REDWOOD BUSINESS PARK FULL SERVICE LEASE BASIC LEASE INFORMATION

EX-10.7 11 dex107.htm REDWOOD BUSINESS PARK FULL SERVICE LEASE, DATED OCTOBER 4, 1999 Redwood Business Park Full Service Lease, dated October 4, 1999

Exhibit 10.7

REDWOOD BUSINESS PARK

FULL SERVICE LEASE

BASIC LEASE INFORMATION


1.	DATE	October 4, 1999
2.	LANDLORD	G & W/Copley Redwood Business Park, L.P., a limited partnership
3.	TENANT	Turin Networks, Inc., a California corporation
4.	PREMISES		REFERENCE
	a. Project	Redwood Business Park	Paragraph 1
	b. Building	1415 N. McDowell Blvd.
	c. Address	1415 N. McDowell Blvd.
	d. Assessor’s Parcel #	047-360-021
	e. Suite	A
	f. Usable Sq. Ft.	28,190
	g. Rentable Sq. Ft.	31,010
5.	TERM		Paragraph 2
	a. Estimated Commencement Date	October 1, 1999
	b. Length of Term	Seven (7) years
6.	BASE RENT		Paragraph 3
	a. Monthly Base Rent	See Addendum
	b. Advanced Base Rent (Paid Upon Lease Execution)	$11,800
	c. Adjustment Date of Monthly Rent	See Addendum
7.	PROPERTY TAXES AND OPERATING EXPENSES		Paragraph 4
	a. Base Year – Calendar Year of:	2000
	b. Premises v. Building Sq.Ft. Ratio	Yrs 1 & 2 25,000/31,010 = 81% Yrs 3 – 7 31,010/31,010 = 100%
	c. Premises v. Project Sq.Ft. Ratio	Yrs 1 & 2 25,000/72,290 = 35% Yrs 3 – 7 31,010/72,290 = 43%
8.	SECURITY DEPOSIT	$28,200	Paragraph 16
9.	TENANT IMPROVEMENTS	As-Is	Exhibit B
10.	USE	General Office/Research & Development	Paragraph 6
11.	TENANT’S ADDRESS FOR NOTICES		Paragraph 20
	John W. Webley Turin Networks, Inc. 1415 N. McDowell Blvd., Suite A Petaluma, CA 94954


12.	LANDLORD’S ADDRESS FOR NOTICE	Paragraph 20
	G & W/Copley Redwood Business Park, L.P. c/o G&W Management Co. P.O. Box 808030, Petaluma, CA ###-###-#### 1318 Redwood Way, Suite 140 Petaluma, CA 94954 With a Copy to:


13.	REAL ESTABE BROKERS	Paragraph 13
	G & W Management Co.


EXHIBITS AND ADDENDUM
	Addendum No. 1 Exhibit A: Diagram of Premises Exhibit A-1: Diagram of the Project ~~Exhibit B. Work Letter Agreement~~ Exhibit C: Rules and Regulations Exhibit D: Hazardous Materials List Exhibit E: Tenant’s Financial Statement

REDWOOD BUSYNESS PARK

FULL SERVICE LEASE

THIS LEASE, dated October 4, 1999, is made and entered into by and between G & W/Copley Redwood Business Park, L.P., a limited partnership (“Landlord”), and Turin Networks, Inc., a California corporation (“Tenant”).

1. Premises.

Landlord leases to Tenant, and Tenant hereby leases from Landlord for the term of this Lease (‘Term”) and at the rent and upon the conditions set forth below, the Premises described in the Basic Lease Information and identified on the floor plan attached hereto as Exhibit A. The Premises are located within the Building described in the Basic Lease Information, and constitute part of the Project described in the Basic Lease Information and as shown in Exhibit A-1 attached hereto, at the Redwood Business Park, located in Petaluma, California. All areas and facilities outside the Buildings and within the exterior boundaries of the Project that are provided and designated by Landlord from time to time for the general nonexclusive use and convenience of the tenants of the Project shall be known as “Common Areas”.

2. Term.

(a) The Term shall commence upon the date (“Commencement Date”) which is the earlier of: (i) substantial completion of the Premises, as the term “substantial completion” is defined in the Work Letter Agreement, attached hereto as Exhibit B, or (ii) the date substantial completion would have occurred but for Tenant Delays (as the term is defined in the Work Letter Agreement): at the time Tenant takes possession of the Premises. The Estimated Commencement Date is set forth in the Basic Lease In formation, which date may be postponed due to a delay in delivering the Premises as provided in Paragraph 2(b) below. A “Lease Year” is a period of twelve (12) consecutive calendar months. A “Lease Month” is a calendar month. The initial Term of this Lease shall be determined as follows:

The initial Term of this Lease shall be determined as follows:

(1) If the Commencement Date of this Lease occurs on the first calendar day of a calendar month, the Term shall be for a period of Lease Years and Months as specified in the Basic Lease Information, unless terminated sooner as provided in this Lease.

(2) If the Commencement Date of this Lease occurs on other than the first calendar day of a calendar month, the Term shall be for a period of Lease Year and Months as specified in the Basic Lease Information, plus the number of days remaining in the calendar month in which the Commencement Date occurs, unless terminated sooner as provided in this Lease.

(b) Subject to the provisions of Paragraph 22 below, in the event the Premises are not substantially completed (in accordance with the Work Letter Agreement) on or within six (6) months after the Estimated Commencement Date, then Tenant may, at Tenant’s option, by notice in writing to Landlord within (10) days thereafter, cancel this Lease, in which event, (i) this Lease shall be deemed null and void and have no further force or effect, (ii) all security or other deposits made herewith shall be promptly returned to Tenant, and (iii) the parties shall have no further obligation to each other, provided further, however, that if such written notice of Tenant is not received by Landlord within said 10-day period, Tenant’s right to cancel this Lease hereunder shall terminate and be of no further force or effect.

3. Rent.

(a) For purposes of this Lease, the term “Rent” shall mean the Base Rent, Advanced Base Rent, all additional rent, and all of the other monetary obligations of Tenant under this Lease. Upon execution of this Lease, Tenant shall pay to Landlord the Advanced Base Rent set forth in the Basic Lease Information. Tenant shall pay to Landlord the Base Rent specified in the Basic Lease Information, payable on or before the first day of each and every successive calendar month following the Commencement Date. If the Term commences on other than the first day of a calendar month, the first payment of Base Rent shall be appropriately prorated, on the basis of a 30-day month. Tenant’s payment of any Advanced Base Rent (excluding that portion attributable to last month’s rent, if any) shall be credited against Tenant’s obligation to pay Base Rent beginning as of the Commencement Date.

(b) Tenant shall pay, as additional rent, all amounts of money required to be paid to Landlord by Tenant under this Lease in addition to monthly Base Rent, whether or not the same be designated “additional rent.” If such amounts are not paid at the time provided in this Lease, they shall nevertheless be collectable as additional rent with the next installment of monthly Base Rent thereafter falling due, but nothing herein contained shall be deemed to suspend or delay the payment of any amount of money at the time the same becomes due and payable hereunder, or limit any other remedy of Landlord.

(c) Tenant acknowledges that late payment by Tenant to Landlord of Rent after the expiration of any applicable grace period will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which will he extremely difficult to ascertain. Such costs include, but are not limited to, processing and accounting charges, and late charges which may be imposed on Landlord by the terms of any trust deed covering the Premises. Accordingly, if any installment of Rent or any other sums due from Tenant shall not be received by Landlord when due, Tenant shall pay to Landlord a late charge equal to six percent (6%) of such overdue amount. The parties agree that such late charge represents a fair and reasonable estimate of the costs Landlord will incur by reason of late payment by Tenant. Acceptance of such late charge by Landlord shall in no event constitute a waiver of Tenant’s default with respect to such overdue amount, nor prevent Landlord from exercising any of the other rights and remedies granted hereunder.

(d) Any amount due to Landlord, if not paid when due, shall bear interest from the date due until paid at the rate of ten percent (10%) per annum. Payment of interest shall not excuse or cure any default hereunder by Tenant.

(e) All payments due from Tenant to Landlord hereunder shall be made to Landlord without deduction or offset, in lawful money of the United States of America at Landlord’s address for notices hereunder, or to such other person or at such other place as Landlord may from time to time designate in writing to Tenant.

4. Taxes and Operating Expenses.

(a) Per each calendar year during the Term after the year specified in the Basic Lease Information as the Base Year, Tenant shall pay its percentage share, as specified in the Basic Lease Information, of the increase in Property Taxes over Base Property Taxes, and its percentage share of the increase in Operating Expenses for such calendar year over Base Operating Expenses.

(1) “Property Taxes” shall mean all real property taxes, bonds and assessments and governmentally imposed fees or charges (and any tax levied wholly or partly in lieu thereof) levied, assessed, confirmed, imposed or which have become a lien against the Building (which for the purposes of defining “Property Taxes” shall include the tax parcel of which the Building is a part) and Common Areas.

(2) “Operating Expenses” shall mean the following. (A) all costs of management, operation, maintenance and repair of the Building and Common Areas, including, without limitation, property management expenses, maintenance and repair materials, supplies and equipment; (B) all costs of water, power, electricity, refuse collection, parking lot sweeping, landscaping, and other services relating to the Common Areas; (C) all costs of alterations or improvements to the Building or Common Areas made to achieve compliance with federal, state and local law including, without limitation, the Americans with Disabilities Act (42 U.S.C. Section 12101 et seq.), which costs will he amortized over the useful life of each alteration or improvement; (D) all costs of public liability and casualty insurance maintained by Landlord with respect to the Building and Common Areas; (E) all costs incurred by Landlord for making any capital improvements, structural , repairs or modifications to the Building or Common Areas or making any improvements or modifications to reduce the operating expenses, which costs will be amortized over the useful life of each capital improvement, structural repair or modification; (F) all costs of maintaining machinery, equipment and directional signage or other markers; and (G) the share allocable to the Building of dues and assessments payable under any reciprocal easement or common area maintenance agreements or declarations or by any owners’ associations affecting the Building. That portion of the Operating Expenses relating to the property management expenses for the Building and Common Areas which shall be charged to Tenant shall be four percent (4%) of both Tenant’s annual Base Rent and the subtotal of Tenant’s share of Operating Expenses of the Building. In the event that Landlord calculates the Operating Expenses based upon the Project instead of the Building, then the term “Project” shall be substituted in the place of all references to the term “Building” in this paragraph.

(3) “Base Property Taxes” shall mean those Property Taxes incurred by Landlord during the calendar year specified as Base Year in the Basic Lease Information.

(4) “Base Operating Expenses” shall mean those Operating Expenses incurred by Landlord during the calendar year specified as Base Year in the Basic Lease Information.

(b) The Property Taxes to be paid by Tenant shall be determined by multiplying the Increase in Property Taxes over Base Property Taxes by Tenant’s Percentage Share or Property Taxes (which percentage is determined by multiplying 100% by a fraction, the

numerator of which is the rentable area of the Premises and the denominator of which is the total rentable area of all improvements located within the tax parcel of which the Premises are a part). Landlord may cause the Common Areas of the Project to he separately assessed dote other areas and buildings of the Project. In such case, Tenant’s Percentage Share of Property Taxes attributable to the Common Areas shall be determined by the ratio that the total rentable square feet in the Premises bears to the total number of square feet of rentable area which is included in the property subject to the assessment.

(c) Operating Expenses for each calendar year shall be adjusted to equal Landlord’s reasonable estimate of Operating Expenses as though ninety-five percent (95%) of the total rentable area of the Building had been occupied. When the Building is one hundred percent (100%) occupied, the Operating Expenses shall be adjusted to reflect a 100% occupied building. The Operating Expenses to be paid by Tenant shall be determined by multiplying the increase in Operating Expenses over Base Operating Expenses, as adjusted above, by Tenant’s Percentage Share of Operating Expenses (which percentage is determined by multiplying 100% by a fraction, the numerator of which is the rentable area of the Premises and the denominator of which is the total rentable area located within the Building, if the Operating Expenses are calculated for the Building, or within the Project, if the Operating Expenses are calculated for the Project).

(d) Commencing as of the second year of the Lease through the remainder of the Tem and any extensions thereof, Tenant shall pay to Landlord each month at the same time and in the same manner as monthly Base Rent one-twelfth (1/12th) of Landlord’s estimate of the increase in Property Taxes and one-twelfth (1/12th) of Landlord’s estimate of the increase in Operating Expenses payable by Tenant for the then-current calendar year. Such monthly amount may be adjusted by Landlord at any time on the basis of Landlord’s experience and reasonably anticipated costs. Within one hundred twenty (120) days after the close of each calendar year, or as soon after such 120-day period as practicable, Landlord shall deliver to Tenant a statement in reasonable detail of the actual amount of Property Taxes and Operating Expenses payable by Tenant in accordance with this Paragraph 4 for such calendar year. Tenant may request further information if desired. Landlord’s failure to provide such statement to Tenant within the 120-day period shall not act as a waiver and shall not excuse Tenant or Landlord from making the adjustments to reflect actual costs as provided herein. If on the basis of such statement Tenant owes an amount that is less than the estimated payments for such calendar year previously made by Tenant, Landlord shall credit such excess to Tenant against future additional rent due under this Paragraph 4. If on the basis of such statement Tenant owes an amount that is more than the estimated payments for such calendar year previously made by Tenant, Tenant shall pay the deficiency to Landlord within fifteen (15) days after delivery of the statement. The obligations of Landlord and Tenant under this Paragraph 4(d) with respect to the reconciliation between the estimated and actual amounts of Property Taxes and Operating Expenses payable by Tenant for the last year of the Term shall survive the termination of the Lease. When the final determination is made of the actual amounts of Property Taxes and Operating Expenses payable by Tenant for the year in which this Lease terminates, Tenant shall immediately pay any increase due over the estimated payments and, conversely, any overpayment made by Tenant shall be immediately reimbursed to Tenant by Landlord.

5. Other Taxes.

In addition to Tenant’s obligations under Paragraph 4 above, Tenant shall pay or reimburse Landlord for (i) any taxes upon, measured by or reasonably attributable to the cost or value of Tenant’s equipment, furniture, fixtures, and other personal property located in the Premises or leasehold improvements made in or to the Premises at Tenant’s expense, (ii) for taxes, if any, measured by or reasonably attributable to tenant improvements paid for by Tenant, and (iii) for any taxes, assessments, fees, or charges imposed by any public authority or private community maintenance association upon or by reason of the development, possession, use or occupancy of the Premises or the parking facilities used by Tenant in connection with the Premises. On request by Landlord, Tenant shall furnish Landlord with satisfactory evidence of payment of Tenant’s business personal property taxes and deliver copies of such business personal property tax bills to Landlord.

6. Use.

6.1 Prohibited Uses.

(a) The Premises shall be used and occupied by Tenant solely for the use set forth in the Basic Lease Information. Tenant shall, at Tenant’s expense, comply promptly with all applicable federal, state and local laws, regulations, ordinances, rules, orders, and requirements in effect during the Term relating to the condition, use or occupancy of the Premises. Tenant shall not use or permit the use of the Premises in any manner that will tend to create waste or a nuisance, or that unreasonably disturbs other tenants of the Building or Project, nor shall Tenant place or maintain any signs, antennas, awnings, lighting or plumbing fixtures, loudspeakers, exterior decoration or similar devises on or visible from the exterior of the Premises, without Landlord’s prior written consent, which consent may be withheld in Landlord’s sole discretion. Tenant shall not use any corridors, sidewalks, stairs, elevators, or other areas outside of the Premises for storage or any purpose other than access to the Premises. Tenant shall not use, keep, or permit to be used or kept on the Premises any foul or noxious gas or substance, nor shall Tenant do or permit to be done anything in and about the Premises, either in connection with activities hereunder expressly permitted or otherwise, which would cause an increase in premiums for or a cancellation of any policy of insurance (including fire insurance) maintained by Landlord in connection with the Premises or the Building or which would violate the terms of any covenants, conditions, or restrictions, or the design guidelines, or the sign guidelines affecting the Building or the land on which it is located, or the Rules (as the term is defined under Paragraph 63(b) below).

(b) Tenant shall not attach any signage to or on any part of the outside of the Premises, the Building or the Project, or in the halls, lobbies, windows or elevator banks of the Building without Landlord’s prior written consent, which consent may he withheld in Landlord’s sole discretion. Any signage so permitted shall be subject to prior approval of and conformance with the requirements of the design review committee of the Project and the design review agency of the city. At Tenant’s expense, Tenant shall (i) maintain all permitted signage, and (ii) upon the expiration or termination of this Lease, remove such signage and repair any damage caused by their removal. If Tenant fails to do so, Landlord may maintain, repair or

remove such signage without notice to Tenant and at Tenant’s expense, the cost of which shall be payable by Tenant as additional rent in accordance with Paragraph 14(b)(2) below.

6.2 Suitability. Tenant acknowledges that neither Landlord nor any agent of Landlord has made any representation or warranty with respect to the Premises or the Building or with respect to the suitability or fitness of either for the conduct of Tenant’s business or for any other purpose. Nor has Landlord agreed to undertake any modification, alteration or improvement to the Premises except as provided in this Lease. Tenant acknowledges that the Premises are located in a 100-year flood zone and that the finished floor elevations of the Building are designed to be at least two (2) feet above the federal government’s estimate of the 100-year flood level at the time of initial construction.

6.3 Use of Common Areas.

(a) Landlord gives Tenant and its authorized employees, agents, customers, representatives, and invitees the nonexclusive right to use the Common Areas, with others who are entitled to use the Common Areas, subject to Landlord’s rights as set forth in this Paragraph 6.3.

(b) All Common Areas shall be subject to the exclusive control and management of Landlord and Landlord shall have the right to establish, modify, amend, and enforce reasonable rules and regulations with respect to the Common Areas. Tenant acknowledges receipt of a copy of the current rules and regulations, attached hereto as Exhibit C, and agrees that they may, from time to time, be modified or amended by Landlord in a commercially reasonable manner (the “Rules”). Tenant agrees to abide by and conform with such Rules; to cause its concessionaires and its and their employees and agents to abide by such Rules; and to use its best efforts to cause its customers, invitees, and licensees to abide by such Rules.

(c) Landlord shall have the right to close temporarily any portion of the Common Areas for the purpose of discouraging use by parties who are not tenants or customers of tenants; to use portions of the Common Areas while engaged in making additional improvements or repairs or alterations to the Property; to use or permit the use of the Common Areas by others to whom Landlord may grant or have granted such rights; and to do and perform such acts in, to, and with respect to, the Common Areas as in the use of good business judgment Landlord shall determine to be appropriate for the Project.

(d) Landlord shall have the unqualified right to increase or reduce the Common Areas, provided the Project meets the parking requirement under Paragraph 6.5 below.

(e) Tenant shall cooperate with Landlord and other tenants in the Project in recycling waste paper, cardboard, or such other materials identified under any trash recycling program that may be established in order to reduce trash collection costs.

6.4 Environmental Matters.

(a) (1) ‘the term “Hazardous Materials” as used herein means any petroleum products, asbestos, polychlorinated biphenyls, P.C.B.’s, chemicals, compounds,

materials, mixtures or substances that are now or hereafter defined or listed in, or otherwise classified as a “hazardous substance”, “hazardous material”, “hazardous waste”, “extremely hazardous waste”, “infectious waste”, “toxic substance”, “toxic pollutant” or any other formulation intended to define, list or classify substances by reason of deleterious properties such as ignitability, corrosivity, reactivity, carcinogenicity or toxicity pursuant to any federal, state or local environmental law, regulation, ordinance, resolution, order or decree relating to industrial hygiene, environmental protection or the use, analysis, generation, manufacture, storage, release, disposal or transportation of the same (“Hazardous Materials Laws”).

(2) Except for ordinary office supplies and janitorial cleaning materials which in common business practice are customarily and lawfully used, stored and disposed of in small quantities, and except for those Hazardous Materials listed on Exhibit D attached hereto, Tenant shall not use, manufacture, store, release, dispose or transport any Hazardous Materials in, on, under or about the Premises, the Building or the Project without giving prior written notice to Landlord and obtaining Landlord’s prior written consent, which consent Landlord may withhold in its sole discretion. Subject to Landlord’s prior written consent, Hazardous Materials may be added to Exhibit D on an annual review basis; any such amendments to Exhibit D shall be signed by each party and attached hereto. Tenant shall at its own expense procure, maintain in effect, and comply with all conditions of any and all permits, licenses, and other governmental and regulatory approvals required in connection with Tenant’s generation, use, storage, disposal and transportation of Hazardous Materials. Except as discharged into the sanitary sewer in strict accordance and conformity with all applicable Hazardous Materials Laws, Tenant shall cause any and all Hazardous Materials removed from the Premises to be removed and transported solely by duly licensed haulers to duly licensed facilities for final disposal of such materials and wastes. Regardless whether permitted under the Hazardous Materials Laws, Tenant shall not maintain in, on, under, or about the Premises, the Building or the Project any above or below ground storage tanks, clarifiers, or sumps, nor shall any wells for the monitoring of ground water, soils, or subsoils be allowed.

(3) Tenant shall immediately notify Landlord in writing of: (a) any enforcement, cleanup, removal or other governmental or regulatory action instituted, completed or threatened pursuant to any Hazardous Materials Law; (b) any claim made or threatened by any person or entity against Tenant or the Premises relating to damage, contribution, cost, recovery, compensation, loss or injury resulting from or claimed to result from any Hazardous Materials; and (c) any reports, information, inquiries or demands made, ordered, or received by or on behalf of Tenant which arise out of or in connection with the existence or potential existence of any Hazardous Materials in, on, under or about the Premises, the Building, or the Project, including, without limitation, any complaints, notices, warnings, asserted violations, or mandatory or voluntary informational filings with any governmental agency in connection therewith, and immediately supply Landlord with copies thereof.

(b) Tenant shall indemnify, defend (by counsel reasonably acceptable to Landlord), protect, and hold Landlord, and each of Landlord’s partners, officers, directors, partners, employees, affiliates, joint venturers, members, trustees, owners, shareholders, principals, agents, representatives, attorneys, successors and assigns, free and harmless from and against any and all claims, liabilities, damages, fines, penalties, forfeitures, losses, cleanup and remediation costs or expenses (including attorneys’ fees) or death of or injury to any person or

damage to any property whatsoever, arising from or caused in whole or in part, directly or indirectly, by (i) Tenant’s use, analysis, generation, manufacture, storage, release, disposal, or transportation of Hazardous Materials by Tenant, Tenant’s agents, employees, contractors, licensees or invitees to, in, on, under, about or from the Premises, the Building, or the Project, or (ii) Tenant’s failure to comply with any Hazardous Materials Law. Tenant’s obligations hereunder shall include, without limitation, and whether foreseeable or unforeseeable, all costs of any required or necessary repair, cleanup, detoxification or decontamination of the Premises, the Building, or the Project and the preparation and implementation of any closure, remedial action or other required plans in connection therewith, and shall survive the expiration or earlier termination of this Lease.

(c) Landlord shall have the right to enter the Premises during regular business hours upon reasonable prior notice at all times for the purposes of ascertaining compliance by Tenant with all applicable Hazardous Materials Laws, provided, however, that in the instance of an emergency Landlords entry onto the Premises shall not be restricted to regular business hours nor shall notice he required.

(d) Landlord shall have the option to declare a default of this Lease for the release or discharge of Hazardous Materials by Tenant, Tenant’s employees, agents, contractors, or invitees on the Premises, Building or Project or in violation of law or in deviation from prescribed procedures in Tenant’s use or storage of Hazardous Materials. If Tenant fails to comply with any of the provisions under this Paragraph 6.4, Landlord shall have the right (but not the obligation) to remove or otherwise cleanup any Hazardous Materials from the Premises, the Building or the Project. In such case, the costs of any Hazardous Materials investigation, removal or other cleanup (including, without limitation, transportation, storage, disposal and attorneys’ fees and costs) will be additional rent due under this Lease, whether or not a court has ordered the cleanup, and will become due and payable on demand by Landlord.

6.5 Parking. Landlord grants to Tenant and Tenant’s customers, suppliers, employees unassigned and unreserved parking spaces in the Common and invitees a nonexclusive license to use unassigned and unreserved parking spaces in the Common Areas for the use of motor vehicles during the Term subject to rights reserved to Landlord as specified in this Paragraph 6.5. Landlord reserves the right to grant similar nonexclusive and unassigned and unreserved use to other tenants; to promulgate rules and regulations relating to the use of the Common Areas including parking by tenants and employees of tenants; to make changes in the parking layout from time to time; and to do and perform any other acts in and to these areas and improvements as Landlord determines to be advisable. Tenant agrees not to overburden the parking facilities and to abide by and conform with the rules and regulations and to cause its employees and agents to abide by and conform to the rules and regulations. Upon request, Tenant shall provide Landlord with license plate numbers of all vehicles driven by its employees and to cause Tenant’s employees to park only in spaces specifically designated for tenant parking. Landlord shall have the unqualified right to rearrange or reduce the number of parking spaces; provided, however, the ratio of the number of parking spaces available to Tenant will be no less than 3.5 spaces per 1,000 usable square feet of the Premises.

7. Services.

(a) Landlord shall furnish the Premises with ~~electricity for lighting and the operation of office machines, heat and air conditioning,~~ lighting replacement for building standard fixtures, restroom supplies, window washing with reasonable frequency, and daily janitor service on normal business days. Landlord shall not be in default hereunder or be liable for any damages directly or indirectly resulting from nor shall there be any Rent abatement by reason of (i) the installation, use or interruption of use of any equipment in connection with the furnishing of any of the foregoing services, (ii) failure to furnish or delay in furnishing any such services, or (iii) the limitation, curtailment, rationing or restrictions on use of water, electricity, gas or any other form of energy serving the Premises, unless the damage or injury is caused by Landlord’s sole negligence or willful misconduct. Tenant shall contract for and pay directly for gas and electrical service for the Premises.

8. Maintenance, Repairs and Alterations.

(a) Tenant shall, at Tenant’s expense, maintain every part of the Premises in good order, condition and repair, including without limitation, (i) all interior surfaces, ceilings, walls, door frames, window frames, floors, carpets, draperies, window coverings and fixtures, (ii) all windows, doors, locks and closing devices, entrances, plate glass, and signs, (iii) all plumbing and sewage pipes, fixtures and fittings, (iv) all phone lines, electrical wiring, equipment, switches, outlets, and lightbulbs, (v) any fire detection, fire sprinkler or extinguisher equipment, (vi) all of Tenant’s personal property, improvements and alterations, and (vii) all other fixtures and special items installed by or for the benefit of, or at the expense of Tenant. All repairs or replacements required of Tenant shall be promptly made with new materials of like kind and quality, and subject to Landlord’s prior written approval where any such repair or replacement work exceeds $200.00.

(b) Landlord shall, at Landlord’s expense, keep in good condition and repair the foundation, roof structure (excluding the roof membrane), exterior walls and other structural parts of the Building not the obligation of Tenant or any other tenant in the Building. Landlord shall keep in good condition and repair all non-structural parts of the Building not the obligation of Tenant or any other tenant in the Building (including, without limitation, the roof membrane, lobby and elevators), and such expense shall be included in the calculation of Operating Expenses payable by tenants within the Building. Tenant expressly waives the benefits of any statute, including Civil Code Sections 1941 and 1942, which would afford Tenant the right to make repairs at Landlord’s expense or to terminate this Lease due to Landlord’s failure to keep the Building in good order, condition and repair. Landlord shall have no liability to Tenant for any damage, inconvenience, or interference with the use of the Premises by Tenant as the result of Landlord performing any such maintenance and repair work.

(c) In the event Tenant fails to perform Tenant’s obligations under this Paragraph 8, Landlord may, but shall not be required to, give Tenant notice to do such acts as are reasonably required to so maintain the Premises. If Tenant shall fail to commence such work and diligently prosecute it to completion, then Landlord shall have the right (but not the obligation) to do such acts and expend such funds at the expense of Tenant as are reasonably required to perform such work. Any amounts so expended by Landlord will be additional rent due under this

Lease, and such amounts will become due and payable on demand by Landlord. Landlord shall have no liability to Tenant for any such damages, inconvenience, or interference with the use of the Premises by Tenant as a result of performing such work.

(d) Upon the expiration or earlier termination of this Lease, Tenant shall surrender the Premises in good condition and repair, only ordinary wear and tear excepted. Tenant, at its sole cast and expense, agrees to repair any damages to the Premises caused by or in connection with the removal of any articles of personal property, business or trade fixtures, signs, machinery, equipment, cabinetwork, furniture, moveable partitions, or permanent improvements or additions, including without limitation thereto, repairing the floor and patching and painting the walls where required by Landlord, to Landlord’s reasonable satisfaction. Tenant shall indemnify Landlord against any loss or liability resulting from delay by Tenant in so surrendering the Premises, including without limitation, any claims made by any succeeding tenant resulting from such delay.

(e) Tenant shall not make any alterations, improvements, or additions in, on, or about the Promises without Landlord’s prier written consent, except that Tenant may make alterations, improvements, or additions without Landlord’s prior written consent where (i) the reasonably estimated cost does not exceed $2,500, and (ii) such alterations, improvements, or additions do not affect or involve the structural integrity, roof membrane, exterior areas, building systems, or water-tight nature of the Premises, the Building or the Project. In requesting Landlord’s consent, Tenant shall, at Tenant’s sole cost, submit to Landlord complete drawings and specifications describing such work and the identity of the proposed contractor at least ten (10) business days prior to the commencement of any work.

With respect to any alterations, improvements or additions made to the Premises by Tenant:

(1) Before commencing any work relating to alterations, additions, or improvements affecting the Premises, Tenant shall notify Landlord of the expected date of commencement thereof and of the anticipated cost thereof. Landlord shall then have the right at any time and from time to time to post and maintain on the Premises such notices as Landlord reasonably deems necessary to protect the Premises and Landlord front mechanics’ liens or any other liens.

(2) Tenant shall pay when due all claims for labor or materials furnished to Tenant for use in the Premises. Tenant shall not permit any mechanics’ liens or any other liens to be levied against the Premises for any labor or materials furnished to Tenant in connection with work performed on the Premises by or at the direction of Tenant. Tenant shall indemnify, hold harmless and defend Landlord (by counsel reasonably satisfactory to Landlord) from any liens and encumbrances arising out of any work performed or materials furnished by, or at the direction of Tenant. In the event that Tenant shall not, within twenty (20) days following the imposition of any such lien, cause such lien to be released of record by payment or posting of a proper bond, Landlord shall have, in addition to all other remedies provided herein by law, the right, but not the obligation, to cause the same to be released by such means as it shall deem proper, including payment of the claim giving rise to such lien. All such sums paid by Landlord and all expenses incurred by it in connection therewith, including attorneys’ fees and

costs, shall he payable to Landlord by Tenant on demand with interest at the rate of ten percent (10%) per annum.

(3) All alterations, improvements or additions in or about the Premises performed by or on behalf of Tenant shall be done in a first-class, workmanlike manner, shall not unreasonably lessen the value of leasehold improvements in the Premises, and shall be completed in compliance with all applicable laws, ordinances, regulations and orders of any governmental authority having jurisdiction thereover, as well as the requirements of insurers of the Premises and the Building.

(4) Upon Landlord’s request, Tenant shall remove any contractor, subcontractor or material supplier from the Premises and the Building if the work or presence of such person or entity results in labor disputes in or about the Building or Project or damage to the Premises, Building or Project.

(5) Landlord, at Landlord’s sole discretion, may refuse to grant Tenant permission for alterations, improvements or additions which require, because of application of Americans with Disabilities Act or other laws, substantial improvements or alterations to be made to the Common Areas.

(6) Landlord may, up to sixty (60) days prior to the expiration of the Term, require that Tenant, at Tenant’s expense, remove any such alterations, improvements or additions prior to or upon the expiration of this Lease, and restore the Premises to their condition prior to such alterations, improvements or additions.

(7) Unless Landlord requires their removal, as set forth above, all alterations, improvements, or additions made to the Premises shall become the property of Landlord and remain upon and he surrendered with the Premises upon the expiration of this Lease; provided, however, that Tenant’s machinery, equipment, and trade fixtures, other than any which may be affixed to the Premises so that they cannot be removed without material damage to the Premises, shall remain the property of Tenant and may be removed by Tenant subject to the provisions of Paragraph 8(d) above.

~~9. Construction of Tenant Improvements.~~

~~Landlord shall be responsible for constructing the tenant improvements (“Tenant Improvements”) in the Premises, as provided in the Work Letter Agreement, attached hereto as Exhibit B.~~

10. Insurance and Indemnity.

10.1 Insurance.

(a) Tenant shall obtain and maintain during the Term commercial general liability insurance with a combined single limit for personal injury and property damage in an amount of not less than $2,000,000 (in a form, with a deductible amount, and with carriers reasonably acceptable to Landlord) and employer’s liability and workers’ compensation insurance as required by law. The insurance carrier shall be authorized to do business in the State

of California, with a policyholders and financial rating of at least A:IX Class status as rated in the most recent edition of Best’s Key-Rating guide. Tenant’s comprehensive general liability insurance policy shall be endorsed to provide that (i) it may not be canceled or altered in such a manner as to adversely affect the coverage afforded thereby without thirty (30) days’ prior written notice to Landlord, (ii) Landlord is designated as an additional insured, (iii) the insurer acknowledges acceptance of the mutual waiver of claims by Landlord and Tenant pursuant to Paragraph 10.2(b) below, and (iv) such insurance is primary with respect to Landlord and that any other insurance maintained by Landlord is excess and noncontributing with such insurance. If, in the opinion of Landlord’s lender or in the commercially reasonable opinion of Landlord’s insurance adviser, the specified amounts of coverage are no longer adequate, such coverage shall, within 30 days written notice to Tenant, be appropriately increased. Prior to the commencement of the Term, Tenant shall deliver to Landlord a duplicate of such policy or a certificate thereof to Landlord for retention by it, with endorsements. At least thirty (30) days prior to the expiration of such policy or any renewal or modification thereof, Tenant shall deliver to Landlord a replacement or renewal binder, followed by a duplicate policy or certificate within a reasonable time thereafter. If Tenant fails to obtain such insurance or to furnish Landlord any such duplicate pokey or certificate as herein required, Landlord may, at its election, without notice to Tenant and without any obligation to do so, procure and maintain such coverage and Tenant shall reimburse Landlord on demand as additional rent for any premium so paid by Landlord.

(b) Landlord waives all claims against Tenant, and Tenant’s officers, directors, partners, employees, agents and representatives for loss or damage to the extent that such loss or damage is insured against under any valid and collectable insurance policy insuring Landlord or would have been insured against but for any deductible amount under any such policy. Tenant waives all claims against Landlord, and Landlord’s officers, directors, partners, employees, affiliates, joint venturers, members, trustees, owners, shareholders, principals, agents, representatives, successors and assigns, for loss or damage to the extent such loss or damage is insured against under any valid and collectable insurance policy insuring Tenant or required to be maintained by Tenant under this Lease, or would have been insured against but for any deductible amount under any such policy. The insuring party shall, upon obtaining the policies of insurance required under this Lease, give notice to the insurance carrier or carriers that the foregoing mutual waiver of subrogation is contained in this Lease. Tenant agrees that in the event of a sale, assignment or transfer of the Premises by Landlord, this waiver of subrogation shall continue in favor of the original Landlord and any subsequent Landlord.

(c) Tenant shall at its own cost maintain on all its personal property, Tenant’s improvements, and alterations, in, on, or about the Premises, a policy of standard fire and extended coverage insurance, with vandalism and malicious mischief endorsements, to the extent of at least one hundred percent (100%) of their full replacement value. The proceeds from any such policy shall be used by Tenant for the replacement of personal property and the restoration of Tenant’s improvements or alterations. Notwithstanding any other provisions of the Lease, Landlord shall have no liability for damage to or destruction of Tenant’s personal property, regardless of whether the damage or destruction results from the acts or omissions of Landlord.

(d) During the Term, Landlord shall keep the Building, and improvements within which the Premises are located, insured against loss or damage by (i) fire, with extended coverage and vandalism, malicious mischief and special extended perils (all risk) endorsements or their equivalents, in amounts not less than one hundred percent (100%) of the replacement cost of the Building and structures insured, and (ii) flood, in the maximum amount provided for by FEMA under its flood loss insurance program, with loss payable thereunder to Landlord and to any authorized encumbrancer of Landlord (with standard mortgagee loss payable clause) in accordance with their respective interests. Landlord may maintain rent insurance, for the benefit of Landlord, equal to at least one year’s Base Rent hereunder. If the Lease is terminated as a result of damage by fire, casualty or earthquake as set forth in this Paragraph 10, all insurance proceeds shall be paid to and retained by Landlord, subject to the rights of any authorized encumbrancer of Landlord.

(e) Tenant acknowledges that Landlord does not, at the time of the signing of this Lease, insure the Building for earthquake damage. Landlord may, when Landlord deems the premiums to be reasonable, insure the Building fully or partially for earthquake damage. At such time, the premium for earthquake insurance will be added to the Operating Expenses for purposes of determining additional rent.

10.2 Indemnity.

(a) Tenant waives all claims against Landlord for damage to any property or injury to or death of any person in, on, or about the Premises, the Building, or any other portion of the Project arising at any time and from any cause, unless caused by the active negligence or willful misconduct of Landlord, its agents, employees, or contractors. Tenant shall indemnify, defend (by counsel reasonably satisfactory to Landlord) and hold harmless Landlord, and Landlord’s officers, directors, partners, employees, affiliates, joint venturers, members, trustees, owners, shareholders, principals, agents, representatives, successors and assigns, from and against all claims, costs, damages, actions, indebtedness and liabilities (except such as may arise from the active negligence or willful misconduct of Landlord, and Landlord’s officers, directors, partners, employees, affiliates, joint venturers, members, trustees, owners, shareholders, principals, agents, representatives, successors and assigns) arising by reason of any death, bodily injury, personal injury, property damage or any other injury or damage in connection with (i) any condition or occurrence in or about or resulting from any condition or occurrence in or about the Premises during the Term, or (ii) any act or omission of Tenant, or Tenants agents, representatives, officers, directors, shareholders, partners, employees, successors and assigns, wherever it occurs. The foregoing indemnity obligation of Tenant shall include reasonable attorneys’ fees, and all other reasonable costs and expenses incurred by Landlord from the first notice that any claim or demand is to be made. The provisions of this Paragraph 10.2 shall survive the termination or expiration of this Lease with respect to any damage, injury, or death occurring prior to such expiration or termination.

(b) Neither party shall he liable to the other for any unauthorized or criminal entry of third parties into the Premises, Building, Project, Common Areas, or parking facilities, or for any damage to person or property, or loss of property in and about the Premises, Building, Project, Common Areas, parking facilities and the approaches, entrances, streets, sidewalks, stairs, elevators, restrooms, or corridors thereto, by or from any unauthorized or

criminal acts of third parties, regardless of any breakdown, malfunction or insufficiency of any security measures, practices or equipment provided by Landlord or Tenant. Tenant shall immediately notify Landlord in writing of any breakdown or malfunction of any security measures, practices or equipment provided by Landlord as to which Tenant has knowledge.

(c) Any diminution or interference with light, air or view by any structure which may be erected on land adjacent to the Building or resulting from any other cause shall in no way alter this Lease or impose any liability on Landlord.

(d) Tenant agrees that in no event shall Landlord be liable for consequential damages, including injury to Tenant’s business or any loss of income therefrom.

(e) In the event that Landlord or any successor owner of the Building sells or conveys the Building, then all liabilities and obligations of Landlord or the successor owner under this Lease accruing after the sale or conveyance shall terminate and become binding on the new owner, and Tenant shall release Landlord from an liability under this Lease (including, without limitation, the Security Deposit, as defined under Paragraph 16 below), except for acts or omissions of Landlord occurring prior to such sale or conveyance.

(f) Tenant expressly agrees that so long as Landlord is a corporation, limited liability company, trust, partnership, joint venture, unincorporated association or other form of business entity, (i) the obligations of Landlord shall not constitute personal obligations of the officers, directors, partners, employees, affiliates, joint venturers, members, trustees, owners, shareholders, or other principals, agents or representatives of such business entity (“.Member of Landlord”), and (ii) Tenant shall have recourse only to the interest of such business entity in the Building of which the Premises arc a part for the satisfaction of such obligations and not against the assets of such Member of Landlord other than to the extent of their respective interests in the Building. In this regard, Tenant agrees that in the event of any actual or alleged failure, breach or default by Landlord ails obligations under this Lease, that (i) no Member of Landlord shall be sued or named as a party in any suit or action (except as may be necessary to secure jurisdiction of Landlord), (ii) no judgment will be taken against any Member of Landlord, and any judgment taken against any Member of Landlord may be vacated and set aside at any time without hearing, (iii) no writ of execution will ever be levied against the assets of any Member of Landlord, and (iv) these agreements by Tenant are enforceable both by Landlord and by any Member of Landlord.

11. Damage or Destruction.

(a) Subject to the provisions of Paragraphs 11(b) and 11(c) below, if, during the Term, the Premises are totally or partially destroyed from any insured casualty, Landlord shall, within ~~ninety (90)~~ forty-five (45) days after the destruction, commence to restore the Premises to substantially the same condition as they were in immediately before the destruction and prosecute the same diligently to completion. Such destruction shall not terminate this Lease. Landlord’s obligation shall not include repair or replacement of Tenant’s alterations or Tenant’s equipment, furnishings, fixtures and personal property. If the existing laws do not permit the Premises to be restored to substantially the same condition as they were in immediately before destruction, and Landlord is unable to get a variance to such laws to permit the commencement

of restoration of the Premises within the ~~ninety (90)~~ 45-day period, then either party may terminate this Lease by giving written notice to the other party within ~~thirty (30)~~ forty-five (45) days after expiration of the ~~ninety (90)~~ 45-day period.

(b) Despite the provisions of Paragraph 11(a) above, Landlord may decide within ~~ninety (90)~~ forty-five (45) days after such destination to demolish the Building rather than rebuild it, in which case this Lease will terminate as of the date or the destruction. Landlord shall give Tenant written notice of its intention within ~~ninety (90)~~ forty-five (45) days after the destruction.

(c) If any destruction occurs to the Premises during the last six (6) months of the initial Term or during the last six (6) months of any extension period, regardless of the nature and extent of the destruction, either party can elect to terminate this Lease within ~~thirty (30)~~ forty-five (45) days after the destruction occurs, If this Lease does not terminate pursuant to this Paragraph 11(c), the provisions of Paragraph 11(a) above shall apply.

(d) If the Premises are damaged from any uninsured casualty to any extent whatsoever, Landlord may within ~~ninety (90)~~ forty-five (45) days following the date of such damage: (i) commence to restore the Premises to substantially the same condition as they were in immediately before the destruction and prosecute the same diligently to completion, in which event this Lease shall continue in full force and effect; or (ii) within the ~~ninety (90)~~ 45-day period Landlord may elect not to so restore the Premises, in which event this Lease shall cease and terminate. In either such event, Landlord shall give Tenant written notice of its intention within the ~~ninety (90)~~ 45-day period.

(e) In the event of destruction or damage to the Premises which materially interferes with Tenant’s use of the Premises, if this Lease is not terminated as above provided, there shall be an abatement or reduction of Base Rent between the date of destruction and the date Landlord substantially completes its reconstruction obligations, based upon the extent to which the destruction materially interferes with Tenant’s use of the Premises. All other obligations of Tenant under this Lease shall remain in full force and effect. Except for abatement of Base Rent, Tenant shall have no claim against Landlord for any loss suffered by Tenant due to damage or destruction of the Premises or any work of repair undertaken as herein provided.

(f) The provisions of California Civil Code Sections 1932(2) and 1933(4), and any successor statutes, are inapplicable with respect to any destruction of the Premises, such sections providing that a lease terminates upon the destruction of the Premises unless otherwise agreed between the parties to the contrary.

12. Eminent Domain.

(a) If all or any part of the Premises shall be taken as a result of the exercise of the power of eminent domain, this Lease shall terminate as to the part so taken as of the date of taking. In the case of a partial taking of greater than fifty percent (50%) of the rentable area of the Premises, either Landlord or Tenant shall have the right to terminate this Lease as to the balance of the Premises by notice to the other within thirty (30) days after the date of the taking. In the event of a partial taking of the Premises which does not result in a termination of this

Lease, the monthly Base Rent thereafter to he paid shall be equitably reduced on a square footage basis. If the continued occupancy of Tenant is materially interfered with for any time during the partial taking, notwithstanding the partial taking does not terminate this Lease as to the part not so taken, the Base Rent shall proportionately abate so long as Tenant is not able to continuously occupy the part remaining and not so taken.

(b) All compensation awarded or paid upon a total or partial taking of the fee title shall belong to Landlord whether such compensation be awarded or paid as compensation for diminution in value of the leasehold or of the fee except: Tenant shall retain and have a claim for the following, to the extent specifically designated by the condemning authority: (i) the unamortized value over the Term of Tenant’s leasehold improvements (to the extent Landlord has not contributed to the cost thereof); (ii) that portion (if any) of the award made to Landlord as a result of removing fixtures, removable by Tenant herein, under the terms of this Lease but which are required to be taken by the condemnor or are so acquired by the condemner; and (iii) all relocation assistance, moving and relocation expenses to the extent of any) provided by the condemning authority directly to Tenant.

13. Assignment and Subletting.

(a) Tenant shall not assign, sublet or hypothecate this Lease or any interest herein or sublet the Premises or any part thereof or permit the use of the Premises by any party other than Tenant without the prior written consent of Landlord, which consent shall not be unreasonably withheld. Any of the foregoing acts without Landlord’s consent shall be void and shall, at the option of Landlord, terminate this Lease. In connection with each consent requested by Tenant, Tenant shall submit to Landlord the terms of the proposed transaction, the identity of the parties to the transaction, the proposed documentation for the transaction, current financial statements of any proposed assignee or sublessee and all other information reasonably requested by Landlord concerning the proposed transaction and the parties involved therein.

(b) As used in this Paragraph 13, the term “assign” or ‘assignment” shall include, without limitation, any sale, transfer, or other disposition of all or any portion of Tenant’s estate under this Lease, whether voluntary or involuntary, and whether by operation of law or otherwise, including any of the following:

(1) if Tenant is a corporation or a limited liability company: (A) any dissolution, merger, consolidation, or other reorganization of Tenant, or (B) a sale or other transfer of more than fifty percent (50%) of the value of the assets of Tenant; or (C) if Tenant is a corporation with fewer than 500 shareholders, a sale or other transfer of’ a control hog percentage of the capital stock of Tenant; or (D) if Tenant is a limited liability company, a sale or other transfer of a controlling percentage of the interest in Tenant. The phrase “controlling percentage” means the ownership of, and the right to vote, stocks or interests possessing at least fifty percent (50%) of the total combined voting power of the limited liability company or, in the case of a corporation, of all classes of Tenant’s stock issues, outstanding and permitted to vote for the election of directors of the corporation;

(2) if Tenant is a trust, the transfer of more than fifty percent (50%) of the beneficial interest of Tenant, or the dissolution of the trust;

(3) if Tenant is a partnership or joint venture, the withdrawal, or the transfer of the interest, of any general partner or joint venturer or the dissolution of the partnership or joint venture; and

(4) if Tenant is composed of tenants-in-common, the transfer of interest of any cotenants or the partition or dissolution of the cotenancy.

(c) No sublessee shall have a right to further sublet, and any assignment by a sublessee of its sublease shall be subject to Landlord’s prior written consent in the same manner as if Tenant were entering into a new sublease.

(d) Regardless of Landlord’s consent, no subletting or assignment shall release Tenant of Tenants obligation, or alter the primary liability of Tenant to pay the Rent and to perform all other obligations to be performed by Tenant hereunder. The acceptance of Rent by Landlord from any other person shall not be deemed to be a waiver by Landlord of any provisions hereof. Consent to one assignment or subletting shall not be deemed consent to any subsequent assignment or subletting. In the event of default by any assignee of Tenant or any successor of Tenant in the performance of any of the terms hereof, Landlord may proceed directly against Tenant without the necessity of exhausting remedies against such assignee or successor.

(e) In the event Tenant shall assign or sublet the Premises or request the consent of Landlord to any assignment or subletting, then Tenant shall reimburse Landlord for reasonable costs and attorneys’ fees incurred in connection therewith in an amount not to exceed $1,000.00.

14. Default by Tenant.

(a) The following events shall constitute events of default under this Lease:

(1) a failure by Tenant to pay any Rent or to deliver an estoppel certificate (as provided in Paragraph 17 below) where such failure continues for five (5) days after written notice by Landlord to Tenant;

(2) the bankruptcy or insolvency of Tenant, any transfer by Tenant to defraud creditors, any assignment by Tenant for the benefit of creditors, or the commencement of any proceedings of any kind by or against Tenant under any provision of the Federal Bankruptcy Act or under any other insolvency, bankruptcy or reorganization act unless, in the event any such proceedings are involuntary, Tenant is discharged from the same within sixty (60) days thereafter; the appointment of a receiver for a substantial part of the assets of Tenant; or the levy upon this Lease or any estate of Tenant hereunder by any attachment or execution;

(3) the abandonment or vacation of the Premises;

(4) the discovery by Landlord that any financial statement given to Landlord by Tenant, any assignee of Tenant, any subtenant of Tenant, any successor in interest of Tenant or any guarantor of Tenant’s obligation hereunder, and any of them, was materially false; and

(5) a failure by Tenant to perform any of the terms, covenants, agreements or conditions of this Lease to be observed or performed by Tenant (excluding any event of default under Paragraph 14(a)(1) above), where such failure continues for thirty (30) days after written notice thereof by Landlord to Tenant; provided, however, that if the nature of the default is such that the same cannot reasonably be cured within the 30-day period, Tenant shall not be deemed to be in default if Tenant shall within such period commence such cure and thereafter diligently prosecute the same to completion,

(b) In the event of any material de fault or breach by Tenant, Landlord may at any time thereafter, without limiting Landlord in the exercise of any right or remedy at law or in equity which Landlord may have by reason of such default or breach:

(1) Pursue the remedy described in California Civil Code Section 1951.4 whereby Landlord may continue this Lease in full force and effect after Tenant’s breach and abandonment and recover the Rent and any other monetary charges as they become due, without terminating Tenant’s right to sublet or assign this Lease, subject only to reasonable limitations as herein provided. During the period Tenant is in default, Landlord shall have the right to do all acts necessary to preserve and maintain the Premises as Landlord deems reasonable and necessary, including removal of all persons and property from the Premises, and Landlord can enter the Premises and relet them, or any part of them, to third parties for Tenant’s account. Tenant shall be liable immediately to Landlord for all costs Landlord incurs in reletting the Premises, including, without limitation, brokers’ commissions, expenses of remodeling the Premises required by the reletting, and like costs. Reletting can be for a period shorter or longer than the remaining Term.

(2) Pay or perform such obligation due (but shall not be obligated to do so), if Tenant fails to pay or perform any obligations when due under this Lease within the time permitted for their payment or performance. In such case, the costs incurred by Landlord in connection with the performance of any such obligation will be additional tent due under this Lease and will become due and payable on demand by Landlord.

(3) Terminate Tenants rights to possession by any lawful means, in which case this Lease shall terminate and Tenant shall immediately surrender possession of the Premises to Landlord. In such event Landlord shall be entitled to recover from Tenant all damages incurred by Landlord by reason of Tenant’s default, including, without limitation, the following: (A) the worth at the time of award of any unpaid Rent which had been earned at the time of such termination; plus (B) the worth at the time of award of the amount by which the unpaid Rent which would have been earned after termination until the time of award exceeds the amount of such Rent loss that is proved could have been reasonably avoided; plus (C) the worth at the time of award of the amount by which the unpaid Rent for the balance of the Term after the time of award exceeds the amount of such Rent loss that is proved could be reasonably avoided; plus (D) any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant’s failure to perform its obligations under this Lease or which in the ordinary course of events would be likely to result therefrom; plus (E) at Landlord’s election, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by applicable State law. Upon any such termination of Tenant’s possessory interest in and to the Premises, Tenant (and at Landlord’s sole election, Tenants sublessees) shall no longer

have any interest in the Premises, and Landlord shall have the right to make any reasonable repairs, alterations or modifications to the Premises which Landlord in its sole discretion deems reasonable and necessary. The “worth at the time of award of the amounts referred to in subparagraphs (A) and (B) above is computed by allowing interest at the maximum rate an individual is permitted by law to charge. The worth at the time of award of the amount referred to in subparagraph (C) above is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%).

(4) Pursue any other legal or equitable remedy available to Landlord. Unpaid installments of Rent and other unpaid monetary obligations of Tenant under the terms of this Lease shall bear interest from the date due at the rate of ten percent (10%) per annum.

(c) In the event Tenant is evicted or Landlord takes possession of the Premises by reason of any default by Tenant hereunder, Tenant hereby waives any right of redemption or relief from forfeiture as provided by law.

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

(e) In the event Tenant is in material default under any provision of this Lease then, at Landlord’s sole election: (i) Tenant shall not have the right to exercise any available right, option or election under this Lease (“Tenant’s Exercise Rights”) if at such time Tenant is in default hereunder, (ii) Tenant shall not have the right to consummate any transaction or event triggered by the exercise of any of Tenant’s Exercise Rights if at such time Tenant is in default hereunder, and (iii) Landlord shall not be obligated to give Tenant any required notices or information relating to the exercise of any of Tenant’s Exercise Rights hereunder.

15. Default by Landlord, Notice to Mortgagee.

Landlord shall not be in default unless Landlord, or the holder of any mortgage, deed of trust or ground lease covering the Premises, fails to perform obligations required of Landlord within a reasonable time, but in no event later than thirty (30) days after written notice by Tenant to Landlord certified mail, postage prepaid, and to the holder of any but mortgage, deed of trust or ground lease covering the Premises whose name and address shall have been furnished to Tenant in writing, specifying wherein Landlord has faded to perform such obligations; provided, however, that if the nature of Landlord’s obligation is such that more than thirty (30) days are required for performance then Landlord shall not be in default if Landlord or the holder of any such mortgage, deed of trust or ground lease commences performance within such 30-day period and thereafter diligently prosecutes the same to completion. In no event Shall Tenant be entitled to terminate this Lease by reason of Landlord’s default, and Tenant’s remedies shall be limited to an action for monetary damages at law.

16. Security Deposit.

On execution of this Lease, Tenant shall deposit with Landlord the sum specified in the Basic Lease Information (the “Security Deposit”). The Security Deposit shall be held by Landlord as security for the performance by Tenant of all of the provisions of this Lease. If Tenant fails to pay Rent or other charges due hereunder, or otherwise defaults with respect to any provision of this Lease, Landlord may use, apply, or retain all or any portion of the Security Deposit for the payment of any Rent or other charge in default, or the payment of any other sum to which Landlord may become obligated by reason of Tenant’s default, or to compensate Landlord for any loss or damage which Landlord may suffer thereby. If Landlord so uses or applies all or any portion of the Security Deposit, then within ten (10) days after demand therefor Tenant shall deposit cash with Landlord in an amount sufficient to restore the deposit to the full amount thereof, and Tenant’s failure to do so shall be a material breach of this Lease. Landlord shall not be required to keep the Security Deposit separate from its general accounts. If Tenant performs all of Tenant’s obligations hereunder, the Security Deposit, or so much thereof as has not theretofore been applied by Landlord, shall be returned, without payment of interest for its use, to Tenant (or, at Landlord’s option to the last assignee, if any, of Tenant’s interest hereunder) at the expiration of the Term, and after Tenant has vacated the Premises. No trust relationship is created herein between Landlord and Tenant with respect to the Security Deposit.

17. Estoppel Certificate.

(a) Tenant shall within ten (10) days of notice from Landlord execute, acknowledge and deliver to Landlord a statement certifying (i) that this Lease is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Lease, as so modified, is in full force and effect), (ii) the amount of the Security Deposit, (iii) the date to which the Rent has been paid, (iv) acknowledging that there are not to Tenant’s knowledge, any uncured defaults on the part of Landlord it hereunder, or specifying such defaults, if any are claimed, and (v) such other matters as may reasonably be requested by Landlord. Any such statement may be conclusively relied upon by any prospective purchaser or encumbrancer of the Building.

(b) Tenant’s failure to deliver such statement within such time shall be conclusive upon Tenant, (i) that this Lease is in full force and effect, without modification except as may be represented by Landlord, (ii) that there are no uncured defaults in Landlord’s performance, and (iii) that not more than one month’s Base Rent has been paid in advance.

(c) If Landlord desires to finance or refinance the Building, Tenant agrees to deliver to any lender designated by Landlord such financial statements of Tenant as may be reasonably required by such lender. All such financial statements shall be received by Landlord in confidence and shall he used for the purposes herein set forth.

18. Subordination.

This Lease, at Landlord’s sole option, shall be subordinate to any ground lease, mortgage, deed of trust, or any other hypothecation for security now or hereafter placed upon the Building and to any and all advances made on the security thereof and to all renewals, modifications,

consolidations, replacements, refinancings and extensions thereof. Notwithstanding such subordination, Tenant’s right to quiet possession of the Premises shall not be disturbed if Tenant is not in default and so long as Tenant shall pay the Rent and observe and perform all of the provisions of this Lease, unless this Lease is otherwise terminated pursuant to its terms. If any mortgagee, trustee, or ground lessor shall elect to have this Lease prior to the lien of its mortgage, deed of trust or ground lease, and shall give notice thereof to Tenant, this Lease shall be deemed prior to such mortgage, deed of trust, or ground lease, whether this Lease is dated prior to or subsequent to the date of said mortgage, deed of trust or ground lease or the date of recording thereof. If any mortgage or deed of trust to which this Lease is subordinate is foreclosed or a deed in lieu of foreclosure is given to the mortgagee or beneficiary, Tenant shall attorn to the purchaser at the foreclosure sale or to the grantee under the deed in lieu of foreclosure; if any ground lease to which this Lease is subordinate is terminated, Tenant shall attorn to the ground lessor. Tenant agrees to execute any documents required to effectuate such subordination or to make this Lease prior to the lien of any mortgage, deed of trust or ground lease, as the case may he, or to evidence such attornment. Any such document of attornment shall also provide that the successor shall not disturb Tenant in its use of the Premises in accordance with this Lease.

19. Attorneys’ Fees.

In the event legal action is initiated by either party, the prevailing party shall be entitled to recover all costs and expenses incurred in such action, including, without limitation, reasonable attorneys’ fees and costs, including attorneys’ fees incurred at trial and on appeal, if any.

20. Notices.

All notices, consents, demands, and other communications from one party to the other given pursuant to the terms of this Lease hall be in writing and shall be personally delivered, delivered by courier service, sent via facsimile (confirmation receipt required), or deposited in the United States mail, certified or registered, postage prepaid, and addressed as follows: To Tenant at the address specified in the Basic Lease Information or to such other place as Tenant may from time to time designate in a notice to Landlord; to Landlord at the address specified in the Basic Lease Information, or to such other place and to such other parties as Landlord may from time to time designate n a notice to Tenant. All notices shall be effective upon delivery or refusal of delivery.

21. General Provisions.

(a) This Lease shall be governed by and construed in accordance with the internal laws of the State of California, notwithstanding any choice of law statutes, regulations, provisions or requirements to the contrary.

(b) The invalidity of any provision of this Lease, as determined by a court of competent jurisdiction, shall in no way affect the validity of any other provision hereof.

(c) This Lease including attached Exhibits, Addenda, and Basic Lease Information contains all agreements and understandings of the parties and supersedes and

cancels any and all prior or contemporaneous written or oral agreements, instruments, understandings, and communications of the parties with respect to the subject matter herein. This Lease, including the attached Exhibits, Addenda, and Basic Lease Information, may be modified only in a writing signed by each of the parties.

(d) No waiver of any provision hereof by either party shall be deemed by the other party to be a waiver of any other provision, or of any subsequent breach of the same provision. Landlord’s or Tenant’s consent to or approval of, any act shall not be deemed to render unnecessary the obtaining of Landlords or Tenant’s consent to, or approval of, any subsequent act by the other party.

(e) If Tenant remains in possession, with the expressed consent of Landlord, of all or any part of the Premises after the expiration of the Term, such tenancy shall be from month to month only, and not a renewal hereof or an extension for any further term, and in such case, Rent shall be payable in the amount of the last month’s Base Rent and all other charges under the Lease and such month-to-month tenancy shall be subject to every other term, covenant and agreement contained herein.

(f) Subject to the provisions of this Lease restricting assignment or subletting by Tenant, this Lease shall bind the parties, their personal representatives, successors, and assigns.

(g) Upon reasonable prior notice to Tenant (which notice shall not be required in the event of an emergency), Landlord and Landlord’s representatives and agents shall have the right to enter the Premises during regular business hours for the purpose of inspecting the same, showing the same to prospective purchasers or lenders, and making such alterations, repairs, improvements, or additions to the Premises, the Building or the Common Areas as Landlord may deem necessary or desirable. Landlord may at any time during the last one hundred twenty (120) days of the Term place on or about the Premises any ordinary “For Lease” sign. Landlord may at any time place on or about the Premises any ordinary “For Sale” sign.

(h) The voluntary or other surrender of this Lease by Tenant, the mutual cancellation thereof or the termination of this Lease by Landlord as a result of Tenant’s default shall, at the option of Landlord, terminate all or any existing subtenancies or may, at the option of Landlord, operate as an assignment to Landlord of any or all of such subtenancies.

(i) If Tenant is a corporation, limited liability company or partnership, each individual executing this Lease on behalf of Tenant represents and wan^-ants that he is duly authorized to execute and deliver this Lease on behalf of the corporation, company or partnership in accordance with, where applicable, a duly adopted resolution of the board of directors of the corporation, the vote of the members of the limited liability company or the vote of the partners within the partnership, and that this Lease is binding upon the corporation, company or partnership in accordance with its respective articles of incorporation and bylaws, operating agreement or partnership agreement.

(j) Time is expressly declared to be of the essence of this Lease and of each and every covenant, term, condition, and provision hereof, except as to the conditions relating to the delivery of possession of the Premises to Tenant.

(k) If there is more than one party comprising Tenant, the obligations imposed on Tenant shall be joint and several.

(l) The language in all parts of this Lease shall be in all cases construed as a whole according to its fair meaning and not strictly for nor against either Landlord or Tenant.

(m) As used in this Lease and whenever required by the context thereof, each number, both singular and plural, shall include all numbers and in each gender shall include all genders, Landlord and Tenant, as used in this Lease or in any other instrument referred to in or made a part of this Lease, shall likewise include both the singular and the plural, a corporation, limited liability company, partnership, individual or person acting in any fiduciary capacity as executor, administrator, trustee or in any other representative capacity.

(n) The Exhibits and Addendum, if any, specified in the Basic Lease Information are attached to this Lease and by this reference made a part hereof.

22. Force Majeure.

Any delay in construction, repairs, or rebuilding any building, improvement or other structure herein shall be excused and the time limit extended to the extent that the delay is occasioned by reason of acts of God, labor troubles, laws or regulations of general applicability, acts of Tenant ~~or Tenant Delays (as the term is defined in the Work Letter Agreement attached hereto as Exhibit B)~~, or other occurrences beyond the reasonable control of Landlord. Accordingly, Landlord’s obligation to perform shall be excused for the period of the delay and the period for performance shall be extended for a period equal to the period of such delay.

23. Broker’s Fee.

Each party represents that it has not had dealings with any real estate broker, finder, or other person, with respect to this Lease in any manner, except the brokerage firm(s) specified in the Basic Lease Information. Each party shall hold harmless the other party from all damages resulting from any claim that may be asserted against the other party by any broker, finder, or other person with whom the other party has or purportedly has dealt. Landlord shall pay any commissions or fees that are payable to the broker or finder specified in the Basic Lease Information, with respect to this Lease in accordance with the provisions of a separate commission contract.

24. Financial Statement.

It is acknowledged by all parties hereto that the attached financial declaration of Tenant is incorporated as a part of this Lease as Exhibit E, that the information contained therein is true and correct in all material respects, and that the accuracy of the information is a significant fact upon which Landlord has relied in the granting of this Lease.

IN WITNESS WHEREOF, the parties have executed this Lease on the date first mentioned above

TENANT:

LANDLORD:

Turin Networks, Inc.,

a California corporation

G & W/Copley Redwood Business Park, L.P.

a limited partnership

By:

/s/ John Webley

By:

G & W Management Co.

Its: Manager

Print Name:

John Webley

By:

/s/ William C. White

Its:

President and CEO

William C. White, President

G & W Management Co.

By:

/s/ Matthew T. White

By:

Matthew T. White

Chief Financial Officer

G & W Management Co.

Print Name:

Its:

EXHIBIT A

FLOOR PLAN

EXHIBIT A-1

SITE PLAN

ADDENDUM NO. 1

1.	RENTAL RATE:

The rental rate will be as follows:


LEASE YEAR	OCCUPY SQ. FT.	PAY ON SQ. FT.	RENT/ SQ. FT./MO	TOTAL MONTHLY BASE RENT
1 (Mos. 1-3)	25,000	-0-	Free	Free
1 (Mos. 412)	25,000	10,000	$1.18	$11,800
2	25,000	20,000	$1.41	$28,200
3	31,010	31,010	$1.47	$45,585
4	31,010	31,010	$1.52	$47,136
5	31,010	31,010	$1.60	$49,616
6	31,010	31,010	$1.65	$51,167
7	31,010	31,010	$1.67	$51,787

2.	OCCUPANCY:

Tenant shall occupy approximately 25,000 square feet for Lease Years 1 and 2. Thereafter, Tenant shall occupy the entire building (31,010 sq ft.) for the balance of the Lease Term.

3.	TENANT IMPROVEMENTS:

Landlord offers this space on an “as-is” basis, except Landlord shall demise the space in order to separate the Premises from the existing Tenant.

All existing furniture and equipment is included as part of the tenant improvements.

4.	WARRANT AGREEMENT:

As additional consideration for Landlord entering into the Lease with Tenant (who, by the self-description and admission of Tenant is a “start-up company with no financial or credit history”) and undertaking the substantial risks and undue potential liabilities associated therewith (including the potential for, and greater than average chance of, loss of tenant improvement costs and expenses, leasing commissions and rent), Tenant has granted to Landlord a Warrant to purchase 147,348 shares of Series B stock of Tenant at $1.018/share. The Warrant may be exercisable at Landlord’s option in whole or in part from time to time until the expiration of the Warrant on the seventh anniversary of the execution of this Lease. Landlord and Tenant agree to execute a Warrant Agreement within six (6) months of the date of execution of this Lease. The Warrant Agreement shall indicate that the Series B stock issuable to Landlord upon exercise of the Warrant

shall be subject to the same terms and conditions as the Series B stock held by other owners of such stock.

Landlord and Tenant acknowledge and agree that the Warrant does not, and shall not, constitute Rent (or any type, form or component thereof) or any part or portion of the Security Deposit. The Warrants have been earned (and all right, title and interest of Landlord therein has accrued and vested without qualification or limitation) immediately upon the execution of the Lease by Landlord (including, among other things, due to the fact that Landlord will immediately incur costs and expenses, and forego alternative opportunities and income, due to the execution of the Lease by landlord and the commencement of the performance of the obligations of Landlord thereunder for the benefit of Tenant).

In addition, Landlord shall own and otherwise have the right to exercise the Warrant in accordance with the Warrant without qualification or limitation (and otherwise possibly benefit therefrom) in accordance therewith whether or not Tenant remains as a tenant in the Building or otherwise occupies the same and whether or not Tenant is in default under the Lease.

EXHIBIT C

RULES AND REGULATIONS

It is further agreed that the following Rules and Regulations shall be and are hereby made a part of this Lease, and Tenant agrees that Tenant’s employees and agents, or any others permitted by Tenant to occupy or enter the Premises, will at all times abide by said Rules and Regulations, unless otherwise specified or provided for in the Lease, to wit:

1. The driveways, entrances and exits to the Property, sidewalks, passages, building entries, lobbies, corridors, stairways, and elevators of the Building shall not be obstructed by Tenant, or Tenant’s agents or employees, or used for any purpose other than ingress and egress to and from the Premises. Tenant or Tenant’s agents or employees shall not loiter on the lawn areas or other common areas of the Property.

(a) Furniture, freight equipment and supplies will be moved in or out of the Building only through the rear service entrances or other entrances designated by Landlord and then only during such hours and in such manner as may be reasonably prescribed by Landlord. Tenant shall cause its movers to use only the loading facilities, and entrances designated by Landlord. In the event Tenant’s movers damage any part of the Building or Property, Tenant shall forthwith pay to Landlord the amount required to repair said damage.

(b) No safe or article, the weight of which may in the opinion of Landlord constitute a hazard to or damage to the Building or the Building’s equipment, shall be moved into the Premises without Landlord’s prior written approval, but such consent or approval shall not be unreasonably withheld, conditioned or delayed. Landlord and Tenant shall mutually agree to the location of such articles in the Premises. All damage done to the Property, Building or Premises by putting in, taking out or maintaining extra heavy equipment shall be repaired at the expense of Tenant.

(c) Landlord reserves the right to close and keep locked any and all entrances and exits of the Building and Property and gates or doors closing the parking areas thereof during such hours as Landlord may deem advisable for the adequate protection of the Property and all tenants therein.

2. Except as otherwise provided for in the Lease, no sign, advertisement or notice shall be inscribed, painted or affixed on any part of the inside or outside of the Building unless of such color, size and style and in such place upon or in the Building as shall be first approved in writing by Landlord. No furniture or other materials shall be placed in front of the Building or in any lobby or corridor, without the prior written consent of Landlord. Landlord shall have the right to remove all non permitted signs and furniture, without notice to Tenant.

3. Tenant shall not employ any person or persons other than the janitor or cleaning contractor of Landlord for the purpose of cleaning or taking care of the Premises without the prior written consent of Landlord, which shall not be unreasonably withheld, conditioned or delayed. Except as otherwise provided in the Lease, Landlord shall in no way be responsible to Tenant for any loss of property from the Premises, however occurring. The janitor of the

Building may at all times keep a pass key, and other agents of Landlord shall at all times be allowed admittance to the Premises in accordance with the provisions set forth in the Lease.

4. Water closets and other water fixtures shall not be used for any purpose other than that for which the same are intended, and any damage resulting to the same from misuse on the part of Tenant or Tenant’s agents or employees, shall be paid for by Tenant. No person shall waste water by tying back or wedging the faucets or in any other manner.

5. No animals except seeing-eye dogs or other animals necessary to the functioning of handicapped personnel shall be allowed on the lawns or sidewalks or in the offices, halls, and corridors of the Building.

6. No persons shall disturb the occupants of this or adjoining buildings or premises by the use of any radio, sound equipment or musical instrument or by the making of loud or improper noises, nor interfere in any way with the other tenants or those having business with them. Should sound mitigation measures be required due to sounds originating in the Premises, the costs of such measures shall be paid for by Tenant.

7. Bicycles or other vehicles, other than wheel chairs, shall not be permitted in the offices, halls, corridors and lobbies in the Building nor shall any obstruction of sidewalks or entrances of the Building by such be permitted.

8. Tenant shall not allow anything to be placed on the outside of the Building, nor shall anything be thrown by Tenant or Tenant’s agents or employees, out of the windows or doors, or down the corridors, ventilation ducts or shafts of the Building. Tenant, except in case of fire or other emergency, shall not open any outside window.

9. No awnings shall be placed over any window or entrance.

10. All garbage, including wet garbage, refuse or trash shall be placed by Tenant in the receptacles designated by Landlord for that purpose. Tenant shall not burn any trash or garbage at any time in or about the leased Premises or any area of the Property. Tenant and Tenant’s officers, agents, and employees shall not throw cigar or cigarette butts or other substances or litter of any kind in or about the Property.

11. Tenant shall not install or operate any steam or gas engine or boiler, or other machinery or carry on any mechanical business, other than such mechanical business which normally is identified with general use in the Premises. Explosives or other articles of an extra hazardous nature shall not be brought into the Building complex.

12. Any painting or decorating as may be agreed to be done by and at the expense of Landlord shall be done during regular weekday working hours. Should Tenant desire such work on Saturdays, Sundays, holidays or outside of regular working hours, Tenant shall pay for the extra cost thereof, if any.

13. Tenant and Tenant’s agents and employees shall park their vehicles in areas designated from time-to-lime for employee parking.

14. Tenant shall not mark, drive nails, screw, bore, or drill into, paint or in any way deface the common area walls, exterior walls, roof, foundations, bearing walls, or pillars without the prior written consent of Landlord. The expense of repairing any breakage, stoppage or damage resulting from a violation of this rule shall be borne by Tenant,

15. No waiver of any rule or regulation by Landlord shall be effective unless expressed in writing and signed by Landlord or his authorized agent.

16. Tenant shall be responsible for cleaning up any ash blowing around their facility that may have been left by their customers or employees.

17. In the event of any conflict between these rules and regulations or any further or modified rules and regulations from time to time issued by Landlord, and the lease provisions, the lease provisions shall govern and control.

18. Landlord reserves the right at any time to change or rescind any one or more of these rules and regulations, or to make such other and further reasonable rules and regulations as in Landlord’s judgment may from time to time be necessary for the management, safety, care and cleanliness of the Premises, and for the preservation of good order therein, as well as for the convenience of other tenants of the Property. Landlord shall not be responsible to Tenant or to any other person for the non-observance or violation of the rules and regulations by any other tenant or person. Tenant shall be deemed to have read these rules and to have agreed to abide by them as a condition to its occupancy of the space herein leased, and Tenant shall abide by any additional rules and regulations which are ordered or requested by Landlord or by any governmental authority.

EXHIBIT D


Materials		Quantities

Tenant agrees that:

(a) None of the above materials will be used, held or stored on or about the Premises in quantities of greater than one (1) gallon each, or twenty (20) pounds each in the case of non-liquid materials; provided, however, that used or excess materials may be stored together in a fifty-five (55) gallon drum while awaiting transport off the Premises for disposal.

(b) The materials listed on Page 1 to this Exhibit D shall be stored in fire-proof lockers on the Premises in accordance with applicable laws, regulations and ordinances. No storage outside the Premises will be permitted.

(c) No used or excess materials will be disposed of in, on, under or about the Premises or Redwood Business Park. Instead, such materials shall be transported off-site, no less often than every one hundred eighty (180) days, by a duty licensed hazardous materials transporter. While waiting for transport off-site for disposal, used or excess materials shall be stored in a safe location on the Premises in secure containers which are appropriately labeled.

(d) No materials listed on Page 1 to this Exhibit D, regardless of whether they are water-soluable, shall be flushed down any sanitary sewer drains on or about the Premises or Redwood Business Park.

EXHIBIT E

FINANCIAL STATEMENT

(TO BE PROVIDED BY TENANT)

AMENDMENT TO LEASE

THIS AMENDMENT TO LEASE (this “Amendment”) dated as of August 22, 2000 is entered into between G&W/COPLEY REDWOOD BUSINESS PARK, L.P., a California limited partnership (“Landlord”), and TURIN NETWORKS, INC., a California corporation (“Tenant”).

THE PARTIES ENTER INTO THIS AMENDMENT based upon the following facts, understandings and intentions:

A. Landlord and Tenant previously entered into that certain Full Service Lease (the “Lease”) dated as of October 4, 1999, pursuant to which Landlord leased to Tenant approximately 31,010 rentable square feet of space (the “Premises”) within the building (the “Building”) known as 1415 N. McDowell Blvd. in Petaluma, California, as more particularly described in the Lease. The capitalized terms used in this Amendment and not otherwise defined herein shall have the same meanings given to such terms in the Lease.

B. Landlord and Tenant now desire to amend the Lease as provided herein.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants and promises of the parties, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

1. Commencement Date. The Commencement Date is October 4, 1999.

2. Occupancy. Paragraph 2 of Addendum No. 1 to the Lease is deleted in its entirety.

3. Base Rent. Landlord and Tenant originally contemplated that Tenant would take possession of a portion of the Premises consisting of approximately 25,000 rentable square feet on the Commencement Date and approximately 6,010 of additional rentable square feet of space on the first day of the third year of the Term. However, Tenant has expanded into the Premises sooner than anticipated and now occupies the entire Premises. As a result thereof, effective as of August 1, 2000, the Base Rent for the Premises shall be as follows:


PERIOD		MONTHLY BASE RENT
8/01/00 -0/31/00		$ 18,891.80
11/01/00 -10/31/01		$ 36,674.10
11/01/01 -10/31/02		$ 45,584.70
11/01/02 -10/31/03		$ 47,135.20
11/01/03 -10/31/04		$ 49,616.00
11/01/04 - 10/31/05		$ 51,166.50
11/01/05 -10/31/06		$ 51.786.70

4. Tenant’s Percentage Share. Effective as of August 1, 2000, Paragraphs 7.a and 7.b of the Basic Lease Information are deleted and the following is substituted in place thereof:


b. Premises v. Building RSF Ratio:		31,010/31,010 = 100%

c. Premises v. Project R.SF Ratio:		31,010/72,290 = 43%

5. Entire Agreement. This Amendment represents the entire understanding between Landlord and Tenant concerning the subject matter hereof, and there are no understandings or agreements between them relating to the Lease or the Premises not set forth in writing and signed by the parties hereto. No party hereto has relied upon any representation, warranty or understanding not set forth herein, either oral or written, as an inducement to enter into this Amendment.

6. Continuing Obligations. Except as expressly set forth to the contrary in this Amendment, the Lease remains unmodified and in full force and effect. To the extent of any conflict between the terms of this Amendment and the terms of the Lease, the terms of this Amendment shall control.

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

“Landlord”

“Tenant”

G & W/COPLEY REDWOOD BUSINESS

PARK, L.P., a California limited partnership

TURIN NETWORKS, INC.,

a California corporation

By:

G & W/McDowell Partners, LLC,

By:

/s/ Karen L. Godfrey

a California limited liability company,

Its: General Partner

Print Name:

Karen L. Godfrey

By:

G & W Ventures, LLC,

a California limited liability company,

Its: Managing Member

Its:

VP & CFO

By:

/s/ William C. White

By:

/s/ John W. Webley

William C. White, Manager

Print Name:

John W. Webley

Its:

President & CEO

SECOND AMENDMENT TO LEASE

THIS SECOND AMENDMENT TO LEASE (this “Amendment”) dated as of December 14, 2004, is entered into between REDWOOD BUSINESS PARK I, LLC, a Delaware limited liability company (“Landlord”), and TURIN NETWORKS, INC., a California corporation (“Tenant”).

THE PARTIES ENTER INTO THIS AMENDMENT based upon the following facts, understandings and intentions:

A. Landlord and Tenant previously entered into that certain Redwood Business Park Full Service Lease dated as of October 4, 1999, as amended by that certain Amendment to Lease dated as of August 22, 2000 (as amended, the “Lease”). Pursuant to the Lease, Landlord leases to Tenant approximately 31,010 rentable square feet of space (the “Premises”) in the building located at 1415 N. McDowell Blvd. in Petaluma, California, as more particularly described therein. The capitalized terms used in this Amendment and not otherwise defined herein shall have the same meaning given to such terms in the Lease.

B. Landlord and Tenant now desire to amend the Lease to, among other things, extend the Term of the Lease as more particularly provided herein.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants and promises of the parties, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

1. Term. The Term of the Lease is extended until November 30, 2010.

2. Base Rent. Effective as of the date of this Lease, the Base Rent shall be adjusted as follows:


Period		Monthly Full Service Rent

December 1, 2004 through November 30, 2005		$41,863.50
December 1, 2005 through November 30, 2006		$43,119.41
December 1, 2006 through November 30, 2007		$44,412.99
December 1, 2007 through November 30, 2008		$45,745.38
December 1, 2008 through November 30, 2009		$47,117.74
December 1, 2009 through November 30, 2010		$48,531.27

Tenant shall pay to Landlord the Base Rent, in advance and without offset, on or before the first day of each and every successive calendar month during the Term in accordance with the terms and conditions of the Lease.

3. Conditions Precedent. This Amendment and the obligations of Landlord and Tenant hereunder are expressly conditioned upon and subject to Redwood Business Park II, LLC, a Delaware limited liability company (“RBP II”), and Tenant entering into that certain Termination Agreement (the “Termination Agreement”), pursuant to which RBP II and Tenant are terminating that certain Redwood Business Park Full Service Lease dated September 26, 2000, with respect to Tenant’s lease of space in that certain building located at 1425 N. McDowell Blvd. in Petaluma, California, as more particularly described therein. If for any reason Landlord and Tenant fail to enter into the Termination Agreement within ten (10) days after the date of this Amendment, this Amendment shall terminate and be of no further force or effect.

4. Entire Agreement. This Amendment represents the entire understanding between Landlord and Tenant concerning the subject matter hereof, and there are no understandings or agreements between them relating to the Lease or the Premises not set forth in writing and signed by the parties hereto. No party hereto has relied upon any representation, warranty or understanding not set forth herein, either oral or written, as an inducement to enter into this Amendment

5. Continuing Obligations. Except as expressly set forth to the contrary in this Amendment, the Lease remains unmodified and in full force and effect. To the extent of any conflict between the terms of this Amendment and the terms of the Lease the terms of this Amendment shall control.

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

“Landlord”

“Tenant”

REDWOOD BUSINESS PARK I, LLC a Delaware limited liability partnership

TURIN NETWORKS, INC.,

a Delaware corporation

By:

G & W/Copley Redwood Business Park, L.P., a California limited partnership

By:

/s/ John Webley

By:

G & W/McDowell Partners, LLC,

Name:

John Webley

a California limited liability company,

its General Partner

Its:

Chairman

By:

G & W Ventures, LLC,

By:

/s/ Ronald Wynn

Managing Member

Name:

Ronald Wynn

By:

/s/ Matthew T. White

Its:

Vice President

Matthew T. White, Manager