Facility Lease

1. PARTIES: THIS LEASE, is entered into on this _____ day of June, 1990, between SOBRATO INTERESTS, a California Limited Partnership, and INTEGRATED INFORMATION TECHNOLOGY, INC., a California Corporation, hereinafter called respectively Landlord and Tenant.



2. PREMISES: Landlord hereby leases to Tenant, and Tenant hires from Landlord those certain Premises with the appurtenances, situated in the City of Santa Clara, County of Santa Clara, State of California, and more particularly described as follows, to-wit:



A part of that certain real property commonly known and

designated 2441 Mission College Boulevard of 100,272 square

feet ("Building") consisting of a part of the first floor

totaling 42,450 square feet as outlined in red on Exhibit "A";

in a complex comprised of four buildings (including the

Building) totaling 419,357 square feet ("Project").



3. USE: Tenant shall use the Premises only for the following purposes and shall not change the use of the Premises without the prior written consent of Landlord: Office, research, development, testing, light manufacturing, ancillary warehouse, and related legal uses.



4. TERM AND RENTAL: The term shall be for eighty-four (84) months, commencing, as adjusted pursuant to paragraph 7, on the first day of October, 1990 ("Commencement Date"), and ending as adjusted pursuant to Paragraph 7 on the thirtieth day of September 1997 at the effective rent of $0.94 per square foot for a total rent or sum of Three Million Three Hundred Fifty-one Thousand Eight Hundred Fifty-Two and No/100 Dollars ($3,351,852.00), payable, without deduction or offset, in monthly installments of:



10/1/90-9/30/91 $16,980.00 per month $203,760.00 $0.40/sq.ft.

10/1/91-9/20/92 $35,233.50 per month $422,802.00 $0.83/sq.ft.

10/1/92-9/30/93 $40,327.50 per month $483,930.00 $0.95/sq.ft.

10/1/93-9/30/94 $42,874.50 per month $514,494.00 $1.01/sq.ft.

10/1/94-9/30/95 $45,421.50 per month $545,059.00 $1.07/sq.ft.

10/1/95-9/30/96 $47,968.40 per month $575,622.00 $1.13/sq.ft.

10/1/96-9/30/97 $50,515.50 per month $606,196.00 $1.19/sq.ft.



due on or before the full day of each calendar month during the term hereof. Said rental shall be paid in lawful money of the United States of America, without offset or deduction, and shall be paid to Landlord at such place or places as may be designated from time to time by Landlord. Rent for any period less than a calendar month shall be a pro rata portion of the monthly installment.



Concurrently with Tenant's execution of this Lease, Tenant shall pay to Landlord the sum of Sixteen Thousand Nine Hundred Eighty and No/100 Dollars ($16,980.00) as prepaid rent for the first month of the term. 4.(a) Tenant shall be allowed to use the Premises prior to October 1, 1990, at the rate to cover the utility charges only.



5. SECURITY DEPOSIT: Concurrently with Tenant's execution of this Lease, Tenant his deposited with Landlord the sum of Thirty-Five Thousand Two Hundred Thirty-Three and 50/100 Dollars ($35,233.50) as a security deposit. If Tenant defaults with respect to any provisions of this lease, including but not limited to the provisions relating to payment of rent or other charges, Landlord may, to the extent reasonably necessary to remedy Tenant's default, use all or any part of said deposit for the payment of rent or other charges in default or the payment of any other payment of any other amount which Landlord may spend or become obligated to spend by reason of Tenant's default or to compensate Landlord for any other loss or damage which Landlord may suffer by reason of Tenant's default. If any portion of said deposit is so used or applied, Tenant shall, within ten (10) days after written demand therefor, deposit cash with Landlord in an amount sufficient to restore said deposit to the full amount hereinabove stated and shall pay to Landlord such other sums as shall be necessary to reimburse Landlord for any sums paid by Landlord. Said deposit shall be returned to Tenant within thirty (30) days after the expiration of the term hereof less any amount deducted in accordance with this paragraph, together with Landlord's written notice itemizing the amounts and purposes for such retention. In the event of termination of Landlord's interest in this Lease, Landlord shall transfer said deposit to Landlord's successor in interest.



In addition to the cash security deposit provided above, Tenant shall provide Landlord a lease guarantee ("Lease Guarantee"), in the initial amount of Five Hundred Thousand and No/100 Dollars ($500,000.00). The Lease Guarantee shall be delivered to Landlord promptly after Lease execution.



Upon the occurrence of any default by Tenant as defined in paragraph 24 of this Lease, Landlord shall be entitled to draw upon the Lease Guarantee to the extent necessary to cure such default. The Lease Guarantee shall be irrevocable, and shall be conditioned solely upon Landlord's certifying to the issuer thereof that a default exists under this Lease. Such Lease Guarantee shall provide for a schedule of reduction in the following amounts:



10/1/91-9/30/92 $425,000.00

10/1/92-9/30/93 $350,000.00

10/1/93-9/30/94 $275,000.00

10/1/94-9/30/95 $200,000.00

10/1/95-9/30/96 $125,000.00

10/1/96-9/30/97 $ 50,000.00



6. LATE CHARGES: Tenant hereby acknowledges that late payment by Tenant to Landlord of rent and other sums due hereunder will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain. Such costs include, but are not limited to, administrative, processing, accounting charges, and late charges, which may be imposed on Landlord by the terms of any contract, revolving credit, mortgage or trust deed covering the Premises. Accordingly, if any installment of rent or any other sum due from Tenant shall not be received by Landlord or Landlord's designee within ten (10) days after such amount shall be due,



Tenant shall pay to Landlord a late charge equal to five (5%) percent of such overdue amount which shall be due and payable with the payment then delinquent. The parties hereby 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. In the event that a late charge is payable hereunder, whether or not collected, for three (3) consecutive installments of rent, then rent shall automatically become due and payable quarterly in advance, rather than monthly, notwithstanding any provision of this Lease to the contrary.



IT IS FURTHER MUTUALLY AGREED BETWEEN THE PARTIES AS FOLLOWS:



7. CONSTRUCTION AND POSSESSION: The Tenant Improvements shall be constructed by independent contractors to be employed by and under the supervision of Landlord, as general contractor, in accordance with plans prepared by Dennis Kobza and Associates, to be attached as Exhibit "B" ("Working Drawings"). Landlord shall construct the Tenant Improvements in accordance with all existing applicable municipal, local, state and federal laws, statutes, rules, regulations and ordinances.



Landlord shall be responsible for and shall pay the cost of the Tenant Improvements up to the amount of Four Hundred Eighty-Eight Thousand Four Hundred Five and No/100 Dollars ($488,405.00) ("Tenant Improvement Allowance"). In the event the cost of Tenant Improvements is less than the Tenant Improvement Allowance, the monthly rental under the f case shall be reduced at the rate of Fifteen Dollars ($15.00) per month for each One Thousand Dollars ($1,000.00) of the Tenant Improvement Allowance not used. The cost of the Tenant Improvements including fit-up of special areas shall include a fee of eight and one half percent (8.5%) to cover all Landlord's Costs and Expenses including but riot limited to: a field superintendent temporary on-site facilities; home office administration, supervision, and coordination; financing fees, and construction interest Landlord hereby guarantees that, under no circumstance, will the expense for Tenant Improvements exceed the said allowance without Tenant's prior approval Tenant shall have the right to approve the budget of the Tenant Improvements prior to the Landlord's contracting for the improvements. If the cost of the Tenant improvements exceed the Tenant Improvement Allowance by virtue of Tenant's written approval, Tenant shall pay for such excess costs in cash within thirty (30) days after Landlord has provided Tenant with evidence that Landlord's progress payments to subcontractors has exceeded said Tenant Improvement budget. All costs for Tenant Improvements shall be fully documented to and verified by Tenant. Anything to the contrary in the foregoing notwithstanding, Landlord shall provide Tenant with a list of contractors to whom Landlord proposes to let the contract for the Tenant Improvements to be constructed by Landlord hereunder. Tenant shall promptly notify Landlord of any reasonable objections to the use of any such contractor and shall also provide Landlord with the name of any contractor Tenant desires to have an opportunity to bid on the contract to construct the Tenant Improvements. Landlord will consult with Tenant in the final selection of a contractor and the letting of any contract to construct the Tenant Improvements. Tenant shall not unreasonably object to the selection of a contractor chosen by Landlord or the terms of the contract for the construction of the Tenant Improvements agreed to by Landlord.



Tenant, at Tenants expense, to supply Landlord with preliminary improvement information ("Preliminary Information") including one line drawings of Tenants wall layout electrical and air conditioning requirements by July 7, 1990. Based on this information, Landlord shall prepare the final working drawings ("Working Drawings") which shall be approved by both Landlord and Tenant In the event (i) Tenant fails to provide the Preliminary Information by July 7, 1990 or, (ii) Tenant makes any changes to the Working Drawings which cause Landlord's construction schedule to be delayed, the Commencement Date shall occur one (1) day in advance of Substantial Completion as defined below for each day of delay. If the delay is not caused by Tenant and is to be more than three (3) months after the originally scheduled date, Landlord shall notify the Tenant not later than the original schedule date and the Tenant shall have the right to terminate this Lease at Tenants option. In all events, Landlord shall provide Tenant will a minimum of two (2) weeks prior written notice of the Commencement Date of the Lease.



If Landlord, for any reason whatsoever, cannot deliver possession of the said Premises to Tenant at the commencement of the said term, as hereinbefore specified,; and if Tenant has not terminated this Lease, Tenant shall be entitled to one(1) free day of rent for every day of delay. In that event the Commencement Date and termination date of the Lease and all other dates affected thereby in that event the Commencement Date and termination date of the Lease and all other dates affected thereby in that event the Commencement Date and termination date of the Lease and all other dates affected thereby shall be revised to conform to the date of Landlord's delivery of possession. The term of the Lease shall not commence until substantial completion of the Premises occurs. "Substantial Completion" shall mean that: (i) all necessary governmental approvals, permits, consents, and certificates have been obtained by or for Landlord for the lawful construction by Landlord, and occupancy by Tenant, or said Premises, excluding work attributable to any special fit-up requested or required by Tenant, (ii) all of the Premises interior fully meet all of the Working Drawings, excluding Tenant's special fit-up, (iii) all of the Premises exterior substantially meets the applicable Working Drawings, including paved parking areas, and (iv) said interior is in a "broom clean" finished condition. If necessary, Landlord reserves the right to post a bond for the uncompleted portion of the landscaping.



8. ACCEPTANCE OF PREMISES AND COVENANTS TO SURRENDER: By entry hereunder, Tenant accepts the Premises as being in good and sanitary order, condition and repair and accepts the Building and the other improvements in their present condition, except for a"punch list" delivered by Tenant to Landlord within five (5) business days after Tenant's entry onto the Premises. The Tenant agrees on the last day of the term hereof, or on the sooner termination of this Lease, to surrender the Premises unto Landlord in good condition and repair, reasonable wear and tear excepted. "Good condition" shall mean that the interior walls of all office and warehouse areas, the floors of all office and warehouse areas, all suspended ceilings and any carpeting will be cleaned to the same condition as existed at the commencement of the Lease, normal wear and tear excepted. Tenant shall ascertain from Landlord within thirty (30) days before the end of the term of this Lease whether Landlord desires to have the Premises or any part or parts thereof restored to their condition as of the commencement of this Lease or to cause Tenant to surrender all alterations, additions, and improvements in place to Landlord. If Landlord shall so desire, then Tenant shall remove such alterations, additions, and improvements as Landlord may require and shall repair and



restore said Premises or such part or parts thereof before the termination of this Lease at Tenants sole cost and expense. Tenant on or before the end of the term or sooner termination of this Lease, shall remove all his or its personal property and trade fixtures from the Premises, and all property not so removed shall be deemed to be abandoned by Tenant. If the Premises are not surrendered at the end of the term or sooner termination of this Lease, Tenant shall indemnify Landlord against loss or liability resulting from delay by Tenant in so surrendering the Premises including, without limitation, any claims made by any succeeding tenant founded on such delay.



9. USES PROHIBITED: Tenant shall not commit or suffer to be committed any waste upon the said Premises, or any nuisance, or other act or thing which may disturb the quiet enjoyment of any other tenant in or around the Buildings in which the Premises may be located or allow any sale by auction upon the Premises, or allow the Premises to be used for any unlawful or objectionable purpose, or place any loads upon the floor, walls, or ceiling which endanger the structure, or use any machinery or apparatus which will in any abnormal manner vibrate or shake the Premises or the Building of which it is a part, or place any harmful liquids, waste materials, or hazardous materials in the drainage system of, or upon or in the soils surrounding the Building. No materials, supplies, equipment, finished products or semi-finished products, raw materials or articles of any nature or any waste materials, refuse, scrap or debris shall be stored upon or permitted to remain on any portion of the Premises outside of the Building proper without Landlord's prior approval, which approval may be withheld in its sole discretion.



10. ALTERATIONS AND ADDITIONS: Tenant shall not make, or suffer to be made, any major alteration or addition to the said Premises, or any part thereof, without the written consent of Landlord first had and obtained, which consent will not be unreasonably withheld or delayed, based upon Tenants delivering to Landlord the proposed architectural and structural plans for all such alterations; any addition or alteration to the said Premises except movable furniture and trade fixtures, shall become at once a part of the realty and belong to Landlord unless otherwise agreed between Landlord and Tenant. Alterations and additions which are not to be deemed as trade fixtures shall include heating, lighting, electrical systems, air conditioning, partitioning, carpeting, or any other installation which has become an integral part of the Premises. After having obtained Landlord's consent, Tenant agrees that it will not proceed to make such alterations or additions, until three (3) days from the receipt of such consent, in order that Landlord may post appropriate notices to avoid any liability to contractors or material suppliers for payment for Tenant's improvements. Tenant will at all times permit such notices to be posted and to remain posted until the completion of work. Tenant acknowledges Landlord's right to and hereby consents to construction of additional Buildings and improvements in the Building, on the Land where the Building is situated, in the Project and on adjacent land owned by Landlord subject; always, to recalculation of Tenants Allocable share of Costs as set forth below. Anything to the contrary in the foregoing notwithstanding, Tenant shall have the right to make improvements or alterations to the Premises upon notice to Landlord if such alterations or improvements do not cause any major alteration to the appearance of the Building or any material alteration in the electrical, heating, air conditioning, ventilation or plumbing systems of the Building and, in any case, cost less than Twenty-Five Thousand and No/100 Dollars ($25,000.00).





11. LANDLORD'S AND TENANT'S OBLIGATIONS REGARDING COMMON AREA COSTS: Tenant agrees to reimburse Landlord for the reasonable expenses resulting from Landlords payment of Common Area Costs as defined in paragraph 1.1(a) incurred by Landlord because the cost is not directly allocable to or payable by a single tenant in the Building or the Project. Tenant agrees to pay Tenants Allocable Share as defined in paragraph 1.1.(b) of the Common Area Costs, as additional rental, within thirty (30) days of written invoice from Landlord.



11.(A) COMMON AREA COSTS: For purposes of calculating Tenants Allocable Share of Building and of Project Costs, the term "Common Area Costs" shall mean all costs and expenses of the nature hereinafter described which am incurred in connection with ownership and operation of the Building or the Project in which the Premises are located, as the case may be not directly allocable to or payable by a single tenant in the Building or the Project, together with such additional facilities as may be determined by Landlord to be reasonably desirable or necessary to the ownership and operation of the Building and/or Project. Common Area Costs shall not include any capital expenditures, except to the extent such expenditures benefit the occupants of the Project, Building, and Tenant during the term of the Lease and are amortized over the useful life of the property acquired or constructed as a result of such expenditure. All costs and expenses shall be determined in accordance with generally accepted accounting principles which shall be consistently applied (with accruals appropriate to Landlord's business), including but not limited to, the following:



(i) Common area utilities, including water and power,

heating, lighting, air-conditioning, ventilating and Building

utilities to the extent not separately metered and are not in

an area separately rented out and are the located only in a

common area;



(ii) All common area maintenance and service

agreements for the Building or the Project and the equipment

therein including, without limitation, common area janitorial

services, alarm and security services, exterior window

cleaning, and maintenance of the sidewalks, landscaping,

waterscape, roof membrane, parking areas, driveways, service

areas, mechanical rooms, elevators, and the building exterior,



(iii) All insurance premiums and costs, including

without limitation, the premiums and cost of fire, casualty

and liability coverage and rental abatement and earthquake (if

commercially available) insurance applicable to the Building

or Project;



(iv) Repairs, replacements and general maintenance

(excluding repairs and general maintenance paid by proceeds of

insurance or by Tenant or other third parties, and repairs or

alterations attributable solely to tenants of the Building or

Project other than Tenant). This also includes the repairs and

maintenance for the area which is common to the Premises and

the floor above the Premises such as roof membrane and

exterior walls, sidewalks, etc.;



(v) All real estate taxes, special assessment service

payments in lieu of taxes, excises, transit charges, housing

fund assessment, levies, fees or charges and including any

substitutes or additions thereto which may occur during the

Term (and



Renewal Terms, if any) of this lease which are assessed, or

imposed by any public authority upon the Building or Project,

the act of entering this Lease, the occupancy by Tenant, the

rent provided for in this Term and including real estate tax

increases due to a sale or transfer of the Building or the

Project, in which the Premises are located, as such taxes are

levied or appear on the City and County tax bills and

assessment rolls. Nothing in the foregoing shall be construed

to require Tenant to pay any taxes or other fees of the sort

usually denominated as general income taxes by any federal,

state, county or city governmental unit.



(vi) At a sum equal to eight and one-half percent

(8.5%) of all the above operating costs to reimburse Landlord

for its supervisory, managerial, administration and collection

services therewith.



This shall be a Net Lease and the Rental shall be paid to Landlord absolutely net of all costs and expenses. The provision for payment of Common Area Costs by mews of periodic payment of Tenants Allocable Share of Building and/or Project Costs are intended to pass on to Tenant and reimburse Landlord for all costs of operating and managing the Building and/or Project.



11.(B) TENANT'S ALLOCABLE SHARE: For purposes of prorating Common Area Costs which Tenant shall pay, Tenant's Allocable Share of Building Costs is computed by multiplying the total Common Area Costs for services shared by the Building by a fraction, the numerator of which is the rentable square footage of the Building (excluding common areas). Tenant's Allocable Share of Project Costs shall be computed on a shared service by service basis, by multiplying the total Common Area Costs for services shared by the Building and one or more buildings in the Project by a fraction, the numerator of which is the rentable square footage of the Buildings in the Project which share the services. It is understood and agreed by Landlord and Tenant that Tenant's Allocable Share of Building Costs is 42.33% and of Project Costs is 10.12%. For all tax-related expenses, tenant's allocable share shall be 17.19% of the Parcel cost.



It is understood and agreed that Tenant's obligation to share in Common Area Costs shall be adjusted to reflect the commencement and termination dates of the Lease Term and are subject to recalculation in the event of expansion of the Building or Project.



12. MAINTENANCE OF PREMISES: Except as provided in paragraph 11 Tenant shall at its sole cost, keep and maintain, repair and replace, said Premises and appurtenances and every part hereof. including but not limited to, exterior walls, roof, glazing, sidewalks, parking plumbing, electrical and HVAC systems excluding those areas that have been designated as Common Areas in Paragraph 11.(a); and all the Tenant Interior Improvements in good and sanitary order, condition, and repair, ordinary wear and tear excepted. Tenant shall provide Landlord with a copy of a service contract between Tenant and a licensed air-conditioning and heating contractor which contract shall provide for maintenance of all air conditioning and heating equipment with reasonable routine intervals at the Premises. Tenant shall pay the cost of all air-conditioning and heating equipment repairs or replacements which are either excluded from such service contract or any existing equipment warranties. Tenant shall be responsible for the preventive maintenance of the



membrane of the roof, which responsibility shall be deemed properly discharged if (i) Tenant contracts with a licensed roof contractor who is reasonably satisfactory to both Tenant and Landlord, at Tenant's sole cost, to inspect the roof membrane at least every six months, with the first inspection due the sixth (6th) month after the Commencement Date, and (ii) Tenant performs, at Tenant's sole cost, all preventive maintenance recommendations made by such contractor within a reasonable time after such recommendations are made. Such preventive maintenance might include acts such as clearing storm gutters and drains, removing debris from the roof membrane, trimming trees overhanging the roof membrane, applying coating materials to seal roof penetrations, repairing blisters and other routine measures. Tenant shall provide to Landlord a copy of such preventive maintenance contract and paid invoices for the recommended work. All vinyl wall surfaces and floor tile are to be maintained in an as good a condition as when Tenant took possession free of holes, gouges, or defacements. Tenant agrees to limit attachments to vinyl wall surfaces exclusively to V-joints. Landlord shall, at Landlords cost and expense, maintain and repair the exterior walls of the Building, the roof structure of the building, the structural components of the Building, except to the extent such repair and maintenance is the responsibility of Tenant under this Lease or some other provision of this Lease may excuse Landlord's performance form such duties on account of casualty or similar cause, and the Common Areas of the complex of which the Building is a part.



13. HAZARD INSURANCE: Tenant shall not use, or permit said Premises, or any part thereof, to be used for any purpose other than that for which the said Premises are hereby leased; and no use shall be made or permitted to be made of the said Premises, nor acts done, which will cause an increase in premiums or a cancellation of any insurance policy covering said Building, or any part thereof, nor shall Tenant sell or permit to be kept, used or sold, in or about said Premises, any article which may be prohibited by the standard form of fire insurance policies. Tenant shall, at its sole cost and expense, comply with any and all requirements, pertaining to said Premises, of any insurance organization or company, necessary for the maintenance of reasonable fire and public liability insurance, covering said Building and appurtenances. The Landlord agrees to purchase and keep in force fire, earthquake (if commercially available and/or required by Landlord's Lender), and extended coverage insurance covering the Premises in amounts not to exceed the actual insurable value of the Building, including the Premises, as determined by Landlord's insurance company's appraisers.



In addition, Tenant agrees to insure its personal property, additions, ...