8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): January 22, 2014

Applied Micro Circuits Corporation

(Exact Name of Registrant as Specified in Charter)

DELAWARE	000-23193	94-2586591
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

215 Moffett Park Drive, Sunnyvale, California 94089

(Address of Principal Executive Offices)

(408) 542-8600

(Registrants telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01. Entry into a Material Definitive Agreement.

On January 22, 2014, Applied Micro Circuits Corporation (the “Company”) entered into an Agreement of Purchase and Sale and Joint Escrow Instructions with RW9 REIT Acquisition, LLC, as purchaser, and First American Title Insurance Company, as escrow agent (the “Purchase Agreement”), pursuant to which the Company has agreed to sell to the purchaser its headquarters building and related parcel of land in Sunnyvale, California, for a purchase price of $40.8 million in cash. The closing of the sale is scheduled to occur on or before March 13, 2014, and is subject to a limited set of closing conditions. In connection with the execution of the Purchase Agreement, the purchaser provided a non-refundable cash deposit of $7.0 million.

Upon the closing of the sale, the Company will enter into a lease (the “Lease”) with Moffett Park Drive Owner, LLC, an affiliate of the purchaser, under which the Company will lease a portion of the space that it currently occupies at the Sunnyvale facility, and will be responsible for monthly rent of $50,000 and a portion of certain utilities, maintenance and repair costs. The lease will expire on August 31, 2015, subject to the Company’s right to terminate early upon at least 120 days’ notice.

The basis for the Company’s decision to sell the building and land comprising its Sunnyvale facilities was three-fold. First, the market value of the property has more than doubled since it was purchased by the Company in 2005, and current market conditions provide an optimal environment in which to monetize the asset. Second, the Company significantly under-utilizes its corporate headquarters building and the surrounding nearly 10 acres of land. Finally, until the Company relocates, it is able to rent the space it currently occupies on favorable terms. As such, management and the Board of Directors determined that this transaction, which further strengthens the Company’s financial flexibility, is in the best interest of the Company.

The foregoing description of the Purchase Agreement and Lease are qualified in their entirety by reference to the full text of the Purchase Agreement and form of Lease, copies of which are filed as exhibits to this report.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information contained in item 1.01 above regarding the Lease is hereby incorporated by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

10.1	Agreement of Purchase and Sale and Joint Escrow Instructions dated January 22, 2014, among the registrant, RW9 REIT Acquisition, LLC, as purchaser, and First American Title Insurance Company, as escrow agent.
10.2	Form of Lease between the registrant and Moffett Park Drive Owner, LLC.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	APPLIED MICRO CIRCUITS CORPORATION
Date: January 22, 2014	By:	/s/ L. William Caraccio
		L.William Caraccio
		Vice President, General Counsel and Secretary

INDEX TO EXHIBITS

10.1	Agreement of Purchase and Sale and Joint Escrow Instructions dated January 22, 2014, among the registrant, RW9 REIT Acquisition, LLC, as purchaser, and First American Title Insurance Company, as escrow agent.
10.2	Form of Lease between the registrant and Moffett Park Drive Owner, LLC.

EX-10.1

Exhibit 10.1

AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS

This Agreement of Purchase and Sale and Joint Escrow Instructions (this “Agreement”) is dated as of January 22, 2014 (the “Effective Date”), and is by and between APPLIED MICRO CIRCUITS CORPORATION, a Delaware corporation (“Seller”), and RW9 REIT ACQUISITION, LLC, a Delaware limited liability company, or its assignee or nominee (“Buyer”), for the purposes of setting forth the agreement of the parties and of instructing FIRST AMERICAN TITLE INSURANCE COMPANY (in such capacity, “Escrow Agent”), with respect to the transactions contemplated by this Agreement.

ARTICLE 1

PURCHASE AND SALE OF PROPERTY

1.1 Sale.

Subject to the terms, covenants and conditions set forth herein, Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller, the following:

(a) that certain parcel of land, consisting of approximately 9.54 acres, located at 215 Moffett Park Drive in the City of Sunnyvale, County of Santa Clara, State of California, more particularly described on Exhibit A attached hereto and made a part hereof, together with all and singular the rights and appurtenances pertaining to such property, including any right, title and interest of Seller in and to all minerals, oil, gas and other hydrocarbon substances thereon, all development rights, air rights, water, water rights and water stock relating thereto, all strips and gores, and all of Seller’s right, title and interest in and to any streets, alleys, easements, rights-of-way, public ways, or other rights appurtenant, adjacent or connected thereto or used in connection therewith (the property described in clause (a) of this Section 1.1 being herein referred to collectively as the “Land”);

(b) the buildings, structures, fixtures and other improvements on the Land, including specifically, without limitation, that certain building located thereon consisting of approximately one hundred fifty-two thousand eight hundred forty-four (152,844) square feet, more or less (the property described in clause (b) of this Section 1.1 being herein referred to collectively as the “Improvements”);

(c) all of Seller’s right, title and interest in and to all personal property now or hereafter owned by Seller and used solely in connection with the maintenance or repair of the Real Property (expressly excluding any personal property used by Seller in the conduct of its business as an occupant of the Real Property as opposed to the maintenance or repair of the Real Property) (collectively, the “Personal Property”);

(d) subject to Section 8.1(a) below, all of Seller’s right, title and interest to the service and maintenance contracts set forth on Exhibit C attached hereto (collectively, the “Contracts”); and

(e) all of Seller’s right, title and interest in and to all intangible property (other than the Contracts) now or hereafter owned by Seller and used in connection with the Land, the Improvements or the Personal Property, including, without limitation, building-specific trademarks and trade names, transferable licenses, architectural, site, landscaping or other permits, applications, approvals, authorizations and other entitlements, transferable guarantees and warranties covering the Land and/or Improvements, books, records, reports, test results, environmental assessments, as-built plans, specifications and other similar documents and materials relating to the use or operation, maintenance or repair of the Land, the Improvements or the Personal Property (collectively, the “Intangible Property”).

The Land, the Improvements, the Intangible Property, the Contracts and the Personal Property are hereinafter sometimes referred to collectively as the “Property.” The Land and Improvements are hereinafter sometimes referred to collectively as the “Real Property”.

1.2 Purchase Price.

(a) Amount. The purchase price of the Property is Forty Million Eight Hundred Thousand and 00/100 Dollars ($40,800,000.00) (the “Purchase Price”).

(b) Payment; Deposit.

(i) Deposits. Escrow No. NC-561882-SC has been established with Escrow Agent with respect to the purchase and sale transaction described herein. Not later than January 22, 2014, Buyer shall deliver to Escrow Agent, a deposit in the amount of Seven Million Dollars ($7,000,000.00) (the “Deposit”) to be held in Escrow (as defined below) in accordance with the terms and conditions of this Agreement. The Deposit shall be placed by the Escrow Agent in a non-commingled trust account and Escrow Agent shall invest the Deposit in insured money market accounts, certificates of deposit, United States Treasury Bills or such other instruments as Buyer may instruct from time to time, with interest accruing in the name of Buyer. As between Seller and Buyer, Buyer shall assume all risk of loss of the Deposit while in Escrow; provided that, nothing herein shall release or in any way modify Escrow Agent’s duties and obligations set forth in Section 9.2 hereof or any additional escrow instructions which may be executed by the parties. The interest and dividends accrued on the Deposit while in Escrow shall be deemed part of the Deposit for purposes of this Agreement. Upon delivery of the Approval Notice (as defined below), the Deposit shall be non-refundable to Buyer (except as otherwise expressly provided in this Agreement) but shall be credited to Buyer against the Purchase Price at the Closing (as defined below) hereunder. By delivery and execution of this Agreement, Buyer shall be deemed to have delivered the Approval Notice.

(ii) Independent Consideration. A portion of the Deposit in the amount of One Thousand and 00/100 Dollars ($1,000.00) shall be independent consideration (“Independent Consideration”) to Seller for Seller having entered into this Agreement and for, among other things, granting Buyer the rights to investigate matters concerning the Property as provided for in this Agreement, including but not limited to, the rights granted Buyer under Sections 2.1, 2.2, 2.3 and Article 3 below. The Independent Consideration shall be credited toward the Purchase Price at Closing, but in no event shall the Independent Consideration be refundable to Buyer in the event the Escrow fails to close hereunder for any reason. The Independent Consideration shall be released to Seller upon Closing or termination or cancellation of this Agreement for any reason.

(iii) Cash at Close. On or before the Closing Date (defined in Section 9.7 below), Buyer shall deliver to Escrow Agent cash in the amount of the Purchase Price, subject to the prorations and adjustments provided for in this Agreement, less the amount of the Deposit to be released to Seller at Closing (the “Closing Cash”). The Closing Cash shall be credited against the Purchase Price at the consummation of the purchase and sale contemplated hereunder (the “Closing”).

(iv) Liquidated Damages. THE PARTIES HERETO AGREE THAT SELLER’S ECONOMIC DETRIMENT RESULTING FROM THE REMOVAL OF THE PROPERTY FROM THE REAL ESTATE MARKET FOR AN EXTENDED PERIOD OF TIME AND ANY CARRYING AND OTHER COSTS INCURRED AFTER THE REMOVAL OF THE PROPERTY FROM THE REAL ESTATE MARKET ARE IMPRACTICABLE OR EXTREMELY DIFFICULT TO ASCERTAIN. THE PARTIES HERETO AGREE THAT THE AMOUNT OF THE DEPOSIT, EXCLUDING ANY INTEREST ACCRUED ON THE DEPOSIT IS A REASONABLE ESTIMATE OF THE DAMAGES THAT WILL BE INCURRED BY SELLER IN THE EVENT THE CLOSING FAILS TO OCCUR AS A RESULT OF A BREACH OR DEFAULT OF THIS AGREEMENT BY BUYER. BUYER AGREES THAT IN THE EVENT OF SUCH BREACH OR DEFAULT BY BUYER OF BUYER’S OBLIGATIONS, SELLER, AS ITS SOLE REMEDY, SHALL BE ENTITLED TO RECEIVE AND RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES AND NOT AS A PENALTY. SUCH RECEIPT OF THE DEPOSIT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO SECTIONS 1671, 1676 AND 1677 OF THE CALIFORNIA CIVIL CODE, AND SHALL NOT BE DEEMED TO CONSTITUTE A FORFEITURE OR PENALTY WITHIN THE MEANING OF SECTION 3275 OR SECTION 3369 OF THE CALIFORNIA CIVIL CODE, OR ANY SIMILAR PROVISION. SELLER HEREBY WAIVES THE REMEDY OF SPECIFIC PERFORMANCE WITH RESPECT TO ANY DEFAULT BY BUYER OF ITS OBLIGATION TO PURCHASE THE PROPERTY, AND AGREES THAT THE LIQUIDATED DAMAGES SET FORTH HEREIN SHALL BE SELLER’S SOLE REMEDY IN THE EVENT THE CLOSING FAILS TO OCCUR AS THE RESULT OF BUYER’S BREACH OR DEFAULT IN ITS OBLIGATIONS UNDER THIS AGREEMENT. THIS LIQUIDATED DAMAGES PROVISION SHALL NOT BE APPLICABLE TO (1) ANY BREACH BY BUYER OF ANY INDEMNIFICATION, DEFENSE OR HOLD HARMLESS OBLIGATION OR RESTORATION OBLIGATION OF BUYER UNDER THIS AGREEMENT, (2) ANY BREACH OF BUYER’S OBLIGATION TO DELIVER TO SELLER BUYER’S WORK PRODUCT PURSUANT TO SECTION 12.16, OR (3) ANY BREACH OF BUYER’S CONFIDENTIALITY OBLIGATIONS UNDER SECTION 12.3 BELOW. IN THE EVENT SELLER INCURS ATTORNEYS’ FEES IN ATTEMPTING TO COLLECT OR RETAIN THE LIQUIDATED DAMAGES AS PROVIDED IN SECTION 1.2(b)(iv), BELOW, THIS LIQUIDATED DAMAGES PROVISION ALSO SHALL NOT SERVE AS A LIMITATION ON THE AMOUNT OF ATTORNEYS’ FEES THAT SELLER MAY PURSUE OR COLLECT FROM BUYER. BY INITIALING THIS SECTION 1.2(b)(iv) BELOW, SELLER AND BUYER AGREE TO THE TERMS OF THIS SECTION 1.2(b)(iv).

INITIALS:     SELLER                              BUYER                     

ARTICLE 2

INSPECTIONS AND CLOSING CONDITIONS

2.1 Documents. Prior to the Effective Date, Seller has delivered and/or made available to Buyer copies of the agreements (including without limitation all brokerage agreements), contracts, documents, information, plans and specifications, guarantees, warranties, permits, reports, books, records and other materials which Seller believes are pertinent to the ownership, operation, occupancy, use, development, or management of the Property, including without limitation, any notice(s) regarding changes to or reconfiguration of streets abutting and in the vicinity of the Real Property (collectively, the “Documents”) except (i) any document that would disclose Seller’s cost of acquisition of the Property (and Seller shall have the right to redact from Documents delivered to Buyer any reference to the purchase price Seller paid for the Property), (ii) any document or correspondence which would be subject to the attorney-client privilege; (iii) any document or item which Seller is contractually or otherwise bound to keep confidential as of the Effective Date; (iv) any documents pertaining to the marketing of the Property for sale to prospective purchasers; (v) any internal memoranda, reports or assessments relating to the valuation or future performance of the Property; or (vi) appraisals of the Property whether prepared internally by Seller or Seller’s affiliates or externally. The Documents delivered and/or made available to Buyer are set forth on Exhibit B attached hereto. Except as expressly set forth in this Agreement and in the documents to be delivered at Closing, Seller makes no representation or warranty as to the completeness or accuracy of the Documents.

2.2 Conditions Precedent to Buyer’s Obligations.

Buyer’s obligation to purchase the Property is conditioned upon the following, which such conditions shall be deemed satisfied upon delivery of the Approval Notice:

(a) Subject to the provisions of Article 3 below, Buyer’s review and approval of the physical condition of the Property, including, without limitation, the structural, electrical, and mechanical condition of the Real Property and the presence or absence of “Hazardous Materials” (defined below) in or from its soil and groundwater, or anywhere else in or around the Real Property. For purposes of this Agreement, the term “Hazardous Materials” shall mean any chemical, substance, waste or material which is deemed hazardous, toxic, a pollutant or a contaminant, under any federal, state or local statute, law, ordinance, rule, regulation or judicial or administrative order or decisions, now or hereafter in effect, or which has been shown to have significant adverse effects on human health or the environment. Hazardous Materials shall include, without limitation, substances defined as “hazardous substances,” “hazardous materials,” or “toxic substances” in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9601, et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. § 1801, et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. § 6901, et seq.; in the regulations adopted and publications promulgated pursuant to such laws; and in the Hazardous Materials storage, use or discharge laws, regulations and ordinances of the State of California, County of Santa Clara or City of Sunnyvale.

(b) Buyer’s review and approval of all zoning, land use, building, environmental and other statutes, rules, or regulations applicable to the Real Property.

(c) Buyer’s review and approval of the Documents. Buyer acknowledges that Seller is furnishing (or has furnished) to Buyer the Documents referred to in Exhibit B for informational purposes only and except as expressly set forth in this Agreement and in the documents to be delivered at Closing, do not constitute representations or warranties of Seller of any kind.

(d) Buyer’s review and approval of the economic feasibility of the Property and the matters referred to in Article 3 below.

2.3 Feasibility Period. Buyer shall have until 5:00 p.m., Pacific Time, on January 22, 2014 (the “Feasibility Period”) to terminate this Agreement in Buyer’s sole and absolute discretion for any reason or no reason by delivering written notice to Seller (a “Termination Notice”), in which event, this Agreement shall terminate, all obligations under this Agreement shall cease (except for any obligations that expressly survive the termination of this Agreement) and Buyer shall be entitled to the prompt return of the Deposit. Buyer may deliver to Seller written notice of Buyer’s waiver of the termination right set forth in this Section 2.3 prior to the expiration of the Feasibility Period (the “Approval Notice”). Buyer’s delivery of the Approval Notice shall constitute a waiver of the conditions set forth in Section 2.2 above, but shall not constitute a waiver of Buyer’s Conditions (as defined below) as set forth in Section 2.4 below. If, prior to the expiration of the Feasibility Period, Buyer does not deliver its Approval Notice to Seller, then Buyer shall be deemed to have elected to terminate this Agreement, in which event, this Agreement shall terminate, all obligations under this Agreement shall cease (except for any obligations that expressly survive the termination of this Agreement) and Buyer shall be entitled to the prompt return of the Deposit.

2.4 Buyer’s Conditions. The obligation of Buyer to render performance under this Agreement is subject to the following conditions precedent (and conditions concurrent, with respect to deliveries to be made by the parties at Closing) (“Buyer’s Conditions”), which conditions may be waived, or the time for satisfaction thereof extended, by Buyer only in a writing executed by Buyer; provided, however, that any such waiver shall not affect Buyer’s ability to pursue any remedy Buyer may have with respect to any breach hereunder by Seller:

(a) Title Policy. Title Company (as defined below) shall be prepared and irrevocably committed to issue the Title Policy (as defined below) to Buyer.

(b) Performance. All of the representations and warranties of Seller set forth in Sections 10.1(a), (b), (c), (d), (e), (g), (h), (i) and (k) shall be true and correct as of the Closing Date, and Seller, on or prior to the Closing Date, shall have complied with and/or performed all of the obligations, covenants and agreements required on the part of Seller to be complied with or performed pursuant to the terms of this Agreement (subject to the cure period sect forth in Section 11.2(a) hereof).

(c) Condition of Property. Subject to the provisions of Article 6 below, the condition of the Property shall be substantially the same on the Closing Date as on the Effective Date, except for reasonable wear and tear and any damages due to any act of Buyer or Buyer’s representatives.

(d) Other Conditions. The fulfillment on or before the Closing Date of all other conditions precedent to Closing benefiting Buyer specifically set forth in this Agreement.

2.5 Failure of Buyer’s Conditions. Subject and without limitation to Buyer’s rights hereunder, including, without limitation, Section 11.2 below, if any of Buyer’s Conditions have not been fulfilled within the applicable time periods, Buyer may:

(a) Waiver. Waive the Buyer’s Condition and close Escrow in accordance with this Agreement, with or without adjustment or abatement of the Purchase Price; or

(b) Termination. Terminate this Agreement by delivering written notice to Seller and to Escrow Agent, in which event, this Agreement shall terminate, all obligations under this Agreement shall cease (except for any obligations that expressly survive the termination of this Agreement) Buyer shall be entitled to the prompt return of the Deposit, and if the Buyer’s Condition set forth in Section 2.4(b) hereof was not fulfilled, then Buyer may pursue any other rights and remedies set forth in this Agreement.

2.6 Seller’s Conditions to Closing. The obligation of Seller to render performance under this Agreement is subject to the following conditions precedent (and conditions concurrent with respect to deliveries to be made by the parties at Closing) (“Seller’s Conditions”), which conditions may be waived, or the time for satisfaction thereof extended, by Seller only in a writing executed by Seller:

(a) Performance. All of the representations and warranties of Buyer set forth in this Agreement shall be true and correct as of the Closing Date, and Buyer, on or prior to the Closing Date, shall have complied with and/or performed all of the obligations, covenants and agreements required on the part of Buyer to be complied with or performed pursuant to the terms of this Agreement.

(b) Other Conditions. All other conditions precedent to Closing benefiting Seller specifically set forth in this Agreement shall have been fulfilled.

2.7 Failure of Seller’s Conditions. Subject to Seller’s rights hereunder in the event of a default by Buyer which results in the failure of a Seller’s Condition, in the event of the failure of a Seller’s Condition, Seller may terminate this Agreement by delivery of written notice to Buyer and Escrow Agent, in which event, this Agreement shall terminate, all obligations under this Agreement shall cease (except for any obligations that expressly survive the termination of this Agreement) and Buyer shall be entitled to the prompt return of the Deposit.

ARTICLE 3

RIGHT OF ENTRY

Prior to Closing, Buyer acknowledges that it will investigate (or will have had the opportunity to investigate) to the extent deemed necessary by Buyer, all matters relating to title, zoning, land use entitlements and governmental regulations affecting the Property, and the use, operation and/or development of the Property, together with all governmental and other legal requirements such as taxes, assessments, zoning, use permit requirements and building codes. In addition, Buyer and its representatives, agents, consultants and contractors shall have the right

prior to Closing to enter the Real Property to inspect it and the Personal Property, including, without limitation, the interior, the exterior, the structure, the paving, the utilities, and all other physical and functional aspects of the Property (each, a “Buyer Inspection”) subject to the following terms and conditions:

(i) Buyer shall provide Seller with at least one (1) business day prior telephonic notice of each Buyer Inspection.

(ii) Each Buyer Inspection shall be at Buyer’s sole cost.

(iii) To the extent applicable, the persons or entities performing the Buyer Inspections shall be properly licensed in the State of California and shall have obtained all appropriate permits (to the extent such permits are required) for performing relevant tests on the Property and shall have delivered such permits to Seller, prior to performing any tests on the Property. At least one (1) business day prior to entry onto the Real Property, Buyer shall deliver to Seller (and cause each contractor and consultant who desires to enter onto the Real Property on behalf, or for the benefit of, Buyer to deliver to Seller) a certificate of insurance evidencing that Buyer (or such applicable contractor or consultant) has obtained a policy or policies of commercial general liability insurance providing for a combined single limit of not less than One Million Dollars ($1,000,000) per occurrence covering liability to property or persons for Buyer’s and its agents’ and employees’ (and contractors’ or consultants’) activities on or about the Real Property, and naming Seller as additional insured. Such insurance policy or policies shall be issued by such insurance companies or an insurance company admitted as an insurer in California and having a Best’s Insurance rating of at least A- VII.

(iv) Buyer shall not have the right to undertake, or cause to be undertaken, any Phase II environmental assessment of the Real Property, including, borings or invasive testing on, in or under the Real Property, or any portion thereof (“Phase II Work”) unless Buyer has obtained Seller’s prior written consent thereto (which consent may be given or withheld in Seller’s reasonable discretion). Such Phase II Work shall be generally consistent with a written plan prepared by Buyer’s contractor(s) or consultant(s) in good faith outlining the scope of the proposed Phase II Work, the area(s) where such Phase II Work is to be performed, the timing of such Phase II Work, the contractor(s) or consultant(s) who Buyer desires to perform such Phase II Work and the party to report any findings of hazardous materials to any environmental agencies (the “Phase II Plan”). Buyer may commence the Phase II Work only after Seller has given its prior written consent to the Phase II Plan, which consent may be given or withheld in Seller’s reasonable discretion. Seller shall approve or reasonably disapprove of any Phase II Plan within three (3) business days after receipt thereof and Seller’s failure to respond within such three (3) business day period shall be deemed to be Seller’s consent to the proposed Phase II Plan. Each physical inspection shall not unreasonably interfere with the use of the Property by Seller nor shall any Buyer Inspection damage the Property in any respect. Buyer shall obtain, or cause to be obtained, all appropriate permits required for performing the Phase II Work. Seller shall have the right to have a representative of Seller present during the performance of any Phase II Work. Buyer shall, at Buyer’s cost and expense, obtain split samples of any drilling or boring tests comprising part of the Phase II work (except that Seller shall be liable for the costs of processing and analyzing, but not producing, such split samples for Seller’s benefit). If Buyer or any of its consultants or contractors discovers any Hazardous

Materials on, in or under the Property, then nothing in this Agreement shall obligate Seller to clean up or remediate such environmental condition so discovered by Buyer or any of its consultants or contractors. Any Phase II Work performed, or caused to be performed, by Buyer pursuant to the terms of this Agreement shall be considered part of the Buyer Inspections.

(v) Unless otherwise requested by Seller, all the Buyer Inspections shall be during normal business hours.

(vi) Seller shall have right to have one (1) or more representatives of Seller accompany Buyer and Buyer’s representatives, agents, consultants or contractors while they are on the Real Property.

(vii) If the Property is damaged by Buyer or any of its agents, employees, consultants, contractors or other representatives in connection with a Buyer’s Inspection, Buyer, at Buyer’s sole cost and expense, shall promptly repair such damage and restore the Property to substantially its condition existing immediately prior to the Buyer Inspections. Until restoration is complete, Buyer shall take all steps necessary to ensure that any conditions on the Property created by the Buyer Inspections do not materially interfere with the normal operation of the Property or create any dangerous or unhealthy conditions on the Property. The restoration obligation contained in this clause (vii) shall not obligate Buyer to clean up or remediate any Hazardous Materials, if any, existing in, on or under the Property except for Hazardous Materials actually caused to be present in, on or under the Property, or applicable portion thereof, by Buyer or any of its agents, employees, contractors or other representatives or to the extent any pre-existing Hazardous Material condition is exacerbated as a result of the acts or omissions of Buyer or any of its agents, employees, contractors or other representatives. The restoration obligation contained in this clause (vii) shall not obligate Buyer to clean-up, remediate, repair or restore any condition caused by Seller or the Seller Related Parties (as defined below). The restoration obligation contained in this clause (vii) shall survive the termination of this Agreement.

(viii) Buyer shall indemnify, protect and defend (with counsel reasonably acceptable to Seller) and hold Seller and its affiliates, partners, trustees, shareholders, directors, officers, members, employees, and agents (collectively “Seller Related Parties”) harmless from and against any and all claims, damages, liens, judgments, demands, obligations, actions, costs, liabilities and losses (including mechanics’ liens) and expenses (including, without limitation, reasonable attorneys’ fees actually incurred) to the extent arising out of any acts of Buyer or any of its agents, employees, representatives, consultants or contractors on or about the Real Property, or applicable portion thereof, in connection with or related to any Buyer Inspections; provided, however, such obligation of Buyer to indemnify, defend, protect and hold harmless Seller and the Seller Related Parties shall not be applicable to (x) the mere discovery by Buyer of any Hazardous Materials existing on, in or under the Real Property and not caused to be present or exacerbated by Buyer or any of its agents, employees, contractors or other representatives or exacerbated by the acts or omissions of Buyer or any of its agents, employees, contractors or other representatives or (y) the acts of Seller or the Seller Related Parties. This clause (viii) shall survive the Closing or any termination of this Agreement.

ARTICLE 4

TITLE

4.1 Conditions of Title. At the Closing, Seller shall convey title to the Real Property to Buyer by grant deed in the form attached hereto as Exhibit D (the “Deed”). Prior to the Effective Date, (a) First American Title Insurance Company (in such capacity, “Title Company”) has delivered to Buyer a pro forma title policy for the Real Property order number NCS561882-SC (the “Pro Forma”), together with copies of all documents referenced as exceptions therein, and (b) Seller has delivered to Buyer an As-Built American Land Title Association survey of the Real Property (the “Existing Survey”). Buyer has obtained an update to the Existing Survey (a “Survey Update”). Title to the Real Property to be conveyed to Buyer shall be subject to (i) current non-delinquent real estate taxes and assessments, a lien not then due and payable; (ii) the exceptions set forth in the Pro Forma and the Existing Survey and the Survey Update; (iii) any exceptions to title which would be disclosed by a reasonable inspection; (iv) local, state and federal laws, ordinances or governmental regulations including, but not limited to, building and zoning laws, ordinances and regulations, now or hereafter in effect relating to the Property; (v) any exceptions to title which may be caused by the actions of Buyer or any of its agents, employees, contractors or consultants; (vi) standard printed exceptions and exclusions generally included in an ALTA extended owner’s policy of title insurance; and (vii) the rights of possession of tenants under the Leaseback Lease (collectively, the “Permitted Exceptions”).By delivery and execution of this Agreement, Buyer shall be deemed to have approved title subject to the Permitted Exceptions.

4.2 Buyer’s Review of Title. Buyer shall have until the end of the Feasibility Period (the “Title Objection Period”) to notify Seller in writing (a “Title Notice”) of any objection which Buyer may have to any updates to the Pro Forma; provided, however, that if any such update to the Pro Forma is received by Buyer after the expiration of the Title Objection Period, Buyer shall have an additional two (2) business days, regardless of the Closing Date, following Buyer’s receipt of such update and legible copies of all documents referenced therein to deliver a notice (“Title Notice(s)”) of objections to items shown on any such update. Exceptions reported in the Pro Forma not objected to by Buyer as provided above shall be deemed to be “Permitted Exceptions.” Seller shall deliver, no later than two (2) business days after receipt of a Title Notice, written notice to Buyer and Title Company identifying which disapproved items, if any, Seller shall undertake to cure (by either having the same removed or by obtaining affirmative insurance over the same in form reasonably acceptable to Buyer as part of the final Title Policy) (“Seller’s Response”). If Seller agrees to so remove any such objection or to obtain such insurance, then such removal or insurance shall be a covenant of Seller and a condition to Closing in favor of Buyer. If Seller does not deliver a Seller’s Response prior to such date, Seller shall be deemed to have elected to not remove or otherwise cure any exceptions disapproved by Buyer. If Seller elects, or is deemed to have elected, not to remove or otherwise cure an exception disapproved in a Title Notice, Buyer shall have until two (2) business days after receipt of Seller’s Response to (i) deliver a written notice to Seller and Escrow Agent terminating this Agreement, in which case, all obligations under this Agreement shall cease (except for any obligations that expressly survive the termination of this Agreement) and Buyer shall be entitled to the prompt return of the Deposit or (ii) waive any such objection (whereupon such objections shall be deemed Permitted Exceptions for all purposes hereof). If Seller and Escrow Agent have not received such written notice from Buyer within such two (2) business day period, such failure shall be deemed Buyer’s waiver of all such objections.

4.3 Obligatory Removal Exceptions. Notwithstanding the foregoing, Seller shall take all action necessary to remove from title to the Property (or in the alternative, Seller shall obtain for Buyer title insurance insuring over such exceptions or matters), such insurance to be in form and substance satisfactory to Buyer in its reasonable discretion) the following matters (none of which shall be deemed to be Permitted Exceptions): (a) all exceptions to title and survey matters created by Seller on or after the Effective Date without the prior written consent of Buyer (which consent may be withheld in Buyer’s reasonable discretion); (b) any and all liens and encumbrances affecting the Property which secure an obligation to pay money (other than installments of real estate taxes or assessments not delinquent as of the Closing); and (c) all taxes and assessments due and payable for any period prior to the Closing (collectively, the “Obligatory Removal Exceptions”).

4.4 Evidence of Title. Delivery of title in accordance with the foregoing shall be evidenced by the willingness of the Title Company to issue at Closing an American Land Title Association (ALTA) extended coverage owner’s policy of title insurance in favor of Buyer in an amount equal to the Purchase Price showing indefeasible fee simple title to the Real Property vested in Buyer, with those additional endorsements and reinsurance reasonably requested by Buyer, subject only to the Permitted Exceptions and the standard pre-printed exclusions to coverage shown on such ALTA Policy of Title Insurance (the “Title Policy”). If Buyer elects to obtain any optional endorsements to the ALTA Title Policy, (a) the cost of such endorsements shall be at Buyer’s sole cost; and (b) Buyer shall obtain, at Buyer’s sole cost and expense, the Survey Update. In no event shall Buyer be excused from its obligation to purchase the Property if the Title Company refuses to issue an ALTA policy because Buyer has failed or refused to provide Title Company the Survey Update. If, following the Closing hereunder, Buyer has any objection to the condition of title of the Real Property conveyed by Seller to Buyer, except to the extent covered by the warranties implied in the Deed, Buyer shall be deemed to have waived any and all claims against Seller related to such condition of title and Buyer acknowledges that its sole recourse shall be against the Title Company with respect to such dispute. Except for the warranties implied in the Deed, Buyer is relying upon the Pro Forma referred to above, the Title Policy to be issued to Buyer at Closing and Buyer’s own investigations respecting Seller’s title to the Real Property.

ARTICLE 5

AS IS SALE, RELEASE OF CLAIMS; FLOOD HAZARD ZONE

5.1 “As-Is” Purchase. Except for the representations, warranties and covenants of Seller set forth in this Agreement and the documents to be delivered by Seller at Closing, Buyer specifically acknowledges and agrees that Seller is selling and Buyer is purchasing the Property on an “As Is With All Faults” basis. Except for the representations, warranties and covenants of Seller set forth in this Agreement and the documents to be delivered by Seller at Closing, Buyer is not relying on any representations or warranties of any kind whatsoever, express or implied, from Seller, its agents, or brokers as to any matters concerning the Property, including without limitation: (i) the quality, nature, adequacy and physical condition of the Land and the

Improvements thereon (and the Personal Property), including, but not limited to, the structural elements, foundation, roof, appurtenances, access, landscaping, parking facilities and the electrical, mechanical, HVAC, plumbing, sewage, and utility systems, facilities and appliances, (ii) the quality, nature, adequacy, and physical condition of soils, geology and any groundwater, (iii) the existence, quality, nature, adequacy and physical condition of utilities serving the Real Property, (iv) the development potential of the Real Property, the use, habitability, merchantability, or fitness of the Property, and the suitability, value or adequacy of the Property for any particular purpose, (v) the zoning or other legal status of the Real Property or any other public or private restrictions on use of the Property, (vi) the compliance of the Property or its operation with any applicable codes, laws, regulations, statutes, ordinances, covenants, conditions and restrictions of any governmental or quasi-governmental entity or of any other person or entity, (vii) the presence or absence of Hazardous Materials (including, without limitation, asbestos or asbestos-containing materials and lead-based paint) on, under or about the Land (or Improvements thereon) or the adjoining or neighboring property, (viii) the quality of any labor and materials used in any Improvements on the Property, (ix) the condition of title to the Real Property and/or Personal Property, (x) the income that may be generated from the Property, (xi) the economics of the operation of the Property and (xii) the existence, quality, nature, adequacy and physical condition of the Personal Property. Except for the representations, warranties and covenants of Seller set forth in this Agreement and the documents to be delivered by Seller at Closing, Buyer acknowledges that it shall use its independent judgment and make its own determination as to the scope and breadth of the due diligence investigation which it shall make relative to the Property. Except for the representations, warranties and covenants of Seller set forth in this Agreement and the documents to be delivered by Seller at Closing, Buyer shall rely upon its own investigation of the physical, environmental, economic and legal condition of the Property (including, without limitation, whether the Property is located in an area which is designated as a special flood hazard area, dam failure inundation area, earthquake fault zone, seismic hazard zone, high fire severity area or wildland fire area, by any federal, state or local agency). Buyer undertakes and assumes the risks associated with all matters pertaining to the Real Property’s location in any area designated as a special flood hazard area, dam failure inundation area, earthquake fault zone, seismic hazard zone, high fire severity area or wildland fire area, by any federal, state or local agency. The provisions of this Section 5.1 shall indefinitely survive the Closing hereunder or termination of this Agreement and shall not be merged into the Deed to be delivered by Seller to Buyer at Closing.

5.2 Release and Waiver.

(a) Release. Without limiting the above, as of the Closing hereunder, Buyer waives on behalf of itself and its agents, employees, affiliates, successors and assigns, any and all right to recover from Seller and the Seller Related Parties, and forever releases and discharges Seller and the Seller Related Parties from any and all damages, claims, losses, liabilities, penalties, fines, liens, actions, causes of action, demands, judgments, costs or expenses whatsoever (including, without limitation, attorneys’ fees and costs), whether direct or indirect, known or unknown, foreseen or unforeseen, that may arise on account of or in any way be connected with this Agreement, the Personal Property, the Land and the Improvements thereon, including, without limitation, title to the Property, latent or patent construction defects applicable to any portion of the Property, the physical and environmental condition of the Property and any law or regulation applicable thereto (including, without limitation, the Comprehensive

Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Sections 9601 et seq.), the Resource Conservation and Recovery Act of 1976 (42 U.S.C. Sections 6901 et seq.), the Federal Water Pollution Control Act (33 U.S.C. Sections 1251 et seq.), the Toxic Substance Control Act (15 U.S.C. Sections 2601 et seq.), the California Hazardous Waste Control Law (California Health and Safety Code Sections 25100 et seq.), the Porter-Cologne Water Quality Control Act (California Water Code Sections 13000 et seq.), and the Safe Drinking Water and Toxic Enforcement Act (California Health and Safety Code Section 25249.5 et seq.)). The preceding to the contrary notwithstanding, the provisions of this Section 5.2(a) and Section 5.2(b) below shall not be applicable to (i) any breach by Seller, or any Seller Related Parties, of any of the representations, warranties or covenants made by Seller under the terms of this Agreement or the documents delivered by Seller at Closing, (ii) any fraud committed by Seller or Seller Related Parties, or (iii) to any other obligation of Seller which survives the Closing.

(b) Waiver. In connection with subsection (a) above, Buyer expressly waives the benefits of Section 1542 of the California Civil Code, which provides as follows: “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

(c) Buyer hereby specifically acknowledges that Buyer has carefully reviewed this Section 5.2 and Section 5.1 above, and discussed their import with legal counsel, is fully aware of their consequences, and that the provisions of this Section 5.2 and Section 5.1 above are a material part of the Agreement and shall survive the Closing.

Buyer’s Initials:                     

5.3 Flood Hazard Zone.

Buyer acknowledges that if the Land or Real Property is located in an area that the Secretary of the Department of Housing and Urban Development has found to have special flood hazards, then pursuant to the National Flood Insurance Program, Buyer may be required to purchase flood insurance in order to obtain a loan secured by the Real Property from any federally regulated financial institution or a loan insured or guaranteed by an agency of the United States government. Buyer shall have sole responsibility to determine whether the Real Property or Land is located in an area that is subject to the National Flood Insurance Program.

ARTICLE 6

RISK OF LOSS AND INSURANCE PROCEEDS

6.1 Minor Loss. Buyer shall be bound to purchase the Property for the full Purchase Price as required by the terms hereof, without regard to the occurrence or effect of any damage to the Property or destruction of any improvements thereon or condemnation or potential condemnation of any portion of the Property, provided that: (a) the cost to repair any such damage or destruction to the Real Property, does not exceed Two Million and 00/100 Dollars ($2,000,000.00) and such damage or destruction is fully covered (except to the extent of Seller’s

deductible) by insurance maintained by Seller (or, absent such full coverage, Seller agrees to fund at Closing as a credit to the Purchase Price the amount not covered in excess of the deductible), (b) the loss due to a condemnation does not (I) exceed Two Million and 00/100 Dollars ($2,000,000.00), (II) materially affect access to the Real Property or (III) otherwise materially impair Buyer’s intended use of the Real Property, and (c) upon the Closing, there shall be a credit against the Purchase Price due hereunder equal to (x) the insurance proceeds paid to Seller with respect to the damage to the Property less any portion of such proceeds used to pay for repair of the damage or destruction, and with the Seller crediting against the Purchase Price at Closing any deductible applicable to such damage, or (y) any condemnation awards actually collected by and paid to Seller as a result of any condemnation of the Real Property, or applicable portion thereof. If Buyer does not elect to terminate this Agreement, Seller shall not compromise, settle or adjust any award or insurance claim without Buyer’s prior written consent (which consent may be withheld in Buyer’s sole and absolute discretion). If the insurance proceeds or condemnation award, if applicable, have not been collected as of the Closing, then Seller shall assign to Buyer at Closing all of Seller’s right to receive any insurance proceeds or condemnation award with respect to the damage to or condemnation of the Real Property, or applicable portion thereof, and Buyer shall receive a credit against the Purchase Price in the amount of any deductible applicable to such damage, if any, less any sums needed to reimburse Seller for sums expended to repair or restore the Real Property. For purposes of this Section 6.1 and Section 6.2 below, the cost to repair any damage or destruction to the Real Property shall be reasonably determined by a general contractor selected by Seller and reasonably approved by Buyer, and any diminution in value arising from a condemnation of a portion of the Real Property shall be determined by an appraiser selected by Seller and reasonably approved by Buyer (and the cost of such appraisal shall be borne equally by Seller and Buyer).

6.2 Major Loss. If (a) the cost to repair any such damage or destruction to the Real Property exceeds Two Million and 00/100 Dollars ($2,000,000.00) or any damage or destruction is not fully covered (except to the extent of Seller’s deductible) by insurance maintained by Seller (and, absent such full coverage, Seller agrees to fund at Closing as a credit to the Purchase Price the amount not covered in excess of the deductible), (b) the loss due to a condemnation (I) exceeds Two Million and 00/100 Dollars ($2,000,000.00), (II) affects access to the Real Property or (III) otherwise materially impairs Buyer’s intended use of the Real Property (as reasonably determined by Buyer), then Buyer may, at its option to be exercised within ten (10) business days of Seller’s notice of the occurrence of the damage or destruction or the threat or commencement of condemnation proceedings (and the Closing Date shall be extended as necessary to allow Buyer the full ten (10) business day period), either (a) terminate this Agreement by giving written notice to Seller within such ten (10) business day period, or (b) consummate the purchase of the Property for the full Purchase Price as required by the terms hereof. If Buyer so terminates this Agreement, then the Deposit paid by Buyer shall be returned to Buyer and neither party shall have any further rights or obligations hereunder except those rights and obligations which survive termination of this Agreement. If Buyer elects to proceed with the purchase or fails to give Seller notice within the above-referenced ten (10) day period of Buyer’s termination of this Agreement, then upon the Closing, there shall be a credit against the Purchase Price due hereunder equal to the amount of any insurance proceeds and with the Seller also crediting against the Purchase Price at Closing any deductible applicable to such damage, or condemnation awards actually collected by and paid to Seller as a result of any such damage or destruction or condemnation under any policy of insurance carried by Seller with respect to such

loss, less any sums expended toward the restoration or repair of the Real Property. If the proceeds or awards have not been collected as of the Closing, then such proceeds or awards shall be assigned to Buyer less any sums needed to reimburse Seller for sums actually expended to repair or restore the Real Property and in the case of damage, Buyer shall receive a credit against the Purchase Price in the amount of any deductible applicable to such damage. If Buyer does not elect to terminate this Agreement, Seller shall not compromise, settle or adjust any award or insurance claim without Buyer’s prior written consent (which consent may be withheld in Buyer’s sole and absolute discretion).

6.3 Notice of Loss. Seller shall provide Buyer written notice of any damage, destruction, condemnation or potential condemnation under Sections 6.1 or 6.2 above, within three (3) business days of Seller learning of such damage, destruction, condemnation or potential condemnation.

ARTICLE 7

BROKERS AND EXPENSES

Seller and Buyer each represent and warrant to the other that it has not engaged or retained any broker or finder in connection with the transaction contemplated by this Agreement to whom a commission may be owed other than Colliers International. If, and only if, escrow closes hereunder, Seller agrees to pay to Colliers International a real estate sale commission pursuant to the terms of a separate agreement between Seller and Colliers International. Buyer shall have no obligation under this Agreement to pay Colliers International any commission or other compensation in connection with this Agreement or the purchase and sale transaction described herein. If any person or entity other than Colliers International brings a claim for a commission or finder’s fee based upon any contact, dealings or communication with Buyer or Seller, then the party whose conduct is the basis for such claim for a commission or finder’s fee shall indemnify, hold harmless and defend the other party (the “Indemnified Party”) from any and all costs, damages, claims, liabilities, losses, or expenses, (including without limitation, reasonable attorneys’ fees and disbursements) incurred by the Indemnified Party in defending against the claim. The provisions of this Article 7 shall survive the Closing or, if the purchase and sale is not consummated, any termination of this Agreement.

ARTICLE 8

AGREEMENTS AFFECTING THE PROPERTY

8.1 Buyer’s Approval of New Agreements Affecting the Property.

(a) New Agreements. Between the Effective Date and the Closing (or earlier termination of this Agreement), Seller shall not, except as otherwise expressly permitted in this Section 8.1(a), enter into any agreement affecting the Property, or portion thereof, or extend, renew, modify or terminate any agreement affecting the Property, or portion thereof, without first obtaining Buyer’s written approval, which may be given or withheld in Buyer’s sole discretion. Seller shall promptly notify Buyer of Seller’s intent to enter into any agreement affecting the Property along with the terms of such proposed agreement. Buyer shall have five (5) business days from receipt of the notice to approve or disapprove any such proposed action in writing. If, with respect to any proposed action that requires Buyer’s written approval, Buyer fails to give

Seller notice of its approval or disapproval of any such proposed action within five (5) business days after Seller notifies Buyer of Seller’s desire to take such action, then Buyer shall be deemed to have given its approval. Prior to the Closing, Buyer may elect not to assume any or all of the Contracts, in which case, Seller shall cause, at Seller’s sole cost and expense, any Contracts that Buyer elects not to assume to be terminated prior to Closing. If Buyer delivers notice to Seller that it will not assume any Contract less than thirty (30) days prior to Closing, Buyer shall be liable for any payments due under such Contract for the period commencing on the Closing Date and ending on the day which is thirty (30) days following the date of delivery of such notice.

(b) Leases. Between the Effective Date of this Agreement and the Closing or earlier termination of this Agreement, Seller shall not enter into any lease, license or third party occupancy agreement covering the Property, or any portion thereof.

8.2 Title. Seller shall not take any of the following actions which would survive the Closing: (a) directly or indirectly sell, assign or create any right, title or interest whatsoever in or to the Property, (b) take any action, create, commit, permit to exist or suffer any acts which would (i) give rise to a variance from the current legal description of the Land, or (ii) cause the creation of any lien, charge or encumbrance other than the Permitted Exceptions, or (c) enter into any agreement to do any of the foregoing without Buyer’s prior written consent (which consent may be withheld in Buyer’s sole and absolute discretion).

8.3 Notice of Change in Circumstances. Seller shall promptly notify Buyer of any change in any condition with respect to the Property or any portion thereof or of any event or circumstance of which Seller has actual knowledge subsequent to the Effective Date which (a) materially, adversely affects the Property or any portion thereof or the use or operation of the Property or any portion thereof (including, without limitation, any notice regarding the potential reconfiguration of the Highway 237 on ramp/off ramp which will have an impact on Moffett Park Drive or (b) makes any representation or warranty of Seller to Buyer under this Agreement untrue or misleading.

8.4 No Defaults. Seller shall not default, after notice and the expiration of any applicable cure period, with respect to the performance of any obligation relating to the Property, including, without limitation, the payment of all amounts due and the performance of all obligations with respect to the Contracts and any existing indebtedness relating to the Property.

8.5 Exclusive Negotiations. Seller shall (i) remove the Property from the market, and (ii) cease and refrain from any and all negotiations with any other prospective optionees or purchasers of the Property.

8.6 Development Activities. Seller shall not enter into or amend any agreements with governmental or other regulatory entities affecting the Property without Buyer’s prior written consent (which consent may be withheld in Buyer’s reasonable discretion). Seller hereby agrees to reasonably cooperate with Buyer in Buyer’s efforts to obtain such governmental approvals as Buyer deems necessary to permit Buyer to operate the Property as Buyer wishes.

8.7 Insurance. Seller will maintain its current insurance in place from the Effective Date through the Closing or earlier termination of this Agreement.

8.8 Management. Prior to the Closing or earlier termination of this Agreement, Seller shall manage and maintain the Real Property in the same manner in which Seller has been managing and maintaining the Real Property during the period of its ownership of the Real Property and in accordance with laws; except that nothing stated herein shall obligate Seller to undertake, or cause to be undertaken, any capital repairs or capital expenditures or capital or structural improvements with respect to the Land or the Improvements thereon.

8.9 Survival. Any claims related to any breach by Seller of the covenants set forth in this Article 8 occurring prior to Closing shall survive the Closing for a period of six (6) months.

ARTICLE 9

CLOSING AND ESCROW

9.1 Opening of Escrow. Promptly following the Effective Date, Buyer and Seller shall each cause a purchase and sale escrow (“Escrow”) to be opened with Escrow Agent by delivery to Escrow Agent of two (2) duplicate partially executed originals of this Agreement executed by Seller and Buyer. Upon receipt of such partially executed originals of this Agreement, Escrow Agent shall form two (2) duplicate original counterparts of this Agreement and telephonically confirm to Buyer and Seller the date upon which Escrow is opened (the “Opening of Escrow”). On or immediately after the Opening of Escrow, Escrow Agent shall (a) confirm the same by executing and dating the two (2) duplicate original counterparts of this Agreement in the space provided for Escrow Agent, and (b) deliver a fully executed original of this Agreement to each of Seller and Buyer.

9.2 Escrow Instructions. This Agreement shall constitute escrow instructions to Escrow Agent as well as the agreement of the parties. Escrow Agent is hereby appointed and designated to act as Escrow Agent and instructed to deliver, pursuant to the terms of this Agreement, the documents and funds to be deposited into Escrow as herein provided. The parties hereto shall execute such additional escrow instructions, not inconsistent with this Agreement as determined by counsel for Buyer and Seller, as Escrow Agent shall deem reasonably necessary for its protection, if any (as may be modified by and mutually acceptable to Buyer, Seller and Escrow Agent). In the event of any inconsistency between this Agreement and such additional escrow instructions, the provisions of this Agreement shall govern.

9.3 Actions by Escrow Agent. Provided that Escrow Agent shall not have received written notice from Buyer or Seller of the failure of any condition to the Closing or of the termination of the Escrow and this Agreement, when Buyer and Seller have deposited into Escrow the documents and funds required by this Agreement, and Title Company is unconditionally and irrevocably committed to issue the Title Policy concurrently with the Closing, Escrow Agent shall, in the order and manner herein below indicated take the following actions:

(a) Recording. Following Title Company’s acknowledgment that it is prepared and irrevocably committed to issue the Title Policy to Buyer, cause the Deed and any other documents which the parties hereto may mutually direct to be recorded in the Official Records of Santa Clara County and obtain conformed copies thereof for distribution to Buyer and Seller.

(b) Disbursements. Upon receipt of confirmation of the recordation of the Deed, disburse all funds deposited with it by Buyer as follows:

(i) Pursuant to the Closing Statement (as hereinafter defined), retain for Escrow Agent’s own account all escrow fees and costs, disburse to Title Company the fees and expenses incurred in connection with the issuance of the Title Policy, and disburse to any other persons or entities entitled thereto the amount of any other closing costs;

(ii) Disburse to Seller an amount equal to the Purchase Price, less or plus the net debit or credit to Seller by reason of the prorations and allocation of closing costs provided for in this Agreement. Seller’s portion of the escrow fees, title fees and other closing costs shall be paid pursuant to clause (i) above; and

(iii) Disburse to Buyer any remaining funds in the possession of Escrow Agent after payments pursuant to clauses (i) and (ii) above have been completed.

(c) Title Policy. Cause Title Company to issue the Owner’s Title Policy to Buyer.

(d) Delivery of Documents. Deliver to Buyer and Seller one original of each of all documents deposited into Escrow, other than the Deed and any other recorded documents.

9.4 Conflicting Demands. Upon receipt of a written demand for the Deposit (a “Deposit Demand”) by Seller or Buyer (the “demanding party”), Escrow Agent shall promptly send a copy of such Deposit Demand to the other party (the “non-demanding party”). Except in connection with the termination of this Agreement pursuant to Section 2.3 above (in which event the Deposit shall be immediately returned to Buyer), Escrow Agent shall hold the Deposit for five (5) business days from the date of delivery by Escrow Agent of the Deposit Demand to the non-demanding party (“Objection Period”) or until Escrow Agent receives a confirming instruction from the non-demanding party. In the event the non-demanding party delivers to Escrow Agent written objection to the release of the Deposit to the demanding party (an “Objection Notice”) within the Objection Period (which Objection Notice shall set forth the basis under this Agreement for objecting to the release of the Deposit), Escrow Agent shall promptly send a copy of the Objection Notice to the demanding party. In the event of any dispute between the parties regarding the release of the Deposit, Escrow Agent, in its good faith business judgment, may disregard all inconsistent instructions received from either party and may either (a) hold the Deposit until the dispute is mutually resolved and Escrow Agent is advised of such mutual resolution in writing by both Seller and Buyer, or Escrow Agent is otherwise instructed by a final non-appealable judgment of a court of competent jurisdiction, or (b) deposit the Deposit with a court of competent jurisdiction by an action of interpleader (whereupon Escrow Agent shall be released and relieved of any further liability or obligations hereunder from and after the date of such deposit). In the event Escrow Agent shall in good faith be uncertain as to its duties or obligations hereunder or shall receive conflicting instructions, claims or demands from the parties hereto (expressly excluding however a conflicting demand given by Seller after Buyer has delivered a Termination Notice or failed to timely deliver an Approval Notice), Escrow Agent shall promptly notify both parties in writing and thereafter Escrow Agent shall be entitled (but not obligated) to refrain from taking any action other than to keep safely the Deposit

until Escrow Agent shall receive a joint instruction from both parties clarifying Escrow Agent’s uncertainty or resolving such conflicting instructions, claims or demands, or until a final non-appealable judgment of a court of competent jurisdiction instructs Escrow Agent to act.

9.5 Real Estate Reporting Person. Escrow Agent is designated the “real estate reporting person” for purposes of section 6045 of title 26 of the United States Code and Treasury Regulation 1.6045-4 and any instructions or settlement statement prepared by Escrow Agent shall so provide. Upon the consummation of the transaction contemplated by this Agreement, Escrow Agent shall file Form 1099 information return and send the statement to Seller as required under the aforementioned statute and regulation.

9.6 Destruction of Documents; Survival. Escrow Agent is hereby authorized to destroy or otherwise dispose of any and all documents, papers, instructions and other material concerning the Escrow at the expiration of six (6) years from the later of (a) the Closing, (b) the final disbursement of any funds maintained in Escrow after the Closing, or (c) the final release of the Deposit following the termination of this Agreement. The provisions of this Article 9 shall survive the Closing or earlier termination of this Agreement until Escrow Agent’s duties and obligations hereunder are fully and finally discharged.

9.7 Closing. The Closing hereunder shall be consummated through Escrow, subject to the satisfaction (or waiver by such party in whose favor such conditions exist) of the conditions set forth in Sections 2.2, 2.4 and 2.5 above, on March 13, 2014 (the “Closing Date”). Time is of the essence as to the closing hereunder. Except as otherwise expressly provided herein, the Closing Date may not be extended without the prior written approval of both Seller and Buyer (which approval may be given or withheld in the party’s sole discretion). The Closing shall be deemed to have occurred on the date that the Deed is recorded in the Official Records of Santa Clara County and Seller has received the Purchase Price, subject to the prorations and adjustments provided for in this Agreement, less Seller’s share of closing costs and other charges allocated to Seller hereunder.

9.8 Deposit of Documents.

(a) Seller’s Deliverables. At least one (1) business day prior to the Closing, Seller shall deposit into Escrow the following items:

(i) a duly executed and acknowledged Deed, in the form attached hereto as Exhibit D, conveying the Real Property to Buyer;

(ii) a duly executed Bill of Sale, in the form attached hereto as Exhibit E, conveying Seller’s right, title and interest, if any, in the Personal Property to Buyer;

(iii) a duly executed Affidavit in compliance with Section 1445 of the Internal Revenue Code of 1986, as amended, and in the form of Exhibit F attached hereto, certifying that Seller is not a “foreign person” or otherwise subject to federal tax withholding by Buyer in connection with this transaction;

(iv) a duly executed Withholding Exemption Certificate in compliance with California law (From 593-C), to confirm that Buyer is not required to withhold any portion of the Purchase Price under California law in connection with this transaction;

(v) two (2) duly executed counterparts of the lease in the form attached hereto as Exhibit G, whereby Seller will lease back certain portions of the Improvements after Closing (the “Leaseback Lease”);

(vi) two (2) duly executed counterparts of the Assignment of Contracts, and Intangible Property in the form attached hereto as Exhibit H (the “Assignment”), conveying Seller’s right, title and interest, if any, in the Contracts and Intangible Property to Buyer;

(vii) one (1) duly executed Closing Statement (as defined below);

(viii) duly executed customary title company affidavits and indemnity agreements;

(ix) all applicable transfer tax forms, if any;

(x) evidence reasonably satisfactory to Title Company that the person executing the Closing documents on behalf of Seller has full right, power and authority to do so; and

(xi) two (2) duly executed and acknowledged counterparts of a subordination, nondisturbance and attornment agreement in form and substance reasonably acceptable to Seller with respect to any secured financing entered into by Buyer concurrent with the Closing, a copy of which shall be delivered to Seller no later than five (5) business days prior to the Closing Date.

(b) Buyer’s Deliverables. At least one (1) business day prior to the Closing, Buyer shall deposit into Escrow the following items:

(i) two (2) duly executed counterparts of the Leaseback Lease;

(ii) two (2) duly executed counterparts of the Assignment; and

(iii) one (1) duly executed Closing Statement.

(c) Other Deliverables. Buyer and Seller shall each deposit such other instruments as are reasonably required by the Escrow Agent or Title Company or otherwise required to close the Escrow and consummate the purchase and sale of the Property in accordance with the terms hereof

9.9 Prorations and Credits. Rents, real property taxes and assessments, water, sewer and utility charges (calculated on the basis of the period covered), any amounts owed under Contracts assumed by Buyer at Closing and any other expenses normal to the operation and maintenance of the Real Property shall all be prorated as of the Closing, on the basis of a 365-day year. Seller and Buyer hereby agree that if any of the aforesaid prorations are not calculated

accurately on the Closing Date, then the same shall be recalculated as soon as reasonably practicable after the Closing Date and either party owing the other party a sum of money based on such subsequent proration(s) shall promptly pay said sum to the other party. With respect to any amounts due under the leases which are subject to an annual or other periodic reconciliation, Seller and Buyer shall cooperate to complete a reconciliation as of the Closing. Based upon such reconciliation, for any amounts owing to tenants under the leases, Buyer shall receive a credit at the Closing, and for any amounts payable by tenants under the leases, Seller shall be entitled to a credit at the Closing.

9.10 Tax Appeals. With respect to any property tax appeals or reassessments filed by Seller for tax years prior to the year in which the Closing occurs, Seller shall be entitled to the full amount of any refund or rebate resulting therefrom (subject to any requirement under the leases to pay to the tenants thereunder a share of any such refund or rebate, which Seller shall promptly pay to Buyer for refunding to such tenants), and with respect to any property tax appeals or reassessments filed by Seller for the tax year in which the Closing occurs, Seller and Buyer shall share the amount of any rebate or refund resulting therefrom (after first paying to Seller all costs and expenses incurred by Seller in pursuing such appeal or reassessment) in proportion to their respective periods of ownership of the Property for such tax year (subject to any requirement under the leases to pay to the tenants thereunder a share of any such refund or rebate, which Seller shall promptly pay to Buyer for refunding to such tenants);

9.11 Preliminary Closing Statement. Three (3) business days prior to the Closing, Escrow Agent shall deliver to each of the parties for their review and approval a preliminary closing statement (the “Preliminary Closing Statement”) based on an income expense statement prepared by Seller, approved by Buyer, and delivered to Escrow Agent prior to said date, setting forth (i) the proration amounts allocable to each of the parties and (ii) the closing costs allocable to each of the parties. Based on each of the party’s comments, if any, regarding the Preliminary Closing Statement, Escrow Agent shall revise the Preliminary Closing Statement which will be signed by each of Buyer and Seller prior to the Closing (the “Closing Statement”).

9.12 Closing Costs. Seller shall pay any City and all of the County transfer taxes incurred in connection with the conveyance of the Real Property from Seller to Buyer. Seller shall pay the premium for that portion of the Title Policy that is allocable to a standard coverage owner’s policy of title insurance. The cost of Buyer’s title endorsements, if any, and the excess premium of an ALTA extended owner’s policy (above the premium of the standard coverage owner’s policy) if extended coverage is issued in connection with this transaction also shall be paid by Buyer (except for title endorsements Seller agrees to provide pursuant to Article 4 above, which shall be paid for by Seller). The escrow fees incurred in connection with the consummation of the transaction described herein shall be borne equally by Seller and Buyer. Any other closing costs shall be allocated to the parties as is customary in Santa Clara County, California. Except as otherwise provided in Section 12.5 and Section 12.6 below, each party shall bear their own costs for legal counsel incurred in this transaction.

9.13 Survival. Sections 9.9 and 9.12 above shall survive the Closing for a period of six (6) months and Sections 9.10, 9.14 and 9.15 shall survive the Closing without limitation.

9.14 Possession. If Escrow closes hereunder, Seller shall deliver possession of the Property to Buyer on the Closing Date.

9.15 Deliveries Outside of Escrow. Seller hereby covenants and agrees, at its sole cost and expense, to deliver or cause to be delivered to deliver to Buyer, on or prior to the Closing, the following items:

(i) An original, fully executed counterpart of each of the Contracts being assumed by Buyer, and any amendments, modifications, supplements and restatements thereto;

(ii) The original of each document evidencing the Intangible Property or rights to ownership and use thereof including the Approvals (as defined below);

(iii) To the extent not previously delivered, original of all of the Documents;

(iv) The Personal Property, including, without limitation, all keys, pass cards, remote controls, security codes, computer software and other devices relating to access to the Improvements; and

(v) Keys, combinations or card keys to all locks and security systems.

ARTICLE 10

REPRESENTATIONS AND WARRANTIES

10.1 Seller’s Representations and Warranties. Seller hereby represents and warrants to Buyer the matters set forth below, and states that these representations are true and correct as of the Effective Date and as of the Closing:

(a) Organization and Authority. Seller has been duly organized, validly exists and is in good standing under the laws of the Delaware and is qualified to transact intrastate business in the State of California. Seller has full right and power and authority to enter into and perform this Agreement and to sell the Property to Buyer. This Agreement has been duly and validly authorized, executed and delivered by Seller. All the documents executed by Seller in connection with the Closing under this Agreement will be duly authorized, executed and delivered by Seller. The person(s) executing this Agreement on behalf of Seller have the legal power, right and actual authority to bind Seller to the terms and conditions of this Agreement. The person(s) executing the documents to be delivered by Seller at Closing on behalf of Seller will have the legal power, right and actual authority to bind Seller to the terms and conditions thereof.

(b) Solvency. Seller has not (i) made a general assignment for the benefit of creditors (ii) filed any voluntary petition in bankruptcy or suffered the filing of an involuntary petition by creditors, (iii) suffered the appointment of a receiver to take possession of all or substantially all of such person’s assets, (iv) suffered the attachment or other judicial seizure of all, or substantially all, of Seller’s assets, (v) admitted in writing its inability to pay its debts as they come due, or (vi) made an offer of settlement, extension or composition to its creditors generally.

(c) Other Agreements; Third Party Consents. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, will not conflict with or constitute a default under any of the terms, conditions or provisions of any other agreement to which Seller is a party or by which Seller is bound or any applicable regulation of any governmental agency, or any judgment, order or decree of any court having jurisdiction over either Seller or all or any portion of the Property. No consents or waivers of or by any third party are necessary to permit the consummation by Seller of the transaction contemplated by this Agreement.

(d) Non-Foreign Person. Seller is not a “foreign person” as defined in Section 1445 of the Internal Revenue Code, as amended.

(e) OFAC. Seller is currently (a) in compliance with and shall at all times prior to Closing remain in compliance with the regulations of the Office of Foreign Assets Control (“OFAC”) of the U.S. Department of Treasury and any statute, executive order, or regulation relating thereto (collectively, the “OFAC Rules”), (b) not listed on, and shall not during the term of this Agreement be listed on, the Specially Designated Nationals and Blocked Persons List maintained by OFAC and/or on any other similar list maintained by OFAC or other governmental authority pursuant to any authorizing statute, executive order, or regulation, and (c) not a person or entity with whom a U.S. person is prohibited from conducting business under the OFAC Rules.

(f) Legal Proceedings. There are no pending, or To Seller’s Knowledge (as defined below), threatened actions, suits or proceedings before any judicial or quasi-judicial body or condemnation actions against the Property or against either Seller with respect to the Property. To Seller’s Knowledge, there are no existing, proposed or contemplated special assessments, except those shown as exceptions on the Pro Forma.

(g) Leases. Seller has not entered into any leases, licenses or other occupancy agreements affecting any portion of the Property which will be in force after the Closing. There are no security deposits held by Seller.

(h) Notices. Seller has received no notice(s) regarding changes to or reconfiguration of streets abutting and in the vicinity of the Real Property which have not been delivered to Buyer. To Seller’s Knowledge, no changes to or reconfiguration of streets abutting and in the vicinity of the Real Property are pending or threatened.

(i) Contracts. Seller has not entered into any service, maintenance, repair, management, leasing, or supply contracts or equipment leasing contracts relating to the Property which will be in force after the Closing, except for the Contracts. Seller has not received any written notice, nor delivered any written notice, of any monetary default or material non-monetary default under any of the Contracts and, To Seller’s Knowledge, there is no fact or facts which would now or with the giving of notice or the passage of time or both be a default under the terms thereof.

(j) Violation of Legal Requirements. Seller has not received a written notice of any violations of any laws applicable to the Property, including, without limitation, all laws with respect to zoning, building, fire and health codes, environmental protection and sanitation and pollution control and the Americans with Disabilities Act, as amended (collectively, “Laws”), which violations have not been cured and, To Seller’s Knowledge, there are no violations of any Laws applicable to the Property. Seller has not received notice of, and has no Knowledge of, any condition currently or previously existing on the Property or any portion thereof which may give rise to any violation of any Laws applicable to the Property if it were disclosed to the authorities having jurisdiction over the Property.

(k) Preferential Rights. Seller has not granted any options or rights of first refusal or rights of first offer or similar rights to third parties to purchase or otherwise acquire an interest in the Property. No party has any option, right of first refusal, right of first offer or similar right to lease all or any portion of the Real Property.

(l) Property Documents. Each Document as delivered by Seller constitutes a true, correct and complete copy of such Document. To Seller’s Knowledge, there are no material commitments or agreements affecting the Property which have not been disclosed by Seller to Buyer in writing.

(m) Employees. There will be no obligations concerning any employees of Seller which will be binding upon Buyer or the Property after Closing.

(n) Insurance. Seller has not received any notice or request from any insurance company requesting the performance of any work or alteration with respect to the Property. Seller has not received notice from any insurance company concerning, nor, To Seller’s Knowledge, are there any defects or inadequacies in the Property which, if not corrected, would result in the termination of insurance coverage or increase its cost.

(o) Environmental Matters. To Seller’s Knowledge, except as expressly disclosed in the Documents or in any environmental study or report with respect to the Property which was obtained by Buyer prior to Closing, each of the Property and Seller is in compliance with all Laws relating to Hazardous Materials, which compliance includes, but is not limited to, the possession by such Seller of all permits and other governmental authorities required under applicable Laws, and compliance with the terms and conditions thereof, and Seller has not received any written notice that alleges that Seller or the Property is not in such compliance and there are no circumstances that may prevent or interfere with such compliance in the future. There is no Environmental Claim (as defined below) pending, or To Seller’s Knowledge threatened, with regard to the Property. To Seller’s Knowledge, there are no past or present actions, activities, circumstances, conditions, events or incidents relating to Hazardous Materials that could form the basis of any Environmental Claim against Seller or against any person or entity, including, without limitation, persons or entities whose liability for any such Environmental Claim Seller has or may have retained or assumed either contractually or by operation of law.

“Environmental Claim” means any and all actions (including, without limitation, investigatory, remedial or enforcement actions of any kind, administrative or judicial

proceedings, and orders or judgments arising out of or resulting therefrom), costs, claims, damages (including, without limitation, punitive damages), expenses (including, without limitation, attorneys’, consultants’ and experts’ fees, court costs and amounts paid in settlement of any claims or actions), fines, forfeitures or other civil, administrative or criminal penalties, injunctive or other relief (whether or not based upon personal injury, property damage, or contamination of, or adverse effects upon, the environment, water tables or natural resources), liabilities or losses arising from or relating to the presence or suspected presence of any Hazardous Materials in, on, under, or about the Property or properties adjacent thereto.

“Fundamental Representations” means the representations and warranties set forth in Sections 10.1(a) through 10.1(e) above.

For purposes of the representations and warranties referred to above, the term “To Seller’s Knowledge,” shall mean the actual knowledge of William Caraccio, Michael Major, Paula Pereira, and Douglas Ahrens (collectively, “Seller’s Representatives”) without duty of inquiry and investigation. Seller represents and warrants that Seller’s Representatives are those persons affiliated with Seller most knowledgeable regarding the ownership and operation of the Property. In the event of any breach of any representation or warranty by Seller above, then Seller’s Representatives shall not be personally liable for such breach and recourse may not be had against Seller’s Representatives personally.

10.2 Buyer’s Representations and Warranties. Buyer hereby represents and warrants to Seller the matters set forth below, and states that these representations are true and correct as of the Effective Date and as of the Closing:

(a) Organization and Authority. Buyer is duly formed, validly existing and is in good standing under the laws of Delaware and at Closing will be qualified to transact intrastate business in the State of California. Buyer has full right and power and authority to enter into and perform this Agreement and to purchase the Property from Seller. This Agreement has been duly and validly authorized, executed and delivered by Buyer. All the documents executed by Buyer in connection with the Closing under this Agreement will be duly authorized, executed and delivered by Buyer. The person(s) executing this Agreement on behalf of Buyer have the legal power, right and actual authority to bind Buyer to the terms and conditions of this Agreement. The person(s) executing the documents to be delivered by Buyer at Closing on behalf of Buyer will have the legal power, right and actual authority to bind Buyer to the terms and conditions thereof.

(b) Solvency. Buyer has not (i) made a general assignment for the benefit of creditors (ii) filed any voluntary petition in bankruptcy or suffered the filing of an involuntary petition by creditors, (iii) suffered the appointment of a receiver to take possession of all or substantially all of such person’s assets, (iv) suffered the attachment or other judicial seizure of all, or substantially all, of Buyer’s assets, (v) admitted in writing its inability to pay its debts as they come due, or (vi) made an offer of settlement, extension or composition to its creditors generally.

(c) Other Agreements; Third Party Consents. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby will not conflict

with or constitute a default under any of the terms, conditions or provisions of any other agreement to which Buyer is a party or by which Buyer is bound. No consents or waivers of or by any third party are necessary to permit the consummation by Buyer of the transaction contemplated by this Agreement.

(d) OFAC. Buyer is currently (a) in compliance with and shall at all times prior to Closing remain in compliance with the regulations of the OFAC of the U.S. Department of Treasury and the OFAC Rules, (b) not listed on, and shall not during the term of this Agreement be listed on, the Specially Designated Nationals and Blocked Persons List maintained by OFAC and/or on any other similar list maintained by OFAC or other governmental authority pursuant to any authorizing statute, executive order, or regulation, and (c) not a person or entity with whom a U.S. person is prohibited from conducting business under the OFAC Rules.

10.3 Survival. The representations and warranties set forth in Section 10.1 and Section 10.2 above (excepting the Fundamental Representations and the representations and warranties set forth in Section 10.2 above, which shall survive the Closing indefinitely) shall survive the Closing until the expiration of the Survival Period. Buyer shall be deemed to have waived its right to bring a claim against Seller based on a breach of any representation or warranty set forth in Section 10.1 above (excepting the Fundamental Representations, which shall survive the Closing indefinitely) unless Buyer shall have asserted a claim against Seller in writing based on such breach of such applicable Section within six (6) months following the Closing (and any such claim(s) shall be limited as provided in Section 11.2 below). The provisions of this Section 10.3 shall survive the Closing hereunder.

ARTICLE 11

DEFAULTS

11.1 Buyer’s Default.

(a) Default. Buyer shall be deemed to be in default under this Agreement if Buyer fails, for reasons other than Seller’s default hereunder or the failure of a condition precedent to Buyer’s obligation to perform hereunder, to meet, comply with or perform any covenant, agreement or obligation on Buyer’s part required within the time limits and in the manner required in this Agreement or there shall have occurred a material breach of any representation or warranty made by Buyer, and such failure or breach is not cured or remedied by Buyer within five (5) business days following Buyer’s receipt of written notice from Seller of such failure or breach; provided, however, under no circumstances shall the five (5) business day cure period referred to above extend the Closing Date referred to in Section 9.7 above or extend the time period by which Buyer is to make its Deposit.

(b) Liquidated Damages. If the Closing fails to occur as the result of Buyer’s default in Buyer’s obligations under this Agreement, Seller shall be entitled to receive and retain the Deposit as liquidated damages pursuant to Section 1.2(b)(iv) of this Agreement.

11.2 Seller’s Default.

(a) Default. Seller shall be deemed to be in default under this Agreement if Seller fails, for a reason other than Buyer’s default hereunder or the failure of a condition

precedent to Seller’s obligation to perform hereunder, to meet, comply with, or perform any covenant, agreement or obligation on its part required within the time limits and in the manner required in the Agreement, or there shall have occurred a material breach of any representation, warranty or covenant made by Seller, and such failure or breach is not cured or remedied by Seller within five (5) business days following Seller’s receipt of written notice from Buyer of such failure or breach.

(b) Remedies Before Closing. If Seller shall be deemed in default under Section 11.2(a) at or before Closing, and Buyer does not waive such default, Buyer may pursue one of the following remedies, which shall be Buyer’s sole and exclusive remedies:

(i) Enforce specific performance of this Agreement against Seller, in which case, Buyer shall have no claim for damages or any other remedy against Seller in a court having jurisdiction in Santa Clara County; provided, however, if Buyer fails to file suit for specific performance against Seller on or before the date sixty (60) days following the Closing Date, then Buyer shall be deemed to elected to terminate this Agreement and to receive back the return of its Deposit and Seller shall be obligated to reimburse Buyer for the out-of-pocket third party expenses, not to exceed Two Hundred Fifty Thousand Dollars ($250,000.00), incurred by Buyer in connection with this Agreement and/or the Property as provided in Section 11.2(b)(ii) below.

(ii) Terminate this Agreement by written notice delivered to Seller, and in the event of such termination, Buyer shall be entitled to the return of its Deposit and Seller shall reimburse Buyer, within ten (10) days following receipt of a written invoice and reasonable supporting documents, for the out-of-pocket third party expenses, not to exceed Two Hundred Fifty Thousand Dollars ($250,000.00), incurred by Buyer in connection with this Agreement and/or the Property.

(c) Remedies After Closing. If the Closing has occurred, Buyer shall not be entitled to bring a claim against Seller unless Buyer establishes that Seller shall have materially breached a representation or warranty contained in this Agreement and the damages suffered by Buyer as a result of such breach exceed Ten Thousand Dollars ($10,000.00) (the “Basket”), in which case Buyer may seek damages by reason thereof (not to exceed One Million Dollars ($1,000,000.00) (the “Cap”)), but shall not be entitled to consequential, punitive or exemplary damages. If Seller’s liability to Buyer shall exceed the Basket, then Seller shall be liable for the entire amount thereof up to but not exceeding the Cap. The preceding to the contrary notwithstanding, in the event Seller commits any fraud or breach of the Fundamental Representations or breach of the representation set forth in Article 7 above, then neither the Basket nor the Cap shall not apply and Buyer shall be permitted to avail itself of any rights or remedies available to it at law or in equity

(d) Termination Procedure. Upon termination of this Agreement in accordance with this Section 11.2, the Deposit made by Buyer hereunder shall be promptly returned to Buyer. Seller shall be responsible for all cancellation charges and escrow charges required to be paid to the Title Company and Escrow Agent. Buyer acknowledges and agrees that the provisions of Section 11.2 of this Agreement were specifically bargained for between Seller and Buyer and are reasonable.

(e) Limitation of Liability. Notwithstanding anything to the contrary contained in this Agreement, Buyer agrees that in the event of any breach or default by Seller under this Agreement, Buyer shall not seek or obtain any recovery or judgment against any of the Seller Related Parties. Under no circumstances shall any affiliate of Buyer or any partner, member, stockholder, trustee, beneficiary, officer, director, employee or agent of Buyer or of any of Buyer’s affiliates have any personal liability for the performance of Buyer’s obligations under this Agreement or the documents to be delivered at Closing under this Agreement. The terms of this Section 11.2(e) shall survive the Closing.

Buyer’s Initials:                           Seller’s Initials:                     

ARTICLE 12

MISCELLANEOUS

12.1 Notices. Any notices required or permitted to be given hereunder shall be given in writing and shall be deemed to have been given when delivered by U.S. Mail, registered or certified, return receipt requested, postage prepaid, or by overnight delivery service showing receipt of delivery, or by personal delivery, or by facsimile transmission. Notices and/or demands shall be addressed as follows:

To Buyer:	c/o Rockwood Capital LLC Two Embarcadero Center, Suite 2360 San Francisco, CA 94111 Attention: Jason Oberman Facsimile: (415) 788-7054
with copy to:	c/o Rockwood Capital LLC Two Embarcadero Center, Suite 2360 San Francisco, CA 94111 Attention: Jennifer Levy Facsimile: (415) 788-7054
and a copy to:	Paul Hastings LLP 55 Second Street, 24th Floor San Francisco, CA 94105 Attention: Stephen I. Berkman, Esq. Facsimile: (415) 856-7100
To Seller:	Applied Micro Circuits Corporation 215 Moffett Park Drive Sunnyvale, CA 94089 Attn: L. William Caraccio Fax No.: (408) 542-8355
with a copy to:	Miller, Morton, Callait & Nevis, LLP 25 Metro Drive, 7th Floor San Jose, California 95110
	Attn: Peter A. Kline Fax No.: (408) 292-1765

To Escrow Agent: First American Title Insurance Company 1737 North First Street, 5th Floor San Jose, California 95112 Attn: Linda Tugade Fax No.: (408) 451-7928

or to such other address as either party may from time to time specify in writing to the other party. Notices as aforesaid shall be effective upon actual receipt, or the next business day after delivery to a recognized overnight delivery service, or three (3) business days after the deposit in the U.S. mail, or upon confirmation of transmission by facsimile if transmitted by 5:00 p.m. PST (and if transmitted after 5:00 p.m. PST, then deemed received on the next succeeding business day) provided such facsimile notice or demand is also sent by one of the other methods of delivery set forth above on the same date or next succeeding business day as the facsimile notice is sent.

12.2 Entire Agreement.

This Agreement, together with the Exhibits hereto, contains all representations, warranties and covenants made by Buyer and Seller and constitutes the entire understanding between the parties hereto with respect to the subject matter hereof. Any prior correspondence, memoranda or agreements or letters of intent are replaced in total by this Agreement together with the Exhibits hereto.

12.3 Confidentiality.

(a) Buyer. Buyer shall not make any public announcement or disclosure of the Documents, the terms of this Agreement or the pendency of the transaction contemplated by this Agreement; provided, however, Buyer may disclose the same without the specific prior written consent of Seller to Buyer’s lenders, partners, members, investors, officers, employees, agents, brokers, consultants, attorneys, accountants, auditors, tenants of the Real Property, Escrow Agent, Title Company personnel and exchange facilitators on a need-to-know basis and as required to comply with applicable laws including the U.S. Securities and Exchange Commission (“SEC”) and public company reporting regulations (an “SEC Disclosure”) or to enforce Buyer’s rights and remedies under this Agreement. Notwithstanding anything to the contrary contained herein, the foregoing covenants made by Buyer shall expressly not include (i) any disclosure or dissemination to the extent legally compelled to do so or otherwise required by law, statute, court order or subpoena, or (ii) any information or Documents which are public record or the contents of which are otherwise in the public domain or known to third parties unless due to the breach of Buyer’s obligations under this Section 12.3(a). Buyer’s obligations under this Section 12.3(a) shall survive the termination of this Agreement, but shall not survive the Closing.

(b) Seller. Seller shall not make any public announcement or disclosure of the terms of this Agreement or the pendency of the transaction contemplated by this Agreement; provided, however, Seller may disclose the same without the specific prior written consent of Buyer to

Seller’s lenders, partners, members, investors, officers, employees, agents, brokers, consultants, attorneys, accountants, auditors, tenants of the Real Property, Escrow Agent, Title Company personnel and exchange facilitators on a need-to-know basis and as required to comply with applicable laws including SEC and public company reporting regulations or to enforce Seller’s rights and remedies under this Agreement. Notwithstanding anything to the contrary contained herein, the foregoing covenants made by Seller shall expressly not include (i) any disclosure or dissemination to the extent legally compelled to do so or otherwise required by law, statute, court order or subpoena, or (ii) any information which is public record or in the public domain or known to third parties unless due to the breach of Seller’s obligations under this Section 12.3(b). Seller’s obligations under this Section 12.3(b) shall survive the Closing or earlier termination of this Agreement.

(c) Approval Rights. The form of any press release or public announcement of the transaction contemplated by this Agreement made by either party shall be subject to the prior written approval of the other party not to be unreasonably withheld, conditioned or delayed.

12.4 Time.

Time is of the essence in the performance of each of the parties’ respective obligations contained herein.

12.5 Attorneys’ Fees.

If either party hereto fails to perform any of its obligations under this Agreement or if any dispute arises between the parties hereto concerning the meaning or interpretation of any provision of this Agreement, then the party not prevailing in such dispute shall pay any and all reasonable attorneys’ fees and disbursements and costs of suit incurred by the other party, including, without limitation, court costs and arbitration fees, if applicable. Nothing in this Agreement shall be deemed to limit Buyer’s or Seller’s rights to attorneys’ fees and costs under this Section 12.5, or otherwise.

12.6 Tax Deferred Exchange.

Each party agrees to reasonably cooperate with the other in the event a party attempts to effectuate a Section 1031 exchange with respect to the Property. Such reasonable cooperation shall not require the cooperating party to obtain title to any exchange or target property, execute any promissory note or other document or instrument which would or could impose personal liability upon such cooperating party, or incur any additional expense, cost or liability whatsoever (including, but not limited to, liabilities or warranties of title, or assumption of indebtedness) with regard to the Section 1031 exchange or exchanges. If Buyer is the party desiring to affect a Section 1031 exchange with respect to the Property, Seller agrees to convey title to the Property at Closing to a qualified intermediary designated by Buyer if so requested by Buyer in writing. The party attempting to effectuate a Section 1031 exchange hereby agrees to indemnify and hold harmless the other party from any claim, damage, liability, demand, cause of action, loss, cost, or expense (including, without limitation, reasonable attorney’s fees) the other party may suffer or incur as a result of the cooperating party’s participation in the aforesaid exchange or exchanges. Notwithstanding the foregoing, a cooperating party’s agreement

hereunder to participate in a tax-deferred exchange or exchanges shall not extend the Closing Date hereunder. A cooperating party in such 1031 exchange shall not, by this Agreement or acquiescence to the exchange contemplated by this Section 12.6, (x) have its rights under this Agreement affected or diminished in any manner or (y) be responsible for compliance with or be deemed to have warranted to the other party that any exchange in fact complies with Section 1031 of the Internal Revenue Code of 1986, as amended. The obligations of Seller and Buyer under this Section 12.6 shall survive the Closing.

12.7 Assignment.

(a) Successors and Assigns. This Agreement shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. Seller shall not have the right, power, or authority to assign, pledge or mortgage this Agreement or any portion of this Agreement, or to delegate any duties or obligations arising under this Agreement, voluntarily, involuntarily, or by operation of law

(b) No Assignment. Except in the event of an assignment to a qualified intermediary pursuant to Section 12.6 above, Buyer shall not assign or transfer this Agreement or any of its rights or obligations under this Agreement to any person or entity without first obtaining Seller’s written consent thereto (which consent may be given or withheld in Seller’s sole and subjective discretion); provided, however, Buyer shall have the right, without obtaining Seller’s written consent but upon written notice given to Seller, not less than three (3) Business Days prior to the Closing Date (which notice shall include the name of Buyer’s assignee and the signature block for such assignee), to assign this Agreement to an entity controlled by, controlling or in common control with Buyer. Any assignee of Buyer’s rights or obligations hereunder or in this Agreement, or any portion thereof, shall, as a condition to the effectiveness of such assignment, expressly assume in writing all of Buyer’s obligations under this Agreement and agree in writing to be bound by all of the terms of this Agreement (including, without limitation, the terms of Sections 5.1 and 5.2 above) as if such assignee had executed this Agreement as the original Buyer. Notwithstanding such assignment, Buyer shall not be released or relieved of any of its obligations under this Agreement.

12.8 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.

12.9 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.

12.10 Interpretation of Agreement. Notwithstanding that Seller’s legal counsel has drafted this Agreement, the doctrine or rule of construction that ambiguities in a written instrument are to be construed against the drafting party shall not be employed in connection with this Agreement. This Agreement shall be construed in accordance with its fair meaning. The article, section and other headings of this Agreement are for convenience of reference only and shall not be construed to affect the meaning of any provision contained herein. Where the context so requires, the use of the singular shall include the plural and vice versa and the use of the masculine shall include the feminine and the neuter. The term “person” shall include any

individual, partnership, joint venture, corporation, trust, unincorporated association, limited liability company, any other entity and any government or any department or agency thereof, whether acting in an individual, fiduciary or other capacity.

12.11 Amendments. This Agreement may be amended or modified only by a written instrument signed by Buyer and Seller.

12.12 No Recording. Neither this Agreement or any memorandum or short form thereof may be recorded by Buyer; however, Buyer shall be entitled to record a lis pendens in connection with any action for specific performance.

12.13 Further Documents. In connection with the closing of the transaction described herein, each party agrees to execute and deliver any further documents which may be reasonable and necessary in carrying out the provisions of this Agreement.

12.14 Computation of Time. The term “business day” as used in this Agreement shall mean any day other than a Saturday, Sunday, or state or federal legal holiday. In computing any period of time under this Agreement, the date of the act or event from which the designated period of time begins to run shall not be included. The last day of the period so computed shall be included unless it is not a business day, in which event the period shall run until the end of the next business day. Similarly, if any date specified herein for performance or satisfaction of any obligation or condition falls on a non-business day, then that date also will be extended to the next succeeding business day thereafter.

12.15 Venue and Jurisdiction. The parties agree that any suit, action or proceeding arising directly or indirectly from or out of this Agreement shall be litigated only in Santa Clara County, California, Superior Court or the United States District Court for the Northern District of California. Both parties irrevocably consent to the jurisdiction of the Santa Clara County, California, Superior Court and the United States District Court for the Northern District of California. Without limiting the generality of the foregoing, each party waives and agrees not to assert by way of motion, defense or otherwise in any suit, action or proceeding any claim that such party is not personally subject to the jurisdiction of the above-named courts, that such suit, action or proceeding is brought in an inconvenient forum, or that the venue of such action, suit or proceeding is improper. In the event any suit, action or proceeding arising directly or indirectly from or out of this Agreement is commenced, each party agrees that, in addition to any other manner provided by applicable law or court rule, service of process may be made by service of a copy of the summons, complaint and other pleadings required by applicable law to commence such litigation upon each party’s appointed agent for service of process in the State of California.

12.16 Buyer’s Work Product. If the Closing hereunder does not occur for any reason other than due to Seller’s breach of this Agreement, then copies of all studies, surveys, test results, analyses, plans, drawings, engineering and other work product concerning the Real Property, or applicable portion thereof, prepared by, for or on behalf of Buyer (collectively, “Buyer’s Work Product”) shall at the option of Seller, following written request therefor by Seller to Buyer, promptly be delivered to Seller at Seller’s cost and expense; provided, however, in no event shall Buyer be obligated to furnish to Seller any: (1) document or correspondence which would be subject to the attorney-client privilege; (2) document or item which Buyer is

contractually or otherwise bound to keep confidential; (3) internal memoranda, reports or assessments relating to the valuation or future performance of the Property; or (4) appraisals of the Property whether prepared internally by Buyer or Buyer affiliates or externally. Buyer’s obligations under the immediately preceding sentence shall survive the termination of this Agreement. Any of Buyer’s Work Product delivered to Seller at Seller’s written request pursuant to the terms above shall be delivered by Buyer to Seller without representation or warranty by Buyer to Seller. Buyer shall not in any way be liable or otherwise responsible for any inaccuracies or misstatements set forth therein. Seller will not be entitled to rely on Buyer’s Work Product and, to the extent it does so, will do so at its sole risk.

12.17 Permits. Prior to Closing, Seller at Seller’s sole expense shall use commercially reasonable efforts to cause all necessary action to be taken with the City of Sunnyvale, California (the “City”) to cause all of the permits set forth on Exhibit I marked “Expired” (collectively, the “Expired Permits”) to be fully rectified such that the Expired Permits are no longer shown as “Expired” in the City’s records and are no longer considered by the City to be building code violations. In addition, prior to Closing, Seller at Seller’s sole expense shall complete all remaining work with regard to the permit set forth on Exhibit I marked “Active” and thereafter shall cause all necessary action to be taken with the City to cause such permit to be marked as final.

12.18 Energy Disclosure. Buyer waives, to the extent permitted by Legal Requirements, the requirement of California Public Resource Code § 25402.10 and the regulations issued in connection therewith (e.g., California Code of Regulations, Title 20, Sections 1680 – 1684) to deliver to Buyer a Data Verification Checklist as of the Effective Date, and any rights and remedies Buyer may have as a result of not receiving the Data Verification Checklist. Notwithstanding the foregoing, Seller shall as soon as reasonably practicable after the date hereof and in any event no later than the Closing Date provide to Buyer the Data Verification Checklist and any other materials required in connection with California Public Resource Code § 25402.10 and the disclosure regulations issued in connection therewith.

12.19 Survival. Except as expressly provided otherwise in this Article 12, this Article 12 shall survive the Closing.

[balance of page is intentionally blank; signature page follows on next page]

The parties hereto have executed this Agreement as of the Effective Date.

SELLER:
APPLIED MICRO CIRCUITS CORPORATION, a Delaware corporation
By:	/s/ L. William Caraccio
Name:	L. William Caraccio
Its:	Vice President
BUYER:
RW9 REIT ACQUISITION, LLC, a Delaware limited liability company
By:	/s/ Jennifer A. Levy
Name:	Jennifer A. Levy
Title:	Vice President & Treasurer

ESCROW AGENT:

The undersigned Escrow Agent accepts the foregoing Agreement of Purchase and Sale and Joint Escrow Instructions and agrees to act as Escrow Agent under this Agreement in strict accordance with its terms.

FIRST AMERICAN TITLE INSURANCE COMPANY		Date: January 22, 2014
By:	/s/ Darlene Ferrill
Name:	Darlene Ferrill
Title:	Authorized Signatory

EXHIBIT A

LEGAL DESCRIPTION OF PROPERTY

Real property in the City of Sunnyvale, County of Santa Clara, State of California, described as follows:

PARCEL 1, AS SHOWN ON THAT CERTAIN PARCEL MAP FILED IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA ON NOVEMBER 9, 1976, IN BOOK 383 OF MAPS PAGE 19.

APN: 110-34-006; ARB No : 110-03-062.09

EX-10.2

Exhibit 10.2

LEASE

THIS LEASE (“Lease”) is dated as of March 13, 2014 between Moffett Park Drive Owner, LLC, a Delaware limited liability company (“Landlord”), and Applied Micro Circuits Corporation, a Delaware corporation (“Tenant”).

1. PREMISES AND COMMON AREAS.

1.1 Premises. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord, a portion of the building (the “Building”) located at 215 Moffett Park Drive in the City of Sunnyvale, Santa Clara County, California, consisting of the complete second floor of the Building and a portion of the ground floor of the Building as depicted on Exhibit A-1 attached hereto and incorporated herein (the “Premises”). The Building together with the land on which the Building is located is referred to herein collectively as, the “Property”. During the Term (as defined below), Tenant shall have the exclusive right to use the generator which currently services the Building. During the Term, Tenant shall have the right to use two hundred twenty (220) parking stalls at the Property, including the exclusive right to use twenty-one (21) parking stalls as depicted on Exhibit A-2 attached hereto and incorporated herein, which reserved spaces will be marked by Landlord “Reserved for Applied Micro”. Notwithstanding the foregoing, Landlord may at its election upon thirty (30) days written notice to Tenant but only to the extent necessary to allow Landlord’s Construction (hereinafter defined and with the designated location as convenient as practicable to the main entrance of the Building) designate the locations within the Property in which Tenant and Tenant’s employees and visitors may park and move (but only on a temporary basis, the location of the reserved spaces shown on Exhibit A-2 attached hereto to a location in close proximity to the existing reserved spaces designated on Exhibit “A-2”. In addition, Tenant shall have the non-exclusive right to use those portions of the Property designated by Landlord from time to time for the general non-exclusive use of Landlord, Tenant and other tenants of the Building, which shall include but shall not be limited to, those areas on the ground floor of the Building designated on Exhibit A-1 as “Common Area”, common entrances, lobbies, corridors, stairwells, elevators, trash areas, roadways, walkways, driveways and landscape areas, together with the existing training room, cafeteria, fitness room and the adjacent restrooms and shower facilities (the “Common Area”). Common Area does not include the Building’s exterior windows and walls and the roof. Tenant is currently in occupancy of the Building and Tenant shall be entitled to exclusive occupancy of the Building (including, without limitation, the complete ground floor) through and including March 13, 2014 without additional charge or Rent.

1.2 AS-IS. Tenant acknowledges and agrees that Tenant (x) was the long-term occupant of the Premises immediately prior to the Commencement Date (as defined below), and (y) is extremely familiar with the condition of the Property due to its prior occupancy and as such has inspected the Premises and accepts the Premises as of the Commencement Date “AS IS” and “WITH ALL FAULTS”. TENANT ACKNOWLEDGES THAT LANDLORD HAS NOT MADE, AND WILL NOT MAKE, NOR SHALL LANDLORD

BE DEEMED TO HAVE MADE, ANY WARRANTIES TO TENANT WITH RESPECT TO THE QUALITY OF CONSTRUCTION OF ANY LEASEHOLD IMPROVEMENTS OR TENANT FINISH WITHIN THE PREMISES OR AS TO THE CONDITION OF THE PREMISES, EITHER EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OR REPRESENTATION AS TO (i) ITS FITNESS, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE, (ii) THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, (iii) THE EXISTENCE OF ANY DEFECT, LATENT OR PATENT, (iv) LANDLORD’S TITLE THERETO, (v) VALUE, (vi) COMPLIANCE WITH SPECIFICATIONS, (vii) LOCATION, (viii) USE, (ix) CONDITION, (x) MERCHANTABILITY, (xi) QUALITY, (xii) DESCRIPTION, (xiii) DURABILITY (xiv) OPERATION, (xv) THE EXISTENCE OF ANY HAZARDOUS MATERIAL, HAZARDOUS CONDITION OR HAZARDOUS ACTIVITY OR (xvi) COMPLIANCE OF THE PREMISES WITH ANY REGULATIONS OR EASEMENT AGREEMENTS; AND ALL RISKS INCIDENT THERETO ARE TO BE BORNE BY TENANT. TENANT ACKNOWLEDGES THAT THE PREMISES IS OF ITS SELECTION AND TO ITS SPECIFICATIONS AND THAT THE PREMISES HAS BEEN INSPECTED BY TENANT AND IS SATISFACTORY TO IT. IN THE EVENT OF ANY DEFECT OR DEFICIENCY IN ANY OF THE PREMISES OF ANY NATURE, WHETHER LATENT OR PATENT, THAT IS EXISTING ON THE EFFECTIVE DATE, LANDLORD SHALL NOT HAVE ANY RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO OR FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES TO TENANT (INCLUDING STRICT LIABILITY IN TORT). THE PROVISIONS OF THIS SECTION 2 HAVE BEEN NEGOTIATED, AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY WARRANTIES BY LANDLORD, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE PREMISES, ARISING PURSUANT TO THE UNIFORM COMMERCIAL CODE OR ANY OTHER LAW NOW OR HEREAFTER IN EFFECT OR ARISING OTHERWISE.

2. TERM.

2.1 The term of this Lease (“Term”) shall commence on the date first set forth above (“Commencement Date”) and expire on August 31, 2015 (“Expiration Date”); provided, however, that Tenant shall have the right (the “Early Termination Option”) to accelerate the Expiration Date to an earlier date selected by Tenant (the “Termination Date”) upon not less than one hundred twenty (120) days’ notice to Landlord. If Tenant elects to have the Termination Date occur prior to the Expiration Date (which such notice shall be irrevocable), Landlord shall pay to Tenant an amount equal to Seventy Five Thousand Dollars ($75,000) per month (prorated for any partial calendar month based upon the actual number of days in such month and the number of days remaining in such month after the date Tenant surrender possession of the Premises to Landlord) that Tenant surrenders possession of the Premises prior to the Expiration Date, not to exceed Three Seventy Five Thousand Dollars ($375,000) in total (the “Early Termination Fee”), such payment to be made within ten (10) business days following Tenant’s surrender of the Premises in the condition required herein. For purposes of Section 26 hereof, once Tenant exercises the Early Termination Option the Termination Date shall be deemed the Expiration Date for purposes of determining liability under such Section 26.

2.2 On or before the Termination Date, Tenant shall be required to surrender the Premises in its entirety to Landlord in the same condition required under this Lease for the surrender of the Premises. Tenant’s failure to so surrender the Premises to Landlord on or before the applicable Termination Date shall be deemed to be a holdover.

2

3. RENT.

3.1 Monthly Rent; Utility Cost. As monthly rental hereunder, Tenant shall pay to Landlord the amount of Fifty Thousand Dollars ($50,000) (the “Rent”), in advance, on the first day of each calendar month, during the Term, without demand, notice, abatement (except as expressly set forth herein), deduction or set-off. Tenant shall be responsible to pay for fifty percent (50%) of the cost of all utilities (i) consumed in the Premises and (ii) used to operate the Building’s elevators and HVAC systems within ten (10) business days following written request.

3.2 Late Payment Charges. If any installment of Rent, or any other sum due from Tenant is not received by Landlord within ten (10) days after the due date, Tenant shall pay to Landlord an additional sum equal to five percent (5%) of the amount overdue to compensate Landlord for reasonably foreseeable processing and accounting charges. Acceptance of any late charge shall not constitute a waiver by Landlord of Tenant’s default with respect to the overdue amount. Notwithstanding the foregoing, Tenant shall be entitled to a ten (10) day grace period after written notice from Landlord on the first occasion during any calendar year in which any amount due hereunder is not paid when due prior to the application of such late charge.

3.3 PRORATIONS. Rent for any period during the Term which is for less than one (1) month shall be a prorated portion of the monthly installment herein, based upon a thirty (30) day month.

3.4 PLACE OF PAYMENT. All sums payable by Tenant hereunder shall be paid to Landlord at its address for notices hereunder or at such other addresses as may from time to time be designated by notice to Tenant.

4. FULL SERVICE LEASE. Tenant shall provide its own janitorial service for the Premises. With this exception and except for Tenant’s obligations expressly set forth in this Lease, this Lease shall be a full service lease and Landlord shall be responsible at Landlord’s sole cost and expense, for all operating costs of the Property, including, but not limited to, all costs incurred by Landlord for the administration, operation, and maintenance of the Premises, Building and Common Area, including, but not limited to (i) Real property taxes and assessments, and personal property taxes on Landlord’s personal property; (ii) the cost of all utilities supplied to the Premises and the Common Area; (iii) Landlord’s liability, property and casualty insurance; (iv) labor and costs incurred in managing the Building, Premises and Common Area; and (v) the costs of maintenance and repair of the Building, Premises and Common Area including, but not limited to, the Building elevator, roof and HVAC systems. Landlord shall reimburse Tenant for janitorial service to the Premises, up to an amount equal to the market rate based upon the same scope and quality of services being provided to Tenant as of the Effective Date plus five percent (5%).

5. ACCESS AND UTILITIES.

5.1 Services. Landlord shall furnish the following services to Tenant twenty-four (24) hours a day and seven (7) days a week: (i) hot and cold water for use in the

3

lavatories, kitchen, shower facilities and at all sinks; (ii) customary heat and air conditioning; (iii) elevator service; (iv) electricity; and (v) access to the Premises and Common Area for Tenant and its employees. Except to the extent caused by the gross negligence or willful misconduct of Landlord or Landlord Parties, Tenant agrees that Landlord shall not be liable for failure to furnish or delay in furnishing any service or utility, or for any diminution in the quality or quantity thereof, whether such failure or delay or diminution is occasioned, in whole or in part, by repairs, replacements, or improvements (subject to Landlord’s compliance with Section 11 below), by Force Majeure (as defined below), by any strike, lockout or other labor trouble, by inability to secure electricity, gas, water, or other fuel at the Building or Property, by any accident or casualty whatsoever, by act or default of Tenant or other parties, or by any other cause; and such failures or delays or diminution shall never be deemed to constitute an eviction or disturbance of Tenant’s use and possession of the Premises or, relieve Tenant from performing any of its obligations under this Lease. Landlord reserves the right to temporarily stop services to the Common Areas, when necessary by reason of accident or emergency, or for reasons of security or for repairs, maintenance, alterations or improvements, in the judgment of Landlord desirable or necessary to be made or performed, until the repairs, alterations or improvements have been completed and subject to restoration as soon as is practicable.

5.2 No Access Control Services. Tenant recognizes that Landlord shall not be providing any access control services at the Building or Property and Landlord shall not be responsible for, and Tenant waives any rights with respect to, providing security or other protection for Tenant or its employees, invitees or property in or about the Premises or the Property. Tenant has installed an access control system (“Access Systems”) restricting access to the Premises. Tenant, at its sole cost and expense, shall maintain the Access System for Tenant’s benefit and Landlord shall not take any actions to dis-arm or disable or to interfere with the operation of the Access System. Landlord shall not be liable to Tenant, and Tenant hereby waives any claim against Landlord, for, and expressly assumes the risk of (i) any unauthorized or criminal entry of third parties into the Premises or the Property, (ii) any damage to Tenant in or about the Premises or the Property, or (iii) any loss of property in and about the Premises or the Property, by or from any unauthorized or criminal acts of third parties, regardless of any action, inaction, failure, breakdown, malfunction and/or insufficiency of the security services provided by Landlord.

5.3 Landlord’s Right of Entry. Notwithstanding anything to the contrary contained in this Lease, Landlord or any other Landlord Party may enter the Premises from 8:00 a.m. to 6 p.m. on any business day after at least one (1) Business Day notice (except in the case of emergency where there is an imminent risk of material injury or damage to person or property), for which no notice shall be required), specifying a two (2) hour window for such entry (provided, however, in the event that tenant promptly notified Landlord that the time is not convenience, Landlord and Tenant shall negotiate in good faith to arrive at a good time) to: (a) examine and inspect the Premises (including to confirm Tenant’s compliance with its obligations under this Lease), (b) show the Premises to prospective investors, purchasers, mortgagees, lessors or (from and after the earlier of (x) January 5, 2015 and (y) the date of delivery of Tenant’s notice to exercise the Early Termination Option) lessees, (c) make such repairs, alterations, replacements or additions to the Premises for which Landlord is responsible pursuant to this Lease, (d) perform tenant improvements necessary to accommodate additional tenants in the Building during term, (e) comply with any applicable laws, (f) post notices of nonresponsibility and (g) to the extent permitted by applicable laws, exercise Landlord’s remedies upon the occurrence and during the continuation of a Default; provided, however, that all Landlord Parties and any such prospective investors, purchasers, mortgagees, lessors or lessees described above shall adhere to Tenant’s reasonable security and confidentiality standards, and any such individuals must agree to being accompanied by Tenant’s security member or personnel during any such visit; and provided further, that Landlord shall, except in case of emergency, use commercially reasonable efforts to minimize interference with Tenant’s use of and access to the Premises. In addition, in the event that during the term Landlord performs tenant improvement work to the Building necessary to accommodate an additional tenant in the Building, Tenant shall, upon the written request of Landlord, meet with Landlord and the general contractor performing such work to establish procedures to facilitate the contractor’s reasonable access to the Premises in a timely manner. Subject to the foregoing, Landlord shall be allowed to take into and through the Premises any and all materials that may be required to make any such repairs, additions, alterations or improvements. Any such entries shall be without the abatement of Rent and shall include the right to take such reasonable steps as are required to accomplish the stated purposes. In an emergency to property or the life or safety of any person, Landlord shall have the right to use any means that Landlord may deem proper to open the doors in and to the Premises. Any entry into the Premises in the circumstances and manner described in this Section 5.3 shall not be deemed to be a forcible or unlawful entry into, or a detainer of, the Premises, or an actual or constructive eviction of Tenant from any portion of the Premises. If Tenant, upon receipt of the required notice set forth above, fails to provide Landlord with access to the Premises, then (i) Landlord shall not be liable for failure to perform the service or repair for which Landlord’s access was intended until such time as access is provided, but Tenant shall be liable for any damage caused by its delay and (ii) Tenant shall be required to pay Landlord One Thousand Dollars ($1,000) per incident.

4

6. TAXES.

6.1 Taxes Payable by Tenant. Tenant shall pay before delinquency, any and all taxes levied or assessed and which become payable during the Term upon Tenant’s equipment, furniture, fixtures and other personal property located in the Premises (“Personal Property Taxes”). In the event that Personal Property Taxes are imposed or assessed against Landlord, the Building or the Property, Landlord shall furnish Tenant with all applicable tax bills, public charges and other assessments or impositions and Tenant shall forthwith pay the same either directly to the taxing authority or, at Landlord’s option, to Landlord, in which event Landlord shall pay such amounts to the taxing authority promptly after receipt of the funds from Tenant.

6.2 Taxes Payable by Landlord. Landlord shall pay before delinquency all real property taxes and assessments and taxes imposed upon the Property.

7. USE OF PREMISES.

7.1 Use. Tenant agrees that the Premises shall be used and occupied only for office, research and development use, manufacturing and storage, together with uses which are related to the foregoing, and for no other purpose whatever without the written consent of Landlord which consent shall not be unreasonably withheld, conditioned or delayed. Tenant will commit no nuisance or waste on the Premises, will not unreasonably obstruct the areas outside of Tenant’s doors or any portion of the Common Area and will not cause any unreasonable odors, noise, smoke, vibration, electronic emissions or any other item to emanate from the Premises so as to damage or interfere with any other tenant of Landlord.

7.2 Hazardous Materials. Tenant shall not cause or permit to be discharged from or about the Premises or the Property any materials identified by any federal, state, or local governmental body or agency as hazardous materials (collectively, “Hazardous Materials”), except for such Hazardous Materials which are commonly used or stored as a consequence of using the Premises for general office and administrative purposes which are used and stored in accordance with all applicable laws. Tenant shall at its sole expense comply with all applicable governmental rules, regulations, codes, ordinances, statutes and other requirements respecting Hazardous Materials in connection with Tenant’s activities on or about the Premises or the Property. Tenant shall at its sole cost perform all clean-up and remedial actions which may be required of Tenant by any governmental authority with respect to any discharge of such materials by Tenant.

7.3 Compliance With Laws And Regulations. Tenant shall, at its sole cost and expense, comply fully with all laws, rules and orders of all federal, state and municipal governments and any subdivision or agency thereof (collectively, “Governmental Requirements”) applicable to Tenant’s use and occupancy of the Premises, provided, however, that Tenant shall not be required to make or to pay the cost of any capital improvements to the Premises, the Building or the Common Area with respect to any such Governmental Requirements unless resulting from alterations performed by Tenant or Tenant’s particular use of

5

the Premises; provided that, (i) Tenant shall not be required to perform such capital improvements if such capital improvement results from Tenant’s particular use of the Premises or alterations performed by Tenant prior to the Commencement Date if Tenant terminates this Lease and surrenders possession of the Premises to Landlord within thirty (30) days of receipt of notice of the violation of Governmental Requirements, in which case, Tenant shall be entitled to receipt of the Early Termination Fee, if applicable and (ii) if such capital improvement results from alterations performed by Tenant on or after the Commencement Date, then Tenant may not exercise Tenant’s Early Termination Option unless and until Tenant performs the applicable capital improvements resulting from such alterations performed by Tenant on or after the Commencement Date. If any alterations performed by Landlord to the Building triggers a requirement to make any capital improvement to the Building under applicable Governmental Requirements, then Landlord shall at Landlord’s sole cost and expense perform such capital improvement. Tenant shall neither do nor permit any act which will cause the premiums for insurance upon or with respect to the Building or other buildings and appurtenances in the Property to increase, or cause a cancellation of any insurance policy covering said building, or any part thereof. Tenant shall not sell, or permit to be stored, used or sold, in or about the Premises, any article which may be prohibited by the standard form of fire insurance policy in effect from time to time. Tenant shall, at its sole cost and expense, comply with any and all requirements and recommendations of any insurance organization or company, including, without limitation, the board of fire underwriters, pertaining to the use or occupancy of the Premises by Tenant, if compliance with such requirements or recommendations is necessary for the maintenance of reasonable fire and public liability insurance covering said Building.

8. MAINTENANCE AND REPAIR DUTIES.

8.1 Tenant Repair. By entry hereunder, Tenant acknowledges that the Premises and appurtenances are in good, clean and sanitary order and repair. Except as set forth in Section 8.2 below, Tenant shall be solely responsible to repair the HVAC systems located within the Building. If Tenant determines the HVAC system cannot be repaired, Tenant may install, at Tenant’s sole expense, temporary HVAC units. Additionally, Tenant shall be responsible for the expense of installation, operation, and maintenance of its telephone and other communications cabling from the point of entry into the Property to the Premises and throughout the Premises.

8.2 Landlord Repair. Except as expressly set forth herein, Landlord, at its expense, shall maintain the Property (including the Premises) and all components thereof, including, but not limited to the elevator, Building systems (including but not limited to, the HVAC system, the roof and roof membrane), the foundation and structural elements of the Building (including structural load bearing walls and roof structure), the Property’s parking facilities, the Common Areas of the Property and the landscaped areas in the same condition as on the Commencement Date. Landlord’s obligation with respect to the HVAC system shall solely be to perform routine maintenance; any repairs shall be the responsibility of Tenant at Tenant’s sole cost. Landlord shall have no obligation to make any capital repairs to the HVAC, roof or roof membrane and shall not be obligated to replace any of the foregoing; provided that, should Landlord elect to replace the HVAC system during the Term in its sole discretion, such replacement shall be at Landlord’s sole expense notwithstanding Tenant’s repair obligation with respect thereto, and shall be performed in such manner as to not materially interfere with

6

Tenant’s use or occupancy of and/or access to the Premises, the Building and the Common Area, or the provision of any utilities or services to be provided to the Premises and the Common Areas by Landlord hereunder, as provided in Section 11. Notwithstanding the foregoing, Landlord shall not be required to make any repair to the Premises the cost of which is estimated to exceed $5,000.00 individually or the cost of which when aggregated with all other repairs to the Premises or the Property previously made by Landlord during the Term is estimated to exceed $50,000.00. If any repair to the Premises is required the estimated cost of which exceeds the amounts set forth in the preceding sentence, then Landlord shall notify Tenant, Tenant may, but shall have no obligation, to make such repair and, if Tenant elects to make such repair, then Landlord shall reimburse Tenant for the first $5,000.00 of the cost of such repair within thirty (30) days after receipt of invoice together with reasonable supporting evidence provided that Landlord’s total aggregate liability for all repairs to the Premises or the Property during the Term shall not exceed $50,000.00, and any remaining cost shall be borne exclusively by Tenant. If any repair to the Premises is required the estimated cost of which would exceed the amounts set forth in this Section 8.2, then, except as expressly set forth in the preceding sentence, Landlord shall have no liability to Tenant whatsoever for failure to make such repair.

9. REMOVAL OF FIXTURES AND PERSONAL PROPERTY. On the last day of the Term, Tenant will remove its trade fixtures (including, but not limited to, all lab equipment) from the Premises and the Common Areas, remove all of its furniture, equipment and other personal property from the Premises and will surrender the Premises to Landlord in the condition existing on the Commencement Date, reasonable wear and tear, obsolescence and damage by casualty, act of God or the elements, or damage by insured perils covered by Landlord’s insurance excepted. In addition, if during the Term Landlord leases any portion of the ground floor of the Building east of the main entry lobby of the Building to a third-party, then, upon Landlord’s request, Tenant shall promptly remove Tenant’s paintings from the eastern wall of the main entry lobby of the Building. The generator and the HVAC System which service the Building shall be surrendered to Landlord on the last day of the Term in their then current condition. If Tenant fails to remove Tenant’s trade fixtures (including, but not limited to, all lab equipment), furniture, equipment and other personal property from the Premises prior to the expiration or earlier termination of this Lease, Landlord shall also have the right, subject to applicable law, to re-enter the Premises and remove all such property from the Premises; such property may be removed and stored in a public warehouse or elsewhere at the cost of and for the account of Tenant for such period of time as may be required by applicable law after which time Landlord may dispose of such property in accordance with applicable law.

10. TENANT IMPROVEMENTS.

10.1 Demised Premises. If the Premises as demised as shown on Exhibit “A” are not permitted by laws, Tenant shall be responsible at Tenant’s sole cost and expense to reconfigure the Premises, subject to Landlord’s reasonable approval; provided that Landlord may reasonably object, without limitation, to any revised configuration which increases the rentable square footage of the Premises or which adversely affects Landlord’s ability to lease or renovate the remainder of the Building as compared to the configuration of the Premises shown on Exhibit “A” hereto. At Landlord’s election, upon at least thirty (30) days prior written notice to Tenant, Tenant shall, at Tenant’s sole cost and expense, construct a chain link fence in the warehouse portion of the Building in the locations show on Exhibit “A” hereto.

7

10.2 Alterations. Tenant shall not make, or suffer to be made, any alterations of the Premises, or any part thereof, without the prior written consent of Landlord, which consent will not be unreasonably withheld, conditioned or delayed (but, in the case of alterations which will affect the structural portions of the Building, may be granted or withheld in Landlord’s sole and absolute discretion), and any Tenant improvements, additions to or alterations of the Premises shall become a part of the realty and belong to Landlord; provided, however, Tenant shall retain title to all equipment, furniture, fixtures and other personal property placed in the Premises (whether before or after the Commencement Date) by Tenant excepting only personal property used by Tenant solely in connection with the maintenance or repair of the Property (expressly excluding any personal property used by Tenant in the conduct of its business as an occupant of the Property as opposed to the maintenance or repair of the Property) which has been conveyed to Landlord. Notwithstanding the foregoing, Tenant may paint the Premises and install carpet in the Premises without Landlord’s consent. Landlord’s consent shall be conditioned upon Tenant’s acquiring all applicable governmental permits, and all Tenant’s alterations shall be performed in a workmanlike manner with good and sufficient materials. If Landlord has consented to any proposed alterations by Tenant, Tenant shall advise Landlord in writing, in advance, of the date upon which such alterations will commence in order to permit Landlord to post a notice of non-responsibility. Except for such as it may be contesting in good faith in a manner not prejudicial to Landlord, Tenant will promptly pay and discharge all claims for work or labor done, supplies furnished or services rendered at the request of Tenant. Tenant will keep the Premises free and clear of all mechanic’s and materialmen’s liens in connection herewith, and Tenant covenants to indemnify and hold Landlord free and harmless from any and all liability, claim, damage, loss, cost or expense (including but not limited to reasonable attorneys’ fees) in connection with any labor, material or service supplied or rum/shed in or about the Premises at the request of Landlord or its assignees or sub-tenants to those for whom it is responsible. Upon demand, Tenant shall reimburse Landlord for all reasonable, out-of-pocket costs incurred by Landlord in connection with any alterations performed by Tenant, including, without limitation, the costs of any third-party architects, engineers or consultants reasonably required by Landlord to review drawings for such alterations.

10.3 Signs. Tenant shall have the right to maintain its interior and exterior signage existing as of the Commencement Date (“Tenant’s Signage”) throughout the Term. Tenant shall not have the right to install any additional signage on the exterior or interior of the Building, or to place any marquee, awning, decoration or other attachment on or to the storefront, windows (inside or outside), or exterior walls of the Building without the prior written approval of Landlord, which approval may be withheld in Landlord’s sole and absolute discretion. Tenant shall remove all of Tenant’s Signage upon expiration or sooner termination of the Term (“Lease Termination”), and any signage not removed within sixty (60) days after the Lease Termination shall be deemed abandoned by Tenant and may be disposed of by Landlord at Tenant’s cost. Tenant’s right to maintain Tenant’s Signage on the Building is personal to the Tenant originally named in this Lease and may not be transferred or assigned to any party. Notwithstanding the foregoing, Tenant shall have the right to place banners and similar decorations in the interior of the Premises.

11. LANDLORD’S CONSTRUCTION. All construction, remodeling, renovation and other work performed by or on behalf of Landlord (including, but without limitation, work performed by other tenants of the Building) (“Landlord’s Construction”) shall be performed in

8

such manner as to not materially interfere with Tenant’s use or occupancy of and/or access to the Premises, the Building and the Common Area, or the provision of any utilities or services to be provided to the Premises and the Common Areas by Landlord hereunder. Other than tenant improvement work of other tenants in the Building within the premises of such other tenants, Landlord’s Construction shall be limited during the Term to (i) constructing exterior test fits and exterior mock ups which shall not be adjacent to the main front entry of the Building and (ii) performing demolition in the other tenant areas of the Building and minor demolition for investigative purposes in the interior Common Areas. Landlord’s Construction shall not include the ability to replace the roof of the Building during the Term unless agreed to by Landlord and Tenant in writing. Landlord covenants and agrees that upon Tenant paying the Rent and complying with the terms hereof within the expiration of all applicable notice and cure periods, Tenant may peaceably and quietly enjoy the Premises. Landlord reserves the right to enter into and record against the Property easement agreements, covenants, restrictions and conditions, declarations and licenses or to apply for entitlements, subdivision maps, seek rezoning, or otherwise negotiate agreements with the governmental entities having jurisdiction over the Property; provided, that, none of the same have a material adverse effect on the operation of Tenant’s business at the Premises.

12. INSURANCE.

12.1 Tenant’s General Liability Insurance. Tenant shall, at its own cost and expense, keep and maintain in full force during the Term, a policy of comprehensive general liability insurance insuring Landlord and Tenant against any liability arising out of the operation of Tenant’s business and the condition, use, occupancy or maintenance of the Premises including contractual liability coverage (or with contractual liability endorsement). Such insurance policy shall have a general aggregate limit for personal injury and property damage in an amount of not less than Five Million Dollars ($5,000,000) and a per occurrence limit of not less than Five Million Dollars ($5,000,000). Landlord shall be named as an additional insured on such policy.

12.2 Tenant’s Property. Tenant shall, at its own cost and expense, maintain “all risk” property insurance on a “special causes of loss” basis (including boiler and machinery (if applicable); sprinkler damage, vandalism and malicious mischief) on Tenant’s personal property, leasehold improvements and Alterations in an amount equal to the full replacement cost thereof.

12.3 Workers Compensation. Tenant shall, at its sole cost and expenses, keep and maintain workers compensation insurance, statutory and employer’s liability coverage at a limit of $1,000,000 bodily injury each accident.

12.4 General Requirements. All of Tenant’s insurance policies required under this Section 12 shall be issued by carriers licensed to do business in the State of California each with a Best’s Insurance Reports policy holder’s rating of not less than A- and a financial size category of not less than Class VII, shall be written on an “occurrence basis,” which shall afford coverage for all claims based on acts, omissions, injury and damage, which occurred or arose (or the onset of which occurred or arose) in whole or in part during the policy period and shall be non-cancellable and not subject to material change except after thirty (30)

9

days written notice to Landlord and any mortgagee or underlying ground lessor of Landlord. Tenant shall deliver policies of such insurance or certificates thereof to Landlord prior to the Commencement Date, and evidence of renewals of such policies shall be delivered to Landlord at least ten (10) days prior to the expiration of each respective policy term. In the event Tenant shall fail to procure and keep such insurance in full force and effect during the Term, or to deliver such policies or certificates within said time frame, Landlord may, at its option, procure same for the account of Tenant, and the cost thereof shall be paid to Landlord as additional rent within five (5) business days after delivery to Tenant of bills therefor. Tenant shall have the right to satisfy the foregoing insurance requirements pursuant to so-called “umbrella” or “blanket” insurance coverage so long as the minimum coverages described above are applicable to the Premises, Landlord and the Property, as applicable.

12.5 Landlord’s Insurance. Landlord shall at its own cost and expense, keep and maintain throughout the Term insurance on the Building against fire and risks covered by “special causes of loss” form (excluding earthquake and flood) on a 100% “replacement cost” basis. Landlord’s insurance shall: (i) cover the Building; and (ii) not cover any Alterations, leasehold improvements or personal property installed in the Premises by or on behalf of Tenant. Landlord shall also maintain at its expense commercial general liability insurance including contractual liability coverage (or with contractual liability endorsement) on an occurrence basis in amounts not less than Five Million Dollars ($5,000,000) per occurrence and general aggregate limit of Five Million Dollars ($5,000,000) with respect to bodily injury or death and property damage. Any insurance required or permitted to be carried by Landlord hereunder may be carried under blanket policies covering other properties of Landlord and/or its partners and/or their respective related or affiliated corporations so long as such blanket policies provide insurance at all times for the Property as required by this Lease.

12.6 Waiver of Subrogation. Landlord and Tenant hereby agree that no insurer of any interest of either shall have any right of subrogation against the other under any property insurance policies carried by either on the Premises or any part thereof and that an appropriate waiver of subrogation shall be placed in such policies. Notwithstanding anything to the contrary in this Lease, to the extent that this waiver does not invalidate or impair their respective insurance policies, the parties hereto release each other and their respective agents, employees, successors, assignees and subtenants from all liability for injury to any person or damage to any property that is caused by or results from a risk (i) which is actually insured against, to the extent of receipt of payment under such policy (unless the failure to receive payment under any such policy results from a failure of the insured party to comply with or observe the terms and conditions of the insurance policy covering such liability, in which event, such release shall not be so limited), (ii) which is required to be insured against under this Lease, or (iii) which would normally be covered by the standard “special causes of loss” form of property insurance, without regard to the negligence or willful misconduct of the entity so released. Landlord and Tenant shall each obtain from their respective insurers under all policies of fire, theft, and other property insurance maintained by either of them at any time during the Term insuring or covering the Property or any portion thereof of its contents therein, a waiver of all rights of subrogation which the insurer of one party might otherwise, if at all, have against the other party, and Landlord and Tenant shall each indemnify the other against any loss or expense, including reasonable attorneys’ fees, resulting from the failure to obtain such waiver.

10

13. INSPECTION OF PREMISES. Tenant shall permit Landlord and its agents to enter into and upon the Premises at all reasonable times, following reasonable notice (and solely in accordance with the terms of Section 5.2 above), for the purposes of protecting owner’s property, inspecting the Premises, maintaining the Building, making repairs, alternations or additions to any other portion of the Building or for the purpose of posting notices of non-responsibility for alterations, additions, or repairs.

14. DESTRUCTION. In the event of total or partial destruction of the Premises or to the Building and Common Area which prevents Tenant’s beneficial use of the Premises caused by a loss required to be insured under Landlord’s property insurance pursuant to Section 12.6 hereof, Landlord shall forthwith repair the same; provided, however, that if the repairs cannot be made within ninety (90) days after the date of destruction, under the then applicable laws and regulations of Federal, State, County and Municipal authorities and in the light of the extent of damage and the then condition of the labor market and availability of materials and supplies, as reasonably and in good faith estimated by an architect retained by Landlord, then either party may elect to terminate this Lease by written notice to the other given within ten (10) days after Landlord provides Tenant with written notice of the estimated time to complete the repairs. Landlord shall retain the architect as soon as is practicable after the occurrence of the damage and shall provide the architect’s estimate of the time to complete the repairs. If Landlord is required to make repairs, this Lease shall continue in full force and effect and the rent shall be proportionately reduced while repairs are being made, such reduction shall be based upon the extent to which the damage and making of repairs shall interfere with the business carried on by Tenant in the Premises. If Landlord should elect or be obligated pursuant to this Section 14 to repair because of any damage or destruction, Landlord’s obligation shall be limited solely to restoration of the Building to the condition provided to Tenant on the Commencement Date and shall not extend to any leasehold improvements or alterations in the Premises made by Tenant during the Term, furniture, equipment, supplies, trade fixtures or other personal property owned or leased by Tenant, its employees, contractors, invitees or licensees. The provisions of this Lease, including this Section, constitute an express agreement between Landlord and Tenant with respect to any and all damage to, or destruction of, all or any part of the Premises, the Building or any other portion of the Property. Any statute or regulation of the state in which the Building is located including, without limitation, Sections 1932(2) and 1933(4) of the California Civil Code, with respect to any rights or obligations concerning damage or destruction in the absence of an express agreement between the parties, shall have no application to this Lease or any damage or destruction to all or any part of the Premises, the Building or any other portion of the Property.

15. EMINENT DOMAIN.

15.1 Total Or Substantial Taking. If title to all the Premises is taken for any public or quasi-public use or under any statute or by right of eminent domain or by private purchase in lieu of eminent domain or if title to so much of the Premises is taken or if the Premises be damaged by taking so that a reasonable amount of reconstruction of the Premises will not result in the Premises being a practical improvement with adequate access and reasonably suitable for Tenant’s continued occupancy or for the conduct of Tenant’s business in a manner consistent with the conduct of said business prior to said taking, then in either event this Lease shall terminate on the date that the possession of the Premises or part of the Premises is taken or on the date such damage occurs.

11

15.2 Partial Taking. If any part of the Premises shall be so taken and the remaining part of the Premises (after the reconstruction of the then existing Building and improvements) is reasonably suitable for Tenant’s continued occupancy for the purposes and uses for which the Premises are leased and Landlord elects, by notice to Tenant with five (5) days of such taking, to cause such reconstruction, this Lease shall, as to the part so taken, terminate as of the date that possession of such part is taken, and the rental shall be reduced in the same proportion that the floor areas of the portion of the Premises so taken (less any additions to the Premises by reconstruction) bears to the original floor area of the Premises. In the event of such election, Landlord shall, at its own cost and expenses, make all necessary repairs or alterations to the Premises to as to constitute a portion thereof not taken a complete architectural unit and the remaining Premises a complete facility for the conduct of the business of Tenant. During such period of repair and restoration, rental shall be abated on a proportionate basis as it would be if the Premises had been damaged or destroyed pursuant to the provisions of this Lease. Otherwise, this Lease shall terminate on the date that the possession of the part of the Premises is taken.

15.3 Damages. That portion of the compensation awarded or paid upon any such taking or purchase which is allocable to Tenant’s business losses and/or to improvements and fixtures in, upon or forming a part of the Premises which are the property of, or which were paid for by, Tenant hereunder shall be paid to Tenant. The remainder of the award or payment shall belong to Landlord and Tenant waives any right to any part of such remainder.

16. TENANT’S DEFAULT. The occurrence of any of the following events (an “Event of Default”) shall constitute a default and breach of this Lease by Tenant:

a. The failure by Tenant to make any payment of Rent, or any other required payment, as and when due, and such failure shall not have been cured within ten (10) days after written notice specifying the default with particularity thereof from Landlord.

b. Tenant’s failure to perform any other term, covenant or condition contained in this Lease and such failure shall have continued for thirty (30) days after written notice of such failure specifying the default with particularity is given to Tenant; provided that where such failure cannot reasonably be cured within said thirty (30) day period, Tenant shall not be in default if Tenant commences such cure within said thirty (30) day period and thereafter diligently pursues all reasonable efforts to complete said cure until completion thereof;

c. Tenant’s assignment of its assets for the benefit of its creditors, the filing of a petition by or against Tenant (where such petition against Tenant is not dismissed within thirty (30) days), seeking adjudication or reorganization under the Bankruptcy Code; the appointment of a receiver to take possession of, or a levy by way of attachment or execution upon, substantially all of Tenant’s assets at the Premises;

12

d. Tenant shall do or permit to be done anything which creates a lien upon the Premises or the Property and such lien is not removed or discharged within thirty (30) days after the filing thereof;

e. Tenant shall fail to return a properly executed instrument to Landlord in accordance with Section 22 hereof within the time period provided therein;

f. Tenant shall fail to return a properly executed estoppel certificate to Landlord in accordance with Section 21 hereof within the time period provided therein; and

g. Notwithstanding the foregoing, Tenant shall not be deemed in default under Section 16(d), (e) or (f) unless Landlord has provided Tenant with written notice setting forth the default with particularity and such claimed default shall not have been cured within five (5) business days after delivery of such notice

17. REMEDIES. Upon any Event of Default, Landlord shall have the following remedies, in addition to all other remedies now or hereafter provided by law or equity:

17.1 Lease In Full Force and Effect. Landlord shall be entitled to keep this Lease in full force and effect and Landlord may enforce all of its rights and remedies under this Lease, including the right to recover rent and other sums as they become due, plus interest at the highest rate then allowed by law, from the due date of each installment of rent or other sum until paid. Landlord shall have the remedy described in California Civil Code Section 1951.4 (lessor may continue lease in effect after lessee’s breach and abandonment and recover rent as it becomes due, if lessee has the right to sublet or assign, subject only to reasonable limitations).

17.2 Termination. Landlord may terminate Tenant’s right to possession by giving Tenant written notice of termination, whereupon this Lease and all of Tenant’s rights in the Premises shall terminate. Any termination under this Paragraph shall not release Tenant from the payment of any sum then due Landlord or from any claim for damages or rent accrued. In the event this Lease is terminated pursuant to this Paragraph, Landlord may recover from Tenant all damages incurred by Landlord by reason of Tenant’s default, including but not limited to: (i) the cost of recovering possession of the Premises; (ii) reasonable attorneys’ fees, any real estate commissions actually paid and that portion of any leasing commission paid by Landlord applicable to the unexpired Term of this Lease; (iii) the worth at the time of award of the unpaid rent which had been earned at the time of termination; (iv) the worth at the time of award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss for the same period that Tenant proves could have been reasonably avoided; (v) the worth at the time of award of the amount by which the unpaid rent for the balance of the Term after the time of award exceeds the amount of such rental loss for the same period that Tenant proves could be reasonably avoided; and (vi) any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant’s failure to perform Tenant’s obligations under this Lease, or which in the ordinary course of things would be likely to result therefrom; provided, however, that the total damages recoverable on account of clauses (iv) and (v) of this Section 17.2 shall not exceed the sum of three (3) months’ Rent. The “worth at the time of award” of the

13

amounts referred to in subparagraphs (iii) and (iv) of this Paragraph shall be computed by allowing interest at the maximum rate then permitted by law. The “worth at the time of award” of the amount referred to in subparagraphs (v) of this Paragraph shall be 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%).

17.3 NO RELIEF FROM FORFEITURE AFTER DEFAULT. Tenant waives all rights of redemption or relief from forfeiture under California Civil Code section 3275 and California Code of Civil Procedure sections 1174(c) and 1179, and under any other present or future law, in the event Tenant is evicted or Landlord otherwise lawfully takes possession of the Premises by reason of any Event of Default.

18. LANDLORD’S DEFAULT. In the event of any failure by Landlord to perform any of Landlord’s obligations under this Lease, Tenant will give Landlord written notice specifying such default with particularity, and Landlord shall thereupon have thirty (30) days in which to cure any such default. Unless and until Landlord fails to so cure any default after such notice, Tenant shall not have any remedy or cause of action by reason thereof. If a default by Landlord remains uncured after the expiration of the thirty (30) day period (except for obligations of Landlord which reasonably require greater than thirty (30) days to fulfill, in which event Landlord shall not be in default so long as Landlord initiates performance of any such obligation within such thirty (30) day period and thereafter diligently acts to fulfill any such obligation), then Tenant shall have the right, as Tenant’s sole and exclusive remedies, to either (i) bring an action for damages or (ii) seek specific performance.

19. ASSIGNMENT AND SUBLETTING.

19.1 General. No assignment, subletting or hypothecation of this Lease by Tenant (including by operation of law) (each, a “Transfer”) shall be permitted without the written consent of Landlord. Whether or not Landlord grants consent to a Transfer, Tenant shall pay Landlord’s review and processing fees for such Transfer, as well as any reasonable legal fees incurred by Landlord, within thirty (30) days after written request by Landlord. Any attempt to Transfer this Lease by Tenant without Landlord’s consent shall be null and void. In the event that Landlord consents to a Transfer, such consent shall not constitute a waiver of the provision of this Paragraph with respect to any subsequent attempt to Transfer this Lease. Notwithstanding the foregoing, Tenant shall have the right to share portions of the Premises with employees of its wholly or majority-owned subsidiaries and other companies with which Tenant has entered into joint development agreements or similar arrangements (all of such subsidiaries, companies and the employees thereof being “Tenant Parties” hereunder). Sublessees or transferees of the Premises shall become directly liable to Landlord for all obligations of Tenant hereunder pertaining to that portion of the Premises covered by their subleases or other instruments of transfer (e.g., an assignment) without relieving Tenant of any liability therefor, and Tenant shall remain obligated for all liability to Landlord arising under this Lease during the entire remaining Term.

19.2 Permitted Transfer. A change or series of changes in ownership of stock or other ownership interests of Tenant (other than a sale on a public stock exchange) which would result in direct or indirect change in ownership of more than fifty percent (50%) of

14

the outstanding stock of or other ownership interests in Tenant as of the Commencement Date shall be considered a Transfer of this Lease. Notwithstanding the foregoing, Landlord’s consent shall not be required to an assignment of this Lease or a subletting of any portion of the Premises to (i) any entity controlling, controlled by or under common control with Tenant or (ii) to a corporation or other entity which is a successor-in-interest to Tenant, by way of merger, consolidation or corporate reorganization, or by the purchase of all or substantially all of the assets or the ownership interests of Tenant provided that (A) Tenant provides thirty (30) days advance written notice of any such transfer, (B) such merger or consolidation, or such acquisition or assumption, as the case may be, is for a good business purpose and not principally for the purpose of transferring the Lease, and (C) such assignee or subtenant shall agree in writing to assume all of the terms, covenants and conditions of this Lease (or, in the case of a sublease, all of the terms, covenants and conditions of this Lease applicable to the applicable sublet space) arising after the effective date of the assignment.

19.3 Transfer Premium. Fifty percent (50%) of any consideration, net of Tenant’s reasonable, out-of-pocket costs on a straight-line basis incurred in the assignment or subletting (including Tenant’s reasonable expenses in constructing improvements specifically for the subtenant or assignee and reasonable brokerage commissions in connection with the assignment or subletting), which is in excess of the Rent and other amounts due and payable by Tenant under this Lease, and which is due to Tenant by any assignee of this Lease or successor to Tenant for its assignment, or by any sublessee under or in connection with its sublease, or otherwise due to Tenant by another party for use and occupancy of the Premises or any portion thereof, on a per-rentable-square foot basis if less than all of the Premises is transferred, shall be promptly remitted by Tenant to Landlord as additional rental hereunder and Tenant shall have no right or claim thereto as against Landlord.

19.4 Recapture. Notwithstanding anything to the contrary contained in this Section 19, upon receipt of any notice which contemplates an assignment of Tenant’s interest in this Lease or subletting of any portion of the Premises, Landlord shall have the option exercisable by written notice to Tenant given within ten (10) business days after receipt of such notice, to recapture the space proposed to be sublet or assigned (“Transfer Space”). If Landlord exercises its option to recapture, the Lease shall terminate with respect to the Transfer Space on the commencement date specified in Tenant’s notice, and if there is no such date then thirty (30) days after Landlord sends its written notice of recapture. In the event of a recapture by Landlord, if this Lease shall be canceled with respect to less than the entire Premises, Landlord and Tenant shall enter into an appropriate amendment to this Lease confirming such partial termination of this Lease, providing for a prorata reduction in and apportionment of Base Rental on a straight square footage basis, and Landlord shall have the right to use or relet the Transfer Space for any legal purpose in its sole discretion. If Landlord elects to recapture the Transfer Space, then Tenant shall separately demise the portion of the Premises so recaptured by Landlord from the balance of the Premises, including, without limitation, capping, re-routing or reconfiguring all mechanical, electrical, plumbing, life-safety and other systems and equipment serving the affected portions of the Premises and construct such other improvements as may be required by law or which Landlord reasonably deems to be necessary or appropriate to so demise the portion of the Premises so recaptured and the cost of such work shall be paid by Tenant. If Landlord declines, or fails to elect in a timely manner to recapture the Transfer Space within such thirty (30) day period, then, provided Landlord has consented or is deemed to have consented to the

15

proposed Transfer, Tenant shall be entitled to proceed to transfer the Transfer Space to the proposed Transferee, subject to the provisions of the last sentence of this grammatical paragraph. Any subsequent proposed Transfer of the applicable space shall be subject to this Section. If a proposed Transfer is not consummated within six (6) months after the date of the relevant notice, Tenant shall be required to submit a new notice to Landlord with respect to any contemplated Transfer of the Transfer Space described in the first notice

20. CONVEYANCE BY LANDLORD. Landlord (or its successors or assigns) may, at any time during the Term, convey its interest in the Premises, provided that, as a condition to any such conveyance, the transferee or assignee of such interest assumes in writing all of Landlord’s obligations and liabilities under this Lease, which shall thereupon continue in full force and effect. From and after the effective date of the conveyance, Landlord (or, in the case of successive conveyance, its successors or assigns) shall be released and discharged from any and all obligations under this Lease, except those already accrued.

21. ESTOPPELS. Tenant shall, at any time and from time to time upon not less than ten (10) business days’ prior written request by Landlord, execute, acknowledge and deliver to Landlord an estoppel statement in writing certifying the date of commencement of this Lease, that this Lease is unmodified and full force and effect if such is the fact (or if there has been a modification thereof that the Lease is in full force and effect as modified and stating the modifications), the dates to which the rentals and other charges have been paid in advance, if any, and any other information as may be reasonably requested. It is expressly understood and agreed that any such statement delivered pursuant to this Paragraph may be relied upon by any prospective purchaser of the estate of Landlord or the mortgagee or assignee of any mortgagee of any mortgage or the trustee or beneficiary of any deed of trust constituting a lien upon the Premises or upon the Property. If Tenant refuses to provide said estoppel statement within five (5) business days after the giving of the notice pursuant to Paragraph 16(g) as provided herein, it shall be considered an event of default under this Lease.

22. LEASEHOLD PRIORITY AND SUBORDINATION.

22.1 Subordination. Tenant agrees that this Lease is and shall be subordinate to any mortgage which has been or which hereafter may be placed upon the Premises or the land or Building of which they are a part, by Landlord; provided, that, as a condition to such subordination, Landlord agrees that it will obtain a commercially reasonable nondisturbance agreement from any mortgagee or trust deed beneficiary as to whom Tenant’s rights hereunder are or hereafter may become subordinate. Within five (5) business days after Landlord’s request, Tenant agrees to execute, acknowledge, and deliver any and all instruments which are necessary or proper to effect the subordination of this Lease to any mortgage, and hereby irrevocably appoints Landlord as Tenant’s attorney-in-fact to make, execute, acknowledge and deliver any such instruments in the name an on behalf of Tenant. Tenant hereby attorns and agrees to attorn to such person. The word “mortgage” includes any mortgage, deed of trust, or security instrument given to secure a loan or loans against the real property of which the Premises are a part of (any and all modifications, extensions, renewals, and replacements thereof, any and all advances thereunder.). Tenant shall not be deemed to be in default under this Section 22.1, unless Tenant fails to deliver such instruments within five (5) business days after Landlord has given Tenant the Notice provided under Section 16.g.

16

22.2 Lender Protection. In the event any proceedings are brought for the foreclosure of, or in the event of exercise of the power of sale under, any mortgage covering the Premises or the Property, or in the event the interests of Landlord under this Lease shall be transferred by reason of deed in lieu of foreclosure or other legal proceedings, or in the event of termination of any lease under which Landlord may hold title, Tenant shall attorn to the transferee or purchaser at foreclosure or under power of sale, or the lessor of Landlord upon such lease termination, as the case may be (sometimes hereinafter called “such person”), without any deductions or off set whatsoever, and shall recognize and be bound and obligated hereunder to such person as the Landlord under this Lease; provided, however, that no such person shall be (i) bound by any payment of Rent for more than one (1) month in advance, except prepayments in the nature of security for the performance by Tenant of its obligations under this Lease (and then only if such prepayments have been deposited with and are under the control of such person); (ii) bound by any amendment or modification of this Lease made without the express written consent of the mortgagee or lessor of the Landlord, as the case may be; (iii) obligated to cure any defaults under this Lease of any prior landlord (including Landlord); provided, however, that such person shall be responsible for ongoing maintenance and repair obligations of the Landlord; (iv) liable for any act or omission of any prior landlord (including Landlord); (v) subject to any offsets or defenses which Tenant might have against any prior landlord (including Landlord); or (vi) bound by any warranty or representation of any prior landlord (including Landlord) relating to work performed by any prior landlord (including Landlord) under this Lease.

23. ATTORNEY’S FEES. In the event that any dispute between the Landlord and the Tenant should result in litigation (including a judicial reference pursuant or arbitration), the prevailing party in such dispute shall be entitled to recover from the other party all reasonable fees, costs and expenses of enforcing any right of the prevailing party, including without limitation, reasonable attorneys’ fees and expenses.

24. WAIVER. No waiver by either party of any default or breach of any covenant hereunder shall be implied from any omission by either party to take action on account of such default if such default persists or is repeated. No express waiver shall affect any default other than the default specified in the waiver, and then said waiver shall be operative only for the time and to the extent therein stated. Waivers by either party of any covenant, term or condition contained herein shall not be construed as a waiver of any subsequent breach of the same covenant, term or condition. The consent or approval by either party to or of any act by either party requiring further consent or approval shall not be deemed to waiver or render unnecessary consent or approval to or of any subsequent similar acts.

25. NOTICES. All notices shall be sent addressed to Tenant at the Premises as follows:

Applied Micro Circuits Corporation

215 Moffett Park Drive

Sunnyvale, CA 94089

Attn: L. William Caraccio

17

with a copy to:	Miller, Morton, Caillat & Nevis, LLP
	25 Metro Drive, 7th Floor
	San Jose, California 95110
	Attn: Peter A. Kline
and to Landlord as follows:
	Moffett Park Drive Owner, LLC c /o Four Corners Properties, LLC
	One Embarcadero Center, 37th Floor
	San Francisco, CA 94111
	Attn: Bruce Burkard
with a copy to:	Rockwood Capital, LLC
	2 Embarcadero Center, Suite 2360
	San Francisco, CA 94110 Attn: Jason Oberman and Jennifer Levy
and a copy to:	Rockwood Capital, LLC
	10 Bank Street, 11th Floor
	White Plains, New York 10606 Attn: David Becker
and a copy to:	Paul Hastings LLP 55 Second Street, 24th Floor San Francisco, California 94105 Attn: Stephen I. Berkman

or at such other place as either Landlord or Tenant may, from time to time, respectively designate in a written notice given to the other. Any notice to be given or to be served must be in writing and will be deemed to have been given and received as follows: certified or first-class mail notices will be presumed to be received three (3) business days after deposited in the United States Mail; and notices sent by overnight courier service will be presumed to be received one (1) business day after delivery to the overnight courier service.

26. HOLDING OVER. If Tenant remains in possession after expiration or termination of the Term with or without the Landlord’s written consent, Tenant shall become a tenant-at-sufferance, and there shall be no renewal or extension of this Lease by operation of law. Landlord hereby expressly reserves the right to require Tenant to surrender possession of the Premises to Landlord as provided in this Lease upon the expiration or other termination of this Lease. TENANT ACKNOWLEDGES THAT LANDLORD INTENDS TO RENOVATE THE PREMISES FOLLOWING TENANT’S VACATION OF THE PREMISES AND THAT IT IS EXTREMELY DIFFICULT AND IMPRACTICABLE TO ASCERTAIN THE EXTENT OF DETRIMENT TO LANDLORD CAUSED BY THE HOLDOVER BY TENANT UNDER

18

THIS LEASE OR THE AMOUNT OF COMPENSATION LANDLORD SHOULD RECEIVE AS A RESULT OF TENANT’S HOLDOVER. During the period of any such holding over, all provisions of this Lease shall be and remain in effect except that the monthly Rent shall be Three Hundred Fifty Thousand Dollars ($350,000) (whether or not Tenant surrenders a portion of the Premises upon expiration of the Term). The inclusion of the preceding sentence in this Lease shall not be construed as the Landlord’s consent for Tenant to hold over. If Tenant fails to surrender the Premises upon the termination or expiration of this Lease, in addition to any other liabilities to Landlord accruing therefrom, Tenant shall protect, defend, indemnify and hold Landlord harmless from all loss, costs (including reasonable attorneys’ fees) and liability resulting from such failure, including, without limiting the generality of the foregoing, any claims made by any succeeding tenant founded upon such failure to surrender, any consequential damages and any lost profits resulting therefrom. The provisions of this Section 26 shall not be deemed to limit or constitute a waiver of any other rights or remedies of Landlord provided herein or at law.

27. SUCCESSORS. All the terms, covenants and conditions hereof shall be binding upon and inure to the benefit of the heirs, executors, administrators, successors and assigns of the parties hereto; provided, however, that nothing in this Paragraph shall be deemed to permit any assignment, subletting, occupancy or use contrary to the provisions of Paragraph 20.

28. COMPLETE AGREEMENT. This Lease contains all terms, covenants, conditions, warranties and agreements of the parties relating in any manner to the rental and use and occupancy of the Premises. No prior agreement or understanding pertaining to the same shall be valid or of any force and effect.

29. WAIVER OF JURY TRIAL. LANDLORD AND TENANT HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LEASE OR ANY DOCUMENTS CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ANY ACTIONS OF EITHER PARTY ARISING OUT OF OR RELATED IN ANY MANNER WITH THIS LEASE. THIS WAIVER IS A MATERIAL INDUCEMENT FOR LANDLORD AND TENANT TO ENTER INTO THIS LEASE, AND SHALL SURVIVE THE CLOSING OR TERMINATION OF THIS LEASE. Each party hereby authorizes and empowers the other to file this Section 29 with the clerk or judge of any court of competent jurisdiction as a written consent to waiver of jury trial. Landlord and Tenant agree and intend that this paragraph constitutes a written consent to waiver of trial by jury within the meaning of California Code of Civil Procedure Section 631(a)(2).

30. TIME. Time is of the essence of this Lease and each of its provisions and whenever a certain day is stated for payment or performance of any obligation of Tenant or Landlord, the same enters into and becomes a part of the consideration hereof.

19

31. MISCELLANEOUS.

31.1 Captions. The captions in this Lease are for convenience only and shall not in any way limit or be deemed to construe or interpret the terms and provisions hereof.

31.2 Words. The words “Landlord” and “Tenant”, as used herein, shall include the plural as well as the singular. Words used in the neuter gender include the masculine and feminine. If there be more than one Landlord or Tenant, the obligations hereunder imposed upon Landlord or Tenant shall be joint and several.

31.3 Choice Of Law. This Lease shall be construed and enforced in accordance with the laws of the State of California.

31.4 Amendment. This Lease cannot be amended, altered or modified in any way except in writing signed by the parties hereto.

31.5 Certified Access Specialist. Tenant acknowledges that Landlord has not engaged a Certificate Access Specialist, as such term is defined in California Civil Code Section 55.52, to inspect the Property.

32. LIABILITY OF LANDLORD AND TENANT.

32.1 Waiver. Except to the extent caused by the intentional or willful misconduct or negligence of Landlord, its employees, agents and contractors, Tenant hereby assumes all risk of damage to property and injury to persons, in, on, or about the Premises from any cause whatsoever including without limiting the generality of the foregoing, whether caused by water leakage of any character from the roof, walls, or other portion of the Premises, the Building or the Property, or caused by gas, fire, oil, electricity, or any cause whatsoever , in, on, or about the Premises, the Building, the Property or any part thereof and agrees that Landlord, and its partners, joint venturers, members, shareholders, lenders and mortgagees, and their respective officers, agents, property managers, servants, employees, and independent contractors (collectively, “Landlord Parties”) shall not be liable for, and are hereby released from any responsibility for, any damage to property or injury to persons or resulting from the loss of use thereof, which damage or injury is sustained by Tenant or by other persons claiming through Tenant.

32.2 Indemnity. Except to the extent caused by (a) Landlord’s Construction or (b) the intentional or willful misconduct or negligence of Landlord, its employees, agents and contractors, Tenant shall indemnify and hold the Landlord Parties harmless from and defend Landlord and the other Landlord Parties against any and all loss, cost, damage, injury, expense and liability, including, without limitation, court costs and reasonable attorneys’ fees (collectively, “Claims”): (i) incurred in connection with or arising from any cause in or on the Premises (including, without limitation, Tenant’s installation, placement and removal of Tenant Improvements, Alterations, fixtures and/or equipment in, on or about the Premises); (ii) occurring in, on, or about any other portion of the Property to the extent such injury or damage shall be caused by the intentional or willful misconduct or negligence of Tenant or of the contractors, agents, servants, directors, officers, employees, licensees or invitees

20

of Tenant (collectively, the “Tenant Parties”) in, on or about the Premises, Building and Property, or (iii) arising from any breach of this Lease by Tenant. Tenant further agrees to indemnify and hold the Landlord Parties harmless from, and defend the Landlord Parties against, any and all Claims arising from the conduct of any work or business of Tenant Parties in or about the Property, including any release, discharge, storage or use by Tenant Parties of any Hazardous Material, hazardous waste, toxic substance, oil, explosives, asbestos, or similar material. In the event of a discrepancy between the terms of this Section and the terms of Section 7.2 (concerning Hazardous Material liability), the latter shall control.

33. FORCE MAJEURE. Any prevention, delay or stoppage due to strikes, lockouts, labor disputes, acts of God, acts of war, terrorist acts, inability to obtain services, labor, or materials or reasonable substitutes therefor, governmental actions, civil commotions, moratorium, adverse weather, delays in receipt of permits, fire or other casualty, and other causes beyond the reasonable control of the party obligated to perform, except with respect to the obligations imposed with regard to Rent and other charges to be paid by Tenant pursuant to this Lease (collectively, a “Force Majeure”), notwithstanding anything to the contrary contained in this Lease, shall excuse the performance of such party for a period equal to any such prevention, delay or stoppage and, therefore, if this Lease specifies a time period for performance of an obligation of either party, that time period shall be extended by the period of any delay in such party’s performance caused by a Force Majeure. The foregoing shall in no event be deemed to cause an extension of the Lease Commencement Date or Expiration Date, or in any way eliminate or defer any obligation of Tenant to pay Rent for the period in which a Force Majeure event occurs.

34. LANDLORD’S COVENANT OF QUIET ENJOYMENT. Provided Tenant performs the terms, conditions and covenants of this Lease, and subject to the terms and provisions hereof and the rights of any lenders or ground lessors of the Property, Landlord covenants and agrees to maintain for the benefit of Tenant the quiet and peaceful access to and possession of the Premises and access to and use of the Common Areas for the Lease Term, without hindrance, claim or molestation by Landlord or any other person lawfully claiming under Landlord. The foregoing covenant is in lieu of any other covenant, express or implied. Notwithstanding the foregoing, Landlord shall have the right to perform Landlord’s Construction to the Building (excluding the Premises) and the Property during the Term. Notwithstanding the foregoing, upon at least thirty (30) days advance notice to Tenant, Landlord may install a test section of exterior glass in the portion of the Premises located on the second floor of the Building and not above or immediately adjacent to the recessed portion of the main entrance to the Building (defined as the approximate 70 foot section of the Building between the metal guard rails set on either side of the front entrance).

35. BROKERS’ OR FINDERS’ FEE. Each of the parties represents and warrants that there are no claims for brokerage commissions or finder’s fees in connection with the execution of this Lease and each of the parties agree to indemnify the other against and hold it harmless from, all liabilities arising from any such claim (including, without limitation, the cost of counsel fees in connection therewith).

36. PARTIES REPRESENTED. This Lease has been jointly prepared by the parties with the advice of independent legal counsel of their choice. Neither party shall be entitled to have this Lease interpreted more strongly against the other party by reason of any presumption which arises from the drafting of this Lease.

21

37. RELATIONSHIP OF PARTIES. Nothing contained in this Lease shall be deemed or construed by the parties hereto or by any third party to create the relationship of principal and agent or of partnership or of joint venture or of any association whatsoever between Landlord and Tenant, it being expressly understood and agreed that neither the method of computation of rent nor any of the other provisions contained in this Lease nor any act or acts of the parties hereto shall be deemed to create any relationship between Landlord and Tenant other than the relationship of Landlord and Tenant.

38. OFAC. Tenant is currently (a) in compliance with and shall at all times during the Term remain in compliance with the regulations of the Office of Foreign Assets Control (“OFAC”) of the U.S. Department of Treasury and any statute, executive order, or regulation relating thereto (collectively, the “OFAC Rules”), (b) not listed on, and shall not during the Term be listed on, the Specially Designated Nationals and Blocked Persons List maintained by OFAC and/or on any other similar list maintained by OFAC or other governmental authority pursuant to any authorizing statute, executive order, or regulation, and (c) not a person or entity with whom a U.S. person is prohibited from conducting business under the OFAC Rules.

39. SEVERABILITY If any part or portion of this Lease is held by a court of competent jurisdiction to be invalid, void or unenforceable, all of the remaining provisions shall nevertheless continue in full force without being impaired or invalidated in any way.

40. MULTIPLE COUNTERPARTS. This Lease may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.

41. RULES. Landlord shall have the right at all times during the Term to establish and enforce such reasonable rules and regulations as it deems necessary in its reasonable discretion in conformance with rules and regulations in comparable buildings to the Building to protect the tenantability, safety, operation, and welfare of the Premises and the Property (the “Rules and Regulations”). In the event of any inconsistency between the Lease and the Rules and Regulations, the Lease shall prevail.

42. LIMITATIONS ON LIABILITY. Landlord and the Landlord Parties shall have no personal liability with respect to any of the provisions of this Lease. If Landlord is in default with respect to its obligations under this Lease, Tenant shall look solely to the equity of Landlord in and to the Property for satisfaction of Tenant’s remedies, if any. It is expressly understood and agreed that Landlord’s liability under the terms of this Lease shall in no event exceed the amount of its interest in and to said Property. In no event shall any of the Landlord Parties be personally liable with respect to any of the provisions of this Lease and Tenant hereby expressly waives and releases such personal liability on behalf of itself and all persons claiming by, through or under Tenant. In no event shall any of the Tenant Parties be personally liable with respect to any of the provisions of this Lease and Landlord hereby expressly waives and releases such personal liability on behalf of itself and all persons claiming by, through or under Landlord. Neither Landlord nor any Landlord Party shall be liable to Tenant or any other person for any

22

consequential damages, special or punitive damages, or for loss of business, revenue, income or profits even if caused by the active or passive negligence, or intentional or willful misconduct, of any Landlord Party, and Tenant hereby waives any and all claims for any such damages. Neither Tenant nor any Tenant Party shall be liable to Landlord or any other person for any consequential damages, special or punitive damages, except as set forth in Section 26 hereof, even if caused by the active or passive negligence, or intentional or willful misconduct, of any Tenant Party, and Landlord hereby waives any and all claims for any such damages. Notwithstanding the foregoing, however, the terms of this Section 42 shall in no way be construed to limit Landlord’s rights and remedies against Tenant for loss of rent, including but not limited to rent recoverable under California Civil Code Section 1951.2 or 1951.4.

43. AUTHORITY. The undersigned represent and warrant that the individuals signing this Lease have the full authority to so execute this Lease.

[Signatures On Following Page]

23

IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed the day and date first above written.

LANDLORD:	TENANT:
MOFFETT PARK DRIVE OWNER, LLC, a Delaware limited liability company By:                                                                                                         Name: Title:	APPLIED MICRO CIRCUITS CORPORATION, a Delaware corporation By:                                                                                                    Name:   Title:

24