EXHIBIT 10(gg)

 

TO FORM 10-K OF

WELLS REAL ESTATE FUND X, L.P.

 

 

 

 

 

 

LEASE AGREEMENT

 

Between

 

WELLS/FREMONT ASSOCIATES,

a Georgia joint venture,

as Landlord

 

And

 

TCI INTERNATIONAL, INC.,

a Delaware corporation,

as Tenant

 

Dated: June 16, 2004

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TABLE OF CONTENTS

 

LEASE AGREEMENT

 

No.

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Description

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   Page

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1.    Premises    5 2.    Lease Term    5 3.    Base Rent    5 4.    Rent
Payment    5 5.    Late Charge    5 6.    Partial Payment    5 7.   
Construction of this Agreement    6 8.    Use of Premises    6 9.    Definitions
   7 10.   

Repairs By Landlord

   7 11.   

Repairs By Tenant

   7 12.   

Alterations and Improvements

   8 13.   

Operating Expenses

   9 14.   

Landlord’s Failure to Give Possession

   12 15.   

Acceptance and Waiver

   12 16.   

Signs

   13 17.   

Advertising

   13 18.   

Removal of Fixtures

   13 19.   

Entering Premises

   14 20.   

Services

   14 21.   

Indemnities

   14 22.   

Tenant’s Insurance; Waivers

   15 23.   

Governmental Requirements

   17 24.   

Abandonment of Premises

   17 25.   

Assignment and Subletting

   17 26.   

Default

   19 27.   

Remedies

   19 28.   

Destruction or Damage

   20 29.   

Eminent Domain

   21 30.   

Service of Notice

   21 31.   

Mortgagee’s Rights

   22 32.   

Tenant’s Estoppel

   23 33.   

Attorney’s Fees and Homestead

   23 34.   

Parking

   23 35.   

Storage

   23 36.   

Waste Disposal

   23 37.   

Surrender of Premises

   23 38.   

Cleaning Premises

   24 39.   

No Estate In Land

   24 40.   

Cumulative Rights

   24 41.   

Paragraph Titles; Severability

   24 42.   

Damage or Theft of Personal Property

   24 43.   

Holding Over

   24 44.   

Security Deposit

   24 45.   

Tenant Finishes

   24 46.   

Rules and Regulations

   24 47.   

Quiet Enjoyment

   24

 

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48.   

    Entire Agreement

   25 49.   

    Limitation of Liability

   25 50.   

    Submission of Agreement

   25 51.   

    Authority

   25 52.   

    Intentionally Omitted

   25 53.   

    Broker Disclosure

   25 54.   

    Notices

   25 55.   

    Force Majeure

   26 56.   

    Financial Statements

   26 57.   

    Special Stipulations

   26

 

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BASIC LEASE PROVISIONS

 

The following is a summary of some of the Basic Provisions of the Lease. In the
event of any conflict between the terms of these Basic Lease Provisions and the
referenced Sections of the Lease, the referenced Sections of the Lease shall
control.

 

1.    Building (See Section 1):   47320 Kato Road          Fremont, California
94538 2.    Premises (See Section 1):          Floors:  

1 and 2, being 100% of Building

and the Property

     Rentable Square Feet:   58,424 3.    Term (See Section 2):   Approximately
five (5) years 4.    Base Rent (See Sections 3 and 4):    

 

Period

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Base Rent

per Rentable
Square Foot
per Month

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December 1, 2004 - November 30, 2005

   $ 0.60

December 1, 2005 - November 30, 2006

   $ 0.62

December 1, 2006 - November 30, 2007

   $ 0.64

December 1, 2007 - November 30, 2008

   $ 0.66

December 1, 2008 - November 30, 2009

   $ 0.68

 

5.    Tenant’s Share (See Section 13):   100% 6.    Security Deposit (See
Section 44):   None 7.    Landlord’s Broker (See Section 53):   N/A     
Tenant’s Broker (See Section 53):   N/A 8.    Notice Addresses:   See Section 54

 

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LEASE AGREEMENT

 

THIS LEASE AGREEMENT (hereinafter called the “Lease”) is made and entered into
this 16th day of June, 2004, by and between WELLS/FREMONT ASSOCIATES, a Georgia
joint venture (hereinafter called “Landlord”), and TCI INTERNATIONAL, INC., a
Delaware corporation (hereinafter called “Tenant”).

 

1. Premises. Landlord does hereby rent and lease to Tenant and Tenant does
hereby rent and lease from Landlord, the following described space (hereinafter
called the “Premises”, which defined term is deemed to include the Building and
the Property, each as hereinafter defined):

 

58,424 rentable square feet of space comprising 100% of the rentable space of a
two-story building (the “Building”) known as 47320 Kato Road, Fremont,
California 94538 and that certain real property described on Exhibit “A”
attached hereto (the “Property”). Landlord and Tenant agree that the number of
rentable square feet described above has been confirmed and conclusively agreed
upon by the parties.

 

2. Lease Term. Tenant shall have and hold the Premises for a term (“Term”)
commencing on December 1, 2004 (the “Commencement Date”) and terminating (the
“Expiration Date”) at midnight on November 30, 2009, unless sooner terminated or
extended as hereinafter provided.

 

3. Base Rent. Tenant shall pay to Landlord, at P.O. Box 926040, Norcross,
Georgia 30010-6040, or at such other place as Landlord shall designate in
writing to Tenant, annual base rent (“Base Rent”) in the amounts set forth in
the Basic Lease Provisions. The term “Lease Year”, as used in the Basic Lease
Provisions and throughout this Lease, shall mean each and every consecutive
twelve (12) month period during the Term of this Lease, with the first such
twelve (12) month period commencing on the Commencement Date; provided, however,
if the Commencement Date occurs other than on the first day of a calendar month
the first Lease Year shall be that partial month plus the first full twelve (12)
months thereafter.

 

The Base Rent shall be paid to Landlord on an absolutely “net” basis without
application to any expenses incurred in connection with the operation, repair
and maintenance of the Premises, the Building or the Property.

 

4. Rent Payment. The Base Rent for each Lease Year shall be payable in equal
monthly installments, due on the first day of each calendar month, in advance,
in legal tender of the United States of America, without abatement, demand,
deduction or offset whatsoever, except as may be expressly provided in this
Lease. One full monthly installment of Base Rent shall be due and payable on the
Commencement Date and a like monthly installment of Base Rent shall be due and
payable on or before the first day of each calendar month following the
Commencement Date during the Term hereof. Tenant shall pay, as Additional Rent,
all other sums due from Tenant under this Lease (the term “Rent”, as used
herein, means all Base Rent, Additional Rent and all other amounts payable
hereunder from Tenant to Landlord). Rent for any period less than a full
calendar month shall be appropriately prorated.

 

5. Late Charge. Other remedies for non-payment of Rent notwithstanding, if any
monthly installment of Base Rent or Additional Rent is not received by Landlord
on or before the date due, or if any payment due Landlord by Tenant which does
not have a scheduled due date is not received by Landlord on or before the fifth
(5th) business day following the date Tenant was invoiced, a late charge of five
percent (5%) percent of such past due amount shall be immediately due and
payable as Additional Rent and interest shall accrue from the date past due
until paid at the lower of twelve percent (12%) per annum or the highest rate
permitted by applicable law. In the event that checks submitted by Tenant to
Landlord for payment of amounts due pursuant to the Lease shall not be honored
by the financial institution due to insufficient funds in excess of two (2)
times during the Term, Landlord may, in its sole discretion, require that all
future payments by Tenant to Landlord be paid by certified funds, cashier’s
check or cash.

 

6. Partial Payment. No payment by Tenant or acceptance by Landlord of an amount
less than the Rent herein stipulated shall be deemed a waiver of any other Rent
due. No partial payment or

 

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endorsement on any check or any letter accompanying such payment of Rent shall
be deemed an accord and satisfaction, but Landlord may accept such payment
without prejudice to Landlord’s right to collect the balance of any Rent due
under the terms of this Lease or any late charge assessed against Tenant
hereunder.

 

7. Construction of this Agreement. No failure of Landlord to exercise any power
given Landlord hereunder, or to insist upon strict compliance by Tenant of his
obligations hereunder, and no custom or practice of the parties at variance with
the terms hereof shall constitute a waiver of Landlord’s right to demand exact
compliance with the terms hereof. Time is of the essence of this Lease.

 

8. Use of Premises.

 

(a) Subject to complying with all applicable zoning laws and other governmental
regulations, Tenant shall use and occupy the Premises for office, manufacturing
and warehouse purposes of a type customary for comparable buildings in the
Fremont, California area and for no other purpose. The Premises shall not be
used for any illegal purpose, nor in violation of any valid regulation of any
governmental body, nor in any manner to create any nuisance or trespass, nor in
any manner to vitiate the insurance or increase the rate of insurance on the
Premises or the Building, nor in any manner inconsistent with the first-class
nature of the Building.

 

(b) Tenant shall not cause or permit the receipt, storage, use, location or
handling on the Property (including the Building and Premises) of any product,
material or merchandise which is explosive, highly inflammable, or a “hazardous
or toxic material,” as that term is hereafter defined. “Hazardous or toxic
material” shall include all materials or substances which have been determined
to be hazardous to health or the environment, including, without limitation
hazardous waste (as defined in the Resource Conservation and Recovery Act);
hazardous substances (as defined in the Comprehensive Emergency Response,
Compensation and Liability Act, as amended by the Superfund Amendments and
Reauthorization Act); gasoline or any other petroleum product or by-product or
other hydrocarbon derivative; toxic substances, (as defined by the Toxic
Substances Control Act); insecticides, fungicides or rodenticide, (as defined in
the Federal Insecticide, Fungicide, and Rodenticide Act); asbestos and radon and
substances determined to be hazardous under the Occupational Safety and Health
Act or regulations promulgated thereunder. Notwithstanding the foregoing, Tenant
shall not be in breach of this provision as a result of the presence in the
Premises of hazardous or toxic materials which are in compliance with all
applicable laws, ordinances and regulations and are customarily present in
general office, manufacturing and warehouse uses permitted by this Lease (e.g.,
copying machine chemicals, oil, propane (for forklifts), paints, solvents and
kitchen cleansers).

 

(c) The occupancy rate of the Premises shall in no event be more than the
maximum occupancy permitted pursuant to applicable laws or codes. In the event
that Tenant exceeds this ratio, and Landlord consents to such overage, Tenant
shall be responsible for any and all costs related with such overage, including
without limitation, excessive maintenance charges.

 

(d) Tenant shall not use the Premises or any part thereof for any use or purpose
contrary to those certain covenants, conditions and restrictions listed on
Exhibit B (the “CC&Rs”). This Lease is subject in all respects to the CC&Rs and
the Bylaws of the “Association(s)” established under the CC&Rs. In addition,
Tenant shall comply with all recorded covenants, conditions, easements and
restrictions now or hereafter affecting the Premises and with all reasonable
rules adopted from time to time by the Associations established under the CC&Rs.
To the extent Landlord has approval rights, Landlord will not approve any
amendment to the CC&R’s, nor enter into any new covenants, conditions or
restrictions, without Tenant’s consent if the effect of such amendment, or such
new covenants, conditions or restrictions, will materially, adversely affect
Tenant’s rights under this Lease.

 

(e) Landlord hereby represents and warrants to Tenant that: (1) to the actual
knowledge of the Property’s Responsible Officers (as hereinafter defined), with
no duty to investigate, neither the Building nor the Property contains any
“hazardous or toxic material” in violation of any applicable codes, laws,
ordinances, regulations or covenants, and (2) none of the Property’s Responsible
Officers has received written notice of the presence of any “hazardous or toxic
material” at the Property for

 

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which monitoring or remediation is legally required on or after the date of this
Lease, except for asbestos containing materials in the roof penetration mastic.
The term “Responsible Officers” shall mean those employees of Landlord holding
the titles of “asset manager” and “property manager” for the Property, which
individual(s) are charged with primary responsibility for the ownership,
management and operation of the Property.

 

9. Definitions. “Landlord,” as used in this Lease, shall include the party named
in the first paragraph hereof, its representatives, assigns and successors in
title to the Premises. “Tenant” shall include the party named in the first
paragraph hereof, its successors and assigns, and, if this Lease shall be
validly assigned or sublet, shall also include Tenant’s assignees or subtenants,
as to the Premises, or portion thereof, covered by such assignment or sublease.
“Landlord” and “Tenant” include male and female, singular and plural,
corporation, partnership, limited liability company (and the officers, members,
partners, employees or agents of any such entities) or individual, as may fit
the particular parties.

 

10. Repairs By Landlord. Tenant, by taking possession of the Premises, shall
accept and shall be held to have accepted the Premises as suitable for the use
intended by this Lease. Landlord shall not be required, after possession of the
Premises has been delivered to Tenant, to make any repairs or improvements to
the Premises, except as set forth in this Lease. It is the intention of the
parties that the terms of this Lease shall govern the respective obligations of
the parties as to maintenance and repair of the Premises. Tenant waives the
right to make repairs at the expense of Landlord or to terminate this Lease by
reason of any needed repairs under Sections 1941 and 1942 of the California
Civil Code, or any similar law, statute, or ordinance, now or hereafter in
effect. Except for damage caused by casualty and condemnation (which shall be
governed by Sections 28 and 29 below), and subject to normal wear and tear,
Landlord shall maintain in good repair the structural skeleton of the Building
consisting only of the exterior walls (but not any of the Building’s windows or
glass and not any sealing or repainting of such exterior walls), foundation,
load bearing columns, and lateral supports of the Building, and all of the
foregoing shall be subject to reimbursement by Tenant to the extent it comprises
Operating Expenses. Except for damage caused by casualty and condemnation (which
shall be governed by Sections 28 and 29 below), if and when repair and
maintenance of the Building’s roof is no longer commercially feasible, Landlord
shall, at Landlord’s sole cost and expense, replace the structural portions of
the Building’s roof. Landlord shall, at Landlord’s sole cost and expense,
perform any repairs, maintenance or replacement relating to any hazardous or
toxic material contained in the Building or the Property as of the date of this
Lease and not introduced by Tenant, its representatives, agents, licensees,
contractors or invitees (“Landlord Environmental Obligation”).

 

Landlord hereby represents and warrants to Tenant that none of the Property’s
Responsible Officers has received written notice of the existence of any
violation at the Building or the Property of any applicable codes, laws,
ordinances, regulations and/or covenants where such violation has not been
remedied or otherwise eliminated on or before the date of this Lease.

 

11. Repairs By Tenant. Except as described in Section 10 above or Sections 28
and 29 below, Tenant shall, at its own cost and expense, maintain the Premises,
the Building and the Property in good repair, in a neat and clean, first-class
condition and subject to compliance with all applicable codes, laws, ordinances,
regulations and covenants, including making all necessary repairs and
replacements (collectively, the “Tenant Maintenance Items”). In particular but
not to the exclusion of any other Tenant Maintenance Items, Tenant Maintenance
Items shall include Tenant’s obligation to, at Tenant’s sole cost and expense,
operate, keep, and maintain, and as necessary, repair, restore and replace (i)
the interior and exterior of the Building (excluding Landlord’s responsibilities
as set forth in Section 10 above), including the roof, ceilings, floor surface,
interior and non-structural portions of the exterior walls, wall covering,
shafts, stairs, stairwells, elevator cabs, glass, interior and exterior
painting, caulking and resealing, mullions, windows and doors, washrooms, and
Building mechanical, electrical and telephone closets (provided if and when
repair and maintenance of the Building’s roof is no longer commercially
feasible, Landlord shall replace same as provided in Section 10 above), and (ii)
the Building mechanical, electrical, gas, life safety, plumbing, sewage,
sprinkler systems, elevators, restrooms, and heating, ventilation and
air-conditioning systems, and (iii) exterior lighting and fencing, any common
areas and any sidewalks, parking areas and access ways (including, without
limitation, curbs and striping) upon the Premises and the

 

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landscaping and grounds surrounding the Building. All glass, both interior and
exterior, is at the sole risk of Tenant; and any broken glass shall be promptly
replaced at Tenant’s expense by glass of like kind, size and quality. All
repairs and maintenance of the Premises by Tenant as required under this Lease
shall be performed in a good and safe manner by contractor and other personnel
reasonably approved by Landlord, and in compliance with the provisions of
Section 12 below. Tenant shall further, at its own cost and expense, repair or
restore any damage or injury to all or any part of the Premises, the Building or
the Property that is Landlord’s responsibility to maintain pursuant to Section
10 above if caused by Tenant or Tenant’s agents, employees, invitees, licensees,
visitors or contractors. If Tenant fails to make such repairs or replacements
promptly, Landlord may, at its option, make the repairs and replacements and the
costs of such repair or replacements shall be charged to Tenant as Additional
Rent and shall become due and payable by Tenant with the monthly installment of
Base Rent next due hereunder.

 

Tenant shall, at Tenant’s sole cost and expense, maintain contracts (with
recognized national service providers) for the inspection, maintenance and
service of the (i) roof and the heating, air conditioning and ventilation
equipment, (ii) boiler, fired or unfired pressure vessels, and (iii) fire
sprinkler and/or standpipe and hose or other automatic fire extinguishing
systems, including fire alarm and/or smoke detection, and (iv) elevator, all of
which shall be customary for comparable general office, manufacturing and
warehouse buildings in Fremont, California and shall be performed in accordance
with all applicable codes, laws, ordinances, regulations and covenants. Tenant
shall also be responsible for maintaining a landscape service contract, a
janitorial service contract and a security service contract for the Premises and
the Property during the Term, all of which shall be customary for comparable
general office, manufacturing and warehouse buildings in Fremont, California and
shall be performed in accordance with all applicable codes, laws, ordinances,
regulations and covenants. Tenant shall deliver to Landlord (i) a copy of said
service contracts prior to the Commencement Date, and (ii) thereafter, a copy of
any renewal or substitute service contracts within thirty (30) days prior to the
expiration of the existing service contract.

 

12. Alterations and Improvements. Except for minor, decorative alterations which
do not affect the Building structure or systems, are not visible from outside
the Premises and do not cost in excess of $25,000.00 in the aggregate, Tenant
shall not make or allow to be made any alterations, physical additions or
improvements in or to the Premises without first obtaining in writing Landlord’s
written consent for such alterations or additions, which consent may be granted
or withheld in the sole, unfettered discretion of Landlord (if the alterations
will affect the Building structure or systems or will be visible from outside
the Premises), but which consent shall not be unreasonably withheld (if the
alterations will not affect the Building structure or systems and will not be
visible from outside the Premises). Upon Landlord’s request, Tenant will furnish
Landlord plans and specifications for any proposed alterations, additions or
improvements and shall reimburse Landlord for its reasonable cost to review such
plans. Tenant shall bear responsibility for compliance with all applicable laws,
ordinances, the CC&R’s and governmental approvals, for obtaining the approval of
the association or architectural committee governing the Building, and for
complying with any other requirements of Mission Industrial Park, the City of
Fremont or the County of Alameda (the compliance with which, including the
procurement of all necessary permits and licenses, is Tenant’s responsibility).
Any alterations, physical additions or improvements shall at once become the
property of Landlord; provided, however, Landlord, at its option, may require
Tenant to remove any alterations, additions or improvements in order to restore
the Premises to the condition existing on the Commencement Date. All costs of
any such alterations, additions or improvements shall be borne by Tenant. All
alterations, additions or improvements must be made in a good, first-class,
workmanlike manner and, if the Building is multi-tenanted in the future, in a
manner that does not disturb other tenants (i.e., any loud work must be
performed during non-business hours) and Tenant must maintain appropriate
liability and builder’s risk insurance throughout the construction. Tenant does
hereby indemnify and hold Landlord harmless from and against all claims for
damages or death of persons or damage or destruction of property arising out of
the performance of any such alterations, additions or improvements made by or on
behalf of Tenant. Under no circumstances shall Landlord be required to pay,
during the Term of this Lease, any ad valorem or Property tax on such
alterations, additions or improvements, Tenant hereby covenanting to pay all
such taxes when they become due. In the event any alterations, additions,
improvements or repairs are to be performed by contractors or workmen other than
Landlord’s contractors or workmen, any such contractors or workmen must first be
approved, in writing, by Landlord. Landlord agrees to assign to Tenant any
rights it may have against the contractor of the Premises with respect to any
work performed by said contractor in connection with improvements made by
Landlord at the request of Tenant.

 

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Upon the completion of any alterations, additions or improvements the cost of
which is in excess of $25,000.00, Tenant agrees to cause a Notice of Completion
to be recorded in the office of the Recorder of Alameda County in accordance
with Section 3093 of the Civil Code of the State of California or any successor
statute.

 

13. Operating Expenses.

 

(a) Tenant agrees to reimburse Landlord throughout the Term, as Additional Rent
hereunder for Tenant’s Share (as defined below) of the annual Operating Expenses
(as defined below). The term “Tenant’s Share” shall mean the percentage
determined by dividing the rentable square footage of the Premises by the
rentable square footage of the Building. Landlord and Tenant hereby agree that
Tenant’s Share is 100%. If Tenant does not lease the Premises during the entire
full calendar year in which the Term of this Lease commences or ends, Tenant’s
Share of Operating Expenses for the applicable calendar year shall be
appropriately prorated for the partial year, based on the number of days Tenant
has leased the Premises during that year.

 

(b) Operating Expenses shall be all those expenses of operating, servicing,
managing, maintaining and repairing the Property, Building and all parking areas
in a manner deemed by Landlord reasonable and appropriate and in the best
interest of the tenants of the Building and in a manner consistent with
comparable general office, manufacturing and warehouse buildings in Fremont,
California. Operating Expenses shall include, without limitation, the following:

 

(1) All taxes and assessments, whether general or special, applicable to the
Property and the Building, which shall include real and personal property ad
valorem taxes, and any and all reasonable costs and expenses incurred by
Landlord in seeking a reduction of any such taxes and assessments (collectively,
“Taxes”). Taxes shall be deemed to include any assessment, tax, fee, levy or
charge in addition to, or in substitution, partially or totally, of any
assessment, tax, fee, levy or charge previously included as of the date hereof
within the definition of real property tax, it being acknowledged by Tenant and
Landlord that Proposition 13 was adopted by the voters of the State of
California in the June 1978 election (“Proposition 13”) and that assessments,
taxes, fees, levies and charges may be imposed by governmental agencies for such
services as fire protection, street, sidewalk and road maintenance, refuse
removal and for other governmental services formerly provided without charge to
property owners or occupants, and, in further recognition of the decrease in the
level and quality of governmental services and amenities as a result of
Proposition 13, Taxes shall also include any governmental assessments or
contribution towards a governmental cost-sharing agreement for the purpose of
augmenting or improving the quality of services and amenities normally provided
by governmental agencies. It is the intention of Tenant and Landlord that all
such new and increased assessments, taxes, fees, levies and charges and all
similar assessments, taxes, fees, levies and charges be included within the
definition of Taxes for purposes of this Lease. However, Tenant shall not be
obligated for Taxes on the net income from the operation of the Building
(whether federal, state or local income or rent taxes), unless there is imposed
in the future a tax on rental income on the Building in lieu of the real
property ad valorem taxes, in which event such tax shall be deemed an Operating
Expense of the Building, nor shall Tenant be obligated for Landlord’s franchise,
gift, transfer, excise, capital stock, estate, succession or inheritance taxes.

 

(2) Insurance premiums and commercially reasonable deductible amounts,
including, without limitation, for commercial general liability, ISO Causes of
Loss Special Form property, rent loss, earthquake and other coverages carried by
Landlord on the Building and Property (including terrorism insurance, if
Landlord elects to carry it or is required to carry it by any lender).

 

(3) Management fees not to exceed three (3) percent of Operating Expenses
chargeable hereunder;

 

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(4) The costs, including interest, amortized over its useful life, of any
capital improvement made to the Building by or on behalf of Landlord after the
Commencement Date which is required under any governmental law or regulation (or
any judicial interpretation thereof) that was not applicable to the Building as
of the date of this Lease, and of the acquisition and installation of any device
or equipment, in each case approved by Tenant, not to be unreasonably withheld,
designed to improve the operating efficiency of any system within the Building
or which is acquired to improve the safety of the Building or the Property.

 

(5) All services, supplies, repairs, replacements or other expenses directly and
reasonably associated with servicing, maintaining, managing and operating the
Building.

 

(6) Accounting costs, excluding, however, costs relating to Landlord’s entity.

 

(7) Costs to maintain and repair the Building and Property not otherwise
specified to be the direct obligation of Landlord or Tenant hereunder,
including, without limitation items includable in Operating Expenses pursuant to
Section 10 above.

 

(8) If the Property is covered by a declaration and/or an owners association and
costs of the type described above are allocated to the Building by way of dues
or costs charged or assessed under that declaration or by that association,
those charges or dues shall be included in the Operating Expenses (collectively,
the “CCR Payments”).

 

(c) Landlord shall, on or before the Commencement Date and on or before December
20 of each calendar year, provide Tenant a statement of the estimated monthly
installments of Tenant’s Share of Operating Expenses which will be due for the
remainder of the calendar year in which the Commencement Date occurs or for the
upcoming calendar year, as the case may be. In the event Landlord has not
provided Tenant with such statement prior to January 1 of any calendar year,
Tenant shall continue to pay Tenant’s Share of Operating Expenses in the same
amount as the previous calendar year, unless and until Landlord provides a
statement of estimated monthly installments for the current calendar year. As
soon as practicable after December 31 of each calendar year during the Term of
this Lease, Landlord shall furnish to Tenant an itemized statement of the
Operating Expenses within the Building for the calendar year then ended. Upon
reasonable prior written request given not later than thirty (30) days following
the date Landlord’s statement is delivered to Tenant, Landlord will provide
Tenant detailed documentation to support the itemized statement. If Tenant does
not notify Landlord of any objection to Landlord’s itemized statement within one
(1) year of Landlord’s delivery thereof, Tenant shall be deemed to have accepted
such statement as true and correct and shall be deemed to have waived any right
to dispute the Operating Expenses due pursuant to that statement.

 

(i) Tenant shall pay to Landlord, together with its monthly payment of Base Rent
as provided in Sections 3 and 4 hereinabove, as Additional Rent hereunder, the
estimated monthly installment of Tenant’s Share of the Operating Expenses for
the calendar year in question. At the end of any calendar year if Tenant has
paid to Landlord an amount in excess of Tenant’s Share of Operating Expenses for
such calendar year, Landlord shall reimburse to Tenant any such excess amount
(or shall apply any such excess amount to any amount then owing to Landlord
hereunder, and if none, to the next due installment or installments of
Additional Rent due hereunder, at the option of Landlord). At the end of any
calendar year if Tenant has paid to Landlord less than Tenant’s Share of
Operating Expenses for such calendar year, Tenant shall pay to Landlord any such
deficiency within thirty (30) days after Tenant receives the annual statement.

 

(ii) For the calendar year in which this Lease terminates, and is not extended
or renewed, the provisions of this Section shall apply, but Tenant’s Share for
such calendar year shall be subject to a pro rata adjustment based upon the
number of days prior to the expiration of the Term of this Lease. Tenant shall
make monthly estimated payments of the prorata portion of Tenant’s Share for
such calendar year (in the manner provided above) and when the actual prorated
Tenant’s Share for such calendar year is determined Landlord shall send a
statement to Tenant and if such statement

 

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reveals that Tenant’s estimated payments for the prorated Tenant’s Share for
such calendar year exceeded the actual prorated Tenant’s Share for such calendar
year, Landlord shall include a check for that amount along with the statement.
If the statement reveals that Tenant’s estimated payments for the prorated
Tenant’s Share for such calendar year were less than the actual prorated
Tenant’s Share for such calendar year, Tenant shall pay the shortfall to
Landlord within thirty (30) days of the date Tenant receives Landlord’s
statement.

 

(d) Should Landlord choose not to contest the Taxes in any given year, Tenant
shall have the right to lawfully contest (and Landlord shall cooperate with such
contest, provided Tenant reimburses Landlord for all costs and expenses incurred
in connection therewith), in good faith and with reasonable diligence, the
amount of any such Taxes if Tenant shall post with Landlord such security as
Landlord shall reasonably require to assure payment thereof and to prevent any
sale, foreclosure, or forfeiture of Landlord’s interest in the Property by
reason of non-payment thereof; provided further that on final determination of
the amount of such Taxes, Tenant shall promptly pay any amount so determined,
with all proper costs and charges, and shall have any lien on the Property
released and any judgment satisfied.

 

(e) Notwithstanding the foregoing to the contrary, Landlord shall have the
right, from time to time, no more frequently than annually, to elect to have
Tenant pay Taxes and /or CCR Payments as a monthly pass-through component of
Operating Expenses or as a direct payment in accordance with the following (but
still included within the definition of Operating Expenses for all purposes of
this Lease, except for the method of reimbursement/payment described
hereinabove). If Landlord elects to have Tenant pay direct, Landlord shall give
Tenant thirty (30) days prior written notice. Thereafter, Landlord shall forward
bills to Tenant for Taxes and/or CCR Payments and Tenant shall (i) promptly and
timely pay such bills at least thirty (30) days prior to the due date thereof
directly to the invoicee in accordance with Landlord’s election and such bills
and (ii) provide Landlord with evidence of such payment no later than thirty
(30) days prior to the last day upon which they may be paid without any fine,
penalty, interest or additional cost. If Tenant fails to pay the Taxes and/or
CCR Payments in accordance with this Section 13(c)(iii), such failure shall be
deemed a default by Tenant in accordance with Section 26 hereof and a failure to
timely pay Additional Rent, and Tenant shall be liable for all fines, penalties,
interest and additional cost incurred by Landlord, which amounts Tenant shall
pay to Landlord within thirty (30) days after receipt of written notice from
Landlord. If Landlord has elected to pay Taxes and/or CCR Payments directly,
Landlord shall have the right, from time to time, to elect to return to
collection as a monthly pass-through component of Operating Expenses on thirty
(30) days prior written notice to Tenant.

 

(f) Tenant shall have the right to audit Landlord’s books, with respect to
Operating Expenses only, provided all of the following conditions are met: (i)
Tenant must provide written notice at least ten (10) business days prior to the
day it desires to conduct the audit; (ii) the audit shall be conducted at
Tenant’s sole expense during normal hours at Landlord’s office where the books
are kept; (iii) the audit shall be conducted using Generally Accepted Accounting
Principles and coordinated by Tenant’s central accounting personnel or by an
independent and certified public accounting firm so long as such personnel or
firm does not conduct such audits on a contingent fee basis (although any of the
“Big 4” accounting firms may work on a contingent fee basis and any other
reputable firm may work on a contingent fee basis if Landlord approves same);
(iv) Tenant shall keep all information discovered in such audit confidential;
(v) Tenant shall cause its central accounting personnel and public accounting
firm to keep all information discovered in such audit confidential; (vi) Tenant
may not audit any statement of Operating Expenses more than one (1) year after
Landlord delivers the statement to Tenant and (vii) Tenant shall provide
Landlord a report of the results of such audit. If Tenant audits Landlord’s
books and either (i) Landlord agrees or (ii) a court or arbitration panel (if
the parties elect to arbitrate) determines that Landlord’s itemized statement
overstated the Operating Expenses for the period in question, Landlord shall pay
to Tenant the amount of such overcharge within thirty (30) days after such
agreement or determination. In the event Tenant’s audit discloses an undercharge
of such items as billed to Tenant, Tenant shall pay Landlord the amount of such
undercharge within thirty (30) days after completion of the applicable audit. If
Tenant audits Landlord’s books and either (i) Landlord agrees or (ii) a court or
arbitration panel (if the parties elect to arbitrate) determines that Landlord’s
itemized statement overstated the Operating Expenses for the period in question

 

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by more than 10% then, in addition to reimbursement from Landlord as aforesaid
for any such excess, Landlord shall reimburse Tenant for the reasonable, actual
costs of such audit. If Tenant does not properly exercise the aforesaid right to
audit, Tenant shall be deemed to have accepted such statement as true and
correct and shall be deemed to have waived any right to dispute the excess
Operating Expenses due pursuant to that statement. The pendency of Tenant’s
audit hereunder does not stay Tenant’s obligation to pay Rent as set forth
herein, with Tenant’s only remedy being the mechanism set forth in this
paragraph.

 

(g) Notwithstanding anything in this Lease to the contrary, the following shall
be excluded from Operating Expenses:

 

(i) Penalties or interest for Landlord’s failure to pay Taxes as and when due if
pursuant to subsection (e) above Landlord has elected to pay Taxes itself,
instead of electing to have Tenant pay Taxes directly.

 

(ii) Leasing commissions or other expenses incurred for leasing the Premises;

 

(iii) Depreciation or amortization (except as specifically included in Operating
Expenses above);

 

(iv) The cost of any repairs, additions, alterations, changes, replacement and
other items which, under generally accepted accounting principles, are
classified as capital expenditures or capital improvements, except as
specifically contemplated by Section 13(b)(4) above;

 

(v) Advertising and promotional expenditures;

 

(vi) Costs in connection with insurable fire, windstorm, earthquake, terrorism,
war or other insurable perils, except to the extent of commercially reasonable
deductibles;

 

(vii) Costs, fines or penalties arising from Landlord’s violation of any
governmental rule or regulation (other than Violations of Title III, as
hereinafter defined);

 

(viii) Any amount paid by Landlord to remediate or monitor any substance which
was released, used or disposed of by Landlord which, at the time of such
release, use or disposal, was a hazardous or toxic substance as defined by the
then existing applicable laws and was released, used or disposed of by Landlord
in violation of such then existing applicable laws; and

 

(ix) Costs incurred by Landlord in correcting “Violations of Title III” (as such
term is hereinafter defined) with respect to the Property to the extent, except
as specifically included in Operating Expenses pursuant to Section 23 of the
Lease, arising out of the condition of the Property prior to the Commencement
Date. The term “Violations of Title III” shall mean any failure of the Building
to comply with (or be in legal noncompliance with) Title III of the ADA to the
extent Landlord is directed to cure such failure to comply with (or failure to
be in legal noncompliance with) Title III of the ADA by any federal, state, or
local governmental authority having jurisdiction over the enforcement of Title
III of the ADA.

 

14. Landlord’s Failure to Give Possession. Landlord shall not be liable for
damages to Tenant for failure to deliver possession of the Premises to Tenant if
such failure is due to no fault of Landlord, to the failure of any construction
or remodeling of the Premises by Tenant to be completed or to the failure of any
previous tenant to vacate the Premises. Landlord will use commercially
reasonable efforts to give possession to Tenant by the scheduled Commencement
Date of the Term. If Landlord’s failure to do so is caused by the act of any
previous tenant holding over, Landlord agrees to use reasonable efforts to
recover possession as soon as reasonably possible, including filing a customary
dispossession action.

 

15. Acceptance and Waiver. Landlord shall not be liable to Tenant, its agents,
employees, guests or invitees (and, if Tenant is an entity, its officers,
agents, employees, guests or invitees) for any

 

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damage caused to any of them due to the Building or any part or appurtenances
thereof being improperly constructed or being or becoming out of repair, or
arising from the leaking of gas, water, sewer or steam pipes, from water rising
from underground pipes or the ground, or from electricity, but Tenant, by moving
into the Premises and taking possession thereof, shall accept, and shall be held
to have accepted the Premises as suitable for the purposes for which the same
are leased, and shall accept and shall be held to have accepted the Building and
every appurtenances thereof, and Tenant by said act waives any and all defects
therein; provided, however, that this Section shall not apply to any damages or
injury caused by or resulting from the negligence or willful misconduct of
Landlord or to any Landlord Environmental Obligation pursuant to Section 10
above nor shall it modify any of Landlord’s repair and maintenance obligations.
Subject to the foregoing and except as otherwise provided in this Lease, Tenant
hereby accepts the Premises in its “As Is” condition with all faults and
acknowledges and agrees that Landlord shall not be deemed to have given any
express or implied warranties whatsoever with respect to the condition of the
Premises.

 

16. Signs. Except as set forth below, Tenant shall not paint or place signs,
placards, or other advertisement of any character visible from the exterior of
the Premises except with the consent of Landlord which consent may be withheld
by Landlord in its absolute discretion, and Tenant shall place no signs upon the
outside walls, common areas or the roof of the Building.

 

Subject to (collectively, the “Signage Conditions”) complying with all
applicable laws, ordinances, the CC&R’s and governmental approvals, to obtaining
the approval of the association governing the Building, and to complying with
the Mission Industrial Park sign guidelines and City of Fremont/County of
Alameda sign criteria (the compliance with which, including the procurement of
all necessary permits and licenses, is Tenant’s responsibility), Tenant shall
have the right to install, at Tenant’s sole cost and expense, interior and
exterior signs at the Property (“Tenant’s Signage”) in accordance with the
location(s), size, color, design, material, content, lighting and other
characteristics to be reasonably approved by Landlord. Landlord hereby consents
to Tenant’s Signage to the extent existing as of the date of this Lease. At
Tenant’s sole cost and expense, Tenant shall maintain Tenant’s Signage in good
condition, subject to Landlord’s reasonable approval as to Tenant’s maintenance
plan and implementation. Upon the expiration or earlier termination of this
Lease, Landlord shall have the right, but not the obligation, to require Tenant
to remove Tenant’s Signage, to require Tenant to repair all injury or damage
resulting from such removal and to require Tenant to return the Property to as
good a condition as it was at the Commencement Date, normal wear and tear and
damage from casualty and condemnation excepted, all at Tenant’s sole cost and
expense. If Tenant fails to perform as required in the immediately preceding
sentence, Landlord shall have the right to perform on Tenant’s behalf and Tenant
shall reimburse Landlord for all actual cost incurred in connection therewith.
Notwithstanding anything to the contrary contained herein, Tenant shall not have
the right to install Tenant’s Signage which includes “Objectionable Substance”
(as hereinafter defined). The term “Objectionable Substance” shall mean any
substance which relates to an entity which is of a character or reputation, or
is associated with a political orientation or faction, that is inconsistent with
the quality of the Property, or which would otherwise reasonably offend a
landlord of a comparable building in the same market as the Building.

 

17. Advertising. Landlord may advertise the Premises as being “For Rent” at any
time following a default by Tenant which remains uncured, beyond applicable
grace periods, and at any time within nine (9) months prior to the expiration,
cancellation or termination of this Lease for any reason and during any such
periods may exhibit the Premises to prospective tenants. Such entry shall be
subject to the notice requirements of Section 19 below.

 

18. Removal of Fixtures. Tenant may from time to time, and shall upon the
expiration or earlier termination of this Lease, remove any trade fixtures and
equipment which it has placed in the Premises which can be removed without
significant damage to the Premises, provided Tenant repairs all damages to the
Premises caused by such removal. Landlord hereby irrevocably waives any
statutory or common law lien rights that Landlord has or may have in any
personal property or trade fixtures or Tenant now or hereafter located at the
Premises. Upon request, from time to time, Landlord agrees to confirm the
foregoing waiver for the benefit of any lender, vendor or equipment lessor of
Tenant.

 

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19. Entering Premises. Landlord may enter the Premises at reasonable hours
provided that Landlord’s entry shall not unreasonably interrupt Tenant’s
business operations and that prior notice is given when reasonably possible
(and, if in the opinion of Landlord any emergency exists, at any time and
without notice) for any legitimate business purpose and/or to exercise any other
right or perform any other obligation that Landlord has under this Lease.
Landlord shall be allowed to take all material into and upon the Premises that
may be appropriate, without in any way being deemed or held guilty of trespass
and without constituting a constructive eviction of Tenant. Except as provided
in Section 20(b) below, the Rent reserved herein shall not abate during any such
entry and Tenant shall not be entitled to maintain a set-off or counterclaim for
damages against Landlord by reason of loss from interruption to the business of
Tenant because of any such entry. Any such entry shall be accomplished during
ordinary business hours, or, if any such entry is at the request of Tenant to be
done during any other hours, the Tenant shall pay all overtime and other extra
costs.

 

20. Services.

 

(a) From and after the date of this Lease, Tenant will be responsible, at its
sole cost and expense, for contracting for such utility service as needed from
time to time by Tenant. If Tenant fails to pay any utility bills or charges and
such failure presents a threat of harm or risk to the Property or could result
in a lien on the Property, Landlord may, at its option and upon reasonable
notice to Tenant, pay the same and in such event, the amount of such payment,
together with interest thereon at the lower of eighteen percent (18%) per annum
or the highest rate permitted by applicable law from the date of such payment by
Landlord, will be added to Tenant’s next due payment, as Additional Rent.

 

From and after the date of this Lease, Tenant will be responsible, at its sole
cost and expense, for the furnishing of all services to the Premises in a manner
customary for comparable general office, manufacturing and warehouse buildings
in Fremont, California, including, but not limited to, janitorial and security
services, pest control, window washing and landscaping services. Landlord shall
have no obligation to provide any services to the Premises, including, but not
limited to, janitorial and security services, pest control, window washing and
landscaping services.

 

In the event Tenant fails to promptly and properly perform under this Section
20, Landlord shall have the right, but not the obligation, upon reasonable prior
written notice to Tenant to take over Tenant’s responsibilities under this
Section 20, and the costs incurred in connection therewith shall be charged to
Tenant as Additional Rent and shall become due and payable by Tenant with the
monthly installment of Base Rent next due hereunder.

 

(b) Landlord shall not be liable for any damages directly or indirectly
resulting from the interruption in any of the services or utilities to the
Premises, nor shall any such interruption entitle Tenant to any abatement of
Rent or any right to terminate this Lease. Notwithstanding the foregoing to the
contrary, if any of the essential services (water, sanitary sewer, electrical,
HVAC and elevator) to the Premises are interrupted, Tenant shall provide
Landlord prompt written notice. If any of such essential services to the
Premises are interrupted as a result of the negligence or willful misconduct of
Landlord, its agents or employees, and the interruption renders all or a
material portion of the Premises untenantable for a period of five (5) or more
consecutive business days following Landlord’s receipt of the notice from Tenant
as aforesaid (the “Service Interruption Period”), with Tenant actually
discontinuing its operations in all or any such material portion of the Premises
for the Service Interruption Period, the Base Rent due under this Lease shall be
abated from the expiration of the Service Interruption Period until the service
is restored, such abatement to be in proportion to the portion of the Premises
that are so rendered untenantable. This abatement of Base Rent shall be Tenant’s
sole remedy with respect to service interruptions.

 

21. Indemnities. Tenant does hereby indemnify and save harmless Landlord against
all claims for damages to persons or property which are caused anywhere in the
Building or on the Property by the negligence or willful misconduct of Tenant,
its agents or employees or which occur in the Premises (or arise out of actions
taking place in the Premises) unless such damage is caused by the negligence or
willful misconduct of Landlord, its agents, or employees. Landlord does hereby
indemnify and hold Tenant

 

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harmless against all claims for damaged persons or property if caused by the
negligence or willful misconduct of Landlord, its agents or employees and
against any damages to Tenant resulting from Landlord’s breach of the
representations set forth in Section 8(e) above. The indemnities set forth
hereinabove shall include the obligation to pay reasonable expenses incurred by
the indemnified party, including, without limitation, reasonable, actually
incurred attorney’s fees. The indemnities contained herein do not override the
waivers contained in Section 22(d) below.

 

22. Tenant’s Insurance; Waivers.

 

(a) Tenant further covenants and agrees that from and after the date of delivery
of the Premises from Landlord to Tenant, Tenant will carry and maintain, at its
sole cost and expense, the following types of insurance, in the amounts
specified and in the form hereinafter provided for:

 

(i) Commercial General and Umbrella Liability Insurance covering the Premises
and Tenant’s use thereof against claims for personal injury or death, property
damage and product liability occurring upon, in or about the Premises, such
insurance to be written on an occurrence basis (not a claims made basis), with a
limit for each occurrence not less than $3,000,000 and to have general aggregate
limits of not less than $5,000,000 for each policy year. The insurance coverage
required under this Section 22(a)(i) shall, in addition, extend to any liability
of Tenant arising out of the indemnities provided for in Section 21 and, if
necessary, the policy shall contain a contractual endorsement to that effect.
The general aggregate limits under the Commercial General Liability (CGL)
insurance policy or policies must apply separately to the Premises and to
Tenant’s use thereof (and not to any other location or use of Tenant) and, if
necessary, such policy shall contain an endorsement to that effect. CGL
insurance shall be written on ISO occurrence form CG 00 01 01 96 (or a
substitute form providing equivalent or better coverage). The certificate of
insurance evidencing the Commercial General Liability form of policy shall
specify all endorsements required herein, shall name all additional insureds
required by Section 22(b) below and shall specify on the face thereof that the
limits of such policy applies separately to the Premises.

 

(ii) Commercial all risk property insurance covering any equipment owned by
Tenant, trade fixtures, merchandise and personal property of Tenant from time to
time in, on or upon the Premises, and alterations, additions or changes made by
Tenant pursuant to Section 12, in an amount not less than one hundred percent
(100%) of their full replacement value from time to time during the Term,
providing protection against perils included within the ISO Special Causes of
Loss –Form insurance policy (or substitute form providing, in Landlord’s
reasonable discretion, equivalent or better coverage), together with insurance
against sprinkler damage, vandalism and malicious mischief. Any policy proceeds
from such insurance shall be applied by Tenant to the repair, construction and
restoration or replacement of the property damaged or destroyed unless this
Lease shall cease and terminate under the provisions of Section 28 of this
Lease.

 

(iii) Workers’ Compensation and Employer’s Liability insurance affording
statutory coverage and containing statutory limits with the Employer’s Liability
portion thereof to have minimum limits of $500,000.00.

 

(iv) Business Interruption Insurance in an amount sufficient to cover costs,
damages, lost income, expenses, base rent and additional rent, should any or all
of the Premises not be usable for a period of up to twelve (12) months.

 

(v) Automobile (and if necessary, commercial umbrella) liability insurance with
a limit of not less than $1,000,000 for each accident. Such insurance shall
insure liability arising out of any automobiles used in connection with Tenant’s
business (including owned, hired, leased and non-owned automobiles).

 

(vi) Tenant shall carry and maintain during the entire Term, at Tenant’s sole
cost and expense, such increased amounts of the insurance required to be carried
by Tenant pursuant to this Section 22, and such other reasonable types of
insurance coverage and in such reasonable amounts covering the Premises and
Tenant’s operations therein, as may be reasonably requested by Landlord;
provided that such requests shall be consistent with the treatment of comparable
tenants in similar buildings in the same market as the Building.

 

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(b) All policies of the insurance provided for in Section 22(a) shall be issued
in form acceptable to Landlord by insurance companies with a rating and
financial size of not less than A-X in the most current available “Best’s
Insurance Reports”, and licensed to do business in the state in which Landlord’s
Building is located. Landlord, in its sole discretion, shall be permitted to
temporarily waive or accept alternative coverages for Tenant’s insurance as
required by the terms of this Section 22. Each and every such policy:

 

(i) shall name Landlord and Wells Management, Inc. as an additional insured (as
well as any mortgagee of Landlord and any other party reasonably designated by
Landlord) and the coverage in item (ii) shall also name Landlord as loss payee
as its interest may appear with respect to all leasehold improvements and
fixtures (other than Tenant’s trade fixtures).

 

(ii) shall (and a certificate thereof shall be delivered to Landlord at or prior
to the execution of the Lease) be delivered to each of Landlord and any such
other parties in interest within thirty (30) days after delivery of possession
of the Premises to Tenant and thereafter within thirty (30) days prior to the
expiration of each such policy, and, as often as any such policy shall expire or
terminate. Renewal or additional policies shall be procured and maintained by
Tenant in like manner and to like extent;

 

(iii) shall contain a provision that the insurer will give to Landlord and such
other parties in interest at least thirty (30) days notice in writing in advance
of any material change, cancellation, termination or lapse, or the effective
date of any reduction in the amounts of insurance; and

 

(iv) shall be written as a primary policy which does not contribute to and is
not in excess of coverage which Landlord may carry.

 

(c) Any insurance provided for in Section 22(a) may be maintained by means of a
policy or policies of blanket insurance, covering additional items or locations
or insureds, provided, however, that:

 

(i) Landlord and any other parties in interest from time to time designated by
Landlord to Tenant shall be named as an additional insured thereunder as its
interest may appear;

 

(ii) the coverage afforded Landlord and any such other parties in interest will
not be reduced or diminished by reason of the use of such blanket policy of
insurance;

 

(iii) any such policy or policies shall specify therein (or Tenant shall furnish
Landlord with a written statement from the insurers under such policy
specifying) the amount of the total insurance allocated to the Tenant’s
improvements and property more specifically detailed in Section 22(a); and

 

(iv) the requirements set forth in this Section 22 are otherwise satisfied.

 

(d) Notwithstanding anything to the contrary set forth hereinabove, Landlord and
Tenant do hereby waive any and all claims against one another for damage to or
destruction of real or personal property to the extent such damage or
destruction can be covered by an ISO Causes of Loss – Special Form property
insurance of the type described in Section 22(a)(ii) above. Each party shall
also be responsible for the payment of any deductible amounts required to be
paid under the applicable ISO Causes of Loss – Special Form property insurance
carried by the party whose property is damaged. These waivers shall apply if the
damage would have been covered by a customary ISO Causes of Loss – Special Form
property insurance policy, even if the party fails to obtain such coverage. The
intent of this provision is that each party shall look solely to its insurance
with respect to property damage or destruction which can be covered by ISO
Causes of Loss – Special Form property insurance of the type described in

 

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Section 22(a)(ii). To further effectuate the provisions of this Section 22(d),
Landlord and Tenant both agree to provide copies of this Lease (and in
particular, these waivers) to their respective insurance carriers and to require
such insurance carriers to waive all rights of subrogation against the other
party with respect to property damage covered by the applicable ISO Causes of
Loss – Special Form property insurance policy.

 

(e) Tenant acknowledges and agrees that any contractors (and subcontractors of
any tier) hired by Tenant to do work in the Premises will be required to carry
sufficient insurance coverage insuring the contractor (or subcontractor), Tenant
and Landlord with terms equivalent to those specified in this Section 22, and
Tenant shall provide certificates of such insurance to Landlord prior to
commencing any work in the Premises.

 

23. Governmental Requirements. Tenant shall promptly comply throughout the Term
of this Lease, at Tenant’s sole cost and expense, with all present and future
laws, ordinances and regulations of all applicable governing authorities,
including, without limitation, the Americans with Disabilities Act, relating to
all or any portion of the Premises, the Building or the Property, foreseen or
unforeseen, ordinary as well as extraordinary, or to the use or manner of use of
the Premises, the Building or the Property (collectively, the “Applicable
Laws”). Tenant shall also observe and comply with the requirements of all
policies of public liability, fire and other policies of insurance at any time
in force with respect to the Premises, the Building or the Property.

 

Notwithstanding anything to the contrary set forth hereinabove,

 

(i) Tenant shall not be obligated to make alterations to the Premises to comply
with the Applicable Laws if same were in effect as of the date of this Lease and
should have been complied with by Landlord on or before the date of this Lease.
The cost of the foregoing shall be borne by Landlord and shall not be passed
through as an Operating Expense.

 

(ii) Tenant shall not be obligated to make any alterations to comply with any
Applicable Laws that are promulgated after the date of this Lease unless they
are applicable to the Premises because of Tenant’s unique or particular type of
use (as opposed to being applicable to occupied space in general), or because of
any special requirements relating to accommodations for individual employees,
invitees and/or guests of Tenant, or as a result of any improvements,
alterations, additions or improvements made by or on behalf of Tenant. The cost
of the foregoing to the extent not Tenant’s obligation hereunder as aforesaid,
shall be borne by Landlord, but subject to inclusion in Operating Expenses as
permitted by Section 13 (including, the amortization of capital items as
permitted by Section 13(b)(4)).

 

24. Abandonment of Premises. Tenant agrees not to abandon the Premises or,
without having given Landlord thirty (30) days prior written notice thereof,
vacate the Premises during the Term of this Lease. If Tenant does abandon the
Premises for more than ninety (90) days, Landlord may terminate this Lease, by
written notice to Tenant at any time prior to Tenant reoccupying the Premises,
but such termination shall not entitle Landlord to pursue any other remedies
unless an uncured Event of Default then exists, in which case Landlord may
pursue any and all remedies provided by this Lease, at law or in equity.

 

25. Assignment and Subletting. Tenant may not, without the prior written consent
of Landlord, which consent may be withheld by Landlord in its sole but
reasonable discretion, assign this Lease or any interest hereunder, or sublet
the Premises or any part thereof, or permit the use of the Premises by any party
other than Tenant. Landlord will be deemed reasonable in withholding its consent
to any such request based on: (i) the poor business reputation of the proposed
assignee, sublessee or transferee; (ii) the poor financial condition of the
proposed assignee, sublessee or transferee; (iii) the fact that the use of the
proposed assignee, sublessee or transferee is not in keeping with the nature of
the Building or may affect the marketability of the Building; (iv) the fact that
proposed assignee, sublessee or transferee is an existing tenant of the Building
if the building is multi-tenanted in the future, or is a prospective tenant with
respect to space in the Building if the building is multi-tenanted in the
future; (v) the fact that the use contemplated by the proposed assignee,
sublessee or transferee would violate an exclusive granted by Landlord to
another tenant of the Building if the building is multi-tenanted in the future
or otherwise; or (vi) the fact

 

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that the proposed assignee, sublessee or transferee is a governmental
subdivision or agency or any person or entity who enjoys diplomatic or sovereign
immunity In the event that Tenant is a corporation or entity other than an
individual, any transfer of a majority or controlling interest in Tenant
(whether by stock transfer, merger, operation of law or otherwise) shall be
considered an assignment for purposes of this paragraph and shall require
Landlord’s prior written consent. Consent to one assignment or sublease shall
not waive this provision, and all later assignments and subleases shall likewise
be made only upon the prior written consent of Landlord. Tenant shall reimburse
Landlord for its reasonable legal and administrative costs in reviewing any such
proposed assignment or sublease. Subtenants or assignees shall become liable to
Landlord for all obligations of Tenant hereunder, without relieving Tenant’s
liability hereunder and, in the event of any default by Tenant under this Lease,
Landlord may, at its option, but without any obligation to do so, elect to treat
such sublease or assignment as a direct Lease with Landlord and collect rent
directly from the subtenant. In addition, upon any request by Tenant for
Landlord’s consent to an assignment or sublease covering all of the Premises,
Landlord may elect to terminate this Lease and recapture all of the Premises;
provided, however, if Landlord notifies Tenant that Landlord elects to exercise
this recapture right, Tenant may, within five (5) business days of its receipt
of Landlord’s notice, notify Landlord that Tenant withdraws its request to
sublease or assign, in which case Tenant shall continue to lease all of the
Premises, subject to the terms of this Lease and Landlord’s recapture notice
shall be null and void. If Tenant desires to assign or sublease, Tenant must
provide written notice to Landlord describing the proposed transaction in detail
and providing all documentation (including detailed financial information for
the proposed assignee or subtenant) reasonably necessary to let Landlord
evaluate the proposed transaction. Landlord shall notify Tenant within twenty
(20) days of its receipt of such notice whether Landlord elects to exercise its
recapture right and, if not, whether Landlord consents to the requested
assignment or sublease. If Landlord fails to respond within such twenty (20) day
period, Landlord will be deemed not to have elected to recapture and not to have
consented to the assignment or sublease. If Landlord does consent to any
assignment or sublease request and the assignee or subtenant pays to Tenant an
amount in excess of the Rent due under this Lease (after deducting Tenant’s
reasonable, actual expenses in obtaining such assignment or sublease, amortized
in equal monthly installments over the then remainder of the Term), Tenant shall
pay 50% of such excess to Landlord as and when the monthly payments are received
by Tenant.

 

Notwithstanding the foregoing to the contrary, but subject to compliance with
all other provisions of this Lease (including, but not limited to, the “use”
provisions hereof), Tenant may assign or transfer this Lease without Landlord’s
consent, to any partnership, corporation or other entity resulting from a merger
or consolidation with Tenant, or to any person or entity which acquires
substantially all the assets or stock of Tenant as a going concern, (any of the
foregoing being, a “Permitted Successor”), provided that (i) Tenant shall
endeavor to provide Landlord prior written notice of such assignment or transfer
(but in any event shall deliver notice to Landlord within 15 days after the
effective date of such an assignment or transfer), (ii) the Permitted
Successor’s long-term, unsecured credit rating is rated at least “Investment
Grade” by Standard & Poors or Moody’s [or an equivalent rating from any other
rating agency approved by Landlord if Standard & Poors or Moody’s no longer
publishes a rating on such Permitted Successor; however, if the Permitted
Successor is not rated by any other rating agency, then the Permitted
Successor’s net worth (defined as stockholder’s equity on the company’s audited
financial statements) must equal or exceed $1,000,000,000.00 ($1 Billion), (iii)
the Permitted Successor (or in the case of a newly formed entity, its
management) will continue to use the Premises in substantially the same manner
as Tenant’s use immediately prior to the assignment or transfer, (iv) the
Permitted Successor assumes in writing all of Tenant’s obligations under this
Lease, as amended from time to time, and the prior Tenant (if it survives) and
guarantor are not released from any of their respective obligations or
liabilities under this Lease, as amended from time to time, or any guaranty
delivered to Lender in connection with this Lease, (v) Landlord receives a fully
executed copy of the assignment between Tenant and the Permitted Successor, and
(vi) the primary purpose of such assignment is for legitimate business reasons
unrelated to this Lease, and the assignment or transfer is not a subterfuge by
Tenant to avoid its obligations under this Lease or the restrictions on
assignment contained herein. Any attempted assignment or transfer in violation
of the preceding sentence shall be voidable at Landlord’s option.

 

Notwithstanding the foregoing to the contrary, but subject to compliance with
all other provisions of this Lease (including, but not limited to, the “use”
provisions hereof), Tenant may assign this Lease or

 

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sublet the Premises or any portion thereof, without Landlord’s consent, to any
partnership, corporation or other entity which controls, is controlled by, or is
under common control with Tenant or Tenant’s parent (control being defined for
such purposes as ownership of at least 50% of the equity interests in, and the
power to direct the management of, the relevant entity) (with any such entity
being referred to herein as an “Affiliate”), provided that (i) Landlord receives
thirty (30) days’ prior written notice of such assignment or subletting, (ii)
Tenant and any guarantor are not dissolved as a matter of law as a consequence
of the assignment or subletting or at any time thereafter, (iii) the Affiliate
remains an affiliate meeting the definition of “Affiliate” above for the
duration of the subletting or the balance of the Lease Term in the event of an
assignment, (iv) the Affiliate assumes in writing (the form of which shall be
subject to Landlord’s approval) all of Tenant’s obligations under this Lease, as
amended from time to time, and the prior Tenant and any guarantor are not
released from any of their respective obligations or liabilities under this
Lease, as amended from time to time, or any guaranty delivered to Lender in
connection with this Lease, (v) Landlord receives a fully executed copy of the
assignment or sublease agreement between Tenant and Affiliate, and (vi) the
primary purpose of such assignment or sublet is for legitimate business reasons
unrelated to this Lease, and the assignment or sublet is not a subterfuge by
Tenant to avoid its obligations under this Lease or the restrictions on
assignment and subletting contained herein. Any attempted assignment or
subletting in violation of the preceding sentence shall be voidable at
Landlord’s option. Provided items (i) through (vi) above are otherwise
satisfied, Landlord hereby consents to the subletting of portions of the
Premises by Tenant to the Dactron Division of SPX Corporation, an affiliate of
Tenant. Landlord acknowledges that, as of the date of this Lease, items (i)
through (vi) above have been satisfied with respect to the Sublease attached
hereto as Exhibit E.

 

26. Default. If Tenant shall default in the payment of Rent herein reserved when
due and fails to cure such default within five (5) business days after written
notice of such default is given to Tenant by Landlord; or if Tenant shall be in
default in performing any of the terms or provisions of this Lease other than
the provisions requiring the payment of Rent, and fails to cure such default
within thirty (30) days after written notice of such default is given to Tenant
by Landlord or, if such default cannot be cured within thirty (30) days, Tenant
shall not be in default if Tenant promptly commences and diligently proceeds the
cure to completion as soon as possible and in all events within ninety (90)
days; or if Tenant is adjudicated a bankrupt; or if a permanent receiver is
appointed for Tenant’s Property and such receiver is not removed within sixty
(60) days after written notice from Landlord to Tenant to obtain such removal;
or if, whether voluntarily or involuntarily, Tenant takes advantage of any
debtor relief proceedings under any present or future law, whereby the Rent or
any part thereof, is, or is proposed to be, reduced or payment thereof deferred;
then, and in any of said events, Landlord, at its option, may exercise any or
all of the remedies set forth in Section 27 below.

 

27. Remedies. Upon the occurrence of any default set forth in Section 26 above
which is not cured by Tenant within the applicable cure period provided therein,
if any, Landlord may exercise all or any of the following remedies:

 

(a) terminate this Lease by giving Tenant written notice of termination, in
which event this Lease shall terminate on the date specified in such notice and
all rights of Tenant under this Lease shall expire and terminate as of such
date, Tenant shall remain liable for all obligations under this Lease up to the
date of such termination and Tenant shall surrender the Premises to Landlord on
the date specified in such notice, and if Tenant fails to so surrender, Landlord
shall have the right, without notice, to enter upon and take possession of the
Premises and to expel and remove Tenant and its effects without being liable for
prosecution or any claim of damages therefor;

 

(b) terminate this Lease as provided in the immediately preceding subsection and
recover from Tenant all damages Landlord may incur by reason of Tenant’s
default, including without limitation, the then present value of (i) the total
Rent which would have been payable hereunder by Tenant for the period beginning
with the day following the date of such termination and ending with the
Expiration Date of the term as originally scheduled hereunder, minus (ii) the
aggregate reasonable rental value of the Premises for the same period (as
determined by a real estate broker licensed in the state where the Building is
located, who has at least ten (10) years experience, immediately prior to the
date in question evaluating commercial office, manufacturing and warehouse
space, taking into account all relevant factors including,

 

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without limitation, the length of the remaining Term, the then current market
conditions in the general area, the likelihood of reletting for a period equal
to the remainder of the Term, net effective rates then being obtained by
landlords for similar type space in similar buildings in the general area,
vacancy levels in the general area, current levels of new construction in the
general area and how that would affect vacancy and rental rates during the
period equal to the remainder of the Term and inflation), plus (iii) the costs
of recovering the Premises, and all other expenses incurred by Landlord due to
Tenant’s default, including, without limitation, reasonable attorneys’ fees,
plus (iv) the unpaid Rent earned as of the date of termination, plus interest,
all of which sum shall be immediately due and payable by Tenant to Landlord;

 

(c) without terminating this Lease, and without notice to Tenant, Landlord may
in its own name, but as agent for Tenant enter into and take possession of the
Premises and re-let the Premises, or a portion thereof, as agent of Tenant, upon
any terms and conditions as Landlord may deem necessary or desirable (Landlord
shall have no obligation to attempt to re-let the Premises or any part thereof).
Upon any such re-letting, all rentals received by Landlord from such re-letting
shall be applied first to the costs incurred by Landlord in accomplishing any
such re-letting, and thereafter shall be applied to the Rent owed by Tenant to
Landlord during the remainder of the term of this Lease and Tenant shall pay any
deficiency between the remaining Rent due hereunder and the amount received by
such re-letting as and when due hereunder;

 

(d) collect Rent from Tenant as it becomes due; or

 

(e) pursue such other remedies as are available at law or in equity.

 

28. Destruction or Damage.

 

(a) Tenant shall promptly notify Landlord of any material damage to the Premises
resulting from fire or any other casualty. If the Building or the Premises are
totally destroyed by storm, fire, earthquake, or other casualty, or damaged to
the extent that, in Landlord’s reasonable opinion the damage cannot be restored
within two hundred seventy (270) days of the date Landlord provides Tenant
written notice of Landlord’s reasonable estimate of the time necessary to
restore the damage, or if the damage is not covered by standard ISO Causes of
Loss – Special Form property insurance, or if the Landlord’s lender requires
that the insurance proceeds be applied to its loan, Landlord shall have the
right to terminate this Lease effective as of the date of such destruction or
damage by written notice to Tenant on or before thirty (30) days following
Landlord’s notice described in the next sentence and Rent shall be accounted for
as between Landlord and Tenant as of that date. Landlord shall provide Tenant
with notice (the “Casualty Notice”) within sixty (60) days following the date of
the damage of the estimated time needed to restore, whether the loss is covered
by Landlord’s insurance coverage and whether or not Landlord’s lender requires
the insurance proceeds be applied to its loan. If Landlord has notified Tenant
that the Premises can not be restored within two hundred seventy (270) days
after the date of the Casualty Notice, then Tenant may, within thirty (30) days
after the date of the Casualty Notice, terminate this Lease effective as of the
date of such damage or destruction.

 

(b) If the Premises are damaged by any such casualty or casualties but Landlord
and Tenant are not entitled to or do not terminate this Lease as provided in
subparagraph (a) above, this Lease shall remain in full force and effect,
Landlord shall notify Tenant in writing within sixty (60) days of the date of
the damage that the damage will be restored (and will include Landlord’s good
faith estimate of the date the restoration will be complete (the “Estimated
Restoration Date”)), in which case Rent shall abate as to any portion of the
Premises which is not usable, and Landlord shall restore the Premises to
substantially the same condition as before the damage occurred (“Casualty
Substantial Completion”) as soon as practicable, whereupon full Rent shall
recommence. In the event Landlord does not so restore the Premises to Casualty
Substantial Completion as set forth in the preceding sentence on or before the
date that is three hundred sixty (360) days following the Casualty Notice (or
the date that is ninety (90) days after the Estimated Restoration Date,
whichever is greater) (such greater date being referred to herein as the
“Casualty Outside Date”), which date shall be delayed on a day for day basis for
each day of force majeure (as defined in Section 55 hereof) and for each day of
“Tenant Casualty Delay” (as hereinafter defined), Tenant shall have the right to
terminate this Lease by providing written notice to Landlord in the manner

 

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set forth in this Lease within five (5) business days of the Casualty Outside
Date (which date shall be likewise extended for force majeure and Tenant
Casualty Delay). In the event Tenant fails to so deliver such notice, Tenant’s
termination right shall be of no force and effect, the Lease shall remain in
effect and full Rent shall recommence as described above. The term “Tenant
Casualty Delay” shall mean any action or inaction of Tenant which causes the
date of Casualty Substantial Completion to be delayed beyond the date Casualty
Substantial Completion would have occurred but for such action or inaction of
Tenant.

 

(c) Notwithstanding anything to the contrary contained herein, Landlord shall
have no obligation to restore any item that is Tenant’s responsibility to insure
under Section 22 hereof, regardless of whether Tenant insures same, undertakes
self insurance with respect to same or fails to maintain insurance with respect
to same; Tenant shall bear the responsibility for prompt restoration of all such
items.

 

(d) The provisions of this Lease, including this Section 28, 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 the
Property, and any statute or regulation of the State of California, 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, and any other statute
or regulation, now or hereafter in effect, shall have no application to this
Lease or any damage or destruction to all or any part of the Premises, the
Building or the Property.

 

(e) Landlord shall throughout the Term, by insurance carriers with a rating and
financial size of not less than A-/VII in the most current available “Best’s
Insurance Reports”, keep and maintain in full force and effect a policy of
commercial all risk property insurance (including flood and earthquake coverage
as deemed applicable and prudent by Landlord) covering the Building and
Landlord’s personal property located thereon, if any, (but excluding any items
for which Tenant bears insurance responsibility under Section 22(a)(ii) above)
in the amount of the then current replacement value of such property.

 

29. Eminent Domain. If the whole of the Building or Premises, or such portion
thereof as will make the Building or Premises unusable for their intended
purposes, is condemned or taken by any legally constituted authority for any
public use or purpose, then in either of said events, Landlord or Tenant may
terminate this Lease by written notice to the other party and the Term hereby
granted shall cease from that time when possession thereof is taken by the
condemning authorities, and Rent shall be accounted for as between Landlord and
Tenant as of that date. If a portion of the Building or Premises is so taken,
but not such amount as will make the Building or Premises unusable for the
purposes herein leased, or if neither Landlord nor Tenant elects to terminate
this Lease, this Lease shall continue in full force and effect and the Rent
shall be reduced prorata in proportion to the amount of the Premises so taken,
and Landlord shall, to the extent reasonably feasible, restore the Building and
the Premises to substantially its former condition, but such work shall not
include (i) any component of the Building or the Premises for which Tenant is
required to maintain insurance under Section 22 or any alterations, additions or
improvements to the Premises made by Tenant following the date hereof. Further
Landlord shall not be required to spend any amounts for such work in excess of
the amount received by Landlord in connection with such condemnation. Tenant
shall have no right or claim to any part of any award made to or received by
Landlord for such condemnation or taking, and all awards for such condemnation
or taking shall be made solely to Landlord. Tenant shall, however, have the
right to pursue any separate award that does not reduce the award to which
Landlord is entitled. Tenant hereby waives any and all rights it might otherwise
have pursuant to Section 1265.130 of The California Code of Civil Procedure, or
any successor statute.

 

30. Service of Notice. Except as otherwise provided by law, Tenant hereby
appoints as its agent to receive the service of all dispossessory or distraint
proceedings and notices thereunder, the person in charge of or occupying the
Premises at the time of such proceeding or notice; and if no person be in charge
or occupying the Premises, then such service may be made by attaching the same
to the front entrance of the Premises.

 

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31. Mortgagee’s Rights.

 

(a) Subject to Tenant’s receipt of the SNDA (as hereinafter defined), Tenant
agrees that this Lease shall be subject and subordinate (i) to any future
mortgage, deed to secure debt or other security interest that any owner of the
Property may hereafter, at any time, elect to place on the Property and to all
advances which may be thereafter made, to the full extent of all debts and
charges secured thereby and to all renewals or extensions of any part thereof;
(ii) to any assignment of Landlord’s interest in the leases and rents from the
Building or Property which includes the Lease which any owner of the Property
may hereafter, at any time, elect to place on the Property; and (iii) to any
Uniform Commercial Code Financing Statement covering the personal property
rights of Landlord or any owner of the Property which any owner of the Property
may hereafter, at any time, elect to place on the foregoing personal property
(all of the foregoing instruments set forth in (i), (ii) and (iii) above being
hereafter collectively referred to as “Security Documents”). Tenant agrees upon
request of the holder of any Security Documents (“Holder”) to hereafter execute
any documents which the counsel for Landlord or Holder may deem necessary to
evidence the subordination of the Lease to the Security Documents.
Notwithstanding anything to the contrary contained hereinabove, Tenant shall not
be required to subordinate or to execute any subordination document, unless, the
party seeking such subordination executes a document which includes a
commercially reasonable non-disturbance agreement (the “SNDA”). Landlord
represents and warrants to Tenant that as of the date of this Lease, the
Property is not encumbered with any Security Documents.

 

(b) In the event of a foreclosure pursuant to any Security Documents, Tenant
shall thereafter remain bound pursuant to the terms of this Lease as if a new
and identical Lease between the purchaser at such foreclosure (“Purchaser”), as
landlord, and Tenant, as tenant, had been entered into for the remainder of the
Term hereof and Tenant shall attorn to the Purchaser upon such foreclosure sale
and shall recognize such Purchaser as the Landlord under the Lease. Such
attornment shall be effective and self-operative without the execution of any
further instrument on the part of any of the parties hereto. Tenant agrees,
however, to execute and deliver at any time and from time to time, upon the
request of Landlord or of Holder, any instrument or certificate that may be
necessary or appropriate in any such foreclosure proceeding or otherwise to
evidence such attornment.

 

(c) If the Holder of any Security Document or the Purchaser upon the foreclosure
of any of the Security Documents shall succeed to the interest of Landlord under
the Lease, such Holder or Purchaser shall have the same remedies, by entry,
action or otherwise for the non-performance of any agreement contained in the
Lease, for the recovery of Rent or for any other default or event of default
hereunder that Landlord had or would have had if any such Holder or Purchaser
had not succeeded to the interest of Landlord. Any such Holder or Purchaser
which succeeds to the interest of Landlord hereunder, shall not be (a) liable
for any act or omission of any prior Landlord (including Landlord); or (b)
subject to any offsets or defenses which Tenant might have against any prior
Landlord (including Landlord); or (c) bound by any Rent which Tenant might have
paid for more than the current month to any prior Landlord (including Landlord);
or (d) bound by any amendment or modification of the Lease made without its
consent.

 

(d) Tenant hereby acknowledges that if the interest of Landlord hereunder is
covered by an assignment of Landlord’s interest in Lease, Tenant shall pay all
Rent due and payable under the Lease directly to the Holder of the assignment of
Landlord’s interest in Lease upon notification of the exercise of the rights
thereunder by the Holder thereof. Landlord waives any claim it may have against
Tenant arising from Tenant’s payment of Rent to any Holder pursuant to any
notice received from Holder notwithstanding contrary direction from Landlord.

 

(e) Notwithstanding anything to the contrary set forth in this Section 31, the
Holder of any Security Documents shall have the right, at any time, to elect to
make this Lease superior and prior to its Security Document. No documentation,
other than written notice to Tenant, shall be required to evidence that the
Lease has been made superior and prior to such Security Documents, but Tenant
hereby agrees to execute any documents reasonably requested by Landlord or
Holder to acknowledge that the Lease has been made superior and prior to the
Security Documents.

 

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32. Tenant’s Estoppel. Tenant shall, from time to time, upon not less than ten
(10) days prior written request by Landlord, execute, acknowledge and deliver to
Landlord a written statement certifying that this Lease is unmodified and in
full force and effect (or, if there have been modifications, that the same is in
full force and effect as modified and stating the modifications), the dates to
which the Rent has been paid, that Tenant is not in default hereunder and has no
known offsets or defenses against Landlord under this Lease, whether or not to
the best of Tenant’s knowledge Landlord is in default hereunder (and if so,
specifying the nature of the default), and other matters reasonably requested by
Landlord concerning the status of the Lease and the Premises, it being intended
that any such statement delivered pursuant to this paragraph may be relied upon
by a prospective purchaser of Landlord’s interest or by a mortgagee of
Landlord’s interest or assignee of any security deed upon Landlord’s interest in
the Premises.

 

33. Attorney’s Fees and Homestead. If Landlord exercises any of the remedies
provided to Landlord under this Lease as a result of Tenant’s failure to comply
with its obligations, or if Landlord brings any action to enforce its rights
under this Lease, Tenant shall be obligated to reimburse Landlord, on demand,
for all costs and expenses, including reasonable attorneys’ fees and court
costs, incurred in connection therewith.

 

34. Parking. Tenant shall be entitled to use all parking spaces in the parking
facilities located on the Property. All parking spaces provided to Tenant shall
be unreserved and are to be used by Tenant, its employees and invitees in common
with Landlord and its agents, representatives, invitees and contractors to the
extent consistent with Landlord’s rights and obligations under this Lease.
Subject to Tenant’s reasonable approval (unless Landlord is directed to do any
of the following by any party having jurisdiction over the Property, in which
event Tenant’s approval shall not be required), Landlord reserves the right to
build improvements upon, relocate, reconfigure, restripe and/or make alterations
or additions to such parking facilities at any time. The use of the parking
spaces is provided by Landlord to Tenant and is included within the Base Rent.

 

35. Storage. If Landlord makes available to Tenant any storage space outside the
Premises, anything stored therein shall be wholly at the risk of Tenant, and
Landlord shall have no responsibility or liability for the items stored therein.

 

36. Waste Disposal.

 

(a) All normal trash and waste (i.e., waste that does not require special
handling pursuant to subparagraph (b) below) shall be disposed of through the
janitorial service.

 

(b) Subject to the provisions of Section 8 above, Tenant shall be responsible
for the removal and disposal of any waste deemed by any governmental authority
having jurisdiction over the matter to be hazardous or infectious waste or waste
requiring special handling, such removal and disposal to be in accordance with
any and all applicable governmental rules, regulations, codes, orders or
requirements. Tenant agrees to separate and mark appropriately all waste to be
removed and disposed of through the janitorial service pursuant to (a) above and
hazardous, infectious or special waste to be removed and disposed of by Tenant
pursuant to this subparagraph (b).

 

37. Surrender of Premises. Whenever under the terms hereof Landlord is entitled
to possession of the Premises, Tenant at once shall surrender the Premises and
the keys thereto to Landlord in the same condition as on the Commencement Date
hereof, normal wear and tear, casualty and condemnation only excepted, and
Tenant shall remove all of its personalty therefrom and shall, if directed to do
so by Landlord, remove all improvements (including cabling) and restore the
Premises to its original condition prior to the construction of any improvements
which have been made therein by or on behalf of Tenant, excluding any
improvements made prior to the date of this Lease. Landlord may forthwith
re-enter the Premises and repossess itself thereof and remove all persons and
effects therefrom, using legal process, if persons are present, or otherwise
using such force as may be necessary without being guilty of forcible entry,
detainer, trespass or other tort. Tenant’s obligation to observe or perform
these covenants shall survive the expiration or other termination of the Term of
this Lease. If the last day of the Term of this Lease or any renewal falls on
Sunday or a legal holiday, this Lease shall expire on the business day
immediately preceding.

 

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38. Cleaning Premises. Upon vacating the Premises, Tenant agrees to return the
Premises to Landlord broom clean.

 

39. No Estate In Land. This contract shall create the relationship of landlord
and tenant between Landlord and Tenant; no estate shall pass out of Landlord;
Tenant has only a usufruct, not subject to levy or sale, and not assignable by
Tenant except with Landlord’s consent.

 

40. Cumulative Rights. All rights, powers and privileges conferred hereunder
upon the parties hereto shall be cumulative but not restrictive to those given
by law.

 

41. Paragraph Titles; Severability. The paragraph titles used herein are not to
be considered a substantive part of this Lease, but merely descriptive aids to
identify the paragraph to which they refer. Use of the masculine gender includes
the feminine and neuter, and vice versa, where necessary to impart contextual
continuity. If any paragraph or provision herein is held invalid by a court of
competent jurisdiction, all other paragraphs or severable provisions of this
Lease shall not be affected thereby, but shall remain in full force and effect.

 

42. Damage or Theft of Personal Property. All personal property brought into the
Premises shall be at the risk of the Tenant only and Landlord shall not be
liable for theft thereof or any damage thereto occasioned by any acts of
co-tenants, or other occupants of the Building, or any other person, except,
with respect to damage to the Premises, as may be occasioned by the negligent or
willful act of the Landlord, its employees and agents.

 

43. Holding Over. In the event Tenant remains in possession of the Premises
after the expiration of the Term hereof, or of any renewal term, with Landlord’s
written consent, Tenant shall be a tenant at will and such tenancy shall be
subject to all the provisions hereof, except that the monthly rental shall be at
150% of the monthly Base Rent payable hereunder upon such expiration of the Term
hereof, or of any renewal term. In the event Tenant remains in possession of the
Premises after the expiration of the Term hereof, or any renewal term, without
Landlord’s written consent, Tenant shall be a tenant at sufferance and may be
evicted by Landlord without any notice but pursuant to legal process, but Tenant
shall be obligated to pay rent for such period that Tenant holds over without
written consent at the same rate provided in the previous sentence and shall
also be liable for any and all other damages Landlord suffers as a result of
such holdover including, without limitation, the loss of a prospective tenant
for such space. There shall be no renewal of this Lease by operation of law or
otherwise. Nothing in this Section shall be construed as a consent by Landlord
for any holding over by Tenant after the expiration of the Term hereof, or any
renewal term.

 

44. Security Deposit. Not Used.

 

45. Tenant Finishes. The Work Letter attached hereto as Exhibit “C” is hereby
made a part of this Lease, and its provisions shall control in the event of a
conflict with the provisions contained in this Lease.

 

46. Rules and Regulations. The rules and regulations in regard to the Building,
annexed hereto, and all reasonable rules and regulations which Landlord may
hereafter, from time to time, adopt and promulgate for the government and
management of said Building, are hereby made a part of this Lease and shall,
during the said term, be observed and performed by Tenant, his agents, employees
and invitees.

 

47. Quiet Enjoyment. Tenant, upon payment in full of the required Rent and full
performance of the terms, conditions, covenants and agreements contained in this
Lease, shall peaceably and quietly have, hold and enjoy the Premises during the
term hereof. Landlord shall not be responsible for the acts or omissions of any
other tenant, Tenant or third party not claiming by, through or under Landlord
that may interfere with Tenant’s use and enjoyment of the Premises.

 

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48. Entire Agreement. This Lease contains the entire agreement of the parties
and no representations, inducements, promises or agreements, oral or otherwise,
between the parties not embodied herein shall be of any force or effect.

 

49. Limitation of Liability. Landlord’s obligations and liability with respect
to this Lease shall be limited solely to Landlord’s interest in the Building
[together with the rents, issues, profits and proceeds therefrom which accrue
after the uncured event of default by Landlord hereunder giving rise to any such
liability (net of debt service and operating expenses for the Property) and
sales, condemnation and insurance proceeds (net of any such proceeds that are or
will be applied to rebuild or restore the Property in compliance with the terms
of this Lease) which are available to Landlord after an uncured event of default
by Landlord hereunder giving rise to any such liability], as such interest is
constituted from time to time, and neither Landlord nor any partner of Landlord,
or any officer, director, shareholder, or partner of any partner of Landlord,
shall have any personal liability whatsoever with respect to this Lease. No
owner of the Property, whether or not named herein, shall have liability
hereunder after it ceases to hold title to the Property.

 

50. Submission of Agreement. Submission of this Lease to Tenant for signature
does not constitute a reservation of space or an option to acquire a right of
entry. This Lease is not binding or effective until execution by and delivery to
both Landlord and Tenant.

 

51. Authority. If Tenant executes this Lease as a corporation, Tenant does
hereby represent and warrant that Tenant is a duly organized and validly
existing corporation, limited partnership, limited liability company or other
type of entity, that Tenant is qualified to do business in the state where the
Building is located, that Tenant has full right, power and authority to enter
into this Lease, and that each person signing on behalf of Tenant is authorized
to do so. Upon Landlord’s request, Tenant shall provide Landlord with evidence
reasonably satisfactory to Landlord confirming the foregoing representations and
warranties. Landlord represents and warrants to Tenant that Landlord has full
right, power and authority to enter into this Lease, and that each person
signing on behalf of Landlord is authorized to do so.

 

52. Intentionally Omitted.

 

53. Broker Disclosure. Landlord represents that it has dealt with no real estate
broker in connection with this Lease. Landlord agrees that, if any broker makes
a claim for a commission based upon the actions of Landlord, Landlord shall
indemnify, defend and hold Tenant harmless from any such claim. Tenant
represents that it has dealt with no real estate broker in connection with this
Lease. Tenant agrees that, if any broker makes a claim for a commission based
upon the actions of Tenant, Tenant shall indemnify, defend and hold Landlord
harmless from any such claim.

 

54. Notices. Any notice which is required or permitted to be given by either
party under this Lease shall be in writing and must be given only by certified
mail, return receipt requested, by hand delivery or by nationally recognized
overnight courier service at the addresses set forth below. Any such notice
shall be deemed given on the date sent or deposited for delivery in accordance
with one of the permitted methods described above. The time period for
responding to any such notice shall begin on the date the notice is actually
received, but refusal to accept delivery or inability to accomplish delivery
because the party can no longer be found at the then current notice address,
shall be deemed receipt. Either party may change its notice address by notice to
the other party in accordance with the terms of this Section 54. The following
are the initial notice addresses for each party:

 

Landlord’s Notice Address:

  

Wells/Fremont Associates

    

c/o Wells Real Estate Funds

    

6200 The Corners Parkway, Suite 250

    

Norcross, Georgia 30092-2295

    

Attention: VP of Asset Management, 47320 Kato

    

Road, Fremont, CA

 

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With a copy to:

  

Wells Capital, Inc.

    

6200 The Corners Parkway, Suite 250

    

Norcross, Georgia 30092-2295

    

Attention: 47320 Kato Road, Fremont, CA

Tenant’s Notice Address:

  

TCI International, Inc.

    

47320 Kato Road

    

Fremont, California 94538

    

Attention: Mr. Steve Berger, VP and CEO

With a copy to:

  

Kevin G. Lilly, Esquire

    

Group General Counsel

    

SPX Corporation

    

One Centennial Square

    

Haddonfield, New Jersey 08033

 

55. Force Majeure. In the event of a strike, lockout, labor trouble, civil
commotion, an act of God, or any other event beyond Landlord’s control (a “force
majeure event”) which results in the Landlord being unable to timely perform its
obligations hereunder so long as Landlord diligently proceeds to perform such
obligations after the end of the force majeure event, Landlord shall not be in
breach hereunder, this Lease shall not terminate, and Tenant’s obligation to pay
any Base Rent, additional rent, or any other charges and sums due and payable
shall not be excused.

 

56. Financial Statements. Within ninety (90) days following the end of each of
Tenant’s fiscal years, Tenant shall forward to Landlord Tenant’s audited,
certified financial statements for the fiscal year then ended (which shall
include balance sheet, income statement, and cashflow statement with
accompanying notes and Management’s discussion, as well as the most recently
quarterly SEC filing). Such statements shall be prepared in accordance with
generally accepted accounting principles. So long as SPX Corporation is a
Guarantor of Tenant, Tenant’s submission of Guarantor’s audited, certified
financial statements for the fiscal year then ended (which shall include balance
sheet, income statement, and cashflow statement with accompanying notes and
Management’s discussion, as well as the most recently quarterly SEC filing)
shall satisfy Tenant’s submission requirements under this Section 56.

 

57. Special Stipulations.

 

(1) Guaranty.

 

Tenant shall cause Tenant’s obligation of both payment and performance to be
guaranteed in full by SPX Corporation, a Delaware corporation, as guarantor,
pursuant to a guaranty in the form attached hereto as Exhibit D.

 

(2) Option to Renew.

 

A. Following the Commencement Date and thereafter during the Term (excluding any
holdover period), so long as, both as of the exercise date and as of the first
day of the Extended Term (as hereinafter defined) the Lease is in full force and
effect and no default has occurred and continued beyond the expiration of any
applicable notice and cure period and no facts or circumstances then exist
which, with the giving of notice or the passage of time, or both, would
constitute a default, Landlord hereby grants to Tenant one (1) option to extend
the Term with respect to all but not any lesser portion of the Premises for a
period of five (5) years (the “Extended Term”) beginning immediately upon the
expiration of the Term, such option to be exercised by Tenant giving written
notice of its exercise to Landlord in the manner provided in this Lease at least
twelve (12) months prior, but not more than fifteen (15) months prior, to the
expiration of the Term. Time is of the essence with respect to the foregoing.

 

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B If Tenant exercises its option to extend the Term, Landlord and Tenant shall
in good faith negotiate Base Rent and other financial terms for the Extended
Term for a period of sixty (60) days after Landlord’s receipt of Tenant’s notice
of exercise.

 

C. In the event Landlord and Tenant are able to agree (as evidenced by a written
agreement or binding letter of intent) on the Base Rent and other financial
conditions for the Extended Term as set forth above within such sixty (60) day
period, then, except for the Base Rent, which shall be determined as set forth
in subparagraph B above, leasing of the Premises by Tenant for the Extended Term
shall be subject to all of the same terms and conditions set forth in this
Lease; provided, however, that any construction provisions, improvement
allowances, rent abatements or other concessions applicable to the Premises
during any prior period shall not be applicable during the Extended Term (unless
otherwise mutually acceptable to both Landlord and Tenant in the sole discretion
of each). Landlord and Tenant shall enter into an amendment to this Lease to
evidence Tenant’s exercise of the extension option. If this Lease is guaranteed
now or at any time in the future, Tenant simultaneously shall deliver to
Landlord an original, signed reaffirmation of each guarantor’s guaranty, in form
and substance acceptable to Landlord.

 

D. In the event Landlord and Tenant are unable to agree (as evidenced by a
written agreement or binding letter of intent) on the Base Rent and other
financial conditions for the Extended Term as set forth above within such sixty
(60) day period, Tenant’s exercise of the Option to Renew shall be deemed
revoked, the Lease shall expire as if Tenant had not exercised such Option to
Renew, Tenant shall thereafter have no further right to renew this Lease and the
provisions of this Special Stipulation shall be of no further force and effect.

 

[SIGNATURES APPEAR ON NEXT PAGE]

 

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IN WITNESS WHEREOF, the parties herein have hereunto set their hands and seals,
the day and year first above written.

 

LANDLORD:

WELLS/FREMONT ASSOCIATES, a Georgia

joint venture

    By:  

Wells Operating Partnership, L.P., a

Delaware limited partnership and joint venture

partner

        By:      

Wells Real Estate Investment Trust, Inc.,

a Maryland corporation, as general partner

                By:  

 

--------------------------------------------------------------------------------

               

Name:

 

 

--------------------------------------------------------------------------------

                Title:  

 

--------------------------------------------------------------------------------

    By:  

Fund X and Fund XI Associates,

a Georgia joint venture and joint venture partner

        By:      

Wells Real Estate Fund X, L.P.,

a Georgia limited partnership, as

administrative venturer

                By:  

Wells Partners, L.P., a Georgia

limited partnership, general partner

                    By:  

Wells Capital, Inc., a Georgia

corporation, General Partner

                        By:  

 

--------------------------------------------------------------------------------

                        Name:  

 

--------------------------------------------------------------------------------

                        Title:  

 

--------------------------------------------------------------------------------

 

[SIGNATURES CONTINUE ON NEXT PAGE]

 

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TENANT:

TCI INTERNATIONAL, INC., a Delaware corporation

By:

 

 

--------------------------------------------------------------------------------

Name:

 

 

--------------------------------------------------------------------------------

Title:

 

 

--------------------------------------------------------------------------------

    (CORPORATE SEAL)

 

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RULES AND REGULATIONS

 

1. The sidewalks, entry passages, corridors, halls, elevators and stairways
shall not be obstructed by Tenant or used by Tenant for any purpose other than
those of ingress and egress. The floors, skylights and windows that reflect or
admit light into any place in said building shall not be covered or obstructed
by Tenant. The toilets, drains and other water apparatus shall not be used for
any other purpose than those for which they were constructed and no sweepings,
rubbish or other obstructing substances shall be thrown therein.

 

2. No advertisement or other notice shall be inscribed, painted or affixed on
any part of the outside of the Building, except upon the doors, and of such
order, size and style, and at such places, as shall be approved and designated
by Landlord.

 

3. Tenant shall not do nor permit to be done in the Premises, or bring or keep
anything therein, which shall in any way increase the rate of insurance carried
by Landlord on the Building, or on the Property, or obstruct or interfere with
the rights of other parties or violate any applicable laws, codes or
regulations. Tenants, its agents, employees and invitees shall maintain order in
the Premises and the Building and shall not make or permit any improper noise in
the Premises or the Building. Nothing shall be thrown by Tenant, its agents,
employees or invitees, out of the windows or doors, or down the passages or
skylights of the Building. No rooms shall be occupied or used as sleeping or
lodging apartments at any time. No part of the Building shall be used or in any
way appropriated for gambling, immoral or other unlawful practices, and no
intoxicating liquor or liquors shall be sold in the Building.

 

4. No animals, birds, bicycles or other vehicles shall be allowed in the
offices, halls, corridors, elevators or elsewhere in the Building, without the
approval of Landlord.

 

5. Not Used.

 

6. Except as installed in compliance with the terms of the Lease, including
without limitation, Section 12 of the Lease, no additional security systems,
access systems, locks or latches shall be put upon any door without the written
consent of Landlord. Landlord shall be given the ability to bypass all such
systems, locks and latches. Tenant, at the termination of their Lease, shall
return to Landlord all card keys to doors in the Building.

 

7. Landlord in all cases retains the power to prescribe the weight and position
of iron safes or other heavy articles. The use of burning fluid, camphene,
benzine, kerosene or anything except gas or electricity, for lighting the
Premises, is prohibited. No offensive gases or liquids will be permitted.

 

8. Except as installed in compliance with the terms of the Lease, including
without limitation, Section 12 of the Lease, no blinds, coverings or drapes over
the windows shall be installed without Landlord’s consent. No awnings shall be
placed on the Building.

 

9. Except as installed in compliance with the terms of the Lease, including
without limitation, Section 12 of the Lease, all wiring and cabling work shall
be done only by contractors approved in advance by Landlord and Landlord shall
have the right to have all such work supervised by Building
engineering/maintenance personnel.

 

10. No smoking shall be permitted in any portion of the interior of the Building
(including the Premises). Tenants shall not install equipment that causes
electrical consumption at any time to exceed the capacity of the existing
feeders, risers, or wiring.

 

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EXHIBIT “A”

 

PROPERTY

 

Real Property in the City of Fremont, County of Alameda, State of California,
described as follows:

 

Lots 1 and 2 of Tract 4200, as shown on that certain Map filed August 30, 1979,
in Book 112 of Maps, at Page 85 and 86 Alameda County Records.

 

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EXHIBIT “B”

 

CC&R’s

 

Declaration of Protective Covenants for Mission Industrial Park dated May 9,
1979, Series No. 79-91168, Official records, as amended from time to time.

 

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EXHIBIT “C”

(WORK LETTER)

 

Landlord agrees to reimburse Tenant for its documented third-party costs up to a
maximum of $50,000.00 to perform alterations, additions, repairs, maintenance
and improvements to the Premises deemed necessary by Tenant and satisfying the
terms and conditions of this Lease, including, without limitation, Section 12
hereof. Tenant shall comply with the terms of this Exhibit C and the remainder
of this Lease in performing any alterations, additions, repairs, maintenance or
improvements, whether performed before or after the Commencement Date. Tenant
shall be eligible for such reimbursement upon its presentation to Landlord, on
or before December 1, 2008, of paid invoices, receipts or other reasonable
evidence supporting actual expenses incurred by Tenant in performing
alterations, additions, repairs, maintenance or improvements to the Premises
satisfying the terms and conditions of this Lease, including, but not limited
to, Section 12 hereof. Time is of the essence with respect to the foregoing. Any
costs incurred for which paid invoices, receipts or other reasonable evidence
are not so timely delivered on or before such deadline shall not be reimbursed
by Landlord, with any excess portion of the aforesaid maximum refurbishment
allowance deemed to be forfeited by Tenant in favor of Landlord, with Tenant
hereby releasing any and all rights thereto.

 

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EXHIBIT “D”

 

GUARANTY

 

IN CONSIDERATION OF, and as an inducement for the execution by WELLS/FREMONT
ASSOCIATES, a Georgia joint venture (“Landlord”), of that certain Lease
Agreement dated June 16, 2004 (the “Lease”) between Landlord and TCI
INTERNATIONAL, INC., a Delaware corporation (“Tenant”), demising to Tenant a
leasehold estate in and to space (the “Premises”) in that certain building known
as 47320 Kato Road situated in Fremont, California the undersigned Guarantor
(jointly and severally, the “Guarantor”) hereby unconditionally guarantees to
Landlord (and its successors and assigns) the full and timely payment of all
amounts owed by Tenant (or its successors and assigns) under the Lease, and
further hereby unconditionally guarantees the full and timely performance and
observance of all the covenants, terms, conditions and agreements therein
provided to be performed and observed by Tenant (or its successors and assigns).
Guarantor hereby covenants and agrees to and with Landlord (and its successors
and assigns) if Tenant (or its successors and assigns) should default in the
payment of any such rent and any and all other sums and charges payable by
Tenant (or its successors and assigns) under the Lease, or if Tenant (or its
successors and assigns) should default in the performance and observance of any
of the covenants, terms, conditions or agreements contained in the Lease,
Guarantor will, within thirty days of written demand, forthwith pay such rent
and other sums and charges, and any arrears thereof, to Landlord (or its
successors and assigns), and will forthwith faithfully perform and fulfill all
of such terms, covenants, conditions and agreements, and will forthwith pay to
Landlord (or its successors and assigns), all damages, costs and expenses that
may arise in consequence of any default by Tenant (or its successors and
assigns) under the Lease, including without limitation all reasonable attorneys’
fees, court costs, accounting fees, investigation costs and other disbursements
incurred by Landlord (or its successors and assigns) or caused by any such
default and/or by the enforcement of this Guaranty.

 

This Guaranty is an absolute and unconditional Guaranty of payment and of
performance. It shall be enforceable against Guarantor (and its successors and
assigns) without the necessity of any suit or proceedings on Landlord’s part of
any kind or nature whatsoever against Tenant (or its successors and assigns) and
without the necessity of any notice of nonpayment, nonperformance or
nonobservance of any notice of acceptance of this Guaranty, or of any other
notice or demand to which Guarantor might otherwise be entitled, all of which
Guarantor (for Guarantor and Guarantor’s successors and assigns) hereby
expressly waives. Guarantor hereby expressly agrees that the validity of this
Guaranty and the obligations of Guarantor hereunder shall in no way be
terminated, affected, diminished or impaired by reason of the assertion or the
failure to assert by Landlord against Tenant (or against Tenant’s successors and
assigns) of any of the rights or remedies reserved to Landlord pursuant to the
provisions of the Lease or by relief of Tenant from any of Tenant’s obligations
under the Lease or otherwise by: (a) the release or discharge of Tenant in any
creditor’s proceedings, receivership, bankruptcy or other proceedings; (b) the
impairment, limitation or modification of the liability of Tenant or the estate
of Tenant in bankruptcy, or of any remedy for the enforcement of Tenant’s said
liability under the Lease, resulting from the operation of any present or future
provision of the Federal Bankruptcy Code, as amended from time to time, or any
other statute, or from the decision in any court; or (c) the rejection or
disaffirmance of this Lease in any such proceedings.

 

This Guaranty shall be a continuing guaranty and the liability of Guarantor
shall in no way be affected, modified or diminished by reason of any assignment,
amendment, renewal, expansion, supplement, modification or waiver of, or change
in, any of the terms, covenants, conditions or provisions of the Lease, or by
reason of any extension of time that may be granted by Landlord to Tenant (or
its successors or assigns) or a changed or different use of the Premises
consented to in writing by Landlord and Tenant, its successors and assigns,
whether or not notice thereof is given to Guarantor.

 

Guarantor expressly waives any and all defenses arising by reason of any
amendment, modification, extension or renewal of the Lease, any failure to give
notice of default, any failure to pursue potential remedies with due diligence,
any failure to resort to other security or other remedies available to Landlord
under the Lease, any failure of Landlord to take any action to terminate the
Lease, or to take possession of and relet the Premises for Tenant’s account, and
any and all defenses arising out of the guarantor-principal relationship, and
the same shall not operate to release Guarantor from any of its undertakings as
set forth herein.

 

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Landlord’s consent to any assignment or assignments, and successive assignments
by Tenant and Tenant’s assigns of the Lease, made either with or without notice
to Guarantor, shall in no manner whatsoever release Guarantor from any liability
as Guarantor, except as specifically provided in the Lease.

 

The assignment by Landlord of the Lease, and/or the avails and proceeds thereof,
made either with or without notice to Guarantor, shall in no manner whatsoever
release Guarantor from any liability as Guarantor hereunder. The term “Landlord”
as used herein shall be deemed to include Landlord’s successors and assigns.

 

All of Landlord’s rights and remedies under the Lease or under this Guaranty are
intended to be distinct, separate and cumulative, and no such right and remedy
therein or herein mentioned is intended to be in exclusion of or a waiver of any
of the others. The obligation of Guarantor hereunder shall not be released by
Landlord’s receipt, application, release or compromise of security or other
guarantees given for the performance and observance of covenants and conditions
required to be performed and observed by Tenant under Lease, nor shall Guarantor
be released by the maintenance of or execution upon any lien which Landlord may
have or assert against Tenant and/or Tenant’s assets.

 

Until all the covenants and conditions in the Lease on Tenant’s part to be
performed and observed are fully performed and observed, Guarantor (a) shall
have no right of subrogation against Tenant by reason of any payments or acts or
performance by Guarantor in compliance with the obligations of Guarantor
hereunder; (b) waives any right to enforce any remedy which Guarantor now or
hereafter shall have against Tenant by reason of any one or more payment or acts
or performance in compliance with the obligations of Guarantor hereunder; and
(c) subordinates any liability or indebtedness of Tenant now or hereafter held
by Guarantor to the obligations of Tenant to Landlord under the Lease.

 

This Guaranty, and Guarantor’s obligations hereunder, shall be governed by and
construed under the laws of the State of California, and all obligations of the
parties hereto shall be performable in Alameda County, California.

 

Guarantor represents and warrants that the value of the consideration received
and to be received by Guarantor is reasonably worth at least as much as the
liability and obligations of Guarantor hereunder, and such liability and
obligations may reasonably be expected to benefit Guarantor directly or
indirectly.

 

[Signatures appear on the following page]

 

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IN WITNESS WHEREOF, Guarantor has executed this Guaranty under seal this 16th
day of June, 2004

 

Signed, sealed and delivered

in the presence of:

  GUARANTOR:     SPX CORPORATION, a Delaware corporation

--------------------------------------------------------------------------------

Unofficial Witness

        By:  

 

--------------------------------------------------------------------------------

    Name:  

 

--------------------------------------------------------------------------------

    Title:  

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

  Tax ID#:  

 

--------------------------------------------------------------------------------

Notary Public

My Commission Expires:

 

                        [Notary Seal]

 

 

Address for Notice Purposes:

SPX Corporation

One Centennial Square

Haddonfield, New Jersey 08033

Attention: Kevin G. Lilly, Esquire, Group General

Counsel

    With a copy to:    

SPX Corporation

13515 Ballantyne Corporate Place

Charlotte, North Carolina 28277

Attention: Christopher J. Kearney, Vice President,

Secretary and General Counsel

 

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EXHIBIT “E”

 

[ATTACH APPROVED SUBLEASE DATED JUNE 16, 2004]

 

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