exv10w64



 





EXHIBIT 10.64




SUBLEASE

(BUILDING 5)




     THIS SUBLEASE (“Sublease”), dated as of November 1, 2006, is made by and between MAXTOR
CORPORATION, a Delaware corporation (“Sublessor”), and SANDISK CORPORATION, a Delaware corporation
(“Sublessee”).



RECITALS




     A. John Arrillaga, Trustee or his Successor Trustee u/t/a dated 7/20/77 (John Arrillaga
Separate Property Trust), as amended, and Richard T. Peery, Trustee or his Successor Trustee u/t/a
dated 7/20/77 (Richard T. Peery Separate Property Trust), as amended (collectively, “Original
Master Lessor”), and Quantum Corporation, a Delaware corporation (“Quantum”), have entered into:
(i) that certain Lease Agreement dated March 23, 1994 pursuant to which Quantum leased from
Original Master Lessor the real property commonly called 1100 Sumac Drive, Milpitas, California and
the building constructed thereon (“Building 5” or the “Building”), as amended by that certain
Amendment No. 1 to Lease dated April 16, 1997 and that certain Amendment No. 2 to Lease dated March
22, 2001 (collectively, the “Building 5 Master Lease” or the “Master Lease”); (ii) that certain
Lease Agreement dated September 17, 1990 pursuant to which Quantum leased from Original Master
Lessor the real property commonly called 1000 Sumac Drive, Milpitas, California and the building
constructed thereon (“Building 4”), as amended by that certain Amendment No. 1 to Lease dated April
16, 1997 and that certain Amendment No. 2 to Lease dated March 26, 2001 (collectively, the
“Building 4 Master Lease”); (iii) that certain Lease Agreement dated April 16, 1997 pursuant to
which Quantum leased from Original Master Lessor the real property commonly called 601 McCarthy
Boulevard, Milpitas, California and the building constructed thereon (“Building 6”), as amended by
that certain Amendment No. 1 to Lease dated April 15, 1998 and that certain Amendment No. 2 to
Lease dated March 22, 2001 (collectively, the “Building 6 Master Lease”); and (iv) that certain
Lease Agreement dated April 10, 1992 pursuant to which Quantum leased from Origiinal Master Lessor
the real property commonly called 900 Sumac Drive, Milpitas, California and the building
constructed thereon (“Building 3”), as amended by that certain Amendment No. 1 to Lease dated April
16, 1997 and that certain Amendment No. 2 to Lease dated March 22, 2001 (collectively, the
“Building 3 Master Lease”). Pursuant to Amendment No. 2 to each of the foregoing leases, Sublessor
has succeeded to the interest of Quantum as tenant thereunder. Additionally, Original Master
Lessor has transferred all of its right, title and interest in the Building 3 Master Lease, the
Building 4 Master Lease, the Building 5 Master Lease and the Building 6 Master Lease to Silicon
Valley CA-I, LLC, a Delaware limited liability company (hereinafter, “Master Lessor”). A copy of
the Building 5 Master Lease is attached hereto as Exhibit D.



     B. Sublessee has previously subleased from Sublessor, and Sublessor has previously subleased
to Sublessee, (i) the entire premises covered by the Building 3 Master Lease upon the terms and
conditions set forth in that certain Sublease (Building 3) dated December 21, 2005



 









 







between Sublessor and Sublessee (the “Building 3 Sublease”), (ii) the entire premises covered
by the Building 4 Master Lease upon the terms and conditions set forth in that certain Sublease
(Building 4) dated December 21, 2005 between Sublessor and Sublessee (the “Building 4 Sublease”),
and (iii) the entire premises covered by the Building 6 Master Lease upon the terms and conditions
set forth in that certain Sublease (Building 6) dated December 21, 2005 between Sublessor and
Sublessee (the “Building 6 Sublease”). This Building 3 Sublease, the Building 4 Sublease and the
Building 6 Sublease are collectively called the “ Other Subleases”.



     C. Sublessee now desires to sublease from Sublessor, and Sublessor now desires to sublease to
Sublessee, the entire premises covered by the Building 5 Master Lease upon the terms and conditions
hereinafter set forth in this Sublease. This Sublease, and the Other Subleases are collectively
called the “Subleases”.



     NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Sublessor and
Sublessee agree as follows:



     1. Definitions. All capitalized terms not otherwise defined herein shall have the
respective meanings ascribed to them under the Master Lease.



     2. Subleased Premises. Subject to the terms and conditions contained in this Sublease,
Sublessor hereby subleases to Sublessee, and Sublessee hereby subleases from Sublessor, the entire
premises covered by the Master Lease as depicted on Exhibit A hereto (the “Subleased
Premises”); provided, however, subject to Section 29 below, Sublessor shall retain for itself and
its employees, agents, contractors, invitees, licensees, successors and assigns (and Sublessee does
hereby grant to each of the foregoing) the right to non-exclusive use of all common areas,
landscaped areas, sidewalks and driveways related to the Building. Moreover, subject to the terms
and conditions of this Sublease, Sublessee shall have exclusive use of the service yard adjacent to
Building 5 comprising approximately 2862 square feet as depicted on Exhibit A attached
hereto as AREA B thereon (the “ B5 Service Yard”), and shall have the non-exclusive use of all
common areas, landscaped areas, sidewalks and driveways related to the Building. For all purposes
hereunder, the B5 Service Yard shall be treated as a part of the Subleased Premises as of the
Commencement Date (as hereinafter defined). For the avoidance of doubt, Sublessee acknowledges
that it has no right to access any building other than the Building and Buildings 3, 4 and 6 while
the Other Subleases and this Sublease are in effect. Sublessee hereby acknowledges and agrees that
Building 5 consists of approximately 94,484 rentable square feet. Nevertheless, the parties agree
that the foregoing approximation shall be final and binding for all purposes hereunder; and
notwithstanding anything to the contrary contained herein, no adjustment shall be made to the Base
Rent (as defined in Section 5.1(a) below) if the actual square footage of Building 5 differs from
any reference to square footage contained herein.



     3. Term; Sublease Consent; Early Entry.



          3.1 Term. Provided that Master Lessor has consented to this Sublease (the “Sublease
Consent”) and unless sooner terminated in accordance with the provisions contained herein, the term
(“Term”) of this Sublease shall commence on January 1, 2007 (the




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“Commencement Date”) and shall expire on July 31, 2011 (the “Expiration Date”) [sixty (60)
days prior to the expiration date of the Master Lease]. If the Sublease Consent has not been
obtained by January 1, 2007, then the Commencement Date shall be the date that Sublessor delivers
the Sublease Consent executed by Master Lessor to Sublessee.




          3.2 Sublease Consent. If Master Lessor has not consented to this Sublease on or prior
to November 30, 2006, then either party hereto shall have the right to terminate this Sublease at
any time on or prior to December 31, 2006, effective upon written notice to the other party.
Sublessor agrees to use commercially reasonable efforts to obtain a non-disturbance agreement for
the benefit of Sublessee as part of the Sublease Consent.




          3.3 Delivery of Subleased Premises. Sublessor and Sublessee acknowledge that,
despite the commencement of the Term on the Commencement Date, possession of certain portions of
the Subleased Premises shall not be delivered to Sublessee until later dates as set forth below.
On the Commencement Date, Landlord shall deliver possession of that portion of the Subleased
Premises on the first floor of the Building comprising 43,494 rentable square feet and depicted in
Exhibit A-1 attached to this Sublease by the areas marked in blue, green and pink lines (and noted
thereon as the “Initial Premises”). On or before April 1, 2007, Landlord shall deliver possession
of that portion of the Subleased Premises on the first floor of the Building comprising 3,801 rsf
and depicted in Exhibit A-1 attached to this Sublease by the areas marked in orange lines, at which
time Sublessee shall be deemed to have been delivered all of the first floor of the Building,
comprising 47,295 rentable square feet, and all of the Subleased Premises on the second floor of
the Building, comprising 47,189 rsf (and noted thereon as the “Remainder Premises”) (such date of
actual delivery, the “RP Delivery Date”). Sublessor will use all commercially reasonable efforts
to deliver possession of the noted portions of the Subleased Premises to Sublessee by the dates set
forth above; provided, however, notwithstanding the dates for delivery of the Initial Premises and
the Remainder Premises set forth above, Sublessor shall not be liable for damages to Sublessee for
failure to deliver possession of the any part of the Subleased Premises to Sublessee for any reason
whatsoever, nor shall this Sublease be void or voidable as a result of such delay, except that the
no Rent shall be payable on any portion of the Subleased Premises not delivered until Sublessor
delivers possession of such portion of the Subleased Premises to Sublessee (so long as Sublessee
is not responsible for such failure or delay), and in the event that any portion of the Premises is
not delivered within [sixty (60)] days of the date targeted for delivery as set forth above,
Sublessee shall be entitled, as to such portion of the Premises delivered late, to one (1) days’
free rent following the actual delivery of such portion of the Premises for each day beyond [sixty
(60)] days that actual delivery thereof is delayed. Sublessee further recognizes and acknowledges
that Sublessor will be occupying a portion of the Building during the Term, and that not all
portions of the Building occupied by Sublessor and Sublessee will be separately demised and secure
from each other’s access. In order to maintain such separation and security to as great a degree
as possible, Sublessor shall, at Sublessee’s sole cost and expense, either demise the Building as
reasonably appropriate, or engage a private security firm to keep the undemised portions of the
Building secure from unauthorized entry by Sublessor and Sublessee. Sublessor shall supply
Sublessee with appropriate invoices of all costs and expenses so incurred and Sublessee shall
reimburse Sublessor for such costs and expenses within thirty (30) days of receipt of such
invoices.




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          3.4 Early Entry. Prior to the delivery of each portion of the Subleased Premises as
set forth in Section 3.3 above, Sublessee and Sublessee’s employees, agents and contractors shall
be permitted to enter such undelivered portions of the Subleased Premises during Building business
hours (as determined by Sublessor in its sole discretion) for the sole purposes of preparing
construction drawing, plans and specifications, and for no other purposes. Such entry shall be
subject to all of the terms and conditions of the Master Lease and this Sublease, including without
limitation, (a) the indemnity and hold harmless provisions of Section 9 of this Sublease and (b)
the obligation to pay utilities and janitorial services; provided, however, other than as provided
in Section 5.2 below, Sublessee shall not be required to pay any Base Rent nor Operating Expense
Payments for Real Property Taxes, insurance premiums and common area expenses with regard to such
early entry. Sublessee shall furnish to Sublessor evidence of the insurance required under Section
7 of this Sublease prior to any entry into any portion of the Subleased Premises. Moreover, and
without limiting the foregoing, Sublessee shall indemnify, protect, defend with counsel reasonably
acceptable to Sublessor and hold harmless Sublessor and Sublessor’s shareholders, directors,
officers, employees, agents, affiliates, successors and assigns from and against any and all
claims, demands, liabilities, judgments, losses, causes of action, fines, penalties, damages, costs
and expenses, including reasonable attorneys’ and experts’ fees (collectively, “Claims”), caused by
or arising in connection with the early entry described in this Section 3.4, including without
limitation, any Claims by Master Lessor that Sublessor has committed (or allegedly committed) a
default and/or breach under the Master Lease by permitting the early entry described in this
Section 3.4 if made prior to delivery of the Sublease Consent. Sublessee’s indemnification and
other covenants provided in this Section 3.4 shall survive the expiration or termination of this
Sublease.




     4. Use; “As Is” Condition; Furniture.



          4.1 Use. Sublessee shall use the Subleased Premises for any legal use permitted under
the Master Lease. Sublessee acknowledges that it is thoroughly familiar with the condition of the
Subleased Premises, and Sublessee agrees that it is subleasing the Subleased Premises on an “AS
IS”, “WHERE IS” basis, subject to all latent or patent defects, without any representation or
warranty by Sublessor or Master Lessor or their respective employees or agents as to the condition
of the Subleased Premises or their fitness for Sublessee’s use, except as otherwise set forth in
this Sublease, and subject to all applicable zoning, municipal, county and state laws, ordinances
and regulations governing and regulating the use of the Subleased Premises, and any easements,
covenants or restrictions of record. Sublessee acknowledges that Sublessor and Master Lessor and
their respective employees or agents have not made any representations or warranties that the
Subleased Premises comply with applicable law, ordinance, rule, regulation or covenant or
restriction of record (collectively, “Applicable Requirements”), including, but not limited to, the
Americans With Disabilities Act, as amended (“ADA”), or any laws relating to earthquake or other
life/safety matters or Hazardous Substances (as defined below), except as set forth in this
Sublease. The parties hereto agree that the plans attached hereto as Exhibit B accurately
reflect all Alterations (as defined below) in the Subleased Premises existing as of the date hereof
(collectively, the “Existing Alterations”). Sublessor hereby assigns all of its right, title and
interest under any warranties with respect to the Building and/or such Building’s systems and which
are then in effect and which by their terms may be assigned without the consent of the counterparty
thereto (collectively, “Building Warranties”). The assignment of the Building Warranties is
conditioned on this Sublease being in full force

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and effect and that upon expiration or termination of this Sublease, the conditional
assignment shall terminate automatically and Sublessee shall not have any further right, title or
interest in the Building Warranties.




          4.2 Alterations. Sublessee shall obtain both Sublessor’s and Master Lessor’s prior
written consent to the architect and contractor engaged by Sublessee to perform work in or about
the Subleased Premises, which consent Sublessor shall not unreasonably withhold. Sublessor agrees
that it shall not charge Sublessee any supervisory fee with respect to any alterations, additions
or improvements (collectively, “Alterations”) that Sublessee makes to the Subleased Premises, other
than any supervisory fee that Master Lessor charges Sublessor with respect thereto (which charge
Sublessee shall pay Sublessor as Additional Rent (as defined below) hereunder). Except as modified
by this Section, Sublessee shall strictly comply with all obligations of Section 6 of the Master
Lease, as incorporated by reference herein. Notwithstanding anything to the contrary contained in
this Sublease, (a) if so required in writing by Master Lessor, Sublessee shall remove all
Alterations made by or on behalf of Sublessee in or to the Subleased Premises (whether or not
Sublessor’s consent was required hereunder) at expiration or termination of this Sublease and
restore the Subleased Premises to the condition shown on Exhibit B hereto, ordinary wear
and tear and damage caused by Sublessor excepted, all at Sublessee’s sole cost and expense, and (b)
Sublessee shall not be required to obtain Sublessor’s consent (but shall still be required to
obtain Master Lessor’s consent, if applicable) to any Alteration to the Subleased Premises if (i)
(A) the total cost (including soft costs) for such Alteration does not exceed Twenty Thousand
Dollars ($20,000), (B) such Alteration does not affect the foundation, roof or any structural
component of the Building, (C) such Alteration does not materially affect the Building’s
mechanical, electrical, plumbing or life safety systems, and (D) Sublessee provides Sublessor with
not fewer than ten (10) days’ prior written notice of Sublessee’s construction or installation of
such Alteration, or (ii) if Master Lessor consents in writing to the Alterations in question and
agrees that it need not be removed at the end of the term of the Master Lease. Sublessee shall
furnish to Sublessor copies of all permits and plans and specifications for all Alterations made by
or for Sublessee to the Subleased Premises, whether or not Sublessor’s consent thereto is required
hereunder. Sublessee shall pay, when due, all Claims for labor or materials furnished or alleged
to have been furnished to or for Sublessee at or for use on the Subleased Premises. If any
mechanic’s lien is recorded for work claimed to have been done for, or on behalf of, or for
materials claimed to be furnished to or for Sublessee, then Sublessee shall, at its expense,
immediately discharge such lien, by bond or otherwise, on demand of Sublessor. As long as
otherwise in accordance with the terms and conditions of the Master Lease, Sublessor hereby
consents to the installation by Sublessee, at Sublessee’s sole cost, of a nitrogen tank in the B5
Service Yard after the Commencement Date.




          4.3 Repair and Maintenance. Subject to the provisions of Sections 6.3(c) and 8 below,
the parties hereto agree that Sublessor shall have no obligation to Sublessee, in any manner
whatsoever, to repair and/or maintain the Subleased Premises or the Building, or any portion
thereof or the contents therein (including, without limitation, the Personal Property, as defined
below). Sublessee shall strictly comply with all other obligations of Section 7 of the Master
Lease, as incorporated by reference herein.




          4.4 License for Personal Property and Infrastructure Systems. Sublessor hereby grants
Sublessee a license to use in the Subleased Premises during the Term, (i) all

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cubicle systems, work stations, furniture, trade fixtures, equipment, art work, cabling,
cafeteria and gym equipment, security systems (including card access, camera and intrusion systems,
the “Security Systems”), and other personal property owned by Sublessor and located in the
Subleased Premises as of the date hereof, including without limitation, those items described in
Exhibit C attached hereto (collectively, the “Personal Property”), and (ii) all generators,
uninterruptible power systems (UPS), heating, ventilation and air conditioning systems (HVAC), and
data center systems and controls, located in the Subleased Premises (collectively, the
“Infrastructure Systems”), and subject to the terms and conditions set forth below:




          (a) The parties shall jointly conduct a walk-through inspection of the Personal Property (and
photograph such Personal Property, if needed), and note on Exhibit C any pre-existing
damage or defective conditions in the Personal Property.




          (b) SUBLESSEE ACCEPTS THE PERSONAL PROPERTY AND THE INFRASTRUCTURE SYSTEMS IN THEIR “AS IS”,
“WHERE IS” CONDITION WITH ALL FAULTS AND WITHOUT WARRANTIES, EXPRESS OR IMPLIED. SUBLESSOR
DISCLAIMS ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. SUBLESSEE
EXPRESSLY ASSUMES ALL RISK AND RESPONSIBILITY FOR ANY DEFECTS (INCLUDING LATENT DEFECTS) IN THE
PERSONAL PROPERTY AND THE INFRASTRUCTURE SYSTEMS.




          (c) Except for pre-existing damage or defective conditions to the Personal Property (as
mutually agreed by Sublessor and Sublessee), Sublessee shall maintain the Personal Property and the
Infrastructure Systems, and all portions thereof, in good condition and repair throughout the Term.
Upon the expiration or earlier termination of this Sublease but subject to Section 4.2(f) below,
Sublessee shall surrender the Personal Property and the Infrastructure Systems in the same
condition as received, ordinary wear and tear excepted. Except for pre-existing damage or
defective conditions to the Personal Property (as mutually agreed by Sublessor and Sublessee) but
subject to Section 4.2(f) below, Sublessee shall reimburse Sublessor, as Additional Rent, for the
reasonable cost of repairing any damage to the Personal Property and the Infrastructure Systems,
ordinary wear and tear excepted.




          (d) Sublessee shall keep the Personal Property and the Infrastructure Systems free from any
liens arising out of work performed, materials furnished or obligations incurred by Sublessee.




          (e) Sublessee shall be permitted to remove the Personal Property from the Subleased Premises;
provided, however, Sublessee shall not transfer its right to use the Personal Property or dispose
of any of the same, without obtaining the prior written consent of Sublessor, and shall comply with
Sublessor’s reasonable instructions regarding such transfer or disposition. Sublessee shall not
be permitted to remove the Infrastructure Systems or any portion thereof from its location in the
Building, without obtaining the prior written consent of Sublessor, which consent shall not be
unreasonably withheld.




          (f) Provided that this Sublease has not been terminated in accordance with the terms and
conditions contained herein and Sublessee has not surrendered the Personal Property

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in accordance with Section 32 below, on the Expiration Date, Sublessee shall purchase the
Personal Property on an “AS IS”, “WHERE IS” basis with all faults and without warranties, express
or implied, for the sum of One Dollar ($1.00), pursuant to a bill of sale in a form mutually
agreeable to the parties.




     5. Rent; Security Deposit.



          5.1 Base Rent.




          (a) The base rent (“Base Rent”) to be paid by Sublessee to Sublessor under this Sublease is
intended to be absolutely triple net. Subject to Section 5.1(b) below, beginning on the
Commencement Date and continuing during the Term, Sublessee shall pay to Sublessor monthly Base
Rent for the Subleased Premises, payable in advance on the first (1st) day of each month
in accordance with the following schedule (“Base Rent Schedule”):




	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Monthly Installment of
	 	 	Monthly Base Rent	 	Base Rent
	Time Period	 	Rate Per RSF	 	(Bldg 5)
	Commencement Date —
March 31, 2007
(Initial Premises only)
	 	$	0.65	 	 	$	28,271.11	 
	April 1, 2007 —
June 30, 2007
(Entire Premises)
	 	$	0.65	 	 	$	61,414.60	 
	July 1, 2007 —
June 30, 2008
	 	$	0.69	 	 	$	65,193.96	 
	July 1, 2008 —
June 30, 2009
	 	$	0.73	 	 	$	68,973.32	 
	July 1, 2009 —
June 30, 2010
	 	$	0.77	 	 	$	72,752.68	 
	July 1, 2010 —
July 31, 2011
	 	$	0.81	 	 	$	76,532.04	 






          (b) Notwithstanding the foregoing Base Rent Schedule, should the RP Delivery Date slip past
April 1, 2007, the Base Rent increase described above shall not be put in place until the RP
Delivery Date occurs.




          (c) If the Term commences on a day other than the first (1st) day of a calendar
month or ends on a day other than the last day of a calendar month, Base Rent for the first and/or
last fractional month of the Term shall be prorated on the actual number of days elapsed in such
month.




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          5.2 Additional Rent. Sublessee shall pay as additional rent (“Additional Rent”),
within twenty (20) days after demand therefor, all sums or other charges required to be paid by
Sublessee under this Sublease. During the Term, Sublessee shall pay to Sublessor all sums or other
charges required to be paid by Sublessor, as tenant, to Master Lessor under the Master Lease,
including without limitation, (a) all Real Property Taxes, insurance premiums and common area
expenses required to be paid to Master Lessor thereunder (collectively, “Operating Expense
Payments”, and which shall include expenses relating to the Parking Areas and Outdoor Areas, as
such terms are defined below), (b) all “Additional Rent” (as defined in the Master Lease) due from
Sublessor, as tenant, to Master Lessor under Paragraphs 4.D.(a) and (b) of the Master Lease, and
(c) the management fee charged by Master Lessor to Sublessor under the Master Lease, but expressly
excluding (i) any “Basic Rent” due from Sublessor, as tenant, to Master Lessor under the Master
Lease, and (ii) any late charges, default interest and other penalties due from Sublessor, as
tenant, to Master Lessor under the Master Lease provided the same are not caused by the default or
breach of any of Sublessee’s obligations contained in this Sublease. Sublessor shall not charge
Subtenant a management fee with regard to the Building, other than the management fees charged by
Master Lessor under the Master Lease. Notwithstanding the foregoing, Sublessee’s obligation to pay
Operating Expense Payments for the Subleased Premises shall be prorated for all periods prior to
the time that the entire Subleased Premises has been delivered to Sublessee, on the basis of the
ratio that the rentable square footage of those portions of the Subleased Premises delivered to
Sublessee bears to 94,484 rentable square feet. Moreover, Sublessee agrees to pay its proportionate
share of any costs and expenses incurred by Sublessor for (A) any insurance obtained by Sublessor
pursuant to Section 54 of the Master Lease, (B) repair or maintenance of the central courtyard
amongst the Buildings, and (C) repair, maintenance, replacement or new construction of improvements
in such central courtyard, within twenty (20) days after written demand therefor (which written
demand shall contain documentation in reasonable detail evidencing the costs and expenses incurred
by Sublessor); provided, however, that Sublessee shall have no obligation to reimburse Sublesssor
for any (aa) replacement of an existing improvement in the central courtyard, or (bb) construction
or installation of any new improvement in the central courtyard, if Sublessor had not first
obtained Sublessee’s written approval thereof, which approval shall not be unreasonably withheld,
conditioned or delayed by Sublessee. Sublessor shall have the same remedies for a default in the
payment of Additional Rent as for a default in the payment of Base Rent. Base Rent and Additional
Rent are hereinafter sometimes referred to collectively as “Rent.”




          5.3 Payment of Rent. Rent shall be paid to Sublessor, without deduction, demand,
recoupment, offset or counterclaim, in lawful money of the United States of America, at Maxtor
Corporation, 333 South Street, Shrewsbury, MA 01545, Attn: Gary Leblanc, or to such other person or
at such other place as Sublessor may from time to time designate in writing.




          5.4 Security Deposit; Letter of Credit.




          (a) Upon execution of this Sublease, Sublessee shall deliver to Sublessor a clean,
unconditional, irrevocable, transferable letter of credit in the amount of One Hundred Eighty Four
Thousand Two Hundred Forty Three and 80/100 Dollars ($184,243.80). (the “Letter of Credit”), in
form and issued by a financial institution (“Issuer”) satisfactory to Sublessor in its sole
discretion, which Letter of Credit (and all sums drawn by Sublessor thereunder) shall constitute a
security deposit to secure Sublessse’s obligations under this

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Sublease and the other Subleases (the “Security Deposit”). Sublessee hereby grants to
Sublessor a security interest in the Letter of Credit and all proceeds, replacements and
modifications thereof to secure Sublessee’s obligations herein, including without limitation, the
obligation to pay Rent, perform its insurance and indemnity obligation and to maintain and restore
the Subleased Premises. The Letter of Credit shall permit partial draws, and provide that draws
thereunder will be honored upon receipt by Issuer (at its offices in San Francisco, California or
such other location that Sublessor shall approve in its sole discretion) of the original or a
certified copy of the Letter of Credit accompanied by a written statement signed by Sublessor or
its authorized agent stating that Sublessor is entitled to draw on the Letter of Credit pursuant to
the terms of this Sublease. The Letter of Credit shall have an expiration period of one (1) year
from the date of issuance but shall provide that it will automatically renew by its terms to a date
which is sixty (60) days following the Expiration Date of the Building 6 Sublease unless
affirmatively cancelled by Issuer following not fewer than sixty (60) days prior written notice of
such expiration or cancellation from Issuer to Sublessor. Sublessor shall be entitled to draw the
Letter of Credit in part or in full. All costs and expenses related to the Letter of Credit,
including any transfer fees, shall be paid by Sublessee.




          (b) Sublessor shall hold the Security Deposit as security for the full and faithful
performance by Sublessee of its covenants and obligations under this Sublease and the Other
Subleases. If Sublessee defaults in the full and timely performance of any or all of Sublessee’s
covenants and obligations under this Sublease or any of the Other Subleases, then Sublessor may,
from time to time, without waiving any other remedy available to Sublessor, use the Security
Deposit, or any portion thereof, to the extent necessary to cure or remedy the default or to
compensate Sublessor for all or any part of the damages sustained by Sublessor resulting from
Sublessee’s default. Sublessee shall pay to Sublessor within ten (10) business days after receipt
of demand, the amount so applied in order to restore the Security Deposit to its original amount.
Sublessor shall not be required to keep the Security Deposit separate from its general accounts and
no trust relationship is created between Sublessor and Sublessee with respect to the Security
Deposit. If Sublessee performs all of its obligations hereunder and under all of the other
Subleases, the Security Deposit, or so much thereof as has not theretofore been applied by
Sublessor, shall be returned to Sublessee, without interest or other increment for its use, at the
Expiration Date and after Sublessee has vacated the entire Subleased Premises. Sublessee’s failure
to provide and keep the Letter of Credit in full force and effect and otherwise in accordance with
the terms of this Section 5.4 shall constitute a default of this Sublease and the Other Subleases.
Similarly, any failure to maintain the letters of credit provided under the Other Subleases as
required thereunder shall be a default under this Sublease.




     6. Master Lease.



          6.1 Subject to Master Lease. This Sublease is and shall at all times be subject and
subordinate to the Master Lease attached hereto as Exhibit D, and every provision thereof.
Sublessee acknowledges that (a) Sublessee’s use and enjoyment of the Subleased Premises are subject
to the rights of Master Lessor pursuant to the Master Lease, and (b) Sublessee has reviewed a copy
of each Master Lease and is fully familiar with the provisions thereof. Sublessor represents and
warrants that (i) the copy of the Master Lease attached hereto as Exhibit D is a true and
complete copy of the Master Lease and all amendments, modifications, written side letter agreements
and recorded memoranda of leases with respect thereto, (ii) Sublessor has

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not already assigned its interest in the Master Lease or sublet any of the Subleased Premises,
and (iii) as of the date hereof, the Master Lease is in full force and effect and no defaults exist
on the part of Sublessor or, to the best of Sublessor’s knowledge, Master Lessor under the terms of
the Master Lease. Sublessor shall not assign, terminate or amend the Master Lease without the
prior written consent of Sublessee, which consent shall not be unreasonably withheld, conditioned
or delayed.




          6.2 No Violation of Master Lease. Neither Sublessor nor Sublessee shall commit or
permit to be committed any act or omission which would violate any term or condition of the Master
Lease. If a Master Lease terminates, this Sublease shall terminate as to the portion of the
Subleased Premises covered thereby and the parties shall be relieved of any further liability or
obligation under this Sublease with respect thereto; provided, however, that if the Master Lease
terminates as a result of a default or breach by either Sublessor or Sublessee under this Sublease
and subject to Section 13 of this Sublease, then the defaulting party shall be liable to the other
party for the damage suffered as a result of such termination. Furthermore, Sublessor agrees not
to voluntarily terminate the Master Lease without the prior written consent of Sublessee, which
consent shall not be unreasonably withheld, conditioned or delayed.




          6.3 Incorporation of Master Lease.




          (a) Subject to and in accordance with the exceptions, qualifications and modifications set
forth below and elsewhere in this Sublease, all the provisions of the Master Lease, as set forth in
Exhibit D hereto, are hereby incorporated by reference and made a part of this Sublease,
and to the extent that such provisions impose obligations or duties on Sublessor as tenant under
the Master Lease and are incorporated by reference into the terms of this Sublease, Sublessee does
hereby expressly assume and agree with Sublessor to perform and to comply with such obligations and
duties of Sublessor as tenant thereunder, as the same accrue on and after the Commencement Date.
In the event of any conflict between any provision of the Master Lease incorporated herein and a
provision contained in this Sublease, the provision contained in this Sublease shall prevail.




          (b) Except as otherwise expressly provided herein and except for those provisions that are not
incorporated into this Sublease, the term “Landlord” (and similar terms) as used in the Master
Lease shall mean “Sublessor” hereunder; the term “Tenant” (and similar terms) as used in the Master
Lease shall mean “Sublessee” hereunder; the term “Premises” (and similar terms) as used in the
Master Lease shall mean “Subleased Premises” hereunder; and the term “Lease” as used in the Master
Lease shall mean this “Sublease”.

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          (c) Sublessor shall have no obligation to operate or maintain (i) the Building or any other
premises covered by the Master Lease, (ii) any common areas in the Building or any other premises
covered by the Master Lease, or (iii) provide any Building services or utilities. With respect to
all services to be performed or provided by Master Lessor under the Master Lease, Sublessor’s sole
obligation shall be to exercise commercially reasonable efforts (without litigation or the threat
thereof) to require Master Lessor to comply with its obligations to perform or provide such
services under the Master Lease, including promptly notifying Master Lessor of its nonperformance
if so requested by Sublessee in writing.




          (d) Notwithstanding anything to the contrary contained herein, in no event shall Sublessor be
deemed to be in default under this Sublease or liable to Sublessee for any failure of Master Lessor
to perform its obligations under the Master Lease. Wherever the Master Lease requires the consent
of the landlord be obtained, both Master Lessor’s consent and Sublessor’s consent shall be required
and the standard for such consent by Sublessor shall be a consent not unreasonably withheld or
delayed. For the avoidance of doubt, Sublessee shall be required to obtain both Sublessor’s and
Master Lessor’s consent for (i) any assignment or sub-subletting of the Subleased Premises
(provided that Sublessor’s consent shall not be required for assignments to entities controlled by
or under common control with Sublessee if Sublessee is not released from its obligations under this
Sublease), or (ii) any Alterations to the Subleased Premises or any portion thereof, in accordance
with the provisions of the Master Lease, as incorporated be referenced herein, but subject to the
terms and conditions contained in Section 4.2 above.




          6.4 Exclusions from Master Lease. Sublessor and Sublessee expressly agree that the
following provisions of the Master Lease are not incorporated in this Sublease: the first
full paragraph of the Master Lease; Sections 2, 4.A and 4.B; Sections 4.E and 4.F; the first two
sentences of Section 5; the seventh sentence of Section 6; the first sentence of Section 9; the
first sentence of Section 12; Sections 13 and 23; the term “Landlord” in the first and second
sentences of Section 21, in the second paragraph of Section 22 and in Section 27 shall be replaced
with “Master Lessor”; Sections 29, 31, 34, 36, 38.G, 39 through 44 (inclusive), 45 through 50
(inclusive), 51.A through D (inclusive); the term “Landlord” in Section 52 shall be replaced with
“Master Lessor” and all references to extension rights or periods in such Section 52 shall be
deleted (i.e., not incorporated by reference into this Sublease); Sections 54, 61, 62, 63 and 64;
the term “for lease” in Section 58(ii) shall be replaced with “for sublease”; Sections 1 through 5
(inclusive), Sections 8, 9, 11, 12, 14, 16, 17 and 18 of Amendment No. 1 to Lease; and all of
Amendment No. 2 to Lease.




          6.5 Time for Notices and Demands. Whenever in the Master Lease a time is specified
for the giving of any notice or the making of any demand by the tenant thereunder, such time is
hereby changed (for the purpose of this Sublease only) by subtracting five (5) days thereto (unless
the time specified is less than five (5) days in which event two (2) business days shall be
subtracted thereto instead); and whenever in the Master Lease a time is specified for the giving of
any notice or the making of any demand by the landlord thereunder, such time is hereby changed (for
the purpose of this Sublease only) by adding five (5) days if such notice, request or demand of the
landlord thereunder relates to any subject other than the payment of fixed annual rent or
additional rent under the Master Lease (unless the time specified is less than five (5) days in
which event two (2) business days shall be added thereto instead). Whenever in

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the Master Lease a time is specified within which the tenant thereunder must give notice or
make a demand following an event, or within which the tenant thereunder must respond to any notice,
request or demand previously given or made by the landlord thereunder, or to comply with any
obligation on the tenant’s part thereunder, such time is hereby changed (for the purpose of this
Sublease only) by subtracting five (5) days if the same shall relate to any obligation other than
the payment of fixed annual rent or additional rent under the Master Lease or under this Sublease
(unless the time specified is less than five (5) days in which event two (2) business days shall be
subtracted thereto instead). Wherever in the Master Lease a time is specified within which the
landlord thereunder must give notice or make a demand following an event, or within which the
landlord thereunder must respond to any notice, request or demand previously given or made by the
tenant thereunder, such time is hereby changed (for the purpose of this Sublease only) by adding
five (5) days thereto (unless the time specified is less than five (5) days in which event two (2)
business days shall be added thereto instead). It is the purpose and intent of the foregoing
provisions, among other things, to provide Sublessor with time within which to transmit to the
Master Lessor any notices or demands received from Sublessee and to transmit to Sublessee any
notices or demands received from the Master Lessor.




          6.6 Options to Extend Under Master Lease; Amendment to Sublease. In the event that
(a) Sublessee notifies Sublessor in writing that Sublessee is actively negotiating a direct lease
with Master Lessor (“Direct Lease”) with regard to the Subleased Premises for a term commencing
immediately after the Expiration Date, and (b) provided that Sublessee is not then in default under
this Sublease, then Sublessor agrees that it will not exercise its Option to Extend with regard to
the Subleased Premises until such time as Sublessee notifies Sublessor in writing that it is no
longer negotiating a Direct Lease with Master Lessor for the Subleased Premises. Sublessee hereby
agrees to respond (in the affirmative or negative), from time to time, within ten (10) business
days of its receipt of a written inquiry from Sublessor requesting that Sublessee confirm that
Sublessee is or is not actively negotiating a Direct Lease with Master Lessor. In the event that
Sublessee and Master Lessor execute and deliver a Direct Lease for the Subleased Premises, with a
term commencing immediately after the Expiration Date, then (1) Sublessor shall agree to amend the
Master Lease to delete its Options to Extend thereunder, and (2) Sublessor and Sublessee shall
execute and deliver an amendment to this Sublease providing: (I) the Expiration Date for this
Sublease shall be extended to be co-terminus with the expiration date of the Master Lease on the
same terms and conditions as were applicable immediately prior to such extension; (II) Sublessee
shall assume the obligations of Sublessor under the Master Lease to remove any Alterations to the
applicable Building that Master Lessor requires be removed and to restore the same in accordance
with the terms of the Master Lease (collectively, the “Restoration Obligations”); and (III)
Sublessee shall indemnify, defend and hold harmless Sublessor and the Sublessor Indemnitees from
and against all Claims related to the Restoration Obligations assumed by Sublessee. In the event
that Sublessee executes a Direct Lease with Master Lessor for the Subleased Premises, then
Sublessor agrees to execute a quitclaim deed with respect thereto for delivery and recordation at
expiration or termination of the Master Lease.




     7. Sublessee’s Insurance. Notwithstanding anything to the contrary contained in the
Master Lease, Sublessee, at its sole cost and expense, shall keep in force at all times during the
Term a policy of commercial general liability insurance with combined single limit coverage of not
less than Three Million Dollars ($3,000,000) per occurrence and Five Million Dollars ($5,000,000)
in the aggregate for bodily injury and property damage occurring in, on or about the



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Subleased Premises, including parking and landscaped areas. All insured policies required to
be maintained by Sublessee hereunder shall name Sublessor and Master Lessor as additional insureds.
Except as modified by this Section, Sublessee shall strictly comply with all other obligations
under Section 10 of the Master Lease, as incorporated by reference herein.



     8. Casualty; Condemnation.



          (a) In the event that Sublessor’s interest as tenant under the Master Lease is terminated by
reason of damage or destruction, condemnation, or any other reason, then this Sublease shall
terminate as to Sublessor’s interest therein only (and not as to all Sublessor interests under the
Master Lease) on the same date as the termination of such interest, without liability of Sublessor
to Sublessee, and Sublessee shall not be entitled to any insurance proceeds or other remuneration
from Sublessor except for insurance proceeds from insurance policies purchased by Sublessee for its
own personal property. Sublessor agrees to give written notice to Sublessee promptly should
Sublessor’s interest in any portion of the Subleased Premises be terminated, or be threatened to be
terminated, under the Master Lease. Sublessor shall not terminate the Master Lease due to a
casualty or condemnation without the prior written consent of Sublessee, which consent may be
withheld in Sublessee’s sole and absolute discretion.




          (b) If the Subleased Premises or any portion thereof is damaged by fire or other casualty, and
if the Master Lease is not terminated, then:




               (i) This Sublease shall continue in full force and effect;



               (ii) Sublessor shall have no obligation to repair or restore the damaged space;



               (iii) Sublessor shall use commercially reasonable efforts (without litigation or the threat
thereof), as set forth in Section 6.3(c) above, to cause Master Lessor to perform the repairs which
Master Lessor is required to perform under the Master Lease; provided that Sublessor shall not be
liable for any damages, nor shall Rent due hereunder be abated, nor shall Sublessee be relieved
from the performance of any term or covenant hereunder, nor shall Sublessee be deemed to have been
evicted, due to any aspect of the repair and restoration of the damaged space (including without
limitation any delay of such repair and restoration), except to the extent so abated, relieved or
evicted under the Master Lease; and



               (iv) There shall be no reduction or abatement of Rent for any period during which Sublessee is
unable to use the affected portion of the Subleased Premises, in whole or part, due to damage or
destruction of the same or the Building, unless Sublessor actually receives a reduction or
abatement of rent under the Master Lease.



          (c) In the event eminent domain or condemnation is instituted against the Subleased Premises
or any portion thereof, and the Master Lease is terminated with respect to all or a portion of the
Subleased Premises as a result thereof pursuant to the Master Lease, (i) this Sublease shall
terminate as of the date the Master Lease terminates with respect to such portion of the Subleased
Premises without any liability on the part of Sublessor to Sublessee, and Sublessee shall not be
entitled to any award of damages for Sublessee’s interest in the Subleased

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Premises, except that Sublessee may make a claim against the condemning authority for loss of
or damage to Sublessee’s trade fixtures and personal property, relocation expenses, and unamortized
subtenant improvements costs that have been paid by Sublessee, and (ii) Sublessor shall have no
obligation to rebuild or restore the Subleased Premises. If this Sublease is terminated as to less
than all of the Subleased Premises, this Sublease shall continue in full force and effect as to the
remaining portion of the Subleased Premises, except that the Base Rent payable hereunder shall be
equitably reduced but only to the extent (if any) that rent applicable to the affected portion of
the Subleased Premises is reduced under the Master Lease.




          (d) Sublessee expressly waives the provisions of California Civil Code Section 1932(2) and
Section 1933(4). Sublessor and Sublessee expressly waive the provisions of California Code of
Civil Procedure Sections 1265.120 and 1265.130.




     9. Indemnity; Hold Harmless.



          (a) Sublessor shall not be liable to Sublessee or Sublessee’s employees, agents, invitees,
licensees or visitors, or to any other person, for any injury to person, or damage to or loss of
property on or about the Subleased Premises or the Building arising from any cause whatsoever,
except to the extent caused solely by the gross negligence or willful misconduct of Sublessor.
Except to the extent caused solely by the gross negligence or willful misconduct of Sublessor,
Sublessee shall indemnify, protect, defend with counsel reasonably acceptable to Sublessor and hold
harmless Sublessor and Sublessor’s shareholders, directors, officers, employees, agents,
affiliates, successors and assigns (collectively, “Sublessor Indemnitees”) from and against any and
all Claims caused by or arising in connection with: (i) the use or occupancy of the Subleased
Premises, the Building, the Infrastructure Systems and the Personal Property by Sublessee or its
employees, contractors, agents, invitees, licensees, permitted sub-sublessees or assignees or
permitted sublessees pursuant to Section 32 below; or (ii) the negligence or willful misconduct of
Sublessee or its employees, contractors, agents, invitees, licensees or permitted sub-sublessees or
assignees; or (iii) a default or breach of Sublessee’s obligations under this Sublease; or (iv) a
default or breach of Sublessor’s obligations under the Master Lease to the extent caused by
Sublessee’s default or breach of any of its obligations contained in this Sublease; or (v) any
negligence, gross negligence or willful misconduct of Sublessee or its agents, employees,
contractors, invitees, licensees, permitted sub-sublessees or assignees or permitted sublessees
pursuant to Section 32 below in, on or about the Subleased Premises or the Building; or (vi) any
failure of Sublessee to surrender the Subleased Premises (or any portion thereof) to Sublessor at
the end of the Term hereof (or such sooner date as provided in this Sublease) or otherwise in the
condition required hereunder to the extent required pursuant to the terms of this Sublease, or
(vii) all Claims for labor or materials furnished or alleged to have been furnished to or for
Sublessee at or for use on the Subleased Premises. Sublessee’s indemnification and other covenants
provided in this Section 9 shall survive the expiration or termination of this Sublease.




          (b) Except to the extent caused solely by the gross negligence or willful misconduct of
Sublessee but subject to Section 3.4 above, Sublessor shall indemnify, protect, defend with counsel
reasonably acceptable to Sublessee and hold harmless Sublessee and Sublessee’s shareholders,
directors, officers, employees, agents, affiliates, successors and assigns (collectively,
“Sublessee Indemnitees”) from and against any and all Claims caused by or arising

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in connection with: (i) a default or breach of Sublessor’s obligations under the Master Lease
that is not caused by Sublessee’s default or breach of any of its obligations contained in this
Sublease; or (ii) any negligence, gross negligence or willful misconduct of Sublessor or its
agents, employees, contractors, invitees, licensees or permitted sub-sublessees or assignees in, on
or about the Subleased Premises or the Building; or (iii) all Claims for labor or materials
furnished or alleged to have been furnished to or for Sublessor at or for use on the Subleased
Premises. Sublessor’s indemnification and other covenants provided in this Section 9 shall survive
the expiration or termination of this Sublease




     10. Utilities; System Connections; Vendors. Pursuant to Section 8 of the Master
Lease, as incorporated by reference herein, Sublessee shall be responsible and shall pay directly
all utilities and services furnished to the Subleased Premises, including security and janitorial
services. Sublessor shall cause, at Sublessor’s expense, Infrastructure Systems and Security
Systems within the Building to be separated from Infrastructure Systems and Security Systems for
other buildings; and thereafter, Sublessee shall cause, at Sublessee’s expense, Infrastructure
Systems and Security Systems within the Building to be reconnected (if necessary). Subject to the
terms of the Master Lease and provided that Sublessee obtains both Sublessor’s and Master Lessor’s
prior written consent (which consent Sublessor shall not unreasonably withhold), Sublessee shall be
permitted to select its own vendors for its repair and maintenance of the Subleased Premises and
for janitorial, security and other services to the Subleased Premises.



     11. Notices.



          11.1 Notices Under Sublease. All notices, consents, demands, requests and other
communications from one party to the other given pursuant to the terms of this Sublease shall be in
writing and shall be delivered by hand, air courier or by United States mail, certified or
registered, postage prepaid, and addressed to Sublessee or Sublessor at the addresses respectively
specified below or to such other place as Sublessee or Sublessor may from time to time designate in
a written notice to the other. Notices shall be deemed given on the earliest of (i) receipt, (ii)
one (1) business day after deposit with an courier for overnight delivery, or (iii) three (3)
business days after deposit in the United States mail.




	 	 	 	 	 
	 

	 	The address for	 	 
	 

	 	Sublessor is:
	 	Maxtor Corporation

333 South Street

Shrewsbury, MA 01545

Attn: Gary Leblanc
	 
	 	 	 	 
	 

	 	with a copy to:
	 	Maxtor Corporation

2452 Clover Basin Drive

Longmont, CO 80503

Attention: General Counsel






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	 	The address for	 	 
	 

	 	Sublessee is:
	 	SanDisk Corporation

601 McCarthy Boulevard

Milpitas, CA 95035

Attn: General Counsel
	 
	 	 	 	 
	 

	 	with a copy to:
	 	SanDisk Corporation

601 McCarthy Boulevard

Milpitas, CA 95035

Attn: Edward Palma






          11.2 Notices Under Master Lease. Sublessor shall promptly provide Sublessee with a
copy of any notice it receives from Master Lessor relating to the Subleased Premises or the Master
Lease. Sublessee shall promptly provide Sublessor with a copy of any notice it receives from
Master Lessor relating to the Subleased Premises or the Master Lease.




     12. Confidentiality. Sublessee acknowledges and agrees that the terms and conditions
set forth in this Sublease constitute Sublessor’s “Confidential Information” (as defined in the
NDA, as defined below) and that such terms and conditions shall be subject to the Mutual
Nondisclosure Agreement executed by Sublessor and Sublessee and made effective as of May 4, 2004
(the “NDA”).



     13. Limitation of Liability. Notwithstanding anything to the contrary contained in
this Sublease, (a) no director, officer, shareholder, employee, adviser or agent of Sublessor or
Sublessee shall be personally liable in any manner or to any extent under or in connection with
this Sublease, and (b) neither Sublessor nor any of the Sublessor Indemnitees shall be responsible
or liable for any consequential or punitive damages in connection with this Sublease, including,
without limitation, on account of lost profits or the interruption of Sublessee’s business.



     14. Signage. Subject to the terms and conditions of the Master Lease, Sublessee, at
its sole cost and expense, shall have the same signage rights as Sublessor has under the Master
Lease with regard to the Building subleased to Sublessee hereunder, provided that at Sublessee’s
sole cost (a) Sublessee shall obtain the prior written consent of Master Lessor thereto, (b)
Sublessee shall obtain the prior written consent of Sublessor thereto (which consent of Sublessor
shall not be unreasonably withheld), (c) Sublessee shall obtain all necessary permits and approvals
from all applicable government agencies with respect thereto, (d) Sublessee shall install,
maintain, repair and, to the extent required by Master Lessor, remove all signage at expiration or
earlier termination of this Sublease, and (e) Sublessee shall repair all damage to the Subleased
Premises caused by the removal of all signage at expiration or earlier termination of this
Sublease.



     15. Brokers. Sublessee represents and warrants to Sublessor that no real estate
broker, agent or finder negotiated or was instrumental in negotiating or representing Sublessee in
the negotiation of this Sublease. Sublessor represents and warrants to Sublessee that no real
estate broker, agent or finder negotiated or was instrumental in negotiating or representing



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Sublessor in the negotiation of this Sublease. Sublessee and Sublessor shall each indemnify
and hold the other harmless from and against any Claims resulting from breach of such party’s
representation and warranty contained above.



     16. Counterparts. This Sublease may be executed in separate counterparts, each of
which shall be an original, and all of which taken together shall constitute one and the same
agreement.



     17. No Recording. Neither party hereto shall record this Sublease nor any memorandum
hereof without the written consent of the other party.



     18. Curing Defaults.



     (a) If Sublessee shall be in default in the performance of any of its obligations hereunder
beyond any applicable notice and cure period, Sublessor, without any obligation to do so, in
addition to any other rights it may have in law or equity, may elect (but shall not be obligated)
to cure such default after the applicable cure period at any time after delivery of five (5)
business days’ notice to Sublessee. Sublessee shall reimburse Sublessor, upon demand for one
hundred percent (100%) of all costs and expenses paid or incurred by Sublessor in curing such
default, and interest thereon from the respective dates of Sublessor’s making the payments and
incurring such costs, at the lesser of (i) the prime rate announced by Bank of America NT&SA from
time to time (the “Prime Rate”) plus two percent (2%), or (ii) the maximum amount allowed by law,
which sums and costs together with interest thereon shall be deemed Additional Rent payable
promptly upon being billed therefor.



     (b) If Sublessor shall be in default in the performance of any of its obligations under the
Master Lease beyond any applicable notice and cure period, Sublessee, without any obligation to do
so, in addition to any other rights it may have in law or equity, may elect (but shall not be
obligated) to cure such default after the applicable cure period at any time after delivery of five
(5) business days’ notice to Sublessor. Sublessor shall reimburse Sublessee, upon demand for one
hundred percent (100%) of all costs and expenses paid or incurred by Sublessee in curing such
default, and interest thereon from the respective dates of Sublessee’s making the payments and
incurring such costs, at the lesser of (i) the Prime Rate plus two percent (2%), or (ii) the
maximum amount allowed by law, which sums and costs together with interest thereon shall be payable
promptly upon being billed therefor.



     19. Time. In all instances where Sublessee is required by the provisions of this
Sublease to pay any sum of money or to do any act at a particular indicated time or within any
indicated period, it is understood and agreed that TIME IS OF THE ESSENCE.



     20. Authority. The individual or individuals signing this Sublease on behalf of
Sublessee or Sublessor, represent and warrant that: (i) Sublessee or Sublessor, respectively, is a
corporation duly incorporated and organized and validly existing and in good standing under the
laws of the State of Delaware; (ii) Sublessee or Sublessor, respectively has full power and
authority to enter into this Sublease and to perform its obligations under this Sublease; (iii) the
execution, delivery and performance of this Sublease by Sublessee or Sublessor have been duly and
validly authorized by all necessary corporate action on the part of Sublessee or Sublessor



-17-









 







and all required consents and approvals have been duly obtained; and (iv) this Sublease is a
legal, valid and binding obligation of Sublessee or Sublessor, respectively, enforceable against
Sublessee or Sublessor, respectively in accordance with its terms, subject to the effect of
applicable bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar laws
affecting the rights of creditors generally.



     21. Attorneys’ Fees. If as a result of any breach or default on the part of Sublessee
under this Sublease, Sublessor uses the services of an attorney in order to secure compliance with
this Sublease, Sublessee shall reimburse Sublessor upon demand as Additional Rent for any and all
reasonable attorneys’ fees and expenses incurred by Sublessor, whether or not formal legal
proceedings are instituted. Should either party bring an action against the other party, by reason
of or alleging the failure of the other party to comply with any or all of its obligations
hereunder, whether for declaratory or other relief, then the party which prevails in such action
shall be entitled to its reasonable attorneys’ fees and expenses related to such action, in
addition to all other recovery or relief. A party shall be deemed to have prevailed in any such
action (without limiting the generality of the foregoing) if such action is dismissed upon the
payment by the other party of the sums allegedly due or the performance of obligations allegedly
not complied with, or if such party obtains substantially the relief sought by it in the action,
irrespective of whether such action is prosecuted to judgment. Attorneys’ fees shall include,
without limitation, fees incurred in discovery, contempt proceedings, and bankruptcy litigation.
The non-prevailing party shall also pay the reasonable attorneys’ fees and costs incurred by the
prevailing party in any post-judgment proceedings to collect and enforce the judgment. The
covenant in the preceding sentence is separate and several and shall survive the merger of this
provision into any judgment on this Sublease.



     22. Successors. The terms, covenants and conditions of this Sublease shall be binding
upon and inure to the benefit of Sublessor and Sublessee and their respective successors, and
except as otherwise provided, their assigns.



     23. Remedies; Cross-Defaults. Sublessor shall have the right, upon Sublessee’s
default hereunder, in addition to the remedies set forth in this Sublease, to exercise against
Sublessee any and all of the rights and remedies described in the Master Lease as available to
Master Lessor in the event of a default by the tenant under the Master Lease. Moreover, any
default by Sublessee of any of its obligations or duties under any of the Other Subleases shall
constitute a default by Sublessee under this Sublease and all of the Other Subleases. Similarly, a
default by Sublessee under this Sublease shall constitute a default under each of the Other
Subleases.



     24. Not Offer. The submission of this Sublease for review or signature by Sublessee
shall not constitute an offer or option to sublease the Subleased Premises, nor shall this Sublease
be effective as a sublease or otherwise until both parties execute and deliver execution
counterparts of this Sublease and Master Lessor approves this Sublease in writing.



     25. Construction. This Sublease is the result of negotiations between the parties and
their respective attorneys and shall be construed in an even and fair manner, regardless of the
party who drafted this Sublease or any provision hereof. The headings or captions of sections in



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this Sublease are for convenience and reference only, and in no way define, limit, or describe
the scope or intent of this Sublease or the provisions of such sections. The term “including”
shall mean “including, but not limited to.”



     26. Entire Agreement; Amendment; Severability. There are no oral agreements between
Sublessor and Sublessee affecting this Sublease, and this Sublease (along with the NDA) supersedes
and cancels any and all prior negotiations, arrangements, correspondence, communications,
agreements and understandings, if any, whether oral or written, between Sublessor and Sublessee
with respect to the subject matter of this Sublease, and none of the foregoing shall be used to
construe this Sublease. No amendment or modification of this Sublease shall be binding or valid
unless expressed in writing and executed and delivered by Sublessor and Sublessee. If any one or
more of the provisions contained in this Sublease shall be invalid, illegal or unenforceable in any
respect, the validity, legality or enforceability of the remaining provisions contained herein
shall not in any way be affected or impaired.



     27. Intentionally Deleted.



     28. No Solicitation. During the Term, Sublessee shall not solicit nor hire any
employee of Sublessor with first obtaining the prior written consent of Sublessor, which consent
may be withheld in Sublessor’s sole discretion. Sublessee hereby agrees that money damages will not
be a sufficient remedy for any breach of this Section 28, such that Sublessor shall be entitled to
injunctive relief, specific performance, or both as a remedy for any such breach. Such remedy
shall not be deemed to be the exclusive remedy for any such breach but shall be in addition to all
other remedies available at law or equity.



     29. Parking. Sublessee shall have the right to use, on an unassigned, non-exclusive
basis, all parking spaces in the parking areas designated for the Building, as shown on Exhibit
A hereto (the “Parking Areas”). The use of the Parking Areas shall be subject to, and is
conditioned upon, compliance by Sublessee with all rules and regulations governing the Parking
Areas promulgated by Master Lessor or Sublessor from time to time (and Sublessee shall cause all of
its employees, agents, contractors and invitees to comply with the same).



     30. Outdoor Areas. Sublessee shall have the right to use, on a non-exclusive basis,
the outdoor sunken amphitheatre, basketball and volleyball courts, seating and lawn areas and other
outdoor areas associated with the Buildings (collectively, the “Outdoor Areas”). The use of the
Outdoor Areas shall be subject to, and is conditioned upon, compliance by Sublessee with all rules
and regulations governing the Outdoor Areas promulgated by Master Lessor or Sublessor from time to
time (and Sublessee shall cause all of its employees, agents, contractors and invitees to comply
with the same). In the event that Sublessee desires to reserve an Outdoor Area for its exclusive
use (a “Reservation”), it may do so subject to the following requirements: (a) Sublessee shall
deliver to Sublessor written notice specifying which Outdoor Area it proposes to reserve and the
date and time of the proposed Reservation at least fifteen (15) days’ prior to the proposed
Reservation date; (b) Sublessee shall not be permitted to reserve an Outdoor Area if Sublessor or
Master Lessor intends to use such Outdoor Area (or any portion thereof) during the proposed
Reservation period; (c) Sublessee shall not be permitted to reserve an Outdoor Area for longer than
a twenty-four (24) hour period (unless otherwise approved in writing by Sublessor



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which approval shall not be unreasonably withheld, conditioned or delayed); (d) Sublessee
shall set up and clean up the Outdoor Area at Sublessee’s sole cost; and (e) Sublessee shall comply
with all rules and regulations governing the Outdoor Areas promulgated by Master Lessor or
Sublessor from time to time, including without limitation, any requirement by Sublessor that
Sublessee obtain additional insurance or provide Sublessor with additional indemnities in
connection with any alcoholic beverages served by or for Sublessee in or around the Outdoor Area.



     31. Hazardous Substances.



          31.1 Definitions. As used in this Sublease, the term “Hazardous Substance” shall mean
any product, substance, or waste whose presence, use, manufacture, disposal, transportation, or
release, either by itself or in combination with other materials expected to be on the Subleased
Premises, is: (i) potentially injurious to the public health, safety or welfare, the environment or
the Subleased Premises, (ii) regulated or monitored by any governmental authority, or (iii) a basis
for potential liability of Sublessor to any governmental agency or third party under any applicable
statute or common law theory. Hazardous Substances shall include, but not be limited to, PCB’s,
hydrocarbons, petroleum, gasoline, asbestos and/or crude oil or any products, by-products or
fractions thereof. As used in this Sublease, the term “Reportable Use” shall mean (i) the
installation or use of any above ground storage tank, (ii) the generation, possession, storage,
use, transportation, release or disposal of a Hazardous Substance that requires a permit from, or
with respect to which a report, notice, registration or business plan is required to be filed with,
any governmental authority, and/or (iii) the presence at the Subleased Premises of a Hazardous
Substance with respect to which any Applicable Requirement requires that a notice be given to
persons entering or occupying the Subleased Premises or neighboring properties.




          31.2 Reportable Uses and Hazardous Substances Require Consent. Except as expressly
provided below and subject to the Master Lease, Sublessee shall not engage in any activity in or on
the Subleased Premises which constitutes a Reportable Use of Hazardous Substances, nor shall
Sublessee generate, possess, store, use, release or dispose of any Hazardous Substances in, on,
under or about the Subleased Premises or the Building, without the express prior written consent of
both Sublessor and Master Lessor (which consent Sublessor shall not unreasonably withhold), and
Sublessee’s timely compliance (at Sublessee’s expense) with all Applicable Requirements.




          31.3 Duty to Inform Sublessor. If Sublessee knows that a Hazardous Substance has come
or may have come to be located in, on, under or about the Subleased Premises, Sublessee shall
immediately give written notice of such fact to Sublessor, and provide Sublessor with a copy of any
report, notice, claim or other documentation which it has concerning the presence of such Hazardous
Substance.




          31.4 Sublessee Remediation. Sublessee shall not cause or permit any Hazardous
Substance to be spilled or released in, on, under, or about the Subleased Premises (including
through the plumbing or sanitary sewer system) and shall promptly, at Sublessee’s sole cost and
expense, take all investigatory and/or remedial action reasonably recommended,

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whether or not formally ordered or required, for the cleanup of any contamination of, and for the
maintenance, security and/or monitoring of the Subleased Premises or neighboring properties, that
was caused or materially contributed to by Sublessee, or pertaining to or involving any Hazardous
Substance brought onto or released in, on or under the Subleased Premises the Subleased Premises by
or for Sublessee or Sublessee’s employees, contractors, agents, invitees, licensees or permitted
sub-sublessees or assignees. Sublessee shall be solely responsible for the remediation of any
condition concerning any Hazardous Substance brought onto or released in, on or under the Subleased
Premises by or for Sublessee or Sublessee’s employees, contractors, agents, invitees, licensees or
permitted sub-sublessees or assignees.




          31.5 Investigations and Remediations. Sublessee shall have responsibility and shall
pay for any investigations or remediation measures required by governmental entities having
jurisdiction with respect to the existence of Hazardous Substances brought onto or released in, on
or under the Subleased Premises by or for Sublessee or Sublessee’s employees, contractors, agents,
invitees, licensees or permitted sub-sublessees or assignees. Sublessee shall cooperate fully in
any such activities at the request of Sublessor or Master Lessor, including allowing Sublessor and
Master Lessor and their respective employees and agents to have reasonable access to the Subleased
Premises at reasonable times in order to carry out any investigative and remedial actions which
Sublessor or Master Lessor may elect to do.




          31.6 Sublessee’s Compliance with Applicable Requirements. Sublessee shall obtain,
maintain and strictly comply with, at Sublessee’s sole cost and expense, any and all Applicable
Requirements with the generation, possession, storage, use, release or disposal of any Hazardous
Substance brought onto or released in, on or under the Subleased Premises by or for Sublessee or
Sublessee’s employees, contractors, agents, invitees, licensees or permitted sub-sublessees or
assignees. Sublessee shall, within ten (10) days after receipt of Sublessor’s or Master Lessor’s
written request, provide Sublessor and Master Lessor with copies of all permits and other
documents, and other information evidencing Sublessee’s compliance with any Applicable Requirements
specified by Sublessor or Master Lessor, and shall immediately upon receipt by Sublessee, notify
Sublessor and Master Lessor in writing (and immediately provide to Sublessor and Master Lessor
copies of any documents involved) of any threatened or actual claim, notice, citation, warning,
complaint or report pertaining to or involving the failure of Sublessee or the Subleased Premises
to comply with any Applicable Requirements or the provisions of this Section 31.




          31.7 Inspection; Compliance. Sublessor and Master Lessor and their respective
employees and agents shall have the right to enter the Subleased Premises at any time, in the case
of an emergency, and otherwise at reasonable times upon reasonable prior notice, which may be
verbal, for the purpose of inspecting the condition of the Subleased Premises and for verifying
compliance by Sublessee with this Section 31. The reasonable cost of any such inspections shall be
paid by Sublessor, unless such inspection reveals that Sublessee has violated the provisions of
this Section 31 in which case Sublessee shall reimburse Sublessor for the reasonable out of pocket
costs of such inspections. Moreover, Master Lessor shall be permitted at any time (a) to cause
testing wells to be installed in or around the Subleased Premises, and (b) to cause ground water to
be tested to detect the presence of Hazardous Substances.




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          31.8 Sublessee Indemnification. Sublessee shall indemnify, defend and hold harmless
each of Sublessor, the Sublessor Indemnitees and the Master Lessor from and against any and all
Claims arising out of or involving any Hazardous Substance brought onto or released in, on or under
the Subleased Premises by or for Sublessee or Sublessee’s employees, contractors, agents, invitees,
licensees or permitted sub-sublessees or assignees. Sublessee’s obligations shall include, but not
be limited to, the effects of any contamination or injury to person, property or the environment
created or suffered by Sublessee, and the cost of investigation, removal, remediation, restoration
and/or abatement, and shall survive the expiration or termination of this Sublease. No
termination, cancellation or release agreement entered into by Sublessor and Sublessee shall
release Sublessee from its obligations under this Sublease with respect to Hazardous Substances,
unless Sublessor specifically agrees thereto in writing at the time of such agreement and such
agreement specifically identifies this Section 31 of this Sublease.




          31.9 Sublessor Indemnification. Sublessor shall indemnify, defend and hold harmless
each of Sublessee and the Sublessee Indemnitees from and against any and all Claims arising out of
or involving (a) any Hazardous Substance existing in, on or under the Subleased Premises prior to
the Commencement Date other than any Hazardous Substance brought onto or released in, on or under
the Subleased Premises by or for Sublessee or Sublessee’s employees, contractors, agents, invitees
or licensees prior to the Commencement Date, or (b) any Hazardous Substance brought onto or
released in, on or under the Subleased Premises by or for Sublessor on and after the Commencement
Date. Sublessor’s obligations shall include, but not be limited to, the cost of investigation,
removal, remediation, restoration and/or abatement, and shall survive the expiration or termination
of this Sublease. No termination, cancellation or release agreement entered into by Sublessor and
Sublessee shall release Sublessor from its obligations under this Section 31, unless Sublessee
specifically agrees thereto in writing at the time of such agreement and such agreement
specifically identifies this Section 31 of this Sublease.




          31.10 Environmental Assessment upon Termination of Sublease. At the request of
Sublessor, Sublessee shall, within 60 days of the expiration or earlier termination of this
Sublease or the Other Subleases, conduct an “environmental assessment” of Sublessee’s operations
involving the use of Hazardous Substances on or about the premises covered by this Sublease or the
Other Subleases, and provide an environmental representation to Sublessor, in writing, stating that
Sublessee has not, and has no knowledge of any other person who has, released, threatened to
release, disposed of, or caused to migrate any Hazardous Substances on or about, or originating or
emanating from, the premises covered by this Sublease or the Other Subleases, in any material
quantity, and that the said premises have not been the site of, and are not adversely affected by,
any release, threatened release, migration, or disposal of Hazardous Substances. For purposes
hereof, the term “environmental assessment” shall mean, without limitation, any assessment by means
of document review, inspection, investigation, inquiry, due diligence investigation, review, test,
sampling or the reporting of environmental matters pertaining to environmental affairs management,
compliance management or environmental conditions of property or assets.




     32. Proposed Sub-Subletting; Recapture. In the event that Sublessee desires to
sub-sublet all or a portion of the Subleased Premises, Sublessee shall submit to Sublessor for its



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review the terms and conditions of such proposed sub-sublease transaction. Sublessor shall
have the option for a period of thirty (30) days, commencing upon the delivery to Sublessor of all
of the information described in the succeeding sentence, to elect in Sublessor’s sole discretion to
terminate this Sublease (as to the portion of the Subleased Premises that Sublessee proposes to
sub-sublet) and enter into a direct sublease (the “Direct Sublease”) with the prospective
sub-sublessee (the “Recapture”). In connection with Sublessor’s review process, Sublessee shall
submit to Sublessor in writing (i) the name of the proposed sub-sublessee, (ii) such information as
to such sub-sublessee’s financial condition and general standing in the community as may be
available to Sublessee, (iii) all of the terms and conditions upon which the proposed transaction
is to be made, and (iv) such other information as Sublessor shall reasonably request. The parties
hereto acknowledge and agree that, if Sublessor elects to Recapture: (a) the consent of Master
Lessor is required for the Direct Sublease (the “Direct Sublease Consent”); (b) the parties hereto
shall use commercially reasonable efforts to negotiate in good faith to obtain, execute and deliver
the Direct Sublease Consent as soon as reasonably practicable; (c) Sublessee shall execute and
deliver a guaranty, in form and substance reasonably acceptable to Sublessor and Sublessee, wherein
Sublessee shall guaranty for the benefit of Sublessor the prompt payment and performance of each
and every obligation of the sublessee under the Direct Sublease; (d) upon the effective date of the
Recapture (provided that Master Lessor has executed the Direct Sublease Consent), Sublessee shall
surrender possession of the portion of the Subleased Premises covered by the Direct Sublease and
any applicable Personal Property and Infrastructure Systems in accordance with the terms and
conditions contained in this Sublease for the surrender of the same; and (e) Sublessee shall
execute and deliver an amendment to this Sublease modifying the description of the Subleased
Premises, the Base Rent and any other relevant provisions contained herein. The provisions
contained in this Section 32 are in addition to (and not in lieu of) the provisions contained in
Sections 16, 55 and 56 of the Master Lease, as the same have been incorporated by reference into
this Sublease.



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     IN WITNESS WHEREOF, the parties have executed this Sublease as of the date first hereinabove
written.



	 	 	 	 	 
	 	Sublessor:



MAXTOR CORPORATION

 	 
	 	By:  	/s/
Pat O’Malley
 	 
	 	 	Name:  	Pat O’Malley 	 
	 	 	Title:  	Sr. VP Finance 	 
	 



	 	 	 	 	 
	 	Sublessee:



SANDISK CORPORATION

 	 
	 	By:  	/s/ Judy Bruner
 	 
	 	 	Name:  	Judy Bruner 	 
	 	 	Title:  	EVP, Administration and CFO 	 
	 




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