exv10w6






EXHIBIT
10.6




Lease Agreement

Basic Lease Information




	 	 	 
	Lease Date:

	 	September 28, 1999
	 
	 	 
	Landlord:

	 	WIX/NSJ REAL ESTATE LIMITED PARTNERSHIP,
	 

	 	a Delaware limited partnership
	 
	 	 
	Landlord’s Address:

	 	c/o Legacy Partners Commercial, Inc.
	 

	 	101 Lincoln Centre Drive, Fourth Floor
	 

	 	Foster City, California 94404-1167
	 
	 	 
	Tenant:

	 	Foundry Networks, Inc.,
	 

	 	a California corporation
	 
	 	 
	Tenant’s Address:

	 	2100 Gold Street
	 

	 	San Jose, California 95002
	 
	 	 
	Premises:

	 	70,755 rentable square feet as shown on Exhibit A
	 
	 	 
	Premises Address:

	 	2100 Gold Street
	 

	 	San Jose, California 95002
	 
	 	 
	Building:

	 	Building A, consisting of 70,755 rentable square
feet
	 
	 	 
	(Park’s tax parcels):

	 	APN 015-34-27, 015-34-28, 015-34-77, 015-34-78
	 
	 	 
	Park: Legacy Tech Park@237:

	 	Approximately 302,186 rentable square feet
	 
	 	 
	Term((P)2):

	 	January 1, 2000 (“Commencement Date”), through
December 31, 2005 (“Expiration Date”)
	 
	 	 
	Base Rent ((P)3):

	 	No Dollars ($0.00) per month commencing January 1,
2000 through March 31, 2000.
	 
	 	 
	Advance Rent ((P)3):

	 	Seventy One Thousand and 00/100 Dollars ($71,000.00).
	 
	 	 
	Adjustments to Base Rent:

	 	Effective April 1, 2000, the Base Rent shall
increase to $71,000.00 per month ($1.003 per
rentable sf) Effective July 1, 2000, the Base Rent
shall increase to $127,359.00 per month ($1.80 per
rentable sf) Effective January 1, 2001, the Base
Rent shall increase to $131,816.57 per month
($1.863 per rentable sf) Effective January 1, 2002,
the Base Rent shall increase to $136,430.14 per
month ($1.928 per rentable sf) Effective January 1,
2003, the Base Rent shall increase to $141,205.20
per month ($1.996 per rentable sf) Effective
January 1, 2004, the Base Rent shall increase to
$146,147.38 per month ($2.065 per rentable sf)






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	 	Effective January 1, 2005, the Base Rent shall
increase to $151,274.19 per month ($2.138 per
rentable sf)
	 
	 	 
	 

	 	Notwithstanding the foregoing Annual Adjustment
Dates, the actual Annual Adjustments to Base Rent
shall occur on the annual anniversary of the
Commencement Date.
	 
	 	 
	Security Deposit ((P)4):

	 	One Hundred Sixty Nine Thousand One Hundred Four
and 00/100 Dollars ($169,104.00) subject to Section
4 herein.
	 
	 	 





	 	 	 
	*Tenant’s Share of Operating Expenses ((P)6.1):

	 	23.41% of the Park
	*Tenant’s Share of Tax Expenses ((P)6.2):

	 	23.41% of the Park
	*Tenant’s Share of Common Area Utility Costs ((P)7):

	 	23.41% of the Park
	*Tenant’s Share of Utility Expenses ((P)7):

	 	100% of the Building








 




			
	*	 	The amount of Tenant’s Share of the expenses as referenced above shall be
subject to modification as set forth in this Lease.





	 	 	 
	Permitted Uses ((P)9):

	 	The Premises shall be used solely for sales, marketing,
design, research and development, light manufacturing,
office and administration of networking equipment
products and for no other purposes without Landlord’s
prior written consent, but only to the extent permitted
by the City of San Jose and all agencies and
governmental authorities having jurisdiction thereof.
	 
	 	 
	Unreserved
Parking Spaces:

	 	Two hundred forty (240) non-exclusive and non-designated
spaces
	 
	 	 
	Broker ((P)38):

	 	Cornish & Carey Commercial for Tenant
	 

	 	BT Commercial for Landlord
	 
	 	 
	Exhibits:

	 	Exhibit A — Premises, Building and/or Park
	 

	 	Exhibit B — Tenant Improvements
	 

	 	Exhibit C — Rules and Regulations
	 

	 	Exhibit D — Covenants, Conditions and
Restrictions (Intentionally omitted)
	 

	 	Exhibit E — Hazardous Materials Disclosure
Certificate — Example
	 

	 	Exhibit F — Change of Commencement Date — Example
	 

	 	Exhibit G — Tenant’s Initial Hazardous Materials
Disclosure Certificate
	 

	 	Exhibit H — Sign Criteria
	 

	 	Exhibit I — Subordination, Non-Disturbance and
Attornment Agreement
	 
	 	 
	Addenda:

	 	Addendum 1: Option to Extend the Lease 

Addendum 2: Right of First Refusal






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Table of Contents




	 	 	 	 	 	 	 
	Section	 	Page	 
	 
	 	 	 	 	 	 
	1.
	 	Premises
	 	 	5	 
	 
	 	 	 	 	 	 
	2.
	 	Occupancy; Adjustment of Commencement Date
	 	 	5	 
	 
	 	 	 	 	 	 
	3.
	 	Rent
	 	 	7	 
	 
	 	 	 	 	 	 
	4.
	 	Security Deposit
	 	 	7	 
	 
	 	 	 	 	 	 
	5.
	 	Condition of Premises; Improvements
	 	 	8	 
	 
	 	 	 	 	 	 
	6.
	 	Additional Rent
	 	 	8	 
	 
	 	 	 	 	 	 
	7.
	 	Utilities and Services
	 	 	13	 
	 
	 	 	 	 	 	 
	8.
	 	Late Charges
	 	 	14	 
	 
	 	 	 	 	 	 
	9.
	 	Use of Premises
	 	 	15	 
	 
	 	 	 	 	 	 
	10.
	 	Alterations; Surrender of Premises
	 	 	17	 
	 
	 	 	 	 	 	 
	11.
	 	Repairs and Maintenance
	 	 	19	 
	 
	 	 	 	 	 	 
	12.
	 	Insurance
	 	 	20	 
	 
	 	 	 	 	 	 
	13.
	 	Waiver of Subrogation
	 	 	23	 
	 
	 	 	 	 	 	 
	14.
	 	Limitation of Liability and Indemnity
	 	 	23	 
	 
	 	 	 	 	 	 
	15.
	 	Assignment and Subleasing
	 	 	24	 
	 
	 	 	 	 	 	 
	16.
	 	Ad Valorem Taxes
	 	 	27	 
	 
	 	 	 	 	 	 
	17.
	 	Subordination
	 	 	27	 
	 
	 	 	 	 	 	 
	18.
	 	Right of Entry
	 	 	28	 
	 
	 	 	 	 	 	 
	19.
	 	Estoppel Certificate
	 	 	29	 
	 
	 	 	 	 	 	 
	20.
	 	Tenant’s Default
	 	 	 	 
	 
	 	 	 	 	 	 





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	Section	 	Page	 
	 
	 	 	 	 	 	 
	21.
	 	Remedies for Tenant’s Default
	 	 	 	 
	 
	 	 	 	 	 	 
	22.
	 	Holding Over
	 	 	 	 
	 
	 	 	 	 	 	 
	23.
	 	Landlord’s Default
	 	 	 	 
	 
	 	 	 	 	 	 
	24.
	 	Parking
	 	 	 	 
	 
	 	 	 	 	 	 
	25.
	 	Sale of Premises
	 	 	 	 
	 
	 	 	 	 	 	 
	26.
	 	Waiver
	 	 	 	 
	 
	 	 	 	 	 	 
	27.
	 	Casualty Damage
	 	 	29	 
	 
	 	 	 	 	 	 
	28.
	 	Condemnation
	 	 	30	 
	 
	 	 	 	 	 	 
	29.
	 	Environmental Matters/Hazardous Materials
	 	 	30	 
	 
	 	 	 	 	 	 
	30.
	 	Financial Statements
	 	 	35	 
	 
	 	 	 	 	 	 
	31.
	 	General Provisions
	 	 	35	 
	 
	 	 	 	 	 	 
	32.
	 	Signs
	 	 	37	 
	 
	 	 	 	 	 	 
	33.
	 	Mortgagee Protection
	 	 	38	 
	 
	 	 	 	 	 	 
	34.
	 	Quitclaim
	 	 	38	 
	 
	 	 	 	 	 	 
	35.
	 	Modifications for Lender (Intentionally omitted)
	 	 	38	 
	 
	 	 	 	 	 	 
	36.
	 	Warranties of Tenant
	 	 	38	 
	 
	 	 	 	 	 	 
	37.
	 	Compliance with Americans with Disabilities Act
	 	 	39	 
	 
	 	 	 	 	 	 
	38.
	 	Brokerage Commission
	 	 	40	 
	 
	 	 	 	 	 	 
	39.
	 	Confidentiality
	 	 	40	 
	 
	 	 	 	 	 	 
	40.
	 	Quiet Enjoyment
	 	 	40	 
	 
	 	 	 	 	 	 
	41.
	 	Landlord’s Ability to Perform Tenant’s Unperformed Obligations
	 	 	40	 
	 
	 	 	 	 	 	 
	42.
	 	Collateral for Performance of Lease Obligations
	 	 	41	 
	 
	 	 	 	 	 	 
	43.
	 	Satellite Dish
	 	 	43	 
	 
	 	 	 	 	 	 
	44.
	 	Tenant’s Ability to Perform Landlord’s  Unperformed Obligations
	 	 	44	 







4











 





NNN R&D Development Landlord TI

Lease Agreement




Date: The Basic Lease Information set forth on Page 1 and this Lease are
and shall be construed as a single instrument.




1. Premises



Landlord hereby leases the Premises to Tenant upon the terms and conditions
contained herein. Tenant shall have the right to use, on a non-exclusive basis,
parking areas and ancillary facilities located within the Common Areas of the
Park, subject to the terms of this Lease. Tenant further agrees that the
number of rentable square feet of the Building and the Park may subsequently
change during the Term of this Lease commensurate with any physical
modifications by Landlord, and Tenant’s Share shall accordingly change. In
addition, Tenant shall have the exclusive use of the loading dock area located
between the Building and Building B, as outlined on Exhibit A attached hereto.




2. Occupancy; Adjustment of Commencement Date




     2.1 If on the Commencement Date, Landlord has not delivered possession
of the Premises with the Tenant Improvements Substantially Completed (as defined
in Exhibit B hereto), Landlord shall not be subject to any liability nor shall
the validity of the Lease be affected; provided, however, the Lease Term and the
obligation to pay Rent, except as set forth in the Basic Lease Information,
shall commence on the date on which Landlord has Substantially Completed the
Tenant Improvements in accordance with the provisions of Exhibit B hereto and
the annual Adjustments to Base Rent shall be adjusted accordingly.
Notwithstanding the foregoing, in the event Landlord cannot deliver to Tenant
possession of the Premises with all Tenant Improvements Substantially Complete
(as defined in Exhibit B) by February 1, 2000 (“Outside Date”) (subject to Force
Majeure Delays and Tenant Delays, as such terms are defined in Exhibit B, in
which event the Outside Date shall be extended commensurately by the period of
time attributable to such delays), Tenant shall receive a credit against Base
Rent equal to one (1) day’s Base Rent for each day beyond the Outside Date that
possession of the Premises is delivered to Tenant with the Tenant Improvements
Substantially Complete, but Landlord shall neither be subject to any other
liability nor shall the validity of the Lease be affected. In the event Landlord
is unable to obtain a building permit (“Permit”) for the Tenant Improvements on
or before December 31, 1999, then, following such date,


Landlord may terminate this Lease upon written notice delivered to Tenant by
January 10, 2000. Tenant acknowledges and agrees that Tenant’s sole and
exclusive remedy for Landlord’s failure to deliver possession of the Premises to
Tenant with the Tenant Improvements Substantially Complete on or before the
Outside Date (whether due to the failure of Landlord to Substantially Complete
the Tenant Improvements, to obtain the Permit or otherwise) shall be to accept a




5









 







credit to Base Rent equal to one (1) day of Base Rent for each day beyond the
Outside Date that possession of the Premises is delivered to Tenant with the
Tenant Improvements Substantially Complete, provided however, the maximum credit
to Tenant for any delay due to not receiving the initial building permit from
the City of San Jose as scheduled, shall be thirty (30) days. Upon Landlord’s
delivery to Tenant of possession of the Premises with the Tenant Improvements
Substantially Complete, Tenant shall promptly deliver written notice to Landlord
confirming same (however, any failure by Tenant to deliver to Landlord such
written notice shall not affect the effectiveness of this Lease). If the
commencement date and/or the expiration date of this Lease is other than the
Commencement Date and/or Expiration Date specified herein, Landlord and Tenant
shall execute a written amendment to this Lease, substantially in the form of
Exhibit F hereto, wherein the parties shall specify the actual commencement
date, expiration date and the date on which Tenant is to commence paying Rent.
The word “Term” whenever used herein refers to the initial term of this Lease
and any extension thereof.




     2.2 Within three (3) business days after the Substantial Completion of
the Tenant Improvements, representatives of Landlord and Tenant shall make a
joint inspection of the Tenant Improvements and the results of such inspection
shall be set forth in a written list specifying the incomplete items as well as
those items for which corrections need to be made (the “Punchlist Items”).
Landlord and Tenant shall promptly (by no later than three (3) business days
thereafter) and in good faith approve the written list of Punchlist Items.
Landlord shall use commercially reasonable efforts to cause the Punchlist Items
to be promptly completed and/or corrected, as applicable. The performance of
the work associated with the Punchlist Items shall be performed in such a manner
so as not to preclude or substantially prevent Tenant’s ability to conduct its
operations in the Premises. Upon the completion of the Punchlist Items, to
Tenant’s reasonable satisfaction, Tenant shall immediately notify Landlord in
writing that such items have been completed to Tenant’s reasonable satisfaction.
In addition to the Punchlist Items, Landlord shall also use commercially
reasonable efforts to cause the general contractor to correct any other
deficiencies or defects in the Tenant Improvements during the thirty (30) day
period following Substantial Completion of the Tenant Improvements. Except as
set forth below, if Tenant fails to timely deliver to Landlord any such written
notice of the aforementioned deficiencies or defects within said 30-day period,
Landlord shall have no obligation to perform any such work thereafter. Landlord
and the General Contractor (as defined in Exhibit B) shall provide Tenant with a
customary warranty for the Tenant Improvements for a period of one (1) year
following Substantial Completion; provided, however, any claim by Tenant under
said warranty against General Contractor must be made by Tenant in writing
within said one (1) year period and must include the specific nature of the
problem. Tenant shall have the right , together with Landlord, to concurrently
enforce any warranties made by the General Contractor or material suppliers in
favor of Landlord with respect to the construction of the Tenant Improvements.
In addition, Tenant shall be subrogated to the rights of Landlord against the General
Contractor to the extend Tenant has paid amounts to Landlord to correct defects or
deficiencies in the construction of the Tenant Improvements.



6









 





     2.3 If, at any time, Tenant is in material default of any term,
condition or provision of this Lease beyond any applicable cure period, any such
waiver by Landlord of Tenant’s requirement to pay Rent shall be null and void
and Tenant shall immediately pay to Landlord all Rent so waived by Landlord.



3. Rent




     On the date that Tenant executes this Lease, Tenant shall deliver to
Landlord the original executed Lease, the Advance Rent (which shall be applied
against the Rent payable for the first month Tenant is required to pay Rent),
the Security Deposit, and all insurance certificates evidencing the insurance
required to be obtained by Tenant under Section 12 of this Lease. Tenant agrees
to pay Landlord the Base Rent, without prior notice or demand, abatement,
offset, deduction or claim, in advance at Landlord’s Address on the Commencement
Date and thereafter on the first (1st) day of each month throughout the balance
of the Term of the Lease. In addition to the Base Rent, Tenant shall pay
Landlord in advance on the Commencement Date and thereafter on the first (1st)
day of each month throughout the balance of the Term of this Lease, as
Additional Rent, Tenant’s Share of Operating Expenses, Tax Expenses, Common Area
Utility Costs, and Utility Expenses. The term “Rent” whenever used herein
refers to the aggregate of all these amounts. The Rent for any fractional part
of a calendar month at the commencement or termination of the Lease Term shall
be a prorated amount of the Rent for a full calendar month based upon the
actual number of days in such month. The prorated Rent shall be paid on the
Commencement Date and the first day of the calendar month in which the date of
expiration or termination occurs, as the case may be.



4. Security Deposit




     Simultaneously with Tenant’s execution and delivery of this Lease, Tenant
shall deliver to Landlord, as a Security Deposit for the performance by Tenant
of its obligations under this Lease, the amount specified in the Basic Lease
Information. If Tenant is in material default, Landlord may, but without
obligation to do so, use the Security Deposit, or any portion thereof, to cure
the material default or to compensate Landlord for all damages sustained by
Landlord resulting from Tenant’s default. Tenant shall, immediately on demand,
pay to Landlord a sum equal to the portion of the Security Deposit so applied or
used so as to replenish the amount of the Security Deposit held to increase such
deposit to the amount initially deposited with Landlord. In the event Tenant
has materially defaulted more than three (3) times during the Term, Landlord
may require an increase in the amount of the Security Deposit required hereunder
for the then balance of the Lease Term to an amount equal to two (2) times the
amount of the Security Deposit set forth in the Basic Lease Information and
Tenant shall, immediately on demand, pay to Landlord additional sums in the
amount of such increase. Within thirty (30) days after the expiration or
earlier termination of this Lease, Landlord shall return the Security Deposit to
Tenant, less such amounts as are reasonably necessary to remedy Tenant’s
material default(s) hereunder or to otherwise restore and repair the Premises to
a clean and safe condition, reasonable wear and tear excepted. If the cost to
restore and repair the Premises exceeds the amount of the Security Deposit,
Tenant shall promptly deliver to Landlord any and all of such excess sums as
reasonably determined by Landlord. Landlord shall not be required to keep the



7









 







Security Deposit separate from other funds, and, unless otherwise required by
law, Tenant shall not be entitled to interest on the Security Deposit. In no
event or circumstance shall Tenant have the right to any use of the Security
Deposit and, specifically, Tenant may not use the Security Deposit as a credit
or to otherwise offset any payments required hereunder, including, but not
limited to, Rent or any portion thereof. In the event Landlord draws down the
Letter of Credit in an amount which exceeds the amounts required to cure
Tenant’s material defaults under this Lease, such excess amounts shall be
treated at Landlord’s option, either (i) as part of the Security Deposit for purposes of
this Lease or (ii) be returned to the Issuer of the Letter of Credit. The Letter
of Credit shall be amended to reflect the addition of such amounts to the Letter
of Credit and Tenant shall, as required by Section 42 of this Lease, provide
Landlord with a new or additional Letter of Credit such that Landlord shall hold
an original Letter of Credit in an amount equal to the Letter of Credit
originally delivered to Landlord.



5. Condition of Premises; Improvements




     Tenant hereby agrees to accept the Premises upon Landlord’s Substantial
Completion of the Tenant Improvements as suitable for Tenant’s intended use and
as then being in good operating order, condition and repair in its then “AS IS”
condition, except for the (i) correction of any Punchlist Items in accordance
with the provisions of Section 2.2 hereof, (ii) the thirty (30) day period
referenced in 2.2 above with respect to defects or deficiencies, and (iii) and
Landlord shall deliver the electrical, plumbing and HVAC systems in good working
conditions for a period of ninety (90) days. The Tenant Improvements (as such
term is defined in Exhibit B hereto) shall be installed by Landlord in
accordance with the terms, conditions, criteria and provisions set forth in
Exhibit B. Except as otherwise expressly set forth in this Lease, by taking
possession of the Premises with the Tenant Improvements Substantially Completed,
Tenant shall be deemed to have then accepted the Premises in good, clean and
completed condition and state of repair. Landlord and Tenant hereby agree to
and shall be bound by the terms, conditions and provisions of Exhibit B. Tenant
acknowledges and agrees that neither Landlord nor any of Landlord’s agents,
representatives or employees has made any representations as to the suitability,
fitness or condition of the Premises for the conduct of Tenant’s business or for
any other purpose, including without limitation, any storage incidental thereto.
Any exception to the foregoing provisions must be made by express written
agreement by both parties. In addition, Landlord shall provide one roll up door
at Landlord’s sole cost and expense in the location shown on Exhibit A.



6. Additional Rent




     It is intended by Landlord and Tenant that this Lease be a “triple net
lease.” The costs and expenses described in this Section 6 and all other sums,
charges, costs and expenses specified in this Lease other than Base Rent are to
be paid by Tenant to Landlord as additional rent (collectively, “Additional
Rent”).



     6.1 Operating Expenses: In addition to the Base Rent set forth in
Section 3, Tenant shall pay Tenant’s Share of all Operating Expenses as



8









 







Additional Rent. The term “Operating Expenses” as used herein shall mean the
amounts paid or payable by Landlord in connection with the management,
maintenance, repair and operation of the Premises and the Building , and where
applicable, of the Park. These Operating Expenses may include, but are not
limited to, Landlord’s cost of:



     6.1.1 repairs to, and maintenance of, the non-structural portions of the
roof, the roof membrane and the non-structural elements of the perimeter
exterior walls of the Building;



     6.1.2 maintaining the outside paved area, landscaping and other common
areas of the Park. The term “Common Areas” shall mean all areas and facilities
within the Park exclusive of the Premises and the other portions of the Park
leasable exclusively to other tenants. The Common Areas include, but are not
limited to, interior lobbies, mezzanines, parking areas, access and perimeter
roads, sidewalks, rail spurs, landscaped areas and similar areas and facilities;



     6.1.3 annual insurance premium(s) for insuring against fire and extended
coverage (including, if Landlord elects, “all risk” or “special purpose”
coverage) and all other insurance, including, but not limited to, earthquake,
flood and/or surface water endorsements for the Building and the Park (including
the Common Areas), rental value insurance against loss of Rent in an amount
equal to the amount of Rent for a period of at least nine (9) months commencing
on the date of loss, and subject to the provisions of Section 27 below, any
deductible;



     6.1.4 Landlord’s cost of: (i) modifications and/or new improvements to the
Building, the Common Areas and/or the Park occasioned by any rules, laws or
regulations effective subsequent to the Lease Date; (ii) reasonably necessary
replacement improvements to the Building, the Common Areas and the Park after
the Lease Date; and (iii) new improvements to the Building, the Common Areas
and/or the Park to the extent that they reduce operating costs or improve
life/safety conditions, all as reasonably determined by Landlord, in its sole
discretion; provided, however, if any of the foregoing are in the nature of
capital improvements, then the cost of such capital improvements shall be
amortized on a straight-line basis over a reasonable period, which shall be the
period of time specified under generally accepted accounting principles as the
estimated useful life of such modifications, new improvements or replacement
improvements in question (at an interest rate as reasonably determined by
Landlord), and Tenant shall pay Tenant’s Share of the monthly amortized portion
of such costs (including interest charges) as part of the Operating Expenses
herein;



     6.1.5 preventative maintenance and repair contracts including, but not
limited to, contracts for elevator systems and heating, ventilation and air
conditioning systems, lifts for disabled persons, and trash or refuse
collection, if Landlord elects to so procure;



     6.1.6 security and fire protection services for the Building and/or the
Park, as the case may be, if in Landlord’s sole but reasonable discretion such
services are provided;



9









 





     6.1.7 supplies, equipment, rental equipment and other similar items used
in the operation and/or maintenance of the Park;



     6.1.8 the repairs and maintenance items set forth in Section 11.2 below;



     6.1.9 any and all levies, charges, fees and/or assessments payable to any
applicable owner’s association or similar body; and



     6.1.10 the management and administration of all or any portion of the
Premises, the Building, and/or the Park, including without limitation, a
property management fee (based upon a percentage of all Rent, including Tax
Expenses), accounting, auditing, billing, postage, salaries and benefits for
clerical and supervisory employees, whether located on the Park or off-site,
payroll taxes and legal and accounting costs, and all fees, licenses and permits
related to the operation and management of the Park.



     Notwithstanding anything to the contrary contained hereon, for purposes of
this Lease, the term “Operating Expenses” shall not include the following:



     (a) Costs (including permit, license, and inspection fees) incurred in
renovating improving decorating, painting, or redecorating vacant space or space
for other tenants within the Park;



     (b) Costs incurred because Landlord or another tenant actually violated the
terms of any lease for premises within the Building and/or Park;



     (c) Legal and auditing fees (other than those fees reasonably incurred in
connection with the maintenance and operation of the Building and/or Park),
leasing commissions, advertising expenses, and other costs incurred in
connection with the original development or original leasing of the Building
and/or Park or future re-leasing of the Building and/or Park;



     (e) Any items for which Landlord is actually reimbursed or by direct
reimbursement by any other tenant of the Building or Park;



     (f) Costs of repair or other work necessitated by fire, windstorm or other
casualty (excluding any commercially reasonable deductibles) and/or costs of
repair or other work necessitated by the exercise of the right of eminent domain
to the extent insurance proceeds or a condemnation award, as applicable, is
actually received by Landlord for such purposes; provided such costs of repairs
or other work shall be paid by the parties in accordance with the provisions of
Sections 27 and 28 below;



     (g) Other than any interest charges for capital improvements referred to in
Section 6.1.4 hereinabove, any interest or payments on any financing for the
Building or the Park, interest and penalties incurred as a result of Landlord’s
late payment of any invoice (provided that Tenant pays Tenant’s Share of
Operating Expenses and Tax Expenses to Landlord when due as set forth herein),
and any bad debt loss, rent loss or reserves for same;



10









 





     (h) Costs associated with the investigation and/or remediation of Hazardous
Materials (hereafter defined) present in, on or about the Premises, the Building
or the Park, unless such costs and expenses are the responsibility of Tenant as
provided in Section 29 of this Lease, in which event such costs and expenses
shall be paid solely by Tenant in accordance with the provisions of Section 29
of this Lease;



     (i) Costs of correcting defects in the initial design or construction of
the Shell Improvements or the repair or replacement of any original materials
and equipment as a result of such defects (collectively, “Defect Costs”), as long as
such defects are covered by warranties from the contractors performing such work
and Landlord has actually received compensation therefor; provided, in the event such
Defect Costs and such Defect Costs constitute capital improvements, are not covered
by warranties and/or Landlord has not received compensation therefor, such Defect
Costs shall be included in Operating Expenses and amortized on the basis set forth in
Section 6.1 of the Lease.



     (j) Landlord’s cost for the repairs and maintenance items set forth in
Section 11.3 below;



     (k) Overhead, fee and profit paid to subsidiaries or affiliates of Landlord
for management services or materials to the extent that the cost of those items
would not have been paid had the services and materials been provided by
unaffiliated parties on a competitive basis; and



     (l) Depreciation of the Building or any improvements situated in the Park.



     6.2 Tax Expenses: In addition to the Base Rent set forth in Section 3,
Tenant shall pay Tenant’s Share of all real property taxes applicable to the
Park and one hundred percent (100%) of all personal property taxes now or
hereafter assessed or levied against the Premises or Tenant’s Property (defined
below). Tenant shall also reimburse and pay Landlord, as Additional Rent, within
ten (10) days after demand therefor, one hundred percent (100%) of (i) any
increase in real property taxes attributable to any and all Alterations (defined
below), Tenant Improvements, fixtures, equipment or other improvements of any
kind whatsoever placed in, on or about the Premises for the benefit of, at the
request of, or by Tenant, and (ii) taxes assessed upon or with respect to the
possession, leasing, operation, management, maintenance, repair, use or
occupancy by Tenant of the Premises or any portion of the Building. The term
“Tax Expenses” shall mean and include, without limitation, any form of tax and
assessment (general, special, supplemental, ordinary or extraordinary),
entitlement fees, allocation fees, sewer use fees and/or similar fees or
charges, commercial rental tax, payments under any improvement bond or bonds,
license fees, license tax, business license fee, rental tax, transaction tax or
levy imposed by any authority having the direct or indirect power of tax
(including any city, county, state or federal government, or any school,
agricultural, lighting, drainage or other improvement district thereof) as
against any legal or equitable interest of Landlord in the Premises, the
Building or the Park or any other tax, fee, or excise, however described,
including, but not limited to, any value added tax, or any tax imposed in
substitution (partially or totally) of any tax previously included within the



11









 




definition of real property taxes, or any additional tax the nature of which was
previously included within the definition of real property taxes. The term “Tax
Expenses” shall not include any (i) franchise, estate, inheritance, net income,
or excess profits tax imposed upon Landlord, (ii) a penalty or fee imposed as a
result of Landlord’s failure to pay Tax Expenses when due or (iii) any item
included in Operating Expenses.




     6.3 Payment of Expenses: Landlord shall estimate Tenant’s Share of the
Operating Expenses and Tax Expenses for the calendar year in which the Lease
commences. Commencing on the Commencement Date, one-twelfth (1/12th) of this
estimated amount shall be paid by Tenant to Landlord, as Additional Rent, and
thereafter on the first (1st) day of each month throughout the remaining months
of such calendar year. Thereafter, Landlord may estimate such expenses as of the
beginning of each calendar year during the Term of this Lease and Tenant shall
pay one-twelfth (1/12th) of such estimated amount as Additional Rent hereunder
on the first (1st) day of each month during such calendar year and for each
ensuing calendar year throughout the Term of this Lease. Tenant’s obligation to
pay Tenant’s Share of Operating Expenses and Tax Expenses shall survive the
expiration or earlier termination of this Lease.



     6.4 Annual Reconciliation: By May 1st of each calendar year, or as soon
thereafter as reasonably possible, Landlord shall furnish Tenant with an
accounting of actual and accrued Operating Expenses and Tax Expenses. Within
thirty (30) days of Landlord’s delivery of such accounting, Tenant shall pay to
Landlord the amount of any underpayment. Notwithstanding the
foregoing, failure by Landlord to give such accounting by
such date shall not constitute a waiver by Landlord of its right to collect any
of Tenant’s underpayment at any time. Landlord shall credit the amount of any
overpayment by Tenant toward the next estimated monthly installment(s) falling
due, or where the Term of the Lease has expired, refund the amount of
overpayment to Tenant. If the Term of the Lease expires prior to the annual
reconciliation of expenses Landlord shall have the right to reasonably estimate
Tenant’s Share of such expenses, and if Landlord determines that an underpayment
is due, Tenant hereby agrees that Landlord shall be entitled to deduct such
underpayment from Tenant’s Security Deposit. If Landlord reasonably determines
that an overpayment has been made by Tenant, Landlord shall refund said
overpayment to Tenant as soon as practicable thereafter. Notwithstanding the
foregoing, failure of Landlord to accurately estimate Tenant’s Share of such
expenses or to otherwise perform such reconciliation of expenses, including
without limitation, Landlord’s failure to deduct any portion of any underpayment
from Tenant’s Security Deposit, shall not constitute a waiver of Landlord’s
right to collect any of Tenant’s underpayment at any time during the Term of the
Lease or at any time after the expiration or earlier termination of this Lease.



     6.5 Audit: After delivery to Landlord of at least thirty (30) days prior
written notice, Tenant, at its sole cost and expense through any accountant
designated by it, shall have the right to examine and/or audit the books and
records evidencing such costs and expenses for the previous one (1) calendar
year, during Landlord’s reasonable business hours and not more frequently than
once during any calendar year. Any such accounting firm designated by Tenant may
not be compensated on a contingency fee basis. The results of any such audit



12









 







(and any negotiations between the parties related thereto) shall be maintained
strictly confidential by Tenant and its accounting firm and shall not be
disclosed, published or otherwise disseminated to any other party other than to
Landlord and its authorized agents. Landlord and Tenant shall use their best
efforts to cooperate and promptly resolve any discrepancies between Landlord and
Tenant in the accounting of such costs and expenses. If through such audit it is
determined that there is a discrepancy of more than six percent (6%), then
Landlord shall reimburse Tenant for the reasonable accounting costs and expenses
incurred by Tenant in performing such audit including Tenant’s in-house or
outside auditors or accountants. However, if through such audit it is determined
that there is a discrepancy of six percent (6%) or less, then Tenant shall
reimburse Landlord for the reasonable accounting costs and expenses associated
with Landlord’s in-house auditors or accounting personnel as well as those
reasonable costs and expenses incurred by Landlord for any outside accounting
firms or auditors in connection with such audit within ten (10) days after
receipt of written demand therefor. In the event that any other tenant audits or
reviews Operating Expenses and an adjustment is made such same adjustment shall
be made with respect to Tenant.



7. Utilities and Services




     In addition to the Base Rent set forth in Section 3 hereof, Tenant shall
pay the cost of all (i) water, sewer use, sewer discharge fees and sewer
connection fees, gas, electricity, telephone, telecommunications, cabling and
other utilities billed or metered separately to the Premises; and (ii) refuse
pickup and janitorial service to the Premises. Utility Expenses, Common Area
Utility Costs and all other sums or charges set forth in this Section 7 are
considered part of Additional Rent.



     7.1 Utility Expenses: For any utility fees, use charges or similar
services that are not billed or metered separately to Tenant, including without
limitation, water charges (“Utility Expenses”), (i) Tenant shall pay to Landlord
Tenant’s Share of Utility Expenses, as Additional Rent and (ii) if Landlord
reasonably determines that Tenant’s Share is not commensurate with Tenant’s use
of such services, Tenant shall pay to Landlord the amount which is attributable
to Tenant’s use of the utilities or similar services, as reasonably estimated
and determined by Landlord based upon factors such as size of the Premises and
intensity of use of such utilities by Tenant such that Tenant shall pay the
portion of such charges reasonably consistent with Tenant’s use of such
utilities and similar services. If Tenant disputes any such estimate or determination,
then Tenant shall either pay the estimated amount or cause the Premises to be separately
metered at Tenant’s sole expense.



     7.2 Common Area Utility Costs: Tenant shall pay to Landlord Tenant’s
Share of any Common Area utility costs, fees, charges or expenses (“Common Area
Utility Costs”). Tenant shall pay to Landlord one-twelfth (1/12th) of the
estimated amount of Tenant’s Share of the Common Area Utility Costs on the
Commencement Date and thereafter on the first (1st) day of each month throughout
the balance of the Term of this Lease. Any reconciliation thereof shall be
substantially in the same manner as set forth in Section 6.4 above.



13









 





     7.3 Miscellaneous: Tenant acknowledges that the Premises may become
subject to the rationing of utility services or restrictions on utility use as
required by a public utility company, governmental agency or other similar
entity having jurisdiction thereof. Notwithstanding any such rationing or
restrictions on use of any such utility services, Tenant acknowledges and agrees
that its tenancy and occupancy hereunder shall be subject to such rationing
restrictions as may be imposed upon Landlord, Tenant, the Premises, the
Building, or the Park, and Tenant shall in no event be excused or relieved from
any covenant or obligation to be kept or performed by Tenant by reason of any
such rationing or restrictions. Tenant further agrees to timely and faithfully
pay, prior to delinquency, any amount, tax, charge, surcharge, assessment or
imposition levied, assessed or imposed upon the Premises, or Tenant’s use and
occupancy thereof. Notwithstanding anything to the contrary contained herein,
if permitted by applicable Laws, Landlord shall have the right at any time and
from time to time during the Term of this Lease to either contract for service
from a different company or companies (each such company shall be referred to
herein as an “Alternate Service Provider”) other than the company or companies
presently providing electricity service for the Building or the Park (the
“Electric Service Provider”) or continue to contract for service from the
Electric Service Provider, at Landlord’s reasonable discretion. Tenant hereby
agrees to cooperate with Landlord, the Electric Service Provider, and any
Alternate Service Provider at all times and, as reasonably necessary, shall
allow Landlord, the Electric Service Provider, and any Alternate Service
Provider reasonable access to the Building’s electric lines, feeders, risers,
wiring, and any other machinery within the Premises. Landlord shall use
Landlord’s commercially reasonable efforts to minimize any interruption to
Tenant’s business operations in connection with the discontinuation of any
Electric Service Provider and the commencement of service by an Alternative
Service Provider and Landlord shall give Tenant at least ten (10) days prior
written notice of the date of any such discontinuation and commencement.



8. Late Charges




     Any and all sums or charges set forth in this Section 8 are considered part
of Additional Rent. Tenant acknowledges that late payment (the fourth (4th)
day of each month or any time thereafter) by Tenant to Landlord of Base Rent,
Tenant’s Share of Operating Expenses, Tax Expenses, Common Area Utility Costs,
and Utility Expenses or other sums due hereunder, will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of such costs being
extremely difficult and impracticable to fix. Such costs include, without
limitation, processing and accounting charges, and late charges that may be
imposed on Landlord by the terms of any note secured by any encumbrance against
the Premises, and late charges and penalties due to the late payment of taxes
and expenses with respect to the Premises. Therefore, if any installment of
Rent or any other sum due from Tenant is not received by Landlord within three
(3) days of the date when due, Tenant shall promptly pay to Landlord an
additional sum equal to seven percent (7%) of such delinquent amount plus
interest on such delinquent amount at the rate equal to the prime rate plus
three percent (3%) for the time period such payments are delinquent as a late
charge for every month or portion thereof that such sums remain unpaid. If
Tenant delivers to Landlord a check for which there are not sufficient funds, Landlord



14









 







may, at its sole option, require Tenant to replace such check with a cashier’s
check for the amount of such check and all other charges payable hereunder. The
parties agree that this late charge and the other charges referenced above
represent a fair and reasonable estimate of the costs that Landlord will incur
by reason of late payment by Tenant. Acceptance of any late charge or other
charges shall not constitute a waiver by Landlord of Tenant’s default with
respect to the delinquent amount, nor prevent Landlord from exercising any of
the other rights and remedies available to Landlord for any other breach of
Tenant under this Lease. If a late charge or other charge becomes payable for
any three (3) installments of Rent within any twelve (12) month period, then
Landlord, at Landlord’s sole option, can either require the Rent be paid
quarterly in advance, or be paid monthly in advance by cashier’s check or by
electronic funds transfer. Notwithstanding anything to the contrary contained
herein, if Tenant is late in making any of the payments described in this
Section 8 to Landlord hereunder in any two (2) instances during the Term of this
Lease, then Landlord hereby waives the requirement that Tenant pay to Landlord a
late charge for such late payments.



9. Use of Premises




     9.1 Compliance with Laws, Recorded Matters, and Rules and Regulations:
The Premises are to be used solely for the purposes and uses specified in the
Basic Lease Information and for no other uses or purposes without Landlord’s
prior written consent, which consent shall not be unreasonably withheld or
delayed so long as the proposed use (i) does not involve the use of Hazardous
Materials other than as expressly permitted under the provisions of Section 29
below, (ii) does not require any additional parking in excess of the parking
spaces already allotted to Tenant pursuant to the provisions of Section 24 of
this Lease, and (iii) is compatible and consistent with the other uses then
being made in the Park and in other similar types of buildings in the vicinity
of the Park, as reasonably determined by Landlord. The use of the Premises by
Tenant and its employees, representatives, agents, invitees, licensees,
subtenants, customers or contractors (collectively, “Tenant’s Representatives”)
shall be subject to, and at all times in compliance with, (a) any and all
applicable laws, ordinances, statutes, orders and regulations as same exist from
time to time (collectively, the “Laws”), (b) any and all documents, easements,
covenants, conditions and restrictions, and similar instruments, each of which
has been or hereafter is recorded in any official or public records with respect
to the Premises, the Building and/or the Park, or any portion thereof
(collectively, the “Recorded Matters”), and (c) any and all rules and
regulations set forth in Exhibit C, attached to and made a part of this Lease,
any other reasonable rules and regulations promulgated by Landlord now or
hereafter enacted relating to parking and the operation of the Premises, the
Building, and the Park, and any and all rules, restrictions and/or regulations
imposed by any applicable owners association or similar entity or body
(collectively, the “Rules and Regulations”); provided, none of the Recorded
Matters which are subsequently recorded after the Lease Date shall materially
and adversely affect Tenant’s use and/or business operations at the Premises
(excluding any liens related to any mortgage, deed of trust or similar type of
security interest (but still subject to the terms of Section 17). Tenant agrees
to comply with the provisions of the Rules and Regulations adopted by the



15









 







Landlord; provided, however, that such Rules and Regulations shall be enforced
equally as to all tenants located in the Building. Additionally, Landlord
agrees not to adopt any Rule or Regulation which adversely and materially
affects the use and/or business operations of the Tenant on the Premises.
Landlord shall use reasonable efforts to ensure other tenants comply with the
Rules and Regulations (provided, Landlord shall not be required to institute or
prosecute litigation or expend more than nominal amounts in connection with such
efforts. Tenant agrees to, and does hereby, assume full and complete responsibility
to ensure that the Premises, including without limitation, the Tenant Improvements, are
adequate to fully meet the needs and requirements of Tenant’s intended operations of its
business within the Premises, and Tenant’s use of the Premises is in compliance
with all applicable Laws throughout the Term of this Lease. Additionally, Tenant
shall be solely responsible for the payment of all costs, fees and expenses
associated with any modifications, improvements or alterations to the Premises,
Building, the Common Areas and/or the Park required by the enactment of, or
changes to, any Laws after the Lease Date and arising from Tenant’s particular
use of the Premises or alterations, improvements or additions made to the
Premises regardless of when such Laws became effective. Tenant shall not
initiate, submit an application for, or otherwise request, any land use
approvals or entitlements with respect to any portion of the Park, including
without limitation, any variance, conditional use permit or rezoning, without
first obtaining Landlord’s prior written consent thereto, which consent may be
given or withheld in Landlord’s sole discretion.



     9.2 Prohibition on Use: Tenant shall not use the Premises or permit
anything to be done in or about the Premises nor keep or bring anything therein
which will in any way increase the existing rate of or affect any policy of
fire or other insurance upon the Building or any of its contents, or cause a
cancellation of any insurance policy. No auctions may be held or otherwise
conducted in, on or about the Premises, the Building, or the Park without
Landlord’s written consent thereto, which consent may be given or withheld in
Landlord’s sole discretion. Tenant shall not do or permit anything to be done
in or about the Premises which will in any way obstruct or interfere with the
rights of Landlord, other tenants or occupants of the Building and/or other
buildings in the Park. The Premises shall not be used for any unlawful
purpose; nor shall Tenant cause, maintain or permit any private or public
nuisance in, on or about the Premises, Building, Park and/or the Common Areas,
including, but not limited to, any offensive odors, noises, fumes or vibrations.
Tenant shall neither damage or deface or otherwise commit or suffer to be
committed any waste in, upon or about the Premises. Tenant shall not place or
store, nor permit any other person or entity to place or store, any property,
equipment, materials, supplies, personal property or any other items or goods
outside of the Premises nor park any motor vehicles for any period of time
greater than forty eight (48) hours, provided the parking of such motor vehicles
and/or the storage of such property, equipment, materials, supplies and personal
property shall neither violate any Laws, interfere with any other tenants’
operations, not disturb any neighboring properties, tenants or residents nor
interfere with ingress or egress to any portion of the Park. Tenant shall not
permit any animals, including, but not limited to, any household pets, to be
brought or kept in or about the Premises. Tenant shall not install any radio or
television antenna, satellite dish, microwave, loudspeaker or other device on



16









 







the roof or exterior walls of the Building. Tenant shall not interfere with
radio, telecommunication, or television broadcasting or reception from or in the
Building or elsewhere. Tenant shall place no loads upon the floors, walls, or
ceilings in excess of the maximum designed load permitted by the applicable
Uniform Building Code or which may damage the Building or outside areas; nor
place any harmful liquids in the drainage systems; nor dump or store waste
materials, refuse or other such materials, or allow such materials to remain
outside the Building area, except for any non-hazardous or non-harmful materials
which may be stored in refuse dumpsters. If Tenant fails to comply with such
Laws, Recorded Matters, Rules and Regulations or the provisions of this Lease,
Landlord shall have the right to collect from Tenant a reasonable sum as a
penalty, in addition to all rights and remedies of Landlord hereunder, including
without limitation, Landlord’s costs and expenses, if any, to cure any of such
failures of Tenant, if Landlord, at its sole option, elects to undertake such
cure and such costs and expenses shall be due and owing from Tenant to Landlord
within ten (10) days after Tenant’s receipt of written demand therefor.



10. Alterations; Surrender of Premises




     10.1 Alterations: Tenant shall not install any signs, fixtures,
improvements, nor make or permit any other alterations or additions
(individually, an “Alteration”, and collectively, the “Alterations”) to the
Premises without the prior written consent of Landlord, which consent shall not
be unreasonably withheld or delayed. However, Tenant shall be permitted to hang
pictures and shelving and perform other similar minor decorating activities and
to perform non-structural alterations not exceeding an aggregate of $25,000
during any calendar year without securing Landlord’s prior consent (“Permitted
Improvements”), provided that Tenant (i) complies with all pertinent building
codes and fire, safety and other such governmental regulations, (ii) does not
take any action which could in any way impact the structural, mechanical,
electrical, maintenance, HVAC or plumbing systems of the Premises and/or
exterior appearance of the Building and (iii) submits its plans for such
Alterations to Landlord at least fifteen (15) business days prior to
commencement of such Alterations (except as to minor decorative items and
installations of furniture for which plans are not required). Within ten (10)
business days following Landlord’s receipt of Tenant’s written notice with
respect to Tenant’s performance of any Permitted Improvements and at such time
as Landlord may approve other Alterations, Landlord shall notify Tenant, in
writing, whether or not Landlord will require Tenant to remove such Permitted
Improvements and Alterations from the Premises upon the expiration or earlier
termination of this Lease. If any such Alteration is expressly permitted by
Landlord, Tenant shall deliver at least ten (10) days prior notice to Landlord,
from the date Tenant intends to commence construction, sufficient to enable
Landlord to post a Notice of Non-Responsibility. In all events, Tenant shall
obtain all permits or other governmental approvals prior to commencing any of
such work and deliver a copy of same to Landlord. All Alterations shall be at
Tenant’s sole cost and expense, and shall be installed by a licensed contractor
(approved by Landlord) in compliance with all applicable Laws (including, but
not limited to, the ADA as defined herein), Recorded Matters, and Rules and
Regulations. Tenant shall keep the Premises and the property on which the
Premises are situated free from any liens arising out of any work performed,



17









 







materials furnished or obligations incurred by or on behalf of Tenant. Tenant
shall, prior to construction of any and all Alterations, provide additional
insurance as required, and also such assurances to Landlord, including without
limitation, waivers of lien, surety company performance bonds as Landlord shall
require to assure payment of the costs thereof to protect Landlord, the Building
and the Park from and against any loss from any mechanic’s, materialmen’s or
other liens.



     10.2 Surrender of Premises: At the end of the Term or earlier termination
of this Lease, Tenant shall surrender the Premises to Landlord (a) in good
condition and repair (damage by acts of God, casualty, and normal wear and tear
excepted), but with all interior walls cleaned, any carpets cleaned, all floors
cleaned and waxed, all non-working light bulbs and ballasts replaced and all
roll-up doors and plumbing fixtures in good condition and working order, and (b)
otherwise in accordance with the provisions of Section 29 hereof. Normal wear
and tear shall not include any damage or deterioration to the floors of the
Premises arising from the use of forklifts in, on or about the Premises
(including, without limitation, any marks or stains on any portion of the
floors), and any damage or deterioration that would not have reasonably been
prevented by proper maintenance by Tenant, or Tenant otherwise performing all of
its obligations under this Lease. On or before the expiration or earlier
termination of this Lease, (i) Tenant shall remove all of Tenant’s Property (as
hereinafter defined) and Tenant’s signage from the Premises, the Building and
the Park and repair any damage caused by such removal, and (ii) Landlord may, by
notice to Tenant given not later than ninety (90) days prior to the Expiration
Date (except in the event of a termination of this Lease prior to the scheduled
Expiration Date, in which event no advance notice shall be required), require
Tenant, at Tenant’s expense, to remove any or all Alterations (except those
Permitted Improvements and Alterations of which Landlord has notified Tenant in
writing, at the time set forth in Section 10.1, that Landlord will not require
such removal) and to repair any damage caused by such removal. For purposes
hereof, the term “Tenant’s Property” shall mean and refer to all equipment,
trade fixtures, furnishings, goods and personal property of Tenant. Any of
Tenant’s Property not so removed by Tenant as required herein shall be deemed
abandoned and may be stored, removed, and disposed of by Landlord at Tenant’s
expense, and Tenant waives all claims against Landlord for any damages resulting
from Landlord’s retention and disposition of such property; provided, however,
that Tenant shall remain liable to Landlord for all costs incurred in storing
and disposing of such abandoned property of Tenant. All Tenant Improvements and
Alterations, except those which Tenant is required to remove, shall remain in
the Premises as the property of Landlord. If the Premises are not surrendered at
the end of the Term or earlier termination of this Lease, and in accordance with
the provisions of this Section 10 and Section 29 below, Tenant shall continue to
be responsible for the payment of Rent (as the same may be increased pursuant to
Section 22 below) until the Premises are so surrendered in accordance with said
provisions, and Tenant shall indemnify, defend and hold the Indemnitees
(hereafter defined) harmless from and against any and all damages, expenses,
costs, losses or liabilities arising from any delay by Tenant in so surrendering
the Premises including, without limitation, any damages, expenses, costs, losses
or liabilities arising from any claim against Landlord made by any succeeding
tenant or prospective tenant founded on or resulting from such delay and losses



18









 







and damages suffered by Landlord due to lost opportunities to lease any portion
of the Premises to any such succeeding tenant or prospective tenant, together
with, in each case, actual attorneys’ fees and costs.



11. Repairs and Maintenance




     11.1 Tenant’s Repairs and Maintenance Obligations: Except for those
portions of the Building to be maintained by Landlord, as provided in Sections
11.2 and 11.3 below, Tenant shall, at its sole cost and expense, keep and
maintain all parts of the Premises and such portions of the Building and
improvements as are within the exclusive control of Tenant in good, clean and
safe condition and repair, promptly making all necessary repairs and
replacements, whether ordinary or extraordinary, with materials and workmanship
of the same character, kind and quality as the original thereof, all of the
foregoing to the reasonable satisfaction of Landlord including, but not limited
to, repairing any damage caused by Tenant or any of Tenant’s Representatives and
replacing any property so damaged by Tenant or any of Tenant’s Representatives.
Without limiting the generality of the foregoing, Tenant shall be solely
responsible for promptly maintaining, repairing and replacing (a) all plumbing
work and fixtures exclusively serving the Premises, (b) electrical wiring
systems, fixtures and equipment exclusively serving the Premises, (c) all
interior lighting (including, without limitation, light bulbs and/or ballasts)
and exterior lighting exclusively serving the Premises or adjacent to the
Premises, (d) all glass, windows, window frames, window casements, skylights,
interior and exterior doors, door frames and door closers, (e) all roll-up
doors, ramps and dock equipment, including without limitation, dock bumpers,
dock plates, dock seals, dock levelers and dock lights, (f) all tenant signage,
(g) lifts for disabled persons serving the Premises, (h) security systems,
except to the extent maintained by Landlord, and (i) all partitions, fixtures,
equipment, interior painting, interior walls and floors, and floor coverings of
the Premises and every part thereof (including, without limitation, any demising
walls contiguous to any portion of the Premises). Additionally, Tenant shall be
solely responsible for performance of the regular removal of trash and debris.



     11.2 Maintenance by Landlord: Subject to the provisions of Section 11.1,
and further subject to Tenant’s obligation under Section 6 to reimburse
Landlord, in the form of Additional Rent, for Tenant’s Share of the cost and
expense of the following described items, Landlord agrees to (i) repair,
maintain and replace the fire protection and sprinkler systems serving the
Premises and all mechanical and heating, ventilation and air conditioning
systems serving the Premises and (ii) repair and maintain the following items:
fire protection services; the roof and roof coverings (provided that Tenant
installs no additional air conditioning or other equipment on the roof that
damages the roof coverings, in which event Tenant shall pay all costs resulting
from the presence of such additional equipment); the plumbing and mechanical
systems serving the Building, excluding the plumbing, mechanical and electrical
systems exclusively serving the Premises; any rail spur and rail crossing;
exterior painting of the Building; and the parking areas, pavement, landscaping,
sprinkler systems, sidewalks, driveways, curbs, and lighting
systems in the Common Areas. Notwithstanding anything in this Section 11 to the
contrary, Landlord shall have the right to either repair or to require Tenant to



19









 




repair any damage to any portion of the Premises, the Building, the Common Areas
and/or the Park caused by or created due to any act, omission, negligence or
willful misconduct of Tenant or any of Tenant Representatives and to restore the
Premises, the Building, the Common Areas and/or the Park, as applicable, to the
condition existing prior to the occurrence of such damage; provided, however,
that in the event Landlord elects to perform such repair and restoration work,
Tenant shall reimburse Landlord within ten (10) days after written demand
therefor for all costs and expenses incurred by Landlord in connection
therewith. Tenant shall promptly report in writing to Landlord any defective
condition known to it which Landlord is required to repair, and failure to so
report such defects shall make Tenant responsible to Landlord for any liability
proximately caused by Tenant’s failure to report such condition.




     11.3 Landlord’s Repairs and Maintenance Obligations: Subject to the
provisions of Sections 11.1, 27 and 28, and except for repairs rendered
necessary by the intentional or negligent acts or omissions of Tenant or any of
Tenant’s Representatives, Landlord agrees, at Landlord’s sole cost and expense,
to (a) keep in good repair the structural portions of the floors, foundations
and exterior perimeter walls of the Building (exclusive of glass and exterior
doors), and (b) replace the structural portions of the roof of the Building
(excluding the roof membrane). Tenant shall promptly report in writing to
Landlord any defective condition known to it which Landlord is required to
repair, and failure to so report such defects shall make Tenant responsible to
Landlord for any liability proximately caused by Tenant’s failure to report such
condition.



     11.4 Tenant’s Failure to Perform Repairs and Maintenance Obligations:
Tenant shall have no right of access to or right to install any device on the
roof of the Building nor make any penetrations of the roof of the Building
without the express prior written consent of Landlord. If Tenant refuses or
neglects to repair and maintain the Premises and the other areas properly as
required herein , Landlord may, but without obligation to do so, at any time
make such repairs and/or maintenance without Landlord having any liability to
Tenant for any loss or damage that may accrue to Tenant’s merchandise, fixtures
or other property, or to Tenant’s business by reason thereof, except to the
extent any damage is caused by the willful misconduct or gross negligence of
Landlord or its authorized agents and representatives. In the event Landlord
makes such repairs and/or maintenance, upon completion thereof Tenant shall pay
to Landlord, as Additional Rent, within ten (10) days after receipt of written
demand therefor, Landlord’s actual costs for making such repairs and/or
maintenance. The obligations of Tenant hereunder shall survive the expiration
of the Term of this Lease or the earlier termination thereof. Tenant hereby
waives any right to repair at the expense of Landlord under any applicable Laws
now or hereafter in effect respecting the Premises.



12. Insurance




     12.1 Types of Insurance: Tenant shall maintain in full force and effect
at all times during the Term of this Lease, at Tenant’s sole cost and expense,
for the protection of Tenant and Landlord, as their interests may appear,
policies of insurance issued by a carrier or carriers reasonably acceptable to




20












 




Landlord and its lender(s) which afford the following coverages: (i) worker’s
compensation: statutory limits; (ii) employer’s liability, as required by law,
with a minimum limit of $100,000 per employee and $500,000 per occurrence; (iii)
commercial general liability insurance (occurrence form) providing coverage
against any and all claims for bodily injury and property damage occurring in,
on or about the Premises arising out of Tenant’s and Tenant’s Representatives’
use and/or occupancy of the Premises. Such insurance shall include coverage for
blanket contractual liability, fire damage, premises, personal injury, completed
operations, products liability, personal and advertising.



Such insurance shall have a combined single limit of not less than One Million
Dollars ($1,000,000) per occurrence with a Two Million Dollar ($2,000,000)
aggregate limit and excess/umbrella insurance in the amount of Two Million
Dollars ($2,000,000). If Tenant has other locations which it owns or leases, the
policy shall include an aggregate limit per location endorsement. If necessary,
as reasonably determined by Landlord, Tenant shall provide for restoration of
the aggregate limit; (iv) comprehensive automobile liability insurance: a
combined single limit of not less than $2,000,000 per occurrence and insuring
Tenant against liability for claims arising out of the ownership, maintenance,
or use of any owned, hired or non-owned automobiles; (v) “all risk” or “special
purpose” property insurance, including without limitation, sprinkler leakage,
boiler and machinery comprehensive form, if applicable, covering damage to or
loss of any of Tenant’s personal property, trade fixtures, inventory, fixtures
and equipment located in, on or about the Premises, and in addition, coverage
for flood, earthquake, and business interruption of Tenant, together with, if
the property of Tenant’s invitees is to be kept in the Premises, warehouser’s
legal liability or bailee customers insurance for the full replacement cost of
the property belonging to invitees and located in the Premises. Such insurance
shall be written on a replacement cost basis (without deduction for
depreciation) in an amount equal to one hundred percent (100%) of the full
replacement value of the aggregate of the items referred to in this subparagraph
(v); and (vi) such other insurance or higher limits of liability as is then
customarily required for similar types of buildings within the general vicinity
of the Park or as may be reasonably required by any of Landlord’s lenders,
members or partners.




     12.2 Insurance Policies: Insurance required to be maintained by Tenant
shall be written by companies (i) licensed to do business in the State of
California, (ii) domiciled in the United States of America, and (iii) having a
“General Policyholders Rating” of at least A:X (or such higher rating as may be
required by a lender having a lien on the Premises) as set forth in the most
current issue of “A.M. Best’s Rating Guides.” Any deductible amounts under any
of the insurance policies required hereunder shall not exceed Five Thousand
Dollars ($5,000). Tenant shall deliver to Landlord certificates of insurance
and true and complete copies of any and all endorsements required herein for all
insurance required to be maintained by Tenant hereunder at the time of execution
of this Lease by Tenant. Tenant shall, at least thirty (30) days prior to
expiration of each policy, furnish Landlord with certificates of renewal or
“binders” thereof. Each certificate shall expressly provide that such policies
shall not be cancelable or otherwise subject to modification of the amounts of
coverage except after thirty (30) days prior written notice to the parties named



21









 




as additional insureds as required in this Lease (except for cancellation for
nonpayment of premium, in which event cancellation shall not take effect until
at least ten (10) days’ notice has been given to Landlord). Landlord and Tenant
shall have the right to provide insurance coverage which it is obligated to
carry pursuant to the terms of this Lease under a blanket insurance policy,
provided such blanket policy expressly affords coverage for the Premises and for
Landlord as required by this Lease.




     12.3 Additional Insureds and Coverage: Landlord, Landlord’s property
management company or agent, and any of Landlord’s lender(s) having a lien
against the Premises, the Building or the Park shall be named as additional
insureds under all of the policies required in Section 12.1(iii) above.
Additionally, such policies shall provide for severability of interest. All
insurance to be maintained by Tenant shall, except for workers’ compensation and
employer’s liability insurance, be primary, without right of contribution from
insurance maintained by Landlord. Any umbrella/excess liability policy (which
shall be in “following form”) shall provide that if the underlying aggregate is
exhausted, the excess coverage will drop down as primary insurance. The limits
of insurance maintained by Tenant shall not limit Tenant’s liability under this
Lease. It is contemplated by the parties that the risks of loss described in
Section 12.1 shall be borne by Tenant’s insurance carriers and not by Landlord’s
insurance carriers. Notwithstanding anything to the contrary contained herein, to
the extent Landlord’s cost of maintaining insurance with respect to the Building and/or
any other buildings within the Park is increased as a result of Tenant’s acts, omissions,
alterations,
improvements, use or occupancy of the Premises, Tenant shall pay one hundred
percent (100%) of, and for, such increase(s) as Additional Rent.



     12.4 Failure of Tenant to Purchase and Maintain Insurance: In the event
Tenant does not purchase the insurance required in this Lease or keep the same
in full force and effect throughout the Term of this Lease, Landlord may, but
without obligation to do so, purchase the necessary insurance and pay the
premiums therefor. If Landlord so elects to purchase such insurance, Tenant
shall promptly pay to Landlord as Additional Rent, the amount so paid by
Landlord, upon Landlord’s demand therefor. In addition, Landlord may recover
from Tenant and Tenant agrees to pay, as Additional Rent, any and all losses,
damages and costs which Landlord may sustain by reason of Tenant’s failure to
obtain and maintain such insurance.



     12.5 Landlord’s Insurance: Landlord shall, during the Term of this Lease,
procure and keep in force the following insurance, the cost of which shall be
deemed an Operating Expense under Section 6.1 of this Lease: property insurance
insuring the Building (and Tenant Improvements) and improvements within the Park
and rental value insurance for perils covered by the causes of loss — special
form (all risk) and in addition coverage for flood, earthquake and boiler and
machinery (if applicable). Such coverage (except for flood and earthquake) shall
be written on a replacement cost basis equal to at least eighty percent (80%) of
the full insurable replacement value of the foregoing (excluding costs for
footings and excavation) and shall not cover any Alterations, Tenant’s
equipment, trade fixtures, inventory, fixtures or personal property located on
or in the Premises. Additionally, Landlord shall, during the Term of this Lease,
procure and keep in force the following insurance, the cost of which shall be



22









 




deemed an Operating Expense under Section 6.1 of this Lease: commercial general
liability insurance (occurrence form) providing coverage against claims for
bodily injury, personal injury and property damage occurring in, on or about the
Common Areas, having a combined single limit of not less than Two Million
Dollars ($2,000,000) per occurrence and in the aggregate.




13. Waiver of Subrogation




     Landlord and Tenant hereby mutually waive their respective rights of
recovery against each other for any loss of, or damage to, either parties’
property to the extent that such loss or damage is insured by an insurance
policy required to be in effect at the time of such loss or damage. Each party
shall obtain any special endorsements, if required by its insurer whereby the
insurer waives its rights of subrogation against the other party. This
provision is intended to waive fully, and for the benefit of the parties hereto,
any rights and/or claims which might give rise to a right of subrogation in
favor of any insurance carrier. The coverage obtained by Tenant and Landlord
pursuant to Section 12 of this Lease shall include, without limitation, a waiver
of subrogation endorsement attached to the certificate of insurance. The
provisions of this Section 13 shall not apply in those instances in which such
waiver of subrogation would invalidate such insurance coverage or would cause
either party’s insurance coverage to be voided or otherwise uncollectible.



14. Limitation of Liability and Indemnity




     Except to the extent of damage resulting from the gross negligence or
willful misconduct of Landlord or its authorized representatives, Tenant agrees
to protect, defend (with counsel acceptable to Landlord) and hold Landlord and
Landlord’s lenders, partners, members, property management company (if other
than Landlord), agents, directors, officers, employees, representatives,
contractors, shareholders, successors and assigns and each of their respective
partners, members, directors, employees, representatives, agents, contractors,
shareholders, successors and assigns (collectively, the “Indemnitees”) harmless
and indemnify the Indemnitees from and against all liabilities, damages, claims,
losses, judgments, charges and expenses (including reasonable attorneys’ fees,
costs of court and expenses necessary in the prosecution or defense of any
litigation including the enforcement of this provision) arising from or in any
way related to, directly or indirectly, (i) Tenant’s or Tenant’s
Representatives’ use of the Premises, Building, and/or the Park, (ii) the
conduct of Tenant’s business, (iii) from any activity, work or thing done,
permitted or suffered by Tenant in or about the Premises, (iv) in any way
connected with the Premises, the Alterations or with the Tenant’s Property
therein, including, but not limited to, any liability for injury to person or
property of Tenant, Tenant’s Representatives or third party persons, and/or (v)
Tenant’s failure to perform any covenant or obligation of Tenant under this
Lease. Tenant agrees that the obligations of Tenant herein shall survive the
expiration or earlier termination of this Lease.



     Except to the extent of damage resulting from the gross negligence or
willful misconduct of Landlord or its authorized representatives, to the fullest
extent permitted by law, Tenant agrees that neither Landlord nor any of



23









 




Landlord’s lender(s), partners, members, employees, representatives, legal
representatives, successors or assigns shall at any time or to any extent
whatsoever be liable, responsible or in any way accountable for any loss,
liability, injury, death or damage to persons or property which at any time may
be suffered or sustained by Tenant or by any person(s) whomsoever who may at any
time be using, occupying or visiting the Premises, the Building, or the Park,
including, but not limited to, any acts, errors or omissions by or on behalf of
any other tenants or occupants of the Building and/or the Park. Tenant shall
not, in any event or circumstance, be permitted to offset or otherwise credit
against any payments of Rent required herein for matters for which Landlord may
be liable hereunder. Landlord and its authorized representatives shall not be
liable for any interference with light or air, or for any latent defect (except
for the thirty (30) day period described in Section 2.2 of this Lease) in the
Premises or the Building.




15. Assignment and Subleasing




     15.1 Prohibition: Tenant shall not assign, mortgage, hypothecate,
encumber, grant any license or concession, pledge or otherwise transfer this
Lease (collectively, “assignment”), in whole or in part, whether voluntarily or
involuntarily or by operation of law, nor sublet or permit occupancy by any
person other than Tenant of all or any portion of the Premises without first
obtaining the prior written consent of Landlord, which consent shall not be
unreasonably withheld. Tenant hereby agrees that Landlord may withhold its
consent to any proposed sublease or assignment if the proposed sublessee or
assignee or its business is subject to compliance with additional requirements
of the ADA (defined below) and/or Environmental Laws (defined below) beyond
those requirements which are applicable to Tenant, unless the proposed sublessee
or assignee shall (a) first deliver plans and specifications for complying with
such additional requirements and obtain Landlord’s written consent thereto, and
(b) comply with all Landlord’s conditions for or contained in such consent,
including without limitation, requirements for security to assure the lien-free
completion of such improvements. If Tenant seeks to sublet or assign all or any
portion of the Premises, Tenant shall deliver to Landlord at least fifteen (15)
days prior to the proposed commencement of the sublease or assignment (the
“Proposed Effective Date”) the following: (i) the name of the proposed assignee
or sublessee; (ii) such information as to such assignee’s or sublessee’s
financial responsibility and standing as Landlord may reasonably require; and
(iii) the aforementioned plans and specifications, if any. Within ten (10) days
after Landlord’s receipt of a written request from Tenant that Tenant seeks to
sublet or assign all or any portion of the Premises, Landlord shall deliver to
Tenant a copy of Landlord’s standard form of consent to sublease or assignment
agreement (as applicable), which instrument shall be utilized for each proposed
sublease or assignment (as applicable). Any assignment or sublet agreement shall
include a provision whereby the assignee or sublessee assumes all of Tenant’s
obligations hereunder and agrees to be bound by the terms hereof. As Additional
Rent hereunder, Tenant shall pay to Landlord a fee in the amount of
five hundred dollars ($500) plus Tenant shall reimburse Landlord for actual
legal and other expenses incurred by Landlord in connection with any actual or
proposed assignment or subletting. In the event the sublease or assignment (I)
by itself or taken together with prior sublease(s) or partial assignment(s)



24









 




covers or totals, as the case may be, more than twenty-five percent (25%) of the
rentable square feet of the Premises or (2) is for a term which by itself or
taken together with prior or other subleases or partial assignments is greater
than fifty percent (50%) of the period remaining in the Term of this Lease as of
the time of the Proposed Effective Date, then Landlord shall have the right, to
be exercised by giving written notice to Tenant (“Recapture Notice”), to
recapture the space described in the sublease or assignment. If within fifteen
(15) days of Landlord’s delivery to Tenant of the Recapture Notice, Tenant does
not deliver to Landlord written notice (the “Tenant’s Recapture Rescission
Notice”) that Tenant has elected (I) not to consummate such proposed assignment
or sublease, and (II) to rescind the request to enter into such proposed
assignment or sublease, such Recapture Notice shall serve to terminate this
Lease with respect to the proposed sublease or assignment space, or, if the
proposed sublease or assignment space covers all the Premises, it shall serve to
terminate the entire balance of the term of this Lease, in either case, as of
the Proposed Effective Date. However, no termination of this Lease with respect
to part or all of the Premises shall become effective without the prior written
consent, where necessary, of the holder of each deed of trust encumbering the
Premises or any part thereof. If this Lease is terminated pursuant to the
foregoing with respect to less than the entire Premises, the Rent shall be
adjusted on the basis of the proportion of square feet retained by Tenant to the
square feet originally demised and this Lease as so amended shall continue
thereafter in full force and effect. Each permitted assignee or sublessee shall
assume and be deemed to assume this Lease and shall be and remain liable jointly
and severally with Tenant for payment of Rent and for the due performance of,
and compliance with all the terms, covenants, conditions and agreements herein
contained on Tenant’s part to be performed or complied with, for the term of
this Lease. No assignment or subletting shall affect the continuing primary
liability of Tenant (which, following assignment, shall be joint and several
with the assignee), and Tenant shall not be released from performing any of the
terms, covenants and conditions of this Lease. Tenant hereby acknowledges and
agrees that it understands that Landlord’s accounting department may process and
accept Rent payments without verifying that such payments are being made by
Tenant, a permitted sublessee or a permitted assignee in accordance with the
provisions of this Lease. Although such payments may be processed and accepted
by such accounting department personnel, any and all actions or omissions by the
personnel of Landlord’s accounting department shall not be considered as
acceptance by Landlord of any proposed assignee or sublessee nor shall such
actions or omissions be deemed to be a substitute for the requirement that
Tenant obtain Landlord’s prior written consent to any such subletting or
assignment, and any such actions or omissions by the personnel of Landlord’s
accounting department shall not be considered as a voluntary relinquishment by
Landlord of any of its rights hereunder nor shall any voluntary relinquishment
of such rights be inferred therefrom. Except with respect to a Related Entity,
for purposes hereof, in the event Tenant is a corporation, partnership, joint
venture, trust or other entity other than a natural person, any change in the
direct or indirect ownership of Tenant (whether pursuant to one or more
transfers other than the initial public offering of Tenant’s common stock or the
subsequent trading of tenant’s publicly traded common stock which does not
confer upon any party or parties control over Tenant) which results in a change
of more than fifty percent (50%) in the direct or indirect ownership of Tenant




25









 







shall be deemed to be an assignment within the meaning of this Section 15 and
shall be subject to all the provisions hereof. Any and all options, first rights
of refusal, tenant improvement allowances and other similar rights granted to
Tenant in this Lease, if any, shall not be assignable by Tenant unless expressly
authorized in writing by Landlord.




     15.2 Excess Sublease Rental or Assignment Consideration: In the event of
any sublease or assignment of all or any portion of the Premises where the rent
or other consideration provided for in the sublease or assignment either
initially or over the term of the sublease or assignment exceeds the Rent or pro
rata portion of the Rent, as the case may be, for such space reserved in the
Lease, Tenant shall pay the Landlord monthly, as Additional Rent, at the same
time as the monthly installments of Rent are payable hereunder, fifty percent
(50%) of the excess of each such payment of rent or other consideration in
excess of the Rent called for hereunder.



     15.3 Waiver: Notwithstanding any assignment or sublease, or any
indulgences, waivers or extensions of time granted by Landlord to any assignee
or sublessee, or failure by Landlord to take action against any assignee or
sublessee, Tenant agrees that Landlord may, at its option, proceed against
Tenant without having taken action against or joined such assignee or sublessee,
except that Tenant shall have the benefit of any indulgences, waivers and
extensions of time granted to any such assignee or sublessee.



     15.4 Related Entities: Notwithstanding anything to the contrary contained
in this Section 15, so long as Tenant delivers to Landlord (1) at least fifteen
(15) business days prior written notice of its intention to assign or sublease
the Premises to any Related Entity, which notice shall set forth the name of the
Related Entity, (2) a copy of the proposed agreement pursuant to which such
assignment or sublease shall be effectuated, and (3) such other information
concerning the Related Entity as Landlord may reasonably require, including
without limitation, information regarding any change in the proposed use of any
portion of the Premises and any financial information with respect to such
Related Entity, and so long as (i) any change in the proposed use of the subject
portion of the Premises is in conformance with the uses permitted to be made
under this Lease and do not involve the use or storage of any Hazardous
Materials (other than normal amounts of ordinary household cleaners, office
supplies and janitorial supplies which are not regulated by any Environmental
Laws), and (ii) at the time of the proposed assignment or sublease, the net
profits and financial condition of the Related Entity is reasonably adequate and
sufficient in relation to the then remaining obligations of Tenant under this
Lease, then Tenant may assign this Lease or sublease any portion of the Premises
(X) to any Related Entity, or (Y) in connection with any merger, consolidation
or sale of substantially all of the assets of Tenant, without having to obtain
the prior written consent of Landlord thereto. For purposes of this Lease, the
term “Related Entity” shall mean and refer to any corporation or entity which
controls, is controlled by or is under common control with Tenant, as all of
such terms are customarily used in the industry.



26









 





16. Ad Valorem Taxes




     Prior to delinquency, Tenant shall pay all taxes and assessments levied
upon trade fixtures, alterations, additions, improvements, inventories and
personal property located and/or installed on or in the Premises by, or on
behalf of, Tenant; and if requested by Landlord, Tenant shall promptly deliver
to Landlord copies of receipts for payment of all such taxes and assessments.
To the extent any such taxes are not separately assessed or billed to Tenant,
Tenant shall pay the amount thereof as invoiced by Landlord.



17. Subordination




     Without the necessity of any additional document being executed by Tenant
for the purpose of effecting a subordination, and at the election of Landlord or
any bona fide mortgagee or deed of trust beneficiary with a lien on all or any
portion of the Premises or any ground lessor with respect to the land of which
the Premises are a part, the rights of Tenant under this Lease and this Lease
shall be subject and subordinate at all times to: (i) all ground leases or
underlying leases which may now exist or hereafter be executed affecting the
Building or the land upon which the Building is situated or both, and (ii) the
lien of any mortgage or deed of trust which may now exist or hereafter be
executed in any amount for which the Building, ground leases or underlying
leases, or Landlord’s interest or estate in any of said items is specified as
security. Notwithstanding the foregoing, Landlord or any such ground lessor,
mortgagee, or any beneficiary shall have the right to subordinate or cause to be
subordinated any such ground leases or underlying leases or any such liens to
this Lease. If any ground lease or underlying lease terminates for any reason
or any mortgage or deed of trust is foreclosed or a conveyance in lieu of
foreclosure is made for any reason, Tenant shall, notwithstanding any
subordination and upon the request of such successor to Landlord, attorn to and
become the Tenant of the successor in interest to Landlord, provided such
successor in interest will not disturb Tenant’s use, occupancy or quiet
enjoyment of the Premises so long as Tenant is not in default of the terms and
provisions of this Lease. The successor in interest to Landlord following
foreclosure, sale or deed in lieu thereof shall not be (a) liable for any act or
omission of any prior lessor or with respect to events occurring prior to
acquisition of ownership; (b) subject to any offsets
or defenses which Tenant might have against any prior lessor; (c) bound by
prepayment of more than one (1) month’s Rent, except in those instances when
Tenant pays Rent quarterly in advance pursuant to Section 8 hereof, then not
more than three months’ Rent; or (d) liable to Tenant for any Security Deposit
not actually received by such successor in interest to the extent any portion or
all of such Security Deposit has not already been forfeited by, or refunded to,
Tenant. Landlord shall be liable to Tenant for all or any portion of the
Security Deposit not forfeited by, or refunded to Tenant, until and unless
Landlord transfers such Security Deposit to the successor in interest. Tenant
covenants and agrees to execute (and acknowledge if required by Landlord, any
lender or ground lessor) and deliver, within five (5) days of a demand or
request by Landlord and in the form requested by Landlord, ground lessor,
mortgagee or beneficiary, any additional documents evidencing the priority or
subordination of this Lease with respect to any such ground leases or underlying
leases or the lien of any such mortgage or deed of trust. Tenant’s failure to
timely execute and deliver such additional documents shall, at Landlord’s



27









 




option, constitute a material default hereunder. Tenant hereby acknowledges that
as of the date on which Landlord and Tenant execute this Lease there is a deed
of trust encumbering, and in force against the Premises, the Building and the
Park in favor of Nationsbank, N.A. (the “Current Lender”). Simultaneously with
Tenant’s execution of this Lease, Tenant shall sign, notarize and deliver a
subordination, non-disturbance and attornment agreement substantially in the
form of Exhibit I attached hereto, entitled “Subordination, Non-Disturbance and
Attornment Agreement.” Landlord shall (i) execute and notarize such agreement
simultaneously with Landlord’s execution of this Lease and (ii) cause Current
Lender to execute and notarize such agreement promptly after Landlord’s and
Tenant’s execution and notarization of such non-disturbance agreement. If
Landlord at any time during the Term of the Lease causes the Premises, the
Building and the Park to be encumbered by a new deed of trust or mortgage
pursuant to which the beneficiary of such deed of trust or mortgage is a party
or entity other than the Current Lender, the parties acknowledge and agree that
the form of any non-disturbance and attornment agreement that may be requested
to be executed and delivered by Tenant in connection therewith will not be the
“Subordination, Non-Disturbance and Attornment Agreement” attached to the Lease
as Exhibit I. Tenant’s agreement to subordinate this Lease to any future ground
or underlying lease or any future deed of trust or mortgage pursuant to the
foregoing provisions o this Section 17 is conditioned upon Landlord delivering
to Tenant form the lessor under such future ground or underlying lease or the
holder of any such deed of trust, a non-disturbance agreement agreeing, among
other things, that Tenant’s right to possession of the Premises pursuant to the
terms and conditions of this Lease shall not be disturbed provided Tenant is not
in default under this Lease beyond the applicable notice and cure periods
hereunder.




18. Right of Entry




     Landlord and its agents shall have the right to enter the Premises at all
reasonable times upon reasonable notice, except in the event of emergency (in
which event no notice shall be required), for purposes of inspection,
exhibition, posting of notices, repair, maintenance and alteration. At
Landlord’s option, Landlord shall at all times have and retain a key with which
to unlock all the doors in, upon and about the Premises, excluding Tenant’s
vaults and safes. It is further agreed that Landlord shall have the right to
use any and all means Landlord deems necessary to enter the Premises in an
emergency. During the final nine (9) months of the Term, Landlord shall have
the right to place “for rent” or “for lease” signs on the outside of the
Premises, the Building and in the Common Areas. Landlord shall also have the
right to place “for sale” signs on the outside of the Building and in the Common
Areas. Tenant hereby waives any claim from damages or for any injury or
inconvenience to or interference with Tenant’s business, or any other loss
occasioned thereby except for any claim for any of the foregoing arising out of
the gross negligence or willful misconduct of Landlord or its authorized
representatives.



28









 





19. Estoppel Certificate



waiver of such default, other than a waiver of timely payment for the particular
Rent payment involved, and shall not prevent Landlord from maintaining an
unlawful detainer or other action based on such breach. No payment by Tenant or
receipt by Landlord of a lesser amount than the monthly Rent and other sums due
hereunder shall be deemed to be other than on account of the earliest Rent or
other sums due, nor shall any endorsement or statement on any check or
accompanying any check or payment be deemed an accord and satisfaction; and
Landlord may accept such check or payment without prejudice to Landlord’s right
to recover the balance of such Rent or other sum or pursue any other remedy
provided in this Lease. No failure, partial exercise or delay on the part of
the Landlord in exercising any right, power or privilege hereunder shall operate
as a waiver thereof.




27. Casualty Damage




     If the Premises or any part thereof shall be damaged by fire or other
casualty, Tenant shall give prompt written notice thereof to Landlord. In case
the Building shall be so damaged by fire or other casualty such that the
Premises and/or the Building cannot, in Landlord’s reasonable opinion, be fully
repaired within one hundred eighty (180) days following the date of such damage
(subject to extension for Force Majeure Delays and Tenant Delays), Landlord or
Tenant may terminate this Lease by notifying the other in writing of such
termination within thirty (30) days after the date of Landlord’s determination
of the extent of such damage (which determination shall be made within ninety
(90) days after the date of such damage) in which event the Rent shall be abated
as of the date of such damage. If neither party elects to terminate this Lease,
and provided insurance proceeds and any contributions from Tenant, if necessary,
are available to fully repair the damage, Landlord shall within one hundred
twenty (120) days after the date of such damage commence to repair and restore
the Building and shall proceed with reasonable diligence to restore the Building
(except that Landlord shall not be responsible for delays outside its control)
to substantially the same condition in which it was immediately prior to the
happening of the casualty; provided, Landlord shall not be required to rebuild,
repair, or replace any part of the Tenant Improvements (in excess of any
insurance proceeds actually received by Landlord) of Tenant’s Property, any
Alterations . Landlord shall not in any event be required to spend for such work
an amount in excess of the insurance proceeds (excluding any deductible) and any
contributions from Tenant, if necessary, actually received by Landlord as a
result of the fire or other casualty. Landlord shall not be liable for any
inconvenience or annoyance to Tenant, injury to the business of Tenant, loss of
use of any part of the Premises by Tenant or loss of Tenant’s Property resulting
in any way from such damage or the repair thereof, except that, subject to the
provisions of the next sentence, Landlord shall allow Tenant a fair diminution
of Rent during the time and to the extent the Premises are unfit for occupancy.
Notwithstanding anything to the contrary contained herein, if the Premises or
any other portion of the Building be damaged by fire or other casualty resulting
from the intentional or negligent acts or omissions of Tenant or any of Tenant’s
Representatives, (i) the Rent shall not be diminished during the repair of such
damage to the extent any portion of the Rent is not actually reimbursed to
Landlord from the proceeds of any rental loss insurance procured by Landlord
hereunder, (ii) Tenant shall not have any right to terminate this Lease due to



29









 




the occurrence of such casualty or damage, and (iii) Tenant shall be liable to
Landlord for the cost and expense of the repair and restoration of all or any
portion of the Building caused thereby (including, without limitation, any
deductible) to the extent such cost and expense is not covered by insurance
proceeds. If the holder of any indebtedness secured by the Premises requires
that the insurance proceeds be applied to such indebtedness, then Landlord shall
have the right to terminate this Lease by delivering written notice of
termination to Tenant within thirty (30) days after the date of notice to Tenant
of any such event, whereupon all rights and obligations shall cease and
terminate hereunder except for those obligations expressly intended to survive
any such termination of this Lease. Except as otherwise provided in this Section
27, Tenant hereby waives the provisions of Sections 1932(2.), 1933(4.), 1941 and
1942 of the California Civil Code.




28. Condemnation




     If twenty-five percent (25%) or more of the Premises is condemned by
eminent domain, inversely condemned or sold in lieu of condemnation for any
public or quasi-public use or purpose (“Condemned”), then Tenant or Landlord may
terminate this Lease as of the date when physical possession of the Premises is
taken and title vests in such condemning authority, and Rent shall be adjusted
to the date of termination. Tenant shall not because of such condemnation
assert any claim against Landlord or the condemning authority for any
compensation because of such condemnation, and Landlord shall be entitled to
receive the entire amount of any award without deduction for any estate of
interest or other interest of Tenant; provided, however, the foregoing
provisions shall not preclude Tenant, at Tenant’s sole cost and expense, from
obtaining any separate award to Tenant for loss of or damage to Tenant’s trade
fixtures and removable personal property or for damages for cessation or
interruption of Tenant’s business provided such award is separate from
Landlord’s award and provided further such separate award does not diminish nor
impair the award otherwise payable to Landlord. In addition to the foregoing,
Tenant shall be entitled to seek compensation for the relocation costs
recoverable by Tenant pursuant to the provisions of California Government Code
Section 7262. If neither party elects to terminate this Lease, Landlord shall,
if necessary, promptly proceed to restore the Premises or the Building to
substantially its same condition prior to such partial condemnation, allowing
for the reasonable effects of such partial condemnation, and a proportionate
allowance shall be made to Tenant, as solely determined by Landlord, for the
Rent corresponding to the time during which, and to the part of the Premises of
which, Tenant is deprived on account of such partial condemnation and
restoration. Landlord shall not be required to spend funds for restoration in
excess of the amount received by Landlord as compensation awarded.



29. Environmental Matters/Hazardous Materials




     29.1 Hazardous Materials Disclosure Certificate: Prior to executing
this Lease, Tenant has completed, executed and delivered to Landlord Tenant’s
initial Hazardous Materials Disclosure Certificate (the “Initial HazMat
Certificate”), a copy of which is attached hereto as Exhibit E and incorporated



30









 




herein by this reference. Tenant covenants, represents and warrants to Landlord
that the information on the Initial HazMat Certificate is true and correct and
accurately describes the use(s) of Hazardous Materials which will be made and/or
used on the Premises by Tenant. Tenant shall commencing with the date which is
one year from the Commencement Date and continuing every year thereafter,
complete, execute, and deliver to Landlord, a Hazardous Materials Disclosure
Certificate (“the “HazMat Certificate”) describing Tenant’s present use of
Hazardous Materials on the Premises, and any other reasonably necessary
documents as requested by Landlord. The HazMat Certificate required hereunder
shall be in substantially the form as that which is attached hereto as Exhibit E.




     29.2 Definition of Hazardous Materials: As used in this Lease, the
term Hazardous Materials shall mean and include (a) any hazardous or toxic
wastes, materials or substances, and other pollutants or contaminants, which are
or become regulated by any Environmental Laws; (b) petroleum, petroleum by
products, gasoline, diesel fuel, crude oil or any fraction thereof; (c) asbestos
and asbestos containing material, in any form, whether friable or non-friable;
(d) polychlorinated biphenyls; (e) radioactive materials; (f) lead and lead-
containing materials; (g) any other material, waste or substance displaying
toxic, reactive, ignitable or corrosive characteristics, as all such terms are
used in their broadest sense, and are defined or become defined by any
Environmental Law (defined below); or (h) any materials which cause or threatens
to cause a nuisance upon or waste to any portion of the Premises, the Building,
the Park or any surrounding property; or poses or threatens to pose a hazard to
the health and safety of persons on the Premises or any surrounding property.



     29.3 Prohibition; Environmental Laws: Tenant shall not be entitled to
use nor store any Hazardous Materials on, in, or about the Premises, the
Building and the Park, or any portion of the foregoing, without, in each
instance, obtaining Landlord’s prior written consent thereto. If Landlord
consents to any such usage or storage, then Tenant shall be permitted to use
and/or store only those Hazardous Materials that are necessary for Tenant’s
business and to the extent disclosed in the HazMat Certificate and as expressly
approved by Landlord in writing, provided that such usage and storage is only to
the extent of the quantities of Hazardous Materials as specified in the then
applicable HazMat Certificate as expressly approved by Landlord and provided
further that such usage and storage is in full compliance with any and all
local, state and federal environmental, health and/or safety-related laws,
statutes, orders, standards, courts’ decisions, ordinances, rules and
regulations (as interpreted by judicial and administrative decisions), decrees,
directives, guidelines, permits or permit conditions, currently existing and as
amended, enacted, issued or adopted in the future which are or become applicable
to Tenant or all or any portion of the Premises (collectively, the
“Environmental Laws”). Tenant agrees that any changes to the type and/or
quantities of Hazardous Materials specified in the most recent HazMat
Certificate may be implemented only with the prior written consent of Landlord,
which consent may be given or withheld in Landlord’s sole discretion. Tenant



31









 




shall not be entitled nor permitted to install any tanks under, on or about the
Premises for the storage of Hazardous Materials without the express written
consent of Landlord, which may be given or withheld in Landlord’s sole
discretion. Landlord shall have the right at all times during the Term of this
Lease to (i) inspect the Premises, (ii) conduct tests and investigations to
determine whether Tenant is in compliance with the provisions of this Section
29, and (iii) request lists of all Hazardous Materials used, stored or otherwise
located on, under or about any portion of the Premises and/or the Common Areas.
The cost of all such inspections, tests and investigations shall be borne solely
by Tenant, if Landlord reasonably determines that Tenant or any of Tenant’s
Representatives are directly or indirectly responsible in any manner for any
contamination revealed by such inspections, tests and investigations. The
aforementioned rights granted herein to Landlord and its representatives shall
not create (a) a duty on Landlord’s part to inspect, test, investigate, monitor
or otherwise observe the Premises or the activities of Tenant and Tenant’s
Representatives with respect to Hazardous Materials, including without
limitation, Tenant’s operation, use and any remediation related thereto, or (b)
liability on the part of Landlord and its representatives for Tenant’s use,
storage, disposal or remediation of Hazardous Materials, it being understood
that Tenant shall be solely responsible for all liability in connection
therewith.




     29.4 Tenant’s Environmental Obligations: Tenant shall give to Landlord
immediate verbal and follow-up written notice of any spills, releases,
discharges, disposals, emissions, migrations, removals or transportation of
Hazardous Materials on, under or about any portion of the Premises or in any
Common Areas. Tenant, at its sole cost and expense, covenants and warrants to
promptly investigate, clean up, remove, restore and otherwise remediate
(including, without limitation, preparation of any feasibility studies or
reports and the performance of any and all closures) any spill, release,
discharge, disposal, emission, migration or transportation of Hazardous
Materials arising from or related to the intentional or negligent acts or
omissions of Tenant or Tenant’s Representatives such that the affected portions
of the Park and any adjacent property are returned to the condition existing
prior to the appearance of such Hazardous Materials. Any such investigation,
clean up, removal, restoration and other remediation shall only be performed
after Tenant has obtained Landlord’s prior written consent, which consent shall
not be unreasonably withheld so long as such actions would not potentially have
a material adverse long-term or short-term effect on any portion of the
Premises, the Building or the Park. Notwithstanding the foregoing, Tenant shall
be entitled to respond immediately to an emergency without first obtaining
Landlord’s prior written consent. Tenant, at its sole cost and expense, shall
conduct and perform, or cause to be conducted and performed, all closures as
required by any Environmental Laws or any agencies or other governmental
authorities having jurisdiction thereof with respect to any Hazardous Materials
used, stored, spilled, discharged, emitted, released, disposed of, removed
and/or transported by Tenant or Tenant’s Representatives. If Tenant fails to so
promptly investigate, clean up, remove, restore, provide closure or otherwise so
remediate, Landlord may, but without obligation to do so, take any and all steps
necessary to rectify the same and Tenant shall promptly reimburse Landlord, within ten
(10) days after receipt of written demand therefor, for all costs and expenses to Landlord of



32









 




performing investigation, clean up, removal, restoration, closure and
remediation work. All such work undertaken by Tenant, as required herein, shall
be performed in such a manner so as to enable Landlord to make full economic use
of the Premises, the Building and the Park after the satisfactory completion of
such work.




     29.5 Tenant’s Environmental Indemnity: In addition to Tenant’s
obligations as set forth hereinabove, Tenant agrees to, and shall, protect,
indemnify, defend (with counsel acceptable to Landlord) and hold Landlord and
the other Indemnitees harmless from and against any and all claims, judgments,
damages, penalties, fines, liabilities, losses (including, without limitation,
diminution in value of any portion of the Premises, the Building or the Park,
damages for the loss of or restriction on the use of rentable or usable space,
and from any adverse impact of Landlord’s marketing of any space within the
Building and/or Park), suits, administrative proceedings and costs (including,
but not limited to, attorneys’ and consultant fees and court costs) arising at
any time during or after the Term of this Lease in connection with or related
to, directly or indirectly, the use, presence, transportation, storage,
disposal, migration, removal, spill, release or discharge of Hazardous Materials
on, in or about any portion of the Premises, the Common Areas, the Building or
the Park as a result of the intentional or negligent acts or omissions of
Tenant or any of Tenant’s Representatives. Neither the written consent of
Landlord to the presence, use or storage of Hazardous Materials in, on, under or
about any portion of the Premises, the Building and/or the Park, nor the strict
compliance by Tenant with all Environmental Laws shall excuse Tenant from its
obligations of indemnification pursuant hereto. Tenant shall not be relieved of
its indemnification obligations under the provisions of this Section 29.5 due to
Landlord’s status as either an “owner” or “operator” under any Environmental
Laws.



     29.6 Survival: Tenant’s obligations and liabilities pursuant to the
provisions of this Section 29 shall survive the expiration or earlier
termination of this Lease. If it is determined by Landlord that the condition of
all or any portion of the Premises, the Building, and/or the Park is not in
compliance with the provisions of this Lease with respect to Hazardous
Materials, including without limitation all Environmental Laws at the expiration
or earlier termination of this Lease, then in Landlord’s sole discretion,
Landlord may require Tenant to hold over possession of the Premises until Tenant
can surrender the Premises to Landlord in the condition in which the Premises
existed as of the Commencement Date and prior to the appearance of such
Hazardous Materials except for reasonable wear and tear, including without
limitation, the conduct or performance of any closures as required by any
Environmental Laws. The burden of proof hereunder shall be upon Tenant. For
purposes hereof, the term “reasonable wear and tear” shall not include any
deterioration in the condition or diminution of the value of any portion of the
Premises, the Building and/or the Park in any manner whatsoever related to
directly, or indirectly, Hazardous Materials. Any such holdover by Tenant will
be with Landlord’s consent, will not be terminable by Tenant in any event or
circumstance and will otherwise be subject to the provisions of Section 22 of
this Lease.



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     29.7 Exculpation of Tenant: Tenant shall not be liable to Landlord for
nor otherwise obligated to Landlord under any provision of the Lease with
respect to the following: (i) any claim, remediation, obligation, investigation,
obligation, liability, cause of action, attorney’s fees, consultants’ cost,
expense or damage resulting from any Hazardous Materials present in, on or about
the Premises , the Building or Park to the extent not caused or otherwise
permitted, directly or indirectly, by Tenant or Tenant’s Representatives; or
(ii) the removal, investigation, monitoring or remediation of any Hazardous
Material present in, on or about the Premises , the Building or Park caused by
any source, including third parties, other than Tenant or Tenant’s
Representatives, including but not limited to the conditions described in the
Environmental Report; provided, however, Tenant shall be fully liable for and
otherwise obligated to Landlord under the provisions of this Lease for all
liabilities, costs, damages, penalties, claims, judgments, expenses (including without limitation,
attorneys’ and experts’ fees and costs) and losses to the extent (a) Tenant or any of Tenant’s
Representatives contributes to the presence of such Hazardous Materials, or
Tenant and/or any of Tenant’s Representatives exacerbates the conditions caused
by such Hazardous Materials, or (b) Tenant and/or Tenant’s Representatives
allows or permits persons over which Tenant or any of Tenant’s Representatives
has control, and/or for which Tenant or any of Tenant’s Representatives are
legally responsible for, to cause such Hazardous Materials to be present in, on,
under, through or about any portion of the Premises, the Common Areas, the
Building or the Park, or (c) Tenant and/or any of Tenant’s Representatives does
not take all reasonably appropriate actions to prevent such persons over which
Tenant or any of Tenant’s Representatives has control and/or for which Tenant or
any of Tenant’s Representatives are legally responsible from causing the
presence of Hazardous Materials in, on, under, through or about any portion of
the Premises, the Common Areas, the Building or the Park.



     29.8 Disclosure: Pursuant to the provisions of California Health & Safety
Code Section 25359.7, Landlord hereby discloses to Tenant that as of the Lease
Date certain portions of the Park contain certain Hazardous Materials as such
Hazardous Materials are more particularly described and set forth in that
certain report prepared by CET Environmental Services, entitled Soil Management
Plan for Development and Ongoing Activities Route 237 Assemblage, dated August
27, 1997 (the “Environmental Report”). Landlord acknowledges and agrees that
none of the environmental conditions or presence of Hazardous Materials on, in
or under the Park as described in the Environmental Report have been in any way
caused by Tenant or any of Tenant’s Representatives. Tenant hereby acknowledges
and agrees that Landlord has delivered to Tenant a copy of the Environmental
Report prior to Tenant entering into this Lease.



     29.9 Landlord’s Environmental Indemnity: Landlord agrees to, and shall
protect, indemnify, defend and hold Tenant harmless from and against any and all
claims, judgments, damages, penalties, fines, liabilities, losses, suits,
administrative proceedings, and costs arising at any time during or after the
Term of this Lease in connection with or related to the presence of the
Hazardous Materials disclosed in Section 29.8 above.



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30. Financial Statements




     Tenant, for the reliance of Landlord, any lender holding or anticipated to
acquire a lien upon any portion of the Premises, the Building, or the Park, or
any prospective purchaser of any portion of the Building, or the Park, within
ten (10) days after Landlord’s request therefor, but not more often than once
annually so long as Tenant is not in material default of this Lease, shall
deliver to Landlord the then current audited financial statements of Tenant
(including interim periods following the end of the last fiscal year for which
annual statements are available) which statements shall be prepared or compiled
by a certified public accountant and shall present fairly the financial
condition of Tenant at such dates and the result of its operations and changes
in its financial positions for the periods ended on such dates. If an audited
financial statement has not been prepared, Tenant shall provide Landlord with an
unaudited financial statement and/or such other information, the type and form
of which are acceptable to Landlord in Landlord’s reasonable discretion, which
reflects the financial condition of Tenant. If Landlord so requests, Tenant
shall deliver to Landlord an opinion of a certified public accountant, including
a balance sheet and profit and loss statement for the most recent prior year,
all prepared in accordance with generally accepted accounting principles
consistently applied. If Landlord releases or delivers a copy of such
financial statement or any such financial information to any lender of Landlord
or any prospective purchaser of the Building, Landlord shall use commercially
reasonable efforts to advise such parties and require of such parties that they
maintain such financial statements and any such financial information strictly
confidential and not further disseminate the financial statement(s) or any
such financial information to any other party without first obtaining Tenant’s
consent thereto, which consent shall not be unreasonably withheld or delayed;
provided (a) any of Landlord’s lenders or partners, (b) any prospective
purchaser of the Premises, and (c) such party(s) as may be required by any laws,
regulations, orders, decrees, court orders or subpoenas



31. General Provisions




     31.1 Time. Time is of the essence in this Lease and with respect to
each and all of its provisions in which performance is a factor.



     31.2 Successors and Assigns. The covenants and conditions herein
contained, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.



     31.3 Recordation. Tenant shall not record this Lease or a short form
memorandum hereof.



     31.4 Landlord’s Personal Liability. The liability of Landlord to
Tenant for any default by Landlord under the terms of this Lease shall be
limited to the actual interest of Landlord and its present or future partners or
members in the Premises or the Building, and Tenant agrees to look solely to the
Premises for satisfaction of any liability and shall not look to other assets of
Landlord nor seek any recourse against the assets of the individual partners,
members, directors, officers, shareholders, agents or employees of Landlord
(including without limitation, any property management company of Landlord); it
being intended that Landlord and the individual partners, members, directors,



35









 




officers, shareholders, agents and employees of Landlord (including without
limitation, any property management company of Landlord) shall not be personally
liable in any manner whatsoever for any judgment or deficiency. The liability
of Landlord under this Lease is limited to its actual period of ownership of
title to the Building.




     31.5 Separability. Any provisions of this Lease which shall prove to
be invalid, void or illegal shall in no way affect, impair or invalidate any
other provisions hereof and such other provision shall remain in full force and
effect.



     31.6 Choice of Law. This Lease shall be governed by, and construed in
accordance with, the laws of the State of California.



     31.7 Attorneys’ Fees. In the event any dispute between the parties
results in litigation or other proceeding, the prevailing party shall be
reimbursed by the party not prevailing for all reasonable costs and expenses,
including, without limitation, reasonable attorneys’ and experts’ fees and costs
incurred by the prevailing party in connection with such litigation or other
proceeding, and any appeal thereof. Such costs, expenses and fees shall be
included in and made a part of the judgment recovered by the prevailing party,
if any.



     31.8 Entire Agreement. This Lease, including the Exhibits hereto,
supersedes any prior agreements, representations, negotiations or correspondence
between the parties, and contains the entire agreement of the parties on matters
covered. No other agreement, statement or promise made by any party, that is
not in writing and signed by all parties to this Lease, shall be binding.



     31.9 Warranty of Authority. On the date that Tenant executes this
Lease, Tenant shall deliver to Landlord an original certificate of status for
Tenant issued by the California Secretary of State or statement of partnership
for Tenant recorded in the county in which the Premises are located, as
applicable, and such other documents as Landlord may reasonably request with
regard to the lawful existence of Tenant. Each person executing this Lease on
behalf of a party represents and warrants that (1) such person is duly and
validly authorized to do so on behalf of the entity it purports to so bind, and
(2) if such party is a partnership, corporation or trustee, that such
partnership, corporation or trustee has full right and authority to enter into
this Lease and perform all of its obligations hereunder. Tenant hereby warrants
that this Lease is valid and binding upon Tenant and enforceable against Tenant
in accordance with its terms.



     31.10 Notices. Any and all notices and demands required or permitted
to be given hereunder to Landlord shall be in writing and shall be sent: (a) by
United States mail, certified and postage prepaid; or (b) by personal delivery;
or (c) by overnight courier, addressed to Landlord at 101 Lincoln Centre Drive,
Fourth Floor, Foster City, California 94404-1167. Any and all notices and
demands required or permitted to be given hereunder to Tenant shall be in
writing and shall be sent: (i) by United States mail, certified and postage
prepaid; or (ii) by personal delivery to any employee or agent of Tenant over



36









 





the age of eighteen (18) years of age; or (iii) by overnight courier, all of
which shall be addressed to Tenant at the Premises. Notice and/or demand shall
be deemed given upon the earlier of actual receipt or the third day following
deposit in the United States mail. Any notice or requirement of service
required by any statute or law now or hereafter in effect, including, but not
limited to, California Code of Civil Procedure Sections 1161, 1161.1, and 1162
(including any amendments, supplements or substitutions thereof), is hereby
waived by Tenant.



     31.11 Joint and Several. If Tenant consists of more than one person or
entity, the obligations of all such persons or entities shall be joint and
several.



     31.12 Covenants and Conditions. Each provision to be performed by
Tenant hereunder shall be deemed to be both a covenant and a condition.



     31.13 Waiver of Jury Trial. The parties hereto shall and they hereby
do waive trial by jury in any action, proceeding or counterclaim brought by
either of the parties hereto against the other on any matters whatsoever arising
out of or in any way related to this Lease, the relationship of Landlord and
Tenant, Tenant’s use or occupancy of the Premises, the Building, or the Park,
and/or any claim of injury, loss or damage.



     31.14 Merger. The voluntary or other surrender of this Lease by
Tenant, the mutual termination or cancellation hereof by Landlord and Tenant, or
a termination of this Lease by Landlord for a material default by Tenant
hereunder, shall not work a merger, and, at the sole option of Landlord, (i)
shall terminate all or any existing subleases or subtenancies, or (ii) may
operate as an assignment to Landlord of any or all of such subleases or
subtenancies. Landlord’s election of either or both of the foregoing options
shall be exercised by delivery by Landlord of written notice thereof to Tenant
and all known subtenants under any sublease.



32. Signs




     All signs and graphics of every kind visible from the exterior of the
Premises shall be subject to Landlord’s prior written approval and shall be
subject to and in compliance with any applicable Laws, Development Documents,
Recorded Matters, Rules and Regulations, and Landlord’s sign criteria as same
may exist from time to time or as set forth in Exhibit H hereto and made a part
hereof. Tenant shall remove all such signs and graphics prior to the
termination of this Lease. Such installations and removals shall be made in a
manner as to avoid damage or defacement of the Premises; and Tenant shall repair
any damage or defacement, including without limitation, discoloration caused by
such installation or removal. Landlord shall have the right, at its option, to
deduct from the Security Deposit such sums as are reasonably necessary to remove
such signs, including, but not limited to, the costs and expenses associated
with any repairs necessitated by such removal. Notwithstanding the foregoing,
in no event shall any: (a) neon, flashing or moving sign(s) or (b) sign(s) which
shall interfere with the visibility of any sign, awning, canopy, advertising
matter, or decoration of any kind of any other business or occupant of the Building, or the



37









 




Park be permitted hereunder. Tenant further agrees to maintain any such sign,
awning, canopy, advertising matter, lettering, decoration or other thing as may
be approved in good condition and repair at all times.




33. Mortgagee Protection




     Upon any default on the part of Landlord, Tenant will give written notice
by registered or certified mail to any beneficiary of a deed of trust or
mortgagee of a mortgage covering the Premises who has provided Tenant with
notice of their interest together with an address for receiving notice, and
shall offer such beneficiary or mortgagee a reasonable opportunity to cure the
default (which, in no event shall be more than one hundred fifty (150) days),
including time to obtain possession of the Premises by power of sale or a
judicial foreclosure, if such should prove necessary to effect a cure. If such
default cannot be cured within such time period, then such additional time as
may be necessary will be given to such beneficiary or mortgagee to effect such
cure so long as such beneficiary or mortgagee has commenced the cure within the
original time period and thereafter diligently pursues such cure to completion,
in which event this Lease shall not be terminated while such cure is being
diligently pursued. Tenant agrees that each lender to whom this Lease has been
assigned by Landlord is an express third party beneficiary hereof. Tenant shall
not make any prepayment of Rent more than one (1) month in advance without the
prior written consent of each such lender, except if Tenant is required to make
quarterly payments of Rent in advance pursuant to the provisions of Section 8
above. Tenant waives the collection of any deposit from such lender(s) or any
purchaser at a foreclosure sale of such lender(s)’ deed of trust unless the
lender(s) or such purchaser shall have actually received and not refunded the
deposit. Tenant agrees to make all payments under this Lease to the lender with
the most senior encumbrance upon receiving a direction, in writing, to pay said
amounts to such lender. Tenant shall comply with such written direction to pay
without determining whether an event of default exists under such lender’s loan
to Landlord and Landlord waives and releases Tenant from any liability for
Tenant’s compliance with such written direction.



34. Quitclaim




     Upon any termination of this Lease, Tenant shall, at Landlord’s request,
execute, acknowledge and deliver to Landlord a quitclaim deed of Tenant’s
interest in and to the Premises.



35. Modifications for Lender (Intentionally omitted)




36. Warranties of Tenant




     Tenant hereby warrants and represents to Landlord, for the express benefit
of Landlord, that Tenant has undertaken a complete and independent evaluation of
the risks inherent in the execution of this Lease and the operation of the
Premises for the use permitted hereby, and that, based upon said independent
evaluation, Tenant has elected to enter into this Lease and hereby assumes all
risks with respect thereto. Tenant hereby further warrants and represents to
Landlord, for the express benefit of Landlord, that in entering into this Lease,



38









 




Tenant has not relied upon any statement, fact, promise or representation
(whether express or implied, written or oral) not specifically set forth herein
in writing and that any statement, fact, promise or representation (whether
express or implied, written or oral) made at any time to Tenant, which is not
expressly incorporated herein in writing, is hereby waived by Tenant.




37. Compliance with Americans with Disabilities Act




     Landlord and Tenant hereby agree and acknowledge that the Premises, the
Building and/or the Park may be subject to the requirements of the Americans
with Disabilities Act, a federal law codified at 42 U.S.C. 12101 et seq,
including, but not limited to Title III thereof, all regulations and guidelines
related thereto, together with any and all laws, rules, regulations, ordinances,
codes and statutes now or hereafter enacted by local or state agencies having
jurisdiction thereof, including all requirements of Title 24 of the State of
California, as the same may be in effect on the date of this Lease and may be
hereafter modified, amended or supplemented (collectively, the “ADA”). Any
Tenant Improvements to be constructed hereunder shall be in compliance with the
requirements of the ADA, and all costs incurred for purposes of compliance
therewith shall be a part of and included in the costs of the Tenant
Improvements. Tenant shall be solely responsible for conducting its own
independent investigation of this matter. Subject to reimbursement pursuant to
Section 6 of the Lease, if any barrier removal work or other work is required to
the Building, the Common Areas or the Park under the ADA, then such work shall
be the responsibility of Landlord; provided, if such work is required under the
ADA as a result of Tenant’s use of the Premises or any work or alteration made
to the Premises by or on behalf of Tenant, then such work shall be performed by
Landlord at the sole cost and expense of Tenant. Except as otherwise expressly
provided in this provision, Tenant shall be responsible at its sole cost and
expense for fully and faithfully complying with all applicable requirements of
the ADA, including without limitation, not discriminating against any disabled
persons in the operation of Tenant’s business in or about the Premises, and
offering or otherwise providing auxiliary aids and services as, and when,
required by the ADA. Within ten (10) days after receipt, Landlord and Tenant
shall advise the other party in writing, and provide the other with copies of
(as applicable), any notices alleging violation of the ADA relating to any
portion of the Premises or the Building; any claims made or threatened in
writing regarding noncompliance with the ADA and relating to any portion of the
Premises, or the Building ; or any governmental or regulatory actions or
investigations instituted or threatened regarding noncompliance with the ADA and
relating to any portion of the Premises, or the Building. Tenant shall and
hereby agrees to protect, defend (with counsel acceptable to Landlord) and hold
Landlord and the other Indemnitees harmless and indemnify the Indemnitees from
and against all liabilities, damages, claims, losses, penalties, judgments,
charges and expenses (including reasonable attorneys’ fees, costs of court and
expenses necessary in the prosecution or defense of any litigation including the
enforcement of this provision) arising from or in any way related to, directly
or indirectly, Tenant’s or Tenant’s Representatives’ violation or alleged
violation of the ADA. Tenant agrees that the obligations of Tenant herein shall
survive the expiration or earlier termination of this Lease.



39









 





38. Brokerage Commission




     Landlord and Tenant each represents and warrants for the benefit of the
other that it has had no dealings with any real estate broker, agent or finder
in connection with the Premises and/or the negotiation of this Lease, except for
the Broker(s) (as set forth on Page 1) (which Brokers shall be paid by Landlord
pursuant to a separate written agreement between Landlord and Brokers), and that
it knows of no other real estate broker, agent or finder who is or might be
entitled to a real estate brokerage commission or finder’s fee in connection
with this Lease or otherwise based upon contacts between the claimant and
Tenant. Each party shall indemnify and hold harmless the other from and against
any and all liabilities or expenses arising out of claims made for a fee or
commission by any real estate broker, agent or finder in connection with the
Premises and this Lease other than Broker(s) (which Brokers shall be paid by
Landlord pursuant to a separate written agreement between Landlord and Brokers),
if any, resulting from the actions of the indemnifying party. Any real estate
brokerage commission or finder’s fee payable to the Broker(s) in connection with
this Lease shall only be payable and applicable to the extent of the initial
Term of the Lease and to the extent of the Premises as same exist as of the date
on which Tenant executes this Lease. Unless expressly agreed to in writing by
Landlord and Broker(s), no real estate brokerage commission or finder’s fee
shall be owed to, or otherwise payable to, the Broker(s)
for any renewals or other extensions of the initial Term of this Lease or for
any additional space leased by Tenant other than the Premises as same exists as
of the date on which Tenant executes this Lease. Tenant further represents and
warrants to Landlord that Tenant will not receive (i) any portion of any
brokerage commission or finder’s fee payable to the Broker(s) in connection with
this Lease or (ii) any other form of compensation or incentive from the
Broker(s) with respect to this Lease.



39. Confidentiality




     Language to be provided.



40. Quiet Enjoyment




     Landlord covenants with Tenant, upon the paying of Rent and observing and
keeping the covenants, agreements and conditions of this Lease on its part to be
kept, and during the periods that Tenant is not otherwise in material default of
any of the terms or provisions of this Lease, and subject to the terms of
Section 17 of this Lease, (i) that Tenant shall and may peaceably and quietly
hold, occupy and enjoy the Premises and the Common Areas during the Term of this
Lease, and (ii) neither Landlord, nor any successor or assign of Landlord, shall
disturb Tenant’s occupancy or enjoyment of the Premises and the Common Areas.



41. Landlord’s Ability to Perform Tenant’s Unperformed Obligations




     Notwithstanding anything to the contrary contained in this Lease, if Tenant
shall fail to perform any of the terms, provisions, covenants or conditions to
be performed or complied with by Tenant pursuant to this Lease, and/or if the
failure of Tenant relates to a matter which in Landlord’s judgment reasonably




40












 




exercised is of an emergency nature and such failure shall remain uncured for a
period of time commensurate with such emergency, then Landlord may, at
Landlord’s option without any obligation to do so, and in its sole discretion as
to the necessity therefor, perform any such term, provision, covenant, or
condition, or make any such payment and Landlord by reason of so doing shall not
be liable or responsible for any loss or damage thereby sustained by Tenant or
anyone holding under or through Tenant. If Landlord so performs any of Tenant’s
obligations hereunder, the full amount of the cost and expense entailed or the
payment so made or the amount of the loss so sustained shall immediately be
owing by Tenant to Landlord, and Tenant shall promptly pay to Landlord upon
demand, as Additional Rent, the full amount thereof with interest thereon from
the date of payment at the greater of (i) ten percent (10%) per annum, or (ii)
the highest rate permitted by applicable law.




42. Collateral for Performance of Lease Obligations




     Simultaneously with Tenant’s delivery to Landlord of this Lease and the
first month’s Base Rent in accordance with the provisions of Section 3 above,
Tenant shall deliver to Landlord, as collateral for the full and faithful
performance by Tenant of all of its obligations under this Lease and for all
losses and damages Landlord may suffer as a result of any default by Tenant
under this Lease, an irrevocable and unconditional negotiable letter of credit,
in the form and containing the terms required herein, payable in the City of
Foster City, California running in favor of Landlord issued by a solvent bank
under the supervision of the Superintendent of Banks of the State of California,
or a National Banking Association, in the amount of Four Hundred Thirty Five
Thousand Nine Hundred Forty-Six and 00/100 Dollars ($435,946.00) (the “Letter of
Credit”). The Letter of Credit shall be (a) at sight and irrevocable, (b)
maintained in effect, whether through replacement, renewal or extension, for the
entire Lease Term (the “Letter of Credit Expiration Date”) and Tenant shall
deliver a new Letter of Credit or certificate of renewal or extension to
Landlord at least thirty (30) days prior to the expiration of the Letter of
Credit, without any action whatsoever on the part of Landlord, (c) subject to
the Uniform Customs and Practices for Documentary Credits (1993-Rev)
International Chamber of Commerce Publication #400, (d) acceptable
to Landlord in its sole discretion, and (e) fully assignable by
Landlord and permit partial draws. In addition to the foregoing, the form and
terms of the Letter of Credit (and the bank issuing the same) shall be
acceptable to Landlord, in Landlord’s sole discretion, and shall provide, among
other things, in effect that: (1) Landlord, or its then managing agent, shall
have the right to draw down an amount up to the face amount of the Letter of
Credit upon the presentation to the issuing bank of Landlord’s (or Landlord’s
then managing agent’s) statement that Tenant is in material default and such
amount is due to Landlord under the terms and conditions of this Lease, it being
understood that if Landlord or its managing agent be a corporation, partnership
or other entity, then such statement shall be signed by an officer (if a
corporation), a general partner (if a partnership), or any authorized party (if
another entity); (2) the Letter of Credit will be honored by the issuing bank
without inquiry as to the accuracy thereof and regardless of whether the Tenant
disputes the content of such statement; and (3) in the event of a transfer of
Landlord’s interest in the Building, Landlord shall transfer the Letter of



41









 




Credit, in whole or in part (or cause a substitute letter of credit to be
delivered, as applicable), to the transferee and thereupon the Landlord shall,
without any further agreement between the parties, be released by Tenant from
all liability therefor, and it is agreed that the provisions hereof shall apply
to every transfer or assignment of the whole or any portion of said Letter of
Credit to a new Landlord. If, as a result of any such application of all or any
part of the Letter of Credit, the amount of the Letter of Credit shall be less
than Four Hundred Thirty Five Thousand Nine Hundred Forty-Six and 00/100 Dollars
($435,946.00), Tenant shall within five (5) days thereafter provide Landlord
with additional letter(s) of credit in an amount equal to the deficiency (or a
replacement letter of credit in the total amount of Four Hundred Thirty Five
Thousand Nine Hundred Forty-Six and 00/100 Dollars ($435,946.00) and each such
additional (or replacement) letter of credit shall comply with all of the
provisions of this Section 42, and if Tenant fails to do so, the same shall
constitute an incurable default by Tenant. Tenant further covenants and warrants
that it will neither assign nor encumber the Letter of Credit or any part
thereof and that neither Landlord nor its successors or assigns will be bound by
any such assignment, encumbrance, attempted assignment or attempted encumbrance.
Without limiting the generality of the foregoing, if the Letter of Credit
expires earlier than the Letter of Credit Expiration Date, Landlord will accept
a renewal thereof or substitute letter of credit (such renewal or substitute
letter of credit to be in effect not later than thirty (30) days prior to the
expiration thereof), which shall be irrevocable and automatically renewable as
above provided through the Letter of Credit Expiration Date upon the same terms
as the expiring letter of credit or such other terms as may be acceptable to
Landlord in its sole discretion. However, if the Letter of Credit is not timely
renewed or a substitute letter of credit is not timely received, or if Tenant
fails to maintain the Letter of Credit in the amount and terms set forth in this
Section 42, Landlord shall have the right to present such Letter of Credit to
the bank in accordance with the terms of this Section 42, and the entire sum
evidenced thereby shall be paid to and held by Landlord as collateral for
performance of all of Tenant’s obligations under this Lease and for all losses
and damages Landlord may suffer as a result of any default by Tenant under this
Lease. If there shall occur a material default under this Lease as set forth in
Section 20 of this Lease, Landlord may, but without obligation to do so, draw
upon the Letter of Credit, in part or in whole, to cure any default of Tenant
and/or to compensate Landlord for any and all damages of any kind or nature
sustained or which may be sustained by Landlord resulting from Tenant’s default.
Tenant agrees not to interfere in any way with payment to Landlord of the
proceeds of the Letter of Credit, either prior to or following a “draw” by
Landlord of any portion of the Letter of Credit, regardless of whether any
dispute exists between Tenant and Landlord as to Landlord’s right to draw from
the Letter of Credit. No condition or term of this Lease shall be deemed to
render the Letter of Credit conditional to justify the issuer of the Letter of
Credit in failing to honor a drawing upon such Letter of Credit in a timely
manner. Landlord and Tenant acknowledge and agree that in no event or
circumstance shall the Letter of Credit or any renewal thereof or substitute
therefor be (i) deemed to be or treated as a “security deposit” within the
meaning of California Civil Code Section 1950.7, (ii) subject to the terms of
such Section 1950.7, or (iii) intended to serve as a “security deposit” within
the meaning of such Section 1950.7. The parties hereto (x) recite that the




42









 







Letter of Credit is not intended to serve as a security deposit and such Section
1950.7 and any and all other laws, rules and regulations applicable to security
deposits in the commercial context (“Security Deposit Laws”) shall have no
applicability or relevancy to the Letter of Credit and (y) waive any and all rights,
duties and obligations either party may now or, in the future, will have relating to or arising
from the Security Deposit Laws. Notwithstanding the above, upon Tenant completing
an initial public offering and achieving a market value of $400,000,000.00, such Letter of
Credit shall no longer be required. Tenant shall be required to provide written
documentation outlining Tenant’s market valuation for Landlord’s review and
acceptance prior to the release and termination of such Letter of Credit.




43. Satellite Dish




     Tenant shall have the right (but only to the extent permitted by the City
of San Jose and all agencies and governmental authorities having jurisdiction
thereof), at Tenant’s sole cost and expense, to install and operate a satellite
or microwave dish or dishes (“Satellite Dishes”) along with any necessary cables
(“Cables”) on a portion of the roof of the Building to be designated by Landlord
(“Roof Space”) for the Term of the Lease (the Satellite Dishes and Cables are
hereinafter collectively referred to as the “Equipment”). The location and size
of the Equipment shall be subject to Landlord’s approval, not to unreasonably
withheld and which best promotes the safety, aesthetics and efficiency of the
Equipment; provided, all of the Equipment and any modifications thereto or
placement thereof shall be (i) at Tenant’s sole cost and expense, (ii) contained
visually within the roof screen, (iii) installed and operated to Landlord’s
reasonable specifications, and (iv) installed, maintained, operated and removed
in accordance with all Recorded Matters and applicable Laws. Landlord shall
cooperate reasonably with Tenant to modify the roof screen placement (subject to
all applicable Laws and Recorded Matters) if required for signal quality,
reconfiguration due to the installation of any HVAC systems and other reasonable
considerations; provided, the cost of all such modifications shall be the
responsibility of Tenant. All modifications to the Building, including the Roof
Space, if any, shall be reasonably approved by Landlord prior to commencement of
any work with respect to the Equipment. No additional rent shall be paid by
Tenant for use of the Roof Space and operation of the Equipment. The Equipment
shall remain the property of Tenant and Tenant shall remove the Equipment upon
the expiration or earlier termination of the Lease. Tenant shall restore the
Roof Space and any other portion of the Buildings affected by the Equipment to
its original condition, excepting ordinary wear and tear and/or damage or
destruction due to fire or other casualty not caused directly or indirectly by
Tenant, its agents, employees, contractors or the Equipment or any part thereof.
Tenant may not assign, lease, rent, sublet or otherwise transfer any of its
interest in the Roof Space or the Equipment except together with the remainder
of all of the Premises as more particularly set forth in Section 15. Each of
the other provisions of this Lease shall be applicable to the Equipment and the
use of the Roof Space by Tenant, including without limitation, Sections 12 and
14 of this Lease. The Equipment shall comply with all-non-interference rules of
the Federal Communications Commission. If applicable, Tenant shall provide to
Landlord a copy of (i) the Federal Communications Commission (or other agency)
grant which has awarded frequencies to Tenant and (ii) a list of Tenant’s
frequencies. Anything to the contrary contained herein notwithstanding, if,



43









 




during the Lease Term, as such Term may be extended, Landlord, in its reasonable
judgment, believes that the Equipment poses a human health or environmental
hazard that cannot be remediated or has not been remediated within ten (10) days
after Tenant has been notified thereof, then Tenant shall immediately cease all
operations of the Equipment and Tenant shall remove all of the Equipment within
thirty (30) days thereafter. To the best of Tenant’s knowledge, Tenant
represents to Landlord that the Equipment shall not emit or project any electro-
magnetic fields which pose a human health or environmental hazard. In addition,
Tenant shall be responsible for insuring the Equipment and Landlord shall have
no responsibility therefor. Tenant shall indemnify, defend (by counsel
reasonably acceptable to Landlord) and hold harmless Landlord from any and all
claims, demands, liabilities, damages, judgments, costs and expenses (including
reasonable attorneys’ fees) Landlord may suffer or incur arising out of or
related to the installation, use, operation, maintenance, replacement and/or
removal of the Equipment or any portion thereof.




44. Tenant’s Ability to Perform Landlord’s Unperformed Obligations




     Notwithstanding anything to the contrary contained in this Lease, if
Landlord shall fail to perform any of the terms, provisions, covenants or
conditions to be performed or complied with by Landlord under Section 11.2 of
this Lease with respect only to the Premises (such terms, provisions, covenants
or conditions are referred to herein, collectively as “Landlord Repair
Obligations”) after expiration of all applicable notice and cure periods for
Landlord’s and any mortgagee’s benefit as set forth in Sections 23 and 33,
respectively, then Tenant may, at Tenant’s option and risk, but without any
obligation to do so, after delivery of an additional twenty (20) day prior
written notice to Landlord, perform such Landlord Repair Obligations on
Landlord’s behalf. If Tenant so performs any of such Landlord Repair
Obligations hereunder, then Tenant will perform such Landlord Repair Obligations
(1) in compliance with all applicable Laws, regulations and requirements to
which Landlord would be subject under this Lease (if Landlord were performing
such Landlord Repair Obligations), (2) in a good workmanlike manner using
materials of a quality and grade at least equal to that in place as of the date
of delivery of the Premises to Tenant, if applicable, (3) without interfering
with the rights of other tenants of the Park, and (4) in compliance with the
terms and provisions of Section 10.1 hereof, as applicable. Tenant will
promptly assign to Landlord any warranties or guaranties in respect of any
Landlord Repair Obligations. If Tenant so performs any of such Landlord Repair
Obligations hereunder, the full amount of the fair and reasonable costs and
expenses incurred by Tenant shall be owing by Landlord to Tenant, and Landlord
shall pay to Tenant the full undisputed amount thereof within sixty (60) days of
Landlord’s receipt of Tenant’s written demand therefor together with reasonable
evidence verifying the amount of such costs and expenses.



44









 





     IN WITNESS WHEREOF, this Lease is executed by the parties as of the Lease
Date referenced on Page 1 of this Lease.



	 	 	 	 	 
	Tenant:	 	 
	 
	 	 	 	 
	Foundry Networks, Inc.,

a California corporation
	 
	 	 	 	 
	By:

	 	/s/ Timothy D. Heffner
 
	 	 
	Its:

	 	CFO and Assistant Secretary
 
	 	 
	Date:

	 	September 30, 1999
 
	 	 
	By:

	 	/s/ Bobby R. Johnson
 
	 	 
	Its:

	 	President and CEO
 
	 	 
	Date:

	 	September 30, 1999
 
	 	 
	 
	 	 	 	 
	Landlord:	 	 
	 
	 	 	 	 
	WIX/NSJ REAL ESTATE LIMITED PARTNERSHIP,

a Delaware limited partnership
	 
	 	 	 	 
	By:	 	LEGACY PARTNERS COMMERCIAL, INC.,

as manager and agent for WIX/NSJ Real Estate Limited Partnership
	 
	 	 	 	 
	By:

	 	/s/ Barry DiRaimondo

 
	 	 
	 

	 	Senior Vice President	 	 
	 
	 	 	 	 
	Date:

	 	September 30, 1999
 
	 	 





If Tenant is a CORPORATION, the authorized officers must sign on behalf of the
corporation and indicate the capacity in which they are signing. The Lease must
be executed by the president or vice-president and the secretary or assistant
secretary, unless the bylaws or a resolution of the board of directors shall
otherwise provide, in which event, the bylaws or a certified copy of the
resolution, as the case may be, must be attached to this Lease.




45









 








Exhibit A

Premises



This exhibit, entitled “Premises”, is and shall constitute EXHIBIT A to that
certain Lease Agreement dated September 15, 1999 (the “Lease”), by and between
WIX/NSJ REAL ESTATE LIMITED PARTNERSHIP, a Delaware limited partnership
(“Landlord”) and Foundry Networks, Inc., a California corporation (“Tenant”) for
the leasing of certain premises located at 2100 Gold Street, San Jose,
California (the “Premises”).



The Premises consist of the rentable square footage of space specified in the
Basic Lease Information and has the address specified in the Basic Lease
Information. The Premises are a part of and are contained in the Building
specified in the Basic Lease Information. The cross-hatched area depicts the
Premises within the Park:




46









 








Exhibit B to Lease Agreement

Tenant Improvements and Shell Improvements



This exhibit, entitled “Tenant Improvements and Shell Improvements”, is and
shall constitute Exhibit B to that certain Lease Agreement, dated for reference
purposes as of September 15, 1999 (the “Lease”), by and between WIX/NSJ REAL
ESTATE LIMITED PARTNERSHIP, a Delaware limited partnership (“Landlord”) and
Foundry Networks, Inc., a California corporation (“Tenant”) for the leasing of
certain premises located at 2100 Gold Street, San Jose, California (the
“Premises”). The terms, conditions and provisions of this Exhibit B are hereby
incorporated into and are made a part of the Lease. Any capitalized terms used
herein and not otherwise defined herein shall have the meaning ascribed to such
terms as set forth in the Lease.



1. Tenant Improvements. Subject to the conditions set forth below, Landlord
agrees to construct and install certain improvements (“Tenant Improvements”) in
the Building of which the Premises are a part in accordance with the Approved
Final Drawings (defined below) and the terms of this Exhibit B.



2. Definition. “Tenant Improvements” as used in this Lease shall include only
those interior improvements to be made to the Premises as specified in the
Approved Final Drawings (defined below) and agreed to by Tenant and Landlord in
accordance with the provisions hereof. “Tenant Improvements” shall specifically
not include (i) any alterations, additions or improvements installed or
constructed by Tenant, (ii) any of Tenant’s trade fixtures, security equipment,
equipment, furniture, furnishings, telephone and/or data equipment, telephone
and/or data lines or other personal property, and (iii) any supplemental fire
protection improvements or equipment (collectively, “Tenant’s Installations”).
Landlord shall construct the Tenant Improvements in a good and workmanlike
manner in substantial accordance with the Approved Final Drawings, and in
compliance with the Americans with Disabilities Act as such Act is in effect as
of the Commencement Date.



3. Tenant’s Initial Plans; the Work. Tenant desires Landlord to perform
certain Tenant Improvements in the Premises. The Tenant Improvements shall be in
substantial accordance with the plan(s) and scope of work (collectively, the
“Initial Plans”) . The parties shall meet and confer to agree upon a scope of
work immediately after execution of this Lease and, within fifteen (15) business
days from the date Landlord and Tenant meet to discuss the scope of work,
Landlord’s Architect shall prepare and deliver to Tenant the Initial Plans. A
copy of the Initial Plans shall be attached hereto as Schedule 1, as soon as
practicable thereafter. Such work, as shown in the Initial Plans and as more
fully detailed in the Approved Final Drawings (as defined and described in
Section 4 below), shall be hereinafter referred to as the “Work”. Not later than
five (5) days after the Initial Plans are prepared and delivered to Tenant,
Tenant or Tenant’s Representatives shall furnish to Landlord such additional
plans, drawings, specifications and finish details as Landlord may reasonably
request to enable Landlord’s architects and engineers, as applicable, to prepare
mechanical, electrical and plumbing plans and to prepare the Final Drawings,




47









 







including, but not limited to, a final telephone layout and special electrical
connections, if any. All plans, drawings, specifications and other details
describing the Work which have been, or are hereafter, furnished by or on behalf
of Tenant shall be subject to Landlord’s approval, which approval shall not be
unreasonably withheld. Landlord shall not be deemed to have acted unreasonably
if it withholds its approval of any plans, specifications, drawings or other
details or of any Change Request (hereafter defined in Section 11 below)
because, in Landlord’s reasonable opinion, the work as described in any such
item or any Change Request, as the case may be: (a) is likely to adversely
affect Building systems, the structure of the Building or the safety of the
Building or its occupants; (b) is likely to impair Landlord’s ability to furnish
services to Tenant ; (c) would increase the cost of operating the Park; (d)
would violate any applicable governmental, administrative
body’s or agencies’ laws, rules, regulations, ordinances, codes or similar
requirements (or interpretations thereof); (e) contains or uses Hazardous
Materials; (f) would adversely affect the appearance of the Building or the
Park; (g) is likely to adversely affect another tenant’s premises or such other
tenant’s use and enjoyment of such premises; (h) is prohibited by any ground
lease affecting the Building and/or the Park, any Recorded Matters or any
mortgage, trust deed or other instrument encumbering the Building and/or the
Park; (i) is likely to be substantially delayed because of unavailability or
shortage of labor or materials necessary to perform such work or the
difficulties or unusual nature of such work; (j) is not, at a minimum, in
accordance with Landlord’s Building Standards (defined below); (k) would
increase the Tenant Improvement Costs (defined in Section 9 below) by more than
twenty percent (20%) from the cost originally estimated and anticipated by the
parties; or (l) would delay completion of the Final Drawings, the Approved Final
Drawings and/or the Tenant Improvements. The foregoing reasons, however, shall
not be the only reasons for which Landlord may reasonably withhold its approval,
whether or not such other reasons are similar or dissimilar to the foregoing.
Neither the approval by Landlord of the Work, the Initial Plans or any other
plans, specifications, drawings or other items associated with the Work or any
Change Request nor Landlord’s performance, supervision or monitoring of the Work
shall constitute any warranty or covenant by Landlord to Tenant of the adequacy
of the design for Tenant’s intended use of the Premises. Tenant agrees to, and
does hereby, assume full and complete responsibility to ensure that the design
of the Work and the Approved Final Drawings are adequate to fully meet the needs
and requirements of Tenant’s use and intended operations of its business within
the Premises.



4. Final Drawings and Approved Final Drawings. If necessary for the
performance of the Work, and to the extent not already included as part of the
Initial Plans to be attached hereto, Landlord shall prepare or cause to be
prepared final working drawings and specifications for the Work (the “Final
Drawings”) based on and consistent with the Initial Plans and the other plans,
specifications, drawings, finish details or other information furnished by
Tenant or Tenant’s Representatives to Landlord and approved by Landlord pursuant
to Section 3 above. Tenant shall cooperate diligently with Landlord and
Landlord’s architect, engineer and other representatives and Tenant shall
furnish within five (5) days after any request therefor, all information
required by Landlord or Landlord’s architect, engineer or other representatives




48









 







for completion of the Final Drawings. So long as the Final Drawings are
substantially consistent with the Initial Plans, Tenant shall approve the Final
Drawings within five (5) days after receipt of same from Landlord. Tenant’s
failure to approve or disapprove such Final Drawings within the foregoing five
(5) day time period, shall be conclusively deemed to be disapproval of same by
Tenant and deemed a “Tenant Delay” (as defined herein). If Tenant reasonably
disapproves of any matters included in the Final Drawings because such items are
not substantially consistent with the Initial Plans, Tenant shall, within the
aforementioned five (5) day period, deliver to Landlord written notice of its
disapproval and Tenant shall specify in such written notice, in reasonable
detail the matters disapproved, the reasons for such disapproval, and, if
possible, the specific changes or revisions necessary to be made to the Final
Drawings to cause such drawings to substantially conform to the Initial Plans
(and failure to deliver such notice within such time period shall be a Tenant
Delay). Any additional costs associated with such requested changes or revisions
shall be included as part of the Tenant Improvement Costs (defined below). The
foregoing procedure shall be followed by the parties until the Final Drawings
are acceptable to both Landlord and Tenant. Landlord and Tenant shall indicate
their approval of the Final Drawings by initialing each sheet of the Final
Drawings and delivering to one another a true and complete copy of such
initialed Final Drawings (the “Approved Final Drawings”). A true and complete
copy of the Approved Final Drawings shall be attached to the Lease as
Exhibit B-1 and shall be made a part hereof. Any changes or revisions to the
Approved Final Drawings requested by Tenant must first be approved by Landlord,
which approval shall not be unreasonably withheld, subject to the provisions of
Section 3 above. If Landlord approves such requested changes or revisions,
Landlord shall cause the Approved Final Drawings to be revised accordingly and
Landlord and Tenant shall initial each sheet of the Approved Final Drawings as
Revised and replace and attach a true and complete copy thereof to the Lease as
Exhibit B-1. Landlord and Tenant hereby covenant to each other to cooperate with
each other and to act reasonably in the preparation and approval of the Final
Drawings and the Approved Final Drawings.



5. Performance of Work. As soon as practicable after Tenant and Landlord
initial and attach to the Lease as Exhibit B-1 a true and complete copy of the
Approved Final Drawings, Landlord shall submit the Approved Final Drawings to
the governmental authorities having rights of approval over the Work and shall
apply for the necessary approvals and building permits. Subject to the
satisfaction of all conditions precedent and subsequent to its obligations under
this Exhibit B, and further subject to the provisions of Section 10 hereof, as
soon as practicable after Landlord or its representatives have received all
necessary approvals and building permits, Landlord will put the Approved Final
Drawings out for bid to several licensed and insured general contractors. The
Tenant Improvements shall be constructed by a general contractor selected by
Landlord and reasonably acceptable to Tenant (the “General Contractor”).
Landlord shall commence construction, or cause the commencement of construction
by the General Contractor, of the Tenant Improvements, as soon as practicable
after selection of the General Contractor. Except as hereinafter expressly
provided to the contrary, Landlord shall cause the performance of the Work using
the standard of materials shown in the Approved Final Drawings (“Building
Standards”). Landlord agrees that any such contract with the General Contractor




49









 







shall identify Tenant as a third-party beneficiary thereof and contain a
warranty of the Work of at least one (1) year from such General Contractor.
Prior to Landlord’s execution of any agreement with the General Contractor,
Landlord shall provide to Tenant a copy of such agreement. The terms of such
agreement shall be in Landlord’s sole and absolute discretion.



6. Substantial Completion. Landlord shall cause the General Contractor to
Substantially Complete (defined below) the Tenant Improvements in accordance
with the Approved Final Drawings by the Commencement Date of the Lease as set
forth in Section 2 of the Lease (the “Completion Date”), subject to delays due
to (a) acts or events beyond Landlord’s control including, but not limited to,
acts of God, earthquakes, strikes, lockouts, boycotts, casualties,
discontinuance of any utility or other service required for performance of the
Work, moratoriums, governmental agencies, delays on the part of governmental
agencies, delays in obtaining permits or approvals from governmental agencies
(exclusive of the initial building permit for the Premises) and inclement
weather (including rain delays), (b) the lack of availability or shortage of
specialized materials used in the construction of the Tenant Improvements, (c)
any matters beyond the control of Landlord, the General Contractor or any
subcontractors, (d) any changes required, after the issuance of the initial
building permit for the Premises by the fire department, building and/or
planning department, building inspectors or any other agency having jurisdiction
over the Building, the Work and/or the Tenant Improvements (except to the extent
such changes are directly attributable to Tenant’s use or Tenant’s particular
tenant improvements, in which event such delays are considered Tenant Delays)
(the events and matters set forth in Subsections (a), (b), (c) and (d) are
collectively referred to as “Force Majeure Delays”), or (e) any Tenant Delays
(defined in Section 7 below). The Tenant Improvements shall be deemed
substantially complete on the date that (i) the building officials of the
applicable governmental agency(s) issues its final approval of the construction
of the Tenant Improvements whether in the form of the issuance of a final
permit, certificate of occupancy or the written approval evidencing its final
inspection on the building permit(s), (ii) on which the General Contractor
delivers to both Landlord and Tenant a certificate of substantial completion
wherein the General Contractor shall certify to both Landlord and Tenant that
the Tenant Improvements have been substantially completed in accordance with the
Approved Final Drawings, or (iii) on which Tenant first takes occupancy of the
Premises and actually commences the conduct of its operations from the Premises,
whichever occurs first (“Substantial Completion”, or “Substantially Completed”,
or “Substantially Complete”). Tenant hereby acknowledges and agrees that the term
“Substantial Completion” of the Tenant Improvements as used herein will not include the
completion of any work associated with Tenant’s Installations, including without
limitation, Tenant’s storage requirements, Tenant’s data equipment and
telecommunication systems, and work related to any requirements of governmental
and regulatory agencies with respect to any of Tenant’s Installations. If the
Work is not deemed to be Substantially Completed on or before the scheduled
Completion Date, (i) Landlord agrees to use reasonable efforts to Substantially
Complete the Work as soon as practicable thereafter, (ii) the Lease shall remain
in full force and effect, (iii) Landlord shall not be deemed to be in breach or
default of the Lease or this Exhibit B as a result thereof and Landlord shall
have no liability to Tenant as a result of any delay in occupancy (whether for




50









 







damages, abatement of all or any portion of the Rent, or otherwise), and (iv)
except in the event of any Tenant Delays (which notwithstanding anything to the
contrary contained in the Lease will not affect the Commencement Date but will
extend the Completion Date without any penalty or liability to Landlord), the
Commencement Date and the Expiration Date of the Term of the Lease shall be
extended commensurately by the amount of time attributable to any Force Majeure
Delays. In such event, Landlord and Tenant shall execute a written amendment to
the Lease evidencing such extensions of time, substantially in the form of
Exhibit F to the Lease. Subject to the provisions of Section 10.2 of the Lease,
the Tenant Improvements shall belong to Landlord and shall be deemed to be
incorporated into the Premises for all purposes of the Lease, unless Landlord,
in writing, indicates otherwise to Tenant.



7. Tenant Delays. There shall be no extension of the scheduled Commencement
Date or Expiration Date of the Term of the Lease (as otherwise permissibly
extended in accordance with the provisions of Section 6 above) if the Work has
not been Substantially Completed by the scheduled Commencement Date due to any
delay attributable to Tenant and/or any of Tenant’s Representatives or Tenant’s
acts or omissions or otherwise relating to Tenant’s intended use of the Premises
(collectively, “Tenant Delays”), including, but not limited to, any of the
following described events or occurrences: (a) delays related to changes made or
requested by Tenant to the Work, the Final Drawings and/or the Approved Final
Drawings; (b) the failure of Tenant to furnish timely all or any plans,
drawings, specifications, finish details or other information required under
Sections 3 and 4 above; (c) the failure of Tenant to comply with the
requirements of Section 10 below; (d) Tenant’s requirements for special work or
materials, finishes, or installations other than the Building Standards or
Tenant’s requirements for special construction or phasing; (e) any changes
required by the fire department, building or planning department, building
inspectors or any other agency having jurisdiction over the Building, the Work
and/or the Tenant Improvements if such changes are directly attributable to
Tenant’s particular use or Tenant’s particular tenant improvements; (f) the
completion of any work associated with Tenant’s Installations, including without
limitation, Tenant’s storage requirements, Tenant’s data equipment and
telecommunication systems, and work related to any requirements of governmental
and regulatory agencies with respect to any of Tenant’s Installations; (g) the
performance of any additional work pursuant to a Change Request that is
initiated by Tenant; (h) the performance of work in or about the Premises by any
person, firm or corporation employed by or on behalf of Tenant during the period
prior to the Commencement Date, including, without limitation, any failure to
complete or any delay in the completion of such work; and/or (i) any and all
delays caused by or arising from the acts or omissions of Tenant and/or Tenant’s
Representatives, in any manner whatsoever, including, but not limited to, any
and all revisions to the Approved Final Drawings and Approved Final Drawings.
Notwithstanding anything to the contrary contained in the Lease, any delays in
the construction of the Tenant Improvements due to any Tenant Delays, shall in
no way extend or affect the date on which Tenant is required to commence paying
Rent under the terms of the Lease. It is the intention of the parties that all
of such delays will be considered Tenant Delays for which Tenant shall be wholly
and completely responsible for any and all consequences related to such delays,
including, without limitation, any costs and expenses attributable to increases in labor or materials.




51









 







8. Tenant Improvement Allowance. Subject to the provisions of this Exhibit B,
Landlord shall provide to Tenant an allowance for the planning and construction
of the Tenant Improvements including the Work to be performed in the Premises,
as described in the Initial Plans and the Approved Final Drawings, in the amount
of Two Million Four Hundred Seventy Six Thousand Four Hundred Twenty-Five and
00/100 Dollars ($2,476,425.00) (the “Tenant Improvement Allowance”) based upon
an allowance of Thirty-Five and 00/100 Dollars ($35.00) per rentable square foot
for approximately 70,755 rentable square feet of the Premises to be improved, as
described in the Initial Plans and the Approved Final Drawings. Tenant shall not
be entitled to any credit, abatement or payment from Landlord in the event that
the amount of the Tenant Improvement Allowance specified above exceeds the
actual Tenant Improvement Costs. The Tenant Improvement Allowance shall only be
used for tenant improvements typically installed by Landlord in research and
development buildings. The Tenant Improvement Allowance shall be the maximum
contribution by Landlord for the Tenant Improvement Costs and shall be subject
to the provisions of Section 10 below.



9. Tenant Improvement Costs. The Tenant Improvements’ cost (the “Tenant
Improvement Costs”) shall mean and include any and all costs and expenses of the
Work, including, without limitation, all of the following:




     (a) All costs of preliminary space planning and final architectural and
engineering plans and specifications (including, without limitation, the scope
of work, all plans and specifications, the Initial Plans, the Final Drawings and
the Approved Final Drawings) for the Tenant Improvements, and architectural
fees, engineering costs and fees, and other costs associated with completion of
said plans;



     (b) All engineering costs associated with completion of the State of
California energy utilization calculations under Title 24 legislation;



     (c) All costs of obtaining building permits and other necessary
authorizations and approvals from all local governmental authorities and all
other applicable agencies and entities having jurisdiction thereof;



     (d) All costs of interior design and finish schedule plans and
specifications including as-built drawings, if applicable;



     (e) All direct and indirect costs of procuring, constructing and installing
the Tenant Improvements in the Premises, including, but not limited to, the
construction fee for overhead and profit, the cost of all on-site supervisory
and administrative staff, office, equipment and temporary services rendered by
Landlord’s consultants (excluding the cost of any outside construction
management services employed by Landlord, if any, which costs shall be paid by
Landlord from Landlord’s management fee described in Section 9(j) below) and the
General Contractor in connection with construction of the Tenant Improvements,
and all labor (including overtime) and materials constituting the Work;



52









 





     (f) All fees payable to the General Contractor, architect and Landlord’s
engineering firm if they are required by Tenant to redesign any portion of the
Tenant Improvements following Tenant’s approval of the Approved Final Drawings;



     (g) Utility connection fees;



     (h) Inspection fees and filing fees payable to local governmental
authorities, if any;



     (i) All costs of all permanently affixed equipment and non-trade fixtures
provided for in the Approved Final Drawings, including the cost of installation;
and,



     (j) A construction management fee payable to Landlord in the amount of
three percent (3%) of all direct and indirect costs of procuring, constructing
and installing the Tenant Improvements in the Premises and the Building.


10. Change Requests. No changes or revisions to the Approved Final Drawings
shall be made by either Landlord or Tenant unless approved in writing by both
parties. Upon Tenant’s request and submission by Tenant (at Tenant’s sole cost
and expense) of the necessary information and/or plans and specifications for
any changes or revisions to the Approved Final Drawings and/or for any work
other than the Work described in the Approved Final Drawings (“Change Requests”)
and the approval by Landlord of such Change Request(s), which approval Landlord
agrees shall not be unreasonably withheld, Landlord shall perform the additional
work associated with the approved Change Request(s), at Tenant’s sole cost and
expense, subject, however, to the following provisions of this Section 11.
Prior to commencing any additional work related to the approved Change
Request(s), Landlord shall submit to Tenant a written statement of the cost of
such additional work and a proposed tenant change order therefor (“Change
Order”) in the standard form then in use by Landlord. Tenant shall execute and
deliver to Landlord such Change Order and shall pay the entire cost of such
additional work in the following described manner. Any costs related to such
approved Change Request(s) and Change Order shall be added to the Tenant
Improvement Costs and shall be paid for by Tenant as and with any Excess Tenant
Improvement Costs as set forth in Section 10 above. Any delays associated with
any Change Request or Change Order shall be considered a Tenant Delay. The
billing for such additional costs to Tenant shall be accompanied by evidence of
the amounts billed as is customarily used in the business. Costs related to
approved Change Requests and Change Orders shall include without limitation, any
architectural or design fees, Landlord’s construction fee for overhead and
profit, the cost of all on-site supervisory and administrative staff, office,
equipment and temporary services rendered by Landlord and/or Landlord’s
consultants, and the General Contractor’s price for effecting the change. If
Tenant fails to execute or deliver such Change Order, or to pay the costs
related thereto, then Landlord shall not be obligated to do any additional work
related to such approved Change Request(s) and/or Change Orders, and Landlord
may proceed to perform only the Work, as specified in the Approved Final
Drawings. Landlord shall equitably adjust the amount of the Tenant Improvement
Costs for any deletions in the scope of the Work.




53









 







11. Termination. If the Lease is terminated prior to the Completion Date, for
any reason due to the default of Tenant hereunder, in addition to any other
remedies available to Landlord under the Lease, Tenant shall pay to Landlord as
Additional Rent under the Lease, within five (5) days of receipt of a statement
therefor, any and all costs incurred by Landlord and not reimbursed or otherwise
paid by Tenant through the date of termination in connection with the Tenant
Improvements to the extent planned, installed and/or constructed as of such date
of termination, including, but not limited to, any costs related to the
demolition and/or removal of all or any portion of the Tenant Improvements and
restoration costs related thereto. Subject to the provisions of Section 10.2 of
the Lease, upon the expiration or earlier termination of the Lease, Tenant shall
not be required to remove the Tenant Improvements it being the intention of the
parties that the Tenant Improvements are to be considered incorporated into the
Building. Notwithstanding anything to the contrary contained herein, Landlord
shall have the right to terminate the Lease, as more particularly set forth in
Section 2.1 of the Lease, if Landlord is unable to obtain a building permit for
the Tenant Improvements , by December 31, 1999.



12. Tenant Access. Landlord, in Landlord’s reasonable discretion and upon
receipt of a written request from Tenant and written confirmation from the
General Contractor that such limited entry will be in harmony with the General
Contractor’s work schedule with respect to the Tenant Improvements, may
grant Tenant a license to have access to the Premises prior to the Completion
Date to allow Tenant to do other work required by Tenant to install the Tenant
Installations and to otherwise make the Premises ready for Tenant’s use and
occupancy (the “Tenant’s Pre-Occupancy Work”). It shall be a condition to the
grant by Landlord and continued effectiveness of such license that:




     (a) Tenant shall give to Landlord a written request to have such access not
less than ten (10) business days prior to the date on which such proposed access
will commence (the “Access Notice”). The Access Notice shall contain or be
accompanied by each of the following items, all in form and substance reasonably
acceptable to Landlord: (i) a detailed description of and schedule for Tenant’s
Pre-Occupancy Work; (ii) the names and addresses of all contractors,
subcontractors and material suppliers and all other representatives of Tenant
who or which will be entering the Premises on behalf of Tenant to perform
Tenant’s Pre-Occupancy Work or will be supplying materials for such work, and
the approximate number of individuals, itemized by trade, who will be present in
the Premises; (iii) copies of all contracts, subcontracts, material purchase
orders, plans and specifications pertaining to Tenant’s Pre-Occupancy Work; (iv)
copies of all licenses and permits required in connection with the performance
of Tenant’s Pre-Occupancy Work; and (v) certificates of insurance (in amounts
satisfactory to Landlord and with the parties identified in, or required by, the
Lease named as additional insureds).



     (b) Tenant shall indemnify, defend and hold the Indemnitees harmless from
and against any and all claims, liens, actions, costs, expenses (including
without limitation, attorneys’ fees and costs), penalties, fines, and damages
arising from or related to, in any manner whatsoever, the Tenant’s Pre-Occupancy
Work.



54









 





     (c) Such pre-term access by Tenant and Tenant’s employees, agents,
contractors, consultants, workmen, mechanics, suppliers and invitees shall be
subject to scheduling by Landlord.



     (d) Tenant’s employees, agents, contractors, consultants, workmen,
mechanics, suppliers and invitees shall fully cooperate, work in harmony and
not, in any manner, interfere with Landlord or Landlord’s agents or
representatives in performing the Work and any additional work pursuant to
approved Change Orders, Landlord’s work in other areas of the Building or the
Park, or the general operation of the Park. If at any time any such person
representing Tenant shall not be cooperative or shall otherwise cause or
threaten to cause any such disharmony or interference, including without
limitation, labor disharmony, and Tenant fails to immediately institute and
maintain corrective actions as directed by Landlord, then Landlord may revoke
such license upon twenty-four (24) hours’ prior written notice to Tenant.



     (e) Any such entry into and limited occupancy of the Premises or any
portion thereof by Tenant or any person or entity working for or on behalf of
Tenant shall be deemed to be subject to all of the terms, covenants, conditions
and provisions of the Lease, excluding only the covenant to pay Rent. Landlord
shall not be liable for any injury, loss or damage that may occur to any of
Tenant’s Pre-Occupancy Work made in or about the Premises or to any property
placed therein prior to the commencement of the Term of the Lease, the same
being at Tenant’s sole risk and liability. Tenant shall be liable to Landlord
for any damage to any portion of the Premises, the Work or the additional work
related to any approved Change Orders caused by Tenant or any of Tenant’s
employees, agents, contractors, consultants, workmen, mechanics, suppliers and
invitees. In the event that the performance of Tenant’s Pre-Occupancy Work
causes extra costs to be incurred by Landlord or requires the use of other
Building services, after delivery to Tenant of prior notice that such extra
costs are reasonably anticipated by Landlord to be incurred Tenant shall
promptly reimburse Landlord for such extra costs within ten (10) days after
receipt of written demand therefor and/or shall pay Landlord for such other
Building services at Landlord’s standard rates then in effect.


13. Lease Provisions; Conflict. The terms and provisions of the Lease, insofar
as they are applicable, in whole or in part, to this Exhibit B, are hereby
incorporated herein by reference, and specifically including all of the
provisions of Section 31 of the Lease. In the event of any conflict between the
terms of the Lease and this Exhibit B, the terms of this Exhibit B shall
prevail. Any amounts payable by Tenant to Landlord hereunder shall be deemed to
be Additional Rent under the Lease and, upon any default in the payment of same,
Landlord shall have all rights and remedies available to it as provided for in
the Lease.




55









 








Exhibit C to Lease Agreement

Rules & Regulations



This exhibit, entitled “Rules & Regulations”, is and shall constitute EXHIBIT C
to that certain Lease Agreement dated September 15, 1999 (the “Lease”), by and
between WIX/NSJ REAL ESTATE LIMITED PARTNERSHIP, a Delaware limited partnership
(“Landlord”) and Foundry Networks, Inc., a California corporation (“Tenant”) for
the leasing of certain premises located at 2100 Gold Street, San Jose,
California (the “Premises”). The terms, conditions and provisions of this
EXHIBIT C are hereby incorporated into and are made a part of the Lease. Any
capitalized terms used herein and not otherwise defined herein shall have the
meaning ascribed to such terms as set forth in the Lease:



1. No advertisement, picture or sign of any sort shall be displayed on or
outside the Premises or the Building without the prior written consent of
Landlord. Landlord shall have the right to remove any such unapproved item
without notice and at Tenant’s expense.



2. Tenant shall not use any method of heating or air conditioning other than
that supplied by Landlord without the prior written consent of Landlord, which
consent shall not be unreasonably withheld or delayed.



3. All window coverings installed by Tenant and visible from the outside of
the Building require the prior written approval of Landlord.



4. Tenant shall not use, keep or permit to be used or kept any foul or noxious
gas or substance or any flammable or combustible materials on or around the
Premises, the Building or the Park that are not in compliance with the
provisions of the Lease.



5. Tenant shall not alter any lock or install any new locks or bolts on any
door at the Premises without the prior consent of Landlord.



6. Tenant shall park motor vehicles in those general parking areas as
designated by Landlord except for loading and unloading. During those periods
of loading and unloading, Tenant shall not unreasonably interfere with traffic
flow within the Park and loading and unloading areas of other Tenants.



7. Tenant shall not disturb, solicit or canvas any occupant of the Building or
Park and shall cooperate to prevent same.



8. No person shall go on the roof without Landlord’s permission.



9. Business machines and mechanical equipment belonging to Tenant which cause
noise or vibration that may be transmitted to the structure of the Building, to
such a degree as to be objectionable to Landlord or other Tenants, shall be placed
and maintained by Tenant, at Tenant’s expense, on vibration eliminators or
other devices sufficient to eliminate noise or vibration.




56









 







10. All goods, including material used to store goods, delivered to the
Premises of Tenant shall be immediately moved into the Premises and shall not be
left in parking or receiving areas overnight.



11. Tractor trailers which must be unhooked or parked with dolly wheels beyond
the concrete loading areas must use steel plates or wood blocks under the dolly
wheels to prevent damage to the asphalt paving surfaces. No parking or storing
of such trailers will be permitted in the auto parking areas of the Park or on
streets adjacent thereto.



12. Forklifts which operate on asphalt paving areas shall not have solid rubber
tires and shall only use tires that do not damage the asphalt.



13. Tenant is responsible for the storage and removal of all trash and refuse.
All such trash and refuse shall be contained in suitable receptacles stored
behind screened enclosures at locations approved by Landlord.



14. Tenant shall not store or permit the storage or placement of goods, or
merchandise or pallets or equipment of any sort in or around the Premises, the
Building, the Park or any of the Common Areas of the foregoing. No displays or
sales of merchandise shall be allowed in the parking lots or other Common Areas.



15. Tenant shall not permit any animals, including, but not limited to, any
household pets, to be brought or kept in or about the Premises, the Building,
the Park or any of the Common Areas of the foregoing.



16. Tenant shall not permit any motor vehicles to be washed on any portion of
the Premises or in the Common Areas of the Park, nor shall Tenant permit
mechanical work or maintenance of motor vehicles to be performed on any portion
of the Premises or in the Common Areas of the Park.





57











 





Exhibit E

Hazardous Materials Disclosure Certificate



Your cooperation in this matter is appreciated. Initially, the information
provided by you in this Hazardous Materials Disclosure Certificate is necessary
for the Landlord (identified below) to evaluate and finalize a lease agreement
with you as Tenant. After a lease agreement is signed by you and the Landlord
(the “Lease Agreement”), on an annual basis in accordance with the provisions of
Section 29 of the signed Lease Agreement, you are to provide an update to the
information initially provided by you in this certificate. The information
contained in the initial Hazardous Materials Disclosure Certificate and each
annual certificate provided by you thereafter will be maintained in confidence
by Landlord subject to release and disclosure as required by (i) any lenders and
owners and their respective environmental consultants, (ii) any prospective
purchaser(s) of all or any portion of the property on which the Premises are
located, (iii) Landlord to defend itself or its lenders, partners or
representatives against any claim or demand, and (iv) any laws, rules,
regulations, orders, decrees, or ordinances, including, without limitation,
court orders or subpoenas. Any and all capitalized terms used herein, which are
not otherwise defined herein, shall have the same meaning ascribed to such term
in the signed Lease Agreement. Any questions regarding this certificate should
be directed to, and when completed, the certificate should be delivered to:



Landlord:



 





 





c/o Legacy Partners Commercial, Inc.

101 Lincoln Centre Drive, Fourth Floor

Foster City, California 94404

Attn:



 






Phone: (650) 571-2200



Name of (Prospective) Tenant:



 





Mailing Address:



 





 





Contact Person, Title and Telephone Number(s):



 





Contact Person for Hazardous Waste Materials Management and Manifests and
Telephone Number(s):



 






58









 







 





Address of (Prospective) Premises:



 






Length of (Prospective) Initial Term:



 





 





1. General Information:




     Describe the initial proposed operations to take place in, on, or about the
Premises, including, without limitation, principal products processed,
manufactured or assembled services and activities to be provided or otherwise
conducted. Existing Tenants should describe any proposed changes to on-going
operations.



 





 





2. Use, Storage and Disposal of Hazardous Materials




     2.1 Will any Hazardous Materials be used, generated, stored or
disposed of in, on or about the Premises? Existing Tenants should describe any
Hazardous Materials which continue to be used, generated, stored or disposed of
in, on or about the Premises.


Wastes                                Yes o     No o

Chemical Products             Yes o     No o

Other                                  Yes o     No o




     If Yes is marked, please explain:



 





 





 





     2.2 If Yes is marked in Section 2.1, attach a list of any Hazardous
Materials to be used, generated, stored or disposed of in, on or about the
Premises, including the applicable hazard class and an estimate of the
quantities of such Hazardous Materials at any given time; estimated annual
throughput; the proposed location(s) and method of storage (excluding nominal
amounts of ordinary household cleaners and janitorial supplies which are not
regulated by any Environmental Laws); and the proposed location(s) and method of
disposal for each Hazardous Material, including, the estimated frequency, and
the proposed contractors or subcontractors. Existing Tenants should attach a
list setting forth the information requested above and such list should include



59









 







actual data from on-going operations and the identification of any variations in
such information from the prior year’s certificate.



3. Storage Tanks and Sumps




     3.1 Is any above or below ground storage of gasoline, diesel,
petroleum, or other Hazardous Materials in tanks or sumps proposed in, on or
about the Premises? Existing Tenants should describe any such actual or
proposed activities.


Yes o     No o



If yes, please explain:



 





 





 






4. Waste Management




     4.1 Has your company been issued an EPA Hazardous Waste Generator I.D.
Number? Existing Tenants should describe any additional identification numbers
issued since the previous certificate.


Yes o     No o




     4.2 Has your company filed a biennial or quarterly reports as a
hazardous waste generator? Existing Tenants should describe any new reports
filed.


Yes o     No o



If yes, attach a copy of the most recent report filed.




5. Wastewater Treatment and Discharge




     5.1 Will your company discharge wastewater or other wastes to:


storm drain?                    sewer?



                                                            




surface water?                 no wastewater or other wastes discharged.



                                                            




          Existing Tenants should indicate any actual discharges. If so,
describe the nature of any proposed or actual discharge(s).



 





 





60









 





     5.2 Will any such wastewater or waste be treated before discharge?


Yes o     No o




              If yes, describe the type of treatment proposed to be conducted.
Existing Tenants should describe the actual treatment conducted.



 





 





6. Air Discharges




     6.1 Do you plan for any air filtration systems or stacks to be used in
your company’s operations in, on or about the Premises that will discharge into
the air; and will such air emissions be monitored? Existing Tenants should
indicate whether or not there are any such air filtration systems or stacks in
use in, on or about the Premises which discharge into the air and whether such
air emissions are being monitored.


Yes o     No o



If yes, please describe:



 





 





 






     6.2 Do you propose to operate any of the following types of equipment,
or any other equipment requiring an air emissions permit? Existing Tenants
should specify any such equipment being operated in, on or about the Premises.


Spray booth(s)                 Incinerator(s)



                                                            



Dip tank(s)                      Other (Please describe)



                                                            



Drying oven(s)                No Equipment Requiring Air Permits



                                                            



If yes, please describe:



 





 





 






7. Hazardous Materials Disclosures




61









 








     7.1 Has your company prepared or will it be required to prepare a
Hazardous Materials management plan (“Management Plan”) pursuant to Fire
Department or other governmental or regulatory agencies’ requirements? Existing
Tenants should indicate whether or not a Management Plan is required and has
been prepared.


Yes o     No o




If yes, attach a copy of the Management Plan. Existing Tenants
should attach a copy of any required updates to the Management Plan.



     7.2 Are any of the Hazardous Materials, and in particular chemicals,
proposed to be used in your operations in, on or about the Premises regulated
under Proposition 65? Existing Tenants should indicate whether or not there are
any new Hazardous Materials being so used which are regulated under Proposition
65.


Yes o     No o



If yes, please explain:



 





 





 






8. Enforcement Actions and Complaints




     8.1 With respect to Hazardous Materials or Environmental Laws, has
your company ever been subject to any agency enforcement actions, administrative
orders, or consent decrees or has your company received requests for
information, notice or demand letters, or any other inquiries regarding its
operations? Existing Tenants should indicate whether or not any such actions,
orders or decrees have been, or are in the process of being, undertaken or if
any such requests have been received.


Yes o     No o




     If yes, describe the actions, orders or decrees and any continuing
compliance obligations imposed as a result of these actions, orders or decrees
and also describe any requests, notices or demands, and attach a copy of all
such documents. Existing Tenants should describe and attach a copy of any new
actions, orders, decrees, requests, notices or demands not already delivered to
Landlord pursuant to the provisions of Section 29 of the signed Lease Agreement.



 





 





     8.2 Have there ever been, or are there now pending, any lawsuits



62









 







against your company regarding any environmental or health and safety concerns?


Yes o     No o




     If yes, describe any such lawsuits and attach copies of the complaint(s),
cross-complaint(s), pleadings and all other documents related thereto as
requested by Landlord. Existing Tenants should describe and attach a copy of
any new complaint(s), cross-complaint(s), pleadings and other related documents
not already delivered to Landlord pursuant to the provisions of Section 29 of
the signed Lease Agreement.



 





 





     8.3 Have there been any problems or complaints from adjacent Tenants,
owners or other neighbors at your company’s current facility with regard to
environmental or health and safety concerns? Existing Tenants should indicate
whether or not there have been any such problems or complaints from adjacent
Tenants, owners or other neighbors at, about or near the Premises.


Yes o     No o




     If yes, please describe. Existing Tenants should describe any such
problems or complaints not already disclosed to Landlord under the provisions of
the signed Lease Agreement.



 





 





9. Permits and Licenses




     9.1 Attach copies of all Hazardous Materials permits and licenses
including a Transporter Permit number issued to your company with respect to its
proposed operations in, on or about the Premises, including, without limitation,
any wastewater discharge permits, air emissions permits, and use permits or
approvals. Existing Tenants should attach copies of any new permits and
licenses as well as any renewals of permits or licenses previously issued.


The undersigned hereby acknowledges and agrees that (A) this Hazardous Materials
Disclosure Certificate is being delivered in connection with, and as required
by, Landlord in connection with the evaluation and finalization of a Lease
Agreement and will be attached thereto as an exhibit; (B) that this Hazardous
Materials Disclosure Certificate is being delivered in accordance with, and as
required by, the provisions of Section 29 of the Lease Agreement; and (C) that
Tenant shall have and retain full and complete responsibility and liability with
respect to any of the Hazardous Materials disclosed in the HazMat Certificate
notwithstanding Landlord’s/Tenant’s receipt and/or approval of such certificate.
Tenant further agrees that none of the following described acts or events shall
be construed or otherwise interpreted as either (a) excusing, diminishing or


63









 






otherwise limiting Tenant from the requirement to fully and faithfully perform
its obligations under the Lease with respect to Hazardous Materials, including,
without limitation, Tenant’s indemnification of the Indemnitees and compliance
with all Environmental Laws, or (b) imposing upon Landlord, directly or
indirectly, any duty or liability with respect to any such Hazardous Materials,
including, without limitation, any duty on Landlord to investigate or otherwise
verify the accuracy of the representations and statements made therein or to
ensure that Tenant is in compliance with all Environmental Laws; (i) the
delivery of such certificate to Landlord and/or Landlord’s acceptance of such
certificate, (ii) Landlord’s review and approval of such certificate, (iii)
Landlord’s failure to obtain such certificate from Tenant at any time, or (iv)
Landlord’s actual or constructive knowledge of the types and quantities of
Hazardous Materials being used, stored, generated, disposed of or transported on
or about the Premises by Tenant or Tenant’s Representatives. Notwithstanding
the foregoing or anything to the contrary contained herein, the undersigned
acknowledges and agrees that Landlord and its partners, lenders and
representatives may, and will, rely upon the statements, representations,
warranties, and certifications made herein and the truthfulness
thereof in entering into the Lease Agreement and the continuance thereof
throughout the term, and any renewals thereof, of the Lease Agreement.



I (print
name)                                         , acting with full authority to bind the
(proposed) Tenant and on behalf of the (proposed) Tenant, certify, represent and
warrant that the information contained in this certificate is true and correct.



(Prospective) Tenant:



By:



 





Title:



 





Date:



 







64











 





Exhibit F

First Amendment to Lease Agreement

Change of Commencement Date



This First Amendment to Lease Agreement (the “Amendment”) is made and entered
into to be effective as of ____________, by and between
__________________ (“Landlord”), and __________________
(“Tenant”), with reference to the following facts:



Recitals



A. Landlord and Tenant have entered into that certain Lease Agreement dated
____________ (the “Lease”), for the leasing of certain premises containing
approximately ____________ rentable square feet of space located at
__________________, California (the “Premises”) as such Premises are
more fully described in the Lease.



B. Landlord and Tenant wish to amend the Commencement Date of the Lease.



NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Landlord and Tenant hereby agree as follows:




     1. Recitals: Landlord and Tenant agree that the above recitals are true
and correct.



     2. The Commencement Date of the Lease shall be _______________.



     3. The last day of the Term of the Lease (the “Expiration Date”) shall
be _______________.



     4. The dates on which the Base Rent will be adjusted are:


for the period ____ to ____ the monthly Base Rent shall be $___________;

for the period ____ to ____ the monthly Base Rent shall be $______; and

for the period ____ to ____ the monthly Base Rent shall be $__________.




     5. Effect of Amendment: Except as modified herein, the terms and conditions
of the Lease shall remain unmodified and continue in full force and effect. In
the event of any conflict between the terms and conditions of the Lease and this
Amendment, the terms and conditions of this Amendment shall prevail.



     6. Definitions: Unless otherwise defined in this Amendment, all terms not
defined in this Amendment shall have the meaning set forth in the Lease.



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     7. Authority: Subject to the provisions of the Lease, this Amendment shall
be binding upon and inure to the benefit of the parties hereto, their respective
heirs, legal representatives, successors and assigns. Each party hereto and the
persons signing below warrant that the person signing below on such party’s
behalf is authorized to do so and to bind such party to the terms of this
Amendment.



     8. The terms and provisions of the Lease are hereby incorporated in this
Amendment.


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



[PROPERTY MANAGER: Please provide Tenant information and Word Processing will
complete the signature block]




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EXHIBIT G

TENANT’S INITIAL HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE



Your cooperation in this matter is appreciated. Initially, the information
provided by you in this Hazardous Materials Disclosure Certificate is necessary
for the Landlord (identified below) to evaluate and finalize a lease agreement
with you as Tenant. After a lease agreement is signed by you and the Landlord
(the “Lease Agreement”), on an annual basis in accordance with the provisions of
Section 29 of the signed Lease Agreement, you are to provide an update to the
information initially provided by you in this certificate. The information
contained in the initial Hazardous Materials Disclosure Certificate and each
annual certificate provided by you thereafter will be maintained in
confidentiality by Landlord subject to release and disclosure as required by (i)
any lenders and owners and their respective environmental consultants, (ii) any
prospective purchaser(s) of all or any portion of the property on which the
Premises are located, (iii) Landlord to defend itself or its lenders, partners
or representatives against any claim or demand, and (iv) any laws, rules,
regulations, orders, decrees, or ordinances, including, without limitation,
court orders or subpoenas. Any and all capitalized terms used herein, which are
not otherwise defined herein, shall have the same meaning ascribed to such term
in the signed Lease Agreement. Any questions regarding this certificate should
be directed to, and when completed, the certificate should be delivered to:




Landlord: WIX/NSJ REAL ESTATE LIMITED PARTNERSHIP,





	 	 	a Delaware limited partnership

c/o Legacy Partners Commercial, Inc.

101 Lincoln Centre Drive, Fourth Floor

Foster City, California 94404

Attn: Portfolio Vice President

Phone: (650) 571-2200




Name of (Prospective) Tenant: Foundry Networks, Inc.



Mailing Address:




	 	 	 
	 


	 	 
	 
	 	 
	 

	 	 





Contact Person, Title and Telephone Number(s):




	 	 	 
	 


	 	 





Contact Person for Hazardous Waste Materials Management and Manifests and

Telephone Number(s):




	 	 	 
	 


	 	 
	 
	 	 
	 

	 	 






Address of (Prospective) Premises:




	 	 	 
	 


	 	 





Length of (Prospective) Initial Term:



	 	 	 
	 
	 	
 
	 
	 	 







67









 








1. General Information:




     Describe the initial proposed operations to take place in, on, or about the
Premises, including, without limitation, principal products processed,
manufactured or assembled services and activities to be provided or otherwise
conducted. Existing Tenants should describe any proposed changes to on-going
operations.



	 	 	 
	 


	 	 
	 
	 	 
	 

	 	 






2. Use, Storage and Disposal of Hazardous Materials




     2.1 Will any Hazardous Materials be used, generated, stored or disposed of
in, on or about the Premises? Existing Tenants should describe any Hazardous
Materials which continue to be used, generated, stored or disposed of in, on or
about the Premises.


Wastes                               Yes o No o 

Chemical Products            Yes o No o 

Other                                   Yes o No o 


If Yes is marked, please explain:




	 	 	 
	 


	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 






     2.2 If Yes is marked in Section 2.1, attach a list of any Hazardous
Materials to be used, generated, stored or disposed of in, on or about the
Premises, including the applicable hazard class and an estimate of the
quantities of such Hazardous Materials at any given time; estimated annual
throughput; the proposed location(s) and method of storage (excluding nominal
amounts of ordinary household cleaners and janitorial supplies which are not
regulated by any Environmental Laws); and the proposed location(s) and method of
disposal for each Hazardous Material, including, the estimated frequency, and
the proposed contractors or subcontractors. Existing Tenants should attach a
list setting forth the information requested above and such list should include
actual data from on-going operations and the identification of any variations in
such information from the prior year’s certificate.



3. Storage Tanks and Sumps




     3.1 Is any above or below ground storage of gasoline, diesel, petroleum,



68









 




or other Hazardous Materials in tanks or sumps proposed in, on or about the
Premises? Existing Tenants should describe any such actual or proposed
activities.



Yes o No o 



If Yes is marked, please explain:




	 	 	 
	 


	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 






4. Waste Management




     4.1 Has your company been issued an EPA Hazardous Waste Generator I.D.
Number? Existing Tenants should describe any additional identification numbers

issued since the previous certificate.


Yes o No o 




     4.2 Has your company filed a biennial or quarterly reports as a hazardous
waste generator? Existing Tenants should describe any new reports filed.


Yes  o  No  o 



If yes, attach a copy of the most recent report filed.




5. Wastewater Treatment and Discharge




     5.1 Will your company discharge wastewater or other wastes to:


______ storm drain? _____ sewer?

______ surface water? _____ no wastewater or other wastes discharged.




     Existing Tenants should indicate any actual discharges. If so, describe
the nature of any proposed or actual discharge(s).



	 	 	 
	 


	 	 
	 
	 	 
	 

	 	 





5.2 Will any such wastewater or waste be treated before discharge?



Yes  o  No  o 




     If yes, describe the type of treatment proposed to be conducted. Existing
Tenants should describe the actual treatment conducted.



	 	 	 
	 


	 	 
	 
	 	 
	 

	 	 





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6. Air Discharges




     6.1 Do you plan for any air filtration systems or stacks to be used in
your company’s operations in, on or about the Premises that will discharge into
the air; and will such air emissions be monitored? Existing Tenants should
indicate whether or not there are any such air filtration systems or stacks in
use in, on or about the Premises which discharge into the air and whether such
air emissions are being monitored.


Yes  o  No  o 



If Yes is marked, please explain:




	 	 	 
	 


	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 






     6.2 Do you propose to operate any of the following types of equipment, or
any other equipment requiring an air emissions permit? Existing Tenants should
specify any such equipment being operated in, on or about the Premises.


______ Spray booth(s) ______ Incinerator(s)

______ Dip tank(s) ______ Other (Please describe)

______ Drying oven(s) ______ No Equipment Requiring Air Permits



If Yes is marked, please explain:




	 	 	 
	 


	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 






7. Hazardous Materials Disclosures




     7.1 Has your company prepared or will it be required to prepare a
Hazardous Materials management plan (“Management Plan”) pursuant to Fire
Department or other governmental or regulatory agencies’ requirements? Existing
Tenants should indicate whether or not a Management Plan is required and has
been prepared.


Yes  o  No  o 




     If yes, attach a copy of the Management Plan. Existing Tenants should
attach a copy of any required updates to the Management Plan.



     7.2 Are any of the Hazardous Materials, and in particular chemicals,
proposed to be used in your operations in, on or about the Premises regulated under Proposition 65? Existing Tenants should indicate whether or not there are



70









 




any new Hazardous Materials being so used which are regulated under Proposition 65.



Yes  o  No  o 




     If Yes is marked, please explain:



	 	 	 
	 


	 	 
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 






8. Enforcement Actions and Complaints




     8.1 With respect to Hazardous Materials or Environmental Laws, has your
company ever been subject to any agency enforcement actions, administrative
orders, or consent decrees or has your company received requests for
information, notice or demand letters, or any other inquiries regarding its
operations? Existing Tenants should indicate whether or not any such actions,
orders or decrees have been, or are in the process of being, undertaken or if
any such requests have been received.


Yes  o  No  o 




     If yes, describe the actions, orders or decrees and any continuing
compliance obligations imposed as a result of these actions, orders or decrees
and also describe any requests, notices or demands, and attach a copy of all
such documents. Existing Tenants should describe and attach a copy of any new
actions, orders, decrees, requests, notices or demands not already delivered to
Landlord pursuant to the provisions of Section 29 of the signed Lease Agreement.



	 	 	 
	 


	 	 
	 
	 	 
	 

	 	 






     8.2 Have there ever been, or are there now pending, any lawsuits against
your company regarding any environmental or health and safety concerns?


Yes  o  No  o 



          If yes, describe any such lawsuits and attach copies of the
complaint(s), cross-complaint(s), pleadings and all other documents related
thereto as requested by Landlord. Existing Tenants should describe and attach a
copy of any new complaint(s), cross-complaint(s), pleadings and other related
documents not already delivered to Landlord pursuant to the provisions of
Section 29 of the signed Lease Agreement.




	 	 	 
	 


	 	 
	 
	 	 
	 

	 	 






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     8.3 Have there been any problems or complaints from adjacent Tenants,
owners or other neighbors at your company’s current facility with regard to
environmental or health and safety concerns? Existing Tenants should indicate
whether or not there have been any such problems or complaints from adjacent
Tenants, owners or other neighbors at, about or near the Premises.


Yes  o  No  o 




     If yes, please describe. Existing Tenants should describe any such
problems or complaints not already disclosed to Landlord under the provisions of the signed Lease Agreement.



	 	 	 
	 


	 	 
	 
	 	 
	 

	 	 






9. Permits and Licenses




     9.1 Attach copies of all Hazardous Materials permits and licenses
including a Transporter Permit number issued to your company with respect to its
proposed operations in, on or about the Premises, including, without limitation,
any wastewater discharge permits, air emissions permits, and use permits or
approvals. Existing Tenants should attach copies of any new permits and
licenses as well as any renewals of permits or licenses previously issued.


The undersigned hereby acknowledges and agrees that (A) this Hazardous Materials
Disclosure Certificate is being delivered in connection with, and as required
by, Landlord in connection with the evaluation and finalization of a Lease
Agreement and will be attached thereto as an exhibit; (B) that this Hazardous
Materials Disclosure Certificate is being delivered in accordance with, and as
required by, the provisions of Section 29 of the Lease Agreement; and (C) that
Tenant shall have and retain full and complete responsibility and liability with
respect to any of the Hazardous Materials disclosed in the HazMat Certificate
notwithstanding Landlord’s/Tenant’s receipt and/or approval of such certificate.
Tenant further agrees that none of the following described acts or events shall
be construed or otherwise interpreted as either (a) excusing, diminishing or
otherwise limiting Tenant from the requirement to fully and faithfully perform
its obligations under the Lease with respect to Hazardous Materials, including,
without limitation, Tenant’s indemnification of the Indemnitees and compliance
with all Environmental Laws, or (b) imposing upon Landlord, directly or
indirectly, any duty or liability with respect to any such Hazardous Materials,
including, without limitation, any duty on Landlord to investigate or otherwise
verify the accuracy of the representations and statements made therein or to
ensure that Tenant is in compliance with all Environmental Laws; (i) the
delivery of such certificate to Landlord and/or Landlord’s acceptance of such
certificate, (ii) Landlord’s review and approval of such certificate, (iii)
Landlord’s failure to obtain such certificate from Tenant at any time, or (iv)
Landlord’s actual or constructive knowledge of the types and quantities of
Hazardous Materials being used, stored, generated, disposed of or transported on
or about the Premises by Tenant or Tenant’s Representatives. Notwithstanding
the foregoing or anything to the contrary contained herein, the undersigned




72









 







acknowledges and agrees that Landlord and its partners, lenders and
representatives may, and will, rely upon the statements, representations,
warranties, and certifications made herein and the truthfulness
thereof in entering into the Lease Agreement and the continuance thereof
throughout the term, and any renewals thereof, of the Lease Agreement.



I (print name)____________, acting with full authority to bind the
(proposed) Tenant and on behalf of the (proposed) Tenant, certify, represent and
warrant that the information contained in this certificate is true and correct.




73









 








(Prospective) Tenant:




	 	 	 	 	 
	By:

	 	 	 	 
	 

	 
	 	 
	 	Title: 
	 	 	 
	 

	 	 
	 	 
	 	Date:
	 	 	 
	 

	 	 
	 	 







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EXHIBIT H

SIGN CRITERIA




     TO BE ATTACHED



75









 





Exhibit I




SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT




This Subordination, Non-Disturbance and Attornment Agreement (this “Agreement”)
dated _________, 19___, is made among________________________, (“Tenant”)
_________________________________________________________ (“Landlord”), and
_________________________________________________________ (“Mortgagee”).




     WHEREAS, Mortgagee is the owner of a promissory note (herein, as it may
have been or may be from time to time renewed, extended, amended or
supplemented, called the “Note”) dated ____________, 19___, executed by
Landlord, payable to the order of Mortgagee, in the principal face amount of
$____________, bearing interest and payable as therein provided, secured by,
among other things, a Deed of Trust (herein, as it may have been or may be from
time to time renewed, extended, amended or supplemented, called the “Deed of
Trust”), recorded in the office of the County Clerk of ____________ County,
California, covering, among other property, the land (the “Land”) described in
Exhibit “A” which is attached hereto and incorporated herein by reference, and
the improvements (the “Improvements”) thereon (such Land and Improvements being
herein together called the “Property”);



     WHEREAS, Tenant and Landlord executed a certain Lease Agreement dated
____________, 19___, (herein, as it may from time to time be renewed, extended,
amended or supplemented, called the “Lease”), covering a portion of the Property
(said portion being herein referred to as the “Premises”); and



     WHEREAS, the term “Landlord” as used herein means the present landlord
under the Lease or, if the landlord’s interest is transferred to any manner, the
successor(s) or assign(s) occupying the position of landlord under the Lease at
the time in question;



     THEREFORE, in consideration of the mutual agreements herein, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:



     1. Subordination. Tenant agrees and covenants that the Lease and the
rights of Tenant thereunder, all of Tenant’s right, title and interest in and to
the property covered by the Lease, and any lease hereafter executed by Tenant
covering any part of the Property, are and shall be subordinate and inferior to
(a) the Deed of Trust and the rights of Mortgagee thereunder, and all right,
title and interest of Mortgagee in the Property, and (b) all other security
documents now or hereafter securing payment of any indebtedness of the Landlord
(or any prior Landlord) to Mortgagee which cover or affect the Property (the
“Security Documents”). This Agreement is not intended and shall not be construed
to subordinate the Lease to any mortgage, deed of trust or other security
document other than those referred to in the preceding sentence, securing the
indebtedness to Mortgagee. Without limitation of any other provision hereof,
Mortgagee may, at its option and without joinder or further consent of Tenant,
Landlord, or anyone else, at any time after the date hereof subordinate the lien
of the Deed of Trust (or any other lien or security interest held by Mortgagee



76









 




which covers or affects the Property) to the Lease by executing an instrument
which is intended for that purpose and which specifies such subordination; and,
in the event of any such election by Mortgagee to subordinate, Tenant will
execute any documents required to evidence such subordination; provided however,
notwithstanding that the Lease may be unilateral subordination by Mortgagee
hereafter be made superior to the lien of the Deed of Trust, the provisions of
the Deed of Trust relative to the rights of Mortgagee with respect to proceeds
arising from an eminent domain taking (including a voluntary conveyance by
Landlord) and/or insurance payable to reason of damage to or destruction of the
Premises shall be prior and superior to and shall control over any contrary
provisions in the Lease.




     2. Non-Disturbance. Mortgagee agrees that so long as the Lease is in full
force and effect and Tenant is not in default in the payment of rent, additional
rent or other payments or in the performance of any of the other terms,
covenants or conditions of the Lease on Tenant’s part to be performed (beyond
the period, if any, specified in the Lease within which Tenant may cure such
default),



     (a) Tenant’s possession of the Premises under the Lease shall not be
disturbed or interfered with by Mortgagee in the exercise of any of its rights
under the Mortgage, including any foreclosure or conveyance in lieu of
foreclosure, and



     (b) Mortgagee will not join Tenant as a party defendant for the purpose
of terminating Tenant’s interest and estate under the Lease in any proceeding
for foreclosure of the Mortgage.



     3. Attornment.



     (a) Tenant covenants and agrees that in the event of foreclosure of the
Mortgage, whether by power of sale or by court action, or upon a transfer of the
Property by conveyance in lieu of foreclosure (the purchaser at foreclosure or
the transferee in lieu of foreclosure, including Mortgagee if it is such
purchaser or transferee, being herein called “New Owner”), Tenant shall attorn
to the New Owner as Tenant’s new landlord, and agrees that the Lease shall
continue in full force and effect as a direct lease between Tenant and New Owner
upon all of the terms, covenants, conditions and agreements set forth in the
Lease and this Agreement, except for provisions which are impossible for
Mortgagee to perform; provided, however, that in no event shall the New Owner
be:



     (i) liable for any act, omission, default, misrepresentation, or
breach of warranty, of any previous landlord (including Landlord) or obligations
accruing prior to New Owner’s actual ownership of the property; (other than for
a default by Landlord arising from Landlord’s failure to perform any maintenance
or repair obligation required of Landlord under the Lease if, and only if, (i)
Tenant has provided New Owner with written notice of such default and an
opportunity to cure the same in accordance with the requirements of Section 5



77









 




hereof prior to exercising any of Tenant’s rights under the Lease, (ii) Tenant
duly exercises its rights under the Lease to cure such default by making such
repairs or performing such maintenance to the Premises or the Building on behalf
of Landlord (1) in compliance with all applicable laws (2) with materials of a
quality and grade at least as equal to that in place as of the date of delivery
of the Premises to Tenant, and (3) without interference with the rights of other
tenants of the Property, (iii) the total liability for such default shall not
exceed the fair and reasonable cost to Tenant to make such repairs or perform
such maintenance on Landlord’s behalf);




     (ii) subject to any offset, defense, claim or counterclaim which
Tenant might be entitled to assert against any previous landlord (including
Landlord); except with respect to offsets arising from Tenant’s repairs to or
maintenance of the Premises or the Building in accordance with subparagraph (i)
above;



     (iii) bound by any payment of rent, additional rent or other
payments, made by Tenant to any previous landlord (including Landlord) for more
than one (1) month in advance;



     (iv) bound by any amendment, or modification of the Lease
hereafter made, or consent by any previous landlord (including Landlord) under
the Lease to any assignment or sublease hereafter granted, without the written
consent of Mortgagee; or



     (v) liable for any deposit that Tenant may have given to any
previous landlord (including Tenant) which has not, as such, been transferred to
New Owner.



     (b) The provisions of this Agreement regarding attornment by Tenant
shall be self-operative and effective without the necessity of execution of any
new lease or other document on the part of any party hereto or the respective
heirs, legal representatives, successors or assigns of any such party. Tenant
agrees, however, to execute and deliver at any time and from time to time, upon
the request of Landlord or of any holder(s) of any of the indebtedness or other
obligations secured by the Mortgage, any instrument or certificate which, in the
reasonable judgement of Landlord or of such holder(s), may be necessary or
appropriate in any such foreclosure proceeding or otherwise to evidence such
attornment, including, if requested, a new lease of the Premises on the same
terms and conditions as the Lease for the then unexpired term of the Lease
including the Extended Term, if any.



     4. Estoppel Certificate. Tenant agrees to execute and deliver from time
to time, upon the request of Landlord or of any holder(s) of any of the
indebtedness or other obligations secured by the Mortgage, a certificate
regarding the status of the Lease in a form reasonably acceptable to Tenant,
consisting of statements, if true (or if not, specifying why not), (a) that the
Lease is in full force and effect, (b) the date through which rentals have been
paid, (c) the date of the commencement of the term of the Lease, (d) the nature
of any amendments or modifications of the Lease, (e) that no default, or state
of facts which with the passage of time or notice (or both) would constitute a



78









 




default, exists under the Lease, and (f) such other matters as may be reasonable
requested.




     5. Acknowledgement and Agreement by Tenant. Tenant acknowledges and
agrees as follows:



     (a) Tenant acknowledges that Landlord will execute and deliver to
Mortgagee in connection with the financing of the Property the Deed of Trust
which assigns the rent and all other sums due under the Lease to Mortgagee.
Tenant hereby expressly consents to such [absolute assignment] [collateral
assignment] and agrees that such assignment shall, in all respects, be superior
to any interest Tenant has in the Lease of the Property, subject to the
provision of the Agreement. Tenant will not amend, alter, terminate, or waive
any provision of, or consent to the amendment, alteration, termination or waiver
of any provision of the Lease without the prior written consent of Mortgagee,
and no termination of the Lease, whether pursuant to the terms of the Lease or
otherwise, will be effective without prior written consent of Mortgagee. Tenant
shall not prepay any rents or other sums due under the lease for more than one
(1) month in advance of the due date therefor. Tenant acknowledges that
Mortgagee will rely upon this instrument in connection with such financing.



     (b) Mortgagee, in making any disbursements to Landlord, is under no
obligation or duty to oversee or direct the application of the proceeds of such
disbursements, and such proceeds may be used by Landlord for purposes other than
improvement of the Property.



     (c) From and after the date hereof, in the event of any act or omission
by Landlord which would give Tenant the right, either immediately or after the
lapse of time, to terminate the Lease or to claim a partial or total eviction,
Tenant will not exercise any such right (i) until it has given written notice of
such act or omission to the Mortgagee; and (ii) until the same period of time as
is given to Landlord under the Lease to cure such act or omission shall have
elapsed following such giving of notice to Mortgagee and following tile time
when Mortgagee shall have become entitled under the Mortgage to remedy the same,
but in any event 30 days after receipt of such notice or such longer period of
time as may be necessary to cure or remedy such default, act, or omission
including such period of time necessary to obtain possession of the Property and
thereafter cure such default, act, or omission, during which period of time
Mortgagee shall be permitted to cure or remedy such default; act or omission;
provided, however that Mortgagee shall have no duty or obligation to cure or remedy any
beach of default. It is specifically agreed that Tenant shall not, as to
Mortgagee, require cure of any such default which is personal to Landlord, and
therefore not susceptible to cure by Mortgagee.



     (d) In the event that Mortgagee notifies Tenant of a default under the
Mortgage, Note, or Security Documents and demands that Tenant pay its rent and
all other sums due under the Lease directly to Mortgagee, Tenant shall honor
such demand and pay the full amount of its rent and all other sums due under the
Lease directly to Mortgagee or as otherwise required pursuant to such notice
beginning with the payment next due after such notice of default, without
inquiry as to whether a default actually exists under the Mortgage, Security



79









 




Documents or otherwise in connection with the Note, and notwithstanding any
contrary instructions of or demands from Landlord.




     (e) Tenant shall send a copy of any notice or statement under the Lease
to Mortgagee at the same time such notice or statement is sent to Landlord.



     (f) Tenant has no right or option of any nature whatsoever, whether
pursuant to the Lease or otherwise, to purchase the Premises or the Property, or
any portion thereof or any interest therein, and to the extent that Tenant has
had, or hereafter acquires, any such right or option, same is hereby
acknowledged to be subject and subordinate to the Mortgage and is hereby waived
and released as against Mortgagee.



     (g) This Agreement satisfies any condition or requirement in the Lease
relating to the granting of a non-disturbance agreement and Tenant waives any
requirement to the contrary in the Lease.



     (h) Mortgagee and any New Owner shall have no liability to Tenant or
any other party for any conflict between the provisions of the Lease and the
provisions of any other lease affecting the Property, including, but not limited
to, any provisions relating to exclusive or non-conforming uses or rights,
renewal options and options to expand, and in the event of such a conflict,
Tenant shall have no right to cancel the Lease or take any other remedial action
against Mortgagee or New Owner, or against any other party for which Mortgagee
or any New Owner would be liable.



     (i) Mortgagee and any New Owner shall have no obligation nor incur any
liability with respect to the erection or completion of the improvements in
which the Premises are located or for completion of the Premises or any
improvements for Tenant’s use and occupancy, either at the commencement of the
term of the Lease or upon any renewal or extension thereof or upon the addition
of additional space, pursuant to any expansion rights contained in the Lease.



     (j) Mortgagee and any New Owner shall have no obligation nor incur any
liability with respect to any warranties of any nature whatsoever, whether
pursuant to the Lease or otherwise, including, without limitation, any
warranties respecting use, compliance with zoning, Landlord’s title, Landlord’s
authority, habitability, fitness for purpose or possession.



     (k) In the event that Mortgagee or any New Owner shall acquire title to
the Premises or the Property, Mortgagee or such New Owner shall have no
obligation, nor incur any liability, beyond Mortgagee’s or New Owner’s then
equity interest, if any, in the Property or the Premises, and Tenant shall look
exclusively to such equity interest or Mortgagee or New Owner, if any, for the
payment and discharge of any obligations imposed upon Mortgagee or New Owner
hereunder or under the Lease or for recovery of any judgement from Mortgagee, or
New Owner, and in no event shall Mortgagee, New Owner, nor any of their
respective officers, directors, shareholders, agents, representatives, servants,
employees or partners ever by personally liable for such judgement.



     (l) Nothing herein contained is intended, nor shall it be construed, to



80









 




abridge or adversely affect any right or remedy of Landlord under the Lease in
the event of any default by Tenant in the payment of rent and/or any other sums
due under the Lease or in the performance of any of the other terms, covenants
or conditions of the Lease on Tenant’s part to be performed.




     (m) Landlord has not agreed to any abatement of rent or other sums or
period of “free rent” for the Premises unless same is specifically provided in
the Lease, and Tenant agrees that in the event Mortgagee, or any New Owner
becomes the owner of the Property, no agreement for abatement of rent or any
other sum not specifically provided in the Lease will be binding on Mortgagee or
New Owner.



     (n) Tenant have never permitted, and will not permit, the generation,
treatment, storage or disposal of any hazardous substance as defined under
federal, state, or local law, on the Premises or Property except for such
substances of a type and only in a quantity normally used in connection with the
occupancy or operation of buildings (such a non-flammable cleaning fluids and
supplies normally used in the day to day operation of first class [office or
retail establishments]) which substances are being held, stored, and used in
strict compliance with federal, state, and local laws. Tenant shall be solely
responsible for and shall reimburse Landlord for any loss, liability, claim or
expense, including without limitation, cleanup and all other expenses, that
Landlord may incur by reason of Tenant’s violation of the requirements of this
Paragraph 5(n).



     6. Acknowledgement and Agreement by Landlord. Landlord, as landlord under
the Lease and grantor under the Mortgage, acknowledges and agrees for itself and
its heirs, representative, successors and assigns, that: (a) this Agreement does
not constitute a waiver by Mortgagee of any of its rights under the Mortgage,
Note, or Security Documents, or in any way release Landlord from its obligations
to comply with the terms, provisions, conditions, covenants, agreements and
clauses of the Mortgage, Note, or Security Documents; (b) the provisions of the
Mortgage, Note, or Security Documents remain in full force and effect and must
be complied with by Landlord; and (c) Tenant is hereby authorized to pay its
rent and all other sums due under the Lease directly to Mortgagee upon receipt
of a notice as set forth in paragraph 5(d) above from Mortgagee and that Tenant
is not obligated to inquire as to whether a default actually exists under the
Mortgage, Security Documents or otherwise is connection with the Note. Landlord
hereby releases and discharges Tenant of and from any liability to Landlord
resulting from Tenant’s payment to Mortgagee in accordance with this Agreement.
Landlord represents and warrants to Mortgagee that a true and complete copy of
the Lease has been delivered by Landlord to Mortgagee.



     7. Lease Status. Landlord and Tenant certify to Mortgagee that neither
Landlord nor Tenant has knowledge of any default on the part of the other under
the Lease, and the Lease is bona fide and contains all of the agreements of the
parties thereto with respect to the letting of the Premises and that all of the
agreements and provisions therein contained are in full force and effect.



     8. Notices. All notices, requests, consents, demands and other
communications required or which any parties desires to give hereunder shall be



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in writing and shall be deemed sufficiently given or furnished if delivered by
personal delivery, by telegram, telex, or facsimile, by expedited delivery
service with proof of delivery, or by registered or certified United States
mail, postage prepaid, at the addresses specified at the end of this Agreement
(unless changed by similar notice in writing given by the particular party whose
address is to be changed). Any such notice or communication shall be deemed to
have been given either at the time of personal delivery or, in the case of
delivery service or mail, as of the date of first attempted delivery at the
address and in the manner provided herein, or, in the case of telegram, telex or
facsimile, upon receipt. Notwithstanding the foregoing, no notice of change of
address shall be effective except upon receipt. This Paragraph 8 shall not be
construed in any way to affect or impair any waiver of notice or demand provided
in this Agreement or in the lease or in any document evidencing, securing or
pertaining to the loan evidenced by the Note or to require giving of
notice or demand to or upon any person in any situation or for any reason.




     9. Miscellaneous.



     (a) This Agreement supersedes any inconsistent provision of the Lease.



     (b) Nothing contained in this Agreement shall be construed to derogate
from in any way impair, or affect the lien, security interest or provisions of
the Mortgage, Note, or Security Documents.



     (c) This Agreement shall inure to the benefit of the parties hereto,
their respective successors and permitted assigns, and any New Owner, and its
heirs, personal representatives, successors and assigns; provided, however, that
in the event of the assignment or transfer of the interest of Mortgagee, all
obligations and liabilities of the assigning Mortgagee under this Agreement
shall terminate, and thereupon all such obligations and liabilities shall be the
responsibility of the party to whom Mortgagee’s interest is assigned or
transferred; and provided further that the interest of Tenant under this
Agreement may not be assigned or transferred without the prior written consent
of Mortgagee.



     (d) THIS AGREEMENT AND, ITS VALIDITY, ENFORCEMENT AND INTERPRETATION
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA, AND APPLICABLE UNITED
STATES FEDERAL LAW EXCEPT ONLY TO THE EXTENT, IF ANY, THAT THE LAWS OF THE STATE
IN WHICH THE PROPERTY IS LOCATED NECESSARILY CONTROL.



     (e) The words “herein”, “hereof”, hereunder” and other similar
compounds of the word “here” as used in this Agreement refer to this entire
Agreement and not to any particular section or provision.



     (f) This Agreement may not be modified orally or in any manner other
than by an agreement in writing signed by the parties hereto or their respective
successors in interest.



     (g) If any provision of the Agreement shall be held to be invalid,
illegal, or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not apply to or affect any other provision hereof, but



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this Agreement shall be construed as if such invalidity, illegibility, or
unenforceability did not exist.




     (h) If any bankruptcy proceedings shall hereafter commence with respect
to Landlord, and if the Lease is rejected by the trustee pursuant to section 365
(L) of the United States Bankruptcy Code, Tenant agrees with Mortgagee (i) not
to treat such lease as terminated, and (ii) to remain in possession of the
Premises.



     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.




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	Address or Mortgagee:	 	Mortgagee:	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Its:	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Date:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Attention:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Address of Tenant:	 	Tenant:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Its:	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Date:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	Attention:
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Address of Landlord:	 	Landlord:	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	c/o Legacy Partners Commercial, Inc.	 	 	 	 	 	 
	101 Lincoln Centre Drive, Fourth Floor	 	 	 	 	 	 
	Foster City, California 94404	 	 	 	 	 	 
	Attention:	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Its:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	Date:	 	 	 	 
	 

	 	 	 	 	 	 	 	 





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Addendum 1

Option to Extend the Lease




This Addendum 1 (“Addendum”) is incorporated as a part of that certain Lease
Agreement dated September15, 1999 (the “Lease”), by and between Foundry
Networks, Inc., a California corporation (“Tenant”), and WIX/NSJ REAL ESTATE
LIMITED PARTNERSHIP, a Delaware limited partnership (“Landlord”), for the
leasing of those certain premises located at 2100 Gold Street, San Jose,
California as more particularly described in Exhibit A to the Lease (the
“Premises”). Any capitalized terms used herein and not otherwise defined herein

shall have the meaning ascribed to such terms as set forth in the Lease.



1. Grant of Extension Option. Subject to the provisions, limitations and
conditions set forth in Paragraph 5 below, Tenant shall have an Option
(“Option”) to extend the term of the Lease for five (5) years (the “Extended
Term”).



2. Tenant’s Option Notice. If Landlord does not receive written notice from
Tenant of its exercise of this Option on a date which is not more than two
hundred seventy (270) days nor less than one hundred eighty (180) days prior to
the end of the initial term of the Lease (the “Option Notice”), all rights under
this Option shall automatically terminate and shall be of no further force or
effect.



3. Establishing the Initial Monthly Base Rent for the Extended Term. The
initial monthly Base Rent for the Extended Term shall be the then current market
rent for similar space within the competitive market area of the Premises (the
“Fair Rental Value”). “Fair Rental Value” of the Premises means the fair market
rental value of the Premises as of the commencement of the Extended Term, taking
into consideration all relevant factors, including length of term, the uses
permitted under the Lease, the quality, size, design and location of the
Premises, including the condition and value of existing tenant improvements,
free rent periods, tenant improvement allowances, brokerage commissions, and the
monthly base rental paid by tenants for premises comparable to the
Premises, and located within the competitive market area of the Premises as
reasonably determined by Landlord.



If Landlord and Tenant are unable to agree on the Fair Rental Value for either
the Extended Term, within ten (10) days of receipt by Landlord of the Option
Notice for the Extended Term, Landlord and Tenant each, at its cost and by
giving notice to the other party, shall appoint a competent and disinterested
commercial real estate broker (hereinafter “broker”) with at least five (5)
years’ full-time commercial real estate brokerage experience in the geographical
area of the Premises to set the Fair Rental Value for the Extended Term. If
either Landlord or Tenant does not appoint a broker within ten (10) days after
the other party has given notice of the name of its broker, the single broker



85









 





appointed shall be the sole broker and shall set the Fair Rental Value for the
Extended Term. If two (2) brokers are appointed by Landlord and Tenant as stated
in this paragraph, they shall meet promptly and attempt to set the Fair Rental
Value. If the two (2) brokers are unable to agree within ten (10) days after the
second broker has been appointed, they shall attempt to select a third broker,
meeting the qualifications stated in this paragraph within ten (10) days after
the last day the two (2) brokers are given to set the Fair Rental Value. If they
are unable to agree on the third broker, either Landlord or Tenant by giving ten
(10) days’ notice to the other party, can apply to the Presiding Judge of the
Superior Court of the county in which the Premises is located for the selection
of a third broker who meets the qualifications stated in this paragraph.
Landlord and Tenant each shall bear one-half (1/2) of the cost of appointing the
third broker and of paying the third broker’s fee. The third broker, however
selected, shall be a person who has not previously acted in any capacity for
either Landlord or Tenant. Within fifteen (15) days after the selection of the
third broker, the third broker shall select one of the two Fair Rental Values
submitted by the first two brokers as the Fair Rental Value for the Extended
Term. Such third broker determination shall be binding on Landlord and Tenant.
If either of the first two brokers fails to submit their opinion of the Fair
Rental Value, then the single Fair Rental Value submitted shall automatically be
the monthly Base Rent for the Extended Term.



Upon determination of the initial monthly Base Rent for the Extended Term in
accordance with the terms outlined above, Landlord and Tenant shall immediately
execute, an amendment to this Lease. Such amendment shall set forth among other
things, the initial monthly Base Rent for the Extended Term and the actual
commencement date and expiration date of the Extended Term. Tenant shall have no
other right to extend the term of the Lease under this Addendum unless Landlord
and Tenant otherwise agree in writing.



4. Condition of Premises and Brokerage Commissions for the Extended Term. If
Tenant timely and properly exercises this Option, in strict accordance with the
terms contained herein: (1) Tenant shall accept the Premises in its then “As-
Is” condition and, accordingly, Landlord shall not be required to perform any
additional improvements to the Premises; and (2) Tenant hereby agrees that it
will be solely responsible for any and all brokerage commissions and finder’s
fees payable to any broker now or hereafter procured or hired by Tenant or who
otherwise claims a commission based on any act or statement of Tenant (“Tenant’s
Broker”) in connection with the Option; and Tenant hereby further agrees that
Landlord shall in no event or circumstance be responsible for the payment of any
such commissions and fees to Tenant’s Broker.



5. Limitations On, and Conditions To, Extension Option. This Option is
personal to Tenant and may not be assigned, voluntarily or involuntarily,
separate from or as part of the Lease. At Landlord’s option, all rights of
Tenant under this Option shall terminate and be of no force or effect if any of
the following individual events occur or any combination thereof occur: (1)
Tenant has been in material default more than twice during the initial term of
the Lease, or is in material default of any provision of the Lease on the date



86









 





of the Option Notice; and/or (2) Tenant has assigned its rights and obligations
under all or part of the Lease or Tenant has subleased more than ten percent
(10%) of the Premises, except to a Related Entity; and/or (3) Between the Lease
Date and the time the Option Notice is delivered there has occurred a material
and adverse change in Tenant’s financial condition; and/or (4) Tenant has failed
to properly exercise this Option in a timely manner in strict accordance with
the provisions of this Addendum; and/or (5) Tenant no longer has possession of
all or any part of the Premises under the Lease (unless a Related Entity has
possession of the Premises), or if the Lease has been terminated earlier,
pursuant to the terms of the Lease.



6. Time is of the Essence. Time is of the essence with respect to each and
every time period described in this Addendum.



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Addendum 2

Right of First Refusal




This Addendum 2 is incorporated as a part of that certain Lease Agreement dated
September 15, 1999, by and between Foundry Networks, Inc., a
California corporation (“Tenant”), and WIX/NSJ REAL ESTATE LIMITED PARTNERSHIP,
a Delaware limited partnership corporation (“Landlord”), for the Premises
located at 2100 Gold Street, San Jose, California 95002 (the “Premises”).



During the initial term of the Lease only, Tenant shall have a one time First
Right to Lease (“Right of First Refusal”) the space within the Building commonly
known as 2130 Gold Street, San Jose, California, and containing approximately
26,000 square feet on the first (1st) floor of the Building, located at 2130
Gold Street, San Jose, California, as outlined on Exhibit A attached hereto and
made a part hereof (the “Expansion Space”). Tenant’s right, as granted herein,
is subject to the following conditions:



     i. Tenant’s Right of First Refusal shall be void if, at any time, Tenant
has been, more than two (2) times during the Term of this Lease in material
default or is currently in material default in the performance of any of its
obligations under the Lease;



     ii. Tenant’s Right of First Refusal shall be subject to Landlord’s review
and approval of Tenant’s then current financial condition; and



     iii. Tenant’s Right of First Refusal shall be subject to the rights of the
then existing tenant pursuant to its existing Lease, as such Lease may be
modified, amended or extended.



Provided the above conditions are satisfied, and upon Landlord’s receipt of a
bona fide third party offer to lease the Expansion Space which Landlord is
willing to accept (other than by the current occupant of the Expansion Space),
Landlord will notify Tenant in writing (i) that Landlord has received such third
party offer and (ii) of all material terms of such third party offer to lease
such Expansion Space to Tenant. Tenant shall have three (3) business days after
delivery of such notice to notify Landlord in writing (“Election Notice”) of
Tenant’s election to lease all the Expansion Space upon those terms. If Tenant
fails to notify Landlord of Tenant’s election to lease the Expansion Space
within the time specified herein, it shall be deemed that (i) Tenant has elected
not to lease said Expansion Space; (ii) Landlord may thereafter enter into a
Lease Agreement with a third party; and (iii) all rights under this Right of
First Refusal shall terminate and be of no further force and effect. Time is of
the essence herein.



In the event Tenant exercises this Right of First Refusal as herein provided,
Tenant shall provide Landlord a $25,000.00 nonrefundable deposit, and the
parties shall have ten (10) working days after Landlord receives the Election
Notice from Tenant in which to execute an amendment to the Lease setting forth
the agreed-upon terms. Upon full execution of an amendment for the Expansion



88









 





Space, the nonrefundable deposit shall be credited toward Rent or security
deposit for the Expansion Space, as agreed between the parties.



This Right of Refusal shall terminate and be of no force and effect if, at any
time, the Premises are being subleased at the time of this Right of First
Refusal is offered, except to a Related Entity.



Upon determination of the initial monthly Base Rent for the Extended Term in
accordance with the terms outlined above, Landlord and Tenant shall immediately
execute, an amendment to this Lease. Such amendment shall set forth among other
things, the initial monthly Base Rent for the Extended Term and the actual
commencement date and expiration date of the Extended Term. Tenant shall have no
other right to extend the term of the Lease under this Addendum unless Landlord
and Tenant otherwise agree in writing.



4. Condition of Premises and Brokerage Commissions for the Extended Term. If
Tenant timely and properly exercises this Option, in strict accordance with the
terms contained herein: (1) Tenant shall accept the Premises in its then “As-
Is” condition and, accordingly, Landlord shall not be required to perform any
additional improvements to the Premises; and (2) Tenant hereby agrees that it
will be solely responsible for any and all brokerage commissions and finder’s
fees payable to any broker now or hereafter procured or hired by Tenant or who
otherwise claims a commission based on any act or statement of Tenant (“Tenant’s
Broker”) in connection with the Option; and Tenant hereby further agrees that
Landlord shall in no event or circumstance be responsible for the payment of any
such commissions and fees to Tenant’s Broker.



5. Limitations On, and Conditions To, Extension Option. This Option is
personal to Tenant and may not be assigned, voluntarily or involuntarily,
separate from or as part of the Lease. At Landlord’s option, all rights of
Tenant under this Option shall terminate and be of no force or effect if any of
the following individual events occur or any combination thereof occur: (1)
Tenant has been in material default more than twice during the initial term of
the Lease, or is in material default of any provision of the Lease on the date
of the Option Notice; and/or (2) Tenant has assigned its rights and obligations
under all or part of the Lease or Tenant has subleased more than ten percent
(10%) of the Premises, except to a Related Entity; and/or (3) Between the Lease
Date and the time the Option Notice is delivered there has occurred a material
and adverse change in Tenant’s financial condition; and/or (4) Tenant has failed
to properly exercise this Option in a timely manner in strict accordance with
the provisions of this Addendum; and/or (5) Tenant no longer has possession of
all or any part of the Premises under the Lease (unless a Related Entity has
possession of the Premises), or if the Lease has been terminated earlier,
pursuant to the terms of the Lease.



6. Time is of the Essence. Time is of the essence with respect to each and
every time period described in this Addendum.





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Addendum 2

Right of First Refusal




This Addendum 2 is incorporated as a part of that certain Lease Agreement dated
September 15, 1999, by and between Foundry Networks, Inc., a
California corporation (“Tenant”), and WIX/NSJ REAL ESTATE LIMITED PARTNERSHIP,
a Delaware limited partnership corporation (“Landlord”), for the Premises
located at 2100 Gold Street, San Jose, California 95002 (the “Premises”).



During the initial term of the Lease only, Tenant shall have a one time First
Right to Lease (“Right of First Refusal”) the space within the Building commonly
known as 2130 Gold Street, San Jose, California, and containing approximately
26,000 square feet on the first (1st) floor of the Building, located at 2130
Gold Street, San Jose, California, as outlined on Exhibit A attached hereto and
made a part hereof (the “Expansion Space”). Tenant’s right, as granted herein,
is subject to the following conditions:



     i. Tenant’s Right of First Refusal shall be void if, at any time, Tenant
has been, more than two (2) times during the Term of this Lease in material
default or is currently in material default in the performance of any of its
obligations under the Lease;



     ii. Tenant’s Right of First Refusal shall be subject to Landlord’s review
and approval of Tenant’s then current financial condition; and



     iii. Tenant’s Right of First Refusal shall be subject to the rights of the
then existing tenant pursuant to its existing Lease, as such Lease may be
modified, amended or extended.



Provided the above conditions are satisfied, and upon Landlord’s receipt of a
bona fide third party offer to lease the Expansion Space which Landlord is
willing to accept (other than by the current occupant of the Expansion Space),
Landlord will notify Tenant in writing (i) that Landlord has received such third
party offer and (ii) of all material terms of such third party offer to lease
such Expansion Space to Tenant. Tenant shall have three (3) business days after
delivery of such notice to notify Landlord in writing (“Election Notice”) of
Tenant’s election to lease all the Expansion Space upon those terms. If Tenant
fails to notify Landlord of Tenant’s election to lease the Expansion Space
within the time specified herein, it shall be deemed that (i) Tenant has elected
not to lease said Expansion Space; (ii) Landlord may thereafter enter into a
Lease Agreement with a third party; and (iii) all rights under this Right of
First Refusal shall terminate and be of no further force and effect. Time is of
the essence herein.



In the event Tenant exercises this Right of First Refusal as herein provided,
Tenant shall provide Landlord a $25,000.00 nonrefundable deposit, and the
parties shall have ten (10) working days after Landlord receives the Election
Notice from Tenant in which to execute an amendment to the Lease setting forth
the agreed-upon terms. Upon full execution of an amendment for the Expansion



90









 





Space, the nonrefundable deposit shall be credited toward Rent or security
deposit for the Expansion Space, as agreed between the parties.



This Right of Refusal shall terminate and be of no force and effect if, at any
time, the Premises are being subleased at the time of this Right of First
Refusal is offered, except to a Related Entity.



This Right of First Refusal is personal to Tenant and may not be assigned,
voluntarily or involuntarily, separate from or as a part of the Lease, except to
a Related Entity.



Should Tenant exercise the Right herein, Landlord and Tenant shall execute an
amendment to this Lease, adding the Expansion Space to the Premises and
adjusting the Rent and Tenant’s proportionate share of the items set forth in
Paragraph 3 of this Lease. If Tenant does not elect to exercise the Right
herein, based upon the material terms proposed by Landlord, all Rights under
this Right of First Refusal shall terminate and be of no further force and
effect.




91