exv10w2



 






	 	 	 	 	 



Exhibit 10.2




THIRD AMENDMENT

TO LEASE AGREEMENT





     This THIRD AMENDMENT TO LEASE AGREEMENT (“Amendment”), is entered into as of the ___day of
November, 2007, by and between BIXBY TECHNOLOGY CENTER, LLC, a Delaware limited liability company
(“Landlord”), as successor-in-interest to WIX/NSJ Real Estate Limited Partnership, a Delaware
limited partnership (“Prior Landlord”), and FOUNDRY NETWORKS, INC., a Delaware corporation
(“Tenant”), with reference to the facts set forth in the Recitals below.



RECITALS:




     A. Prior Landlord and Tenant entered into that certain Lease Agreement dated September 28,
1999 (the “Original Lease”), as amended by that certain: (i) First Amendment to Lease Agreement
dated February 16, 2000 and Second Amendment to Lease Agreement dated July 28, 2005 (collectively,
the “Lease”) pursuant to which Landlord currently leases to Tenant approximately 70,755 rentable
square feet in the building located at 2100 Gold Street, Alviso, California 95002 (the “Premises”)
as more particularly described in the Lease. The Premises are part of the development known as
Bixby Technology Center (the “Park”). Landlord has succeeded to Prior Landlord’s interest as
landlord under the Lease.



     B. Capitalized terms not defined in this Amendment have the meanings given to them in the
Lease.



     C. The Lease Term is scheduled to expire on May 31, 2008.



     D. Landlord and Tenant desire to amend the Lease in order to, among other things, extend the
Lease Term upon and subject to the terms set forth below.



AGREEMENT:




     NOW THEREFORE, in consideration of the above Recitals and other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties agree as follows:



     1. Extended Term. The Term is hereby extended for thirty-two (32) months from June 1,
2008 (the “Extended Term Commencement Date”), expiring on January 31, 2011 (the “Termination
Date”), unless sooner terminated pursuant to the terms of the Lease (the “Extended Term”).



     2. Base Rent. Prior to the Extended Term Commencement Date, Tenant shall continue to
pay Base Rent for the Premises in accordance with the Lease. Commencing as of the Extended Term
Commencement Date and continuing until the Termination Date, Tenant shall make payments of Base
Rent on a monthly basis pursuant to the Lease in accordance with the following schedule:



	 	 	 	 	 
	Period	 	Monthly Base Rent
	6/1/2008 — 5/31/2009

	 	$	109,670.25	 
	6/1/2009 — 5/31/2010

	 	$	116,745.75	 
	6/1/2010 — 1/31/2011

	 	$	120,283.50	 






     3. Condition of Premises. Tenant acknowledges that it is presently in possession of
the Premises pursuant to the Lease and is fully aware of the condition of the Premises. Landlord
shall not be obligated to refurbish or improve the Premises in any manner whatsoever or to
otherwise provide funds for the improvement of the Premises in conjunction with the Extended Term,
and Tenant hereby accepts the Premises “AS-IS”. Tenant further acknowledges that except as
expressly provided in the Lease and this Amendment, neither Landlord nor any agent of Landlord has
made any representation or warranty regarding the condition of the Premises, the improvements,
refurbishments, or alterations therein, or the Building or with respect to the functionality
thereof or the suitability of any of the foregoing for the conduct of Tenant’s business and that
all representations and warranties of Landlord, if any, are as set forth in the Lease and this
Amendment.



     4. Notice Addresses. Landlord’s Address for notices and payment of rent set forth in
the Lease is hereby deleted and replaced by the following address:


Bixby Technology Center, LLC

c/o Bixby Land Company

2211 Michelson Drive, Suite 500

Irvine, California 92612

Attention: Property Manager




     5. ERISA. Tenant represents and warrants to Landlord that neither Tenant nor any
guarantor of Tenant’s obligations under the Lease is (a) a party in interest, as defined in Section
3(14) of the of the



 









 




Employee Retirement Income Security Act of 1974, as amended (“ERISA”), to the AFL-CIO Building
Investment Trust (“Trust”), or of any of the plans participating therein, or (b) a disqualified
person under Section 4975(e)(2) of the Internal Revenue Code of 1986, as amended (“Code”), with
respect to the Trust or the plans participating therein. Neither Tenant nor any guarantor of
Tenant’s obligations under the Lease shall take any action that would cause the Lease or the
exercise by Landlord or the Trust of any rights hereunder, to be a non-exempt prohibited
transaction under ERISA. Notwithstanding any contrary provision of the Lease, Tenant shall not
assign the Lease or sublease all or any portion of the Premises unless (i) such assignee or
subtenant delivers to Landlord a certification (in form and content satisfactory to Landlord) with
respect to the status of such assignee or subtenant (and any guarantor of such assignee’s or
subtenant’s obligations) as a party in interest and a disqualified person, as provided above; and
(ii) such assignee or subtenant undertakes not to take any action that would cause the Lease or the
exercise by Landlord or the Trust of any rights hereunder, to constitute a non-exempt prohibited
transaction under ERISA.




     Notwithstanding any contrary provision of the Lease, Tenant shall not (a) sublease all or any
portion of the Premises under a sublease in which the rent is based on the net income or net
profits of any person, or (b) take any other action with respect to the Lease or the Premises such
that the revenues to be received by Landlord or the Trust from time to time in connection with the
Lease would, as a result of such action, be subject to the Unrelated Business Income Tax under
Sections 511 through 514 of the Code.



     Tenant agrees that it shall incorporate the requirements of this Section 5 in any sublease of
the Premises (without implying Landlord’s consent thereto).



     6. Labor. Tenant shall use Union Labor (defined below) for all maintenance, repair,
and replacement of the Premises (the “Maintenance Labor Covenant”). Notwithstanding the foregoing,
the Maintenance Labor Covenant shall not apply to (i) the services for installation, operation,
maintenance and repair of personal property owned exclusively by Tenant (e.g., computer systems,
telephones, and furniture other than modular furniture) or for any of Tenant’s specialized
equipment, (ii) a specific item or instance of maintenance, repair or replacement to the extent
Union Labor is not available in the market to perform such specific item or instance of
maintenance, repair or replacement, and/or (iii) maintenance, repairs and replacements that may be
and are self-performed by the existing staff of Tenant without the retention, engagement or hiring
of any third party or additional employee. Tenant shall (a) include the Maintenance Labor Covenant
in each of its service contracts, (b) provide such evidence as Landlord may reasonably require,
from time to time during the Lease Term, that the Maintenance Labor Covenant is being fully and
faithfully observed and Tenant shall include the obligation to provide such evidence in each
service contract entered into by Tenant for such services, and (c) incorporate the foregoing
requirements in any sublease, license, or occupancy agreement relating to all or any part of the
Premises (without implying Landlord’s consent to same).



     In addition to any other conditions contained in the Lease with respect to Tenant making any
alterations or improvements, before making any alterations or improvements to the interior or
exterior of the Premises, Tenant shall (a) deliver to Landlord evidence satisfactory to Landlord
that Tenant shall cause such construction or alteration work (collectively, the “Construction
Activities”) to be performed by contractors who employ craft workers who are members of unions that
are affiliated with The Building and Construction Trades Department, AFL-CIO (“Union Labor”), and
such work shall conform to traditional craft jurisdictions as established in the area (the
“Construction Labor Covenant”), (b) include the Construction Labor Covenant in each of its
contracts for the Construction Activities, (c) provide such evidence as Landlord may reasonably
require, from time to time during the course of the Construction Activities, that the Construction
Labor Covenant is being fully and faithfully observed and Tenant shall include the obligation to
provide such evidence in each contract entered into by Tenant for the Construction Activities, and
(d) incorporate the foregoing requirements in any sublease, license, or occupancy agreement
relating to all or any part of the Premises (without implying Landlord’s consent to same). Tenant
shall require that all contractors and subcontractors, of whatever tier, performing Construction
Activities agree to submit all construction jurisdictional disputes (i.e., disputes about which
union is the appropriate union to perform a given contract) to final and binding arbitration to the
procedures of the jointly administered “Plan for the Settlement of Jurisdictional Disputes in the
Construction Industry,” a dispute resolution plan established and administered by The Building and
Construction Trades Department, AFL-CIO, and various construction industry employer associations.
If a resolution to a construction-related jurisdictional dispute cannot be obtained through The
Building and Construction Trades Department, AFL-CIO, contractors and subcontractors, of whatever
tier, shall agree to submit all such disputes to final and binding arbitration procedures to be
administered by the American Arbitration Association (“AAA”) and in conformity with AAA’s
Commercial Arbitration Rules, Expedited Procedures, with an arbitrator who is an experienced labor
arbitrator and is a member of the National Academy of Arbitration.



     7. Environmental Disclosures/ Tenant Acknowledgements. The following is hereby added
to Section 29.8 of the Original Lease:




“29.8.1 Environmental Disclosures. Landlord hereby discloses to Tenant and
Tenant hereby acknowledges that it understands and accepts that the Park was
constructed on property that was part of the regional South Bay Asbestos Area
Superfund Site under the careful regulatory oversight of the United States
Environmental Protection Agency (“US EPA”) and the California Department of Toxic
Substances Control (“DTSC”). The Park was under those agencies’ oversight because it
contained fill materials that included construction debris including transite pipe, a
material that typically contains asbestos, in addition to materials that had been
removed from a nearby landfill in the 1960’s during relocation of the Guadalupe River
channel. In addition to the steps taken to remove these materials prior to
construction of the buildings that are now a part of the Park, any materials that
might not



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have been removed were isolated in place by installation of a soil cap and a sealed
60-mil thick polyethylene liner under the buildings. A venting system was also
installed to collect any methane that might be generated by the decomposition of any
organic landfill material remaining in the soil.




29.8.2 Tenant Acknowledgements. Tenant acknowledges that there are certain
commitments to the US EPA and DTSC to ensure that the measures taken to protect human
health and the environment remain effective. One of those commitments is to ensure
that tenants are provided notice that asbestos, which is a hazardous substance, may
be located on or beneath the property. To ensure that there is no exposure to the
asbestos, there is also a soil management plan in effect to maintain the cap
integrity. Although the majority of the tasks under that soil management plan are
performed by Landlord, Tenant acknowledges and understands that Tenant is
specifically prohibited from performing any actions that disturb the soil or asphalt
at the Park. Tenant shall obtain Landlord’s prior written consent prior to
performing any activities that might disturb the soil or asphalt, or could pierce the
polyethylene liner under the buildings at the Park or interfere with the sub-surface
venting system at the Park.”



     8. Broker. Tenant hereby represents to Landlord that Tenant has dealt with no broker
other than Cornish & Carey Commercial (“Broker”) in connection with this Amendment. Tenant agrees
to indemnify and hold Landlord, its trustees, members, principals, beneficiaries, partners,
officers, directors, employees, mortgagee(s) and agents, and the respective principals and members
of any such agents harmless from all claims of any brokers claiming to have represented Tenant in
connection with this Amendment (other than Broker).



     9. No Other Modifications. Except as modified in this Agreement, all other terms and
conditions of the Lease shall remain unchanged and in full force and effect. To the extent of a
conflict between the terms of the Lease and the terms of this Amendment, the terms of this
Amendment shall prevail. A breach by Tenant of any of the terms of this Amendment shall constitute
a material breach by Tenant of the Lease as to which Landlord shall have all rights and remedies.
This Amendment may be executed in multiple counterparts, each of which shall be deemed to be an
original, but all of which, together, shall constitute one and the same instrument.



     IN WITNESS WHEREOF, the parties hereto have executed this Amendment.





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	TENANT:	 	 	 	 	 	LANDLORD:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	FOUNDRY NETWORKS, INC.,	 	 	 	BIXBY TECHNOLOGY CENTER, LLC,
	a Delaware corporation	 	 	 	a California limited liability company
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	 	 	 	 	 	 	By:	BixbyBIT Investments, LLC,
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Name:	 	 	 	 	 	 	a Delaware limited liability company
	 	 	Title:	 	 	 	 	 	 	its sole member
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	 	 	 	 	 	 	 	By:	BLC Ventures I, LLC,
	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Name:	 	 	 	 	 	 	 	a Delaware limited liability company,
	 	 	Title:	 	 	 	 	 	 	 	its Managing Member
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	By:	 	Bixby Land Company,

a California corporation,

its Managing Member






	 	 	 	 	 
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