Executive Retention Agreement - Cylink Corp. and Robert B. Fougner
EXECUTIVE RETENTION AGREEMENT
AMENDED AND RESTATED
This Executive Retention Agreement (the "Agreement") is entered into as
of June 1, 1998, (the "Effective Date") by and between Robert B. Fougner, who
resides at 2475 Elevado Road, Vista, CA 92084 (the "Executive") and Cylink
Corporation (the "Company"), and amended and restated as of April 1, 2002.
WHEREAS, the Executive has faithfully and diligently served the Company
as its General Counsel and Corporate Secretary since December 18, 1989;
NOW, THEREFORE in consideration of Executive's past services and to
encourage Executive's continued services on the Company's behalf, the parties
agree to the following:
PART I - NATURE OF AGREEMENT
1. Waiver Of Employment Agreement. In consideration of the special services
rendered by Executive and the nature of Executive's duties, this Agreement shall
not be construed as a contract of employment. Executive has been and continues
to serve "at will", and the Company is free at all times to discharge Executive
from its continued service, subject to the terms and benefits described in this
Agreement.
2. Conditions For Benefits. This Agreement will address certain benefits in the
event of (i) Executive's separation from the Company's service, and (ii) a
Change in Control or a Corporate Transaction, as those terms are defined in the
Company's 1994 Stock Incentive Plan, as amended (the "Plan"), except that a
Corporate Transaction shall also include any acquisition of more than 50% of the
Company's outstanding securities by any entity or related group of entities
(collectively with a Corporate Transaction, a "Corporate Event").
3. Executive Compensation. This Agreement shall not replace, affect or limit in
any way Executive's eligibility for continued adjustments in compensation and
benefits including but not limited to merit increases in salary, bonuses, awards
under the Plan and similar benefits offered to other Company executives,
provided however that Executive's eligibility for such adjustments shall
continue only for so long as Executive remains in the Company's service. Nothing
in this Agreement shall be construed as an obligation on behalf of the Company
to grant any such adjustments in Executive's compensation and benefits.
4. Commuting and Telecommuting. The Company acknowledges that Executive intends
to move his principal place of residence more than 100 miles away from the
Company's principal place of business. In consideration for the Executive's
agreement
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Executive Retention Agreement
Cylink Corporation
Robert B. Fougner
to continue his employment at the Company's offices on a full time basis, the
Company shall provide Executive, at the Company's expense, with (i) suitable
rental living quarters, cleaning services and utilities, for Executive's
exclusive use, comparable to those previously provided for relocation of the
Company's senior employees, and (ii) payment of all travel expenses for
commuting (e.g. airfare, parking and local transportation) between the
Executive's principal place of residence and the Company's offices. The Company
further agrees to the Telecommuting Agreement attached to this Agreement.
PART II - SEPARATION FROM SERVICE
5. Involuntary Termination. In the event Executive's employment is terminated
either: (i) by the Company for any reason except for Good Cause, as that term is
defined herein, or (ii) by the Executive for Good Reason, as that term is
defined herein, then the Company agrees to compensate the Executive with the
following remuneration:
5.1 Severance. The Company shall continue to pay Executive salary
and bonus for a period of six months (the "Severance Period"),
subject to tax withholdings as required by law, based on the
highest amount paid by Executive over any twelve month period
prior to notice of termination, pro rated monthly, for the
duration of the Severance Period. At Executive's option, this
severance may be paid in full at time of termination or over
the Severance Period in accordance with the Company's standard
payroll practices. In the event of termination under
subsections (iv) or (v) of Section 8 ("Termination By
Executive For Good Reason"), Executive's Severance Period
shall be increased to an amount equal twelve (12) months
salary and bonus calculated in accordance with this Section
5.1.
5.2 Benefits. The Company shall pay Executive's cost of exercising
his rights under COBRA to continuing medical benefits during
the Severance Period.
5.3 Consulting Agreement. The Company and Executive shall be
deemed to have entered into the Consulting Agreement annexed
hereto as Attachment "A" effective immediately as of the date
of Executive's
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Executive Retention Agreement
Cylink Corporation
Robert B. Fougner
separation from service. Except as specifically provided in
this Agreement, the Company shall be under no obligation to
employ Executive under said Consulting Agreement.
5.4 Extension Of Stock Option Period. Subject to any other time
limitations imposed by law, the ninety (90) day period for
exercise of all outstanding Stock Options previously issued to
Executive shall be extended for the duration of the Consulting
Agreement.
5.5 Automobile. The automobile used exclusively by Executive for
Company business (the Executive Automobile) shall be
transferred to Executive, at the Company's expense, and
Executive's severance payments shall be "grossed up" to cover
payment of all taxes, fees and costs incurred by Executive as
a consequence of this transfer. Executive is authorized to
execute a transfer of title and registration on the Company's
behalf necessary to effect this transfer.
5.6 Office Equipment. Executive shall be permitted to retain his
personal laptop computer, peripheral equipment, and a copy of
his work product (subject to his professional obligations and
code of ethics concerning client confidentiality)
6. Termination For Good Cause. The following grounds shall serve as the sole
basis for termination of Executive's employment by the Company for Good Cause:
(i) a material breach by Executive of his duty of loyalty to the Company except
when required by law, (ii) a persistent and continuing refusal to follow a
written instruction addressed personally to Executive by the Company's Chief
Executive Officer, except when Executive has a good faith basis for believing he
is precluded by law from doing so, (iii) in the event of material
misappropriation by Executive of Company assets for personal use (which shall
specifically exclude disputes concerning Executive's handling of his expense
accounts and personal property used regularly by Executive in conducting Company
business), in the event Executive is convicted of a felony involving fraud
(other than disputes concerning taxes) or serious bodily harm (other than those
arising from a traffic related accident).
7. Notice Of Termination For Good Cause And Cure. Termination for Good Cause
shall be deemed to have occurred ninety (90) days following Notice (as that term
is
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Executive Retention Agreement
Cylink Corporation
Robert B. Fougner
defined herein) which sets forth specifically the grounds which constitute "Good
Cause" and the Company's intention to terminate Executive's employment, unless
prior to expiration of said ninety (90) day period Executive cures all such
stated grounds or, in the event cure within said ninety period is impracticable,
Executive commences to effect such cure and diligently continues to do so until
cure is completed.
8. Termination By Executive For Good Reason. In the event Executive serves
written notice to the Company of his resignation due to any one of the following
reasons, then Executive's resignation shall be deemed to have occurred for Good
Reason: (i) a material change in Executive's responsibility, including without
limitation, either the assignment of any of Executive's responsibilities to
other personnel or the addition of additional responsibility previously
fulfilled by other personnel, without Executive's consent, (ii) a reduction in
Executive's title or direct reporting relationship to the Chief Executive
Officer of the Company or its parent corporation, if any (iii) a reduction in
Executive's salary or denial of bonus payments commensurate with previous
bonuses paid to Executive for satisfactory performance, unless such reduction is
part of a fiscal plan by the Company for a period of less than twelve months due
to the Company's severe financial under performance and provided such plan is
applied equitably to all of the Company's officers, (iv) subject to Part III of
this Agreement, the occurrence of a Change In Control or a Corporate Event, (v)
a change in the Company's Chief Executive Officer, (vi) upon completion of
Executive's Year 2001 Goals annexed to this First Amendment as Attachment "A"
but, for purposes of this subsection (vi), no earlier than December January 1,
2002, or (vii) at any time after March 29, 2002. Any reduction in the benefits
described in Section 4 ("Commuting and Telecommuting") shall be deemed a
reduction in salary or bonus for purposes of subsection (iii) of this Section 7
(regardless of whether such reduction is part of a fiscal austerity program).
9. Notice Of Termination For Good Reason. Termination for Good Reason shall be
deemed to have occurred thirty (30) days following Notice (as that term is
defined herein) which sets forth specifically the grounds which constitute "Good
Reason" and the Executive's intention to terminate his employment with the
Company.
10. Death or Disability. In the event of Executive's (i) death, or (ii)
Executive resigns due to a disability certified by a licensed physician which
materially impairs Executive's ability to fulfill his responsibilities for a
period exceeding ninety (90) days (a "Disability") then, subject to any other
limitations which may be imposed by law, the period for
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Executive Retention Agreement
Cylink Corporation
Robert B. Fougner
exercise of Executive's Stock Options shall be extended until twelve (12) months
from the date of death or commencement of Executive's disability.
11. Indemnification. In the event of Executive's separation from the Company's
service for any reason, Executive shall continue to be indemnified and held
harmless for claims arising out of or related in any way whatsoever to his
activities as an officer of the Company to the full extent provided in the
Company's Articles of Incorporation, By-Laws and in accordance with the
Indemnification Agreement previously executed by the parties. In addition, the
Company shall continue to cover Executive under the Company's Directors and
Officers Liability Insurance for any claims related to such activities,
regardless of whether the claim is asserted prior to or following the date of
termination of Executive's employment.
III. CHANGE OF CONTROL OR CORPORATE EVENT
12. Acceleration Of Stock Options. In the event of a Change in Control or a
Corporate Event, all outstanding Stock Options issued to Executive shall
immediately vest and become exercisable regardless of the date of grant.
13. Special Bonus. In the event of a Corporate Event, Executive shall receive a
bonus equal to the cumulative amount of Executive's annual bonuses, consistent
with the President's letter dated August 24, 1998, and salary that has been
unpaid due to corporate austerity programs in effect since fiscal year 2000.
IV. GENERAL PROVISIONS
14. Entire Agreement; Modification. This Agreement, and all documents
incorporated herein, constitutes the full and complete understanding of the
parties hereto and will supersede all prior agreements and understandings, oral
or written, with respect to the subject matter hereof. Each party to this
Agreement acknowledges that no representations, inducements, promises or
agreements, oral or otherwise, have been made by either party, or anyone acting
on behalf of either party, which are not embodied in this Agreement, and that no
other agreement, statement or promise not contained in this Agreement shall be
valid or binding. This Agreement may not be modified or amended except by an
instrument in writing signed by the party against whom or which enforcement may
be sought.
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Executive Retention Agreement
Cylink Corporation
Robert B. Fougner
15. Survival. The provisions of this Agreement which, by their terms, imply
continuation beyond the end of Executive's employment shall survive
notwithstanding any termination of Executive's employment.
16. Severability. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms of provisions of
this Agreement in any other jurisdiction.
17. Waiver of Breach. The waiver by any party of a breach of any provisions of
this Agreement, which waiver must be in writing to be effective, shall not
operate or be construed as a waiver of any subsequent breach.
18. Notices. All notices hereunder shall be in writing and shall be deemed to
have been duly given when delivered by hand, or one (1) day after sending by
express mail or other "overnight mail service," or three (3) days after sending
by certified or registered mail, postage prepaid, return receipt requested.
Notice shall be sent as follows: if to Executive, to the address provided by the
Executive in the Company's records and, if to the Company, at the address set
forth on the first page of this Agreement, attention of the Chief Executive
Officer. Either party may change the notice address by notice in accordance with
this Section.
19. Assignability; Binding Effect. This Agreement shall be binding upon and
inure to the benefit of Executive and Executive's legal representatives, heirs
and distributees, and shall be binding upon and inure to the benefit of the
Company, its successors and assigns. This Agreement may not be assigned by the
Executive. This Agreement may not be assigned by the Company, except in
connection with a merger or a sale by the Company of all or substantially all of
its assets and, in such event, only on the condition that the assignee
specifically assumes in writing all of the Company's obligations under this
Agreement.
20. Governing Law. All issues pertaining to the validity, construction,
execution and performance of this Agreement shall be construed and governed in
accordance with the laws of the State of California, without giving effect to
the conflict or choice of law provisions thereof.
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Executive Retention Agreement
Cylink Corporation
Robert B. Fougner
21. Arbitration.
21.1 In the event of any dispute of any kind whatsoever between the
parties, arising out of or related in any way to this
Agreement, the parties agree to submit all such disputes to
binding arbitration. Each party shall be entitled to appoint
one arbitrator, who shall not be an affiliate, officer,
director, employee, agent, vendor or contractor of that party.
The appointed arbitrators shall then appoint a neutral
arbitrator who shall serve as Chairman, and the arbitration
shall be conducted by the arbitrators so chosen. The parties'
arbitrators shall be experienced executives in the technology
industry, and the Chairman shall be an attorney practicing
litigation in the field of employment law. The arbitration
shall be conducted in Santa Clara County, California. Demand
for arbitration shall be made in writing and shall be served
upon the party or parties to whom the demand is addressed in
the manner provided for the tender of notices in this
Agreement. If the party receiving the demand for arbitration
does not appoint its arbitrator within 30 days after receiving
such notice, the arbitrator appointed by the party serving the
demand for arbitration shall be further empowered to serve as
the sole arbitrator, notwithstanding that he fails to meet the
qualifications for the Chairman set forth in this Section.
21.2 The arbitrators are authorized to award any remedy, legal or
equitable, as well as any interim relief as they deem
appropriate in their discretion. However, notwithstanding the
foregoing, the arbitrators shall have no power to add to,
subtract from, or modify any of the terms or conditions of
this Agreement.
21.3 Subject to the arbitration agreement stated in this Article,
the federal and state courts located in Santa Clara County,
California shall have exclusive jurisdiction over all other
legal proceedings between the parties. Executive agrees to the
personal jurisdiction of said courts and to the receipt of
service of process in the same form as other notices under
this Agreement. Application may be made to any such court to
assist the arbitrators in performing their arbitral duties, to
confirm their award and to enforce any such award as a
judgment of said court.
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Executive Retention Agreement
Cylink Corporation
Robert B. Fougner
22. Headings. The headings in this Agreement are intended solely for convenience
or reference and shall be given no effect in the construction or interpretation
of this Agreement.
23. Counterparts. This Agreement may be executed in several 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 Company has caused this Agreement to be duly
executed and Executive has hereunto set his hand as of the date first set forth
above.
CYLINK CORPORATION
By: /s/ William P. Crowell
-----------------------------
William P. Crowell
President & CEO
EXECUTIVE
/s/ Robert B. Fougner
-----------------------------
Robert B. Fougner
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Document Form No. D3-301-006 Telecommuting Agreement
Revision A October 30, 2001
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TELECOMMUTING AGREEMENT
This Telecommuting agreement is entered into between Cylink Corporation
("CYLINK") and Robert B. Fougner ("EMPLOYEE") effective as of April 1, 2002.
1. EMPLOYEE agrees to work at his/her home work space at 2475 Elevado Road,
Vista, CA, approximately 1-2 weeks per month, subject to the necessity for
Employee's participation in meetings at Cylink's facilities or other
locations, as determined by Employee in his best judgment and reasonable
discretion (generally referred to as "telecommuting").
2. CYLINK will provide EMPLOYEE with: (List equipment department will
provide)
Personal computer, peripherals, fax/printer, dedicated teleco line,
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Broadband service provider, broadband receiver and installation
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3. EMPLOYEE will provide:
Facilities, liability insurance, office furnishings
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4. CYLINK agrees to reimburse EMPLOYEE for reasonable business expenses, such
as long distance telephone charges, according to the Telecommuting Policy
and Finance Department guidelines. CYLINK will not reimburse EMPLOYEE for
any other expenses incurred while telecommuting, such as public utility
charges.
5. EMPLOYEE is required to comply with the department's record keeping
practice regarding attendance and absence notification.
6. EMPLOYEE will be expected to meet all agreed upon performance measures and
objectives.
7. The telecommuter shall hold harmless and otherwise indemnify Cylink for any
injuries that occur to third parties, including members of telecommuter's
family. By entering into the Telecommuting Agreement with Cylink, the
employee represents and warrants that they have homeowner's liability
insurance coverage for injuries to third parties for an amount not less
than $250,000.
8. This Agreement is subject to Employee's Executive Retention Agreement, as
Amended and Restated (the "Retention Agreement"). EMPLOYEE continues to be
subject to all policies, procedures and guidelines of CYLINK and
understands and agrees that certain policies and notices are available and
accessible only at CYLINK'S offices.
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Cylink Corporation Proprietary Information Page 1 of 2
Document is Uncontrolled When Printed
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Document No. D3-301-006 Telecommuting Agreement
Revision A October 30, 2001
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9. This Agreement is in effect for as long as Employee is employed under the
Retention Agreement.
10. Upon completion of the telecommuting arrangement, EMPLOYEE (may keep/must
return): (List equipment EMPLOYEE may keep or must return)
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Employee may keep all equipment provided by Cylink
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11. EMPLOYEE has read and understands the Cylink Corporation Telecommuting
Policy which is specifically incorporated by reference into this Agreement.
Dated: 4/1/02 /s/ [ILLEGIBLE]
---------------------- ----------------------
Employee Name
CYLINK CORPORATION
Dated: 4/18/02 by: /s/ [ILLEGIBLE]
---------------------- -------------------
Manager's Name
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Cylink Corporation Proprietary Information Page 2 of 2
Document is Uncontrolled When Printed
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ATTACHMENT "A"
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CYLINK CORPORATION
CONSULTANT AGREEMENT
THIS AGREEMENT, by and between CYLINK Corporation ("CYLINK"), a California
corporation with principal offices located at 910 Hermosa Court, Sunnyvale,
California, 94086, and ROBERT B. FOUGNER ("CONSULTANT") is made and entered into
as of the date of termination of CONSULTANT's full time employment with CYLINK
(the "Effective Date"), in accordance with the terms of CONSULTANT's Executive
Retention Agreement dated as of June 1,1998, as Amended and Restated as of April
1, 2002.
WITNESSETH
In consideration of the undertakings set forth herein, the parties hereby agree
with each other as follows:
1. APPOINTMENT
CYLINK hereby appoints CONSULTANT, and the CONSULTANT hereby accepts such
appointment, to accept employment from CYLINK as an independent consultant in
the manner hereinafter described.
2. STATEMENT OF WORK
A. At least once a month, CONSULTANT will report in writing to CYLINK on the
progress of the work described in Subparagraph B, herein.
2. CONSULTANT agrees to accept employment for the Projects agreed to by both
parties in writing from time to time. Nothing stated herein shall be
construed as an obligation by either party to employ CONSULTANT for any
specific Project.
3. TERM
This Agreement commences as of the date of CONSULTANT's termination from
CYLINK's full time employment, and shall continue for a period of two years, or
until CONSULTANT exercises all of his outstanding options to purchase CYLINK
stock, whichever shall first occur.
4. PAYMENT
The amount of Payment shall be agreed by the parties in writing for each Project
during the term of this Agreement. Any expenses incurred by CONSULTANT in
performing the Statement of Work shall be the sole responsibility of CONSULTANT,
unless otherwise agreed in the Project Statement.
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Consultant Agreement
Cylink Corporation
Robert B. Fougner
5. RELATIONSHIP OF THE PARTIES
CONSULTANT will serve as an independent contractor, and this Agreement will
not be deemed to create a partnership, joint enterprise, or employment
relationship between the parties nor a right to any of the rights or
privileges otherwise resulting therefrom. The authority of the CONSULTANT is
limited to the performance of the functions set forth in the Agreement.
CONSULTANT shall make appropriate filings with taxing authorities as a
self-employed entity, and shall be liable for all required payments to the
local, State, Federal and other taxing authorities (including income tax and
social security and SDI payments). CONSULTANT agrees to indemnify and hold
CYLINK harmless for any claims for payments made by said taxing authorities
resulting from performance of CONSULTANT pursuant to this Agreement.
Neither party shall have authority to make any Agreement or incur any
liability on behalf of the other party, nor shall either party be liable for
any acts, omissions to act, contracts, commitments, promises or
representations made by the other, except as specifically authorized in this
Agreement or as the parties may otherwise agree.
6. OTHER OBLIGATIONS
CONSULTANT represents and warrants to CYLINK that CONSULTANT is now under no
contract or Agreement, with any other person, firm, association or
corporation that will, in any manner, prevent CONSULTANT from giving, and
CYLINK from receiving, the full benefit of CONSULTANT's services in
accordance with the terms of this Agreement. CYLINK agrees that during the
Term of this Agreement or any extension or renewal thereof, CONSULTANT may,
after written notice to CYLINK, be employed by other persons, firms, or
corporations engaged in the same or similar business as that of CYLINK,
provided, however, that CONSULTANT will observe all of his ethical
obligations the Code of Professional Responsibility governing attorney client
confidentiality with respect to CYLINK's confidential information.
CONSULTANT agrees that it will not solicit the services of any of the
employees, consultants, suppliers or customers of CYLINK during the term of
this Agreement and for six (6) months thereafter.
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Consultant Agreement
Cylink Corporation
Robert B. Fougner
7. AUDIT AND RECORDS
CYLINK or its duly authorized representatives shall have access at all
reasonable times during the Term of this Agreement and for a period of three
(3) years thereafter to CONSULTANT's records and all other documentation
pertaining to CONSULTANT's services hereunder for the purpose of auditing and
verifying the cost of such services. CONSULTANT shall also retain all
documents, notes and records pertaining to this Agreement or any services
rendered hereunder for a period of three (3) years.
8. NOTICES
Any notice or demand required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given when
delivered personally or received by registered mail or certified mail,
postage prepaid, at the following respective addresses (or such other address
as the parties may agree to):
CYLINK CONSULTANT
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CYLINK Corporation 2475 Elevado Road
3131 Jay Street Vista, CA 92084
Santa Clara, CA. 95054
(408) 735-5800 760-941-4464
9. ASSIGNMENT
This Agreement is not assignable without prior written approval of CYLINK and
any attempt to assign any rights, duties or obligations herein without such
approval shall be void.
10. GOVERNING LAW AND JURISDICTION
This Agreement shall be interpreted, construed and governed by the laws of
the State of California. The parties agree to submit all disputes of any
kind whatsoever arising out of this Agreement to arbitration in accordance
with the procedure stated in CONSULTANT's Executive Retention Agreement.
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Consultant Agreement
Cylink Corporation
Robert B. Fougner
11. GENERAL PROVISIONS
Deviations from these terms and conditions are not valid unless confirmed in
writing by an authorized representative of both parties. All rights and
remedies, whether conferred hereby or by any other instrument or law shall
be cumulative, and may be exercised singularly or concurrently. Failure by
either party to enforce any contract term shall not be deemed a waiver of
future enforcement of that or any other term. If any provision of this
Agreement is held invalid under any applicable statute or rule of law, such
invalidity shall not affect any other provisions of the Agreement which can
be given effect without the invalid provisions, and to this end the
provisions of this Agreement are declared to be severable. Notwithstanding
the above, such invalid provision or clause shall be construed to the
extent possible, in accordance with the original intent of the parties.
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FIRST AMENDMENT TO LEASE
This First Amendment to Lease (the "Amendment") is dated as of August 5,
1999, for reference purposes only, and is made between Orchard Jay Investors,
LLC, a California limited liability company, and David J. Brown (collectively
"Landlord") and Cylink Corporation, a California corporation ("Tenant"), with
reference to the following facts and circumstances, which are conclusively
agreed between the parties:
A. Landlord and Tenant are parties to a lease dated for reference
purposes as of May 10, 1999 (the "Lease"). All capitalized words having
an assigned meaning in the Lease shall continue to have such meaning in
this Amendment unless explicitly modified.
B. Pursuant to the Lease, Tenant has leased from Landlord two
buildings located at 3131 and 3151 Jay Street, Santa Clara, California
(the "Existing Premises"), within Landlord's Project.
C. Tenant wishes to lease the remaining building of the Project,
located at 3101 Jay Street, Santa Clara, California, on the terms set
forth herein. Accordingly, Landlord and Tenant wish to amend the Lease
on the terms and conditions set forth below.
D. Landlord and Tenant acknowledge Tenant's intent to sublease a
portion of the First Floor Space (as defined below) after execution
hereof (but also agree that such subleasing shall be subject to the
provisions of the Lease relating to subleasing and shall not be deemed
approved hereby).
Now, therefore, in consideration of all of the foregoing facts and
circumstances, and for good and valuable consideration, the receipt of which is
acknowledged by each party, Landlord and Tenant agree to and do amend the Lease
as follows:
1. Description of Additional Space:
Landlord's building at 3101 Jay Street, Santa Clara, California (the
"3101 Building"), is a two-story building. As used herein, the first story of
the 3101
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First Amendment To Lease Page 2 of 16
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Building, comprised of 22,099 square feet of gross leasable area, will
be referred to as the "First Floor Space" and the second story of the
3101 Building, comprised of 24,625 square feet of gross leasable area,
will be referred to as the "Second Floor Space". The First and Second
Floor Spaces are shown on the drawing attached hereto as Exhibit "A".
The First Floor Space does not include all space on the first floor of
the 3101 Building. Rather, the cross-hatched portion of the first floor
is not a part of the First Floor Space, but rather constitutes a lobby
and access area which is a part of the Second Floor Space.
2. Demise of Additional Space
Pursuant to the terms and conditions hereof, and of the Lease, Landlord
hereby leases to Tenant (a) the First Floor Space, beginning on the First Floor
Commencement Date (as defined herein) and for the term specified herein; and (b)
the Second Floor Space, beginning on the Second Floor Commencement Date and for
the term specified herein.
Tenant acknowledges and agrees that Landlord is currently party to a
lease of the Second Floor Space with TollBridge Technologies, Inc.
("TollBridge"), the current tenant, and that the lease of the Second Floor Space
to Tenant is subject to the rights of TollBridge. Landlord is only required to
deliver the Second Floor Space to Tenant after TollBridge's possessory interest
terminates or is terminated and after Landlord has had a reasonable period of
time to deliver the Second Floor Space in accordance with Paragraph 11 below.
Landlord represents to Tenant that it is not contractually obligated to
TollBridge for a term in excess of five (5) years from the commencement date of
such lease (currently estimated to be September 1, 1999) plus whatever partial
month may be added pursuant to the terms thereof if the commencement date is not
the first day of a month. Landlord shall not agree to extend the term of such
lease beyond such five (5) year term. When the commencement date of such lease
is established, Landlord shall give Tenant written notice of such date.
This Amendment creates an indivisible, single Lease of all of the space
leased to Tenant, and shall not under any circumstances be deemed to be
divisible into separate leases on the separate buildings. Except as herein
provided, all of the terms and provisions of the Lease, including Landlord's
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First Amendment To Lease Page 3 of 16
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remedies under the Lease, shall apply to all space leased as a whole, and if
Landlord is allowed to terminate the Lease, such right is to be exercised as to
all of the property. A termination which occurs at a time when Tenant is not in
possession of the Second Floor Space shall nevertheless terminate Tenant's
rights to the Second Floor Space.
3. Term for Additional Space
The parties agree that this Lease as amended shall expire as to all
space (including the Existing Premises, the First Floor Space, and the Second
Floor Space) on the same day. Accordingly, the lease terms for the First and
Second Floor Spaces shall be as follows.
A. The Lease Term for the First Floor Space shall begin on the
First Floor Commencement Date (as defined below) and run through the
Expiration Date under the Lease (as defined therein) unless the Lease
is sooner terminated under and pursuant to its terms.
B. The Lease Term for the Second Floor Space shall begin on the
Second Floor Commencement Date (as defined below) and run through the
Expiration Date under the Lease (as defined therein) unless the Lease
is sooner terminated under and pursuant to its terms.
4. Option To Extend Terms on Additional Space
The First and Second Floor Spaces shall be subject to the options
provided to Tenant pursuant to Paragraph 2 of the First Addendum to Lease. The
option granted thereby shall be a single, indivisible option which may be
exercised only as to the total space leased by Tenant (including the Existing
Premises and the 3101 Building). Rent and other terms during any option term for
the First and Second Floor Spaces shall be determined as set forth in said
Paragraph 2.
5. Modification Of Option Provision
Paragraph 2A of the option granted in Paragraph 2 of the First Addendum
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First Amendment To Lease Page 4 of 16
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to the Lease is hereby modified to provide that the Earliest Exercise Date shall
be the date which is 360 days before the date the Lease Term would end but for
the exercise of the option and the Last Exercise Date shall be the date which is
270 days before the Lease Term would end but for the exercise of the option.
6. Effect On Right Of First Offer
With the execution of this Amendment, Tenant's rights under Paragraph 1
of the First Addendum to Lease shall be eliminated, Tenant having obtained the
rights to all of the First Offer Space described therein, and such Paragraph 1
shall be of no further force or effect.
7. Commencement Dates
The Tenant Improvements for the First Floor Space shall be constructed
according to the timeline which is attached hereto as Exhibit "B". If the Tenant
Improvements are completed by October 1, 1999, or if they would have been so
completed but for delays caused by Tenant in regard to the schedule presented in
the timeline, then the First Floor Commencement Date shall be October 1, 1999.
However, if Landlord's delay and failure to meet the schedule set forth in such
timeline causes the First Floor Space to be completed after October 1, 1999,
then the First Floor Commencement Date shall be the date of such completion. In
the event that Landlord completes construction and tenders the First Floor Space
to Tenant prior to the First Floor Commencement Date, Tenant shall have
occupancy thereof without being obligated to pay Base Monthly Rent, and such
occupancy shall be subject to all other terms and conditions of the Lease as
amended hereby, including the duty to pay Tenant's Share of Operating Expenses.
The Second Floor Commencement Date shall be the date on which Landlord
shall tender the Second Floor Space to Tenant in compliance with the
requirements for condition thereof set forth above and below. Landlord agrees to
use reasonable efforts to obtain possession of the Second Floor Space from the
then-occupant(s) thereof, by legal process if necessary, in the event of any
holdover past the term of the TollBridge Lease.
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First Amendment To Lease Page 5 of 16
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Landlord agrees that (1) it will provide Tenant with copies of any
Notices of Default given to TollBridge; (2) it will provide Tenant with copies
of any Complaint filed against TollBridge seeking possession of the Second Floor
Space; (3) it will provide Tenant with copies of any Judgment entered in regard
to such a Complaint; (4) it will keep Tenant apprised of progress on any
eviction action against TollBridge with the intent that Tenant have good
information on the likely date on which Landlord will gain possession of the
Second Floor Space; (5) it will reasonably cooperate with Tenant in regard to
marketing the Second Floor Space for sublease (without waiving the provisions of
the Lease relating to subleases) in advance of Landlord's delivery of possession
to Tenant; (6) it will give Tenant written notice when it obtains possession of
the Second Floor Space from TollBridge; and (7) it will not, without Tenant's
written agreement, tender the Second Floor Space to Tenant any sooner than (a)
if such notice is given during the first two years following the First Floor
Commencement Date, ninety (90) days after the date Landlord gives notice to
Tenant that it has obtained possession of the Second Floor Space from
TollBridge, and (b) if such notice is given thereafter, thirty (30) days after
the date Landlord gives notice to Tenant that it has obtained possession of the
Second Floor Space from TollBridge. Notwithstanding the foregoing, Tenant will
not be entitled to any such notices or notice periods if TollBridge's lease ends
by its terms on expiration of the lease term thereof.
Upon delivery of the Second Floor Space, Landlord and Tenant shall sign
a further Amendment to this Lease, in form reasonably prepared and approved by
Landlord, reflecting the Second Floor Commencement Date and the acceptance of
possession of the Second Floor Space pursuant hereto. However, the failure to
execute such an Amendment shall not invalidate or otherwise affect the lease of
such space.
8. Base Monthly Rent
As used in both of the tables set forth in this Paragraph, Month 1 is
the first full month after the Commencement Date under the Lease and Month 120
is the final month of the Lease. Notwithstanding this reference, however, Tenant
shall begin to make Base Monthly Rent payments for the First Floor Space on the
First Floor Commencement Date and for the Second Floor Space on the Second
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<PAGE>
First Amendment To Lease Page 6 of 16
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Floor Commencement Date, as more fully set forth in the examples which follow
each table.
The Base Monthly Rent from the First Floor Commencement Date until the
Second Floor Space is tendered to Tenant shall be as set forth in the following
Table I, where Column A represents the Base Monthly Rent under the Lease for the
Existing Premises, Column B represents the additional Base Monthly Rent paid for
occupancy of the First Floor Space, and Column C represents the sum of Columns A
and B and thus the total Base Monthly Rent which is due:
TABLE I: BASE MONTHLY RENT UNTIL SECOND FLOOR SPACE IS DELIVERED
-----------------------------------------------------------
A B C
-----------------------------------------------------------
Mo. Thru BMR/Existing BMR 1st Fl. Total BMR
-----------------------------------------------------------
-----------------------------------------------------------
1 12 $174,406.96 $47,512.85 $221,919.81
-----------------------------------------------------------
13 24 $179,639.17 $48,617.80 $228,256.97
-----------------------------------------------------------
25 36 $185,028.34 $49,722.75 $234,751.09
-----------------------------------------------------------
37 48 $190,579.19 $50,827.70 $241,406.89
-----------------------------------------------------------
49 60 $196,296.57 $51,932.65 $248,229.22
-----------------------------------------------------------
61 72 $202,185.47 $53,037.60 $255,223.07
-----------------------------------------------------------
73 84 $208,251.03 $54,142.55 $262,393.58
-----------------------------------------------------------
85 96 $214,498.56 $55,247.50 $269,746.06
-----------------------------------------------------------
97 108 $220,933.52 $56,352.45 $277,285.97
-----------------------------------------------------------
109 120 $227,561.52 $57,457.40 $285,018.92
-----------------------------------------------------------
However, rent for the First Floor Space under Table I shall be applicable only
from and after the First Floor Commencement Date. Thus, for purposes of example,
if the First Floor Commencement Date occurs on the first day of Month 2 of the
Lease, then the Base Monthly Rent for the Existing Premises for Month 1 would be
$174,406.96 and the Base Monthly Rent for the First Floor Space would not be
payable in Month 1, the Base Monthly Rent for the First Floor Space for Month 2
would be $47,512.85, the total Base Monthly Rent for Month 2 would be
$221,919.81 and the rent for the following 118 months of the Lease
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<PAGE>
First Amendment To Lease Page 7 of 16
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for the First Floor Space and the Existing Premises would be as set forth for
months 3 through 120 in Table I.
In the event that, for any reason, the Commencement Date of the Lease
for the Existing Premises does not occur until after First Floor Commencement
Date, Tenant shall nonetheless begin paying Base Monthly Rent on the First Floor
Space on the First Floor Commencement Date at the rate shown in Column B above,
and shall continue at that rate through the Commencement Date under the Lease
and thence for 120 months at the total rates shown in Table I, Column C.
The Base Monthly Rent for all space leased from Landlord from the Second
Floor Commencement Date until the end of the Lease Term shall be as set forth in
the following Table II, where Column A represents the Base Monthly Rent under
the Lease for the Existing Premises, Column B represents the additional Base
Monthly Rent paid for occupancy of the First Floor Space, Column C represents
the additional Bases Monthly Rent paid for occupancy of the Second Floor Space,
and Column D represents the sum of Columns A, B, and C, and thus the total Base
Monthly Rent which is due:
TABLE II: BASE MONTHLY RENT AFTER SECOND FLOOR SPACE IS DELIVERED
----------------------------------------------------------------------------
A B C D
----------------------------------------------------------------------------
Mo. Thru BMR/ Existing BMR 1st Fl. BMR 2nd Fl. Total BMR
----------------------------------------------------------------------------
----------------------------------------------------------------------------
1 12 $174,406.96 $47,512.85 $52,943.75 $274,863.56
----------------------------------------------------------------------------
13 24 $179,639.17 $48,617.80 $54,175.00 $282,431.97
----------------------------------------------------------------------------
25 36 $185,028.34 $49,722.75 $55,406.25 $290,157.34
----------------------------------------------------------------------------
37 48 $190,579.19 $50,827.70 $56,637.50 $298,044.39
----------------------------------------------------------------------------
49 60 $196,296.57 $51,932.65 $57,868.75 $306,097.97
----------------------------------------------------------------------------
61 72 $202,185.47 $53,037.60 $59,100.00 $314,323.07
----------------------------------------------------------------------------
73 84 $208,251.03 $54,142.55 $60,331.25 $322,724.83
----------------------------------------------------------------------------
85 96 $214,498.56 $55,247.50 $61,562.50 $331,308.56
----------------------------------------------------------------------------
97 108 $220,933.52 $56,352.45 $62,793.75 $340,079.72
----------------------------------------------------------------------------
109 120 $227,561.52 $57,457.40 $64,025.00 $349,043.92
----------------------------------------------------------------------------
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<PAGE>
First Amendment To Lease Page 8 of 16
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However, the amounts of rent shown in Table II shall be applicable only from and
after the Second Floor Commencement Date. Thus, for purposes of example, if the
Second Floor Commencement Date occurs on the first day of Month 61 of the Lease,
then this Table II would not be applicable for months 1 through 60 of the Lease,
the Base Monthly Rent for the Second Floor Space for the first month of
occupancy (Month 61) would be $59,100.00 and the rent for the following 59
months of the Lease for the Second Floor Space would be as set forth for months
62 through 120 in the table, Column C. If the Second Floor Commencement Date
does not fall on the first day of a month, then the partial month in which it
falls shall be prorated.
The amounts of Base Monthly Rent for the First Floor Space set forth
under Column B in each of the above tables shall be in addition to all other
sums payable under the Lease as Base Monthly Rent for the Existing Premises, and
the amounts payable for the Second Floor Space under Column C of Table II shall
be in addition to all amounts payable for the First Floor Space and the Existing
Premises.
All sums stated as Base Monthly Rent in this Paragraph shall be in
addition to all Additional Rent, expenses, and other sums required to be paid by
Tenant pursuant to the Lease as amended by this Amendment.
9. Tenant Improvements
Landlord shall construct improvements for Tenant in the First Floor
Space pursuant to the plans identified as follows: "Project 845 - Jay Street,
Building A, First Floor Tenant Improvements, Permit 2, dated 1/12/99, by DES
Architects" (the "Plans"), and at a cost to be paid by Landlord which is
expected to be $447,561.00. Except as provided below in regard to changes to the
Plans which cause increased expenses, or unless Tenant otherwise causes
increased expense, Tenant will not be responsible for any cost of construction
in excess of this amount.
If Tenant wishes changes in the Plans, any increased expenses of
constructing the improvements as a result of Tenant's requested changes shall be
paid by Tenant under the provisions of Exhibit "B" to the Lease, the
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<PAGE>
First Amendment To Lease Page 9 of 16
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Improvement Agreement, Paragraph 5A and B. Such expenses shall include, but not
be limited to, all hard construction costs, architecture costs, engineering
costs, City fees, and any and all other expenses reasonable and normally
incurred in conjunction with such construction.
Such construction shall be conducted pursuant to the following
additional terms and conditions:
A. The provisions of Exhibit B, the Interior Improvement Agreement,
shall not apply to construction of Tenant Improvements for Tenant in
the First Floor Space except as specifically adopted and incorporated
herein.
B. Landlord and Tenant will consult on the Plans, and Tenant will
have a reasonable opportunity to request and obtain changes therein,
and will thereafter execute an approved set of Plans as modified and a
memorandum approving any increase in costs occasioned by the
modifications to the Plans, if any. Thereafter, any changes to the
Plans will be made only on written Change Order, executed by both
parties and containing agreement to Tenant's payment of additional
costs of such Change Orders. In each case, at the time of agreement to
the changes, Tenant will pay Landlord the agreed amount of additional
cost at the times specified above
C. In the event of any changes or modifications to the Plans which
increase the cost of construction, Tenant will pay Landlord, in
addition to all other amounts specified hereunder, Landlord's
construction management fee of Four Percent (4%) of the hard costs of
construction on such increased costs.
D. Upon Landlord's completion of the Tenant Improvements called for
hereby, Landlord and Tenant shall walk through the First Floor Space,
using reasonable efforts to locate and identify any defective or
incomplete construction. Thereafter, an agreement shall be executed
which will contain a list of all "punch list" items which the parties
agree are to be corrected by Landlord, and
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<PAGE>
First Amendment To Lease Page 10 of 16
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Landlord will use reasonable diligence to correct and complete same.
E. Landlord and Tenant adopt and incorporate Paragraphs 9 and 12 of
the Interior Improvement Agreement as applicable to the Tenant
Improvements being constructed in the First Floor Space by Landlord. If
there is any inconsistency between this Amendment and the Lease
(including the Interior Improvement Agreement), this Amendment shall
prevail.
F. Tenant shall not be entitled to any credit or payment or future
construction of improvements if the improvements shown on the Plans,
with or without any further changes or adjustments, are constructed by
Landlord at a lesser cost than set forth herein. Notwithstanding the
foregoing, in the event that, after the accounting called for by
Paragraph 5C of the Interior Improvement Agreement, Exhibit B to the
Lease, it is determined that amounts paid by Tenant exceed what is due
hereunder, Landlord shall refund the overpayment.
10. Warranty for Building Shell and Grounds
The limited warranty provided by Paragraph 8 of the First Addendum to
Lease shall apply to the 3101 Building and surrounding parking, landscaping, and
grounds as they existed prior to construction of the Tenant Improvements
referenced in Paragraph 9 above and prior to the construction of the TollBridge
tenant improvements referenced in Paragraph 11 below.
11. Condition of Second Floor Space
Tenant has reviewed the plans for construction of tenant improvements in
the Second Floor Space for the existing tenant, which are described as follows:
"Project 845 - Jay Street, Building A, Second Floor Tenant Improvements, Permit
3 Re-submittal, dated 7/30/99, by DES Architects". Tenant will accept the Second
Floor Space for the term created hereby in their "AS-IS" condition with the
construction set forth in such plans (and including reasonable changes
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<PAGE>
First Amendment To Lease Page 11 of 16
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made by Landlord by agreement with TollBridge, or its successors during the
course of construction) completed at Landlord's expense, with all latent and
patent faults, without warranty or obligation on the part of Landlord to provide
any further interior improvements or tenant improvement allowances.
Notwithstanding the foregoing, in the event that Tenant takes possession of the
Second Floor Space prior to the expiration of said warranties (as set forth
below in this paragraph), Tenant shall be entitled to the same warranties with
regard to the Second Floor Space as Landlord granted to Tenant under Paragraph 9
of the Interior Improvement Agreement, Exhibit B to the Lease, for a period
beginning on the Commencement Date for the Existing Premises or the commencement
date of the TollBridge lease, whichever is earlier, and running for eighteen
(18) months thereafter. Tenant shall have no obligation to restore the Second
Floor Space to a better condition than it's condition when it was delivered to
Tenant.
Upon surrender of possession of the Second Floor Space by the current
tenant thereof, Landlord will attempt to cause the person or persons obligated
under the Lease with TollBridge to return the Second Floor Space in accordance
with the requirements of the current tenant's lease. If the current tenant does
not turn the Second Floor Space over to Landlord in the required condition, then
Landlord will remove or cause to be removed all items of personal property which
are not attached to the premises; will cause the Second Floor Space to be
cleaned to "broom clean" condition; and, to the extent that Landlord has funds
available pursuant to the current Tenant's security deposit or from available
insurance proceeds actually received, Landlord will use such funds to restore
the Second Floor Space to the condition in which the current tenant is required
to return it. Landlord shall not be required to expend its own funds beyond what
is available through the current tenant's security deposit for such restoration,
and may reserve and not spend on restoration sufficient funds from the security
deposit to pay for any rent loss during the period between turnover of
possession by the current tenant and the Second Floor Commencement Date.
12. Increased Security Deposit; Amendment to Security Deposit Clause
Tenant has provided to Landlord, on execution of the Lease, a Security
Deposit in the total sum of $827,561.22, of which $227,561.22 (the "Cash
Deposit") is a cash deposit and the remaining $600,000.00 (the "Additional
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<PAGE>
First Amendment To Lease Page 12 of 16
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Deposit") is currently made by a letter of credit. On execution hereof, Tenant
shall deposit an additional cash deposit as part of the Cash Deposit in the sum
of $57,457.40. In addition thereto, Tenant shall deposit a letter of credit or
cash to increase the Additional Deposit from $600,000.00 to $1,400,000.00.
Following these deposits, the total Security Deposit, including Cash Deposit and
Additional Deposit, will be $1,685,018.60.
Upon delivery of the Second Floor Space, Tenant shall further increase
the Cash Deposit by a further cash deposit of $64,025.00, with the result that
the total Security Deposit, including Cash Deposit and Additional Deposit, will
be increased to $1,749,043.60.
The foregoing deposits shall be held, treated, and applied pursuant to
the provisions of the Lease relating thereto, as amended hereby. Paragraph 3B of
the First Addendum to Lease is deleted hereby, and the following is substituted
therefore:
B. Notwithstanding the foregoing, the Additional Deposit, whether
then held as a cash or letter of credit deposit, shall be released by
Landlord if (1) four years have passed after the Commencement Date under
the Lease and (2) Tenant has achieved all of the following goals during
the calendar quarters immediately preceding the date of release
1. Net Income per Tenant's audited financial statements has been
profitable each quarter for six consecutive calendar quarters
immediately preceding the release;
2 Income from Continuing Operations per Tenant's audited
financial statements has been profitable each quarter for six
consecutive calendar quarters immediately preceding the release;
3. The aggregate total of profit for Net Income and Income from
Continuing Operations per
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<PAGE>
First Amendment To Lease Page 13 of 16
--------------------------------------------------------------------------------
Tenant's audited financial statements for the six immediately
preceding calendar quarters as shown by Tenant's audited financials
is at least $15,000,000.00.
4. Tenant is not then in default past any applicable cure period
provided in the Lease
In addition, the achievement of these goals must be documented to
Landlord in form and substance reasonably approved by Landlord, and
Tenant's audited financials must be in accordance with generally
accepted accounting principles, consistently applied. Release of the
Additional Deposit shall not take place until at least four years
have passed after the Commencement Date under the Lease.
13. Tenant's Share
Beginning on the First Floor Commencement Date, the Tenant's Share under
the Lease shall remain 100% of the Existing Premises, shall be increased to
47.30% of the 3101 Building, and shall be increased to 82.73% of the Project. In
the event Tenant takes early occupancy of the First Floor Space prior to the
First Floor Commencement Date, then the Tenant's Share shall be so increased
from the first day of early occupancy. Notwithstanding the foregoing, until the
Commencement Date for the Existing Premises (if such Commencement Date is later
than the First Floor Commencement Date), Tenant's Share of the Existing Premises
shall be 0% and Tenant's Share of the Project shall be determined solely by the
space of which it has possession, if any..
Beginning on the Second Floor Commencement Date, the Tenant's Share
under the Lease shall be 100% of each of the three Buildings (the 3101 Building
and the Existing Premises) and 100% of the Project.
14. Parking
Effective on the First Floor Commencement Date, Tenant's Allocated
Parking Stalls shall be increased to 445 stalls. Effective on the Second Floor
Commencement Date, Tenant's Allocated Parking Stalls shall be all on-site
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<PAGE>
First Amendment To Lease Page 14 of 16
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parking stalls. From and after the Second Floor Commencement Date, Tenant may
designate a further five (5) parking stalls for use as "Visitor" spaces, subject
to all of the terms and provisions of the Lease and in particular, to Paragraph
7 of the First Addendum to Lease.
15. Continuing Obligation
Except as expressly set forth in this Amendment, all terms and
conditions of the Lease remain in full force and effect, and all terms and
conditions of the Lease are incorporated herein as though set forth at length.
16. Effect of Amendment
This Amendment modifies the Lease. In the event of any conflict or
discrepancy between the Lease and/or any other previous documents between the
parties and the provisions of this Amendment, then the provisions of this
Amendment shall control. Except as modified herein, the Lease shall remain in
full force and effect.
17. Authority
Each individual executing this Amendment represents and warrants that he
or she is duly authorized to and does execute and deliver this Amendment
pursuant to express authority from Tenant or Landlord, as applicable, pursuant
to and in accordance with the By-Laws and the other organic documents of the
signing party.
18. Entire Agreement
The Lease, as modified by this Amendment, constitutes and contains the
entire agreement between the parties, and there are no binding agreements or
representations between the parties except as expressed herein. Tenant
acknowledges that neither Landlord nor Landlord's Agents have made any legally
binding representations or warranties as to any matter except for such matters
which are expressly set forth herein and in the Lease, including any
representations or warranties relating to the condition of the Premises or the
improvements thereto or the suitability of the Premises or the Project for
Tenant's
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<PAGE>
First Amendment To Lease Page Page 15 of l6
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business.
19. Commissions
Commissions on this transaction will be subject to the provisions of
Paragraph 15.13 of the Lease, and commissions to Retained Real Estate Brokers
will be paid by Landlord pursuant to Landlord's separate written agreement with
such Brokers.
20. Subordination and Non-Disturbance Agreement
Not later than the First Floor Commencement Date, Landlord will obtain
for Tenant the written agreement of Wells Fargo Bank incorporating this
Amendment into the Subordination and Non-Disturbance Agreement executed by said
lender with regard to the original Lease.
21. Elevator Access
Tenant acknowledges that, from time to time during the period when the
Second Floor Space is not under Tenant's control, the tenant thereof, currently
TollBridge, will be required to service, maintain, and when necessary repair the
elevator, which requires access to elevator facilities through a portion of the
First Floor Space. Tenant agrees that during such period, Tenant will cooperate
reasonably with the Second Floor Space tenant and its vendors and service
providers to allow such service, maintenance, and repair at reasonable times and
on reasonable conditions. Tenant shall not be responsible for any damage caused
by such entry and access into the First Floor Space.
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<PAGE>
First Amendment To Lease Page 16 of 16
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LANDLORD: TENANT:
Orchard Jay Investors, LLC, a Cylink Corporation, a California
California limited liability company corporation
By: ___________________ By: /s/ [ILLEGIBLE]
Michael J. Biggar ------------------------
Managing Member
/s/ [ILLEGIBLE]
Dated: ___________________ ---------------------------
[Print Title]
CFO
David J. Brown ---------------------------
[Print Title]
By: /s/ Robert B. Fougner
------------------------
By: Orchard Jay Investors, LLC
his authorized agent Robert B. Fougner
---------------------------
[Print Name]
By: _________________________ Corporate Secretary
Michael J. Biggar ---------------------------
Managing Member [Print Title]
Dated: ______________________
--------------------------------------------------------------------------------
<PAGE>
Exhibit A
First Floor Space, 3101 Building
[GRAPHIC OMITTED]
Not a part of First Floor Space
Page One of Two
<PAGE>
Exhibit A
Second Floor Space, 3101 Building
[GRAPHIC OMITTED]
Page Two of Two
<PAGE>
Exhibit B
Schedule of Performance
First Floor Tenant Improvements
Action Responsible
Items Due Date Party
------ -------- -----------
A. Delivery to Completed. Tenant
Landlord of
Tenant's Interior
Interior
B. Delivery to Completed. Landlord
Tenant of Revised
First Floor Plans
C. Approval by 8/10/99 Tenant
Tenant of Revised
First Floor Plans
D. Delivery to Tenant 8/11/99 Landlord
of Constuction Cost
Estimate for Revised
Plans
E. Approval by Tenant 8/13/99 Tenant
of Construction
Costs for Revised
Plans
F. Issuance of 8/9/99 Landlord
Building Permit
for Original Plans
G. Commencement of 8/23/99 Landlord
construction
of First Floor
Improvements
H. Issuance of Building 8/31/99 Landlord
Permit for Revised
Plans
I. Substantial 10/1/99 Landlord
Completion
of First Floor
Improvements