Master Building Lease

HARBOR GATEWAY BUSINESS CENTER
HI-TECH/RESEARCH AND DEVELOPMENT
MASTER BUILDING LEASE


Landlord hereby leases to Tenant, and Tenant hereby hires from Landlord the following described premises (the "Premises") located in the following described building (the "Building"), upon the following terms and conditions. The following Basic Lease Provisions are an integral part of this Lease and each reference in this Lease to any Basic Lease Provision incorporates all of the terms provided under such Basic Lease Provision. In the event of any conflict between any Basic Lease Provision and the balance of this Lease, the latter shall control. References to specific Articles are for convenience only and designate some of the Articles where references to the particular Basic Lease Provisions appear. (See Addendum Section 48.1)


BASIC LEASE PROVISIONS


Date of Lease: September 1, 1999 1. Landlord: C.J. SEGERSTROM & SONS, a California general partnership


2. Tenant: FILENET CORPORATION, a California corporation


3. Tenant's Trade Name: FileNET


4. Building Addresses: (See Addendum Section 48.1)


5. Commencement Date: (See Addendum Sections 48.1 and 48.3) (2.1)


Expiration Date: (See Addendum Sections 48.1 and 48.3)


6. Basic Annual Rent (triple net): (See Addendum Section 48.5)


7. Operating Expenses: (4)


(a) Tenant's Proportionate Share of Total Operating Expenses: (See
Addendum Section 48.1)


(b) Initial estimated Total Operating Expenses = $0.265 per square foot
per month for the full lease year 1999. Actual Total Operating
Expenses for 1999 and subsequent lease years shall be determined and
used as the basis for adjustments for future years as described in
Section 4 of Exhibit "B."


8. Rentable Area of Premises: Approximately 256,698 square feet: (47.5)
(See Addendum Sections 48.1 and 48.3)


9. Tenant's Allocated Parking Spaces: 993 spaces: (44)
(See Addendum Section 48.15)


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10. Deposits: Security Deposit: 1 month's rent in the form of a letter of (3.1 & 5)
credit: (See Addendum Section 48.7); First Month's Rent: HT-B Premises


11. Use of Premises: Corporate headquarters and marketing and administrative (10)
offices (including engineering offices), distribution and light industrial
uses (including laboratory, warehousing, manufacturing and assembly uses)
and such other uses as are consistent with Tenant's current use of the
Premises pursuant to the Old Leases (as defined in Addendum Section 48.1).


12. Alterations: Except as otherwise expressly provided in this Lease, Tenant (9)
shall not make any alterations of or to the Premises without the prior
written consent of Landlord.


13. Brokers: CB/Richard Ellis (38)


14. Addresses for payments and notices: (35)


To Landlord: To Tenant:


C.J. Segerstrom & Sons FileNET Corporation
3315 Fairview Road 3565 Harbor Boulevard
Costa Mesa, California 92626 Costa Mesa, CA 92626
Attn: Controller Attn: Senior Vice President of Operations


IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease, consisting of the foregoing provisions and Articles 1 through 48 which follow, together with Exhibits "A" through "F" incorporated herein by this reference, as of the date first above written.


"Landlord" "Tenant"


C.J. SEGERSTROM & SONS, FILENET CORPORATION, a California general partnership a California corporation


By By
Manager
Title: By
Manager
By


Title:


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HARBOR GATEWAY BUSINESS CENTER


HI-TECH/RESEARCH AND DEVELOPMENT MASTER BUILDING LEASE


Tenant: FILENET CORPORATION


Premises: 3545 Harbor Boulevard (HTB)
3565 Harbor Boulevard (HT-1)
1540 Scenic Avenue (HT-2)
1550 Scenic Avenue (HT-3)
1535 Scenic Avenue (HT-14)
1590 Scenic Avenue (R&D 10)
1580 Corporate Drive, Suite 123 (R&D 8)
Costa Mesa, California 92626


HARBOR GATEWAY BUSINESS CENTER
HI-TECH BUILDING LEASE


Article 1. PREMISES (See Addendum Section 48.1)


1.1. Landlord hereby leases to Tenant and Tenant hereby leases from Landlord
that certain building (the "Building") or the portion thereof identified in
the applicable Basic Lease Provision and depicted on the plan(s) attached
hereto as Exhibit "A." - The Building, or the portion thereof leased to
Tenant, shall sometimes be referred to herein as the "Premises". The
Premises are located in the Harbor Gateway Business Center depicted on
Exhibit "A" attached hereto (the "Center").


1.2. Tenant is obtaining a right of exclusive use only of the Premises.
Landlord reserves to itself, its successors and assigns, together with the
right to grant and transfer all or a portion of the same, the non-exclusive
right of use of all portions of the Center other than that occupied by the
Premises for all purposes not inconsistent with Tenant's use of the
Premises.


Article 2. TERM (See Addendum Sections 48.1, 48.3 and 48.4)


2.1. The applicable term shall commence on the applicable Commencement Date (as
defined in Addendum Section 48.1), and shall end on the applicable
Expiration Date (as defined in Addendum Section 48.1). If Tenant shall
occupy the Premises prior to the Commencement Date, such occupancy shall be
subject to all of the provisions of this Lease, including all provisions
relating to rent and other sums payable hereunder. Such early possession
shall not, however, affect the applicable Expiration Date.


2.2. [Intentionally Deleted]


2.3. [Intentionally Deleted]


Article 3. RENT (See Addendum Section 48.5)


3.1. Tenant shall pay, for each lease year, a Basic Annual Rent in the amount
shown in the applicable Basic Lease Provision, in equal monthly
installments payable, without prior notice or demand, on the first day of
each month in advance. If the Commencement Date occurs on other than the
first day of a month, the basic rent for the fraction of the month starting
with the Commencement Date shall be prorated and paid on said Commencement
Date. If the term hereof ends on a day other than the last day of a month,
the basic rent for the month during which said expiration occurs shall be
prorated on the basis of the actual number of days in said month. Tenant
has deposited with Landlord the sum set forth in the applicable Basic Lease
Provision as the first month's Monthly Basic Rent due hereunder for the
applicable Premises, which sum shall be applied by Landlord, without
interest, to the first installment(s) of Monthly Basic Rent due hereunder
with respect to such Premises until applied in full.


3.2. As used herein, a "lease year" is a period of twelve (12) consecutive full
calendar months commencing on January 1 and ending on December 31, except
that if the Commencement Date occurs on a date other than January 1 there
shall be a partial lease year for the period from the Commencement Date to
the next following December 31, both dates inclusive, and the last lease
year, if this Lease expires or is terminated on a date other than December


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31, shall be a partial lease year for the period beginning on January 1
following the last preceding lease year and ending on the expiration or
termination date.


3.3. In addition to the basic rent, Tenant agrees to pay Tenant's Proportionate
Share of Total Operating Expenses as and when provided in Article 4 and all
taxes as and when provided in Article 7. Basic rent and such expenses are
hereinafter sometimes referred to collectively as the "rent".


Article 4. COMMON FACILITIES EXPENSES (See Addendum Section 48.6)


With respect to each full or partial lease year, commencing with the lease year in which the Commencement Date occurs, Tenant shall pay an amount equal to Tenant's Proportionate Share of Landlord's estimate of Total Operating Expenses for such lease year. At the end of each lease year, an adjustment shall be made by Landlord, and Tenant shall pay such amount or receive a credit of such amount as is necessary to adjust Tenant's payments to the actual Proportionate Share of Total Operating Expenses for such lease year. Such payments and adjustments will be made as provided in Exhibit "B." "Total Operating Expenses" and "Tenant's Proportionate Share" are each defined in Exhibit "B."


Article 5. SECURITY DEPOSIT (See Addendum Section 48.7)


Tenant shall deposit with Landlord the sum set forth in the applicable Basic Lease Provision in the form of an unconditional, irrevocable letter of credit as security for the faithful performance of this Lease by Tenant. Such letter of credit shall be effective for a period of one (1) year and shall be renewed at the end of each one (1) year period during the term of this Lease for additional periods of one (1) year until the last Expiration Date so as to keep the letter of credit in effect during the entire term of this Lease. If Tenant defaults with respect to any provision of this Lease, or if Tenant fails to renew such letter of credit not less than thirty (30) days prior to the expiration date thereof, Landlord may draw, in whole or in part, on the letter of credit, and use, apply, or retain all or any part of the amount drawn thereon for the payment of any sum in default, the payment of any other amount which Landlord may spend or become obligated to spend by reason of Tenant's default or to compensate Landlord for any other loss or damage which Landlord may suffer by reason of Tenant's default. If any portion of such amount so drawn is used or applied, Tenant shall within ten (10) days after written demand therefor, deposit a new letter of credit with Landlord in an amount sufficient to restore the letter of credit required hereunder to its original amount. If Tenant shall faithfully perform every provision of this Lease, the letter of credit or any unused portion thereof shall be returned to Tenant within the time provided in Civil Code section 1950.7 and after Tenant has surrendered all of the Premises to Landlord.


Article 6. UTILITIES


6.1. Tenant shall pay all charges for utility services furnished to the Premises
during the term, together with all taxes thereon as set forth on the
purveyors' bills and shall indemnify Landlord and the Center from and
against any such charges or liens arising therefrom. Landlord contemplates
that all such services shall be separately metered to Tenant; provided,


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however, that if any such services are not separately metered, Tenant shall
pay a reasonable proportion to be determined by Landlord of all charges
jointly metered with other Premises.


6.2. Tenant shall comply with all rules and regulations which Landlord may
reasonably establish for the proper functioning and protection of the air
conditioning, electrical, heating and plumbing systems. Tenant shall not
overload any of the mechanical, electrical, plumbing, sewer or other
utility equipment. Landlord shall not be liable in damages or otherwise
for any failure or interruption of any utility service being furnished to
the Premises and no such failure or interruption shall entitle Tenant to
terminate this Lease or to an abatement of any rent due hereunder;
provided, however, that in the event that any utility fails or is
interrupted solely due to the fault of Landlord, and such failure or
interruption materially and adversely effects Tenant's business, and such
failure or interruption continues for a period of more than two (2) full
business days, rent hereunder shall abate beginning on the third (3rd) full
business day of such failure or interruption shall continue until the last
business day of such failure or interruption before the utility involved is
restored or until Landlord otherwise begins to provide full power by means
of some emergency power generation method; provided, further, however, that
in the event that any such failure or interruption is not remedied within
one hundred twenty (120) days, with respect to any Premises, Tenant shall
have the right to terminate this Lease as to such Premises. The foregoing
shall be Tenant's sole remedy for any such failure and interruption. In
addition, nothing contained in the foregoing shall be deemed to limit or
prohibit Landlord from receiving proceeds under any rental interruption or
business interruption policy maintained by Landlord pursuant to this Lease.


Article 7. PAYMENT OF TAXES


7.1. Tenant shall pay, not later than ten (10) days prior to delinquency, all
real property taxes levied or assessed by any taxing or assessing authority
upon, against or with respect to the Premises. The term "real property
taxes" shall include (i) all taxes, assessments and governmental charges
and surcharges (including, without limitation, assessments for public
improvements or benefits whether or not commenced or completed during the
term of this Lease, or for water, sewer, or storm drains, and other rents,
rates, charges, excises, levies, license fees, service fees, use fees,
permit fees and other authorization fees) and all other charges (in each
case, whether general or special, ordinary or extraordinary, foreseen or
unforeseen) of every kind and character (including all penalties and
interest thereon), levied upon or with respect to the Premises, (ii) any
tax or excise on or measured by rents, and (iii) any other tax, however
described, levied against Landlord or Tenant on account of the rent
reserved hereunder or on the business of renting the Premises. Without
limiting the generality of the foregoing, real property taxes shall include
any assessment by any governmental authority pursuant to any enabling
statute (such as, for example an "SB 55 Assessment") or payment to retire
bonds or other indebtedness created by a special assessment district, an
improvement district or other governmental authority (such as, for example,
1911 Act and 1915 Act Bonds). Notwithstanding anything to the contrary in
the foregoing, "real property taxes" shall not include franchise, estate,
inheritance, succession, capital levy, net income or excise profits taxes
imposed upon Landlord, except that if real property taxes are withdrawn in
whole or in part and any substitute tax is made therefor, such tax shall
for the purpose of this Lease be considered a real property tax, regardless
of how denominated or the source from which collected. Tenant shall, not
later than the delinquency date for any real property tax, furnish to
Landlord a copy of the receipted tax bill or other documentary proof of
said payment. Tenant appoints Landlord as its attorney-in-fact for the


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purpose of performing, at Tenant's sole cost, all acts necessary to cause
the Premises to be separately assessed, and Tenant agrees to pay to
Landlord, within ten (10) days after the date of billing, all costs
reasonably incurred by Landlord in performing such acts.


7.2. Tenant shall be responsible for and shall pay not later than ten (10) days
prior to delinquency all municipal, county and state taxes, levies and fees
of every kind and nature, including but not limited to, general or special
assessments, assessed during the term of this Lease against any leasehold
interest, leasehold improvement and all furniture, fixtures, equipment and
other personal property of any kind placed, installed or located within,
upon or about the Premises. Tenant shall cause all taxes imposed upon any
personal property situated in the Premises to be levied or assessed
separately from the Premises and not as a lien thereon. Upon request of
Landlord, Tenant shall, not later than the delinquency date for any such
tax, furnish to Landlord documentary proof of payment of said tax.


7.3. If at any time during the term any of the above-described taxes are not
levied and assessed separately to Tenant, Tenant shall pay to Landlord (a)
that portion of such taxes assessed against the land underlying the tax
parcel which the gross area of the land underlying the Premises bears to
the gross area of the entire tax parcel; plus (b) that portion of such
taxes assessed against the improvements included within the tax parcel
which the valuation assigned by the taxing authorities to the Premises
bears to the valuation so assigned to all improvements included within such
tax parcel; plus (c) with respect to the other types of taxes, a reasonable
proportion thereof as determined by Landlord. If separate valuations as to
the Premises, the improvements thereto and Tenant's personal property in
the Premises are not reasonably available to Landlord, then the reasonable
determination by Landlord in good faith, from the best information
reasonably available to it, of the portion of such taxes assessed against
the Premises, the improvements thereto and Tenant's personal property in
the Premises shall be conclusive. If the Premises, the improvements
thereto and Tenant's personal property in the Premises are not separately
assessed and taxed, then such taxes shall be paid to Landlord within ten
(10) days after Tenant's receipt of Landlord's invoice therefor.


7.4. Provided that the Premises are separately assessed and taxed, Tenant may,
at Tenant's sole risk and cost, contest the amount and/or validity of
applicable taxes by appropriate legal proceedings; provided, however, that
said right shall be availed of only upon condition that Tenant shall
indemnify and hold Landlord and the Center harmless from all losses, costs
and expenses, including but not limited to, Landlord's reasonable
attorneys' fees and court costs, which in any manner arise from or with
respect to such contest and upon further condition that Tenant shall take
all actions required to prevent the loss or forfeiture of the Center or any
part thereof. The foregoing shall not, however, relieve, modify, or extend
Tenant's covenant to pay any such taxes at the time and in the manner
provided in this Article unless such proceedings operate to prevent the
sale of the Center or any part thereof or the placing of any lien thereon
to satisfy such taxes prior to the final determination of such
proceedings. Upon termination of such proceedings, Tenant shall promptly
pay all taxes then payable and the interest and penalties in connection
therewith, and the charges accruing in such proceedings.


7.5. All taxes for the first and last lease year of this Lease shall be prorated
between Landlord and Tenant on the basis of the fiscal year of the
appropriate governmental authority. Taxes which are levied on a fiscal
year basis shall be deemed to apply one-twelfth (1/12) to each calendar
month in such fiscal year.


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Article 8. MAINTENANCE AND REPAIR (See Addendum Section 48.8)


8.1. Except as provided in Sections 8.2 and 8.3, Articles 15, 17 and 18 and
Addendum Section 48.12, Tenant at its expense shall keep in good order,
condition, and repair (including replacement of parts and equipment, if
necessary) the Premises and every part thereof and all equipment (including
all heating, ventilating and air conditioning equipment unless the first
paragraph of Section 8.3 applies) trade fixtures, furnishings and other
personal property in the Premises or serving the Premises, and shall
furnish and repair all expendables (soap, towels, etc.). Tenant shall
promptly at Tenant's cost make all repairs necessary to maintain the
Premises in good condition. Tenant shall provide whatever treatment may be
necessary, as often as may be required, to keep the Premises neat and
attractive.


On the last day of the term hereof, or on any sooner termination of this
Lease, Tenant shall, subject to the provisions of Articles 15, 17 and 18,
surrender the Premises to Landlord in good condition, ordinary wear and
tear excepted (subject, however, to Tenant's obligations pursuant to the
foregoing provisions of this Section 8.1).


8.2. Landlord shall repair and maintain the exterior walls of the Building and
the roof and foundations of the Building in good condition and repair.
Landlord shall not be liable for failure to make any repairs or maintenance
unless such failure persists for an unreasonable time after written notice
of the need therefor is given to Landlord by Tenant. Except as provided in
Articles 15, 17 and 18, there shall be no abatement of rent and no
liability of Landlord by reason of any injury to or interference with
Tenant's business arising from the making of any repairs, alterations, or
improvements in or to any portion of the Premises, or in or to the
fixtures, appurtenances and equipment therein or to the Common Facilities
or the improvements thereon. Should any controversy relating to any
alleged failure by Landlord to repair and maintain portions of the Premises
as described above arise between Landlord and Tenant, such controversy
shall be settled by arbitration in accordance with the provisions of
Addendum Section-48.21. Landlord's costs incurred in repair and maintenance
of the Building and the equipment described in this Section shall be
included in Total Operating Costs as defined in Exhibit "B." Except as
provided in this Section and Articles 15, 17 and 18, Landlord shall not be
obligated to repair or maintain the Premises or to bear any part of the
expense of the Premises.


Except as provided in Addendum Section 48.8, Tenant expressly waives and
releases its right to make repairs at Landlord's expense under Sections
1932(1) and 1942 of the California Civil Code or any other statute or rule
of law now or hereafter in effect.


8.3. Landlord may elect, by written notice to Tenant, to maintain, repair and
replace the heating, ventilating and air conditioning system in or serving
the Premises. Tenant shall reimburse Landlord for Landlord's costs so
incurred, together with an amount equal to ten percent (10%) of such costs
to cover Landlord's administrative and overhead expenses. Such
reimbursement may be, at Landlord's election, retrospective or in advance
based upon Landlord's estimate of the costs to be incurred and may be in
periodic installments not more frequent than monthly. If Landlord elects to
collect such reimbursement in advance based upon an estimate of costs, at
the end of each lease year Landlord shall adjust as necessary the estimated
amounts paid by Tenant to actual costs with a billing to Tenant for any
additional amount due or a credit to Tenant against the next amounts due
equal to any amount paid by Tenant in excess of the actual costs of


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Landlord hereunder, and Landlord shall provide Tenant verified invoices
evidencing the actual cost of such maintenance within thirty (30) days
following the end of each lease year for which Landlord receives a written
request for the same from Tenant within the last sixty (60) days of such
lease year. Landlord may cause the maintenance services hereunder to be
performed by a service which maintains the system in the Premises and
systems located in other tenant premises in the Center. Unless the
provider of such services allocates its charges among individual tenant
premises, Tenant's obligation hereunder shall be to reimburse Landlord for
a portion of the total cost charged as determined by Landlord. The amounts
to be reimbursed by Tenant pursuant to this Section shall be additional
rent. Landlord may at any time on at least thirty (30) days' written notice
to Tenant elect to cease providing maintenance of the system. After such
notice, Tenant shall maintain, repair and replace the system at Tenant's
cost. Tenant shall contract with a licensed air conditioning firm approved
in advance by Landlord to perform inspections, and any maintenance, repair
and replacement recommended as the result of such inspections, on a
periodic basis not less frequently than as recommended by the
manufacturers' maintenance and repair manuals. If Tenant shall fail to
perform its obligations under this paragraph, Landlord may, upon five (5)
days' written notice to Tenant, perform such inspections, maintenance,
repair and replacement work and the cost thereof, together wi ...