Office Lease

EXECUTION COPY


OFFICE LEASE


between


MICRON CUSTOM MANUFACTURING SERVICES, INC.


(Landlord)


----------


and


MICRON ELECTRONICS, INC.


----------


(Tenant)


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TABLE OF CONTENTS


Section Page
----


1. Lease 1

2. Term 1

3. Rent 1

4. Use and Condition of Premises 2

5. Services 3

6. Alterations and Liens 3

7. Insurance 4

8. Fire or Casualty and Condemnation 4

9. Indemnification 5

10. Waiver 5

11. Assignment and Subletting 6

12. Rules and Regulations 6

13. Default and Remedies 6

14. Covenant of Quiet Enjoyment 6

15. Miscellaneous 7

EXHIBIT "A" DRAWING OF PREMISES A-1


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OFFICE LEASE


THIS OFFICE LEASE (this "Lease") is made as of this 1st day of November, 1996, between MICRON CUSTOM MANUFACTURING SERVICES, INC., an Idaho corporation ("Landlord"), and MICRON ELECTRONICS, INC., a Minnesota corporation ("Tenant").


RECITALS


A. Landlord owns the Premises (as hereinafter defined) for use in its general corporation operations.


B. Landlord is willing to lease the Premises to Tenant, and Tenant is willing to lease the Premises from Landlord, upon the terms and conditions set forth in this Lease.


LEASE OF PREMISES


In exchange for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:


1. Lease. Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, on the terms and conditions hereinafter set forth, those premises (the "Premises") containing approximately 31,975 square feet of rentable area and depicted on the floor plan attached hereto as Exhibit "A" of the building located at 16399 Franklin Road, Nampa, Idaho 83687 (the "Building"). The Building, the land upon which it is located, and all other improvements and facilities located on such land, are hereinafter called the "Property."


2. Term The term of this Lease (the "Term") shall be for three (3) years, commencing on November 1, 1996. Either party may elect to terminate this Lease, in whole or in part, at any time after the first year for any reason by giving the other party written notice of such election not less than ninety (90) days before the date the termination is to become effective, or such notice as shall be mutually agreeable to the parties.


3. Rent. Tenant shall pay Landlord, upon execution of this Lease, the sum of $480,000.00 in payment of rent for the first year of the Term of this Lease. During the second and third year of the Term, Tenant shall pay rent for the Premises in the amount of $40,000.00 per month. Rent for the second and third year of this Lease shall be payable on a monthly basis, in advance, and shall be due on the first day of


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each month during the Term, without notice or demand.


4. Use and Condition of Premises. Tenant shall use and occupy the Premises solely for administrative business purposes. Tenant hereby accepts the Premises in their current physical condition (i.e., "AS-IS" condition). At the expiration or other termination of this Lease, Tenant shall leave the Premises, and during the Term will keep the same, in good order and condition, ordinary wear and tear and damage by fire or other casualty excepted (other than fire or other casualty occurring through the negligence or willful act or omission of Tenant or Tenant's agents, employees, contractors or invitees); and for that purpose, Tenant shall make all necessary repairs and replacements. At the expiration or termination of this Lease, Tenant shall remove from the Premises all furniture, trade fixtures, office equipment and all other items of personal property owned and purchased by Tenant. All such items not removed from the Premises shall conclusively be deemed to have been abandoned and may be appropriated, sold, stored, destroyed or otherwise disposed of by Landlord without notice to Tenant or any other party and without any obligation to account therefor. Tenant shall pay Landlord all expenses incurred in connection with the disposition of such property. Tenant shall comply with all laws, rules, orders, ordinances and regulations applicable to Tenant or to the use or occupancy of the Premises.


During its occupation of the Premises under this Lease, Tenant's employees working on the Premises shall also be entitled to use of the parking lot, cafeteria, conference rooms adjacent to the Premises and all other common areas.


Tenant shall not bring or permit to remain in the Premises any Hazardous Substances, except ordinary office supply products used and stored in usual quantities and manner. As used in the preceding sentence, the term "Hazardous Substances" means any hazardous or toxic substances, materials or wastes, including, but not limited to, those substances, materials, and wastes listed in the United States Department of Transportation Hazardous Materials Table (49 CFR ss. 172.101) or by the Environmental Protection Agency as hazardous substances (40 CFR Part 302) and amendments thereto, or such substances, materials and wastes which are or become regulated under any applicable local, state or federal law including, without limitation, any material, waste or substance which is (i) designated as a "hazardous substance" pursuant to Section 311 of the Clean Water Act, 33 U.S.C. ss. 1251, et seq. (33 U.S.C. ss. 1321) or listed pursuant to Section 307 of the Clean Water Act (33 U.S.C. ss. 1317), (ii) defined as a "hazardous waste" pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. ss. 6901, et seq. (42 U.S.C. ss. 6903) or (iii) defined as a "hazardous substance" pursuant to Section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. ss. 9601).


Tenant shall, upon demand, pay to Landlord all costs incurred by Landlord to


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repair damage to the Property caused by Tenant, its agents, employees, contractors or invitees. Tenant shall not do or commit, or suffer or permit to be done or committed, any act or thing as a result of which any policy of insurance of any kind on or in connection with the Property shall become void or suspended, or any insurance risk on or in connection with the Building or any other portion of the Property shall (in the opinion of the insurer or any insurance organization) be rendered more hazardous or require payment of a greater premium. Without limiting other rights and remedies of Landlord, Tenant shall pay as additional rent the amount of any increase of premiums for such insurance resulting from any breach of this provision.


5. Services. So long as Tenant is not in default hereunder, Landlord shall, subject to the terms and conditions hereinafter set forth, furnish or provide to the Premises (i) air conditioning, heat, and lighting twenty-four (24) hours per day, seven days per week, in such quantity and of such quality as Landlord determines is reasonably necessary for Tenant's comfortable use and enjoyment of the Premises for its purposes; (ii) water for lavatory and drinking purposes at all times when the Premises are occupied; (iii) routine janitorial services, (iv) maintenance of the common areas of the Building and (v) security services similar to those provided to other parts of the Building.


Electricity service and costs, real property taxes and real property insurance relating to the Premises are the obligations and expense of Landlord. Tenant's phone charges, supply costs and taxes (other than real property taxes) relating to the Premises are the obligations and expense of Tenant.


Landlord shall not be liable for damages (by abatement of rent or otherwise) for failure to furnish or delay in furnishing any utility o ...