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Exhibit 10.6.1
SUBLEASE AGREEMENT
This Sublease Agreement ("Sublease") dated for reference purposes only,
December 15, 1997, by and between Siemens Pyramid Information Systems, Inc., a
Delaware corporation, with its principal offices at 0000 Xxxxx Xxxxx Xxxxxx, Xxx
Xxxx, Xxxxxxxxxx, 00000 ("SUBLANDLORD"), and Xxxxx Corporation, a California
corporation, with its principal business offices at 0000 Xxxxxxxx Xxxxx, Xxxxx
Xxxxx, Xxxxxxxxxx, 00000 ("SUBTENANT").
RECITALS
[ILLEGIBLE]
Therefore, SUBLANDLORD and SUBTENANT agree as follows:
1. PREMISES. Subject to the terms, conditions, and covenants set forth
in this Sublease, SUBLANDLORD hereby leases to SUBTENANT and SUBTENANT hereby
leases from SUBLANDLORD, approximately 47,950 rentable square foot in the
Building commonly known as 0000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxx-Xxxxxxx Xxxxxxxx
Xxxxx (X0), XX ("Premises"). A description of the Premises is attached hereto as
EXHIBIT B, outlined in yellow, attached which by this reference is incorporated
herein.
2. EXPANSION PREMISES. Subject to the terms, conditions, and covenants
set forth in this Sublease, effective on October 1, 1998, the Premises shall be
deemed to include an additional 17,877 rentable square foot adjacent space in
the Building commonly known as 0000 Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, XX-X0
("Expansion Premises") at which time, the
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SUBLANDLORD shall deliver the Expansion Premises to SUBTENANT "broom clean" with
all building systems in good working and operable condition. The Expansion
Premises shown as outlined in green on Exhibit B. SUBTENANT shall have a right
of first refusal for the remainder of the Building commonly known as 0000 Xxxxx
Xxxxx Xxxxxx, Xxx Xxxx, XX-X0 under the same terms and conditions of this
Sublease Agreement, except as provided in this paragraph below.
SUBTENANT shall have a right of first refusal to sublease the remainder
of the Building. If SUBLANDLORD desires to sublease that space, or any portion
thereof, to a third party, SUBLANDLORD shall provide written notice to SUBTENANT
of the terms upon which SUBLANDLORD would be willing to lease the space in
question. If SUBTENANT does not deliver written notice to SUBLANDLORD, within
fifteen (15) days of receipt of SUBLANDLORD's notice, of SUBTENANT's willingness
to occupy the subject space SUBLANDLORD shall be free to sublease that space to
the third party in question. If SUBTENANT does timely indicate its willingness
to occupy the subject space, SUBLANDLORD shall lease the space to SUBTENANT on
all the same terms and conditions set forth herein, including Rent, provided
that if SUBTENANT indicates in its response to SUBLANDLORD that SUBTENANT
desires to substitute any material business term from SUBLANDLORD's notice which
is more favorable to SUBTENANT, such term shall be incorporated into the
sublease of the subject space. It is understood and agreed that SUBLANDLORD
shall have the right to Sublease to any subsidiary, affiliate, or alliance
company without triggering the foregoing right of first refusal.
3. TERM. The term of this Sublease shall be for a period of forty three
(43) months commencing on February 15, 1998 ("Commencement Date"), with Basic
Rent due and payable upon the Commencement Date. The Sublease will expire on
September 14, 2001, unless sooner terminated pursuant to any provision hereof,
or by breach of the terms and conditions of this Sublease.
If for any reason, except as provided for below, SUBLANDLORD has not
delivered possession of the Premises to SUBTENANT by February 15, 1998, in the
condition required hereunder, which shall include completion by SUBLANDLORD, at
its sole cost and expense, of a demising wall separating the existing Premises
and the subleased Premises in a manner reasonably acceptable to SUBTENANT, this
Sublease shall not be void or voidable, nor shall SUBLANDLORD be liable to
SUBTENANT for any loss or damage resulting therefrom: but in such event
SUBTENANT shall not be obligated to pay rent until the date that SUBLANDLORD
delivers possession of the Premises, and the Commencement Date of this Sublease
shall be revised to conform to such date. Notwithstanding the foregoing
sentence, SUBLANDLORD shall not be responsible for any delays whatsoever caused
by or due to the fault of MASTER LANDLORD, or any such delays which may be
caused by, due to, or occur in connection with obtaining MASTER LANDLORD's
consent to this Sublease, or permits from the City of San Xxxx.
4. BASIC RENT. SUBTENANT shall pay to SUBLANDLORD all Basic Rent for the
Premises according to the following schedule:
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Months Basic Monthly Rental
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February 15, 1998 - September 30, 1998 $ 79,117.50
October 1, 1998 - January 31, 1999 $108,614.55
February 1, 1999 - January 31, 2000 $111,905.90
February 1, 2000 - January 31, 2001 $115,197.25
February 1, 2001 - September 14, 2001 $118,488.60
All such Basic Rent shall be payable in advance on the first day of each
calendar month during the Term. SUBTENANT shall deposit with SUBLANDLORD upon
execution of this Sublease the sum of Seventy Nine Thousand One Hundred
Seventeen Dollars and 50/100 ($79,117.50) as Basic Rent for the first month that
Basic Rent is due under this Sublease, namely February 15, 1998 through March
14, 1998. In addition to said Basic Rent, SUBTENANT shall pay its pro-rata share
based on occupied square footage compared to total square footage of the
Premises, of all charges, costs and expense obligations defined as Additional
Rent as set forth in said Master Lease, including any obligations for taxes,
assessments, utilities, and common area costs, and excluding any penalties,
interest, damages, costs or expenses resulting from a default of SUBLANDLORD.
All Basic and Additional Rent ("Rent") shall be paid to SUBLANDLORD at its
address indicated above, or at any other place designated by SUBLANDLORD. Rent
shall be payable without notice or demand and without any deduction, offset, or
abatement, except that Rent shall xxxxx for any portion of the Premises for
which Rent abates under the Master Lease. Rent payable for any portion of a
calendar month shall be a pro rata portion of the installment payable for a lull
calendar month.
5. SECURITY DEPOSIT. Concurrently with SUBTENANT's execution of this
Sublease, SUBTENANT shall deposit with SUBLANDLORD the sum of Two Hundred Thirty
Six Thousand Nine Hundred Seventy Seven Dollars and 20/100 ($236,977.20). Said
sum shall be held by SUBLANDLORD as a Security Deposit for the faithful
performance by SUBTENANT of all the terms, covenants and conditions of this
Sublease to be kept and performed by SUBTENANT during the term hereof. If
SUBTENANT defaults with respect to any provision of this Sublease, including,
but not limited to, the provisions relating to the payment of Rent and any of
the monetary sums due herewith, SUBLANDLORD may (but shall not be required to)
use, apply or retain all or any part of this Security Deposit for the payment of
any other amount which SUBLANDLORD may spend by reason of SUBTENANT's default or
to compensate SUBLANDLORD for any other loss or damage which SUBLANDLORD may
suffer by reason of SUBTENANT's default. If any portion of said Deposit is so
used or applied, SUBTENANT shall, within ten (10) days after written demand
therefor, deposit cash with SUBLANDLORD in that amount sufficient to restore the
Security Deposit to its original amount. SUBTENANT's failure to do so shall be a
material breach of this Sublease. SUBLANDLORD shall not be required to keep this
Security Deposit separate from its general funds, and SUBTENANT shall not be
entitled to interest on such Deposit. So much of the Security Deposit as has not
been properly used, applied, or retained hereunder shall be returned to
SUBTENANT (or at SUBLANDLORD's option, to the last assignee of SUBTENANT's
interest hereunder) at the expiration of the Sublease term and after SUBTENANT
has vacated the Premises. If
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SUBTENANT, during the term of the Sublease, successfully completes an Initial
Public Offering (IPO) and can provide proof and evidence thereof, SUBLANDLORD
shall reimburse to SUBTENANT one-half of the security deposit, One Hundred
Eighteen Thousand Four Hundred Eighty Eight and 60/100 ($118,488.60).
6. USE. SUBTENANT shall use the Premises only for general offices, light
assembly, light manufacturing, storage of electronic components and any other
related legal use in accordance with the Master Lease. SUBTENANT shall not
permit the Premises or any part thereof to be used for any purpose or use in
violation of any law or ordinance, or of the regulation of any governmental
authority, or in any manner that will constitute a nuisance, or in any manner
which would generate or create or emit any toxic waste, hazardous materials, or
environmental damage. SUBTENANT shall not allow any use in violation of any
existing restriction on the Premises. SUBTENANT shall conform its use of the
Premises in every respect to all laws, statutes, ordinances, and regulations now
enforced or hereafter enacted affecting the use of occupancy of the Premises,
provided that SUBTENANT shall not be obligated to correct any condition
pre-dating the Commencement Date for the initial Subleased Premises or the
Expansion Premises, unless the need to comply with such requirement is triggered
by a specific and particular use of the Subleased Premises by SUBTENANT, or by
the construction of alterations by SUBTENANT.
7. ACCEPTANCE OF PREMISES. SUBTENANT acknowledges that the Premises
contain certain existing tenant improvements with which SUBTENANT is familiar.
SUBTENANT agrees that its act of taking possession of the Premises will
constitute its acknowledgment and acceptance that the Premises are in rentable
and good condition, and that SUBLANDLORD makes no representation or warranty of
any kind whatsoever as to the condition or repair of the Premises. Except as
provided for in Section 7.1 below, SUBTENANT acknowledges and hereby agrees that
SUBTENANT is Subleasing the Subject Premises strictly on an "as is" basis, and
that SUBLANDLORD makes no representation or warranty relating to the suitability
of the Premises for SUBTENANT's intended use, or whether said Premises are in
compliance with all applicable building codes, governmental laws, statutes,
ordinances and regulations (e.g. ADA and Title 24 statutes and laws). Any
additional compliance measures regarding ADA shall be sole responsibility of
SUBTENANT, except as otherwise provided herein.
7.1 SUBLANDLORD shall deliver the Premises to SUBTENANT, prior to
SUBTENANT's access, with all building utility systems in good working and
operable condition and with the roof in good condition and repair. Any building
system or component that is altered or damaged during SUBTENANT's access to the
Premises for their operation setup, or thereafter during the term of this
Sublease, by SUBTENANT, its agents, employees or contractors, shall be repaired
at SUBTENANT's expense.
8. INCORPORATION OF MASTER LEASE, ASSUMPTION, TERMINATION OF MASTER
LEASE.
8.1 This Sublease is expressly subject and subordinate to the
terms and conditions of "The Master Lease" attached hereto as Exhibit A. Subject
and except for
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paragraphs 2, 4, 5, 24, 29C, 37, 38, and 41 of the Master Lease, and all
provisions contained in FIRST AMENDMENT TO LEASE AGREEMENT as they apply to this
Sublease, or as otherwise provided herein, all terms and conditions of the
Master Lease are incorporated herein and are deemed a part of this Sublease.
With respect to the obligation to maintain the Premises, SUBLANDLORD shall
continue to maintain the roof membrane, HVAC and other Building systems,
exterior landscaping and common areas as required under the Master Lease, and
SUBTENANT shall pay to SUBLANDLORD its pro rata share of the reasonable costs so
incurred promptly following receipt of written invoice therefor. The basis for
determining the pro rata share of the reasonable costs shall be; (i) an agreed
percentage of such costs if such costs are incurred in the common (shared) areas
of the Premises, proposed by SUBLANDLORD, on the basis of the relative
difference in the square footage of the Building to be occupied by SUBLANDLORD
and by SUBTENANT, to be 47% allocated to SUBTENANT, and after the Expansion
Premises is occupied by SUBTENANT, to be 65% allocated to SUBTENANT, and (ii)
100% allocated to SUBTENANT if such costs involve services rendered for the
primary benefit of the Premises or the Expansion Premises. Subject to Section 10
herein, references to Landlord and Tenant in the Master Lease shall, for
purposes of this Sublease, be deemed to refer to both MASTER LANDLORD and
SUBLANDLORD, and SUBTENANT, respectively, and reference to the Premises (as
defined in the Master Lease) shall refer to the Premises (as defined herein).
8.2 Except as otherwise provided herein, SUBTENANT hereby
expressly assumes and agrees to perform and comply with all obligations required
to be kept or performed by SUBLANDLORD pursuant to the provisions of the Master
Lease with respect to the Premises, to the extent incorporated into this
Sublease. SUBTENANT shall not commit or permit to be committed on the Premises
any act or omission which shall violate any term or condition of the Master
Lease. SUBTENANT agrees to indemnify, defend, hold harmless SUBLANDLORD from any
and all claims, damages, costs, and expenses (including reasonable attorney's
fees) with respect to SUBTENANT's non performance or non observance of any such
term and condition.
8.3 If the Master Lease is terminated, this Sublease shall
terminate simultaneously and the SUBLANDLORD and SUBTENANT shall thereafter be
released from all obligations under this Sublease accruing thereafter (except
that SUBTENANT shall have all of its rights and remedies against SUBLANDLORD if
the Master Lease is terminated as a result of a default by SUBLANDLORD
hereunder, if such default was not the result of a default by SUBTENANT
hereunder, and SUBLANDLORD shall refund to SUBTENANT any unreturned Rent paid in
advance, except as otherwise provided in this Sublease).
9. UTILITIES/SERVICES. SUBLANDLORD will provide domestic water for
building operation and utility water, natural gas, HVAC, electrical power, and
fire protection systems as necessary for the normal operation of the Subleased
Premises, except for those services described below to be obtained directly by
SUBTENANT. Except as otherwise provided herein, SUBTENANT shall pay as
Additional Rent and in accordance with the Master Lease, its share of all
expenses, based on occupied square footage compared to total square footage of
the Premises,
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for all utilities provided to the Premises. SUBTENANT will reimburse to
SUBLANDLORD the actual cost of electrical power supplied to the Premises. The
parties have assumed that each party will consume electrical power at a similar
rate, and the electrical power costs will, therefore, be allocated initially
according to the percentage shares described in section 8.1. However, if either
party determines that the percentage shares do not accurately reflect the actual
consumption of electrical power by the parties, that party may so inform the
other party in writing. For a period of thirty days following receipt of such
notice, the parties will negotiate in good faith to attempt to allocate more
accurately the costs of electrical power, which may include retaining, at the
joint cost of the parties, an independent, qualified electrical consultant to
investigate actual electrical power usage. Provided, however, SUBTENANT shall
obtain, contract for, and pay 100% of all expenses relating to its personal
electronic communications, data and telephone services, its private security
systems, trash, and recycling services provided to the SUBTENANT's Premises.
SUBTENANT's pro-rata share of the Premises shall be 47% for the initial seven
and one-half (7-1/2) months of occupancy. Beginning October 1, 1998, this share
shall increase to 65% for the remainder of the Sublease term provided that if
SUBTENANT subleases the remainder of the Building, pursuant to paragraph 2
herein, its share shall increase to 100%. It is understood and agreed the cost
to sub-meter the Premises has been deemed prohibitive. Any electrical cost
incremental to SUBLESSOR'S normal operation shall be paid by SUBTENANT according
to the square footage allocation. All service, repairs, and maintenance
responsibilities will be listed on attached Schedule A.
10. OBLIGATIONS OF SUBLANDLORD. SUBLANDLORD agrees to maintain the
Master Lease during the Term of this Sublease, subject, however, to any
termination of the Master Lease without the fault of SUBLANDLORD. SUBLANDLORD
agrees to comply with or perform all of its obligations under the Master Lease
that SUBTENANT has not assumed under this Sublease. Provided, however,
SUBLANDLORD, does not assume the obligations required to be kept or performed by
the MASTER LANDLORD under the Master Lease. SUBLANDLORD shall upon written
request by SUBTENANT, fully cooperate with SUBTENANT in enforcing the Master
Lease against MASTER LANDLORD, and SUBTENANT shall reimburse SUBLANDLORD for all
of SUBLANDLORD's costs reasonably incurred in connection therewith. SUBLANDLORD
represents and warrants (i) that the document attached as Exhibit A to this
Sublease is a true, correct and complete copy of the Master Lease, that the
Master Lease represents the entire agreement between SUBLANDLORD and MASTER
LANDLORD with respect to the lease of the Premises, (ii) there is no default, or
any condition which with the passage of time or the giving of notice, or both,
would constitute a default, on the part of either party to the Master Lease,
(iii) SUBLANDLORD has not assigned, encumbered or otherwise transferred any
interest of the Tenant under the Master Lease, and (iv) the scheduled Expiration
Date of the Master Lease is September 14, 2001. SUBLANDLORD shall cooperate with
SUBTENANT as reasonably necessary to obtain the consent of MASTER LANDLORD to
any act for which such consent is required.
11. ALTERATIONS, ADDITIONS, OR IMPROVEMENTS. SUBTENANT shall not make
any alterations, additions or improvements on or to the Premises without first
obtaining the written consent of SUBLANDLORD, which consent will not be
unreasonably withheld or delayed and,
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if required by the Master Lease, the consent of the MASTER LANDLORD. All
permitted alterations, additions and improvements shall be made at the sole
expense of SUBTENANT, and the rights and obligations of the parties regarding
the removal of such alterations, additions and improvements from the Subleased
Premises, and title to the same, shall be governed by Paragraph 10 of the Master
Lease as incorporated herein.
12. ASSIGNMENT OR SUBLEASE. SUBTENANT shall have the Sublease rights of
SUBLANDLORD set forth in Paragraph 29 of the Master Lease, subject to
SUBLANDLORD and MASTER LANDLORD's approval to the extent required hereunder. All
Sublease profits (100%) shall be paid to SUBLANDLORD.
13. HAZARDOUS MATERIALS. Notwithstanding anything contained in Paragraph
18 of the Master Lease, SUBTENANT shall not be entitled to use or store any
Hazardous Materials or Substances on or about the Premises without first
obtaining the express written consent of SUBLANDLORD, which may be given or
withheld in SUBLANDLORD's absolute and sole discretion. Except as otherwise
provided in this Section 13, the provisions of Paragraph 18 of the Master Lease
apply to this Sublease. Provided however, that SUBLANDLORD's consent shall not
be required for normal use, in compliance with applicable Environmental Laws of
customary household and office supplies (SUBTENANT shall first provide
SUBLANDLORD with a list of said materials use), such as mild cleaners,
lubricants and copier toner.
14. BROKERS. SUBLANDLORD and SUBTENANT hereby agree, consent to and
acknowledge that Xxxxxx/Xxxxx Corporate Real Estate Services has represented the
SUBLANDLORD and Colliers Xxxxxxx International, Inc. has represented the
SUBTENANT ("Brokers") in connection with this Sublease. SUBLANDLORD and
SUBTENANT represent that no other brokers have been retained in connection with
this Sublease and agree to indemnify, defend and hold harmless the other in
connection with any commission claims brought in connection with their
respective activities on this Sublease. SUBLANDLORD shall pay all commissions
payable to Brokers in connection with this Sublease in accordance with a
separate agreement between SUBLANDLORD and Xxxxxx/Xxxxx Corporate Real Estate
Services.
15. CONSENT OF MASTER LANDLORD. This Sublease requires the consent and
agreement of MASTER LANDLORD and the effectiveness of this Sublease is hereby
expressly conditioned upon receiving such consent. SUBLANDLORD and SUBTENANT
agree to timely execute MASTER LANDLORD's standard Consent to Sublease Agreement
form (a sample copy is provided herein as Exhibit C), which shall be prepared by
MASTER LANDLORD, and shall set forth MASTER LANDLORD's acknowledgment of this
Sublease, and which shall be subject to review and reasonable approval of the
parties. Said Consent shall apply to this Sublease only, and shall not be deemed
as MASTER LANDLORD's consent to any other sublease.
16. MISCELLANEOUS PROVISIONS.
A. SIGNAGE. Notwithstanding anything contained in the Master
Lease, SUBTENANT shall have building signage rights at the front entrance on
North First Street and the subject Premises as reasonably allowed by
SUBLANDLORD, MASTER LANDLORD,
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CITY OF SAN XXXX, and any of the covenant, codes, and restrictions per Master
Lease. All costs of related signage shall be paid by SUBTENANT.
B. SUBTENANT EQUIPMENT. SUBTENANT will require roof access, in
an ongoing process, to inspect and demonstrate equipment related to their
business. Any roof penetrations will be done in accordance with the Master
Lease. Notwithstanding anything contained in the Master Lease, any damage to the
roof through SUBTENANTS actions shall be fully repaired at SUBTENANTS cost.
Subject to the approval of the MASTER LANDLORD, if required by the Master Lease,
SUBTENANT shall have the right to install an LN2 plumbing system, at its sole
cost, in accordance with the Master Lease and this Section 16 of the Sublease,
and conforming to all codes, covenants, and restrictions with the City of San
Xxxx. SUBTENANT shall conform with all covenants codes and restrictions of the
Master Lease and the City of San Xxxx.
C. USE OF SUBLANDLORD EMPLOYEES BY SUBTENANT. In the event
SUBTENANT uses any employees of SUBLANDLORD for any of it's purposes for
outfitting or work arrangements, SUBTENANT agrees that it will pay any charge
therefore imposed by SUBLANDLORD and assume the sole liability and
responsibility with respect to any personal injury, including death, or property
damage to or in connection with such use.
D. HOLDING OVER. If SUBTENANT holds over after the expiration of
the Master Lease and SUBLANDLORD pays holdover rent on the entire Premises due
to SUBTENANT's holdover, SUBTENANT shall assume the entire holdover obligation
due under Master Lease.
17. NOTICES. All notices to be given to SUBTENANT may be given in
writing, personally, or by depositing the same in the United States mail,
postage prepaid, addressed to SUBTENANT as provided for herebelow. Any notice or
document required or permitted by this Sublease to be given MASTER LANDLORD or
SUBLANDLORD shall be addressed to MASTER LANDLORD or SUBLANDLORD at the
addresses set forth below, or at such other address as it may have therefore
specified by notice delivered in accordance herewith, and shall be deemed
delivered upon actual receipt or refusal of delivery:
MASTER LANDLORD: North San Xxxx Interests
c/o Sobrato Development Company
00000 Xxxxx Xx Xxxx Xxxx.
Xxxxx 000
Xxxxxxxxx, XX 00000
SUBLANDLORD: Siemens Pyramid Information Systems
0000 Xxxxx Xxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
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SUBTENANT: Xxxxx Corporation
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
IN WITNESS WHEREOF, the parties have executed this Sublease on the date
indicated below.
XXXXX CORPORATION, a California corporation
("SUBTENANT")
By: ______________________________
Title: ___________________________
Date: ____________________________
SIEMENS PYRAMID INFORMATION SYSTEMS, INC., a Delaware corporation
("SUBLANDLORD")
By: ______________________________
Title: ___________________________
Date: ____________________________
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AMENDMENT TO SUBLEASE AGREEMENT
This Amendment to the Sublease Agreement dated for reference December 15, 1997,
between Siemens Pyramid Information Systems, Inc. ("SubLandlord") and Xxxxx
Corporation ("SubTenant"), amends the Sublease by providing in Section 2,
Expansion Premises, that SubTenant has until November 1, 1998 to sublease and to
commence paying rent on the Expansion Premises.
EXCEPT AS PROVIDED IN THIS AMENDMENT, ALL TERMS AND CONDITIONS OF THE SUBLEASE
SHALL REMAIN IN FULL FORCE AND EFFECT.
IN WITNESS WHEREOF, the parties have executed this Amendment to Sublease on the
date indicated below.
XXXXX CORPORATION, a California corporation
By: ______________________________
Title: ___________________________
Date: ____________________________
SIEMENS PYRAMID INFORMATION SYSTEMS, INC., a Delaware corporation
By: ______________________________
Title: ___________________________
Date: ____________________________
