Exhibit 10.11
Westport 17
AMENDMENT NO. 2
TO LEASE
THIS AMENDMENT NO. 2 is made and entered into this 20th day of December,
2002, by and between WESTPORT JOINT VENTURE, a California joint venture, as
LANDLORD, and COSINE COMMUNICATIONS, INC., A DELAWARE CORPORATION, as TENANT.
RECITALS
A. WHEREAS, by Lease Agreement dated September 20, 1999 Landlord leased to
Tenant all of that certain 48,384+ square foot building located at 0000 Xxxxxx
Xxxxxxx, Xxxxxxx Xxxx, Xxxxxxxxxx, the details of which are more particularly
set forth in said September 20, 1999 Lease Agreement, and
B. WHEREAS, said Lease was amended by the Commencement Letter dated
January 23, 2000 which changed the Lease Commencement Date from January 1, 2000
to January 16, 2000 and changed the Lease Termination Date from December 31,
2011 to February 29, 2012, and,
C. WHEREAS, said Lease was amended by Amendment No. 1 dated March 28,
2002, which amended the Lease by amending Lease Paragraph 58 ("Cross Default")
to include reference to additional premises leased by Tenant at 0000 Xxxxxx
Xxxxxxx, Xxxxx 000, Xxxxxxx Xxxx, Xxxxxxxxxx, and
D. WHEREAS, it is now the desire of the parties hereto to amend the Lease
by (i) terminating said Lease early, changing the Lease Termination Date from
February 29, 2012 to December 31, 2002, (ii) establishing a Termination Fee for
the early termination of said Lease, (iii) providing for Tenant to transfer
ownership of certain Furniture within the Premises to Landlord, (vi) providing
for Tenant to lease any additional space required by Tenant from Landlord or one
of Landlord's affiliates from the date of this Amendment No. 2 through February
29, 2012 and (v) amending the Basic Rent schedule and Aggregate Basic Rent of
said Lease Agreement as hereinafter set forth.
AGREEMENT
NOW THEREFORE, for valuable consideration, receipt of which is hereby
acknowledged, and in consideration of the hereinafter mutual promises, the
parties hereto do agree as follows:
1. TERMINATION OF LEASE: As an accommodation to Tenant and subject to the
terms and conditions stated herein, Landlord has agreed to the early termination
of said Lease Agreement, therefore, upon the execution of this Amendment No. 2
by all parties hereto, it is agreed that the Lease Termination Date shall be
changed from February 29, 2012 to December 31, 2002 ("Termination Date"). Tenant
shall be responsible for paying all Basic Rent and Additional Rent and
fulfilling all Lease obligations as contained in said Lease through the
Termination Date as set forth above. Notwithstanding the above, Tenant's
obligations as stated in Lease Paragraphs 12 ("Taxes"), 17 ("Compliance") and 53
("Hazardous Materials") shall survive the Termination Date of this Lease; it
being understood, however, that Tenant's obligations under the aforementioned
Paragraphs 12, 17 and 53 shall survive only as to those obligations that accrued
and/or occurred during the Term of the Lease.
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Although this Termination Agreement shall be deemed effective as of
December 31, 2002, and Landlord shall be entitled to take possession and accept
surrender of the Premises in accordance with the terms of this Amendment No. 2
and relet them for its own account, the release of Tenant from its obligations
under this Lease as stated in Lease Paragraph 4, including but not limited to
the obligation to pay all Rent and other sums due hereunder, shall not be deemed
effective unless and until ninety-one (91) days have expired from the date of
the payments due under Paragraph 1.A ($7,579.03) and Paragraph 2 ($8,549,577.80)
are paid to Landlord and the funds for the payments have cleared Tenant's bank
account and/or the issuing bank and a bankruptcy or insolvency proceeding has
not been filed by or against Tenant. In the event a bankruptcy or insolvency
proceeding is filed within said ninety-one (91) day period, the release of
Tenant from its future obligations under the Lease shall not be effective and
Landlord shall be entitled to recover damages from Tenant in accordance with
Section 1951.2 of the California Civil Code and the default provisions of
Paragraph 22 of the Lease for all Rent and other sums due under the Lease
through the originally scheduled Lease Termination Date of February 29, 2012 net
of Termination Fee. In such event, Landlord shall be entitled to retain the
Termination Fee and to offset the amount of the Termination Fee against all
damages recoverable to the extent permissible under applicable law. In
consideration of the Landlord's execution of this Agreement, Tenant waives the
provisions of Section 1950.7 of the California Civil Code, and any claim
concerning the security deposit to be retained by Landlord and or amounts paid
to Landlord pursuant to this Agreement. Tenant represents and warrants to
Landlord that Tenant is not insolvent as of the date of this Agreement and as of
the date Tenant executed this Agreement, and has no plans to file for bankruptcy
protection.
A. Surrender Requirements. Tenant shall be responsible for
relinquishing the Premises in the condition required under Lease Paragraphs 8
("Acceptance and Surrender of Premises"), 9 ("Alterations and Additions") and 53
("Hazardous Materials"); provided however, that Tenant shall not be required to
restore or remove any alterations or improvements made by Tenant to the Premises
(if any) and shall only be required to (i) return the Leased Premises in clean
condition, free of Tenant's personal property and (ii) pay Landlord,
concurrently with the return of this executed Amendment No. 2, for the cost of
the repairs to the HVAC and electrical systems pursuant to the quotes attached
hereto as Exhibit A-1 and Exhibit A-2, (collectively "Restoration Work"). The
total cost for the Restoration Work is $7,579.03. Upon making such payment of
$7,579.03, Tenant shall be relieved of any further liability relating to the
condition of the Premises upon surrender as related to Tenant's surrender
obligations as stated in Lease Paragraphs 8 and 9.
B. Taxes. Tenant's ongoing obligation related to Paragraph 12
("Taxes") shall include all regularly assessed Real Estate Taxes and any
supplemental taxes that were accrued and/or occurred during Tenant's Lease Term
whenever levied, including any such taxes that may be levied after the
Termination Date.
C. Hazardous Materials. In the event any Hazardous Materials were used
and/or stored on the Premises during the Term of the Lease by Tenant, Tenant's
assignor (if any) or subtenants (if any), prior to the Termination Date, Tenant
shall provide Landlord, concurrently with the return of this executed Amendment
No. 2, with (i) a list of Hazardous Materials used and/or stored on the
Premises, including the quantities so used and/or stored, (ii) copies of all
Hazardous Materials permits, (iii) copies of all related Hazardous Materials
manifests, (iv) a copy of the floor and site plan of the Premises reflecting the
location where any and all Hazardous Materials were used, stored and/or
disposed, and (v) a copy of the preliminary and final Hazardous Materials
Closure Plan filed with the City of Redwood City. If no Hazardous Materials were
used and/or stored on the Premises, Tenants shall provide Landlord with a
written statement representing and warranting the same.
2. TERMINATION FEE: As a material part of the consideration for Landlord's
consent to the early termination of this Lease, Tenant agrees to pay to Landlord
$8,549,577.80 ("Termination Fee"). Landlord shall retain Tenant's full Security
Deposit of $445,132.80 as a credit against the Termination Fee, and within two
business days after execution of this Agreement by both parties, Tenant shall
pay to Landlord the remaining balance of $8,104,445.00 in the form of a
cashier's check.
3. TENANT'S PERSONAL PROPERTY TO BE TRANSFERRED TO
Initial:
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LANDLORD. Tenant hereby assigns, at no cost to Landlord, its ownership interest
in all of the office furniture/cubicles and equipment listed on Exhibit B
attached hereto (collectively "Furniture") as of the Lease Termination Date, and
shall leave and assign ownership of the Furniture in the Premises upon Lease
Termination, and execute the Xxxx of Sale attached hereto as Exhibit C for the
same. Tenant further warrants and represents to Landlord that the Furniture is
owned free and clear of any debt by Tenant, there are no existing or pending
liens against said Furniture and that the Furniture has not been and shall not
be encumbered by Tenant. The Furniture, as of the Lease Termination Date, shall
become the property of the Landlord. The Furniture shall be delivered to
Landlord in its current, "as is" condition, except as noted herein, without any
warranty or guaranty of any kind or nature (express or implied) concerning the
quality, condition or value of the Furniture, or its usefulness for any
particular purpose.
4. REAL PROPERTY INSURANCE. Notwithstanding Tenant's obligations related
to payment of Additional Rent as set forth in Paragraph 1 above, Tenant
acknowledges that Tenant has prepaid real property insurance premiums due
through March 13, 2003, and that Tenant will not receive any rebate of said
prepaid premiums related to the Premises accruing after the Early Termination
Date of December 31, 2002.
5. AGGREGATE BASIC RENT: The Aggregate Basic Rent for the Lease shall be
decreased by $22,305,024.00 or from $28,299,301.08 to $5,994,277.08.
6. FUTURE LEASE COMMITMENT: As a material part of the consideration to
Landlord hereunder, Tenant agrees that if Tenant determines at any time from
the date of this Amendment No. 2 through February 29, 2012 that it wishes to
lease additional space within the Silicon Valley (i.e. Palo Alto, Mountain
View, Redwood City, Fremont, Sunnyvale, Santa Xxxxx, San Xxxx and/or Milpitas),
it will give Landlord notice (the "Rental Notice") and an opportunity to lease
such space to Tenant (in a building owned by Landlord or an affiliate of
Landlord), subject to and in accordance with the terms of this Paragraph 6,
provided that the space Landlord (or its affiliate) makes available is within
the Silicon Valley.
Tenant's Rental Notice shall include a description of Tenant's proposed
use, the term of lease Tenant desires, the approximate size of the premises
Tenant is seeking, whether Tenant is seeking to relocate its entire workforce
or is seeking adjunct space to its existing headquarters space, and any special
requirements Tenant may have with respect to the space it is seeking ("Tenant
Requirements"). If within thirty (30) days after receipt of such Rental
Notice, Landlord advises Tenant that Landlord or an affiliate has space
available for Lease (in a building owned by Landlord or an affiliate) in the
Silicon Valley meeting Tenant's Requirements, Tenant agrees to negotiate to
lease such space in good faith, and further agrees to lease such space from
Landlord or its affiliate, provided that (i) the space meets Tenant's
Requirements, (ii) the rent shall be at the then-prevailing triple net fair
rental rate (taking into consideration the term of the lease and tenant
improvement allowances, if any), and (iii) the lease (the "Future Lease") shall
be for a term sought by Tenant and upon terms and conditions that are the
standard terms on Landlord's (or Landlord's affiliate) leases.
It is understood that if, prior to execution of a Future Lease, Tenant
decides it does not wish to lease additional space in Silicon Valley, Tenant
shall bear no liability for discontinuing negotiations with Landlord, provided
that Tenant, nor any of its subsidiaries, shall not lease any other space in
Silicon Valley from the date of this Amendment No. 2 through February 29, 2012
without again giving Landlord written notice and an opportunity to negotiate a
Future Lease in accordance with the terms of this Paragraph 6. Additionally, if
Tenant and Landlord fail to enter into a Future Lease following Tenant's Rental
Notice (whether because Landlord or an affiliate did not then have space
available in the Silicon Valley or because they could not agree on lease
terms), it shall not relieve Tenant of the obligation to give Landlord another
Rental Notice (and an opportunity to negotiate a Future Lease) if Tenant
subsequently requires additional space from the date of this Amendment No. 2
through February 29, 2012.
7. DELETION OF COTERMINOUS PARAGRAPH: Pursuant to Lease Paragraph 57
("Lease Terms Co-Terminous"), the Term of this Lease was intended to be
coterminous with the term of the lease dated May 26, 1998 between the parties
hereto.
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a result of the early Termination of this Lease as agreed upon herein, it is
agreed between the parties hereto that said Lease Paragraph 57 is hereby null
and void and of no further force or effect.
8. CHOICE OF LAW/VENUE; SEVERABILITY. This Agreement shall in all
respects be governed by and construed in accordance with the laws of the County
of Santa Xxxxx in the State of California and the venue shall be in Santa Xxxxx
County. If any provisions of this Agreement shall be invalid, unenforceable, or
ineffective for any reason whatsoever, all other provisions hereof shall be and
remain in full force and effect.
9. AUTHORITY TO EXECUTE. The parties executing this Agreement hereby
warrant and represent that they are properly authorized to execute this
Agreement and bind the parties on behalf of whom they execute this Agreement and
to all of the terms, covenants and conditions of this Agreement as they relate
to the respective parties hereto.
10. EXAMINATION OF AMENDMENT. This Amendment No. 2 shall not be effective
until its execution by both Landlord and Tenant.
EXCEPT AS MODIFIED HEREIN, all other terms, covenants, and conditions of
said September 20, 1999 Lease Agreement shall remain in full force and effect
and unmodified.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment No. 2
to Lease as of the day and year last written below.
LANDLORD: TENANT:
WESTPORT JOINT VENTURE COSINE COMMUNICATIONS, INC.
A California joint venture A Delaware corporation
XXXX XXXXXXXXX SURVIVOR'S TRUST By /s/ XXXXX XXXXXX
By /s/ Xxxx Xxxxxxxxx XXXXX XXXXXX VP FINANCE & CFO
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Xxxx Xxxxxxxxx, Trustee Print or Type Name/Title
Date: 2/17/03 Date: 2/13/03
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XXXXX PRIVATE INVESTMENT
COMPANY - WP, L.P.
A California limited partnership
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, Trustee of the
Xxxxxxx X. Xxxxx Separate Property
Trust dated 7/20/77, as its General
Partner
Date: 2/17/03
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Initial:
(SIGNATURES CONTINUED ON FOLLOWING PAGE)
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XXXXX PUBLIC INVESTMENT
COMPANY-WP, L.P.,
A California limited partnership
By /s/ Xxxxxxx X. Xxxxx
___________________________________________
Xxxxxxx X. Xxxxx, Trustee of the
Xxxxxxx X. Xxxxx Separate Property
Trust dated 7/20/77, as its General
Partner
Date: 2/17/03
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