EXHIBIT 10.40
AMENDMENT NO. 4 TO
LEASE DATED NOVEMBER 29,1999
BRISBANE TECHNOLOGY PARK
THIS AMENDMENT NO. 4 TO LEASE (this "Amendment"), dated March 13, 2002, is
made and entered into by and between GAL-BRISBANE, L.P., a California limited
partnership ("Landlord"), and XXXXXXXX.XXX, INC., a Delaware corporation
("Tenant").
A. Landlord and Tenant entered into that certain Lease dated November 29,
1999 (the "Original Lease"), as amended by that certain First Amendment to Lease
dated May 4, 2000 (the "First Amendment"), that certain Amendment No. 2 to Lease
dated November 16, 2000 (the "Second Amendment"), and that certain Amendment No.
3 to Lease dated July 16, 2001 (which never became effective) (the "Third
Amendment"). The Original Lease, as amended by the First Amendment, the Second
Amendment and the Third Amendment is herein referred to as the "Lease." Pursuant
to the Original Lease, Landlord leased to Tenant premises within Building A (the
"Building A Premises") at 0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxxx,
promises within Building B (the "Building B Premises") at 0000 Xxxxxxxx
Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxxx, and premises within Building C (the "Building C
Premises") at 0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxxx. As a result of the
First Amendment, the Second Amendment and the Third Amendment, the Lease has
been terminated as to the Building A Premises and the Building B Premises, and
the premises leased to Tenant are now limited to the Building C Premises. Terms
used herein that are defined in the Lease shall have the meanings therein
defined.
B. The rentable area of the Building C Premises is approximately 66,002
s.f. Tenant has advised Landlord that its actual occupancy requirements are
approximately 13,606 s.f, and that its financial position is such that
commencing March 1, 2002 it can no longer pay Rent on space in the Building C
Premises that is in excess of its occupancy requirements. March Rent has not
been paid in the amount required by the Lease.
C. Landlord presently holds the lease security under Paragraph 28.B of the
Lease in the form of a Letter of Credit issued by Silicon Valley Bank in the
amount of $1,583,688. As consideration for Landlord entering into this Lease
Amendment to, among other things, (i) reduce the Building C Premises to
approximately 13,606 s.f., (ii) reduce the term of the Lease; (iii) reduce the
Tenant's rental obligations under the Lease; and (iv) otherwise to modify the
terms of the Lease as provided in Part II below, Tenant shall provide to
Landlord consideration in the sum of TWO MILLION AND 00/100 DOLLARS
($2,000,000.00) as follows: (i) payment of $416,312 (the "Partial
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Termination Payment") as provided for in Part I below and (ii) authorization of
the Landlord to immediately draw down the full amount of the letter of Credit as
provided above. Based on the foregoing (including Recital B), Tenant
acknowledges and agrees that Landlord is entitled to draw the full amount of the
Letter of Credit.
Accordingly, Landlord and Tenant hereby agree as follows:
Part I
On the later to occur of February 28, 2002, or one day following the
date that Credit Suisse First Boston Mortgage Capital LLC ("Lender") consents to
this Lease Amendment, Tenant shall pay to Landlord the Partial Termination
Payment and Landlord is hereby authorized to and shall draw the full amount of
the Letter of Credit. Tenant hereby consents to such draw by Landlord on the
Letter of Credit. Tenant shall make the Partial Termination Payment to Landlord
by means of a wire transfer in the amount of the Partial Termination Payment to
Union Bank of California, Palo Alto, CA, Account of Gal-Brisbane, X.X.
Xxxxxxxxxxx Property Company as manager of Brisbane Technology Park Account
#6470028767, and Landlord shall give appropriate instructions in connection with
its draw on the Letter of Credit that the proceeds of the draw are to be wired
to Deutsche Bank, New York, New York, ABA# 000-000-000, Orix Real Estate Capital
Markets, LLC, as servicer for Credit Suisse First Boston Mortgage Capital LLC,
as Mortgagee of Gal-Brisbane, L.P. Cash Collateral Account, Account No.
00-000-000 (the "Account").
Part II
Conditioned upon the full performance of the provisions of Part I
above, and satisfaction of the conditions described in Part III, the Lease is
hereby amended in the manner set forth below, effective as of March 1, 2002:
A. Physical Premises.
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l. The physical location of the Premises shall be only that area of
the first floor of Building C designated as Tenant's Premises on the Plan
attached hereto as Exhibit A, provided, however, Tenant shall also be entitled
to (i) the non-exclusive right to use common areas of Building C and the Project
intended for the common use of Tenants of Building C and the Project,
respectively, from time to time and (ii) the non-exclusive license to the
Server Room as provided in subparagraph 2 below, subject to the obligations of
Tenant under the Lease. Landlord and Tenant acknowledge that such Premises shown
on Exhibit A are not presently separately demised from the balance of the
rentable areas or common areas shown on Exhibit A. Tenant acknowledges that
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Landlord plans to build out the lobby area substantially in the manner shown on
Exhibit A and in the course of such construction, to separately demise the
Premises shown on Exhibit A (except for the Server Room which is governed by
subparagraph 2 below). Tenant acknowledges that construction of such
improvements and construction of Tenant improvements by or for any additional
tenants who may lease space in Building C will cause noise, dust and other
disruption and interference with the operation of Tenant's business in the
Premises. Landlord shall make reasonable efforts to inform Tenant of the
schedule and nature of construction and Landlord shall request the contractors
performing such work to take reasonable steps to minimize disruption to Tenant,
however, neither Landlord nor such contractors shall be obligated to schedule
such work during off hours, incur overtime costs or off hours work charges or
employ methods, materials or means which increase the cost or materially affect
the schedule of such construction. Moreover, Tenant acknowledges that from time
to time, Landlord and such contractors may need to have access to the Premises
in connection with such construction and Tenant agrees to cooperate in
connection therewith.
2. For purposes of the Lease, the term "Server Room" shall mean an area on
the first floor of Building C in the location designated "Server Room" on
Exhibit A attached hereto. Landlord and Tenant acknowledge that Tenant presently
owns and operates computer equipment located in the Server Room. Subject to
terms and conditions hereof, Tenant shall be entitled to a non-exclusive license
to use the Server Room for the storage and operation of Tenant's computer
servers and related equipment. In the event Landlord leases a portion of the
first floor of Building C to another tenant and the demised premises of such
other tenant include the Server Room and if such other tenant is unwilling to
allow Tenant access to the Server Room through a direct agreement between such
other tenant and Tenant (with express provisions waiving any liability of
Landlord in connection therewith), Tenant's right to continue to occupy the
Server Room on the terms and conditions hereof shall terminate and Tenant shall
be solely responsible for removing and/or re-locating to its separately demised
Premises, all equipment and property owned and/or operated by Tenant in the
Server Room. Landlord shall give Tenant thirty (30) days advance notice with
respect to relocation of Server Room. Simultaneously with the execution of this
Amendment No. 4 to Lease, Tenant shall deposit with Landlord a separate security
deposit (the "Server Deposit") in the amount of $35,000 in the form of cash or
the form of a clean irrevocable letter of credit approved by Landlord in its
sole and absolute discretion, securing Tenant's obligation to remove or relocate
such equipment and other property on the terms and conditions hereof. In the
event Tenant does not remove or re-locate such equipment and property as
required hereunder, Landlord may do so on Tenant's behalf without any liability
to Tenant for any interference with Tenant's business; Landlord may use the
Server Deposit to pay the costs in connection therewith. So long as Landlord's
interest is not adversely affected, and Tenant is in full compliance with all
obligations under the Lease, Landlord shall
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cooperate with Tenant to the end that the Deposit may be used by Tenant to
effect the removal or relocation of such equipment and property. Upon the
earlier of (i) performance of the obligations of Tenant secured by the Server
Deposit (whether performed by Landlord or Tenant) or (ii) when Tenant has fully
vacated the Premises after expiration or termination of this Lease, Landlord
shall return any unused balance of the Server Deposit to Tenant.
B. Computations etc. Notwithstanding anything to the contrary in
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this Lease, Landlord and Tenant agree that the following figures, calculations
and computations shall prevail over any figures, computations or calculations
which are inconsistent therewith:
1. Rentable area of Buildings and Project
Building Rentable Area
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Building A 55,898
Building B 61,444
Building C 66,002
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Total Project 183,344
2. Rentable Area of Premises: For purposes of Base Rent and the
calculation of "Tenant's Project Percentage" and "Tenant's Building C
Percentage," the rentable area is 13,606 rentable square feet unless and until
Tenant's license to the Server Room is terminated and all of Tenant's property
and equipment is removed and/or relocated, and upon such event the rentable area
shall be reduced by 194 s.f.
C. Base Rent. Base Rent (as adjusted pursuant to paragraph 3A(ii)), from
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time to time, shall be based upon the rentable area of the Premises as described
in paragraph B.2 above.
D. Additional Rent; Operating Expenses.
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1. From time to time, at any time, during the remaining term of this
Lease, Landlord may elect to convert any of the costs and expenses payable by
Tenant directly as described in paragraph 8A, 9A to "Operating Expenses" to be
included in Additional Rent including the estimates thereof contemplated by
paragraph 12E.
2. Notwithstanding the provisions of subparagraph B2 above, the
following items shall constitute Operating Expenses (which may be included in
the estimates of Tenant's share of Operating Expenses contemplated by paragraph
12E) and shall be allocated in the manner described below based upon good faith
computations and estimates performed by Landlord:
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(i) Janitorial for Building C (excluding the areas within
Tenant's Premises which are separately contracted and paid for by Tenant), water
and trash collection costs shall be shared in proportion to the rentable area of
the Premises as compared to the rentable area occupied by Tenant and all other
tenants of Building C from time-to-time.
(ii) Tenant shall pay 100% of the costs of electric power and
HVAC costs of Building C until other tenants occupy Building C. Upon such time
as tenants other than Tenant occupy Building C, Landlord shall use its best
efforts to allocate the costs of electric power and HVAC costs in a manner based
upon the actual usage of Tenant and such other tenants.
E. Term: Landlord's Right to Terminate or Move.
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1. The Lease Term and all other terms depending thereon including
"Building C Term" and "Building C Expiration Date" and any right or provision of
Tenant entitling Tenant to extend or renew the Lease Term shall be governed and
superceded by the terms and conditions of this subparagraph. The Lease Term
shall expire February 28, 2004. Tenant shall have one option to extend the Lease
Term for the Premises for a period of two (2) years ("Extension Term") subject
to the terms and conditions hereof. Tenant's right to exercise its option for
the Extension Term shall be subject to all of the terms, conditions and
procedures set forth in paragraph 1 of the "Addendum" except that (i) the term
"Extension Term" shall be substituted for "Building C Extension Term", (ii) the
term "Premises" shall be substituted for "Building C Premises", (iii) the term
"Tenant's Extension Notice" shall be substituted for "Tenant's Building C
Extension Notice", (iv) the term "Lease Term" (as modified herein) shall be
substituted for "Building C Term", and (v) the Base Rent during the Extension
Term shall be the Base Rent in effect at the expiration of the Initial Lease
Term (as modified herein) as adjusted from time-to-time in accordance with
paragraph 3A(ii) of the Lease as though the Initial Lease Term included the
Extension Term.
2. Notwithstanding anything to the contrary herein, on sixty days
prior written notice by Landlord to Tenant, Landlord may terminate this Lease
(and the license pertaining to the Server Room) or require Tenant to move to
another location in the Project comprising comparable space. 1f Landlord
requires Tenant to move to another location in the Project at any time during
the Lease Term, or if Landlord elects to terminate this Lease pursuant to this
subparagraph at any time during the period ending February 28, 2004, Landlord
shall pay the reasonable out-of-pocket moving costs up to but not exceeding
$100,000.
F. Other Provisions.
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l. Paragraph 6 is modified as follows:
(a) Paragraph 6B(i)(b) shall be modified to read as follows:
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"(b) to consent to the transfer by Tenant, in which case
(including any deemed consent pursuant to the following sentence) the Base Rent
from and after the Transfer by Tenant shall be the greater of Base Rent in
effect as of the date of the Transfer by Tenant or Fair Market Rent determined
in accordance with the procedure set forth in paragraph 3C of the Addendum;"
(b) The balance of Paragraph 6E(i) following the first two
sentences thereof and all of paragraph 6E(ii), is hereby deleted.
2. Paragraph 7A is amended by deleting all of that paragraph except
for the first and last sentences thereof. Notwithstanding such deletion,
Landlord's consent to any Alterations occasioned by the change in the physical
location of the Premises as contemplated by paragraph A.1 above, by the
relocation of the Server Room as contemplated by paragraph A.2 above, or by the
relocation of the Premises as contemplated by paragraph E.1 above, shall not be
unreasonably withheld, conditioned or delayed.
3. Notwithstanding anything to the contrary contained in Paragraph
9.B., Tenant shall not be responsible for the cost of installing metering
devices necessary or appropriate by reason of the multi-tenant use of Building
C.
4. Paragraph 10F is deleted.
5. Paragraph 15A(i) is hereby modified by deleting the words ". . .
written notice that. . . " therefrom.
6. On or before the date Tenant is obligated to pay the Partial
Termination Payment, Tenant shall deliver to Landlord a Security Deposit in the
amount of one month's Base Rent plus one month's estimated Additional Charges,
in the form of cash or an irrevocable clean letter of credit issued by a lender
and on terms and conditions approved by Landlord, which Security Deposit shall
be maintained and otherwise subject to the provisions of Paragraph 28.
7. Paragraph 30 is hereby amended by changing the number of parking
spaces referred to therein to forty-six (46) spaces.
8. Paragraph 32 is deleted except for a listing of Tenant's name in
the lobby to be constructed by Landlord if, and only if, Landlord provides for
such listings.
9. Paragraph 37 is hereby deleted and Tenant shall be obligated to remove any
Antenna and/or related equipment Tenant may have installed on the roof of any
Building no later than April 1, 2002.
10. Landlord acknowledges that Tenant has installed a reverse osmosis
water filtration system serving drinking fountains and sinks in Building C, and
that the filtration assembly is located in a janitorial closet on the second
floor. Landlord also acknowledges that it has been advised by Tenant that the
filtration assembly is leased
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from a vendor. Tenant may continue to use the filtration system to supply water
within the Premises, and if any other tenant wishes to have water furnished to
its premises from the system, Tenant shall be responsible for establishing such
cost-sharing arrangements with such tenant or tenants as shall be mutually
acceptable. At Landlord's request, Tenant shall cap the service lines providing
water to any space designated by Landlord outside of the Premises.
11. Attached hereto as Exhibit B are floor plans of the first and
second floor of Building C depicting the location of cublicles. Attached hereto
as Exhibit C is a schedule of task chairs and lounge, phone room and conference
room furniture. All items shown on Exhibits B and C, excluding items located in
"Snowball Occupied Areas," identified as "Relocate to Snowball Area" or crossed
out are herein referred to as "Excess Furniture". As partial consideration for
Landlord's entering into this Amendment No. 4 to Lease, Tenant shall, by
appropriate xxxx of sale or other transfer instrument, transfer and convey to
Landlord, free and clear of all encumbrances, the Excess Furniture.
Part III
This Amendment shall become effective immediately upon receipt of the
proceeds of the draw upon the Letter of Credit and the Partial Termination
Payment in the aggregate amount of $2,000,000.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment
No. 4 to Lease as of the date first above written.
GAL-BRISBANE, L.P., a XXXXXXXX.XXX, A
California limited partnership Delaware company
By: Brisbane Tech LLC, A By: /s/ XXXXX X. XXXXXXX
Delaware limited liability -------------------------------------
company, its General Partner Name: Xxxxx X. Xxxxxxx
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Its: COO & CFO
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3/14/02
By: Stuhlmuller Real Estate, LLC, a By: /s/ XXXX XXXX
Delaware limited liability -------------------------------------
company, Manager Name: Xxxx Xxxx
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By: /s/ XXXXX X. STUHMULLER Its: CEO
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Xxxxx X. Xxxxxxxxxxx
Manager
3-14-02
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CONSENT
This undersigned Lender, having the right to approve any modifications
of the Lease pursuant to that certain Deed of Trust, Assignment of Leases and
Rents, Security Agreement and Fixture Filing by Landlord, as grantor, and
Lender, as beneficiary, dated December 28, 2000, and that certain Subordination,
NOn-Disturbance and Attornment Agreement dated December __, 2000, by and between
Lender and Tenant, hereby consents to the provisions of the foregoing Amendment
No. 4 to Lease.
Dated: March 15, 2002
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CREDIT SUISSE FIRST BOSTON
MORTGAGE CAPITAL LLC
By /s/ XXXX XXXXX
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Name: Xxxx Xxxxx
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Its: Vice President
--------------------------------
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