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Exhibit 10.16.3
00 XXXXXXXXX XXXX
XXXXXXX, XXXXXXXXXXXXX
SUBLEASE
SUBLESSOR: PICTURETEL CORPORATION, A DELAWARE CORPORATION
SUBLESSEE: CABLETRON SYSTEMS SALES & SERVICE, INC., A DELAWARE CORPORATION
DATE: June 4, 1998
SUBLEASE
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THIS SUBLEASE, dated and effective as of June 4, 1998, is between
PICTURETEL CORPORATION, a Delaware corporation ("Sublessor"), and CABLETRON
SYSTEMS SALES & SERVICE, INC., a Delaware corporation ("Sublessee").
RECITALS:
A. Pursuant to that certain Amended and Restated Lease, dated as
of August 25, 1998 (the "Main Lease"), between 50 Minuteman Limited
Partnership ("Landlord"), as the landlord, and Sublessor, as the tenant,
Sublessor is leasing from Landlord the improved real property commonly known as
00 Xxxxxxxxx Xxxx in Andover, Massachusetts, which is improved with, among other
things, a building of approximately 151,800 square feet. This improved real
property is described as the "Premises" in the Main Lease. Capitalized terms not
otherwise defined herein shall have the meanings set forth in the Main Lease.
B. Sublessor has agreed to sublease to Sublessee, and Sublessee has
agreed to sublease from Sublessor, the entire Premises, for the Sublease Term,
on the terms and conditions stated herein.
AGREEMENTS:
In consideration of the mutual covenants herein contained and for Ten
Dollars ($10.00) and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. INCORPORATION OF MAIN LEASE. Except to the extent inconsistent with or
modified by the terms and conditions of this Sublease, all terms and conditions
of the Main Lease are hereby incorporated into this Sublease and shall govern
Sublessee's use and occupancy of the Premises and its rights, obligations and
liabilities with respect thereto, in the same manner as if Sublessee were the
Tenant and Sublessor were the Landlord under the Main Lease, and the Sublease
Term were the term under the Main Lease: PROVIDED, HOWEVER, that Sublessor shall
not be obligated to pay for or provide any services to Sublessee or to or for
the benefit of the Premises, or to repair or maintain the Premises or to pay for
or perform the obligations of Landlord under the Main Lease, and whenever the
obligations of Sublessor to Sublessee hereunder derive from the obligations of
Landlord to Sublessor (including, without limitation, any consent or approval of
Landlord or the provision of any services by Landlord under the Main Lease), the
sole obligation of Sublessor shall be to use reasonably diligent efforts to
obtain appropriate action on the part of Landlord (or omission to take action)
in accordance with the terms of the Main Lease, but Sublessor shall not be
liable to Sublessee if it fails to obtain such consent or approval or if
Landlord takes any action or fails to take such appropriate action. However, if
Landlord defaults under the Main Lease Sublessee shall have the right to avail
itself of the "Right of Self Help" as set forth in Section 14.4 of the Main
Lease (except that, in accordance with Section 1(h) hereof, the parenthetical at
the end of Section 14.4 of the Main Lease shall be deemed deleted and shall not
apply with respect to Sublessee). Subject to the foregoing, Sublessor and
Sublessee each shall comply with and perform the terms and provisions of the
Main Lease as if they were Landlord and Tenant, respectively, thereunder, to the
extent the same are not inconsistent with or modified by the terms and
provisions
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of this Sublease (including, without limitation, obtaining approval or consent
from Sublessor hereunder where such approval would be required under the Main
Lease, and, in addition, obtaining such approval or consent from Landlord). The
following provisions of the Main Lease shall NOT be incorporated into this
Sublease (or shall be incorporated in modified form as set forth below):
(a) Sections 1.1(a) and 1.1(b). The Commencement Date of this
Sublease is the date first set forth above, and the Sublease Term begins on the
Commencement Date and ends ten (10) Lease Years thereafter, unless terminated
earlier per this Sublease or the Main Lease.
(b) Section 1.1(g).
(c) Section 1.1(l).
(d) Section 2.
(e) The first sentence of Section 4(a).
(f) The last three sentences of Section 5(a) starting with the words
"Notwithstanding the foregoing, if and for so long as...," and Section 5(b).
(g) Sections 7.1(c) and 7.1(d), and the words "until the end of the
ninth Lease Year," in the first and second lines of Section 7.1(b).
(h) Addenda # 2, 3 and 4, and all references to any of them,
including, without limitation, all references to Extension Options and Net
Proceeds.
(i) Section 9.3.
(j) All of Section 18.4 after the words "other obligations under this
Lease," in the fourth line thereof, and all references to a Released Assignor.
(k) Sections 19.4 and 19.5.
(l) Section 22.2(g).
(m) The first sentence of Section 24.9 after the words "agreements or
understandings" in the third line thereof.
(n) Section 24.17 and all references to the Letter of Credit and the
Letter of Credit Loan.
(o) Exhibits "C", "D", "DD", "L" and "M".
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2. DEMISE OF PREMISES; SUBLEASE TERM. Sublessor hereby leases to
Sublessee, and Sublessee hereby leases from Sublessor, the Premises on the terms
and conditions set forth herein, TO HAVE AND TO HOLD for the Sublease Term as
defined in Section 1(a) hereof, except that this Sublease shall terminate when
and if the Main Lease terminates. Sublessee has no right to extend the Sublease
Term.
This Sublease is and shall remain subject and subordinate in all
respect to the Main Lease and to all extensions, modifications, consolidations
and replacements thereof. It is the intention of the parties that Landlord shall
retain all of its rights and remedies under the Main Lease and that Sublessee
shall cooperate in connection with the exercise thereof and take (or omit to
take) all actions as may be required of the Tenant under the Main Lease.
3. RENT.
(a) Subject to Section 3(b) below, all rent payable by Sublessee
(including, without limitation, Taxes, Operating Costs and utilities) shall be
payable beginning as of the Commencement Date of this Sublease, and the annual
base rent payable by Sublessee during the Sublease Term shall be as set forth
below and shall be payable in equal monthly installments in advance beginning on
the Commencement Date of this Sublease and thereafter on the first day of each
month during the Sublease Term, prorated for any portion of a month. Base rent
and all other rent payable by Sublessee shall be paid directly to or as directed
by Landlord under the Main Lease (except that on request of Landlord or
Sublessor, pursuant to Section 5(a) of the Main Lease, base rent shall be
payable into the collection account described in said Section 5(a)), and receipt
of such payments by Landlord or the collection account (as to base rent only)
shall be deemed receipt by Sublessor hereunder, except that if and to the extent
that Landlord or the collection account already has received from Sublessee for
each month during the fifth through tenth Lease Years base rent of One Hundred
Ninety Six Thousand and Seventy Five Dollars ($196,075), and Landlord receives
all other rent due for such month, base rent hereunder for each such month in
excess of $196,075 (i.e., $5,060) shall be paid directly to or as directed by
Sublessor for so long as Sublessor is not in default under the Main Lease.
Otherwise, all rent will be payable in accordance with Section 5(a) of the Main
Lease.
Lease Year Annual Base Rent
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1-4 $ 2,352,900
5-10 2,413,620
(b) Notwithstanding Section 3(a) above, Sublessee's obligation to pay
base rent, Taxes and Operating Costs shall be entirely abated until October 1,
1998.
4. DEFAULT BY SUBLESSEE. Notwithstanding anything in the Main Lease to
the contrary, for the purposes of determining applicable cure periods hereunder
for a default by Sublessee, Sublessee's cure period hereunder shall be two (2)
business days less than any such cure period granted to Sublessor as Tenant
under the Main Lease. In addition, a valid notice of default from
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Landlord under the Main Lease that is delivered to Sublessee (whether or not it
is addressed to Sublessee) shall be deemed to be a valid notice of default
delivered by Sublessor to Sublessee hereunder.
5. QUIET ENJOYMENT. Sublessor, with respect to the Sublease Term,
covenants and agrees with Sublessee, that upon Sublessee paying the rent and
performing the covenants of this Sublease, and subject to the terms and
conditions of this Sublease, Sublessee shall peacefully and quietly have, hold
and enjoy the Premises and all rights granted to Sublessee in this Sublease
throughout the Sublease Term without hindrance or molestation by anyone claiming
by or through Sublessor.
6. CONDITION OF THE PREMISES. By its execution hereto, Sublessee agrees
that it accepts the Premises "as is" in all respects. Except as specifically set
forth in Section 13 hereof, Sublessor is not making and Sublessee has not relied
on any representations or warranties of any type, express or implied, in
connection with the condition of the Premises or its fitness for any particular
use. Sublessor shall have no obligation or duty to Sublessee regarding the
preparation of the Premises for occupancy by Sublessee or the payment of any
amounts in connection therewith.
7. INFRASTRUCTURE PAYMENT. The Building will be delivered to Sublessee
with the existing above-standard finishes, Lucent switch, UPS system, generator
and cabling, which shall remain Sublessor's property to the extent that such
items are deemed to be "Tenant's Property" under the Main Lease, and Sublessee
shall not remove any of the foregoing items at the expiration of the Sublease
Term or otherwise. As payment for the use of these above-standard items during
the Sublease Term, which were originally paid for by Sublessor, concurrently
with its execution of this Sublease Sublessee shall pay to Sublessor the amount
of One Million Dollars ($1,000,000) by cashier's check or wire transfer in good
U.S. funds, which amount shall be in addition to, and shall not be credited
against or reduce, any base rent or other rent payable by Sublessee hereunder.
If and to the extent that Sublessee makes additions to these items during the
Sublease Term and such additions would be deemed to be "Tenant's Property" under
the Main Lease if made by Tenant thereunder, the additions shall be and remain
Sublessee's property and may be removed by Sublessee at the end of the Sublease
Term, provided that Sublessee shall repair any damage to these items caused
thereby.
8. CASUALTY AND CONDEMNATION. If the Premises or any part thereof are
damaged or destroyed by fire or other casualty or are Condemned, then: if and to
the extent that the rent payable by Sublessor as Tenant under the Main Lease is
abated as a result thereof, then rent under this Sublease shall be similarly
abated to the same extent for the same period. If the Condemnation, damage or
destruction is of the type which entitles either Landlord or Tenant to terminate
the Main Lease in whole or in part and either such party elects to terminate,
then this Sublease shall terminate to the same extent as of the same date. In
addition, if the Condemnation, damage or destruction is of the type that would
entitle Sublessor to terminate the Main Lease, then Sublessee shall have the
right to terminate this Sublease to the same extent, subject to and in
accordance with the terms and conditions of Article 17 or Section 16.2 of the
Main Lease, as applicable. Sublessee agrees that Sublessor shall not, in any
case, have any obligation whatsoever to rebuild or repair the Premises or pay
any amounts in connection therewith.
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9. INDEMNIFICATION AND INSURANCE. Sublessee acknowledges and agrees that:
(a) Sublessee's indemnification and defense obligations hereunder, whether set
forth specifically in this document or by incorporation of the Main Lease, shall
also include the obligation to indemnify and defend Landlord and its Affiliates
to the same extent; (b) all waivers and releases by Sublessee in this Sublease,
whether set forth specifically in this document or by incorporation of the Main
Lease or in some other document (including, without limitation, the waiver of
subrogation required of Sublessee's insurers under Section 8.3 of the Main
Lease), shall apply with respect to Sublessor and Landlord and its Affiliates;
(c) all insurance required to be carried by Sublessee as set forth in Section
8.1 of the Main Lease shall comply with that Section and shall name as
additional insureds Sublessor, Landlord and its general partners, Landlord's
Mortgagees and any property managers; (d) Sublessor shall not be required to
(although it may) carry any of the insurance required to be carried by Landlord
under the Main Lease nor does Sublessor make any representations and warranties
about the adequacy of any insurance to protect Sublessee's interests; and (e)
nothing in this Sublease is intended to, nor shall it, affect any of the rights
and obligations of Landlord and Sublessor under the Main Lease.
10. SIGNAGE. Subject to and in accordance with the terms and conditions of
the Main Lease, Sublessee shall have the right at its cost to replace
Sublessor's signage on and in the Building and to have its name placed on a
monument sign outside of the Building.
11. ACTION WITH RESPECT TO MAIN LEASE. Sublessor shall not amend or modify
(nor agree to amend or modify) the Main Lease in any way that would materially
increase Sublessee's obligations or materially diminish Sublessee's rights under
this Sublease without Sublessee's prior written consent. Sublessee shall not do
or permit to be done anything that would increase Sublessor's obligations under
the Main Lease nor shall Sublessor or Sublessee do or permit anything to be done
that would cause a default under the Main Lease prior to the end of the Sublease
Term.
12. SUBLESSOR'S RIGHTS AND REMEDIES. If Sublessee defaults hereunder
Sublessor shall have all of the rights and remedies of Landlord under the Main
Lease with respect to Sublessee's default, to the extent same are applicable
thereto, provided, however, that notwithstanding anything contained in Exhibit
"H" to the Main Lease to the contrary, for the purposes of this Sublease, the
"Unamortized Costs" as shown in Exhibit "H" shall be reduced, as of any point in
time during the term hereof, by the amount of the "Unamortized Costs" as shown
in Exhibit "H" which are effective as of the date of the stated expiration date
of the Sublease.
13. REPRESENTATIONS AND WARRANTIES: (a) Sublessor hereby represents and
warrants that: (i) Sublessor is the Tenant under the Main Lease; (ii) the Main
Lease is in full force and effect, and attached hereto as EXHIBIT AA is a true,
correct and complete copy of the Main Lease; (iii) Sublessor has not received
any notice of default under the Main Lease from Landlord relating to a default,
or alleged default, which, as of the date hereof, remains uncured or has not
been waived by Landlord; (iv) Sublessor is not insolvent and is able to pay its
debts and other obligations as they come due, has not declared bankruptcy or
filed a petition to take advantage of any law relating to bankruptcy,
insolvency, reorganization, winding up or composition or adjustment of debts,
and no such proceeding has been commenced against Sublessor seeking such relief,
and Sublessor has no
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knowledge that any such proceeding is threatened; (v) the execution and delivery
of this Sublease by Sublessor has been authorized by all requisite corporate
action; and (vi) to the best of Sublessor's knowledge, Sublessor has not
created, released or disposed of any hazardous or toxic substances on, in or
under the Premises in amounts that would require remediation under any
applicable Laws.
(b) Sublessee hereby represents and warrants that: Sublessee is not
insolvent and is able to pay its debts and other obligations as they come due;
Sublessee has not declared bankruptcy or filed a petition to take advantage of
any law relating to bankruptcy, insolvency, reorganization, winding-up or
composition or adjustment of debts and no such proceeding has been commenced
against Sublessee seeking such relief, and Sublessor has no knowledge that any
such proceeding is threatened; and the execution and delivery of this Sublease
by Sublessee has been authorized by all requisite corporate action.
(c) Except as specifically set forth in this Sublease, the parties are
not making or relying on any representations or warranties of any kind, express
or implied.
14. NO ASSIGNMENT OR SUBLEASE BY SUBLESSEE. Notwithstanding anything
herein or in the Main Lease to the contrary, Sublessee shall have no right,
power or authority to assign its rights under this Sublease or to sublease or
sub-sublease the Premises or to otherwise engage in a Transfer (and Sublessor
shall have no obligation to consent thereto), except for:
(a) A valid assignment of this Sublease in accordance with the terms
of Section 18 of the Main Lease, as modified by Section 1(j) hereof; or
(b) A valid sub-sublease of a portion of the Premises in accordance
with the terms of Section 18 of the Main Lease, as modified by Section 1(j)
hereof, provided that at all times Sublessee still continues to sublease and
occupy at least fifty percent (50%) of the Building, there shall be no more than
one (1) sub-sublease/sub-sublessee, and prior to termination of this Sublease
Sublessee shall, at its sole cost, remove any Alterations made in order to
demise the Premises for the sub-sublessee, repair all damage and restore the
Premises to the condition existing prior to such demising.
15. COMMUNICATION WITH LANDLORD. So long as Sublessee is not in default
hereunder, and subject to all of the terms and conditions of this Sublease,
Sublessee shall have the right, without the prior consent of Sublessor, to send
notices to and communicate directly with Landlord under the Main Lease with
respect to Landlord's obligations under the Main Lease, provided that copies of
all such notices given to or received from Landlord by Sublessee (including,
without limitation, requests for approvals, consents or waivers) are
concurrently delivered to Sublessor, and that such notices or other
communications shall not be deemed to modify the Main Lease or this Sublease or
a party's rights and obligations thereunder.
16. NOTICES. All notices required or permitted hereunder shall be given
and deemed effective in accordance with Section 24.16 of the Main Lease, and the
addresses of Sublessor and Sublessee shall be as follows:
If to Sublessor: PictureTel Corporation
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000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Financial Officer
with a copy to: PictureTel Corporation
000 Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Vice President, Human Resources
If to Sublessee: (FOR NOTICES OTHER THAN INVOICES)
c/o Cabletron Systems, Inc.
00 Xxxxxxxxxx Xxx
Xxxxxxxxx, Xxx Xxxxxxxxx 00000
Attention: Legal Department
(FOR INVOICES)
c/o Cabletron Systems, Inc.
XX Xxx 0000
Xxxxxxxxx, Xxx Xxxxxxxxx 00000
Any of the parties named in this Section may change its address by written
notice sent to each of the other persons at the addresses as set forth herein.
Copies of all notices also shall be delivered to Landlord at the then-current
address for Landlord under the Main Lease, such delivery to be concurrent with
the delivery of notices to Sublessor and Sublessee.
17. BROKERAGE. Within two (2) business days after receiving the One
Million Dollar ($1,000,000) infrastructure payment from Sublessee, Sublessor
shall pay as full and complete consideration $40,000 to Avalon Partners, Inc.
(Sublessor's broker), and $460,000 to Xxxxx & Xxxxx and X.X. Xxxxxxx & Co., Inc.
by joint check. Sublessee warrants and represents to Sublessor and Landlord that
Sublessee has not dealt with any agent, broker or finder in connection with this
Sublease or the Premises except Avalon Partners, Inc.and Xxxxx & Xxxxx and X.X.
Xxxxxxx & Co., Inc., and agrees to indemnify and defend Sublessor and Landlord
and hold them harmless from any loss, cost, damage, claims and liabilities of
any type, including, without limitation, reasonable attorneys' fees and costs,
incurred by Sublessor or Landlord for any breach of this representation and
warranty and any claims by anyone (other than Avalon Partners, Inc.) claiming
by, under or through Xxxxx & Xxxxx and X.X. Xxxxxxx & Co., Inc. for commissions
or consideration.
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18. AMENDMENT. This Sublease (and this Section) shall not be amended,
altered or modified except by an instrument in writing executed by Sublessor and
Sublessee and consented to by Landlord.
19. CONTINGENT EFFECTIVENESS AND SPECIAL TERMINATION CONDITIONS. This
Sublease shall be effective as of the date first set forth above but may be
terminated by Sublessor at any time, without Sublessor incurring any liability
to Sublessee, if the following conditions are not satisfied: (a) concurrently
with the delivery of this Sublease, Landlord, Sublessor, Sublessee and Cabletron
Systems, Inc. ("Guarantor") each execute and deliver a letter agreement whereby
Landlord consents to this Sublease (the "Consent Letter"); (b) concurrently with
delivery of this Sublease, Landlord and Sublessor each receive from Sublessee
Certificates of Insurance as required under this Sublease and the Consent
Letter; (c) concurrently with the delivery of this Sublease, Guarantor executes
and delivers a Continuing Guaranty of Sublease guarantying the payment and
performance of Sublessee's obligations under this Sublease (the "Guaranty"); and
(d) within fourteen (14) days after the date first set forth above, Landlord and
Sublessor each receive certified copies of Board of Directors' Resolutions
approving the execution and delivery of this Sublease, the Consent Letter and
related documents by Sublessee, and the execution and delivery of the Guaranty,
the Consent Letter and related documents by Guarantor. Sublessee also shall have
the right to terminate this Sublease at any time without incurring any liability
to Sublessor if within fourteen (14) days after the date first set forth above
Sublessee has not received certified copies of the Board of Directors Resolution
approving the execution and delivery of this Sublease, the Consent Letter and
related documents by Sublessor.
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IN WITNESS WHEREOF, intending to be legally bound, the parties have
executed this Sublease under seal as of the date first above written.
Sublessor:
WITNESS: PICTURETEL CORPORATION, a Delaware
corporation
_______________________________ By: /s/ Authorized Signatory
Name Printed: _____________________________________
Name:
Title:
Authorized Signature
Sublessee:
WITNESS: CABLETRON SYSTEMS SALES & SERVICE,
INC., a Delaware corporation
________________________________ By: /s/ Authorized Signatory
Name Printed: _____________________________________
Name:
Title:
Authorized Signature
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EXHIBIT AA
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Main Lease
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