Exhibit 10.33
SECOND AMENDMENT TO LEASE AGREEMENT
This Second Amendment to Lease Agreement (the "Second Amendment") is made
and entered into as of August 9, 1996, by and between AETNA LIFE INSURANCE
COMPANY, A CONNECTICUT CORPORATION ("LANDLORD"), AND PREMISYS
COMMUNICATIONS, INC., A DELAWARE CORPORATION ("TENANT"), with reference to
the following facts:
RECITALS
WHEREAS, Landlord and Premisys Communications Holdings, Inc., a
California corporation ("Premisys Communications Holdings") have entered
into that certain Lease Agreement dated October 4, 1993 (the "Lease"), for
the leasing of certain premises located at 00000 Xxxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxxxx (the "Premises") as such Premises are more fully described in the
Lease;
WHEREAS, Premisys Communications Holdings has assigned its interest in the
Lease to Premisys Communications, Inc., a Delaware corporation
("Premisys Communications"); and
WHEREAS, Landlord and Tenant have agreed to extend the Lease Term subject to
the term and conditions set forth in this Second Amendment.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. TERM: The Term of the Lease commenced on April 1, 1994 and is
scheduled to expire on May 31, 1999. Upon execution of this Second Amendment,
the Term of the Lease shall be extended for an additional sixty-five (65)
months, therefore, the lease expiration date shall be amended from May 31, 1999
to October 31, 2004.
2. BASE RENT: The monthly Base Rent payable by Tenant shall be set
forth below commencing and effective June 1, 1999:
Monthly Periods Monthly Rate Monthly Base Rent
--------------- ------------ -----------------
6/l/1999 - 5/31/2000 $0.81 $35,519.31
6/l/2000 - 5/31/2001 $0.84 $36,834.84
6/l/2001 - 5/31/2002 $0.875 $38,369.63
6/l/2002 - 5/31/2003 $0.91 $39,904.41
6/l/2003 - 10/31/2004 $0.945 $41,439.20
3. TENANT IMPROVEMENTS BY TENANT: Tenant shall construct and install
the improvements ("Tenant Improvements") in the Premises as described
and in accordance with the terms, conditions, criteria and provisions set
forth in the Final Plans and Specifications as prepared by Tenant's
architect, Banuazizi Associates Architects, and dated August 2, 1996.
4. OPTION TO EXTEND THE LEASE: The parties hereby acknowledge and
agree that Tenant did not exercise the Option To Extend The Lease in
accordance with the terms and conditions set forth in Addendum I of the
Lease dated October 4, 1993 (the "First Option To Extend"). The parties
further agree that this option is of no further force and effect, and the
following option shall replace the First Option To Extend: Landlord shall
grant Tenant one (1) five (5) year option to extend the Lease (the "Option
to Extend") as set forth in Addendum 1, attached and incorporated herein
by this reference.
5. HVAC REPAIRS: Tenant has acknowledged to Landlord that they
are experiencing pressure differentials along with warm and cold
variations throughout the Premises. Effective upon execution of this
Second Amendment, Landlord agrees to hire an HVAC engineering company to
investigate the existing HVAC zoning of the Premises. This investigation
and any necessary corrective work as a result of said investigation
shall be at Landlord's sole cost, provided the cost does not exceed the
amount of five thousand and 00/100 dollars ($5,000.00). Any cost in excess of
five thousand and 00/100 dollars ($5,000.00), and any corrective work as a
result of modifications made to the Premises by Tenant shall be at Tenant's
sole cost.
6. EFFECT OF AMENDMENT: Except as modified herein, the terms
and conditions of the Lease shall remain unmodified and continue in full
force and effect. In the event of any conflict between the terms and
conditions of the Lease and this Second Amendment, the terms and
conditions of this Second Amendment shall prevail.
7. DEFINITIONS: Unless otherwise defined in this Second Amendment, all
terms not defined in this Second Amendment shall have the meaning set forth in
the Lease.
8. AUTHORITY: Subject to the provisions of the Lease, this
Second Amendment shall be binding upon and inure to the benefit of the
parties hereto, their respective heirs, legal representatives, successors
and assigns. Each party hereto and the persons signing below warrant that
the person signing below on such party's behalf is authorized to do so and
to bind such party to the terms of this Second Amendment.
9. The terms and provisions of the Lease are hereby incorporated in this
Second Amendment.
IN WITNESS WHEREOF, the parties have executed this Second Amendment as of the
date and year first above written.
TENANT:
Premisys Communications, Inc.,
a Delaware corporation
By: /S/ Xxxxx Xxxxxxx
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Printed Name: Xxxxx X. Xxxxxxx
----------------------------
Title: Chief Financial Officer
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Date: 8/21/96
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LANDLORD:
AETNA LIFE INSURANCE COMPANY,
a Connecticut corporation
By: Lincoln Property Company Management Services, Inc.,
As Manager and Agent for Owner
By: /S/ Xxxxx XxXxxxxxxx
----------------------------------
Vice President
Date: 9/17/96
---------------------------------
2
EXHIBIT A
TENANT IMPROVEMENTS
PAGE 1 OF 3
This exhibit, entitled "Tenant Improvements", is and shall
constitute Exhibit A to the Lease Agreement, dated as of the Lease Date,
by and between Landlord and Tenant for the Premises. The terms and
conditions of this Exhibit A are hereby incorporated into and are made a
part of the Lease. Capitalized terms used, but not otherwise defined, in
this Exhibit A have the meanings ascribed to such terms in the Lease.
1. TENANT TO CONSTRUCT TENANT IMPROVEMENTS. Tenant shall be
solely responsible for the planning, construction and completion of the
interior tenant improvements ("Tenant Improvements") to the Premises in
accordance with the terms and conditions of this Exhibit A.
2. DEFINITION. "Tenant Improvements" as used in the Lease and
this Exhibit A shall include only those improvements within the interior
portions of the Premises which are depicted on the Final Plans and
Specifications (hereafter defined in Paragraph 3 (b)) or described
hereinbelow. "Tenant Improvements" shall specifically not include Tenant's
personal property of trade fixtures.
The Tenant Improvements may include:
a. Partitioning, doors, floor coverings, finishes, ceilings, wall
coverings and painting, millwork and similar items.
b. Electrical wiring, lighting fixtures, outlets and switches, and
other electrical work.
c. Duct work, terminal boxes, defusers and accessories required for
the completion of the heating, ventilation and air conditioning systems
serving the Premises, including the cost of meter and key control for
after-hour air conditioning.
d. All fire and life safety control systems such as fire walls,
sprinklers, halon, fire alarms, including piping, wiring and accessories
installed within the Building and serving the Premises.
e. All plumbing, fixtures, pipes, and accessories to be installed
within the Building and serving the Premises.
3. TENANT IMPROVEMENTS PLANS.
a. PRELIMINARY PLANS AND SPECIFICATIONS. Tenant shall retain
an architect ("Architect") and/or engineer ("Engineer") to prepare
preliminary working architectural and engineering plans and specifications
("Preliminary Plans and Specifications") for the Tenant Improvements. The
Preliminary Plans and Specifications shall be in sufficient detail to show
locations, types and requirements for all heat loads, people loads, floor
loads, power and plumbing, regular and special HVAC needs, telephone
communications, telephone and electrical outlets, lighting, lighting
fixtures and related power, and electrical and telephone switches.
Landlord shall approve or disapprove the Preliminary Plans and
Specifications within five (5) business days after Landlord receives
the Preliminary Plans and Specifications, and if disapproved, Landlord
shall return the Preliminary Plans and Specifications to Tenant, who shall
make all necessary revisions. This procedure shall be repeated until
Landlord approves the Preliminary Plans and Specifications. Landlord shall
not unreasonably withhold its approval of the Preliminary Plans and
Specifications. The approved Preliminary Plans and Specifications, as
modified, shall be deemed the "Final Preliminary Plans and Specifications".
b. FINAL PRELIMINARY PLANS AND SPECIFICATIONS. After
the Preliminary Plans and Specifications are approved by Landlord and are
deemed to be the Final Preliminary Plans and Specifications, Tenant
shall cause the Architect and/or the Engineer to prepare the final
working architectural and engineering plans and specifications ("Final Plans
and Specifications") for the Tenant Improvements. Upon preparation of the
Final Plans and Specifications Tenant shall deliver the Final Plans and
Specifications to Landlord. Landlord shall approve or disapprove the Final
Plans and Specifications within five (5) business days after Landlord
receives the Final Plans and Specifications and, if disapproved, Landlord
shall return the Final Plans and Specifications to Tenant who shall make all
necessary revisions. This procedure shall be repeated until Landlord
approves the Final Plans and Specifications. Landlord shall not
unreasonably withhold its approval of the Final Plans and Specifications.
The approved Final Plans and Specifications, as modified, shall be
deemed the "Construction Documents".
c. MISCELLANEOUS. All deliveries of the Preliminary Plans
and Specifications, the Final Preliminary Plans and Specifications, the
Final Plans and Specifications, and the Construction Documents shall
be delivered by messenger service, by personal hand delivery or by
overnight parcel service. While Landlord has the right to approve
the Preliminary Plans and Specifications, the Final Preliminary Plans and
Specifications, the Final Plans and Specifications, and the Construction
Documents, Landlord's interest in doing so is to protect the Premises, the
Building and Landlord's interest therein. Accordingly,
EXHIBIT A
TENANT IMPROVEMENTS
PAGE 2 OF 3
Tenant shall not rely upon Landlord's approvals and Landlord shall not be
the guarantor of, nor responsible for, the correctness or accuracy
of the Preliminary Plans and Specifications, the Final Preliminary
Plans and Specifications, the Final Plans and Specifications, and the
Construction Documents, or the compliance thereof with applicable laws,
and Landlord shall incur no liability of any kind by reason of granting such
approvals.
4. PERMITS. Tenant at its sole cost and expense shall obtain
all governmental approvals of the Construction Documents to the full
extent necessary for the issuance of a building permit for the Tenant
Improvements based upon such Construction Documents. Tenant at its sole
cost and expense shall also cause to be obtained all other necessary
approvals and permits from all governmental agencies having jurisdiction or
authority for the construction and installation of the Tenant Improvements
in accordance with the approved Construction Documents. Landlord shall
cooperate with Tenant at no cost or expense to Landlord in the obtaining
of such approvals and permits. Tenant at its sole cost and expense shall
undertake all steps necessary to ensure that the construction of the Tenant
Improvements is accomplished in strict compliance with all statutes, laws,
ordinances, rules, and regulations applicable to the construction of the
Tenant Improvements and the requirements and standards of any insurance
underwriting board, inspection bureau or insurance carrier insuring the
Premises and/or the Building.
5. CONSTRUCTION.
a. Tenant shall be solely responsible for the
construction, installation and completion of the Tenant Improvements in
accordance with the Construction Documents approved by Landlord and is
solely responsible for the payments of all amounts when payable in
connection therewith without any cost or expense to Landlord, except for
Landlord's obligation to contribute the Carpet and Paint Tenant
Improvement Allowance (as hereinafter defined). Once undertaken,
Tenant shall diligently proceed with the construction, installation and
completion of the Tenant Improvements in accordance with the Construction
Documents. No material changes shall be made to the Construction
Documents approved by Landlord without Landlord's prior written consent,
which consent shall not be unreasonably withheld or delayed.
b. Tenant at its sole cost and expense shall employ a
reputable general contractor ("Contractor") to construct the Tenant
Improvements in accordance with the Construction Documents. The Contractor
selected by Tenant shall be subject to the written approval of Landlord,
which approval shall not be unreasonably withheld or delayed. The
construction contract between Tenant and the Contractor shall be subject to
Landlord's prior written approval. Proof that the Contractor is licensed
in California and has insurance coverage typically carried by a
reputable general contractor in the State of California shall be provided
to Landlord at the time that Tenant requests approval of the Contractor from
Landlord. Tenant shall ensure that all subcontractors hired by the
Contractor are licensed in California and have insurance typically carried
by reputable subcontractors in the State of California.
c. Prior to the commencement of the construction and installation
of the Tenant Improvements, Tenant shall provide the following to the
Landlord, all of which shall be to the Landlord's reasonable satisfaction:
i. An estimated completion schedule for the Tenant
Improvements.
ii. Copies of all required approvals and permits from
governmental agencies having jurisdiction or authority over the construction and
installation of the Tenant Improvements.
d. Landlord shall at all times have the right to inspect the
Tenant Improvements and Tenant shall immediately cease work upon written
notice from the Landlord if the Tenant Improvements are not substantially in
compliance with the Construction Documents approved by the Landlord. If
Landlord gives notice of faulty construction or any other deviation from the
Construction Documents, Tenant shall cause Contractor to make corrections
promptly. However, neither the privilege herein granted to Landlord to make
such inspection, nor the making of such inspections by Landlord, shall
operate as a waiver of any rights of Landlord to require good and
workmanlike construction and improvements constructed in accordance with
the Construction Documents.
e. Tenant shall discharge promptly and fully, by payment
or appropriate bond satisfactory to Landlord in form and substance, all
claims for labor done and materials and services furnished in connection
with the Tenant Improvements. Tenant Improvements shall not be commenced
until five (5) days after Landlord has received notice from Tenant stating
the date the construction of the Tenant Improvements is to commence so that
Landlord can post and record any appropriate notice of non-responsibility.
EXHIBIT A
TENANT IMPROVEMENTS
PAGE 3 OF 3
f. Tenant shall maintain during the construction of the
Tenant Improvements, at its sole cost and expense, builders' risk
insurance for the amount of the completed value of the Tenant
Improvements on an all-risk non-reporting form covering all improvements
under construction, including building materials, and other insurance in
amounts and against such risks as the Landlord shall reasonably require in
connection with the Tenant Improvements.
g. No materials, equipment of fixtures shall be delivered to
or installed upon the Premises pursuant to any agreement by which another
party has a security interest or right to remove or repossess such items,
without the prior written consent of Landlord.
h. Upon completion of the Tenant Improvements, Tenant shall
deliver to Landlord the following, all of which shall be to the Landlord's
reasonable satisfaction:
i. Any certificates required for occupancy, including a
permanent and complete Certificate of Occupancy issued by the City of
Fremont or a final signed-off building permit or its equivalent.
ii. A Certificate of Completion signed by the Architect who
prepared the Construction Documents approved by the Landlord.
6. CARPET AND PAINT TENANT IMPROVEMENT ALLOWANCE.
a. Landlord shall provide an allowance to recarpet the
existing carpeted areas of the Premises, and repaint the interior office
portion of the Premises in the amount of sixty-five thousand seven
hundred seventy-six and 50/100 dollars ($65,776.50) ($1.50 per square foot),
or the amount equal to the lowest of three (3) bids received by Tenant,
whichever is lower (the "Carpet and Paint Tenant Improvement Allowance").
The Carpet and Paint Tenant Improvement Allowance shall be the maximum
contribution by Landlord for the Carpet and Paint Tenant Improvements and
shall be used to install the Carpet and Paint Tenant Improvements and for
no other purpose. Landlord shall have no obligation to disburse the
Carpet and Paint Tenant Improvement Allowance or any portion thereof
unless and until the Carpet and Paint Tenant Improvements have been
completed in a lien-free and good and workmanlike manner and in accordance
with all statues, laws, ordinances, rules and regulations applicable
thereto, Tenant has made the deliveries required under Paragraph 5(h.)
above, and the Lien Period (as hereinafter defined) has expired and
Landlord has been reasonably able to confirm that no mechanics' or
materialsmens' liens have been filed against the Property during such
Lien Period. As used herein, "Lien Period" means the period during
which the Contractor and any subcontractors, labor suppliers and
materialsmen providing services or materials for the Tenant
Improvements may file a lien against the Property of otherwise enforce
lien rights.
b. Notwithstanding the foregoing to the contrary, Landlord shall
not be obligated to disburse any portion of the Carpet and Paint Tenant
Improvement Allowance while Tenant is in Default of this Lease.
c. Should the total cost of the Carpet and Paint Tenant
Improvements be less than the Carpet and Paint Tenant Improvement
Allowance, the Carpet and Paint Tenant Improvement Allowance shall be
automatically reduced to the amount equal to said actual cost.
7. CONDITION PRECEDENT. Landlord shall have no obligation to approve or
review any plans or take any other actions required by Landlord pursuant to this
Exhibit A if at the time Tenant requests such approval, review or action or at
any time thereafter Tenant is in Default of this Lease.
8. LANDLORD'S CONSENTS. If Landlord does not respond to any request for
consent under this Exhibit A within the period set forth for such consent
herein, then such consent shall be deemed given.
ADDENDUM 1 - OPTION TO RENEW
PAGE 1 OF 2
This Addendum No. 1 is incorporated as a part of that certain Second
Amendment to Lease Agreement dated August 9, 1996 (the "Amendment"), by and
between AETNA LIFE INSURANCE COMPANY, A CONNECTICUT CORPORATION
("LANDLORD"), AND PREMISYS COMMUNICATIONS INC., A DELAWARE CORPORATION
("TENANT"), of the premises located at 00000 Xxxxxxx Xxxxx, Xxxxxxx,
Xxxxxxxxxx (the "Premises"). Any capitalized terms used herein and not
otherwise defined herein shall have the meaning ascribed to such terms as
set forth in the Lease.
If Tenant has not at any time been, or is currently not, in default in
the performance of any of its obligations under this Lease and
contingent upon review and approval of Tenant's then current financial
condition by Landlord, Tenant shall have the right at its option to extend
the term of the Lease for five (5) years (the "Extended Term"). The
Lease of the Premises during the Extended Term shall be upon the same
terms, covenants and conditions as are set forth in this Lease, other than
the monthly Base Rent and the term of the Lease. If Landlord does not receive
from Tenant written notice of Tenant's exercise of this option on a date
which is not more than three hundred sixty (360) days nor less than two
hundred forty (240) days prior to the end of the initial term of the
Lease (the "Option Notice"), all rights under this option shall
automatically lapse and terminate and shall be of no further force and
effect. Time is of the essence herein.
The monthly Base Rent for the Extended Term shall be equal to the higher of
(i) the current fair market rent for space comparable to the Premises
taking into account any increases in the fair market rent over the Extended
Term (the "Fair Rental Value") determined as set forth below, or (ii) the
Base Rent payable hereunder immediately prior to the commencement of the
Extended Term.
1. The parties shall have ten (10) days after Landlord receives
the Option Notice within which to agree on the monthly Base Rent for the
Extended Term. If the parties agree on the monthly Base Rent for the
Extended Term within ten (10) days after Landlord receives the Option
Notice, they shall immediately execute an amendment to this Lease stating
the monthly Base Rent for the Extended Term. If the parties have not agreed
on the monthly Base Rent for the Extended Term within the aforesaid ten
(10) days, Tenant may rescind its exercise of the option by giving written
notice to Landlord within five (5) days after expiration of the aforesaid
ten (10) day period. If Tenant does not exercise its right to rescind
as and when required, it shall conclusively be presumed that Tenant has
elected not to rescind its exercise of the option.
2. If the parties are unable to agree on the Fair Rental Value for
the Extended Term within ten (10) days after Landlord receives the Option
Notice, and in the event Tenant does not exercise its right to rescind as
provided in Paragraph 1 above, the Fair Rental Value of the Premises shall
be determined in accordance with Paragraph 4 below.
3. The "Fair Rental Value" of the Premises shall be defined to mean
the fair market rental value of the Premises as of the commencement of the
Extended Term, taking into consideration all relevant factors, including
length of term, the uses permitted under the Lease, the quality, size,
design and location of the Premises, including the condition and value of
existing tenant improvements, and the monthly Base Rent paid by tenants
for premises comparable to the Premises, and located in Fremont,
California.
4. Within five (5) days after the expiration of the ten (10) day
period set forth in Paragraph 2 above, each party, at its sole cost and
by giving notice to the other party, shall appoint a real estate appraiser
with at least five (5) years' full-time commercial appraisal experience in
the area in which the Premises are located to appraise and set the Fair
Rental Value of the Premises for the Extended Term. If a party does not
appoint an appraiser within this five (5) day time period, the single
appraiser appointed shall be the sole appraiser and shall set the then Fair
Rental Value of the Premises. If the two appraisers are appointed by the
parties as stated in this Paragraph 4, they shall meet promptly and
attempt to set the Fair Rental Value of the Premises. If they are unable
to agree within fifteen (15) days after the second appraiser has been
appointed, they shall attempt to elect a third appraiser meeting the
qualifications stated in this Paragraph 4 within five (5) days after the
last day the two appraisers are given to set the Fair Rental Value of the
Premises. If they are unable to agree on the third appraiser, either of
the parties to this Lease, by giving five (5) days notice to the other
party, can apply to the then president of the real estate board for the
city in which the Premises are located, or the then presiding judge of the
Alameda County Superior Court, for the selection of a third appraiser who
meets the qualifications stated in this Paragraph 4. Each of the parties
shall bear one-half (1/2) of the cost of the appointed third appraiser and
of paying the third appraiser's fee. The third appraiser, however
selected, shall be a person who has not previously acted in any capacity
for either party.
Within twenty (20) days after the election of the third appraiser, a majority
of the appraisers shall set the Fair Rental Value of the Premises. If a
majority of the appraisers are unable to set the Fair Rental Value
ADDENDUM 1 - OPTION TO RENEW
PAGE 2 OF 2
of the Premises within the stipulated period of time, the three appraisals
shall be added together and their total divided by three (3); subject to
the next sentence, the resulting quotient shall be the Fair Rental Value of
the Premises. If, however, the low appraisal and/or high appraisal is more
than ten percent (10%) lower and/or higher than the middle appraisal, the
low appraisal and/or high appraisal shall be disregarded. If only one
appraisal is disregarded, the remaining two appraisals shall be added
together and their total divided by two (2); the resulting quotient shall be
the then Fair Rental Value of the Premises. If both the low appraisal and
the high appraisal are disregarded as stated in this Paragraph 4, the
middle appraisal shall be the Fair Rental Value of the Premises. After
the Fair Rental Value of the Premises has been set, the appraisers
shall immediately notify the parties of such value, and the monthly Base
Rent for the Extended Term shall be the amount which is the Fair Rental
Value of the Premises so set.
In no event shall the monthly Base Rent for any period of the Extended Term
be less than the highest monthly Base Rent charged during the Term of the
Lease. Upon determination of the monthly Base Rent for the Extended Term,
pursuant to the terms outlined above, the parties shall immediately execute
the new standard lease document stating the minimum monthly Base Rent for
the Extended Term and confirming the dates of the Extended Term. Tenant
shall have no other right to extend the term of the Lease under this
Addendum 1 unless Landlord and Tenant otherwise agree in writing. If Tenant
duly exercises this option, in accordance with the terms contained herein:
(1) Tenant shall accept the Premises in its then "As-Is" condition and,
accordingly, Landlord shall not be required to perform any additional
improvements to the Premises; and (2) Tenant hereby agrees that it will
solely be responsible for any and all brokerage commissions and finder's
fees payable to any broker in connection with the option described herein,
and Tenant hereby further agrees that Landlord shall in no event or
circumstance be responsible for the payment of any such commissions and fees.
This option is personal to Tenant and may not be assigned, voluntarily
or involuntarily, separate from or as part of the Lease. At Landlord's
option, all rights of Tenant under this option shall terminate and be of no
force and effect if any of the following individual events occur or any
combination thereof occur: (1) Tenant has been in default at any time
during the Term of the Lease, or is currently in default of any provision of
the Lease; and/or (2) Tenant has assigned its rights and obligations under
all or part of the Lease or Tenant has subleased all or part of the
Premises; and/or (3) Tenant's financial condition is unacceptable to
Landlord at the time the Option Notice is delivered to Landlord; and/or
(4) Tenant has failed to exercise this option in a timely manner in
accordance with the provisions of this Addendum 1; and/or (5) Tenant no
longer has possession of all or any part of the Premises under the Lease, or
if Lease has been terminated earlier, pursuant to the terms of the Lease.
