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EXHIBIT 10.1
SUBLEASE AGREEMENT
This Sublease Agreement ("Sublease") is made effective as of the 7 day
of March, 2000, (the "Effective Date") by and between Seagate Technology, Inc.,
a Delaware corporation ("Sublessor"), and Xxxxxxxx.xxx, a Delaware corporation
("Sublessee"). Sublessor agrees to sublease to Sublessee, and Sublessee agrees
to sublease from Sublessor, those certain premises situated in the City of San
Xxxx, County of Santa Xxxxx, State of California, consisting of that free
standing two-story building consisting of approximately 116,000 square feet of
space located at 0000 Xxxxxx Xxxx, Xxx Xxxx, Xxxxxxxxxx, more particularly set
forth on Exhibit "A" hereto (the "Subleased Premises").
ARTICLE 1
MASTER LEASE AND OTHER AGREEMENTS
1.1 MASTER LEASE. Except as specifically set forth herein, this Sublease
is subject and subordinate to all of the terms and conditions of the lease
executed on August 19, 0000, xxxxxxx Xxxxxxxxx Xxxxx, Xxxxx 0, a California
General Partnership ("Master Lessor") and Xxxxxx Peripherals, a California
Corporation ("Lessee" and now "Sublessor" under this Sublease), amended by that
certain First Amendment to lease made and entered into on December 2, 1988 and
that certain Second Amendment dated June 8, 1990, and that certain Third
Amendment dated May 18, 1994, and a Fourth Amendment dated August 19, 1999. The
Lease, First Amendment, Second Amendment, Third Amendment, and Fourth Amendment
are collectively referred to herein as the "Master Lease". Sublessee hereby
assumes and agrees to perform the obligations of Lessee under the Master Lease
applicable to the Subleased Premises and as more particularly limited by
Paragraph 1.2 set forth hereafter. Unless otherwise defined, all capitalized
terms used herein shall have the same meanings as given them in the Master
Lease. A copy of the Master Lease is attached hereto as Exhibit "B" and
incorporated herein by this reference and to Sublessor's reasonable knowledge is
a true and correct copy of the Master Lease. Sublessee shall not commit or
permit to be committed any act or omission which would violate any term or
condition of the Master Lease. Sublessee shall neither do nor permit anything to
be done which would cause the Master Lease to be terminated or forfeited by
reason of any right of termination or forfeiture reserved or vested in Master
Lessor under the Master Lease, and Sublessee shall indemnify and hold Sublessor
harmless from and against all liability, judgments, costs, demands, claims, and
damages of any kind whatsoever (including, without limitation, attorneys' fees
and court costs) by reason of any failure on the part of Sublessee to perform
any of the obligations of Lessee under the Master Lease which Sublessee has
become obligated hereunder to perform. In the event of the termination of
Sublessor's interest as Lessee under the Master Lease for any reason other than
for Sublessor's breach, then this Sublease shall terminate automatically upon
such termination without any liability of Master Lessor or Sublessor to
Sublessee. Sublessor shall not exercise any discretionary right to terminate the
Master Lease without the prior consent of Sublessee, which consent shall not be
unreasonably withheld. Sublessee represents and warrants to Sublessor that it
has read and is familiar with the Master Lease.
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Sublessor reserves the right to negotiate an "Amended and Restated"
Master Lease to which Sublessee agrees will be deemed the Master Lease under
this Sublease except to the extent any of Sublessee's obligations under this
Sublease are materially adversely affected, and Sublessee will reasonably
cooperate with an amendment to this Sublease incorporating the Amended and
Restated Master Lease and amending all references to Sections or Articles or
amendment to the Master Lease herein accordingly.
1.2 APPLICABLE PROVISIONS. All of the terms and conditions contained in
the Master Lease as they may apply to the Subleased Premises, except those
directly contradicted or superseded by the terms and conditions contained in
this document are specifically incorporated herein and shall be terms and
conditions of this Sublease (with each reference therein to "Landlord" or
"Lessor", "Tenant" or "Lessee" and "Lease" to be deemed to refer to Sublessor,
Sublessee, and Sublease, respectively, as appropriate except the following
provisions that are incorporated herein, the reference to Landlord or Lessor
shall mean Master Lessor only in Section 16.25, Third Amendment paragraph 14 and
all references to Tenant's duties regarding the Property shall mean the
Subleased Premises) and along with all of the following terms and conditions set
forth in this document, shall constitute the complete terms and conditions of
this Sublease. Notwithstanding anything herein contained, the following
provisions of the Master Lease shall not apply: Article I, Article II, Article
III, Section 4.1 first sentence, Section 9.2, Section 11.1 except for the third
sentence, Section 15.1(vii) and (viii), Section 15.2, Sections 16.21, 16.22,
16.24, 16.27, Exhibit A, Exhibit C and C1-4, Exhibits D and E, First Amendment
to Lease, Second Amendment to Lease, Third Amendment paragraphs 1-6, 8 second
paragraph, 9, 10, 12, 13, 15, Fourth Amendment. Furthermore, Sublessee's
maintenance and repair responsibilities under Section 6.1 of the Master Lease
and Reimbursable Expenses allocation and responsibility under Section 16.26 of
the Master Lease are limited to the extent the Sublessee/Sublessor
responsibilities are allocated differently in Paragraph 3.4 hereafter; and
Section 6.3 of the Master Lease does not apply to any damage or destruction
covered under Paragraph 12.8 hereafter.
1.3 OBLIGATIONS OF SUBLESSOR. Notwithstanding anything herein contained,
for those services or rights to which Sublessor is entitled to receive from
Master Lessor under the Master Lease, Sublessor's obligations to Sublessee
hereunder shall be limited to using its reasonable good faith efforts to obtain
the performance by Master Lessor of its obligations. Sublessor shall have no
liability to Sublessee or any other person for damage of any nature whatsoever
as a result of the failure of Master Lessor to perform said obligations except
for (a) Master Lessor's termination of Sublessor's interest as Lessee under the
Master Lease in the event of, or Master Lessor's refusal to perform said
obligations because of, Sublessor's breach of the Master Lease, or (b)
Sublessor's failure to use reasonable good faith efforts to obtain Master
Lessor's performance, and Sublessee shall hold Sublessor harmless from any and
all claims and liability whatsoever for any such damage including, without
limitation, all costs and attorneys' fees incurred in defending against same.
Unless Sublessee is in default under this Sublease, Sublessor shall timely
perform its obligations under the Master Lease unless these obligations are to
be performed by Sublessee under the terms of this Sublease.
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ARTICLE 2
TERM
2.1 TERM. The term of this Sublease shall commence on February 1, 2000.
This shall be referred to as the "Commencement Date." The term of this Sublease
shall end on March 31, 2007, unless sooner terminated pursuant to any provision
of the Master Lease applicable to the Subleased Premises (the "Expiration
Date"). Sublessor shall have no obligation to Sublessee to exercise any of its
options to extend under the Master Lease.
2.2 OPTION TO EXTEND. Sublessee shall have no option to extend this
Sublease.
2.3 SUBLESSOR'S INABILITY TO DELIVER SUBLEASED PREMISES. In the event
Sublessor is unable to deliver possession of the Subleased Premises on or before
February 1, 2000, Sublessor shall not be liable for any damage caused thereby,
nor shall this Sublease be void or voidable, but Sublessee shall not be liable
for Rent until such time as Sublessor offers to deliver possession of the
Subleased Premises to Sublessee, but the term hereof shall not be extended by
such delay. If Sublessee, with Sublessor's consent, takes possession prior to
commencement of the term, Sublessee shall do so subject to all the covenants and
conditions hereof and shall pay pro rated Rent for each day at the same rate as
that prescribed for the first month of the term. In the event either party has
been unable to secure Master Lessor's consent to this Sublease within twenty
(20) days after execution by both parties, either Sublessor or Sublessee may
terminate this Sublease.
2.4 EARLY ACCESS. Subject to Master Landlord's approval, and after
execution of the Sublease by both parties, Sublessee may be permitted early
access to the Subleased Premises ("Early Access") prior to the Commencement Date
for the purpose of installing fixtures, furniture placement, tenant improvement
construction and communication cabling. Such Early Access shall be subject to
all of the provisions of this Sublease, except that Sublessee shall not be
required to pay Rent.
ARTICLE 3
RENT
3.1 RENT. Sublessee shall pay to Sublessor each month during the term of
this Sublease, rent as set forth in Exhibit C, attached hereto. First month's
rent is payable on execution hereof and monthly rent is payable in advance on or
before the first of each month thereafter ("Base Rent"). Rent for partial months
at the commencement or termination of this Sublease shall be prorated. Rent
shall be paid to the Sublessor at its business address noted herein, or at any
other place Sublessor may from time to time designate by written notice mailed
or delivered to Sublessee.
3.2 ADDITIONAL RENT. Subject to Paragraph 3.4 hereof, if Sublessor shall
be charged for additional rent or other sums pursuant to any of the provisions
of the Master Lease, Sublessee shall be liable for its pro rata share (defined
herein) of such additional rent or sums. If Sublessee shall procure any
additional services from Master Lessor, Sublessee shall make such payment to
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Sublessor or Master Lessor, as Sublessor shall direct. In addition to Operating
Expenses as hereinafter defined, Sublessee shall also pay as additional rent its
prorata share of the property taxes, insurance or other sums payable by
Sublessor under the Master Lease including Reimbursable Expenses, except as
otherwise provided in Paragraph 3.4 hereof. Base Rent and additional rent shall
herein be referred to as "Rent" and shall be paid without right of offset.
3.3 PRO RATA SHARE. Sublessee's pro rata share under this Sublease shall
be calculated by multiplying the total additional rent or other charge due by a
fraction, the numerator of which shall be the approximate square footage of the
Subleased Premises and the denominator of which shall be the approximate square
footage of the entire premises under the Master Lease (116,000/180,000 = 64%).
All measurements noted in this Section are included in the Master Lease.
Sublessee acknowledges all square footage measurements noted and relied on in
this Sublease and the Master Lease are estimates, and no adjustments shall be
made based upon any actual measurements which may be made.
3.4 OPERATING EXPENSES. In addition to Paragraph 3.2 above, Sublessor
and/or Sublessee shall be responsible for the common area and building cost as
set forth in Exhibit D, attached hereto. The allocations set forth in Exhibit D
shall supercede the terms of the Master Lease to the extent they are
inconsistent with the Master Lease. All of the items contained in Exhibit D that
require the Master Lessor's approval under the terms of the Master Lease shall
be done only after such approval is received by Sublessor.
ARTICLE 4
SECURITY DEPOSIT
4.1 SECURITY DEPOSIT. Upon execution hereof, Sublessee shall deposit
with Sublessor the sum of Two Hundred Eighty Thousand Four Hundred Ten and
34/100 Dollars ($280,410.34) as and for a Security Deposit to secure Sublessee's
full and timely performance of all of its obligations hereunder. If Sublessee
fails to pay Rent or any other sums as and when due hereunder, or otherwise
defaults with respect to any provision of this Sublease, Sublessor may (but
shall not be obligated to) use, apply, or retain all or any portion of said
deposit for payment of any sum for which Sublessee is obligated or which will
compensate Sublessor for any loss or damage which Sublessor may suffer thereby.
Any such use, application, or retention shall not constitute a waiver by
Sublessor of its right to enforce its other remedies hereunder, at law, or in
equity. If any portion of said deposit is so used, applied, or retained,
Sublessee shall, within 10 (ten) days after delivery of written demand from
Sublessor, restore said deposit to its original amount. Sublessee's failure to
do so shall constitute a material breach of this Sublease, and in such event
Sublessor may elect, among or in addition to other remedies, to terminate this
Sublease. Sublessor shall not be a trustee of such deposit, and shall not be
required to keep this deposit separate from its accounts. Sublessor alone shall
be entitled to any interest or earnings thereon and Sublessor shall have the
free use of same. If Sublessee fully and faithfully performs all of its
obligations hereunder, then so much of the deposit as remains shall be returned
to Sublessee (without payment of interest or earnings thereon) within 30 days
after the later of (i) expiration or sooner termination of the term hereof, (ii)
Sublessee's surrender of possession of the Subleased Premises to Sublessor, or
(iii) completion of restoration obligations, if any, by Sublessee.
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4.2 LETTER OF CREDIT. Two (2) business days after Sublessee's receipt of
a copy of the Consent by Master Lessor to this Sublease, Sublessee shall provide
to Sublessor an unconditional, irrevocable standby Letter of Credit in the
amount of Two Million and no/100 Dollars ($2,000,000.00) in favor of Sublessor
and issued by a bank located in the Bay Area and reasonably acceptable to
Sublessor and for the term of one year and automatically renewed each year as
set forth below for the term of the Sublease ("Letter of Credit"). The Letter of
Credit shall secure all Sublessee's performance of the terms and conditions of
the Sublease and is an additional security deposit subject to Paragraph 4.1
above. The Letter of Credit will automatically renew each year during the
Sublease term unless the beneficiary under the Letter of Credit is given at
least thirty (30) days prior notice of a non-renewal by the issuing bank, and
Sublessor shall be able to draw on the Letter of Credit in the event of such
notice.
Provided Sublessee is not in default under the terms of the Sublease,
Sublessee shall have the right to reduce the Letter of Credit to One Million
Five Hundred Thousand and no/100 Dollars ($1,500,000.00) after the first twelve
(12) months of the Sublease Term and to One Million and no/100 Dollars
($1,000,000.00) after the second twelve (12) months of the Sublease Term, which
Sublessee shall maintain for the remaining Sublease Term. However, in the event
during the term of the Sublease Sublessee achieves either eight (8) consecutive
quarters of net profitability or a Market Capitalization of $500,000,000.00 for
at least four (4) consecutive quarters, Sublessee's obligation to provide
Sublessor with a Letter of Credit shall be terminated and said Letter of Credit
shall be returned to Sublessee.
ARTICLE 5
CONDITION OF PREMISES
5.1 CONDITION OF THE SUBLEASED PREMISES. Sublessee acknowledges that as
of the Commencement Date, and subject to the provisions of this Sublease,
Sublessee accepts the Subleased Premises "as is", Sublessee having made all
investigations and tests it has deemed necessary or desirable in order to
establish to its own complete satisfaction the condition of the Subleased
Premises. Sublessee accepts the Subleased Premises in their condition existing
as of the Commencement Date, subject to all applicable zoning, municipal, county
and state laws, ordinances, and regulations governing and regulating the use of
the Subleased Premises and any covenants or restrictions of record. Sublessee
acknowledges that neither Sublessor nor Master Lessor have made any
representations or warranties as to the condition of the Subleased Premises or
its present or future suitability for Sublessee's purposes, except that: (A) as
of the Commencement Date, excluding that portion of the Subleased Premises
delivered in shell condition, Sublessor shall deliver the Subleased Premises to
Sublessee with all existing building systems including plumbing, HVAC, fire
sprinklers, electrical (including panels and outlets), doors (both personnel and
shipping), lighting, and window coverings in good working order (floors and
walls excluded). If during the initial one hundred twenty (120) days of the
Sublease term, Sublessee should uncover a problem with the building systems not
caused by Sublessee's occupancy, Sublessee shall furnish Sublessor with written
notice of said problem and Sublessor, at Sublessor's sole cost and expense,
shall repair said problem in a timely manner; (B) the Subleased Premises shall
be clear of all debris and clutter with exterior windows washed inside and out,
and the parking lot and landscaping shall be in good condition and free of
debris, clutter
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and all construction equipment; and (C) Sublessor shall use reasonable efforts
to complete the replacement of the roof membrane at Sublessor's and Master
Lessor's expense.
Sublessor represents that it has not received any code or non-compliance
notification (including seismic and ADA) from any local, state, or federal
authority that has not been corrected, and has no knowledge of any code
violations. Sublessor will transfer to Sublessee, to the extent possible and in
Sublessor's possession, any warrantees or service contracts on systems in the
Subleased Premises that the Sublessee is responsible to maintain during the term
of the Sublease to the Sublessee.
5.2 SUBLESSOR'S IMPROVEMENTS. Sublessor, at Sublessor's sole cost and
expense, shall coordinate completion of that work described in Xxxxxx Xxxxx &
Associates, Inc.'s set of plans (labeled as sheets T, X-0.0, X-0.0, X-0, X-0 and
A-1 through A-9) described as Seagate-Building #5-Restoration and dated
September 6, 1999 anticipated to be completed by January 10, 2000.
5.3 SUBLESSEE IMPROVEMENT ALLOWANCE. Sublessor shall provide to
Sublessee a Sublessee improvement allowance of One Million One Hundred Sixty
Thousand and no/100 Dollars ($1,160,000.00) (the "Allowance"), which can be
utilized for building typical generic office improvements to the Subleased
Premises, substantially consistent with that work described in Xxxxxx Xxxxx &
Associates, Inc.'s plans (labeled sheets A-1 and A-2) dated December 9, 1999
("Sublessee Improvements"). It is acknowledged that the second floor plan is
indicative of what is projected for the first floor to be built as part of the
Sublessee Improvements. The Allowance shall only be available for Sublessee
Improvements which have been approved pursuant to the terms of Paragraph 7.2
herein, and construction has commenced, within the initial twelve (12) month
period that Sublessee is obligated to pay full rent on the Subleased Premises.
Sublessor shall pay the Allowance to Sublessee no more often than monthly and
within ten (10) business days after invoice from Sublessee to Sublessor with
evidence that Sublessee has obtained a building permit for the Sublessee
Improvements and that the work covered in the invoice is complete and Sublessee
has received conditional lien releases for progress payments from the general
contractor and any subcontractors, materialmen, architects, or engineers
providing work or materials covered in the invoice. Sublessee shall withhold a
ten (10%) retainage on all progress payments except architects, consultants and
engineers, which retainage will be withheld from the Allowance payment as well,
and paid by Sublessor to Sublessee as a final payment on the Allowance once
Sublessee provides to Sublessor unconditional lien releases for all progress
payments and conditional lien releases for final payment from the contractor,
subcontractors and materialmen as identified above.
5.4 ADDITIONAL SUBLESSEE IMPROVEMENT ALLOWANCE. Sublessor agrees to
provide Sublessee with an additional Sublessee improvement allowance of five and
no/100ths ($5.00) Dollars per square foot ("Additional Allowance") as set forth
herein. The Additional Allowance shall only be available for improvements which
have been approved pursuant to the terms of this Sublease and construction has
commenced, within the initial twelve (12) month period that Sublessee is
obligated to pay full rent on the Subleased Premises. In the event Sublessee
elects to use this Additional Allowance or portion thereof, the amount drawn
down shall be amortized into the rent over a sixty-month (60) period at a rate
of twelve percent (12%) per annum, commencing on the first month after the
initial twelve (12) month period of this Sublease.
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ARTICLE 6
INSURANCE
6.1 SUBLESSEE'S INSURANCE. With respect to the Sublessee's insurance
under the Master Lease, the same is to be provided by Sublessee as described in
the Master Lease, and such policies of insurance shall include as named insureds
Master Lessor, Sublessor and any lender as required by Master Lessor.
6.2 WAIVER OF SUBROGATION. With respect to the waiver of subrogation
contained in the Master Lease, such waiver shall be deemed to be modified to
constitute an agreement by and among Master Lessor, Sublessor and Sublessee (and
Master Lessor's consent to this Sublease shall be deemed to constitute its
approval of this modification).
ARTICLE 7
USE OF PREMISES; PARKING; IMPROVEMENTS
7.1 USE OF PREMISES. Sublessee shall be permitted use and occupancy of
the Subleased Premises only for the purpose of general office, systems
development, research, marketing, sales and administration in conformity with
the municipal zoning requirements of the City of San Xxxx and the Master Lease.
7.2 ALTERATIONS; IMPROVEMENTS. Sublessee shall not make any alterations,
improvements, or modifications including Sublessee Improvements as defined in
Paragraph 5.3, to the Subleased Premises without the express prior written
consent of Sublessor and of Master Lessor, which consent by Sublessor shall not
be unreasonably withheld or delayed and Sublessor will use its reasonable
efforts to get Master Lessor's consent. Notwithstanding the foregoing, Sublessee
shall not install any equipment or antennas and/or make any roof penetrations to
the Subleased Premises without the express prior written consent of Sublessor
and Master Lessor, which consent by Sublessor shall be in its sole discretion.
Concurrently, with the granting of such consent, Sublessor shall notify
Sublessee in writing whether or not the Master Lessor will require the requested
alterations, modifications or improvements to be removed on termination of this
Sublease. Sublessee Improvements as defined in Paragraph 5.3, will be completed:
(i) to Sublessee's specifications, consistent with the specifications of
Sublessor's Improvements in Paragraph 5.2 herein and the consents set forth
above; (ii) in accordance with all applicable codes; and (iii) by a general
contractor chosen by Sublessee licensed in the State of California and approved
by the Sublessor and Master Lessor. Sublessee Improvements may commence upon the
completion and execution of all documentation and receipt of all approvals
and/or permits required for the new construction. Sublessor and Sublessee shall
mutually agree upon the selection of the architect. Sublessee acknowledges that
Sublessor prefers that Sublessee employ Xxxxx Xxxxxxx of Xxxxxx Xxxxx &
Associates, a Mountain View architectural firm, at least in the preliminary
design phase because of Xx. Xxxxxxx'x familiarity with the Subleased Premises.
Notwithstanding the foregoing, Sublessee shall engage Xxxxx Xxxxxxx to review
its plans and specifications for conformance to interior work described in
Paragraph 5.2 herein, with the cost of said review not to exceed Two Thousand
and no/100 Dollars ($2,000.00). On the earlier of the early termination of this
Sublease or prior to the Sublease Expiration Date,
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Sublessee shall remove any or all improvements covered under this Article 7 and
restore the Subleased Premises (or any part thereof) to the same condition as of
the Commencement Date of this Sublease, reasonable wear and tear excepted or as
otherwise instructed in writing by either Sublessor or Master Lessor
("Restoration Work"). This Restoration Work shall include, but not be limited
to, the restoration of the second floor to the configuration and condition
existing as of the Commencement Date, but the first floor may be left in the
final configuration existing as of the Sublease expiration or termination except
to the extent of any improvements not consented to by Sublessor and/or Master
Lessor. Should Sublessee fail to timely completed any or all of the Restoration
Work, unless instructed otherwise in writing as set forth above, Sublessor shall
have the right to do so, and charge Sublessee therefor, including holdover Rent
for any extended period for the Restoration Work to be completed.
Sublessee shall submit to Sublessor all "as built plans" (including an
update of the work performed on the then present "as built plans" to insure that
any work performed is always currently reflected on such plans) for all work
(regardless as to whether consent is required) performed by Sublessee within
ninety (90) days of completion.
7.3 MINOR ALTERATIONS. "Minor Alterations" shall consist of
non-structural alterations, additions and improvements to the Subleased Premises
not affecting the exterior of the Subleased Premises and not exceeding Twenty
Thousand and no/100 Dollars ($20,000.00). Notwithstanding paragraph 7.2 herein,
Sublessor's prior written consent shall not be required for Minor Alterations,
provided Sublessee shall give Sublessor at least twenty (20) days prior written
notice describing the proposed Minor Alteration, including a sketch thereof and
the construction schedule therefor.
7.4 SURRENDER. On termination of the Sublease, the Subleased Premises
shall be surrendered in the same condition as received, reasonable wear and tear
excepted, and with a new coat of paint on all interior walls, unless otherwise
instructed in writing by Sublessor. Alternatively, not later than one hundred
eighty (180) days prior to Sublease expiration, the Sublessee may request that
the Sublessor competitively bid the restoration required to be performed by
Sublessee to at least three (3) general contractors, in which event Sublessee
shall pay to Sublessor an amount equal to the average of the three (3) bids
received, plus design costs without xxxx-up with thirty (30) days of invoice
from Sublessor.
Notwithstanding Section 15.1 of the Master Lease, Sublessee will have no
obligation to remove any improvements not made or installed by Sublessee or
those so made or installed by Sublessee which Master Lessor agrees may remain on
the Subleased Premises at the end of the Master Lease Term.
ARTICLE 8
COMMON AREAS
8.1 USE OF COMMON AREAS. As used herein, "Common Areas" shall mean all
areas within the Property (as defined in the Master Lease) that are available
for the common use of lessees of the Property and are not leased or held for the
exclusive use of Sublessee, Sublessor or other lessees, and include parking
areas, driveways, sidewalks, access roads,
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landscaping and planted areas. Sublessee shall have the nonexclusive right to
use the Common Areas for the purposes intended, subject to such reasonable rules
and regulations as Sublessor may uniformly establish from time to time.
Sublessee shall not interfere with the rights of any or all of Sublessor, other
lessees, or any other person entitled to use the Common Areas. Sublessor agrees
to keep the Common Areas in good condition and repair during the term of this
Sublease.
ARTICLE 9
ASSIGNMENT, SUBLETTING & ENCUMBRANCE
9.1 CONSENT REQUIRED. Sublessee shall not assign this Sublease or any
interest therein nor shall Sublessee sublet, license, encumber or permit the
Subleased Premises or any part thereof to be used or occupied by persons other
than Sublessee's employees, agents, contractors and invitees, without
Sublessor's and Master Lessor's prior written consent, which shall not be
unreasonably withheld. The consent by Sublessor and Master Lessor to any
assignment or subletting shall not waive the need for Sublessee (and Sublessee's
assignee or subtenant) to obtain the consent of Sublessor and Master Lessor to
any different or further assignment or subletting. All Conditions and Standards
set forth in the Master Lease regarding assignments and subletting shall apply,
and to the extent there is any Bonus Rents, (Rent paid by such Assignee or
SubSublessee in excess of Rent paid by Sublessee hereunder) the Bonus Rent shall
first be split per the Master Lease and any Bonus Rent to go to Sublessee shall
be split 50/50 with Sublessor to be paid to Sublessor within five (5) days of
receipt by Sublessee. Sublessor hereby consents, subject only to notice from
Sublessee to Sublessor and Master Lessor's consent and no change in use, to any
assignment of the Sublease to an affiliate (owned by or owner of) Sublessee or
successor of Sublessee caused by merger, consolidation, stock acquisition or
other non-bankruptcy reorganization.
9.2 FORM OF DOCUMENT. Every assignment, agreement, or sublease shall (i)
recite that it is and shall be subject and subordinate to the provisions of this
Sublease, that the assignee or sublessee assumes Sublessee's obligation
hereunder, that the termination of this Sublease shall at Sublessor's sole
election, constitute a termination of every such assignment or sublease, and
(ii) contain such other terms and conditions as shall be reasonably requested or
provided by Sublessor's attorneys.
9.3 NO RELEASE OF SUBLESSEE. Regardless of Sublessor's consent, no
subletting or assignment shall release Sublessee of Sublessee's obligation or
alter the primary liability of Sublessee to pay the Rent and to perform all
other obligations to be performed by Sublessee hereunder. The acceptance of Rent
by Sublessor from any other person shall not be deemed to be a waiver by
Sublessor of any provision hereof. In the event of default by any assignee,
subtenant or any other successor of Sublessee, in the performance of any of the
terms hereof, Sublessor may proceed directly against Sublessee without the
necessity of exhausting remedies against such assignee, subtenant or successor.
9.4 RECAPTURE. Sublessor shall have the right to recapture the Subleased
Premises and terminate this Sublease in the event Sublessee elects to
sub-sublease substantially all of the Subleased Premises for substantially all
of the remaining term.
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9.5 DEFAULT. An involuntary assignment shall constitute a default and
Sublessor shall have the right to elect to terminate this Sublease, in which
case this Sublease shall not be treated as an asset of Sublessee.
ARTICLE 10
DEFAULT
10.1 DEFAULT DESCRIBED. The occurrence of any of the following shall
constitute a material breach of this Sublease and a default by Sublessee: (i)
failure to pay Rent or any other amount due under this Sublease within three (3)
business days after due; (ii) all those items of default set forth in the Master
Lease which remain uncured after the cure period provided in the Master Lease;
or (iii) Sublessee's failure to perform timely and subject to any cure periods
any other material provision of this Sublease or the Master Lease as
incorporated herein.
10.2 SUBLESSOR'S REMEDIES. Sublessor shall have the rights and remedies
set forth in the Master Lease default provisions as though Sublessor is Master
Lessor. These rights and remedies are not exclusive; they are cumulative and in
addition to any remedies now or later allowed by law.
10.3 ALL SUMS DUE AND PAYABLE AS RENT. Sublessee shall also pay without
notice, or where notice is required under this Sublease, immediately upon demand
without any abatement, deduction, or setoff Rent and as additional rent all
sums, impositions, costs, expenses, and other payments which Sublessee in any of
the provisions of this Sublease assumes or agrees to pay, and, in case of any
nonpayment thereof, Sublessor shall have, in addition to all other rights and
remedies, all the rights and remedies provided for in this Sublease or by law in
the case of nonpayment of rent.
10.4 SUBLESSOR DEFAULT. For purposes of this Sublease, Sublessor shall
not be deemed in default hereunder unless and until Sublessee shall first
deliver to Sublessor thirty (30) days' prior written notice, and Sublessor shall
fail to cure said default within said thirty (30) day period, or in the event
Sublessor shall reasonably require in excess of thirty (30) days to cure said
default, shall fail to commence said cure with said thirty (30) day period, and
thereafter diligently to prosecute the same to completion.
10.5 NOTICE OF EVENT OF DEFAULT UNDER MASTER LEASE. Sublessor shall
notify Sublessee of any Event of Default under the Master Lease, or of any other
event of which Sublessor has actual knowledge which will impair Sublessee's
ability to conduct its normal business at the Subleased Premises, as soon as
reasonably practicable following Sublessor's receipt of notice from Master
Lessor of an Event of Default or Sublessor's actual knowledge of such
impairment.
10.6 LATE FEES. A late fee of five per cent (5%) will be charged on any
payment more than five (5) days overdue, and payment more than thirty (30) days
overdue will accrue interest at the maximum rate allowed by law.
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ARTICLE 11
CONSENT OF MASTER LESSOR
11.1 PRECONDITION. The Master Lease requires that Sublessor obtain the
consent of Master Lessor to any subletting by Sublessor. This Sublease shall not
be effective unless Master Lessor signs a consent to this subletting
satisfactory to Sublessor and Sublessee.
ARTICLE 12
MISCELLANEOUS
12.1 CONFLICT WITH MASTER LEASE; INTERPRETATION. In the event of any
conflict between the provisions of the Master Lease and this Sublease, the
Master Lease shall govern and control except to the extent directly contradicted
by the terms of this Sublease. No presumption shall apply in the interpretation
or construction of this Sublease as a result of Sublessor having drafted the
whole or any part hereof.
12.2 REMEDIES CUMULATIVE. The rights, privileges, elections, and
remedies of Sublessor in this Sublease, at law, and in equity are cumulative and
not alternative.
12.3 WAIVER OF REDEMPTION. Sublessee hereby expressly waives any and all
rights of redemption to which it may be entitled by or under any present or
future laws in the event Sublessor shall obtain a judgment for possession of the
Subleased Premises.
12.4 HOLDING OVER. Any holding over by Sublessee after expiration of
this Sublease with the consent of Sublessor and Master Lessor shall be deemed a
tenancy from month-to-month at a monthly rate of one hundred and fifty percent
(150%) of the Base Rent and other amounts due for the last month of the Sublease
term and shall otherwise be on the same terms and conditions set forth herein.
Any holding over by Sublessee after the expiration of this Sublease without the
consent of Sublessor and Master Lessor shall be deemed a tenancy from
month-to-month, at the monthly rate of three hundred percent (300%) of Base
Rent, and other amounts due for the last month of the Sublease Term, and shall
otherwise be on the same terms and conditions as set forth herein. Said monthly
rent shall be due and payable monthly in advance on the first day of the month
and otherwise as provided for in Article 3 hereof until such tenancy is
terminated by Sublessor or upon thirty (30) days notice by Sublessee. Sublessor
and Master Lessor expressly do not waive any rights to further claims for
damages should Sublessee holdover without consent.
12.5 ENVIRONMENTAL. Sublessor represents that it has no knowledge of
existing contamination of the Subleased Premises. Sublessee covenants and agrees
that its operations shall be in full compliance with all federal, state and
local laws, rules or regulations relating to pollution or to the protection of
the environment or human health. Sublessee shall not bring or permit to remain
on the Subleased Premises any asbestos, petroleum or petroleum products,
explosives, toxic materials, or substances defined as hazardous wastes,
hazardous materials, or hazardous substances under any federal, state, or local
law or regulation ("Hazardous Materials"), except ordinary office products used
on the Subleased Premises
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and stored in the usual and customary manner and quantities. Sublessee shall not
install or operate any underground storage tanks on or under the Subleased
Premises. Sublessee's violation of the foregoing covenant or prohibitions shall
constitute a material breach and default hereunder, and Sublessee shall
indemnify, hold harmless and defend (by counsel acceptable to Sublessor)
Sublessor, and its partners, directors, officers, employees, shareholders,
lenders, agents, contractors and each of their respective successors and
assigns, from and against any claims, damages, penalties, liabilities, and costs
(including reasonable attorney fees and court costs) caused by or arising out of
(i) a violation of the foregoing covenant or prohibitions or (ii) the presence
of any Hazardous Materials on, under, or about the Subleased Premises or other
properties as the direct or indirect result of Sublessee's occupancy of the
Subleased Premises. Sublessee, at its sole cost and expense, shall clean up,
remove, remediate and repair any soil or groundwater contamination and damage
caused by the presence or any release of any Hazardous Materials in, on, under,
or about the Subleased Premises, not in existence at Commencement Date and
arising during the term of the Sublease, in conformance with the requirements of
applicable law. Neither the written consent of Sublessor to the presence of the
Hazardous Materials nor Sublessee's compliance with all laws applicable to such
Hazardous Materials shall relieve Sublessee of its indemnification obligation
under this Sublease. Sublessee shall immediately give Sublessor written notice
(i) of any suspected breach of this paragraph, (ii) upon learning of the
presence or any release of any Hazardous Materials, or (iii) upon receiving any
notices from governmental agencies pertaining to Hazardous Materials which may
affect the Subleased Premises. Sublessor shall have the right from time to time,
but not the obligation, to enter upon the Subleased Premises, at Sublessee's
sole expense, to conduct such inspections and undertake such sampling and
testing activities as Sublessor deems necessary or desirable to determine
whether Sublessee is in compliance with this provision. Any costs or expenses
incurred by Sublessor for which Sublessee is responsible under this provision
shall be deemed Additional Rent that is due and payable on notice from Sublessor
to Sublessee. The obligations of Sublessee hereunder shall survive the
expiration or earlier termination, for any reason, of this Sublease.
12.6 SIGNAGE. Sublessee may install signage at 3061 Zanker Road, and as
approved by Sublessor and Master Lessor, subject to any municipal restrictions
by the City of San Xxxx, the C.C. & R.'s for the project and the Master Lease.
The monument sign on the corner of Montague and Zanker will continue to identify
the project in its entirety as "Corporate Plaza". Subject to City of San Xxxx
approval, Master Landlord and Sublessor may consent to Sublessee's installation
of a backlit triangular shaped sign on the south side of the main entrance on
Zanker, identical to the existing triangular sign situated north of the main
entrance. Subject to City of San Xxxx approval and Master Lessor, Sublessor
shall be responsible for placing, at its cost, a generic monument to Sublessor's
specifications on the south side of the Zanker Road entrance so that Sublessee
may place its signage on such monument.
12.7 PARKING. Sublessee is entitled to four hundred and six (406)
undesignated parking spaces at 3061 Zanker Road within the area as set forth on
Exhibit E hereto, . Nine (9) of these parking spaces are handicapped parking
spaces. Subject to Master Lessor's consent and Sublessor's reasonable consent,
Sublessee may designate certain spaces for Sublessee's exclusive use not to
exceed 60 spaces. Sublessor agrees to cooperate with Sublessee, in the
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event Sublessee, at Sublessee's sole cost and expense, and with Master Lessor's
approval, elects to restripe the parking lot in order to increase the number of
parking stalls. Sublessee agrees to reinstate the parking lot to original layout
if required by Master Lessor under the terms of the Master Lease.
12.8 EXPANSION OPTION. In the event, during the term of the Sublease,
3081 Zanker Road ("Expansion Space") becomes available for sublease through
Sublessor, Sublessee shall have a first right to negotiate on the Expansion
Space for a period of ten (10) business days after notice from Sublessor that
the Expansion Space is available. During said ten (10) business days, Sublessor
and Sublessee shall negotiate exclusively with each other, in good faith, to
affect a sublease of the Expansion Space. If during the ten (10) business days
the parties cannot reach an agreement as to the terms of the Sublease for the
Expansion Space, Sublessor, without liability to Sublessee, shall be free to
negotiate with any other party on any terms relating to the Expansion Space.
12.9 NON DISTURBANCE. Sublessor is presently the beneficiary under a
Deed of Trust on the Property, and agrees that if Sublessor as such beneficiary
forecloses on the Property under the Deed of Trust, that Sublessor will honor
the Sublease and it shall remain in full force and effect so long as Sublessee
is not in default under the Sublease. This Paragraph is null and void if and
when Sublessor is no longer the beneficiary under a Deed of Trust on the
Property.
12.10 DAMAGE AND DESTRUCTION. In the Master Lease, in the event of
damage or destruction, there is no abatement of Rent. Therefore, Sublessee shall
purchase business interruption insurance that includes coverage for payment of
Sublessee's obligations to pay Rent hereunder for a period of not less than
twelve (12) months. Sublessee shall furnish a certificate of insurance for such
coverage to Sublessor before the Commencement Date and at least thirty (30) days
before the expiration dates thereof. Said policy shall also provide that said
insurance shall not be canceled or coverage reduced without thirty (30) days
prior written notice having been given to Sublessor. In the event Sublessee
shall fail to procure such insurance, or to deliver such certificate, Sublessor
may, at its option, procure lost rents insurance and the cost thereof shall be
paid by Sublessee to Sublessor within ten (10) days after delivery of a xxxx
from Sublessor to Sublessee for such cost.
Subject to the provisions hereof, Sublessor shall retain the duty to
restore the Subleased Premises in the event of a casualty loss in accordance
with Section 11.1 of the Master Lease. Upon the occurrence of any casualty
damage to the Subleased Premises and Sublessor's obligation or election to
restore the Subleased Premises as hereinafter set forth, Sublessee shall assign
to Sublessor (or any party designated by Sublessor) the portion of the insurance
proceeds payable to Sublessee under any insurance required to be carried by
Sublessee under this Sublease and the portion of the deductible amounts, that
pertain to Leasehold Improvements. Sublessor shall then repair any damage to the
Tenant Improvements covered by such Sublessee insurance and the Subleased
Premises, and shall return such Tenant Improvements to the extent of Sublessee's
insurance coverage and deductible and the Subleased Premises to their original
condition. Sublessor shall make all repairs for damage to the Subleased Premises
if in Sublessor's reasonable judgment the repairs can be completed (without over
time or other premiums) within three hundred and sixty-five
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(365) days after Sublessor's discovery of the damage. If in Sublessor's opinion
the repair will take more than three hundred and sixty-five (365) days to
complete from date of Sublessor's discovery of the damage ("Sublessor's Opinion
of Repair Time") then either Sublessor or Sublessee may elect to terminate this
Sublease within thirty (30) days after written notice from Sublessor to
Sublessee of Sublessor's Opinion of Repair Time, and such termination shall be
effective thirty (30) days after such notice. In event of such Sublease
termination, the proceeds of insurance shall be the property of the party paying
for that insurance, except for Section 11.1, third sentence of the Master Lease.
Notwithstanding the foregoing, Sublessee shall not have the right to terminate
this Sublease unless Sublessor has the right to terminate the Lease as to the
Subleased Premises.
ARTICLE 13
BROKER'S COMMISSIONS
13.1 COMMISSION. Sublessor and Sublessee represent and warrant to each
other that each has dealt with the following brokers Xxx Xxxxxxx and Xxx Xxxxxxx
of Colliers International (Sublessor's Broker) and Xxxxx Xxxxxx and Xxxxxx Xxxxx
of Colliers International (Sublessee's Broker) and with no other agent, finder,
or other such person with respect to this Sublease and each agrees to indemnify
and hold the other harmless from any claim asserted against the other by any
broker, agent, finder, or other such person not identified above as Sublessor's
Broker or Sublessee's Broker. The Commission to the Brokers is pursuant to
separate agreement.
ARTICLE 14
NOTICES AND PAYMENTS
14.1 CERTIFIED MAIL. Any notice, demand, request, consent, approval,
submittal or communication that either party desires or is required to give to
the other party or any other person shall be in writing and either served
personally or sent by prepaid, first-class certified mail or commercial
overnight delivery service. Such Notice shall be effective on the date of actual
receipt (in the case of personal service or commercial overnight delivery
service) or two days after deposit in the United States mail, to the following
addresses:
Sublessor at: Seagate Technology, Inc.
Attn: Corporate Real Estate Manager
000 Xxxx Xxxxx, XX00-X0
Xxxxxx Xxxxxx, XX 00000-0000
Sublessee at the Premises, whether or not Sublessee has
abandoned or vacated the Premises or notified the Sublessor of
any other address, with a copy to:___________________________.
ARTICLE 15
ATTORNEYS' FEES
15.1 SUBLESSOR MADE PARTY TO LITIGATION. If Sublessor becomes a party to
any litigation brought by someone other than Sublessee and concerning this
Sublease, the Subleased
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Premises, or Sublessee's use of occupancy of the Subleased Premises, based upon
any real or alleged act or omission of Sublessee or its authorized
representatives, Sublessee shall be liable to Sublessor for reasonable
attorneys' fees and court costs incurred by Sublessor in the litigation.
15.2 CERTAIN LITIGATION BETWEEN THE PARTIES. In the event any action or
proceeding at law or in equity or any arbitration proceeding be instituted by
either party, for an alleged breach of any obligation of Sublessee of Sublessor
under this Sublease, to recover rent, to terminate the tenancy of Sublessee at
the Subleased Premises, or to enforce, protect, or establish any right or remedy
of either party to this Sublease Agreement, the prevailing party (by judgment or
settlement) in such action or proceeding shall be entitled to recover as part of
such action or proceeding such reasonable attorneys' fees, expert witness fees,
and court costs as may be fixed by the court or jury, but this provision shall
not apply to any cross-complaint filed by anyone other than Sublessor in such
action or proceeding.
ARTICLE 16
EXHIBITS
16.1 EXHIBITS AND ATTACHMENTS. All exhibits and attachments to this
Sublease are a part hereof.
IN WITNESS WHEREOF, Sublessor and Sublessee have executed and delivered
this Sublease on the date first set forth above.
SUBLESSOR: SUBLESSEE:
Segate Technology, Inc.
a Delaware corporation a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Its: Vice President Worldwide Facilities Its: CEO
By: By: /s/ Xxxxxxxxx X. Xxxxxxxxxx
--------------------------------
Its: Its: CFO
-------------------------------
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EXHIBIT C
BASE RENT SCHEDULE
Sublessor shall provide the Sublessee a Triple Net (NNN) Sublease. The
net monthly Base Rate shall be set as follows:
RENTAL PERIOD MONTHLY RENT
------------- --------------
February 1, 2000 through January 31, 2001 *$220,400.00
February 1, 2001 through January 31, 2002 $228,114.00
February 1, 2002 through January 31, 2003 $236,097.99
February 1, 2003 through January 31, 2004 $244,361.41
February 1, 2004 through January 31, 2005 $252,914.06
February 1, 2005 through January 31, 2006 $261,766.06
February 1, 2006 through January 31, 2007 $270,927.87
February 1, 2007 through March 31, 2007 $280,410.34
---------------------
* Base Rent shall be payable at fifty percent (50%) of the scheduled rate for
the period commencing on the Commencement Date until the earlier of (1)
substantial completion of Sublessor's Improvements as set forth in
Paragraph 5.2 of the Sublease, or (2) April 1, 2000, at which time full
scheduled Base Rent shall be payable.
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EXHIBIT D
OPERATING EXPENSE OBLIGATIONS
COST MANAGEMENT
RESPONSIBILITY RESPONSIBILITY
-------------- --------------
A. 1. Maintenance of the building foundation, Sublessor Sublessor
structural exterior walls (excluding exterior
painting and window cleaning):
2. Maintenance and repair of structural roof Sublessor Sublessor
elements:
3. Maintenance and minor repair (minor Sublessee Sublessee
patching) of roof membrane:
4. Service contract for the roof: Sublessee Sublessee (Copy to
be provided to
Sublessor and
Master Lessor)
5. Roof repairs and replacement in excess of Sublessor Sublessor
minor patching (unless due to Sublessee or
its agent's actions) and the duty to pursue
any warranty work on the roof.
B. 6. All other building interior and exterior Sublessee Sublessee
maintenance, and repair including normal
heating, ventilation, air conditioning
maintenance and repair, painting (interior
and exterior), window cleaning, entry ways,
and all other building operating and
maintenance and repair expenses as defined
in the Master Lease and Sublease:
7. Service contracts for HVAC and window Sublessee Sublessee (Copy to
washing per Master Lease: be provided to
Sublessor and
Master Lessor)
8. Insect and rodent spraying: Sublessee Sublessee
9. Structural Repairs Sublessor Sublessor
10. All capital repairs shall be governed Sublessee, as Sublessor
pursuant to Section 16.25 of the Master tenant, pursuant
Lease and Sublessor will use reasonable to Section 16.25
efforts to enforce Section 16.25 with the of the Master
Master Lessor. Lease.
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COST MANAGEMENT
RESPONSIBILITY RESPONSIBILITY
-------------- --------------
Cost Management
Responsibility Responsibility
C. 11. Outside area maintenance and repair, Sublessee (pro- Sublessor
including landscaping, parking lot seal, rata and monthly
stripping, and patch repairs of less than accrual as an
1,000 sq. ft. of repairing per patch repair Operating
and parking lot light fixtures, and utilities Expense)
for such areas and property management:
D. 12. Real Estate Taxes: Sublessee (pro- Sublessor
rata payable
within 10 days of
invoice)
Sublessor
E. 13. All risk insurance including earthquake and Sublessee (pro-
flood coverage and deductibles as incurred. rata and monthly
accrual) Sublessor
F. 14. Public liability and property damage Sublessee (pro-
insurance: rata and monthly Sublessee
accrual)
G. 15. Telephone service, water, gas and Sublessee
electricity, garbage, and janitorial charges:
B-2
