Exhibit 10.3
SUBLEASE
(3167 Corporate Place, Hayward, CA)
THIS SUBLEASE ("Sublease"), dated as of November 5, 2001, for reference
purposes only, is entered into by and between BEI TECHNOLOGIES, INC., a Delaware
corporation ("Sublandlord"), and OPTICNET, INC., a Delaware corporation
("Subtenant").
RECITALS
A. Sublandlord leases certain premises (the "Premises") consisting of
approximately 15,571 rentable square feet in a building located at 0000
Xxxxxxxxx Xxxxx, Xxxxxxx, XX, 00000 pursuant to a certain Standard
Industrial/Commercial Multi-Tenant Lease - Gross, dated September 20, 2000,
between CALWEST INDUSTRIAL PROPERTIES, LLC, a California Limited Liability
Company, successor in interest to PGP NORTHERN INDUSTRIAL L.P., a Delaware
limited partnership, as landlord (the "Master Landlord"), and Sublandlord, as
tenant, (the "Master Lease"). Sublandlord represents and warrants that a true
and complete copy of the Master lease is attached hereto as Exhibit A.
Capitalized terms herein not otherwise defined herein shall have the same
meanings as provided in the Master Lease.
B. Sublandlord desires to sublease the Premises to Subtenant, and
Subtenant desires to sublease the Premises from Sublandlord upon the terms and
conditions provided for herein.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained herein, Sublandlord and Subtenant covenant and agree as follows:
AGREEMENT
1. Premises. Sublandlord hereby leases to Subtenant, and Subtenant
hereby leases from Sublandlord, the Premises, upon and subject to the terms and
conditions set forth herein.
2. Term. The term of this Sublease has commenced on December 15, 2000
(the "Commencement Date"). The term of this Sublease shall end on December 31,
2005 or upon such earlier or later date mutually agreed to by each of the
Sublandlord and Subtenant.
3. Use. Subtenant shall be permitted to use the Premises consistent
with the permitted uses under the Master Lease.
4. Rent.
(a) Base Rent. Starting on the Commencement Date, Subtenant
shall pay as base rent ("Base Rent") for the Premises in advance, on or before
the first day of each month, without deduction or offset, monthly rent in the
amounts set forth below. Base Rent and Additional Rent (defined below) shall be
payable to Sublandlord at the address stated herein for Sublandlord. Base Rent
and Additional Rent shall collectively be referred to herein as "Rent." Rent for
any period during the term hereof which is for less than one month shall be a
pro rata portion of the monthly installment based on the number of days in the
month at issue.
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Period Monthly Rent
12/15/00 - 12/31/01 $16,972.39
1/1/02 - 12/31/02 $17,750.94
1/1/03 - 12/31/03 $18,529.49
1/1/04 - 12/31/04 $19,308.04
1/1/05 - 12/31/05 $20,086.59
(b) Additional Rent. Subtenant shall pay to Sublandlord, as
additional rent ("Additional Rent"), all Common Area Operating Expenses (as
defined in Section 4 of the Master Lease) accruing during the term of this
Sublease. Notwithstanding the foregoing, in the event any amounts payable by
Sublandlord to Master Landlord are (i) due to Sublandlord's breach of any
provision of the Master Lease (ii) due to Sublandlord's negligence or willful
misconduct, or (iii) are for the sole benefit of Sublandlord, then such amounts
shall be the sole responsibility of Sublandlord.
5. Security Deposit. Upon execution of this Sublease, Subtenant shall
deposit with Sublandlord the sum of Twenty Thousand Eighty Six and 59/100
Dollars ($20,086.59) as a security deposit ("Security Deposit"). Subtenant
hereby grants to Sublandlord a security interest in the Security Deposit,
including but not limited to replenishments thereof. If Subtenant fails to pay
Rent or other charges when due under this Sublease, or fails to perform any of
its other obligations hereunder, Sublandlord may use or apply all or any portion
of the Security Deposit for the payment of any Rent or other amount then due
hereunder and unpaid, for the payment of any other sum for which Sublandlord may
become obligated by reason of Subtenant's default or breach, or for any loss or
damage sustained by Sublandlord as a result of Subtenant's default or breach. If
Sublandlord so uses any portion of the Security Deposit, Subtenant shall restore
the Security Deposit to the full amount originally deposited within ten (10)
days after Sublandlord's written demand. Sublandlord shall not be required to
keep the Security Deposit separate from its general accounts, and shall have no
obligation or liability for payment of interest on the Security Deposit. The
Security Deposit, or so much thereof as had not theretofore been applied by
Sublandlord, shall be returned to Subtenant within thirty (30) days of the
expiration or earlier termination of this Sublease, provided Subtenant has
vacated the Sublease Premises.
6. As-Is. Subject to Master Landlord's service, maintenance or repair
obligations under the Master Lease, the Premises and all improvements will be
taken over on an "as is" basis.
7. Master Lease.
(a) Sublandlord represents to Subtenant that the Master Lease
represents that entire agreement between Master Landlord and Sublandlord
respecting the subject matter thereof, is in full force and effect, and that no
default or event that, with the passing of time or the giving of notice or both,
would constitute a default, exists on the part of Sublandlord, or, to
Sublandlord's knowledge, the Master Landlord. Sublandlord agrees to maintain the
Master Lease in full force and effect, except to the extent that any failure to
maintain the Master Lease is due to the failure of Subtenant to comply with any
of its obligations under this Sublease. Sublandlord shall not amend or modify
the Master Lease in such a manner as to materially adversely affect Subtenant's
use of the Subleased Premises or increase the obligations or decrease the rights
of Subtenant hereunder except where required pursuant to Paragraph 49 of the
Addendum to the Master Lease, without the prior written consent of Subtenant,
which may be granted or withheld at Subtenant's sole discretion.
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(b) Except as otherwise provided in this Sublease, all of the
terms and provisions of the Master Lease are incorporated into and made a part
of this Sublease, and the rights and obligations of the parties under the Master
Lease are hereby imposed upon the parties hereto with respect to the Premises,
the Sublandlord being substituted for the Lessor in the Master Lease, the
Subtenant being substituted for the Lessee in the Master Lease, and the Premises
being substituted for the Premises in the Master Lease; provided, however, that
the term "Landlord" in the following sections of the Master Lease shall mean
Master Landlord, not Sublandlord: 4, 7.2, 8.1, 8.3, 9, 10.1, and 49, and the
term Landlord in the following sections of the Master Lease shall mean both
Master landlord and Sublandlord: 6.4, 8.8, and 32. Notwithstanding the
foregoing, the following Sections of the Master Lease are not incorporated
herein: 1.1, 1.3, 1.4, 1.5, 1.6, 1.7, 1.9, 1.10, 1.11, the first sentence of
2.1, 2.2, 2.3, 2.5, 2.6, 3, 5, 15, and 37; Addendum To Standard AIR Industrial
Lease Paragraphs: 1.5, 3.3 and 15.
(c) Notwithstanding the incorporation of Exhibit B to the
Master Lease, Sublandlord and Subtenant agree that Subtenant shall perform the
obligations of Lessee thereunder, provided, however, Sublandlord shall be solely
responsible for any costs associated with or attributable to such obligations.
Sublandlord and Subtenant anticipate that the Lessee Improvements as defined in
Exhibit B will be substantially completed by the end of the 2002 calendar year.
(d) In the event of any conflict between this Sublease and the
Master Lease, as between Sublandlord and Subtenant, the terms and conditions of
this Sublease shall control. Further, if Rent is abated under the Master Lease,
Rent hereunder shall also be abated.
8. Indemnity. The following provisions and obligations shall survive
the termination of this Sublease:
(a) Subtenant shall indemnify, defend, protect, and hold
Sublandlord harmless from and against all actions, claims, demands, costs,
liabilities, losses, reasonable attorneys' fees, damages, penalties, and
expenses which may be brought or made against Sublandlord or which Sublandlord
may pay or incur to the extent caused by (i) a breach of this Sublease by
Subtenant, (ii) the negligence or willful misconduct of Subtenant, or (iii) the
storage, use, release or disposal of Hazardous Substances on or about the
Premises by Subtenant.
(b) Sublandlord shall indemnify, defend, protect, and hold
Subtenant harmless from and against all actions, claims, demands, costs,
liabilities, losses, reasonable attorneys' fees, damages, penalties and expenses
which may be brought or made against Subtenant or which Subtenant may pay or
incur to the extent caused by (i) a breach of this Sublease or a breach of the
Master Lease by Sublandlord, (ii) the negligence or willful misconduct of
Sublandlord; (iii) the storage, use, release or disposal of Hazardous Substances
on or about the Premises by Sublandlord.
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9. Brokerage. Each party warrants and represents to the other that
other that they have not retained any other real estate broker, finder or any
other person whose services would form the basis for any claim for any
commission or fee in connection with this Sublease or the transactions
contemplated hereby. Each party agrees to save, defend, indemnify and hold the
other party free and harmless from any breach of its warranty and representation
as set forth in the preceding sentence, including the other party's attorneys'
fees.
10. Sublandlord's Obligations. Except as expressly otherwise provided
herein Sublandlord shall have no obligation to Subtenant with respect to the
performance by Master Landlord of any obligations of Master Landlord under the
Master Lease, except to use reasonable efforts to enforce Master Landlord's
obligations under the Master Lease. Such reasonable efforts shall include,
without limitation, upon Subtenant's request, (a) immediately notifying Master
Landlord of its non-performance under the Master Lease and requesting that
Master Landlord perform its obligations under the Master Lease and/or (b)
assigning Sublandlord's rights under the Master Lease to Subtenant to the extent
necessary to permit Subtenant to institute legal proceedings against Master
Landlord to obtain the performance of Master Landlord's obligations under the
Master Lease; provided, however, that if Subtenant commences a lawsuit or other
action, Subtenant shall pay all costs and expenses incurred in connection
therewith, and Subtenant shall indemnify Sublandlord against, and hold
Sublandlord harmless from, all costs and expenses incurred by Sublandlord in
connection therewith.
11. Early Termination of Master Lease. If, without the fault of
Sublandlord hereunder the Master Lease should terminate prior to the expiration
of this Sublease, Sublandlord shall have no liability to Subtenant. To the
extent that the Master Lease grants Sublandlord any discretionary right to
terminate the Master Lease due to casualty or condemnation, or otherwise,
Sublandlord shall not exercise such right without the prior written consent of
the Subtenant which may be withheld by Subtenant in its sole and absolute
discretion.
12. Quiet Enjoyment. Subtenant shall peacefully have, hold and enjoy
the Premises, subject to the terms and conditions of this Sublease and subject
to the Master Lease, provided that Subtenant pays all rent and performs all of
Subtenant's covenants and agreements contained herein. If Master Landlord seeks
to terminate the Master Lease because of a default or alleged default by
Sublandlord under the Master Lease (other than a default or alleged default
caused by the default by Subtenant under this Sublease), Sublandlord shall take
all action required to reinstate the Master Lease. In the event that Sublandlord
defaults in the performance or observance of any of Sublandlord's obligations
under this Sublease or receives a notice of default from Master Landlord under
the Master Lease, then Sublandlord shall give written notice to Subtenant
specifying in what manner Sublandlord has defaulted. If such default shall not
be cured within a reasonable time, then Subtenant shall be entitled, at
Subtenant's option, to cure such default and promptly collect from Sublandlord
Subtenant's reasonable expenses in so doing (including, without limitation,
reasonable attorneys' fees and court costs) unless such default by Sublandlord
is caused by a default of Subtenant hereunder (in which case Sublandlord shall
not be liable for Subtenant's costs to cure the default). Subtenant shall not be
required to wait to cure a default by Sublandlord if such action is reasonably
required to prevent a termination by Master Landlord of the Master Lease.
Nothing contained herein shall entitle Subtenant to act on behalf of Sublandlord
or in Sublandlord's name.
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13. Consent of Master Landlord. If Subtenant desires to take any action
which requires the consent of Master Landlord pursuant to the terms of the
Master Lease, including, without limitation, the making of any alterations,
then, notwithstanding anything to the contrary herein, (a) Sublandlord,
independently, shall have the same rights of approval or disapproval as Master
Landlord has under the Master Lease, (b) Subtenant shall not take any such
action until it obtains the consent of both Sublandlord and Master Landlord, and
(c) Subtenant shall request that Sublandlord obtain Master Landlord's consent on
Subtenant's behalf and Sublandlord shall use best efforts to obtain such
consent, unless Sublandlord and Master Landlord agree that Subtenant may contact
Master Landlord directly with respect to the specific action for which Master
Landlord's consent is required.
14. No Third Party Rights. Except as otherwise expressly set forth
herein, the benefit of the provisions of this Sublease is expressly limited to
Sublandlord and its affiliates on one hand, and Subtenant on the other hand, and
each of their permitted successors and assigns. Under no circumstances will any
third party be construed to have any rights as a third party beneficiary with
respect to any of said provisions.
15. Master Landlord Consent to Sublease. This Sublease and
Sublandlord's and Subtenant's obligations hereunder are conditioned upon having
obtained the written consent of the Master Landlord to this Sublease.
Sublandlord shall use commercially reasonable efforts to obtain Master
Landlord's consent to this Sublease as soon as practicable.
16. Surrender. At the expiration or earlier termination of this
Sublease, Subtenant shall surrender the Premises in the condition required under
the Master Lease.
17. Mutual Waiver of Subrogation. The waiver of subrogation provision
set forth in Section 8.6 of the Master Lease shall be deemed a three party
agreement binding among and inuring to the benefit of Sublandlord, Subtenant and
Master Landlord (by reason of its consent to hereto).
18. Non-Disturbance. In the event that the Sublease terminates prior to
the expiration of the term thereof for any reason other than as a result of an
event of default by Subtenant under the Sublease, the Sublease shall continue in
full force and effect, at Subtenant's option, as a direct lease between the
Master Landlord and Subtenant upon all of the terms, covenants and conditions of
the Sublease and Master Landlord shall recognize Subtenant's right to possession
of the Premises as provided for in the Sublease and shall not disturb
Subtenant's right to possession so long as an event of default does not exist in
the performance of Subtenant's obligations under the Sublease.
19. Counterparts. This Sublease may be executed in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
all of which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Sublease as of the
date first written above.
ADDRESS: SUBLANDLORD
One Post Street, Suite 2500 BEI TECHNOLOGIES, INC.
Xxx Xxxxxxxxx, XX 00000 a Delaware corporation
Attn: Chief Executive Officer
By: /s/ Xxxxxx Xxxx
Its: Vice President and Treasurer
SUBTENANT
One Post Street, Suite 2500 OPTICNET, INC.,
Xxx Xxxxxxxxx, XX 00000 a Delaware corporation
Attn: President
By: /s/ Xxxxxxxx Xxxxxx
Its: President
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CONSENT TO SUBLEASE
The undersigned, as Landlord under that certain Lease dated September
20, 2000, as more fully set forth in the attached Sublease Agreement (the
"Lease"), hereby consents to the foregoing Sublease between BEI TECHNOLOGIES,
INC., A Delaware Corporation, ("Sublandlord"), OPTICNET, INC., A Delaware
Corporation, ("Subtenant").
This consent is given upon the expressed following conditions:
1. Sublandlord shall continue to remain primarily liable for the
payment of all amounts of rental and other sums and performance of all covenants
required of Sublandlord under the Lease.
2. There shall be no modifications or amendments of the Sublease
Agreement without the prior written consent of Landlord.
3. Consent by Landlord to this subletting shall not include consent to
the assignment or transferring of any lease renewal option rights or space
option rights, special privileges or extra services granted to Sublandlord by
the Lease, or addendum or amendment hereto or letter of agreement (and such
options, right, privileges or services shall terminate upon such assignment or
transfer).
4. In the event of any default under the terms and provisions of the
Lease, Landlord shall have the right to collect the rental attributable to the
Sublease Premises directly from Subtenant without waiving any of Landlord's
rights against Sublandlord as a result of such default.
5. Consent to the sublease is without waiver of restrictions concerning
future subleases or extensions of the foregoing sublease.
6. Sublandlord shall pay Landlord the sum of One Thousand Six Hundred
Ninety Seven Dollars and 23/100 ($1,697.23) to defray Landlord's costs in
approving this subletting.
7. Landlord shall not be liable for, and Sublandlord hereby indemnifies
and holds Landlord harmless from, any commission payable associated with the
sublease agreement.
8. In the event of any conflict between the terms and provisions of the
Lease and the aforementioned sublease, the terms and provisions of the Lease
shall control.
9. Redress for any claims against Landlord under the Lease or this
Consent shall only be made against Landlord to the extent of Landlord's interest
in the property of which the Premises are a part. The obligations of Landlord
under the Lease and this Consent shall not be
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personally binding on, nor shall any resort be had to the private properties of,
any of its trustees or board of directors and officers, as the case may be, the
general partners thereof or any beneficiaries, stockholders, employees or agents
of Landlord, or its investment manager.
LANDLORD: SUBLANDLORD:
CALWEST INDUSTRIAL PROPERTIES, LLC BEI TECHNOLOGIES, INC.
A California Limited Liability Company A Delaware Corporation
By: PGP PARTNERS, INC. By: /s/ Xxxxxxx Xxxxxxx
A California Corporation Title: Chief Executive Officer
As Agent and Property Manager for Landlord Date: October 30, 2001
By: /s/ Xxxxx Xxxxxxxxx
Xxxxx Xxxxxxxxx
Title: Regional Manager
Date: November 5, 2001
SUBTENANT:
OPTICNET, INC.,
A Delaware Corporation
By: /s/ Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxxxx
Title: President
Date: October 25, 2001
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