1
EXHIBIT 10.12
OCCUPANCY LICENSE AGREEMENT
THIS OCCUPANCY LICENSE AGREEMENT ("Agreement") is made effective as of
November 12, 1998, by and between ADAPTEC, INC., a Delaware corporation
("Licensor"), and JAYCOR NETWORKS INC., a Delaware corporation ("Licensee"), in
the context of the following facts and circumstances:
A. Pursuant to the Asset Acquisition Agreement entered into by and
between Licensor and Licensee dated November 12, 1998, (the "Asset Acquisition
Agreement"), Licensor has agreed to sell, and Licensee has agreed to purchase
the "Tangible Assets" (as such term is defined in the Asset Acquisition
Agreement).
B. Licensor owns that certain building (the "Building") located at ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
C. Licensor and Licensee are desirous of entering into a short-term
occupancy arrangement for the use by Licensee of certain space within the
Building.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties agree as follows:
1. LICENSE AREA AND LOCATION. Licensor hereby grants to Licensee a non-
assignable, non-transferable right and license for the use of that certain area
(the "License Area") containing approximately 1,194 rentable square feet of
space, as shown on the attached Exhibit A. Licensee hereby acknowledges and
agrees that this right of use is a license only and not a leasehold interest and
that Licensee shall not be entitled to any actions, claims, defenses, unlawful
detainer protections, or other rights afforded to lessees, tenants, or "parties
in possession" under applicable law.
Licensor may in its sole discretion, upon forty-five (45) days
written notice to Licensee, relocate the License Area to another location within
the Building; provided, however, that Licensor will not relocate Licensee's lab
and in the event the Licensor elects to relocate some or all of Licensee's
cubicles, such replacement cubicles shall be similar in size and type as the
original cubicles and will be in an area reasonably close in proximity to
Licensee's lab. In addition, in the event that Licensor requests Licensee to
relocate, all reasonable costs of relocation, to be mutually agreed upon by
Licensor and Licensee, will be borne by Licensor.
2. TERM. The term of this Agreement (the "License Term") will commence
as of the date of the Asset Acquisition Agreement (the "Commencement Date"), and
will continue for a period of twelve (12) months (the "Termination Date"),
unless sooner terminated pursuant to the following provisions:
2
(a) Licensor may terminate this Agreement for cause by giving three
(3) days written notice to Licensee. As used herein, "cause" means any of the
following: (i) Licensee is in material breach of a material obligation under
this Agreement, and Licensee has failed to correct such breach within fourteen
(14) days after written notice from Licensor; or (ii) Licensee causes or permits
hazardous materials or toxic substances to be used or handled in violation of
Paragraph 6 below; or (iii) the License Area is damaged or destroyed by a fire
or other casualty that makes it impracticable for Licensor to continue to allow
Licensee to occupy the License Area.
(b) Licensee may terminate this Agreement for any reason by giving
Licensor no less than thirty (30) days prior written notice. The termination of
the Agreement shall be effective on the last day of the month following the
month in which such termination notice was delivered to Licensor.
On or before the Termination Date, Licensee shall completely remove all of
its personal property and vacate the License Area, leaving all of the
Furnishings therein in the same condition as received.
3. LICENSE FEE. For the use of the License Area, as well as for the use
of the Furnishings, the Common Facilities, and the Services provided by Licensor
as described below, Licensee shall pay to Licensor a fee (the "License Fee") in
the amount of $27.00 per rentable square foot per year, payable in monthly
installments in the amount of $2,686.50, due on the first day of each calendar
month, in such manner and at such address as Licensor shall designate. For any
partial month at the beginning or end of the License Term, the monthly License
Fee will be prorated. A late charge of $400.00 will be assessed if the License
Fee is not paid by the 5th day of the month.
4. SECURITY DEPOSIT. Licensee shall pay to Licensor upon execution of
this Agreement the first month's License Fee, which amount shall be held by
Licensor and applied to the first installment due under this Agreement. Licensee
also shall pay to Licensor upon execution of this Agreement an amount equal to
one month's License Fee as a "Security Deposit", which amount shall be held by
Licensor as security for Licensee's faithful performance under this Agreement.
If Licensee fails to pay any License Fee or other amount due under this
Agreement, as and when due, or otherwise fails to perform its obligations
hereunder, then Licensor may, at its option and without prejudice to any other
remedy which Licensor may have, apply, use or retain all or any portion of the
Security Deposit toward the payment of delinquent amounts or for any loss or
damage sustained by Licensor due to such failure by Licensee. Licensee shall
upon demand restore the Security Deposit to the original sum deposited. The
Security Deposit shall not bear interest nor shall Licensor be required to keep
such sum separate from its general funds. To the extent not otherwise applied by
Licensor as provided herein, the Security Deposit shall be returned to Licensee
within thirty (30) days after the Termination Date.
5. IMPROVEMENTS AND FURNISHINGS. Licensor will provide offices,
cubicles and lab space
20
3
within the License Area at Licensor's cost, based on Licensor's building
standard specifications, pursuant to the floor plan shown in Exhibit A. Licensor
will also furnish the License Area with Licensor's standard furniture, such as
basic desks, chairs, tables, bookshelves, and filing cabinets as currently
provided. Unless otherwise agreed in the Asset Acquisition Agreement, such
improvements and furnishings (collectively, the "Furnishings") shall at all
times remain Licensor's property. Licensee shall not make any alterations or
modifications to or upon the License Area or any of the Furnishings (including
without limitation any painting, wall hangings or signage), or add to, delete
from or relocate any of the same, without Licensor's prior written approval
which may be withheld in Licensor's sole and absolute discretion. If Licensor
does grant approval for any such alterations or modifications, Licensee will be
required to use Licensor's established vendors for the performance of such work.
6. USE. Licensee will use the License Area during the License Term only
for general office purposes, research and development, light manufacturing, and
sales, and for no other purpose without Licensor's prior written approval which
may be withheld in Licensor's sole and absolute discretion. Except for small
quantities of products used in normal office environments (e.g., toner,
white-out), Licensee shall not cause or permit any hazardous materials or toxic
substances to be used, stored, generated, discharged, treated, handled,
transported to or from, or released in, on, or about the License Area or the
Building, without the prior written consent of Licensor which consent may be
withheld in the sole and absolute discretion of Licensor.
7. COMMON FACILITIES. During the License Term, Licensee and its
employees shall be entitled to use, in common with Licensor's employees,
contractors, agents, invitees and other licensees, those portions of the
Building and related parking areas that are designated by Licensor from time to
time as being available for such common use (the "Common Facilities"). The
Common Facilities include such areas and facilities as reception areas,
hallways, stairs and elevators, the cafeteria, coffee stations (including the
refreshments supplied by Licensor at no cost to Licensor's employees),
bathrooms, locker rooms (including lockers), parking stalls, and other similar
areas and facilities designated by Licensor. The cost of Licensee's use of the
Common Facilities shall be included in the License Fee. Conference and training
rooms will be accessible by Licensee based on availability, subject to such
rules regarding scheduling and priority as may be promulgated by Licensor from
time to time in a non-discriminatory manner.
8. SERVICES PROVIDED BY LICENSOR. Licensor shall provide to Licensee,
during the License Term, the services described below (the "Services") in
accordance with Licensor's typical practices and standards in Licensor's sole
determination. The cost of such Services shall be included in the License Fee
except where expressly provided below or otherwise in this Agreement. In
accepting Licensor's agreement to provide such Services, Licensee expressly
acknowledges that there is the possibility of error or malfunction in any or all
of the same, and agrees that Licensee is fully assuming all risks associated
with Licensee's use or dependence on such Services, except for the negligence or
the intentional
3
4
misconduct of Licensor or its agents, contractors and employees.
(a) Licensor shall provide general repairs and maintenance,
janitorial services and utilities for the License Area. Licensee shall notify
Licensor as soon as possible after Licensee becomes aware of the need for any
repairs or maintenance, or of any of the foregoing matters that is in need of
correction or attention by Licensor.
(b) Licensor shall provide up to 10 telephone systems and
facilities for Licensee's use in the License Area, including telephone set,
voice mail with direct dial extensions; and up to 10 concurrent telephone calls
through Licensor's PBX and interconnect facilities for networking equipment, all
in such amounts and types and according to such specifications as determined by
Licensor in its sole discretion. Licensee shall pay to Licensor (i) an initial
set-up fee in the amount of $750.00 for the foregoing items; provided, however,
if Licensee elects to utilize the current telephone systems and facilities "AS
IS" without modification, then the initial set-up fee will be waived by
Licensor; (ii) a fee on a time and material basis (with time being billed at $75
per hour) for any changes to such telephone systems or facilities after the
initial set-up; (iii) the monthly charges incurred for toll and long distance
calls (including facsimile) made by Licensee or from the License Area; and (iv)
a basic monthly telephone service charge, in the amount of $65 per line per
month. Licensee shall use one or more of its direct dial extensions as
Licensee's main office phone number, as the receptionists employed by Licensor
will not be expected to take or deliver messages for Licensee except in
extenuating circumstances.
(c) Licensee shall be permitted to utilize Licensor's mail room
services for the receipt and delivery of mail to and from Licensee, provided
that correct postage on all outgoing mail must be pre-affixed by Licensee.
9. OFFICE SUPPLIES AND EQUIPMENT.
a) Licensor shall supply Licensee with a photo copy machine, fax
machine, and supplies, including paper. Any such costs will be included in the
License Fee.
b) Unless otherwise specified in this Agreement, Licensee shall
be responsible for supplying, at Licensee's own cost, all office supplies, and
equipment utilized by Licensee in connection with Licensee's operations in the
License Area, including without limitation computer equipment, modems and
networking equipment, postage meter, and all materials and service. Any vendors,
suppliers or service constructors who will need to enter the Building regularly
for access to the License Area shall be subject to the reasonable approval of
Licensor.
10. COMPLIANCE WITH LAWS.
(a) Licensee and its employees shall in all respects use the
License Area and Common Facilities, and operate Licensee's business therein, in
compliance with all applicable laws, ordinances and
4
5
governmental rules and regulations, including without limitation all fire codes.
(b) Licensee shall secure, at its sole cost and expense, all
necessary use permits, business licenses, and other governmental approvals
necessary for the lawful conduct of Licensee's business.
(c) Licensee shall pay, before delinquency, any and all taxes,
charges, and governmental fees assessed or levied upon or on account of
Licensee's business, Licensee's occupancy of the License Area, and Licensees
personal property.
11. RULES OF CONDUCT. Licensee and its employees shall at all times use
the License Area, the Services, the Furnishings and the Common Facilities in
compliance with the following provisions:
(a) Licensee shall at all times conduct its activities in or about
the Building in a professional and proper manner in accordance with Licensor's
rules and regulations regarding employee conduct, which rules Licensor may
change from time to time in a non-discriminatory manner at Licensor's sole
discretion.
(b) Licensee shall keep the License Area and the Furnishings
therein neat and safe at all times. Any damage caused by Licensee in excess of
normal wear and tear will be the financial responsibility of Licensee.
(c) Licensee shall abide by Licensor's policies and procedures
regarding Building access and security, which policies and procedures Licensor
may change from time to time in Licensor's sole discretion. Licensee shall use
commercially reasonable efforts to safeguard and preserve the confidentiality of
the work spaces, discussions, work product, systems, files, and any other
proprietary information of Licensor, other licensees, and any other users or
occupants of the Building.
(d) Licensee will be provided a copy of Licensor's rules
regulations, and policies and procedures, and will promptly be notified of any
changes in the same.
(e) Licensee nor Licensee's agents, employees, or invitees may do
any of the following in or about the Building: (i) solicit the employees of
Licensor, other licensees or other users or occupants of the Building for
employment; and/or (ii) directly or indirectly or by action in concert with
others, induce or influence (or seek to induce or influence) any person who is
engaged (as an employee, agent, independent contractor, or otherwise) by
Licensor, other licensees or other users or occupants of the Building to
terminate his or her employment or engagement. If, in the reasonable opinion of
Licensor, Licensee or Licensee's agents, employees, or invitees are engaging in
such conduct in, on or about the Building, Licensee, upon demand of Licensor,
shall enforce such restrictions and have such persons removed from the Building.
Licensor shall have the right but not the obligation to remove or exclude from
the Premises or the Building any person engaging in such prohibited conduct.
5
6
(f) Unless otherwise allowed pursuant to the terms of the Asset
Acquisition Agreement, neither Licensor nor Licensor's agents, employees, or
invitees may do any of the following in or about the Building: (i) solicit the
employees of Licensee for employment; and/or (ii) directly or indirectly or by
action in concert with others, induce or influence (or seek to induce or
influence) any person who is engaged (as an employee, agent, independent
contractor, or otherwise) by Licensee to terminate his or her employment or
engagement.
12. CONFIDENTIALITY. Licensee acknowledges that Licensee and other
licensees of the Building may be permitted by Licensor to utilize Licensor's
computer, telephone, message correspondence, and mail delivery facilities for
their operations, and Licensee agrees to use the utmost care to safeguard and
insure that the confidential information, proprietary information, work product,
systems and files of Licensor, other licensees, or any other users or occupants
of the Building are not disclosed or misappropriated. Subject to the terms of
Paragraphs 14 and 18 of this Agreement, Licensor shall use commercially
reasonable efforts to safeguard and preserve the confidentiality of Licensee's
work spaces, discussions, work product, systems, files, and other proprietary
information; provided, however, Licensee acknowledges that if Licensee and other
licensees of the Building utilize Licensor's computer, telephone, message
correspondence, and mail delivery facilities for their operations, Licensor will
have limited means to protect the confidentiality of such confidential
information, work product, systems and files, and Licensee shall waive all
claims for loss or damage to Licensee or any person claiming by, through or
under Licensee resulting from the disclosure or misappropriation of Licensee's
confidential information, work product, systems or files, except to the extent
caused by the gross negligence or intentional misconduct of Licensor.
13. LICENSOR'S RIGHT TO ENTER. Licensee agrees that Licensor shall have
the right to enter the License Area at all times for the purpose of inspecting
the same, making repairs, and performing its obligations under this Agreement.
Licensor shall use commercially reasonable efforts not to interfere with
Licensee's use of the License Area in connection with such entry.
14. NO REPRESENTATIONS BY LICENSOR. Licensee hereby acknowledges and
agrees as follows:
(a) Licensor has made no representations or warranties regarding
the level of safety and security in the Building, and Licensee will be
responsible for adequately protecting its own possessions, work product and
files.
(b) Licensor has made no representations or warranties regarding
the condition of the License Area or the Common Facilities or the suitability
thereof for Licensees purposes, and Licensee accepts the same in its "AS IS"
condition.
6
7
15. REQUIRED INSURANCE. Licensee shall obtain, at its sole cost and
expense, and deliver to Licensor prior to the Commencement Date, signed
certificates of insurance evidencing currently effective policies of insurance
as follows:
(a) Commercial general liability insurance with broad form
contractual liability coverage and with limits of not less than One Million
Dollars ($1,000,000) combined each occurrence and in the aggregate insuring
against any and all liability of Licensee and/or Licensor (as an additional
insured) with respect to the License Area, or arising out of the maintenance,
use or occupancy thereof, or in connection with the conduct of Licensee's
business within the Building.
(b) All Risk property insurance covering Licensee's personal
property and work product, in an amount not less than ninety percent (90%) of
their full replacement cost.
(c) Workers' compensation insurance in such forms and amounts as
is required under the laws of the State in which the Building is located.
Such certificates shall contain a provision that the policy of insurance
may not be canceled or reduced without prior notice to Licensor.
16. INDEMNIFICATION OF LICENSOR. Licensee shall, at its sole cost and
expense, indemnify, protect, defend (with counsel acceptable to Licensor) and
hold harmless Licensor, its partners, shareholders, officers, directors,
attorneys, agents, beneficiaries, employees, affiliates, contractors, and
related entities (collectively, "Licensor's Related Parties") from and against
all liabilities, obligations, damages, penalties, claims, costs, charges and
expenses, including reasonable attorneys' fees, which may arise in any manner
out of or in connection with (i) Licensee's use of the License Area, the
Furnishings, the Services and/or the Common Facilities; (ii) the conduct of
Licensee's business; (iii) any act or omission of Licensee or Licensee's
partners, shareholders, officers, directors, attorneys, agents, beneficiaries,
employees, affiliates, contractors, and related entities (collectively,
"Licensee's Related Parties") in connection with this Agreement; and/or (iv) any
material breach by Licensee under this Agreement; provided, however, Licensee
shall have no obligation to defend or indemnify Licensor from claims which are
caused by the negligence or willful misconduct of Licensor or Licensor's Related
Parties.
17. INDEMNIFICATION OF LICENSEE. Licensor shall, at its sole cost and
expense, indemnify, protect, defend (with counsel acceptable to Licensee) and
hold harmless Licensee, and Licensee's Related Parties from and against all
liabilities, obligations, damages, penalties, claims, costs, charges and
expenses, including reasonable attorneys' fees, which may arise in any manner
out of or in connection with any injury or death to any person or injury or
damage to property caused by, arising out of, or involving (i) any willful
misconduct or negligence of Licensor or Licensor's Related Parties in connection
with this Agreement; and/or (ii) any material breach by Licensor under this
Agreement; provided, however, Licensor shall have no obligation to defend or
indemnify Licensee from claims which are caused
7
8
by the negligence or willful misconduct of Licensee or Licensee's Related
Parties.
18. WAIVER OF RESPONSIBILITY. Except to the extent caused by the willful
misconduct or negligence of Licensor, Licensor and Licensor's Related Parties
shall not be liable for, and Licensee waives, all claims for loss or damage to
Licensee's business or damage or injury to person or property sustained by
Licensee or any person claiming by, through, or under Licensee, resulting from
any accident or occurrence in, on or about the License Area, or any other part
of the Building, including, without limitation, claims for loss, theft or damage
resulting from: (i) any Furnishings or other equipment or appurtenances being in
disrepair; (ii) injury done or occasioned by wind or weather; (iii) any defect
in or failure to operate, for whatever reason, any Furnishings or other
equipment or facilities in or about the Building; (iv) broken glass; (v) any
act, omission or negligence of other licensees, any other users or occupants of
the Building or the public; or (vi) any other cause of any nature. To the
maximum extent permitted by law, Licensee agrees to use and occupy the License
Area, the Furnishings, the Services, and the Common Facilities at Licensee's own
risk.
19. WAIVER OF RIGHT OF RECOVERY. Notwithstanding the terms of Paragraph
17, Licensee (for itself and its insureds) hereby releases and waives all right
of recovery which it might otherwise have (including rights of subrogation)
against Licensor and Licensor's Related Parties by reason of any loss or damage
resulting from any recovery, claim, action or cause for damages or injury or
other occurrence no matter how caused, to the extent that the same is covered by
Licensee's insurance or which would have been covered had Licensee complied with
the requirements of Paragraph 15 of this Agreement. The foregoing waiver shall
be effective whether or not Licensee maintains the insurance required to be
carried pursuant to this Agreement.
Notwithstanding the terms of Paragraph 16, Licensor (for itself and its
insureds) hereby releases and waives all right of recovery which it might
otherwise have (including rights of subrogation) against Licensee and Licensee's
Related Parties by reason of any loss or damage resulting from any recovery,
claim, action or cause for damages or injury or other occurrence no matter how
caused, to the extent that the same is covered by Licensor's insurance.
20. HOLDING OVER. If Licensee fails to vacate the License Area upon
termination of this Agreement, Licensee's presence upon or occupancy of the
License Area shall constitute a trespass. Licensor shall have the benefit of all
provisions of law respecting the recovery of the License Area and removal of
Licensee and its employees, including but not limited to, changing the locks to
the Building and/or the License Area, requesting action by local law enforcement
officers, and/or immediate injunctive relief. Licensee's occupancy of the
License Area subsequent to the termination of this Agreement shall be subject to
all the terms, covenants, and conditions of this Agreement for Licensor's
benefit, except that the License Fee shall be three times the License Fee
otherwise payable hereunder. After termination of this Agreement, Licensor shall
have no obligation to provide or allow Licensee to use any Furnishings,
8
9
Services, or Common Facilities
21. DEFAULT. Each party may exercise any remedy available to it at law
or in equity upon the other party's breach or default of this Agreement, and the
rights, remedies, and benefits provided by this Agreement and by law are
cumulative and nonexclusive. In the event of any action or other proceeding to
interpret or enforce this Agreement, the prevailing party shall be entitled to
recover its reasonable attorney's fees from the other party.
22. MISCELLANEOUS PROVISIONS. This Agreement may be modified only in
writing by Licensor and Licensee. This Agreement is the only agreement between
the parties with respect to the subject matter of this Agreement, and all other
negotiations, representations and agreements between the parties are merged
therein. This Agreement shall be governed by the laws of the State in which the
Building is located. This Agreement shall not be strictly construed against the
party preparing it, but shall be construed as if all parties prepared this
Agreement jointly upon the advice of their respective legal counsel. If any
provision in this Agreement is held by any court to be invalid, void or
unenforceable, the remaining provisions shall nevertheless continue in full
force and effect. Waiver by Licensor of any breach of any term, covenant or
condition herein contained shall not be deemed a waiver of any subsequent breach
of the same or any other term, covenant or condition herein contained. Time is
of the essence of this Agreement and of every term, covenant and condition
hereof.
23. DELIVERY BY COUNTERPARTS AND FACSIMILES. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original
and which together shall constitute one and the same instrument. Each party may
execute and deliver this instrument by facsimile, and facsimiles of signatures
shall be deemed original signatures for all purposes, but each party executing
and delivering this instrument by facsimile shall also send the other party an
original of this instrument containing such party's ink signature. Each person
executing this Agreement represents that the execution of this Agreement has
been duly authorized by the party on whose behalf the person is executing this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
respective dates set forth below.
"Licensor"
ADAPTEC, INC.,
A Delaware Corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Director of Corporate Facilities
and Real Estate
9
10
Date Signed:
----------------------------
"Licensee"
JAYCOR NETWORKS INC.,
a Delaware Corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Title:
----------------------------------
Date Signed:
----------------------------
10
11
EXHIBIT 4
BLDG 4
[FLOORPLAN]