SUBLEASE AGREEMENT
BY AND BETWEEN
CISCO SYSTEMS, INC.
A CALIFORNIA CORPORATION
AS SUBLANDLORD
AND
SONUS NETWORKS, INC.
A DELAWARE CORPORATION
AS SUBTENANT
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DATED AS OF OCTOBER__, 2003
SUBLEASE AGREEMENT
DEFINED TERMS
BASE RENT: RENT
(a) In order to achieve the lower monthly rent set forth
in paragraph (b) below for the period of the Sublease
Term commencing on the Rent Commencement Date and
continuing through the Expiration Date, Subtenant
shall make a one-time rent payment of $1,250,000.00
due and payable on the Commencement Date ("Advanced
Rent Payment").
(b) Six Hundred and Eighty Thousand Six Hundred
Eighty-Eight Dollars ($680,688.00) per annum, payable
in monthly payments of Fifty Six Thousand, Seven
Hundred Twenty-Four and 00/100 Dollars ($56,724.00)
commencing on the Rent Commencement Date and
continuing through the Expiration Date.
BROKER: The Staubach Company
BUILDING: An approximately 144,375 rentable square foot building
situated upon approximately 10.99 acres of land located at
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇.
COMMENCEMENT DATE: The date of receipt by Sublandlord of an executed original
of the Master Landlord's Consent to Sublease with respect to
this fully executed Sublease and substantially in the form
attached hereto and incorporated herein as EXHIBIT X
("MASTER LANDLORD'S CONSENT").
EXPIRATION DATE: January 31, 2007
OCCUPANCY DATE: The earlier of (a) April 1, 2004, or (b) the date Subtenant
first occupies any part of the Sublease Premises for any of
the Permitted Uses.
MASTER LANDLORD: CSDV, Limited Partnership, as successor to 250 Apollo
Investors LLC
MASTER LEASE: That certain Lease Agreement dated March 2, 1999 between
Master Landlord and Sublandlord, attached hereto as EXHIBIT
A.
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PERMITTED USES: General administrative office, industrial, assembly, light
manufacturing and distribution of computer products and
related uses as and to the extent permitted by Section 8 of
the Master Lease and in compliance with all Laws.
MASTER PREMISES: Improved real property, including the Building containing
approximately 144,375 rentable square feet, located on
approximately 10.99 acres of land, as more particularly
described in the Master Lease.
RENT COMMENCEMENT DATE: April 1, 2004.
SUBLEASE PREMISES: A portion of the Master Premises, consisting of
approximately 133,621 total rentable square feet consisting
of approximately 60,547 rentable square feet located on the
first floor and 73,074 rentable square feet located on the
second floor of the Building as depicted in EXHIBIT B.
SECURITY DEPOSIT: Seven Hundred and Fifty Thousand Dollars ($750,000.00) plus
Restoration Costs as defined in Section 3(g) due and payable
on or before January 15, 2004 and in the form of cash or a
Letter of Credit as provided in Section 3(g), subject to
reduction as provided in Section 3(g).
SUBTENANT: Sonus Networks, a Delaware corporation
SUBTENANT'S ADDRESS: Prior to the Occupancy Date:
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
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Attn:▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
From and after the Occupancy Date:
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▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
SUBTENANT'S SHARE: 92.5%
SUBLANDLORD: Cisco Systems, Inc., a California corporation.
SUBLANDLORD'S ADDRESS FOR ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Drive
NOTICES: ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Director, Worldwide Real Estate
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SUBLANDLORD'S ADDRESS FOR Cisco Systems, Inc.
PAYMENT:
File #74172
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SUBLEASE TERM: Approximately forty (40) months, commencing on the
Commencement Date and expiring on the Expiration Date.
EXHIBITS: EXHIBIT A - Master Lease
EXHIBIT B - Sublease Premises
EXHIBIT C - Form of Letter of Credit
EXHIBIT D - Preliminary Plans for Tenant Improvements
EXHIBIT E - Schedule of Sublandlord Property
EXHIBIT E-1 - Form of ▇▇▇▇ of Sale
EXHIBIT X - Form of Master Landlord Consent
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THIS
SUBLEASE AGREEMENT (this "SUBLEASE") is entered as of the Commencement
Date by and between Sublandlord and Subtenant.
THE PARTIES ENTER this Sublease on the basis of the following facts,
understandings and intentions:
A. Sublandlord presently leases the Sublease Premises pursuant to the
Master Lease.
B. Sublandlord desires to sublease the Sublease Premises to Subtenant and
Subtenant desires to sublease the Sublease Premises from Sublandlord on all of
the terms, covenants and conditions hereinafter set forth.
C. All of the terms and definitions in the Defined Terms section are
incorporated herein by this reference, and any capitalized terms not defined in
the Defined Terms or elsewhere in this Sublease shall have the meanings given to
such terms in the Master Lease.
NOW, THEREFORE, IN CONSIDERATION of the Sublease Premises subleased herein,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereby covenant and agree as follows:
1. SUBLEASE PREMISES AND TERM.
(a) DEMISE. Sublandlord hereby subleases to Subtenant, and Subtenant
hereby subleases from Sublandlord, the Sublease Premises, for the Sublease Term
subject to the terms, covenants and conditions set forth herein. The Sublease
Term shall commence on the Commencement Date. Sublandlord and Subtenant shall
execute a Commencement Date notice promptly following the Commencement Date. The
Sublease Term shall end on January 31, 2007 (the "EXPIRATION DATE") or on such
earlier date upon which said term may expire or be cancelled or terminated
pursuant to any of the provisions of this Sublease. As used herein, "Sublease
Premises" shall include the appurtenances, the existing interior improvements,
equipment and systems of the Sublease Premises as of the Commencement Date,
together with the appurtenant right to use in common with others entitled
thereto the following areas (collectively the "COMMON AREAS"): (i) the common
lobbies, loading docks, hallways and stairways of the Building serving the
Sublease Premises, (ii) common walkways and driveways necessary for access to
the Building and delivery of products to the Subleased Premises, and (iii) the
common toilets and other common facilites of the floors on which the Subleased
Premises is located. If Sublandlord fails to deliver possession of the Sublease
Premises to Subtenant on or before the Commencement Date this Sublease shall not
be void or voidable nor shall Sublandlord be liable to Subtenant for any
resulting loss or damage; provided, however, Subtenant shall not be liable for
Subtenant's Electricity or janitorial services costs for the Sublease Premises
until the later to occur of delivery of the Sublease Premises to Subtenant or
the Occupancy Date. Subtenant covenants that, as a material part of the
consideration for this Sublease, it shall keep and perform each and all of such
terms, covenants and conditions by it to be kept and performed, and that this
Sublease is made upon the condition of such performance. Subtenant assumes and
agrees to perform Sublandlord's obligations under the Master Lease during the
Sublease Term to the extent such obligations are applicable to the Sublease
Premises and are not either excluded from incorporation herein or specifically
contradicted or modified herein. Subtenant shall not commit or suffer any act or
omission that will violate any of the provisions of the Master Lease
incorporated herein.
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(b) MEASUREMENT OF THE SUBLEASE PREMISES. Subtenant understands that the
Sublease Premises is to contain approximately 133,621 "rentable square feet" as
determined pursuant to the standard method for measuring floor area in office
buildings published by the Building Owners and Managers Association
International ("BOMA") as revised and readopted June 7, 1996 (the "STANDARD
MEASURE").
(c) CONDITION PRECEDENT. The parties' obligations hereunder are expressly
conditioned upon, within ten (10) days after execution of this Sublease,
delivery to Sublandlord of certified copies of corporate resolutions of
Subtenant, authorizing or ratifying the execution of this Sublease.
The foregoing condition precedent runs to the benefit of Sublandlord and if
Subtenant does not timely satisfy same, this Sublease may be terminated by
Sublandlord in its sole and absolute discretion by notice to Subtenant,
whereupon Sublandlord shall refund to Subtenant the Security Deposit and any
Base Rent or Advanced Rent Payment paid to Sublandlord.
(d) INSTALLATION OF SUBTENANT'S FURNITURE, EQUIPMENT AND FIXTURES. As of
the Commencement Date, Subtenant and its agents, employees, invitees,
consultants and contractors (collectively "AGENTS") shall have the right to
enter the Sublease Premises for space planning, construction of tenant
improvements and installation of furniture, equipment and furnishings in the
Sublease Premises, at Subtenant's sole cost (provided that Subtenant shall
obtain the consent of Sublandlord and Master Landlord to any Alterations as
required by Section 6 of this Sublease).
(e) PARKING. Subtenant shall be entitled to a Subtenant's Share of
Sublandlord's parking rights under the Master Lease (i.e., 92% of the parking
spaces depicted in a plan of the Master Premises, prepared by ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
and Brustlin, Inc. (VHB), and attached as Exhibit B to the Master Lease) which
spaces shall be unreserved and otherwise subject to the terms and conditions of
the Master Lease.
(f) ACCEPTANCE OF SUBLEASE PREMISES. Subtenant agrees to accept the
Sublease Premises in its current "as is" condition. Without limiting the
foregoing, Subtenant's rights in the Sublease Premises are subject to all local,
state and federal laws, regulations, codes and ordinances (collectively, "LAWS")
governing and regulating the use and occupancy of the Sublease Premises, the
terms and conditions of the Master Lease, and all matters now or hereafter of
record. Sublandlord has not received notice of any violations of any Laws by or
at the Sublease Premises, including with respect to the use thereof. Subtenant
acknowledges that, neither Sublandlord nor Sublandlord's agent has made any
representation or warranty as to: (i) the present or future suitability of the
Sublease Premises for the conduct of Subtenant's business; (ii) the physical
condition of the Sublease Premises; (iii) the expenses of operation of the
Sublease Premises; (iv) the safety of the Sublease Premises, whether for the use
of Subtenant or any other person, including Subtenant's Agents; (v) the
compliance of the Sublease Premises with applicable Laws; or (vi) any other
matter or thing affecting or related to the Sublease Premises.
Subtenant acknowledges that no rights, easements or licenses are acquired
by Subtenant by implication or otherwise except as expressly set forth herein.
Subtenant has inspected or will
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inspect, prior to delivery of possession of the Sublease Premises, the Sublease
Premises and become thoroughly acquainted with their condition. Subtenant
acknowledges that the taking of possession of the Sublease Premises by Subtenant
will be conclusive evidence that the Sublease Premises were in good and
satisfactory condition at the time such possession was taken. Subtenant
specifically agrees that, except as specifically provided by Laws in force as of
the date hereof, Sublandlord has no duty to make any disclosures concerning the
condition of the Building and the Sublease Premises and/or the fitness of the
Building and the Sublease Premises for Subtenant's intended use and Subtenant
expressly waives any duty which Sublandlord might have to make any such
disclosures. Subtenant further agrees that, in the event Subtenant is permitted
to and in fact assigns this Sublease or sub-subleases all or any portion of the
Sublease Premises, Subtenant will indemnify and defend Sublandlord (in
accordance with Section 8(a) hereof) for, from and against any matters which
arise as a result of Subtenant's failure to disclose any relevant information
about the Building or the Sublease Premises to any sub-sublessee or assignee of
Subtenant. Subtenant will comply with all Laws relating to the use or occupancy
of the Sublease Premises and the Common Areas (other than those requiring
structural alterations, except as required as a result of Subtenant's
Alterations). Subtenant shall have no obligation to make non-structural
alterations or provide auxiliary aids and services to the Sublease Premises and
to the Common Areas of the Premises as required by the Americans with
Disabilities Act of 1990, 42 U.S.C. Section 12101 et seq. (the "ADA") except to
the extent such alterations, aids or services (x) are required by Subtenant's
particular use or occupancy of the Sublease Premises, or (y) are due to any
alterations or improvements installed by Subtenant in the Sublease Premises
(including any resulting ADA compliance requirements in the Common Areas).
Subtenant further agrees that all telephone and other communication installation
and use requirements will be compatible with the Building and that Subtenant
will be solely responsible for all of its telephone and communication
installation and usage costs.
(g) REMOVAL OF PERSONAL PROPERTY. All articles of personal property, and
all business and trade fixtures, machinery and equipment, cabinet work,
furniture and movable partitions, if any, owned or installed by Subtenant at its
expense in the Sublease Premises will be and remain the property of Subtenant
and may be removed by Subtenant at any time, provided that Subtenant, at its
expense, shall repair any damage to the Sublease Premises caused by such removal
or by the original installation. Sublandlord may elect to require Subtenant to
remove all or any part of Subtenant's personal property at the expiration of the
Sublease Term or sooner termination of this Sublease, in which event the removal
will be done at Subtenant's expense and Subtenant, prior to the end of the
Sublease Term or upon sooner termination of this Sublease, will repair any
damage to the Sublease Premises caused by its removal.
(h) HOLDING OVER. If Subtenant holds over after the expiration of the
Sublease Term or earlier termination of this Sublease, with or without the
express or implied consent of Sublandlord, then Subtenant will become and be
only a tenant at sufferance at a per diem Base Rent equal to (i) one hundred and
twenty five percent (125%) of the Base Rent payable by Sublandlord under the
Master Lease, or (ii) if Sublandlord is then subleasing the remaining space in
the Building, one hundred and twenty five percent (125%) of the Base Rent
allocable to the Sublease Premises payable by Sublandlord under the Master
Lease, immediately prior to such expiration or termination, and otherwise upon
the terms, covenants and conditions herein specified. Notwithstanding any
provision to the contrary contained herein, (a) Sublandlord expressly reserves
the right to require Subtenant to surrender possession of the Sublease
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Premises upon the expiration of Sublease Term or upon the earlier termination of
this Sublease and the right to assert any remedy at law or in equity to evict
Subtenant and/or collect damages in connection with any holding over, and (b)
Subtenant will indemnify, defend and hold Sublandlord harmless from and against
any and all liabilities, claims, demands, actions, losses, damages, obligations,
costs and expenses, including, without limitation, attorneys' fees incurred or
suffered by Sublandlord by reason of Subtenant's failure to surrender the
Sublease Premises on the expiration of the Sublease Term or earlier termination
of this Sublease.
(i) PURCHASE OF SUBLANDLORD PROPERTY. Subtenant agrees to purchase and
Sublandlord agrees to sell certain personal property, equipment, and furniture
presently located within the Sublease Premises (the "SUBLANDLORD PROPERTY") as
described generally on EXHIBIT E attached hereto and incorporated herein.
Subtenant agrees to pay Sublandlord the sum of One Dollar ($1.00) ("SUBLANDLORD
PROPERTY PURCHASE PRICE") for the Sublandlord Property upon execution of this
Sublease. Sublandlord shall, upon the full execution of this Sublease and
Sublandlord's receipt of a fully executed copy of the Master Landlord's Consent
to Sublease, execute and deliver to Subtenant a ▇▇▇▇ of sale for the Sublandlord
Property in the form of EXHIBIT E-1 attached hereto and incorporated herein.
Subtenant acknowledges that Sublandlord shall have the option, prior to the
Commencement Date, of removing certain items of its personal property from the
Sublease Premises, including networking equipment and certain business and trade
fixtures, provided however Sublandlord shall not remove any office furniture or
installed wiring not connected to any networking equipment which is set forth in
Exhibit E and which is currently located within the Sublease Premises. The
Sublandlord Property shall be conveyed to Subtenant in its "AS IS, WHERE IS,
WITH ALL FAULTS, IF ANY" condition as of the Commencement Date, without any
warranties, express or implied regarding the number of such items, their
physical condition, existence, capacity, quality, value, workmanship, operating
capability or performance, compliance with applicable laws, or their fitness or
suitability for Subtenant's purposes (but with a warranty by Sublandlord that as
of the date of such conveyance, Sublandlord has good title to and the right and
authority to convey the Sublandlord Property; and that the Sublandlord Property
is free and clear of all security interests, liens and encumbrances).
Notwithstanding the foregoing, if this Sublease is terminated due to the failure
of any of the conditions set forth in Section 1(c) of this Sublease, the
Sublandlord Property shall be deemed not conveyed to Subtenant and the
Sublandlord Property Purchase Price, if received by Sublandlord, shall be
promptly refunded to Subtenant.
(j) RIGHT OF FIRST OFFER. Sublandlord hereby grants Subtenant a
continuing right of first offer to lease any unoccupied space within the first
floor of the Building which is currently available or later becomes available
during the Sublease Term (the "RIGHT OF FIRST OFFER"). Subtenant shall have
three (3) business days after receipt of Sublandlord's written notice that
Sublandlord is marketing such space in which to exercise the Right of First
Offer upon any such vacant space. In the event Subtenant chooses not to exercise
its Right of First Offer, then if Sublandlord has not entered into a letter of
intent with a subtenant for the unoccupied space within one hundred and eighty
(180) days following Sublandlord's notice to Subtenant, Subtenant's right of
First Offer shall be restored and Sublandlord must send a new notice to
Subtenant pursuant to the previous sentence prior to subleasing such vacant
space to a subtenant. Upon the exercise of the Right of First Offer and the
execution of an amendment to this Sublease, the space subject to the Right of
First Offer shall become part of the Sublease Premises and the Rent shall
increase based upon a rental rate of $6.68 per square foot effective as of the
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date of such amendment and the Subtenant's Share shall increase accordingly.
Subtenant shall be responsible for the construction and cost of demising such
excess space, if any.
2. SUBLEASE SUBJECT TO MASTER LEASE.
(a) INCLUSIONS. All of the terms, conditions and covenants of the Master
Lease are hereby incorporated into this Sublease by reference, except as
excluded in Section 2(b) herein. Subtenant shall be subject to, bound by,
benefit from and comply with all of said included terms, conditions, rights and
covenants of the Master Lease with respect to the Sublease Premises herein for
the benefit of both Sublandlord and Master Landlord, it being understood and
agreed that wherever in the Master Lease the word "Tenant" appears, for the
purposes of this Sublease, the word "Subtenant" shall be substituted, and
wherever the word "Landlord" appears, for the purposes of this Sublease, the
word "Sublandlord" shall be substituted; and that upon the breach of any of said
terms, conditions or covenants of the Master Lease by Subtenant or upon the
occurrence of an event of default by Subtenant, Sublandlord may exercise any and
all rights and remedies granted to Master Landlord by the Master Lease and
Subtenant shall have all of the rights of the Tenant under the Master Lease. In
the event of any conflict between this Sublease and the Master Lease, the terms
of this Sublease shall control between Sublandlord and Subtenant. It is further
understood and agreed that Sublandlord has no duty or obligation to Subtenant
under the aforesaid Sections of the Master Lease other than to perform the
obligations of Sublandlord as tenant under the Master Lease during the Sublease
Term. Whenever the provisions of the Master Lease incorporated as provisions of
this Sublease require the written consent of Master Landlord, said provisions
shall be construed to require the written consent of both Master Landlord and
Sublandlord. Subtenant hereby acknowledges that it has read and is familiar with
all the terms of the Master Lease, and agrees that this Sublease is subordinate
and subject to the Master Lease. With respect to the following incorporated
provisions, the references therein to Landlord shall be deemed to be references
to Sublandlord and Master Landlord: Sections 8.1 (Compliance with Laws), 8.2
(Prohibition on Use), 9.1 (Alterations), 10.4 (Tenant's Failure to Perform
Repairs and Maintenance Obligations), 11.3 (Additional Insured's), 11.4 (Failure
of Tenant to Purchase Insurance), 12 (Waiver of Subrogation), 17 (Right of
Entry), 18 (Estoppel Certificate), 26 (Environmental Matters), 27 (Financial
Statements), 29 (Signs), and 31 (Quitclaim).
(b) EXCLUSIONS. The terms and provisions of the following Sections and
Exhibits of the Master Lease are not incorporated into this Sublease: The last
Sentence of Section 1 (Premises), Sections 2 (Term), 3 (Rent), 4 (Security
Deposit), 5 (Additional Rent), the first four sentences and the seventh sentence
of Section 6 (Utilities), Sections 7 (Late Charges), 10.1 (Tenant's Repairs and
Maintenance Obligations), 11.5 (Self Insurance), the second full paragraph of
Section 14.1 (Assignment), the sentences in the first paragraph of Section 24
beginning with "Notwithstanding anything to the contrary . . ." and "In the
event the holder of any indebtedness . . .", and Addendum 1 to the Master Lease.
Section 28.10 of the Master Lease shall apply to notices to Master Landlord and
not payment hereunder.
(c) TIME FOR NOTICE. Except for the time limits for notice, demands,
performance or exercise of rights specified in this Sublease which shall not be
altered by this Section 2(c), including without limitation the time frames set
forth in Sections 11 and 12 hereof, the time limits provided for in the Master
Lease for the giving of notice, making of demands,
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performance of any act, condition or covenant, or the exercise of any right,
remedy or option, are amended for the purposes of this Sublease by lengthening
or shortening the same in each instance by five (5) days, as appropriate, so
that notices may be given, demands made, or any act, condition or covenant
performed, or any right, remedy or option hereunder exercised, by Sublandlord or
Subtenant, as the case may be, within the time limit relating thereto contained
in the Master Lease. If the Master Lease allows only five (5) days or less for
Sublandlord to perform any act, or to undertake to perform such act, or to
correct any failure relating to the Sublease Premises or this Sublease, then
Subtenant shall nevertheless be allowed three (3) days to perform such act,
undertake such act and/or correct such failure. In the event of a conflict
between the time frame set forth elsewhere in this Sublease and the time frame
specified in the Master Lease as modified by this Section 2(c), the time frame
set forth elsewhere in this Sublease shall control.
(d) MASTER LANDLORD'S OBLIGATIONS. It shall be the obligation of Master
Landlord to provide all services to be provided by Master Landlord under the
terms of the Master Lease and to satisfy all obligations and covenants of Master
Landlord made in the Master Lease. Subtenant acknowledges that Sublandlord shall
be under no obligation to provide any such services or satisfy any such
obligations or covenants; provided, however, Sublandlord, upon written notice by
Subtenant, shall use reasonable and diligent efforts to enforce all obligations
of Master Landlord under the Master Lease, without any obligation of Sublandlord
to incur any costs or bring any legal action against Master Landlord.
(e) RULES AND PROCEDURES. Subtenant hereby acknowledges and agrees that
other subtenants of Sublandlord are occupying or may in the future occupy other
portions of the Master Premises. In addition to the rules and regulations of the
Master Lease, Subtenant's use of the Sublease Premises and access to and use of
the Common Areas of the Building and Lot and any other services in connection
with the Sublease Premises or this Sublease shall be subject to such additional
rules and procedures reasonably promulgated by Sublandlord and delivered to
Subtenant from time to time. Subtenant's compliance with such rules and
procedures constitutes a material inducement to Sublandlord's willingness to
enter into this Sublease; any material violation thereof shall constitute a
material breach of this Sublease.
(f) TERMINATION OF MASTER LEASE. If the Master Lease terminates with
respect to the Sublease Premises, prior to the expiration or earlier termination
of this Sublease, this Sublease shall concurrently terminate, unless this
Sublease becomes a direct lease of the Building between Master Landlord and
Subtenant as provided in the Master Landlord's Consent or unless Master Landlord
and Subtenant agree to deem this Sublease to be a direct lease of the Sublease
Premises between Master Landlord and Subtenant; provided that as a condition to
such direct lease, Sublandlord shall be released from all liabilities and
obligations under this Sublease, and the Master Lease with respect to the
Sublease Premises arising from and after the date that the Master Lease
terminated with respect to the Sublease Premises.
(g) CONSENT OR APPROVAL OF MASTER LANDLORD. All references in this
Sublease (whether in the text itself or by incorporation from the Master Lease)
to the consent or approval of Master Landlord or Sublandlord shall mean the
written consent or approval of Master Landlord or Sublandlord, as the case may
be. If any request or demand is made by Master Landlord (whether requiring an
act, restraint or payment) directly to Subtenant pursuant to the
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Master Lease in respect of a corresponding obligation under the Master Lease,
then such request or demand shall be honored and performed or adhered to as if
the request or demand was made directly by Sublandlord. In all provisions of
this Sublease requiring the satisfactory approval or consent of Sublandlord,
Subtenant first shall be required to obtain the approval or consent of
Sublandlord and then, if Sublandlord under similar circumstances would be
required under the terms of the Master Lease, to obtain the like approval or
consent of Master Landlord, Sublandlord shall forward to Master Landlord such
requests as Subtenant may submit for approval or consent from Master Landlord.
In the case of a time sensitive matter, Subtenant may submit the request for
approval or consent simultaneously to Master Landlord and Sublandlord. Whenever,
pursuant to this Sublease, Master Landlord or Sublandlord's consent or approval,
or the review or consideration by Master Landlord or Sublandlord of any matter,
is permitted, solicited or required prior to or in connection with any activity
planned or undertaken on behalf of Subtenant, Subtenant shall reimburse Master
Landlord and Sublandlord for all reasonable expenses (including, without
limitation, the reasonable fees and disbursements of attorneys and other
professional consultants) incurred by Master Landlord and Sublandlord, as the
case may be, in connection with such consideration, review, consent or approval.
Such reimbursement shall be made by Subtenant within twenty (20) days after
written demand. Expenses incurred by Sublandlord shall be deemed to include any
expenses or fees payable to Master Landlord under the Master Lease.
(h) REPRESENTATIONS OF SUBLANDLORD. Sublandlord represents to Subtenant
that a true and correct copy of the Master Lease, redacted to expunge certain
confidential economic information, is attached hereto as EXHIBIT A, that the
Master Lease is in full force and effect and has not been amended, and that, to
Sublandlord's knowledge, no default nor any matter or event which with the
passage of time or the giving of notice would constitute a default exists on the
part of Sublandlord or Master Landlord under the Master Lease. As long as no
Event of Default by Subtenant exists hereunder, Sublandlord (i) shall continue
to perform the obligations of tenant under the Master Lease which are not
incorporated herein, including the obligation of Sublandlord to pay rent to
Master Landlord in accordance with the provisions of the Master Lease and (ii)
agrees not to voluntarily amend, terminate, cancel or surrender the Master Lease
with respect to the Sublease Premises during the Sublease Term.
(i) RESPONSIBILITY FOR REPAIRS AND MAINTENANCE. Except as otherwise
provided in this Sublease, Subtenant shall have no responsibility for repairs
and maintenance that are the responsibility of Sublandlord as Tenant under
Section 10.1 of the Master Lease except that Subtenant shall be responsible, at
Subtenant's sole cost and expense, for the completion of (i) any repairs or
replacements necessitated by damage caused by Subtenant or Subtenant's Agents,
(ii) any repairs to Alterations installed by Subtenant, or (iii) repairs to
mechanical systems, heating, ventilation and air conditioning systems installed
by Subtenant to serve its manufacturing areas within the Subleased Premises.
3. RENT.
(a) BASE RENT. Base rent ("BASE RENT") shall be as set forth in the
Defined Terms. Subtenant shall pay Base Rent in monthly installments in advance
on or before the first day of each and every calendar month during the Sublease
Term commencing as of April 1, 2004, without being invoiced; provided however
that Subtenant shall pay to Sublandlord upon the
7
Commencement Date, the Advanced Rent Payment of One Million, Two Hundred and
Fifty Thousand Dollars ($1,250,000) in cash, which amount shall be
non-refundable except with regard to any termination of this Sublease pursuant
to Sections 1(c), 2(f), 13 or 16(o) of this Sublease, in which event a pro-rated
portion of the Advanced Rent Payment may be refundable for the period of time
between the date the Subtenant enters the Sublease Premises for space planning,
construction of tenant improvements or installation of furniture, equipment and
furnishings pursuant to Section 1(d) of this Sublease and the Expiration Date
which has not expired as of the date of termination of the Master Lease,
provided however, in the event of any such termination of the Sublease pursuant
to Sections 1(c), 2(f), 13 or 16(o) of this Sublease prior to Subtenant's
payment of the Security Deposit pursuant to Section 3(g) of this Sublease, Seven
Hundred and Fifty Thousand Dollars ($750,000) of such Advanced Rent Payment
shall constitute the Security Deposit securing the performance of Subtenant's
obligations under this Sublease.
(b) SUBLANDLORD'S PAYMENT OF OPERATING EXPENSES AND TAX EXPENSES.
Subtenant shall have no obligation to pay to Sublandlord or Master Landlord
Operating Expenses, Tax Expenses or Utility Expenses (except as set forth below
in 3(c)), as those terms are defined within Section 5 of the Master Lease.
(c) SUBTENANT'S ELECTRICITY. From and after the Occupancy Date, Subtenant
agrees to pay to Sublandlord the cost and expense of electricity for Subtenant's
light, HVAC and outlet consumption ("Subtenant's Electricity") use in the
Subleased Premises on a monthly basis based upon Sublandlord's estimate thereof.
If actual Subtenant's Electricity is greater than Sublandlord's estimate
thereof, a lump sum payment (which payment shall be deemed a payment of rent
hereunder for all purposes) will be made from Subtenant to Sublandlord within
thirty (30) days of the delivery of such statement equal to the amount by which
actual Subtenant's Electricity exceeded Sublandlord's estimate thereof. If
actual Subtenant's Electricity is less than Sublandlord's estimate thereof,
Sublandlord shall promptly after delivery of such statement (but in no event
within more than thirty (30) days) make a lump sum payment to Subtenant (or at
Sublandlord's option, Sublandlord may credit such lump sum amount against the
rent installment due in the immediately succeeding month) equal to the amount by
which estimated Subtenant's Electricity exceeded the actual amount thereof.
Notwithstanding the foregoing, Sublandlord reserves the right to assess
Subtenant's Electricity based on an engineer's survey of Subtenant's electrical
usage conducted from time to time or on the sub-metering of all or part of the
Sublease Premises. Subtenant's Electricity shall be paid by Subtenant as
additional rent at the same time and in the same manner as payments of Base
Rent.
(d) PERSONAL PROPERTY AND JANITORIAL SERVICE. From and after the
Occupancy Date, Subtenant shall be responsible to pay directly (i) all personal
property taxes assessed upon the Sublease Premises including without limitation
any entitlement fees related to Subtenant's particular use of the Sublease
Premises and any penalties related thereto to the extent any such penalties
result from Subtenant's failure to so timely make such payments, and (ii) for
the cost of all janitorial services provided to the Sublease Premises. Subtenant
shall be responsible for contracting directly with a third party vendor for
janitorial services for the Sublease Premises from and after the Occupancy Date.
8
(e) PAYMENT OF RENT. As used herein, "RENT" shall include Base Rent,
Subtenant's Electricity and any other additional rent, costs, charges and
expenses to be paid by Subtenant to Sublandlord pursuant to this Sublease. Rent
herein reserved or payable shall be paid at Sublandlord's election, (i) to
Sublandlord's address for payment of Rent set forth in the Defined Terms, or
(ii) to such other payee and/or at such other place as Sublandlord may designate
from time to time in writing, in lawful money of the United States of America,
as and when the same become due and payable, without demand therefor and without
any deduction, set-off or abatement whatsoever, except as expressly provided
otherwise in this Sublease or the Master Lease. In the event the first day of
the Sublease Term shall not be the first day of a calendar month or the last day
of the Sublease Term is not the last day of the calendar month, Base Rent and
other costs an expenses shall be appropriately prorated based on a thirty (30)
day month. Additionally, Subtenant shall pay to Sublandlord, as additional rent
hereunder, within twenty (20) days after written request therefor, any other
payments for which Sublandlord shall become responsible to Master Landlord and
which are otherwise the responsibility of Subtenant pursuant to the terms of
this Sublease, including, but not limited to, additional rent arising (i) by
reason of Subtenant's request for extraordinary services or utilities (such as
replacement lighting or other utilities not otherwise provided to Sublandlord
under the Master Lease) from Master Landlord or Sublandlord, or (ii) as a result
of Subtenant's Event of Default hereunder.
(f) LATE PAYMENT CHARGES. Any payment of Rent or other amount from
Subtenant to Sublandlord or Master Landlord under this Sublease which is not
paid on the date due shall accrue interest from the date due until the date paid
at a rate equal to the lesser of ten percent (10%) per year or the maximum rate
then permitted by law (the "INTEREST RATE"). If any installment of Rent is not
paid promptly on the first of the month, or otherwise when due, Subtenant shall
pay to Sublandlord a late payment charge equal to five percent (5%) of the
amount of such delinquent payment of Rent, in addition to the installment of
Rent then owing. Notwithstanding the foregoing two sentences, no late charge
shall be imposed on the first late payment of Rent in any single calendar year
of the Sublease Term unless Subtenant fails to make such payment within five (5)
days after written notice from Sublandlord of such delinquency. This Section
shall not relieve Subtenant of Subtenant's obligation to pay any amount owing
hereunder at the time and in the manner provided.
(g) SECURITY DEPOSIT. On or before January 15, 2004, Subtenant shall pay
to Sublandlord the amount of (i) Seven Hundred and Fifty Thousand Dollars
($750,000.00), plus (ii) an amount equal to the total projected cost of the
work, as estimated by Sublandlord in its reasonable discretion on or before
January 15, 2004, to remove, repair and perform restoration work caused by such
removal, of any Subtenant Improvements (herein defined in Section 6) required to
be removed pursuant to Section 6 of this Sublease or Section 9.2 of the Master
Lease ("RESTORATION COSTS"). Such cumulative security deposit shall be in the
form of either cash or a letter of credit to be held by Sublandlord as a
security deposit ("SECURITY DEPOSIT") for the performance of Subtenant's
obligations under this Sublease. The Security Deposit shall be held by
Sublandlord as security for the faithful performance by Subtenant of all of its
obligations under this Sublease. Sublandlord shall not be required to keep the
Security Deposit separate from its other accounts, provided that if Subtenant
deposits the Security Deposit with the Sublandlord in the form of cash, such
deposit shall be deemed to earn an interest at an annual rate of two percent
(2%), which interest shall be payable to Subtenant upon the return of Security
Deposit pursuant to this Section 3. Sublandlord may apply all or a part of the
Security Deposit to
9
any unpaid Rent due from Subtenant or to cure any other default of Subtenant
hereunder and to compensate Sublandlord for all damage and expense sustained as
a result of such default. If all or any portion of the Security Deposit is so
applied, Subtenant shall deposit cash sufficient to restore the Security Deposit
to its original amount within five (5) days after receipt of Sublandlord's
written demand. Provided that Subtenant complies with all of its obligations
hereunder and promptly pays Rent when due, Sublandlord shall refund the Security
Deposit, plus interest to Subtenant within thirty (30) days after the later of
the expiration or earlier termination of the Sublease or Subtenant's vacating of
the Sublease Premises. No trust relationship is created herein between
Sublandlord and Subtenant with respect to the Security Deposit. Any deposit
under the Master Lease which may be returned by the Master Landlord will be the
property of Sublandlord.
In lieu of a cash Security Deposit, Subtenant may deliver to Sublandlord a
clean, irrevocable, non-documentary and unconditional letter of credit (the
"LETTER OF CREDIT") issued by and drawn upon Silicon Valley Bank or another
financial institution acceptable to Sublandlord (the "ISSUER"), which Letter of
Credit shall have a term of not less than one year, be in form and content
satisfactory to Sublandlord (and substantially as shown on EXHIBIT C to this
Sublease), be for the account of Sublandlord, be in the amount of the Security
Deposit then required to be deposited hereunder, and be fully transferable by
Sublandlord to its successors and/or assigns without the payment of any fees or
charges, it being agreed that if any such fees or charges shall be so imposed,
then such fees or charges, shall be paid by Subtenant. The Letter of Credit
shall provide that it shall be deemed automatically renewed, without amendment,
for consecutive periods of one (1) year each thereafter during the Sublease
Term, unless the Issuer sends notice (the "NON-RENEWAL NOTICE") to Sublandlord
by certified mail, return receipt requested, not less than thirty (30) days next
preceding the then expiration date of the Letter of Credit that it elects not to
have such Letter of Credit renewed. Additionally, the Letter of Credit shall
provide that Sublandlord shall have the right, exercisable upon its receipt of
the Non-Renewal Notice, by sight draft on the Issuer, to receive the monies
represented by the existing Letter of Credit and in such event, Sublandlord
shall hold such proceeds pursuant to the terms of this Section as a cash
security pending the replacement of such Letter of Credit. If an Event of
Default shall have occurred and be continuing with respect to any provision of
this Sublease, including but not limited to the provisions relating to the
payment of Rent, Sublandlord may apply or retain the whole or any part of the
cash security so deposited or may notify the Issuer and thereupon receive all
the monies represented by the Letter of Credit and use, apply, or retain the
whole or any part of such proceeds, as provided in this Section. Any portion of
the cash proceeds of the Letter of Credit not so used or applied by Sublandlord
in satisfaction of the obligations of Subtenant as to which such an Event of
Default shall have occurred shall be retained by Sublandlord as a cash Security
Deposit as provided herein. If Sublandlord applies or retains any part of the
cash security or proceeds of the Letter of Credit, as the case may be, Subtenant
shall, within five (5) days after written demand therefor, deposit with
Sublandlord the amount so applied or retained so that Sublandlord shall have the
full Security Deposit required pursuant to this Section on hand at all times
during the Term.
If the credit rating of the Issuer is downgraded, at any time during the
Term of this Sublease, below the level of "A-" (long term) as issued by Standard
and Poor's, or below the level of "A3" (long term) as issued by ▇▇▇▇▇'▇,
Sublandlord may, in Sublandlord's sole discretion, require Subtenant to provide
Sublandlord with a replacement Letter of Credit from a
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new Issuer with a credit rating of at least "A-" (long term) as issued by
Standard and Poor's and at least "A3" (long term) as issued by ▇▇▇▇▇'▇ (provided
that if such Issuer is only rated by one of such rating bureaus, it satisfies
the aforesaid rating requirement for such rating bureau), and otherwise
acceptable to Sublandlord. Such replacement Letter of Credit shall be in the
form called for by this Section 3(f) and shall be provided by Subtenant within
thirty (30) days following Sublandlord's notice to Subtenant, and Subtenant's
failure to provide such replacement Letter of Credit shall constitute an Event
of Default. Upon Sublandlord's receipt of such replacement Letter of Credit,
Sublandlord shall return the Letter of Credit originally issued by the
downgraded Issuer to Subtenant.
If Subtenant shall fully and faithfully comply with all of the terms,
provisions, covenants and conditions of this Sublease, the Letter of Credit
shall be returned to Subtenant within thirty (30) days after the Expiration Date
and after delivery of possession of the Sublease Premises to Sublandlord. In the
event of a transfer of Sublandlord's interest in the Premises, within thirty
(30) days of notice of such transfer, Subtenant, at Subtenant's sole cost and
expense, shall arrange for the transfer of the Letter of Credit to the new
Sublandlord, as designated by Sublandlord, or have the Letter of Credit reissued
in the name of the new Sublandlord and Sublandlord shall thereupon be released
by Subtenant from all liability for the return of the reissued Letter of Credit,
provided that Sublandlord shall return the original Letter of Credit issued in
Sublandlord's name to Subtenant.
Notwithstanding the foregoing, provided Subtenant is not then otherwise in
default Sublandlord shall return to Subtenant the following portions of a cash
Security Deposit, or so much thereof as shall not have theretofore been applied
in accordance with the terms of this Section 3, on the dates specified below:
February 1, 2005 $250,000.00
February 1, 2006 $250,000.00
March 1, 2007 $250,000.00
If the Security Deposit is in the form of a Letter of Credit, Subtenant
shall furnish Sublandlord with a replacement Letter of Credit in the form called
for by this Section 3, on the dates specified above and reduced by the amounts
set forth above.
4. USE. The Sublease Premises shall be used for the Permitted Uses only and
for no other purpose or business without the prior written consent of Master
Landlord and Sublandlord, as provided for in the Master Lease. At its own
expense, Subtenant will procure, maintain in effect and comply with all
conditions of any and all permits, licenses and other governmental approvals
required for Subtenant's use of the Sublease Premises.
5. ASSIGNMENT AND SUBLETTING.
(a) TRANSFER OF SUBLEASEHOLD ESTATE. Subtenant shall not permit occupancy
of the Sublease Premises by any person or persons other than Subtenant or sell,
assign, encumber, sublease or otherwise transfer by operation of law or
otherwise (collectively, "TRANSFER") the Sublease Premises or this Sublease
without Master Landlord's and Sublandlord's prior written
11
consent, which consent of Sublandlord shall not be unreasonably withheld or
conditioned or delayed subject to the provisions of Section 14 of the Master
Lease as incorporated herein; provided, however, that, except with respect to an
assignment or sublet to a Related Entity, prior to making the Sublease Premises
available for subletting or assignment, Subtenant shall first offer to
Sublandlord, by written notice, the right to recapture the portion of the
Sublease Premises which Subtenant intends to sublet or assign. Sublandlord shall
give its approval or reasons for disapproval, or election to recapture, within
ten (10) business days after Subtenant has requested Sublandlord's consent to
such sublease or assignment. If Sublandlord so elects to recapture, Sublandlord
and Subtenant shall enter into an agreement partially terminating this Sublease
with respect to the portion of the Sublease Premises so recaptured by
Sublandlord. Subtenant shall reimburse Sublandlord, as additional rent, for (i)
all of Sublandlord's reasonable attorneys fees and other costs, charges and
expenses in connection with the review, processing, negotiation and
documentation of any request for Sublandlord's and Master Landlord's consents to
a proposed Transfer of the Sublease Premises (including, but not limited to,
amounts payable by Sublandlord to Master Landlord for its consent) and (ii)
fifty percent (50%) of the excess of any subrent and other consideration
received by Subtenant by reason of such Transfer, over the sum of the Rent
payable hereunder plus all of any bonus or excess rent payable by Sublandlord to
Master Landlord under the Master Lease by reason of such Transfer. Any Transfer
in violation of the terms of this Sublease shall be void and shall be of no
force or effect. Any consent by Sublandlord or Master Landlord to any Transfer
shall apply only to the specific Transfer thereby approved. Such consent shall
not be construed as a waiver of Subtenant's obligations to obtain Sublandlord's
and Master Landlord's consent to any subsequent Transfer or as a modification or
limitation of Sublandlord's rights hereunder.
(b) ASSUMPTION BY TRANSFEREES. Each and every assignee, transferee or
successor in interest of Subtenant, and their respective assignees, transferees
or successors in interest, shall immediately be and remain liable jointly and
severally with Subtenant and with each other for the payment of the Rent payable
under this Sublease and for the performance of all covenants, agreements, terms
and provisions of this Sublease on the part of Subtenant to be performed to the
end of the Sublease Term.
(c) ASSIGNMENT OF SUBRENTS. In the event of any Transfer, whether or not
in violation of the provisions of this Sublease, Sublandlord may, after an Event
of Default by Subtenant, collect Rent from the assignee of the Sublease, or the
subtenant or occupant or the Sublease Premises and apply the net amount
collected to the curing of any Event of Default hereunder in any order or
priority Sublandlord may elect, any unexpended balance to be applied by
Sublandlord against any Rent or other obligations subsequently becoming due, but
no such assignment, subletting, occupancy or collection of Rent shall be deemed
a waiver of the covenants in this Section 5, nor shall it be deemed acceptance
of the assignee, subtenant or occupant as a subtenant, or a release of Subtenant
from the full performance by Subtenant of all of the terms, conditions and
covenants of this Sublease.
(d) VOLUNTARY TERMINATION OF MASTER LEASE. In the event that Master
Landlord and Sublandlord negotiate a voluntary termination of the Master Lease,
then as long as the Master Landlord and Subtenant have entered into a direct
lease of the Sublease Premises, this Sublease shall terminate concurrently
therewith and Sublandlord shall be relieved of its obligations, and
12
released of all liability, accruing under this Sublease from and after the
effective date of such direct lease, whereupon Subtenant shall attorn directly
to the Master Landlord.
6. ALTERATIONS. In limitation of the rights set forth in Section 9.1 of
the Master Lease, Subtenant shall not make or suffer to be made any alterations,
additions or improvements (collectively "ALTERATIONS") in, on, or to the
Sublease Premises without the prior written consent of Sublandlord, which
consent shall not be unreasonably withheld, conditioned or delayed and Master
Landlord, pursuant to Section 9 of the Master Lease. Subtenant shall notify
Sublandlord (and Master Landlord, if applicable) not less than five (5) business
days in advance of commencing construction of the Alterations so that
Sublandlord and Master Landlord may post appropriate notices of
non-responsibility. The term "Alterations" includes any alterations, additions
or improvements made by Subtenant to comply with the ADA as required by Section
1(f) above. All Alterations must be constructed (a) in a good and ▇▇▇▇▇▇▇-like
manner using materials of a quality comparable to those on the Sublease
Premises, (b) in conformance with all Laws, (c) only after all necessary
permits, licenses and approvals have been obtained by Subtenant from appropriate
governmental agencies, and (d) shall be diligently prosecuted to completion. Any
contractor or other person making any Alterations must first be approved in
writing by Sublandlord (and Master Landlord, if required by the Master Lease)
and Sublandlord may require that all work be performed under Sublandlord's
supervision. Except where precluded by terms of the Master Lease and Master
Landlord's rights in and to any Alterations to any of the Sublease Premises,
within twenty-five (25) business days after Sublandlord's receipt of Subtenant's
written notice of any Alterations, Sublandlord shall notify Subtenant whether or
not Sublandlord will require Subtenant to remove such Alterations from the
Sublease Premises upon the expiration or earlier termination of this Sublease.
Subtenant shall where required pursuant to Sublandlord's previous notice, upon
the expiration or sooner termination of this Sublease, at Subtenant's sole cost
and expense, promptly remove any Alterations made or paid for by Subtenant and
repair and restore the Sublease Premises to their original condition, ordinary
wear and tear excepted.
Subtenant will keep the Sublease Premises and the Building free from any
liens arising out of any work performed, materials furnished, or obligations
incurred by Subtenant. If a lien is filed, Subtenant will discharge the lien or
post a bond within ten (10) days after receiving notice thereof. Sublandlord has
the right to post and keep posted on the Sublease Premises any notices that may
be provided by law or which Sublandlord may deem to be proper for the protection
of Sublandlord, the Sublease Premises and the Building from such liens.
Subtenant shall promptly reimburse to Sublandlord as additional rent hereunder,
any fees or charges imposed on Sublandlord under the Master Lease by virtue of
Subtenant's proposal or performance of any Alterations.
Subject to Master Landlord's approval thereof, Sublandlord hereby approves
the preliminary plans attached hereto as EXHIBIT D for certain Alterations to be
installed in the Sublease Premises by Subtenant (the "SUBTENANT IMPROVEMENTS").
Subtenant shall submit for Sublandlord's approval (which approval shall not be
unreasonably withheld) final plans and specifications for the Subtenant
Improvements. Sublandlord shall not unreasonably withhold its approval if such
final plans and specifications are natural derivations of EXHIBIT D. Sublandlord
shall give its approval or detailed reasons for disapproval within ten (10)
business days of receipt of the final plans and specifications for the Subtenant
Improvements. Subtenant's construction
13
of the Tenant Improvements shall otherwise comply with the terms and conditions
of Section 14 of the Master Lease, including, but not limited to, Subtenant's
obligation to remove such Subtenant Improvements if required by Master Landlord
in accordance therewith. Notwithstanding anything in this Sublease or the Master
Lease to the contrary, and as long as Master Landlord does not require such
removal, Sublandlord shall not require Subtenant to remove the Subtenant
Improvements at the expiration of the Sublease Term, but Sublandlord reserves
the right to require such removal if this Sublease is terminated due to the
default of the Subtenant prior to the expiration of the Sublease Term. Subtenant
shall be solely responsible for the cost of all architectural, engineering,
permitting and any Master Landlord related fees arising from the planning,
review and completion of the Subtenant Improvements.
7. INDEMNITY.
(a) SUBTENANT INDEMNITY. Subtenant shall indemnify, defend (by counsel
acceptable to Sublandlord and Master Landlord in their sole discretion), protect
and hold Sublandlord and Master Landlord and their respective directors,
officers, shareholders, partners, members, employees, contractors, assigns and
mortgagees harmless from and against, and release and waive the same from any
and all liabilities, claims, demands, losses, damages, costs and expenses
(including reasonable attorneys' fees) arising out of or relating to (i) the use
or occupancy of the Sublease Premises by Subtenant or its Agents or anyone
claiming by, through or under Subtenant; (ii) the failure by Subtenant or anyone
claiming by, through or under Subtenant to comply with any term, condition, or
covenant of this Sublease or the Master Lease incorporated herein, including,
without limitation, Subtenant's obligation to surrender the Sublease Premises in
the condition herein required; (iii) the negligence or willful misconduct of
Subtenant, its Agents or anyone claiming by, through or under Subtenant; (iv)
the existence of Hazardous Materials on, under or about the Sublease Premises to
the extent caused, stored, released, discharged or introduced by Subtenant or
its Agents; (v) the death of or injury to any person or damage to any property
in the Sublease Premises; or (vi) the death of or injury to any person or damage
to any property on or about the Master Premises to the extent caused by the
negligence or willful misconduct of Subtenant or its Agents. Notwithstanding
anything in this Sublease or the Master Lease to the contrary, Subtenant shall
not be responsible for, or indemnify Sublandlord or Master Landlord for, any
injury to or death of any person or damage to property to the extent caused by
the negligence or willful misconduct of Master Landlord, Sublandlord or their
respective Agents, employees, or contractors).
(b) SUBLANDLORD INDEMNITY. Sublandlord shall indemnify, defend (by
counsel acceptable to Subtenant), protect and hold Subtenant and its directors,
officers, shareholders, partners, members, employees, contractors and assigns
harmless from and against and release and waive the same from any and all
liabilities, claims, demands, losses, damages, costs and expenses (including
attorneys' fees) arising out of or relating to: (i) the existence of Hazardous
Materials on, under or about the Sublease Premises to the extent introduced upon
the Sublease Premises by Sublandlord, its agents, employees, contractors,
licensees, subtenants or invitees prior to the Commencement Date; or (ii) the
death of or injury to any person or damage to any property to the extent caused
by the negligence or willful misconduct of Sublandlord or its agents, employees,
contractors, licensees, subtenants or invitees (other than Subtenant).
Notwithstanding anything in this Sublease to the contrary, Sublandlord shall not
be responsible for, or indemnify Subtenant for, any injury to or death of any
person or damage to property to the
14
extent caused by (i) the negligence or willful misconduct of Subtenant or its
Agents or (ii) the breach by Subtenant of its obligations under this Sublease.
The indemnifications set forth in this Article 7 shall survive the
expiration or earlier termination of this Sublease.
8. INSURANCE.
(a) SUBTENANT COMPLIANCE WITH INSURANCE REQUIREMENTS. Subtenant shall
not, directly or indirectly, make any use of the Sublease Premises which may be
dangerous to person or property or which may jeopardize any insurance coverage
or may increase the cost of insurance or require additional insurance coverage.
If, by reason of any activity allowed by Subtenant in the Sublease Premises, any
insurance coverage is jeopardized or insurance premiums are increased,
Sublandlord shall have the option, in its sole discretion, either to terminate
this Sublease or to require Subtenant to make immediate payment of such
increased insurance premium and upon payment of such premium Subtenant shall not
be deemed in default hereunder. Subtenant may not self-insure against any risks
required herein to be covered by insurance.
(b) SUBTENANT'S USE OF CONSULTANTS AND CONTRACTORS. In the event
Subtenant utilizes the services of consultants and/or contractors at the
Sublease Premises, Subtenant shall require from them (or provide in its
insurance policies) for insurance coverage for all such consultants and
contractors with the same minimum insurance requirements detailed below.
Sublandlord reserves the right to request from Subtenant copies of such
consultants' and contractors' certificates (to the extent such persons are not
covered under Subtenant's insurance policies) when deemed necessary.
(c) POLICY REQUIREMENTS. The policies carried by Subtenant as required
below (i) shall be written by companies licensed to do business in the state in
which the Sublease Premises are located and have a General Policyholder's rating
of at least B+13 as set forth in the most current issue of Best's Insurance
Guide, (ii) not be invalidated or reduced by the acts or omissions of other
insureds, or by any breach, violation or misrepresentation of any warranties,
declarations or conditions in such policy, (iii) name Master Landlord,
Sublandlord and any other additional insureds required to be named in
Sublandlord's insurance policies under the Master Lease, and their respective
officers, directors, employees, agents and invitees as additional insureds, and
(iv) endorsed to stipulate that Subtenant's insurance shall be primary to and
noncontributory with any and all other insurance maintained or otherwise
afforded to Sublandlord or Master Landlord, or their respective officers,
directors, employees and agents. The insurance policies required herein shall
also comply with the standards for insurance coverage set forth in the Master
Lease.
(d) CERTIFICATES OF INSURANCE. Certificates of insurance for all
insurance required hereby shall be furnished by Subtenant to Sublandlord and
Master Landlord before the Commencement Date and thereafter at least thirty (30)
days prior to each policy expiration. The insurance certificates required hereby
shall provide that the insurance carrier shall endeavor to provide the
certificate holders with at least ten (10) days notice prior to the
cancellation, non-renewal or adverse material change in any policy covered
thereby and shall otherwise be
15
acceptable in form and substance to Sublandlord, but any acceptance of insurance
certificates by Sublandlord shall not limit or relieve Subtenant of its
obligations under this Section 8. NOTICE TO SUBTENANT: IN ACCORDANCE WITH THE
TERMS OF THIS SUBLEASE, SUBTENANT MUST PROVIDE EVIDENCE OF THE REQUIRED
INSURANCE TO SUBLANDLORD PRIOR TO OCCUPANCY OF THE SUBLEASE PREMISES.
(e) SUBTENANT'S INSURANCE POLICIES. Subtenant shall, at its own expense,
at all times during the Sublease Term provide and maintain in effect those
insurance policies and minimum limits of coverage as designated below, and any
other insurance required by Section 11 of the Master Lease or by law of the
State in which the Sublease Premises are located.
(i) WORKERS' COMPENSATION AND EMPLOYER'S LIABILITY INSURANCE.
Subtenant shall carry Workers' Compensation insurance as required by any
applicable law or regulation and, in accordance with the provisions of all
applicable Laws. Subtenant shall carry Employer's Liability insurance in
amounts not less than $1,000,000 per illness or injury.
(ii) "SPECIAL PURPOSE" INSURANCE. Subtenant shall carry "special
purpose" insurance covering leasehold improvements paid for by Subtenant
and Subtenant's personal property from time to time in, on, or at the
Sublease Premises, in an amount not less than eighty percent (80%) of the
full replacement cost to provide protection against events protected under
"fire and extended coverage," as well as against sprinkler damage,
vandalism, and malicious mischief.
(iii) COMMERCIAL GENERAL LIABILITY INSURANCE. Subtenant shall carry
Commercial General Liability insurance covering all operations by or on
behalf of Subtenant at the Sublease Premises, and providing insurance for
bodily injury, property damage, personal injury, blanket contractual,
independent contractors, severability of interest and advertising injury,
as those terms are defined by Commercial General Liability insurance
policies, with limits of not less than $1,000,000 each occurrence or claim
and $2,000,000 in the aggregate. If such policy of Commercial General
Liability insurance is written on a claims-made basis, such policy shall
provide "tail coverage" for claims made for a minimum of one (1) year
following expiration or earlier termination of this Sublease (and such
coverage shall be expressly set forth in the applicable certificate of
insurance).
(iv) AUTOMOBILE LIABILITY INSURANCE. Subtenant shall carry Business
Automobile Liability insurance, including bodily injury and property damage
for all vehicles, including but not limited to all owned, hired (or rented)
and non-owned vehicles. The limits of liability shall not be less than
$1,000,000 combined single limit for each accident and in the aggregate.
(v) BUSINESS INTERRUPTION INSURANCE. Subtenant's "special purpose"
insurance shall provide coverage for business interruption/loss of
income/extra expense insurance in an amount not less than $20,000,000.
16
(vi) EMPLOYMENT PRACTICES LIABILITY INSURANCE. Subtenant shall carry
Employment Practices Liability insurance providing coverage for employment
practices liability, including by way of example but not limitation,
wrongful termination, sexual or other harassment, discrimination, invasion
of privacy, employment-related defamation, and violation of the Family and
Medical Leave Act, with limits of not less than $1,000,000 per occurrence
or claim and in the annual aggregate.
(vii) MASTER LANDLORD AND SUBLANDLORD PROPERTY. Subtenant shall
obtain insurance to cover loss or damage to any Master Landlord-owned or
Sublandlord-owned property in the care, custody, or control of Subtenant
(including, but not limited, to any furniture, fixtures or equipment) for
all losses including, but not limited to, theft, loss, misappropriation or
destruction caused by Subtenant, its employees, agents, or other
representative whether intentional or through negligence.
9. SIGNS. Subtenant shall not place on any portion of the Sublease Premises
any sign, placard, lettering in or on windows, banners, displays or other
advertising or communicative material which is visible from the exterior of the
Sublease Premises without the prior written approval of Sublandlord, which shall
not be unreasonably withheld, conditioned or delayed, and, if required, from
Master Landlord in accordance with the Master Lease; provided, however, that
subject to compliance with the terms of this Sublease and the Master Lease,
Subtenant shall have the right, at its sole cost and expense, to install suite
identification signage in the main lobby of the Building and identification
signage on the Building and on the monument sign for the Building subject to
Master Landlord's sign criteria and Master Landlord's prior written approval.
All such approved signs shall strictly conform to all Laws. Subtenant shall
maintain such signs in good condition and repair. If Subtenant fails to remove
such signs upon the expiration or earlier termination of this Sublease, and
repair any damage caused by such removal, Sublandlord may do so at Subtenant's
expense, which expense, together with interest thereon at the rate for late
payments set forth in Section 3(g) above shall be paid by Subtenant to
Sublandlord upon demand.
10. HAZARDOUS SUBSTANCES. Subtenant shall strictly comply with Section 26
of the Master Lease to the extent such provisions relate to the Sublease
Premises during the Sublease Term. Subtenant, at its sole cost and expense,
shall be fully responsible for the storage and disposal of all Hazardous
Materials used in, on or about the Building by the Subtenant or its Agents.
Notwithstanding anything in this Sublease to the contrary, Subtenant shall have
no liability to Sublandlord or Master Landlord or responsibility under this
Sublease for any Hazardous Materials in, on, under or about the Sublease
Premises which were not released, discharged, stored or introduced by Subtenant
or its Agents.
11. ESTOPPEL CERTIFICATES. Subtenant will at any time upon not less than
ten (10) business days' prior written notice from Sublandlord execute,
acknowledge and deliver to Sublandlord a statement in writing (i) certifying
that this Sublease is unmodified (or, if modified, stating the nature of such
modification) and is in full force and effect, the amount of any Security
Deposit, and the date to which Rent are paid in advance, if any, (ii)
acknowledging that there are not, to Subtenant's knowledge, any uncured defaults
on the part of Sublandlord hereunder or of Master Landlord under the Master
Lease, or specifying such defaults if any are claimed, and (iii) any other
matters relating to the Sublease or the Sublease Premises as may be reasonably
17
requested by Sublandlord. Any such statement may be conclusively relied upon by
any prospective purchaser, transferee or encumbrancer of the Sublease Premises
or of Sublandlord's interest in this Sublease.
12. EVENTS OF DEFAULT. If one or more of the following events ("EVENT OF
DEFAULT") occurs, such occurrence constitutes a breach of this Sublease by
Subtenant (such events being in addition to, and superseding to the extent
inconsistent with, the Events of Default set forth in the Master Lease):
(a) Subtenant fails to pay when due any Rent due hereunder and such
failure shall continue for five (5) days after written notice thereof from
Sublandlord;
(b) Subtenant fails to comply with any other provision of this Sublease
in the manner and within the time required, and such failure continues for
twenty (20) days after written notice thereof from Sublandlord, provided that if
such failure cannot be cured within such twenty (20) day period, an Event of
Default shall not be deemed to have occurred so long as (i) Subtenant commences
such cure within such twenty (20) day period and diligently pursues such cure to
completion, provided so that an "event of default" (as defined in the Master
Lease) is not deemed to have occurred under the Master Lease;
(c) any other event occurs which involves Subtenant or the Sublease
Premises and which would constitute an event of default under the Master Lease
if it involved Sublandlord or the Master Premises, subject to any notice and/or
cure periods applicable thereto as set forth in the Master Lease;
(d) the occurrence of an event of default under the Master Lease which is
the result of any act or omission of Subtenant or any person claiming by,
through or under Subtenant or any of their respective employees, subtenants,
licensees, agents, contractors and invitees (each, a "SUBTENANT PARTY"); or
(e) any purported or attempted Transfer of this Sublease or the Sublease
Premises in contravention of this Sublease or the Master Lease; or
(f) Subtenant (i) files or consents by answer or otherwise to the filing
against it of a petition for relief or reorganization or arrangement or any
other petition in bankruptcy or liquidation or to take advantage of any
bankruptcy or insolvency law of any jurisdiction; (ii) makes an assignment for
the benefit of its creditors; (iii) consents to the appointment of a custodian,
receiver, trustee or other officer with similar powers of itself or of any
substantial part of its property; or (iv) takes action for the purpose of any of
the foregoing;
(g) A court or governmental authority of competent jurisdiction, without
consent by Subtenant, enters an order appointing a custodian, receiver, trustee
or other officer with similar powers with respect to it or with respect to any
substantial portion of its property, or constituting an order for relief or
approving a petition for relief or reorganization or any other petition in
bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution,
winding up or liquidation of Subtenant, or if any such petition is filed against
Subtenant and such petition is not dismissed within sixty (60) days; or
18
(h) This Sublease or any estate of Subtenant hereunder is levied upon
under any attachment or execution and such attachment or execution is not
vacated within sixty (60) days.
Upon the occurrence of an Event of Default, Sublandlord shall have, in
addition to any other rights and remedies available to it under this Sublease
and/or at law and/or in equity, any and all rights and remedies of Master
Landlord set forth in the Master Lease as incorporated herein. All rights and
remedies of Sublandlord herein enumerated shall be cumulative and none shall
exclude any other right allowed by law or in equity and said rights and remedies
may be exercised and enforced concurrently and whenever and as often as occasion
therefor arises. If Subtenant shall have committed an Event of Default, then
Sublandlord shall have the right, but not the obligation, without waiving or
releasing Subtenant from any obligations hereunder, to cure such Event of
Default in such manner and to such extent as Sublandlord shall deem necessary,
and in exercising any such right, to pay or incur any reasonable costs and
expenses (including, without limitation, attorneys' fees and costs) required in
connection therewith which Subtenant shall pay to Sublandlord upon, together
with interest thereon at the Interest Rate.
13. OTHER CASUALTY; EMINENT DOMAIN. In the event of a fire or other
casualty affecting the Building or the Sublease Premises, or of a taking of all
or a part of the Building or Sublease Premises under the power of eminent
domain: (i) Sublandlord shall be obligated to restore the Sublease Premises to
the condition it was in at the Effective Date to the extent that it is the
responsibility of Sublandlord as it is the Tenant under the Master Lease, except
as otherwise set forth herein, to do so but Sublandlord shall not have any
obligation to repair or restore the Sublease Premises to the extent of any
Alterations performed by or on behalf of the Subtenant or any personal property
of Subtenant; (ii) Subtenant shall be entitled only to a proportionate abatement
of Rent to the extent Sublandlord receives a corresponding abatement of rent
under the Master Lease during the time and to the extent the Sublease Premises
are unfit for occupancy for the purposes permitted under this Sublease and not
occupied by Subtenant as a result thereof; (iii) Subtenant shall not, by reason
thereof, have a right to terminate this Sublease unless the Master Lease shall
be terminated; and (iv) Sublandlord reserves the right to terminate the Master
Lease and this Sublease in connection with any right granted to it under the
Master Lease whether or not the Sublease Premises is damaged or the subject of a
taking. In the event Master Landlord or Sublandlord exercises the right to
terminate the Master Lease as the result of any such fire, casualty or taking,
Sublandlord shall provide Subtenant with a copy of the relevant termination
notice and this Sublease shall terminate on the date upon which the Master Lease
terminates.
14. INTENTIONALLY OMITTED
15. LIMIT OF SUBLANDLORD'S LIABILITY. Notwithstanding anything to the
contrary contained in this Sublease, Sublandlord, its partners, members,
officers, directors, employees, agents, servants and contractors (collectively,
the "SUBLANDLORD PARTIES"), shall not be liable for any damages or injury to
person or property or resulting from the loss of use thereof sustained by
Subtenant or any Subtenant Party, based on, arising out of, or resulting from,
any cause whatsoever, including any due to the Building becoming out of repair,
or due to the occurrence of any accident or event in or about the Building, or
due to any act or neglect of any tenant or occupant of the Building or any other
person, provided however Sublandlord shall not be released from liability to
Subtenant for any physical injury to any natural person caused by
19
Sublandlord's negligence or willful misconduct to the extent such injury is not
covered by insurance either carried by Subtenant (or such person) or required by
this Sublease to be carried by Subtenant; provided that neither Sublandlord nor
any Sublandlord Party shall under any circumstances be liable for any exemplary,
punitive, consequential or indirect damages (or for any interruption of or loss
to business).
16. MISCELLANEOUS.
(a) ATTORNEYS' FEES. In the event of any litigation or arbitration
between Sublandlord and Subtenant, whether based on contract, tort or other
cause of action or involving bankruptcy or similar proceedings, in any way
related to this Sublease, the non-prevailing party shall pay to the prevailing
party all reasonable attorneys' fees and costs and expenses of any type, without
restriction by statute, court rule or otherwise, incurred by the prevailing
party in connection with any action or proceeding (including arbitration
proceedings, any appeals and the enforcement of any judgment or award), whether
or not the dispute is litigated or prosecuted to final judgment. The "prevailing
party" shall be determined based upon an assessment of which party's major
arguments or positions taken in the action or proceeding could fairly be said to
have prevailed (whether by compromise, settlement, abandonment by other party of
its claim or defense, final decision after any appeals, or otherwise) over the
other party's major arguments or positions on major disputed issues. Any fees
and cost incurred in enforcing a judgment shall be recoverable separately from
any other amount included in the judgment and shall survive and not be merged in
the judgment.
(b) AUTHORITY. Each person executing this Sublease on behalf of a party
hereto represents and warrants that he or she is authorized and empowered to do
so and to thereby bind the party on whose behalf he or she is signing.
(c) BROKERAGE COMMISSIONS. Subtenant hereby acknowledges that
Sublandlord's Broker represents both the Subtenant and the Sublandlord.
Sublandlord shall pay a commission to each of Sublandlord's Broker and
Subtenant's Broker in connection with this Sublease transaction pursuant to
Sublandlord's separate agreement with such Brokers. Except for Sublandlord's
Broker and Subtenant's Broker, each of Subtenant and Sublandlord warrants and
represents to the other that it has dealt with no other broker or other person
in connection with this sublease transaction other than the other party and its
agents and employees. Each of Sublandlord and Subtenant agrees to indemnify,
defend and save harmless the other and Master Landlord from any and all costs,
expenses, attorneys' fees, charges or liability arising out of any claim by any
broker or agent, other than Sublandlord's Broker or Subtenant's Broker, as a
result of such party's conversations, correspondence, other dealings or actions
in connection with this Sublease.
(d) CAPTIONS. All captions and headings in this Sublease are for the
purposes of reference and convenience and shall not limit or expand the
provisions of this Sublease.
(e) COUNTERPARTS. This Sublease may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
taken together shall comprise but a single instrument.
20
(f) ENTIRE AGREEMENT. This Sublease and the applicable portions of the
Master Lease contained by reference herein, contain all of the covenants,
conditions and agreements between the parties concerning the Sublease Premises,
and shall supersede any and all prior correspondence, agreements and
understandings concerning the Sublease Premises, both oral and written. No
addition or modification of any term or provision of this Sublease shall be
effective unless set forth in writing and signed by both Sublandlord and
Subtenant.
(g) NOTICES. Any notice required or desired to be given regarding this
Sublease shall be in writing and may be given by personal delivery, reputable
next-day courier service, or by certified or registered mail. A notice shall be
deemed to have been given (i) on the third business day after mailing if mailed,
postage prepaid, return receipt requested addressed to the party to be served at
its address specified in the Defined Terms, and (ii) when delivered or refused
if given by personal delivery or courier service. Copies of notices of defaults
under this Sublease shall be concurrently provided to Master Landlord at the
address set forth in the Master Lease. Either party may change its address by
giving notice of the same in accordance with this Section (g).
(h) GOVERNING LAW. This Sublease shall be governed by and construed in
accordance with the laws of the Commonwealth of
Massachusetts (the "STATE")
applicable to contracts entered into in the State between parties residing in
the State. Subtenant hereby consents to the personal jurisdiction and venue of
any State court located in the county in which the Building is located and
United States District Courts for the District of
Massachusetts, and any
successor court, and the service or process by any means authorized by such
court.
(i) EXHIBITS. All exhibits and any schedules or riders attached to this
Sublease are incorporated herein by this reference and made a part hereof, and
any reference in the body of the Sublease or in the exhibits, schedules or
riders to the Sublease shall mean this Sublease, together with all exhibits,
schedules and riders.
(j) WAIVER OF TRIAL BY JURY. EACH PARTY HEREBY WAIVES ANY AND ALL RIGHTS
IT MAY HAVE UNDER APPLICABLE LAW TO TRIAL BY JURY WITH RESPECT TO ANY DISPUTE
WITH THE OTHER PARTY ARISING DIRECTLY OR INDIRECTLY IN CONNECTION WITH THIS
SUBLEASE, THE MASTER LEASE, OR THE SUBLEASE PREMISES.
(k) NEGOTIATION AND MEDIATION OF DISPUTES. In the event that Sublandlord
and Subtenant become involved in any dispute, controversy or claim arising out
of or relating to the Sublease Premises, this Sublease or a breach hereof (a
"DISPUTE"), either party may initiate negotiation proceedings by sending written
notice to the other party setting forth the particulars of the Dispute, the
term(s) of this Sublease that are involved and a suggested resolution of the
problem. The recipient of the letter must respond in writing within ten (10)
business days with an explanation and response to the proposed solution. If an
exchange of correspondence does not resolve the Dispute, a representative of
each party shall meet on at least one (1) occasion within thirty (30) days of
the parties' exchange of correspondence to attempt to resolve the Dispute. The
meeting shall take place at a location mutually selected by the parties and,
should they not agree on a location, at the Boston,
Massachusetts office of JAMS
at the parties' shared expense. In the event Sublandlord and Subtenant do not
resolve such Dispute within thirty (30) days (or any mutually agreed to
extension of time) after the first meeting of their representatives
21
with regard to such Dispute, Sublandlord and Subtenant agree to participate in
good faith in an informal, non-binding mediation. Sublandlord and Subtenant
shall select a mutually acceptable panel member from the list of neutrals in the
Boston,
Massachusetts office of JAMS or, if Sublandlord and Subtenant so agree,
any other mutually acceptable alternative dispute resolution provider. If
Sublandlord and Subtenant cannot agree to a mutually acceptable mediator, then
JAMS shall send a list of three (3) names and resumes of the available mediators
in the Boston,
Massachusetts office of JAMS to Sublandlord and Subtenant, each
of whom may strike one (1) name, leaving the remaining name as the mediator. If
more than one (1) name remains, the JAMS administrator shall select the
designated mediator. The mediation shall take place in the Boston,
Massachusetts
office of JAMS. The cost of such mediation shall be borne equally by Sublandlord
and Subtenant provided that each party shall be responsible for the costs and
fees of its own attorneys, experts and consultants engaged by it connection
therewith.
(l) SUCCESSORS AND ASSIGNS. Subject to the provisions of this Sublease
and the Master Lease relating to assignment and subletting, this Sublease shall
be binding upon, and shall insure to the benefit of the parties' respective
representatives, successors and assigns.
(m) ACCESS. Sublandlord reserves the right to enter the Sublease Premises
upon reasonable prior written or oral notice, giving 24 hour notice whenever
possible to Subtenant (except that in case of emergency no notice shall be
necessary) in order to inspect the Sublease Premises and/or the performance by
Subtenant of the terms of this Sublease or to exercise Sublandlord's rights or
perform Sublandlord's obligations hereunder.
(n) TIME. Time is of the essence of every provision of this Sublease.
(o) MASTER LANDLORD'S CONSENT. The effectiveness of this Sublease is
conditioned upon receipt of Master Landlord's Consent. Notwithstanding anything
in this Sublease to the contrary, in the event Master Landlord's Consent is not
received within thirty (30) days after the date of this Sublease, or such later
date Sublandlord and Subtenant may agree in writing, this Sublease shall
automatically become null and void, in which case Sublandlord shall return any
Security Deposit and prepaid Base Rent or Advanced Rent Payment to Subtenant.
(p) QUIET ENJOYMENT. Sublandlord covenants with Subtenant that, upon
paying the Rent and observing the covenants, agreements and conditions of this
Sublease on its part to be kept (i) Subtenant shall and may peaceably and
quietly have, hold and enjoy the Sublease Premises during the term of this
Sublease and (ii) neither Sublandlord nor anyone claiming by, through or under
Sublandlord shall disturb Subtenant's occupancy or enjoyment of the Sublease
Premises.
22
IN WITNESS WHEREOF, Sublandlord and Subtenant have duly executed this
Sublease as of the day and year first above written.
SUBLANDLORD: SUBTENANT:
CISCO SYSTEMS, INC., a California SONUS NETWORKS, a Delaware
corporation corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇.▇. ▇▇▇▇
------------------------------- -------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇.▇. ▇▇▇▇
------------------------------- -------------------------------
Title: Director, Americas Real Estate Title: VP & CFO
------------------------------- -------------------------------
By: By:
------------------------------- -------------------------------
Name: Name:
------------------------------- -------------------------------
Title: Title:
------------------------------- -------------------------------
23
EXHIBIT A
MASTER LEASE
A-1
EXHIBIT B
SUBLEASE PREMISES
B-1
EXHIBIT C
STANDBY LETTER OF CREDIT DRAFT FOR REGIONAL OFFICES
IRREVOCABLE STANDBY LETTER OF CREDIT NO. SVBSFXXXXXX
DATE:
BENEFICIARY:
CISCO SYSTEMS, INC.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
ATTN: DIRECTOR, AMERICAS REAL ESTATE
APPLICANT:
SONUS NETWORKS, INC.
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
AMOUNT: _______________________________________
EXPIRATION DATE: _____, 2004
LOCATION: AT OUR COUNTERS IN SANTA CLARA, CALIFORNIA
DEAR SIR/MADAM:
WE HEREBY ESTABLISH OUR IRREVOCABLE STANDBY LETTER OF CREDIT NO. SVBSFXXXXXX IN
YOUR FAVOR AVAILABLE BY YOUR DRAFT DRAWN ON US AT SIGHT IN THE FORM OF EXHIBIT
"B" ATTACHED AND ACCOMPANIED BY THE FOLLOWING DOCUMENTS:
1. THE ORIGINAL OF THIS LETTER OF CREDIT AND ALL AMENDMENT(S), IF ANY.
2. A DATED CERTIFICATION FROM THE BENEFICIARY SIGNED BY AN AUTHORIZED OFFICER,
FOLLOWED BY ITS DESIGNATED TITLE, STATING THE FOLLOWING:
"THE UNDERSIGNED IS ENTITLED TO DRAW UPON THIS CREDIT IN ACCORDANCE WITH
THE TERMS OF THAT CERTAIN SUBLEASE DATED _______________, 2003 BY AND
BETWEEN CISCO SYSTEMS, INC., AS SUBLANDLORD AND SONUS NETWORKS, INC., AS
SUBTENANT (AS THE SAME MAY BE MODIFIED, AMENDED OR ASSIGNED) FOR THE
SUBLEASE OF CERTAIN SPACE LOCATED AT ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇."
THE LEASE AGREEMENT MENTIONED ABOVE IS FOR IDENTIFICATION PURPOSES ONLY AND IT
IS NOT INTENDED THAT SAID LEASE AGREEMENT BE INCORPORATED HEREIN OR FORM PART OF
THIS LETTER OF CREDIT.
PARTIAL DRAWS ARE ALLOWED. THIS LETTER OF CREDIT MUST ACCOMPANY ANY DRAWINGS
HEREUNDER FOR ENDORSEMENT OF THE DRAWING AMOUNT AND WILL BE RETURNED TO THE
BENEFICIARY UNLESS IT IS FULLY UTILIZED.
DRAFT(S) AND DOCUMENTS MUST INDICATE THE NUMBER AND DATE OF THIS LETTER OF
CREDIT.
C-1
PAGE 1 OF 2
IRREVOCABLE STANDBY LETTER OF CREDIT NO. SVBSFXXXXXX
DATED
THIS LETTER OF CREDIT SHALL BE AUTOMATICALLY EXTENDED FOR AN ADDITIONAL PERIOD
OF ONE YEAR, WITHOUT AMENDMENT, FROM THE PRESENT OR EACH FUTURE EXPIRATION DATE
UNLESS AT LEAST SIXTY (60) DAYS PRIOR TO THE THEN CURRENT EXPIRATION DATE WE
NOTIFY YOU BY REGISTERED MAIL/OVERNIGHT COURIER SERVICE AT THE ABOVE ADDRESSES
THAT THIS LETTER OF CREDIT WILL NOT BE EXTENDED BEYOND THE CURRENT EXPIRATION
DATE. IN NO EVENT SHALL THIS LETTER OF CREDIT BE AUTOMATICALLY EXTENDED BEYOND
MARCH 31, 2007.
THIS LETTER OF CREDIT IS TRANSFERABLE SUCCESSIVELY IN ITS ENTIRETY ONLY UP TO
THE THEN AVAILABLE AMOUNT IN FAVOR OF ANY NOMINATED TRANSFEE THAT IS THE
SUCCESSOR IN INTEREST TO BENEFICIARY OR IS THE NEW OWNER OF CERTAIN STATED
PROPERTY ("TRANSFEREE"), ASSUMING SUCH TRANSFER TO SUCH TRANSFEREE WOULD BE IN
COMPLIANCE WITH THEN APPLICABLE LAW AND REGULATIONS, INCLUDING BUT OT LIMITED TO
THE REGULATIONS OF THE U.S. DEPARTMENT OF TREASURY AND U.S. DEPARTMENT OF
COMMERCE. AT THE TIME OF TRANSFER, THE ORIGINAL LETTER OF CREDIT AND ORIGIANL
AMENDMENT(S), IF ANY, MUST BE SURRENDERED TO US TOGETHER WITH OUR LETTER OF
TRANSFER DOCUMENTATION (IN THE FORM OF EXHIBIT "A" ATTACHED HERETO). OUR
TRANSFER FEE OF 1/4 OF 1% OF THE TRANSFER AMOUNT (MINIMUM $250.00) IS FOR THE
ACCOUNT OF THE APPLICANT.
ALL DEMANDS FOR PAYMENT SHALL BE MADE BY PRESENTATION OF THE ORIGINAL
APPROPRIATE DOCUMENTS PRIOR TO 10:00 A.M. CALIFORNIA TIME, ON A BUSINESS DAY AT
OUR OFFICE (THE "BANK'S OFFICE") AT: SILICON VALLEY BANK, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ATTENTION: STANDBY LETTER OF CREDIT NEGOTIATION SECTION.
PAYMENT AGAINST CONFORMING PRESENTATIONS HEREUNDER SHALL BE MADE BY BANK DURING
NORMAL BUSINESS HOURS OF THE BANK'S OFFICE WITHIN TWO (2) BUSINESS DAYS AFTER
PRESENTATION.
WE HEREBY AGREE WITH THE DRAWERS, ENDORSERS AND BONAFIDE HOLDERS THAT THE DRAFTS
DRAWN UNDER AND IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS LETTER OF
CREDIT SHALL BE DULY HONORED UPON PRESENTATION TO THE DRAWEE, IF NEGOTIATED ON
OR BEFORE THE EXPIRATION DATE OF THIS CREDIT.
THIS CREDIT SETS FORTH IN FULL THE TERMS OF OUR UNDERTAKING AND SUCH AN
UNDERTAKING SHALL NOT IN ANY WAY BE MODIFIED OR AMPLIFIED BY REFERENCE TO ANY
DOCUMENTS, INSTRUMENTS OR AGREEMENTS REFERRED TO HEREIN, OR IN WHICH THIS CREDIT
IS REFERRED TO OR TO WHICH THIS CREDIT RELATES AND ANY SUCH REFERENCE SHALL NOT
BE DEEMED TO INCORPORATE HEREIN BY REFERENCE ANY SUCH DOCUMENTS, INSTRUMENTS OR
AGREEMENTS.
THIS LETTER OF CREDIT IS SUBJECT TO THE INTERNATIONAL STANDBY PRACTICES 1998,
("ISP98"), INTERNATIONAL CHAMBER OF COMMERCE, PUBLICATION NO. 590.
----------------------- ------------------------
AUTHORIZED SIGNATURE AUTHORIZED SIGNATURE
PAGE 2 OF 2
C-2
EXHIBIT "A"
DATE:
TO: SILICON VALLEY BANK
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ RE: STANDBY LETTER OF CREDIT
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ NO. ISSUED BY
ATTN:INTERNATIONAL DIVISION. SILICON VALLEY BANK, SANTA ▇▇▇▇▇
STANDBY LETTERS OF CREDIT L/C AMOUNT:
GENTLEMEN:
FOR VALUE RECEIVED, THE UNDERSIGNED BENEFICIARY HEREBY IRREVOCABLY TRANSFERS TO:
(NAME OF TRANSFEREE)
(ADDRESS)
ALL RIGHTS OF THE UNDERSIGNED BENEFICIARY TO DRAW UNDER THE ABOVE LETTER OF
CREDIT UP TO ITS AVAILABLE AMOUNT AS SHOWN ABOVE AS OF THE DATE OF THIS
TRANSFER.
BY THIS TRANSFER, ALL RIGHTS OF THE UNDERSIGNED BENEFICIARY IN SUCH LETTER OF
CREDIT ARE TRANSFERRED TO THE TRANSFEREE. TRANSFEREE SHALL HAVE THE SOLE RIGHTS
AS BENEFICIARY THEREOF, INCLUDING SOLE RIGHTS RELATING TO ANY AMENDMENTS,
WHETHER INCREASES OR EXTENSIONS OR OTHER AMENDMENTS, AND WHETHER NOW EXISTING OR
HEREAFTER MADE. ALL AMENDMENTS ARE TO BE ADVISED DIRECT TO THE TRANSFEREE
WITHOUT NECESSITY OF ANY CONSENT OF OR NOTICE TO THE UNDERSIGNED BENEFICIARY.
THE ORIGINAL OF SUCH LETTER OF CREDIT IS RETURNED HEREWITH, AND WE ASK YOU TO
ENDORSE THE TRANSFER ON THE REVERSE THEREOF, AND FORWARD IT DIRECTLY TO THE
TRANSFEREE WITH YOUR CUSTOMARY NOTICE OF TRANSFER.
SINCERELY,
-----------------------------
(BENEFICIARY'S NAME)
-----------------------------
SIGNATURE OF BENEFICIARY
SIGNATURE AUTHENTICATED
----------------------------
(NAME OF BANK)
----------------------------
AUTHORIZED SIGNATURE
C-3
EXHIBIT "B"
================================================================================
DATE: _______________ REF. NO. ___________________
AT SIGHT OF THIS DRAFT
PAY TO THE ORDER OF ___________________________________US$_________________
USDOLLARS _________________________________________________________________
___________________________________________________________________________
DRAWN UNDER SILICON VALLEY BANK, SANTA CLARA, CALIFORNIA, STANDBY
LETTER OF CREDIT NUMBER NO. ______________________ DATED __________________
TO: SILICON VALLEY BANK
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ _____________________________
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (BENEFICIARY'S NAME)
-----------------------------
AUTHORIZED SIGNATURE
================================================================================
GUIDELINES TO PREPARE THE DRAFT
1. DATE: ISSUANCE DATE OF DRAFT.
2. REF. NO.: BENEFICIARY'S REFERENCE NUMBER, IF ANY.
3. PAY TO THE ORDER OF: NAME OF BENEFICIARY AS INDICATED IN THE L/C (MAKE SURE
BENEFICIARY ENDORSES IT ON THE REVERSE SIDE).
4. US$: AMOUNT OF DRAWING IN FIGURES.
5. USDOLLARS: AMOUNT OF DRAWING IN WORDS.
6. LETTER OF CREDIT NUMBER: SILICON VALLEY BANK'S STANDBY L/C NUMBER THAT
PERTAINS TO THE DRAWING.
7. DATED: ISSUANCE DATE OF THE STANDBY L/C.
8. BENEFICIARY'S NAME: NAME OF BENEFICIARY AS INDICATED IN THE L/C.
9. AUTHORIZED SIGNATURE: SIGNED BY AN AUTHORIZED SIGNER OF BENEFICIARY.
IF YOU NEED FURTHER ASSISTANCE IN COMPLETING THIS DRAFT, PLEASE CALL OUR L/C
PAYMENT SECTION AND ASK FOR:
▇▇▇▇▇ ▇▇ ▇▇▇: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇: ▇▇▇-▇▇▇-▇▇▇▇
C-4
EXHIBIT D
PRELIMINARY PLANS FOR TENANT IMPROVEMENTS
D-1
EXHIBIT E
SCHEDULE OF SUBLANDLORD PROPERTY
Sublandlord agrees to sell to Subtenant the following Sublandlord Property
located within the Sublease Premises as of the Commencement Date:
Workstations (singles & doubles)
Workspaces - Fax Copy Printer
Office Furniture Set Ups
Training Tables
Cafeteria Tables
Stackable Chairs
Small Conference Room Set Ups
Medium Conference Room Set Ups
Large Conference Room Set Ups
Lobby Furniture
The Sublandlord Property shall be conveyed to Subtenant in its "AS IS, WHERE IS,
WITH ALL FAULTS, IF ANY" condition as of the Commencement Date, without any
warranties, express or implied regarding the number of such items, their
physical condition, existence, capacity, quality, value, workmanship, operating
capability or performance, compliance with applicable laws, or their fitness or
suitability for Subtenant's purposes (but with a warranty by Sublandlord that as
of the date of such conveyance, Sublandlord has good title to and the right and
authority to convey the Sublandlord Property; and that the Sublandlord Property
is free and clear of all security interests, liens and encumbrances).
E-1
EXHIBIT E-1
▇▇▇▇ OF SALE
THIS ▇▇▇▇ OF SALE, is executed by CISCO SYSTEMS, INC., a California
corporation ("SELLER"), and SONUS NETWORKS, INC., a Delaware corporation
("BUYER"), effective as of as of the Commencement Date of the
Sublease Agreement
(the "SUBLEASE") dated __________________, 2003 by and between Seller as
Sublandlord and Buyer as Subtenant (the "EFFECTIVE DATE"),.
IN CONSIDERATION of the payment of One Dollar ($1.00), and for other
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Seller hereby sells, assigns and transfers to Buyer all of the
assets more particularly described on Schedule 1 attached hereto and made a part
hereof (the "SUBLANDLORD PROPERTY"), subject to the following terms and
conditions:
1. BUYER ACKNOWLEDGES THAT BUYER IS ACQUIRING THE SUBLANDLORD PROPERTY
"AS IS AND WHERE IS, WITH ALL FAULTS, IF ANY", IN THE CONDITION THEY ARE IN AS
OF THE EFFECTIVE DATE, AND NO WARRANTIES, EXPRESS OR IMPLIED, HAVE BEEN MADE BY
SELLER REGARDING THEIR PHYSICAL CONDITION, CAPACITY, QUALITY, VALUE,
WORKMANSHIP, OPERATING CAPABILITY OR PERFORMANCE, OR THEIR COMPLIANCE WITH
APPLICABLE LAWS, OR THEIR FITNESS OR SUITABILITY FOR BUYER'S PURPOSES. NO
WARRANTIES, EXPRESS OR IMPLIED, CONTAINED IN THE UNIFORM COMMERCIAL CODE OR
OTHERWISE (INCLUDING, WITHOUT LIMITATION, THE IMPLIED WARRANTY OF
MERCHANTABILITY AND THE IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE)
SHALL APPLY TO THE SALE OF THE SUBLANDLORD PROPERTY, AND BUYER HEREBY DISCLAIMS
AND NEGATES THE RIGHT TO ANY SUCH WARRANTIES.
2. As of the Effective Date, Seller represents and warrants that: (a)
Seller is lawfully possessed of good title to the Sublandlord Property; (b)
Seller has the right and authority to convey the Sublandlord Property; and (c)
the Sublandlord Property shall be conveyed to Buyer free and clear of all
security interests, liens and encumbrances.
3. Possession of the Sublandlord Property shall be delivered to Buyer on
the Effective Date set forth above.
4. All applicable sales, use, transfer and documentary taxes arising out
of the transfer of the Sublandlord Property (but excluding sales taxes
applicable to Seller's period of ownership and income taxes of Seller arising
out of the sale) shall be paid by Buyer.
5. Notwithstanding the foregoing, if the Sublease is terminated due to
the failure of any of the conditions set forth in Section 1(c) of the Sublease,
the Sublandlord Property shall be deemed not conveyed to Buyer.
1
6. This ▇▇▇▇ of Sale shall be governed, construed and enforced in
accordance with the laws of the Commonwealth of
Massachusetts.
IN WITNESS WHEREOF, this ▇▇▇▇ of Sale has been executed in the Commonwealth
of
Massachusetts, to be effective on the Effective Date first set forth above.
BUYER: SELLER:
SONUS NETWORKS, INC., a Delaware CISCO SYSTEMS, INC., a California
corporation corporation
By: By:
------------------------------- -------------------------------
Name: Name:
------------------------------- -------------------------------
Title: Title:
------------------------------- -------------------------------
By: By:
------------------------------- -------------------------------
Name: Name:
------------------------------- -------------------------------
Title: Title:
------------------------------- -------------------------------
2
COMMONWEALTH OF
MASSACHUSETTS)
)SS
COUNTY OF MIDDLESEX)
I, _______________________________, a Notary Public, in and for the County and
State aforesaid, DO HEREBY CERTIFY that _____________________________ and
___________________________, personally known to me to be the
__________________________ and __________________________ of Sonus Networks,
Inc., a Delaware corporation, and the same person(s) whose name(s) are/is
subscribed to the foregoing instrument, appeared before me this day in person
and acknowledged to me that he/she/they, being thereunto duly authorized, signed
and delivered said instrument as their own free and voluntary act, and the free
and voluntary act of said corporation, for the uses and purposes set forth
therein.
GIVEN under my hand and Notarial seal this __ day of _________, 2003.
------------------------------
Notary Public
My Commission expires:
_________________________
STATE OF CALIFORNIA )
)SS
COUNTY OF SANTA ▇▇▇▇▇ )
I, _______________________________, a Notary Public, in and for the County and
State aforesaid, DO HEREBY CERTIFY that _____________________________ and
___________________________, personally known to me to be the
__________________________ and __________________________ of CISCO SYSTEMS,
INC., a California corporation, and the same person(s) whose name(s) are/is
subscribed to the foregoing instrument, appeared before me this day in person
and acknowledged to me that he/she/they, being thereunto duly authorized, signed
and delivered said instrument as their own free and voluntary act, and the free
and voluntary act of said corporation, for the uses and purposes set forth
therein.
GIVEN under my hand and Notarial seal this __ day of _________, 20___.
------------------------------
Notary Public
My Commission expires:
_________________________
3
SCHEDULE 1
SUBLANDLORD PROPERTY
The following Property located within the Sublease Premises as of the
Commencement Date set forth in the Sublease:
Workstations (singles & doubles)
Workspaces - Fax Copy Printer
Office Furniture Set Ups
Training Tables
Cafeteria Tables
Stackable Chairs
Small Conference Room Set Ups
Medium Conference Room Set Ups
Large Conference Room Set Ups
Lobby Furniture
4
EXHIBIT X
CONSENT TO SUBLEASE
THIS CONSENT TO SUBLEASE dated as of September 23, 2003 (this "Consent"),
is entered into by and among CSDV, LIMITED PARTNERSHIP, a Delaware limited
partnership ("Landlord"), CISCO SYSTEMS, INC., a California corporation
("Tenant"), and
SONUS NETWORKS INC., a Delaware corporation ("Subtenant"), with
reference to the following Recitals:
R E C I T A L S
WHEREAS, 250 Apollo Investors, LLC ("Original Landlord") and Tenant
have entered into that certain Lease Agreement (NNN) dated March 2, 1999 (the
"Lease"), a copy of which is attached hereto as EXHIBIT "A", wherein Landlord
leased to Tenant certain premises (the "Premises") consisting of a two-story
building consisting of approximately 144,375 rentable square feet, located at
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇., and more particularly described in
the Lease. Landlord is the successor in interest to Original Landlord under the
Lease.
WHEREAS, Tenant desires to sublease to Subtenant a portion of the
Premises consisting of approximately 133,621 rentable square feet (the
"Subleased Premises") more particularly described in and pursuant to the
provisions of that certain Sublease dated as of October__, 2003 (the
"Sublease"), a copy of which is attached hereto as EXHIBIT "B".
WHEREAS, Tenant desires to obtain Landlord's consent to the Sublease.
NOW, THEREFORE, in consideration of the mutual promises set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, Landlord hereby consents to the Sublease, such
consent being subject to and upon the following terms and conditions to which
Tenant and Subtenant hereby agree:
1. All initial capitalized terms not otherwise defined in this
Consent shall have the meanings set forth in the Lease. In the event of any
conflict between the terms of the Sublease and the terms of this Consent, the
terms of this Consent shall control.
2. This Consent shall not be effective and the Sublease shall not be
valid nor shall Subtenant take possession of the Subleased Premises unless and
until (a) a fully executed original of this Consent is delivered to Landlord,
(b) a fully executed original of the Sublease in the form attached hereto as
EXHIBIT "B" is delivered to Landlord, and (c) a fully executed original Estoppel
Certificate in the form attached hereto as EXHIBIT "C" is delivered to Landlord.
3. The Sublease is and shall be at all times subject and subordinate
to (a) all
5
of the covenants, agreements, terms, provisions and conditions contained in the
Lease, including, without limitation, any provisions regarding conflicts of laws
and/or the applicability or venue thereof, (b) any prior ground lease and any
prior mortgage or deed of trust, and (c) all matters of record affecting the
Premises and all laws, ordinances and regulations now or hereafter affecting the
Premises. The parties expressly acknowledge and agree that notwithstanding the
terms of the Sublease, Subtenant shall carry insurance in the amounts and
pursuant to the requirements contained in Article 11 of the Lease, naming
Sublandlord and Master Landlord as additional insureds.
Notwithstanding anything to the contrary contained in the Lease,
the parties hereby acknowledge and agree that Subtenant shall have one (1)
option (the "Option") to extend the Term of the Lease as to the entire Premises
only. Subtenant shall exercise such option to extend by giving written notice to
Landlord of its desire to do so not later than twenty-four (24) months prior to
the expiration of the Term, provided, that at the time of the exercise,
Subtenant's net cash position after current liabilities is not less than
$50,000,000. Upon a timely exercise of the Option, Subtenant shall enter into a
direct lease with Landlord based upon the terms of the Lease as it pertains to
the Premises, as amended or modified by this Consent, for a period of three (3)
years (the "Extension Period"), provided that at the time of Subtenant's
exercise, there is not then an Event of Default (as defined in Section 19 of the
Lease) on the part of Tenant or Subtenant. The Extension Period shall commence
on the day immediately following the last day of the original Term and shall end
on the last day of the thirty-sixth month thereafter. In the event that
Subtenant fails to give notice to Landlord within the time period provided
herein, the Lease shall automatically terminate at the end of the original Term,
and Subtenant shall have no further option to extend the Term. The Extension
Period shall be on all the terms and conditions of the Lease, as hereby amended,
except that: (i) Subtenant shall have no further option to extend the Term, and
(ii) the Base Rent for the Extension Period shall be the Fair Market Rental
Value (as defined below) of the Premises for the Extension Period, determined
pursuant to this Section 3.
If Subtenant subleases any portion of the Premises or assigns or
otherwise transfers any interest under the Lease to any person or entity prior
to the exercise of the Option, the Option shall lapse. If Subtenant subleases
any portion of the Premises or assigns or otherwise transfers any interest of
Subtenant under the Lease to any person or entity after the exercise of the
Option but prior to the commencement of the Extension Period (whether with or
without Landlord's consent), the Option shall lapse and the term of the Lease
shall expire as if such Option were not exercised.
Basic Rental for the Premises shall be increased on the first day
of the Extension Period to an amount equal to the "Fair Rental Value" of the
Premises (which Fair Rental Value determination may include increases in rent
during the Extension Period) as of the first day of the Extension Period, which
Fair Rental Value shall be determined by Landlord in its sole but reasonable
discretion, after evaluating, among other things, the rents for comparable space
in comparable buildings in the greater Boston area, but in no event shall the
Base Rent be less than $14.00 per rentable square foot. Landlord shall notify
Subtenant in writing of such determination of Fair Rental Value within thirty
(30) days after Landlord's receipt of Subtenant's notice exercising the Option.
If Subtenant shall dispute Landlord's determination of Fair Market
6
Rental Value for the Premises, then Subtenant shall have the right to submit the
issue of Landlord's reasonableness (but not the Fair Market Rental Value) for
neutral binding arbitration (and not by court action) to the American
Arbitration Association in accordance with the rules of such Association then in
effect. Subtenant shall exercise such right of arbitration by delivering written
notice of such election within thirty (30) days after receipt of Landlord's
notice of Fair Market Rental Value. If the arbitrators shall decide that
Landlord's determination of Fair Market Rental Value was reasonable, then Fair
Market Rental Value shall be the amount previously determined by Landlord. If
the arbitrators shall determine that Landlord acted unreasonably, then Landlord
shall redetermine the Fair Market Rental Value in its sole but reasonable
discretion, provided that Subtenant shall again have the right to challenge
Landlord's reasonableness in the manner set forth above. In the event that the
arbitrators determine that Landlord acted unreasonably in redetermining the Fair
Market Rental Value, Subtenant may revoke its exercise of the Option by giving
Landlord written notice of such revocation within ten (10) days of the second
determination by the arbitrators that Landlord acted unreasonably and the Lease
shall terminate on the Expiration Date. In no event shall the arbitrators be
permitted to determine rental value under the Lease. The decision of the
arbitrators shall be binding upon both parties. Each party shall share equally
the cost of the arbitration process.
In view of the foregoing Option in favor of Subtenant, the
parties hereby acknowledge and agree that Tenant shall have no further right to
extend the Lease, and Addendum 1 of the Lease is hereby deleted and of no
further force and effect.
4. Subtenant does hereby expressly assume and agree to be bound by
and to perform and comply with, for the benefit of Landlord, each and every
obligation of Tenant under the Lease applicable to the Subleased Premises.
Notwithstanding the Sublease or Landlord's consent thereto, Tenant shall remain
fully and primarily liable for the payment of Rents and all other amounts
required to be paid by Tenant under the Lease and for the performance of all
other obligations of Tenant under the Lease.
5. The acceptance of Rents or other amounts by Landlord from
Subtenant or anyone else liable under the Lease shall not be deemed a waiver by
Landlord of any provisions of the Lease.
6. The execution of this Consent by Landlord shall in no way
constitute any representation or warranty whatsoever by Landlord, express or
implied, relating to the Lease, the Premises, the Subleased Premises or any
other matter relating to Tenant's or Subtenant's tenancy, including without
limitation, the physical condition or square footage of the Premises or the
Subleased Premises, and Tenant and Subtenant acknowledge and agree that they are
not relying on any such representation or warranty in entering into the Sublease
or consummating the transactions contemplated by the Sublease and each of them
hereby waives any claim against Landlord with respect to any such matters.
7. This Consent shall not constitute a consent to any subsequent
subletting or assignment and shall not relieve Tenant or any person claiming
under or through Tenant of the obligation to obtain the consent of Landlord,
pursuant to Section 14 of the Lease, to any future assignment or sublease
(including, without limitation any future assignment or sublease of the
7
Sublease).
8. Landlord may consent to subsequent subletting and assignments of
the Lease or the Sublease or any amendments or modifications thereto and shall
use its best efforts to notify Tenant and anyone else liable under the Lease,
but with no liability for failing to do so, and Landlord's failure to obtain any
such consent shall not relieve such persons from liability.
9. Any act or omission of Subtenant or anyone claiming under or
through Subtenant that violates any of the provisions of the Lease shall be
deemed a violation of the Lease by Tenant.
10. In the event of any default of Tenant under the Lease, Landlord
may proceed directly against Tenant, any guarantors or anyone else liable under
the Lease or the Sublease without first exhausting Landlord's remedies against
any other person or entity liable thereon to Landlord.
11. The Subleased Premises shall (subject to all of the covenants and
agreements of the Lease) be used solely for the purposes as described in the
Lease and for no other use or purpose.
12. In the event of any default of Tenant in the performance of its
obligations under the Lease and termination of the Lease or re-entry or
repossession of the Premises by Landlord, then Landlord may, at its option and
without being obligated to do so, require Subtenant to attorn to Landlord;
provided, that the exercise of such option shall in no way waive any rights
Landlord may have against Tenant or any other party with respect to such default
or release Tenant or any such other party from its obligations under the Lease
or otherwise. In the event Landlord exercises such option, Landlord and
Subtenant shall be bound by the terms of the Sublease from the time of the
exercise of such option to the date of termination of the Sublease, but Landlord
shall not (a) be bound by any prepayment of more than one month's rent or liable
for any security deposit paid by Subtenant unless actually delivered to
Landlord, (b) be liable for any previous act or omission of Tenant under the
Lease or for any other defaults of Tenant under the Sublease, (c) be subject to
any defenses or offsets accrued previous to the date Landlord exercises such
option which Subtenant may have against Tenant or (d) be bound by any changes or
modification made to the Sublease without the written consent of Landlord. In
the event Landlord does not exercise such option, then upon the termination of
the Lease and the delivery of written notice to Subtenant, the Sublease shall
terminate and be of no further force or effect, except with respect to
obligations relating to Subtenant's occupancy of the Subleased Premises that
survive the termination of the Lease or the Sublease, including without
limitation, indemnity obligations under the Lease or the Sublease and
obligations relating to removal of Subtenant's property from and restoration of
the Subleased Premises.
13. Tenant hereby assigns and transfers to Landlord all of Tenant's
right, title and interest in the rentals and income arising from the Sublease,
subject however to the following terms of this Section 13:
(a) Landlord, by executing this Consent, agrees that until a default
shall occur
8
in the performance of Tenant's obligations under the Lease, Tenant may
receive, collect and enjoy the rents accruing under the Sublease; provided,
that if, under the Lease, Landlord is entitled to any portion of such rent
that constitutes profit or excess rent due under the Lease, such portion
shall be promptly paid over to Landlord upon receipt by Tenant. However, if
Tenant shall default in the performance of any of its obligations under the
Lease, then Landlord may, at its option, subject to the provisions of
Section 12 above, receive and collect, directly from Subtenant, all rent
then owing and thereafter becoming due and payable under the Sublease as
such rent shall become due and payable under the Sublease; provided, that
the exercise of such option shall in no way waive any rights Landlord may
have against Tenant or any other party with respect to such default or
release Tenant or any such other party from its obligations under the Lease
or otherwise. All such rent payable under the Sublease so collected by
Landlord shall be applied against any Rents and Additional Charges payable
by Tenant to Landlord under the Lease. Landlord shall not, by reason of
this assignment of the Sublease nor by reason of the collection of rents
from Subtenant, be deemed liable to Subtenant for any failure of Tenant to
perform and comply with Tenant's obligations under the Lease or the
Sublease. Nothing contained herein shall be deemed to create any right of
Tenant to the refund of any rents or other amounts paid or payable to
Landlord by Subtenant arising or accruing after the expiration or earlier
termination for any reason of the Lease.
(b) Tenant hereby irrevocably authorizes and directs Subtenant,
subject to the provisions of Section 13(a) hereof, upon receipt of any
written notice from Landlord stating that a default exists in the
performance of Tenant's obligations under the Lease, to pay to Landlord the
rents and other amounts due and to become due and payable under the
Sublease as such rents and other amounts shall become due and payable under
the Sublease. Tenant agrees that Subtenant shall have the right to rely
upon any such statement and request from Landlord, and that Subtenant shall
pay such rents and other amounts to Landlord without any obligation or
right to inquire as to whether such default exists and notwithstanding any
notice from or claim from Tenant to the contrary and Tenant shall have no
right or claim hereunder against Subtenant for any such rents or other
amounts so paid by Subtenant. Subject to Landlord's rights under Section 12
above, such payments to Landlord shall satisfy and discharge Subtenant's
obligation for the payment of rent and other amounts under the Sublease to
the full extent of such payments made to Landlord.
14. It is expressly understood and agreed that notwithstanding
anything in the Sublease or the Lease to the contrary, and notwithstanding any
applicable law to the contrary, the liability of Landlord hereunder (including
any successor landlord) and any recourse by Subtenant or Tenant against Landlord
shall be limited solely and exclusively to the interest of Landlord in and to
the Building, and neither Landlord, nor any of its constituent partners, shall
have any personal liability therefor, and Tenant and Subtenant hereby expressly
waive and release such personal liability on behalf of itself and all persons
claiming by, through or under Tenant or Subtenant. Under no circumstances shall
Landlord be liable for injury to Tenant's or Subtenant's business or for any
loss of income or profit therefrom.
This Consent to Sublease is being executed by CB ▇▇▇▇▇▇▇ ▇▇▇▇▇
Investors, LLC, a
9
Delaware limited liability company ("CB ▇▇▇▇▇▇▇ ▇▇▇▇▇"), on behalf of Landlord.
No present or future officer, director, employee, trustee, partner, member,
manager, retirant, beneficiary, internal investment contractor, investment
manager or agent of Landlord shall have any personal liability, directly or
indirectly, and recourse shall not be had against any such officer, director,
employee, trustee, partner, member, manager, retirant, beneficiary, internal
investment contractor, investment manager or agent under or in connection with
the Sublease or any other document or instrument heretofore or hereafter
executed in connection with the Sublease. Tenant and Subtenant hereby waive and
release any and all such personal liability and recourse. The limitations of
liability provided herein are in addition to, and not in limitation of, any
limitation on liability applicable to Landlord provided by law or in any other
contract, agreement or instrument. Tenant and Subtenant further acknowledge that
CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ has consented to this Sublease as investment manager to
Landlord and Tenant and Subtenant agree that all persons dealing with CB ▇▇▇▇▇▇▇
▇▇▇▇▇ must look solely to Landlord (for which CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ is acting as
investment manager) for the enforcement of any claims arising under the Lease or
the Sublease (subject to the limitations upon Landlord's liability set forth
above), as neither CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ nor any of its affiliated entities
(including, but not limited to CB ▇▇▇▇▇▇▇ ▇▇▇▇▇, Inc. and CB ▇▇▇▇▇▇▇ ▇▇▇▇▇
Services, Inc.) nor any of their respective officers, directors, agents,
managers, trustees, employees, members, investment managers, partners or
shareholders assume any personal, corporate, partnership, limited liability
company, or other liability for any of the obligations entered into by CB
▇▇▇▇▇▇▇ ▇▇▇▇▇ as investment manager for Landlord.
15. Tenant hereby acknowledges that Landlord or its affiliate is a
unit of the California State and Consumer Services Agency established pursuant
to Title I, Division 1, Part 13 of the California Education Code, Sections 22000
et seq., as amended (the "Ed Code"). As a result, Tenant acknowledges that
Landlord is prohibited from engaging in certain transactions with a "school
district or other employing agency" or a "member, retirant or beneficiary" (as
those terms are defined in the Ed Code). In addition, Landlord may be subject to
certain restrictions and requirements under the Internal Revenue Code, 26 U.S.C.
Section 1 et seq. (the "Code"). Accordingly, Tenant represents and warrants to
Landlord that Tenant is neither a school district or other employing agency nor
a member, retirant or beneficiary; and, to Tenant's knowledge (a) Tenant has not
made any contribution or contributions to Landlord (other than the consideration
set forth in the Lease); (b) neither a school district or other employing
agency, member, retirant, participant nor beneficiary, nor any person who has
made any contribution to Landlord, nor any combination thereof, is related to
Tenant by any relationship described in Section 267(b) of the Code; (c) neither
Landlord, CB ▇▇▇▇▇▇▇ ▇▇▇▇▇, their affiliates, related entities, agents,
officers, directors or employees, nor any Landlord board member, trustee, agent,
related entity, affiliate, employee or internal investment contractor (both
groups collectively, "Landlord Affiliates") has received or will receive,
directly or indirectly, any payment, consideration or other benefit from Tenant
or any affiliate of Tenant in connection with the transaction contemplated by
this Consent (excluding any benefit derived from the ownership, if any, of
publicly traded stock in Tenant or any affiliate of Tenant or consideration set
forth in the Lease or this Consent), nor does any Landlord Affiliate have any
agreement or arrangement with Tenant or any person or entity affiliated with
Tenant relating to the transactions contemplated by this Consent, except as
disclosed to and expressly approved by Landlord; and (d) no Landlord's
Affiliates have any direct or indirect ownership interest in Tenant or any
person or entity affiliated with Tenant (other than the ownership, if any, of
publicly traded stock in Tenant or any
10
entity affiliated with Tenant), except as disclosed to and expressly approved by
Landlord. Landlord acknowledges that Tenant is a publicly held company, and its
affiliates may be publicly held companies, and that Landlord may own shares in
such companies, and such publicly held companies may employ former teachers who
may have made contributions to Landlord.
16. Subtenant hereby acknowledges that Landlord or its affiliate is a
unit of the California State and Consumer Services Agency established pursuant
to Title I, Division 1, Part 13 of the California Education Code, Sections 22000
et seq., as amended (the "Ed Code"). As a result, Subtenant acknowledges that
Landlord is prohibited from engaging in certain transactions with a "school
district or other employing agency" or a "member, retirant or beneficiary" (as
those terms are defined in the Ed Code). In addition, Landlord may be subject to
certain restrictions and requirements under the Internal Revenue Code, 26 U.S.C.
Section 1 et seq. (the "Code"). Accordingly, Subtenant represents and warrants
to Landlord that Subtenant is neither a school district or other employing
agency nor a member, retirant or beneficiary; and, to Subtenant's knowledge (a)
Subtenant has not made any contribution or contributions to Landlord (other than
the consideration set forth in the Lease); (b) neither a school district or
other employing agency, member, retirant, participant nor beneficiary, nor any
person who has made any contribution to Landlord, nor any combination thereof,
is related to Subtenant by any relationship described in Section 267(b) of the
Code; (c) neither Landlord, CB ▇▇▇▇▇▇▇ ▇▇▇▇▇, their affiliates, related
entities, agents, officers, directors or employees, nor any Landlord board
member, trustee, agent, related entity, affiliate, employee or internal
investment contractor (both groups collectively, "Landlord Affiliates") has
received or will receive, directly or indirectly, any payment, consideration or
other benefit from Subtenant or any affiliate of Subtenant in connection with
the transaction contemplated by this Consent (excluding any benefit derived from
the ownership, if any, of publicly traded stock in Subtenant or any affiliate of
Subtenant or consideration set forth in the Lease, Sublease or this Consent),
nor does any Landlord Affiliate have any agreement or arrangement with Subtenant
or any person or entity affiliated with Subtenant relating to the transactions
contemplated by this Consent, except as disclosed to and expressly approved by
Landlord; and (d) no Landlord's Affiliates have any direct or indirect ownership
interest in Subtenant or any person or entity affiliated with Subtenant (other
than the ownership, if any, of publicly traded stock in Subtenant or any entity
affiliated with Subtenant), except as disclosed to and expressly approved by
Landlord. Landlord acknowledges that Subtenant is a publicly held company, and
its affiliates may be publicly held companies, and that Landlord may own shares
in such companies, and such publicly held companies may employ former teachers
who may have made contributions to Landlord.
17. Nothing contained herein shall be deemed or construed to modify,
waive, impair or affect any of the covenants, agreements, terms, provisions or
conditions contained in the Lease or to waive any breach or default by Tenant in
the due keeping, performance or observance thereof.
18. This Consent may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which when taken together shall
constitute but one and the same instrument.
[SIGNATURES TO FOLLOW ON NEXT PAGE]
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IN WITNESS WHEREOF, Landlord, Tenant and Subtenant have caused their duly
authorized representatives to execute this Consent as of the date first above
written.
LANDLORD: CSDV, LIMITED PARTNERSHIP,
a Delaware limited partnership
By: CB ▇▇▇▇▇▇▇ ▇▇▇▇▇ Investors, LLC,
solely in its capacity as agent for
CSDV, LIMITED PARTNERSHIP
By:
--------------------------------
Name:
Title: Authorized Signatory
TENANT: CISCO SYSTEMS, INC.,
a California corporation
By:
---------------------------------------
Its:
--------------------------------------
SUBTENANT: SONUS NETWORKS, INC.,
a Delaware corporation
By:
---------------------------------------
Its:
---------------------------------------
12
EXHIBIT "A"
LEASE
16-A-1
EXHIBIT "B"
SUBLEASE
F
EXHIBIT "C"
ESTOPPEL CERTIFICATE
TO: CSDV, LIMITED PARTNERSHIP, a Delaware limited partnership ("Landlord").
CISCO SYTEMS, INC., a California corporation ("Tenant"), hereby certifies as
follows:
1. The undersigned is the Tenant under that certain Lease Agreement (NNN)
dated March 2, 1999 (the "Lease"), executed by Landlord, as Landlord, and
Tenant, as Tenant, covering certain premises (the "Premises"), consisting of a
two-story building consisting of an approximately 144,375 rentable square foot
building located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and more
particularly described in the Lease.
2. The term of the Lease commenced on February 1, 2000 and the expiration
date of the Lease is January 31, 2007. Tenant has paid rent through September
30, 2003. The next monthly payment of Base Rent in the amount of $162,421.87 is
due on October 1, 2003.
3. Notwithstanding anything to the contrary contained in the Lease,
Tenant shall have no right to extend the term of the Lease. Tenant does not have
any preferential right to purchase all or any part of the Premises.
4. True, correct and complete copies of the Lease and all amendments,
modifications and supplements thereto are attached to the Consent with which
this Estoppel Certificate is being delivered, and the Lease, as so amended,
modified and supplemented, is in full force and effect, and represents the
entire agreement between Tenant and Landlord with respect to the Premises. There
are no amendments, modifications or supplements to the Lease, whether oral or
written, except as follows (if none, write "none"): None.
5. All space and improvements leased by Tenant have been completed and
furnished in accordance with the provisions of the Lease and Tenant has accepted
and taken possession of the Premises.
6. Landlord is not in any respect in default in the performance of the
terms and provisions of the Lease. Tenant has not assigned, transferred or
hypothecated the Lease or any interest therein or subleased all or any portion
of the Premises.
7. There are no offsets or credits against rentals payable under the
Lease and no free period or rental concessions have been granted to
Tenant, except as follows (if none, write "none"): NONE.
Notwithstanding the foregoing, although Tenant currently has no
knowledge of offsets, credits, refunds due or set offs against
Landlord arising from the Lease, Tenant does not waive the right to
conduct audits of the Lease pursuant to Section 5.5 therein. Should an
audit conducted by the Tenant of the Lease reveal a claim for credits,
refunds due, set offs against Landlord, concessions, rebates,
allowances or free rent, Tenant reserves the right to make claim for
such credits, refunds due, set offs against
F
Landlord, concessions, rebates, allowances or free rent pursuant to
Section 5.5.
8. For informational purposes only, Tenant has no knowledge of any
processing, use, storage, disposal or treatment of any hazardous or toxic
material or substance on the Premises except as follows (if none, write "none"):
None.
This Certificate is given to Landlord with the understanding that Landlord
will rely hereon in connection with the sublease to Sonus Networks, Inc.
Following such sublease, Tenant agrees that the Lease shall remain in full force
and effect and shall bind Tenant and such assignee and inure to the benefit of
the Landlord and its successors in interest.
DATED: October ___, 2003
"TENANT"
CISCO SYSTEMS, INC.,
a California corporation
By:
----------------------------------
Its:
---------------------------------
F