California-Santa Clara-3990 Freedom Circle Sublease - Transmeta Corp. and Mitel Inc.
SUBLEASE
Sublandlord: Transmeta Corporation Master
Premises: 3990 Freedom Circle
Santa Clara, California
Subtenant: Mitel, Inc. Date: October 28, 1998
1. Parties:
This Sublease is made and entered into as of Wednesday, October 28, 1998,
by and between Transmeta Corporation ("Sublandlord") and Mitel, Inc.
("Subtenant"), under the Master Lease dated April 2, 1998 between John Arrillaga
and Richard T. Peery as "Landlord", and Sublandlord as "Tenant", ("Master
Lease"). A copy of the Master Lease is attached hereto as "Attachment I" and
incorporated herein by this reference. Pursuant to the Master Lease, Sublandlord
leases all of that certain Forty-five Thousand (45,000+/-) square foot,
two-story building located at 3990 Freedom Circle, Santa Clara, California (the
"Master Premises").
2. Provisions Constituting Sublease:
2.1 This Sublease is subject to all of the terms and conditions of the
Master Lease. Subtenant hereby assumes and agrees to perform all of the
obligations of "Tenant" under the Master Lease to the extent said obligations
apply to the Subleased Premises and Subtenant's use of the Common Areas as
depicted in "Exhibit A" attached, except as specifically set forth herein.
Sublandlord hereby agrees to use reasonable efforts to cause Landlord under the
Master Lease to perform all of the obligations of Landlord thereunder to the
extent said obligations apply to the Subleased Premises and Subtenant's use of
the Common Areas. Neither Subtenant nor its employees, agents, contractors or
invitees ("Subtenant's Agents") shall commit on the Subleased Premises or on any
other portion of the Master Premises any act or omission which violates the
rights of any other party or parties hereto who are affected thereby, neither of
the parties hereto will, by renegotiation of the Master Lease assignment,
subletting, default or any other voluntary action, avoid or seek to avoid the
observance or performance of the terms to be observed or performed hereunder by
such party, but will at all times in good faith assist in carrying out all the
terms of this Sublease and in taking all such action as may be necessary or
appropriate to protect the rights of the other party or parties hereto who are
affected thereby against impairment. Nothing contained in this Section 2.1 or
elsewhere in this Sublease shall prevent or prohibit Sublandlord (a) from
exercising its right to terminate the Master Lease pursuant to the terms thereof
or (b) from assigning its interest in this Sublease or subletting portions of
the Master Premises other than the Subleased Premises.
2.2 With respect to all of the provisions of the Master Lease incorporated
into this Sublease, wherever the word "Premises" is used in the Master Lease,
for purposes of this Sublease, the word "Subleased Premises" shall be
substituted and any calculation of charges shall be prorated on the basis of the
proportionate share which the Subleased Premises represents per paragraph 3.2
below (i.e. 30,000 square feet); wherever in the Master Lease the word "Tenant"
appears, for purposes of this Sublease, the word "Subtenant" shall be
substituted; wherever in the Master Lease the word "Landlord" appears, for the
purposes of this Sublease, the word "Sublandlord" shall be substituted.
Notwithstanding the foregoing,
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the word "Landlord" in Paragraph 5 of the Master Lease shall be deemed to refer
to "Master Landlord", and the word "Sublandlord" shall not be substituted
therefor. All of the terms and conditions contained in the Master Lease are
incorporated herein, except as specifically provided below, and the terms and
conditions of this Sublease, except the following paragraphs of the Master Lease
which shall solely be the obligation of Sublandlord: the description of the
premises leased pursuant to the Master Lease, Paragraphs 2, 3, 4A, 4F, 34, 41,
43, 55 and substitute "Exhibit B" with "Exhibit A of the Sublease" in Paragraph
44, and substitute the amount of $283,500.00 as noted in Paragraph 4g of the
Master Lease with $29,400.00.
3. Subleased Premises and Rent:
3.1 Subleased Premises:
Sublandlord leases to Subtenant and Subtenant leases from Sublandlord the
Subleased Premises upon all of the terms, covenants and conditions contained in
the Sublease. The Subleased Premises consists of approximately 33,600 +/- square
feet of the Master Premises and as shown in red on "Exhibit A" attached hereto,
approximately 22,500 square feet on the second floor and 11,100 square feet on
the first floor. Sublandlord represents and warrants to Subtenant that
Sublandlord is presently in possession of the Subleased Premises and has been
continuously since July 1, 1998. Sublandlord reserves the option to recapture a
certain approximate 2,846 to 2,890 +/- square feet on the first floor, as shown
on Exhibit A as indicated in "Exhibit A." In order to exercise this option,
Sublandlord must provide Subtenant with 60 days prior written notice and is
solely responsible for the cost and expense of demising and securing the space.
In the event that Sublandlord does recapture this space, there will be no
reduction in the monthly gross rent due from the Subtenant.
3.2 Rent:
<TABLE>
<CAPTION>
Approximate
Month NNN Rent Base Rent Rentable Area
<S> <C> <C> <C>
01 - 12 $56,700.00 per month $1.89/sf/mo. 30,000 sq.ft.
13 - 24 $56,700.00 per month $1.89/sf/mo. 30,000 sq.ft.
25 - 36 $66,900.00 per month $2.23/sf/mo. 30,000 sq.ft.
</TABLE>
Subtenant shall pay to Sublandlord rent for the Subleased Premises without
deductions, offset, prior notice or demand. Rent shall be payable by Subtenant
to Sublandlord in consecutive monthly installments on or before the first day of
each calendar month during the Sublease Term. This is a net rent. As set forth
in the Master Lease, Subtenant shall be responsible for all additional rent,
including, but not limited to Paragraphs 7, 10, 11, 12 and 15, based only on
30,000 square feet. All such expenses shall be determined on a pro-rata basis
and paid monthly to Sublandlord as additional rent, except Sublandlord shall be
responsible for costs associated with repairing or replacing the roof membrane
under Paragraph 10 of the Master Lease for the first twelve (12) months of the
Sublease term. All personal property insurance of Subtenant shall be the sole
responsibility of the Subtenant. Sublandlord shall not be responsible for
providing janitorial for Subleased Premises, however, Sublandlord shall be
responsible for maintaining the Common Areas as identified in "Exhibit A"
including, but not limited to, the restrooms. Maintenance shall be provided five
(5) days a week.
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3.3. Security Deposit:
In addition to the Rent specified above, Subtenant shall pay to Sublandlord
$70,000.00 as a non-interest bearing Security Deposit. Sublandlord shall return
to Subtenant, within ten days after Subtenant has vacated the Subleased
Premises, the Security Deposit less any sums due and owing to Sublandlord and/or
the cost to Sublandlord to cure any other of the Subtenant's breaches of the
Sublease, all in accordance with California Civil Code Section 1950.7 or any
successor statute thereto.
3.4 Subsequent to execution of the Sublease Agreement by both parties and
upon consent thereto by Landlord, Subtenant shall pay to Sublandlord the
Security Deposit and the first month's base rent and additional rent.
4. Rights of Access and Use:
4.1 Use:
Subtenant shall use the Subleased Premises only for those purposes
permitted in the Master Lease and the purpose of sales office, unless
Sublandlord and Master Landlord consent in writing to other uses prior to the
commencement thereof.
5. Sublease Term:
5.1 Sublease Term:
The Sublease Term shall commence on the earlier of December 1, 1998, or
upon substantial completion of Sublandlord's tenant improvements (demising the
space and restroom upgrade), whichever is sooner and subject to adjustment as
set forth in Paragraph 5.3 ("Commencement Date") and terminate thirty-six (36)
months after Sublease commencement. In no event shall the Sublease Term extend
beyond the Term of the Master Lease.
5.2 Upon the Commencement Date, Sublandlord shall deliver the Subleased
Premises with the roof, fire sprinkler system, HVAC system, electrical
(including all outlets), plumbing, exterior doors, interior doors and lighting
in good working condition. Sublandlord to have all systems serviced and warrant
that all are in a good, safe, working condition at Sublandlord's cost before
December 1, 1998.
5.3 Inability to Deliver Possession:
In the event Sublandlord is unable to deliver possession of the Subleased
Premises on December 1, 1998, Sublandlord shall not be liable for any damage
caused thereby, nor shall this Sublease be void or voidable except as provided
for in this paragraph 5.3 but Subtenant shall not be liable for Rent until such
time as Sublandlord offers to deliver possession of the Subleased Premises to
Subtenant, but the term hereof shall not be extended by such delay. If
Subtenant, with Sublandlord's consent, takes possession prior to commencement of
the term, Subtenant shall do so subject to all the covenants and conditions
hereof and shall pay Rent for the period ending with the commencement of the
term at the same rental as that prescribed for the first month of the term
prorated at the rate of 1/30th thereof per day. In the event Sublandlord has
been unable to deliver possession of the Subleased Premises or secure Landlord's
consent to this Sublease by Ninety (90) days Subtenant, at Subtenant's
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<PAGE> 4
option, may terminate this Sublease and Sublandlord shall return to Subtenant
all money Subtenant may have paid whether as a security deposit, rent or
otherwise.
6. Parking:
Sublandlord will grant Subtenant their prorata share of the parking spaces
granted to the building by the Master Lease. Said proration to be determined by
dividing square footage of Subleased Premises per paragraph 3.2 below (i.e.
30,000 square feet) by the total Master Premises' square footage (i.e. 45,000
square feet) then multiplying this percent (66.67%) by the total parking spaces
granted (135) for a total of approximately 90 parking spaces. Sublandlord will
not charge Subtenant for parking except as noted in Paragraph 6 in the Master
Lease.
7. HVAC Maintenance:
Notwithstanding Paragraph 10 of the Master Lease, Sublandlord shall be
responsible for maintaining heating and air conditioning systems which service
the Subleased Premises only, the cost of which will be included as part of
Subtenant's additional rent due on a monthly basis.
8. Tenant Improvements:
Sublandlord, at Sublandlord's sole cost and expense, shall demise the Subleased
Premises with floor to ceiling walls and upgrade the restrooms and all entrances
and egress routes within the Premises to current ADA code. Subtenant will have
to remove and restore only those improvements or alterations that Sublandlord
designates as such upon Sublandlord's approval of these improvements or
alterations. Sublandlord will provide Subtenant with an improvement allowance of
$280,000.00 based on the attached Exhibit A, which will be paid to the Subtenant
15 days after receipt of invoice and after verification by Transmeta's architect
and representative that the work has been completed. Any additional improvements
beyond this allowance will be at Subtenant's sole cost and expense. Subtenant
shall be responsible for constructing all improvements with Sublandlord's prior
written approval, and will employ a contractor jointly agreed upon by
Sublandlord and Subtenant. Sublandlord will not withhold its consent
unreasonably. Subtenant shall have both Sublandlord's and Master Landlord's
prior written consent.
9. Alterations:
Subtenant shall not make any alterations to the interior or exterior of the
Premises without prior written consent of Sublandlord.
10. Notices:
Any notice or report required or desired to be given regarding this Sublease
shall be in writing, may be given by personal delivery, by facsimile, by courier
service or by certified mail, return receipt requested. Any notice or report
addressed to Subtenant or to Sublandlord at the address shown below, shall be
deemed to have been given (I) on the date the U.S. Post Office certifies
delivery, nondeliverability or refusal of delivery if such notice or report was
deposited in the United States mail, certified, postage prepaid, (ii) when
delivered if given by personal delivery, (iii) on the business day following
deposit, cost prepaid, with Federal Express or similar private carrier, if next
business day delivery was requested and a delivery receipt is generated, and
(iv) in all other cases when actually received. Either party may change its
address by giving notice of the same in accordance with this Paragraph. The term
"business day" shall mean a day on which the carrier used (Federal Express or
other private carrier, or the U.S. Postal Service, as applicable) delivers,
whether by special request or in the ordinary course of operations.
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<PAGE> 5
All notices, demands, requests, advices or designations by Subtenant shall be
addressed to Sublandlord at its offices at Transmeta Corporation, 2540 Mission
College Boulevard, Santa Clara, California 95054. All notices, demands,
requests, advices or designations by Sublandlord or Master Landlord shall be
addressed to Subtenant at its offices at 205 Van Buren Street, Suite 400,
Herndon, VA 20170-5336 Attention: Law Department.
11. Agency:
Sublandlord and Subtenant acknowledge that CPS represents the Sublandlord, and
CPS and Cushman Realty represent the Subtenant, and therefore CPS will be acting
as a dual agent of each of the parties. We understand and consent to this dual
agency and waive any possible or actual conflict of interest which may arise
from this representation.
As a dual agent, CPS is obligated to disclose to both parties all material facts
or confidential information known to it which would affect the decisions of a
party. However, CPS will not be obligated to disclose, nor will it disclose, the
fact that either party is willing to offer more favorable terms than that
party's last authorized offer.
12. Broker Fee:
Sublandlord shall pay CPS and Cushman Realty, licensed real estate brokers
representing Sublandlord and Subtenant, fees set forth in a separate agreement
between Sublandlord and Broker. Subtenant shall have no obligation to Broker for
payment of any fees.
13. Broker:
Each party warrants and represents to the other party hereto that it has not
dealt with any brokers in connection with this Sublease other than the brokers
identified in Paragraph 12 of this Sublease (the "Brokers"). Each party hereby
indemnifies and holds the other party harmless from any and all loss, damage,
claim, liability, cost or expense (including, but not limited to, reasonable
attorneys' fees, expenses and court costs) arising out of or in connection with
any breach of the foregoing warranty and representation. The provisions of this
Paragraph shall survive the expiration or earlier termination of this Sublease.
14. Assignment and Subletting:
Notwithstanding any provision to the contrary in this Sublease, including,
without limitation, any provision of the Master Lease incorporated herein,
Sublandlord shall not withhold its consent to any assignment or subletting which
either does not require the consent of Master Landlord or which requires the
consent of Master Landlord and to which Master Landlord consents. If Subtenant
desires to Sublease the Subleased Premises, Sublandlord shall have Right of
First Refusal of such space. Upon receiving written notice of Subtenant's desire
to Sublease, Sublandlord shall respond in writing its decision to Sublease
within ten (10) days. The rental rate shall be the same as Paragraph 3.3.
15. Waiver of Subrogation:
Notwithstanding any provision to the contrary in this Sublease, including,
without limitation, any provision incorporated from the Master Lease, the
parties hereto release each other and their respective agents, employees,
successors, assignees and subtenants from all liability for damage to any
property that is caused by or results from a risk which is actually insured
against, which is required to be insured against by either party under this
Sublease or the Master Lease,
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<PAGE> 6
or which would normally be covered by the standard form of "all risk extended
coverage" property insurance, without regard to the negligence or willful
misconduct of the entity so released. Each party shall use its best efforts to
cause each insurance policy it obtains to provide that the insurer thereunder
waives all right of recovery by way of subrogation as required herein in
connection with any injury or damage covered by the policy. If such insurance
policy cannot be obtained with such waiver of subrogation, or if such waiver of
subrogation is only available at additional cost and the party for whose benefit
the waiver is not obtained does not pay such additional cost, then the party
obtaining such insurance shall immediately notify the other party of that fact.
16. Waiver of Subrogation in Master Lease:
Upon Master Landlord's execution of the Consent to Sublease which follows this
Sublease, the waiver of subrogation provision in Paragraph 15 of the Master
Lease, notwithstanding any provision to the contrary in this Sublease or the
Master Lease, shall be effective between Master Landlord and Subtenant with
respect to insured casualties regarding the Subleased Premises as well as
between Master Landlord and Sublandlord.
17. Master Lease Enforcement
Sublandlord shall diligently attempt to enforce Master Landlord's obligations
under the Master Lease with respect to or affecting the Sublandlord Premises
and/or any common areas used (or available for use by Subtenant). Subtenant
acknowledges that Sublandlord is under no duty to make repairs or improvements
to the Subleased Premises accept as specifically set forth in the Master Lease.
18. Sublandlord's Cooperation
If Master Landlord's consent is required for any action which Subtenant desires
to take under this Sublease, Sublandlord shall cooperate with Subtenant to
obtain such consent. If Master Landlord fails to perform any of its obligations
under the Master Lease, Sublandlord, at the request of Subtenant, shall use its
good faith efforts to obtain Master Landlord's performance of such
obligation(s). Sublandlord shall cooperate with Subtenant in bringing any suit
or other action against Landlord in the event that Subtenant would otherwise be
barred from bringing such suit for want of privity, or any other reason.
19. Subtenant's Corporate Authority
Subtenant represents (a) that it is a corporation organized and existing under
the laws of the State of Delaware and is qualified to do business in the State
of California; (b) that this Sublease has been duly authorized by all required
corporate actions; and (c) that the persons executing the Sublease are
authorized to execute this Sublease on behalf of Subtenant.
20. Renewal Option
Tenant will have an option to extend the lease on the following terms:
a. One (1), twelve (12) month option;
b. To be exercised by written notice no earlier than 270 days nor later
than 180 days prior to the termination of the lease;
c. At a new base monthly rent of: $76,500.00 NNN; and
d. The option term will be granted only if Tenant is in compliance with
all lease terms when notice is given and on the first day of the
option period.
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21. Access
Subtenant shall have access to the Subleased Premises and the Common Areas 24
hours a day, every day. Master Landlord and Sublessor agree to be accompanied by
a Mitel employee if access is required.
SUBLANDLORD : Transmeta Corporation
BY: /s/ David R. Ditzel BY: /s/ Colin Hunter
------------------------------- ---------------------------------
TITLE: President & CEO TITLE: Corporate Secretary
---------------------------- ------------------------------
DATE: 10/29/98 DATE: 10/29/98
----------------------------- -------------------------------
SUBTENANT: Mitel, Inc.
BY: /s/ BY: /s/
------------------------------- ---------------------------------
TITLE: Asst. Corp. Ser. TITLE: Corporate Secretary
---------------------------- ------------------------------
DATE: 10/28/98 DATE: 10/28/98
----------------------------- -------------------------------
NOTICE TO SUBLANDLORD AND SUBTENANT: CPS IS NOT AUTHORIZED TO GIVE LEGAL OR TAX
ADVICE; NOTHING CONTAINED IN THIS SUBLEASE FOR ANY DISCUSSIONS BETWEEN CPS AND
SUBLANDLORD AND SUBTENANT SHALL BE DEEMED TO BE A REPRESENTATION OR
RECOMMENDATION BY CPS, OR ITS AGENTS OR EMPLOYEES AS TO THE LEGAL IMPACT OR TAX
CONSEQUENCES OF THIS DOCUMENT OR ANY TRANSACTION RELATING THERETO. ALL PARTIES
ARE ENCOURAGED TO CONSULT WITH THEIR INDEPENDENT FINANCIAL CONSULTANTS AND/OR
ATTORNEYS REGARDING THE TRANSACTION CONTEMPLATED BY THIS PROPOSAL.
CONSENT BY MASTER LANDLORD: The undersigned, Landlord under the Master Lease in
Exhibit "C", hereby consents to the subletting of the Premises described herein
on the terms and conditions contained in this Sublease. This consent shall apply
only to this Sublease and shall not be deemed to be a consent to any other
Sublease.
MASTER LANDLORD:
BY:________________________________ BY:________________________________
TITLE:_____________________________ TITLE:_____________________________
DATE:______________________________ DATE:_____________________________
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October 29, 1998
Mr. Richard Stiller
TRANSMETA CORPORATION
3940 Freedom Circle
Santa Clara, CA 95054
Re: CONSENT TO SUBLEASE TO MITEL, INC., A DELAWARE CORPORATION FOR A PERIOD OF
THREE YEARS, COMMENCING DECEMBER 1, 1998 AND TERMINATING NOVEMBER 30, 2001
Gentlemen:
This letter is written with regard to your proposed sublease of approximately
33,600 square feet of space (as shown on Exhibit A attached hereto) (the "Sublet
Premises") of the 45,000 square feet of space leased by Tenant at 3990 Freedom
Circle, Santa Clara, California, under Lease Agreement dated April 2, 1998
("Master Lease"), by and between John Arrillaga Survivor's Trust and Richard T.
Peery Separate Property Trust ("Master Landlord"), and Transmeta Corporation, a
California corporation ("Tenant"), which Tenant is proposing to sublease to
Mitel, Inc., a Delaware corporation ("Subtenant") on the terms and conditions
set forth in the proposed Sublease dated October 28, 1998, submitted by Tenant
to Master Landlord on October 29, 1998 (the "Sublease").
Pursuant to Master Lease Paragraph 19 ("Assignment and Subletting") Master
Landlord hereby approves Tenant's subleasing said space to Subtenant for the
thirty six month period ending November 30, 2001, subject to the following terms
and conditions:
1. Master Landlord's Consent shall in no way void or alter any of the terms
of the Lease by and between Master Landlord and Tenant, nor shall this
Consent alter or diminish in any way Tenant's obligations to Master
Landlord.
2. Tenant shall not give Subtenant any rights or privileges in excess of
those given Tenant under the terms of the Master Lease.
3. Subtenant shall not have a separate address from the address of the
Premises. Therefore, Tenant shall provide Subtenant with internal mail
delivery. Tenant and Subtenant shall share (the prorata shares to be
determined in a separate agreement between Tenant and Subtenant) the
existing signage allocated to Tenant for the Premises.
4. Notwithstanding anything to the contrary herein, Master Landlord has not
reviewed the
<PAGE> 9
terms of any agreement between Tenant and Subtenant, and in approving
said Sublease, Master Landlord is in no way approving any term, covenant
or condition therein contained, and said Sublease is subject and
subordinate to all terms, covenants and conditions of the Master Lease.
Master Landlord shall not be bound by any agreement other than the terms
of the Master Lease between Master Landlord and Tenant. Except as noted
herein, in the event of conflict in the terms, covenants and conditions
between the Sublease and the Master Lease, the terms, covenants and
conditions of the Master Lease shall prevail and take precedence over
said Sublease. Master Landlord does not make any warranties or
representations as to the condition of the Leased Premises or the terms
of the Lease between Master Landlord and Tenant. This Consent to
Sublease shall in no event be construed as consent to any future
sublease agreement (including any extensions and/or amendments to the
current Sublease) between Tenant and Subtenant, or any other party; and
any future sublease agreement (including any extensions and/or
amendments to the current Sublease) between Tenant and Subtenant, or any
other party shall require the prior written consent of Master Landlord.
Under no circumstances will Master Landlord consent to a sub-sublease or
assignment under the Sublease.
5. A. It is agreed by all parties hereto that in the event Master Landlord
terminates the Master Lease, pursuant to any right therein contained,
said Sublease shall automatically terminate simultaneously with the
Master Lease. Unless Master Landlord, at Master Landlord's sole option
and election, chooses to allow Subtenant to remain in possession of the
Sublet Premises leased under said Sublease subject to all terms,
covenants and conditions of said Master Lease by giving Subtenant
written notice prior to the effective date of termination of said Master
Lease, of Master Landlord's election to allow Subtenant to remain in
possession of the Sublet Premises in which event Subtenant shall be
entitled and obligated to remain in possession of the Sublet Premises
under the terms of said Sublease, subject to all terms, covenants and
conditions of the Master Lease, including, without limitation to,
payment of Basic Rent at the greater of: (i) the rate provided for in
the Master Lease, or (ii) the rate provided for in the Sublease. Such
election by Master Landlord shall not operate as a waiver of any claims
Master Landlord may have against Tenant. Following such written notice
by Master Landlord Subtenant shall then, as of the effective date of
said termination of said Master Lease, be liable to and shall attorn in
writing directly to Master Landlord as though said Sublease were
executed directly between Master Landlord and Subtenant; provided,
however, it is specifically agreed between the parties hereto, that
whether Master Landlord elects to allow Subtenant to remain in
possession of the Sublet Premises under the terms of the Sublease,
subject to the Master Lease, or allow said Sublease to automatically
terminate simultaneously with the Master Lease, Master Landlord shall
not, in any event, nor under any circumstances be responsible or liable
to Subtenant for (i) the return of any security deposit paid by
Subtenant to Tenant, nor shall Subtenant be given credit for any prepaid
rental or other monetary consideration paid by Subtenant to Tenant under
said Sublease; (ii) any other claim or damage of any kind or nature
whatsoever by reason of or in connection with Master Landlord's
termination of said Master Lease and/or Sublease; and (iii) any default
of Tenant under the Sublease.
<PAGE> 10
B. In the event Master Landlord has terminated the Master Lease, and has
not elected, in writing prior to the effective date of termination of
said Master Lease, to allow Subtenant to remain in the Sublet Premises
as set forth above, said Sublease shall terminate co-terminously with
the effective termination of the Master Lease automatically, without
notice, and Subtenant and/or Tenant, jointly and severally, shall
surrender the Sublet Premises to Master Landlord in good condition and
repair as of the effective termination of the Master Lease, with Master
Landlord having no obligation or liability whatsoever to Subtenant by
reason of or in connection with such early termination of the Master
Lease. In the event Subtenant and/or Tenant fails to timely surrender
the Sublet Premises to Master Landlord in good condition and repair as
of the date the Master Lease terminates, Subtenant and/or Tenant,
jointly and severally, shall be liable to Master Landlord in such event
for all damages, costs, claims, losses, liabilities, fees or expenses
sustained by Master Landlord, including, but not limited to, loss of
rental income, attorney's fees and court costs resulting from or in
connection with Subtenant's failure to timely vacate the Sublet Premises
and surrender the Sublet Premises to Master Landlord as of the effective
termination date of said Master Lease.
C. As a condition to Landlord's consent to the Sublease, by execution of
this Consent to Sublease, Subtenant hereby agrees to be bound by the
following provision in relation to both Tenant and Master Landlord:
If Master Landlord and Tenant jointly and voluntarily elect, for
any reason whatsoever, to terminate the Master Lease prior to the
scheduled Master Lease Termination Date, then this Sublease (if
then still in effect) shall terminate concurrently with the
termination of the Master Lease. Subtenant expressly acknowledges
and agrees that (1) the voluntary termination of the Master Lease
by Master Landlord and Tenant and the resulting termination of this
Sublease shall not give Subtenant any right or power to make any
legal or equitable claim against Master Landlord, including without
limitation any claim for interference with contract or interference
with prospective economic advantage, and (2) Subtenant hereby
waives any and all rights it may have under law or at equity to
challenge such an early termination of the Sublease, and
unconditionally releases and relieves Master Landlord, and its
officers, directors, employees and agents, from any and all claims,
demands, and/or causes of action whatsoever (collectively,
"Claims"), whether such matters are known or unknown, latent or
apparent, suspected or unsuspected, foreseeable or unforeseeable,
which Subtenant may have arising out of or in connection with any
such early termination of this Sublease. Subtenant knowingly and
intentionally waives any and all protection which is or may be
given by Section 1542 of the California Civil Code which provides
as follows: "A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor at the time
of executing the release, which if known by him must have
materially affected his settlement with debtor." The term of this
Sublease is therefore subject to early termination. Subtenant's
initials here below evidence (a) Subtenant's consideration of and
agreement to this early termination provision, (b) Subtenant's
acknowledgment that, in determining the net benefits to be derived
by
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Subtenant under the terms of this Sublease, Subtenant has
anticipated the potential for early termination, and (c)
Subtenant's agreement to the general waiver and release of Claims
above.
Initials: /s/ Initials: /s/
----------- ----------
Subtenant Tenant
6. In consideration of Master Landlord's consent to the Sublease, Tenant
irrevocably assigns to Master Landlord, as security for Tenant's
obligations under this Lease, all rent and income payable to Tenant
under the Sublease. Therefore Master Landlord may collect all rent due
under the Sublease and apply it towards Tenant's obligations under the
Master Lease. Notwithstanding anything to the contrary herein or in the
Master Lease, Tenant and Subtenant agree to pay same to Master Landlord
upon demand without further consent of Tenant and Subtenant required;
provided, however, that until the occurrence of a default by Tenant
under the Master Lease, Tenant shall have the right and obligation to
collect such rent. Tenant hereby irrevocably authorizes and directs
Subtenant, upon receipt of a written notice from Master Landlord stating
that a default exists in the performance of Tenant's obligations under
the Master Lease, to pay to Master Landlord the rents due and to become
due under the Sublease. Tenant agrees that Subtenant shall have the
right to rely on any such statement and request from Master Landlord,
and that Subtenant shall pay such rents to Master Landlord without any
obligation or right to inquire as to whether such default exists and
notwithstanding any notice or claim from Tenant to the contrary. Tenant
shall have no right or claim against Subtenant or Master Landlord for
any such rents so paid by Subtenant to Master Landlord. It is further
agreed between the parties hereto that neither Tenant's assignment of
such rent and income, nor Master Landlord's acceptance of any payment of
rental or other sum due by Subtenant to Tenant under said sublease,
whether payable directly to Master Landlord or endorsed to Master
Landlord by Tenant, shall in any way nor in any event be construed as
creating a direct contractual relationship between Master Landlord and
Subtenant, unless the Parties expressly so agree in writing and such
acceptance shall be deemed to be an accommodation by Master Landlord to,
and for the convenience of, Tenant and Subtenant. Any direct contractual
agreement between Master Landlord and Subtenant must be in writing.
7. Pursuant to the provisions of Paragraph 19 entitled "Assignment and
Subletting" of the Master Lease, Master Landlord hereby requires Tenant
to pay to Master Landlord, as Additional Rent, all rents and/or
additional consideration received by Tenant from said Sublease in excess
of the Basic Rent payable to Master Landlord in said Lease (after
deducting reasonable leasing commissions as provided for in the Lease)
(hereinafter referred to as "Excess Rent"). Tenant and Subtenant
acknowledge that any Excess Rent is owed to Master Landlord and Tenant
hereby agrees to pay any Excess Rent to Master Landlord as due under
said Sublease. Tenant and Subtenant represent and warrant to Master
Landlord that: (1) the information to be completed and provided by
Tenant and Subtenant on the attached Exhibit B "Summary of
Amounts/Consideration to be Paid by
<PAGE> 12
Subtenant" accurately represents amounts to be paid by Subtenant under
said Sublease; (2) no additional consideration is due Tenant under said
Sublease, other than the additional consideration (if any) identified on
Exhibit B; and (3) no changes in the terms and/or conditions of said
Sublease shall be made without Master Landlord's prior written approval.
8. This Consent is conditional upon Master Landlord's receipt of Master
Landlord's reasonable costs and attorney's fees, to which Master
Landlord is entitled under Paragraph 19 of the Master Lease. Tenant
shall pay such fees and costs to Landlord, pursuant to the invoice
provided to Tenant by Landlord with this Consent, upon execution of this
Consent by Tenant and Subtenant.
9. This Consent to Sublease shall only be considered effective, and Master
Landlord's consent to the Sublease given, when (i) Landlord receives
payment from Tenant of Landlord's costs, and (ii) this Letter Agreement
is executed by Master Landlord, Tenant, and Subtenant, and Guarantors
(if any) under the Master Lease.
Please execute this letter in the space provided below, obtain the signature of
Subtenant, and return all copies to our office no later than November 13, 1998.
IN THE EVENT TENANT FAILS TO RETURN THE FULLY EXECUTED DOCUMENTS TO LANDLORD BY
NOVEMBER 13, 1998, THIS CONSENT SHALL BE AUTOMATICALLY RESCINDED, IN WHICH
EVENT, TENANT SHALL BE REQUIRED TO RESUBMIT ITS REQUEST IN THE EVENT TENANT
DESIRES TO GO FORWARD WITH SAID SUBLEASE. A fully executed copy will be returned
to you after execution by the Master Landlord.
Very truly yours,
PEERY/ARRILLAGA
By /s/ JOHN ARRILLAGA
------------------------------------
John Arrillaga
(SIGNATURES CONTINUED ON FOLLOWING PAGE)
<PAGE> 13
THE UNDERSIGNED Tenant and Subtenant do hereby jointly and severally agree to
the terms and conditions of this Consent to Sublease.
TENANT: SUBTENANT:
TRANSMETA CORPORATION MITEL, INC.
a California corporation a Delaware corporation
By /s/ DAVID DITZEL By /s/
------------------------------- --------------------------------
Print Name David Ditzel Print Name
----------------------- ------------------------
Title President & CEO Title
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