EXHIBIT 10.1
SUBLEASE AGREEMENT
This SUBLEASE AGREEMENT ("Sublease") is made and entered into as of the
14th day of April, 2000 by and between FRANKLIN TEMPLETON CORPORATE SERVICES,
INC., a Delaware corporation ("Sublandlord"), and WIRELESS FACILITIES, INC., a
Delaware corporation ("Subtenant"), with respect to the following facts and
circumstances:
RECITALS
A. Spieker Properties, L.P., a California limited partnership
("Landlord") is the owner of approximately 29 acres and up to approximately
591,000 square feet (existing, under construction or planned) in 9 buildings
known as Bridge Pointe Corporate Centre within the Eastgate Technology Park in
San Diego, California (the "Project"). A depiction of the Project is attached
hereto as Exhibit "A" and incorporated herein by this reference. Phase A of the
Project consists of 4 existing buildings known as "Building 1" (also referred to
as the "Phase A-1 Premises") located at 4770 Eastgate Mall, "Building 2" (also
referred to as the "ADC Telecommunications Premises") located at 4790 Eastgate
Mall, "Building 3" (also referred to as the "Phase A-2 Premises") located at
4760 Eastgate Mall and "Building 4" (also referred to as the "Phase A-3
Premises") located at 4780 Eastgate Mall. Phase B of the Project consists of 2
buildings under construction known as "Building 5" (also referred to as the
"Phase B-2 Premises") located at 4810 Eastgate Mall and "Building 6" (also
referred to as the "Phase B-1 Premises") located at 4820 Eastgate Mall. Phase C
of the Project consists of 3 planned buildings known as "Buildings 7 through 9".
B. Landlord and Sublandlord entered into an Industrial Net Lease dated
September 2, 1998, assigned by that certain Assignment, Assumption and Consent
agreement dated January 1, 2000 (collectively, the "Phase B Lease") whereby
Landlord leased to Sublandlord the Phase B-1 Premises and the Phase B-2
Premises, upon the terms and conditions contained therein. A true, correct and
complete copy of the Phase B Lease is attached hereto as Exhibit "B" and made a
part hereof. All capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in the Phase B Lease.
C. Sublandlord and Subtenant are desirous of entering into a sublease of
the Phase B-2 Premises ("Sublease Premises") on the terms and conditions
hereafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto mutually covenant and agree as
follows:
1. Sublease. Sublandlord hereby subleases and demises to Subtenant
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and Subtenant hereby hires and subleases from Sublandlord the Sublease Premises
which contain 90,000 rentable square feet, upon and subject to the terms,
covenants and conditions hereinafter set forth.
2. Term.
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(a) The term of this Sublease ("Sublease Term") shall be for one
hundred fourteen months (114) commencing on November 1, 2000 regardless of the
status of the Tenant
Improvements as of that date ("Sublease Commencement Date") and shall terminate
on April 30, 2010 ("Sublease Expiration Date"). In the event Substantial
Completion (as defined below) of the Sublease Premises is completed prior to the
Sublease Commencement Date, Subtenant shall be permitted to occupy the Sublease
Premises without the payment of Rent until the Sublease Commencement Date. As
used herein, the term "Substantial Completion" shall mean (A) all of the
Sublease Premises' plumbing, heating, life safety, ventilation, air conditioning
and electrical systems are operational to the extent necessary to service the
Sublease Premises, (B) Landlord has substantially completed all work required to
be performed by Landlord in accordance with the Work Letter Agreement executed
among Landlord, Sublandlord and Subtenant of even date herewith and attached
hereto as Exhibit "D" ("Work Letter"), except minor "punch-list" items which
shall thereafter be promptly completed, (C) Subtenant has obtained a certificate
of occupancy for the Sublease Premises or its equivalent in accordance with the
Work Letter Agreement, and (D) Subtenant has been tendered access to the
Sublease Premises.
(b) Sublandlord shall deliver possession of the Sublease Premises to
Subtenant upon full execution of this Sublease and receipt of Landlord's consent
pursuant to Paragraph 14 hereof, with the roof and all plumbing, lighting,
heating, ventilating and air conditioning systems within the Sublease Premises
in good working order, at which time Subtenant shall have the right to commence
the Tenant Improvements pursuant to the Work Letter.
(c) Subtenant acknowledges that Subtenant has inspected and accepts
the Sublease Premises in its present condition, broom clean, "as is" and is
suitable for Subtenant's intended operations in the Sublease Premises, subject
to punch list items and latent defects not visually discoverable by Subtenant in
accordance with the Work Letter and Paragraph 2.B of the Master Lease. Subtenant
further acknowledges that except as set forth in the Work Letter or expressly
set forth in this Sublease, no representations as to the condition or repair of
the Sublease Premises and no promises to alter, remodel or improve the Sublease
Premises have been made by Landlord, Sublandlord or any agents of either party.
(d) After the Sublease Commencement Date, Subtenant shall promptly
execute and return to Sublandlord a "Start-Up Letter" in which Subtenant shall
agree, among other things, to acceptance of the Sublease Premises and to the
determination of the Sublease Commencement Date, in accordance with the terms of
this Sublease, but Subtenant's failure or refusal to do so shall not negate
Subtenant's acceptance of the Sublease Premises or affect determination of the
Sublease Commencement Date.
3. Subrental.
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(a) Base Rental. Beginning with the Sublease Commencement Date and
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thereafter during the Sublease Term and ending on the Sublease Expiration Date,
Subtenant shall pay to Sublandlord monthly installments of base rent ("Base
Rental") as set forth below. The first monthly installment of Base Rental and
Operating Expenses shall be paid by Subtenant upon the execution of this
Sublease. Base Rental and additional rent shall hereinafter be collectively
referred to as "Rent."
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Monthly Base Rental
Period (Per Square Foot)
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November 1, 2000 - July 31, 2001 $1.55
August 1, 2001 - July 31, 2002 $1.61
August 1, 2002 - July 31, 2003 $1.68
August 1, 2003 - April 30, 2004 $1.74
May 1, 2004 - April 30, 2005 $1.82
May 1, 2005 - April 30, 2006 $1.90
May 1, 2006 - April 30, 2007 $1.99
May 1, 2007 - April 30, 2008 $2.08
May 1, 2008 - April 30, 2009 $2.17
May 1, 2009 - April 30, 2010 $2.27
(b) Operating Expenses. Beginning with the Sublease Commencement
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Date and thereafter during the Sublease Term, Subtenant shall pay to Sublandlord
as additional rent under this Sublease, Subtenant's Proportionate Share of the
amounts that Sublandlord, as Tenant, has to pay Landlord, pursuant to Paragraph
7 of the Phase B Lease. "Subtenant's Proportionate Share" shall mean the
following: 100% of the Building in which the Phase B-2 Premises are located and
60% of Phase B of the Project.
(c) Payment of Rent. Except as otherwise specifically provided in
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this Sublease, Rent shall be payable in lawful money without notice or demand,
and without offset, counterclaim, or setoff in monthly installments, in advance,
on the first day of each and every month during the Sublease Term. All of said
Rent is to be paid to Sublandlord at its office at the address set forth in
Paragraph 12 herein, or at such other place or to such agent and at such place
as Sublandlord may designate by notice to Subtenant. Any additional rent payable
on account of items which are not payable monthly by Sublandlord to Landlord
under the Phase B Lease is to be paid directly to Sublandlord as and when such
items are payable by Sublandlord to Landlord under the Phase B Lease unless a
different time for payment is elsewhere stated herein. Sublandlord shall request
that copies of all notices sent by Landlord pursuant to the Phase B Lease also
be sent to Subtenant at the address set forth in Paragraph 12 below. In
addition, Sublandlord agrees to provide Subtenant with copies of any notices,
statements or invoices received by Sublandlord from Landlord pursuant to the
terms of the Phase B Lease.
(d) Security Deposit. Concurrently with the execution of this
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Sublease, Subtenant shall deposit with Sublandlord the sum of One Hundred
Thirty-Nine Thousand Five Hundred and no/100 Dollars ($139,500.00) ("Deposit"),
which shall be held by Sublandlord as
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security for the full and faithful performance by Subtenant of its covenants and
obligations under this Sublease. The Deposit is not an advance Rent deposit, an
advance payment of any other kind, or a measure of Sublandlord's damage in case
of Subtenant's default. If Subtenant defaults in the full and timely performance
of any or all of Subtenant's covenants and obligations set forth in this
Sublease, then Sublandlord may, from time to time, without waiving any other
remedy available to Sublandlord, use the Deposit, or any portion of it, to the
extent necessary to cure or remedy the default or to compensate Sublandlord for
all or a part of the damages sustained by Sublandlord resulting from Subtenant's
default. Subtenant shall immediately pay to Sublandlord within five (5) days
following demand, the amount so applied in order to restore the Deposit to its
original amount, and Subtenant's failure to immediately do so shall constitute a
default under this Sublease. If Subtenant is not in default with respect to the
covenants and obligations set forth in this Sublease at the expiration or
earlier termination of this Sublease, Sublandlord shall return the Deposit to
Subtenant after the expiration or earlier termination of this Sublease.
Sublandlord's obligations with respect to the Deposit are those of a debtor and
not a trustee. Sublandlord shall not be required to maintain the Deposit
separate and apart from Sublandlord's general and other funds and Sublandlord
may commingle the Deposit with any of Sublandlord's general or other funds.
Subtenant shall not at any time be entitled to interest on the Deposit.
(e) Late Charge. In addition to any other remedies of Sublandlord
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hereunder, Subtenant shall, without notice or demand, add to the amount of any
payment required to be made by Subtenant hereunder, and which is not paid and
received by Sublandlord on or before the fifth (5th) business day of each
calendar month, an amount equal to five percent (5%) of the delinquency for each
month or portion thereof that the delinquency remains outstanding to compensate
Sublandlord for the loss of the use of the amount not paid and the
administrative costs caused by the delinquency; the parties agreeing that
Sublandlord's damage by virtue of such delinquencies would be extremely
difficult and impracticable to compute and the amount stated herein represents a
reasonable estimate thereof. Any waiver by Sublandlord of any late charges or
failure to claim the same shall not constitute a waiver of other late charges or
any other remedies available to Sublandlord, such charge to accrue from the
date upon which such amount was due until paid.
4. Signage. Subtenant shall have the right to install at
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Subtenant's sole cost and expense up to two (2) business identification signs
identifying Subtenant on the upper exterior of the building and adjacent to the
building entrance doors of the building in which the Sublease Premises are
located, subject to Landlord's prior written approval, which approval shall not
be unreasonably withheld, delayed or conditioned. In addition, Subtenant shall
have the right to install one (1) business identification sign on the Project's
monument sign, subject to Landlord's prior written approval, which shall not be
unreasonably withheld, delayed or conditions. Except for the foregoing,
Subtenant shall have no right to install or keep Subtenant identification signs
in any other location outside the Sublease Premises. The size, design, color and
other physical aspects of all such permitted signs shall also be subject to
Landlord's prior written approval, which approval shall not be unreasonably
withheld, delayed or conditioned and shall also be subject to any covenants,
conditions or restrictions encumbering the Sublease Premises and any applicable
municipal or other governmental permits and approvals. The cost of all such
signs, including the installation, maintenance and removal thereof, shall be at
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Subtenant's sole cost and expense. If Subtenant fails to maintain its signs, or
if Subtenant fails to remove same 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 and Subtenant shall reimburse Sublandlord for all
actual costs incurred by Sublandlord to affect such removal.
5. Parking Density. 4.5 parking spaces per 1,000 square feet of the
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rentable area of the Sublease Premises.
6. Bonus Rent. Any Rent or other consideration realized by
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Subtenant under any sublease or assignment, in excess of the Rent payable
hereunder, after amortization of all transaction costs reasonably incurred in
connection therewith, including but not limited to reasonable brokerage
commission incurred by Subtenant, legal fees, costs of improvements, shall be
divided and paid, twenty-five percent (25%) to Subtenant, and seventy-five
percent (75%) to Sublandlord ("Bonus Rent"). In any subletting or assignment
undertaken by Subtenant, Subtenant shall diligently seek to obtain the maximum
rental amount available in the marketplace for comparable space available for
primary leasing.
7. Incorporation of Terms of Phase B Lease. This Sublease is
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subject and subordinate to the Phase B Lease. Subject to the modifications set
forth in this Sublease, the terms of the Phase B Lease are incorporated herein
by reference, and shall, as between Sublandlord and Subtenant (as if they were
Landlord and Tenant, respectively, under the Phase B Lease) constitute the terms
of this Sublease except to the extent that they are inapplicable to,
inconsistent with, or modified by, the terms of this Sublease. In the event of
any inconsistencies between the terms and provisions of the Phase B Lease and
the terms and provisions of this Sublease, the terms and provisions of this
Sublease shall govern. Subtenant acknowledges that it has reviewed the Phase B
Lease and is familiar with the terms and conditions thereof.
(a) For the purposes of incorporation herein, the terms of the Phase
B Lease are subject to the following additional modifications:
(i) In all provisions of the Phase B Lease (under the terms
thereof and without regard to modifications thereof for purposes of
incorporation into this Sublease) requiring the approval or consent of
Landlord, Subtenant shall be required to obtain the approval or
consent of Landlord and Sublandlord.
(ii) In all provisions of the Phase B Lease requiring Tenant to
submit, exhibit to, supply or provide Landlord with evidence,
certificates, or any other matter or thing, Subtenant shall be
required to submit, exhibit to, supply or provide, as the case may be,
the same to Landlord and Sublandlord.
(iii) Sublandlord shall have no obligation to restore or rebuild
any portion of the Sublease Premises after any destruction or taking
by eminent domain.
(iv) Nothwithstanding anything to the contrary in Paragraph 21
of the Phase B Lease, Subtenant's customers shall have the right to
occupy space in Subtenant's network operating center (which shall
comprise less than twenty-five percent 25% of the
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Sublease Premises) from time to time and shall not be subject to the
provisions of Paragraph 21 of the Phase B Lease.
(v) In Paragraph 38(G) of the Phase B Lease, the reference to
the "Designated Building" shall be deemed to reference the building
constituting the Sublease Premises. All such roof rights shall be
exclusive to Subtenant. In addition, the term "Satellite Dish" is
hereby revised to include more than one (1) satellite dish or
antennae. Said amount of satellite dishes or antennae shall be subject
to Landlord's reasonable approval.
(b) The following provisions of the Phase B Lease are specifically
excluded: all of the Basic Lease Information, Paragraph 1, Paragraph 2,
Paragraph 3, the requirement for two months prepaid rent in Paragraph 6.A.,
first paragraph of Paragraph 8.B. concerning self-insurance, Paragraph 15.D.,
Paragraph 19, Paragraph 21.B., last two sentences of Paragraph 25, Paragraph
26.D., Paragraph 32, Paragraph 38.A., Paragraph 38.B., Paragraph 38.C.,
Paragraph 38.D., Paragraph 38.E., Paragraph 38.I., Paragraph 38.J., Paragraph
38.K., Exhibit B, Exhibit C, Exhibit H, Exhibit I, Exhibit J.
8. Subtenant's Obligations. Subtenant covenants and agrees that all
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obligations of Sublandlord under the Phase B Lease shall be done or performed by
Subtenant with respect to the Sublease Premises, except as otherwise provided by
this Sublease, and Subtenant's obligations shall run to Sublandlord and Landlord
as Sublandlord may determine to be appropriate or be required by the respective
interests of Sublandlord and Landlord. Subtenant agrees to indemnify
Sublandlord, and hold it harmless, from and against any and all claims, damages,
losses, expenses and liabilities (including reasonable attorneys' fees) incurred
as a result of the non-performance, non-observance or non-payment of any of
Sublandlord's obligations under the Phase B Lease applicable to the Sublease
Premises which, as a result of this Sublease, became an obligation of Subtenant.
Subtenant shall not do, nor permit to be done, any act or thing which is, or
with notice or the passage of time would be, a default under this Sublease or
the Phase B Lease (to the extent applicable to the Sublease Premises).
Sublandlord agrees to indemnify Subtenant, and hold it harmless, from and
against any and all claims, damages, losses, expenses and liabilities (including
reasonable attorneys' fees) incurred as a result of the non-performance, non-
observance or non-payment of any of Sublandlord's obligations under the Phase B
Lease
9. Sublandlord's Obligations. Sublandlord agrees that Subtenant
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shall be entitled to receive all services and repairs to be provided by Landlord
to Sublandlord under the Phase B Lease. Subtenant shall look solely to Landlord
for all such services and shall not, under any circumstances, seek nor require
Sublandlord to perform any of such services, nor shall Subtenant make any claim
upon Sublandlord for any damages which may arise by reason of Landlord's default
under the Phase B Lease. Any condition resulting from a default by Landlord
shall not constitute as between Sublandlord and Subtenant an eviction, actual or
constructive, of Subtenant and no such default shall excuse Subtenant from the
performance or observance of any of its obligations to be performed or observed
under this Sublease, or, except as otherwise provided in this Sublease, entitle
Subtenant to receive any reduction in or abatement of the Rent provided for in
this Sublease. In furtherance of the foregoing, and subject to Paragraph 11
hereof, Subtenant does hereby waive any cause of action and any right to bring
any action
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against Sublandlord by reason of any act or omission of Landlord under the Phase
B Lease. Sublandlord covenants and agrees with Subtenant that Sublandlord will
pay all fixed rent and additional rent payable by Sublandlord pursuant to the
Phase B Lease to the extent that failure to perform the same would adversely
affect Subtenant's use or occupancy of the Sublease Premises. In the event of a
breach by Landlord of any term of the Phase B Lease, then Sublandlord's sole
obligation in regard to its obligation under this Sublease shall be to
diligently pursue the correction or cure by Landlord of Landlord's breach. Such
efforts shall include, without limitation, upon Subtenant's request, (a)
immediately notifying Landlord of its non-performance under the Phase B Lease
and demanding that Landlord perform its obligations under the Phase B Lease
and/or (b) assigning Sublandlord's rights under the Phase B Lease to Subtenant
to the extent necessary to permit Subtenant to institute legal proceedings
against Landlord to obtain the performance of Landlord's obligations under the
Phase B Lease; provided, however, that if Subtenant commences a lawsuit or other
action, Subtenant shall pay all costs and expenses incurred in connection
therewith, and Subtenant shall indemnify Sublandlord against, and hold
Sublandlord harmless from, all costs and expenses incurred by Sublandlord in
connection therewith.
10. Default by Subtenant. In the event Subtenant shall be in default of
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any covenant of, or shall fail to honor any obligation under, this Sublease,
Sublandlord shall have available to it against Subtenant all of the remedies
available (a) to Landlord under the Phase B Lease in the event of a similar
default on the part of Sublandlord thereunder or (b) at law.
11. Quiet Enjoyment. So long as Subtenant pays all of the Rent due
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hereunder and performs all of Subtenant's other obligations hereunder,
Sublandlord shall do nothing to affect Subtenant's right to peaceably and
quietly have, hold and enjoy the Sublease Premises, and all of the rights,
entitlements, and options granted to Subtenant hereunder. In the event, however,
that Sublandlord defaults in the performance or observance of any of
Sublandlord's obligations under this Sublease or Subtenant receives a notice of
default on the part of Sublandlord from Landlord under the Phase B Lease, then
Subtenant shall give written notice to Sublandlord specifying in what manner
Sublandlord has defaulted. If such default shall not be cured within a
reasonable time, but in no event later than thirty (30) days after Sublandlord's
receipt of such written notice from Subtenant (except that if such default
cannot be cured within said thirty (30) day period, this period shall be
extended for an additional reasonable time, provided that Sublandlord commences
to cure such default within such thirty (30) day period and proceeds diligently
thereafter to effect such cure as quickly as possible), then Subtenant shall be
entitled, at Subtenant's option, to cure such default and promptly collect from
Sublandlord Subtenant's reasonable expenses in so doing (including, without
limitation, reasonable attorneys' fees and court costs) unless such default by
Sublandlord is caused by a default of Subtenant hereunder (in which case
Sublandlord shall not be liable for Subtenant's costs to cure the default).
Subtenant shall not be required to wait the entire cure period provided for
herein if earlier action is required to prevent a termination by Landlord of the
Phase B Lease and Sublandlord has failed to take such earlier action.
Sublandlord shall not amend or modify the Phase B Lease in such a manner as to
materially adversely affect Subtenant's use of the Sublease Premises or increase
the obligations or decrease the rights of Subtenant hereunder, without the prior
written consent of Subtenant, which may be granted or withheld at Subtenant's
sole discretion. Anything contained in any provision of this Sublease to the
contrary notwithstanding, Subtenant agrees, with respect
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to the Sublease Premises, to comply with and remedy any default in this Sublease
or the Phase B Lease which is Subtenant's obligation to cure, within the period
allowed to Sublandlord under the Phase B Lease, even if such time period is
shorter than the period otherwise allowed therein due to the fact that notice of
default from Sublandlord to Subtenant is given after the corresponding notice of
default from Landlord to Sublandlord. Sublandlord agrees to forward to
Subtenant, promptly upon receipt thereof by Sublandlord, a copy of each notice
of default received by Sublandlord in its capacity as Tenant under the Phase B
Lease. Subtenant agrees to forward to Sublandlord, promptly upon receipt
thereof, copies of any notices received by Subtenant from Landlord or from any
governmental authorities.
12. Notices. All notices, demands and requests shall be in writing and
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shall be sent either by hand delivery or by a nationally recognized overnight
courier service (e.g., Federal Express), in either case return receipt
requested, to the address of the appropriate party. Notices, demands and
requests so sent shall be deemed given when the same are received. Notices and
remittance of Rent to Sublandlord shall be sent to the attention of:
Franklin Resources, Inc.
777 Mariners Island Boulevard
San Mateo, California 94404
Attn: Manager of Corporate Real Estate
Notices to Landlord shall be sent to the attention of:
Spieker Properties, L.P.
9255 Towne Centre Drive, Suite 100
San Diego, California 92121
Attn: Tambra Martinez
Notices to Subtenant shall be sent to the attention of:
Wireless Facilities, Inc.
4810 Eastgate Mall
San Diego, CA 92121
Attn:Facilities Manager
Prior to Subtenant's occupancy of the Sublease Premises notices shall be sent
to:
Wireless Facilities, Inc.
9805 Scranton Road, Suite 100
San Diego, CA 92121
Attn: Facilities Manager
13. Condition of Premises. Except as provided in the Work Letter,
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Subtenant acknowledges that it is subleasing the Sublease Premises "as-is" and
that Sublandlord is not making any representation or warranty concerning the
condition of the Sublease Premises and that Sublandlord is not obligated to
perform any work to prepare the Sublease Premises for
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Subtenant's occupancy. Subtenant acknowledges that it is not authorized to make
or do any alterations or improvements in or to the Sublease Premises except as
permitted by the provisions of this Sublease and the Phase B Lease and that it
must deliver the Sublease Premises to Sublandlord on the Sublease Expiration
Date in the condition required by the Phase B Lease.
14. Consent of Landlord. Paragraph 21.A. of the Phase B Lease requires
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Sublandlord to obtain the written consent of Landlord to this Sublease.
Sublandlord shall diligently pursue Landlord's consent to this Sublease promptly
following the execution and delivery of this Sublease by Sublandlord and
Subtenant.
15. Termination of the Phase B Lease. If for any reason the term of the
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Phase B Lease shall terminate prior to the Sublease Expiration Date, this
Sublease shall automatically be terminated and Sublandlord shall not be liable
to Subtenant by reason thereof unless said termination shall have been caused by
the default of Sublandlord under the Phase B Lease, and said Sublandlord default
was not as a result of a Subtenant default hereunder. To the extent that the
Phase B Lease grants Sublandlord any discretionary right to terminate the Phase
B Lease, whether due to casualty, condemnation, or otherwise, Sublandlord shall
not exercise such right without the prior written consent of the Subtenant which
may be withheld by Subtenant in its sole and absolute discretion. If Landlord
seeks to terminate the Phase B Lease because of a default or alleged default by
Sublandlord under the Phase B Lease (other than a default or alleged default
caused by the default by Subtenant under this Sublease), Sublandlord shall take
all action required to reinstate the Phase B Lease. Further, if Rent is abated
under the Phase B Lease, Rent hereunder shall also be abated in the same
proportion.
16. Limitation of Estate. Subtenant's estate shall in all respects be
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limited to, and be construed in a fashion consistent with, the estate granted to
Sublandlord by Landlord.
17. Confidentiality. The covenants, obligations and conditions contained
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in this Sublease and the Phase B Lease shall remain strictly confidential.
Subtenant agrees to keep such terms, covenants, obligations and conditions
strictly confidential and not to disclose such matters to any other landlord,
tenant, prospective tenant, or broker. Notwithstanding the foregoing, Subtenant
shall be allowed to disclose the Sublease and all covenants, obligations and
conditions contained therein and the Phase B Lease, for business purposes only,
to its shareholders, lenders, attorneys and accountants, and in any filing made
by Subtenant with the Securities and Exchange Commission or other governmental
authorities in accordance with applicable law.
18. Indemnity. Subtenant shall indemnify, defend, protect, and hold
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Sublandlord harmless from and against all actions, claims, demands, costs,
liabilities, losses, reasonable attorneys' fees, damages, penalties, and
expenses (collectively "Claims") which may be brought or made against
Sublandlord or which Sublandlord may pay or incur to the extent resulting from
(i) Subtenant's use or occupancy of the Sublease Premises, (ii) a breach of this
Sublease by Subtenant, (iii) any violation of law by Subtenant or its employees,
agents, contractors or invitees ("Agents") relating to the use or occupancy of
the Sublease Premises, or (iv) the negligence or willful misconduct of
Subtenant or its Agents. Sublandlord shall indemnify, defend, protect, and hold
Subtenant harmless from and against all actions, claims, demands, costs,
liabilities, losses, reasonable attorneys' fees, damages, penalties and expenses
which may be brought or made against Subtenant or which Subtenant may pay or
incur to the extent caused
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by (i) the negligence or willful misconduct of Sublandlord or its Agents
occurring on or about the Project or Sublease Premises; (ii) the failure by
Sublandlord to comply with or perform its obligations under the Phase B Lease
and/or this Sublease, and (iii) a breach by Sublandlord of any of its
representations or warranties to Subtenant under this Sublease.
19. Permitted Use. The Sublease Premises shall be used for general office
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space and any other legal permitted uses compatible with the City of San Diego's
MLI zone and the MCAS Miramar Comprehensive Land Use Plan and otherwise
compatible with comparable office projects. The Occupancy Density shall not
exceed 5 persons per 1,000 square feet.
20. Mutual Waiver of Subrogation. The waiver of subrogation provision set
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forth in Paragraph 9 of the Phase B Lease shall be deemed a three party
agreement binding among and inuring to the benefit of Sublandlord, Subtenant and
Landlord (by reason of its consent to hereto).
21. Representations. Sublandlord represents to Subtenant that (A) the
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Phase B Lease is in full force and effect, (B) the copy of the Phase B Lease
which is attached to this Sublease as Exhibit B is a true, correct and complete
copy of the Phase B Lease, (C) to Sublandlord's best knowledge, no default
exists on the part of Sublandlord, or has there occurred any event which, with
the giving of notice or passage of time or both, could constitute such a default
or event of default, and (D) to Sublandlord's best knowledge, there are no
pending or threatened actions, suits or proceedings before any court or
administrative agency against Sublandlord which could, in the aggregate,
adversely affect the Sublease Premises or of Sublandlord to perform its
obligations under the Sublease, and Sublandlord is not aware of any facts which
might result in any actions, suits or proceedings.
22. Entire Agreement. It is understood and acknowledged that there are no
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oral agreements between the parties hereto affecting this Sublease and this
Sublease supersedes and cancels any and all previous negotiations, arrangements,
brochures, agreements and understandings, if any, between the parties hereto or
displayed by Sublandlord to Subtenant with respect to the subject matter
thereof, and none thereof shall be used to interpret or construe this Sublease.
This Sublease, and the exhibits and schedules attached hereto, contain all of
the terms, covenants, conditions, warranties and agreements of the parties
relating in any manner to the rental, use and occupancy of the Sublease Premises
and shall be considered to be the only agreements between the parties hereto and
their representatives and agents. None of the terms, covenants, conditions or
provisions of this Sublease can be modified, deleted or added to except in
writing signed by the parties hereto. All negotiations and oral agreements
acceptable to both parties have been merged into and are included herein. There
are no other representations or warranties between the parties, and all reliance
with respect to representations is based totally upon the representations and
agreements contained in this Sublease.
10
IN WITNESS WHEREOF, the parties have entered into this Sublease as of the
date first written above.
SUBLANDLORD:
FRANKLIN TEMPLETON CORPORATE
SERVICES, INC., a Delaware corporation
By: ____________________________________
Its: ____________________________________
SUBTENANT:
WIRELESS FACILITIES, INC., a Delaware
corporation
By: ____________________________________
Its: ____________________________________
By: ____________________________________
Its: ____________________________________
11
EXHIBIT "A"
DEPICTION OF THE PROJECT
------------------------
Bridge Pointe Corporate Centre consists of approximately 29 acres and up to
approximately 591,000 square feet in up to 9 buildings. Phase A consists of
four buildings indicated on the site plan below as 4760, 4770, 4780 and 4790
Eastgate Mall, totaling 215,800 square feet consisting of approximately 12.5 net
acres. Phase B will consist of two buildings totaling approximately 150,000
square feet and consisting of approximately 8.5 acres. Phase C will consist of
three buildings totaling up to approximately 225,000 square feet and consisting
of approximately 8 acres.
The Sublease Premises consists of one building in Phase B of the Project
(labeled "Phase B-2 Premises") and is detailed in Exhibit C of this Sublease.
The Site Plan detailing the Premises and the Project follows this page and
consists of one (1) page.
A-1
EXHIBIT "B"
-----------
COPY OF PHASE B LEASE
---------------------
B-1
EXHIBIT "C"
DEMISING PLAN
-------------
[To be attached when completed.]
C-1
EXHIBIT "D"
WORK LETTER AGREEMENT
This Work Letter Agreement ("Work Letter") sets forth the terms and
conditions relating to construction of the initial tenant improvements described
in the Plans to be prepared and approved as provided below (the "Tenant
Improvements") in the Sublease Premises. Capitalized terms used but not
otherwise defined herein shall have the meanings set forth in the Sublease (the
"Sublease") to which this Work Letter is attached and forms a part.
1. Base Building Work. The "Base Building Work" described on Schedule 1 to
------------------
this Exhibit D, if any, has been performed by Landlord at Landlord's sole
cost and expense.
2. Plans and Specifications.
------------------------
2.1 Subtenant shall retain the services of Jossy + Carrier
Design Group(the "Space Planner") to prepare a detailed space plan
(the "Space Plan") mutually satisfactory to Landlord, Sublandlord and
Subtenant for the construction of the Tenant Improvements in the
Sublease Premises. Subtenant shall submit the Space Plan and any
proposed revisions thereto to Landlord and Sublandlord for their
approval.
2.2 Based on the approved Space Plan, Subtenant shall cause the
Space Planner to prepare detailed plans, specifications and working
drawings mutually satisfactory to Landlord, Sublandlord and Subtenant
for the construction of the Tenant Improvements (the "Plans") no later
than sixty (60) days after execution of the Sublease Agreement.
Landlord, Sublandlord and Subtenant shall diligently pursue the
preparation of the Plans and any proposed revisions thereto, including
the estimated cost of the Tenant Improvements. All necessary revisions
to the Space Plan and the Plans shall be made within two (2) business
days after Landlord's and Sublandlord's response thereto, until
Landlord and Sublandlord ultimately approve the Space Plan and Plans.
2.3 Subtenant shall be responsible for ensuring that the Plans
are compatible with the design, construction and equipment of the
Building, comply with applicable Regulations and the Standards
(defined below), and contain all such information as may be required
to show locations, types and requirements for all heat loads, people
loads, floor loads, power and plumbing, regular and special HVAC
needs, telephone communications, telephone and electrical outlets,
lighting, light fixtures and related power, and electrical and
telephone switches, B.T.U. calculations, electrical requirements and
special receptacle requirements. The Plans shall also include
mechanical, electrical, plumbing, structural and engineering drawings
mutually satisfactory to Landlord, Sublandlord and Subtenant which
shall be prepared by ILA/Zammit (electrical), McParlane & Associates
(mechanical and plumbing), and Burkett & Wong (structural).
Notwithstanding the foregoing sentence, Subtenant may use other
engineers as reasonably approved by Landlord. Notwithstanding
Landlord's and Sublandlord's preparation, review and approval of the
Space Plan and the Plans
D-1
and any revisions thereto, Landlord and Sublandlord shall have no
responsibility or liability whatsoever for any errors or omissions
contained in the Space Plan or Plans or any revisions thereto, or to
verify dimensions or conditions, or for the quality, design or
compliance with applicable Regulations of any improvements described
therein or constructed in accordance therewith. Subtenant hereby
waives all claims against Landlord and Sublandlord relating to, or
arising out of the design or construction of, the Tenant Improvements.
2.4 Landlord and/or Sublandlord may approve or disapprove the
Space Plan or Plans or any proposed revision thereto submitted to
Landlord and Sublandlord in Landlord's and Sublandlord's reasonable
discretion, provided that Landlord and Sublandlord shall not
unreasonably withhold such approval. Landlord and Sublandlord shall
approve or disapprove any Space Plan, Plans or proposed revisions
thereto submitted to Landlord and Sublandlord for Landlord's and
Sublandlord's approval within three (3) business days after Landlord's
and Sublandlord's receipt thereof. If Landlord or Sublandlord has not
approved or disapproved in writing any Space Plan, Plans, or proposed
revisions thereto submitted to Landlord and Sublandlord within five
(5) business days after Landlord's and Sublandlord's receipt thereof,
Landlord and Sublandlord shall be deemed to have approved the same.
3. Specifications for Standard Tenant Improvements.
-----------------------------------------------
3.1 Specifications and quantities of standard building
components which will comprise and be used in the construction of the
Tenant Improvements ("Standards") are set forth in Schedule 2 to this
Exhibit D. As used herein, "Standards" or "Building Standards" shall
mean the standards for a particular item selected from time to time by
Landlord for the Building, including those set forth on Schedule 2 of
this Exhibit D, or such other standards of equal or better quality as
may be mutually agreed between Landlord and Subtenant in writing.
3.2 No deviations from the Standards are permitted without
Landlord's prior written approval, which will not be unreasonably
withheld, conditioned or delayed.
4. Tenant Improvement Cost.
-----------------------
4.1 The cost of the Tenant Improvements shall be paid for by
Subtenant, including, without limitation, the cost of: Standards;
space plans and studies; architectural and engineering fees; permits,
approvals and other governmental fees; labor, material, equipment and
supplies; construction fees and other amounts payable to contractors
or subcontractors; remediation and preparation of the Premises for
construction of the Tenant Improvements; taxes; filing and recording
fees; premiums for insurance and bonds; attorneys' fees; financing
costs; and all other costs expended or to be expended in the
construction of the Tenant Improvements.
D-2
4.2 Provided Subtenant is not in default under the Sublease,
including this Work Letter, Landlord shall contribute a tenant
improvement allowance not to exceed $2,250,000.00 ("Tenant Improvement
Allowance") toward the cost of the initial Tenant Improvements and
shall disburse the Tenant Improvement Allowance to Subtenant as
follows: (a) Twenty Percent (20%) of the Tenant Improvement Allowance
within ten (10) days of execution of the Sublease; (b) Seventy Percent
(70%) of the Tenant Improvement Allowance at Substantial Completion of
the entire Premises; and (c) the remaining balance of Ten Percent
(10%) of the Tenant Improvement Allowance upon submission by Subtenant
to Landlord copies of a certificate of completion executed by the
Space Planner and Subtenant's contractor, and unconditional mechanics'
lien releases (which mechanics' lien releases shall be executed by the
subcontractors, labor suppliers and materialmen in addition to
Subtenant's contractor), in each case in form and substance
satisfactory to Landlord, and all appropriate bills and supporting
documentation for the work ordered by Subtenant or its contractor or
any subcontractor.
4.3 In the event the estimated cost of the design and
construction of the Tenant Improvements exceeds the Tenant Improvement
Allowance, Subtenant shall pay such excess cost to Subtenant's
contractor.
5. Construction of Tenant Improvements.
-----------------------------------
5.1 Within ten (10) days after Subtenant's, Sublandlord's and
Landlord's approval of the Plans including the estimate of the cost of
the Tenant Improvements and Landlord's receipt of payment of any such
estimated cost exceeding the amount of the Tenant Improvement
Allowance, Subtenant shall cause the contractor to proceed to secure a
building permit and commence construction of the Tenant Improvements
provided that the Building has in Landlord's discretion reached the
stage of construction where it is appropriate to commence construction
of the Tenant Improvements in the Sublease Premises.
5.2 Subtenant shall be responsible for obtaining all
governmental approvals to the full extent necessary for the
construction and installation of the Tenant Improvements and for
Subtenant's occupancy of the Sublease Premises, in compliance with all
applicable Regulations. Subtenant shall employ contractors, which
shall be reasonably approved by Landlord in writing, to construct the
Tenant Improvements in conformance with the approved Space Plan and
Plans. The construction contracts between Subtenant and the approved
contractor shall be subject to Landlord's prior reasonable approval
and shall provide for progress payments. The contractor(s) shall be
duly licensed and Landlord's approval of the contractor(s) shall be
conditioned, among other things, upon the contractor's reputation for
quality of work, timeliness of performance, integrity and Landlord's
prior experience with such contractor.
D-3
5.3 Sublandlord and Landlord shall not be liable for any direct
or indirect damages suffered by Subtenant as a result of delays in
construction beyond Landlord's and Sublandlord's reasonable control,
including, but not limited to, delays due to strikes or unavailability
of materials or labor, or delays caused by Subtenant (including delays
by the Space Planner, the contractor or anyone else performing
services on behalf of Landlord or Subtenant).
5.4 All work to be performed on the Sublease Premises by
Subtenant or Subtenant's contractor or agents shall be subject to the
following conditions:
(a) Such work shall proceed upon Landlord's written
approval of Subtenant's contractor, and public liability and property
damage insurance carried by Subtenant's contractor, and shall further
be subject to the provisions of Paragraphs 12 and 27 of the Master
Lease.
(b) All work shall be done in conformity with a valid
building permit when required, a copy of which shall be furnished to
Sublandlord and Landlord before such work is commenced, and in any
case, all such work shall be performed in a good and workmanlike and
first-class manner, and in accordance with all applicable Regulations
and the requirements and standards of any insurance underwriting
board, inspection bureau or insurance carrier insuring the Sublease
Premises pursuant to the Sublease. Notwithstanding any failure by
Sublandlord or Landlord to object to any such work, neither
Sublandlord nor Landlord shall have any responsibility for Subtenant's
failure to comply with all applicable Regulations. Subtenant shall be
responsible for ensuring that construction and installation of the
Tenant Improvements will not affect the structural integrity of the
Building.
(c) Landlord or Landlord's agents shall have the right to
inspect the construction of the Tenant Improvements by Subtenant
during the progress thereof. If Landlord shall give notice of faulty
construction or any other deviation from the approved Space Plan or
Plans, Subtenant shall cause its contractor to make corrections
promptly. However, neither the privilege herein granted to Landlord to
make such inspections, nor the making of such inspections by Landlord,
shall operate as a waiver of any right of Landlord to require good and
workmanlike construction and improvements erected in accordance with
the approved Space Plan or Plans.
(d) Subtenant shall cause its contractor to complete the
Tenant Improvements as soon as reasonably possible.
(e) Subtenant's construction of the Tenant Improvements
shall comply with the following: (i) the Tenant Improvements shall be
constructed in strict accordance with the approved Space Plan or
Plans; (ii) Subtenant's and its contractor shall submit
D-4
schedules of all work relating to the Tenant Improvements to Landlord
for Landlord's approval within two (2) business days following the
selection of the contractor and the approval of the Plans. Landlord
shall within three (3) business days after receipt thereof inform
Subtenant of any changes which are necessary and Subtenant's
contractor shall adhere to such corrected schedule; and (iii)
Subtenant shall abide by all rules made by Landlord with respect to
the use of freight, loading dock, and service elevators, storage of
materials, coordination of work with the contractors of other tenants,
and any other matter in connection with this Work Letter, including,
without limitation, the construction of the Tenant Improvements.
(f) Subtenant or Subtenant's contractor or agents shall
arrange for necessary utility, hoisting and elevator service with
Landlord's contractor and shall pay such reasonable charges for such
services as may be charged by Subtenant's or Landlord's contractor.
(g) Subtenant's entry to the Sublease Premises for any
purpose, including, without limitation, inspection or performance of
Subtenant construction by Subtenant's agents, prior to the date
Subtenant's obligation to pay rent commences shall be subject to all
the terms and conditions of the Sublease except the payment of Rent.
Subtenant's entry shall mean entry by Subtenant, its officers,
contractors, licensees, agents, servants, employees, guests, invitees,
or visitors. Landlord and Sublandlord shall have the right to post the
appropriate notices of non-responsibility and to require Subtenant to
provide Landlord and Sublandlord with evidence that Subtenant has
fulfilled its obligation to provide insurance pursuant to the
Sublease.
(h) Subtenant shall promptly reimburse Landlord upon demand
for any reasonable expense actually incurred by the Landlord by reason
of faulty work done by Subtenant or its contractors or by reason of
any delays caused by such work, or by reason of inadequate clean-up.
(i) Subtenant hereby indemnifies and holds Sublandlord and
Landlord harmless with respect to any and all costs, losses, damages,
injuries and liabilities relating in any way to any act or omission of
Subtenant or Subtenant's contractor or agents, or anyone directly or
indirectly employed by any of them, in connection with the Tenant
Improvements and any breach of Subtenant's obligations under this Work
Letter, or in connection with Subtenant's non-payment of any amount
arising out of the Tenant Improvements. Such indemnity by Subtenant,
as set forth above, shall also apply with respect to any and all
costs, losses, damages, injuries, and liabilities related in any way
to Sublandlord's and Landlord's performance or any ministerial acts
reasonably necessary (i) to permit Subtenant to complete the Tenant
D-5
Improvements, and (ii) to enable Subtenant to obtain any building
permit or certificate of occupancy for the Sublease Premises.
(j) Subtenant's contractor and the subcontractors utilized
by Subtenant's contractor shall guarantee to Subtenant and for the
benefit of Sublandlord and Landlord that the portion of the Tenant
Improvements for which it is responsible shall be free from any
defects in workmanship and materials for a period of not less than one
(1) year from the date of completion thereof. Each of Subtenant's
contractor and the subcontractors utilized by Subtenant's contractor
shall be responsible for the replacement or repair, without additional
charge, of all work done or furnished in accordance with its contract
that shall become defective within one (1) year after the later to
occur of (i) completion of the work performed by such contractor of
subcontractors and (ii) the Sublease Commencement Date. The correction
of such work shall include, without additional charge, all additional
expenses and damages incurred in connection with such removal or
replacement of all or any part of the Tenant Improvements, and/or the
Building and/or common areas that may be damaged or disturbed thereby.
All such warranties or guarantees as to materials or workmanship of or
with respect to the Tenant Improvements shall be contained in the
construction contract or subcontract and shall be written such that
such guarantees or warranties shall inure to the benefit of
Sublandlord, Landlord and Subtenant, as their respective interests may
appear, and can be directly enforced by any of them. Subtenant
covenants to give to Sublandlord and Landlord any assignment or other
assurances which may be necessary to effect such rights of direct
enforcement.
(k) Commencing upon the execution of the Sublease,
Subtenant shall hold weekly meetings at a reasonable time with the
Space Planner and the contractor regarding the progress of the
preparation of the Plans and the construction of the Tenant
Improvements, which meetings shall be held at a location designated by
Subtenant, and Landlord and/or its agents shall receive prior notice
of, and shall have the right to attend, all such meetings, and upon
Landlord's request, certain of Subtenant's contractors shall attend
such meetings.
6. Insurance Requirements.
-----------------------
6.1 All of Subtenant's contractors shall carry worker's compensation
insurance covering all of their respective employees, and shall also carry
public liability insurance, including property damage, all with limits, in
form and with companies as are required to be carried by Subtenant as set
forth in the Sublease.
6.2 Subtenant shall carry "Builder's All Risk" insurance in an amount
approved by Landlord covering the construction of the Tenant Improvements,
and such other insurance as Landlord may require, it being understood and
agreed that
D-6
the Tenant Improvements shall be insured by Subtenant pursuant to the
Sublease immediately upon completion thereof. Such insurance shall be in
amounts and shall include such extended coverage endorsements as may be
reasonably required by Landlord including, but not limited to, the
requirement that all of Subtenant's contractors shall carry excess
liability and Products and Completed Operation coverage insurance, each in
amounts not less than $500,000 per incident, $1,000,000 in aggregate, and
in form and with companies as are required to be carried by Subtenant as
set forth in the Sublease.
6.3 Certificates for all insurance carried pursuant to this Work
Letter must comply with the requirements of the Sublease and shall be
delivered to Sublandlord and Landlord before the commencement of
construction of the Tenant Improvements and before the contractor's
equipment is moved onto the site. In the event the Tenant Improvements are
damaged by any cause during the course of the construction thereof,
Subtenant shall immediately repair the same at Subtenant's sole cost and
expense. Subtenant's contractors shall maintain all of the foregoing
insurance coverage in force until the Tenant Improvements are fully
completed and accepted by Landlord, except for any Product and Completed
Operation Coverage insurance required by Landlord, which is to be
maintained for ten (10) years following completion of the work and
acceptance by Landlord and Subtenant. All policies carried under this
Paragraph 6 shall insure Landlord, Sublandlord and Subtenant, as their
interests may appear, as well as the contractors. All insurance maintained
by Subtenant's contractors shall preclude subrogation claims by the insurer
against anyone insured thereunder. Such insurance shall provide that it is
primary insurance as respects the owner and that any other insurance
maintained by owner is excess and noncontributing with the insurance
required hereunder.
7. Notice of Completion. Within ten (10) days after completion of
---------------------
construction of the Tenant Improvements, Subtenant shall cause a Notice of
Completion to be recorded in the office of the Recorder of the county in which
the Building is located in accordance with Section 3093 of the Civil Code of the
State of California or any successor statute, and shall furnish a copy thereof
to Landlord upon such recordation. If Subtenant fails to do so, Landlord may
execute and file the same on behalf of Subtenant as Subtenant's agent for such
purpose, at Subtenant's sole cost and expense. At the conclusion of
construction, (i) Subtenant shall cause the Space Planner and the contractor (i)
to update the approved working drawings as necessary to reflect all changes made
to the approved working drawings during the course of construction, (ii) to
certify to the best of their knowledge that the "record-set" of as-built
drawings are true and correct, which certification shall survive the expiration
or termination of the Lease, and (c) to deliver to Landlord two (2) sets of
copies of such record set of drawings within ninety (90) days following issuance
of a certificate of occupancy for the Premises, and (iii) Subtenant shall
deliver to Sublandlord and Landlord a copy of all warranties, guarantees, and
operating manuals and information relating to the improvements, equipment, and
systems in the Sublease Premises.
8. Work Letter Default. A default under this Work Letter shall constitute a
-------------------
default under the Sublease, and the parties shall be entitled to all rights and
remedies under the Sublease in the
D-7
event of a default hereunder by the other party (notwithstanding that the
Sublease Term thereof has not commenced).
IN WITNESS WHEREOF, the parties have entered into this Work Letter which is
of even date with the Sublease of which this is a part.
SUBLANDLORD:
FRANKLIN TEMPLETON CORPORATE
SERVICES, INC., a Delaware corporation
By: ____________________________________
Its: ____________________________________
SUBTENANT:
WIRELESS FACILITIES, INC., a Delaware
corporation
By: ____________________________________
Its: ____________________________________
By: ____________________________________
Its: ____________________________________
LANDLORD:
SPIEKER PROPERTIES, L.P., a California limited
partnership
By: Spieker Properties, Inc., a Maryland
corporation
Its: General Partner
By:______________________________________
Richard L. Romney
Senior Vice President
By:______________________________________
Its:_____________________________________
D-8
SCHEDULE 1
TO EXHIBIT D
BASE BUILDING WORK
------------------
Completed according to the plans and specifications prepared by Smith Consulting
Architects, Inc. dated July 6, 1999. Landlord and Subtenant hereby acknowledge
that Landlord has provided CAD drawings of said plans to Subtenant.
D-9
SCHEDULE 2
TO EXHIBIT D
BUILDING STANDARDS
------------------
The following constitutes the Building Standard tenant improvements
("Standards") in the quantities specified:
(to be provided)
D-10