LEASE AGREEMENT
Between
S.W. Austin Office Building Ltd.,
as Landlord,
and
Silicon Laboratories, Inc.
a Delaware corporation,
as Tenant,
Covering approximately 37,800 gross square feet
of the Building known as
Austin Industrial Center
located at
4609 Southwest Parkway
Austin, Texas 78735.
STANDARD INDUSTRIAL LEASE AGREEMENT
Approximately 37,800 gross square feet
1609 Southwest Parkway Suite 100
Austin, Texas 78735
LEASE AGREEMENT
THIS LEASE AGREEMENT is made and entered into by and between S.W. AUSTIN
OFFICE BUILDING, LTD., A TEXAS LIMITED PARTNERSHIP, hereinafter referred to as
"LANDLORD", and SILICON LABORATORIES, INC., A DELAWARE CORPORATION, hereinafter
referred to as "TENANT".
PREAMBLE
Landlord intends to construct an office/warehouse building containing
approximately 37,800 square feet of space (the "BUILDING") on the tract of land
located at 4609 southwest Parkway, Austin, Texas, legally described on EXHIBIT
"A" attached hereto and incorporated herein by reference for all purposes (the
"PROPERTY"), together with certain exterior and interior amenities and features
(collectively, the "PROJECT"). Landlord intends to construct the Project
substantially in accordance with the Plans for the Project (hereinafter
defined). The term "PROJECT" shall mean the base building, all parking areas,
exterior features and amenities as reflected on the Plans for the Project and
all common area interior finishes, as generally set forth on EXHIBIT "B"
attached hereto. The term "PROJECT" does not include the finish out or
improvements to the tenant spaces in the Building. The completed construction
drawings and plans and specifications for the Project shall be referred to
herein as the "PLANS FOR THE PROJECT". The Plans for the Project shall be based
on the schematic plans and specifications attached hereto as EXHIBIT "B" and by
this reference made a part hereof.
1, PREMISES AND TERM. In consideration of the mutual obligations of Landlord
and Tenant set forth herein, Landlord leases to Tenant, and Tenant hereby takes
from Landlord, certain leased premises situated within the County of Travis,
State of Texas, as more particularly described on EXHIBIT "A" attached hereto
and incorporated herein by reference (the "PREMISES"), to have and to hold,
subject to the terms, covenants and conditions in this Lease. The term of this
Lease shall commence on the Commencement Date hereinafter set forth and shall
end on the last day of the month that is eighty-four (84) months after the
Commencement Date.
A. EXISTING BUILDING AND IMPROVEMENTS. If no material improvements are
to be constructed to the Premises, the "COMMENCEMENT DATE" shall be October 1,
1998. In such event, Tenant acknowledges that (i) it has inspected and accepts
the Premises in its "as is" condition, (ii) the buildings and improvements
comprising the same are suitable for the purpose for which the Premises are
leased, (iii) the Premises are in good and satisfactory condition, and (iv) no
representations as to the repair of the Premises nor promises to alter, remodel
or improve the Premises have been made by Landlord (unless otherwise expressly
set forth in this Lease).
B. BUILDING OR IMPROVEMENTS TO BE CONSTRUCTED. If the Premises or part
thereof are to be constructed, the Commencement Date shall be deemed to be the
earliest of: (i) the date upon which the Interior Improvements (defined on
EXHIBIT "C" attached hereto) to Premises which are to be erected in accordance
with the Interior Improvements Plans (defined on EXHIBIT "C" attached hereto)
have been substantially completed; (ii) the date on which the Interior
Improvements to the Premises would have been substantially completed but for
delays caused directly or indirectly by Tenant, including Interior Improvements
Plans delays or change orders; or (iii) the date on which Tenant occupies any
part of the Premises. Landlord and Tenant anticipate that the Premises and the
Interior Improvements will be substantially complete by November 18, 1998. As
used herein, the term "SUBSTANTIALLY COMPLETED", "SUBSTANTIALLY COMPLETE" and
"SUBSTANTIAL COMPLETION" shall mean that, in the opinion of the architect or
space planner that prepared the Interior Improvements Plans, such improvements
have been completed in accordance with the Interior Improvements Plans, the City
of Austin has issued a temporary certificate of occupancy for the Premises and
the Premises are in good and satisfactory condition, with the exception of
completion of minor details of construction, mechanical adjustments or
decorations which do not materially interfere with Tenant's use of the Premises
remain to be performed (items normally referred to as "PUNCH LIST" items).
Landlord and Tenant shall complete one punch list inspection and Landlord shall
complete and/or correct such punch list items within a reasonable period of time
after such inspection. As soon as the Interior Improvements have been
substantially completed, Landlord shall notify Tenant in writing that the
Commencement Date has occurred; provided, however, that in no event will the
Commencement Date occur prior to October 1, 1998 (unless Tenant occupies the
Premises prior to October 1, 1998), without the written consent of Tenant.
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C. PARKING. Tenant and its employees, customers and licensees, in
common with Landlord and Landlord's agents, employees, contractors and
subcontractors, shall have the right to use for automobile parking the
entirety of the parking areas constructed for the Project, subject to (i) all
rules and regulations promulgated by Landlord, and (ii) rights of ingress and
egress of others as designated by Landlord. Subject to the foregoing and any
applicable laws and ordinances, Tenant may additionally park on any private
streets which are included in the Project. Landlord shall not be responsible
for enforcing Tenant's parking rights against any third parties and Tenant
expressly does not have the right to tow or obstruct improperly parked
vehicles. Tenant agrees not to park on any public streets adjacent to or in
the vicinity of the Premises.
2. BASE RENT, SECURITY DEPOSIT AND ESCROW DEPOSITS.
A. BASE RENT. Tenant agrees to pay Landlord rent for the Premises, in
advance, without demand, deduction or set off, at the rate of thirty-seven
thousand eight hundred dollars ($37,800.00) per month during Year 1 of the
initial term hereof, thirty-seven thousand eight hundred dollars ($37,800.00)
per month during Year 2 of the initial term hereof, thirty-seven thousand
eight hundred dollars ($37,800.00) per month during Year 3 of the initial
term hereof, thirty-nine thousand three hundred seventy-five and No/100
dollars ($39,375.00) per month during Year 4 of the initial term hereof,
thirty-nine thousand three hundred seventy-five and No/100 dollars
($39,375.00) per month during Year 5 of the initial term hereof, forty
thousand nine hundred fifty and No/l00 dollars ($40,950.00) per month during
Year 6 of the initial term hereof and forty thousand nine hundred fifty and
No/100 dollars ($40,950.00) per month during Year 7 of the initial term
hereof. One such monthly installment, plus the other monthly charges set forth
in Paragraph 2C below, shall be due and payable on the date hereof, and a
like monthly installment shall be due and payable on or before the first day
of each calendar month succeeding the Commencement Date, except that all
payments due hereunder for any fractional calendar month shall be prorated.
B. SECURITY DEPOSIT.
(i) CASH PORTION OF SECURITY DEPOSIT. Tenant agrees to deposit
with Landlord on the date of execution hereof the sum of one hundred
thirteen thousand four hundred and no/100 dollars ($113,400.00), which
shall be held by Landlord, without obligation for interest, as partial
security for the performance of Tenant's obligations under this Lease.
(ii) LETTER OF CREDIT PORTION OF SECURITY DEPOSIT. Prior to
the commencement of construction of the Interior Improvements, as an
additional Security Deposit, Tenant shall provide Landlord with an
irrevocable letter of credit (the "LETTER OF CREDIT") in the amount
of $453,600.00 issued by a bank acceptable to Landlord, naming
Landlord as the Beneficiary thereof. The Letter of Credit shall
provide that Landlord may draw the full face amount thereof upon the
presentation of the original of the Letter of Credit together with a
sworn affidavit by Landlord (or an officer of Landlord) stating that
Tenant is in default hereunder and that all cure periods relating to
such default have expired. The Letter of Credit shall also provide
that it may be drawn in full by Landlord in the same manner if at any
time prior to the expiration of this Lease the Letter of Credit is
within thirty (30) days of expiring and a replacement or extension
thereof has not been furnished to Landlord. The Letter of Credit,
including, without limitation, the form thereof, and all extensions
and renewals thereof, shall otherwise be acceptable to Landlord in
all respects. Tenant covenants to continuously keep the Letter of
Credit in full force and effect and failure to do so shall constitute
an Event of Default hereunder. The Letter of Credit shall be
assignable and transferrable to Landlord's mortgage lender. In the
event Landlord ever draws on the Letter of Credit, Landlord may
thereafter retain all proceeds thereof in the form of cash in the
same manner as the funds deposited with Landlord under paragraph
2B(i) hereof and Landlord shall have no obligation to refund such
proceeds in exchange for a replacement Letter of Credit.
(iii) SECURITY DEPOSIT GENERALLY. The term "SECURITY DEPOSIT",
when used in this Lease, shall mean the cash portion of the Security
Deposit as described in paragraph 2B(i), above and/or the Letter of
Credit portion of the Security Deposit as described in paragraph
2B(ii), above. It is expressly understood and agreed that the Security
Deposit is not an advance rental deposit or a measure of Landlord's
damages in case of Tenant's default. Landlord may commingle the
Security Deposit with Landlord's other funds. Upon occurrence of an
Event of Default, Landlord may use all or any part of the Security
Deposit to pay past due rent or other payments due Landlord under this
Lease or the cost of any other damage, injury, expense or liability
caused by such Event of Default, without prejudice to any other remedy
provided herein or provided by law. On demand after application of any
portion of the Security Deposit, Tenant shall pay Landlord the amount
that will restore the Security Deposit to its original amount. The
Security Deposit shall be deemed the property of Landlord, but any
remaining balance of the Security Deposit shall be returned by
Landlord to Tenant when all of Tenant's present and future obligations
under this Lease have been fulfilled. If Landlord transfers its
interest in the Building during the term of this Lease, Landlord shall
assign any unforfeited portion of the Security Deposit to the
transferee if the transferee executes and delivers a letter to Tenant
acknowledging receipt of the Security Deposit and liability for the
same, and expressly assumes all obligations of Landlord under this
Lease.
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(iv) REDUCTION OF LETTER OF CREDIT. The following shall be the
conditions to a reduction in the amount of the Letter of Credit:
(1) If Tenant achieves four (4) consecutive increasingly
profitable quarters that reach an aggregate minimum net
profit of $2,500,000.00, based on generally accepted
accounting principles, consistently applied (the
"MINIMUM PERFORMANCE CRITERIA"), the Letter of Credit
may be reduced by $66,600.00;
(2) At such time thereafter as Tenant achieves a minimum
aggregate net profit of $2,500,000.00 during four (4)
consecutive quarters (not including any of the four
quarters used in paragraph 2B(iv)(1), above), based on
generally accepted accounting principles, consistently
applied, the Letter of Credit may be reduced by an
additional $66,600.00; and
(3) At such time thereafter as Tenant achieves a minimum
aggregate net profit of $2,500,000.00 during four (4)
consecutive quarters (not including any of the four
quarters used in paragraph 2B(iv)(2), above), based on
generally accepted accounting principles, consistently
applied, the Letter of Credit may be reduced by an
additional $66,600.00.
(4) The remainder of the Letter of Credit shall not be
subject to further reductions.
C. ESCROW DEPOSITS. Without limiting in any way Tenant's other
obligations under this Lease, Tenant agrees to pay to Landlord its Proportionate
Share (as defined in this Paragraph 2C) of (i) Taxes (hereinafter defined)
payable by Landlord pursuant to Paragraph 3A, below, (ii) the cost of utilities
payable by Landlord pursuant to Paragraph 3, below, (iii) Landlord's cost of
maintaining insurance pursuant to Paragraph 9A, below, and (iv) Landlord's cost
of maintaining the Premises pursuant to paragraph 5C, below and any common area
charges payable by Tenant in accordance with Paragraph 4B, below (collectively,
the "TENANT COSTS"). During each month of the term of this Lease, on the same
day that rent is due hereunder, Tenant shall deposit in escrow with Landlord an
amount equal to one-twelfth (1/12) of the estimated amount of Tenant's
Proportionate Share of the Tenant Costs. Tenant authorizes Landlord to use the
funds deposited with Landlord under this Paragraph 2C to pay such Tenant Costs.
The initial monthly escrow payments are based upon the estimated amounts for the
year in question and shall be increased or decreased annually to reflect the
projected actual amounts of all Tenant Costs. If the Tenant's total escrow
deposits for any calendar year are less than Tenant's actual Proportionate Share
of the Tenant Costs for such calendar year, Tenant shall pay the difference to
Landlord within ten (10) days after demand. If the total escrow deposits of
Tenant for any calendar year are more than Tenant's actual Proportionate Share
of the Tenant Costs for such calendar year, Landlord shall retain such excess
and credit it against Tenant's escrow deposits next maturing after such
determination. Tenant's "PROPORTIONATE SHARE" with respect to the Building, as
used in this Lease, shall mean a fraction, the numerator of which is the gross
rentable area contained in the Premises and the denominator of which is the
gross rentable area contained in the entire Building. In the event the Premises
or the Building is part of a project or business park owned, managed or leased
by Landlord or an affiliate of Landlord (the "PROJECT"), Tenant's "PROPORTIONATE
SHARE" with respect to the Project, as used in this Lease, shall mean a
fraction, the numerator of which is the gross rentable area contained in the
Premises and the denominator of which is the gross rentable area contained in
all of the buildings (including the Building) within the Project.
3. TAXES
A. REAL PROPERTY TAXES. Subject to reimbursement under Paragraph 2C
herein, Landlord agrees to pay all taxes, assessments and governmental charges
of any kind and nature (collectively referred to herein as "TAXES") that accrue
against the Premises, the Building and/or the Property. If at any time during
the term of this Lease there shall be levied, assessed or imposed on Landlord a
capital levy or other tax directly on the rents received therefrom and/or a
franchise tax, assessment, levy or charge measured by or based, in whole or in
part, upon such rents from the Premises and/or the Property, the Building or any
other improvements of which the Premises are a part, then all such taxes,
assessments, levies or charges, or the part thereof so measured or based shall
be deemed to be included in the term "Taxes" for the purposes hereof. The
Landlord shall have the right to employ a tax-consulting firm to attempt to
assure a fair tax burden on the real property within the applicable taxing
jurisdiction. Tenant agrees to pay its Proportionate Share of the cost of such
consultant.
B. PERSONAL PROPERTY TAXES. Tenant shall be liable for all taxes levied
or assessed against any personal property or fixtures placed in or on the
Premises. If any such taxes are levied or assessed against Landlord or
Landlord's property and (i) Landlord pays the same or (ii) the assessed value of
Landlord's property is increased by inclusion of such personal property and
fixtures and Landlord pays the increased taxes, then Tenant shall pay to
Landlord, upon demand, the amount of such taxes.
4. LANDLORD'S REPAIRS AND MAINTENANCE.
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A. STRUCTURAL REPAIRS. Landlord, at its own cost and expense, shall
maintain the roof, foundation and the structural soundness of the exterior
walls of the Building in good repair, reasonable wear and tear excluded. The
term "walls" as used herein shall not include windows, glass or plate glass,
any doors, special store fronts or office entries, and the term "foundation"
as used herein shall not include loading docks. Tenant shall immediately give
Landlord written notice of defect or need for repairs, after which Landlord
shall have reasonable opportunity to effect such repairs or cure such defect.
B. TENANT'S SHARE OF COMMON AREA CHARGES. Tenant agrees to pay its
Proportionate Share of the cost of (i) maintenance and/or landscaping (including
both maintenance and replacement of landscaping) of any property that is a part
of the Building and/or the Project; (ii) operating, maintaining and repairing
any property, facilities or services (including without limitation utilities and
insurance therefor) provided for the use or benefit of Tenant or the common use
or benefit of Tenant and other lessees of the Project or the Building; and (iii)
an administrative fee of fifteen percent (15%) of all common area maintenance
charges.
5. TENANT'S REPAIRS.
A. MAINTENANCE OF PREMISES AND APPURTENANCES. Tenant, at its own
cost and expense, shall (i) maintain all parts of the Premises and promptly
make all necessary repairs and replacements to the Premises (except those for
which Landlord is expressly responsible hereunder), and (ii) keep the parking
areas, driveways and alleys surrounding the Premises in a clean and sanitary
condition. Tenant's obligation to maintain, repair and make replacements to
the Premises shall cover, but not be limited to, pest control, trash removal
and the maintenance, repair and replacement of all HVAC, electrical,
plumbing, sprinkler and other mechanical systems.
B. SYSTEM MAINTENANCE. Tenant, at its own cost and expense, shall enter
into a regularly scheduled preventive maintenance/service contract with a
maintenance contractor approved by Landlord for servicing all hot water, heating
and air conditioning systems and equipment within the Premises. The service
contract must include all services suggested by the equipment manufacturer in
its operations/maintenance manual and must become effective within thirty (30)
days of the date Tenant takes possession of the Premises.
C. OPTION TO MAINTAIN PREMISES. Landlord reserves the right to perform,
in whole or in part and without notice to Tenant, maintenance, repairs and
replacements to the Premises, paving, common area, landscape, exterior painting,
common sewage line plumbing and any other items that are otherwise Tenant's
obligations under this Section 5, in which event, Tenant shall be liable for its
Proportionate Share of the cost and expense of such repair, replacement,
maintenance and other such items.
6. ALTERATIONS.
Tenant shall not make any alterations, additions or improvements to the premises
without the prior written consent of Landlord. Tenant at its own cost and
expense, may erect such shelves, bins, furniture, machinery, liquid nitrogen
piping and associated equipment (including a tank and compressor outside the
Building), alternate fire suppression system and other trade fixtures as it
desires, provided that (i) such items do not alter the basic character of the
Premises or the Building, (ii) such items do not overload or damage the Building
or any Building systems, (iii) such items may be removed without injury to the
Premises, and (iv) the construction, erection or installation thereof complies
with all applicable governmental laws, ordinances, regulations and with
Landlord's specifications and requirements. Tenant shall be responsible for the
compliance of all of its alterations, additions and improvements to the Premises
with the Americans With Disabilities Act of 1990 and the Texas Architectural
Barriers Act. Except for removable furniture, fixtures and equipment, raised
computer floor(s), cubical furniture, liquid nitrogen piping and associated
equipment (including outside tank and compressor), alternate fire suppression
system and de-mountable interior wall panels, all alterations, additions,
improvements and partitions erected by Tenant shall be and remain the property
of Landlord immediately upon installation. All shelves, bins, furniture,
machinery, liquid nitrogen piping and associated equipment (including exterior
tank and compressor), raised computer floor(s), cubical furniture, alternate
fire suppression system(s) and removable trade fixtures installed by Tenant
shall be the Property of Tenant and shall be removed by Tenant on or before the
earlier to occur of the day of termination or expiration of this Lease or
vacating the Premises, at which time Tenant shall restore the Premises to the
condition which existed as of the completion of the Interior Improvements
[specifically excluding liquid nitrogen piping and associated equipment
(including exterior tank and compressor) and alternate fire suppression
system(s)], reasonable wear and tear excepted. All alterations, installations,
removals and restorations shall be performed in a good and workmanlike manner so
as not to damage or alter the primary structure or structural qualities of the
Building or other improvements situated on the Premises or of which the Premises
are a part.
7. SIGNS.
Any signage Tenant desires shall be subject to Landlord's written approval and
shall be submitted to Landlord prior to installation. Tenant shall repair, paint
and/or replace the Building fascia surface to which its signs are attached upon
Tenant's vacating the Premises or the removal or alteration of its signage.
Tenant shall not, without Landlord's
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prior written consent, (i) make any changes to the exterior of the Building or
the Premises, such as painting; (ii) install any exterior lights, decorations,
balloons, flags, pennants or banners; or (iii) erect or install any signs,
windows or door lettering, placards, decorations or advertising media of any
type which can be viewed from the exterior of the Premises. All signs,
decorations, advertising media, blinds, draperies and other window treatment or
bars or other security installations visible from outside the Premises shall
conform in all respects to the criteria established by Landlord or shall be
otherwise subject to Landlord's prior written consent.
8. UTILITIES.
Landlord agrees to provide water, electricity and wastewater service to the
Premises. Electrical service to the Building shall be at least three phase, 480
volt, 1,000 amperes, 20 watts per square foot. Tenant shall pay for all water,
gas, heat, light, power, telephone, sewer, sprinkler charges and other utilities
and services used on or at the Premises, together with any taxes, penalties,
surcharges or the like pertaining to the Tenant's use of the Premises and any
maintenance charges for utilities. Landlord shall have the right to cause any of
said services to be separately metered to Tenant, at Tenant's expense. Tenant
shall pay its prorata share, as reasonably determined by Landlord, of all
charges for jointly metered utilities. Landlord shall not be liable for any
interruption or failure of utility service on the Premises, and Tenant shall
have no rights or claims as a result of any such failure, however, Landlord will
use its diligent good faith efforts to restore any such failure of utility
service as soon as reasonably practicable. In the event water is not separately
metered to Tenant, Tenant agrees that it will not use the water and sewer
capacity for uses other than normal domestic restroom and kitchen usage, and
Tenant further agrees to reimburse Landlord for the entire amount of common
water and sewer costs as additional rental if, in fact, Tenant uses water or
sewer capacity for uses other than normal domestic restroom and kitchen uses
without first obtaining Landlord's written permission, including but not limited
to the cost for acquiring additional sewer capacity to service Tenant's excess
sewer use. Furthermore, Tenant agrees in such event to install its own expense a
submeter to determine Tenant's usage.
9. INSURANCE.
A. LANDLORD'S INSURANCE. Subject to reimbursement under Paragraph 2C
herein, Landlord shall maintain insurance covering the Building in an amount not
less than eighty percent (80%) of the "replacement cost" thereof, insuring
against the perils of fire, lightning, extended coverage, vandalism and
malicious mischief. Landlord, at Landlord's election, may carry insurance in
such additional amounts and coverages as Landlord may deem prudent from time to
time and the cost of such additional insurance shall likewise be reimbursable
under Paragraph 2C hereof.
B. TENANT'S INSURANCE. Tenant, at its own expense, shall maintain during
the term of this lease a policy or policies of worker's compensation and
comprehensive general liability insurance, including personal injury and
property damage, with contractual liability endorsement, in the amount of Five
Hundred Thousand Dollars ($500,000.00) for property damage and One Million
Dollars ($ 1,000,000.00) per occurrence and One Million Dollars ($1,000,000.00)
in the aggregate for personal injuries or deaths of persons occurring in or
about the Premises. Tenant, at its own expense, shall also maintain during the
term of this Lease fire and extended coverage insurance covering the replacement
cost of (i) all alterations, additions, partitions and improvements installed or
placed on the Premises by Tenant or by Landlord on behalf of Tenant; and (ii)
Tenant's personal property contained within the Premises. Said policies shall
(i) name the Landlord as an additional insured and insure Landlord's contingent
liability under or in connection with this Lease (except for worker's
compensation policy, which instead shall include a waiver of subrogation
endorsement in favor of Landlord); (ii) be issued by an insurance company which
is acceptable to Landlord; and (iii) provide that said insurance shall not be
canceled unless thirty (30) days prior written notice has been given to
Landlord. Said policy or policies or certificates thereof shall be delivered to
Landlord by Tenant on or before the Commencement Date and upon each renewal of
said insurance.
C. PROHIBITED USES. Tenant will not permit the Premises to be used for
any purpose or in any manner that would (i) void the insurance thereon, (ii)
increase the insurance risk or cost thereof, or (iii) cause the disallowance of
any sprinkler credits; including without limitation, use of the Premises for the
receipt, storage or handling of any product, material or merchandise that is
explosive or highly inflammable. If any increase in the cost of any insurance on
the Premises or the Building is caused by Tenant's use of the Premises or
because Tenant vacates the Premises, then Tenant shall pay the amount of such
increase to Landlord upon demand therefor.
10. FIRE AND CASUALTY DAMAGE.
A. TOTAL OR SUBSTANTIAL DAMAGE AND DESTRUCTION. If the Premises or the
Building should be damaged or destroyed by fire or other peril, Tenant shall
immediately give written notice to Landlord of such damage or destruction. If
the Premises or the Building should be totally destroyed by any peril covered by
the insurance to be provided by Landlord under Paragraph 9A above, or if they
should be so damaged thereby that, in Landlord's estimation, rebuilding or
repairs cannot be completed within one hundred eighty (180) days after the date
of such damage or after such completion there would not be enough time remaining
under the terms of this Lease to fully
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amortize such rebuilding or repairs, then this Lease shall terminate and the
rent shall be abated during the unexpired portion of this lease, effective upon
the date of the occurrence of such damage.
B. PARTIAL DAMAGE OR DESTRUCTION. If the Premises or the Building should
be damaged by any peril covered by the insurance to be provided by Landlord
under Paragraph 9A above and, in Landlord's estimation, rebuilding or repairs
can be substantially completed within one hundred eighty (180) days after the
date of such damage, then this Lease shall not terminate and Landlord shall
substantially restore the Premises to its previous condition, except that
Landlord shall not be required to rebuild, repair or replace any part of the
partitions, fixtures, additions and other improvements that may have been
constructed, erected or installed in or about the Premises for the benefit of,
by or for Tenant.
C. LIENHOLDERS' RIGHTS IN PROCEEDS. Notwithstanding anything herein to
the contrary, in the event the holder of any indebtedness secured by a mortgage
or deed of trust covering the Premises requires that the insurance proceeds be
applied to such indebtedness, then Landlord shall have the right to terminate
this Lease by delivering written notice of termination to Tenant within fifteen
(15) days after such requirement is made known to Landlord by any such holder,
whereupon all rights and obligations hereunder shall cease and terminate.
D. WAIVER OF SUBROGATION. Notwithstanding anything in this lease to the
contrary, Landlord and Tenant hereby waive and release each other of and from
any and all rights of recovery, claims, actions or causes of action against each
other, or their respective agents, officers and employees, for any loss or
damage that may occur to the Premises, improvements to the Building or personal
property (Building contents) within the Building and/or Premises, for any reason
regardless of cause or origin. Each party to this Lease agrees immediately after
execution of this Lease to give written notice of the terms of the mutual
waivers contained in this subparagraph to each insurance company that has issued
to such party policies of fire and extended coverage insurance and to have the
insurance policies properly endorsed to provide that the carriers of such
policies waive all rights of recovery under subrogation or otherwise against the
other party.
11. LIABILITY AND INDEMNIFICATION.
Except for any claims, rights of recovery and causes of action that Landlord has
released, Tenant shall hold Landlord harmless from and defend Landlord against
any and all claims or liability for any injury or damage (i) to any person or
property whatsoever occurring in, on or about the Premises or any part thereof,
the Building and/or other common areas, the use of which Tenant may have in
accordance with this Lease, if (and only if) such injury or damage shall be
caused in whole or in part by the act, neglect, fault or omission of any duty by
Tenant, its agents, servants, employees or invitees; (ii) arising from the
conduct or management of any work done by the Tenant in or about the Premises;
(iii) arising from transactions of the Tenant; and (iv) all costs, counsel fees,
expenses and liabilities incurred in connection with any such claim or action or
proceeding brought thereon. The provisions of this Paragraph 11 shall survive
the expiration or termination of this Lease. Landlord shall not be liable in any
event for personal injury or loss of Tenant's property caused by fire, flood,
water leaks, rain, hail, ice, snow, smoke, lightning, wind, explosion,
interruption of utilities or other occurrences. LANDLORD STRONGLY RECOMMENDS
THAT TENANT SECURE TENANT'S OWN INSURANCE IN EXCESS OF THE AMOUNTS REQUIRED
ELSEWHERE IN THIS LEASE TO PROTECT AGAINST THE ABOVE OCCURRENCES IF TENANT
DESIRES ADDITIONAL COVERAGE FOR SUCH RISKS. Tenant shall give prompt notice to
Landlord of any significant accidents involving injury to persons or property.
Furthermore, Landlord shall not be responsible for lost or stolen personal
property, equipment, money or jewelry from the Premises or from the public areas
of the Building or the Project, regardless of whether such loss occurs when the
area is locked against entry. Landlord shall not be liable to Tenant or Tenant's
employees, customers or invitees for any damages or losses to persons or
property caused by any lessees in the Building or the Project and/or any
personal injury or property damage caused thereby. Landlord may, but is not
obligated to, enter into agreements with third parties for the provision,
monitoring, maintenance and repair of any courtesy patrols or similar services
or fire protective systems and equipment and, to the extent same is provided at
Landlord's sole discretion, Landlord shall not be liable to Tenant for any
damages, costs or expenses which occur for any reason in the event any such
system or equipment is not properly installed, monitored or maintained or any
such services are not property provided. Landlord shall use reasonable diligence
in the maintenance of lighting furnished by Landlord, if any, in the parking
garage or parking areas servicing the Premises, and Landlord shall not be
responsible for additional lighting or any security measures in the Project, the
Premises, the parking garage or other parking areas.
12. USE.
Subject to the other provisions of this Lease, Tenant may use the Premises
for the purpose of conducting a manufacturing and testing services facility
as permitted under the IP-CO zoning of the Property, together with attendant
office areas and dining amenities, and for such other purposes as are
permitted by the applicable zoning restrictions of the Property. Outside
storage, including without limitation storage of trucks and other vehicles,
is prohibited without Landlord's prior written consent. Tenant shall comply
with all governmental laws, ordinances and regulations applicable to the use
of the Premises and shall promptly comply with all governmental orders and
Initial NSS [ILLEGIBLE]
Date 6/25/98 6/26/98
6
directives for the correction, prevention and abatement of nuisances in, upon
or connected with the Premises, all at Tenant's sole expense. Tenant shall not
permit any objectionable or unpleasant odors, smoke, dust, gas, noise or
vibrations to emanate from the Premises, nor take any other action that would
constitute a nuisance or would disturb, unreasonably interfere with or endanger
Landlord or the tenants of other buildings in the vicinity of the Building or
the Project.
13. HAZARDOUS SUBSTANCES.
A. REGULATION OF HAZARDOUS SUBSTANCES AND INDEMNITY. The term "HAZARDOUS
SUBSTANCES", as used in this Lease, shall mean pollutants, contaminants, toxic
or hazardous substances, substances that are reactive, corrosive or ignitable,
radioactive materials, asbestos, polychlorobiphenyls, petroleum and petroleum
distillates and any other substances, the use and/or the removal of which is
required or the use of which is restricted, prohibited or penalized by any
"Environmental Law", which term shall mean any federal, state or local statute,
ordinance, regulation or other law of a governmental or quasi-governmental
authority relating to pollution or protection of the environment or the
regulation of the storage or handling of Hazardous Substances. Tenant hereby
agrees that: (i) no activity will be conducted on the Premises that will produce
any Hazardous Substances, except for such activities that are part of the
ordinary course of Tenant's business activities (the "PERMITTED ACTIVITIES"),
provided said Permitted Activities are conducted in accordance with all
Environmental laws and have been approved in advance in writing by Landlord and,
in connection therewith, Tenant shall be responsible for obtaining any required
permits or authorizations and paying any fees and providing any testing required
by any governmental agency; (ii) the Premises will not be used in any manner for
the storage of any Hazardous Substances, except for the temporary storage of
such materials that are used in the ordinary course of Tenant's business (the
"PERMITTED MATERIALS"), provided such Permitted Materials are properly stored in
a manner and location meeting all Environmental Laws and have been approved in
advance in writing by Landlord, and, in connection therewith, Tenant shall be
responsible for obtaining any required permits or authorizations and paying any
fees and providing any testing required by any governmental agency; (iii) no
portion of the Premises will be used as a landfill or a dump; (iv) Tenant will
not install any underground tanks of any type; (v) Tenant will not allow any
surface or subsurface conditions to exist or come into existence that
constitute, or with the passage of any time may constitute, a public or private
nuisance; and (vi) Tenant will not permit any Hazardous Substances to be brought
onto the Premises, except for the Permitted Materials, and if so brought or
found located thereon, the same shall be immediately removed, with proper
disposal, and all required clean-up procedures shall be diligently undertaken by
Tenant at its sole cost pursuant to all Environmental Laws. Landlord and
Landlord's representatives shall have the right but not the obligation to enter
the Premises for the purpose of inspecting the storage, use and disposal of any
Permitted Materials to ensure compliance with all Environmental Laws. Should it
be determined, in Landlord's sole opinion, that any Permitted Materials are
being improperly stored, used or disposed of, or that any non-Permitted
Materials are present on the Premises, then Tenant shall immediately take such
corrective action as requested be Landlord. Should Tenant fail to take such
corrective action within twenty four (24) hours, Landlord shall have the right
to perform such work and Tenant shall reimburse Landlord, on demand, for any and
all costs associated with said work. Tenant shall indemnify, defend and hold
Landlord harmless from any and all claims, damages, fines, judgments, penalties,
costs, liabilities, or losses (including, without limitation, a decrease in
value of the Project, damages caused by loss or restriction of rentable or
usable space, or any damages caused by adverse impact on marketing of the space,
and any and all sums paid for settlement of claims, attorneys' fees, consultant
and expert fees) arising during or after the Term hereof and arising as a result
of any contamination, Hazardous Substance release or spill by Tenant. This
indemnification includes, without limitation, any and all costs incurred because
of any investigation of the site or any cleanup, removal, or restoration
mandated by a federal, state, or local agency or political subdivision. Without
limitation of the foregoing, if Tenant causes or permits the presence of any
Hazardous Substance on the Project, including, without limitation, any Permitted
Materials, by any of its agents, employees, guests, invitees, contractors,
subcontractors or subtenants which results in contamination, Tenant shall
promptly, at its sole expense, take any and all necessary actions to return the
Project to the condition existing prior to the presence of any such Hazardous
Substance on the Project. Tenant shall first obtain Landlord's approval for any
such remedial action. The foregoing indemnification and the responsibilities of
Tenant shall survive the termination or expiration of this Lease.
B. LANDLORD'S REPRESENTATIONS AND OBLIGATIONS. Landlord hereby
represents and warrants to Tenant that, to Landlord's current actual knowledge,
and based solely upon that certain Environmental Site Assessment Report, dated
June 25, 1998, as of the date hereof there are no Hazardous Substances present
or stored on, in or about the Project and there is no Hazardous Substance
contamination on the Project or any portion thereof. Landlord shall not cause or
permit any Hazardous Substance to be used, stored, generated, or disposed of on
or in the Project by Landlord or Landlord's agents, employees, guests, invitees,
contractors, or subcontractors. If Hazardous Substances are used, stored,
generated or disposed of by Landlord or Landlord's agents, employees, guests,
invitees, contractors, or subcontractors (specifically excluding Tenant and
Tenant's agents, employees, guests, invitees, contractors, or subcontractors) on
or in the Project, or if the Project becomes contaminated in any way by Landlord
or Landlord's agents, employees, guests, invitees, contractors, or
subcontractors (specifically excluding Tenant and Tenant's agents, employees,
guests, invitees, contractors, or subcontractors), Landlord shall indemnify,
defend and hold Tenant harmless from any and all claims, damages, fines,
judgments, penalties, costs, liabilities, or losses (including, without
limitation, and any and all sums paid for settlement of claims, attorneys' fees,
consultant
Initial NSS [ILLEGIBLE]
Date 6/25/98 6/26/98
7
and expert fees) arising during or after the Term hereof and arising as a result
of Hazardous Substance contamination caused by the use, storage, generation, or
disposal of Hazardous Substances on or in the Project by Landlord or Landlord's
agents, employees, guests, invitees, contractors, or subcontractors
(specifically excluding Tenant and Tenant's agents, guests, invitees,
contractors, or subcontractors). This indemnification includes, without
limitation, any and all costs incurred because of any investigation of the site
or any cleanup, removal, or restoration mandated by a federal, state, or local
agency or political subdivision. The foregoing indemnification and the
responsibilities of Landlord shall survive the termination or expiration of this
Lease.
C. DEFINITION OF "HAZARDOUS SUBSTANCE". As used herein, "Hazardous
Substance" means any substance that is toxic, ignitable, reactive, or
corrosive and that is regulated by any local government, the state of Texas,
or the United States Government. "Hazardous Substance" includes any and all
material or substances that are defined as "hazardous waste," "extremely
hazardous waste," or a "hazardous substance" pursuant to state, federal, or
local government law. "Hazardous Substance" includes but is not restricted to
asbestos, polychlorobiphenyls, petroleum and petroleum distillates.
14. ARCHITECTURAL BARRIERS
A. LANDLORD'S OBLIGATIONS. Landlord hereby agrees to design and
construct the base building and exterior portions of the Project (but
specifically excluding the design or the Interior Improvements and any other
Tenant Alterations) in compliance with the requirements of the Americans with
Disabilities Act (the "ADA") and the Texas Architectural Barriers Act (the
"TABA"). Landlord will indemnify and hold Tenant harmless from any and all
claims, actions, causes of action, liability, loss, cost or expense, including
court costs and attorneys fees, incurred by Tenant as a result of claims by
third parties (including the federal government or the State of Texas but
excluding any claims of Tenant or any subtenants of Tenant) based on the failure
of the failure of the base building and exterior portions of the Project (but
specifically excluding the design or the Premises) to comply with the ADA or the
TABA.
B. TENANT'S OBLIGATIONS. Tenant hereby agrees to design the Interior
Improvements and all other Alterations by or for Tenant in compliance with the
requirements of the ADA and the TABA. Tenant will indemnify and hold Landlord
harmless from any and all claims, actions, causes of action, liability, loss,
cost or expense, including court costs and attorneys fees, incurred by Landlord
as a result of claims by third parties (including the federal government or the
State of Texas) based on the failure of the Premises (but specifically excluding
the base building and exterior portions of the Project designed and constructed
by Landlord) to comply with the ADA or the TABA.
15. INSPECTION.
Landlord's agents and representatives shall have the right to enter the Premises
at any reasonable time during business hours (or at any time in case of
emergency) (i) to inspect the Premises, (ii) to make such repairs as may be
required or permitted pursuant to this Lease, and/or (iii) during the last six
(6) months of the Lease term, for the purpose of showing the Premises. In
addition, Landlord shall have the right to erect a suitable sign on the Premises
stating the Premises are available for lease. Tenant shall notify Landlord in
writing at least thirty (30) days prior to vacating the Premises and shall
arrange to meet with Landlord for a joint inspection of the Premises prior to
vacating. If Tenant fails to give such notice or to arrange for such inspection,
then Landlord's inspection of the Premises shall be deemed correct for the
purpose of determining Tenant's responsibility for repairs and restoration of
the Premises.
16. ASSIGNMENT AND SUBLETTING.
Tenant shall not have the right to sublet, assign or otherwise transfer or
encumber this Lease, or any interest therein, without the prior written consent
of Landlord, which consent will not be unreasonably withheld so long as (i) the
creditworthiness and financial condition of the proposed assignee or sublessee
is satisfactory to Landlord, in Landlord's reasonable discretion, and (ii) the
proposed use of the Premises by such proposed assignee or sublessee would not,
in Landlord's reasonable opinion, be detrimental to the Building, the Project or
the other tenants therein. Any attempted assignment, subletting, transfer or
encumbrance by Tenant in violation of the terms and covenants of this paragraph
shall be void. Any assignee, sublessee or transferee of Tenant's interest in
this Lease (all such assignees, sublessees and transferees being hereinafter
referred to as "TRANSFEREES"), by assuming Tenant's obligations hereunder, shall
assume liability to Landlord for all amounts paid to persons other than Landlord
by such Transferees to which Landlord is entitled or is otherwise in
contravention of this Paragraph 15. No assignment, subletting or other transfer,
whether or not consented to by Landlord or permitted hereunder, shall relieve
Tenant of its liability under this Lease. If an Event of Default occurs while
the Premises or any part thereof are assigned or sublet, then Landlord, in
addition to any other remedies herein provided or provided by law, may collect
directly from such Transferee all rents payable to the Tenant and apply such
rent against any sums due Landlord hereunder. No such collection shall be
construed to constitute a novation or a release of Tenant from the further
performance of Tenant's obligations and liabilities hereunder. If Landlord
consents to any subletting or assignment by Tenant as hereinabove provided and
any category of rent subsequently received by Tenant under any such sublease is
in excess of the same
Initial NSS [ILLEGIBLE]
Date 6/25/98 6/26/98
8
category of rent payable under this Lease, or any additional consideration is
paid to Tenant by the assignee under any such assignment, then Landlord may, at
its option, declare such excess rents under any sublease or such additional
consideration for any assignment to be due and payable by Tenant to Landlord as
additional rent hereunder. The following shall additionally constitute an
assignment of this Lease by Tenant for the purposes of this Paragraph 15: (i) if
Tenant is a corporation, any merger, consolidation, dissolution or liquidation,
or any change in ownership or owner entitled to vote thirty percent (30%) or
more of Tenant's outstanding voting stock other than pursuant to (A) a
registered public offering of Tenant's stock, (B) a sale of stock or a merger
with another company whose stock is listed on a recognized exchange, or (C) a
joint venture between Tenant and a third party; (ii) if Tenant is a partnership,
joint venture or other entity, any liquidation, dissolution or transfer of
ownership of any interests totaling thirty percent (30%) or more of the total
interests in such entity; (iii) the sale, transfer, exchange, liquidation or
other distribution of more than thirty percent (30%) of Tenant's assets, other
than this Lease; or (iv) the mortgage, pledge, hypothecation or other
encumbrance of or grant of a security interest by Tenant in this Lease, or any
of Tenant's rights hereunder.
17. CONDEMNATION.
If more than eighty percent (80%) of the Premises are taken for any public or
quasi-public use under governmental law, ordinance or regulation, or by right of
eminent domain or private purchase in lieu thereof, and the taking prevents or
materially interferes with the use of the remainder of the Premises for the
purpose for which they were leased to Tenant, then this Lease shall terminate
and the rent shall be abated for the unexpired portion of this Lease, effective
on the date of such taking. If less than eighty percent (80%) of the Premises
are taken for any public or quasi-public use under any governmental law,
ordinance or regulation, or by right of eminent domain or private purchase in
lieu thereof, or if the taking does not prevent or materially interfere with the
use of the remainder of the Premises for the purpose for which they were leased
to Tenant, then this Lease shall not terminate, but the rent payable hereunder
during the unexpired portion of this Lease shall be reduced to such extent as
may be fair and reasonable under all circumstances. All compensation awarded in
connection with or as a result of any of the foregoing proceedings shall be the
property of Landlord, and Tenant hereby assigns any interest in any such award
to Landlord; provided, however, Landlord shall have no interest in any award
made to Tenant for Tenant's moving expenses or for the taking of Tenant's trade
fixtures and personal property, if a separate award for such items is made to
Tenant. Notwithstanding the foregoing, Tenant may pursue a separate award in
condemnation, at its own expense, so long such award does not operate to reduce
the award paid to Landlord.
18. HOLDING OVER.
At the termination of this Lease by its expiration or otherwise, Tenant shall
immediately deliver possession of the Premises to Landlord with all repairs and
maintenance required herein to be performed by Tenant completed. If for any
reason Tenant retains possession of the Premises after the expiration or
termination of this Lease, unless the parties hereto otherwise agree in writing,
such possession shall be deemed to be a tenancy at will only, and all of the
other terms and provisions of this Lease shall be applicable during such period,
except that Tenant shall pay Landlord from time to time, upon demand, as rental
for the period of such possession, an amount equal to one and one-half (1-1/2)
times the rent in effect on the date of such termination of this lease, computed
on a daily basis for each day of such period. No holding over by Tenant, whether
with or without consent of Landlord, shall operate to extend this Lease except
as otherwise expressly provided. The preceding provisions of this Paragraph 18
shall not be construed as consent for Tenant to retain possession of the
Premises in the absence of written consent thereto by Landlord.
19. QUIET ENJOYMENT.
Landlord represents that it has the authority to enter into this lease and that,
so long as Tenant pays all amounts due hereunder and performs all other
covenants and agreements herein set forth, Tenant shall peaceably and quietly
have, hold and enjoy the Premises for the term hereof without hindrance or
molestation from Landlord, subject to the terms and provisions of this Lease.
20. EVENTS OF DEFAULT.
The following events (herein individually referred to as an "EVENT OF DEFAULT")
each shall be deemed to be a default in or breach of Tenant's obligations under
this Lease:
A. Tenant shall fail to pay any installment of the rent herein reserved
when due, or any other payment or reimbursement to Landlord required herein when
due, and such failure shall continue for a period of ten (10) days from the date
such payment was due. Notwithstanding the foregoing, Tenant shall be entitled to
written notice from Landlord not more than two times during any twelve (12)
consecutive month period that Tenant has failed to timely pay any rent or
additional rent hereunder before such failure shall constitute an Event of
Default. Unless Landlord receives such payment within ten (10) days after such
written notice, Tenant's failure shall constitute an Event of Default.
Initial NSS [ILLEGIBLE]
Date 6/25/98 6/26/98
9
B. Tenant shall (i) vacate or abandon all or a substantial portion of
the Premises or (ii) fail to continuously operate its business at the Premises
for the permitted use set forth herein, in either event whether or not Tenant is
in default of the rental payments due under this lease.
C. Tenant shall fail to discharge any lien placed upon the Premises in
violation of Paragraph 23 hereof within twenty (20) days after such lien or
encumbrance is filed against the Premises.
D. Tenant shall default in the performance of any of its obligations
under any other lease to Tenant from Landlord, or from any person or entity
affiliated with or related to Landlord, including, without limitation, the
Office Building Owner (as defined in EXHIBIT "E" attached hereto) and same shall
remain uncured after the lapsing of any applicable cure periods provided for
under such other lease.
E. Tenant shall fail to comply with any term, provision or covenant of
this Lease (other than those listed above in this paragraph) and shall not cure
such failure within thirty (30) days after written notice thereof from Landlord.
21. REMEDIES.
Upon each occurrence of an Event of Default, Landlord shall have the option to
pursue any one or more of the following remedies without any notice or demand:
(a) Terminate this Lease;
(b) Enter upon and take possession of the Premises without terminating
this Lease;
(c) Make such payments and/or take such action and pay and/or perform
whatever Tenant is obligated to pay or perform under the terms of this Lease,
and Tenant agrees that Landlord shall not be liable for any damages resulting to
Tenant from such action; and/or
(d) Alter all locks and other security devices at the Premises, with or
without terminating this Lease, and pursue, at Landlord's option, one or more
remedies pursuant to this Lease, and Tenant hereby expressly agrees that
Landlord shall not be required to provide to Tenant the new key to the Premises,
regardless of hour, including Tenant's regular business hours;
and in any such event Tenant shall immediately vacate the Premises, and if
Tenant fails to do so, Landlord, without waiving any other remedy it may have,
may enter upon and take possession of the Premises and expel or remove Tenant
and any other person who may be occupying such Premises or any part thereof,
without being liable for prosecution or any claim of damages therefore. In the
event of any violation of Section 93.002 of the Texas Property Code by Landlord
or by any agent or employee of Landlord, Tenant hereby expressly waives any and
all rights Tenant may have under Paragraph (g) of such Section 93.002.
A. DAMAGES UPON TERMINATION. If Landlord terminates this Lease at
Landlord's option, Tenant shall be liable for and shall pay to Landlord the sum
of all rental and other payments owed to Landlord hereunder accrued to the date
of such termination, plus, as liquidated damages, an amount equal to (i) the
present value of the total rental and other payments owed hereunder for the
remaining portion of the Lease term, calculated as if such term expired on the
date set forth in Paragraph 1, less (ii) the present value of the then fair
market rental for the Premises for such period, provided that, because of the
difficulty of ascertaining such value and in order to achieve a reasonable
estimate of liquidated damages hereunder, Landlord and Tenant stipulate and
agree, for the purposes hereof, that such fair market rental shall in no event
exceed seventy five percent (75%) of the rental amount for such period set forth
in Paragraph 2A above.
B. DAMAGES UPON REPOSSESSION. If Landlord repossesses the Premises
without terminating this Lease, Tenant at Landlord's option, shall be liable for
and shall pay Landlord on demand all rental and other payments owed to Landlord
hereunder, accrued to the date of such repossession, plus all amounts require to
be paid by Tenant to Landlord until the date of expiration of the term as stated
in Paragraph 1, diminished by all amounts actually received by Landlord through
reletting the premises during such remaining term (but only to the extent of the
rent herein reserved). Actions to collect amounts due by Tenant to Landlord
under this paragraph may be brought from time to time, on one or more occasions,
without the necessity of Landlord's waiting until the expiration of the lease
term.
C. COSTS OF RELETTING, REMOVING, REPAIRS AND ENFORCEMENT. Upon an
Event of Default, in addition to any sum provided to be paid under this
Paragraph 21, Tenant also shall be liable for and shall pay to Landlord (i)
broker's fees and all other costs and expenses incurred by Landlord in
connection with reletting the whole or any part of the Premises; (ii) the
costs of removing, storing or disposing of Tenant's or any other occupant's
property; (iii) the costs of repairing, altering, remodeling or otherwise
putting the Premises into condition acceptable to a new tenant or tenants;
(iv) any and all costs and expenses incurred by Landlord in effecting
compliance with Tenant's
10
obligations under this Lease; and (v) all reasonable expenses incurred by
Landlord in enforcing or defending Landlord's rights and/or remedies hereunder,
including without limitation all reasonable attorneys' fees and all court costs
incurred in connection with such enforcement or defense.
D. LATE CHARGE. In the event Tenant fails to make any payment due
hereunder within five (5) days after such payment is due, including without
limitation any rental or escrow payment, in order to help defray the
additional cost to Landlord for processing such late payments and not as
interest, Tenant shall pay to Landlord on demand a late charge in an amount
equal to five percent (5%) of such payment. The provision for such late
charge shall be in addition to all of Landlord's other rights and remedies
hereunder or at law, and shall not be construed as liquidated damages or as
limiting Landlord's remedies in any manner.
E. INTEREST ON PAST DUE AMOUNTS. If Tenant fails to pay any sum which
at any time becomes due to Landlord under any provision of this Lease as and
when the same becomes due hereunder, and such failure continues for ten (10)
days after the due date for such payment, then Tenant shall pay to Landlord
interest on such overdue amounts from the date due until paid at an annual
rate which equals the lesser of (i) eighteen percent (18%) or (ii) the
highest rate then permitted by law.
F. NO IMPLIED ACCEPTANCES OR WAIVERS. Exercise by Landlord of any one
or more remedies hereunder granted or otherwise available shall not be deemed
to be an acceptance by Landlord of Tenant's surrender of the Premises, it
being understood that such surrender can be effected only by the written
agreement of Landlord. Tenant and Landlord further agree that forbearance by
Landlord to enforce any of its rights under this lease or at law or in equity
shall not be a waiver of Landlord's right to enforce any one or more of its
rights, including any right previously forborne, in connection with any
existing or subsequent default. No re-entry or taking possession of the
Premises by Landlord shall be construed as an election on its part to
terminate this Lease, unless a written notice of such intention is given to
Tenant, and, notwithstanding any such reletting or re-entry or taking
possession of the Premises, Landlord may at any time thereafter elect to
terminate this lease for a previous default. Pursuit of any remedies
hereunder shall not preclude the pursuit of any other remedy herein provided
or any other remedies provided by law, nor shall pursuit of any remedy herein
provided constitute a forfeiture or waiver of any rent due to Landlord
hereunder or of any damages occurring to Landlord by reason of the violation
of any of the terms, provisions and covenants contained in this Lease.
Landlord's acceptance of any rent following an Event of Default hereunder
shall not be construed as Landlord's waiver of such Event of Default. No
waiver by Landlord of any violation or breach of any of the terms, provisions
and covenants of this lease shall be deemed or construed to constitute a
waiver of any other violation or default.
G. RELETTING OF PREMISES. In the event of any termination of this
Lease and/or repossession of the Premises for an Event of Default, Landlord
shall use reasonable efforts to relet the Premises and to collect rental
after reletting, with no obligation to accept any lessee that Landlord deems
undesirable, to expend any funds in connection with such reletting or
collection of rents therefrom, or to lease the Premises in preference to any
other space that Landlord may have available for lease at the time. Tenant
shall not be entitled to credit for or reimbursement of any proceeds of such
reletting in excess of the rental owed hereunder for the period of such
reletting. Landlord may relet the whole or any portion of the Premises, for
any period, to any tenant and for any use or purpose.
H. LANDLORD'S DEFAULT. If Landlord fails to perform any of its
obligations hereunder within thirty (30) days after written notice from
Tenant specifying such failure, Tenant's exclusive remedy shall be an action
for damages. Unless and until Landlord fails to so cure any default after
such notice, Tenant shall not have any remedy or cause of action by reason
thereof. All obligations of Landlord hereunder will construed as covenants,
not conditions; and all such obligations will be binding upon Landlord only
during the period of its possession of the premises and not thereafter. The
term "LANDLORD" shall mean only the owner, for the time being, of the
Premises and, in the event of the transfer by such owner of its interest in
the Premises, such owner shall thereupon be released and discharged from all
covenants and obligations of the Landlord thereafter accruing, provided that
such covenants and obligations shall be binding during the lease term upon
each new owner for the duration of such owner's ownership. Notwithstanding
any other provision of this Lease, Landlord shall not have any personal
liability hereunder. In the event of any breach or default by Landlord in any
term or provision of this Lease, Tenant agrees to look solely to the equity
or interest then owned by Landlord in the Premises or the Building; however,
in no event shall any deficiency judgment or any money judgment of any kind
be sought or obtained against any Landlord.
I. TENANT'S PERSONAL PROPERTY. If Landlord repossesses the Premises
pursuant to the authority herein granted, or if Tenant vacates or abandons
all or any part of the Premises, then Landlord shall have the right to (i)
keep in place and use, or (ii) remove and store, all of the furniture,
fixtures and equipment at the Premises, including that which is owned by or
leased to Tenant, at all times prior to any foreclosure thereon by Landlord
or repossession thereof by any lessor thereof or third party having a lien
thereon. In addition to the Landlord's other rights hereunder, Landlord may
dispose of the stored property if Tenant does not claim the property within
ten (10) days after the date the property is stored. Landlord shall give
Tenant at least ten (10) days prior written notice of such intended
disposition. Landlord shall also have the right to relinquish possession of
all or any portion of such furniture, fixtures, equipment and other property
to any person ("CLAIMANT") who presents to Landlord a copy of any
11
instrument represented by Claimant to have been executed by Tenant (or any
predecessor of Tenant) granting Claimant the right under various circumstances
to take possession of such furniture, fixtures, equipment or other property,
without the necessity on the part of Landlord to inquire into the authenticity
or legality of said instrument. The rights of Landlord herein stated shall be in
addition to any and all other rights that Landlord has or may hereafter have at
law or in equity, and tenant stipulates and agrees that the rights granted
Landlord under this paragraph are commercially reasonable.
22. MORTGAGES.
Subject to Tenant receiving a non-disturbance agreement from the mortgagee of
the Property, Tenant accepts this Lease subject and subordinate to any
mortgages and/or deeds of trust now or at any time hereafter constituting a
lien or charge upon the Premises or the improvements situated thereon or the
Building, provided, however, that if the mortgagee, trustee or holder of any
such mortgage or deed of trust elects to have Tenant's interest in this Lease
superior to any such instrument, then by notice to Tenant from such
mortgagee, trustee or holder, this Lease shall be deemed superior to such
lien, whether this lease was executed before or after said mortgage or deed
of trust. If any mortgage, deed of trust or security agreement is enforced by
the mortgagee, the trustee, or the secured party, Tenant shall, upon request,
attorn to the mortgagee or purchaser at such foreclosure sale, or any person
or party succeeding to the interest of Landlord as a result of such
enforcement, as the case may be, and execute instrument(s) confirming such
attornment. In the event of such enforcement and upon Tenant's attornment as
aforesaid, Tenant will automatically become the tenant of the successor to
Landlord's interest without change in the terms or provisions of this Lease;
provided, however, that such successor to Landlord's interest shall not be
bound by (a) any payment of Rent for more than one month in advance (except
prepayments for security deposits, if any), or (b) any amendments or
modifications of this Lease made without the prior written consent of such
Lessor or mortgagee. Tenant, at any time hereafter on demand, shall execute
any instruments, releases or other documents that may be required by any
mortgagee, trustee or holder for the purpose of subjecting and subordinating
this Lease to the lien of any such mortgage or to confirm Tenant's agreement
of attornment. In consideration of Tenant's subordination and attornment
agreements set forth above, Landlord shall provide Tenant with a
non-disturbance agreement from its lender. Tenant shall not terminate this
Lease or pursue any other remedy available to Tenant hereunder for any
default on the part of Landlord without first giving written notice by
certified or registered mail, return receipt requested, to any mortgagee,
trustee or holder of any such mortgage or deed of trust, the name and post
office address of which Tenant has received written notice, specifying the
default in reasonable detail and affording such mortgagee, trustee or holder
a reasonable opportunity (but in no event less than thirty (30) days) to make
performance, at its election, for and on behalf of Landlord.
23. MECHANIC'S LIENS.
Tenant has no authority, express or implied to create or place any lien or
encumbrance of any kind or nature whatsoever upon, or in any manner to bind,
the interest of Landlord or Tenant in the Premises. Tenant will save and hold
Landlord harmless from any and all loss, costs expense, including without
limitation attorneys' fees, based on or arising out of asserted claims or
liens against the leasehold estate or against the right, title and interest
of the Landlord in the Premises or under the terms of this Lease.
24. MISCELLANEOUS.
A. INTERPRETATION. The captions inserted in this lease are for
convenience only and in no way define, limit or otherwise describe the scope
or intent of this Lease, or any provision hereof, or in any way affect the
interpretation of this Lease. Any reference in this Lease to rentable area
shall mean the gross rentable area as determined by the roofline of the
building in question.
B. BINDING EFFECT. Except as otherwise herein expressly provided, the
terms, provisions and covenants and conditions in this Lease shall apply to,
inure to the benefit of and be binding upon the parties hereto and upon their
respective heirs, executors, personal representatives, legal representatives,
successors and assigns. Landlord shall have the right to transfer and assign,
in whole or in part, its rights and obligations in the Premises and in the
Building and other property that are the subject of this Lease.
C. EVIDENCE OF AUTHORITY. Tenant agrees to furnish to Landlord,
promptly upon demand, a corporate resolution, proof of due authorization by
partners or other appropriate documentation evidencing the due authorization
of such party to enter into this Lease.
D. FORCE MAJEURE. Landlord shall not be held responsible for delays
in the performance of its obligations hereunder when caused by material
shortages, acts of God, labor disputes or other events beyond the control of
Landlord.
12
E. PAYMENTS CONSTITUTE RENT. Notwithstanding anything in this Lease
to the contrary, all amounts payable by Tenant to or on behalf of Landlord
under this Lease, whether or not expressly denominated as rent, shall
constitute rent.
F. ESTOPPEL CERTIFICATES. Tenant agrees from time to time, within
ten (10) days after request of Landlord to deliver to Landlord, or Landlord's
designee, an estoppel certificate stating that this Lease is in full force
and effect, the date to which rent has been paid, the unexpired term of this
Lease, any defaults existing under this Lease (or the absence thereof) and
such other factual or legal matters pertaining to this Lease as may be
requested by Landlord. It is understood and agreed that Tenant's obligation
to furnish such estoppel certificates in a timely fashion is a material
inducement for Landlord's execution of this Lease. Tenant's failure to timely
comply with the requirements of this Paragraph 24F will constitute an Event
of Default under this Lease, notwithstanding the existence of any notice and
opportunity to cure periods which would otherwise apply to extend the time
period within which Tenant may respond.
G. ENTIRE AGREEMENT. This Lease constitutes the entire understanding
and agreement of Landlord and Tenant with respect to the subject matter of
this Lease, and contains all of the covenants and agreements of Landlord and
Tenant with respect thereto. Landlord and Tenant each acknowledge that no
representations, inducements, promises or agreements, oral or written, have
been made by Landlord or Tenant, or anyone acting on behalf of Landlord or
Tenant, which are not contained herein, and any prior agreements, promises,
negotiations or representations not expressly set forth in this Lease are of
no force or effect. EXCEPT AS SPECIFICALLY PROVIDED IN THIS LEASE, TENANT
HEREBY WAIVES THE BENEFIT OF ALL WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT
TO THE PREMISES, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY THAT THE
PREMISES ARE SUITABLE FOR ANY PARTICULAR PURPOSE. Landlord's agents and
employees do not and will not have the authority to make exceptions, changes
or amendments to this Lease, or factual representations not expressly
contained in this Lease. Under no circumstances shall Landlord or Tenant be
considered an agent of the other. This Lease may not be altered, changed or
amended except by an instrument in writing signed by both parties hereto.
H. SURVIVAL OF OBLIGATIONS. All obligations of Tenant hereunder not
fully performed as of the expiration or earlier termination of the term of
this Lease shall survive the expiration or earlier termination of the term
hereof, including without limitation all payment obligations with respect to
taxes and insurance and all obligations concerning the condition and repair
of the Premises. Upon the expiration or earlier termination of the term
hereof, and prior to Tenant vacating the Premises, Tenant shall pay to
Landlord any amount reasonable estimated by Landlord as necessary to put the
Premises in good condition and repair, reasonable wear and tear excluded,
including without limitation the cost of repairs to and replacements of all
heating and air conditioning systems and equipment therein. Tenant shall
also, prior to vacating the Premises, pay to Landlord the amount, as
estimated by Landlord, of Tenant's obligation hereunder for real estate taxes
and insurance premiums for the year in which the Lease expires or terminates.
All such amounts shall be used and held by Landlord for payment of such
obligations of Tenant hereunder, with Tenant being liable for any additional
costs therefore upon demand by Landlord, or with any excess to be returned to
Tenant after all such obligations have been determined and satisfied, as the
case may be. Any Security Deposit held by Landlord may, at Landlord's option,
be credited against any amounts due from Tenant under this Paragraph 24H.
I. SEVERABILITY OF TERMS. If any clause or provision of this Lease is
illegal, invalid or unenforceable under present or future laws effective
during the term of this Lease, then, in such event, it is the intention of
the parties hereto that the remainder of this Lease shall not be affected
thereby, and it is also the intention of the parties to this Lease that in
lieu of each clause or provision of this lease that is illegal, invalid or
unenforceable, there be added, as a part of this Lease, a clause or provision
as similar in terms to such illegal, invalid or unenforceable clause or
provision as may be possible and be legal, valid and enforceable.
J. EFFECTIVE DATE. All references in this Lease to "the date hereof"
or similar references shall be deemed to refer to the last date, in point of
time, on which all parties hereto have executed this Lease.
K. BROKERS' COMMISSION. Tenant represents and warrants that it has
dealt with Oxford Commercial and Pyramid Properties, Inc. in connection with
this transaction or future related transactions and that no other broker,
agent or other person brought about this transaction, and Tenant agrees to
indemnify and hold Landlord harmless from and against any claims by any
broker, agent or other person claiming a commission or other form of
compensation by virtue of having dealt with Tenant with regard to this
leasing transaction.
L. AMBIGUITY. Landlord and tenant hereby agree and acknowledge that
this Lease has been fully reviewed and negotiated by both Landlord and
Tenant, and that Landlord an Tenant have each had the opportunity to have
this Lease reviewed by their respective legal counsel, and, accordingly, in
the event of any ambiguity herein, Tenant does hereby waive the rule of
construction that such ambiguity shall be resolved against the party who
prepared this Lease.
13
M. THIRD PARTY RIGHTS. Nothing herein expressed or implied is
intended, or shall be construed, to confer upon or give to any person or
entity, other than the parties hereto, any right or remedy under or by reason
of this Lease.
N. EXHIBITS AND ATTACHMENTS. All exhibits, attachments, riders and
addenda referred to in this Lease, and the exhibits listed herein below and
attached hereto, are incorporated into this lease and made a part hereof for
all intents and purposes as if fully set out herein. All capitalized terms
used in such documents shall, unless otherwise defined therein, have the same
meanings as are set forth herein.
0. APPLICABLE LAW. This Lease has been executed in the State of Texas
and shall be governed in all respects by the laws of the State of Texas. It
is the intent of Landlord and Tenant to conform strictly to all applicable
state and federally usury laws. All agreements between Landlord and Tenant,
whether now existing or hereafter arising and whether written or oral, are
hereby expressly limited so that in no contingency or event whatsoever shall
the amount contracted for, charged or received by Landlord for the use
forbearance or retention of money hereunder or otherwise exceed the maximum
amount which Landlord is legally entitled to contract for, charge or collect
under the applicable state or federal law. If, from any circumstance
whatsoever, fulfillment of any provision hereof at the time performance of
such provision shall be due shall involve transcending the limit of validity
prescribed by law, then the obligation to be fulfilled shall be automatically
reduced to the limit of such validity, and if from any such circumstance
Landlord shall ever receive as interest or otherwise an amount in excess of
the maximum that can be legally collected, then such amount which would be
excessive interest shall be applied to the reduction of rent hereunder, and
if such amount which would be excessive interest exceeds such rent, then such
additional amount shall be refunded to Tenant.
25. NOTICES.
Each provision of this instrument or of any applicable governmental laws,
ordinances, regulations and other requirements with reference to the sending,
mailing or delivering of notice or the making of any payment by Landlord to
Tenant or with reference to the sending, mailing or delivering of any notice or
the making of any payment by Tenant to Landlord shall be deemed to be complied
with when and if the following steps are taken:
(i) All rent and other payments required to be made by Tenant to
Landlord hereunder shall be payable to Landlord at the address for Landlord set
forth below or at such other address as Landlord may specify from time to time
by written notice delivered in accordance herewith. Tenant's obligation to pay
rent and any other amounts to Landlord under the terms of this lease shall not
be deemed satisfied until such rent and other amounts have been actually
received by Landlord.
(ii) All payments required to be made by Landlord to Tenant hereunder
shall be payable to Tenant at the address set forth below, or at such other
address within the continental United States as Tenant may specify from time to
time by written notice delivered in accordance herewith.
(iii) Except as expressly provided herein, any written notice, document
or payment required or permitted to be delivered hereunder shall be deemed to be
delivered when received or, whether actually received or not, when deposited in
the United States Mail, postage prepaid, Certified or Registered Mail, addressed
to the parties hereto at the respective addresses set out below, or at such
other address as they have theretofore specified by written notice delivered in
accordance herewith.
LANDLORD'S ADDRESS:
S.W. Office Building, Ltd.
c/o Pyramid Properties
1717 West Sixth Street, Suite 380
Austin, Texas 78703
TENANT'S ADDRESS:
(Prior to Commencement Date)
Silicon Laboratories, Inc.
-------------------------------
2024 E. St. Elmo Road
-------------------------------
Austin TX 78744-1018
-------------------------------
(After Commencement Date)
Silicon Laboratories, Inc.
4609 Southwest Parkway
Austin, TX 78735
14
Silicon Laboratories, Inc.
4609 Southwest Parkway
Austin, Texas 78735
26. EXHIBITS.
EXHIBITS "A", "B" "C" and "D" are attached hereto and are hereby incorporated
into this Lease as fully as if herein set forth at length.
27. TENANT'S RIGHT TO OBTAIN FINANCING FOR AND TO LEASE TENANT'S PERSONAL
PROPERTY AND EQUIPMENT.
Tenant shall have the right to grant any security interests in Tenant's
REMOVABLE furniture, fixtures and equipment located in the Premises for the
purpose of securing any indebtedness provided by a third party. Tenant may also
lease any such furniture, fixtures and/or equipment from one or more equipment
lessors and grant security interests in such furniture, fixtures and/or
equipment to such equipment lessors in connection with such leases. Upon request
Landlord will execute one or more consent and/or subordination agreements
subordinating any landlord's lien rights held by Landlord to any such security
interests or leases. Notwithstanding the foregoing, in no event will Tenant
have the right to grant any lien, mortgage or security interest in any portion
of the Building or in this Lease.
28. LANDLORD'S CONDITIONS TO PERFORMANCE
Notwithstanding anything contained in this Lease to the contrary,
Landlord's obligations hereunder are specifically conditioned upon Landlord
achieving substantial completion of the Premises not later than March 31, 1999.
In the event Landlord does not achieve substantial completion of the Premises by
March 31, 1999, Tenant, as Tenant's sole and exclusive remedy, may terminate
this Lease in writing at any time after March 31, 1999 and before Landlord
achieves substantial completion of the Premises. In the event Tenant terminates
this Lease pursuant to this paragraph, Landlord will return all advance payments
of rent and Security Deposits theretofore paid to Landlord by Tenant and all
Letters of Credit theretofore delivered to Landlord by Tenant and will reimburse
and refund Tenant for all moneys theretofore expended by Tenant in connection
with the construction of the Interior Improvements pursuant to paragraph 5b of
EXHIBIT "C" attached hereto, as well as any moneys remaining in the escrow
account for Tenant's Proportionate Share of the cost of the Interior
Improvements.
EXECUTED BY LANDLORD, this 26th day of June, 1998.
S.W. AUSTIN OFFICE BUILDING, LTD., A TEXAS LIMITED
PARTNERSHIP
By: /s/ [ILLEGIBLE]
----------------------------------------------
Name: [ILLEGIBLE]
--------------------------------------------
Title: Partner
-------------------------------------------
EXECUTED BY TENANT, this 25th day of June, 1998.
SILICON LABORATORIES, INC., A DELAWARE CORPORATION
By: /s/ Navdeep Sooch
----------------------------------------------
Name: NAVDEEP SOOCH
--------------------------------------------
Title: PRESIDENT
-------------------------------------------
ATTACH EXHIBITS:
EXHIBIT "A" - Legal Description of the Property and Floor Plan of the Premises
EXHIBIT "B" - Schematic Plans for the Building
EXHIBIT "C" - Work Letter for Interior Improvements
EXHIBIT "D" - Renewal Option
15
EXHIBIT "A"
LEGAL DESCRIPTION OF THE PROPERTY
BUILDING: Tech Center Southwest
ADDRESS: 4609 Southwest Parkway, Suite 100
Austin, Texas 78735
LEGAL
DESCRIPTION: Lot 1, Boston 290 Office Park Section Two-A, a subdivision in
Travis County, Texas, according to the map or plat of record in
Volume 100, Pages 58-59 of the Plat Records of Travis County,
Texas.
EXHIBIT "A"
FLOOR PLAN OF THE PROMISES
To be attached prior to execution
[FLOOR PLAN]
EXHIBIT "A"
SITE PLAN OF THE PROJECT
[SITE PLAN]
EXHIBIT "B"
PLANS FOR THE PROJECT
[PHOTO]
EXHIBIT "C"
WORK LETTER
1. INTERIOR IMPROVEMENTS.
Reference herein to "INTERIOR IMPROVEMENTS" shall include all work to
be done in the Premises pursuant to the Interior Improvements Plans (defined
in paragraph 2 below), including, but not limited to, partitioning, doors,
ceilings, floor coverings, wall finishes (including paint, wallpaper, fabric
and all other coverings), electrical (including lighting, switching,
telephones, outlets, etc.), plumbing, heating, ventilating and air
conditioning, fire protection, cabinets, and other millwork, and any other
improvements required by Tenant which are not included in the Plans for the
Project. Landlord and Tenant hereby agree that unless otherwise agreed to,
the design architect for the Interior Improvements will be RTG Partners (the
"INTERIOR DESIGN ARCHITECT") and the general contractor for the construction
of the Interior Improvements will be Marcon Construction Company (the
"CONTRACTOR").
2. INTERIOR IMPROVEMENTS PLANS.
Immediately after execution of the Lease, Tenant shall meet with
representatives of the Interior Design Architect for the purpose of promptly
preparing a space plan and selecting materials and finishes for the layout
and construction of improvements in the Premises. After the preparation of
the space plan and after Tenant's written approval thereof, the Interior
Design Architect shall prepare final working drawings and specifications for
the Interior Improvements based on the space plan and submit the same to
Tenant for Tenant's approval. Such final working drawings and specifications
are referred to herein as the "INTERIOR IMPROVEMENTS PLANS". A copy of the
space plan and the Interior Improvements Plans, and each revised version
thereof, shall also be submitted to Landlord for Landlord's reasonable
approval simultaneously with submission to Tenant. Tenant shall promptly
review each version of the space plan and the Interior Improvements Plans and
deliver any comments to the Interior Design Architect expeditiously, and in
no event later than five (5) days after receipt of the same, so that the
Interior Improvements Plans are finally approved by Tenant within thirty (30)
days after the date of this Lease. After approval of the Interior
Improvements Plans by Landlord and Tenant, the same shall be submitted to the
appropriate governmental body by the Interior Design Architect for plan
checking and issuance of a building permit. The Interior Design Architect,
with Tenant's cooperation, shall cause to be made to the Interior
Improvements Plans any changes necessary to obtain the building permit.
Landlord's approval of the Interior Improvements Plans shall create or impose
no liability or responsibility on Landlord for their completeness, design
sufficiency or compliance with all applicable laws, rules and regulations of
governmental agencies or authorities. Tenant shall work together with the
Interior Design Architect, Landlord and the Contractor diligently to finally
approve the Interior Improvements Plans and the final pricing for the
construction of the Interior Improvements not later than sixty (60) days
after the date of this Lease.
3. FINAL PRICING AND DRAWING SCHEDULE.
After the approval of the Interior Improvements Plans by Landlord and
Tenant, the Interior Improvement Plans shall be submitted to the appropriate
governmental body by the Interior Design Architect for plan checking and the
issuance of a building permit. Landlord, with Tenant's cooperation, shall
cause to be made to Tenant Improvement Plans any changes necessary to obtain
the building permit. Concurrently with the plan checking, Landlord shall have
prepared a final pricing for Tenant's approval, taking into account any
modifications which may be required to reflect changes in Tenant Improvement
Plans required by the city or county in which the Premises are located. After
final approval of the Tenant Improvement Plans, no further changes may be
made thereto without the prior written approval from both Landlord and
Tenant, and then only after agreement by Tenant to pay any excess costs
resulting from the design and/or construction of such changes.
4. CONSTRUCTION OF INTERIOR IMPROVEMENTS.
After the Interior Improvement Plans have been prepared and approved,
the final pricing, based on subcontractors' competitive bids, has been
approved, a building permit for the Interior Improvements has been issued,
and the construction of the Project has progressed to the point that the
Contractor can begin construction of the Interior Improvements, the
Contractor shall begin construction and installation of the Interior
Improvements in accordance with Interior Improvement Plans. Landlord shall
supervise the completion of such work and shall secure substantial completion
of the work in a timely manner. The cost of such work shall be paid as
provided in Section 5 below. Landlord shall not be liable for any direct or
indirect damages as a result of delays in construction beyond Landlord's
reasonable control arising as a result of acts of God or delays by Tenant or
Tenant's agents or employees.
5. PAYMENT FOR THE INTERIOR IMPROVEMENTS.
a. Tenant shall be responsible for the entire cost of the design,
construction and permitting of the Interior Improvements. In order to defray a
portion of the cost of the Interior Improvements, however, Landlord hereby
grants to Tenant an "INTERIOR IMPROVEMENTS ALLOWANCE" in the amount of Six
Hundred Eighty Thousand Four Hundred Dollars ($680,400.00). The Interior
Improvements Allowance shall be used only for:
(1) Payment of the cost of space planning; provided, however,
that not more than $0.10 per rentable square foot) of the Interior
Improvements Allowance may be used for such planning work.
(2) Payment of the cost of preparing the Interior Improvements
Plans, including mechanical, electrical, plumbing and structural
drawings, and of all other aspects necessary to complete the Interior
Improvements Plans; provided, however, that not more than $0.35 per
rentable square foot of the Interior Improvements Allowance may be used
for plan preparation.
(3) Payment of plan check, permit, and license fees relating to
construction of the Interior Improvements.
(4) Construction of the Interior Improvements including, but not
limited to, the following:
(a) Installation within the Premises of all
partitioning, doors, cabinets, floor coverings, ceiling, wall
coverings and painting, millwork, and similar items;
(b) All electrical wiring, lighting fixtures, outlets
and switches, and other electrical work to be installed within
the Premises;
(c) The furnishing and installation of all duct work,
terminal boxes, diffusers, and accessories required for the
completion of the heating, ventilation and air conditioning
systems within the Premises;
(d) Any additional Tenant requirements, including, but
not limited to, odor control, special heating, ventilation and
air conditioning, noise or vibration control, or other special
systems;
(e) All fire and life safety control systems such as
fire walls, halon, fire alarms, including piping, wiring and
accessories installed within the Premises;
(f) All plumbing, fixtures, pipes and accessories to be
installed within the Premises;
(g) Testing and inspection costs; and
(h) Contractors' fees, including but not limited to any
fees based on general conditions, and supervisory fees.
(5) All other costs to be expended by Landlord in the
construction of the Interior Improvements in accordance with the
Interior Improvements Plans.
b. In the event that the cost of installing the Interior
Improvements, as established by Landlord's final pricing schedule, shall
exceed the Interior Improvements Allowance, or if any of the Interior
Improvements do not qualify for payment out of the Interior Improvement
Allowance as provided in Paragraph 5 a, above, the amount which is in excess
of the Interior Improvements Allowance (the "EXCESS") shall be paid by
Tenant. Not later than sixty (60) days after the date of this Lease, Tenant
shall deposit the Excess in a segregated account (the "ESCROW ACCOUNT") at a
bank or savings institution in Austin, Texas acceptable to Landlord and upon
which Landlord has sole signatory and withdrawal authority. Upon request by
Landlord, Tenant will provide Landlord with evidence of the deposit of the
Excess into the Escrow Account. Landlord shall pay Tenant's Proportionate
Share of the cost of the construction of the Interior Improvements out of
such Escrow Account periodically as such costs are incurred. As the
construction of the Interior Improvements proceeds, Landlord will
periodically provide Tenant with an invoice for Tenant's Proportionate Share
of the cost of the Interior Improvements. "Tenant's Proportionate Share" of
such costs from time to time shall be equal to the total cost of the Interior
Improvements to the date of such invoice, minus the amount previously paid by
Tenant under this paragraph, multiplied by a fraction, the numerator of which
is the original amount of the Excess and the denominator of which is the
total cost of the Interior Improvements. Simultaneously with delivery to
Tenant of the backup invoice for each periodic installment of the cost to
construct the Interior Improvements, Landlord will be authorized to draw
Tenant's Proportionate Share of such costs out of the Escrow Account. Subject
to the foregoing, Landlord will make payment to all suppliers of materials
and labor in connection with the construction of the Interior Improvements.
c. In the event that, after the Interior Improvement Plans have been
prepared and the final pricing therefor has been agreed to between Landlord
and Tenant, Tenant shall require any changes or substitutions to the Interior
Improvements Plans, any additional costs related thereto shall be paid by
Tenant to Landlord prior to the commencement of construction of the Interior
Improvements. Landlord shall have the right to decline Tenant's request for
change to the Interior Improvement Plans if, in Landlord's opinion, such
changes would unreasonably delay construction of the Interior Improvements.
d. No unused portion of the Interior Improvement Allowance shall be
refunded to Tenant or available to Tenant as a credit against any obligations
of Tenant under the Lease.
e. No portion of the Interior Improvements Allowance will be
disbursed by Landlord until such time as the Interior Improvements Plans have
been finalized and agreed to by Landlord and Tenant, the final pricing for
the construction and installation of the Interior Improvements has been
agreed to by Tenant and any Excess (as such term is defined in paragraph 5 b,
above) has been deposited by Tenant into the account referred to in paragraph
5b, above.
6. WARRANTY.
Landlord will provide a one year warranty on the construction and
installation of the Interior Improvements. Landlord will pass any
subcontractors' and manufacturers' warranties on all appliances and equipment
but Landlord will not provide any warranty with respect to appliances or
equipment installed for Tenant.
EXHIBIT "D"
RENEWAL OPTION
1. OPTION TO RENEW TERM.
Landlord grants to Tenant the right (the "RENEWAL OPTION") to renew
this Lease with respect to all, but not less than all, of the Premises for
one (1) additional term of five (5) years (the "RENEWAL TERM"), such Renewal
Term commencing upon the expiration of the initial Term and continuing for
five (5) years thereafter. The Renewal Option is granted on the same terms,
conditions and covenants set forth in this Lease, except as provided below.
The Renewal Option may be exercised only by written notice (the "NOTICE")
delivered to Landlord no earlier than two hundred forth (240) days before,
and no later than one hundred eighty (180) days before, the expiration of the
initial Lease Term. If Tenant fails to deliver Landlord written Notice of the
exercise of the Renewal Option within the prescribed time period, the Renewal
Option shall lapse, and thereafter shall be null and void and of no further
force or effect and Tenant shall be deemed to have waived its right to renew
or extend the Lease Term under this EXHIBIT "D". The Renewal Option may only
be exercised by Tenant on the express condition that, at the time of the
exercise, Tenant is not in default under any of the provisions of this Lease.
The Renewal Option is personal to Tenant and may not be exercised by any
assignee or subtenant without Landlord's written consent. In addition, Tenant
shall not have the right to exercise the Renewal Option of any portion of the
Premises is subleased or if any portion of the Lease has been assigned by
Tenant.
a. Upon receipt of the Renewal Option Notice, Landlord will deliver
Tenant notice of the Base Rent to be in effect for the Renewal
Term. In no event shall the Base Rent for the Renewal Term be
less than the rate of Base Rent in effect at the expiration of
the initial Term. Such Base Rent shall be equal to market rent
for comparable space as reasonably determined by Landlord, it
being understood that as of the date of this Lease, there is no
space which is comparable to the Premises in the vicinity of the
Premises. Upon receipt of Landlord's determination of the Base
Rent for the Renewal Term, Tenant shall have the right to accept
or reject the same. If Tenant specifically rejects Landlord's
designation of Base Rent for the Renewal Term in writing within
five (5) days after Landlord has notified Tenant of the Base
Rent for the Renewal Term then Tenant, as its sole remedy, will
be deemed to have revoked its election to renew the term of this
Lease, whereupon the Renewal Option will, be deemed to have been
waived by Tenant and the Renewal Option shall lapse, and
thereafter shall be null and void and of no further force or
effect. If Tenant fails to deliver notice of rejection of the
Base Rent within the five (5) day period referred to above,
Tenant shall be deemed to have accepted Landlord's designation
of Base Rent for the Renewal Term and Tenant may not thereafter
revoke its election to Renew.
b. Tenant shall pay Base Rent during the Renewal Term to Landlord
in monthly installments in the amount or amounts determined
pursuant to paragraph a, above, along with all other Rent and
other amounts due under the Lease, including without limitation,
all rental adjustments pursuant to Paragraph 2C of the Lease.
c. Landlord shall not be obligated to make any alterations or
improvements to the Premises during or in connection with the
Renewal Term.
d. Except for the Renewal Option described above, Tenant shall have
no further right to renew or extend this Lease.
FIRST AMENDMENT TO LEASE AGREEMENT
THIS FIRST AMENDMENT TO LEASE AGREEMENT (this "FIRST AMENDMENT") is
entered into by and between S.W. AUSTIN OFFICE BUILDING, LTD., A TEXAS
LIMITED PARTNERSHIP ("LANDLORD"), and SILICON LABORATORIES, INC., A DELAWARE
CORPORATION ("TENANT") effective as of the 29th day of July, 1998.
RECITALS
A. Landlord and Tenant executed a certain Lease Agreement (the "LEASE")
dated June 25, 1998, covering approximately 37,800 square feet of space in a
building to be built (the "BUILDING") located at 4635 Boston Lane, Austin, Texas
78735.
B. The Lease and the Ancillary Agreements (hereinafter defined)
incorrectly refer to the address of the Building as being 4609 Southwest Parkway
instead of 4635 Boston Lane.
C. Landlord and Tenant desire to amend the Lease and the Ancillary
Agreements to correct the address of the Building stated therein.
NOW, THEREFORE, in consideration of the premises, and for Ten and No/100
Dollars ($10.00) and other good and valuable consideration, Landlord and Tenant
agree as follows:
AGREEMENTS
1. AMENDMENT TO LEASE AND ANCILLARY DOCUMENTS. All references in the
Lease and in all documents and instruments executed in connection therewith,
including, without limitation, that certain Side Letter Agreement (regarding
environmental report), that certain Letter Agreement (regarding approval of the
issuer of the Letter of Credit and zoning), that certain Parking Structure
Agreement, and that certain Right of First Refusal and Option Agreement
(collectively, the "ANCILLARY AGREEMENTS") to the address of the Building as
being 4609 Southwest Parkway are hereby amended to provide that the address of
the Building is 4635 Boston Lane, Austin, Texas 78735.
2. CAPITALIZED TERMS. All capitalized terms used herein shall have the
meaning ascribed to them in the Lease unless specifically defined herein.
3. EFFECT OF AMENDMENT. The Lease and the Ancillary Agreements, as hereby
amended, shall continue in full force and effect. All of the other terms of the
Lease and the Ancillary Agreements shall remain unchanged and shall continue in
full force and effect.
4. COUNTERPARTS. This First Amendment may be executed in several
counterparts and all counterparts so executed shall together be deemed to
constitute one final agreement as if signed by all parties hereto and all
counterparts shall be deemed to be an original.
Page 1 of 2
5. AMENDMENT CONTROLLING. The provisions of this First Amendment shall
supersede and control over any conflicting provisions in the Lease and the
Ancillary Agreements.
EXECUTED to be effective as of the date first above written.
LANDLORD:
S.W. AUSTIN OFFICE BUILDING, LTD., A
TEXAS LIMITED PARTNERSHIP
By: [ILLEGIBLE]
----------------------------
Name:
--------------------------
Title:
-------------------------
TENANT:
SILICON LABORATORIES, INC., A DELAWARE
CORPORATION
By: /s/ Navdeep Sooch
----------------------------
Name: Navdeep S. Sooch
--------------------------
Title: President
-------------------------
Page 2 of 2
SECOND AMENDMENT TO LEASE AGREEMENT
THIS SECOND AMENDMENT TO LEASE AGREEMENT (this "SECOND AMENDMENT") is
entered into by and between S.W. AUSTIN OFFICE BUILDING, LTD., A TEXAS
LIMITED PARTNERSHIP ("LANDLORD"), and SILICON LABORATORIES, INC., A DELAWARE
CORPORATION ("TENANT"), effective as of the 20th day of August, 1998.
RECITALS
A. Landlord and Tenant executed a certain Lease Agreement (the "ORIGINAL
LEASE") dated June 25, 1998, covering approximately 37,800 square feet of space
in a building to be built (the "BUILDING") located at 4635 Boston Lane, Austin,
Texas 78735.
B. Landlord and Tenant have heretofore amended the Original Lease
pursuant to that certain First Amendment to Lease Agreement dated July 29,
1998 (the "FIRST AMENDMENT").
C. Tenant desires to delay the construction of the Interior Improvements
and the Commencement Date of the Lease Term and to provide for an option to
terminate the Lease.
D. In order to accommodate the foregoing, Landlord and Tenant now desire
to further amend the Lease as hereinafter set forth.
NOW, THEREFORE, in consideration of the premises, and for Ten and No/100
Dollars ($10.00) and other good and valuable consideration, Landlord and Tenant
agree as follows:
AGREEMENTS
1. AMENDMENT TO LEASE AND ANCILLARY AGREEMENTS. The Original Lease, as
amended by the First Amendment, is hereinafter referred to as the "Lease".
2. PAYMENT FOR BUILDING SHELL CHANGE ORDERS. Prior to the execution
hereof, Tenant has remitted payment to Landlord for two change orders to the
base building requested by Tenant in the respective amounts of $29,720.00 and
$11,950.00. Landlord and Tenant agree that the amounts stated in the foregoing
sentence constitute reimbursements to Landlord for the cost of changes to the
Building which were requested by Tenant and therefore, such amounts are not
refundable to Tenant under any circumstances.
3. REVISED DUE DATE FOR DELIVERY OF LETTER OF CREDIT. The Letter of
Credit referenced in SECTION 2 of the Lease shall be delivered to Landlord on or
before September 8, 1998.
4. LIMITED RIGHT OF TERMINATION. Landlord hereby grants Tenant a limited
right of termination of the Lease as set forth in this paragraph 4. Tenant may
exercise the option to terminate the Lease by failing to deliver the Letter of
Credit by September 8, 1998, for any
Page 1 of 5
reason. Tenant's failure to deliver the Letter of Credit in the required form
by September 8, 1998 will constitute an irrevocable election on Tenant's part
to terminate the Lease. In the event the Lease is terminated pursuant to this
paragraph, Landlord, as Landlord's sole and exclusive remedy, will retain the
$151,200.00 lease termination cash security deposit heretofore tendered by
Tenant as a lease termination fee and not as a penalty. It is agreed that the
$151,200 fee is a 2 reasonable fee and constitutes just compensation for the
right to terminate the Lease as set forth above.
5. OXFORD COMMERCIAL, INC. COMMISSION IN THE EVENT OF TERMINATION OF
LEASE. In the event the Lease is terminated pursuant to Paragraph 4, above,
Tenant will assume all responsibility for payment of all leasing commissions, if
any, due or payable to Oxford Commercial, Inc. in connection with the Lease.
Oxford Commercial, Inc. agrees to look only to Tenant for payment of all
compensation due or to become due in connection with the Lease. In the event of
termination of the Lease in accordance with Paragraph 4, above, Oxford
Commercial, Inc. and Tenant will indemnify, defend and hold Landlord harmless
from any cost or claim of Oxford Commercial, Inc., or any agent, broker or
person claiming a right to a leasing commission or fee by, through or under
Oxford Commercial, Inc., by reason of the Lease. The indemnity obligations set
forth herein shall survive any termination or cancellation of the Lease
notwithstanding any contrary provision contained herein or therein. Oxford
Commercial, Inc. hereby joins in the execution of this Second Amendment to
confirm its agreement to be bound by the provisions of this Paragraph 5.
6. DELAY OF COMMENCEMENT OF CONSTRUCTION OF INTERIOR IMPROVEMENTS. At
Tenant's request, Landlord agrees to delay the commencement of construction of
the Interior Improvements until finalization of the Interior Improvements Plans
as set forth in paragraph 7, below. It is acknowledged and agreed that Landlord
may commence construction of the Interior Improvements at any time after the
finalization of the Interior Improvements Plans in order to meet Landlord's
construction schedule. Pursuant to paragraph 10, below, Tenant is not required
to pay the Excess into the Escrow Account until January 4, 1999. Landlord's
election to commence construction of the Interior Improvements prior to January
4, 1999, will not operate to accelerate Tenant's obligation to pay the Excess
into the Escrow Account prior to January 4, 1999.
7. FINALIZATION OF INTERIOR IMPROVEMENTS PLANS. In the event the Lease is
not terminated as aforesaid, Tenant will proceed to finalize the Interior
Improvements Plans not later than November 30, 1998, in order to enable Landlord
to achieve substantial completion of the Interior Improvements in a timely
manner.
8. DELAY OF COMMENCEMENT DATE AND INTERIM RENT PAYMENTS. The Commencement
Date shall be determined as set forth in SECTION 1B of the Lease except that
the period from the Effective Date until January 1, 1999 shall not be includible
as a Tenant Delay for purposes of SECTION 1B(ii) of the Lease. The Base Rent and
other charges provided for in the Lease shall be due and payable in the manner
and in the amounts set forth in the Lease, beginning on the Commencement Date.
As consideration to Landlord (and provided that the Lease is not
Page 2 of 5
terminated as provided in paragraph 4, above), Tenant will pay Landlord, in
advance, without demand, deduction or set off, the sum of $20,000.00 per
month as interim rent (the "INTERIM RENT") commencing on October 1, 1998 and
continuing through the month of December, 1998, for a total of $60,000.00 in
Interim Rent to be paid in $20,000.00 increments on October 1, 1998, November
1, 1998 and December 1, 1998.
9. SUBLEASING. Tenant does not intend to initially occupy the entirety of
the Building. In order to defray a portion of the costs associated with leasing
the Premises, however, Tenant intends to sublease portions of the Premises to
third party users. Nothing in the foregoing sentence will be deemed to modify
the provisions of SECTION 16 of the Lease or Landlord's obligations with respect
thereto. Specifically, it is hereby confirmed that Landlord has the right to
approve any subtenant of a portion of the Premises in accordance with the
provisions of SECTION 16 of the Lease and Landlord has no obligation to assist
Tenant in locating any acceptable subtenants.
10. CONSTRUCTION OF INTERIOR IMPROVEMENTS. In order to accommodate the
foregoing changes, the following modifications will be made to the procedures
set forth in EXHIBIT "C" of the Lease regarding the Interior Improvements:
a. The entire 37,800 sq. ft. building will be finished out at a
minimum $18.000 per square foot level of finish, or as may be subsequently
agreed to in writing between Landlord and Tenant on or before November 30,
1998.
b. The portion of the Premises to be occupied by Tenant may be
finished out at a level which is higher than the $18.00 per square foot
minimum level provided that the Excess (as such term is defined in SECTION
5b of EXHIBIT "C" attached to the Lease) shall be deposited by Tenant into
the Escrow Account (as such term is defined in SECTION 5b of EXHIBIT "C"
attached to the Lease) on or before January 4, 1999.
c. Any portion of the Premises not to be initially occupied by
Tenant may be finished out on behalf of a subtenant at a level which is
higher than the $18.00 per square foot minimum level provided that the
Excess related to such portion of the Premises shall also be deposited by
Tenant into the Escrow Account on or before January 4, 1999.
11. DELETION OF EXPANSION OPTION. The Expansion Option [as such term is
defined in that certain Right of First Refusal and Option Agreement (the "RIGHT
OF FIRST REFUSAL AND OPTION AGREEMENT") dated of even date with the Lease and
executed by Landlord, Tenant and 290 Office Building, Ltd. regarding space in
the office building located 5613 Highway 290 West, Austin, Texas], is hereby
deleted in its entirety, is null, void and of no further force or effect, as
fully as if the Expansion Option had never been granted in the first place.
12. SUSPENSION OF RIGHT OF FIRST REFUSAL. The Rights of First Refusal
granted to Tenant in the Right of First Refusal and Option Agreement are hereby
suspended until January
Page 3 of 5
4, 1999. Accordingly, the Office Building Owner is free to lease any and all of
the space in the Office Building to any party whatsoever without the obligation
to offer any part thereof to Tenant through January 3, 1999, at which time
Tenant's rights to the Rights of First Refusal, if any, will be deemed to be
revived, but only to the extent provided in the Right of First Refusal and
Option Agreement and only as to space leased after January 3, 1999.
13. AMENDMENT TO SECTION 28 OF THE LEASE. SECTION 28 of the Lease is
hereby deleted in its entirety and is replaced with the following:
"Notwithstanding anything contained in this Lease to the contrary,
Landlord's obligations hereunder are specifically conditioned upon Landlord
achieving substantial completion of the Premises not later than June 30,
1999, subject to any extensions for force majeure and delays caused by
Tenant (not including the suspension of the commencement of construction of
the Interior Improvements until January 4, 1999). In the event Landlord
does not achieve substantial completion of the Premises by June 30, 1999,
Tenant, as Tenant's sole and exclusive remedy, may terminate this Lease in
writing at any time after June 30, 1999 and before Landlord achieves
substantial completion of the Premises. In the event Tenant terminates this
Lease pursuant to this paragraph, Landlord will return all advance payments
of rent and Security Deposits theretofore paid to Landlord by Tenant and
all Letters of Credit theretofore delivered to Landlord by Tenant and will
reimburse and refund Tenant for all moneys theretofore expended by Tenant
in connection with the construction of the Interior Improvements pursuant
to paragraph 5b of EXHIBIT "C" attached hereto, as well as any moneys
remaining in the escrow account for Tenant's Proportionate Share of the
cost of the Interior Improvements."
14. CAPITALIZED TERMS. All capitalized terms used herein shall have the
meaning ascribed to them in the Lease unless specifically defined herein.
15. EFFECT OF AMENDMENT. The Lease and the Ancillary Agreements (as
defined in the First Amendment), as hereby amended, shall continue in full force
and effect. All of the other terms of the Lease and the Ancillary Agreements
shall remain unchanged and shall continue in full force and effect.
16. COUNTERPARTS. This Second Amendment may be executed in several
counterparts and all counterparts so executed shall together be deemed to
constitute one final agreement as if signed by all parties hereto and all
counterparts shall be deemed to be an original.
17. AMENDMENT CONTROLLING. The provisions of this Second Amendment shall
supersede and control over any conflicting provisions in the Lease and the
Ancillary Agreements.
Page 4 of 5
EXECUTED to be effective as of the date first above written.
LANDLORD:
S.W. AUSTIN OFFICE BUILDING, LTD., A
TEXAS LIMITED PARTNERSHIP
By: /s/ Manuel Zuniga
---------------------------------
Name: MANUEL ZUNIGA
-------------------------------
Title: PARTNER
------------------------------
TENANT:
SILICON LABORATORIES, INC., A DELAWARE
CORPORATION
By: /s/ Navdeep Sooch
---------------------------------
Name: NAVDEEP SOOCH
-------------------------------
Title: PRESIDENT
------------------------------
EXECUTED by the undersigned for purposes of Paragraph 5, above.
OXFORD COMMERCIAL, INC., A TEXAS
CORPORATION
By: /s/ Michael K. Tipps
---------------------------------
Name: Michael K. Tipps
-------------------------------
Title: Managing Principal
------------------------------
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