SUBLEASE AGREEMENT
This Sublease is entered into as of January 8, 1997 by and between LSI
Logic Corporation, a Delaware corporation ("Sublessor") and C-Cube
Microsystems, Inc., a Delaware corporation ("Sublessee"), as a Sublease
under that Single Tenant Net Lease dated as of August 25, 1995 between Oak
Creek Delaware, Inc., a Delaware corporation, ("Landlord"), and Sublessor,
as tenant (the "Lease"). A copy of the Lease is attached hereto as Exhibit
A.
1. SUBLEASE
1.1 Sublessor leases to Sublessee and Sublessee leases from
Sublessor real property commonly known as 1855 Barber Lane, Milpitas,
California, and more particularly described in Exhibit A to the Lease,
together with the building thereon (the "Building"), subject, however, to
any and all existing encumbrances, easements, conditions, covenants, and
restriction, rights-of-way, any other matters of record, and such matters
as may be disclosed by inspection or survey. The real property and the
Building shall be referred to herein as the "Premises."
1.2 Sublessee accepts the Premises as being in good and sanitary
order, condition and repair, and accepts the improvements included in the
Premises in their present condition, "as is," and without representation
or warranty by Sublessor as to the condition of the Premises or as to the
use or occupancy which may be made thereof. Upon the expiration or sooner
termination of this Sublease, Sublessee shall surrender the Premises,
together with all Alterations (as defined in Paragraph 24 of the Lease),
to Sublessor in the same condition as when received or installed, ordinary
wear and tear excepted, and clean and free of debris and free of any liens
created or suffered to be created by Sublessee. Sublessee shall not,
however, be required to remove any tenant improvements to the Premises
installed or constructed by, on behalf of or for the benefit of Sublessor,
nor shall Sublessor require Sublessee to remove any tenant improvements to
the Premises installed or constructed by Sublessee pursuant to the Tenant
Improvements Agreement except to the extent Landlord requires the removal
of any tenant improvements installed by Sublessee.
2. TERM
2.1 The term of this Sublease shall be for a period of
approximately forty-eight (48) months commencing on the date on which all
of the following has occurred: (i) this Sublease has been fully executed
by both Sublessor and Sublessee, (ii) this Sublease has been consented to
in writing by Landlord ("Consent of Landlord to Sublease) and (iii)
Sublessor has delivered possession of the Premises to Sublessee. The term
shall end on December 31, 2000, unless sooner terminated pursuant to any
provision hereof.
2.2 Sublessor shall deliver possession of the Premises to
Sublessee when this Sublease and the Consent of Landlord to Sublease have
both been fully executed (the "Commencement Date"). If the Commencement
Date has not occurred for any reason whatsoever on or before April 1, 1997
then, in addition to Sublessee's other rights, Sublessee may terminate
this Sublease by written notice to Sublessor, whereupon any monies
previously paid by Sublessee to Sublessor shall be immediately reimbursed
to Sublessee.
3. RENT
3.1 Sublessee shall pay to Sublessor as net monthly rent for the
Premises the amounts set forth below, in advance, on the first day of each
month of the term hereof:
Months of Term Monthly Rent
Until February 28,1997 $0/month
March 1,1997 - Dec. 31,1998 $93,725.00/month
Jan 1,1999 - Dec. 31, 2000 $101,875.00/month
Sublessee shall pay Sublessor upon the execution hereof the sum of
Ninety-three Thousand Seven Hundred and Twenty Five Dollars ($93,725.00)
as rent in advance for the first month due. Rent for any period during the
term hereof which is for less than one month shall be prorated. Rent shall
be payable in advance on the 1st day of each month during the term,
without notice or demand without any deduction, offset, or abatement
(except to the extent expressly permitted by this Sublease) in lawful
money of the United States of America to Sublessor at the address stated
herein or to such other persons or at such other places as Sublessor may
designate in writing.
3.2 Notwithstanding anything to the contrary in this Sublease,
Sublessee shall not be required to pay any Impositions, maintenance
charges or any other charges, costs or expenses that may be required to be
paid by Sublessee under the terms of this Sublease (except utilities for
the Premises) until rent commencement or March 1,1997, whichever occurs
first. Sublessee recognizes its obligations to pay Sublessee's liability
insurance premiums as required after the Commencement Date.
3.3 Sublessee hereby acknowledges that late payment by Sublessee
to Sublessor of rent and other sums due hereunder will cause Sublessor to
incur costs not contemplated by this Sublease, the exact amount of which
will be difficult to ascertain. Such costs include, but are not limited
to, processing and accounting charges, and late charges which may be
imposed on Sublessor by the terms of the Lease. Accordingly, if any
installment of rent or other sums due from Sublessee is not received by
Sublessor within five (5) business days after its due date, Sublessee
shall pay to Sublessor a late charge equal to five percent (5%) of such
overdue amount. The parties hereby agree that such late charge represents
a fair and reasonable estimate of the costs Sublessor will incur by reason
of late payment by Sublessee based upon the circumstances existing as of
the date of this Sublease. Acceptance of such late charge by Sublessor
shall in no event constitute a waiver of Sublessee's default with respect
to such overdue amount, nor prevent Sublessor from exercising any of its
other rights or remedies granted to it by law or this Sublease.
Initials: /s/ RDN (Sublessor) /s/ MKA (Sublessee)
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4. SECURITY DEPOSIT
4.1 Sublessee shall deposit with Sublessor upon the execution
hereof the sum of One Hundred One Thousand Eight Hundred Seventy-five
Dollars ($101,875) as security for Sublessee's faithful performance of
Sublessee's obligations hereunder. If Sublessee fails to pay rent or other
charges due hereunder, or otherwise defaults with respect to any provision
of this Sublease, Sublessor may use, apply or retain all or any portion of
said deposit for the payment of any rent or other charge in default or for
the payment of any other sum to which Sublessor may become obligated by
reason of Sublessee's default, or to compensate Sublessor for any loss or
damage which Sublessor may suffer thereby. If Sublessor so uses or applies
all or any portion of said deposit, Sublessee shall within fifteen (15)
days after written demand therefor deposit cash with Sublessor in an
amount sufficient to restore said deposit to the full amount herein above
stated and Sublessee's failure to do so shall be a breach of this
Sublease, and Sublessor may at his option terminate this Sublease.
Sublessor shall not be required to keep said deposit separate from its
general accounts. Said deposit or so much thereof as had not theretofore
been applied by Sublessor shall be returned without payment of interest
for its use, to Sublessee within ten (10) days after the expiration of the
term hereof (or earlier termination of the Sublease if Sublessee does not
have any remaining contractual obligations to Sublessor), or after
Sublessee has vacated the Premises, whichever is later.
5. PROVISIONS CONSTITUTING SUBLEASE
5.1 This Sublease is and at all times shall be subject and
subordinate to the Lease. Sublessee shall take no action which would cause
Sublessor to be in default of its obligations under the Lease, and
Sublessee shall perform all of its obligations under this Sublease, and
Sublessee shall indemnify and hold Sublessor harmless from and against all
liability, costs, damages, claims, demands and expenses, including
reasonable attorney's fees and costs, arising out of Sublessee's failure
to do so. Sublessor shall fully perform all of its obligations under the
Lease (except to the extent any of the same are the obligation of
Sublessee hereunder) and shall indemnify and hold Sublessee harmless from
and against all liability, costs, damages, claims, demands and expenses,
including reasonable attorneys' fees and costs, arising out of Sublessor's
failure to do so. Upon any termination of the Lease, this Sublease shall
terminate concurrently therewith except as otherwise provided in the
Consent of Landlord to Sublease and without any liability of Sublessor to
Sublessee; provided, however, that a Lease termination due to Sublessor's
default of its obligations under the Lease or this Sublease, shall be
subject to the indemnification set forth above. Sublessor shall not enter
into any amendment or modification of the Lease without the consent of
Sublessee, nor shall Sublessor consent to a termination of the Lease or
exercise any option to terminate the Lease that it may have, or surrender
the Lease, without the prior written consent of Sublessee which will not
unreasonably be withheld (and except as may be specifically permitted by
this Sublease).
5.2 Except for paragraphs 1, 2, 3, 49, and 52 of the Lease; and
the second sentence of paragraph 9 of Exhibit B to the Lease (the "Tenant
Improvement Agreement"); all of the terms and conditions contained in the
Lease in the form attached hereto as Exhibit A are incorporated herein as
terms and conditions of this Sublease. All references in the Lease to the
"Lease" or the "lease" shall be deemed to refer to this Sublease and all
references in the Lease to "Landlord" and "Tenants shall be deemed to
refer to Sublessor and Sublessee, respectively, except that any reference
to "Landlord" in Paragraph 12, 13, 23, 24, 27, 33, 34, 36, 39, 40, and 41
of the Lease shall be deemed to refer to both Landlord and Sublessor and
any reference in Paragraphs 11 (except that Sublessee's reimbursement of
insurance premiums paid by Landlord for the Premises shall be paid to
Sublessor), 16, 20, 25, 26, 29, 30, 31, 32, 35, 37, and 53 of the Lease
shall be deemed to refer to Landlord only; provided, however, that
Sublessor shall use reasonable efforts to enforce the obligations of
Landlord pursuant to Paragraphs 11, 16, 20, 25, 26, 29, 30, 31, and 32 of
the Lease for the benefit of Sublessee. Such efforts shall include the
following: (i) upon Sublessee's written request, promptly notifying
Landlord of any nonperformance under the Lease and requesting that
Landlord perform its obligations thereunder; and (ii) after the time by
which Landlord must cure a breach has expired, cooperating with Sublessee
to institute, in the name of Sublessor, such legal proceedings as may be
appropriate, with legal counsel selected by Sublessee and approved by
Sublessor, to enforce the obligations of Landlord under the Lease
(including the execution of such documents as may be reasonably required
by such legal counsel). Sublessor and Sublessee shall be entitled to
jointly control the conduct of the litigation; provided, however, that in
the conduct of any litigation brought against Landlord to enforce its
obligations under the Lease for the benefit of Sublessee, both Sublessor
and Sublessee shall have an obligation to act in a commercially reasonable
manner and with the goal of employing a strategy which is designed to
ensure that Landlord will fully perform its obligations under the Lease,
and no action may be taken which may materially and adversely affect the
other party's rights or obligations under the Lease or Sublease without
such other party's consent, including settlement. All reasonable costs
incurred in connection with any enforcement undertaken by Sublessor at the
request of Sublessee shall be paid by Sublessee. Sublessor agrees;
however, that if Sublessor is the prevailing party in any action
instituted against Landlord at Sublessee's request to enforce the
obligations of Landlord under the Lease, and Sublessor recovers any
attorneys' fees and costs from Landlord in connection therewith, Sublessor
shall apply the amount recovered by Sublessor to any attorneys' fees and
costs incurred by Sublessor in connection with such action (to the extent
such fees and costs have not yet been paid or reimbursed by Sublessee)
and, to the extent that Sublessee has incurred and paid legal fees in
connection with such action, the balance, if any, of the amount recovered
by Sublessor shall be paid to Sublessee.
5.3 Except as otherwise expressly provided in this Sublease, all
references to "Landlord" in paragraphs 2,4, and 5 and Appendix 1 of the
Tenant Improvements Agreement shall refer to Landlord only.
5.4 The following portions of the incorporated provisions of the
Lease are
hereby expressly deleted or modified as follows:
a. Paragraph 10: the date "September 1, 1995" in the last sentence is
hereby deleted and replaced with ________, 1997.
b. Paragraph 5: the words "light manufacturing with the written consent
of Landlord" shall be inserted after the word "offices" in the second
line.
c. Paragraph 26.1: the number "12" in the second sentence is deleted and
replaced with the number "11".
d. The Tenant Improvements Agreement: the date "September 1, 1995" in
paragraph 1 is hereby deleted and replaced with ________, 1997.
6. TENANT IMPROVEMENTS
6.1 Except as expressly provided herein, any tenant improvements
to the Premises shall be constructed by Sublessee in accordance with the
terms of Exhibit B to the Lease (the "Tenant Improvement Agreement").
Sublessee shall submit to Landlord complete, finished drawings and
specifications (the "Plans") for the tenant improvements to be constructed
by Sublessee (the "Tenant Improvements") together with a proposed schedule
for completion. The Plans shall reflect and be in accordance with (i) a
space plan approved by Landlord, and (ii) that certain list of Landlord's
Required Specifications attached as Appendix 1 of the Tenant Improvement
Agreement. Sublessee intends to submit a space plan depicting tenant
improvements to the Premises substantially as shown and/or described on
Exhibit B to this Sublease. Notwithstanding anything set forth herein,
provided that Landlord approves the Plans, the Final Plans, Sublessee's
architect, engineers and contractors, Sublessee's insurance and payment
and performance bonds, and Tenant's Work, Sublessee shall not be required
to obtain Sublessor's approval of any such matters. Sublessee will
indemnify Sublessor and hold Sublessor harmless from and against all
liability, costs, damages, claims, demands and expenses, including
reasonable attorney's fees and costs, arising out of or in any way
connected with the immediately preceding Sublease provision and the Tenant
Improvement Agreement. So long as Landlord approves any disbursements of
the Tenant Improvement Allowance, Sublessor shall deem all conditions to
such disbursements to have been satisfied.
6.2 No construction management fee shall be payable to Sublessor,
nor shall any fees be payable to Sublessor's architects, engineers or
consultants in connection with the Tenant Improvements.
6.3 Landlord shall provide Sublessee with an allowance of up to
One Million Four Hundred Sixty Seven Thousand Dollars ($1,467,000.00) to
be applied to the Tenant Improvement Costs (the "Tenant Improvement
Allowance"). Sublessee shall NOT have the right to utilize the Additional
Tenant Improvement Allowance as described in paragraph 9 of the Tenant
Improvements Agreement. The Tenant Improvement Allowance shall be paid to
Sublessee as provided in the Tenant Improvements Agreement. Upon Sublessor
receipt of written notice from Sublessee that the Tenant Improvements have
been completed in accordance with the requirements of the Tenant
Improvements Agreement, Sublessor shall submit to Landlord a written
request that reimbursement of the Tenant Improvement Costs, up to an
amount equal to the Tenant Improvement Allowance, be paid directly to
Sublessee upon Sublessee's satisfaction of the requirements set forth in
paragraph 9 of the Tenant Improvements Agreement (as modified, if
applicable, by the terms of Landlord's consent).
7. BROKERS
7.1 Sublessee warrants and represents that it has had no dealings
with any real estate broker or agent in connection with the negotiation of
this Sublease other than Colliers Parrish International and CPS, The
Commercial Property Services Company, whose commission shall be paid by
Sublessor, and that it knows of no other real estate broker or agent
(other than the brokers described above) who is or might be entitled to a
commission in connection with this Sublease. Sublessee shall indemnify,
defend and hold Sublessor harmless from and against any and all
liabilities or expenses, including reasonable attorneys' fees and costs,
arising from any claims made by any broker or individual (other than the
brokers described above) for commissions or fees who claims to have
represented Sublessee in connection with this Sublease.
8. RECOGNITION & ATTORNMENT AGREEMENT
8.1 Sublessor shall use its reasonable best efforts to obtain
from Landlord a recognition and attornment agreement which provides that,
if the Lease is terminated as a result of any default by Sublessor, (a)
(i) the Sublease will not be terminated; (ii) Landlord will recognize all
of Sublessee's right to possession of the Premises pursuant to the terms
of this Sublease; and (iii) Landlord will assume all of Sublessor's
obligations under the Sublease arising on and after the date of the event
of default by Sublessor, and (b) Sublessee will attorn to Landlord and
perform all of Sublessee's obligations under the Sublease directly to
Landlord as if Landlord were the Sublessor under the Sublease.
9. CONSENTS AND APPROVALS
9.1 Whenever the consent or approval of either party is required
under this Sublease, such consent or approval shall not be unreasonably
withheld or delayed.
10. LANDLORD'S CONSENT
10.1 Sublessee acknowledges that this Sublease is subject to the
consent of the Landlord under the Lease. Accordingly, this Sublease shall
not be effective unless and until Landlord's consent has been executed by
Landlord. Sublessor shall use diligent efforts to obtain such consent as
soon as reasonably possible following execution of this Sublease by
Sublessor and Sublessee. Either party shall have the right to terminate
this Sublease if Landlords consent hereto, in form and content reasonably
acceptable to Sublessor and Sublessee, cannot be obtained within fifteen
(15) business days after this Sublease has been fully executed. Sublessor
shall have no liability whatsoever to Sublessee, however, if Sublessor is
unable to obtain such consent from Landlord.
11. SUBLESSOR'S OPTION TO EXTEND LEASE
11.1 Sublessor agrees that it will not exercise its option to
extend the Lease past December 31, 2000, pursuant to paragraph 2 of the
Lease.
12. NOTICES
12.1 All notices, unless otherwise provided herein, will be in
writing and deemed given on the date the notice is hand delivered, mailed,
or electronically transmitted (with a confirmation or acknowledgment of
receipt) to the receiving party at such party's address. Either party may
change its address upon notice to the other party as set forth herein.
For Sublessor: For Sublessee:
LSI Logic Corporation C-Cube Microsystems, Inc.
M/S D-106, 1551 McCarthy Blvd. 1778 McCarthy Boulevard
Milpitas, CA 95035 Milpitas, CA 95035
Attn: General Counsel Attn: Manager, Corp. Facilities
Telephone: (408) 433-7189 Telephone: (408) 944-8606
Fax: (408) 433-6896 Fax: (408) 944-6762
13. CONFLICT
13.1 If any terms of the Master Lease contradict the terms of
this Sublease, the terms of this Sublease shall control over the Master
Lease as between Sublessor and Sublessee.
14. ASSIGNMENT OF WARRANTIES
14.1 Sublessor hereby assigns to Sublessee all warranties given
and indemnities made by Landlord to Sublessor under the Lease subject to
Landlord's written consent to such assignment. Sublessor shall cooperate
with Sublessee to enforce all such warranties and indemnities.
15. ADDITIONAL PROVISIONS
15.1 Without limiting any other right or remedy of Sublessee
under this Sublease, if Landlord seeks to terminate the Lease because of a
default or alleged default by Sublessor, Sublessor shall use its
reasonable good faith efforts to maintain the Lease in full force and
effect for the benefit of Sublessee, and Sublessor shall take reasonable
actions required to reinstate the Lease and/or to claim and pursue any
right of redemption or relief from forfeiture of the Lease (and as a
consequence thereof any forfeiture of this Sublease) to which Sublessor
may be entitled at law or in equity.
15.2 As an inducement to Sublessee to enter this Sublease, to the
best of Sublessor's knowledge, Sublessor represents and warrants with
respect to the Premises that: (a) the Lease is in full force and effect,
and there exists under the Lease no default or event of default by either
Landlord or Sublessor, nor has there occurred any event which, with the
giving of notice or passage of time or both, could constitute such a
default or event of default; (b) there are no pending or threatened
actions, suits or proceedings before any court or administrative agency
against Sublessor or Landlord or third parties which could, in the
aggregate, adversely affect the Premises or any part thereof or the
ability of either party to perform its obligations under the Lease, and
Sublessor is not aware of any facts which might result in such actions,
suits or proceedings; (c) there is no pending or threatened condemnation
or similar proceeding affecting the Premises or any portion thereof, and
Sublessor has no knowledge that any such action currently is contemplated;
and (d) Sublessor has not received any notice from any insurance company
of any defects or inadequacies in the Premises or any part thereof which
could adversely affect the insurability of the Premises or the premiums
for the insurance thereof.
SUBLESSOR
LSI Logic Corporation,
a Delaware corporation
By: /s/ R. Douglas Norby
Its: EVP & CFO
SUBLESSEE
C-Cube Microsystems, Inc.,
a Delaware corporation
By: /s/ Mark K. Allen
Its: V.P.