Exhibit 10.2
THIS CONSENT TO SUBLEASE AGREEMENT is made as of June 4, 2002
A M O N G:
MITEL RESEARCH PARK CORPORATION
(the "Landlord")
- and -
ZARLINK SEMICONDUCTOR INC.
(the "Tenant")
- and -
METASOLV SOFTWARE CANADA INC.
(the "Subtenant")
RECITALS:
A. By a lease agreement dated March 27, 2001 (the "Lease"), between the
Landlord and the Tenant (formerly Mitel Corporation), the Tenant is the
tenant of certain premises described in the Lease and municipally known
as 360 Leggett Drive, Ottawa (formerly Kanata), Ontario (the "Leased
Premises");
B. Subject to obtaining the consent of the Landlord, the Tenant intends to
sublease part of the Leased Premises comprising approximately 31,358
square feet (the "Sublet Premises") to the Subtenant for a term
commencing July1, 2002 and ending June 30, 2007 pursuant to a sublease
made as of June 2002, a copy of which is attached hereto as Exhibit A
(the "Sublease"); and
C. The Subtenant and the Tenant have requested that the Landlord consent
to the Sublease and the Landlord has agreed to do so on the terms
contained in this Agreement.
NOW THEREFORE in consideration of other good and valuable consideration and the
sum of $10.00 now paid by each party to each other party hereto, the receipt and
sufficiency of which are hereby acknowledged by all parties hereto, the parties
agree as follows:
1. Consent by Landlord
The Landlord hereby consents to the Sublease subject to the following terms and
conditions:
(a) This consent shall in no way affect or release the Tenant from its
liabilities and responsibilities under the terms of the Lease. The
Tenant acknowledges that, notwithstanding the terms of the
Sublease, it shall remain principally liable and responsible for
all liabilities and responsibilities of "Tenant" under the Lease.
(b) This consent is given without prejudice to the Landlord's rights
under the Lease, this consent being limited to the Sublease to the
Subtenant, and shall not be deemed to be an authorization for or
consent to any further or other assignment or
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subletting of either or both the Lease or Sublease or parting with
or sharing possession of all or any part of the Leased Premises or
the Sublet Premises, except to the extent that the Subtenant is
hereby permitted to extend the Subterm as set forth in the
Sublease Agreement.
(c) The Landlord joins in this consent solely to grant its consent
and, by doing so, the Landlord does not thereby:
(i) make any representations or warranties; or
(ii) acknowledge or approve of any of the terms of the Sublease
as between the Tenant, as sublandlord, and the Subtenant.
Further, other than expressly provided in this consent, nothing contained in the
Sublease or this consent shall be construed as modifying, waiving or affecting
any of the provisions, covenants and conditions or any of the Landlord's rights
or remedies under the Lease.
2. Covenants by Tenant and Subtenant
In consideration of the Landlord's consent to the Sublease, the Tenant and
Subtenant agree as follows:
(a) The Subtenant covenants that the Sublease shall be subject to and
subordinate to the Lease and further covenants and agrees that,
except for the payment of Rent and other monetary amounts, which
shall be governed by the Sublease, the Subtenant will observe,
comply with and perform all terms, conditions and covenants in the
Lease and to perform all obligations of any kind whatsoever of the
"Tenant" under the Lease as and when the same are due to be
performed by the Tenant pursuant to the terms of the Lease and to
be subject to all of the Landlord's rights thereunder during the
entire term of the Sublease, as though the Subtenant was named
"Tenant" under the Lease to the extent that such covenants,
obligations, terms and conditions relate to the Sublet Premises.
The Subtenant further expressly acknowledges and agrees to be
subject to the prohibition in the Lease against assigning,
subletting or sharing the occupation, control or possession of the
Sublet Premises or any part thereof without the prior written
consent of the Landlord, which consent may not be unreasonably
withheld.
(b) The Tenant and Subtenant each represent and warrant that they have
dealt with no broker, finder, agent or other person in connection
with the Sublease other than the Tenant's broker, Colliers
Macaulay Nicolls (Ontario) Inc., and the Subtenant's broker, The
Staubauch Ontario Inc. (collectively, the "Brokers"), and agree to
indemnify and hold the Landlord harmless from and against any
claims or causes of action for a commission or other form of
compensation arising from the Sublease, whether advanced by the
Broker or any other person or entity. The provisions of this
paragraph shall survive the termination of the Lease, the Sublease
and any renewal or extension of either or both of them.
(c) The Tenant and Subtenant jointly and severally acknowledge that
there are no covenants, representations, warranties, agreements or
conditions expressed or
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implied, collateral or otherwise forming part of or in any way
affecting or relating to the Landlord's consent to the Sublease
save as expressly set out herein and that this consent agreement
constitutes the entire agreement between the Landlord, the Tenant
and the Subtenant with respect to the Sublease and may not be
modified except by subsequent agreement in writing and executed by
the Landlord, the Tenant and the Subtenant.
3. Subtenant Waivers
3.1 The Tenant and Subtenant acknowledge that as a condition to the
Landlord's consent to any sublease, the Lease requires the Subtenant
to:
(a) waive any rights it may have as under-lessee under section 21 of
the Commercial Tenancies Act, as amended or replaced from time to
time (the "Act"), or any like rights under common law and, for the
purpose of clarity, agree that notwithstanding the Landlord has
consented to the Sublease, the Subtenant shall not claim or apply
for an order vesting the term of the Sublease, the Leased
Premises, or any part thereof, in the Subtenant, upon the Landlord
re-entering the Leased Premises or forfeiting the Lease;
(b) waive any rights it may have as under-tenant under subsection
32(2) of the Act or any like rights under common law and, for the
purpose of clarity, agree that notwithstanding the Landlord has
consented to the Sublease, if the Landlord distrains or threatens
to distrain any goods or chattels situate on the Sublet Premises,
the Subtenant shall not seek to protect such chattels from the
Landlord's distress as contemplated by subsection 32(2) of the
Act; and
(c) waive any rights it may have under subsection 39(2) of the Act, or
any like rights under common law and, for the purpose of clarity,
agree that notwithstanding the Landlord has consented to the
Sublease, if a receiving order in bankruptcy, or a winding-up
order has been made against the Tenant, agree not to exercise its
election as under-lessee to stand in the same position with the
Landlord as though the Subtenant were a direct lessee of the
Landlord.
3.2 The Landlord hereby agrees not to require the waiver described in
subsection 3.1(b) of this consent. In consideration of the Landlord's
agreement, on or before June 14, 2002, the Tenant shall deliver to the
Landlord an irrevocable standby demand letter of credit in a form
satisfactory to the Landlord, acting reasonably, in the amount of
CDN$200,000 (the "Letter of Credit"). The Letter of Credit shall be
for a term ending July 15, 2003. On July 1, 2003, the Tenant shall pay
to the Landlord CDN$200,000 (the "Cash Security") in replacement of
the Letter of Credit, failing which the Landlord may draw upon the
Letter of Credit in full, in which case the amount so drawn shall be
deemed to be the "Cash Security". Upon receipt of the Cash Payment,
the Landlord hereby agrees to immediately cancel the Letter of Credit.
(The Letter of Credit and Cash Security are
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hereinafter jointly and severally called the "Distress Security"). The
Letter of Credit shall be issued by a Schedule 1 Canadian chartered
bank (the "Bank"). The Distress Security shall be held by the Landlord
throughout the term of the Sublease, as renewed or extended (whether
by agreement, overholding or otherwise) (the "Sublease Term"), as
security in lieu of the Landlord's right of distress with respect to
the goods and chattels of the Subtenant situate on the Sublet
Premises, irrespective of:
(a) the unenforceability of the Sublease as against the Subtenant;
(b) the termination of any obligation of the Subtenant under the
Sublease by operation of law or otherwise; or
(c) the bankruptcy, insolvency, dissolution, winding-up or other
liquidation of either or both the Tenant or Subtenant, including
without limitation, the repudiation or either both the Lease or
Sublease, or any surrender or disclaimer of either or both the
Lease or Sublease by a trustee in bankruptcy of the Tenant or
Subtenant, respectively.
The obligations of the Bank under the Letter of Credit shall be
absolute and unconditional, and the Distress Security shall be in no
way released, discharged or reduced, and the rights of the Landlord
shall be in no way prejudiced or impaired by any negligent, delay or
forbearance of the Landlord in demanding, requiring or enforcing
performance by the Tenant or any other obligated person of any of its
obligations under the Lease or by granting any extensions of time for
performance, or by waiving any performance (except as to the
particular performance which has been waived) or by permitting or
consenting to any assignment or by the bankruptcy, receivership,
insolvency or any other creditors' proceedings of or against the
Tenant or Subtenant, or by the winding-up or dissolution of the Tenant
or Subtenant, or by any other event or occurrence which would have the
effect at law of terminating the existence of obligations of the
Tenant prior to the termination of the Lease or by any agreements or
other dealings between the Tenant and the Landlord having the effect
of amending or altering the Lease or the obligations of the Landlord
thereunder or by any want of notice by the Landlord to the Bank of any
default of the Tenant or by any matter, thing, act or omission of the
Landlord whatsoever.
If at any time during the Sublease Term, the Tenant defaults in its
payment of Rent under the Lease and does not remedy such default in
accordance with the terms of the Lease, irrespective of the matters
referred to in this section, the Landlord, at its option, may, in
addition to any and all other rights and remedies provided for in the
Lease or by law, immediately draw down the amount of the Rent then in
arrears from the Distress Security and apply such amount firstly to
the Landlord's costs and expenses (including without limitation, legal
fees) reasonably incurred in this regard, then to such arrears of Rent
together with interest thereon at the Stipulated Rate of Interest. For
the purpose of clarity, it is agreed and understood that if the Rent
then in arrears exceeds the amount of the Distress Security then
remaining to be drawn upon by the Landlord, such excess arrears shall
remain immediately due and payable and the Landlord shall have
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available to it any and all of its other rights and remedies provided
for in the Lease or by law. In the event the Landlord draws down upon
the Distress Security, the Tenant shall, within ten (10) days after
demand by the Landlord, remit to the Landlord a further cash deposit
in an amount sufficient to restore the total amount of the Distress
Security to CDN$200,000.
If, throughout the Sublease Term, the Tenant promptly pays all Rent
payable by the Tenant to the Landlord pursuant to the terms of the
Lease, the Landlord shall return the Distress Security to the Tenant
without interest within ten (10) days following receipt of notice from
the Tenant that the Sublease Term has expired and the Subtenant has
vacated the Sublet Premises.
3.3 Termination of Lease
The Subtenant acknowledges and agrees that it has no greater interest
in the Sublet Premises then the Tenant under the Lease and that if the
Lease is terminated for any reason whatsoever, repudiated or
disclaimed, the Sublease shall thereupon terminate forthwith.
The Subtenant covenants and agrees that if the Lease is terminated for
any reason whatsoever, save and except pursuant to section 8.1 of the
Lease, or if the Tenant commits an act of bankruptcy and the Lease is
thereafter repudiated or disclaimed (and whether such termination,
repudiation or disclaimer occurs before or after the commencement of
the Sublease Term), then the Subtenant shall:
(a) to the extent of unpaid rent payable under the Sublease, cure the
Rent default under the Lease; and
(b) forthwith rectify all other defaults under the Lease up to the
date of such termination, repudiation or disclaimer to the extent
that such defaults relate to matters for which the Subtenant is
responsible pursuant to the terms of the Sublease or this
consent;
and enter into a new direct lease (the "New Lease") for the Sublet
Premises with the Landlord, as landlord, commencing upon the
later:
(i) the date of the termination, repudiation or disclaimer of the
Lease; or
(ii) July 1, 2002, being the commencement date of the Sublease;
for the balance of term of the Sublease, and otherwise on the same
terms and conditions as are contained in the Lease (save and except
section 5.3 (Building and Pedestal Signage), the last sentence of
section 7.1 (Tenant Repair), Schedule "G" (Tenant Signage), the
"Excepted Transfer" provisions of sections 12.2 and 12.5, and the
Landlord agrees not to require the Study referred to in section 11.5 of
the Lease unless at any time the Subtenant brings any Hazardous
Substances onto the Complex or uses, generates, stores, handles or
manufactures any Hazardous Substances in the Sublet Premises), applied
mutatis mutandis, except that the "Permitted Use" and "Business" shall
be as set forth in section 4 of this
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consent, the Landlord shall have the right to relocate the Sublet
Premises as described in section 3.4 of this consent, and further
except that the Basic Rent shall be the then current market basic rent
for comparable premises as agreed by the parties, and failing
agreement within thirty (30) days after the commencement date, as
determined by the Arbitration Act, 1991 of Ontario, it being agreed
however that in no event shall the Basic Rent be calculated at rates
per square foot that are less than those set forth in the Lease.
Further, provided the commencement date of the New Lease is a date on
or before June 30, 2005, the New Lease shall include a right to
extend, a right of first refusal and a right of expansion in favour of
the Subtenant on the terms described in sections 5, 9 and 10 of the
Sublease, respectively, applied mutatis mutandis; it being agreed and
understood, however, that in no event shall the Landlord be obligated
to grant the Subtenant a right of first refusal for premises not
contained within Phase III of the Complex, whether or not such space
then adjoins the Sublet Premises, and it being further agreed and
understood that the Basic Rent payable by the Subtenant during the
Extension Term (as defined in section 5 of the Sublease) shall be
determined in the manner described in this section 3.3 in respect of
the initial term of the New Lease.
Notwithstanding any statutory or other rights to the contrary in
favour of the Subtenant (including without limitation the provision of
sections 21 and 39(2) of the Commercial Tenancies Act or any successor
legislation thereto), which rights are hereby expressly waived by the
Subtenant, but except for the obligation of the Subtenant to lease the
Sublet Premises pursuant to the New Lease referred to in this section
3.3 (and the Landlord's obligation to enter into such New Lease with
the Subtenant), the termination, repudiation or disclaimer of the
Lease shall terminate any right of the Subtenant to occupy the Sublet
Premises pursuant to the Sublease. In consideration of such waivers by
the Subtenant, the Landlord covenants and agrees to grant such New
Lease to the Subtenant on the above described terms and conditions.
3.4 Relocation
If the Lease is terminated, disclaimed or repudiated and if a New
Lease for the Sublet Premises is entered into between the Landlord and
the Subtenant, all as described in section 3.3 of this consent, the
Landlord shall have the right to relocate the Sublet Premises on the
terms described below:
(a) if such termination, repudiation or disclaimer occurs between
January 1, 2004 and June 30, 2007, the Landlord may, at its
option, relocate that part of the Sublet Premises which forms
part of the Office Areas of the Leased Premises (hereinafter
called the "Office Space") to office space elsewhere in the
Complex of similar size, similar base building finishes and
similar base building amenities at the Subtenant's sole cost and
expense. For greater certainty, it is agreed and understood that
the Landlord is not required to provide leasehold improvements of
a similar nature as found in the Office Space or to compensate
the Subtenant for the improvements comprising the Office Space
being relocated. It is further agreed and
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understood that the Landlord shall not have the right to require
the Subtenant to relocate any area in the Sublet Premises
comprising part of the Non-Office Areas of the Leased Premises
being used by the Subtenant as a laboratory (hereinafter called
the "Lab Space"); and
(b) if such termination, repudiation or disclaimer occurs on or after
July 1, 2007, the Landlord may, at its option, relocate either or
both the Office Space and Lab Space to space elsewhere in the
Complex of similar size, base building finishes and amenities.
The relocation of the Office Space shall be at the Subtenant's
sole cost and expense; it being agreed and understood that the
Landlord is not required to provide leasehold improvements of a
similar nature as those found in the Office Space or to
compensate the Subtenant for the improvements comprising the
Office Space being relocated. If the Landlord elects to relocate
the Lab Space, the Landlord shall reimburse the Subtenant for all
reasonable costs incurred by the Subtenant as a direct result of
such relocation of the Lab Space, including its physical move,
the rebuilding of the Leasehold Improvements in the new Lab Space
to a standard comparable to those found in the Lab Space at the
time of such relocation and the reconnection of existing
communication lines. In no event, however, shall the Landlord be
liable for or obligated to reimburse the Subtenant for any
indirect costs, including without limitation, interruption or
loss of business.
In each case, the term of the New Lease shall terminate with respect
to the relocated Office Space or Lab Space, as the case may be, and
shall commence with respect to the new Office Space or new Lab Space,
as the case may be, one hundred and twenty (120) days following the
delivery to the Subtenant by the Landlord of written notice of the
Landlord's election to relocate the Sublet Premises pursuant to the
terms of this section 3.4, and provided the Landlord has completed its
aforesaid required work, if any, in the Office Space or Lab Space, as
the case may be.
4. Permitted Use of the Sublet Premises
The Landlord agrees that notwithstanding the definitions of "Permitted Use" and
"Business" contained in the Lease, the Subtenant shall be permitted to use the
Sublet Premises for the purposes of general business offices, which may include
without limitation, software sales (it being agreed and understood however, that
the Sublet Premises shall not be used for commercial sales to the general
public), marketing software development, and a software development computer
laboratory in the Lab Space.
5. Landlord Covenant
No approval or further consent of any other person, firm or corporation is
required in order for the Landlord to provide this consent, including without
limitation, any approval or consent of any mortgagee or assignee of the
Landlord's interest in the Lease or in the Sublet Premises.
6. Notice
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Any notice required or contemplated by any provision of this consent shall be in
writing and, if to the Landlord, addressed to the Landlord at the Landlord's
Address, if to the Tenant, addressed to the Tenant at the Tenant's Address, and
if to the Subtenant to MetaSolv, Inc. 5560 Tennyson Parkway, Plano, Texas 75024,
Facsimile No. 972-403-8989, to the attention of: General Counsel, with a copy to
Purchasing Department.
7. Defined Terms
Except as otherwise defined herein, the parties acknowledge that the defined
terms used herein have the same meaning as the defined terms contained in the
Lease.
8. Costs
The Tenant and Sublandlord shall be jointly and severally liable to the Landlord
for its legal costs reasonably incurred in connection with this consent, and
notwithstanding anything contained herein, the Landlord's consent to the
Sublease is conditional upon such costs being paid. Such costs shall be deemed
to be charges payable as Rent by the Tenant under the Lease.
9. Enurement
This consent shall be binding upon and enforceable against the parties hereto
and their respective successors and assigns and shall enure to the benefit of
and be enforceable by the Landlord and its successors and assigns, and the
Tenant and Subtenant and their respective permitted successors and assigns.
IN WITNESS OF WHICH the parties have duly executed this consent.
MITEL RESEARCH PARK CORPORATION
By: /s/ Dave Barr c/s
------------------------------------
Name: Dave Barr
Title: Site Director
I have authority to bind the Corporation.
ZARLINK SEMICONDUCTOR INC.
By: /s/ Dan McIntyre c/s
-------------------------------------
Name: Dan McIntyre
Title: Sr.V.P
I have authority to bind the Corporation.
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METASOLV SOFTWARE CANADA INC.
By: /s/ Johnathan K Hustis c/s
-------------------------------------
Name: Jonathan K. Hustis
Title: Secretary
I have authority to bind the Corporation.