Exhibit 10.2
SECOND AMENDMENT TO LEASE
This Second Amendment to Lease ("Second Amendment") is entered into as
of this 30th day of June, 2004, by and between DELL ASSOCIATES II-A, a
California general partnership ("Landlord") and NETGEAR, INC., a Delaware
corporation ("Tenant").
RECITALS
A. Landlord and Tenant entered into a Standard Office Lease dated
December 3, 2001("Original Lease") for those certain premises, consisting of
approximately thirty-two thousand three hundred twenty-two (32,322) square feet,
commonly referred to as Suite 100, on the first floor of that certain building
("Building") located at 4500 Great America Parkway, Santa Clara, California, all
as more particularly described in the Lease ("Original Premises").
B. Landlord and Tenant entered into a First Amendment to Lease dated
March 21, 2002 ("First Amendment"), pursuant to which Landlord leased to Tenant,
and Tenant leased from Landlord, certain expansion space, consisting of
approximately twenty-four thousand fifty (24,050) rentable square feet, and
commonly referred to as Suite 200 in the Building referred to above (the
"Expansion Space") and Tenant agreed to vacate and surrender possession to
Landlord of a portion of the Original Premises, consisting of approximately six
hundred (600) rentable square feet on the first floor of the above-referenced
Building (the "Relinquished First Floor Space"). The Original Lease, as amended
by the First Amendment, is referred to herein as the "Lease."
C. Commencing January 1, 2005 and continuing for a period of three (3)
years, Tenant wishes to lease from Landlord, and Landlord wishes to lease to
Tenant, the entire Building referred to above, consisting of the Original
Premises (including, without limitation, the Relinquished First Floor Space),
the Expansion Space and that certain space, commonly referred to as Suite 300,
consisting of approximately seventeen thousand six hundred thirty (17,630)
rentable square feet, on the third (3rd) floor of the Building, on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth below, and for other valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Recitals. The Recitals set forth above are true and correct and are
incorporated into the body of this Amendment as though set forth herein.
2. Defined Terms. Except as otherwise expressly provided herein, the
capitalized terms used herein shall have the meanings set forth in the Lease.
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3. Term. Subject to the satisfaction of the condition set forth in
Paragraph 11 below, the parties hereto agree that the Expiration Date of the
Term of the Lease is hereby extended to December 31, 2007.
4. Lease of Entire Building. Subject to the terms of this Paragraph 4
below and satisfaction of the condition set forth in Paragraph 11 below,
commencing January 1, 2005, the term "Premises" as used in the Lease, as amended
hereby, shall mean the entire Building. Subject to satisfaction of the condition
set forth in Paragraph 11 below, commencing on January 1, 2005 and ending on
December 31, 2007 (unless sooner terminated pursuant to the terms of the Lease,
as amended hereby), Landlord leases to Tenant, and Tenant leases from Landlord,
the entire Building, consisting of approximately seventy-four thousand two
(74,002) rentable square feet of space; provided, however, if BancTec has not
vacated and surrendered possession of Suite 300 referred to above and/or the
First Floor Relinquished Space on or before December 31, 2004, then (i) Landlord
shall promptly exercise commercially reasonable and diligent efforts, at
Landlord's sole cost, to evict BancTec from Suite 300 and/or the First Floor
Relinquished Space, and (ii) the lease by Tenant of Suite 300 or the First Floor
Relinquished Space, as the case may be, shall then commence as of the date
BancTec vacates and surrenders possession of Suite 300 or the First Floor
Relinquished Space, as the case may be, to Landlord. Such commercially
reasonable and diligent efforts referred to in this Paragraph 4 shall include
initiating unlawful detainer or eviction proceedings against BancTec, if
necessary.
5. Tenant Improvement Allowance. Subject to satisfaction of the
condition set forth in Paragraph 11 below, Landlord shall provide a construction
allowance to Tenant to be applied to the costs of constructing alterations,
additions or improvements in or to the Premises (collectively, "Alterations") in
an amount not to exceed Two Hundred Thousand Dollars ($200,000) (the "New
Allowance"). The term "Premises" as used in the immediately preceding sentence
shall include, without limitation, Suite 300 and the First Floor Relinquished
Space once possession of the same is delivered to Tenant by Landlord. Tenant
shall pay all costs of designing and constructing Alterations in or to the
Premises to the extent that the cost thereof exceeds the New Allowance. In
consideration for Landlord agreeing to contribute the New Allowance, Tenant
hereby acknowledges and agrees that Landlord shall have no obligation to
contribute or fund any undisbursed balance of the Expansion TI Allowance
referred to in Paragraph 3(b) of the First Amendment to Lease executed by
Landlord and Tenant; it being understood and agreed that Tenant waives its right
to require Tenant to contribute or fund any undisbursed balance of such
Expansion TI Allowance.
(a) Costs of Construction. For purposes of the New Allowance,
the costs of constructing Alterations shall include, without limitation, costs
for preparation of preliminary and final plans and all working drawings and
processing of applications for all governmental authorizations, approvals,
licenses and permits; costs of obtaining building permits; fees of engineers,
space planners, architects, attorneys and others providing professional or extra
services in connection with the construction of the Alterations or the
supervision of the construction; all hard construction costs for the
construction of the Alterations according to the final plans approved by
Landlord and all approved changes thereto, including, but not limited to, all
labor and supervision costs, costs of all materials and supplies used in such
construction,
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contract price for all construction work undertaken by general contractors and
subcontractors, fees, taxes or other charges levied by governmental or
quasi-governmental agencies (including, public utilities) in connection with the
issuance of all approvals, licenses and permits necessary to undertake
construction of the Alterations, the cost of all equipment and fixtures, if any,
provided for in the final plans for the Alterations approved by Landlord,
including the cost of installation thereof, the cost of installing standard
utility services (i.e. standard HVAC controls and distribution facilities,
standard electrical panels, distribution facilities, wiring, fixtures, switched
and receptacles) and special utility services (i.e, services other than those
specified above); Tenant's general contractor's overhead and profit; and all
other costs of such construction including a conditional use permit (if
required) and occupancy permits. The provisions of Article 9.3 of the Lease
shall apply to all Alterations to be undertaken by or for Tenant.
(b) Use of New Allowance. The entire New Allowance is to be
used for construction of general purpose interior tenant improvements within the
Premises (however, Tenant may not construct any Alterations in Suite 300 or the
First Floor Relinquished Space until possession of the same is delivered by
Landlord to Tenant). As used herein "general purpose interior tenant
improvements" shall mean and refer to interior improvements which may be of
permanent improvement to the Premises (e.g., permanent partitions; window, wall
and floor coverings; HVAC equipment and wiring; electrical distribution
facilities and wiring; lighting and utility fixtures); and shall not mean and
include any "special purpose improvements" needed by Tenant for the conduct of
its business or which might not be a permanent improvement to the Premises
(e.g., demountable partitions, trade fixtures or furniture of Tenant, special
security requirements). In determining whether any interior improvement is a
"general purpose interior tenant improvement" or a "special purpose
improvement", the parties shall take into account the kind, quality, and amount
of such improvements, their location in the Premises, and their relationship to
the other improvements. Landlord agrees that no portion of the New Allowance is
to be used to pay for costs of cleaning up or remediating any hazardous or toxic
materials, if any, in the Premises or anywhere else in, on or under the Project.
(c) Conditions Precedent to Disbursement of New Allowance.
Landlord shall not be obligated to make any disbursement of the New Allowance to
or for the benefit of Tenant unless at the time of each request for
disbursement, all of the following conditions are satisfied: (i) such request
for disbursement by Tenant shall be made prior to July 1, 2006, (ii) there shall
exist no Event of Default under the Lease, as amended hereby, (iii) the Lease,
as amended hereby, shall be in full force and effect, (iv) Tenant shall have
furnished to Landlord receipted bills and releases of lien rights (in statutory
form or in a form otherwise reasonably satisfactory to Landlord) covering work
done and/or materials furnished for which Tenant is requesting payment from the
undisbursed portion of the New Allowance, and (v) the condition set forth in
Paragraph 11 below shall have been satisfied. Landlord shall not be obligated to
disburse any portion of the New Allowance pursuant to any request for
disbursement made after July 1, 2006. If, on or before July 1, 2006, Tenant has
not requested disbursement of the entire New Allowance to cover the cost of
construction of Alterations performed on or before July 1, 2006 by or for
Tenant, then Tenant shall not be entitled to any reduction in the payment of
Basic Rental or Additional Rent under the Lease or any offset of any kind,
Landlord shall have no liability
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whatsoever to Tenant for any undisbursed amounts of the New Allowance for which
disbursement has not been requested and such unapplied portion of the New
Allowance shall be retained by Landlord. Except as provided in this Paragraph 5,
Landlord shall have no obligation to provide any other allowance with respect to
any Alterations or tenant improvements undertaken, or caused to be undertaken,
by or for Tenant.
(d) Disbursement Procedures. Tenant may request disbursements
from the New Allowance, provided request is made prior to July 1, 2006, not more
frequently than once each month. No disbursements shall be made until Landlord
has approved the applicable Alterations to the extent such approval is required
under the Lease. Prior to the commencement of construction of the applicable
Alterations by Tenant, Tenant shall deliver to Landlord, for Landlord's approval
(which shall not be unreasonably withheld or delayed), a schedule of values
allocated to the various portion of the work involved in the construction and
installation of the applicable Alterations. Each disbursement request may seek
disbursement of that portion of the New Allowance in an amount equal to the
proportion of the Alterations completed and covered by the disbursement request,
as determined under the approved schedule of values multiplied by a fraction,
the numerator of which is the lesser of the New Allowance or the total contract
price for the applicable Alterations and the denominator of which is the total
contract price for the applicable Alterations. Each request for disbursement
shall be accompanied by (i) an itemized statement, in form and content
reasonably satisfactory to Landlord, from all persons and entities providing
work or materials covered by such statement; and (ii) invoices, vouchers,
statements, affidavits and/or other documents in a form reasonably acceptable to
Landlord which substantiate and justify the disbursement requested. Within
twenty (20) days after Landlord's receipt of each fully completed disbursement
request made prior to July 1, 2006, Landlord shall pay one hundred percent
(100%) of the amount requested therein directly to Tenant or, at Landlord's
option, directly to contractors, laborers or suppliers entitled thereto. Prior
to or at the time of each disbursement hereunder, Tenant shall deliver to
Landlord lien waivers in statutory form or in a form reasonably satisfactory to
Landlord from Tenant's general contractor and subcontractors and materialmen to
whom funds were disbursed under the previous disbursement. Under no
circumstances shall Landlord be obligated to disburse more than the New
Allowance for the costs of construction of Tenant's Alterations.
6. Rent. Tenant shall pay to Landlord as monthly Basic Rental for the
Premises (i.e. the entire Building), in advance, on the first day of each
calendar month, commencing on January 1, 2005 and continuing through December
31, 2007, an amount equal to the product obtained by multiplying the rentable
square footage included in the Building (i.e. 74,002) by Fifty Cents ($0.50);
provided, however, if BancTec has not vacated and surrendered Suite 300 and/or
the First Floor Relinquished Space to Landlord on or before December 31, 2004,
then Tenant shall not be obligated to pay Basic Rental for such Suite 300 or the
First Floor Relinquished Space, as the case may be, until Landlord delivers
possession of such space to Tenant.
7. Additional Parking Spaces. Effective as of the January 1, 2005,
Article 1.9 of the Lease is amended to provide that the number of unreserved
parking spaces allocated for Tenant's use during the term of the Lease is all of
the parking spaces located within the Project.
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8. Tenant's Proportionate Share. Effective as of January 1, 2005,
Tenant's Proportionate Share as described in Article 1.5 of the Lease shall be
increased to one hundred percent (100%); provided, however, if BancTec has not
vacated and surrendered possession of Suite 300 and/or the First Floor
Relinquished Space on or before December 31, 2004, then until Landlord delivers
possession of such space to Tenant, Tenant's Proportionate Share shall be equal
to the percentage obtained by dividing the rentable square footage of that
portion of the Building for which possession has been delivered to Tenant by the
total rentable square footage of the Building.
9. Deleted Provisions. The provisions of Article 32, Article 33 and
Article 34 of the Lease are hereby deleted in their entirety.
10. Commissions. Landlord hereby represents and warrants to Tenant that
it has not retained or worked with any broker or finder in connection with the
negotiation of this Second Amendment and/or the consummation of the transaction
contemplated hereby. Tenant hereby represents and warrants to Landlord that it
has not retained or worked with any broker or finder in connection with the
negotiation of this Second Amendment and/or the consummation of the transaction
contemplated hereby. Landlord and Tenant do each hereby agree to indemnify,
defend and hold the other harmless from and against liability for compensation
or charges which may be claimed by any broker, finder or other similar party by
reason of any dealings or actions of the indemnifying party, including any
costs, expenses and/or attorneys' fees reasonably incurred with respect thereto.
The obligation to indemnify, defend and hold harmless as set forth in the
immediately preceding sentence shall survive the termination of the Lease.
11. BancTec Lease Termination.As a condition to the effectiveness of
this Second Amendment, Landlord and BancTec shall have executed a lease
termination agreement with respect to Suite 300 and the First Floor Relinquished
Space on terms and conditions acceptable to Landlord and BancTec in their sole
and absolute discretion. Landlord shall notify Tenant of the satisfaction of
this condition promptly following the date such lease termination agreement is
executed by Landlord and BancTec, if applicable. Landlord makes no
representation or warranty that such lease termination agreement will be
executed by Landlord and BancTec. If such lease termination agreement is not
executed by Landlord and BancTec on or before June 15, 2004, then this Second
Amendment shall be void and of no force or effect, the Lease shall continue in
effect without regard to this Second Amendment and Landlord and Tenant shall
each have their respective rights and obligations under the Lease.
12. Lease Terms. Except as otherwise modified herein, the terms and
conditions of the Lease shall remain unmodified and in full force and effect. In
the event of any conflict or inconsistency between the terms of this Second
Amendment and the terms of the Lease, the terms of this Second Amendment shall
control.
13. Counterparts. This Amendment may be executed in counterparts, each
of which shall be deemed an original and which together shall constitute one
instrument.
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IN WITNESS WHEREOF, the parties have executed this Second Amendment as of the
date set forth above.
LANDLORD:
DELL ASSOCIATES II-A,
a California general partnership
By: /s/ James D. Mair
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James D. Mair
Its: General Partner
By: /s/ W. Leslie Pelio
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W. Leslie Pelio
Its: General Partner
By: /s/ W.F. Jury
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W.F. Jury
Its: General Partner
TENANT:
NETGEAR, INC.,
a Delaware corporation
By: /s/ Patrick Lo
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Its: CEO
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By: /s/ Jonathan Mather
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Its: CFO
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