Exhibit 10.2

 

FIRST AMENDMENT TO LEASE

 

This First Amendment to Lease (this “First Amendment”) is made as of May 1, 2004
(the “Effective Date”) by and between HUB PROPERTIES LLC, a Massachusetts
limited liability company (“Lessor”), and TIPPINGPOINT TECHNOLOGIES, INC., a
Delaware corporation (“Lessee”).

 

WHEREAS, SV Bull Creek Limited Partnership, a Texas limited partnership
(“Original Lessor”) and Netpliance, Inc., a Delaware corporation (“Original
Lessee”) entered into that certain Office Lease, dated February 16, 2000 (the
“Lease”), for certain space containing 43,713 rentable square feet in the
building known as the Reserve at Bull Creek, Building B (the “Building”) and
located at 7501 Capitol of Texas Highway, Austin, Texas, as more particularly
described in the Lease (the “Leased Premises”); and

 

WHEREAS, Lessor succeeded to the interest of Original Lessor under the Lease;
and

 

WHEREAS, Lessee succeeded to the interest of Original Lessee under the Lease;
and

 

WHEREAS, Lessor and Lessee desire to amend the Lease as set forth herein;

 

NOW, THEREFORE, in consideration of the foregoing and for other consideration,
the mutual receipt and legal sufficiency of which are hereby acknowledged,
Lessor and Lessee hereby agree as follows:

 

1. Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to such terms in the Lease.

 

2. As of the Effective Date, the first sentence of Section 2.1 of the Lease is
hereby amended and restated in its entirety to read as follows: “This Lease
Agreement shall continue in full force for a period beginning on the
Commencement Date (as hereinafter defined) and ending on April 30, 2010 (the
“Term”).”

 

3. For the period from Effective Date through the end of the Term, the Base Rent
schedule in Section 2.2 of the Lease shall be amended and restated in its
entirety to read as follows:

 

LEASE PERIOD

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ANNUAL BASE
RENTAL RATE PER
RENTABLE SQUARE

FOOT

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   ANNUAL BASE RENT
AMOUNT

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   MONTHLY BASE
RENT AMOUNT

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5/1/04-4/30/05

   $ 9.00    $ 393,417.00    $ 32,784.75

5/1/05-4/30/06

   $ 9.50    $ 415,273.50    $ 34,606.12

5/1/06-4/30/07

   $ 10.00    $ 437,130.00    $ 36,427.50

5/1/07-4/30/08

   $ 10.50    $ 458,986.50    $ 38,248.87

5/1/08-4/30/09

   $ 11.00    $ 480,843.00    $ 40,070.25

5/1/09-4/30/10

   $ 11.50    $ 502,699.50    $ 41,891.62

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4. As of the Effective Date, Section 2.3 of the Lease shall be amended as
follows:

 

  (i) Section 2.3(a) shall be deleted;

 

  (ii) Section 2.3(b) shall be amended and restated in its entirety to read as
follows:

 

“Lessee’s Share of Operating Expenses. Lessee shall pay Lessee’s Share (defined
below) of Operating Expenses for each year during the Term. Lessee’s Share of
Operating Expenses shall be considered a part of the Additional Rent and paid as
provided in this Section 2.3.”;

 

  (iii) Section 2.3(c)(i) shall be amended and restated in its entirety to read
as follows:

 

“‘Lessee’s Share’ shall mean (a) that percentage equal to the rentable square
footage of the Building divided by the rentable square footage of the Project,
with respect to Operating Expenses allocated on a Project basis and (b) 100%,
with respect to Operating Expenses related solely to the Building.”

 

(iv) The last sentence of Section 2.3(c)(iii) shall be amended and restated in
its entirety to read as follows:

 

“No portion of the Building shall be considered part of the “Common Areas” for
the Project; however, Lessee shall only be responsible to pay Lessee’s Share
with respect to any component of Operating Expenses which is allocated only on a
Project basis, such as ad valorem taxes.”; and

 

(v) Each occurrence of the word “Excess” in Section 2.3(e) shall be deleted.

 

5. Tenant shall accept the Leased Premises for the extended Term in its “as is”
condition, without warranty, express or implied, and, except as set forth in
this paragraph, Landlord shall have no obligation to construct improvements or
alterations in the Leased

 

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Premises or provide any allowances therefor. Landlord shall provide an allowance
(the “Tenant Allowance”) for the Tenant’s improvements (the “Tenant
Improvements”) in connection with the Leased Premises including, but not limited
to, those reasonable costs and expenses associated with the preparation of
architectural and mechanical plans, consulting fees, costs of equipment and
other design or construction related fees and expenses relating to such Tenant
Improvements, in an amount up to $284,135 ($6.50 per rentable square foot within
the Leased Premises), provided that Tenant must use (or forfeit) the Tenant
Allowance by January 1, 2006. Lessor acknowledges and agrees that it shall not
be entitled to any construction management fee pursuant to the Construction
Agreement attached as Exhibit E to the Lease, or any other similar fee pursuant
to the Lease, or otherwise, relating to the Tenant Improvements.

 

6. As of the Effective Date, Section 3.1 of the Lease shall be amended and
restated in its entirety to read as follows:

 

“Security Deposit. Upon execution of the First Amendment, Lessee shall deliver
to Lessor an irrevocable, unconditional letter of credit in the amount of
$657,444.00 issued by a national bank having a branch office in Austin, Texas
reasonably acceptable to Lessor in form and substance reasonably satisfactory to
Lessor (the “Initial Letter of Credit”). The form of letter of credit shall also
be subject to the reasonable approval of Lessee’s lender. The Initial Letter of
Credit, and any Replacement Letter of Credit (defined below) (i) shall have a
term which shall extend until at least thirty (30) days after the expiration of
the Term, (ii) be payable at sight upon presentment of a sight draft accompanied
by a certificate of Lessor stating either that Lessee is in default under this
Lease or that Lessor is otherwise permitted to draw upon such Letter of Credit
under the express terms of this Lease, and (iii) permit multiple draws. If (x)
Lessee desires to change the issuing bank with respect to the Initial Letter of
Credit or, if applicable, any Replacement Letter of Credit, or (y) within ten
(10) days following written notice by Lessor to Lessee that, in the reasonable
judgment of Lessor, the bank issuing the Initial Letter of Credit or any
Replacement Letter of Credit, is or may become no longer able to honor the
obligations in such Letter of Credit, or (z) such bank delivers written notice
to Lessor that it is not willing to renew the applicable Letter of Credit,
Lessee shall deliver to Lessor, at least thirty (30) days prior to the
expiration of the applicable Letter of Credit, a replacement letter of credit in
the amount of $657,444.00 (each, a “Replacement Letter of Credit”) issued by a
national bank having a branch office in Austin, Texas reasonably acceptable to
Lessor in form and substance similar to the Initial Letter of Credit. The
Initial Letter of Credit and each Replacement Letter of Credit are sometimes
collectively and individually referred to herein as “Letter of Credit.” If
Lessee fails to deliver a Replacement Letter of Credit as required hereunder,
Lessor shall have the right to require payment of the entire amount under the
Letter of Credit, and hold the proceeds thereof as a cash Security Deposit
hereunder.

 

Lessee agrees that upon any non-monetary default by Lessee under the terms and
provisions of the Lease, which default remains uncured thirty (30) days after
Lessor gives Lessee written notice of such default, Lessor shall have the right
to receive payment of the entire amount under the Letter of Credit, and such
amounts received by Lessor shall be held by Lessor as a cash Security Deposit.
The Letter of Credit and any cash Security Deposit shall be held by Lessor as
security for the faithful performance of all the terms of this Lease to be
observed and performed by Lessee. Neither the Letter of Credit nor any cash
Security Deposit shall be mortgaged, assigned, transferred or encumbered by
Lessee and any such act on the part of Lessee shall be

 

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without force and effect and shall not be binding upon Lessor. Lessee shall
cause the Letter of Credit or any cash Security Deposit to be maintained for the
time period required hereunder in the amount set forth in this Section 3.1.

 

If Base Rent or Additional Rent payable hereunder shall be overdue and unpaid or
should Lessor make any payment on behalf of the Lessee, or Lessee shall fail to
perform any of the terms of this Lease, then Lessor may, at its option and
without notice or prejudice to any other remedy which Lessor may have on account
thereof, (i) if Lessor then holds a Letter of Credit (and not a cash Security
Deposit), require payment of the entire amount under the Letter of Credit and
such amounts paid to Lessor shall be held by Lessor as a cash Security Deposit
hereunder; or (ii) if Lessor then holds a cash Security Deposit, appropriate and
apply the entire Security Deposit or so much thereof as may be necessary to
compensate Lessor toward the payment of Base Rent, Additional Rent or other sums
or loss or damage sustained by Lessor due to such breach by Lessee. Within ten
(10) days after written request by Lessor, Lessee shall restore the cash
Security Deposit to the amount stated above, or in lieu thereof, provide a new
Letter of Credit in accordance with the first paragraph of this Section 3.1.
Notwithstanding the foregoing, upon the proper application by Lessor of all or
any portion of the cash Security Deposit (with or without notice thereof to
Lessee) to compensate Lessor for a failure by Lessee to pay any Base Rent or
Additional Rent when due or to perform any other obligation hereunder, and until
Lessee shall have restored the cash Security Deposit to the amount required by
this Section 3.1 or shall have provided a new Letter of Credit in accordance
with the first paragraph of this Section 3.1, Lessee shall be deemed to be in
default in the payment of Additional Rent for purposes of Section 23.1(a)
hereof. So long as Lessee shall not be in default of its obligations under this
Lease, Lessor shall return the cash Security Deposit, or so much thereof as
shall have not theretofore been applied in accordance with the terms of this
Section 3.1, or the Letter of Credit, as the case may be, to Lessee promptly
following the expiration or earlier termination of the Term of this Lease and
the surrender of possession of the Leased Premises by Lessee to Lessor in
accordance with the terms of this Lease. While Lessor holds any cash Security
Deposit, Lessor shall have no obligation to pay interest on the same and shall
have the right to commingle the same with Lessor’s other funds. If Lessor
conveys Lessor’s interest under this Lease, (i) any cash Security Deposit, or
any part thereof not previously applied, shall be turned over by Lessor to
Lessor’s transferee and (ii) any Letter of Credit shall be turned over by Lessor
to Lessor’s transferee to the extent such Letter of Credit is assignable, and if
such Letter of Credit is not assignable, Lessee shall upon ten (10) days’ prior
written request, cause a Replacement Letter of Credit to be issued in the name
of Lessor’s transferee, and Lessee shall look solely to such transferee for
proper application of any cash Security Deposit and any Letter of Credit in
accordance with the terms of this Section 3.1 and the return thereof in
accordance herewith. Lessor or Lessor’s transferee shall pay any reasonable fees
associated with the assignment of any Letter of Credit, or issuance of a
Replacement Letter of Credit, to Lessor’s transferee, such fees not to exceed
$1,500.00, and Lessee shall be responsible for any such fees in excess of
$1,500.00. The holder of a mortgage on the Property shall not be responsible to
Lessee for the return or application of the Security Deposit, whether or not it
succeeds to the position of Lessor hereunder, unless such holder actually
receives the Security Deposit.”

 

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7. As of the Effective Date, the following text shall be added to the end of
Section 5.3:

 

“Notwithstanding anything herein to the contrary, Lessee may, upon prior notice
to Lessor, elect to enter into a contract for janitorial services directly with
a provider of such services. In such event, Lessor agrees to reduce the
Operating Expenses with respect to such janitorial services as appropriate.”

 

8. As of the Effective Date, the phrase “Operating Expense Stop” in the fourth
sentence of Section 5.5 shall be replaced with the phrase “Operating Expenses.”

 

9. As of the Effective Date, the last sentence of Section 8.1(a) shall be
amended and restated in its entirety to read as follows: “The foregoing
indemnity shall survive the expiration or earlier termination of this Lease for
a period of three years.”

 

10. As of the Effective Date, Section 15.1 of the Lease shall be amended by
deleting Landlord’s and Tenant’s notice addresses in their entirety and
inserting the following in place thereof:

 

     If to Lessor:      HUB Properties LLC      c/o REIT Management & Research
LLC      400 Centre Street      Newton, MA 02458      Attn: Jennifer B. Clark

With a copy to:

   c/o REIT Management & Research LLC      800 W. 34th Street      Suite 220  
   Austin, TX 78705      Attn: Area Manager      If to Lessee:      TippingPoint
Technologies, Inc.      Reserve at Bull Creek, Building B      7501 Capitol of
Texas Highway      Austin, TX 78731      Attn: Chief Financial Officer

With a copy to:

   TippingPoint Technologies, Inc.      Reserve at Bull Creek, Building B     
7501 Capitol of Texas Highway      Austin, TX 78731      Attn: General Counsel

 

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11. As of the Effective Date, Section 19.1 shall be amended and restated in its
entirety to read as follows:

 

“Lessor’s Lien. As of May 1, 2004, in consideration of Lessee entering into the
First Amendment to Lease with Lessee, Lessor forever waives and expressly
releases any contractual or statutory landlord’s lien, including, without
limitation, landlord’s lien provided in Section 54.021 of the Texas Property
Code, that the Lessor may now or at any time may have upon the personal property
of Lessee at the Leased Premises, except any of such personal property purchased
using the Tenant Allowance.”

 

12. As of the Effective Date, Exhibits C and F (and all references in the Lease
thereto) shall be deleted from the Lease in their entirety.

 

13. Tenant warrants and represents that it has dealt with no broker, other than
Staubach Company, in connection with the consummation of this First Amendment,
and in the event of any brokerage claims or liens, against Landlord or the
Building predicated upon or arising out of prior dealings with Tenant other than
of Staubach Company, Tenant agrees to defend the same and indemnify and hold
Landlord harmless against any such claim, and to discharge any such lien.

 

14. As amended hereby, the Lease is hereby ratified and confirmed.

 

[Signature page follows.]

 

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IN WITNESS WHEREOF, the parties have hereto executed this First Amendment as of
the date first appearing above.

 

LANDLORD:

HUB PROPERTIES LLC

By:

 

MA PO, LLC, Manager

   

By:

 

/s/ JENNIFER B. CLARK

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Jennifer B. Clark

       

Vice President

          TENANT:

TIPPINGPOINT TECHNOLOGIES, INC.

By:

 

/s/ ADAM CHIBIB

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Name:

 

Adam Chibib

Title:

 

Chief Financial Officer

 

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