EXHIBIT 10.8
SUBLEASE AGREEMENT
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THIS SUBLEASE AGREEMENT (this "Sublease"), dated as of July 1, 1998 (the
"Effective Date"), is made by and between CREATIVE COMPUTERS, INC., a California
corporation ("Sublessor") and uBID, INC., a Delaware corporation ("Sublessee").
1. Premises. Sublessor hereby subleases to Sublessee and Sublessee hereby
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subleases from Sublessor for the term, at the rental, and upon all of the
conditions set forth herein, that certain improved space (the "Subleased
Premises") consisting of approximately one hundred thousand (100,000) rentable
square feet, situated in that certain industrial building (the "Building")
located at 0000 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxx 00000. A depiction of
the Subleased Premises is attached hereto as Exhibit "A-1." The parties hereto
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acknowledge and agree that during the first ninety (90) days of the term of this
Sublease the Subleased Premises shall consist of Fifty Thousand (50,000)
rentable square feet as depicted on Exhibit "A-2." During the term of this
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Sublease, Sublessee shall have the right to use Sublessor's current inventory
control and shipping systems ("Systems") to the extent permitted under
Sublessor's licenses relating thereto at no additional cost to Sublessee.
Notwithstanding the foregoing, Sublessor shall have no liability whatsoever to
Sublessee for any error, act, omission, or failure associated with the Systems
or the use by Sublessee thereof, unless such error, act, omission or failure is
attributable to Sublessor's willful misconduct or gross negligence. In addition,
in no event shall Sublessee be entitled to any reduction in or offset to Basic
Rent or Additional Rent hereunder as a result of any such error, act, omission
or failure or in the event Sublessee elects at any time to discontinue its use
of the Systems.
2. Master Lease. Sublessor is the lessee of the Subleased Premises and other
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additional office space by virtue of that certain Industrial Lease Agreement
dated September 15, 1995 (the "Master Lease"), between Corporate Estates, Inc.,
a California corporation ("Master Landlord") and Sublessor, as lessee, a copy of
which is attached hereto as Exhibit "B." Capitalized terms not otherwise
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defined herein shall have the meaning ascribed to such terms in the Master
Lease. Sublessor hereby represents and warrants to Sublessee that Sublessor is
not in default under the Master Lease nor is Sublessor aware of any default of
Master Landlord under the Master Lease.
3. Term.
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3.1 Term. The term (the "Term") of this Sublease shall commence on the
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"Commencement Date" (as defined below) and expire on the expiration of the term
of the Master Lease unless sooner terminated pursuant to any provision hereof.
The parties acknowledge and agree that the Commencement Date shall occur on the
later of (i) August 1, 1998, or (ii) the date the parties obtain Master
Landlord's consent pursuant to Section 6 below.
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3.2 Early Occupancy. In the event that Sublessee occupies the Subleased
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Premises for business purposes prior to the Commencement Date, such occupancy
shall be subject to all provisions hereof, and such occupancy shall not advance
the termination date.
4. Rent.
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4.1 Basic Rent. Sublessee shall pay to Sublessor in advance, on the first
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(1st) day of each month, rent (the "Basic Rent") for the Subleased Premises in
the amount of (i) Eleven Thousand Four Hundred Fifty-Eight and 33/100 Dollars
($11,458.33) during the first three (3) months of the Term of this Sublease, and
(ii) Twenty-Two Thousand Nine Hundred Sixteen and 67/100 Dollars ($22,916.67)
for each month thereafter. Sublessee shall pay Sublessor upon the execution of
this Sublease the amount of Eleven Thousand Four Hundred Fifty-Eight and 33/100
Dollars ($11,458.33) as rent for the first (1st) month of the Term of this
Sublease. Rent for any period during the Term hereof which is for less than one
(1) month shall be a prorata portion of the monthly installment. Rent shall be
payable in lawful money of the United States to Sublessor at the address stated
herein or to such other persons or at such other places as Sublessor may
designate in writing.
4.2 Additional Rent.
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(a) Sublessee shall pay to Sublessor as additional rent for the
Subleased Premises Sublessee's proportionate share ("Sublessee's Proportionate
Share") of Tenant's proportionate share of all Additional Rent and "operating
expenses" (as defined and pursuant to Section 6 of the Master Lease) and real
estate taxes and other impositions. Sublessee's Proportionate Share shall be
equal to the fraction, the numerator consisting of the then existing rentable
square feet of the Subleased Premises and the denominator consisting of 325,000.
Sublessee shall pay Sublessor's Proportionate Share of Additional Rent to
Sublessor within ten (10) days of invoice.
(b) In addition, to the extent that during the term hereof, Sublessee
requires extraordinary services or any resource in excess of that customarily
supplied to Sublessor's other premises under the Master Lease, Sublessee shall
contract, at Sublessee's sole costs and expense, with Master Landlord for such
services. Sublessor and Sublessee acknowledge and agree that Sublessee shall
not be required to pay any additional charge for basic services Master Landlord
is required to so provide without additional charge to Sublessor pursuant to
Section 6 of the Master Lease.
4.3 Payment of Rent and Consent to Sublease. Notwithstanding anything to
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the contrary contained herein, Basic Rent and Additional Rent shall be payable
in the amounts and at the times set forth in this Section 4 regardless of the
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date that the parties hereto receive Master Landlord's consent to this Sublease
pursuant to Section 6 below. In the event, however, Master Landlord denies or
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fails to consent to this Sublease prior to the expiration of the Approval Period
(as defined in Section 6 below), Sublessee shall be entitled to the prompt
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return of all rent paid applicable to the period following the date Master
Landlord denied the approval of this Sublease and this Sublease shall be of no
further force or effect and the parties hereto shall have no further obligation
to each other.
5. Use. The Subleased Premises shall be used and occupied for office,
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warehouse and distribution of computers and related equipment and other uses
related to Sublessee's business any other uses permitted under the Master Lease.
Sublessee's business shall be conducted throughout the term hereof so as not to
violate any term, provision or condition of the Master Lease. Sublessee shall
comply with all applicable statutes, ordinances, rules, regulations, orders,
restrictions of record and requirements in effect during the term hereof
regulating the use by Sublessee of the Subleased Premises; provided however,
Sublessee shall not be responsible for violations of applicable law relating to
the Subleased Premises occurring prior to Sublessee's occupancy of the Subleased
Premises.
6. Consent of Master Landlord. The parties hereto acknowledge that the Master
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Lease requires that Sublessor obtain the consent of Master Landlord to any
subletting of the Subleased Premises. Therefore Sublessor and Sublessee agree
that this Sublease shall be terminated pursuant to Section 32 below unless,
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within thirty (30) days of the date hereof (the "Approval Period"), Master
Landlord grants its express consent to the terms and conditions of this
Sublease.
7. Environmental Matters.
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(a) For purposes of this Sublease:
(i) "Contamination" as used herein means the uncontained or
uncontrolled presence of or release of Hazardous Substances (as hereinafter
defined) into any environmental media from, upon, within, below, into or on any
portion of the Subleased Premises, the Building, or the Project so as to require
remediation, cleanup or investigation under any applicable Environmental Law (as
hereinafter defined).
(ii) "Environmental Laws" as used herein means all federal, state,
and local laws, regulations, orders, permits, ordinances or other requirements,
concerning Hazardous Substances, and the protection of human health, safety and
the environment, all as may be amended from time to time.
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(iii) "Hazardous Substances" as used herein means any hazardous or
toxic substance, material, chemical, pollutant, contaminant or waste as those
terms are defined by any applicable Environmental Laws (including, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. 9601 et seq. ("CERCLA") and the Resource Conservation and
Recovery Act, 42 U.S.C. 6901 et seq. ["RCRA"]) and any solid wastes,
polychlorinated biphenyls, urea formaldehyde, asbestos, radioactive materials,
radon, explosives, petroleum products and oil.
(b) Sublessee represents that all its activities on the Subleased
Premises, the Building, or the Project during the course of this Sublease will
be conducted in compliance with Environmental Laws. Sublessee warrants that at
its warehouse facilities (i) to Sublessee's actual knowledge, is currently in
compliance with all applicable Environmental Laws and (ii) that there are no
pending or threatened notices of deficiency, notices of violation, orders, or
judicial or administrative actions involving alleged violations by Sublessee of
any Environmental Laws. Sublessee, at Sublessee's sole cost and expense, shall
be responsible for obtaining all permits or licenses or approvals under
Environmental Laws for Sublessee's operation of its business on the Subleased
Premises and shall make all notifications and registrations required by any
applicable Environmental Laws. Sublessee, at Sublessee's sole cost and expense
shall at all times comply with the terms and conditions of all such permits,
licenses, approvals, notifications and registrations with any other applicable
Environmental Laws. Sublessee warrants that it will apply for all such permits,
licenses or approvals and made all such notifications and registrations required
by any applicable Environmental Laws necessary for Sublessee's operation of its
business on the Subleased Premises prior to the Commencement Date and will
obtain prior to the Commencement Date or as soon thereafter as reasonably
possible all such permits, licenses or approvals.
(c) Sublessee shall not cause or permit any Hazardous Substances to be
brought upon, kept or used in or about the Subleased Premises, the Building, or
the Project without the prior written consent of Landlord, which consent shall
not be unreasonably withheld; provided, however, that the consent of Landlord
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shall not be required for the use at the Subleased Premises of cleaning
supplies, toner for photocopying machines and other similar materials, in
containers and quantities reasonably necessary for and consistent with normal
and ordinary use by Sublessee, at the Subleased Premises, in the routine
operation or maintenance of Sublessee's office equipment or in the routine
janitorial service, cleaning and maintenance for the Subleased Premises. For
purposes of this Section 7, Landlord shall be deemed to have reasonably withheld
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consent if Landlord determines that the presence of such Hazardous Substance
within the Subleased Premises could result in a risk of harm to person or
property or otherwise negatively affect the value or marketability of the
Building or the Project.
(d) Sublessee shall not cause or permit the release of any Hazardous
Substances by Sublessee or its agents, contractors, employees or invitees into
any environmental media such as air, water or land, or into or on the Subleased
Premises, the Building or the Project in any manner that violates any
Environmental Laws. If such release shall occur, Tenant shall (i) take all
steps reasonably necessary to contain and control such release and any
associated Contamination, (ii) clean up or otherwise remedy such release and any
associated Contamination to the extent required by, and take any and all other
actions required under, applicable Environmental Laws and (iii) notify and keep
Sublessor and Landlord reasonably informed of such release and response.
(e) Sublessee shall under no circumstances whatsoever (i) cause or permit
any activity on the Subleased Premises which would cause the Subleased Premises
to become subject to regulation as a hazardous waste treatment, storage or under
RCRA or the regulations promulgated thereunder; (ii) discharge Hazardous
Substances into the storm sewer system serving the Project; or (iii) install any
storage tank or underground piping on or under the Subleased Premises.
(f) Sublessee shall and hereby does indemnify Sublessor and Master
Landlord and hold Sublessor and Master Landlord harmless from and against any
and all expense, loss, and liability suffered by Sublessor or Master Landlord
(with the exception of those expenses, losses, and liabilities arising from
Sublessor's or Master Landlord's own negligence or willful act), by reason of
Sublessee's improper storage, generation, handling, treatment, transportation,
disposal, or arrangement for transportation or disposal, of any Hazardous
Substances (whether accidental, intentional, or negligent) or by reason of
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Sublessee's breach of any of the provisions of this Section 7. Such expenses,
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losses and liabilities shall include, without limitation, (i) any and all
expenses that Sublessor or Master Landlord may incur to comply with any
Environmental Laws as a result of Sublessee's failure to comply therewith; (ii)
any and all costs that Sublessor or Master Landlord may incur in studying or
remedying any Contamination at or arising from the Subleased Premises, the
Building, or the Project; (iii) any and all costs that Sublessor or Master
Landlord may incur in studying, removing, disposing or otherwise addressing any
Hazardous Substances; (iv) any and all fines, penalties or other sanctions
assessed upon Sublessor or Master Landlord by reason of Sublessee's failure to
comply with Environmental Laws; and (v) any and all legal and professional fees
and costs incurred by Sublessor or Master Landlord in connection with the
foregoing. The indemnity contained herein shall survive the termination or
expiration of this Sublease.
(g) Sublessor and Master Landlord shall have the right, but not the
obligation, to enter the Subleased Premises at reasonable times throughout the
Term upon two (2) business days prior notice, except in the event of any
emergency, to audit and inspect the Subleased Premises for Sublessee's
compliance with this Section 7.
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8. Condition of Premises and Alterations. The Subleased Premises sublet
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hereunder shall be taken and leased by Sublessee in their "as is" condition
existing as of the date hereof. Except for non-structural alterations costing
less than Ten Thousand and No/100 Dollars ($10,000.00), Sublessee shall not make
or suffer to be made any alterations, additions or improvements to or of the
Subleased Premises or any part thereof without first obtaining the prior written
consent of Master Landlord and Sublessor. Sublessor agrees that Sublessor's
consent to such alterations, additions or improvements shall not be unreasonably
withheld or delayed. In the event Sublessor consents to the making of any
alterations, additions or improvements to the Subleased Premises by Sublessee
the same shall be made by Sublessee at Sublessee's sole cost and expense. Upon
the expiration or sooner termination of the term hereof, Sublessee shall, upon
written demand by Sublessor given at least thirty (30) days prior to the end of
the term, at Sublessee's sole cost and expense, forthwith and with all due
diligence remove any alterations, additions, or improvements made by Sublessee,
designated by Sublessor to be removed and further, Sublessee shall, forthwith
and with all due diligence at its sole cost and expense, repair any damage to
the Subleased Premises caused by such removal. In all events, Sublessee shall
maintain the Subleased Premises in good condition and repair and shall surrender
the Subleased Premises to Sublessor upon expiration of this Sublease, or the
sooner termination thereof, in good condition and repair, excluding ordinary
wear and tear.
9. Liens. Sublessee shall keep the Subleased Premises free from any liens
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arising out of any work performed or obligations incurred by or for Sublessee or
materials furnished to Sublessee. Sublessor shall have the right to post
notices of nonresponsibility with respect to any work performed or obligations
incurred by or for Sublessee or materials furnished to Sublessee. If Sublessee
fails to keep the Subleased Premises free from any such liens and does not,
within ten (10) days following the imposition of any such lien, cause the same
to be released of record by payment or posting of a proper bond, Sublessor shall
have, in addition to all other remedies provided herein and by law, the right
but not the obligation, to cause the same to be released by such means as it
shall deem proper, including payment of or defense against the claim giving rise
to such lien. All sums paid by Sublessor and all expenses incurred by it in
connection therewith (including, without limitation, reasonable attorneys, fees)
shall create automatically an obligation of Sublessee to pay an equivalent
amount as Additional Rent, which Additional Rent shall be payable by Sublessee
on Sublessor's demand with interest at the maximum rate per annum permitted by
law until paid. Such interest charged shall not constitute Sublessor's
exclusive remedy nor compromise or limit any other rights granted Sublessor by
this Sublease or by law or equity. Nothing herein shall imply any consent by
Sublessor to subject Sublessor's estate to liability under any mechanic's lien
law. Sublessee may contest the validity and/or amount of any lien imposed on
the Subleased Premises, provided that Sublessee has caused such lien to be
released of record by the payment or posting of the proper bond.
10. Repairs. Sublessee shall promptly make all repairs to the Subleased
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Premises not required to be made by Master Landlord pursuant to the Master
Lease, including, but not limited to special items and equipment installed by or
on behalf of Sublessee. Sublessee shall pay for any repairs to the Subleased
Premises or the Building made necessary by any act, neglect, misuse or omission
of duty by Sublessee or its assignees, subtenants, employees, invitees or their
respective agents or other persons permitted in the
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Subleased Premises or on any other portion of the Building by Sublessee, or any
of them, and will maintain the Subleased Premises, and will leave the Subleased
Premises upon termination of this Sublease, in a safe, clean, neat and sanitary
condition. If Sublessee fails to maintain the Subleased Premises in good order,
condition and repair, Sublessor shall give Sublessee notice to do such acts as
are reasonably required to so maintain the Subleased Premises. If Sublessee
fails to promptly commence such work and diligently prosecute it to completion,
Sublessor shall have the right to do such acts and expend such funds at the
expense of Sublessee as are reasonably required to perform such work. Prior to
commencing any item of repair or maintenance work which is connected to the
Building or may affect any structural portion of the Building or any of its
basic systems (including, without limitation, air conditioning, heating,
plumbing, electrical, and light fixtures), Sublessee shall notify Master
Landlord and Sublessor and obtain Master Landlord's and Sublessor's prior
written approval of the contractor who will perform such work. Master Landlord
or Sublessor may elect to perform the required work at Sublessee's cost. All
amounts payable by Sublessee to Sublessor pursuant to this Section 10 shall be
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paid as Additional Rent within ten (10) days after Sublessor delivers to
Sublessee invoices or cancelled checks evidencing such payment obligations.
Notwithstanding the foregoing, the parties hereto acknowledge and agree that
Master Landlord shall remain responsible for the performance of all repairs
expressly required to be performed by Master Landlord pursuant to the terms and
conditions of the Master Lease ("Landlord's Repair Obligations"). Sublessee
shall notify both Master Landlord and Sublessor in the event that Master
Landlord shall fail to perform Landlord's Repair Obligations. Upon such
notification and in addition to such other rights and remedies Sublessor shall
have under the Master Lease, Sublessor shall either (i) take reasonable action
under the Master Lease to require Master Landlord to perform its obligations
thereunder, or (ii) permit Sublessee, with Sublessor's reasonable cooperation,
to enforce Master Landlord's repair obligations under the Master Lease.
11. Damage or Destruction. In the event of damage or destruction to the
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Building or any part thereof, the Master Lease shall either continue or
terminate pursuant to Section 20 of the Master Lease. If the Master Lease
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terminates, the Sublease shall also terminate. If the Master Lease does not
terminate, then Master Landlord shall commence the necessary repair or
restoration of the Building, including that portion of the Subleased Premises,
if any, suffering damage or destruction, as required under the Master Lease.
Sublessor shall have no responsibility whatsoever for the repair or restoration
of the Subleased Premises, it being acknowledged by Sublessee that any repairs
must be performed, if at all, by Master Landlord. There shall be no reduction
or abatement of rent for any period during which Sublessee is unable to use the
Subleased Premises, in whole or in part, due to the repairs or restoration
required under this paragraph, unless Sublessor actually receives a reduction or
abatement in rent under the terms of the Master Lease and then, only to the
extent such reduction or abatement relates to the Subleased Premises. In any
event Sublessee shall not be entitled to any insurance proceeds or other
remuneration except for insurance proceeds from insurance policies it purchased
for its own personal property.
12. Eminent Domain or Condemnation. In the event a proceeding in eminent
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domain or condemnation is instituted against the Building, or any part thereof,
the Master Lease shall either continue or terminate pursuant to Section 21 of
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the Master Lease. If the Master Lease terminates, this Sublease shall also
terminate. If the Master Lease does not terminate and the Subleased Premises
have not been materially affected, then the Sublease shall continue in full
force and effect except that the rental payable hereunder shall be reduced to
the extent that rent applicable to the Subleased Premises is equitably reduced
under the Master Lease. If the Master Lease does not terminate and the
Subleased Premises are materially and substantially affected by the proceeding
in eminent domain or condemnation, then Sublessee shall have the right to
terminate the Sublease. In any event, Sublessee shall not be entitled to any
award of damages for Sublessee's interest in the Subleased Premises.
Notwithstanding the foregoing, nothing contained herein shall prevent Sublessee
from seeking an award against a taking authority for the taking of personal
property and fixtures owned by Sublessee or for moving expenses as a result of
such taking; provided however, the award sought and received by Sublessee shall
not diminish or affect, in whole or in part the award sought by Master Landlord
or Sublessor.
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13. Waiver of Liability; Indemnification. Without limiting in any way the
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effect or generality of all indemnification and waiver provisions contained as
part of the terms of the Master Lease, which are incorporated herein pursuant to
Section 38 below, Sublessee hereby agrees that:
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(a) Sublessor shall not be liable to Sublessee, and Sublessee hereby
waives all claims against Sublessor, for any injury or damage to any person or
property in or about the Subleased Premises by or from any cause whatsoever
other than by reason of the negligent acts or willful misconduct of Sublessor.
(b) Sublessee shall defend, indemnify and hold Sublessor and Master
Landlord harmless against any and all claims or liability for any injury or
damage to any person or property whatsoever when such injury or damage shall be
caused in part or in whole by the act, neglect, fault of, or omission of any
duty with respect to the same, by Sublessee, its agents, servants, employees, or
invitees: (i) occurring in, on, or about the Subleased Premises or any part
thereof, and (ii) occurring in, on, or about any facilities (including, without
prejudice to the generality of the term "facilities," elevators, stairways,
passageways or hallways) the use of which Sublessee may have in conjunction with
other tenants of the Building.
(c) Sublessee and Sublessor each hereby, on behalf of itself and all
persons and parties claiming under or through it, including without limitation
its insurance carrier(s), waives any right of recovery or claim against the
other for any damage to or destruction of any property located in or about the
Subleased Premises which results from or arises out of any casualty or event
insured by any casualty and/or property insurance policy carried by such waiving
party, regardless of the cause or origin of such casualty or event, including
without limitation, the negligence of Sublessee or Sublessor.
14. Assignment and Subletting.
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(a) Sublessee shall not sell, assign, encumber or otherwise transfer by
operation of law or otherwise this Sublease or any interest herein, sub-sublet
the Subleased Premises, or suffer any other person to occupy or use the
Subleased Premises or any portion thereof, without the prior written consent of
Sublessor and Master Landlord as provided herein, nor shall Sublessee permit any
lien to be placed on the Sublessee's interest by operation of law or otherwise.
Sublessee shall, by written notice, advise Sublessor of its desire from and
after a stated date (which shall not be less than ten (10) days nor more than
ninety (90) days after the date of Sublessee's notice), to subsublet the
Subleased Premises or any portion thereof for any part of the term hereof. Said
notice by Sublessee shall state the name and address of the proposed sub-
subtenant, together with such proposed sub-subtenant's certified financial
statements, and Sublessee shall deliver to Sublessor a true and complete copy of
the proposed subsublease with said notice. Sublessor shall not unreasonably
withhold its own consent to such sub-sublease, provided Master Landlord shall
also give its consent.
(b) Any sub-subletting hereunder by Sublessee shall not result in
Sublessee being released or discharged from any liability under this Sublease.
Any consent by Sublessor to any sub-subletting of the Subleased Premises or any
part thereof by Sublessee shall not be deemed to be a consent to any other sub-
subletting of the Subleased Premises and shall not constitute a waiver of the
requirements of Sublessor's consent to any other subsubletting of the Subleased
Premises as such requirement is stated herein. Any sale, assignment,
encumbrance, subsubletting, occupation, lien or other transfer of this Sublease
which does not comply with the provisions of this paragraph shall be voidable
and at Sublessor's election shall constitute a default hereunder.
(c) Sublessee shall pay to Sublessor of all rent received by Sublessee
from any sub-subletting hereunder in excess of the rent payable by Sublessee to
Sublessor under this Sublease, and any sums paid to Sublessee by any assignee
hereunder in consideration of the assignment of this Sublease. Sublessee hereby
irrevocably assigns to Sublessor, as security for Sublessee's obligations under
this Sublease, all rent from any sub-subletting provided, however, that until
the occurrence of an event of default by Sublessee hereunder, Sublessee shall
have the right to collect such rent.
15. Incorporation of Terms of Master Lease. It is expressly understood,
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acknowledged and agreed by Sublessee that all of the other terms, conditions and
covenants of this Sublease shall be those stated in
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the Master Lease but only to the extent that the terms of the Master Lease
relate to the Subleased Premises, except for (i) the basic rent obligations set
forth in Article 4 of the Master Lease, (ii) the Additional Rent obligations set
forth in Article 6 of the Master Lease, subject however to Section 4 above and
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(iii) Articles 16 through 18, inclusive, 35 through 37, inclusive, 39 and 40 of
the Master Lease. Sublessee shall and hereby agrees to be subject to and bound
by and to comply with the Master Lease with respect to the Subleased Premises
and to satisfy all applicable terms and conditions of the Master Lease for the
benefit of both Sublessor and Master Landlord, and that upon the breach of any
of said terms, conditions or covenants of the Master Lease by Sublessee or upon
the failure of the Sublessee to pay rent or comply with any of the provisions of
this Sublease, Sublessor may exercise any and all rights and remedies granted to
Master Landlord by the Master Lease, as well as any and all rights and remedies
granted to Sublessor by this Sublease. It is further understood and agreed that
the Sublessor has no duty or obligation to the Sublessee under the Master Lease
other than to maintain the Master Lease in full force and effect during the term
of this Sublease, provided, however, that Sublessor shall not be liable to
Sublessee for any earlier termination of the Master Lease which is not due to
the fault of Sublessor. Whenever the provisions of the Master Lease which have
been incorporated as provisions of this Sublease require the written consent of
the Master Landlord, said provisions shall be construed to require the written
consent of both the Master Landlord and the Sublessor. Sublessor hereby
covenants that its consent shall not be unreasonably withheld or delayed.
Sublessee hereby acknowledges that it has read and is familiar with the terms of
the Master Lease, and agrees that this Sublease is subordinate and subject to
the Master Lease and that any termination thereof shall likewise terminate this
Sublease. Sublessee further agrees that, in executing this Sublease and assuming
the obligations of lessee under the Master Lease (to the extent applicable), it
has not been granted any of the rights of Sublessor, as lessee under the Master
Lease, such rights being specifically reserved by Sublessor, except to the
extent granted to Sublessee hereunder. In the event of any inconsistencies
between any of the provisions of this Sublease and the Master Lease, the terms
of this Sublease shall govern.
16. Personal Property Taxes. Sublessee shall pay or cause to be paid, before
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delinquency, any and all taxes levied or assessed and which become payable
during the term hereof upon all Sublessee's leasehold improvements, equipment,
furniture, fixtures and personal property located in the Subleased Premises.
17. Default and Remedies.
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(a) The occurrence of any one or more of the following events shall
constitute a material default and breach of this Sublease by Sublessee:
(i) The failure by Sublessee to make any payment of rent or any
other payment required to be made by Sublessee hereunder, as and when due, where
such failure shall continue for a period of three (3) days after written notice
thereof by Sublessor to Sublessee;
(ii) The abandonment (but not vacation of the Subleased Premises
provided Sublessee continue to timely pay all rent due hereunder) of the
Subleased Premises by Sublessee;
(iii) The failure by Sublessee to observe or perform any of the
covenants, conditions or provisions of this Sublease to be observed or performed
by Sublessee, where such failure shall continue for a period of twenty (20) days
after written notice thereof by Sublessor to Sublessee. If the nature of such
default is such that the same cannot be reasonably cured within such twenty (20)
day period, Sublessee shall not be deemed to be in default hereunder if
Sublessee shall within such period commence such cure and thereafter diligently
prosecute the same to completion, provided Master Landlord has not declared a
material default and breach of the Master Lease as a result of Sublessee's
failure to cure such default;
(iv) The making by Sublessee of any general assignment or general
arrangement for the benefit of creditors; or the filing by or against Sublessee
of a petition to have Sublessee adjudged a bankrupt, or a petition for
reorganization or arrangement under any law, now existing or hereafter amended
or enacted, relating to bankruptcy or insolvency (unless, in the case of a
petition filed against Sublessee, Sublessee has not consented to, or admitted
the material allegation of said petition is dismissed within thirty
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(30) days); or the appointment of a trustee or a receiver (other than in a
bankruptcy or insolvency proceeding) to take possession of substantially all of
Sublessee's assets located at the Subleased Premises or of Sublessee's interest
in this Sublease, where possession is not restored to Sublessee within thirty
(30) days; or
(v) Sublessee causes a material default and breach under the Master
Lease.
(b) In the event of any such material default or breach by Sublessee,
Sublessor may, at any time thereafter, with or without notice or demand, and
without limiting Sublessor in the exercise of any right or remedy which
Sublessor may have hereunder, under the Master Lease as incorporated herein or
otherwise at law or in equity by reason of such default or breach, including,
but not limited to:
(i) Terminate this Sublease and Sublessee's right to possession of
the Subleased Premises by notice to Sublessee or any other lawful means, in
which case this Sublease shall terminate and Sublessee shall immediately
surrender possession of the Subleased Premises to Sublessor. In such event
Sublessor shall be entitled to recover from Sublessee all unpaid installments of
rent and other sums due and owing under this Sublease as of the date of
Sublessee's default and all damages incurred by Sublessor by reason of
Sublessee's default, including, but not limited to:
(A) The cost of recovering possession of the Subleased
Premises; or
(B) The worth at the time of award by the court having
jurisdiction thereof of the amount by which the unpaid rent for the balance of
the term after the time of such award exceeds the amount of such rental loss for
the same period that Sublessee proves could be reasonably avoided.
Unpaid installments of rent or other sums shall bear interest from the date due
at the highest legal rate permissible in the State where the Subleased Premises
are located. In the event Sublessee shall have abandoned the Subleased
Premises, Sublessor shall have the option of (1) taking possession of the
Subleased Premises and recovering from Sublessee the amounts specified
hereinabove, or (2) proceeding under the provisions of the following paragraphs
(ii) and/or (iii).
(ii) Maintain Sublessee's right to possession, in which case this
Sublease shall continue in effect whether or not Sublessee shall have abandoned
the Subleased Premises. In such event Sublessor shall be entitled to enforce
all of Sublessor's rights and remedies under this Sublease, including, without
limitation, the right to recover the rent as it becomes due hereunder.
Notwithstanding any election by Sublessor not to terminate this Sublease or
Sublessee's right to possession, and whether or not Sublessor has sublet the
Subleased Premises or any part thereof as provided hereinabove, Sublessor shall
retain the right to and may at any time thereafter elect to terminate this
Sublease or Sublessee's right to possession for any default of Sublessee which
remains uncured or for any subsequent default of Sublessee by giving Sublessee
written notice thereof.
(iii) Pursue any other remedy now or thereafter available to Sublessor
under the laws or judicial decisions of the State in which the Subleased
Premises are located.
(c) No entry or taking of possession of the Subleased Premises or any part
thereof by Sublessor, nor any subletting thereof by Sublessor for Sublessee, nor
any appointment of a receiver, nor any other act of Sublessor, whether
acceptance of keys to the Subleased Premises or otherwise, shall constitute or
be construed as an election by Sublessor to terminate this Sublease or
Sublessee's right to possession of the Subleased Premises unless a written
notice of such election be given to Sublessee by Sublessor.
(d) In the event Sublessor elects to terminate this Sublease or
Sublessee's right to possession hereunder, Sublessee shall surrender and vacate
the Subleased Premises in broom-clean condition, and Sublessor may re-enter and
take possession of the Subleased Premises and may eject all parties in
possession or eject some and not others or eject none. Any personal property of
or under the control of
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Sublessee remaining on the Subleased Premises at the time of such re-entry may
be considered and treated by Sublessor as abandoned.
(e) Termination of this Sublease or Sublessee's right to possession by
Sublessor shall not relieve Sublessee from any liability to Sublessor under any
provision of this Sublease providing for any indemnification of Sublessor by
Sublessee.
18. Brokers. Sublessee and Sublessor each represent and warrant to one another
-------
that no brokers brought about or had any connection with the procuring,
execution, or delivery of this Sublease, and each party hereto agrees to
indemnify and hold the other harmless against any claims by any broker for
services rendered to the indemnifying party in connection with this Sublease.
19. Insurance. Sublessee shall during the entire Term of this Sublease,
---------
maintain all insurance policies required by Sublessor to be maintained under the
Master Lease in accordance with the terms of the Master Lease to the extent
applicable to the Subleased Premises. Sublessee shall name Sublessor as an
additional insured on all such policies in which Master Landlord is also named
as an additional insured.
20. ADA Compliance. Sublessee shall, at its sole cost and expense, cause the
--------------
Subleased Premises to comply at all times with the requirements of the Americans
With Disabilities Act (42 U.S.C. (S) 12181 et seq.), the regulations now or
hereafter adopted pursuant thereto, and any and all applicable state or local
laws, statutes, ordinances, rules and regulations concerning public
accommodations for disabled persons now or hereafter in effect. Sublessee shall
indemnify, defend (with counsel approved by Sublessor) and hold Sublessor
harmless from and against any and all claims, judgments, damages, penalties,
fines, costs, liabilities and losses (including, without limitation, reasonable
attorneys' fees and disbursements) arising from Sublessee's failure to comply
with this Article.
21. Parking. In connection with the Subleased Premises, Sublessee shall be
-------
entitled to use one hundred thirty-eight (138) unreserved parking spaces located
adjacent to the Building.
22. Signage and Directory. Subject to the terms and conditions of the Master
---------------------
Lease and the express approval of Master Landlord, Sublessee, at Sublessee's
sole cost and expense, shall be permitted to install a signs identifying
Sublessee on or about the Subleased Premises and the Building. All such signage
shall be subject to all applicable building codes and all rules and regulations
promulgated by Master Landlord. During the Term of this Sublease, Sublessee, at
Sublessee's sole cost and expense, shall maintain such signage to Master
Landlord's and Sublessor's reasonable satisfaction. Upon the expiration or
early termination of this Sublease, Sublessee, at Sublessee's sole cost and
expense, shall remove all such signage and repair to Master Landlord's and
Sublessor's satisfaction any damage occasioned by the installation and removal
of such signage.
23. Notices. All notices and demands which may or are required to be given by
-------
either party to the other hereunder shall be in writing and shall be personally
delivered or sent by United States certified or registered mail, postage
prepaid, return receipt requested, or sent by reputable overnight courier (such
as Federal Express, UPS or DHL with delivery confirmation) and addressed as
follows:
TO SUBLESSOR: CREATIVE COMPUTERS, INC.
0000 Xxxx 000xx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: Chief Financial Officer
With a copy to: XXXXXXXX & XXXXXXXX LLP
00000 XxxXxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx XX, Esq.
9
TO SUBLESSEE: uBID, INC.
0000 Xxxxx Xxxxxxx
Xxx Xxxxx Xxxxxxx, Xxxxxxxx 00000
Attn: Chief Financial Officer
All notices shall be deemed to have been received at the time of delivery, if
personally delivered, or three (3) business days after deposit in the United
States mail as specified above, if mailed or one (1) business day if sent by
overnight courier for next business day delivery. Either party may from time to
time change the address for delivery of notices and demands by giving notice of
such change as specified above. Sublessor shall promptly provide Sublessee with
a copy of any notice of default under the Master Lease and any notice relating
to the Subleased Premises received by Sublessor from Master Landlord. Sublessee
shall forward concurrently to Sublessor any notices sent or received from Master
Landlord relating to the Subleased Premises.
24. Hold Over. In the event of any holding over without the consent of
---------
Sublessor beyond the end of the term, this Sublease shall be deemed a tenant at
sufferance upon the covenants and conditions herein contained and upon payment
of (i) 150% the monthly rental last paid by Sublessee and (ii) prompt
reimbursement to Sublessor of all loss, cost, expense and consequential damages
incurred by Sublessor as a result of such continued tenancy.
25. Captions. The captions of sections of this Sublease are not a part of this
--------
Sublease and shall have no effect upon the construction or interpretation of any
part hereof.
26. Successors and Assigns. The covenants and conditions herein contained,
----------------------
subject to the provisions as to assignment, apply to and bind the heirs,
successors, executors, administrators, legal representatives and assigns of the
parties hereto.
27. Attorneys' Fees. In the event of any legal action or proceeding brought by
---------------
either party against the other arising out of this Sublease (an "Action"), the
prevailing party shall be entitled to the payment by the losing party of its
reasonable attorneys' fees, court costs and litigation expenses, as determined
by the court.
28. Post-Judgment Attorneys' Fees. The prevailing party in any Action shall be
-----------------------------
entitled, in addition to and separately from the amounts receivable under
Section 27 above, to the payment by the losing party of the prevailing party's
----------
reasonable attorneys' fees, court costs and litigation expenses incurred in
connection with (a) any appellate review of the judgment rendered in such Action
or of any other ruling in such Action, and (b) any proceeding to enforce a
judgment in such Action. It is the intent of the parties that the provisions of
this Section 28 be distinct and severable from the other rights of the parties
----------
under this Lease, shall survive the entry of judgment in any Action and shall
not be merged into such judgment.
29. Gender and Number. Wherever the context so requires, each gender shall
-----------------
include any other gender, and the singular number shall include the plural and
vice-versa.
30. Cumulative Remedies. No remedy or election hereunder shall be deemed
-------------------
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
31. Separability. Any provision of this Sublease which shall prove to be
------------
invalid, void or illegal shall. in no way affect, impair, or invalidate any
other provision hereof and all such other provisions shall remain in full force
and effect.
32. Effectiveness. This Sublease shall become effective when executed by all
-------------
the parties hereto. In the event Master Landlord, however fails to expressly
consent to the same within the Approval Period, this Sublease shall terminate.
Sublessor shall return to Sublessee the initial payment of Basic Rent delivered
to Sublessor concurrently with the execution hereof by Sublessee, and the
parties hereto shall have no further obligation or liability to the other. This
Sublease may be executed by telefacsimile.
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33. Quiet Enjoyment. Upon Sublessee paying all Basic Rent, Additional Rent and
----------------
other charges due hereunder and observing and performing all of the covenants,
conditions and provisions to be performed by Sublessee hereunder, Sublessee
shall have quiet possession of the Subleased Premises for the entire term
hereof, subject to all of the provisions of this Sublease.
34. Time of the Essence. Time is of the essence of each provision of this
-------------------
Sublease where time is an element.
35. Counterparts. This Sublease may be executed in counterparts, each is
------------
hereby declared to be an original; all, however constitute but one and the same
agreement.
IN WITNESS WHEREOF, the parties have executed this Sublease on the date
first above written.
Executed at ________________________ CREATIVE COMPUTERS, INC.,
on __________ ___, 1998 a California corporation
By:____________________________________
Name:_____________________________
Title:____________________________
By:____________________________________
Name:_____________________________
Title:____________________________
"Sublessor" (Corporate Seal)
Executed at ________________________ uBID, INC., a Delaware corporation
on __________ ___, 1998
By:____________________________________
Name:_____________________________
Title:____________________________
By:____________________________________
Name:_____________________________
Title:____________________________
"Sublessor" (Corporate Seal)
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EXHIBIT "A-1"
Subleased Premises
------------------
EXHIBIT "A-1"
EXHIBIT "A-2"
Initial Subleased Premises
--------------------------
EXHIBIT "A-2"
EXHIBIT "B"
Master Lease
------------
EXHIBIT "B"
