SUBLEASE AGREEMENT
EXHIBIT
10.39
This
SUBLEASE is made as of this 11th day of November, 2004 between MICROSOFT
CORPORATION, a Washington corporation ("Sublandlord"), and
Dwango North America Corp., a Nevada corporation ("Subtenant").
Sublandlord
is the successor tenant under that certain lease agreement dated January 9,
1998, as amended by First Amendment to Lease Agreement dated November 1, 1999;
Second Amendment to Lease Agreement dated August 9, 2000; Third Amendment to
Lease dated September 1, 2000, and Fourth Amendment to Lease dated September 30,
2001, with EOP-WTC, L.L.C. as the current landlord ("Landlord")
(collectively, the "Master
Lease"), for
space (the "Master
Space")
located in the building (the "Building")
described below:
| Name of Building: | World Trade Center |
| Address: |
0000
Xxxxxxx Xxxxxx, |
| Xxxx, Xxxxx and Zip Code: |
Xxxxxxx
XX 00000 |
A copy of
the Master Lease is attached as Exhibit
A.
The
Building, and the land on which the Building is located, and the common areas in
the Building and on the land are referred to collectively as the Property (the
“Property”).
In
consideration of the covenants and promises contained in this Sublease, the
parties agree as follows:
1. Subleased
Premises.
1.1 Premises.
Sublandlord agrees to sublease to Subtenant, and Subtenant agrees to sublease
from Sublandlord, that portion of the Master Space shown in Exhibit
B,
consisting of approximately 15,000 rentable square feet on the sixth floor of
the Building (the "Premises"). In
addition to use of the Premises, Subtenant shall have the same rights of ingress
and egress to the Premises, and any common areas and the benefit of any
appurtenant easements and rights of way, all on such conditions and at such
times as permitted by Landlord and granted under the Master Lease.
1.2 Furniture.
Subtenant will use the furniture and telephone equipment (collectively,
“Furniture”) currently located in the Premises during the Term. An inventory of
the Furniture is attached hereto as Exhibit
C.
Subtenant acknowledges the Furniture is used, has been inspected by Subtenant,
and is accepted as-is, where-is in its current condition without warranty,
express of implied, of any kind. Subtenant shall be responsible for all damage
or risk of loss regarding the Furniture.
2. Term/
Sublandlord’s Early Termination Right. This
Sublease shall commence on the later of substantial completion of tenant
improvement or December 1, 2004 (the “Commencement
Date”) and
shall terminate at the end of the twenty-fourth (24th) month
following the Commencement Date (the “Term”), which
Term is less than the remaining term under the Master Lease. If Sublandlord has
not, for any reason whatsoever (other than delays caused by Subtenant)
substantially completed the tenant improvements (i.e. "Sublandlord’s Work”, as
defined in Section 5 below) within sixty (60) days of receipt of Landlord’s
consent, the Subtenant may terminate this Sublease on written notice to
Sublandlord within thirty (30) days thereafter.
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If
Landlord has failed to deliver its written consent to this Sublease within
twenty (20) days of Landlord’s receipt of the fully executed Sublease, Subtenant
or Sublandlord shall, at the option of either, have the right to terminate this
Sublease by written notice delivered to the other party within ten (10) days of
such date and prior to delivery of Landlord’s consent, in which event this
Sublease shall be of no further force and effect.
Sublandlord
shall have the option to terminate this Sublease on four (4) months prior
written notice to Subtenant ("Termination Notice"), provided that the
Termination Notice may not be given prior to the fifteenth (15th) month
after the Commencement Date, and provided, further, that Sublandlord shall pay
to Subtenant, concurrently with the delivery of the Termination Notice, a
termination fee in the amount of Twenty Four Thousand and 00/100 Dollars
($24,000.00).
3. Rent.
3.1 Minimum
Rent. Minimum
Rent due one month following the Commencement Date through February 28, 2005
shall be Fifteen Thousand Eight Hundred Thirty-Three and 33/100 ($15,833.33) per
month. Beginning March 1, 2005 Subtenant agrees to pay Sublandlord Minimum Rent
in the amount of Twenty Thousand and 00/100 (20,000.00) per month. February 28,
2006; Beginning March 1, 2006 Subtenant agrees to pay Sublandlord Twenty-seven
Thousand One Hundred Seven and 50/100 ($27,107.50) per month through the end of
the Term. , all to be paid in advance on the first day of each month without any
prior demand and without any deduction or offset whatsoever.
3.2 Additional
Rent. During
the Term, in addition to paying the Minimum Rent specified in Section 3.1 above,
Subtenant shall, commencing as of January 1, 2006, pay its prorata share of
the annual increases in Operating Costs (as defined in the Master Lease) above
the actual costs for the 2005 calendar year ("Operating Cost Pass Through”)
"Subtenant's
Share" is
determined to be 8.42 %, based upon the ratio of the number of rentable square
feet of the Premises (15,490 RSF) to the total number of rentable square feet
leased by Sublandlord in the Building (183,927 RSF). Such payments by Subtenant,
together with any and all other amounts payable by Subtenant to Sublandlord
pursuant to the terms of this Sublease, are hereinafter referred to as the
"Additional
Rent." The
calculation, payment and reconciliation of the Additional Rent payments by
Subtenant and Sublandlord shall be made in the same manner as between Landlord
and Sublandlord under the Master Lease. Sublandlord shall, at Sublandlord’s
option, credit or refund to Subtenant Subtenant’s Share of any Additional Rent
overpayments received by Sublandlord under the Master Lease, and Subtenant shall
pay to Sublandlord any Additional Rent underpayments prior to the date due from
Sublandlord under the Master Lease.
Any and
all sums Subtenant is obligated to pay under the terms of this Sublease shall be
construed as rent obligations in addition to the monthly rent set forth in this
Sublease. In addition, such additional rent shall include a service charge of
One Hundred Dollars ($100.00) for each of Subtenant's dishonored checks returned
by the institution on which said checks are drawn. If, at any time during the
term of this Sublease, Subtenant has tendered payment by check and Subtenant's
bank has returned more than one such payment for any reason, including
insufficient funds, Sublandlord may, at its option, require that all future
payments be made by cashier's check.
4. Prepaid
Rent/Security Deposit.
Subtenant has prepaid Minimum Rent for months two, three and six of the Term in
the sum of $47,499.99. Additionally, Subtenant has deposited with Sublandlord
the sum of $27,107.50 as a security deposit (the "Security
Deposit”). The
Security Deposit shall be held by Sublandlord as security for Subtenant's
performance of all of the terms, covenants and conditions of this Sublease. If
Subtenant defaults under any provision of this Sublease, Sublandlord may (but
shall not be required to) use, apply or retain all or any part of this Security
Deposit for the payment of any amount Sublandlord may spend by reason of
Subtenant's default or to compensate Sublandlord for any loss or damage
Sublandlord may suffer because of Subtenant's default. If any portion of the
Security Deposit is so used or applied, Subtenant shall, within ten (10) days
after written demand, deposit cash with Sublandlord in an amount sufficient to
restore the Security Deposit to its original amount. Sublandlord is not required
to keep the Security Deposit separate from its general funds, and Subtenant is
not entitled to interest on the Security Deposit. If Subtenant performs each of
its obligations under this Sublease, the Security Deposit, or any balance
thereof, shall be returned to Subtenant within forty five (45) days after the
later of the expiration of the Term or the date Subtenant vacates the Premises.
If Master Landlord consent to this Sublease is not obtained pursuant to the
terms hereof, the Security Deposit shall be returned to Subtenant.
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5. Sublandlord’s
Work and Alterations.
Sublandlord, at its expense, will (a) construct a suitable entry for the
Premises off the sixth floor elevator lobby, with materials and finishes
consistent with those in the Premises and Building; (b) demise or secure the
internal staircase between the sixth and fifth floors; (c) clean and if
necessary repair all carpet in the Premises, and (d) patch walls if necessary
and touch-up paint to match paint in the Premises ("Sublandlord’s Work”).
Sublandlord's Work is more fully described on the plans and specifications for
such work, prepared by Xxxxxx Xxxxxxxxx Architects and dated October 18, 2004
("Plans and Specifications" which is attached hereto as Exhibit
D).
Notwithstanding the above, Subtenant shall have access to the Premises during
Sublandlord’s Work in order to install and test its server equipment and perform
minimal, Sublandlord and Landlord approved, modifications in the Premises,
provided that such modifications do not interfere with Sublandlord’s
Work.
Subtenant
shall not make any improvements in or alterations or additions (collectively,
"Alterations”) to the
Premises without first obtaining Sublandlord's written consent, but as used
herein "Alterations" shall not include decorations and minor, nonstructural
alterations that do not affect Building systems. All Alterations shall be at the
sole cost and expense of Subtenant and, except for Subtenant's trade fixtures,
furniture and equipment shall become the property of Sublandlord and shall
remain in and be surrendered with the Premises at the termination of this
Sublease. However, Sublandlord, in its sole and absolute discretion, may elect
to require Subtenant to remove from the Premises any or all Alterations upon the
termination of the Sublease, and upon any such election (which must be made, if
at all, at the time Sublandlord consents to the Alterations) Subtenant shall
promptly do so and shall repair all damages occasioned by such removal and
return the Premises to their original condition to Sublandlord's reasonable
satisfaction, all at Subtenant's sole cost and expense.
All
Alterations undertaken by Subtenant shall be performed by a contractor approved
in advance by Sublandlord, according to plans approved in advance by
Sublandlord. Subtenant shall cause all work to be done in a good and workmanlike
manner using materials equal to or better than those used in the construction of
the Premises and shall comply with or cause compliance with all laws and with
any direction given by any public officer pursuant to law, including, without
limitation, Title III of the Americans with Disabilities Act of 1990 as amended
("ADA"), as
the same are in effect on the date hereof and may be hereafter modified, amended
or supplemented. During construction, Subtenant or its general contractor shall
procure and maintain in effect all insurance coverages required under the Master
Lease and any additional insurance coverage required by Sublandlord at its
reasonable discretion.
6. Condition
of Premises.
Subtenant has thoroughly inspected the Premises and accepts them in their
present condition, AS IS WITH ALL FAULTS (subject to completion of Sublandlord’s
Work). Subtenant acknowledges that neither Sublandlord nor any agent of
Sublandlord has made any representation as to the suitability of the Premises
for the conduct of Subtenant's business. Subtenant and Sublandlord expressly
agree that there are and shall be no implied warranties of merchantability,
habitability, fitness for a particular purpose or any other kind arising out of
this Sublease, and there are no warranties that extend beyond those expressly
set forth in this Sublease.
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7. Landlord's
Services. Under
the Master Lease Landlord is obligated to provide Sublandlord with certain
operating services, maintenance and repairs (collectively, "Landlord's
Services"). To
the extent Landlord's Services apply to the Premises, Subtenant shall have the
benefit of such services. Sublandlord has no obligation to furnish any of
Landlord's Services and will not be liable for any disruption or failure of such
services. Upon receipt of written complaint from Subtenant, Sublandlord shall
make demand upon Landlord to take all appropriate action for the correction of
any defect, inadequacy or insufficiency in Landlord's provision of Landlord's
Services. If necessary, upon written request of Subtenant, Sublandlord shall
enforce its rights under the Master Lease to Landlord's Services for Subtenant's
benefit (including any abatement of Minimum Rent and Additional Rent provided to
Sublandlord under the Master Lease and applicable to the Premise in the event of
interruption of services that continue for five (5) business days), or by
litigation (if necessary), in which event Subtenant shall reimburse Sublandlord
for the costs and expenses of such enforcement to the extent such costs and
expenses are not recovered from Landlord.
8. Subtenant's
and Sublandlord's Maintenance and Repairs.
8.1 Maintenance
of Premises.
Subtenant shall, at its expense, maintain the Premises, including, without
limitation, all improvements to the Premises, in substantially the same order,
condition and repair as delivered to Subtenant, to the same extent required of
Sublandlord under the Master Lease, excepting only reasonable wear and tear and
damage by the elements.
8.2. Repair
of Building and Common Areas. Except
for repairs required to be made by Landlord under the Master Lease, all repairs
to the Property other than the Premises shall be coordinated by and through
Sublandlord. To the extent the repairs are not paid for from Landlord's
insurance, the costs of repair will be paid in the following
manner:
(a) The
Premises.
Subtenant shall pay for any repairs conducted in the Premises, unless such
repairs are due to the negligence or willful misconduct of
Sublandlord.
(b) The
Property other than the Premises.
Subtenant shall pay for any repairs conducted in the Property to the extent the
damage was caused by Subtenant or an employee, guest, or agent of
Subtenant.
Subtenant
shall promptly notify Sublandlord of any condition in the Property that is in
need of repair.
9. Use.
Subtenant shall use the Premises as a business office only and for no other
purposes whatsoever. Subtenant shall not do or permit anything to be done in or
about the Property that will in any way interfere with the rights of Sublandlord
or other occupants of the Building, or injure or annoy them, or use or allow the
Property to be used for any unlawful purpose; nor shall Subtenant cause,
maintain or permit any nuisance in, on or about the Property. Subtenant shall
not commit or suffer to be committed any waste in or about the
Property.
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10. Signs
and Sign Restrictions.
Sublandlord will provide Subtenant with Building standard signage, in the lobby
directory and on the 6th floor,
at Sublandlord’s expense. No other sign, picture, advertisement or notice shall
be displayed, inscribed, painted or affixed to any door, wall or woodwork
without Sublandlord's prior consent, which shall not be unreasonably
withheld.
11. Locks. Except
for Subtenant’s server room, no additional locks shall be placed upon any doors
of the Premises or Master Space without Sublandlord's consent, which shall not
be unreasonably withheld. Keys will be furnished to each lock for access to the
Premises at times as permitted by Sublandlord. At the termination of the
Sublease, Subtenant shall surrender to Sublandlord all keys and security cards
to the Premises and Master Space.
12. Defaults. Any of
the following occurrences shall constitute a default by Subtenant:
12.1 Failure
to Pay Money When Due. If
Subtenant fails to make any payment of rent, additional security deposit or any
other payment required to be made by Subtenant hereunder, as and when due, for a
three (3) business day period after written notice from
Sublandlord.
12.2 Other
Breaches. If
Subtenant fails to observe or perform any other provision of this Sublease,
including compliance with Landlord's Rules and Regulations, for a twenty (20)
day period after written notice from Sublandlord (or as soon thereafter as is
practicable, provided that Subtenant commences to cure the breach within such
20-day period and diligently prosecutes such cure to completion). The 20-day
grace period shall not apply to Sublandlord’s right to exercise remedies under
Section 13(a) with respect to Subtenant’s breach of its obligations to maintain
unexpired insurance coverages in full compliance with Sections 5 and 14 of
this Sublease.
13. Remedies. If
Subtenant commits a default under this Sublease which continues beyond any
notice and cure period, Sublandlord may do any one or more of the following, in
addition to pursuing its remedies under law:
(a) Cure the
default and charge the costs to Subtenant, in which case Subtenant shall pay
such costs as additional rent promptly on demand, together with interest thereon
at the rate of eighteen percent (18%) per year or the highest rate permitted by
law, whichever is less.
(b) Terminate
this Sublease.
(c) Enter and
take possession of the Premises and remove Subtenant and all other persons and
any property from the Premises, with process of law.
(d) Hold
Subtenant liable for and collect rent and other indebtedness owed by Subtenant
to Sublandlord or rent that would have accrued during the remainder of the term
had there been no default, less any sums Sublandlord receives by reletting the
Premises.
(e) Hold
Subtenant liable for that part of the following sums paid by Sublandlord that
are attributable to the remainder of the term:
(i) Customary
broker's fees incurred by Sublandlord in reletting part or all of the
Premises;
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(ii) The cost
of removing and storing Subtenant's property;
(iii) The cost
of repairs and alterations reasonably necessary to put the Premises in a
condition reasonably acceptable to a new subtenant; and
(iv) Other
necessary and reasonable expenses incurred by Sublandlord in enforcing its
remedies.
Sublandlord
shall mitigate its damage by making reasonable efforts to relet the Premises on
reasonable terms. Sublandlord may relet for a shorter or longer period of time
than the Sublease term and make reasonably necessary repairs and alterations.
All sums collected from reletting shall be applied first to Sublandlord's
expenses of reletting described in Section 13(e), and then to the payment
of amounts due from Subtenant to Sublandlord under this Sublease.
14. Insurance.
Subtenant shall, during any period of occupancy, at its sole cost and expense,
keep in full force and effect the following insurance:
14.1 Liability
Insurance. A
policy of general commercial liability insurance satisfying the requirements of
the Master Lease regarding insurance to be carried by Sublandlord and naming
both Sublandlord and Landlord as additional insureds. Such liability policy
shall (a) insure against any and all claims or liability arising out of the use
or maintenance of the Property under this Sublease, in an amount not less than
Two Million Dollars ($2,000,000) per occurrence covering bodily injury to
persons, including death, and damage to property; (b) insure the hazards of the
Property and Subtenant's operations thereon, independent contractors,
contractual liability (covering all indemnity provisions of this Sublease); and
(c) contain a cross-liability provision and a provision that the insurance
provided Sublandlord and Landlord hereunder shall be primary and
non-contributing with any other insurance.
14.2 Property
Damage Insurance. A fire
and extended coverage insurance policy on the improvements to the Premises
satisfying the requirements of the Master Lease regarding insurance to be
carried by Sublandlord and naming both Sublandlord and Landlord as additional
insureds as their interests may appear. Such policy shall (a) be a standard form
of property insurance insuring against the perils of fire, extended coverage,
vandalism, malicious mischief, special extended coverage ("All-Risk") and
sprinkler leakage, and (b) be upon all property owned by Subtenant, or for which
Subtenant is legally liable, or that was installed at Subtenant's expense, and
that is located at the Premises, including, but not limited to, furniture,
fittings, installations, fixtures, and any other personal property of Subtenant,
in an amount not less one hundred percent (100%) of the full replacement cost
thereof.
14.3 General
Requirements. All
policies shall be written in a form (including amount of deductibles, if any)
reasonably satisfactory to Sublandlord and shall be taken out with insurance
companies holding a General Policyholders Rating of "A" and a Financial Rating
of "X" or better, as set forth in the most current issue of Best's Insurance
Reports, but in any event not less than the rating required under the Master
Lease.
Within
ten (10) days after the execution of this Sublease, Subtenant shall deliver to
Sublandlord copies of policies or certificates complying with this Sublease, in
form reasonably satisfactory to Sublandlord. No such policy shall be cancelable
or reducible in coverage except after thirty (30) days prior written notice to
Sublandlord. If Subtenant fails to obtain, maintain and/or provide evidence of
insurance required hereunder, Sublandlord may obtain the same and Subtenant
shall, upon demand, reimburse Sublandlord for the cost thereof. No such action
by Sublandlord or reimbursement from Subtenant shall be a waiver of default or
other remedies. In no event shall the limits of such policies be considered as
limiting liability of Subtenant under this Sublease.
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15. Waiver
of Recovery.
Sublandlord and Subtenant each release and relieve the other, and waive their
entire rights of recovery for loss or damage to property located within or
constituting a part or all of the Property to the extent that the loss or damage
is covered by (a) the injured party's insurance, or (b) the insurance
the injured party is required to carry under Section 14, whichever is greater.
This waiver applies whether or not the loss is due to the negligent acts or
omissions of Sublandlord or Subtenant, or their respective officers, directors,
employees, agents, contractors, or invitees. Each of Sublandlord and Subtenant
shall have their respective property insurers endorse the applicable insurance
policies to reflect the foregoing waiver of claims, provided, however, that the
endorsement shall not be required if the applicable policy of insurance permits
the named insured to waive rights of subrogation on a blanket basis, in which
case the blanket waiver shall be acceptable.
16. Risk. Except
as otherwise expressly provided in this Section 16, all of Subtenant's personal
property of any kind or description whatsoever in the Property shall be at
Subtenant's sole risk. Sublandlord and Landlord shall not be liable for any
damage done to or loss of such personal property, injury to person or damage or
loss suffered by the business or occupation of Subtenant arising from any acts
or neglect of co-tenants or other occupants of the Building, or of any other
persons, or from bursting, overflowing or leaking of water, sewer or steam
pipes, or from the heating or plumbing or sprinkler fixtures, or from electric
wires, or from gas, or odors, or caused in any other manner whatsoever unless
and to the extent the damage is caused by the willful misconduct or negligence
of Sublandlord or breach of Sublandlord's obligations under this
Sublease.
17. Liability
of Sublandlord.
Sublandlord's officers, directors and employees shall have no personal liability
under this Sublease. Subtenant shall look first to rents, issues and profits
from the Premises for the satisfaction of any judgment or decree against
Sublandlord based upon any default under this Sublease, and then to other
property or assets of Sublandlord, which shall only be subject to levy,
execution or other enforcement procedures for satisfaction of any such judgment
or decree.
18. Indemnification. Subject
to Section 15 above, Subtenant will defend, indemnify and hold harmless
Sublandlord and Landlord from any claim, liability or suit, including attorney
fees, on behalf of any party for any injury or damage occurring in or about the
Master Space where such damage or injury was caused by any act, omission,
negligence or intentional act of Subtenant or by Subtenant's agents, employees,
servants, customers, clients, contractors, or invitees. Subject to Section 15
above, Sublandlord will defend, indemnify and hold harmless Subtenant from any
claim, liability or suit, including attorney fees, on behalf of any party for
any bodily injury or property damage occurring in or about the Master Space to
the extent the damage or injury was caused by the act, omission or negligence of
Sublandlord, its agents, employees, servants, customers, clients, contractors or
invitees. The indemnification obligations contained in this Section shall not be
limited by any worker's compensation, benefit or disability laws, and each
indemnifying party hereby waives any immunity that the indemnifying party may
have under the Industrial Insurance Act, Title 51 RCW and similar worker's
compensation, benefit or disability laws. SUBLANDLORD
AND SUBTENANT ACKNOWLEDGE BY THEIR EXECUTION OF THIS SUBLEASE THAT EACH OF THE
INDEMNIFICATION PROVISIONS OF THIS LEASE (SPECIFICALLY INCLUDING BUT NOT LIMITED
THOSE RELATING TO WORKER'S COMPENSATION BENEFITS AND LAWS) WERE SPECIFICALLY
NEGOTIATED AND AGREED TO BY SUBLANDLORD AND SUBTENANT.
19. Casualty
& Condemnation. Under
certain circumstances described in the Master Lease, either Landlord or
Sublandlord may terminate the Master Lease if there is a fire or other casualty
damaging the Building or the Premises, or if there is a condemnation affecting
the Building. Any such termination will automatically terminate this Sublease.
If there is a fire or other casualty in the Premises that materially damages the
Premises, either party may elect to terminate this Sublease within thirty (30)
days following occurrence of the damage. Sublandlord's obligation to repair any
damage to the Premises is limited to its obligation to do so under the Master
Lease.
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Rent will
xxxxx in proportion to the loss of use of the Premises caused by fire or other
casualty.
20. Master
Lease.
20.1 Good
Standing.
Sublandlord represents and warrants that (a) the Master Lease is in good
standing, (b) there are no agreements other than the Master Lease between
Landlord and Sublandlord concerning the use of the Premises, and (c) to
Sublandlord’s actual knowledge, Sublandlord has not received notice of any
breach or default of the Master Lease by Sublandlord that has not been cured as
of the date of this Sublease.
20.2 Subordination. This
Sublease is subject and subordinate to the Master Lease, to all ground and
underlying leases, and to all mortgages and deeds of trust which may now or
hereafter affect the Property, and to any and all renewals, modifications,
consolidations, replacements and extensions thereof. Sublandlord agrees not to
effect any modification or amendment of the Master Lease that adversely affects
the rights of Subtenant hereunder without the written consent of Subtenant
(which consent shall be deemed granted if not refused within ten (10) business
days of written request). Subtenant agrees, upon request of Sublandlord, at any
time or times, to execute and deliver to Sublandlord any and all instruments as
shall be required by Landlord to effect a subordination of this Sublease to the
lien of a lender or ground lessor of the Master Landlord in accordance with and
subject to the terms of the Master Lease.
20.3 Adherence
to Terms of Master Lease; Indemnity.
Subtenant agrees to be bound by all obligations and responsibilities of
Sublandlord as tenant under the Master Lease as they pertain to the Premises,
except to the extent contradicted by the express terms of this Sublease.
Subtenant shall neither do nor permit anything to be done that would cause the
Master Lease to be terminated or forfeited by reason of any right of termination
or forfeiture reserved or vested in Landlord under the Master Lease. Subtenant
shall defend, indemnify and hold Sublandlord harmless from and against all
claims, damages and liability (including but not limited to actual attorneys’
fees) made or threatened against Sublandlord as a result of Subtenant’s breach
of, or failure to abide by the terms of, this Sublease or of the Master Lease.
Sublandlord shall neither do nor permit anything to be done that would cause the
Master Lease to be terminated or forfeited by reason of any right of termination
or forfeiture reserved or vested in Landlord under the Master Lease. Sublandlord
shall defend, indemnify and hold Subtenant harmless from and against all claims,
damages and liability (including but not limited to actual attorneys’ fees) made
or threatened against Subtenant as a result of Sublandlord’s breach of, or
failure to abide by the terms of, this Sublease or of the Master
Lease.
21. Right
of Entry. Upon
reasonable prior notice to Subtenant (except in the case of emergency),
Sublandlord shall have the right to enter the Premises, subject to such
reasonable security and confidentiality requirements as Subtenant may
require.
22. Parking.
Subtenant, its employees and invitees, shall have the right to use up to 1.2
unreserved parking stalls in the Building garage per 1000 rentable square feet
of Premises at rates charged for such parking from time to time, subject to the
terms of the Master Lease.
23. Rules
and Regulations.
Subtenant shall observe at all times the reasonable rules and regulations
promulgated by Landlord that are applicable to the Premises or any occupant
thereof.
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24. Subletting/Assignment.
24.1 Sublandlord
Consent.
Subtenant shall not sublet the Premises or assign this Sublease or any part
thereof for any period of time without the prior consent of the Landlord and
without Sublandlord’s prior consent pursuant to and subject to the terms of the
Master Lease. Such consent by Sublandlord shall not be unreasonably withheld or
delayed except: (a) Sublandlord may withhold in its absolute and sole discretion
consent to any mortgage, hypothecation, pledge or other encumbrance of any
interest in this Sublease or the Premises by Subtenant, whereby this Sublease or
any interest therein becomes collateral for any obligation of Subtenant; (b)
Sublandlord may withhold in its absolute and sole discretion consent if Landlord
does not consent to the proposed transfer; and (c) Sublandlord may withhold in
its absolute and sole discretion consent if Sublandlord determines the proposed
transferee is a business competitor of Sublandlord. It is agreed that any of the
following factors, or any other reasonable factor, will be reasonable grounds
for Sublandlord deciding whether to consent to Subtenant’s request: (i)
occupancy by any proposed assignee, subtenant or other transferee is not
consistent with the maintenance and operation of a Class A office building due
to the nature of the proposed occupant's business or the manner of conducting
its business or its experience or reputation in the community, (ii) occupancy by
any proposed assignee, subtenant or other transferee is likely to cause
disturbance to the normal use and occupancy of the Building by Sublandlord or
other occupants; and (iii) notwithstanding that Subtenant or others remain
liable under this Sublease, whether the proposed assignee, subtenant or other
transferee has a net worth, financial strength and equal or greater than that of
the Subtenant as of the Commencement Date or the effective date of the
assignment or sublease, whichever is higher.
24.2 Permitted
Transfers.
Notwithstanding
anything to the contrary in this Sublease, Subtenant may, without Sublandlord’s
prior written consent, but with prior notice to Sublandlord, assign this
Sublease or sublet all or portions of the Premises to (i) a subsidiary,
affiliate, parent or other entity which controls, is controlled by, or is under
common control with, Subtenant; or to (ii) a successor corporation related to
subtenant by merger, consolidation, or reorganization, or an entity that
acquires all or substantially all of the assets of Subtenant, provided that the
successor corporation or entity has a net worth at least equal to the greater of
the net worth of Subtenant upon mutual execution of this Sublease or the net
worth of Subtenant immediately prior to such merger, consolidation, or
reorganization (any of the foregoing are referred to herein as "Permitted
Transfers"). In the event of any assignment or subletting permitted by the
foregoing sentence, a copy of the documentation effecting such permitted
assignment or subletting shall be delivered to Sublandlord prior to the
effective date thereof. In the case of a permitted assignment, the assignee
shall expressly assume all of the obligations of Subtenant hereunder in an
assumption agreement reasonably acceptable to Sublandlord. In the case of a
permitted subletting, the subtenant shall expressly agree to comply with all of
Subtenant's obligations under this Sublease applicable to the Premises and, at
Sublandlord's option, will agree (except for the economic obligations which such
subtenant will undertake directly to Subtenant) to attorn to Sublandlord under
the terms of the sublease in the event this Sublease terminates before the
sublease expires.
24.3 Recapture. In lieu
of granting a consent to a proposed sublease, assignment or other transfer, and
except for Permitted Transfers, Sublandlord reserves the right, within ten (10)
days of receipt of a mutually executed sublease, assignment or other transfer,
to terminate this Sublease or, in the case of a subletting of less than all the
Premises, to terminate this Sublease with respect to such portion of the
Premises, as of the proposed effective date of such subletting or assignment, in
which event Sublandlord may enter into the relationship of landlord and tenant
with any other person or entity (including the sublessee or assignee proposed by
Subtenant) on such terms and conditions as Sublandlord may deem acceptable. If
Sublandlord so elects to terminate this Sublease, Subtenant shall have the
option, within the following ten (10) day period, to rescind its request for
consent and keep this Sublease in full force and effect, in which case
Sublandlord's termination shall be null and void.
9
24.4 Effect
of Transfer. No
subletting, assignment or other transfer under this Article 24 shall relieve
Subtenant of any liability under this Sublease, and no consent to any such
transfer shall operate as a waiver of the necessity for consent to a subsequent
transfer. Subtenant promptly shall provide Sublandlord with copies of any
instruments of transfer.
25. Notice. Any
notice in connection with this Sublease or termination thereof shall be in
writing and be sent by certified mail or personally delivered to, in the case of
Sublandlord:
Microsoft
Corporation
Xxx
Xxxxxxxxx Xxx
Xxxxxxx,
Xxxxxxxxxx 00000-0000
Attention:
Xxxx
Xxxxxx,
General
Manager, Real Estate & Facilities
With a
copy to:
Microsoft
Corporation
Xxx
Xxxxxxxxx Xxx
Xxxxxxx,
Xxxxxxxxxx 00000-0000
Attention:
Xxxxxxx
X. Xxxxxx,
Law and
Corporate Affairs
Or, in
the case of Subtenant:
Prior to
the Commencement Date:
000 Xxxx
Xxxxxx Xx., Xxxxx 000
Xxxxxxx,
XX 00000
Attn:
Chief Financial Officer
After the
Commencement Date:
0000
Xxxxxxx Xxx, Xxxxx 000
Xxxxxxx,
XX
00000
Attention:
Chief
Financial Officer,
Xxxx
Xxxxx
Notice
shall be deemed given when so delivered to Sublandlord or Subtenant (or on the
date delivery is refused), or three (3) business days after it is placed,
properly addressed with postage prepaid, in a depository for United States
certified mail. Either party may provide for a different address by notifying
the other party of said change as provided for herein. Subtenant agrees to
deliver to Sublandlord, simultaneously with delivery to Landlord, a copy of any
notice, demand, request, consent or approval Subtenant sends to Landlord. Each
party agrees to promptly deliver to the other party a copy of any notice,
demand, request, consent or approval received from Landlord and not transmitted
directly to such other party which is relevant on its face to the rights and
obligations hereunder of the other party.
10
26. Estoppel
Certificate. Upon
Sublandlord's request, at any time and from time to time, Subtenant shall
execute and deliver to Sublandlord:
(a) An
estoppel in favor of Landlord and Sublandlord in accordance with and subject to
the terms of the Master Lease, and
(b) Within
ten (10) business days after receipt of the request, a written instrument, duly
executed in favor of Sublandlord:
(i) Certifying
that this Sublease has not been amended or modified and is in full force and
effect or, if there has been a modification or amendment, that this Sublease is
in full force and effect as modified or amended, and stating the modifications
or amendments;
(ii) Specifying
the date to which the rent has been paid;
(iii) Stating
whether, to Subtenant's best knowledge, Sublandlord is in default and, if so,
stating the nature of the default; and
(iv) Stating
the commencement date of the term and whether any option to extend the term has
been exercised.
27. Surrender
of Premises.
Subtenant shall, on the last day of the term of this Sublease, or upon any
earlier termination, remove all of its furniture, furnishings, personal property
and equipment and surrender to Sublandlord the Premises and all improvements to
the Premises broom clean in good order, condition and state of repair,
reasonable wear and tear excepted, provided that Subtenant shall leave the
Furniture in the Premises shown on Exhibit
C in
accordance with Section 1.2 above.
28. Holding
Over. If
Subtenant holds over after expiration or termination of this Sublease without
written consent of Sublandlord (which consent may be withheld in Sublandlord’s
sole judgment), Subtenant shall pay two times the fixed minimum monthly rental
in effect during the last month hereof and all other charges due hereunder for
each month or any part thereof of any such holdover period. No holding over by
Subtenant after the term of this Sublease shall operate to extend the Sublease
term. In the event of any unauthorized holding over, Subtenant shall indemnify
Sublandlord against all costs and claims for damages, including, without
limitation, any claims for damages by any other tenant to whom Sublandlord or
Landlord may have leased all or any part of the Premises.
If
Subtenant holds over after expiration of the term of this Sublease, or after the
Sublease is terminated, with Sublandlord's consent, Subtenant shall be deemed to
be occupying the Premises under a month-to-month tenancy, and subject to all the
terms, covenants and conditions of this Sublease (other than the term), except
that minimum monthly rent shall be one hundred twenty-five percent (125%) of the
minimum monthly rent for the last month of the term and the tenancy shall be
terminable by either party on twenty (20) days written notice to the other
party, effective as of the last day of a calendar month.
29. Consent
by Sublandlord.
Whenever Sublandlord's consent or approval is required under this Sublease, such
consent or approval may be withheld at Sublandlord's sole discretion, except as
otherwise expressly provided in this Sublease.
11
30. Successors
and Assigns. Subject
to the restriction contained in Section 24, the covenants and conditions
contained in this Sublease shall bind the heirs, successors, executors,
administrators and assigns of the parties.
31. Brokers.
Sublandlord and Subtenant each represents and warrants to the other that, other
than Xxxxx Xxxxxx of Xxxxxxxx Xxxx Company, which represents Sublandlord, and
Xxxxx Xxx of GVA Xxxxxx Xxxxxxx, which represents Subtenant (collectively, the
"Brokers"), they did not deal with any broker in connection with this
transaction. Sublandlord shall be solely responsible for the fees and
commissions due to the Brokers pursuant to separate agreement. Each party agrees
to indemnify and defend the other against any loss, cost or liability,
including, without limitation, attorneys’ fees, in connection with the claims of
any other broker arising from such party’s acts.
32. Attorney
Fees. In the
event legal proceedings are initiated to enforce any provision of this Sublease,
to recover any rent due under this Sublease, for the breach of any covenant or
condition of this Sublease, or for the restitution of the Premises to the
Sublandlord and/or eviction of the Subtenant, the prevailing party shall be
entitled to recover, as an element of its cost of suit and not as damages,
reasonable attorneys’ fees and costs to be fixed by the court.
33. Entire
Agreement, Merger and Waiver. This
Sublease supersedes and cancels all previous negotiations, arrangements, offers,
agreements or understandings, if any, between the parties. This Sublease
expresses and contains the entire agreement of the parties and there are no
express or implied representations, warranties or agreements between them,
except as contained in this Sublease. This Sublease may not be modified, amended
or supplemented except by a writing signed by both Sublandlord and Subtenant. No
consent given or waiver made by Sublandlord of any breach of Subtenant of any
provision of this Sublease shall operate or be construed in any manner as a
waiver of any subsequent breach of the same or of any other
provision.
34. Captions. The
captions of this Sublease are provided for convenience only and shall not be
used in construing its meaning.
35. Severability. If any
provision of this Sublease is found to be unenforceable, the remainder of this
Sublease shall not be affected thereby.
36. Authority. If
Subtenant is a corporation or partnership, each individual executing this
Sublease on behalf of Subtenant represents and warrants that he or she is duly
authorized to execute and deliver this Sublease on behalf of Subtenant and that
this Sublease is binding upon Subtenant according to its terms. If Subtenant is
a corporation, each individual executing this Sublease on behalf of Subtenant
represents and warrants that his or her authorization to execute and deliver
this Sublease was in accordance with a duly adopted resolution of Subtenant's
Board of Directors and Subtenant's Bylaws. Concurrently with execution of this
Sublease, Subtenant shall deliver to Sublandlord such evidence of authorization
as Sublandlord may require.
37. Sublandlord
and Subtenant Relationship Only. Nothing
contained in this Sublease shall be construed to create the relationship of
principal and agent, partnership, joint venturer or any association between
Sublandlord and Subtenant.
38. Memorandum
of Lease. This
Sublease shall not be recorded, and no memorandum of this Sublease shall be
recorded.
39. Consent
to Sublease by Landlord.
Sublandlord’s obligations under this Sublease are subject
to the consent of Landlord. Accordingly, it shall be a condition precedent of
Sublandlord’s obligations hereunder that Sublandlord has obtained the consent of
Landlord. Sublandlord and Subtenant hereby agree, for the benefit of Landlord,
that this Sublease and Landlord’s consent hereto shall not (a) be deemed to have
amended the Master Lease in any regard (unless Landlord shall have expressly
agreed in writing to such amendment); or (b) be construed as a waiver of
Landlord’s right to consent to an assignment of the Master Lease by Sublandlord
or any further subletting of the Master Space, as and to the extent provided in
the Master Lease. Landlord’s consent shall, however, be deemed to evidence
Landlord’s agreement that Subtenant shall be entitled to any waiver of claims
and of the right of subrogation for damage to Landlord’s property if and to the
extent that the Master Lease provides such waivers for the benefit of
Sublandlord.
12
40. Environmental.
(a) Neither
Subtenant nor its officers, directors, agents, contractors, employees or
invitees will use, generate, manufacture, produce, store, release, discharge or
dispose of on, under or about the Premises, or off-site the Premises affecting
the Property, or transport to or from the Premises, any Hazardous Substance
except small amounts typically found in a class A office environment provided
such use and disposal is in compliance with Environmental Laws. The term
"Hazardous
Substance" means
any hazardous or toxic substance, material or waste, pollutants or contaminants,
as defined, listed or regulated now or in the future by any federal, state or
local law, ordinance, code, regulation, rule, order or decree regulating,
relating to or imposing liability or standards of conduct concerning, any
environmental conditions, health or industrial hygiene, including without
limitation, (i) chlorinated solvents, (ii) petroleum products or
by-products, (iii) asbestos and (iv) polychlorinated biphenyls. The
term "Environmental
Law" means
any federal, state or local law, statute, ordinance, regulation or order
pertaining to health, industrial hygiene, environmental conditions or hazardous
substances or materials including those defined in this Article as "Hazardous
Substances."
(b) Subtenant
shall give prompt written notice to Sublandlord and Landlord of: any proceeding
or inquiry by any governmental authority with respect to the presence of any
Hazardous Substance on the Premises; all claims made or threatened by any third
party against Subtenant or the Premises relating to any loss or injury resulting
from any Hazardous Substance; and Subtenant's discovery of any occurrence or
condition on the Premises that could cause the Premises or any part thereof to
be subject to any restrictions on occupancy, or use of the Premises under any
Environmental Law.
(c) Subtenant
shall protect, indemnify, defend and hold harmless Sublandlord and Landlord and
their directors, partners, officers, employees, agents, parents, subsidiaries,
successors and assigns from any loss, damage, cost, expense or liability
(including reasonable attorneys' fees and costs) directly or indirectly arising
out of or attributable to the use, generation, manufacture, production, storage,
release, discharge, disposal or presence of a Hazardous Substance on the
Premises or off-site of the Premises affecting the Property caused by Subtenant
or its directors, partners, officers, employees, agents, contractors and
invitees, including without limitation, the costs of any required or necessary
repairs, cleanup or detoxification of the Premises and the preparation and
implementation of any closure, remedial or other required plans.
41. Waiver
of Trial by Jury.
Sublandlord and Subtenant each agree to and they hereby do waive trial by jury
in any action, proceeding or counterclaim brought by either of the parties
hereto against the other on any matters whatsoever arising out of or in any way
connected with this Sublease, the relationship of Sublandlord and Subtenant,
Subtenant's use or occupancy of the Premises and/or any claim of injury or
damage, and any statutory remedy.
13
| SUBLANDLORD: | ||
| MICROSOFT CORPORATION, a Washington corporation | ||
| By: | /s/ Xxxx Xxxxxx | |
| Name: Xxxx
Xxxxxx Title: General Manager, Real Estate & Facilities | ||
| SUBTENANT: | ||
| DWANGO NORTH AMERICA CORP. A Nevada corporation | ||
| By: | /s/ J. Xxxx Xxxxx | |
| Name: J. Xxxx Xxxxx Title: CFO | ||
00
Xxxxxxxxxxx
| XXXXX XX XXXXXXXXXX |
) |
|
)
ss. | |
| COUNTY OF KING |
) |
I certify
that I know or have satisfactory evidence that ____________ is the person who
appeared before me, and said person acknowledged that s/he signed this
instrument, on oath stated that s/he was authorized to execute the instrument
and acknowledged it as the ____________ of
Microsoft Corporation to be the free and voluntary act of such party for the
uses and purposes mentioned in the instrument.
Dated:
________________________
|
_______________________________________________________________
Notary
Public
Print
Name_______________________________________________________
My
commission
expires______________________________________________
|
(Use this
space for notarial stamp/seal)
Subtenant
| STATE OF WASHINGTON |
) |
|
)
ss. | |
| COUNTY OF ________________ |
) |
I certify
that I know or have satisfactory evidence that ________________________is the
person who appeared before me, and said person acknowledged that s/he signed
this instrument, on oath stated that s/he was authorized to execute the
instrument and acknowledged it as the _________________
of
________________________to be the
free and voluntary act of such party for the uses and purposes mentioned in the
instrument.
Dated:
________________________
|
_______________________________________________________________
Notary
Public
Print
Name_______________________________________________________
My
commission
expires______________________________________________
|
(Use this
space for notarial stamp/seal)
15
Exhibit A
MASTER
LEASE
A-1
Exhibit B
THE
PREMISES
B-1
Exhibit C
Furniture
Inventory
C-1
Exhibit D
Plans and
Specifications
|
D-1 | |||
