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EXHIBIT 10.5
SUBLEASE AGREEMENT
THIS SUBLEASE AGREEMENT ("Sublease"), dated as of June __, 1999, is made
between THINK NEW IDEAS, INC., a Delaware corporation ("Sublandlord"), and
RIVALNET, INC., a Washington corporation ("Subtenant").
RECITALS
A. Sublandlord is tenant under that certain lease dated September 21,
1998, between Xxxxxxxx X. and Xxxx X. Xxxxxx, husband and wife, as landlord
("Landlord") and Sublandlord as tenant, as amended by First Amendment to Office
Lease dated February 19, 1999 (as amended, the "Lease"). A true, complete and
correct copy of the Lease is attached to this Sublease as EXHIBIT A.
B. Pursuant to the Lease, Sublandlord leases certain space in the
building known as the Xxxxxx Building (the "Building"), located at 71 Columbia
Street, in Seattle, Washington (the "Premises").
C. Sublandlord wishes to sublease to Subtenant a portion of the Premises
comprising all of Subtenant's space on Floor 5 (having approximately 6,268
rentable square feet) of the Building, as shown as cross-hatched on EXHIBIT B
attached to this Sublease (the "Subleased Premises").
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Sublease, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged by the parties, Sublandlord and Subtenant
agree as follows:
AGREEMENT
1. SUBLEASE
Sublandlord subleases to Subtenant and Subtenant subleases from
Sublandlord, for the Term, at the rental, and upon all of the conditions set
forth in this Sublease, the Subleased Premises, together with the right to use,
in common with others entitled thereto, the hallways, stairways, elevators and
other Common Areas of the Building (as that term is defined in the Lease).
2. TERM AND POSSESSION
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2.1 TERM
The term of this Sublease ("Term") shall commence on the date upon which
is the later of the date which all necessary documents have been executed to
provide for occupancy or, the date which a temporary certificate of occupancy is
issued with respect to or other evidence of final inspection of the Subleased
Premises, which the parties anticipate receiving on or about June 4, 1999
("Commencement Date"), provided that if the Commencement Date shall not have
occurred by July 15, 1999, Sublandlord and Subtenant may terminate this Sublease
on written notice to the other within thirty (30) days thereafter. The Term
shall expire on November 30, 2001 ("Expiration Date"). Sublandlord agrees to use
reasonable best efforts to obtain and then convert the temporary certificate of
occupancy to a certificate of occupancy and at no cost to Subtenant.
2.2 DELIVERY OF POSSESSION; CONDITION OF SUBLEASED PREMISES
Prior to the Commencement Date, Sublandlord shall complete construction
of the Subleased Premises in accordance with the floor attached hereto as
Exhibit B. Subject to the receipt of the temporary certificate of occupancy for
the Subleased Premises referenced in subsection 2.1 Sublandlord shall deliver
to Subtenant possession of the Subleased Premises "as-is, where-is" and broom
clean.
2.3 ALLOWANCE; ALTERATIONS
Sublandlord shall provide to Subtenant an allowance in an amount up to
Three Thousand Five Hundred Dollars ($3,500) for electrical work. At
Sublandlord's option, the allowance will be paid to Subtenant or may be paid
directly to Subtenant's electrical contractor, upon delivery of invoices for the
work and reasonable documentation that such work has been performed in the
Subleased Premises. If Subtenant does not use the entire allowance for
electrical work, the balance shall be retained by Sublandlord.
Subtenant shall not make any alterations, modifications or additions to
the Subleased Premises without the prior written consent of Sublandlord and
Landlord, and the consent of Sublandlord shall not be unreasonably delayed or
withheld. Sublandlord may, as a condition to granting such consent, require
Subtenant to remove all or part of any additional improvements added by
Subtenant, at Subtenant's sole cost and expense, at the expiration or earlier
termination of the Term of this Sublease.
2.4 EARLY TERMINATION OPTION
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If Subtenant is not in default in any of its obligations under this
Sublease at the time of exercise of Subtenant's Early Termination Right (as
defined below), then Subtenant shall have a one time right ("Subtenant's Early
Termination Right") to terminate this Sublease effective May 31, 2001, subject
to the terms and conditions of this Section 2.4. Subtenant may exercise
Subtenant's Early Termination Right by delivering written notice to Sublandlord
of such exercise no later than October 31, 2000, time being of the essence.
Subtenant's Early Termination Right is personal to Rivalnet, Inc. and may not be
exercised by any other person or entity. Subtenant shall not be required to pay
a termination fee in order to exercise Subtenant's Early Termination Right.
3. BASE RENT AND OPERATING EXPENSES
3.1 BASE RENT
Commencing thirty (30) days following the Commencement Date as provided
for in Paragraph 2.1, but in no event earlier than July 1, 1999, Subtenant shall
pay to Sublandlord monthly base rent ("Base Rent") in the amount of Thirteen
Thousand Fifty-Eight and 33/100 Dollars ($13,058.33). Base Rent thereafter shall
be paid on or before the first day of each calendar month during the Term. The
monthly installment of Base Rent shall be prorated on a per diem basis for the
first month of the Term if the Commencement Date is not the first day of a
calendar month.
3.2 OPERATING EXPENSES
Commencing on January 1, 2000, Subtenant shall pay to Sublandlord, as
additional rent, its pro rata share (based on Subtenant's percentage of
occupancy of the Premises ) of increases in Operating Costs and Real Property
Taxes (as those terms are defined in the Lease) imposed on Sublandlord pursuant
to Sections 7 and 9 of the Lease (collectively, "Sublandlord's Building
Expenses") to the extent they exceed Sublandlord's Building Expenses for
calendar year 1999. Subtenant shall pay its pro rata share of such increases
with respect to each estimated and final payment due under the terms of Sections
7 and 9 of the Lease, and Sublandlord shall reimburse to Subtenant its pro rata
share of any refunds or reimbursements payable to Sublandlord with respect to
Sublandlord's Building Expenses during the Term. The obligations of Sublandlord
and Subtenant under this Section 3.2 shall survive the expiration or earlier
termination of the Term.
4. USE OF SUBLEASED PREMISES; PARKING
The Subleased Premises shall be used and occupied for general office
purposes and for no other purpose without Sublandlord's written consent.
Commencing on the
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Commencement Date, Subtenant shall be entitled to lease three (3) monthly
parking stalls in the Building parking lot (which is located in and adjacent to
the Building). Rates for parking shall be the then-prevailing market parking
rate and shall, at Sublandlord's option, be paid directly to the parking lot
operator or be paid as reimbursement to Sublandlord.
5. INCORPORATION OF CERTAIN LEASE TERMS
5.1 SUBLEASE SUBJECT TO LEASE
This Sublease is subject to all of the terms and conditions of the Lease
and to Landlord's rights thereunder.
5.2 INCORPORATION OF LEASE
The terms, conditions and respective obligations of Sublandlord and
Subtenant to each other under this Sublease shall be the terms and conditions of
the Lease, except for those provisions of the Lease which are directly
contradicted by this Sublease, in which event the terms of this Sublease shall
control over the Lease. Therefore, for the purposes of this Sublease, wherever
in the Lease the word "Landlord" is used, it shall be deemed to mean the
Sublandlord herein, and wherever in the Lease the word "Tenant" is used, it
shall be deemed to mean the Subtenant herein. Any non-liability, release,
indemnity or hold harmless provision in the Lease for the benefit of Landlord
that is incorporated herein by reference shall be deemed to inure to the benefit
of Sublandlord, Landlord, and any other person intended to be benefited by said
provision, for the purpose of incorporation by reference in this Sublease. Any
non-liability, release, indemnity or hold harmless provision in the Lease for
the benefit of Sublandlord that is incorporated herein by reference, shall be
deemed to inure to the benefit of Subtenant and any other person intended to be
benefited by said provision, for the purpose of incorporation by reference in
this Sublease. Any right of Landlord under the Lease of access or inspection and
any right of Landlord under the Lease to do work in the Premises or in the
Building and any right of Landlord under the Lease in respect of rules and
regulations, which is incorporated herein by reference, shall be deemed to inure
to the benefit of Sublandlord, Landlord, and any other person intended to be
benefited by said provision, for the purpose of incorporation by reference in
this Sublease.
Notwithstanding the foregoing, Subtenant shall have no rights nor
obligations under the following Sections of the Lease: 38, 41, and 45-48.
6. CONDITION PRECEDENT
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It is a condition precedent to this Sublease that Landlord shall have
executed and delivered to Sublandlord and Subtenant its consent in the form
attached to this Sublease as EXHIBIT C on or before June ___, 1999.
7. SUBLANDLORD'S REPRESENTATIONS AND WARRANTIES
Sublandlord represents and warrants to Subtenant as follows:
(a) EXHIBIT A is a true, complete copy of the Lease, and the Lease is in
full force and effect and has not been modified, supplemented or amended except
as set forth in Recital A of this Sublease.
(b) Sublandlord has the right to possess, and is in full and complete
possession of, the Premises.
(c) Sublandlord is not in default under the Lease.
8. COVENANTS REGARDING LEASE
Sublandlord shall use its reasonable efforts to cause Landlord to
perform its obligations under the Lease with respect to the Subleased Premises
for the benefit of Subtenant, and to give any required consents under the Lease
for the benefit of Subtenant. Sublandlord shall deliver to Subtenant a copy of
any notice received from Landlord relating to the Subleased Premises within two
(2) days of Sublandlord's receipt thereof.
9. ASSIGNMENT AND SUBLETTING
Subtenant shall not assign this Sublease or sublet the Subleased
Premises without the prior written consent of Sublandlord and Landlord. If
consent is so given, Subtenant shall pay to Sublandlord fifty percent (50%) of
all amounts received from the assignee or subtenant in excess of the amounts
otherwise payable by Subtenant to Sublandlord with respect to the Subleased
Premises.
10. SECURITY DEPOSIT
Concurrently with execution of this Sublease by Subtenant, Subtenant
shall deliver to Sublandlord as security for the faithful performance of all of
its obligations under this Sublease a security deposit in the amount of Thirteen
Thousand Fifty-Eight and 33/100 Dollars ($13,058.33) (the "Security Deposit").
The Security Deposit shall be held by Sublandlord as security for the
faithful performance by Subtenant of all of the provisions of this Sublease to
be performed or
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observed by Subtenant. If Subtenant fails to pay rent or other charges due under
this Sublease or otherwise defaults with respect to any provision of this
Sublease, Sublandlord may at its sole option apply or retain all or any portion
of the Security Deposit for the payment of any rent or other charges so in
default or the payment of any other sum to which Sublandlord may become entitled
by such default, or to compensate Sublandlord for any loss or damage which
Sublandlord may suffer thereby. If Sublandlord so uses or applies all or any
portion of the Security Deposit, then within ten (10) business days after demand
therefor, Subtenant shall deposit cash with Sublandlord in an amount sufficient
to restore the amount thereof, and Subtenant's failure to do so shall be a
material breach of this Sublease. Sublandlord's application or retention of the
Security Deposit shall not constitute a waiver of such default to the extent
that the Security Deposit does not fully compensate Sublandlord for all losses
or damages incurred by Sublandlord in connection with such default and shall not
prejudice any other rights or remedies available to Sublandlord under this
Sublease or by law. Sublandlord shall not be required to keep the Security
Deposit separate from its general accounts. The Security Deposit shall not
accrue interest. If Subtenant performs all of Subtenant's obligations under this
Sublease, the Security Deposit, or so much thereof as has not theretofore been
applied by Sublandlord, shall be returned to Subtenant (or, at Sublandlord's
option, to the last assignee, if any, of Subtenant's interest under this
Sublease) within thirty (30) days after the earlier of (i) expiration of the
term of this Sublease, or (ii) vacation of the Subleased Premises by Subtenant
pursuant to the exercise of Subtenant's Early Termination Rights.
11. INDEMNIFICATION; RELEASE AND WAIVER OF SUBROGATION
11.1 SUBTENANT'S INDEMNIFICATION
Subtenant shall indemnify, defend and hold harmless Sublandlord from and
against all losses, costs, damages, expenses and liabilities, including, without
limitation, reasonable attorneys' fees and disbursements, that Sublandlord may
incur or pay out (including, without limitation, to Landlord) by reason of (a)
any accidents, damages or injuries to persons or property occurring in, on or
about the Subleased Premises during the Term or while Subtenant is otherwise
occupying the Subleased Premises (unless the same shall have been caused by
Sublandlord's negligence or wrongful act or the negligence or wrongful act of
Landlord), (b) any breach or default under this Sublease on Subtenant's part,
(c) the successful enforcement of Sublandlord's rights under this Section or any
other Section of this Sublease, (d) any work done during the Term of this
Sublease in or to the Subleased Premises except if done by Sublandlord or
Landlord, and (e) any accidents, damages or injuries to persons or property
occurring in, on or about the Building during the Term or while Subtenant is
otherwise occupying the Subleased Premises (other than the Subleased
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Premises) to the extent resulting from any act, omission or negligence on the
part of Subtenant and/or its officers, partners, employees, agents, customers
and/or invitees.
11.2 SUBLANDLORD'S INDEMNIFICATION
Sublandlord shall indemnify, defend and hold harmless Subtenant from and
against all losses, costs, damages, expenses and liabilities, including, without
limitation, reasonable attorneys' fees and disbursements, that Subtenant may
incur or pay out (including, without limitation, to Landlord) by reason of (a)
any accidents, damages or injuries to persons or property occurring in, on or
about any portion of the Premises other than the Subleased Premises (unless the
same shall have been caused by Subtenant's negligence or wrongful act), (b) any
breach or default hereunder or under the Lease on Sublandlord's part, (c) the
successful enforcement of Subtenant's rights under this Section or any other
Section of this Sublease, or (d) any accidents, damages or injuries to persons
or property occurring in, on or about the Building (other than the Premises) to
the extent resulting from any act, omission or negligence on the part of
Sublandlord and/or its officers, partners, employees, agents, customers and/or
invitees.
11.3 WAIVER OF CONSEQUENTIAL DAMAGES
Sublandlord and Subtenant each waive any claim that it may have against
the other under this Sublease for consequential damages.
11.4 RELEASE AND WAIVER OF SUBROGATION
Neither Landlord, Sublandlord nor Subtenant shall be liable to the
other(s) or to any insurance company or companies (by way of subrogation or
otherwise) insuring the other party or parties for any loss or damage to any
building, structure or tangible personal property of the other party or parties
or of any third party occurring in or about the Premises or Building, even
though such loss or damage might have been occasioned by the negligence of such
party, its agents or employees, if such loss or damage would fall within the
scope of a fire and extended coverage (all risk) policy of insurance, whether or
not the party or parties suffering the loss actually maintained such insurance.
Each party shall obtain from its respective insurer under each insurance policy
it maintains a waiver of all rights of subrogation which the insurer of that
party may have against the other parties, and Landlord, Sublandlord and
Subtenant shall indemnify the others against any loss or expense, including
reasonable attorneys' fees, resulting from the failure to obtain such a waiver.
12. NOTICES
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All notices and demands that are required or permitted under this
Sublease shall be in writing, and shall be personally delivered or sent by a
nationally recognized private carrier of overnight mail (e.g. FedEx) or by
United States Certified Mail, return receipt requested and postage prepaid, to
the parties at the addresses listed below or at such other addresses as the
parties may designate by notice from time to time. Notices shall be deemed to
have been given upon receipt or attempted delivery where delivery is not
accepted.
To Sublandlord: Think New Ideas, Inc.
00 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Managing Director
To Subtenant: Rivalnet, Inc.
00 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx
13. ATTORNEYS' FEES
If Sublandlord or Subtenant shall commence an action against the other
arising out of or in connection with this Sublease, the prevailing party shall
be entitled to recover its costs of suit and reasonable attorney's fees.
14. ENTIRE AGREEMENT
This Sublease, including all Exhibits attached to it, constitutes the
entire agreement between Sublandlord and Subtenant with respect to the Subleased
Premises and may not be amended or altered except by written agreement executed
by both parties. The captions and section numbers appearing in this Sublease are
inserted only as a matter of convenience and are not intended to define, limit,
construe, or describe the scope or intent of any section or paragraph.
15. NEGOTIATION AND CONSTRUCTION
This Sublease and each of the terms and provisions of it are deemed to
have been explicitly negotiated between the parties, and the language in all
parts of this Sublease shall, in all cases, be construed according to its fair
meaning and not strictly for or against either party.
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16. BROKERS
Colliers International and Xxxxxxxx Xxxx Company (together, the
"Brokers") represent Subtenant in connection with this Sublease. The entire
commissions payable to the Brokers as a result of this Sublease shall be paid by
Sublandlord pursuant to separate agreements and Subtenant shall not be obligated
to pay any such commission. Each party represents and warrants that it has dealt
with no brokers in connection with this Sublease other than the Brokers, and
each party shall indemnify, protect, defend and hold the other party harmless
from all costs and expenses (including reasonable attorneys' fees) arising from
or relating to any claims to the contrary.
17. PARTIAL INVALIDITY
If any term, covenant or condition of this Lease or the application
thereof to any person or circumstance is, to any extent, invalid or
unenforceable, the remainder of this Sublease, or the application of such term,
covenant or condition to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby and each
other term, covenant or condition of this Sublease shall be valid and be
enforced to the fullest extent permitted by law.
18. BINDING ON SUCCESSORS
This Sublease shall bind the parties' respective heirs, successors,
representatives and permitted assigns.
19. EXHIBITS
The following Exhibits are attached to and by this reference
incorporated into this Sublease as though fully set forth in it.
Exhibit A Lease
Exhibit B Plan of Subleased Premises
Exhibit C Landlord's Consent
IN WITNESS WHEREOF, the parties hereto execute this Sublease as of the
day and year first above written.
SUBLANDLORD:
THINK NEW IDEAS, INC.
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By
Name:
Title:
SUBTENANT:
RIVALNET, INC.
By
Name:
Title:
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STATE OF _______________)
) ss.
COUNTY OF ______________)
On this _____ day of _________________, 1999, before me, the
undersigned, a Notary Public in and for the State of Washington, duly
commissioned and sworn, personally appeared
______________________________________________, to me known to be the person who
signed as _______________________________ of THINK NEW IDEAS, INC., the
corporation that executed the within and foregoing instrument, and acknowledged
said instrument to be the free and voluntary act and deed of said corporation
for the uses and purposes therein mentioned, and on oath stated that _______ was
duly elected, qualified and acting as said officer of the corporation, that
_______ was authorized to execute said instrument and that the seal affixed, if
any, is the corporate seal of said corporation.
IN WITNESS WHEREOF I have hereunto set my hand and official seal the day
and year first above written.
(Signature of Notary)
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the State
of Washington, residing at .
My appointment expires: .
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STATE OF _______________)
) ss.
COUNTY OF ______________)
On this _____ day of _________________, 1999, before me, the
undersigned, a Notary Public in and for the State of Washington, duly
commissioned and sworn, personally appeared
______________________________________________, to me known to be the person who
signed as _______________________________ of RIVALNET, INC., the corporation
that executed the within and foregoing instrument, and acknowledged said
instrument to be the free and voluntary act and deed of said corporation for the
uses and purposes therein mentioned, and on oath stated that _______ was duly
elected, qualified and acting as said officer of the corporation, that _______
was authorized to execute said instrument and that the seal affixed, if any, is
the corporate seal of said corporation.
IN WITNESS WHEREOF I have hereunto set my hand and official seal the day
and year first above written.
(Signature of Notary)
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the State
of Washington, residing at .
My appointment expires: .
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EXHIBIT A
LEASE
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EXHIBIT B
FLOOR PLAN OF SUBLEASED PREMISES
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EXHIBIT C
LANDLORD'S CONSENT
[DATE]
Think New Ideas, Inc.
00 Xxxxxxxx Xx., Xxxxx 000
Xxxxxxx, XX 00000
Rivalnet, Inc.
00 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
RE: APPROVAL OF SUBLEASE AGREEMENT DATED MAY __, 1999 BETWEEN THINK
NEW IDEAS, INC. AND RIVALNET, INC.
Ladies and Gentlemen:
The undersigned Landlord consents to the Sublease described above with
respect to premises located on the 5th floor of the Xxxxxx Building, and agrees
to the following:
1. There are no defaults by Sublandlord under the Lease, and the Lease
is in full force and effect.
2. Landlord consents and agrees to the release and waiver of subrogation
set forth in Section 11.4 of the Sublease.
3. Landlord agrees to furnish to Subtenant a copy of each notice or
request given to Sublandlord at the time that notice is given to Sublandlord.
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4. Landlord agrees to accept from Subtenant any cure it may tender with
respect to a default by Sublandlord under the Lease that is sufficient to cure
the default under the Lease, and to accept payments of Rent and Additional Rent
made under the Sublease from Subtenant.
Very truly yours,
Xxxxxxxx X. Xxxxxx
Xxxx X. Xxxxxx
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