EXHIBIT 10.8
SUBLEASE AGREEMENT
THIS SUBLEASE AGREEMENT ("Agreement") is entered into this 15th day of
February, 2000 by and between RKL TECHNOLOGIES, INC., a California corporation,
("RKL") on the one hand and PATRIOT MANUFACTURING CORPORATION, a California
corporation ("Patriot") on the other hand.
RECITALS
A. RXL is the lessee under a written Office Building Lease dated October
1, 1996 (the "Master Lease") by and between RKL as Tenant thereunder and
Bedrock Properties, a California Joint Venture, ("Bedrock") as Landlord
thereunder;
B. The Master Lease concerns a Building covering an area of approximately
17,169 square feet located at 000 Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx 00000
(the "Master Premises");
C. RKL and Patriot desire to enter into this Agreement, with the advance
written consent of Bedrock, and subject to all of the terms and provisions of
the Master Lease, for the sublease by Patriot from RKL of a portion of the
Master Premises defined within this Agreement.
NOW THEREFORE, in consideration of the foregoing recitals of fact and the
following mutual covenants and promises, the parties agree as follows:
1. Sublease. Pursuant to this Agreement Patriot does hereby sublease from
RKL and RKL does hereby sublease to Patriot a portion of the Master Premises
consisting of 4,750 square feet of leaseable space, which in turn consists of
4,400 square feet of office/shop/warehouse space (the "Operating Space") and
350 square feet of common area (the "Common Area"). Hereinafter the Operating
Space and the Common Area may collectively be referred to from time to time as
the "Subleased Premises." The Subleased Premises, with the Operating Space and
the Common Area separately denoted, is defined and identified within the plot
of the Master Premises, attached hereto as Exhibit "A" and by this reference
incorporated herein. Within the terms of this Agreement Patriot has the right,
provided the space becomes available from its present use by RKL with a current
RKL customer, to expand the size of the Operating Space by 918 square feet,
where depicted on Exhibit "A" at a monthly rent cost of $.57 per square foot.
2. Common Area Defined. The Common Area consists of the bathrooms, the
lunch room, electrical distribution services and conference room, including
walkways to these areas, determined at thirty percent (30%) of the total
leaseable area within the Master Premises, based upon a ratio that the total
leaseable area of the Master Premises bears to the Subleased Premises.
3. Rent. During the term of this Agreement Patriot shall pay to RKL
monthly rent, in advance on the first day of each calendar month during the
term of this Agreement, in the sum of Two Thousand Seven Hundred Seven Dollars
and Fifty Cents ($2,707.50), representing $0.57 per square foot multiplied by
4,750 square feet (the "Minimum Rent"). In addition to the Minimum Rent,
Patriot shall pay to RKL at the same time each month an additional charge of
Six Hundred Dollars ($600.00) per month to cover Patriot's proportionate share
of the costs for utilities, maintenance, janitorial services, security, fire
monitoring, exterior landscaping and maintenance, pest control, facility
related permits and fees (such as the Environmental Permits and Hazard Fees)
and other miscellaneous facility charges (the "Additional Rent").
4. Term. The term of the sublease under this Agreement shall be three (3)
years (the "Initial Term") from the date first written at the beginning of this
Agreement. If that commencement date is in the middle of a calendar month the
first month's Minimum Rent and Additional Rent shall be prorated (as well as
any last partial month at the end of the term of this Agreement). Provided at
the expiration of the Initial Term there exists no uncured default by Patriot
of any promise or covenant the performance of which is imposed upon Patriot
under this Agreement, Patriot shall then have an option, but not an obligation,
to renew and extend the term of this Agreement for one (1) year following the
expiration of the Initial term (the "Extended Term"). The Minimum Rent to be
paid monthly in advance by Patriot to RKL during the Extended Term will be
computed at $.60 per square foot of the total Subleased Premises. Patriot
shall give RKL written notice of its exercise of its option to extend the term
of this Agreement, as set forth herein, no later than sixty (60) days prior to
the expiration of the Initial Term.
5. Sublease Subject to Master Lease. Patriot has thoroughly reviewed the
terms and provisions of the Master Lease between Bedrock and RKL, a true and
correct copy of which is attached hereto as Exhibit "B" and by this reference
incorporated herein. The sublease under this Agreement is subject to the
provisions of the Master Lease, and Patriot as the sublessee under this
Agreement shall be bound to perform the provisions of the Master Lease imposed
upon Tenant under the Master Lease to the extent those provisions related to
Patriot's occupancy of the Subleased Premises. If the Master Lease terminates,
and this Agreement terminates as a result of such termination of the Master
Lease, the parties to this Agreement shall be released from all liabilities and
obligations under this Agreement; except that, if this Agreement terminates as
a result of RKL's being in default of its obligations under the Master Lease,
RKL shall be liable to Patriot for all damages Patriot suffers as a result of
such termination. If Bedrock is given the right under the Master Lease to
terminate the Master Lease for any reason (e.g., in case of the destruction of
the Master Lease Premises, or the Building defined in the Master Lease, or any
portion of the Subleased Premises hereunder), then RKL shall have the right, in
its sole discretion, to determine whether RKL wishes to have the Master Lease
terminated. If RKL elects to have the Master Lease terminated then this
Agreement shall be likewise terminated. So long as Patriot is not in default
of any provision of this Agreement, or any provision of the Master Lease the
performance of which is imposed upon Patriot hereunder, Bedrock shall be
obligated to perform all of its obligations under the Master Lease, and during
the term of this Agreement Patriot shall have quiet enjoyment of the Subleased
Premises.
6. Permitted Alterations. Promptly following the execution of this
Agreement by the parties Patriot shall be solely responsible for the hiring of
duly licensed, properly insured and bonded contractors, the hiring of which
shall be preapproved by RKL, to install a twelve (12) foot in height painted
finished drywall wall surrounding and demising the Subleased Premises, and to
install appropriate doors within such wall that would match existing doors at
the location shown on Exhibit "A" attached hereto. Patriot shall be solely
responsible for the timely payment of all costs associated with such work, and
for obtaining all permits and inspections of such work with the City of Corona.
If Patriot requires further office subdivision within the Subleased Premises
Patriot shall be solely responsible for paying and reimbursing to RKL all costs
incurred to move the RKL computer file server room door to the front wall, and
to have the old door location patched to match the existing wall, all as
depicted on Exhibit "A". In connection with the alterations described within
this paragraph Patriot's attention is drawn to the provisions of Article 12 of
the Master Lease, concerning which Patriot shall be responsible to fully
perform and abide by under this Agreement. Prior to or within a reasonable
time thereafter following the commencement of the alterations by Patriot
described in this paragraph both Bedrock and RKL may file, record and post, in
accordance with California law, appropriate notices of nonresponsibility for
the work of improvement described within this paragraph.
7. Security Deposit. Concurrently with the execution of this Agreement by
the parties Patriot shall pay to RKL a security deposit in the sum of $2,500.00
as security for the faithful performance by Patriot of all of its promises and
covenants under the provisions of this Agreement, including but not limited to
the timely payment of Minimum Rent or Additional Rent. This security deposit
shall become an asset of RKL, and shall not bear interest to the credit of
Patriot. In the event Patriot defaults in the performance of any of its
promises or covenants under this Agreement, including but not limited to the
timely payment of Minimum Rent or Additional Rent, RKL shall have the right,
but not the obligation, to offset against the balance of the security deposit
all monetary damages, including unpaid Minimum Rent or Additional Rent, arising
from such default by Patriot. Upon the termination of this Agreement, and the
timely departure of Patriot from the Subleased Premises at such time, and on
condition that Patriot timely and fully performs its obligations under
paragraph 8 of this Agreement; RKL shall within two weeks thereafter return to
Patriot any unused balance of the security deposit.
8. Restoration of Subleased Premises. At the expiration of the term of
this Agreement set forth herein Patriot shall, only if requested in advance by
RKL, cause all of its trade fixtures and other leasehold improvements to be
removed from the Subleased Premises. Possession of the Subleased Premises
shall then be returned to RKL in a broom clean condition and otherwise restored
to the condition of the Subleased Premises that existed prior to the execution
of this Agreement (subject to the improvements remaining at RKL's discretion),
normal wear and tear excepted.
9. Insurance and Use. Patriot must obtain and carry during the term of
this Agreement all of the insurance required by Article 14 of the Master Lease,
with both RKL and Bedrock as additional insureds or lost payees thereunder,
such as the case may be. Patriot must at all times during the term of this
Agreement operate the business within the Subleased Premises in accordance with
all applicable federal, state, county and municipal laws, regulations and
codes.
10. No Permitted Assignments and Sublettings. At no time during the term
of this Agreement shall Patriot have the right to assign or sublease the
Subleased premises, or any portion thereof. Any effort by Patriot to assign or
sublease the Subleased Premises, or any portion thereof, shall be null and
void, and shall be a default by Patriot under this Agreement.
11. Guaranties. As additional consideration for the execution of this
Agreement by RKL both Xxxxxxx Xxxxxx and Xxxxxx Xxxxxx will jointly and
severally execute a written personal guaranty of the provisions of this
Agreement and the obligations of Patriot hereunder.
12. Miscellaneous.
12.1 Entire Agreement. This Agreement, together with all amendments or
exhibits, if any, incorporated herein, constitutes the entire understanding by
and between the parties hereto with respect to the subject matter hereof, and
shall supersede all previous negotiations, discussions and preliminary
agreements, whether oral or in writing. No party hereto shall be entitled to
rely upon any representation, warranty or promise allegedly made by any other
party hereto unless the same is expressly set forth herein.
12.2 Attorneys' Fees. In the event any party to this Agreement brings any
action or other legal, proceeding in any court or before any arbitration
tribunal against the other party to this Agreement to enforce, collect damages
hereunder or declare any rights herein created, or to bring about or to declare
the termination, cancellation, reformation or rescission of this Agreement, or
any part or provision herein, the prevailing party or parties in such action,
legal proceeding or arbitration shall be entitled to receive and recover from
the other party or parties all reasonable attorneys' fees and costs of suit
incurred in connection therewith by said prevailing party or parties.
12.3 Waiver. No waiver or waivers of any term, provisions, covenant or
condition of this Agreement, or of any breach by any party to this Agreement of
any term, provision, covenant or condition of this Agreement, whether orally,
in writing, by conduct or otherwise, by any other party to this Agreement in
any one or more instance, shall be deemed to be or be construed as a further or
continuing waiver of any such term, provision, covenant or condition of this
Agreement, or of any further or subsequent breach thereof by the party
permitting or waiving such breach.
12.4 Time. Time is of the essence in the performance of the parties under
this Agreement.
12.5 Choice of Law and Forum. This Agreement shall be interpreted and
construed under the laws of the State of California, and the parties hereto
agree that any action or legal proceeding relating to this Agreement shall be
instituted and prosecuted in the courts in Riverside County. Each party to
this Agreement consents to the personal jurisdiction of the courts in Riverside
County and waives the right of any change of venue.
12.6 If any provision of this Agreement is determined by a court of
competent jurisdiction to be void, voidable, invalid or illegal in whole or in
part, such determination shall in no way affect, impair or invalidate any other
provision of this Agreement, and such other provisions of this Agreement shall
remain in foil force and effect.
IN WITNESS WHEREOF the parties have executed this Agreement as of and effective
on the date first written above.
RKL TECHNOLOGIES, INC.,
a California corporation
By: /s/ Xxx Xxxxxxxxx
-------------------
Xxx Xxxxxxxxx, its President
PATRIOT MANUFACTURING CORPORATION,
a California corporation
By: /s/ Xxxxxxx Xxxxxx
-------------------
Xxxxxxx Xxxxxx, its President
By: /s/ Xxxxxx Xxxxxx
-------------------
Xxxxxx Xxxxxx, its ___________
Approval of this Sublease Agreement by the undersigned, as Landlord
under the Master Lease, is hereby given.
BEDROCK PROPERTIES,
a California Joint Venture
By: /s/ Xxx Xxxxxxxxx
-------------------
Xxx Xxxxxxxxx, a member
By: /s/ Xxxxx Xxx Xxxxx
-------------------
Xxxxx Xxx Xxxxx, a member
