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EXHIBIT 10.34
SUBLEASE AGREEMENT
This Sublease Agreement ("Sublease") is made this 11th day of July, 1997,
by and between Global Associates, Ltd., a Virginia corporation ("Landlord") and
Xxxxxx Communications, Inc., a Delaware corporation, and American Technology
Corporation, a Delaware corporation (collectively the "Tenant").
RECITALS
A. Landlord, as tenant, has leased the premises (the "Prime Lease
Premises") located at 00000 Xxxxxxx Xxxxx Xxxxx, Xxxxx, Xxx Xxxxx, Xxxxxxxxxx
00000, from Bedford Property Investors, Inc. (the "Prime Landlord," such Prime
Landlord being the successor-in-interest to Scientific-Atlanta, Inc., a Georgia
corporation and the original landlord under the Prime Lease (as hereinafter
defined)), by lease agreement dated August 14, 1996, as amended by amendment
dated October 23, 1996, and amendment dated January 24, 1997 (collectively the
"Prime Lease," a copy of which is attached hereto and by this reference made a
part hereof as Exhibit A), as the Prime Lease Premises are more particularly
described in the Prime Lease; and
B. Landlord has agreed to sublet to Tenant and Tenant has agreed to sublet
from Landlord a portion of the Prime Lease Premises, deemed and agreed to
comprise approximately 12,925 rentable square feet (the "Premises") in the
building (the "Building") comprising a part of the Prime Lease Premises, as such
Premises are outlined and shown on Exhibit B attached hereto and by this
reference made a part hereof.
NOW THEREFORE, Landlord and Tenant, in consideration of the mutual
covenants herein contained and each with intent to be legally bound, for
themselves and respective successors and assigns, hereby agree as follows:
1. INCORPORATION OF RECITALS
The above recitals are by this reference incorporated as if fully restated
herein.
2. SUBLEASE
Landlord hereby subleases the Premises to Tenant and Tenant hereby
subleases the Premises from Landlord, on the terms and conditions contained in
this Sublease. Landlord shall be entitled, prior to the Commencement Date (as
hereinafter defined), to remove any or all of its fixtures, equipment and other
personal property located ar the Premises, except that Landlord shall leave, and
hereby grants to Tenant a license to use, during the term of this Sublease, the
furniture and equipment of Landlord identified in Exhibit C attached hereto and
by this reference made a part hereof. Tenant hereby accepts the existing "as is"
condition of such furniture and equipment. Tenant represents that it has
inspected the Premises and the Prime Lease Premises and has found the same in
satisfactory condition, subject to the completion of the pre-occupancy tenant
improvements specified in Exhibit B attached hereto and made a part hereof.
3. TERM
(A) The term of this Sublease shall commence on that date (the
"Commencement Date") which is the later to occur of (i) July 14, 1997 (the
"Target Date"), or (ii) the date Landlord shall have substantially completed the
improvements specified in Exhibit B and notified Tenant that the Premises are
ready for delivery. Landlord and Tenant agree that if, for any reason, the
Commencement Date shall not have occurred by the Target Date, Landlord shall use
reasonable efforts to deliver the Premises to Tenant as soon as reasonably
practicable thereafter. In the event that Landlord has not delivered the
Premises to Tenant on or before August 1, 1997, Tenant shall have the right to
terminate this Sublease by written notice to Landlord, and in such event this
Sublease shall terminate as of the date upon which Landlord receives Tenant's
notice, Landlord shall promptly return any monies advanced to Landlord by
Tenant, and neither party shall have any obligation to the other accruing
thereafter.
(B) The term of this Sublease shall expire at the close of business on July
31, 2000, unless sooner terminated pursuant to the provisions of this Sublease,
applicable law or as a result of the termination of the Prime Lease
(collectively the "Expiration Date").
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(C) At the request of Landlord, Tenant shall execute and deliver to
Landlord written confirmation of the Commencement Date established pursuant to
this section of the Sublease.
4. RENT
(A) Tenant covenants and agrees to pay to Landlord an annual base rent (the
"Base Rent") in equal monthly installments, each in advance on the first day of
each calendar month during the term of this Sublease in accordance with the
following schedule:
Annual Rate
Per Square Foot of
Time Period Premises Rentable Area Annual Base Rent Monthly Base Rent
----------- ---------------------- ---------------- -----------------
From August 1, 1997 $ 12.84 $ 165,957.00 $ 13,829.75
through July 31, 1998
From August 1, 1998 $ 13.44 $ 173,712.00 $ 14,476.00
through July 31, 1999
From August 1, 1999 $ 14.04 $ 181,467.00 $ 15,122.25
through July 31, 2000
The installment of Base Rent for the first full calendar month of the term of
this Sublease shall be paid by Tenant at the time of execution and delivery of
this Sublease. Landlord hereby agrees to xxxxx and forgive the payment of Base
Rent for the period from the Commencement Date through July 31, 1997.
(B) Tenant shall pay Base Rent and all other amounts due from Tenant to
Landlord pursuant to this Sublease (all such other amounts collectively called
"Additional Rent"), at such place as Landlord may designate in writing from time
to time, by good check, in lawful money of the United States of America, without
demand and without any deduction, setoff or abatement. Landlord shall have the
same rights and remedies with respect to the nonpayment of Additional Rent as
with respect to the nonpayment of Base Rent.
5. SECURITY DEPOSIT
Upon the execution of this Sublease, Tenant shall deposit with Landlord the
sum of Thirteen Thousand Eight Hundred Twenty-Nine and 75/100 Dollars
($13,829.75) as security for the full and faithful performance of every portion
of this Sublease to be performed by Tenant. If Tenant shall default with respect
to any provision of this Sublease, Landlord may use or apply such portion of
this security deposit as shall reasonably be required to remedy such default. If
any portion of said deposit is so used or applied, Tenant shall, as Additional
Rent, within ten (10) days after demand therefor, deposit funds with Landlord in
an amount sufficient to restore the security deposit to its original amount and
Tenant's failure to do so shall be a breach of this Sublease. Landlord shall not
be required to keep such security deposit separate from its general funds and
Tenant shall not be entitled to interest on such deposit. If Tenant shall fully
and faithfully perform every provision of this Sublease to be performed by it,
the security deposit or any balance thereof shall be returned to Tenant within
thirty (30) days after the expiration of this Sublease.
6. REPAIRS AND MAINTENANCE OF THE PREMISES
(A) Except as provided below in Paragraph 6(B) or otherwise in this
Sublease, any repair and maintenance obligations with respect to the Premises
which are caused solely by ordinary wear and tear and which are the
responsibility of the Landlord, as tenant under the Prime Lease, shall be
performed by Landlord, at Landlord's sole cost and expense. Tenant shall
promptly notify Landlord of the need for any such repair or maintenance.
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(B) Notwithstanding the foregoing provisions of Paragraph 6(A), any repair
or maintenance with respect to the Premises or the Building caused by the
negligence, act or omission of Tenant, its employees, agents, contractors,
subtenants, licensees or invitees shall be made by Landlord at Tenant's sole
cost and expense, which amounts shall be payable by Tenant as Additional Rent
within ten (10) days after demand therefor. Tenant shall promptly notify
Landlord of the need for any such repair or maintenance.
7. TENANT'S USE
(A) Tenant shall use and occupy the Premises for general office, research
and development, and manufacturing purposes only, consistent with Landlord's use
of the Prime Lease Premises, and for no other purpose.
(B) Tenant shall comply with all covenants, conditions and restrictions
governing the Prime Lease Premises and all Federal, State and local laws,
ordinances, rules and regulations and the requirements of any Board of Fire
Insurance Underwriters, applicable to Tenant's use of the Premises.
(C) Tenant shall keep the interior of the Premises and all furniture,
equipment and fixtures therein in good order and condition and, on the
Expiration Date, shall remove all personal property, fixtures, equipment and
supplies which Tenant has placed in or about the Premises and any alterations,
additions or improvements which Landlord shall request Tenant to remove. Any
damage caused to the Premises by such removal shall be repaired by Landlord, or
by Tenant with Landlord's approval, at Tenant's sole expense. The furniture and
equipment of Landlord listed in Exhibit C and to be used by Tenant during the
term of this Sublease shall remain in the Premises and be surrendered by Tenant
on the Expiration Date in good condition and repair.
(D) Tenant shall not, by its acts or omissions, cause any increase in the
premium for fire or other insurance covering the Prime Lease Premises or the
termination of any such insurance.
(E) Tenant shall not commit waste on or to the Premises.
(F) Tenant shall not use the Premises for any unlawful or immoral use.
(G) Tenant shall comply with all of the environmental covenants,
requirements and obligations of Landlord as tenant under the Prime Lease, upon
the terms and conditions set forth in Article 4 (or in any other article or
section) of the Prime Lease.
8. ALTERATIONS
(A) Landlord shall perform the pre-occupancy tenant work, improvements,
installations and alterations as shown on Exhibit B attached hereto and as
specified on those certain drawings filed with and approved by the City of San
Diego, California, Plan File Number A103953-97 entitled "Signal Processing
Systems." Landlord shall perform such pre-occupancy tenant work and improvements
at its sole cost and expense, except as otherwise provided below in Paragraph
(B).
(B) Tenant shall reimburse Landlord for the costs incurred by Landlord to
perform certain pre-occupancy tenant work and improvements requested by Tenant
and performed by Landlord at Tenant's sole cost and expense, including all those
improvements to performed in and to Rooms 17, 19, 20, 22 and 24, as such rooms
are identified on Exhibit B attached hereto. Landlord and Tenant hereby agree
that the amount to be paid by Tenant to Landlord to reimburse it for such costs
is $21,407.08, together with such additional costs as Landlord may incur because
of change orders or other modifications requested by Tenant and approved the
Landlord. Such amount shall be payable as follows: $10,000.00 shall be paid by
Tenant to Landlord upon Tenant's execution and delivery of this Sublease. The
remaining $11,407.08 shall be paid in six (6) equal installments of $1,901.18
each. The first such installment shall be paid to Landlord on August 1,
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1997, and such payments shall continue to be made on the first day of each next
succeeding calendar month until paid in full.
(C) Tenant shall not make any alterations, improvements or installations
(collectively, "Alterations") in or to the Premises without Landlord's prior
written consent which shall not be unreasonably withheld. All Alterations shall
be subject to the approval of Prime Landlord and the terms and conditions of the
Prime Lease. Any Alterations consented to by Landlord shall be performed at the
sole cost and expense of Tenant, by contractors approved in advance by Landlord
and Prime Landlord, but shall become the property of Landlord (subject to the
terms of the Prime Lease and this Sublease). Landlord may condition its approval
to any Alterations on the removal of the same on the Expiration Date, and
restoration of any damage caused by installation and removal.
9. ASSIGNMENT AND SUBLETTING
(A) Tenant shall not (i) assign, mortgage, pledge, hypothecate, encumber or
otherwise transfer this Sublease, (ii) sublease (which term shall be deemed to
include the granting of concessions and licenses and the like) all or any part
of the Premises, (iii) suffer or permit this Sublease or the leasehold estate
hereby created or any other rights arising under this Sublease to be assigned,
transferred, mortgaged, pledged, hypothecated or encumbered, in whole or in
part, whether voluntarily, involuntarily or by operation of law, or (iv) permit
the use or occupancy of the Premises by anyone other than Tenant, or the
Premises to be offered or advertised for assignment or subletting, without
Landlord's prior written consent which shall not be unreasonably withheld
provided that Prime Landlord's consent has been granted.
(B) For purposes of this Section 9, an assignment of this Sublease shall be
deemed to include any change in control of Tenant or any transaction pursuant to
which Tenant is merged or consolidated with another entity or pursuant to which
all or substantially all of Tenant's assets are transferred to any other entity.
For purposes hereof, "control" shall mean possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of the
applicable person or entity, whether through the ownership of voting securities,
partnership or beneficial interests, by contract or otherwise.
(C) If this Sublease is assigned or if the Premises or any part thereof are
sublet (or occupied by anybody other than Tenant and its employees) Landlord,
after default by Tenant hereunder, may collect the rents from such assignee,
subtenant or occupant, as the case may be, and apply the net amount collected to
the rent herein reserved, but no such collection shall be deemed a waiver of the
provisions set forth in the first paragraph of this Section 9, the acceptance by
Landlord of such assignee, subtenant or occupant, as the case may be, as a
tenant, or a release of Tenant from the future performance by Tenant of its
covenants, agreements or obligations contained in this Sublease.
(D) No subletting or assignment shall in any way impair the continuing
primary liability of Tenant hereunder, and no consent to any subletting or
assignment in a particular instance shall be deemed to be a waiver of the
obligation to obtain the Landlord's written approval in the case of any other
subletting or assignment. No assignment, subletting or occupancy shall affect
uses permitted hereunder. Any subletting, assignment or other transfer of
Tenant's interest in this Lease in contravention of this Section shall be
voidable at Landlord's option.
(E) If the rent and other sums (including, without limitation, the
reasonable value of any services performed by any assignee or subtenant in
consideration of such assignment or sublease), net of reasonable expenses such
as brokerage commissions, tenant improvements and rental abatements, either
initially or over the term of any assignment or sublease, payable by such
assignee or subtenant on account of an assignment of sublease of all or any
portion of the Premises exceed the sum of Rent plus Additional Rent called for
hereunder with respect to the space assigned or sublet, Tenant shall pay to
Landlord as Additional Rent one hundred percent (100%) of such excess payable
monthly at the time for payment of Rent. Nothing in this paragraph shall be
deemed to abrogate the provisions of this Section and Landlord's acceptance of
any sums pursuant to this paragraph shall not be deemed a granting of consent to
any assignment of the Lease or sublease of all or any portion of the Premises.
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10. TENANT'S EQUIPMENT
(A) Tenant will not install or operate in the Premises any electrically
operated equipment or other machinery except that listed in Exhibit D attached
hereto and by this reference made a part hereof, without first obtaining the
prior written consent of Landlord, who may condition such consent upon payment
by Tenant of Additional Rent as compensation for additional consumption of
electricity and/or other utility services. Such Additional Rent shall be in
addition to Tenant's obligations to pay its Base Rent.
(B) If any or all of Tenant's equipment and machinery in the Premises
(except for the equipment and machinery listed in Exhibit D) requires
electricity consumption in excess of the capacity of the electrical system in
and serving the Premises, then subject to the approval of Prime Landlord, all
additional transformers, distribution panels and wiring that may be required to
provide the amount of electricity required for Tenant's equipment shall be
installed by Landlord at the cost and expense of Tenant. If Tenant's equipment
and machinery or any item thereof (including without limitation the equipment
and machinery listed in Exhibit D) is to be consistently operated beyond the
normal Building hours of 8:00 a.m. to 5:00 p.m., Monday through Friday (as such
consumption is determined by Landlord in its reasonable discretion), Landlord
may install at its option (i) a separate electric meter for the Premises at
Tenant's sole cost and expense, or (ii) a separate meter for the specific
equipment that is causing Tenant's excessive consumption of electricity at
Tenant's sole cost and expense. In the event Landlord installs a separate meter
for the Premises, Tenant shall then pay the cost of electricity it consumes as
recorded by such meter directly to the electric company. In the event Landlord
separately meters the specific equipment, Tenant shall be billed periodically by
Landlord based upon such consumption.
(C) Tenant shall not install any equipment or machinery of any kind or
nature whatsoever which will or may necessitate any changes, replacements or
additions to, or in the use of, the water system, heating system, plumbing
system, air-conditioning system, or electrical system of the Premises or the
Building without first obtaining the prior written consent of Landlord and Prime
Landlord. Business machines and mechanical equipment belonging to Tenant which
cause noise or vibration that may be transmitted to the structure of the
Building or to any space therein to such a degree as to be objectionable to
Landlord or to any tenant in the Building shall be installed and maintained by
Tenant, at Tenant's expense, on vibration eliminators or other devices
sufficient to eliminate such noise and vibration.
(D) Landlord shall have the right to prescribe the weight and position of
all heavy equipment, machinery and fixtures which Tenant intends to install or
locate within the Premises. Tenant shall obtain Landlord's and Prime Landlord's
prior review and approval before installing or locating heavy equipment and
fixtures in the Premises, and if installation or location of such equipment or
fixtures, in Landlord's opinion, requires structural modifications or
reinforcement of any portion of the Premises or the Building, Tenant agrees to
reimburse Landlord, as additional rent, for any and all costs incurred by
Landlord to make such required modifications or reinforcements, and such
modifications or reinforcements shall be completed prior to Tenant installing or
locating such equipment or fixtures in the Premises. Tenant shall reimburse
Landlord within thirty (30) days of receipt of any statement setting forth those
costs.
11. SERVICES, UTILITIES AND REAL ESTATE TAXES
(A) Landlord shall provide the following utilities and services, which are
included in the payment of Base Rent:
(1) Hot and cold water to the wet stacks of the Building.
(2) Cleaning services as specified in Exhibit E, Monday through Friday
of each week, except on the holidays listed in subparagraph (iii) below.
(3) Heat and air-conditioning to the Premises in season, Monday
through Friday from 8:00 a.m. to 5:00 p.m., except for the following holidays:
New Year's Day, Presidents' Day, Memorial Day, Fourth of July, Labor Day,
Thanksgiving Day and the Friday immediately following Thanksgiving Day, and
Christmas Day, and any other national
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holiday promulgated by a Presidential Executive Order or Congressional Act.
Landlord may agree to provide heat and air-conditioning at times in addition to
those specified in the preceding sentence at Tenant's expense as Additional
Rent, provided Tenant gives Landlord prior reasonable written notice requesting
such after-hours service. Landlord reserves the right to charge Tenant for said
after-hours services at a reasonable rate as determined by Landlord from time to
time.
(4) A card-entry or other controlled-access system to the Premises.
(5) Electricity and electrical facilities to furnish commercially
reasonable amounts of electricity for equipment and machinery of Tenant
installed pursuant to Section 10 of this Sublease.
(B) In the event any public utility supplying energy requires, or
government law, regulation, executive or administrative order results in a
requirement, that Landlord or Tenant must reduce, or maintain at a certain
level, the consumption of electricity for the Premises or Building, which
affects the heating, air-conditioning, lighting, or hours of operation of the
Premises or Building, Landlord and Tenant shall each adhere to and abide by said
laws, regulations or executive orders without any reduction in Base Rent.
(C) Landlord's inability to furnish, to any extent or for any reason, these
defined services, or any interruption or cessation thereof, shall not render
Landlord liable for damages to either person or property, nor be construed as an
eviction of Tenant, nor work an abatement of any portion of rent, nor relieve
Tenant from fulfillment of any covenant or agreement hereof. Should any of the
Building equipment or machinery cease to function properly for any cause,
Landlord shall use reasonable diligence to repair the same promptly, but Tenant
shall have no claim for damages or for a rebate of any portion of rent on
account of any interruptions in any services occasioned thereby or resulting
therefrom.
(D) Tenant shall have no obligation to pay any part of the real estate
taxes or operating expenses relating to the Premises or Prime Lease Premises,
except as otherwise expressly provided in this Sublease.
12. INSURANCE
Tenant shall comply with all of the insurance requirements and obligations
of Landlord, as tenant under the Prime Lease, upon the terms and conditions set
forth in Article 10 (or in any other article or section) of the Prime Lease.
13. TENANT'S INDEMNITY
Tenant shall save Landlord and Prime Landlord harmless, and shall exonerate
and indemnify Landlord and Prime Landlord from and against any and all claims,
liabilities or penalties asserted by or on behalf of any person, firm,
corporation or public authority on account of injury, death, damage or loss to
person or property in or about the Premises and the Prime Lease Premises arising
out of the use or occupancy of the Premises by Tenant or by any person claiming
by, through or under Tenant (including, without limitation, all subtenants,
invitees, agents, contractors, patrons, employees and customers of Tenant), or
arising out of any delivery to or service supplied to the Premises, or on
account of or based upon anything whatsoever done on or occurring in or about
the Premises or Prime Lease Premises, except that Landlord shall not be
indemnified to the extent of any damage caused by Landlord's gross negligence or
willful misconduct. In respect of all of the foregoing, Tenant shall indemnify
Landlord and Prime Landlord from and against all costs, expenses (including
reasonable attorneys' fees), and liabilities incurred in or in connection with
any such claim, action or proceeding brought thereon.
14. PARKING
Landlord shall provide to Tenant up to fifty-two (52) unreserved parking
spaces in the parking lot serving the Prime Lease Premises. Landlord and Tenant
shall mutually agree upon the location of such parking spaces. Tenant shall not
use, and shall not permit its employees, subtenants, visitors and invitees to
use, more than the fifty-two (52) parking spaces allocated to Lessee for use by
its employees, visitors, customers and invitees.
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15. SIGNAGE
Subject to the consent of Prime Landlord and any covenants, conditions,
restrictions and regulations governing such signage, Landlord shall provide to
Tenant, at Tenant's expense, the following signage:
(A) Suite entry signage on the door of the Premises; and
(B) Monument signage on the lawn of the Prime Lease Premises.
The design, size, style and location of such signage shall be subject to the
approval of Landlord and Prime Landlord, and should Prime Landlord disapprove or
withhold its consent to any such signage, or should any covenant, condition,
restriction or regulation prohibit any such signage, Landlord shall have no
further obligation to provide such signage to Tenant. Tenant shall pay to
Landlord as Additional Rent all design, purchase, installation, maintenance,
repair and removal costs incurred by Landlord in connection with such signage.
16. TENANT'S OBLIGATIONS UPON TERMINATION OF THIS SUBLEASE
Tenant shall keep the Premises in good order and condition and, at the
expiration or sooner termination of this Sublease, shall surrender and deliver
up the same, broom clean and in good order and condition, as otherwise required
by this Sublease and by the Prime Lease, ordinary wear and tear and damage by
fire and other casualty excepted (unless the same results from the act of Tenant
or its subtenants, agents, contractors or employees). Tenant shall repair any
damage to the Premises or the Prime Lease Premises caused by removal of any
property by or on behalf of Tenant. Any of Tenant's or its subtenant's personal
property, fixtures or equipment which shall remain in the Premises after the
expiration or sooner termination of this Sublease shall be deemed conclusively
to have been abandoned and either may be retained by Landlord as its property or
may be disposed of in such manner as Landlord may see fit, at Tenant's sole cost
and expense.
17. BROKERS
Each of Landlord and Tenant represents that it has dealt only with Xxxxxxx
& Xxxxxxxxx of California, Inc. (in the case of Landlord) and no one (in the
case of Tenant) and with no other brokers. Landlord shall be responsible for any
commission or fee due or owing to said broker(s) under a separate agreement.
Each party shall indemnify and hold harmless the other from and against any and
all claims of any other broker claiming to have dealt with such party.
18. DEFAULTS
(A) Each of the following shall be a "Default of Tenant":
(1) Tenant shall fail to make any payment of Rent, Additional Rent or
any other payment Tenant is required to make when such payment is due and such
failure shall continue for five (5) days after notice from Landlord to Tenant.
(2) Tenant shall fail to perform any other obligation of Tenant
pursuant to this Sublease (either directly or derivatively pursuant to
obligations arising under the Prime Lease) and such failure shall continue for
ten (10) days after notice from Landlord; provided, if such failure cannot be
cured solely by the payment of money and more than ten (10) days are reasonably
required for its cure, a Default of Tenant shall not be deemed to have occurred
if Tenant shall commence such cure within said ten (10) day period and
thereafter diligently prosecute such cure to completion.
(3) Tenant or any guarantor of Tenant shall (u) file a voluntary
petition in bankruptcy or insolvency, or (v) be adjudicated bankrupt or
insolvent, or (w) take any action seeking or consenting to or acquiescing in a
reorganization arrangement, composition, liquidation, dissolution, appointment
of a trustee or receiver or liquidator or
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similar relief under any federal or state bankruptcy or other law or (x) make an
assignment for the benefit of creditors, or (y) dissolve or liquidate or adopt
any plan or commence any proceeding, the result of which is intended to include
dissolution or liquidation, or (z) fail to discharge, within thirty (30) days,
any proceeding brought against Tenant seeking the relief described in clause (w)
above.
(4) Tenant's leasehold interest shall be taken on execution.
(5) A custodian or similar agent is authorized or appointed to take
charge of all or substantially all of the assets of Tenant or any guarantor or
Tenant.
(6) An order is entered in any proceeding by or against Tenant or any
guarantor of Tenant decreeing or permitting the dissolution of Tenant or any
guarantor of Tenant or the winding up of its affairs.
19. REMEDIES
(A) In the event of a Default of Tenant, Landlord (by and through its
agents, if and as appropriate) shall have the power and right:
(1) To enforce any remedies generally available at law or in equity to
a landlord on account of a default by a tenant.
(2) To obtain injunctive relief against any continuing Default of
Tenant.
(3) To maintain this Sublease in effect and collect the Rent,
Additional Rent and any other payments due from Tenant to Landlord.
(4) In addition to and not in derogation of any remedies for any
preceding breach of covenant, immediately or at any time thereafter without
demand or notice and with or without process of law (forcibly, if necessary) to
enter into and upon the Premises or any part thereof or mail a notice of
termination addressed to Tenant, and repossess the same as of Landlord's former
estate and expel Tenant and those claiming through or under Tenant and remove
its and their effects (forcibly, if necessary) without being deemed guilty of
any manner of trespass or wrongful eviction, and without prejudice to any
remedies which might otherwise be used for arrears of rent or prior breach of
covenant, and upon such entry or mailing as aforesaid this Lease shall
terminate, Tenant hereby waiving all statutory rights to the Premises (including
without limitation rights of redemption, if any, to the extent such rights may
be lawfully waived) and Landlord, without notice to Tenant, may store Tenant's
effects, and those of any person claiming through or under Tenant, at the
expense and risk of Tenant, and, if Landlord so elects, may sell such effects at
public auction or private sale and apply the net proceeds to the payment of all
sums due to Landlord from Tenant, if any, and pay over the balance, if any, to
Tenant.
(B) In the event of any termination pursuant to Section 17(A), Tenant shall
pay the Rent, Additional Rent and other charges payable hereunder up to the time
of such termination, and thereafter Tenant, until the end of what would have
been the term of this Sublease in the absence of such termination, less the net
proceeds, if any, of any reletting of the Premises, after deducting all
reasonable expenses in connection with such reletting, including, without
limitation, all repossession costs, brokerage commissions, legal expenses,
attorneys' fees, advertising, expenses of employees, alteration costs and
expenses of preparation for such reletting. Tenant shall pay such current
damages to Landlord monthly on the days on which the Rent would have been
payable hereunder if this Sublease had not been terminated.
(C) At any time after such termination, whether or not Landlord shall have
collected any such current damages, Land lord may elect to collect as liquidated
final damages and in lieu of all such current damages beyond the date of such
demand an amount equal to the excess, if any of the Rent, Additional Rent and
other charges as hereinbefore provided which would be payable hereunder from the
date of such demand would be the same as payments required for the immediately
preceding twelve calendar months (or if less than twelve calendar months have
expired since the Commencement Date, the payments required for such lesser
period projected to an annual amount) for what would be the
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then unexpired term of this Sublease if the same remained in effect, over the
then fair net rental value of the Premises for the same period. Nothing
contained in this Sublease shall, however, limit or prejudice the right of
Landlord to prove for and obtain in proceedings for bankruptcy or insolvency by
reason of the termination of this Sublease, an amount equal to the maximum
allowed by any statute or rule of law in effect at the time when, and governing
the proceedings in which, the damages are to be proved, whether or not the
amount be greater than, equal to, or less than the amount of the loss or damages
referred to above.
(D) In case of any Default by Tenant, re-entry, expiration and
dispossession by summary proceedings or otherwise, Landlord may (i) relet the
Premises or any part or parts thereof, either in the name of Landlord or
otherwise, for a term or terms which may at Landlord's option be equal to or
less than or exceed the period which would otherwise have constituted the
balance of the term of this Sublease and may grant concessions or free rent to
the extent that Landlord considers advisable and necessary to relet the same and
(ii) may make such reasonable alterations, repairs and decorations in the
Premises as Landlord in its sole judgment considers advisable and necessary for
the purpose of reletting the Premises; and the making of such alterations,
repairs and decorations shall not operate or be construed to release Tenant from
liability hereunder as aforesaid. Landlord shall in no event be liable in any
way whatsoever for failure to relet the Premises, or, in the event that the
Premises are relet, for failure to collect the rent under such reletting.
(E) To the fullest extent permitted by law, Tenant hereby expressly waives
any and all rights of redemption or of limitation or exemption from liability or
stays or other rights that contravene the rights granted to Landlord hereunder
or under any present of future laws in the event of Tenant being evicted or
dispossessed, or in the event of Landlord obtaining possession of the Premises
by reason of the violation by Tenant of any of the covenants and conditions of
this Sublease. Any and all rights and remedies which Landlord may have under
this Sublease, and at law and equity (including without limitation) actions at
law for direct, indirect, special and consequential (foreseeable and
unforeseeable) damages, for Tenant's failure to comply with its obligations
under the Sublease shall be cumulative and shall not be deemed inconsistent with
each other, and any two or more of all such rights and remedies may be exercised
at the same time insofar as permitted by law.
(F) At any time with or without notice, Landlord shall have the right, but
shall not be required, to pay such sums or do any act which requires the
expenditure of monies which may be necessary or appropriate by reason of the
failure or neglect of Tenant to comply with any of its obligations under this
Sublease (irrespective of whether the same shall have ripened into a Default of
Tenant), and in the event of the exercise of such right by Landlord, Tenant
agrees to pay to Landlord forthwith upon demand, as Additional Rent, all such
sums including reasonable attorneys fees, together with interest thereon at a
rate equal to the lesser of 5% over the then applicable Wall Street Journal
Prime Rate (U.S. money center commercial banks) (the "Prime Rate"), or the
maximum rate permitted by law.
(G) The failure of Landlord to seek redress for violation of, or to insist
upon the strict performance of, any covenant or condition of this Sublease shall
not be deemed a waiver of such violation nor prevent a subsequent act, which
would have originally constituted a violation, from having all the force and
effect on an original violation. The receipt by Landlord of rent with knowledge
of the breach of any covenant of this Sublease shall not be deemed to have been
a waiver of such breach by Landlord unless such waiver be in writing signed by
the party to be charged. No consent or waiver, express or implied, by Landlord
to or of any breach of any agreement or duty shall be construed as a waiver or
consent to or of any other breach of the same or any other agreement or duty.
(H) No acceptance by Landlord of a lesser sum than the Rent, Additional
Rent or any other charge then due shall be deemed to be other than on account of
the earliest installment of such rent or charge due, nor shall any endorsement
or statement on any check or any letter accompanying any check or payment as
rent or other charge be deemed an accord and satisfaction, and Landlord may
accept such check or payment without prejudice to Landlord's right to recover
the balance of such installment or pursue any other remedy in this Sublease
provided.
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20. SUBORDINATION TO THE PRIME LEASE
(A) In addition to Tenant's obligations under this Sublease and to the
extent not inconsistent with this Sublease, Tenant shall observe and perform all
of the terms, covenants and conditions of the Prime Lease which Landlord, as
tenant under the Prime Lease, is obligated to observe and perform with respect
to the Premises, to the same extent as if such terms, covenant and conditions of
the Prime Lease were set forth at length in this Sublease but incorporating such
provisions herein shall not obligate Landlord or be construed as causing
Landlord to assume or agree to perform any obligations assumed by the Prime
Landlord under the Prime Lease. Tenant shall not do, omit to do or permit to be
done or omitted any act in or related to the Premises which could constitute a
breach or default under the terms of the Prime Lease or result in the
termination of the Prime Lease by the Prime Landlord, and Tenant hereby
indemnifies and holds harmless Landlord for any claims, losses or damages
resulting from or suffered by Landlord as a result of Tenant's breach of the
foregoing covenant.
(B) Notwithstanding the foregoing, Tenant shall have no option to renew or
extend the term of this Sublease or right of first negotiation to lease
additional premises in the Building.
21. LIMITATIONS ON LANDLORD'S LIABILITY
(A) If Landlord assigns its leasehold estate in the Prime Lease Premises,
Landlord shall be released of its obligations hereunder and shall have no
further obligation to Tenant arising thereafter. Tenant shall then recognize and
attorn to Landlord's assignee as Landlord of this Sublease. The Landlord, upon
serious contemplation of a lease assignment, agrees to promptly notify Tenant
and to keep Tenant informed in that regard.
(B) Except as otherwise expressly stated herein, Landlord shall not be
required to perform any of the covenants and obligations of the Prime Landlord
under the Prime Lease. If the Prime Landlord shall default in the performance of
any of its obligations under the Prime Lease or breach any provision of the
Prime Lease pertaining to the Premises, such default shall not constitute an
actual or constructive eviction nor result in any offset, abatement or deduction
against the Base Rent, Additional Rent or other charges due under this Sublease.
In any such event, Tenant shall promptly notify Landlord of Prime Landlord's
breach, and Landlord shall make a demand upon Prime Landlord. If this demand
does not result in a satisfactory response, Landlord may elect to institute an
action or proceeding, in accordance with and not contrary to any provision of
the Prime Lease, against the Prime Landlord under the Prime Lease for the
enforcement of the Prime Landlord's obligations thereunder.
(C) In no event shall Landlord be liable to Tenant for any indirect or
consequential damages.
22. FIRE, CASUALTY AND EMINENT DOMAIN
In the event of a fire, casualty or taking that affects the Premises but
does not result in termination of the Prime Lease, the rent hereunder shall be
abated to the extent that the rent payable by Landlord under the Prime Lease
with respect to the Premises shall be abated. The provisions of this Section 20
shall be considered an express agreement governing any cause of damage or
destruction to the Premises by fire or other casualty, and no local or state
statute, law, rule or regulation, now or hereafter in effect, providing for such
a contingency shall have any application in such case, to the extent permitted
by law.
23. LANDLORD ACCESS
Landlord and Landlord's agents, contractors and employees shall have the
right to enter onto the Premises at reasonable times, from time to time, upon
reasonable notice to Tenant (which notice may be oral and shall not be required
in the event of emergency) to ascertain whether Tenant is in compliance with the
provisions of this Sublease, to perform such inspections or to make such repairs
as Landlord deems advisable or necessary, to comply with Landlord's obligations
hereunder or under the Prime Lease, to perform work with respect to the
remainder of the Prime Lease Premises and (within
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the last year of the Sublease term) to exhibit the Premises.
24. GOVERNING LAW
This Sublease shall be construed and interpreted in accordance with the
laws of the State of California.
25. INTEREST ON UNPAID RENT
All installments of Base Rent, Additional Rent and all other charges which
are not paid within five (5) days after the date when due shall bear interest
from the date due until paid, at a rate equivalent to the lesser of 5% over the
Prime Rate, or the maximum rate permitted by law.
26. HOLDOVER
If Tenant holds possession of the Premises after the Expiration Date or
sooner termination of this Sublease, Tenant shall become a tenant at sufferance
on a day-to-day basis upon the terms specified herein at 200% of the then
existing Base Rent, Additional Rent and other charges. In addition, Tenant shall
be responsible for any and all damages suffered by Landlord, including, without
limitation, damages or costs resulting from actions initiated by third parties
(including the Prime Landlord) as a result of said holding over. Such tenancy
shall not constitute a renewal of this Sublease.
27. NOTICES
Any notice, statement, certificate, consent, approval, disapproval, request
or demand required or permitted to be given in this Sublease shall be in writing
and delivered by hand, by Federal Express next business day delivery (or other
comparable commercial courier night business day delivery service), or sent by
United States mail, registered or certified, postage prepaid, addressed, as the
case may be:
To Landlord at the following address:
Global Associates, Ltd.
0000 Xxxxxxxx Xxxx
Xxxx Xxxxxxxx
Xxxxx Xxxxxx, Xxxxxxxx 00000-0000
with a copy to:
Holland & Knight LLP 0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxxx Xxxxxx, Esq.
and to Tenant, at the Premises.
Either party by notice to the other may change the place where notices are
to be sent or delivered. In no event shall notice have to be sent on behalf of
either party to more than two (2) persons. Mailed notices will be deemed served
three (3) business days after mailing certified or registered mail properly
addressed with postage prepaid, provided the same are received in the ordinary
course of business.
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28. LANDLORD'S AND TENANT'S POWER TO EXECUTE
Landlord and Tenant each covenants, warrants and represents that it has
full power and proper authority to execute this Sublease.
29. ENTIRE AGREEMENT
This Sublease contains the entire agreement between Landlord and Tenant and
can be changed only by a signed agreement.
30. CONSENT TO SUBLEASE BY PRIME LANDLORD
This Sublease shall be contingent upon and shall not become operative
unless and until the Prime Landlord has given to Landlord its consent hereto.
Landlord shall not be responsible for the failure of the Prime Landlord to
consent to this Sublease or the failure or refusal of Prime Landlord to grant
any consent of Prime Landlord required by this Sublease or the Prime Lease.
Should the Prime Landlord not grant its consent to this Sublease within thirty
(30) days from the date hereof, Landlord and Tenant shall be released from all
obligations with respect hereto and neither shall have any further rights at law
or in equity with respect to this Sublease. It is hereby acknowledged by the
parties that Prime Landlord's consent to this Sublease shall not make Prime
Landlord a party to this Sublease, shall not create any contractual liability or
duty on the part of Prime Landlord and shall not in any manner increase,
decrease or otherwise affect the rights and obligations of Prime Landlord and
Landlord, as lessor and lessee, with respect to the Prime Lease Premises.
31. BINDING EFFECT
The submission of this document for examination and negotiation does not
constitute an offer to sublease or a reservation of, or option for, the Premises
and Tenant shall have no right to the Premises hereunder until the execution
hereof by both Landlord and Tenant. Once fully executed, all the covenants,
agreements and undertakings in this Sublease contained shall extend to and be
binding upon the legal representatives, successors and assigns of the respective
parties hereto, the same as if they were in every case named and expressed, but
nothing herein shall be construed as a consent by Landlord to any assignment or
subletting by Tenant of any interest of Tenant in this Sublease.
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32. MISCELLANEOUS
If any provisions of this Sublease shall to any extent be invalid, the
remainder of this Sublease shall not be affected thereby. There are no oral or
written agreements between Landlord and Tenant affecting this Sublease. This
Sublease may be amended, and the provisions hereof may be waived or modified,
only by instruments in writing executed by Landlord and Tenant. The titles of
the several Sections contained herein are for convenience only and shall not be
considered in construing this Sublease. Except as herein otherwise provided, the
terms hereof shall be binding upon and shall inure to the benefit of the
successors and assigns, respectively, of Landlord and Tenant. If two or more
parties are named as Tenant herein, each of such party shall be jointly and
severally liable for the obligations of the Tenant hereunder, and Landlord may
proceed against any one without first having commenced proceedings against any
other of them. Each term and each provision of this Sublease to be performed by
Tenant shall be construed to be both an independent covenant and a condition.
The reference contained to successors and assigns of Tenant is not intended to
constitute a consent to assignment of Tenant. Except as otherwise set forth in
this Sublease, any obligations of Tenant (including, without limitation, rental
and other monetary obligations, repair obligations and obligations to indemnify
Landlord), shall survive the expiration or sooner termination of this Sublease,
and Tenant shall immediately reimburse Landlord for any expense incurred by
Landlord in curing Tenant's failure to satisfy any such obligation
(notwithstanding the fact that such cure might be effected by Landlord following
the expiration or earlier termination of this Sublease). If any installment of
Base Rent or Additional Rent is collected by or through an attorney, or if
Landlord shall require the services of an attorney after a breach by Tenant of
any of the terms, covenants or conditions of this Sublease, Tenant shall pay to
Landlord the reasonable fees of such attorney regardless of whether formal legal
proceedings have been commenced.
IN WITNESS WHEREOF, Landlord and Tenant have each caused these presents to
be executed, as a sealed instrument, as of the date first above written.
LANDLORD:
GLOBAL ASSOCIATES, LTD.
Attest: /s/Xxxxx Xxxxxxx By: /s/ XXXXX X. XXXXXX
--------------------------------
Name:Xxxxx X. Xxxxxx
Title:President SPS
TENANT:
XXXXXX COMMUNICATIONS, INC.
Attest:/s/ Xxxxx Xxxxxxx By: /s/ XXXXXX X. XXXX
--------------------------------
Name:Xxxxxx X. Xxxx
Title:President
AMERICAN TECHNOLOGY CORPORATION
Attest:/s/Xxxxx Xxxxxxx By: /s/ XXXXXX XXXXXX
--------------------------------
Name:Xxxxxx Xxxxxx
Title:President
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