SUBLEASE AGREEMENT
THIS
SUBLEASE AGREEMENT (“Sublease”) is dated for reference purposes only as
of
this
12th
day of
July, 2006, by and between Aeronet Worldwide, a California corporation
(“Sublessor”) and New Motion, Inc., a California corporation (“Sublessee).
Sublessor is a party to the primary lease defined as that certain Standard
Office Building Lease (the “Lease”) dated January 6, 1998, and includes the
First Amendment to Lease dated September 19, 2002, and the Second Amendment
to
Lease dated July 7, 2006. The Lease covers the Premises commonly known as #42
Xxxxxxxxx Xxxx, Xxxxxx 000 & 000, Xxxxxx, XX 00000 consisting of
approximately 8,247 rentable square feet.
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1.
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Sublessor
hereby leases to Sublessee, and Sublessee hereby leases from Sublessor,
for the term
and subject to the terms, conditions and covenants hereinafter set
forth,
the Property located in the State of California and described as
follows:
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A
portion
of Suite 150 that is approximately 2,190 rentable square feet located on the
first floor at #00 Xxxxxxxxx Xxxx, Xxxxxx XX 00000 (the “Subleased
Premises”).
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2.
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The
term of this Sublease shall be for a period of two (2) years commencing
September 1,
2006, and ending on August 31,
2008.
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3.
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For
and during the initial two (2) year term of this Sublease, Sublessee
shall
pay to Sublessor
Base Rent for the Subleased Premises on the first day of each month
in
accordance
with the following schedule:
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September
1, 2006 - August 31,
2007:
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$4,818.00 per month | |
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September
1, 2007 - August 31,
2008:
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$5,010.72 per month |
In
addition to the foregoing, Sublessee shall pay its proportionate share (50%)
of
all applicable
pass throughs/additional rent for Increases in Operating Expenses which
Sublessor
is responsible to pay to Landlord as defined in the Lease. In the event
Sublessee
fails to pay to Sublessor within five (5) days when due any installment of
Base
Rent
or
other sum to be paid to Sublessor which may become due hereunder, Sublessee
will
pay
Sublessor on demand a late charge equal to ten percent (10%) of the past due
amount and Sublessor may immediately terminate this Sublease without further
notice to Sublessee. Sublessee shall be responsible for the payment of all
sales, use or other taxes which may accrue as a result of Sublessee’s use of the
Subleased Premises.
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4.
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Sublessee
shall pay to Sublessor the sum of $5,010.72 (representing an amount
equal
to the
last month’s Base Rent) as and for a security deposit to secure the
performance of Sublessee’s obligations hereunder. Said security deposit
shall be held by Sublessor in a non-interest bearing account and
shall be
returned to Sublessee at the termination of this Sublease
after determination by Sublessor that the Property has been returned
in
its original
condition, wear and tear excepted. Sublessor shall not be required
to
maintain a separate account for said security deposit, but rather
may
commingle said funds with Sublessor’s other
monies.
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1
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5.
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The
Property shall be used by Sublessee for lawful purposes as permitted
by
the Lease and
for no other purpose.
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| 6. |
(a)
Sublessee agrees to perform and observe the covenants, conditions
and
terms of the
Lease on the part of the Tenant to be performed and observed, except
the
covenant for the payment of Base Rent which shall be governed by
the
provisions of Paragraph 3 above.
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(b)
Sublessee agrees to indemnify and hold Sublessor harmless against
all
claims, damages,
and expenses arising out of nonperformance or non-observance of such
covenants, conditions and terms of the
Lease.
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7.
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So
long as Sublessee perfonns all of its obligations under the terms
of this
Sublease and has
not defaulted under the same, Sublessor warrants that Sublessee will
have
quiet enjoyment and peaceful possession of the
Property.
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8.
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Any
holdover at the expiration of this Sublease with Sublessor’s consent shall
be on a month-to-month basis, which tenancy may then be terminated
as
provided by the laws of the State of California. During such a holdover
tenancy, Sublessee agrees to pay monthly to Sublessor Base Rent at
the
rate of one and one half times the Base Rent in effect at the time
of such
termination and agrees to be bound by the terms of this Sublease
insofar
as they are applicable.
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9.
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Sublessee
shall not commit waste on the Property, nor maintain, commit, or
permit
the maintenance or commission of a nuisance thereon, or use the Property
for an unlawful purpose.
Sublessee shall conform to all applicable federal, state and local
laws
and ordinances
respecting the use, condition and occupancy of the Property relating
to
matters
not covered elsewhere herein.
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10.
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Sublessee
has examined and accepts the condition of the demised premises and
the
building
in which they are to be located and agrees that it is taking possession
of
the Property
in its “as is” condition, without representations of any kind or nature
whatsoever with respect to its condition or suitability for Sublessee’s
intended use of the same.
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11.
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Sublessee
shall not make alterations, additions, or improvements on the Property
without first
obtaining the written consent of the Sublessor and Landlord. All
approved
alterations,
additions and improvements that shall be made at Sublessee’s sole expense,
shall
become Sublessor’s property, and shall remain on and be surrendered with
the property
as a part of the Property at the termination of this Sublease without
disturbance, molestation,
or injury unless otherwise directed by Sublessor or Landlord at the
time
of the
termination of this Sublease. Nothing contained in this paragraph
shall
prevent Sublessee
from removing those fixtures customarily used in Sublessee’s business. All
damages
to the building or Property caused by removal of such items shall
be
repaired and
restored by Sublessee promptly after removal of the
Property.
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2
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12.
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Sublessee
shall keep the Property free and clear of any and all liens arising
out of
any work
performed, materials furnished, or obligations incurred by Sublessee,
including mechanics’ liens. Failure to abide by the terms of this
paragraph shall constitute a breach and default of this
Sublease.
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13.
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Sublessee
covenants and agrees that no signs or symbols shall be placed in
the
windows or
doors of the Property, or on any exterior part of the building without
the
Sublessor’s prior
written approval. Any sign or symbol placed on the Property that
is not
satisfactory to
Sublessor shall be removed immediately on demand by Sublessor and
if not
so removed
within seventy-two (72) hours, will constitute a breach and default
of
this Sublease.
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14.
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Sublessee
shall allow Landlord and Sublessor, and their agents, free access
at all
reasonable
times to the Property for the purpose of inspecting or for making
repairs,
additions,
alterations to the Property or any property owned by or under the
control
of Landlord or Sublessor.
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15.
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Sublessor
shall maintain the Property subject to the Landlord’s obligations under
the Lease.
Likewise, Sublessee shall assume all maintenance obligations imposed
on
Sublessor
as Tenant pursuant to the Lease.
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16.
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Sublessee
agrees to carry such insurance as is required of the Tenant to be
maintained under
the Lease. Said policies shall cover both Sublessee and Sublessor
against
all claims
for personal injury or property damages caused by conditions or activities
on the Property in amounts to be approved by Sublessor. Sublessee
shall
provide proof of said insurance prior to occupancy of the Subleased
Premises by Sublessee.
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17.
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All
provisions of the Lease, specifically including those regarding damage
or
destruction to the Property, eminent domain or condemnation proceedings,
and those regarding termination of the Lease in the event of default,
shall apply to Sublessee and Sublessor’s respective rights and obligations
in the event of default.
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18.
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Waiver
of one breach of a term, condition, or covenant of the Sublease by
either
party to this Sub-lease shall be limited to the particular instance
and
shall not be construed as a waiver of past or future breaches of
the same
or other terms, conditions or
covenants.
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19.
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If
Sublessee abandons or vacates the Property or is dispossessed for
cause by
Sublessor before
the termination of this Sublease, or any renewal of this Sublease,
Sublessor may, on
giving thirty (30) days written notice to Sublessee, declare this
Sublease
forfeited and may
then make reasonable efforts to relet the Property. Sublessee shall
be
liable to Sublessor
for all damages suffered by reason of such forfeiture. Such damages
shall
include,
but shall not be limited to, the following: (a) all actual damages
suffered by Sublessor
until the Property is relet, including reasonable expenses incurred
in
attempting to
relet; (b) the difference between the rent received when the Property
is
relet and the rent
reserved under this Sublease; and (c) attorneys’ fees. In addition,
Sublessor shall be entitled to all remedies available at law or in
equity.
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3
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20.
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California
law shall be used in interpreting this Sublease and in determining
the
rights of the parties under
it.
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21.
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Sublessee
agrees that at the expiration of this Sublease, Sublessee will quit
and
surrender the
Property without notice and will deliver to Sublessor all keys belonging
to the Property.
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22.
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Except
where otherwise required by statute, all notices given pursuant to
the
provisions of
this Sublease shall be in writing, addressed to the party to whom
the
notice is given and
sent by registered or certified mail to the last known mailing address
of
the party. However, notices to Sublessee may be sent to the address
of the
Property.
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23.
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The
terms, conditions and covenants of this Sublease shall inure to and
be
binding on the heirs,
successors, administrators, executors and assigns of the parties
to this
Sublease except
as otherwise provided herein.
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24.
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Sublessee
shall not sell or assign this Sublease or any part of this Sublease,
or
any interest in the Property, or re-sublet the Property in whole
or in
part without first obtaining the written consent of the Sublessor
and
Landlord. This Sublease shall not be assigned by operation of law.
If
Sublessor and Landlord once given consent to assignment of this
Sublease
or of any interest therein, they shall not thereby be barred from
afterwards refusing
to consent to any further assignment. Any attempt to sell, assign
or
re-sublet the Property without written consent of Sublessor and Landlord
shall be deemed sufficient grounds for dispossession and shall entitle
Sublessor to seek all remedies available at law or in
equity.
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25.
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Should
either party employ an attorney to enforce any of the provisions
hereof,
the prevailing
party is entitled to receive from the other party all reasonable
costs,
charges and
expenses, including paralegal and attorneys’ fees, expert witness fees and
appeal fees expended
or incurred in connection therewith, whether resolved by out-of-court
settlement,
arbitration, pre-trial settlement, trial, bankruptcy or appellate
proceeding.
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26.
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Sublessee
represents and warrants that it has dealt with no broker, agent or
other
person in
connection with this transaction and that no other broker, agent
or other
person brought about this transaction by Sublessee as a Sublessee
representative. Sublessee agrees to indemnify and hold Sublessor
harmless
from and against any claims by and other broker, agent or other person
claiming a commission or other form of compensation by virtue of
having
dealt with Sublessee with regard to this leasing transaction. The
provisions of this paragraph shall survive the termination of this
Sublease.
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4
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27.
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This
Sublease may be executed in any number of counterparts and each such
counterpart hereof
shall be deemed to be an original instrument, but all such counterparts
together shall
constitute but one Sublease.
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28.
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This
Sublease embodies and constitutes the entire understanding between
the
parties with respect
to the transaction contemplated herein. All prior or contemporaneous
agreements,
understandings, representations and statements, oral or written,
are
merged into
this Sublease. Neither this Sublease nor any provision hereof may
be
waived, modified,
amended, discharged or terminated except by an instrument in writing
signed by
the parties.
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29.
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Sublessee
agrees that they shall be bound by all of the terms, conditions and
provisions of the Lease, exclusive of the payment of Base Rent, as
if they
were the named tenant under said Lease and that Sublessor shall be
entitled to exercise all of the rights, remedies and privileges provided
to Landlord under said Lease, as if they were the
Landlord.
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30.
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Option
to Extend:
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| 30.1 |
At
the natural expiration of the term of this Sublease, Sublessor shall
have
the right
to possession of the Subleased Premises and shall be entitled to
occupy
same for the remaining three (3) years of term left on the
Lease.
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| 30.2 |
In
the event Sublessor does not require the use of the Subleased Premises,
Sublessee
shall have the option to extend the term of this Sublease provided
that
(i)
Sublessee is not in default of this Sublease beyond any applicable
cure
periods; and (ii) Sublessee has not subleased or assigned any portion
of
the Subleased Premises (without Landlord’s prior written consent) at the
time of its exercise, Sublessor hereby grants to Sublessee one (1),
three
(3) year option to extend the term
of the Lease (“Option to Extend”). Said Option to Extend shall not be for
any
period beyond the natural expiration date of the Lease. Sublessee
shall be
required to give Sublessor not more than nine (9) and not less than
six
(6) full calendar
months advance written notice (from the date that the Option period
would
commence) of its intent to exercise the Option to Extend. The Base
Rent
during the Option period shall be at the then prevailing fair market
value
plus reasonable
annual increases but in no event less than $2.28 per RSF plus fifty
percent
(50%) of all Operating Expense Increases charged to Sublessor in
accordance
with the Lease. The exercise of the Option to Extend by Sublessee
shall
not automatically entitle Sublessee to any tenant improvement or
refurbishment allowance.
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| 30.3 |
The
term “Fair Market Value” (FMV) shall mean the annual amount per rentable
square foot that a willing, comparable renewal Lessee would pay and
a
willing, comparable Lessor of a similar type project/building would
accept
at aim’s length for similar space in the local Irvine area, giving
appropriate consideration to the following matters: (i) annual rental
rates per rentable square foot; (ii) the type of escalation
clauses (including, but without limitation, operating expenses, real
estate
taxes, and CPI) and the extent of liability under the escalation
clauses
(i.e., whether determined on a “net lease” basis or by increases over a
particular base year
or base dollar amount); (iii) rent abatement provisions reflecting
free
rent and/or
no rent during the lease term; (iv) length of lease term; (v) size
and
location
of premises being leased; (vi) amount of tenant improvement allowance;
and
(vii) other generally applicable terms and conditions of tenancy
for
similar space, including any improvement or refurbishment allowances.
The
FMV may also
designate periodic rental increases and/or similar economic adjustments.
The FMV
shall be the FMV in effect as of the beginning of the applicable
option
period,
even though the determination may be made in advance of that date,
and
the
parties may use recent trends in rental rates in determining the
proper
FMV as of
the beginning of the option
period.
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| 30.4 |
Within
fifteen (15) calendar days of the date that Sublessor and Sublessee
mutually agree on the FMV (after Sublessee has properly exercised
its
Option to Extend), Sublessor
shall provide Sublessee with an appropriate amendment to the Lease
that
documents
the newly extended term and conditions thereof. Sublessee shall execute
the amendment to the Sublease within fifteen (15) calendar days of
the
date that the amendment
is delivered to Sublessee. In the event Sublessee fails to execute
the
amendment
within the proscribed time period, the Option to Extend shall be
rendered
null and void.
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IN
WITNESS WHEREOF, Sublessor and Sublessee have caused this Sublease to be duly
executed
by persons hereunto duly authorized as of the date first set forth
above.
| LESSEE: | SUBLESSEE: | ||
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Aeronet
Worldwide
a
California corporation
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New
Motion, Inc.
a
California corporation
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||
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by:
/s/ Xxxxxxx X. Xxxxxxx, CEO
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By: |  |
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| Xxxxx Xxxxxxx, CFO | |||
| DATE: 8-18-06 | Date: 8/18/06 |
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