EXHIBIT 10.44
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EX-10.44-Material Contract
SUBLEASE
This Sublease, dated as of May 2, 2001, is made by and between Venture
Catalyst Incorporated, a Utah corporation, formerly known as Inland Casino
Corporation, a Utah corporation ("Sublessor") and Astute Networks, Inc., a
California corporation ("Sublessee").
PRELIMINARY STATEMENTS
A. Sublessor entered into a certain Lease, dated September 3, 1997, ("Lease")
with the former owner of the Building, Rancho Xxxxxxxx Associates, a
California general partnership ("Former Lessor") with respect to certain
premises located at 00000 Xxx Xxx Xxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx
("Building"). The premises, which are subject to the Lease, comprise a
portion of the Building and contain approximately 20,533 rentable square
feet ("Premises"). A copy of the Lease is attached hereto as Exhibit "C"
and made a part hereof. The current owner of the Building is Xxxxxxxx
Properties Acquisition Partners, L.P., a Delaware limited partnership
("Lessor").
B. Sublessee wishes to sublet the entire Premises from Sublessor on the
terms and conditions contained herein.
NOW THEREFORE, in consideration of the foregoing and the covenants
contained herein, the parties agree as follows:
AGREEMENTS
1. Application of Terms of Lease. Except as provided below, the terms,
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conditions and respective rights and obligations of Sublessor and Sublessee 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, except for the obligations
of Lessor under the Lease, wherever in the Lease the word "Lessor" is used it
shall be deemed to mean the Sublessor herein and wherever in the Lease the word
"Lessee" is used it shall be deemed to mean the Sublessee herein. The
obligations of Lessor under the Lease shall remain the obligations of Lessor.
2. Assumption of Obligation. During the term of this Sublease and for all
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periods subsequent for obligations which have arisen prior to the termination of
this Sublease, Sublessee does hereby expressly assume and agree to perform and
comply with, for the benefit of Sublessor and Lessor, each and every obligation
of Sublessor under the Lease except for the following paragraphs which are
excluded herefrom: 2.4.1, 3.1, 3.2, 3.5, 4.1, 4.4, 4.5, 12.1, 12.5.3, Article
14, 15.3, 15.4, 16.8 and 19.16. The obligations that Sublessee has assumed under
Section 2 hereof are hereinafter sometimes referred to as the "Sublessee's
Assumed Obligations."
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3. Premises. Sublessor hereby subleases to Sublessee and Sublessee hereby
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subleases from Sublessor for the term, at the rental, and upon all of the
conditions set forth herein, the Premises as depicted on Exhibit "A" and
generally described as Suite 200 of the Building, containing approximately
20,533 rentable square feet located on the first (1st) floor. Exhibit "A"
represents a space layout that is substantially correct, but is not an exact
illustration of the actual Premises. Sublessee understands that the actual
Premises may have a different layout than what is illustrated in Exhibit "A",
and accepts the Premises as it is physically designed as of the date of this
Sublease, but with the ceiling tiles replaced as noted in Section 7.2 hereof and
the doors, which the Sublessor will leave in the Premises, as noted in Section
7.2 hereof.
4. Term.
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4.1 Term. The term of this Sublease shall be for approximately seventeen
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(17) months, commencing on the earlier of (i) June 1, 2001 or (ii) the date
Sublessee "opens for business" in the Premises ("Commencement Date") and ending
on October 31, 2002 ("Termination Date"). Whenever the context requires, where
the term "Commencement Date" is used in the Lease for the purposes of
calculating a period of time, such term shall have the meaning ascribed in the
Lease, rather than this Sublease.
4.2 Prior Access. Subject to Sublessee's reasonable notice to Sublessor and
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at Sublessee's own risk, Sublessee shall be entitled access to the Premises
prior to the Commencement Date for the purposes of installing equipment and
trade fixtures, provided Sublessee's access shall not interfere with Sublessor's
ability to operate Sublessor's business or move-out process. Sublessee's access
to the Premises shall comply with the provisions of the Lease, including but not
limited to insurance requirements, indemnity, etc.
4.3 Delay in Commencement. If for any reason Sublessor cannot deliver
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possession of the Premises to Sublessee by June 1, 2001, Sublessor shall not be
subject to any liability therefor, nor shall such failure affect the validity of
this Sublease or the obligations of Sublessee hereunder or extend the term
hereof, but in such case Sublessee shall be entitled to reduce its rental
obligation pro rata on a per day basis for each day after the Commencement Date
for which possession of the Premises is not tendered to Sublessee; provided,
however, that if Sublessor shall not have delivered possession of the Premises
by June 20, 2001, Sublessee may, at Sublessee's option, by notice in writing to
Sublessor within ten (10) days thereafter, cancel this Sublease, in which event
the parties shall be discharged from all obligations hereunder.
4.4 Consent of Lessor. The Lessor's written consent to this
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Sublease in accordance with the terms of Article 13 of the Lease is a condition
subsequent to the validity of this Sublease. If Lessor's Consent to Sublease,
executed by Lessor, has not been obtained and a copy of that consent delivered
to Sublessee by the fifteenth (15th) day following the date of delivery of an
executed Sublease agreement by Sublessor and Sublessee, Sublessee shall
thereafter have the ongoing right, subject to the terms of this Section 4.4, to
terminate this Sublease pursuant to a notice (the "Termination Notice") so
stating delivered to Sublessor. If Sublessor fails to deliver to Sublessee the
Lessor's Consent to Sublease, executed by Lessor, within five (5) days
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following receipt of the Termination Notice (the "Consent Termination Date"),
this Sublease shall, unless the Consent Termination Date is extended in writing
(in a minimum of five (5) day increments), terminate and the parties shall be
released from any further obligations under this Sublease. In such event, any
deposit or funds that may have been given to Sublessor by Sublessee shall be
returned to Sublessee within forty-eight (48) hours of written notice from
Sublessee to Sublessor of such termination. If, however, Sublessor delivers to
Sublessee the consent of Lessor on or before the Consent Termination Date, the
condition subsequent set forth in this Section 4.3 shall be satisfied and this
Sublease shall continue in full force and effect.
5. Rent. Sublessee shall pay to Sublessor, as monthly "Base Rent" for the
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Premises, without off-set or deduction, on the first day of each month of the
term hereof (except as set forth below) the following amounts:
(a) From June 1, 2001 through November 30, 2001, the sum of Twenty
Thousand Three Hundred Eighteen and 46/100ths Dollars ($20,318.46) per
month, on a "triple net" (NNN) basis.
(b) From December 1, 2001 through October 31, 2002, the sum of Twenty-One
Thousand One Hundred Twenty-Two and 23/100ths Dollars ($21,122.23) per
month, on a "triple net" (NNN) basis.
Base Rent shall be paid to Sublessor at the address stated herein or to
such other persons or at such other places as Sublessor may designate in
writing. Base Rent for the period June 1, 2001 through June 30, 2001, Twenty
Thousand Three Hundred Eighteen and 46/100ths Dollars ($20,318.46), shall be
paid upon (i) full execution of this Sublease and (ii) Sublessee's receipt of
Lessor's written consent to this Sublease. The parties expressly acknowledge
that the provisions of Article 4.3 of the Lease relating to late charges are
expressly incorporated into this Sublease by reference. In the event the
Commencement Date occurs prior to June 1, 2001, Base Rent (and all other charges
due under this Sublease and the Lease) during such period prior to June 1, 2001
shall be pro rated based upon a thirty (30) day month and payable to Sublessor,
and such amount shall be due upon the Commencement Date.
Notwithstanding anything contained herein or the Lease to the contrary,
Sublessee shall have no rights to either extend or renew the term of this
Sublease beyond the Termination Date or to expand the Premises.
6. Security Deposit. Upon the (i) full execution of this Sublease and (ii)
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Sublessee's receipt of Lessor's written consent to this Sublease, Sublessee
shall deliver to Sublessor, in cash, a security deposit ("Security Deposit") in
the amount of Twenty Thousand Three Hundred Eighteen and 46/100ths Dollars
($20,318.46). Sublessor may, but shall not be obligated to, apply all or part of
the Security Deposit to any unpaid Rent or other charges due from Sublessee or
to cure any other defaults of Sublessee. If Sublessor uses any part of the
Security Deposit, Sublessee shall restore the Security Deposit to its full
amount within ten (10) days after Sublessor's written request. Sublessee's
failure to do so shall be a default under this Sublease. No interest shall be
paid on the Security Deposit. Sublessor shall not be required to keep the
Security Deposit separate from its other accounts and no trust relationship is
created with respect
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to the Security Deposit. Within thirty (30) days of the expiration or
termination of the Term of this Sublease, Sublessor shall return the Sublessee
any unused portion of the Security Deposit after deduction therefrom of unpaid
amounts owed by Sublessee to Sublessor pursuant to this Sublease and the Lease.
7. Condition of Premises.
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7.1 Condition of Premises. Sublessee has inspected the Premises and
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determined that it is suitable for Sublessee's purposes. Except as set forth in
the next succeeding sentences, neither Sublessor nor Sublessor's Broker (as
defined below) makes any representation or warranty as to the condition of the
Premises or the suitability for the conduct of Sublessee's business.
Notwithstanding the foregoing, Sublessor shall deliver the Premises to Sublessee
in "as-is" condition as of the date hereof (except as written in Section 7.2
below) and Sublessor shall have no obligation to contribute any additional
monies to improve the Premises. To Sublessor's present actual knowledge, the
Premises are in working order in all material respects in light of age and use
by Sublessor. Any work necessary to accommodate Sublessee's occupancy in the
Premises shall be at Sublessee's sole cost and such work shall be completed in
accordance with Article 11 of the Lease.
7.2 Sublessor, at Sublessor's expense, shall reinstall ceiling tiles where
the ceiling tiles have been removed from the existing ceiling grid in the
Premises. In addition, Sublessor shall leave approximately ten (10) freestanding
(uninstalled) doors currently in the possession of Sublessor for Sublessee's use
in the Premises.
7.3 Sublessor shall not remove the built-in kitchen appliances in the
existing kitchen within the Premises. Sublessee shall be entitled to utilize
such built-in appliances during the Sublease Term. Except for normal wear and
tear, Sublessee shall be responsible for any damage Sublessee may cause to any
of the existing built-in kitchen appliances.
7.4 Sublessor shall not remove the Honeywell keyless access and security
system, including all hardware and software currently in the possession of and
being used by Sublessor which is necessary to operate the system, including all
the "keyless" keys used with the system (the "Access System") in the Premises,
and Sublessee shall be entitled to use the Access System during the Sublease
Term. Sublessee shall be responsible for any service, monitoring, maintenance
and/or repair for the Access System. Sublessee shall pay Sublessor $615.99 per
month during the Sublease Term as consideration for Sublessor leaving the Access
System in the Premises. This Access System fee shall be due each month along
with the Base Rent and all other charges due under the Sublease and Lease.
8. Lease, Indemnification and Insurance.
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8.1 Subordinate to Lease. This Sublease is and shall be at all times
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subject and subordinate to the Lease. Without limitation, Sublessor's
obligations hereunder are conditioned upon the receipt of the Lessor's consent
to this Sublease.
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8.2 Indemnification. Sublessee shall indemnify Sublessor and hold Sublessor
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and Sublessor's officers, directors, shareholders, agents, representatives,
employees and attorneys, free and harmless of and from all liability, judgments,
costs, damages, claims or demands, including attorneys' fees and court costs
actually incurred and including costs of appeal, settlement or defense as well
as the obligation to assume such defense if so requested, arising out of:
Sublessee's failure to promptly comply with or perform Sublessee's Assumed
Obligations; Sublessee's use of the Premises; the conduct of Sublessee's
business or from any activity, work or thing done, permitted or suffered by
Sublessee in or about the Premises or elsewhere; or arising out of any act or
omission of Sublessee or Sublessee's employees, agents, representatives or
invitees.
8.3 Insurance. Sublessee shall provide Sublessor and Lessor with
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certificates of insurance naming Sublessor and Lessor as additional insured for
all insurance policies Sublessee is required to maintain under the Lease. The
certificates of insurance shall not be cancelable or modified without at least
thirty (30) days prior written notice to Sublessor.
9. Signage. Subject to Lessor's approval and the provisions of the Lease,
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Sublessee, at Sublessee's expense, shall be permitted to install signage on the
exterior of the Building. Additionally, Sublessor, at Sublessor's expense, shall
remove Sublessor's sign from the exterior of the Building prior to Sublessee's
occupancy of the Premises.
10. Authority. Sublessor represents and warrants that it has full right and
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authority to enter into this Sublease and to perform all of Sublessor's
obligations hereunder and that all persons signing this Sublease on its behalf
are authorized to, and further, that Sublessor is the successor in interest to
Inland Casino Corporation. Sublessee and the person or persons, if any, signing
on behalf of Sublessee jointly and severally represent and warrant that
Sublessee has full right and authority to enter into this Sublease, and to
perform all of Sublessee's obligations hereunder, and that all persons signing
this Sublease on its behalf are authorized to do so.
11. No Existing Defaults. Sublessor represents and warrants to Sublessee
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that the Lease is in full force and effect, and Sublessor has neither given nor
received a notice of default under the Lease.
12. Preservation of Lease. Sublessor agrees not to terminate the Lease
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voluntarily, or modify the Lease in a manner that adversely affects Sublessee's
rights under this Sublease.
13. Broker's Commission. Sublessor and Sublessee each warrant to the other
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that neither has had any dealings with any real estate broker or agent in
connection with this Sublease except that Sublessor has been represented by
Xxxxxxx Real Estate Services, Inc. ("Sublessor's Broker") and Sublessee has been
represented by CB Xxxxxxx Xxxxx ("Sublessee's Broker"). In the event (i) this
Sublease is executed by Sublessor and Sublessee and (ii) Lessor provides its
written consent to this Sublease, Sublessor shall pay a Broker's commission as
follows: Sublessor shall pay CB Xxxxxxx Xxxxx four percent (4%) of the total
consideration of the Sublease and Sublessor shall pay Xxxxxxx Real Estate
Services three percent (3%) of the total consideration of the Sublease. Payment
of such commission shall be one-half (1/2) upon execution of the Sublease by
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Sublessor, Sublessee and Lessor (Consent), and one-half (1/2) upon Sublessee's
occupancy of the Premises. Each party hereto shall defend, indemnify and hold
the other harmless from any claim for any compensation, commission, fee or other
charge by any finder or any other real estate broker or agent, other than as
aforesaid, claiming through the indemnifying party.
14. Notices. The addresses of Sublessor, Sublessee and Lessor for the purposes
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of Section 32 of the Lease are as follows:
Sublessor: Venture Catalyst Incorporated
XXX
XXX
Attention: Xxxxx XxXxxxxx
Sublessee: Astute Networks, Inc
00000 Xxx Xxx Xxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Attention: Xxxxxx Xxxxx, Chief Financial Officer
Lessor: Xxxxxxxx Properties
000 Xxxxxxx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Attention: TBD
15. Event of Default. In the event Sublessee receives notice from Lessor,
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pursuant to Article 16 of the Lease, that Sublessor is in default in the payment
of Base Rent due Lessor under the Lease (the "Default Notice"), then Sublessee
may withhold the amount in default, as stated in the Default Notice, (the
"Default Amount") from Sublessor. If Lessor elects to collect the Default Amount
(and/or any other sums due under the Lease) directly from Sublessee, then
Sublessee shall not be obligated to pay Sublessor such amounts. If Lessor does
not elect to collect the Default Amount directly from Sublessee, then upon
Sublessee receiving notice from Lessor that such default has been cured by
Sublessor, Sublessee shall promptly pay Sublessor the Default Amount in full.
Failure to make payment in full to Sublessor within three (3) business days
shall be deemed a default.
16. Consent to Sublease Agreement. Sublessor and Sublessee agree to promptly
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execute a Consent to Sublease (in a form substantially similar to the form
attached hereto as Exhibit "B") following Sublessor's receipt of such form from
Lessor.
SUBLESSOR AND SUBLESSEE HAVE CAREFULLY READ AND REVIEWED THIS SUBLEASE AND EACH
TERM AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS SUBLEASE, SHOW
THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT
THE TIME THIS SUBLEASE IS EXECUTED, THE TERMS OF THIS SUBLEASE EFFECTUATE THE
INTENT AND PURPOSE OF SUBLESSOR, SUBLESSEE AND LESSOR WITH RESPECT TO THE
PREMISES. THIS SUBLEASE HAS BEEN PREPARED FOR SUBMISSION TO SUBLESSOR AND
SUBLESSEE'S ATTORNEY FOR APPROVAL. NO REPRESENTATION OR RECOMMENDATION IS
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MADE BY XXXXXXX REAL ESTATE SERVICES OR ITS AGENTS OR EMPLOYEES AS TO THE LEGAL
SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS SUBLEASE OR THE
TRANSACTION RELATING THERETO. THE PARTIES SHALL SOLELY RELY UPON THE ADVICE OF
THEIR OWN LEGAL COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS SUBLEASE.
IN WITNESS WHEREOF, the parties hereto have executed this Sublease the day
and year set forth above.
Sublessor:
Venture Catalyst Incorporated,
a Utah corporation,
formerly known as Inland Casino Corporation,
a Utah corporation
By: /s/ Xxxxx XxXxxxxx
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Name: Xxxxx XxXxxxxx
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Title: SVP & CFO
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Sublessee:
Astute Networks, Inc.,
a California corporation
By: /s/ Xxxxxx Xxxxx
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Name: Xxxxxx Xxxxx
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Title: VP Finance
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