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EXHIBIT 10.16
SUBLEASE AGREEMENT
THIS SUBLEASE AGREEMENT is made effective as of June 1, 1999 between
CALIFORNIA CASUALTY MANAGEMENT COMPANY, a California corporation (hereinafter
called "Sublessor") and ELOQUENT, INC., a Delaware corporation (hereinafter
called "Sublessee").
WITNESSETH
WHEREAS, Sublessor is the Tenant under a written Office Lease dated as
of March 18, 1998 wherein OTR (hereinafter called "Prime Landlord") leased to
Sublessor certain real property located in 0000 Xxxxxxx xx xxx Xxxxxx, Xxxx xx
Xxx Xxxxx, Xxxxxx of San Mateo, State of California. This Office Lease is
referred to as the "Prime Lease" and is incorporated herein by reference. Any
term in this Sublease with an initial capital letter, not specifically defined
herein, shall have the meaning given it in the Prime Lease.
WHEREAS, the Premises under the Prime Lease contains Suite 159 and
Sublessor desires to sublease Suite 159 (the "Sublet Premises") to Sublessee
under the terms and conditions contained in this Sublease Agreement; and
WHEREAS, Sublessee desires to sublease from Sublessor the Sublet
Premises on the terms set forth herein.
NOW THEREFORE, Sublessor and Sublessee agree as follows:
1. SUBLEASE.
Upon and subject to the terms and conditions of this Sublease and
applicable provisions of the Prime Lease, Sublessor subleases to Sublessee the
Sublet Premises, consisting of approximately 5,202 rentable square feet ("RSF")
in the Premises, and Sublessee subleases the Sublet Premises from Sublessor,
together with all easements, appurtenances and amenities necessary or convenient
for the enjoyment of the Sublet Premises, to the extent available to Sublessor
under the Prime Lease.
2. TERM.
Unless sooner terminated in accordance with this Sublease, the term
shall commence on the day CCMC receives final approval of this Sublease from the
Prime Landlord ("Sublease Commencement Date"), and terminate thirty-six (36)
calendar months thereafter.
Provided that the Sublessee is not then in default hereunder, the
Sublessor shall provide the Sublessee with a first right of refusal on the
Premises at the expiration of this
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Sublease, provided that the Sublessor does not choose to reoccupy the Premises
for its own purposes.
Sublessor shall give Sublessee notice of the first right of refusal not
less than thirty (30) calendar days prior to the expiration of this Sublease,
and Sublessee shall have five (5) business days to either accept or decline.
Sublessee's failure to reply shall be deemed a declination, conclusively. Notice
and reply must be given in writing.
3. DELIVERY OF SUBLET PREMISES.
As of the Sublease Commencement Date, Sublessor shall deliver the Sublet
Premises to Sublessee free of tenants with existing Building systems in good
working condition, and with the Sublessee Improvements described in Section 6 of
this Sublease completed.
4. RENT.
(a) Sublessee shall pay to Sublessor monthly rent ("Monthly Rent")
for each month during the Term. Monthly rent shall be comprised of base monthly
rent plus a prorata share of Building operating expenses.
(b) The monthly base full service rental rate for the Term is $3.50
per RSF. Commencing on the first day of the second year of the Term, and
annually thereafter, the monthly base rent shall increase by 3 % per annum. The
monthly base rent for the term is as follows:
MONTHS MONTHLY RENT, FULL SERVICE
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1-12 $18,207.00
13-24 $18,753.21
25-36 $19,315.81
(c) In addition to the monthly base rent, Sublessee shall be
responsible for its prorata share of Building operating expense passthroughs
over a Base Year of 1999.
(d) Monthly Rent shall be prorated based on actual days elapsed for
any partial calendar month occurring at the delivery of possession of any Space
or at the end of the term of this Sublease.
(e) Monthly Rent shall be paid by Sublessee to Sublessor without
prior notice or demand in advance on or before the same day of the month as the
Sublease Commencement Date each and every month during the Term of this
Sublease.
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(f) The late fee for delinquent Monthly Rent is $500 per delinquent
installment due plus interest on the delinquent Monthly Rent at the prime rate
(as then published by the Wall Street Journal plus 2%. Monthly Rent shall be
considered delinquent if Sublessee fails to pay on or before five (5) days after
the date the Monthly Rent is due.
5. SECURITY DEPOSIT/FIRST MONTH'S RENT.
Upon the Sublease Commencement Date, Sublessee shall provide Sublessor
with a security deposit in the amount of $25,000.00, which shall be refunded to
Sublessee upon full satisfaction of the terms and conditions of this Sublease.
In addition, Sublessee shall pay to Sublessor first month's monthly base rent of
$18,207.00 upon the Sublease Commencement Date.
6. SUBLESSEE IMPROVEMENTS.
Prior to the Sublease Commencement Date, Sublessor shall, at its sole
cost and expense, shampoo the carpets and paint the Sublet Premises.
7. USE AND CONDITION.
Sublessee may use the Sublet Premises only for general office and
software research and development purposes as permitted by the Prime Lease and
for no other purpose. Sublessor shall maintain the Sublet Premises in its
current condition, reasonable wear and tear excepted, from the effective date
hereof until the date of delivery of possession. To the best of Sublessor's
knowledge, there are no material defects in the Sublet Premises or any reason
they cannot be used for the purposes intended for the term of this Sublease.
Upon expiration of the term of this Sublease, Sublessee shall return the Sublet
Premises to Sublessor in the same condition as when possession was granted,
reasonable wear and tear excepted.
8. ASSIGNMENT AND SUBLETTING.
(a) Notwithstanding anything to the contrary contained in the Prime
Lease or this Sublease, Sublessee may further sublet or assign this Sublease if
Prime Landlord and Sublessor consent to such subleasing or assignment in
accordance with the Prime Lease. Consent by Sublessor shall not be unreasonably
withheld.
(b) Notwithstanding any assignment and assumption by the assignee of
the obligations of Sublessee hereunder, or any subletting, Sublessee shall
remain liable, jointly and severally, with its assignee or sublessee for the
performance and observance of Sublessee's obligations hereunder.
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9. ADMINISTRATIVE DETAILS AND ADDITIONAL SERVICES.
If Sublessee procures any additional services from the Prime Landlord
(such as custodial, maintenance or repair services), Sublessee shall pay Prime
Landlord directly for such additional services. Except in connection with
day-to-day administrative details and procurement of such additional services
and as otherwise expressly provided herein, Prime Landlord shall not be
obligated to deal directly with Sublessee and Sublessee shall have no
landlord-tenant relationship with Prime Landlord.
10. PRIME LEASE.
(a) Sublessor represents that it is not in default under the Prime
Lease and that, to the best of its knowledge, the Prime Landlord is not in
default thereunder. Sublessor further represents that the attached redacted copy
of the Prime Lease is a true and correct copy thereof. This Sublease is subject
and subordinate to the Prime Lease, however, Sublessee has no liability for
non-compliance with the redacted portions of the Prime Lease. The Prime Lease
shall control any conflict or inconsistency between the terms, covenants and
conditions of this Sublease and the terms, covenants, and conditions of the
Prime Lease. All the terms, covenants and conditions contained in the Prime
Lease shall be applicable to this Sublease with the same force and effect as if
Sublessor were the Landlord under the Prime Lease and Sublessee were the Tenant
under the Prime Lease.
(b) In case of any breach of this Sublease by Sublessee, Sublessor
shall have all the rights against Sublessee as would be available to the Prime
Landlord against the Tenant for Tenant's breach of the Prime Lease. Any breach
of this Sublease by Sublessee which would constitute a breach of the Prim Lease
if Sublessee were the Tenant under the Prime Lease shall constitute a breach of
the Prime Lease and Prime Landlord may exercise all rights and remedies
available under the Prime Lease against Sublessor and Sublessee, and may enforce
all provisions of this Sublease, including those pertaining to the collection of
Rent.
(c) This Sublease may not be modified without Prime Landlord's prior
written consent. Any modification without Prime Landlord's written consent shall
be null and void.
(d) If the Prime Lease is terminated or Prime Landlord re-enters or
repossesses the Sublet Premises, then Prime Landlord may, at its option, assume
Sublessor's right, title and interest as the Sublessor under this Sublease and,
at Prime Landlord's option, Sublessee will attorn to Prime Landlord.
Notwithstanding any such assumption, Prime Landlord shall: (i) have no
liabilities for any previous acts or omissions of Sublessor under this Sublease,
(ii) not be subject to any existing defense or offset against Sublessor, which
is not an existing defense or offset against Prime Landlord, (iii) not be bound
by any previous modification of this Sublease made without Prime Landlord's
prior written consent, or (iv) have no liabilities for any prepayment of more
than one-month's rent under this Sublease.
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(e) Sublessor shall promptly provide to Sublessee any notices from
Prime Landlord that affect Sublessee's use and/or occupancy of the Sublet
Premises.
(f) Provided that Sublessee performs all of its obligations
hereunder, Sublessor shall promptly perform all obligations under the Master
Lease.
11. INDEMNITY.
(a) Sublessee shall not do or permit anything to be done which would
be a breach or default under the Prime Lease or which would cause the Prime
Lease to be terminated or forfeited, and Sublessee shall indemnify, defend and
hold Sublessor harmless from and against any and all claims, costs, expenses,
liabilities, judgments, causes of action, and losses resulting from any such
breach or default by Sublessee under this Sublease or the Prime Lease.
(b) Sublessor shall indemnify, defend and hold Sublessee harmless
from and against any and all claims, costs, expenses, liabilities, judgments,
causes of action, and losses resulting from any such breach or default by
Sublessee under this Sublease or the Prime Lease.
12. INSURANCE.
(a) At all times during the Term, Sublessee will carry and maintain,
at Sublessee's expense, the following insurance, in the amounts specified below
or such other amounts as Sublessor may from time to time reasonably request,
with insurance companies and on forms satisfactory to Sublessor:
(i) Commercial General Liability "occurrence form," or
equivalent, covering the Premises and operations of the Sublessee, including
personal injury and contractual liability, with combined single limit for bodily
injury and property damage of not less than $1,000,000 per occurrence,
$1,000,000 annual aggregate, naming Sublessor, its agents and employees, and any
others specified from time to time by Sublessor, as Additional insured under
such Policy. Such policy will be primary insurance, and any similar insurance
which may be purchased by the Sublessor shall be excess of Sublessee's policy,
and not contributory therewith.
(ii) Insurance covering all of Sublessee's furniture and
fixtures, machinery, equipment, stock, and any other personal property owned or
used in Sublessee's business in an amount not less than the full replacement
value, against Basic Form Causes of Loss. (fire and extended coverage). All
policy proceeds will be used for the repair or replacement of the damaged or
destroyed property.
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(iii) Worker's compensation insurance insuring against and
satisfying Sublessee's obligations and liabilities under the Workers'
Compensation laws of the state of California, including Employer's Liability
insurance with a limit of not less dm $1,000,000.
(iv) If Sublessee operates owned, hired, or non-owned
vehicles on the project, Automobile Liability insurance with limits not less
than $1,000,000.
(b) Sublessee will not do or permit to be done any act or thing upon
the Premises or the Building which would:
(i) jeopardize or be in conflict with fire insurance
policies covering the Building and personal property in the Building;
(ii) increase the rate of fire insurance applicable to the
Building to an amount higher than it would otherwise be for general office use;
or
(iii) subject Sublessor to any liability or responsibility for
injury to any person or persons or to property by reason of any business or
operation being carried on upon the Premises or in the Building.
(c) Certificates of insurance, providing for ten (10) days advance
notice of cancellation, together with copies of the endorsements, when
applicable, naming Sublessor and any others specified by Sublessor as additional
insured on General Liability, will be delivered to Sublessor prior to
Sublessee's occupancy of the Premises and from time to time at least 10 days
prior to the expiration of the Term of each such policy. Such policies shall be
placed with an insurer with an A. M. Bests' Rating of not less than B+:V.
(d) Sublessor and Sublessee each waive any and all rights to recover
against the other and the Prime Landlord, and against the officers, directors,
shareholders or employees of such parties, for any loss or damage to such
waiving party arising from any cause covered by any property insurance carried
by such party.
13. POSSESSION.
If Sublessor fails or is unable to deliver possession on the date
required by this Sublease then rent, additional rent and any other charges with
respect to such space shall xxxxx until Sublessor delivers possession.
14. SIGNS.
Sublessee may post signs on or about the Sublet Premises at Sublessee's
sole cost, in accordance with Prime Landlord's signage requirements.
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15. ALTERATIONS.
Sublessee may make alterations or additions to the interior or exterior
of the Sublet Premises if Prime Landlord consents to such alterations or
additions in accordance with the Prime Lease. Alterations and additions shall be
at Sublessee's sole expense. Sublessee shall indemnify, defend, and hold
Sublessor harmless from and against any and all claims and losses resulting from
such alterations and additions. At the expiration or earlier termination of this
Sublease, Sublessee shall remove all of its personal property located in or
about the Sublet Premises, including, without limitation, (i) its signs, (ii)
all movable furniture, trade fixtures, office equipment, and any of Sublessee's
personal belongings; and (iii) all telecommunication and other communication
cabling, including, without limitation, all copper wiring, coaxial wiring,
ethernet wiring, and fiber optic lines, as well as related conduit and
telecommunications equipment (e.g., routers, switches and relays) installed by
Sublessee beyond the minimum point of entry. In addition, Sublessee will return
the Sublet Premises to the condition at the time Sublessee took possession,
reasonable wear and tear excepted.
16. PARKING.
Sublessee shall have the non-exclusive right to use unreserved parking
spaces at a ratio of 4 parking stalls for each one thousand (1,000) RSF leased.
These stalls will be located within the covered garage or in the surface parking
area. All parking is provided free of charge.
17. PRIME LANDLORD'S CONSENT.
This Sublease shall not become effective and binding until Prime
Landlord has executed and delivered its consent thereto in the form attached to
this Sublease.
18. MISCELLANEOUS.
18.1 All notices, demands, requests, approvals, payments and other
communications between the parties (collectively "Notices") shall be in writing
at the address set forth below. Notices shall be sufficiently given if, and
shall be deemed not given unless, deposited in the United States mail postage
prepaid in certified or registered form, return receipt requested, or personally
served or delivered addressed as follows.
If to Sublessor:
California Casualty Management Company
Real Estate Department
0000 Xxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000-0000
Attn: Manager of Real Estate
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If to Sublessee:
Eloquent, Inc.
0000 Xxxxxxx xx xxx Xxxxxx
Xxx Xxxxx, XX 00000
Attn: Chief Financial Officer
If notices are personally delivered, copies also shall be mailed.
Notices shall be deemed given when personally served or delivered, two days
after deposit with Federal Express, or other similar overnight carrier, or five
days after deposit in the United States mail, postage-paid.
18.2 The covenants and agreements contained in this Sublease shall
bind and inure to the benefit of Sublessor, Sublessee and their respective
successors and assigns. This Sublease shall be interpreted for all purposes
under California law. The prevailing party in any action arising from this
Sublease shall be entitled to recover reasonable attorneys' fees.
18.3 All prior understandings and agreements between the parties
respecting the Sublet Premises are merged in this Sublease which alone fully and
completely sets forth the understanding of the parties. This Sublease may not be
changed or amended orally or in any manner other dm by a written agreement
signed by the parties, and approved in writing by Prime Landlord. Without first
obtaining Sublessee's agreement, Sublessor will not agree to amend the Prime
Lease in a manner that materially affects Sublessee's use or occupancy of the
Sublet Premises.
18.4 If either party hereto (i) makes a general assignment for the
creditors, (ii) admits in writing its inability to pay its debts as they become
due, files a in bankruptcy, (iii) is adjudicated as bankrupt or solvent, (iv)
files a petition in any pro seeking any reorganization, liquidation, dissolution
or similar relief under any law, an answer admitting the material allegations of
a petition filed against it in such proceeding, (vi) seeks, consents to or
acquiesces in the appointment of any trustee, receiver or liquidator, or (vii)
within ninety (90) days after the commencement of any proceeding against such
party seeking any reorganization, liquidation, dissolution or similar relief,
has not been dismissed or if within ninety days (90) after the appointment
without the consent or acquiescence of such party of any trustee, receiver or
liquidator, such appointment shall not have been vacated, then such party shall
be deemed in default hereunder and the other party may terminate this Sublease
at any time thereafter. In the event Sublessee files for bankruptcy protection,
all remaining payments under this Sublease constitute "rent reserved" under
applicable law.
18.5 Sublessor and Sublessee acknowledge that all real estate
commissions arising from this transaction shall be paid by Sublessor as part of
its agreement with Cornish & Xxxxx Commercial.
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IN WITNESS WHEREOF, the parties have executed this Sublease effective as
of the date first set forth above.
SUBLESSEE: ELOQUENT, INC.
Date June 23, 1999 By /s/ signature illegible
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Its CFO
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SUBLESSOR: CALIFORNIA CASUALTY MANAGEMENT COMPANY
Date June 24, 1999 By /s/ signature illegible
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Its Assistant Vice President and Real
Estate Manager
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Eloquent Sublease
2000/159
CONSENT OF PRIME LANDLORD
1. OTR, an Ohio general partnership ("Prime Landlord"), landlord
under the Prime Lease, consents to the foregoing Sublease; provided, however,
that except as specifically provided herein, this Consent shall not: (1)
constitute a waiver, amendment or modification of any term or condition of the
Prime Lease with respect to either Sublessor or Sublessee; or (2) limit the
obligations of Sublessor or the rights of Prime Landlord under the Lease; or (3)
make Prime Landlord a party to the Sublease.
2. Prime Landlord represents that (i) it is not in default under
the Prime Lease; (ii) to the best of its knowledge, Sublessor is not in default
under the Prime Lease; (iii) Sublessor has not paid rent for more than one month
in advance; and (iv) Sublessor's last rental payment was made June 23, 1999 for
the month of July, 1999.
OTR, an Ohio general partnership
Date 7/1/99 By /s/ signature illegible
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Its Director - West Region
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