EXHIBIT 10.8
SUBLEASE
THIS SUBLEASE ("Sublease"), dated April 7, 1999 for reference purposes
only, is entered into by and between ALTEON NETWORKS, INC., a Delaware
corporation ("Sublessor") and SILICON VALLEY COLLEGE, a California corporation
("Sublessee").
Recitals
A. Sublessor leases certain premises (the "Master Premises") consisting
of a building located at 0000 Xxx Xxxxxxx Xxxxxx, Xxx Xxxx, Xxxxxxxxxx, from
South San Xxxx Interests, a California limited partnership ("Prime Landlord")
pursuant to that certain lease dated December 24, 1997 (the "Prime Lease") as
attached hereto as Exhibit A. Capitalized terms used but not defined herein have
the same meanings as they have in the Prime Lease.
B. Sublessor desires to sublease a portion of the Master Premises to
Sublessee, and Sublessee desires to sublease a portion of the Master Premises
from Sublessor on the terms and provisions hereof.
Now, Therefore, in consideration of the mutual covenants and conditions
contained herein, Sublessor and Sublessee covenant and agree as follows:
AGREEMENT
1. Subleased Premises. On and subject to the terms and conditions below,
Sublessor hereby leases to Sublessee, and Sublessee hereby leases from
Sublessor, a portion of the Master Premises (the "Premises"). The Premises
contain approximately Thirty Thousand (30,000) square feet, and are more
particularly described in Exhibit B.
2. Term. Subject to the consent of the Prime Landlord, this Sublease
shall commence May 1, 1999 (the "Commencement Date"), and shall expire February
28, 2003, unless sooner terminated pursuant to any provision hereof.
3. Possession. If for any reason Sublessor cannot deliver possession of
the Premises to Sublessee on the Commencement Date, 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.
4. Rent.
(a) Commencing on the Commencement Date and continuing throughout the
term of this Sublease, Sublessee shall pay to Sublessor monthly Basic Rent (the
"Basic Rent") in the following amounts:
Period Amount
------ ------
Month 01-03 $17,250.00
Month 04-12 $40,200.00
Month 13-24 $36,000.00
Month 25-34 $37,500.00
(b) In addition to Basic Rent, Sublessee shall pay to Sublessor
thirty nine percent (39%) of all amounts due from Sublessor to Prime Landlord
pursuant to the Prime Lease, excepting Base Monthly Rent (the "Additional
Rent"). Such Basic Rent and Additional Rent shall be referred to herein as
"Rent."
(c) Rent shall be payable to Sublessor in lawful money of the United
States, in advance, without prior notice, demand, or offset, on or before the
first day of each calendar month during the term hereof. All Rent shall be paid
to Sublessor at the address specified for notice to Sublessor in Section 16,
below. If the Commencement Date does not fall on the first day of a calendar
month, Rent for the first month shall be prorated on a daily basis based upon a
thirty day calendar month.
(d) Upon execution of this Sublease, Sublessee shall pay to Sublessor
the sum of Seventeen Thousand Two Hundred Fifty and 00/100 Dollars ($17,250.00),
constituting payment in advance of the first month's Rent, together with the
Security Deposit, as set forth in Section 5 below.
(e) In the event of any casualty or condemnation affecting the
Premises, Rent payable by Sublessee shall be abated hereunder, but only to the
extent that Rent under the Prime Lease is abated, and Sublessee waives any right
to terminate the Sublease in connection with such casualty or condemnation
except to the extent the Prime Lease is also terminated as to the Premises or
any portion thereof.
5. Security Deposit. Upon execution of this Sublease, Sublessee shall
deposit with Sublessor the cash sum of Seventy Five Thousand Six Hundred and
00/100 Dollars ($75,600.00) as a security deposit ("Security Deposit"). If
Sublessee fails to pay Rent or other charges when due under this Sublease, or
fails to perform any of its other obligations hereunder, Sublessor may use or
apply all or any portion of the Security Deposit for the payment of any Rent or
other amount then due hereunder and unpaid, for the payment of any other sum for
which Sublessor may become obligated by reason of Sublessee's default or breach,
or for any loss or damage sustained by Sublessor as a result of Sublessee's
default or breach. If Sublessor so uses any portion of the Security Deposit,
Sublessee shall restore the Security Deposit to the full amount originally
deposited within ten (10) days after Sublessor's written demand. Sublessor shall
not be required to keep the Security Deposit separate from its general accounts,
and shall have no obligation or liability for payment of interest on the
Security Deposit. The Security Deposit, or so much thereof as had not
theretofore been applied by Sublessor, shall be returned to Sublessee within
thirty (30) days of the expiration or earlier termination of this Sublease,
provided Sublessee has vacated the Premises.
6. Assignment and Subletting.
(a) Sublessee may not assign, sublet, transfer, pledge, hypothecate
or otherwise encumber the Premises, in whole or in part, or permit the use or
occupancy of the Premises by anyone other than Sublessee, unless Sublessee has
obtained Sublessor's consent thereto (which shall not be unreasonably withheld)
and the consent of Prime Landlord. Regardless of Sublessor's consent, no
subletting or assignment shall release Sublessee of its obligations hereunder.
Any rent or other consideration payable to Subtenant pursuant to any
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sublease or assignment permitted by this paragraph which is in excess of the
Rent payable to Netscape pursuant hereto ("Sublease Bonus Rent") shall be
divided equally between Netscape and Subtenant.
(b) Within thirty (30) days after Sublessee's request to assign or
sublease, Sublessor may (by giving written notice to Sublessee) terminate this
Sublease with respect to the Premises (or the space requested to be assigned or
sublet) as of the effective date of the proposed assignment or sublease, and all
obligations under this Sublease as to such space shall expire except as to any
obligations that expressly survive any termination of this Sublease.
7. Condition of Subleased Premises. Sublessee has used due diligence in
inspecting the Premises and agrees to accept the Premises in "as-is" condition
and with all faults as of the date of Sublessee's execution of this Sublease,
without any representation or warranty of any kind or nature whatsoever, or any
obligation on the part of Sublessor to modify, improve or otherwise prepare the
Premises for Sublessee's occupancy except as otherwise provided in Section 8
hereof. By entry hereunder, Sublessee accepts the Premises in their present
condition and without representation or warranty of any kind by Sublessor.
Sublessee hereby expressly waives the provisions of subsection 1 of Section 1932
and Sections 1941 and 1942 of the California Civil Code and all rights to make
repairs at the expense of Sublessor as provided in Section 1942 of said Civil
Code.
8. Condition of the Premises upon Commencement.
(a) As of the Commencement Date, Sublessor agrees to the following:
(i) Perform all repairs necessary to ensure that the building
systems (including lighting fixtures) and roof membrane are in
good operating condition and repair;
(ii) Patch and repaint all existing remaining interior walls;
(iii) Replace all existing VCT and all damaged or stained ceiling
tiles;
(iv) Install new tile or carpeting in those areas without floor
covering;
(v) Remove all the de-ionized water system (including water
lines) and compressed air lines; and
(vi) Clean the Premises (including window blinds and both sides
of windows).
(b) Any additional alterations or improvements shall be done at the
sole cost and expense of Sublessee and shall be subject to the provisions of
this Sublease.
9. Use. Sublessee may use the Premises only for the purposes as allowed
in the Prime Lease, and no other purpose. Sublessee shall promptly comply with
all applicable statutes, ordinances, rules, regulations, orders, restrictions of
record, and requirements in effect during the term of this Sublease governing,
affecting and regulating the Premises, including but not limited to the use
thereof. Sublessee shall not use or permit the use of the Premises in a manner
that will create waste or a nuisance, interfere with or disturb other tenants in
the Building or violate the provisions of the Prime Lease. Notwithstanding the
foregoing, Sublessor shall not
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unreasonably withhold its consent to any proposed alternative use and shall use
reasonable good faith efforts to obtain the consent of the Prime Landlord for
any proposed alternative use.
10. Parking. Sublessee shall have such parking rights as Sublessor may
with respect to the Premises pursuant to the Prime Lease.
11. Signage. Sublessee shall share equally all rights of signage as
Sublessor may have with respect to the Premises pursuant to the Prime Lease.
12. Incorporation of Sublease.
(a) All of the terms and provisions of the Prime Lease, except as
provided in subsection (b) below, are incorporated into and made a part of this
Sublease and the rights and obligations of the parties under the Prime Lease are
hereby imposed upon the parties hereto with respect to the Premises, Sublessor
being substituted for the "Landlord" in Prime Lease, and Sublessee being
substituted for the "Tenant" in the Prime Lease. It is further understood that
where reference is made in the Prime Lease to the "Premises," the same shall
mean the Premises as defined herein; where reference is made to the
"Commencement Date," the same shall mean the Commencement Date as defined
herein; and where reference is made to "this Lease," the same shall mean this
Sublease.
(b) The following Sections of the Prime Lease are not incorporated
herein: Sections 1, 2, 4A, 4C, 5, 6A, 8A, 9B, the second paragraph of Section
10, the second sentence of 14B, 15, 16, 17, 18, 19C, 19E, 19M and 19N and all
Exhibits.
(c) Sublessee hereby assumes and agrees to perform for Sublessor's
benefit, during the term of this Sublease, all of Sublessor's obligations with
respect to the Premises under the Prime Lease, except as otherwise provided
herein. Sublessee shall not commit or permit to be committed any act or omission
which violates any term or condition of the Prime Lease. Except as otherwise
provided herein, this Sublease shall be subject and subordinate to all of the
terms of the Prime Lease.
13. Insurance. Sublessee shall comply with the insurance provisions of the
Prime Lease as incorporated. Additionally, such insurance shall insure the
performance by Sublessee of its indemnification obligations hereunder and shall
name Prime Landlord and Sublessor as additional insureds. All insurance required
under this Sublease shall contain an endorsement requiring thirty (30) days
written notice from the insurance company to Sublessee and Sublessor before
cancellation or change in the coverage, insureds or amount of any policy.
Sublessee shall provide Sublessor with certificates of insurance evidencing such
coverage prior to the commencement of this Sublease.
14. Utilities. Sublessee shall be responsible for its pro-rata share of
all utilities to the Master Premises.
15. Default. In addition to defaults contained in the Prime Lease, failure
of Sublessee to make any payment of Rent when due hereunder shall constitute an
event of default hereunder.
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16. Notices. The addresses specified in the Prime Lease for receipt of
notices to each of the parties are deleted and replaced with the following:
To Sublessor at: Alteon Networks, Inc.
00 Xxxxx Xxxx Xxxx.
Xxx Xxxx, XX 00000-0000
Attn: Xxx Xxxxxx
With copy to: Cooley Godward LLP
5 Palo Alto Square
0000 Xx Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
Attn: Xxxx X. Xxxx
To Sublessee at: Silicon Valley College
00000 Xxxxxxx Xxxxxx
Xxxxxxx, Xx 00000
Attn: Xxxxxx Xxxxxxx, President
17. Sublessor's Obligations.
(a) To the extent that the provision of any services or the
performance of any maintenance or any other act respecting the Premises or
building is the responsibility of Prime Landlord (collectively "Prime Landlord
Obligations"), upon Sublessee's request, Sublessor shall make reasonable efforts
to cause Prime Landlord to perform such Prime Landlord Obligations, provided,
however, that in no event shall Sublessor be liable to Sublessee for any
liability, loss or damage whatsoever in the event that Prime Landlord should
fail to perform the same, nor shall Sublessee be entitled to withhold the
payment of Rent or terminate this Sublease.
(b) It is expressly understood that the services and repairs which
are incorporated herein by reference, including but not limited to, maintenance
of the foundation, exterior load bearing walls and roof structure of the
building, or other services will in fact be furnished by Prime Landlord, and not
by Sublessor. In addition, Sublessor shall not be liable for any maintenance,
restoration (following casualty or destruction) or repairs in or to the Building
or Subleased Premises, other than its obligation hereunder to use reasonable
efforts to cause Prime Landlord to perform its obligations under the Prime
Lease. Except as otherwise provided herein, Sublessor shall have no other
obligations to Sublessee with respect to the Premises or the performance of the
Prime Landlord Obligations.
18. Early Termination of Sublease. If, without the fault of Sublessor, the
Prime Lease should terminate prior to the expiration of this Sublease, Sublessor
shall have no liability to Sublessee on account of such termination. To the
extent that the Prime Lease grants Sublessor any discretionary right to
terminate the Prime Lease, whether due to casualty, condemnation, or otherwise,
Sublessor shall be entitled to exercise or not exercise such right in its
complete and absolute discretion.
19. Consent of Prime Landlord and Sublessor. If Sublessee desires to take
any action which requires the consent or approval of Sublessor pursuant to the
terms of this Sublease,
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prior to taking such action, including, without limitation, making any
alterations, then, notwithstanding anything to the contrary herein, (a)
Sublessor shall have the same rights of approval or disapproval as Prime
Landlord has under the Prime Lease, and (b) Sublessee shall not take any such
action until it obtains the consent of Sublessor and Prime Landlord, as may be
required under this Sublease or the Prime Lease. This Sublease shall not be
effective unless and until any required written consent of the Prime Landlord
shall have been obtained.
20. Brokers. Each party hereto represents and warrants that it has dealt
with no broker in connection with this Sublease and the transactions
contemplated herein, except Cornish & Xxxxx Commercial/ONCOR International.
Each party shall indemnify, protect, defend and hold the other party harmless
from all costs and expenses (including reasonable attorneys' fees) arising from
or relating to a breach of the foregoing representation and warranty.
21. No Third Party Rights. The benefit of the provisions of this Sublease
is expressly limited to Sublessor and Sublessee and their respective permitted
successors and assigns. Under no circumstances will any third party be
construed to have any rights as a third party beneficiary with respect to any of
said provisions.
22. Counterparts. This Sublease may be signed in two or more counterparts,
each of which shall be deemed an original and all of which shall constitute one
agreement.
IN WITNESS WHEREOF, the parties have executed this Sublease as of the date
first written above.
Sublessor: Sublessee:
ALTEON NETWORKS, INC. SILICON VALLEY COLLEGE
By: Xxxxx Xxxxx By: Xxxxxx Xxxxxxx
------------------------ ---------------------------
Title: CFO Title: President
--------------------- ------------------------
Signature: /s/ X.X. Xxxxx Signature: /s/ Xxxxxx Xxxxxxx
----------------- ---------------------
Date: 4/9/99 Date: 4/9/99
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