EXHIBIT 10.26
SUB-SUBLEASE AGREEMENT
This SUB-SUBLEASE AGREEMENT (the "SUB-SUBLEASE") is dated for reference
purposes as of February 2000 and is made and entered into by and between USWEB
CORPORATION, a Delaware corporation ("SUB-SUBLANDLORD"), and ETOYS, INC., a
Delaware corporation ("SUB-SUBTENANT"), with reference to the following facts
and circumstances:
RECITALS
A. Santa Xxxxxx Associates, a California general partnership, as
landlord ("SMA"), and L.A. Gear, Inc., a California corporation ("L.A. Gear"),
as tenant, entered into that certain Office Lease dated June 5, 1992, as amended
by a First Amendment to Office Lease and Parking License Agreement between SMA
and L.A. Gear dated May 5, 1994 ("First Amendment") and a Second Amendment to
Office Lease and Parking License Agreement dated March 21, 1997 ("Second
Amendment") (collectively, the "ORIGINAL LEASE"), pursuant to which SMA
initially leased to L.A. Gear approximately 72,500 rentable square feet ("RSF")
on the basement, first and second floors and subsequently leased to L.A. Gear
approximately 24,550 RSF on the second and third floors (collectively, the
"MASTER PREMISES") of the building located at 0000 Xxxxx Xxxx Xxxxxxxxx, Xxxxx
Xxxxxx, Xxxxxxxxxx (the "BUILDING"), as more particularly described in the
Original Lease, upon the terms and conditions contained therein.
X. Xxxxxxx Properties L.P., a California limited partnership
("Landlord") acquired the Building from SMA and is SMA's successor in interest,
as landlord, under the Master Lease.
C. L.A. Gear, as sublessor, and Cybermedia, Inc., a Delaware
corporation ("Sublandlord"), as sublessee, entered into a sublease dated May 1,
1997 ("L.A. Gear Sublease") for a portion of the Master Premises consisting of
44,722 RSF and located on the entire first floor of the Building ("Sublease
Premises").
D. Sublandlord and Landlord entered into an Agreement Regarding Lease
dated June 1, 1998 and a Modification to Agreement Regarding Lease dated
December 11, 1998 (collectively, "Modification Agreement"), both of which,
together with the Original Lease, are attached hereto as EXHIBIT A and made a
part hereof. The Modification Agreement terminated the L.A. Gear Sublease as of
June 1, 1998, and established a direct lease between Sublandlord and Landlord
upon the terms and conditions of the Original Lease, as modified by the
Modification Agreement. The Modification Agreement and the Original Lease
hereinafter collectively shall be referred to as the "Master Lease".
E. Sublandlord, as sublandlord, and Sub-Sublandlord, as subtenant,
entered into a Sublease Agreement dated as of December 15, 1998 ("Sublease")
pursuant to which Sublandlord subleased the Sublease Premises. The Sublease is
attached hereto as EXHIBIT B and incorporated herein by reference.
F. Sub-Sublandlord now desires to sub-sublease the Sublease Premises
to Sub-Subtenant and Sub-Subtenant desires to sub-sublease the Sublease Premises
from Sub-Sublandlord upon the terms and conditions hereinafter provided.
G. All capitalized terms used herein shall have the same meaning
ascribed to them in the Master Lease or the Sublease unless otherwise defined
herein.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Sub-Sublandlord and Sub-Subtenant
(sometimes collectively referred to herein as the "PARTIES") mutually covenant
and agree as follows:
1. SUBLEASE PREMISES. Sub-Sublandlord hereby sub-subleases and demises
to Sub-Subtenant and Sub-Subtenant hereby hires and sub-subleases from
Sub-Sublandlord the Sublease Premises upon and subject to the terms, covenants
and conditions hereinafter set forth. For purposes of determining the Basic Rent
payable hereunder and for certain other purposes, the Parties stipulate that the
Sublease Premises contain 44,722 rentable square feet and 43,380 usable square
feet.
2. SUB-SUBLEASE TERM. The term of this Sub-Sublease (the "SUB-SUBLEASE
TERM") shall commence on the date (the "SUB-SUBLEASE COMMENCEMENT DATE") that is
the later of (i) the date on which both Landlord's and Sublandlord's written
consents to this Sub-Sublease have been obtained; (ii) April 1, 2000; or (iii)
the date on which Sub-Sublandlord vacates the Sublease Premises, which date
shall not be later than May 1, 2000. Not later than March 15, 2000, if
Sub-Sublandlord has received the required consents but has not already delivered
the Sublease Premises to Sub-Subtenant, Sub-Sublandlord shall notify
Sub-Subtenant in writing of the date upon which Sub-Sublandlord intends to
deliver the Sublease Premises to Sub-Subtenant. The Sub-Sublease Term shall
expire, unless sooner terminated as provided elsewhere in this Sub-Sublease, on
October 31, 2002 (the "SUB-SUBLEASE EXPIRATION DATE"). Sub-Sublandlord and
Sub-Subtenant shall execute a memorandum setting forth the actual Sub-Sublease
Commencement Date within ten (10) business days after the Sub-Sublease
Commencement Date. Notwithstanding anything to the contrary contained in this
Sub-Sublease, if Sub-Sublandlord has not delivered the Sub-Sublease Premises to
Sub-Subtenant in the required condition by May 1, 2000, Sub-Subtenant shall have
the right to terminate this Sub-Sublease, and Sub-Sublandlord promptly shall
return to Sub-Subtenant all sums paid by Sub-Subtenant to Sub-Sublandlord in
connection with its execution of this Sublease. The foregoing shall be
Sub-Subtenant's sole and exclusive remedy if Sub-Sublandlord fails to deliver
the Sublease Premises by May 1, 2000.
3. USE. The Sublease Premises shall be used and occupied by
Sub-Subtenant for the uses permitted under and in compliance with Section 11 of
the Master Lease and for no other purpose.
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4. SUBRENTAL.
(a) BASE RENTAL. Sub-Subtenant shall pay to Sub-Sublandlord,
in the manner set forth in this Section 4 as base rental for the
Sublease Premises ("BASE RENTAL"), according to the following schedule:
MONTHS RENT PER MONTH
Commencement Date - 12/31/00 $89,444.00
1/1/01 - 12/31/01 $91,680.10
1/1/02 - 10/31/02 $93,916.20
(b) PRORATION. Base Rental that is payable in respect of any
portion of a calendar month shall be prorated based upon the actual
number of days in the calendar month in question.
(c) ADDITIONAL RENT. Beginning with the Sub-Sublease
Commencement Date and continuing to the Sub-Sublease Expiration Date,
Sub-Subtenant shall pay to Sub-Sublandlord as additional rent
("Additional Rent") for the Sublease Premises, all special or
after-hours Building charges (including charges for cleaning, heating,
ventilation, air-conditioning and elevator services) incurred at the
request of Sub-Subtenant or its agents, or with respect to the Sublease
Premises. Base Rental, Additional Rent, Expenses and all other sums due
under this Sub-Sublease (including late payment charges) are
hereinafter collectively referred to as "RENT."
(d) EXPENSES. Commencing on the Sub-Sublease Commencement
Date, and continuing thereafter during the Sub-Sublease Term,
Sub-Subtenant shall pay to Sub-Sublandlord as Additional Rent for this
sub-subletting the amount that is 46.1% ("SUB-SUBTENANT'S SHARE") of
the excess of the Expenses (as set forth in Section 6 of the Master
Lease) for the Master Premises over the total amount of Expenses for
the Master Premises incurred during calendar year 1999 ("Base Year")
pursuant to the terms and conditions of the Master Lease, provided that
operating expenses shall in no event include any costs which would be
capital in nature according to generally accepted accounting
principles. Sub-Subtenant's Share is the percentage that corresponds to
the ratio of the stipulated rentable area of the Sublease Premises
(44,722 RSF) to the total rentable area of the Master Premises (97,050
RSF). Sub-Subtenant shall have the right to audit Sub-Sublandlord's
books to confirm the accuracy of all operating expense figures. All
operating expenses shall be based on ninety-five percent (95%)
occupancy of the Building.
(e) PAYMENT OF RENT. Except as otherwise specifically provided
in this Sub-Sublease, Rent shall be payable in lawful money without
demand, and without offset, counterclaim, or setoff, in monthly
installments, in advance, on the first day of each and every month
during the Sub-Sublease Term. All Rent is to be paid to Sub-Sublandlord
at
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its office at the address set forth in Section 24, or at such other
place or to such agent and at such place as Sub-Sublandlord may
designate by notice to Sub-Subtenant. Upon Sub-Subtenant's execution of
this Sub-Sublease, Sub-Subtenant shall pay to Sub-Sublandlord the sum
of $89,444.00 as Base Rental for the first month of the Term. Any
Additional Rent payable on account of items that are not payable
monthly by Sub-Sublandlord to Sublandlord under the Sublease or to
Landlord under the Master Lease shall be paid by Sub-Subtenant to
Sub-Sublandlord at least five (5) business days prior to the date when
such items are payable by Sub-Sublandlord to Sublandlord under the
Sublease or to Landlord under the Master Lease (unless a different time
for payment is stated elsewhere herein), provided that Sub-Subtenant
shall have received, at least five (5) business days prior to
delinquency, invoices for such items from Sub-Sublandlord, together
with copies of any related invoices, statements and other supporting
documentation theretofore received by Sub-Sublandlord from Landlord
pursuant to the terms of the Master Lease or from Sublandlord pursuant
to the terms of the Sublease.
(f) INTEREST AND LATE CHARGES. Any amount due to
Sub-Sublandlord that is not paid when due shall bear interest at the
Agreed Rate in the manner set forth in Section 39(n) of the Master
Lease. In addition, for each late payment that is not paid within ten
(10) days after the date the same is due, Sub-Subtenant shall pay to
Sub-Sublandlord a service charge as set forth in Section 8 of the
Master Lease.
5. SECURITY DEPOSIT. Upon Sub-Subtenant's execution of this
Sub-Sublease, Sub-Subtenant shall deposit with Sub-Sublandlord the sum of
$93,916.20, as a security deposit (the "DEPOSIT"). Sub-Sublandlord shall hold
the Deposit as security for the full and faithful performance by Sub-Subtenant
of its covenants and obligations under this Sub-Sublease. The Deposit is not an
advance Rent deposit, an advance payment of any other kind, or a measure of
Sub-Sublandlord's damages in case of Sub-Subtenant's default. If Sub-Subtenant
defaults in the full and timely performance of any or all of Sub-Subtenant's
covenants and obligations under this Sub-Sublease and any applicable cure period
shall have expired, then Sub-Sublandlord may, from time to time, without waiving
any other remedy available to Sub-Sublandlord, use the Deposit, or any portion
of it, to the extent necessary to cure or remedy the default or to compensate
Sub-Sublandlord for all or a part of the damages sustained by Sub-Sublandlord
resulting from Sub-Subtenant's default. Sub-Subtenant shall immediately pay to
Sub-Sublandlord within five (5) business days after receipt of demand, the
amount so applied in order to restore the Deposit to its original amount.
Sub-Sublandlord shall return the Deposit (or so much of the Deposit as has not
been applied pursuant to this Section) to Sub-Subtenant within thirty (30) days
after the expiration or earlier termination of the Sub-Sublease Term, provided
that there does not then exist any uncured event of default by Sub-Subtenant
under this Sub-Sublease. Sub-Sublandlord's obligations with respect to the
Deposit are those of a debtor and not a trustee. Sub-Sublandlord shall not be
required to segregate the Deposit from, and may
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commingle the Deposit with, Sub-Sublandlord's general or other funds.
Sub-Subtenant shall not at any time be entitled to interest on the Deposit.
6. EARLY ENTRY INTO THE SUBLEASE PREMISES. Subject to having obtained
the prior written consents to this Sub-Sublease from Landlord and Sublandlord,
Sub-Subtenant shall have the right to enter the Sub-Sublease Premises for
fourteen (14) days prior to the Sub-Sublease Commencement Date for the purpose
of installing its furniture, fixtures, cabling, equipment, wiring and the like.
Such early entry shall be subject to all of the terms and conditions of this
Sub-Sublease except for the obligation to pay Rent, including, without
limitation, delivery of certificates of insurance for all insurance required to
be carried by Sub-Subtenant pursuant to this Sub-Sublease. Sub-Subtenant shall
deliver an endorsement evidencing all insurance coverage required by the Master
Lease to Sub-Sublandlord, with Sub-Sublandlord, Sublandlord and Landlord named
as additional insureds, no later than five (5) business days prior to such early
entry pursuant to this Paragraph, and shall maintain such insurance throughout
the Sub-Sublease Term in accordance with the terms of the Master Lease.
Notwithstanding anything to the contrary in the Sublease or the Master Lease,
Sub-Subtenant may carry any or all insurance required hereunder under a
so-called "blanket" policy, provided that such policy provides that the amount
and type of insurance required thereunder.
7. CONDITION OF SUBLEASE PREMISES. Sub-Sublandlord warrants that all
Building operating systems serving the Sublease Premises, including but not
limited to all electrical, HVAC, plumbing and any other Building operating
systems, shall be in good operating order and repair on the Sub-Sublease
Commencement Date. In the event Sub-Subtenant determines that Sub-Sublandlord
has not delivered the Sublease Premises to Sub-Subtenant in the condition
required by the previous sentence, Sub-Subtenant shall have a thirty (30)- day
period after the Sub-Sublease Commencement Date to notify Sub-Sublandlord in
writing of those items or systems requiring repair, and Sub-Sublandlord shall
have the necessary repairs made as soon as is reasonably practicable at no cost
to Sub-Subtenant. Subject to Sub-Sublandlord's obligations under this Section 7
and Sub-Sublandlord's obligation to provide the Sublease Premises in "broom
clean" condition, Sub-Subtenant acknowledges that it is sub-subleasing the
Sublease Premises in its then-existing "AS IS" condition, and that
Sub-Sublandlord is not making any representation or warranty concerning the
condition of the Sublease Premises and is not obligated to perform any work to
prepare the Sublease Premises for Sub-Subtenant's occupancy. Sub-Subtenant
acknowledges that it is not authorized to make or do any alterations or
improvements in or to the Sublease Premises except as permitted by the
provisions of this Sub-Sublease, the Sublease and the Master Lease and that
Sub-Subtenant must deliver the Sublease Premises to Sub-Sublandlord on the
Sub-Sublease Expiration Date in the condition required by Paragraph 31 of this
Sub-Sublease, reasonable wear and tear and casualty excepted; provided, however,
that prior to undertaking any improvements to or alterations of the Sublease
Premises, Sub-Sublandlord agrees to not unreasonably withhold or delay such
approval. The foregoing shall not release Sub-Subtenant from the obligation to
obtain Sublandlord's or Landlord's prior consent as required by the Sublease or
the Master Lease, respectively. Sub-Subtenant shall be responsible for any and
all costs due to any noncompliance of the Sublease Premises (other than as due
to or caused by Sub-Sublandlord prior to the Sub-Sublease Commencement Date)
with applicable laws, codes and ordinances to the extent that Sub-Sublandlord
has such responsibility under the Sublease.
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8. SIGNAGE.
(a) GENERAL. Sub-Sublandlord cannot and does not grant to
Sub-Subtenant any right to install any Sub-Subtenant identification signs in,
on, or about the Sublease Premises except as provided in Section 8(b). However,
Sub-Subtenant may install any such signage that is expressly approved in writing
by Sublandlord and Landlord and allowed by the terms of the Master Lease and the
Sublease. Sub-Subtenant shall be solely responsible to contact and negotiate
directly with Sublandlord and Landlord for any signage rights that Sub-Subtenant
desires; provided, however, that Sub-Sublandlord reserves the right to (and upon
Sub-Subtenant's request, Sub-Sublandlord shall, to the extent requested)
participate in Sub-Subtenant's negotiations with, and communications to,
Sublandlord and Landlord or serve as the exclusive channel through which such
discussions, negotiations and communications are conducted and agrees to use
good faith reasonable efforts in connection therewith. Sub-Sublandlord shall
render such cooperation in connection with Sub-Subtenant's efforts to secure
signage rights as Sub-Subtenant may reasonably request, but Sub-Sublandlord
shall not be required to pay any money or incur any liability in connection with
Sub-Subtenant's efforts to secure signage rights. Sub-Sublandlord disclaims any
assurance that Sub-Subtenant will be able to negotiate satisfactory signage
rights with Sublandlord or Landlord, including monument signage. The failure for
any reason of Sublandlord or Landlord to approve Sub-Subtenant's proposed
signage (including monument signage) shall not excuse the performance of
Sub-Subtenant's obligations under this Sub-Sublease.
(b) MONUMENT SIGNS. Sub-Sublandlord consents to Sub-Subtenant
requesting Sublandlord's and Landlord's approval for Sub-Subtenant's name to
replace Sub-Sublandlord's name on the easternmost monument sign on Ocean Park
Boulevard (the "East Monument Sign") and on the monument sign near the north
entrance to the Building (the "North Entrance Monument Sign"), which, if
approved by Sublandlord and Landlord, shall be done at Sub-Subtenant's expense;
provided, however, that Sub-Subtenant must pay all costs incurred in connection
with seeking and obtaining Sublandlord's and Landlord's consent to the foregoing
sign modifications.
9. PARKING. Sub-Subtenant's parking rights shall be governed by the
Modification Agreement and EXHIBIT "B" attached thereto, and Sub-Subtenant shall
pay to Landlord all charges in connection therewith.
10. SUB-SUBTENANT'S OBLIGATIONS. Except as provided herein to the
contrary and except as modified by this Sub-Sublease, Sub-Subtenant covenants
and agrees that all obligations of Sub-Sublandlord under the Sublease shall be
done or performed by Sub-Subtenant with respect to the Sublease Premises, and
Sub-Subtenant's obligations shall run to Sub-Sublandlord, Sublandlord and
Landlord as Sub-Sublandlord may determine to be appropriate or be required by
the respective interests of Sub-Sublandlord, Sublandlord and Landlord. Except as
otherwise expressly set forth in this Sub-Sublease, and except to the extent due
to the negligence or willful misconduct of Sub-Sublandlord or Sub-Sublandlord's
agents, contractors or employees, Sub-Subtenant agrees to indemnify, protect and
defend Sub-Sublandlord, and hold it harmless, from and against any and all
claims, damages, losses, expenses and liabilities (including reasonable
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attorneys' fees) incurred as a result of the non-performance, non-observance or
non-payment of any of Sub-Sublandlord's obligations under the Master Lease, the
Sublease or any related agreement (including the Parking License Agreement and
the Modification Agreement) which, as a result of this Sub-Sublease, became an
obligation of Sub-Subtenant. If Sub-Subtenant makes any payment to
Sub-Sublandlord pursuant to this indemnity, Sub-Subtenant shall be subrogated to
the rights of Sub-Sublandlord concerning said payment. Sub-Subtenant shall not
do, nor permit to be done, any act or thing which is, or with notice or the
passage of time would be, a default under this Sub-Sublease, the Sublease or the
Master Lease.
11. SUB-SUBLANDLORD'S OBLIGATIONS. Sub-Sublandlord agrees that
Sub-Subtenant shall be entitled to receive all services, utilities and repairs
to be provided by Landlord to Sublandlord under the Master Lease. Sub-Subtenant
shall look solely to Landlord for all such services and utilities and shall not,
under any circumstances, seek or require Sub-Sublandlord to perform any of such
services or provide any utilities, nor shall Sub-Subtenant make any claim upon
Sub-Sublandlord for any damages which may arise by reason of Landlord's default
under the Master Lease unless such default is caused by Sub-Sublandlord. Any
condition resulting from a default by Landlord under the Master Lease or a
default by Sublandlord under the Sublease (other than a default caused by
Sub-Sublandlord) shall not constitute as between Sub-Sublandlord and
Sub-Subtenant an eviction, actual or constructive, of Sub-Subtenant, and no such
default shall excuse Sub-Subtenant from the performance or observance of any of
its obligations to be performed or observed under this Sub-Sublease, or entitle
Sub-Subtenant to receive any reduction in or abatement of the Rent provided for
in this Sub-Sublease, except to the extent Sub-Sublandlord receives an abatement
in its Rent under the Sublease or the Master Lease with respect to the Sublease
Premises. Sub-Sublandlord shall pay all fixed rent and additional rent payable
by Sub-Sublandlord pursuant to the Sublease to the extent that such payment is
not the obligation of Sub-Subtenant hereunder. If the Master Lease, the Sublease
and/or this Sub-Sublease terminates as a result of a default by Sub-Sublandlord
under the terms of the Master Lease, the Sublease or this Sub-Sublease,
Sub-Sublandlord shall indemnify, defend, protect and hold harmless Sub-Subtenant
from and against any and all actual out-of pocket claims, liabilities, damages,
costs, and expenses (including reasonable attorneys' fees, but excluding
punitive or consequential damages, lost profits and the like), caused by or
arising in connection with such termination.
12. DEFAULT BY SUB-SUBTENANT. In the event Sub-Subtenant shall be in
default of any covenant of, or shall fail to honor any obligation under, this
Sub-Sublease, Sub-Sublandlord, upon giving any required notice and subject to
the right, if any, of Sub-Subtenant to cure any such default within any
applicable cure period, shall have available to it against Sub-Subtenant all of
the remedies available (a) to Landlord under the Master Lease in the event of a
similar default thereunder, (b) Sublandlord under the Sublease in the event of a
similar default thereunder, or (c) at law or in equity. Notwithstanding the
foregoing, in no event shall Sub-Subtenant be liable for punitive or, except to
the extent recoverable under California Civil Code Section 1951.2, consequential
damages.
13. QUIET ENJOYMENT. As long as Sub-Subtenant pays all of the Rent due
hereunder and performs all of Sub-Subtenant's other obligations hereunder,
Sub-Sublandlord shall do
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nothing to affect Sub-Subtenant's right to peaceably and quietly have, hold and
enjoy the Sublease Premises.
14. NON-DISTURBANCE AGREEMENT. Promptly after the full execution of
this Sub-Sublease, in accordance with and pursuant to Section 28(n) of the
Master Lease, Sub-Sublandlord shall request that Sublandlord deliver to
Sub-Subtenant, an instrument whereby Sublandlord agrees that in the event the
Sublease shall terminate on account of a default by Sub-Sublandlord thereunder,
then, so long as Sub-Subtenant complies with all of the terms, conditions and
provisions of this Sub-Sublease, Sublandlord shall not disturb Sub-Subtenant's
quiet enjoyment of the Sublease Premises, provided that Sub-Subtenant pays to
Sublandlord, in addition the Rent under this Sub-Sublease, the amount by which
the rent and other charges payable to Sublandlord under the Master Lease
(prorated with respect to the Sublease Premises) exceed (if at all) the Rent
payable under this Sub-Sublease. The failure for any reason of Sublandlord to
provide a non-disturbance agreement shall not excuse the performance of
Sub-Subtenant's obligations under this Sub-Sublease.
15. CONSENT OF LANDLORD. Section 28 of the Master Lease requires
Sub-Sublandlord to obtain the written consent of Landlord to this Sub-Sublease,
and Section 15 of the Sublease requires Sub-Sublandlord to obtain the written
consent of Sublandlord to this Sub-Sublease. Sublandlord shall solicit
Landlord's and Sublandlord's consent to this Sub-Sublease promptly following the
execution and delivery of this Sub-Sublease by Sublandlord and Sub-Subtenant.
For purposes of Section 28(b) of the Master Lease, the "proposed effective date"
of this Sub-Sublease shall be deemed to be the Sub-Sublease Commencement Date.
If Landlord or Sublandlord shall give Sub-Sublandlord written notice of their
respective disapprovals of this Sub-Sublease within thirty (30) days after their
respective receipts of Sub-Sublandlord's request for approval and the related
information, documentation and fee required to be submitted pursuant to Section
28(b) of the Master Lease, then either Party may elect to terminate this
Sub-Sublease by delivering written notice of such election to the other Party.
Upon any such termination, Sublandlord shall promptly refund to Sub-Subtenant,
without interest, the advance Base Rental and Deposit theretofore paid by
Sub-Subtenant to Sub-Sublandlord pursuant to Sections 4 and 5 (but
Sub-Sublandlord shall not be obligated to reimburse the out-of-pocket costs
incurred by Sub-Subtenant in connection with entering into this Sub-Sublease),
whereupon neither Party shall have any further rights against or obligations to
the other Party. The Parties acknowledge that under Section 1.A.(1) of the
Modification Agreement, Landlord's or Sublandlord's failure to give
Sub-Sublandlord a written notice withholding Landlord's or Sub-Sublandlord's
consent to this Sub-Sublease within such thirty (30)- day period shall be deemed
to constitute Landlord's or Sublandlord's refusal to consent to this
Sub-Sublease.
16. ASSIGNMENT AND SUBLETTING. As set forth in Section 1 of the Modification
Agreement, Sub-Subtenant shall not assign this Sub-Sublease or any of
Sub-Subtenant's rights hereunder, and shall not sub-sublet the Sublease Premises
or any portion thereof, except in accordance with the provisions of Section 1 of
the Modification Agreement, and with the prior written consent of Landlord,
Sublandlord and Sub-Sublandlord. So long as Landlord and Sublandlord have
consented to any assignment or subletting ("Transfer") requested by
Sub-Subtenant, Sub-Sublandlord's consent shall not be unreasonably withheld or
delayed.
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Notwithstanding the foregoing, however, Sub-Sublandlord shall not be required to
consent to any Transfer if a condition to Landlord's or Sublandlord's consent
requires the payment of any fee or other consideration by Sub-Sublandlord,
unless Sub-Subtenant agrees to pay such amount on behalf of Sub-Sublandlord.
Notwithstanding anything to the contrary contained in the Modification
Agreement, the Bonus Rent required to be paid by Sub-Subtenant to
Sub-Sublandlord in excess of amortization of any reasonable brokerage commission
and any tenant improvement allowance payable by Sub-Subtenant shall be one
hundred percent (100%) of such Bonus Rent.
17. LIMITATION ON SUBLANDLORD'S LIABILITY. If Sublandlord succeeds to
Sub-Sublandlord's position under this Sub-Sublease, (a) Sublandlord shall not be
liable to Sub-Subtenant for advance rental payments, deposits or other payments
which have not been actually delivered to Sublandlord by Sub-Sublandlord
(provided that in no event shall Sub-Subtenant be obligated to furnish
Sublandlord with an additional Security Deposit in the event Sub-Sublandlord
shall fail to so deliver the Deposit to Sublandlord) and (b) Sub-Subtenant shall
pay Sublandlord the amount of any additional costs or expenses incurred by
Sublandlord for repairs, maintenance or otherwise as a result of any change in
the nature or occupancy caused by this Sub-Sublease. In the event of
termination, or re-entry, or dispossession of Sub-Sublandlord by Sublandlord
under the Sublease, but subject to the provisions of Section 14 of this
Sub-Sublease, Sublandlord may, at its option, take over all of the right, title
and interest of Sub-Sublandlord under this Sub-Sublease and Sub-Subtenant shall,
at Sublandlord's option, attorn to Sublandlord pursuant to the provisions of
this Sub-Sublease, except that Sublandlord shall not (i) be liable for any
previous act or omission of Sub-Sublandlord under this Sub-Sublease, (ii) be
subject to any offset not expressly provided in this Sub-Sublease, or (iii) be
bound by any previous modification of this Sub-Sublease without Sublandlord's
written consent or any previous prepayment of more than one (1) month's fixed
rent or any additional rent then due.
18. ANNUAL FINANCIAL STATEMENTS. The provisions of this Section 18
shall not become applicable or binding unless and until Sub-Subtenant ceases to
be required to file annual and quarterly reports with the Securities and
Exchange Commission. Subject to the foregoing, as soon as available but no later
than ninety (90) after and as of the end of each financial reporting year of
Sub-Subtenant, Sub-Subtenant shall deliver to Sub-Sublandlord a complete copy of
Sub-Subtenant's financial statements (with all notes thereto), which shall
include at minimum a balance sheet, income statement, statement of changes in
equity, and statement of cash flow for such financial reporting year, prepared
and certified by an independent certified public accountant reasonably
acceptable to Sub-Sublandlord. Sub-Subtenant shall have ten (10) business days
after receipt of written notice from Sub-Sublandlord of Sub-Subtenant's failure
to deliver such financial statements when and as required by this Section in
which to cure such failure.
19. HOLDING OVER. Sub-Subtenant shall surrender possession of the
Sublease Premises immediately upon the expiration of the Sub-Sublease Term or
termination of this Sub-Sublease in accordance with all of the terms of
Paragraph 31 below, reasonable wear and tear and casualty excepted. If
Sub-Subtenant shall continue to occupy or possess the Sublease Premises after
such expiration or termination without the consent of Sublandlord and
Sub-Sublandlord,
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then Sub-Subtenant shall be a tenant at sufferance and not a tenant from
month-to-month. All the terms, provisions and conditions of this Sub-Sublease
shall apply to such tenancy at sufferance except those terms, provisions and
conditions pertaining to the Sub-Sublease Term, provided that the monthly Base
Rental shall be immediately adjusted upward upon the expiration or termination
of this Sub-Sublease to one hundred fifty percent (150%) of the monthly Base
Rental for the Sublease Premises in effect under this Sub-Sublease during the
month that includes the day immediately prior to the date of the expiration or
termination of this Sub-Sublease. Further, Sub-Subtenant shall indemnify,
protect, defend with counsel reasonably acceptable to Sub-Sublandlord and hold
harmless Sub-Sublandlord from and against any and all claims, liabilities,
judgments, causes of action, damages, losses, costs and expenses (including
reasonable attorneys' fees and experts' fees) caused by or arising in connection
with Sub-Subtenant's failure to surrender possession of the Sublease Premises to
Sub-Sublandlord upon expiration of the Sub-Sublease Term and in the manner
required by this Sub-Sublease.
20. BROKERS. Sub-Sublandlord and Sub-Subtenant each represent and
warrant to the other that they have not dealt with any broker or finder in
connection with the negotiation or consummation of this Sub-Sublease other than
CRESA Partners LLC, representing Sub-Subtenant, and Colliers International - The
Xxxxxx Company, representing Sub-Sublandlord ("BROKERS"). Sub-Sublandlord agrees
to pay the commissions of Brokers in accordance with a separate agreement.
Sub-Sublandlord and Sub-Subtenant each agree to indemnify, protect, hold
harmless and defend the other from and against any and all claims, damages,
losses, expenses and liabilities (including reasonable attorneys' fees) incurred
by the other as a result of any claims for brokerage commissions, finder's fees,
or other compensation made by any other agent, broker, salesman or finder as a
consequence of said party's actions or dealings with such agent, broker,
salesman, or finder.
21. LIMITATION OF SUB-SUBTENANT'S ESTATE. Sub-Subtenant's estate shall
in all respects be limited to, and be construed in a fashion consistent with,
the estate granted to Sub-Sublandlord by Sublandlord. Sub-Subtenant shall stand
in the place of Sub-Sublandlord and shall defend, protect, indemnify and hold
Sub-Sublandlord harmless with respect to all covenants, warranties, obligations,
and payments made by Sub-Subtenant as required of Sub-Sublandlord by the
Sublease with respect to the Sublease Premises. In the event of a breach by
Sublandlord of a term of the Sublease, then, except as expressly provided
herein, Sub-Sublandlord's sole obligation in regard to its obligation under this
Sub-Sublease shall be to use reasonable good faith efforts in diligently
pursuing the correction or cure by Sublandlord of Sublandlord's breach,
including using reasonable efforts to require Sublandlord to use reasonable
efforts to diligently pursue any correction or cure of any breach by Landlord
under the Master Lease. To the extent that Sub-Sublandlord by this Sub-Sublease
has conveyed to Sub-Subtenant such utilities, services and similar entitlements
"as Landlord may provide under the Master Lease," or "to which Sub-Sublandlord
may be entitled under the Master Lease," Sub-Sublandlord agrees and covenants to
use its reasonable efforts to obtain delivery of same to Sub-Subtenant. With
respect to all such entitlements, as well as any covenants, warranties,
representations, obligations or other agreements of Sublandlord (not otherwise
expressly limited in this Sub-Sublease) and as used in this Section,
Sub-Sublandlord's "reasonable efforts" shall require, at Sub-Subtenant's
reasonable request and at Sub-Subtenant's sole cost and expense, the execution
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by Sub-Sublandlord and delivery to Sublandlord, promptly following receipt of
Sub-Subtenant's written request therefor, of notices, requests and other similar
writings.
22. ENFORCEMENT OF SUBLEASE. Sub-Sublandlord shall use diligent good
faith efforts (without being required to spend more than a nominal sum and
subject to the remainder of this Paragraph 22) to obtain, for the benefit of
Sub-Subtenant, the performance of the obligations of Sublandlord pursuant to the
Sublease. Sub-Subtenant, at its sole cost and expense, may (but only to the
extent applicable to the Sublease Premises) enforce against Sub-Sublandlord the
rights given Sub-Sublandlord under the Sublease in order to realize
Sub-Subtenant's rights under this Sub-Sublease, including rights of reasonable
approval, rights of access, rights of repair and rights to xxxxx rent; provided,
however, that Sub-Subtenant may only xxxxx Rent pursuant to this Section to the
extent that Sub-Sublandlord may xxxxx rent under the Sublease. Sub-Sublandlord
hereby assigns to Sub-Subtenant Sub-Sublandlord's rights under the Sublease to
enforce provisions of the Sublease against Sublandlord, but only to the extent
that such rights apply to the Sublease Premises, reserving to Sub-Sublandlord a
non-exclusive right to enforce the rights given Sub-Sublandlord under the
Sublease. Sub-Sublandlord agrees to join in any arbitration or lawsuit commenced
by Sub-Subtenant hereunder and agrees to use reasonable efforts to assist
Sub-Subtenant in any such action, provided that Sub-Subtenant shall reimburse
Sub-Sublandlord for reasonable out-of-pocket costs and expenses incurred by
Sub-Sublandlord to provide such assistance, including reasonable attorneys' fees
and court costs. Sub-Subtenant shall defend, protect, indemnify and hold
Sub-Sublandlord harmless for any breach by Sub-Subtenant of this Sub-Sublease,
the Sublease or the Master Lease (to the extent incorporated into the Sublease),
and shall indemnify, protect, defend and hold Sub-Sublandlord harmless in
connection with any enforcement action under this Section, except to the extent
incurred as a result of Sub-Sublandlord's negligence or willful misconduct.
23. INCORPORATION OF TERMS OF MASTER LEASE.
(a) This Sublease is subject and subordinate to the Sublease and
the Master Lease. Subject to the modifications set forth in this Sub-Sublease,
the terms of the Sublease and the Master Lease (to the extent incorporated into
the Sublease) are incorporated herein by reference, and shall, as between
Sub-Sublandlord and Sub-Subtenant (as if they were Landlord and Tenant,
respectively, under the Master Lease, and Sublandlord and Subtenant,
respectively, under the Sublease) constitute the terms of this Sub-Sublease
except to the extent that they are inapplicable to, inconsistent with, or
modified by the terms of this Sub-Sublease. In the event of any inconsistencies
between the terms and provisions of the Master Lease and the Sublease, on the
one hand, and the terms and provisions of this Sub-Sublease, on the other hand,
as and between Sub-Sublandlord and Sub-Subtenant, the terms and provisions of
this Sub-Sublease shall govern. Sub-Sublandlord represents and warrants that (a)
the copies of the Master Lease attached hereto as EXHIBIT A, and the Sublease
attached hereto as EXHIBIT B, are true and complete copies thereof, and except
as set forth in EXHIBIT B, there are no additional agreements between
Sub-Sublandlord and Sublandlord with respect to the Sublease Premises, and
(b)to the best of Sub-Sublandlord's actual knowledge, there are no defaults on
the part of either Landlord or Sublandlord under the Master Lease, nor defaults
on the part of either Sublandlord or Sub-Sublandlord under the Sublease, and no
event has occurred which, with the giving of notice and
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the passage of time, would constitute a default under the Master Lease or the
Sublease. Furthermore, Sub-Sublandlord shall not modify or amend the Sublease in
any way that would materially adversely affect Sub-Subtenant's use of, access to
or quiet enjoyment of the Sublease Premises or that would materially increase
Sub-Subtenant's obligations, or materially diminish Sub-Subtenant's rights,
under this Sub-Sublease without Sub-Subtenant's consent, which consent
Sub-Subtenant may withhold in its sole but reasonable discretion. Sub-Subtenant
acknowledges that it has reviewed the Master Lease and the Sublease and is
familiar with the terms and conditions thereof.
(b) For the purposes of incorporation herein, the terms of the
Master Lease are incorporated subject to the following additional modifications:
(i) In all provisions of the Master Lease (under the terms
thereof and without regard to modifications thereof for the
purposes of incorporation into this Sublease) requiring the
approval or consent of Landlord, Sub-Subtenant shall be required
to obtain the approval or consent of Sublandlord, Sub-Sublandlord
and Landlord.
(ii) In all provisions of the Master Lease requiring
Sublandlord to submit, exhibit to, supply or provide Landlord with
evidence, certificates, or any other matter or thing,
Sub-Subtenant shall be required to submit, exhibit to, supply or
provide, as the case may be, the same to Landlord, Sublandlord and
Sub-Sublandlord. In any such instance, Sub-Sublandlord reasonably
shall determine if such evidence, certificate or other matter or
thing shall be satisfactory.
(iii) Sub-Sublandlord shall have no obligation to restore
or rebuild any portion of the Sublease Premises after any
destruction or taking by eminent domain or to perform any services
or other obligations of Landlord under the Master Lease.
(iv) In each instance in which the Master Lease affords
Sub-Sublandlord a period within which to cure a breach or event of
default, such period, as applied to Sub-Subtenant, shall expire
two (2) business days before the expiration of the cure period
specified in the Master Lease; provided, however, that if such
period is two (2) business days or fewer, Sub-Subtenant shall have
two (2) business days to perform.
(c) The following provisions of the Master Lease are specifically
excluded from incorporation in this Sublease: Section 1 (except for the
references therein to the Project, the Building, Expenses, and After-Hours
Charges, which are incorporated to the extent consistent with the provisions of
this Sub-Sublease), the third sentence of Section 2(a) insofar as the size of
the Sublease Premises is concerned, Section 2(e), the provisions set forth on
pages 2(a), 2(b) and 2(c) of the Master Lease (which pertain to the Additional
Premises), 3, the provisions in Section 4(a) designated by *, **, ***, and +, 8,
9, 10, the sentence in Section 15 designated by *** on page 16(a) of the Master
Lease, the sentence in Section 17 designated by *** on page
12
20(a) of the Master Lease, 17(h), the sentence in Section 20 designated by * on
page 22 of the Master Lease, 25, 28, that portion of Section 30 set forth on
page 34(a) of the Master Lease, 32, 39(c), 39(g), 39(h), 41, 43, 44, 45, 46,
47(b), the second and third sentences of Section 47(c), Exhibits A, X-0, X-0, B,
C and D to the Master Lease, all references to Landlord's Expense Stop and Base
Year Costs inconsistent with the terms hereof, and the provisions of the First
and Second Amendments. Sections 2(a) through (f) and Sections 4, 5 and 6 of the
Agreement Regarding Lease are specifically excluded from incorporation in this
Sub-Sublease. With respect to the Modification of Agreement Regarding Lease,
Sections 3 and 4 are specifically excluded from incorporation in this
Sub-Sublease. The exclusion of certain provisions of the Master Lease from
incorporation into this Sub-Sublease shall not in any way limit or affect the
obligations of Landlord to Sublandlord and, subject to the applicable conditions
and limitations set forth in this Sub-Sublease, Sublandlord to enforce
Landlord's compliance with such obligations.
(d) For the purposes of incorporation herein, the terms of the
Sublease are incorporated subject to the following additional modifications:
(i) In all provisions of the Sublease (under the terms
thereof and without regard to modifications thereof for the
purposes of incorporation into this Sub-Sublease) requiring the
approval or consent of Sublandlord, Sub-Subtenant shall be
required to obtain the approval or consent of Sublandlord,
Sub-Sublandlord and Landlord.
(ii) In all provisions of the Sublease requiring
Sub-Sublandlord to submit, exhibit to, supply or provide Landlord
with evidence, certificates, or any other matter or thing,
Sub-Subtenant shall be required to submit, exhibit to, supply or
provide, as the case may be, the same to Landlord, Sublandlord and
Sub-Sublandlord. In any such instance, Sub-Sublandlord reasonably
shall determine if such evidence, certificate or other matter or
thing shall be satisfactory.
(iii)Sub-Sublandlord shall have no obligation to restore
or rebuild any portion of the Sublease Premises after any
destruction or taking by eminent domain or to perform any services
or other obligations of Sublandlord under the Sublease.
(iv) In each instance in which the Sublease affords
Sub-Sublandlord a period within which to cure a breach or event of
default (and such period is in addition to or different from the
cure period set forth in the Master Lease), such period, as
applied to Sub-Subtenant, shall expire two (2) business days
before the expiration of the cure period specified in the
Sublease; provided, however, that if such period is two (2)
business days or fewer, Sub-Subtenant shall have two (2) business
days to perform.
(e) The following provisions of the Sublease are specifically
excluded from incorporation in this Sub-Sublease: the Recitals, Sections 1, 2,
4(a), 4(e), 5, 6, 7, 11, 14, 15, 16, 18, 20, 21, 24, 29, 32, 33, and 36. The
exclusion of certain provisions of the Sublease from
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incorporation into this Sub-Sublease shall not in any way limit or affect the
obligations of Sublandlord to Sub-Sublandlord and, subject to the applicable
conditions and limitations set forth in this Sublease, Sub-Sublandlord to
enforce Sublandlord's compliance with such obligations.
(f) So long as Sub-Subtenant is not in default under this
Sublease, Sub-Sublandlord agrees to pay rent due under the Sublease and
otherwise perform all of Sub-Sublandlord's Master Lease and Sublease obligations
("Obligations") except to the extent (i) such Obligations are the obligations of
Sub-Subtenant under this Sublease, (ii) Sub-Sublandlord's performance of such
Obligations is dependent upon the performance by Sub-Subtenant of certain
obligations which Sub-Subtenant has failed to perform, or (iii)
Sub-Sublandlord's failure to perform such obligations results from acts or
omissions of Sub-Subtenant in violation of this Sub-Sublease, the Sublease or
the Master Lease. Sub-Sublandlord and Landlord shall not amend or modify the
Sublease in any way so as to materially and adversely affect Sub-Subtenant or
its interest hereunder, materially increase Sub-Subtenant's obligations
hereunder or materially restrict Sub-Subtenant's rights hereunder, without the
prior written consent of Subtenant, which shall not be unreasonably withheld or
delayed.
24. NOTICES. Anything contained in any provision of this Sub-Sublease
to the contrary notwithstanding, Sub-Subtenant agrees, with respect to the
Sublease Premises, to comply with and remedy any default in this Sub-Sublease,
the Sublease or the Master Lease which is Sub-Subtenant's obligation to cure,
within the period allowed to Sub-Sublandlord under the Sublease, even if such
time period is shorter than the period otherwise allowed therein due to the fact
that notice of default from Sub-Sublandlord to Sub-Subtenant is given after the
corresponding notice of default from Sublandlord to Sub-Sublandlord.
Sub-Sublandlord agrees to forward to Sub-Subtenant, promptly upon receipt
thereof by Sub-Sublandlord, a copy of each notice, including notices of default,
received by Sub-Sublandlord in its capacity as "Subtenant" under the Sublease.
Sub-Subtenant agrees to forward to Sub-Sublandlord, promptly upon receipt
thereof, copies of any notices received by Sub-Subtenant from Landlord,
Sublandlord or from any governmental authorities. All notices, demands and
requests shall be in writing and shall be sent either by hand delivery or by a
nationally recognized overnight courier service (e.g., Federal Express), in
either case return receipt requested, to the address of the appropriate party.
Notices, demands and requests so sent shall be deemed given when the same are
received. Notices shall be sent to the attention of:
If to Sub-Sublandlord: USWeb Corporation
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Real Estate Department
If to Sublandlord: c/o Network Associates
0000 Xxxxxxx Xxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxx
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If to Sub-Subtenant: eToys, Inc.
At the Sublease Premises
with a copy to: eToys, Inc.
0000 Xxxxx Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxxxx Xxxxxx
and General Counsel
If to Landlord: Xxxxxxx Properties, L.P.
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention:
25. TIME OF THE ESSENCE. Time is strictly of the essence with respect
to each and every term, condition, obligation and provision of this
Sub-Sublease.
26. GOVERNING LAW. California law shall govern the construction and
enforcement of this Sub-Sublease.
27. INTERPRETATION OF SUB-SUBLEASE. Section and Subsection headings in
this Sub-Sublease are included solely for ease of reference and shall not affect
the construction of this Sub-Sublease. This Sub-Sublease shall be construed as
if it had been prepared jointly by Sub-Sublandlord and Sub-Subtenant. Unless
otherwise indicated, all references to Sections and Subsections are to Sections
and Subsections in this Sub-Sublease. Each Exhibit referred to in this
Sub-Sublease is an Exhibit attached to this Sub-Sublease and is incorporated
herein by reference. All times referred to in this Sub-Sublease are Los Angeles,
California times. When used in this Sub-Sublease, the words "include,"
"includes," and "including" shall be construed as if immediately followed by the
words "without limitation." As used in this Sub-Sublease, the term "business
day" means any day that is not a Saturday, Sunday or day on which banking
institutions in the State of California are authorized or obligated by law or
executive order to be closed, and the term "day" means a calendar day, whether
or not a business day. If any portion of this Sub-Sublease shall be declared to
be invalid, illegal or unenforceable by any court of competent jurisdiction,
such portion shall be deemed severed from this Sub-Sublease and the remaining
portions shall continue in full force and effect.
28. ENTIRE AGREEMENT; AMENDMENTS IN WRITING. It is understood and
acknowledged that there are no oral agreements between the Parties hereto
affecting this Sub-Sublease and this Sub-Sublease supersedes and cancels any and
all previous negotiations, arrangements, brochures, agreements and
understandings, if any, between the Parties hereto or displayed by
Sub-Sublandlord to Sub-Subtenant with respect to the subject matter thereof, and
none thereof shall be used to interpret or construe this Sub-Sublease. This
Sub-Sublease, and the exhibits and schedules attached hereto, contain all of the
terms, covenants, conditions, warranties and agreements of the Parties relating
in any manner to the rental, use and occupancy of the Sublease Premises and
shall be considered to be the only agreements between the Parties hereto and
their
15
representatives and agents. None of the terms, covenants, conditions or
provisions of this Sub-Sublease can be modified, deleted or added to except in
writing signed by the Parties hereto. All negotiations and oral agreements
acceptable to both Parties have been merged into and are included herein. There
are no other representations or warranties between the Parties, and all reliance
with respect to representations is based totally upon the representations and
agreements contained in this Sub-Sublease.
29. INDEMNITY.
(a) SUB-SUBTENANT'S INDEMNIFICATION. Except to the extent caused
by Sub-Sublandlord's negligence or willful misconduct, Sub-Subtenant shall
indemnify, protect, defend with counsel reasonably acceptable to Sub-Sublandlord
and hold harmless Sub-Sublandlord from and against any and all claims,
liabilities, judgments, causes of action, damages, costs and expenses (including
reasonable attorneys' and experts' fees but excluding ), caused by or arising in
connection with: (i) the use, occupancy or condition of the Sublease Premises,
or (ii) the negligence or willful misconduct of Sub-Subtenant or its employees,
contractors, agents, or invitees, or (iii) a breach of Sub-Subtenant's
obligations under this Sub-Sublease; or (iv) a breach of Sub-Subtenant's
obligations under the Sublease and/or the Master Lease to the extent
incorporated herein; or (v) any Hazardous Materials (as defined in Section 47 of
the Master Lease) used, stored, released, disposed, generated or transported by
Sub-Subtenant, its agents, employees, contractors or invitees in, on or about
the Sublease Premises.
(b) SUB-SUBLANDLORD'S INDEMNIFICATION. Except to the extent
caused by Sub-Subtenant's negligence or willful misconduct, Sub-Sublandlord
shall indemnify, protect, defend with counsel reasonably acceptable to
Sub-Subtenant and hold Sub-Subtenant harmless from and against any and all any
and all actual out-of pocket claims, liabilities, damages, costs and expenses
(including reasonable attorneys' fees, but excluding punitive or consequential
damages, lost profits and the like) caused by or arising in connection with: (i)
a breach of Sub-Sublandlord's obligations under this Sub-Sublease; or (ii) a
breach of Sub-Sublandlord's obligations as Subtenant under the Sublease (and, to
the extent incorporated into the Sublease, the Master Lease), to the extent
those obligations are not assumed by Sub-Subtenant under this Sub-Sublease; or
(iii) the negligence or willful misconduct of Sub-Sublandlord, its employees,
contractors, agents or invitees occurring on or about the Sublease Premises; or
(iv) Hazardous Materials used, stored or disposed of by Sub-Sublandlord in, on
or about the Sublease Premises.
30. TERMINATION OF SUBLEASE BY SUB-SUBLANDLORD. Sub-Sublandlord shall
not voluntarily terminate the Sublease during the Term unless and until
Sublandlord has agreed in writing to continue this Sub-Sublease in full force
and effect as a direct sublease between Sublandlord and Sub-Subtenant upon and
subject to all of the terms, covenants and conditions of this Sub-Sublease for
the balance of the Term hereof, except that Sub-Subtenant shall pay to
Sublandlord, in addition to the Rent under this Sub-Sublease, the amount by
which Rent and other charges payable to Sublandlord under the Sublease (prorated
with respect to the Sublease Premises) exceed the Rent payable under this
Sub-Sublease. If Sublandlord so consents, Sub-Subtenant shall attorn to
Sublandlord in connection with any such voluntary termination and shall execute
an attornment agreement in such form as may reasonably be requested by
16
Sublandlord; provided, however, that the attornment agreement does not
materially adversely affect the use by Sub-Subtenant of the Sublease Premises in
accordance with the terms of this Sub-Sublease, otherwise materially increase
Sub-Subtenant's obligations under this Sub-Sublease or materially decrease
Sub-Subtenant's rights under this Sub-Sublease.
31. SURRENDER. On the expiration or earlier termination of this
Sub-Sublease, Sub-Subtenant shall surrender to Sub-Sublandlord the Sublease
Premises and any alterations or improvements installed by Sub-Subtenant, broom
clean and in good condition (except for ordinary wear and tear, destruction to
the Sublease Premises covered by Article 18 of the Master Lease and for
alterations installed by Sub-Subtenant that Sub-Subtenant has the right to
remove or is obligated to remove, so long as Sub-Subtenant repairs any damage to
the Sublease Premises under this Paragraph or Article 15 of the Master Lease),
and shall remove all of its personal property including any signs, notices and
displays. Notwithstanding anything to the contrary contained in the foregoing
sentence, Sub-Subtenant shall not be required to remove any alterations or
improvements existing in the Sublease Premises (and not installed by
Sub-Subtenant) on the Sub-Sublease Commencement Date. Sub-Subtenant shall
perform all restoration made necessary by the removal of any of its improvements
or alterations or personal property installed on or after the Sub-Sublease
Commencement Date not later than the expiration of the Sub-Sublease Term. If
removal of any alterations or improvements or personal property installed by
Sub-Subtenant would damage the Building structure, Sub-Subtenant shall give
Sub-Sublandlord, Sublandlord and Landlord prior written notice thereof, and
Landlord may elect to make the removal at Sub-Subtenant's expense or otherwise
require Sub-Subtenant to post security for the restoration. Sub-Sublandlord may
retain or dispose of in any manner any such improvements or alterations or
personal property that Sub-Subtenant does not remove from the Sublease Premises
on expiration or termination of this Sub-Sublease, and title to any such
improvements or alterations or personal property that Sub-Sublandlord elects to
retain or dispose of shall vest in Sub-Sublandlord. Sub-Subtenant waives all
claims against Sub-Sublandlord for any damage or loss to Sub-Subtenant arising
out of Sub-Sublandlord's retention or disposition of any such improvements,
alterations or personal property and shall be liable to Sub-Sublandlord for
Sub-Sublandlord's costs of storing, removing and disposing of any such items
which Sub-Subtenant fails to remove. Sub-Subtenant shall indemnify, defend and
hold Sub-Sublandlord harmless from all damages, loss, cost and expense
(including reasonable attorneys' fees and court costs) arising out of or in
connection with Sub-Subtenant's failure to surrender the Sublease Premises in
the condition required by this Paragraph.
32. ASSIGNMENT TO PERMITTED TRANSFEREE. Notwithstanding anything to the
contrary contained in this Sub-Sublease, Sub-Subtenant, without
Sub-Sublandlord's prior written consent, may sublet the Sublease Premises or
assign this Lease to: (i) a subsidiary, affiliate, franchisee, division or
corporation controlling, controlled by or under common control with
Sub-Subtenant; (ii) a successor corporation related to Sub-Subtenant by merger,
consolidation, non-bankruptcy reorganization or government action; or (iii) a
purchaser of substantially all of Sub-Subtenant's assets located at the Sublease
Premises, so long as, in the case of a transfer defined in subsections (ii) and
(iii), the net worth of the transferee is equal to or greater that
Sub-Subtenant's net worth at the time that Sub-Subtenant executed this
Sub-Sublease, and Sub-Subtenant provides Sub-Sublandlord with notice of such a
transfer at least ten (10) days prior to the effective date of the
17
transfer. For purposes of this Sub-Sublease, a sale of Sub-Subtenant's capital
stock through any public exchange shall not be deemed an assignment, subletting
or other transfer of this Sub-Sublease or the Sublease Premises requiring
Landlord's or Sub-Sublandlord's consent. Nothing in this Paragraph shall be
deemed to relieve Sub-Subtenant of the obligation to obtain Sublandlord's and
Landlord's consents to any assignment or subletting described in this Section.
33. RIGHT TO CURE. If Sub-Sublandlord defaults in the performance or
observance of any of Sub-Sublandlord's remaining obligations under the Sublease
(and, to the extent incorporated by reference herein, the Master Lease) or fails
to perform Sub-Sublandlord's stated obligations under this Sub-Sublease to
enforce, for Sub-Subtenant's benefit, Sublandlord's obligations under the
Sublease, then Sub-Subtenant shall give Sub-Sublandlord notice specifying in
what manner Sub-Sublandlord has defaulted, and if such default shall not be
cured by Sub-Sublandlord within thirty (30) days thereafter (except that if such
default cannot be cured within said thirty (30)-day period, this period shall be
extended for an additional reasonable time, provided that Sub-Sublandlord
commences to cure such default within such thirty (30)-day period and proceeds
diligently thereafter to effect such cure as quickly as possible), then in
addition, Sub-Subtenant shall be entitled, at Sub-Subtenant's option, to cure
such default and promptly collect from Sub-Sublandlord Sub-Subtenant's
reasonable expenses in so doing (including, without limitation, reasonable
attorneys' fees and court costs).
34. AUTHORIZATION TO DIRECT SUB-SUBLEASE PAYMENTS. Sub-Sublandlord
hereby acknowledges that Sub-Sublandlord's failure to pay the base rent,
additional rent and other sums owing by Sub-Sublandlord to Sublandlord under the
Sublease will cause Sub-Subtenant to incur damages, costs and expenses not
contemplated by this Sub-Sublease, especially in those cases where Sub-Subtenant
has paid sums to Sub-Sublandlord hereunder which correspond in whole or in part
to the amounts owing by Sub-Sublandlord to Sublandlord under the Sublease.
Accordingly, Sub-Subtenant shall have the right to pay all rent and other sums
owing by Sub-Subtenant to Sub-Sublandlord hereunder for those items which also
are owed by Sub-Sublandlord to Sublandlord under the Sublease directly to
Sublandlord on the following terms and conditions:
(a) Sub-Subtenant reasonably believes that Sub-Sublandlord has
failed to make any payment required to be made by Sub-Sublandlord to
Sublandlord under the Sublease and Sub-Sublandlord fails to provide
adequate proof of payment within ten (10) business days after the cure
period under the Sublease has expired.
(b) Sub-Subtenant shall not prepay any amounts owing by
Sub-Subtenant without the consent of Sub-Sublandlord.
(c) Sub-Subtenant shall provide to Sub-Sublandlord concurrently
with any payment to Sublandlord reasonable evidence of such payment.
(d) If Sub-Sublandlord notifies Sub-Subtenant that it disputes
any amount demanded by Sublandlord, Sub-Subtenant shall not make any
such payment to Sublandlord unless Sublandlord has provided a three
(3)-day notice to pay such amount or forfeit the Sublease.
18
Any sums paid directly by Sub-Subtenant to Sublandlord in accordance with this
Section shall be credited toward the amounts payable by Sub-Subtenant to
Sub-Sublandlord under this Sub-Sublease. In the event Sub-Subtenant tenders
payment directly to Sublandlord in accordance with this Section and Sublandlord
refuses to accept such payment, Sub-Subtenant shall have the right to deposit
such funds in an account with a national bank for the benefit of Sublandlord and
Sub-Sublandlord, and the deposit of said funds in such account shall discharge
Sub-Subtenant's obligation under this Sub-Sublease to make the payment in
question.
35. WAIVER OF SUBROGATION. Subject to the consent of Landlord and
Sublandlord, the provisions of Section 17(g) of the Master Lease, "Waiver of
Subrogation", shall be extended by Landlord and Sublandlord to Sub-Subtenant,
and Landlord, Sublandlord, Sub-Sublandlord and Sub-Subtenant shall be bound by
the provisions thereof.
36. HAZARDOUS MATERIALS. Sub-Sublandlord represents and warrants to
Sub-Subtenant that, to the best of Sub-Sublandlord's actual knowledge, as of the
Sub-Sublease Commencement Date (i) the Sublease Premises and the operations
conducted thereof by Sub-Sublandlord prior to the Sub-Sublease Commencement Date
are in compliance with all Hazardous Materials laws; and (ii) Sub-Sublandlord's
handling, transportation, storage, treatment, disposal, release or use of
Hazardous Materials that has occurred on or about the Sublease Premises, or the
soil, groundwater or surface water thereof, prior to the Sub-Sublease
Commencement Date, has been in compliance with all Hazardous Materials Laws.
Sub-Sublandlord further represents and warrants that, to the best of
Sub-Sublandlord's actual knowledge, no litigation has been brought or
threatened, nor any settlements reached with any governmental or private party,
involving Sub-Sublandlord and concerning the actual or alleged presence of
Hazardous Materials on or about the Sublease Premises, or the soil, groundwater
or surface water thereof, nor has Sub-Sublandlord received any written notice of
any violation or alleged violation of any Hazardous Materials Laws, pending
claims or pending investigations with respect to the presence of Hazardous
Materials on or about the Sublease Premises, or the soil, groundwater or surface
water thereof. Except to the extent that the Hazardous Material in question was
released, emitted, used, stored, manufactured, transported or discharged by
Sub-Subtenant, its agents, employees, contractors, officers, directors,
shareholders, successors or assigns ("Sub-Subtenant Parties") Sub-Subtenant
shall not be responsible for, and Sub-Subtenant and the Sub-Subtenant Parties
hereby are released from, any claim, remediation obligation, investigation
obligation, monitoring obligation, removal obligation, liability, cause of
action, penalty, attorneys' fee, consultant's cost, expense or damage owing or
alleged to be owing with respect to any Hazardous Material present on or about
the Sublease Premises, or the soil, groundwater or surface water thereof, as a
result of the storage, disposal, use, or release of Hazardous Materials by
Sub-Sublandlord, its agents, employees, contractors or invitees.
Sub-Sublandlord's representations under this Section shall survive the
termination of this Sub-Sublease.
37. CONFIDENTIALITY. Except as may be required by subpoena or other
legal requirement or for the purposes or except as may be required in connection
with the sale or refinancing of the Building, Sub-Sublessor and Sub-Sublessee
shall use good faith efforts to keep confidential all information learned by or
disclosed to the other with respect to the other's business (including without
limitation, a copy of this Sub-Sublease and the terms hereof and
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payments due hereunder) and, with respect to Sub-Sublandlord, information
disclosed or discovered during an entry by Sub-Sublandlord into the Sublease
Premises. The foregoing obligation shall also be binding upon Sub-Sublandlord's
and Sub-Subtenant's legal representatives, successors, assigns, employees,
servants and agents and shall not be used (except for their confidential
internal purposes) or disclosed to others by them or their servants, agents,
employees, legal representatives, successors or assigns, without the express
prior written consent of the other, which the non-requesting party may withhold
in its sole and absolute discretion. Notwithstanding anything to the contrary
contained in this Sub-Sublease, prior to entering the Sublease Premises for any
reason other than an emergency, in which case no notice shall be required,
Sub-Sublandlord shall provide Sub-Subtenant with reasonable prior notice of the
entry, and Sub-Subtenant shall have the right to have an employee accompany
Sub-Sublandlord while Sub-Sublandlord is in the Sublease Premises. If it is
necessary to disclose any confidential information to a court of competent
jurisdiction or pursuant to a subpoena as described above, the party to whom
such an order or subpoena has been directed shall (i) notify the other party in
writing of any such order or subpoena as soon as reasonably practicable of the
receipt of such order or subpoena and prior to making such a disclosure, and
(ii) provide such other party the opportunity to obtain an injunction
prohibiting any documents which require or purport to require the disclosure of
such confidential information.
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IN WITNESS WHEREOF, THE PARTIES HERETO HAVE ENTERED THIS SUB-SUBLEASE
AS OF THE DATE FIRST WRITTEN ABOVE.
SUB-SUBLANDLORD:
USWEB CORPORATION,
a Delaware corporation
By: /s/ XXXXX XXXXXXXX
--------------------------
Name: Xxxxx Xxxxxxxx
Title: General Counsel
SUB-SUBTENANT:
ETOYS, INC.,
a Delaware corporation
By: /s/ XXXXXX XXXXXX
--------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
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