1
Exhibit 10.5
SUB-SUBLEASE
SQA, Inc., a Delaware corporation, with a place of business at One
Burlington Xxxxx Drive, Burlington, Massachusetts, ("Sublessor"), and
SilverStream Software, Inc., a Delaware corporation with a place of business at
Xxx Xxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxxxx ("Sublessee"), make this Sublease as
of February 14, 1997.
PRELIMINARY STATEMENT
A. Pursuant to the terms of that certain Lease dated December 5,
1994 (the "Master Lease"), by and between Xxxxx X. Xxxxxxxx and Xxxxxxx X.
Xxxxxx as Trustees of Burlington Xxxxx Office Trust No. I under a Declaration of
Trust dated April 9, 1980 as the same may be amended from time to time
(collectively, "Owner"), as landlord, and Sybase, Inc., a Delaware corporation
("Sybase"), as Tenant, Owner demised to Sybase certain office space (the
"Premises") located in the building known as Building No. 1 of Burlington Xxxxx
Office Park, with an address of One Burlington Xxxxx Drive, Burlington,
Middlesex County, Massachusetts (the "Building").
B. Pursuant to the terms of that certain Sublease dated as of
February 28, 1996 by and between Sybase as Sublandlord and Sublessor herein as
Subtenant, as affected by that certain Consent to Sublease dated March 12, 1996
and by and among Owner, Sybase and Sublessor and as amended by that certain
First Amendment to Sublease dated as of January 9, 1997, as so affected and
amended being hereinafter referred to as the "Sublease" and attached hereto as
Exhibit A, Sybase demised to Sublessor a portion of the Premises (the "Sublease
Premises") consisting of approximately 80,825 rentable square feet (and
including the entire second floor, the entire third floor and a portion of the
first floor) at the Building.
Capitalized terms used but not defined in this Sub-Sublease shall have
the meaning ascribed to such terms in the Sublease.
Sublessor desires to sub-sublet to Sublessee, and Sublessee desires to
accept from Sublessor, a portion of the Sublease Premises consisting of
approximately 18,225 rentable square feet on the second floor of the Building
and shown on Exhibit B attached to this Sub-Sublease (the "Demised Premises"),
on the terms and conditions set forth in this Sub-Sublease.
AGREEMENT
In consideration of the mutual covenants of this Sub-Sublease and other
valuable consideration, the receipt and sufficiency of which Sublessee and
Sublessor hereby acknowledge, Sublessor and Sublessee agree as follows:
1. DEMISED PREMISES. Sublessor hereby subleases to Sublessee, and
Sublessee hereby subleases from Sublessor, the Demised Premises together with
the non-
2
exclusive right (together with Sublessor, Sybase and other occupants of the
Building) to use and permit its invitees to use public or common lobbies,
hallways, stairways, passenger elevators and sanitary facilities in the Building
necessary for Sublessee's use and occupancy of the Demised Premises and the
right to use on an unreserved basis up to 60 parking spaces at the Building,
subject to the provisions of Section 2.2(a) of the Sublease. Sublessor shall
deliver the Demised Premised to Sublessee on the Term Commencement Date (as
hereinafter defined) in broom clean condition but otherwise in such condition
assets as of the date of this Sub-Sublease, free of all occupants-other than
Sublessee except that (i) Sublessor shall install, at its sole cost and expense,
a demising wall in accordance with the demising plans attached hereto as Exhibit
B-1 and noted thereon as "SQA demising wall" ("Sublessor's Work") and (ii)
certain furniture which Sublessee has purchased from Sybase shall remain in the
Demised Premises, subject to the terms of a letter agreement dated January 30,
1997 among Sybase, Sublessee and Sublessor attached hereto as Exhibit C and
incorporated herein by reference. Sublessee acknowledges that Sublessor has made
no representations or warranties concerning the Demised Premises, the Building
or the Furniture or their nature, condition or usability, or their fitness for
Sublessee's purposes.
2. TERM. Subject to the provisions of Section 20, the term of this
Sub-Sublease (the "Lease Term") shall commence on March 1, 1997 or such later
date on which Sublessor delivers the Demised Premises to Sublessee in the
condition required in Paragraph 1 of this Sub-Sublease (the "Term Commencement
Date") and shall terminate on the date which is the last day of the 24th full
calendar month following the Term Commencement Date, or such sooner date upon
which the Lease Term may expire or terminate under this Sub-Sublease or pursuant
to law. Sublessor shall use reasonable efforts to deliver the Demised Premises
to Sublessee in the condition required in Paragraph 1 of this Sub-Sublease on or
before March 15, 1997. Notwithstanding the foregoing or any other provision of
this Sub-Sublease, in the event that Sublessor shall fail to deliver the Demised
Premises to Sublessee in the condition required in Paragraph 1 of the
Sub-Sublease on or before April 1, 1997, which date may be extended by Sublessor
(but in no event later than May 1, 1997) to the date which is five (5) business
days after the Consent Date (such date, as it may be so extended, the "Outside
Delivery Date"), Sublessee shall have the right to terminate this Sub-Sublease
by notice given to Sublessor not later than four (4) days after the Outside
Delivery Date. In the event of such termination this Sub-Sublease shall be null
and void and of no other force or effect, without recourse to either party
hereto.
3. USE. Sublessee shall use and occupy the Demised Premises only for the
Permitted Use. Sublessee shall also comply with all laws governing or affecting
Sublessee's use of the Demised Premises, and Sublessee acknowledges that
Sublessor has made no representations or warranties concerning whether the
Permitted Use complies with such laws.
-2-
3
4. MONTHLY BASE RENT. Commencing on the Commencement Date, Sublessee shall
pay to Sublessor rent at an annual rate of $400,950.00 (at the rate of $22 per
rentable square foot, which amount includes reimbursement to Sublessor for its
expenses for reasonable attorney fees, brokerage commissions and construction of
the SQA demising wall) ("Base Rent"), in equal monthly installments of
$33,412.50, on the first day of each calendar month during the Lease Term. If
the Lease Term includes a partial calendar month at its beginning or end, the
monthly installment of Base Rent for such partial month shall be prorated at the
rate of 1/30 of the monthly installment for each day in such partial month
within the Lease Term and shall be payable in advance on the first day of such
partial month occurring within the Lease Term. The Base Rent shall be paid to
Sublessor at its offices located at the Building, or such other place as
Sublessor may designate in writing, in lawful money of the United States of
America, without demand, deduction, offset or abatement. Notwithstanding the
foregoing, for the first nine (9) months of the Lease Term, a portion of the
monthly Base Rent, in the amount of $5,974.83, shall be abated, such that the
Base Rent for such period shall be $27,437.67 per month during such period.
5. OPERATING EXPENSES AND TAXES. The Sublessee shall pay to Sublessor, as
additional rent, Sublessee's Share (as defined below) of (a) the amount by which
the Taxes with respect to the Property for any Tax Year exceed the Sublessee Tax
Base (as defined below) and (1)) the excess of the Operating Expenses for any
Operating Year over and above the Sublessee Operating Expense Base (as defined
below). Sublessee's Share shall be determined by multiplying the amount by which
the (a) Taxes exceed the Sublessee Tax Base or (b) Operating Expenses exceed the
Sublessee Base Operating Expenses, as applicable, by a fraction, the numerator
of which is the marketable Floor Area of the Demised Premise and the denominator
of which is the Rentable Floor Area of the Sublease Premises (which the parties
agree is 22.6%). The Sublessee Tax Base shall be the 1996-1997 fiscal year
(ending June 30, 1997) and the Sublessee Operating Expense Base shall be 1997
calendar year. All such Tax payments shall be made within twenty (20) days of
demand and all such Operating Expense payments shall be made within ten (10)
days of demand. In addition, at Sublessor's option, one-twelfth (1/12) of the
estimated annualized amounts (whether for Taxes or Operating Expenses( shall be
paid monthly on the first of the month. Sublessee shall also pay 22.6% of all
other additional rent and other charges payable under the Sublease by Sublessor,
as subtenant under the Sublease, in connection with services provided to
Sublessee at the Demised Premises; provided, however, that Sublessee shall not
be liable to Sublessor, Sybase, Owner or any other party for any additional rent
or other charges payable under the Sublease by Sublessor which arise from or in
connection with any default by Sublessor under the Sublease or any other
negligent act or omission or intentional misconduct of Sublessor, or in
connection with services provided to portions of the Sublease Premises other
than the Demised Premises. Appropriate adjustments and corrections shall be made
in any payments due to or from Sublessee hereunder in the event that adjustments
or corrections are made to payments due to or from Sublessor under the Sublease
pursuant to Section
-3-
4
8.3 of the Sublease. Sublessee shall pay the costs of any overtime HVAC provided
at its request unless Sublessor shall also request the same, in which event such
costs shall be shared equally.
6. UTILITY SERVICES AND CHARGES. Sublessee will pay to Sublessor as
additional rent hereunder, within ten (10) days of being billed therefor, all
charges for electrical service which are reasonably allocable to the Demised
Premises by Sublessor. Sublessor shall have the option to charge Sublessee's
allocable share of electrical usage on an estimated basis, which estimates shall
be made by Sublessor reasonably and in good faith, including consideration of
the amounts it is billed by Sybase. As of the date hereof, Sublessor is
receiving bills from Sybase for charges for electrical services (for lights and
plugs) within the initial Sublease Premises (exclusive of the Expansion
Premises) which are equal to approximately $1.00 per rentable square foot per
year, but Sublessor is in no way warranting the accuracy or completeness of such
charges.
7. SECURITY DEPOSIT. Immediately upon satisfaction of the Sub-Sublease
Consent Contingency (or earlier, if required by Sybase or Owner), Sublessee
shall pay to Sublessor the sum of $ 100,237.50 (the "Security Deposit") as
security for the full and timely payment and performance of Sublessee's
obligations under this Sub-Sublease. If Sublessee fails to pay or perform in a
full and timely manner any of its obligations under this Sub-Sublease, and such
failure continues after the giving of any required notice and the expiration of
any applicable grace period, Sublessor may apply all or any portion of the
Security Deposit toward curing any such failure and compensating Sublessor for
any loss, damage or expenses arising from such failure. If Sublessor so applies
any portion of the Security Deposit, Sublessee shall immediately pay to
Sublessor the amount necessary to restore the Security Deposit to its original
amount. Sublessor shall deposit the Security Deposit in a segregated account,
with interest to Sublessee. If Sublessor assigns its interest in this Sublease
and transfers the Security Deposit (or any balance thereof) to its assignee,
Sublessee shall look only to such assignee for the application and return of the
Security Deposit. In the event that Sublessee receives cash net proceeds from
equity financings in the aggregate amount of $3.0 million or more during the
Lease Term, then Sublessor shall reimburse Sublessee $33,412.50 of the Security
Deposit previously paid by Sublessee hereunder within seven (7) days after
receipt of written confirmation from Sublessee that such equity financings have
closed. Within thirty (30) days after the expiration of the Lease Term
heretofore earlier termination of this Sub-Sublease, Sublessor shall refund the
Security Deposit (or so much thereof as remains after Sublessor's use or
application thereof).
In lieu of a cash Security Deposit, Sublessee may deliver to Sublessor
a clean, irrevocable letter of credit ("Letter of Credit") in the amount of the
Security Deposit naming Sublessor as the beneficiary thereunder and having an
expiration date not less than twenty-four (24) months from the date of issuance
and, in such event, (a) all
-4-
5
of the terms of Section 13.21(c) of the Sublease shall apply to the Letter of
Credit except that the word "Sublandlord" shall mean Sublessor and the word
"Subtenant" shall mean "Sublessee" and (b) if the conditions described above
have been met for a reduction in the amount of the Security Deposit and
Sublessor shall have received written confirmation thereof, Sublessee may
deliver a substitute Letter of Credit in the reduced amount to replace the
initial Letter of Credit, which shall then be returned to Sublessee.
8. ASSIGNMENTS AND SUBLEASES. Notwithstanding any provision of the
Sublease to the contrary, Sublessee shall not assign this Sub-Sublease or sublet
any portion of the Demised Premises without the prior written consent of
Sublessor (whose consent shall not be unreasonably withheld), Sybase and Owner,
subject to Owner's recapture and other rights under the Master Lease and Owner's
and Sybase's rights under the Sublease. The following transactions shall be
deemed assignments of this Sub- Sublease requiring such prior written consent:
(i) any assignment, mortgage, pledge or other transfer of this Sub-Sublease;
(ii) any sublease, license or occupancy agreement with respect to any portion of
the Demised Premises; (iii) if Sublessee or any of its successors or assigns is
a corporation, any sale, pledge or other transfer of all or a majority of the
capital stock of Sublessee or any such successor or assign (unless such stock is
publicly traded on a recognized security exchange or over-the-counter market),
any merger, consolidation or reorganization of or into Sublessee or any such
successor or assign, and any sale of all or substantially all of the assets of
Sublessee or such successor or assign; (iv) if Sublessee or any of its
successors or assigns is a partnership, limited liability partnership or limited
liability company, any change in its partners or members; and (v) if Sublessee
is a trust, any change in the identity of its trustees or any transfer of a
beneficial interest in such trust. If Sublessor, Sybase and Owner consent to any
such assignment or sublease, such assignment or sublease shall comply with the
requirements of Section 5 of the Sublease, except that Sublessee shall reimburse
Sublessor up to a maximum of $5,000 for legal fees and expenses in any instance
and Sublessee shall pay Sublessor 100% of the consideration or excess rent (net
of amounts excludable under Section 5.2(b) of the Sublease) as described under
Section 5.2(b) of the Sublease and any rights to assign or sublet hereunder
shall be for the benefit of SilverStream Software, Inc. and no other entity,
successor or assign. Any attempt by Sublessee to assign or sublet the Demised
Premises without the prior written consent of Sublessor, Sybase and Owner shall
be void.
Notwithstanding the foregoing,-in no event shall any: (i) sale of stock
or other interests in the Sublessee solely in connection with any equity
financing by Sublessee, (ii) assignment or sublease of the Demised Premises to
any entity controlling, controlled by or under common control with Sublessee or
any successor by merger, consolidation or sale of all or substantially all of
the assets of Sublessee (each an "Affiliate of Sublessee"), or (iii) financing
of furniture, fixtures, or equipment of Sublessee in connection with the Demised
Premises, require prior consent of
-5-
6
Sublessor provided that notice of such event is given to Sublessor, except that
(a) prior written consent of Sublessor shall be required if (x) the Sublessee,
following any financing pursuant to (i), or the Affiliate of Sublessee, in the
event of (ii), shall not have a net worth and creditworthiness following such
transaction greater than that of Sublessee immediately prior thereto or (y) any
Affiliate of Sublessee shall be a competitor of or in a business similar to
Sublessor or any of its affiliates and (b) in the event of a transaction
described in (iii) in no event shall Sublessee assign, sublet or transfer any
interest in the Demised Premises or this Sub-Sublease or any property of Owner,
Sybase or Sublessor.
If Sublessee requests Sublessor's consent to an assignment or sublease
of the whole or a portion of Demised Premises, Sublessor shall have the option
to terminate this Sub-Sublease for the balance of the term (in the case of any
proposed assignment) or recapture the applicable portion of the Demised Premises
(in the case of any proposed sublease of a portion of the Demised Premises) for
the balance of the term by notice to Sublessee as of the date specified for the
balance of the term in such notice, which shall be not less than thirty (30) nor
more than sixty (60) days after the date of Sublessor's notice. In such event,
the Demised Premises, or portion thereof shall be delivered to Sublessor on the
date specified in good order and condition in the manner provided in this
Sub-Sublease at the end of the Lease Term and Sublessor shall have, at its own
cost and expense, the right to make modifications to such portion so as to make
it either a self-contained unit or accessible to, or part of, the balance of the
second floor premises occupied by Sublessor. The Base Rent, any additional rent
and other charges payable by Sublessee hereunder and the Rentable Floor Area of
the Demised Premises shall be adjusted according to the extent of the Demised
Premises for which this Sub-Sublease is terminated.
9. INSURANCE. During the Lease Term, Sublessee shall maintain insurance of
such types, in such policies, with such endorsements and coverages, and in such
amounts as are set forth in Section 9 of the Sublease, and such additional
insurance as may be required by Sublessor, in Sublessor's reasonable discretion.
All insurance policies shall name Owner, Sybase and Sublessor as additional
insureds and loss payees and shall contain an endorsement that such policies may
not be modified or canceled without 30 days prior written notice to Owner,
Sybase and Sublessor. Sublessee shall promptly pay all insurance premiums and
shall provide Owner, Sybase and Sublessor with policies or certificates
evidencing such insurance.
10. ALTERATIONS. Notwithstanding any provisions of the Sublease to the
contrary, Sublessee shall not make any alterations, improvements or
installations in the Demised Premises without in each instance obtaining the
prior written consent of Owner and Sybase which they may grant, withhold or
condition in their respective sole discretion and Sublessor (whose consent shall
not be unreasonably withheld). If Owner, Sybase and Sublessor consent to any
such alterations, improvements or
-6-
7
installations, Sublessee shall perform and complete such alterations,
improvements and installations at its expenses, in compliance with applicable
laws and in compliance with Section 4.2 (including, if required by Owner in
accordance with the terms of the Master Lease and Sublease, the removal of
alterations and restoration of the Demises Premises, subject to the provisions
of Section 22 herein) and other applicable provisions of the Sublease. If
Sublessee performs any alterations, improvements or installations without
obtaining the prior written consent of Owner, Sybase and Sublessor, Sublessor
may remove such alterations, improvements or installations, restore the Demised
Premises and repair any damage arising from such a removal or restoration, and
Sublessee shall be liable to Sublessor for all costs and expenses incurred by
Sublessor in the performance of such removal, repairs or restoration.
11. INITIAL WORK. Subject only to Sublessor's obligation to install the SQA
demising wall, Sublessee shall be responsible, at its sole cost and expense, for
the performance of all work necessary to prepare the Demised Premises for
Sublessee's occupancy, which shall include the following, a portion of which is,
shown in more detail on Exhibit B-1: moving the main entrance, constructing
demising walls around Room 234 and renovation of Xxxx 000, including replacement
of the glass wall with a demising wall, closing up the existing doorway and
constructing a new door way and repositioning the existing glass side-light,
(collectively "Sublessee's Initial Work"). Sublessee shall deliver to Sublessor
full plans and specifications for all of Sublessee's Initial Work for
Sublessor's review and approval on or before February 14, 1997 and thereafter
shall, promptly upon Sublessor's request, deliver the plans and specifications
(with such modifications as Sublessor shall have reasonably requested) to Owner
and Sybase. Sublessor shall respond to Sublessee's request for approval of the
Sublessee's Initial Work within five (5) business days of receipt of such
request together with full plans and specifications for the proposed work and
shall use diligent efforts to obtain Sybase's consent. If such plans and
specifications have not been delivered by February 14, 1997 and/or the
Sublessee's Initial Work not completed within 14 days of the date (the "Plan
Approval Date") upon which the consent thereto by Owner, Sybase and Sublessor
have been obtained or, if later, the Consent Date (as defined in Section 20)
(the "Completion Date"), then Sublessee shall not be permitted to occupy or use
for any purposes Room 234 at the Demised Premises until such work has been
completed.
Sublessee's Initial Work-shall comply in all respects with the
requirements of this Sub-Sublease and of the Sublease relating to alterations,
including without limitation the approval by Owner, Sybase and Sublessor of
plans and specifications, the approval by Sublessor and Sybase of contractors
and subcontractors, the provision by Sublessee to Sublessor and Sybase of
as-built plans, and performance of such work in such a manner so as not to
interfere with (i) the business operations of Sublessor, and its use of the
balance of the Sublease Premises, the Building and common areas or (ii) any
alterations being performed by or for Sublessor at the
-7-
8
Building. The Initial Tenant Work shall include any and all alterations and
modifications of the Demised Premises as are required in order to cause the
Demised Premises to comply with tile Americans with Disabilities Act or such
other laws, which work shall be performed by Sublessee or its sole cost and
expense.
Subject to the foregoing, Sublessee shall have access to the Demised
Premises to perform Sublessee's Initial Work from and after the later of the
Plan Approval Date and the Consent. Date, so long as Sublessor, Sybase and the
Owner have consented to the plans and specifications as required.
Notwithstanding the foregoing, Sublessee shall, upon reasonable prior notice to
Sublessor and its agent, and subject to Sublessor's reasonable conditions
therefor, have access to the Demised Premises prior to the Plan Approval Date
and the Consent Date in order to prepare plans, take measurements and inspect
the Demises Premises as may be reasonably necessary or appropriate in connection
with preparation for the Initial Work, but in no event shall such access entitle
Sublessee to begin or perform any alterations.
12. OPTION TO EXTEND TERM. Subject to Sublessor's rights set forth below,
Sublessee shall have the option to extend the Term of this Sublease for a period
("Extension Period") beginning on the day following the end of the Term of this
Sub-Sublease and ending July 30, 2000, provided that (i) Sublessee is not in
default (after any applicable notice and cure periods) under any of the terms
and conditions of this Sub-Sublease at the time it exercises such option to
extend or at the commencement of the Extension Period and (ii) Sublessee has
given Sublessor written notice of its election to extend the Lease Term
("Extension Notice") no later than eight (8) months prior to the expiration date
of the original Lease Term. In such event, the terms and conditions of this
Sub-Sublease, including those relating to Base Rent, Operating Expenses, Taxes,
additional rent and utility charges shall continue to apply except that there
shall be no further right to extend. If Sublessee fails to give an Extension
Notice by such date, Sublessee's rights under this Section 12 shall be waived
and of no further force and effect.
Notwithstanding the foregoing Sublessor shall have the unilateral right
to terminate Sublessee's extension rights under this Section 12 by written
notice to Sublessee given on or before the later to occur of (1) thirty (30)
days after receipt of Sublessee's Extension Notice and (2) eight (8) months
prior to the commencement date of the Extension Period, in the event that
Sublessor, or any affiliate (which shall include any entity controlling,
controlled by, or under common control with Sublessor), or any successor by
merger, consolidation or sale of all or substantially all of the assets of
Sublessor (each an "Affiliate of Sublessor"), intends to occupy the Demised
Premises for its own use.
If Sublessor fails to give such notice terminating Sublessee's
extension rights, Sublessor's right to so terminate Sublessee's extension rights
under this Section 12 shall be waived and of no further force or effect. In the
event that Sublessor shall
-8-
9
exercise its right to terminate Sublessee's extension rights under this Section
12, Sublessor shall not thereafter enter into any sublease or assignment of the
Demised Premises to any party not affiliated with Sublessor for the period
beginning on the expiration date of the Lease Term and ending on the date which
is six (6) months thereafter, unless Sublessor shall first give a notice to
Sublessee offering Sublessee the right to reinstate its option to extend the
term of this Sublease for the Extension Period. Sublessee shall have ten (10)
business days after receipt of such notice to notice Sublessor that it wishes to
remain as a sub-Sublessee in the Demised Premises upon the terms and conditions
set forth above for the Extension Period.
13. RIGHT OF FIRST OFFER TO SUB-SUBLEASE ADDITIONAL SPACE. So long as
Sublessee is not in default under this Sub-Sublease (after any applicable notice
and cure periods), Sublessee shall have a right of first offer (the Offer
Right") to sub-sublease hereunder any additional portions of the Expansion
Premises which Sublessor desires to sublet, on and subject to the terms and
conditions of this Section 13. The Offer Right granted hereunder shall be
subject and subordinate to Owner's rights of recapture to the extent the same
are applicable under the Master Lease and the Sublease.
If during the Lease Term Sublessor desires to sub-sublet any portion of
the Expansion Premises beyond the Demised Premises (the "Available Premises"),
Sublessor shall give Sublessee written notice (the "Availability Notice")
setting forth the size and location of the Available Premises, the rental rate,
the term of the proposed subletting and the date Sublessor expects the Available
Premises to be vacated by Sublessor. Sublessee shall have ten (10) business days
after receipt of the Availability Notice to notice Sublessor that Sublessee (i)
desires to sublet the Available Space on the terms set forth in this
Sub-Sublease as supplemented by the Availability Notice, or (ii) declines the
opportunity to sublet the Available Space pursuant to the Availability Notice.
If Sublessee responds to an Availability Notice pursuant to the
preceding clause (i) Sublessee and Sublessor shall promptly execute an amendment
to this Sub- Sublease for the purpose of expanding the Demised Premises to
incorporate the Available Space. If Sublessee responds to an Availability Notice
pursuant to the preceding clause (ii) or, if Sublessee fails to respond to an
Availability Notice within ten (10) business days after receipt thereof,
Sublessor shall be free for a period of nine (9) months to thereafter sublet the
Available Space to another person on such terms and conditions as are not, in
Sublessor's reasonable discretion, materially more favorable to a sub-subtenant
than those set forth in the Availability Notice. In the event that sublessee
shall fail to exercise its rights to sub-sublease any Available Premises in
accordance with any Availability Notice, and Sublessor shall thereafter fail to
sub-sublease such Available Premises to a third party within said nine (9)
month period in accordance with the foregoing terms of this paragraph, or if
Sublessor shall desire to sub-sublease the Available Space on terms materially
more favorable than those set forth in any such Availability Notice, the Offer
Rights and
-9-
10
procedures set forth herein shall be re-applied prior to any subsequent
Sub-Sublease of the Available Space by Sublessor.
If the rentable square footage of the Demised Premises is increased as
a result of expansion into any Available Premises, the number of unreserved
parking spaces available for Sublessee's use shall be increased by a ratio of
3.3 parking spaces for each 1,000 square feet of added rentable area.
14. BROKERS. Sublessor and Sublessee each represent and warrant to the
other that it has not dealt with any broker other than XxXxxx & Xxxx, Inc. (the
"Broker") in connection with the consummation of this Sub-Sublease. Sublessor
and Sublessee each shall indemnify and hold harmless the other against any loss,
damage, claims or liabilities arising out of the failure of its representation:
or the breach of its warranty set forth in the previous sentence. Sublessor
shall be solely responsible for the payment of any brokerage commission due to
the Broker.
15. NOTICES. All notices and demands under this Sublease shall be in
writing and shall be effective upon the earlier of (i) receipt at the address
set forth below by the party being served, or (ii) two days after being sent to
address set forth below by United States certified mail, return receipt
requested, postage prepaid, or (iii) one day after being sent to the address set
forth below by a nationally recognized overnight delivery service that provides
tracking and proof of receipt.
If to Owner: c/o Finard & Company
Three Xxxxxxxxxx Xxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
If to Sybase: 0000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Director of Real Estate and Facilities
With a copy to: Attention: Real Estate Legal Counsel
If to Sublessor: Xxx Xxxxxxxxxx Xxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Financial Officer
-10-
11
With a copy to: Xxxxx, Xxxxxxx & Xxxxxxxxx
High Street Tower, 000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Real Estate Department
If to Sublessee: SilverStream Software, Inc.
Xxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attn: Mr. Xxxx Xxxxxx
With a copy to: Xxxx and Xxxx
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxx Xxxxx, Esq.
Either party may change its address for notices and demands under this
Sub- Sublease by notice to the other party. After the Term Commencement Date,
notices to Sublessee shall be sent to the Demised Premises.
16. DEFAULT BY SUBLESSEE; INDEMNITY. Sublessee shall indemnify, defend and
hold harmless Sublessor from all claims, liabilities, losses, damages and
expenses arising out of a default by Sublessee in the full and timely payment
and performance of its obligations, as sub-subtenant, under this Sub-Sublease.
In the event of a default by Sublessee in the full and timely payment and
performance of its obligations under this Sub-Sublease, Sublessor shall have all
of the rights and remedies in the Sublease with respect to defaults by the
Subtenant under the Sublease, including without limitation the rights and
remedies set forth in Sections 12.1, 12.3 and 12.4 of the Sublease. Sublessee
shall further indemnify, defend and hold harmless Sublessor from any claims,
liabilities, losses, damages and expenses with respect to bodily injury, death
or property damage arising from the negligence or willful misconduct of
Sublessee or its agents, officers, or employees. Further, the provisions of
Section 9.1 shall be incorporated-herein by reference, except that the word
"Subtenant" in Sections 9. 1 (a) and (b) shall mean Sublessee; the word
"Sublandlord" shall mean both Sybase and Sublessor in Section 9.1(a) and shall
mean only Sublessor in Section 9.1(b); the words "Sublease Premises" shall mean
"Demised Premises"; the words "Sublease Term" shall mean Lease Term; and the
words "Master Lease" shall mean the Sublease.
17. NON-SOLICITATION. Sublessor and Sublessee hereby agree that during the
Lease Term neither party nor any of its Affiliates (as defined in Sections 12
and 8, respectively), successors or assigns will employ any person who is then
currently employed by the other party or has been employed by the other party
within the immediately preceding six (6) month period, including any officers
and directors, and works at the Premises or in any manner seek to solicit or
induce any such person to
-11-
12
leave his or her employment with the other party, or assist in the recruitment
or hiring of any such person.
18. SUBORDINATION TO SUBLEASE. (a) This Sub-Sublease is subject and
subordinate to the terms and conditions of the Sublease and the Master Lease.
Sublessee shall not cause a default under the Sublease or the Master Lease or
permit its employees, agents, contractors or invitees to cause a default under
the Sublease or the Master Lease. The termination of the Sublease shall
automatically terminate this Sub- Sublease. If the Sub-Sublease terminates
before the end of the Lease Term, Sublessor shall not be liable to Sublessee for
any damages arising out of such termination so long as termination of the
Sub-Sublease is not caused solely by Sublessor's default under the Sublease.
Sublessee hereby acknowledges that it has read and has knowledge of all of the
terms, provisions, rules and regulations of the Sublease and agrees not to do or
omit to do anything which would cause Sublessor to be in default under the
Sublease. Any such act or omission which causes Sublessor to be in default under
the Sublease shall also constitute a default under this Sub-Sublease entitling
Sublessor to recover from Sublessee any damage, loss, cost or expense which it
thereby suffers.
(b) Except as otherwise specified in this Sub-Sublease, all of the
terms and conditions of the Sublease are incorporated as a part of this
Sub-Sublease, but all references in the Sublease to "Subtenant", "Sublease
Premises", "Sublease Term or Term", "Fixed Rent", "Commencement Date", "Security
Deposit," "Tax Base", Operating Expense Base", "Sublease Year", "Initial
Subtenant Improvements" ' and "Owner's Consent Contingency" shall be deemed to
refer, respectively, to "Sublessee", "Demised Premises", "Lease Term" "Base
Rent", "Term Commencement Date", "Security Deposit", "Sublessee Tax Base",
"Sublessee Operating Expense Base", "Year of this Sub-Sublease", "Initial
Sublessee Work", and "Consent Date", as defined in this Sub-Sublease. To the
extent incorporated into this Sub-Sublease, and unless otherwise provided,
Sublessee shall perform the obligations of the Sublessor, as Subtenant under the
Sublease allocable to the Demised Premises. Notwithstanding any other provision
of this Sub-Sublease, and unless otherwise provided, Sublessor, as Sublandlord
under this Sub-Sublease, shall have the benefit of all rights, remedies and
limitations of liability enjoyed by Sybase, the Sublandlord under the Sublease,
but (i) Sublessor shall have no obligations under this Sublease to perform the
obligations of Owner as landlord under the Master Lease or Sybase as Sublandlord
under the Sublease; including without limitation any obligation to provide
services or maintain insurance, and Sublessee shall seek such performance and
obtain such services solely from the Owner or Sybase as appropriate (provided,
however, that in the event of any failure by Sybase to perform any obligations
of Sybase as Sublandlord under the Sublease Sublessor shall, upon request of
Sublessee, or Sybase, and shall use good faith efforts to attempt to cause
Sybase to perform its respective obligations); (ii) Sublessor shall not be bound
by any representations or warranties of Sybase as Sublandlord under the
Sublease; (iii) in any instance where the consent of
-12-
13
Owner is required under the terms of the Master Lease and or the Sublease and/or
of Sybase under the Sublease, the consent of Sublessor, Sybase and Owner shall
be required; and (iv) Sublessor shall not be liable to Sublessee for any failure
or delay in Owner's performance of its obligations, as landlord under the Master
Lease or in Sybase's performance of its obligation as Sublandlord under the
Sublease, and in all instances in the Sublease (including without limitation
Sections 6.2, 7.1, 10.1, 11.1, 11.2, and 13.3) where Sybase has agreed to notify
the Owner or to seek Owner's performance, Sublessor shall be obligated to seek
Sybase's compliance with such agreement, but not to contact Owner directly.
(c) Notwithstanding any contrary provision of this Sub-Sublease,
the following terms and conditions of the Sublease are not incorporated as
provisions of this Sub-Sublease: Section 2. 1(b); Section 2.2(a) (last
sentence); Section 2.4; Section 2.5; Section 4. 1(b) (last four sentences);
Section 6. 1(a) and (b)); Section 6.1(c) (second through fifth sentences);
Section 6.1(f) (last sentence); Section 6.2(c); Section 6.2(d) (following the
word "provided"); Section 6.2(e); Section 7. 1 (c) (following the work
"provided"); Section 7. 1(d) and (e); Section 7.3; Section 8.3; Section 11.1(a)
(last two sentences); Section 11.1(b); Section 11.2(c) and (e); Section 12.2;
Section 13.3(a); Section 13.3(e) (Section iii); Section 13.7; Section 13.11;
Section 13.18(b); Section 13.20 (f); Section 13.21(a) and (b); Section 14.1(a)
and (b); Section 14.2; and Section 14.3.
(d) Notwithstanding any contrary provision of this Sub-Sublease,
(i) in any instances where Sybase, as Sublandlord under the Sublease, has a
certain period of time in which to notify Sublessor, as Subtenant under the
Sublease, whether Sybase will or will not take some action, Sublessor, as
Sub-Sublandlord under this Sublease, shall have an additional five (5)-day
period after receiving such notice in which to notify Sublessee, (ii) in any
instance where Sublessor, as Subtenant under the Sublease, has a certain period
of time in which to notify Sybase, as Sublandlord under the Sublease, whether
Sublessor will or will not take some action, Sublessee, as sub-subtenant under
this Sub-Sublease, must notice Sublessor, as Sub-Sublandlord under this
Sub-Sublease, at least five business days before the end of such period, but in
no event shall Sublessee have a period of less than five days in which so to
notify Sublessor unless the period under the Sublease is five days or less, in
which case the period under this Sub-Sublease shall be one day less than the
period provided to Sublessor under the Sublease, and (iii) in any instance where
a specific grace period is granted to Sublessor, as Subtenant under the
Sublease, before Sublessor is considered in default under the Sublease,
Sublessee, as sub-subtenant under this Sub- Sublease, shall be deemed to have a
grace period which is ten days less than Sublessor before Sublessee is
considered in default under this Sub-Sublease, but in any event shall any grace
period be reduced to less than five days unless the period under the Sublease is
five days or less, in which case the period under this Sublease shall be one day
less than the period provided to Sublessor under the Sublease.
-13-
14
(e) Notwithstanding any contrary provision of this Sub-Sublease,
(i) in the following Sections of the Sublease, wherever the word "Sublandlord"
shall appear, the same shall mean both Sublandlord and Sublessor: Section
2.2(a); Section 2.2(c); Section 4.1 (b); Section 4.1(e); Section 4.2; Section
5.1(a), (b) and (c); Section 6.2(a) and (b); Section 6.3(a) and (b); Section
9.1(a); Section 9.2(c) and (d); Section 9.4; Section 9.5; Section 10.1; Section
13.6; Section 13.15; Section 13.20(d); (ii) in the following Sections of the
Sublease, wherever the word "Owner" appears, the same shall mean both the Owner
and Sublessor: Section 4.1 (b); and Section 4.2; (iii) in the following Sections
of the Sublease, where the word "Subtenant" shall appear, the same shall mean
both Sublessor and Sublessee: Section 4.2 (Page 10, line 19); (iv) in the
following Sections of the Sublease, the word "Sublandlord" shall mean Sybase and
not Sublessor: Section 6. 1 (e); and (v) in the following Sections of the
Sublease, the words "Master Lease" shall mean "Sublease": Section 13.3(b) and
Section 14.1(b) and (c).
(f) The parties hereby acknowledge that the Sublease allows rent
abatements or reductions to Sublessor in certain instances, including, without
limitation, under the provisions of Section 6.2(e), Section 7.1(e), Section 7.3,
Section 11.1(c), Section 11.2(d) and Section 13.20(f). The parties hereby agree
that whenever the Sublessor's rent shall be abated or reduced under the
Sublease, and the cause of such abatement or reduction affects Sublessor's use
of the Expansion Premises not sub-subleased hereunder (and not solely the
balance of the Sublease Premises) and also materially interferes with
Sublessee's use and enjoyment of the Demised Premises in substantially the same
way, the Sublessee's rent under this Sub-Sublease shall be abated or reduced in
proportion to the abatement or reduction granted to Sublessor under the
Sublease.
19. ENTIRE AGREEMENT. This Sublease contains all of the
agreements, conditions, warranties and representations relating to the sublease
of the Demised Premises and may be amended or modified only by written
instruments executed by both Sublessor and Sublessee.
20. CONDITION PRECEDENT. This Sublease, and the rights and
obligations of Sublessor and Sublessee under this Sublease, and the commencement
of the Lease Term are subject to the condition (the "Sub-Sublease Consent
Contingency") that Owner and Sybase each consent to this Sub-Sublease (Sublessee
acknowledging that it is aware of Owner's recapture rights under the Master
Lease and Sublease) and to the Sublessor's Work, and the portion of Sublessee's
Initial Work, shown on Exhibit B-1, and this Sublease shall be effective only
upon the receipt by Sublessor and Sublessee of such consent (the date of such
receipt by Sublessor and Sublessee being referred to herein as the "Consent
Date"). Sublessor shall use reasonable efforts to include in such consent of
Owner and Sybase the to Sublessee's signage rights set forth in section 21
hereof.
-14-
15
21. SIGNAGE. Sublessee shall be permitted, subject to the
reasonable consent of Sublessor, Sybase and Owner, and at Sublessee's sole cost
and expense, to install a sign (a) on the entry door to the Demised Premises and
(b) in the lobby on the first floor in the Premises in a location and of a size
and type mutually agreeable to Sublessor and Sublessee.
22. REMOVAL OF ALTERATIONS. Sublessor and Sublessee hereby agree
that in the event that Owner requires the removal of any alterations,
improvements or installations made by Sublessee and restoration of the Demised
Premises in accordance with the terms of the Master Lease or the Sublease,
Sublessee shall remove such alterations, improvements or installations and so
restore the Demised Premises at its sole cost and expense; provided, however,
that in the event that the Term of this Lease shall not be extended for the
Extension Period, then Sublessee shall have the right to give notice to
Sublessor within ten (10) days after the expiration of the initial Term of this
Sub-Sublease offering Sublessor the option to elect for Sublessee to not make
such removal or restoration. Within seven (7) days after receipt of such notice,
Sublessor shall give notice to Sublessee electing either to (a) require
Sublessee to undertake such removal and restoration (assuming same has been
required by Owner), in which case Sublessee shall be given an additional period
of fourteen (14) days from receipt of such notice to complete such work, or (b)
permit such alterations, improvements and installations to remain, in which case
Sublessee shall be relieved of all responsibility to remove such alterations,
improvement and installations and to so restore the Demised Premises, which
responsibility shall thereafter be assumed by Sublessor. In the event that
Sublessor shall fail to make such election by notice given to Sublessee within
said seven (7) day period, Sublessor shall be deemed to have elected to permit
such alterations, improvements and installations to remain and to have assumed
all responsibility for such removal and restoration.
IN WITNESS WHEREOF, Sublessor and Sublessee execute this Sublease as of
the date first written above.
SILVERSTREAM SOFTWARE, INC. SQA, INC.
By: /s/ XXXX XXXXXX By: /s/ XXXXXX X. XXXXX
------------------------------- -------------------------------
Name: Xxxx Xxxxxx Name: Xxxxxx X. Xxxxx
Title: CFO Title: Sr. VP, Finance & Admin
-15-
