EXHIBIT 10.26
SUBLEASE AGREEMENT
This Sublease Agreement ("Sublease"), dated October 22, 2001, is made
between N2H2, INC., a Washington corporation ("Sublessor") and WIDEVINE
TECHNOLOGIES, INC., a Delaware corporation ("Sublessee").
R E C I T A L S
A. Sublessor and Xxxxxx Seattle Investors, LLC (as "Master Lessor")
entered into a written lease dated March 12, 1999 as modified by the First
Amendment to Lease dated June 16, 1999, the Second Amendment to Lease dated
August 10, 1999, the Third Amendment to Lease dated August 12, 1999, the Fourth
Amendment to Lease dated October 12, 1999, the Fifth Amendment to Lease dated
February 14, 2000, the Sixth Amendment to Lease dated April 4, 2000, the Seventh
Amendment to Lease dated December 14, 2000, and the Eighth Amendment to Lease
dated May 31, 2001, in the building known as the Union Bank of California Center
(the "Building") located at 000 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx. Said lease,
together with all modifications thereto, is referred to herein as the "Master
Lease", and the premises covered by the Master Lease is herein collectively
called "Master Premises". A copy of the Master Lease is attached hereto as
EXHIBIT A.
A G R E E M E N T
NOW, THEREFORE, the parties hereto agree as follow:
1. Premises
Sublessor hereby subleases to Sublessee on the terms and conditions set
forth in this Sublease a portion of the Master Premises containing an agreed
area of approximately 7,000 rentable square feet (rsf), (the exact square
footage shall be measured and agreed upon prior to the commencement date)
currently known as Suite(s) 3400, as delineated on the floor plan attached
hereto as EXHIBIT C ("Premises").
2. Term and Possession
a. Term
Provided Master Lessor has consented to this Sublease ("Consent"),
the initial term of this Sublease ("Initial Term") shall commence on November 1,
2001 ("Commencement Date"), and shall end on August 30, 2005 ("Expiration
Date").
b. Condition of Premises
Prior to the Commencement Date, Sublessor shall touch-up paint the
Premises, and have the carpet cleaned. Otherwise, Sublessee shall accept the
Premises in an "as-is, where-is" condition ("Possession"). Sublessee shall
return the Premises on the Expiration Date to Sublessor in substantially the
same condition that existed on the Commencement Date, excluding reasonable wear
and tear. Sublessor shall have the ongoing right to remove and repair relites
and the northern entrance to the server room. Additionally, Sublessor may
construct a vestibule area outside the southern entrance to the server room.
Sublessee acknowledges and agrees that Sublessor shall have continued access to
the Premises for no more than 60 days following the Commencement Date for the
sole purpose of removing network components, file servers and personal
computers.
3. Base Rent, Operating Expenses and Late Charge
a. Base Rent
Sublessee shall pay to Sublessor, on or before the first day of
each calendar month, Base Rent in the amount of $26.00 per rsf from the
Commencement Date through the end of the Term. The monthly installments of Base
Rent shall be prorated at the rate of 1/30 of the monthly Base Rent per day for
any partial month during the Term. Payment shall be made to the following
address: N2H2, Inc., 000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000,
Attention: Accounting Department.
b. Operating Expenses
Sublessee shall pay to Sublessor, as additional rent, Eighteen and
8/10 percent (18.08%) of that portion of the increase in operating costs
allocable to the Master Premises otherwise payable by Sublessor for Operating
Costs incurred during the Term over the base year 2001. If the Master Lease
provides for the payment by Sublessor of Operating Costs on the basis of an
estimate thereof, then as and when adjustments between estimated and actual
Operating Costs are made under the Master Lease, the obligations of Sublessor
and Sublessee hereunder shall be adjusted in a like manner; and if any such
adjustment shall occur after the expiration or earlier termination of the Term,
then the obligations of Sublessor and Sublessee under this Paragraph shall
survive such expiration or termination. Such increase in operating costs shall
be due within fifteen (15) days after Sublessee's receipt from Sublessor of an
itemized statement of such costs, accompanied by copies of appropriate invoices.
Payments by Sublessee will be on the same basis as Sublessor's payments to
Landlord in the Master Lease.
c. Late Charge
Sublessee acknowledges that paying Base Rent late will cause
Sublessor to incur administrative, collection, processing and accounting costs
and expenses not contemplated under this Sublease, the exact amounts of which
are extremely difficult or impracticable to fix. Sublessee therefore agrees that
if rent or any other sum is due and payable pursuant to this Sublease, such
amounts shall be payable upon the same terms and conditions as the Master Lease
and the same late charges shall apply. Sublessor and Sublessee agree that this
late charge represents a reasonable estimate of such costs and expenses and is
fair compensation to Sublessor for its loss caused by Sublessee's nonpayment.
Should Sublessee pay the monthly rent late, but fail to pay said late charge, or
pay said late charge, but fail to pay contemporaneously therewith all unpaid
amounts of Rent, Sublessor's acceptance of the late rent or said late charge
shall not constitute a waiver of Sublessee's default with respect to Sublessee's
nonpayment, nor prevent Sublessor from exercising all other rights and remedies
available to Sublessor under this Lease or under law.
d. Security Deposit
Within ten (10) business days after the execution of this Sublease,
Sublessee shall pay to Sublessor the first month's rent due and provide
Sublessor with security in the sum of the last month's rent due. If Sublessee
fails to pay rent or other charges when due under this Sublease, or fails to
perform any of its obligations hereunder, Sublessor may use or apply all or any
portion of the Security Deposit for the payment of any sum for which the
Sublessor may become obligated by reason of Sublessee's default or breach, or
for any loss or damage sustained by Sublessor as a result of Sublessee's default
or breach. If Sublessor so uses any portion of the Security Deposit, Sublessee
shall, within ten (10) days after written demand by Sublessor, restore the
Security Deposit to the full amount originally deposited less any amounts
applied to the first months' rent, and Sublessee's failure to do so shall
constitute a default under this Sublease. Within thirty (30) days after the Term
has expired, or Sublessee has vacated the Premises, whichever shall last occur,
and provided Sublessee is not then in default of any of its obligations
hereunder, the Security Deposit, or so much thereof as had not therefore been
applied by Sublessor, shall be returned to Sublessee or to the last assignee, if
any, of Sublessee's interest.
4. Use of Premises
The Premises shall be used and occupied only for purposes allowed under
the Master Lease.
5. Parking
Sublessee shall be entitled to the use of six (6) of Sublessor's
parking spaces, which are guaranteed in the Master Lease, upon the same terms
and conditions as the Master Lease.
6. Assignment and Sublease
Neither this Sublease nor any right hereunder nor the Premises may be
assigned, transferred, encumbered or sublet in whole or in part by Sublessee
without Sublessor's and Master Lessor's prior written consent, which consent may
not be unreasonably withheld or delayed, but which may be reasonably
conditioned.
7. Incorporation by Reference
a. Subject to Lease
This Sublease is subject to all of the terms and conditions of the
Master Lease by and between Sublessor and Master Lessor.
b. Interpretation
All terms and conditions of the Master Lease, are incorporated
into and made a part of this Sublease as if Sublessor were the Master Lessor
thereunder, Sublessee the Tenant thereunder, and the Master Premises where the
Premises, except for those provisions of the Master Lease which are directly
contradicted by this Sublease, in which event the terms of this
Sublease shall control over the Master Lease. Sublessee assumes and agrees to
perform the Sublessor's obligations under the Master Lease during the Term to
the extent that such obligations are applicable to the Premises, provided,
however, Sublessor shall be responsible for paying Rent, as provided in the
Master Lease, to the Master Lessor. Therefore, for the purposes of this
Sublease, wherever in the Master Lease the word "Lessor/Landlord" is used it
shall be deemed to mean Sublessor herein and wherever in the Master Lease the
word "Lessee/Tenant" is used it shall be deemed to mean Sublessee herein.
8. Sublessor's Representations and Warranties
Sublessor represents and warrants to Sublessee the following:
a. The Master Lease is in full force and effect and has not been
modified, supplemented or amended except as described in Exhibit B.
b. Sublessor has the right to full and complete possession of the
Premises.
c. Sublessor, at the time of signing this Sublease, at the Commencement
Date, and at the time of delivering Possession, has fulfilled all its duties
under the Master Lease and is not in default under the Master Lease.
d. To the best of Sublessor's knowledge, Master Lessor has fulfilled
all its duties under the Master Lease and is not in default under the Master
Lease.
e. Sublessor has not assigned, transferred or delegated any of its
rights or duties under the Master Lease or pledged or encumbered any of its
interest in, or rights under the Master Lease.
f. This Sublease shall be of no force or effect unless consented to by
Master Lessor by execution of the Consent attached hereto as Exhibit B.
g. Sublessor has all right, power and authority necessary to enter into
and deliver this Sublease and to perform its obligations hereunder. Sublessor's
entering into this Sublease does not breach or contradict any other agreement or
contract that Sublessor is a party to.
h. Sublessor has or will comply with all requirements, perform all
duties, and take all actions necessary under Section 21 of the Master Lease to
properly sublet the Premises.
9. Covenants Regarding Master Lease
a. Sublessor shall use best efforts not to commit or suffer any act or
omission that will result in a violation of or default under any of the
provisions of the Master Lease.
b. Sublessor shall exercise commercially reasonable efforts in
attempting to cause Master Lessor to perform its obligations and give any
required consents under the Master Lease for the benefit of Sublessee,
including, without limitation, consent to this Sublease.
c. With respect to the Premises, unless the context requires otherwise,
Sublessor shall perform all duties of Landlord and Sublessee shall perform all
duties of Tenant under the Master Lease.
d. Sublessor agrees to deliver to Sublessee a copy of any notice
received from Master Lessor relating to the Premises within five (5) business
days of its receipt thereof.
e. In the event that Sublessor defaults under its obligations to be
performed under the Master Lease, Sublessee shall have the right to cure the
default, for the Premises, before the date Sublessor's applicable cure period
expires. If Sublessee cures such default, Sublessor shall reimburse Sublessee
for such amounts within fifteen (15) days after receipt of written notice and
demand therefore from Sublessee. If Sublessor fails to reimburse Sublessee
within such fifteen-day period, Sublessee may deduct such amounts from
subsequent installments of rent due to Sublessor under this Sublease.
f. Sublessor shall not voluntarily terminate the Master Lease without
Sublessee's prior written consent which shall not be unreasonably withheld and
such consent will be delivered to Sublessor within three business days of
Sublessor's notice to terminate. This sublease shall terminate no sooner than
ninety days after such consent has been provided.
g. Sublessor shall not amend the Master Lease in any way that would
affect the Premises or Sublessee's rights or obligations under this Sublease
without Sublessee's prior written consent.
10. Other Provisions of Sublease
Sublessee shall not commit or suffer any act or omission that will
violate any of the provisions of the Master Lease. If the Master Lease
terminates, this Sublease shall terminate and the parties shall be relieved of
any further liability or obligation under this Sublease, provided however, that
if the Master Lease terminates as a result of a default or breach by Sublessor
or Sublessee under this Sublease, then the defaulting party shall be liable to
the non-defaulting party for the damage suffered as a result of such
termination. Notwithstanding the foregoing, if the Master Lease gives Sublessor
any right to terminate the Master Lease in the event of the partial or total
damage, destruction, or condemnation of the Premises or the Building of which
the Premises are a part, the exercise of such right by Sublessor shall not
constitute a default or a breach hereunder.
11. Indemnification
a. Sublessee's Indemnification
Sublessee shall indemnify, defend and hold harmless Sublessor from
and against all losses, costs, damages, expenses and liabilities, including,
without limitation, reasonable attorneys' fees and disbursements, which
Sublessor may incur or pay out (including, without limitation, Sublessor's
payment to Master Lessor) by reason of (a) any accidents, damages or injuries to
persons or property occurring in, on or about the Premises (unless the same
shall have been caused by the respective negligence of Sublessor or Master
Lessor), (b) any breach or
default hereunder on Sublessee's part, (c) the successful enforcement of
Sublessor's rights under this Section or any other Section of this Sublease, (d)
any work done after the date hereof in or to the Premises except if done by
Sublessor or Master Lessor, or (e) any act, omission or negligence on the part
of Sublessee or its officers, partners, employees, agents, customers and/or
invitees, or any person claiming through or under Sublessee. Nothing herein
shall be construed as requiring Sublessee to indemnify, defend or hold harmless
Sublessor against or for any claim, loss, damage or expense to the extent it is
caused by the respective negligence, willful misconduct or breach of the
Sublease or Master Lease by Sublessor or Master Lessor, and not by Sublessee.
b. Sublessor's Indemnification
Sublessor shall indemnify, defend and hold harmless Sublessee from
and against all losses, costs, damages, expenses and liabilities, including,
without limitation, reasonable attorneys' fees and disbursements, which
Sublessee may incur or pay out (including, without limitation, to Master Lessor)
by reason of (a) any breach or default hereunder on Sublessor's part, (b) the
successful enforcement of Sublessee's rights under this Section or any other
Section of this Sublease, (c) any act, omission or negligence on the part of
Sublessor and/or its officers, partners, employees, agents, customers and/or
invitees, or any person claiming through or under Sublessor.
12. Commission
Upon execution of this Sublease, and written consent thereto by Master
Lessor, Sublessor shall pay Washington Partners, Inc. and Xxxxxxxx Xxxx, Inc.
("Brokers"), a real estate commission in accordance with Sublessor's contract
with Washington Partners. Brokers are made a third party beneficiary of this
Sublease for the purpose of enforcing its right to said commission. Sublessee
shall have no liability for any commissions for this Sublease.
13. Agency Disclosure
At the signing of this Sublease, Xxxx Xxxxxxx of Washington Partners,
Inc., represented the Sublessor and Xxxxxxxx Xxxx, Inc. represented the
Sublessee. Sublessor confirms receipt of the pamphlet entitled "The Law of Real
Estate Agency."
14. Notices
All notices and demands that may or are to be required or permitted to
be given by either party on the other hereunder shall be in writing. All notices
and demands by Sublessor to Sublessee, or by Sublessee to Sublessor, shall be
personally delivered or sent by a nationally recognized private carrier of
overnight mail (e.g. FedEx) or by United States Certified Mail, return receipt
requested and postage prepaid, to the parties at the addresses listed below or
at such other addresses as the parties may designate by notice from time to
time. All notices will be deemed given when received or refused.
To Sublessor: N2H2, Inc.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Operations Manager
To Sublessee: Widevine Technologies, Inc.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Legal Department
15. Quiet Enjoyment
Provided that Sublessee is not in default of any term or provision of
this Sublease, Sublessee shall have peaceful and quiet enjoyment of the Premises
without interference from Sublessor or any person or entity claiming by, through
or under Sublessor.
16. Attorney's Fees
If Sublessor (or Master Lessor) or Sublessee shall commence an action
against the other arising out of or in connection with this Sublease, the
prevailing party shall be entitled to recover its costs of suit and reasonable
attorney's fees.
17. Entire Agreement
This Sublease, the Exhibits attached hereto and those provisions of the
Master Lease, which are incorporated herein by reference, constitute the entire
agreement between Sublessor and Sublessee with respect to the Premises and may
not be amended or altered except by written agreement executed by both parties.
18. Binding on Successors
This Sublease shall bind the parties' heirs, successors,
representatives and permitted assigns.
IN WITNESS WHEREOF, the parties hereto hereby execute this Sublease as
of the day and year first above written.
SUBLESSOR: N2H2, INC., SUBLESSEE: WIDEVINE TECHNOLOGIES, INC.,
a Washington corporation a Delaware corporation
By /s/ J. Xxxx Xxxxx By /s/ Xxxx X. Xxxxx
-------------------------------- -----------------------------
Title CFO Title Chairman & CEO
----------------------------- --------------------------
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this 22 day of October, 2001, before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn,
personally appeared J. Xxxx Xxxxx, to me known to be the person who signed as
CFO of N2H2, Inc. the corporation that executed the within and foregoing
instrument, and acknowledged said instrument to be the free and voluntary act
and deed of said corporation for the uses and purposes therein mentioned, and on
oath stated that he was duly elected, qualified and acting as said officer of
the corporation, that he was authorized to execute said instrument and that the
seal affixed, if any, is the corporate seal of said corporation.
IN WITNESS WHEREOF I have hereunto set my hand and official seal the
day and year first above written.
/s/ Xxxxxxx X. Xxxxxx
------------------------------------
Xxxxxxx X. Xxxxxx
------------------------------------
NOTARY PUBLIC in and for the State of
Washington, residing at Covington, WA
My appointment expires: 8/26/05.
STATE OF WASHINGTON )
) ss.
COUNTY OF KING )
On this 19 day of October, 2001, before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn,
personally appeared Xxxx X. Xxxxx, to me known to be the person who signed as
CEO of Widevine Technologies, Inc., the corporation that executed the within and
foregoing instrument, and acknowledged said instrument to be the free and
voluntary act and deed of said corporation for the uses and purposes therein
mentioned, and on oath stated that he was duly elected, qualified and acting as
said officer of the corporation, that he was authorized to execute said
instrument and that the seal affixed, if any, is the corporate seal of said
corporation.
IN WITNESS WHEREOF I have hereunto set my hand and official seal the
day and year first above written.
/s/ Xxxxxx X. Xxxxxx
------------------------------------
Xxxxxx X. Xxxxxx
NOTARY PUBLIC in and for the State
of Washington, residing at Seattle, WA
My appointment expires: 2/3/02.
