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10.35
SUBLEASE
This Sublease, dated, for reference purposes only, August 20, 1996, is made by
and between AG Associates, Inc., a California corporation ("Sublessor"), AGI,
Inc., a Delaware corporation ("Sublessee"), and AG Associates (Israel) Ltd., as
the guarantor of Sublessee's obligations to Sublessor (the "Guarantor").
1. SUBLEASED PREMISES. Sublessor hereby subleases to Sublessee and
Sublessee hereby subleases from Sublessor for the Term, for the Rent
(as hereinafter defined), and upon all of the terms and conditions set
forth herein, that certain real property situated in the County of
Santa Xxxxx, State of California, commonly known as 0000 Xxxxxxx Xxxxx,
Xxx Xxxx, Xxxxxxxxxx and described as 9,188 sq. feet of the southeast
corner of Building C (hereinafter, the "Building") from commencement of
this Sublease until October 1, 1996, and 3,148 square feet located in
the same area of the Building from October 1, 1996 until this Sublease
expires or is otherwise terminated. Such 9,188 or 3,148 square foot
area, as the case may be, will be referred to in this Sublease as the
"Subleased Premises."
2. TERM. The term of this Sublease shall be for three (3) years commencing
on November 30, 1995 and ending on November 30, 1998, unless sooner
terminated pursuant to any provision of this Sublease. Sublessor grants
to Sublessee the right and option, exercisable so long as Sublessee is
not in default of any of its obligations to Sublessor under this
Sublease, to extend and renew this Sublease upon the same terms and
conditions and the same rental for consecutive one (1) year additional
terms (but no longer than the term of the Master Lease, as such term
may be extended from time to time by Master Lessor and Sublessor). Each
such extension shall be automatic, unless the Sublessee notifies the
Sublessor of its intention not to extend the term of the Sublease at
least ninety (90) days prior to the end of the then current term.
3. RENT.
3.1 Initial Rent. Sublessee shall pay to Sublessor as rent for the
Subleased Premises (the "Rent") monthly payments, until July
1, 1996, equal to $22,500 in the aggregate as full and
complete consideration for possession and use of the Subleased
Premises, including all expenses such as insurance costs,
taxes, utilities and other operating expenses charged with
respect to the Subleased Premises and/or the use by Sublessee
of all telecommunications equipment, such as fax, telephone
(including Sublessee's telephone numbers), switchboard, and so
on, in the premises (the "Premises") leased by Sublessor under
the Master Lease, and $10,000 in the aggregate each month from
July 1, 1996 until October 1, 1997. Such payments shall
initially serve as Rent for the Subleased Premises and as full
consideration thereof, which includes also all the aforesaid
expenses.
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3.2 Subsequent Rent. Beginning on October 1, 1997, the Rent for
the Subleased Premises will be adjusted (upward or downward)
on October 1 of each year of the term hereof and any extension
of such term according to the following formula:
New Monthly Rent = A(B) + C(D)
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Where: A = The Sublessor's annual facility department
budget for the Premises, less depreciation,
office supplies and miscellaneous expense
categories;
B = The square footage of the Subleased Premises
divided by the square footage of the Premises
(i.e. the percent of total square feet
occupied by Sublessee);
C = The Sublessor's annual information technology
department budget, less depreciation and
expense associated with the "Dataworks"
system; and
D = The number of Sublessee's employees and full
time consultants divided by the combined
number of such employees and consultants of
Sublessee and Sublessor (i.e. the percent of
total employees and consultants in the
Premises that are Sublessee's).
3.3 Payment. Rent will be paid by Sublessee, in advance, on the
first day of each month of the term hereof and any extension
of such term. Rent for any period during the term hereof which
is for less than one month shall be a pro rata portion of the
monthly installment. Rent shall be payable in lawful money of
the United States to Sublessor at the address stated herein or
to such other persons or at such other places as Sublessor may
designate in writing.
4. NO LIABILITY FOR SUBLESSOR'S ACTIONS. It is hereby clarified that
Sublessee shall not be obligated to pay any taxes, assessments, license
fees or other charges to governmental entities with respect to any
alterations or additions made to the Premises (other than changes made
to the Subleased Premises at the request of Sublessee) at Sublessor's
election, nor to pay any portion of any penalty or other payment under
the Master Lease that resulted from Sublessor's default, omission or
failure to comply with the terms of the Master Lease (other than the
obligations assumed by Sublessee hereunder), including, but not limited
to Late Charges and interest and penalties accruing thereon.
5. USE.
5.1 Use. The Subleased Premises shall be used and occupied only
for the uses permitted in the Master Lease and for no other
purpose. During the term of this Sublease and any extensions
hereof and so long as no default by Sublessee has occurred and
is continuing under this Sublease, Sublessee will be entitled
to use the conference rooms located on the Premises on a first
come first served basis
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and, although Sublessee will maintain its own telephone
number(s), Sublessor and Sublessee will share the use of
Sublessor's switchboard.
5.2 Compliance with Law. Sublessee shall at Sublessee's expense
comply promptly with all applicable statutes, ordinances,
rules, regulation, orders, restrictions of record and
requirements in effect during the term or any part of the term
of this Sublease regulating the use by Sublessee of the
Premises.
5.3 Waste. Neither Sublessee nor Sublessor shall use, or permit
the use of, the Subleased Premises or the Premises,
respectively, in any manner that will tend to create waste or
a nuisance or which shall tend to disturb such other tenants.
5.3 Condition of Subleased Premises. Sublessee hereby accepts the
Subleased Premises in its condition existing as of the date of
commencement of this Sublease, subject to all applicable
zoning, municipal, county and state laws, ordinances and
regulations governing and regulation the use of the Subleased
Premises, and accepts this Sublease subject to such laws,
ordinances and regulations. Sublessee acknowledges that
neither Sublessor nor Sublessor's agents have made any
representation or warranty as to the suitability of the
Subleased Premises for the conduct of Sublessee's business.
6. MASTER LEASE.
6.1 Master Lease and Master Lessor. Sublessor is the lessee of the
Premises by virtue of a Lease Agreement referred to in this
Sublease as the "Master Lease," a copy of which is attached
hereto, marked Exhibit 1 and dated July 21, 1995, wherein
South Bay Construction & Development Company, Inc., a
California corporation is the lessor referred to in this
Sublease as the "Master Lessor."
6.2 Subordination. This Sublease is and shall be at all times
subject and subordinate to the Master Lease.
6.3 Terms Applicable. With respect to the Subleased Premises only,
the terms conditions and respective obligations of Sublessor
and Sublessee to each other under this Sublease shall be,
mutatis mutandis, the terms and conditions of the Master
Lease, 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, or
are excluded or modified as provided in Section 6.4 below.
Therefore, for that purpose, wherever in the Master Lease the
word "Landlord" is used it shall be deemed to mean the
Sublessor herein and wherever in the Master Lease the word
"Tenant" is used it shall be deemed to mean the Sublessee
herein.
6.4 Obligation to Perform. During the term of this Sublease and
for all periods subsequent for obligations which have arisen
prior to the termination of this Sublease
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it is specifically agreed that, as between Sublessee and
Sublessor, the following sections of the Master Lease are
modified or excluded herefrom:
(a) Sections 1, 2, 3, 4A, 4B, 4D, 4E, 0X, 0, 0X xxxxxxx
0X, 0X, 0X, 0, the 4th and 5th sentences of Section
10B, 12, the last sentence of Section 14, Sections
23, 25, 27, 31B, 37, 38, 40 and 41 and Exhibit C are
excluded;
(b) For purposes of this Sublease, Tenant's Pro Rata
Share, when referred to in the Master Lease and where
applicable, will refer to the ratio that the square
footage constituting the Subleased Premises bears to
the square footage of the Premises;
(c) The maintenance and repair obligations of Landlord in
Sections 10A, 11, 13 and 16 will remain the
obligations of Master Lessor; the word "Landlord" as
used in Section 19 will apply both to Sublessor and
Master Lessor; the provisions of Section 39D will be
the direct obligation of Sublessee to Master Lessor;
and the last sentence of Section 39G, will apply only
to Master Lessor.
6.5 Definitions and Clarification. The obligations of the Tenant
under the Master Lease that Sublessee has assumed under
Sections 6.3 and 6.4 above are referred to in this Sublease as
the "Sublessee's Assumed Obligations." The obligations of the
Tenant under the Master Lease that Sublessee has not so
assumed are referred to in this Sublease as the "Sublessor's
Remaining Obligations." It is clarified that the obligations
of the Tenant that the Sublessee has assumed under Section 6.3
and 6.4 are not applicable to any portion of the Premises that
are not the Subleased Premises and that Sublessor remains
responsible for performance of these and the other obligations
that comprise the Sublessor's Remaining Obligations.
6.6 Indemnity of Sublessee. Sublessee will hold Sublessor free and
harmless of and from all liability, judgments, costs, damages,
claims or demands, including reasonable attorneys fees,
arising out of Sublessee's failure to comply with or perform
Sublessee's Assumed Obligations.
6.7 Sublessor to Maintain Master Lease. Sublessor agrees to
maintain the Master Lease during the entire Lease Term under
the Master Lease, or until this Sublease expires or otherwise
is terminated, whichever occurs first, subject, however, to
any earlier termination of the Master Lease without the fault
of the Sublessor and to comply with or perform Sublessor's
Remaining Obligations and to hold Sublessee free and harmless
of and from all liability, judgments, costs, damages, claims
or demands arising out of Sublessor's failure to comply with
or perform Sublessor's Remaining Obligations. Sublessor will
use reasonable commercial efforts to endure and enforce
compliance and performance by the Master Lessor of its
obligations under the Master Lease that remain on Master
Lessor's part to perform.
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6.8 Indemnification Procedure. With respect to any claim for
indemnity arising under Section 6.6 or 6.7 above resulting
from a third party claim or demand, the indemnified party
shall, after receipt of notice of the commencement of any
action or the presentation or other assertion of any claim
which could result in any indemnification claim pursuant to
Section 6.6 or 6.7, give prompt written notice thereof to
indemnifying party (although failure to give prompt notice
shall not mitigate the indemnification obligations hereunder
unless and to the extent the indemnifying party is prejudiced
by such failure or delay).
(a) The indemnifying party shall be entitled to
participate in the defense of any such claim or
action. The indemnifying party may also, to the
extent that it may desire, assume the defense thereof
with its own counsel, unless the indemnified party
reasonably objects to such assumption on the grounds
that representation of all entities by the same
counsel would be prohibited under any rule of
professional conduct applicable to such counsel, then
the indemnified party may participate in its own
defense with counsel of its own choosing at the cost
of the indemnifying party. Except as specified in the
preceding sentence, the indemnifying party shall not
be liable to indemnified party for any fees of other
counsel or any other expenses, in each case, incurred
by the indemnified party in connection with the
defense thereof.
(b) The indemnifying party shall be authorized, without
the consent of indemnified party being required, to
settle or compromise any such action or claim,
provided that such settlement or compromise includes
an unconditional release of the indemnified party
from all liability arising out of such action or
claim. The indemnifying party shall not be liable for
any compromise or settlement of any such action
effected by indemnified party without the
indemnifying party's written consent.
(c) The parties agree to cooperate to the fullest extent
possible in connection with any claim for which
indemnification is or may be sought under this
Agreement.
7. INSURANCE. During the term of this Sublease and any extension thereof,
Sublessor shall include Sublessee as an additional named insured, or at
Sublessor's election, a co-insured party, under the insurance policies
it carries pursuant to Section 8B of the Master Lease.
8. DEFAULT UNDER MASTER LEASE. Sublessor hereby represents and warrants to
Sublessee that, to Sublessor's knowledge, no default presently exists
under the Master Lease of obligations to be performed by Sublessor and
that the Master Lease is in full force and effect. In the event that
Sublessor defaults in its obligations to be performed by it under the
Master Lease, Sublessee shall have the right to cure any default of
Sublessor, if such cure is accepted by the Master Lessor. If such
default is cured by Sublessee, then Sublessee shall have a right of
reimbursement and offset from and against Sublessor.
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9. GUARANTY. Guarantor hereby unconditionally and irrevocably guarantees
to Sublessor, and does hereby become surety for, the punctual payment,
when due whether by reason of acceleration or otherwise, of all rent,
interest, fees and any other amounts payable to Sublessor, to Master
Lessor or to any other person or entity as a result of this Sublease,
whether the obligation for payment is now existing or hereafter arising
(the "Obligations"). The Obligations of Guarantor are absolute,
unconditional and continuing whether or not this Sublease expires or is
terminated. Guarantor hereby consents that, from time to time, without
notice to, or further consent of the Guarantor, the performance or
observance of any provision of the Master Lease or of any Obligation
may be waived by Sublessor and/or Master Lessor, or the time of
performance thereof extended or accelerated or may be renewed in whole
or in part or otherwise amended, changed, released or compromised, all
without affecting the liability of Guarantor hereunder. Guarantor
hereby waives notice of acceptance of this guaranty, all set-offs and
counterclaims of Guarantor and presentment, demand, protest, notice of
protest and notice of dishonor of any Obligation guaranteed hereby.
10. GENERAL PROVISIONS.
10.1 Attorney's fees. If any party named herein brings an action to
enforce the terms hereof or to declare rights hereunder, the
prevailing party in any such action, on trial and appeal,
shall be entitled to his reasonable attorney's fees to be paid
by the losing party as fixed by the court.
10.2 Entire Agreement. This Sublease and the Master Lease contain
the entire agreement among the parties hereto concerning
sublease by Sublessee of the Subleased Premises and replace
any other prior or contemporaneous discussions concerning such
subject matter.
10.3 Notices. All notices or other communications under this
Sublease shall be in writing and shall be effective when
personally delivered or when deposited in the postal service,
certified mail (return receipt requested), postage prepaid, to
the address of the receiving party specified on the signature
page(s) to this Sublease or to such other address as the
receiving party may hereafter have given 10 days advance
notice to the sending party in the manner specified above.
10.4 Governing Law. This Sublease will be governed by, and
interpreted in accordance with, the laws of the State of
California without regard to the principles of conflict of
laws.
10.5 Counterparts. This Sublease may be executed in any number of
counterparts, each of which will be deemed an original but all
of which together shall constitute one and the same agreement.
THIS SUBLEASE WILL NOT BE EFFECTIVE AGAINST ANY PARTY UNLESS SIGNED BY GUARANTOR
WITHIN TEN (10) DAYS AFTER EXECUTION BY SUBLESSOR AND SUBLESSEE.
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Executed at________________________ AG ASSOCIATES, INC.
on_________________________________ By_______________________________________
address____________________________ By_______________________________________
___________________________________ "Sublessor"
Executed at________________________ AGI, INC.
on_________________________________ By_______________________________________
address____________________________ By_______________________________________
___________________________________ "Sublessee"
Executed at________________________ AG ASSOCIATES (ISRAEL) LTD.
on_________________________________ By_______________________________________
address____________________________ By_______________________________________
___________________________________ "Guarantor"
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