1
SUBLEASE AGREEMENT
(11,900 square feet)
THIS SUBLEASE AGREEMENT ("Sublease") is made as of the 28th day of January,
1999 between COMPUS SERVICES CORPORATION ("Sublandlord") and VISUAL NETWORKS
OPERATIONS, INC. ("Subtenant").
WHEREAS, by that Lease Agreement dated October 31, 1996 between Sublandlord
and The Equitable Life Assurance Society of the United States, the predecessor
to TA/Western, LLC (the "Prime Landlord"), Sublandlord leased a premises
containing approximately 11,900 rentable square feet of space (the "Premises")
in a building located at 0000 Xxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxx (the
"Building"), a true and complete copy of which is attached hereto as Exhibit A
(the "Primary Lease"); and
WHEREAS, Sublandlord has agreed to lease to Subtenant and Subtenant has
agreed to lease from Sublandlord the Premises in accordance with the terms of
this Sublease, and the Prime Landlord has consented or will consent to such
subleasing on the terms and conditions hereinafter set forth.
NOW, THEREFORE, for good and valuable consideration, the parties agree as
follows:
1. Subleased Premises. Sublandlord hereby subleases to the Subtenant, and
the Subtenant hereby subleases from Sublandlord the Premises leased to
Sublandlord under the Primary Lease and more specifically outlined in Exhibit B
attached hereto (the "Subleased Premises"). The Subleased Premises are delivered
"as is", subject to the terms and conditions of the Primary Lease.
2. Quiet Enjoyment; Care and Surrender of the Premises. Subject to the terms
of this Sublease and the Primary Lease, so long as Subtenant performs and
observes all the covenants and agreements on its part herein contained, it shall
peaceably and quietly have, hold and enjoy the Subleased Premises.
Without limiting any other provision of this Sublease or the Primary Lease,
Subtenant shall take good care of the Premises, suffer no waste or injury
thereto and shall comply with all laws, orders and regulations which are imposed
on Sublandlord as tenant under the Primary Lease and as are applicable to the
Premises, the Building and Subtenant's use thereof. Upon the Expiration Date (as
defined below) or sooner of this Sublease, Subtenant shall quit and surrender
the Premises to Sublandlord in the condition such Premises were in on the
Commencement Date (as defined below), broom clean, in good order and condition,
ordinary wear and tear and damage by fire and other insured casualty excepted.
Subtenant agrees to indemnify and save Sublandlord harmless from and against any
and all loss, cost, expense or liability resulting from the failure of, or delay
by, Subtenant in so surrendering the Premises on or before the Expiration Date,
including without limitation, any claims made by the Prime Landlord founded on
such failure or delay.
1
2
On or before the Expiration Date, Subtenant shall remove all of its personal
property from the Premises at its sole expense. On such date, any and all
improvements and alterations shall become the property of the Sublandlord,
subject however to the terms of the Primary Lease.
3. Term of Sublease. The term of this Sublease (the "Sublease Term") shall
commence on the earlier to occur of (i) March 15, 1999, or (ii) the date of
substantial completion of the improvements of approximately five thousand three
hundred thirty-seven (5,337) square feet of space in the Building (the "Compus
Services Space"), as set forth in the Sublease Agreement between Sublandlord and
Subtenant dated as of the date hereof (the "Compus Services Sublease"), which
date is anticipated to be March 1, 1999 (the "Commencement Date") and end on
November 29, 2001 (the "Expiration Date"). The Expiration Date is one day prior
to the date the Lease Term ends under the Primary Lease. Promptly upon the
request of either party, a memorandum or lease terms agreement memorializing the
Commencement Date and the Expiration Date will be executed and delivered.
4. Rent. For the Sublease Term, Subtenant shall pay to Sublandlord Basic
Rental and any additional rent due and payable to Prime Landlord under the
Primary Lease, including without limitation, the Basic Rental payable in the
amount described in Sections 3 and 4 of the Primary Lease and Sublandlord's
share of any operating expenses payable under Section 8 of the Primary Lease.
Subtenant covenants, without any previous demand therefor and without deduction,
set-off, recoupment, or counterclaim, to pay payments on or before that date
which is five (5) days before the date such payments are due under the Primary
Lease at Sublandlord's address in Section 7 below, or at such other address as
Sublandlord may provide to Subtenant.
5. Incorporation of Primary Lease Terms. Except to the extent expressly
provided herein, Subtenant shall honor and be bound by, with respect to the
Subleased Premises, all obligations of Sublandlord, as tenant, under the Primary
Lease, and the word "Tenant" as used in the Primary Lease shall be deemed to
refer to Subtenant as they pertain to the Subleased Premises. All remedies,
rights of entry, rights of enforcement, indemnifications, releases, waivers and
right to payment or reimbursement afforded the Landlord under the Primary Lease
as to Sublandlord shall be available to Sublandlord under this Sublease as to
Subtenant.
With respect to any obligations of the Landlord under the Primary Lease,
Subtenant shall be entitled to all benefits thereof, provided that Sublandlord
shall be obligated to exercise its commercially reasonable efforts to enforce
against the Landlord such obligations as are required to be performed by it.
Subtenant acknowledges that it has reviewed and is familiar with the Primary
Lease, and Sublandlord represents that the copy of the Primary Lease attached
hereto as Exhibit A is a true, correct and complete copy of the Primary Lease.
2
3
6. Indemnity and Insurance. Subtenant agrees to defend, indemnify and hold
harmless Sublandlord, Prime Landlord, and Landlord's managing agent
(collectively referred to hereinafter as the "Indemnified Party") from any loss,
cost, liability or expense incurred by such Indemnified Party by reason of (i)
any injuries to person or damages to property occurring in, on or about the
Premises, other than those arising from the gross negligence or willful
misconduct of such Indemnified Party, (ii) any work or thing whatsoever done or
condition created by Subtenant in, on or about the Premises or Building, or
(iii) any act or omission of Subtenant, its agents, contractors, servants,
employees, invitees, licensees, or (iv) any failure of Subtenant to perform or
observe any of the covenants or obligations required of Subtenant under this
Sublease. In furtherance of the foregoing, Subtenant shall not do or permit to
be done anything prohibited to Sublandlord as tenant under the Primary Lease or
take any action or do or permit any action which would result in any additional
cost or other liability to Sublandlord or Prime Landlord under the Primary Lease
or this Sublease.
In addition to, and not in limitation of, the undertakings contained in the
paragraph immediately above, wherever the Sublandlord as tenant under the
Primary Lease has agreed to indemnify the Prime Landlord, and in this Sublease,
Subtenant likewise agrees to indemnify Subtenant and Prime Landlord.
Subtenants's obligations under this section above shall survive the
expiration or termination of this Sublease.
Subtenant will carry the insurance required under Section 26 of the Primary
Lease naming Sublandlord, Landlord, and Landlord's managing agent (and such
other person as Sublandlord or Prime Landlord may request by notice to Subtenant
from time to time) as additional insureds thereunder and shall provide such
insured parties with certificates of insurance each year evidencing such
coverage.
7. Notices. All notices to be given hereunder shall be delivered in the
manner set forth in Section 30 of the Primary Lease addressed to (i) if to
Sublandlord at 0000 Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxx, XX 00000 Attention:
Xxxxxxx X. Xxxxxxxx, or (ii) if to the Subtenant at the 0000 Xxxxxxx Xxxx, Xxxxx
000, Xxxxxxxxx, XX 00000, Attention: Xxxxxxx X. Xxxxx.
8. Brokers. Sublandlord and Subtenant each represent and warrant that
there is no broker or real estate agent involved in this transaction.
Sublandlord and Subtenant each agree to indemnify and hold harmless the other
for breach of their warranties contained in this Section.
9. Interpretation. It is the intent of the parties that all rights and
obligations of Sublandlord under the Primary Lease be passed through to the
Subtenant under terms and conditions set forth herein. Except as otherwise
provided herein, Subtenant shall be bound unto Sublandlord under the terms and
conditions of the Primary Lease as they pertain to the Subleased Premises. With
respect to the obligations of the Landlord under the Primary Lease, Sublandlord
shall be obligated to exercise its rights and remedies against the Landlord
insofar as lawfully permissible to enforce such obligations for the benefit of
Subtenant.
3
4
10. Sublandlord Estoppel and Covenants. Sublandlord hereby represents to
Subtenant that (i) the Primary Lease is in full force and effect; (ii)
Sublandlord has received no notice of default from the Landlord which default
remains uncured on the date hereof; and (iii) to the best of Sublandlord's
knowledge, Sublandlord is not now in default under the Primary Lease.
Sublandlord covenants and agrees that it shall (a) not amend the Primary Lease
in a manner which adversely affects the rights of Subtenant hereunder; (b)
comply with all of the terms, covenants and conditions on its part to be
performed and observed by it pursuant to the Primary Lease other than the terms,
covenants and conditions required to be performed by Subtenant hereunder,
provided that Subtenant does not interfere with Sublandlord in connection with
such compliance, and (c) not voluntarily terminate the Primary Lease or permit
termination thereof as a result of Sublandlord's default thereunder.
11. Subtenant Covenants. Subtenant covenants and agrees that Subtenant
shall not do anything that would constitute a default under the Primary Lease or
omit to do anything that Subtenant is obligated to do under the terms of this
Sublease so as to cause a default under the Primary Lease. Subtenant shall keep
the Premises and the property in which the Premises are situated free from any
liens arising out of any work performed, materials furnished or obligations
incurred by Subtenant.
12. Miscellaneous Provisions.
(a) This Sublease supersedes any prior oral or written agreements
between the parties with respect to the real property described herein, and no
modifications to this Sublease, and no waivers of any rights or benefits
provided herein, shall be binding unless signed by the party against whom such
modification or waiver is sought to be enforced.
(b) Notwithstanding anything to the contrary herein, the effectiveness
of this Sublease shall be contingent upon the consent and approval of the
Landlord as evidenced by Landlord's execution of this Sublease in the space
provided below. In the event that Landlord fails to execute this Sublease within
thirty (30) days after the date hereof, then Sublandlord and Subtenant shall
each have the right to terminate the Sublease, at any time before Landlord
actually executes the Sublease, upon written notice to the other.
(c) Time is of the essence.
(d) Each party expressly waives its right to a jury trial in any claim,
action, counterclaim or proceeding involving the other party, arising out of
this Sublease or the use and occupancy of the Subleased Premises.
(e) Landlord's consent to this Sublease shall not be deemed to relieve
Sublandlord from any of its obligations as tenant under the Primary Lease, all
of which Sublandlord, by its execution hereof, reaffirms to and for the benefit
of Landlord. This Section 12(e) may be relied on by Landlord in connection with
its execution of the "Consent of Landlord" attached hereto and made a part
hereof.
4
5
(f) This Sublease may be executed in multiple counterparts, all of
which taken together shall constitute one and the same original.
(g) Section 11(b)(vii) of the Primary Lease requires that this Sublease
contain the following language, all of which shall be binding on the parties
hereto:
"Underlying Lease Agreement." This Sublease and Subtenant's rights
under this Sublease shall at all times be subject and subordinate to
the underlying Primary Lease identified in the second paragraph hereof,
and Subtenant shall perform all obligations of Sublandlord under said
Primary Lease, with respect to the Sublease Premises. Subtenant
acknowledges that any termination of the underlying Primary Lease shall
extinguish this Sublease. Prime Landlord's consent to this Sublease
shall not make Prime Landlord a party to this Sublease, shall not
create any privity of contract between Prime Landlord and Subtenant or
other contractual liability or duty on the part of the Prime Landlord
to the Subtenant, shall not constitute its consent or waiver of consent
to any subsequent sublease or sub-sublease, and shall not in any manner
increase, decrease or otherwise affect the rights and obligations of
Prime Landlord and Sublandlord under the underlying Primary Lease, in
respect of the Sublease Premises. Subtenant shall have no right to
assign this Sublease or further sublet the Premises without the prior
written consent of Prime Landlord. Any term of this Sublease that in
any way conflicts with or alters the provisions of the underlying
Primary Lease shall be of no effect as to Prime Landlord and Prime
Landlord shall not assume any obligations as landlord under the
Sublease and Sublandlord shall not acquire any rights under the
Sublease directly assertable against Prime Landlord under the
underlying Primary Lease. Sublandlord hereby collaterally assigns to
Prime Landlord this Sublease and any and all payments due to
Sublandlord from Subtenant as additional security for Sublandlord's
performance of all of its covenants and obligations under the
underlying Primary Lease, and authorizes Prime Landlord to collect the
same directly from Subtenant and otherwise administer the provisions
of this Sublease, at the option of Prime Landlord. Subtenant hereby
consents to such collateral assignment of this Sublease to Prime
Landlord and agrees to observe its obligations created hereby."
13. Buyout. As also provided in the Compus Services Sublease, upon the
execution of this Sublease and the Compus Services Sublease, Subtenant shall pay
to Sublandlord a payment of Seventy-Five Thousand Dollars ($75,000.00).
Subtenant shall pay to Sublandlord a second payment of Seventy-Five Thousand
Dollars (75,000.00) upon Sublandlord's complete vacation of the Subleased
Premises.
SIGNATURES ON FOLLOWING PAGE
5
6
IN WITNESS WHEREOF, the parties hereto have caused this Sublease to be
properly executed as the day and year set forth above.
SUBLANDLORD:
COMPUS SERVICES CORPORATION
/s/ Xxxxxxx X. Xxxxxxxx
--------------------------- By: /s/ X.X. XXXXXXX (SEAL)
Witness --------------------------------
Name: X.X. Xxxxxxx
Title: President
SUBTENANT:
VISUAL NETWORKS OPERATIONS, INC.
/s/ XXXXXX XXXXX
--------------------------- By: /s/ XXXXXXX X. XXXXX (SEAL)
Witness --------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Director, Treasury Operations
6
