SUBLEASE AGREEMENT
DATED: October 1, 1998
ARTICLE 1: FUNDAMENTAL SUBLEASE PROVISIONS.
1.1 PARTIES: Sublessor: CONCEPTUS INC., a Delaware corporation
Sublessee: AVIO DIGITAL, INC., a California corporation
1.2 MASTER LEASE: (Article 3): Sublessor, as tenant, is leasing from Master
Lessor (named below), as landlord, approximately 16,397 square feet of leasable
area located at: 000 Xxxxxxxxxx Xxxx, Xxxxxx X, X, X, X, X, X, P and R in the
City of San Xxxxxx, State of California (the "Premises") on the terms and
subject to the conditions of that certain lease agreement executed dated as of
May 31, 1997, as amended (collectively, the "Master Lease"). A copy of the
Master Lease is attached hereto as Exhibit A.
Master Lessor: THREE SISTERS RANCH ENTERPRISES,
a California general partnership
1.3 SUBLEASE PREMISES: (Article 2): The Sublease Premises constitutes all of the
Premises, and contains approximately 16,397 square feet of leasable area (the
"Sublease Premises"). The Sublease Premises is further described on the drawings
attached to the Master Lease.
1.4 SUBLEASE TERM: (Article 4): Approximately forty-three and one-half (43.5)
calendar months, beginning on the Commencement Date and ending on the
Termination Date described below, unless commenced later or terminated earlier
pursuant to the terms of this Sublease.
1.5 COMMENCEMENT DATE: (Article 4.1): October 15, 1998
1.6 TERMINATION DATE: (Article 4.1): May 31, 2002
1.7 RENTAL COMMENCEMENT DATE: (Article 5.2): October 15, 1998
1.8 MINIMUM MONTHLY RENT: (Article 5.2):
October 15, 1998 - September 30, 1999 $2.00/NNN/rsf $32,794.00/month
October 1, 1999 - September 30, 2000 $2.10/NNN/rsf $34,433.70/month
October 1, 2000 - September 30, 2001 $2.20/NNN/rsf $36,073.40/month
October 1, 2001 - May 31, 2002 $2.30/NNN/rsf $37,713.10/month
1.9 PREPAID RENT: (Article 5.4): $32,794.00
1.10 SECURITY DEPOSIT: (Article 6): Letter of Credit with initial balance of
$98,382.00
1.11 PERMITTED USE: (Article 7): research and development, warehousing,
marketing, sales and general office uses
1.12 GUARANTOR: Vulcan Northwest, Inc., a Washington corporation [Guarantee
Agreement is to be signed separately.]
1.13 ADDRESSES FOR NOTICES: (Article 11):
Master Lessor: Three Sisters Ranch Enterprises
X.X. Xxx 0000
Xxx Xxxxxx, XX 00000-0000
Attn: Xx. Xxxxx Xxxxxxx
Fax: (000) 000-0000
With copy to: Xxxxxx Law Firm LLP
0000 Xx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx Xxxx, XX 00000
Attn: Xxx X. Xxxxxx
Fax: (000)000-0000
Sublessor: Conceptus, Inc.
0000 Xxxxxx Xxxxxx
Xxx Xxxxxx, XX 00000
Attn: Xxxxxxx Xxxxx
Fax: (000) 000-0000
With copy to: Xxxxxxxxx, Parish & Xxxxxx, PC
000 X. Xxxxx Xxxxx Xxxxxx, 00xx xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxx X. Xxxxxxxxxx
Fax: (000) 000-0000
Sublessee: Avio Digital, Inc.
0000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attn: Xxxxxxx XxXxxxxxx
Fax: (000) 000-0000
With copy to: Wilson, Sonsini, Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
Fax: (000) 000-0000
1.14 SUBLESSOR'S BROKER: (Article 20.4): CB Xxxxxxx Xxxxx and Vertex Real Estate
Group
1.15 SUBLESSEE'S BROKER: (Article 20.4): CPS
1.16 EXHIBITS AND ADDENDA: The following exhibits and any addenda are annexed to
this Sublease:
Exhibit A - Master Lease
Exhibit B - Form of Letter of Credit
Each reference in this Sublease Agreement ("Sublease") to any provision in
Article 1 shall be construed to incorporate all of the terms of each such
provision. In the event of any conflict between this Article 1 and the balance
of the Sublease, the balance of the Sublease shall control.
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ARTICLE 2: SUBLEASE PREMISES.
2.1 Sublease. Sublessor hereby subleases to Sublessee and Sublessee hereby
subleases from Sublessor for the Sublease Term (hereinafter defined), at the
Rent (hereinafter defined) and upon the terms and conditions hereinafter set
forth, the Sublease Premises, and all common areas related thereto. Sublessee
acknowledges that the leasable area of the Sublease Premises as specified in
Article 1 is an estimate and that Sublessor does not warrant the exact leasable
area of the Sublease Premises. By taking possession of the Sublease Premises,
Sublessee accepts the leasable area of the Sublease Premises as that specified
in Article 1.
2.2 Condition of the Sublease Premises. Sublessor shall deliver the Sublease
Premises to Sublessee with all building systems (i.e., HVAC, electrical,
plumbing and roof) in good operating condition, and warrants the same for the
first thirty (30) days of the Sublease Term. Sublessee acknowledges that except
as expressly stated in this Sublease, (i) Sublessor makes no warranties or
representations regarding the physical condition of the Sublease Premises; (ii)
Sublessee has had an opportunity to inspect the Sublease Premises, including the
roof and structural components of the building; the electrical, plumbing, HVAC,
and other building systems serving the Sublease Premises; and the environmental
condition of the Sublease Premises and related common areas; and to hire experts
to conduct such inspections on its behalf; and (iii) Sublessee is leasing the
Sublease Premises based on its own inspection of the Sublease Premises and those
of its agents, and is not relying on any statements, representations or
warranties of Sublessor regarding the physical condition of the Sublease
Premises. In addition, Sublessor shall pass on to Sublessee any existing
construction warranties that are available.
2.3 Personal Property. Sublessee acknowledges that the Sublease Premises shall
not include any of the fixtures, equipment, cabling, furniture, or other
personal property belonging to Sublessor, except as specifically agreed to by
the parties in the Furniture Rental Agreement dated as of October 1, 1998. The
parties acknowledge that the Furniture Rental Agreement represents material
consideration for each party's entering into this Sublease.
2.4 Alterations to Premises. Sublessee shall not make any alterations,
additions, or improvements to the Sublease Premises without the prior written
consent of Sublessor; provided, however, that Sublessee may make non-structural
alterations to the Sublease Premises costing less than five thousand dollars
($5,000.00) in accordance with and subject to Paragraph 12 of the Master Lease.
ARTICLE 3: TERMS OF THE MASTER LEASE.
3.1 Sublease Subordinate. This Sublease is subordinate and subject to all of
the terms and conditions of the Master Lease. If the Master Lease terminates for
any reason whatsoever, this Sublease shall terminate concurrently, and the
parties hereto shall be relieved of any liability thereafter accruing under this
Sublease, except for the liabilities of the parties which by the terms of this
Sublease survive the expiration or earlier termination of this Sublease.
3.2 Sublessee's Obligations. Sublessee hereby expressly assumes and agrees to
perform and discharge, as and when required by the Master Lease, all debts,
duties and obligations to be paid, performed or discharged by Sublessor under
the terms, covenants and conditions of the Master Lease from and after the
Commencement Date, except as specifically set forth in this Sublease. Sublessee
shall not commit or suffer at any time any act or omission that would violate
any provision of the Master Lease.
3.3 Sublessor's Obligations. So long as Sublessee does not default under this
Sublease, Sublessor shall not commit any act or omission during the Sublease
Term which would lead to the termination of the Master Lease by Master Lessor.
Notwithstanding the foregoing, if Sublessee fails to comply with any of its
obligations under this Sublease (including without limitation the obligations
assumed by Sublessee under the Master Lease), and does not cure such failure
within the applicable cure period (or if no cure period is specified in
either this Sublease or the Master Lease, then within five (5) days after
receiving written notice of such failure), then Sublessor shall have no
obligation to Sublessee to maintain the Master Lease for Sublessee's benefit.
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3.4 Master Lessor's Obligations. Sublessor shall not be responsible to Sublessee
for furnishing any service, maintenance or repairs to the Sublease Premises that
are the obligation of the Master Lessor under the Master Lease, it being
understood that Sublessee shall look solely to Master Lessor for performance of
any such service, maintenance or repairs. However, if Master Lessor shall fail
to perform its obligations under the Master Lease, Sublessor, upon receipt of
written notice from Sublessee, shall use commercially reasonable efforts to
attempt to enforce the obligations of Master Lessor under the Master Lease;
provided, however, that Sublessor shall not be required to incur any costs or
expenses in connection therewith unless Sublessee agrees to reimburse Sublessor
for any such costs and expenses as Additional Rent hereunder.
3.5 Sublessor's Rights and Remedies. In addition to all the rights and remedies
provided to Sublessor at law, in equity, or under the terms of this Sublease,
(a) in the event of any breach by Sublessee of any of its obligations under this
Sublease, Sublessor shall have all of the rights and remedies with respect to
such breach which are available to Master Lessor in the event of any breach
under the Master Lease; and (b) as a further remedy, if Sublessee fails to
perform any act on its part to be performed pursuant to the requirements of the
Master Lease or as otherwise required by this Sublease, within any applicable
grace periods provided herein, then Sublessor may, but shall not be obligated
to, fulfill such obligations of Sublessee, including entering the Sublease
Premises to perform any such act, and all costs and expenses incurred by
Sublessor in doing so shall be deemed Additional Rent payable by Sublessee to
Sublessor upon demand.
3.6 Sublessee's Right to Cure. In the event of default by Sublessor of any
obligation under the Master Lease, subject to Master Lessor's agreement,
Sublessee shall have the right and opportunity to cure such default within the
applicable cure period provided in the Master Lease, or within five (5) business
days after receipt of Master Lessor's notice of such default, whichever is
later. In the event that Sublessee cures such a default by Sublessor under the
Master Lease, Sublessee shall have the right to offset the amount paid to cure
such default and other related costs, including reasonable attorneys' fees,
against any amounts owed by Sublessee under this Sublease.
3.7 Authorization to Direct Sublease Payments. Sublessor hereby acknowledges
that Sublessor's failure to pay the rent and other sums owing by Sublessor to
Master Lessor under the Master Lease will cause Sublessee to incur damages,
costs and expenses not contemplated by the Sublease, especially in those cases
where Sublessee has paid sums to Sublessor hereunder which correspond in whole
or in part to the amounts owing by Sublessor to Master Lessor under the Master
Lease. Accordingly, Sublessee shall have the right to pay all rent and other
sums owing by Sublessee to Sublessor hereunder for those items which also are
owed by Sublessor to Master Lessor under the Master Lease directly to Master
Lessor on the following terms and conditions:
(a) Either (i) Sublessee reasonably believes that Sublessor has failed
to make any payment required to be made by Sublessor to Master Lessor under the
Master Lease and Sublessor fails to provide adequate proof of payment within two
(2) business days after Sublessee's written demand requesting such proof; or
(ii) Sublessee reasonably believes that Sublessor shall fail to make any payment
required to be made by Sublessor to Master Lessor under the Master Lease and
Sublessor fails to provide adequate assurance of future performance within two
(2) business days after Sublessee's written demand requesting such assurance.
(b) Sublessee shall not prepay any amounts owing by Sublessor without
the consent of Sublessor.
(c) Sublessee shall provide to Sublessor concurrently with any payment
to Master Lessor reasonable evidence of such payment.
(d) If Sublessor notifies Sublessee that it disputes any amount
demanded by Master Lessor, Sublessee shall not make any such payment to Master
Lessor unless Master Lessor has provided a three-day notice to pay such amount
or forfeit the Master Lease.
Any sums paid directly by Sublessee to Master Lessor in accordance
with this paragraph and other costs reasonably incurred as a consequence of
Sublessor's failure to pay required sums to Master Lessor, including attorneys'
fees, shall be credited toward the amounts payable by Sublessee to Sublessor
under the Sublease.
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ARTICLE 4: SUBLEASE TERM.
4.1 Commencement and Termination Dates. The term of this Sublease ("Sublease
Term") shall be for the period of time commencing on the scheduled commencement
date described in Article 1 (the "Commencement Date") and ending on the
termination date described in Article I or on such earlier date of termination
as provided herein (the "Termination Date").
4.2 Delay in Commencement. If for any reason possession of the Sublease Premises
has not been delivered to Sublessee by the scheduled Commencement Date or any
other date, Sublessor shall not be liable to Sublessee or any other person or
entity for any loss or damage resulting therefrom. In the event of such delay,
the Commencement Date and the Rental Commencement Date shall be delayed until
possession of the Sublease Premises is delivered to Sublessee, but the
Termination Date shall not be extended. If Sublessor is unable to deliver
possession of the Sublease Premises to Sublessee within sixty (60) days after
the scheduled Commencement Date, then Sublessee may terminate this Sublease by
giving written notice to Sublessor at any time after that date, and the parties
shall have no further liability thereafter accruing under this Sublease;
provided, however, that if Sublessor tenders possession to Sublessee within five
(5) days after receipt of Sublessee's notice of termination, such notice shall
be void.
4.3 Early Occupancy. If Sublessor permits Sublessee to occupy the Sublease
Premises prior to the Commencement Date, such occupancy shall be subject to all
of the provisions of this Sublease, including the payment of Minimum Monthly
Rent. Early occupancy of the Sublease Premises shall not advance the Termination
Date. Sublessee shall, prior to entering the Sublease Premises, deliver to
Sublessor certificates of insurance evidencing the policies required of
Sublessee under this Sublease.
ARTICLE 5: RENT AND ADDITIONAL EXPENSES.
5.1 Payment of Rent. All monies payable by Sublessee under this Sublease shall
constitute "Rent." All Rent shall be paid in lawful money of the United States,
without any deduction or offset, to Sublessor at the address of Sublessor
specified in Article 1 or such other place as Sublessor may designate in
writing. No payment by Sublessee of a lesser amount than the Rent herein
stipulated shall be deemed to be other than on account of the earliest
stipulated Rent, nor shall any endorsement or statement on any check or any
letter accompanying any check or payment of Rent be deemed an accord and
satisfaction, and Sublessor may accept such check or payment without prejudice
to its right to recover the balance of such Rent or to pursue any other remedy.
Rent for any partial calendar months at the beginning or end of the Sublease
Term or by early occupancy of the Sublease Premises shall be prorated based on a
thirty (30) day month.
5.2 Minimum Monthly Rent. Sublessee shall pay to Sublessor the sum set forth in
Article 1 hereof as Minimum Monthly Rent, in advance, on the first day of each
calendar month throughout the Sublease Term, commencing on the Rental
Commencement Date.
5.3 Additional Rent. In addition to Minimum Monthly Rent, commencing on the
Commencement Date (or, if earlier, upon occupancy of the Sublease Premises by
Sublessee), Sublessee shall pay to Sublessor, on the first day of each calendar
month, as "Additional Rent," estimated payments for real property taxes and
assessments, maintenance, repair, management, insurance, utilities and other
charges attributable to and/or accruing against the Sublease Premises and the
related common areas for the Sublease Term, in such amounts as are payable by
Sublessor under the Master Lease; provided, however, that for the term of this
Sublease Additional Rent will not exceed $.20/rsf (i.e., $3,279.40/month),
exclusive of any increases in real property taxes and assessments and insurance
premiums above the cost of real property taxes and assessments and insurance
premiums for the period from July 1998 through June 1999, which increases shall
be paid by Sublessee. However, notwithstanding anything to the contrary
contained in this Sublease, Sublessee shall not be required to pay any
additional rent or perform any obligation that is (i) fairly allocable to any
period of time prior to the Commencement Date or following the Termination Date
or earlier expiration of the Sublease Term; or (ii) payable as a result of a
default by Sublessor of any of its obligations under the Master Lease (unless
such default is a result of Sublessee's default under this Sublease).
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5.4 Prepaid Rent. Concurrently with Sublessee's execution of this Sublease,
Sublessee shall pay to Sublessor the sum specified in Article 1 as Prepaid Rent,
which shall be applied to the installments of Minimum Monthly Rent and
Additional Rent first coming due under this Sublease.
5.5 Late Charge. If Sublessee fails to pay any Rent when due hereunder, then
Sublessee shall pay Sublessor a late charge equal to six percent (6%) of such
delinquent amount as liquidated damages for Sublessee's failure to make timely
payment. Any notice given by Sublessor pursuant to any statute governing
unlawful detainer actions shall be deemed to be concurrent with, and not in
addition to, the notice required herein. This provision for a late charge shall
not be deemed to grant Sublessee a grace period or extension of time for
performance. If any Rent is not paid promptly when due, then, in addition to
such late charge, Sublessee shall pay to Sublessor interest on the delinquent
amount from the date on which said payment is due until paid, at the rate of ten
percent (10%) per annum or the maximum rate permitted by law, whichever is less.
ARTICLE 6: SECURITY DEPOSIT. Upon execution of this Sublease, Sublessee shall
provide to Sublessor an irrevocable letter of credit ("LOC") in favor of
Sublessor, with a financial institution reasonably acceptable to Sublessor, and
in substantially the form attached hereto as Exhibit B, in the amount specified
in Article 1 hereof as a "Security Deposit." Landlord may draw on such LOC in
whole or in part, in lieu of a cash Security Deposit, as security for
Sublessee's faithful performance under this Sublease. If Sublessee fails to pay
any Rent as and when due under this Sublease or otherwise fails to perform its
obligations hereunder, then after giving Sublessee five (5) days written notice
(referenced in Exhibit B as a Letter of Intent to Draw), Sublessor may, at its
option and without prejudice to any other remedy which Sublessor may have, draw
on the LOC and apply, use or retain all or any portion of the Security Deposit
toward the payment of delinquent Rent or for any loss or damage sustained by
Sublessor due to such failure by Sublessee.
ARTICLE 7: USE.
7.1 Use of the Sublease Premises. Sublessee shall use the Sublease Premises
solely for the purposes specified in Article 1 in strict conformance with the
applicable requirements of the Master Lease, and for no other purpose
whatsoever, unless Sublessee shall first have obtained the written approval of
Sublessor (which approval shall not be unreasonably withheld), Master Lessor,
and any and all applicable governmental agencies.
7.2 Suitability. Sublessee acknowledges that, except as may be explicitly stated
in this Sublease, neither Sublessor nor any agent of Sublessor has made any
representation or warranty with respect to the Sublease Premises, the permitted
uses that can be made of the Sublease Premises under existing laws, or the
suitability of the Sublease Premises for the conduct of Sublessee's business,
nor has Sublessor agreed to undertake any modification, alteration or
improvement to the Sublease Premises.
7.3 Hazardous Materials.
7.3.1 Definitions. As used in this Sublease, the following terms shall
have the meanings set forth below:
(a) "Hazardous Material" shall mean any hazardous or toxic substance,
material or waste which is or becomes regulated by any state, federal, or local
government authority, including without limitation all of those materials and
substances designated as hazardous or toxic by the Environmental Protection
Agency, the Department of Labor, the Department of Transportation, the
Department of Agriculture, the Department of Health Services or the Food and
Drug Agency. Without limiting the generality of the foregoing, the term
"Hazardous Material" shall include (i) any substance, product, waste or other
material of any nature whatsoever which may give rise to liability under any
statutory or common law theory based on negligence, trespass, intentional tort,
nuisance or strict liability or under any reported decisions of a state or
federal court; (ii) gasoline, diesel fuel, or other petroleum hydrocarbons;
(iii) polychlorinated biphenyls; (iv) asbestos containing materials; (v) urea
formaldehyde foam insulation; and (vi) radon gas.
(b) "Hazardous Material Law" shall mean any applicable statute, law,
ordinance, or regulation
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of any governmental body or agency which regulates the use, storage, generation,
discharge, treatment, transportation, release, or disposal of any Hazardous
Material.
(c) "Hazardous Material Use" shall mean and include any use, storage,
generation, treatment, or transportation of any Hazardous Material within, from
or to, on or about, or upon the Sublease Premises or any other land or
improvements in the vicinity of the Sublease Premises.
(d) "Hazardous Material Release" shall mean and include any discharge,
release, emission or disposal of any Hazardous Material within, from or to, on
or about, or upon the Sublease Premises or any other land or improvements in the
vicinity of the Sublease Premises.
(e) "Agents" shall mean agents, employees, invitees, contractors,
sublessees, licensees, successors and assigns.
7.3.2 Sublessor's Representation. Except as previously disclosed to
Sublessee, to Sublessor's actual current knowledge, (i) no Hazardous Material is
present on or about the Sublease Premises or the soil, surface water or
groundwater thereof; (ii) no underground storage tanks are present on or about
the Sublease Premises; and (iii) no action, proceeding or claim is pending or
threatened regarding the Sublease Premises concerning any Hazardous Material or
pursuant to any Hazardous Material Law.
7.3.3 Use Restriction. Sublessee shall not cause or permit any
Hazardous Material Use without the prior written consent of Master Lessor and
Sublessor, and in any event Sublessee shall not cause or permit any Hazardous
Material Release. Without limiting the generality of the foregoing, (a) any
Hazardous Material Use by Sublessee or Sublessee's Agents shall strictly comply
with all applicable Hazardous Material Laws, and (b) in the event of any
Hazardous Material Release by Sublessee or Sublessee's Agents, Sublessee, at its
expense, shall promptly take all actions necessary to return the Sublease
Premises to the condition existing prior to such Hazardous Material Release.
7.3.4 Exclusion from Liability. Under no circumstances shall Sublessee
be liable for, and Sublessor shall indemnify, defend and hold harmless Sublessee
and Sublessee's Agents from and against, all costs and expenses (including
attorneys' and consultants' fees) related to or in connection with (i) the
investigation, reporting, removal and remediation of any Hazardous Material on
or about the Sublease Premises, or (ii) the violation of any Hazardous Material
Law, except to the extent that any of the foregoing results from a Hazardous
Material Use or a Hazardous Material Release by Sublessee or Sublessee's Agents.
ARTICLE 8: SURRENDER.
8.1 Condition of the Sublease Premises. Upon the expiration or earlier
termination of this Sublease, Sublessee shall surrender the Sublease Premises
broom clean and in the same condition and repair as the Sublease Premises were
delivered to Sublessee on the Commencement Date, excepting only ordinary wear
and tear and damage by fire, earthquake, act of God or the elements. Sublessee
agrees to repair any damage to the Sublease Premises, or the building of which
the Sublease Premises are a part, caused by or related to the removal of any
articles of personal property, business or trade fixtures, machinery, equipment,
cabinetwork, signs, furniture, movable partitions or permanent improvements or
additions which Sublessor allows or requires Sublessee to remove, including,
without limitation, repairing the floor and patching and/or painting the walls
where required by Sublessor to the reasonable satisfaction of Sublessor and/or
Master Lessor, all at Sublessee's sole cost and expense. Sublessee shall
indemnify Sublessor against any loss or liability resulting from delay by
Sublessee in so surrendering the Sublease Premises, including, without
limitation, any claims made by the Master Lessor and/or any succeeding tenant
founded on such delay. Such indemnity obligation shall survive the expiration or
earlier termination of this Sublease.
8.2 Sublessor's Right to Access. Unless otherwise agreed pursuant to
the Furniture Rental Agreement referenced above, in the thirty (30) days prior
to the expiration of this Sublease, or such shorter time as is reasonably
necessary, Sublessor shall have the right, upon at least twenty-four (24) hours
prior notice, to enter the Sublease Premises during non-business hours to remove
personal property belonging to Sublessor, if any (including without
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limitation any business or trade fixtures, machinery, equipment, cabinetwork,
signs, furniture, and movable partitions owned by Sublessor and located within
the Sublease Premises) and to remove any improvements or additions, if any, that
Sublessor is required to remove prior to surrender of the Premises pursuant to
the Master Lease (not including those items to be removed by Sublessee pursuant
to Article 8.1 of this Sublease). Any work performed by Sublessor pursuant to
the terms of the preceding sentence shall be done in a reasonable manner to
minimize the amount of inconvenience and interference to Sublessee's use and
occupancy of the Sublease Premises; provided, however, Sublessor shall not be
liable to Sublessee for any such inconvenience or interference caused by
Sublessor's reasonable exercise of its rights pursuant to this provision.
ARTICLE 9: CONSENT. Whenever the consent or approval of Master Lessor is
required pursuant to the terms of the Master Lease, for the purposes of this
Sublease, Sublessee, in each such instance, shall be required to obtain the
written consent or approval of both Master Lessor and Sublessor. If Master
Lessor refuses to grant its consent or approval, Sublessor may withhold its
consent or approval and Sublessee agrees that such action by Sublessor shall be
deemed reasonable.
ARTICLE 10: INSURANCE. All insurance policies required to be carried by
Sublessor under the Master Lease shall be maintained by Sublessee pursuant to
the terms of the Master Lease, and shall name Sublessor and Master Lessor (and
such other lenders, persons, firms, or corporations as are designated by
Sublessor or Master Lessor) as additional insureds by endorsement. All policies
shall be written as primary policies with respect to the interests of Master
Lessor and Sublessor and such other additional insureds and shall provide that
any insurance carried by Master Lessor or Sublessor or such other additional
insureds is excess and not contributing insurance with respect to the insurance
required hereunder. All policies shall also contain "cross liability" or
"severability of interest" provisions and shall insure the performance of the
indemnity set forth in Article 14 of this Sublease. Sub lessee shall provide
Master Lessor and Sublessor with copies or certificates of all policies,
including in each instance an endorsement providing that such insurance shall
not be cancelled or amended except after thirty (30) days prior written notice
to Master Lessor and Sublessor. All deductibles, if any, under any such
insurance policies shall be subject to the prior reasonable approval of
Sublessor, and all certificates delivered to Master Lessor and Sublessor shall
specify the limits of the policy and all deductibles thereunder.
ARTICLE 11: NOTICES.
11.1 Notice Requirements. All notices, demands, consents, and approvals which
may or are required to be given by either party to the other under this Sublease
shall be in writing and may be given by (i) personal delivery, (ii) overnight
courier such as Federal Express, or (iii) United States registered or certified
mail addressed as shown in Article 1. Any notice or demand so given shall be
deemed to be delivered or made on (i) the date personal service is effected,
(ii) the next business day if sent by overnight courier, or (iii) the second
business day after the same is deposited in the United States Mail as registered
or certified and addressed as above provided with postage thereon fully prepaid.
Either party hereto may change its address at any time by giving written notice
of such change to the other party in the manner provided herein at least ten
(10) calendar days prior to the date such change is desired to be effective.
11.2 Notices from Master Lessor. Each party shall provide to the other party a
copy of any notice or demand received from or delivered to Master Lessor within
twenty four (24) hours of receiving or delivering such notice or demand.
ARTICLE 12: DAMAGE, DESTRUCTION, CONDEMNATION. To the extent that the Master
Lease gives Sublessor any rights following the occurrence of any damage,
destruction or condemnation to terminate the Master Lease, to repair or restore
the Sublease Premises, to contribute toward such repair or restoration costs to
avoid termination, to obtain and utilize insurance or condemnation proceeds to
repair or restore the Sublease Premises, or any similar rights, such rights
shall be reserved to and exercisable solely by Sublessor, in its sole and
absolute discretion, and not by Sublessee. The exercise of any such right by
Sublessor shall under no circumstances constitute a default or breach under this
Sublease or subject Sublessor to any liability therefor.
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ARTICLE 13: INSPECTION OF THE SUBLEASE PREMISES. Sublessee shall permit
Sublessor and its agents to enter the Sublease Premises at any reasonable time
for the purpose of inspecting the same or posting a notice of nonresponsibility
for alterations, additions or repairs, provided that Sublessor provides at least
twenty-four (24) hours prior notice (except in the case of emergency).
ARTICLE 14: INDEMNITY; EXEMPTION OF SUBLESSOR FROM LIABILITY.
14.1 Sublessee Indemnity. Sublessee shall indemnify, defend (with counsel
reasonably satisfactory to Sublessor), protect and hold harmless Sublessor and
its agents, employees, contractors, stockholders, officers, directors,
successors and assigns from and against any and all claims, demands, actions,
suits, proceedings, liabilities, obligations, losses, damages, judgments, costs,
penalties, fines, and expenses, including, but not limited to, attorneys',
consultants' and expert witness fees (collectively, "Claims") arising out of,
resulting from, or related to (i) any injury or death to any person or injury or
damage to property caused by, arising out of, or involving (A) Sublessee's use
of the Sublease Premises, the conduct of Sublessee's business therein, or any
activity, work or thing done, permitted or suffered by Sublessee in or about the
Sublease Premises or the common areas, (B) a breach by Sublessee in the
performance in a timely manner of any obligation of Sublessee to be performed
under this Sublease, or (C) the negligence or intentional acts of Sublessee or
Sublessee's Agents, and/or (ii) any Hazardous Material Use or Hazardous Material
Release by Sublessee or Sublessee's Agents; provided, however, that Sublessor
shall not be indemnified to the extent any Claims are caused by the gross
negligence or willful misconduct of Sublessor or Sublessor's Agents. This
indemnity shall survive the expiration or earlier termination of this Sublease.
14.2 Sublessee Waiver. Sublessee, as a material part of the consideration to
Sublessor, hereby assumes all risk of damage to property or injury to persons
in, upon or about the Sublease Premises arising from any cause and Sublessee
hereby waives all claims in respect thereof against Sublessor, except to the
extent damage or injury is caused by the gross negligence or willful misconduct
of Sublessor or Sublessor's Agents; provided, however, that in no event shall
Sublessor be liable for any loss of profits or any special, indirect,
incidental, consequential or punitive damages, however caused and on any theory
of liability. This waiver shall survive the expiration or earlier termination of
this Sublease.
14.3 Mutual Waiver of Subrogation. The parties hereto release each other and
their respective Agents from all liability for damage to any property that is
caused by or results from a risk that is actually insured against or that would
normally be covered by the standard form of "all risk" property insurance,
without regard to the negligence or willful misconduct of the entity so
released. Each party shall use its best efforts to cause each insurance policy
it obtains to provide that the insurer thereunder waives all right of recovery
by way of subrogation as required herein in connection with any property damage
covered by the policy.
ARTICLE 15: ASSIGNMENT AND SUBLETTING. Sublessee shall not voluntarily or by
operation of law assign this Sublease or enter into license or concession
agreement, sublet all or any part of the Sublease Premises, or otherwise
transfer, mortgage, pledge, hypothecate or encumber all or any part of
Sublessee's interest in this Sublease or in the Sublease Premises or any part
thereof, without the prior written consent of Master Lessor (pursuant to the
terms of the Master Lease) and Sublessor (whose consent shall not be
unreasonably withheld or conditioned). Any attempt to do so without such consent
being first had and obtained shall be wholly void and shall constitute a default
by Sublessee under this Sublease. However, Sublessor hereby agrees that it will
consent to any subletting of the Sublease Premises or any assignment of this
Sublease to (i) a corporation controlling, controlled by or under common control
with Sublessee; (ii) a corporation related to Sublessee by merger, consolidation
or non-bankruptcy reorganization; or (iii) a purchaser of substantially all of
Sublessee's assets; provided that (a) Sublessee first obtains the written
consent of Master Lessor to such transaction; and (b) any and all compensation
realized by Sublessee under any such sublease or assignment in excess of the
Rent payable under this Sublease shall belong to Sublessor, to be included as
part of "bonus rent" as described in Paragraph 21.B of the Master Lease.
Notwithstanding any assignment or subletting, Sublessee shall not be relieved of
its obligations hereunder, and a consent to one assignment or subletting shall
not constitute a consent to any other assignment or subletting or a waiver of
the provisions of this section.
Page 9
ARTICLE 16: DELIVERY OF DOCUMENTS. Sublessee shall execute and deliver any
document or other instrument required by Master Lessor or Sublessor pursuant to
the Master Lease within five (5) days following receipt of a written request
from Master Lessor or Sublessor. Failure to comply with this provision shall
constitute a default by Sublessee under this Sublease.
ARTICLE 17: HOLDING OVER.
17.1 Without Consent. Any holding over by Sublessee after the Termination Date,
without the prior written consent of Master Lessor and Sublessor, shall not
constitute a renewal or extension of this Sublease or give Sublessee any rights
in or to the Sublease Premises. In the event of any such non-permissive holding
over, Sublessor and Master Lessor may seek any and all remedies available to
Sublessor and/or Master Lessor at law or in equity, and Sublessee shall pay
Sublessor upon demand, (i) all damages, costs, expenses, and fees incurred or
suffered by Sublessor under the Master Lease as a result of such holdover by
Sublessee, including without limitation any increase in rentals resulting
therefrom, and (ii) all attorneys' fees and out-of-pocket costs incurred by
Sublessor arising out of or in connection with such holdover.
17.2 With Consent. Any holding over by Sublessee after the Termination Date,
with the prior written consent of Master Lessor and Sublessor, shall be
construed as a month-to-month tenancy on the same terms and conditions as
specified in this Sublease, except that the Minimum Monthly Rent during such
tenancy shall be increased to an amount equal to One Hundred Fifty Percent
(150%) of the most recent applicable Minimum Monthly Rent amount.
ARTICLE 18: OPTIONS. Any right of Sublessor to extend or renew the term of the
Master Lease or to expand the Premises (if any), shall be reserved to and
exercisable solely by Sublessor, in its sole discretion, and not by Sublessee.
Sublessor agrees to exercise such rights to extend or renew the Master Lease
only to the extent necessary to fulfill its obligations under this Sublease.
ARTICLE 19: REPRESENTATIONS AND WARRANTIES.
19.1 Sublessor's Representations and Warranties. As an inducement to Sublessee
to enter the Sublease, to Sublessor's actual current knowledge, Sublessor
represents and warrants with respect to the Sublease Premises that:
(a) The Master Lease is in full force and effect, and there exists
under the Master Lease no default or event of default by either Master Lessor or
Sublessor, nor has there occurred any event which, with the giving of notice or
passage of time or both, could constitute such a default or event of default.
(b) There are no pending or threatened actions, suits or proceedings
before any court or administrative agency against Sublessor or against Master
Lessor or third parties which could, in the aggregate, adversely affect the
Sublease Premises or any part thereof or the ability of Master Lessor to perform
its obligations under the Master Lease or of Sublessor to perform its
obligations under the Sublease, and Sublessor is not aware of any facts which
might result in any such actions, suits or proceedings.
(c) There is no pending or threatened condemnation or similar
proceedings affecting the Premises or any portion thereof, and Sublessor has no
knowledge that any such action currently is contemplated.
(d) Sublessor has not received any notice from any insurance company of
any defects or inadequacies in the Sublease Premises or any part thereof which
could adversely affect the insurability of the Sublease Premises or the premiums
for the insurance thereof.
19.2 Sublessee's Representations and Warranties. As an inducement to Sublessor
to enter the Sublease, to Sublessee's actual current knowledge, Sublessee
represents and warrants with respect to the Sublease Premises that:
Page 10
(a) There are no pending or threatened actions, suits or proceedings
before any court or administrative agency against Sublessee or third parties
which could, in the aggregate, adversely affect the Sublease Premises or any
part thereof or the ability of Sublessee to perform its obligations under the
Sublease, and Sublessee is not aware of any facts which might result in any such
actions, suits or proceedings.
ARTICLE 20: GENERAL PROVISIONS.
20.1 Severability. If any term or provision of this Sublease shall, to any
extent, be determined by a court of competent jurisdiction to be invalid or
unenforceable, the remainder of this Sublease shall not be affected thereby, and
each term and provision of this Sublease shall be valid and enforceable to the
fullest extent permitted by law.
20.2 Attorneys' Fees; Costs of Suit. In the event of any breach under this
Sublease by Sublessee or Sublessor, the non-breaching party shall be entitled to
recover, from the breaching party, its reasonable attorney's fees and other
out-of-pocket costs incurred to enforce the provisions of this Sublease against
the breaching party or to exercise any remedy available to it in connection with
such breach, including fees and costs incurred in bringing any action or
proceeding for any relief arising out of this Sublease, but in the event of
litigation, the prevailing party shall be entitled to recover its reasonable
attorneys' fees and costs from the other party only as determined by the court.
20.3 Waiver. No covenant, term or condition or the breach thereof shall be
deemed waived, except by written consent of the party against whom the waiver is
claimed, and any waiver of the breach of any covenant, term or condition shall
not be deemed to be a waiver of any other covenant, term or condition or any
subsequent failure to perform the same or any other such term, covenant or
condition. Acceptance by Sublessor of any performance by Sublessee after the
time the same shall have become due shall not constitute a waiver by Sublessor
of the breach or default of any covenant, term or condition unless otherwise
expressly agreed to by Sublessor in writing.
20.4 Brokerage Commissions. The parties represent and warrant to each other that
they have dealt with no brokers, finders, agents or other person in connection
with the transaction contemplated hereby to whom a brokerage or other commission
or fee may be payable, except for the brokers named in Article 1, whose fees
shall be paid pursuant to a separate agreement. Each party shall indemnify,
defend and hold the other harmless from any claims arising from any breach by
the indemnifying party of the representation and warranty in this Section.
20.5 Binding Effect. Preparation of this Sublease by Sublessor or Sublessor's
agent and submission of the same to Sublessee shall not be deemed an offer to
lease. This Sublease shall become binding upon Sublessor and Sublessee only when
fully executed by Sublessor and Sublessee. Sublessor and Sublessee acknowledge
and agree that this Sublease is expressly conditioned upon obtaining the consent
of Master Lessor hereto following such fully execution by Sublessor and
Sublessee. In the event such consent is not so obtained within forty-five (45)
days following the date of this Sublease, then this Sublease shall automatically
terminate and be without further force or effect, and Sublessor shall promptly
return to Sublessee the advance rent and Security Deposit paid by Sublessee to
Sublessor pursuant to Sections 5.4 and Article 6 above.
20.6 Entire Agreement. This instrument and the Furniture Rental Agreement of
even date herewith, along with any exhibits and addenda to those documents,
constitutes the entire agreement between Sublessor and Sublessee relative to the
Sublease Premises. This Sublease may be altered, amended or revoked only by an
instrument in writing signed by both Sublessor and Sublessee. There are no oral
agreements or representations between the parties affecting this Sublease, and
this Sublease supersedes and cancels any and all previous negotiations,
arrangements, brochures, agreements, representations and understandings, if any,
between the parties hereto.
20.7 Covenant of Quiet Enjoyment. Sublessor covenants with Sublessee that, upon
the payment of Rent and performance of all other obligations of Sublessee
hereunder, Sublessee shall be entitled to possession of the Sublease Premises
for the Sublease Term, in accordance with and subject to the terms of this
Sublease.
20.8 Execution. This Sublease may be executed in one or more counterparts, each
of which shall be considered an original counterpart, and all of which together
shall constitute one and the same instrument. Each person executing this
Sublease represents that the execution of this Sublease has been duly authorized
by the party on whose behalf the person is executing this Sublease.
Page 11
20.9 Approvals. Whenever this Sublease requires an approval, consent,
designation, determination, selection or judgment by either Sublessor or
Sublessee, such approval, consent, designation, determination, selection or
judgment and any conditions imposed thereby shall be reasonable and shall not be
unreasonably withheld or delayed and, in exercising any right or remedy
hereunder, each party shall at all times act reasonably and in good faith.
Sublessor: Sublessee:
CONCEPTUS, INC., AVIO DIGITAL, INC.,
a Delaware corporation a California corporation
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxxxxx XxXxxxxxx
---------------------------- --------------------------
Name: Xxxxxxx Xxxxx Name: Xxxxxxx XxXxxxxxx
--------------------------
Title: Senior Vice-President & Title: Chief Executive Officer
Chief Financial Officer --------------------------
By: /s/ Xxxxxxx XxXxxxxxx
--------------------------
Name: Xxxxxxx XxXxxxxxx
--------------------------
Title: Chief Financial Officer
-------------------------
Page 12
Exhibit B
FORM LETTER OF CREDIT
---------------------
We hereby open in favor of Conceptus, Inc. 0000 Xxxxxx Xxxxxx, Xxx Xxxxxx, Xx
00000 and for the account of our client, Avio Digital, Inc. ("Applicant"), this
Irrevocable Standby Letter of Credit No. _________ (this "Letter of Credit") for
the aggregate sum of USD98,382.00 (Ninety-Eight Thousand Three Hundred
Eighty-Two and 00/100 U.S. Dollars).&(P)&(P) We agree to honor payment of drafts
drawn at sight on us when presented on or before the expiration date. Drafts
must be accompanied by the following documents: 1. Beneficiary's certification
bearing a signature purporting to be that of an authorized officer of Conceptus,
Inc., certifying that: "The undersigned, duly authorized by Conceptus, Inc.,
hereby certifies that an event of default by the Applicant has occurred and is
continuing (beyond any applicable notice and cure periods) under that certain
Sublease agreement dated ________________________, 1998 between Conceptus, Inc.,
as Sublessor, and Applicant, as Sublessee, (the "Sublease"); that the amount of
the accompanying draft does not exceed the amount owing resulting from the
default. We further certify that we have delivered to the Subtenant all the
required notices as agreed to under the Sublease, including without limitation,
the five (5) days notice of our intent to draw as evidenced by the attached
copies of the Letter of Intent to Draw and Certified Mail Receipt, however up to
the time of this drawing the Subtenant has not remedied the default." &(P)&(P)2.
Copy of Letter of Intent to Draw dated at least 5 days prior to presentation
date together with a copy of the Certified Mail Receipt. &(P)&(P)3. The original
of this standby letter of credit. &(P)&(P) Each draft must be marked "Drawn
under irrevocable Letter of Credit No.____________ dated ___________ issued by
Seafirst Bank." &(P)&(P) Partial drawings are permitted. &(P)&(P) It is a
condition of this letter of credit that it will automatically be reduced per the
following schedule without further notice from Seafirst Bank to you:&(P)
Date of Amount of Maximum Amount
Reduction Reduction available after
Reduction.
Oct 15, 1999 USD32,794.00 USD65,588.00
Oct 15, 2000 32,794.00 USD32,794.00
This Letter of Credit shall expire at our Counters currently located at 000
Xxxxx Xxxxxx, Xxxxx 00, Xxxxxxx, XX at 3:30 P.M. on June 30, 2002. &(P) We
hereby engage with you that drafts and documents drawn under and in strict
compliance with the terms and conditions of this letter of credit will be duly
honored upon presentation to us.&(P)&(P) This letter of credit is subject to the
uniform customs and practice for documentary credits, 1993 revision, ICC
publication no. 500, with the exception of article no. 41 and, to the extent
where there is a conflict the laws of the State of California shall prevail.
