EXHIBIT 10.1
SUBLEASE
--------
THIS SUBLEASE is dated for references purposes as of February 4, 2002, and
is entered by and between PUMATECH, INC., a Delaware corporation ("Sublessor"),
and ALPHASMART, INC., a California corporation ("Sublessee"). Sublessor and
Sublessee hereby agree as follows:
1. Recitals.
--------
X. Xxxxxxxx Corporation, predecessor-in-interest to BR3 Partners, a
California general partnership ("Master Lessor), as Landlord, and Xxxxxx,
Fuller, Rodriguez, Inc., a California corporation d/b/a The Windward Group,
Inc., a California corporation and wholly owned subsidiary of Vanteon
Corporation, predecessor-in-interest to The Windward Group, Inc., a Delaware
corporation and wholly owned subsidiary of Vanteon Corporation, a New York
corporation, (collectively, "Vanteon"), as Tenant, entered that certain
Industrial Space Lease dated as of June 6, 1997 ("Original Lease"), with respect
to a building since constructed and consisting of approximately 15,000 square
feet, commonly known as 000 Xxxxxxxxxx Xxxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000
("Premises").
B. On October 18, 2000, in connection with a sale of a portion of its
assets to Sublessor and pursuant to an Assignment and Assumption of Lease
("Assignment") dated as of October 18, 2000, Vanteon assigned the Original Lease
and all of its right, title and interest in and to the Premises to Sublessor,
then known as Puma Technology, Inc. Master Lessor consented to the Assignment
pursuant to that certain Letter Agreement dated as of October 16, 2000.
C. Master Lessor and Sublessor amended the Original Lease pursuant to
that certain First Amendment to Industrial Space Lease ("First Amendment"),
dated as of October 25, 2000. The Original Lease and the First Amendment
hereinafter shall be referred to as the "Master Lease". A true and correct copy
of the Master Lease is attached hereto as Exhibit A and incorporated by
reference herein.
D. Sublessor desires to sublease the Premises to Sublessee, and
Sublessee desires to sublease the Premises from Sublessor, upon the terms and
conditions contained herein.
2. Sublease; Subleased Premises: Sublessor hereby subleases to Sublessee,
----------------------------
and Sublessee hereby subleases from Sublessor, the entire Premises ("Subleased
Premises"), together, at no additional cost, with the existing furniture and
network wiring located in the Subleased Premises as of the Commencement Date.
The Subleased Premises are more particularly described in the Master Lease.
3. Term.
----
A. Term. The term ("Term") of this Sublease shall commence on the
----
later of (i) April 15, 2002, and (ii) the date on which Sublessor has received
Master Lessor's written consent to this Sublease ("Commencement Date"). The term
of this Sublease shall end on August 13, 2005 ("Expiration Date"), unless sooner
terminated pursuant to the provisions hereof or pursuant to the provisions of
the Master Lease. Notwithstanding the foregoing, but subject to having obtained
Master Lessor's written consent to this Sublease, the Commencement Date shall
occur prior to April 15, 2002 if Sublessee has provided Sublessor with written
notice fifteen (15) business days prior to the date on which Sublessee wishes
the Commencement Date to occur, but in no event will the Commencement Date occur
prior to February 15, 2002.
X. Xxxxx in Delivery of Possession. Sublessor shall use commercially
-------------------------------
reasonable efforts to deliver possession of the Subleased Premises on April 15,
2002. If Sublessor is unable to deliver possession of the Subleased Premises in
the required condition to Sublessee on April 15, 2002 for any reason whatsoever,
Sublessor shall not be subject to any liability therefor, nor shall such failure
affect the validity of this Sublease or the obligations of Sublessee hereunder,
or extend the Term, but in such case Sublessee shall not be obligated to pay
Rent (as defined in Paragraph 4.B. below) or perform any other obligation of
Sublessee hereunder until Sublessor delivers possession of the Subleased
Premises to Sublessee in the required condition. Sublessor and Sublessee shall
execute a Commencement Date memorandum establishing the Commencement Date
promptly after the Commencement
1
X. Xxxx has been established, but Sublessee's failure to do so shall
not affect the validity of this Sublease. Notwithstanding anything to the
contrary in this Sublease, if Sublessor has not delivered the Subleased Premises
to Sublessee in the condition required by this Sublease by April 30, 2002 (which
date shall be extended for each day of delay in delivery of the Subleased
Premises caused by the act or omission of Sublessee), then Sublessee may
terminate this Sublease upon written notice thereof to Sublessor, in which event
Sublessor shall immediately return any amounts prepaid by Sublessee to Sublessor
hereunder, and the obligations of the parties to each other hereunder shall
immediately terminate. The return of all sums paid by Sublessee to Sublessor
shall be Sublessee's sole and exclusive remedy in the event of a termination
pursuant to the foregoing sentence.
D. No Option to Extend. The parties acknowledge that Sublessee has no
-------------------
option to extend the Term of this Sublease. Sublessor shall not exercise the
option to extend set forth in Section 16 of the Lease Addendum, attached to and
made a part of the Master Lease pursuant to Section 1.1.V of the Master Lease or
enter into any other written agreement with Master Lessor to extend the term of
the Master Lease or enter into a new lease for the Subleased Premises if
Sublessee is then negotiating with Master Lessor for a direct lease of the
Subleased Premises.
E. Early Access. Provided that Master Lessor has consented in writing
------------
to this Sublease and Sublessor has vacated fully the Subleased Premises, the
date of which vacation shall occur not later than March 1, 2002, Sublessee shall
have the right, prior to the Commencement Date, to enter onto the Subleased
Premises solely for the purposes of installing Sublessee's furniture, trade
fixtures and equipment therein and planning its occupancy of the Subleased
Premises. Prior to March 1, 2002, but subject to having obtained Master Lessor's
consent to this Sublease, Sublessee, upon forty-eight (48) hours' prior notice
to Sublessor, may request entry into the Premises for the foregoing purposes
during non-business hours or such other periods as reasonably may be acceptable
to Sublessor, and Sublessor's consent to Sublessee's request for such early
entry shall not be unreasonably withheld. Such early access shall be on all of
the terms and conditions of this Sublease, except that Sublessee shall not be
required to pay Rent hereunder until the Commencement Date. Notwithstanding the
foregoing, if Sublessee commences doing business in the Premises during the
early access period, the Commencement Date shall be the date on which Sublessee
commenced doing business in the Subleased Premises.
4. Rent.
----
A. Monthly Base Rent. Commencing on the Commencement Date and
-----------------
continuing throughout the Term on the first day of each calendar month
thereafter, Sublessee shall pay to Sublessor monthly base rent ("Monthly Base
Rent") for the Subleased Premises in equal monthly installments as follows
Months 1 - 11: $1.80 per rentable sq. ft., NNN,
or $27,000.00 per month
Months 12 - 24: $1.95 per rentable sq. ft., NNN,
or $29,250.00 per month
Months 25 - 36: $2.20 per rentable sq. ft., NNN,
or $33,000.00 per month
Months 37 - Expiration Date: $2.40 per rentable sq. ft., NNN,
or $36,000.00 per month
As used herein, "month" shall mean a period beginning on the first (1st) day of
a calendar month and ending on the last day of that month. Monthly Base Rent
shall be paid on or before the first (1st) day of each month. Rent (as defined
in Paragraph 4.B. below) for any period during the Term hereof which is for less
than one month of the Term shall be a prorata portion of the monthly installment
based on the actual number of days in such month. Rent shall be payable without
notice or demand and without any deduction, offset, or abatement, in lawful
money of the United States of America. Rent shall be paid directly to Sublessor
at the address stated below or to such other persons or at such other places as
Sublessor may designate from time to time to Sublessee in writing.
2
B. Additional Rent. In addition to Monthly Base Rent, Sublessee shall
---------------
pay to Sublessor, at the time that Sublessee pays Monthly Base Rent or, if so
notified by Sublessor in writing, within twenty (20) days after receipt of
Sublessor's invoice therefor, all "Additional Rent" payable by Sublessor to
Master Lessor, as defined in Section 3.2 of the Master Lease, including, without
limitation, "Property Operating Expenses", "Landlord's Insurance Costs" and
"Real Property Taxes", all as defined in Section 13.12 of the Master Lease,
accruing as of and after the Commencement Date only. Notwithstanding the
foregoing, in no event shall Sublessee be required to pay any late charges,
default rates of interest, penalties or administrative charges based on a
failure of Sublessor to perform Sublessor's obligations pursuant to the Master
Lease unless such failure is caused by the failure of the Sublessee to perform
any of its obligations pursuant to the terms of this Sublease. Sublessee also
shall be responsible for payment of its own utilities, as set forth in Section
5.2 of the Master Lease, as well as its own telephone, telecommunications and
data communications charges, directly to the provider. In addition, all monies
required to be paid by Sublessee under this Sublease (except for Monthly Base
Rent, as defined in Paragraph 4.A.), including all other payment obligations
imposed by the Master Lease with respect to the Subleased Premises and
incorporated by reference herein, shall be deemed additional rent ("Additional
Rent"). Monthly Base Rent and Additional Rent hereinafter collectively shall be
referred to as "Rent."
C. Payment of First Month's Rent. Upon the execution of this Sublease
-----------------------------
by Sublessee, Sublessee shall pay to Sublessor the sum of Twenty-Seven Thousand
and No/100 Dollars ($27,000.00), which sum shall constitute Monthly Base Rent
for the first month of the Term.
5. Security Deposit. Upon the Commencement Date of this Sublease, Sublessee
----------------
shall deliver to Sublessor in cash an amount equal to two months' Monthly Base
Rent payable during the last month of the Term, or $72,000.00, as security for
the performance by Sublessee of its obligations under this Sublease, and not as
a prepayment of rent (the "Security Deposit"). If Sublessee is in default,
beyond applicable notice and cure periods, under this Sublease, Sublessor may
apply all or any part of the Security Deposit for the payment of any rent or
other sum in default, the repair of any damage to the Subleased Premises caused
by Sublessee or the payment of any other amount which Sublessor may spend or
become obligated to spend by reason of Sublessee's default or to compensate
Sublessor for any other loss or damage which Sublessor may suffer by reason of
Sublessee's default to the full extent permitted by law. To the extent any
portion of the Security Deposit is used, Sublessee shall within five (5) days
after demand from Sublessor restore the Security Deposit to its full amount.
Sublessor may keep the Security Deposit in its general funds and shall not be
required to pay interest to Sublessee on the deposit amount. If Sublessee shall
perform all of its obligations under this Sublease and return the Subleased
Premises to Sublessor at the end of the Term in the required condition,
Sublessor shall return all of the remaining Security Deposit to Sublessee within
thirty (30) days after the end of the Term. The Security Deposit shall not serve
as an advance payment of Rent or a measure of Sublessor's damages for any
default under this Sublease. If Sublessor transfers its interest in the
Subleased Premises or this Sublease, Sublessor shall transfer the Security
Deposit to its transferee either as a direct transfer or through a credit of the
Security Deposit against consideration being paid by such transferee. Upon such
transfer, and assumption of liability for the return of such Security Deposit by
the transferee, Sublessor shall have no further obligation to return the
Security Deposit and, in such event, Sublessee shall look solely to the new
sublessor for the return of the Security Deposit. Sublessee covenants and agrees
that it shall not assign or encumber or attempt to assign or encumber the
Security Deposit, and neither Sublessor or its successors or assigns shall be
bound by any such agreement, encumbrance, attempted assignment or attempted
encumbrance.
6. Parking. At no cost to Sublessee, Sublessee shall have the non-exclusive
-------
right to use 3.8 parking spaces per 1,000 rentable square feet of space
subleased located in the existing vehicle parking area on the parcel of land on
which the Subleased Premises are located. All parking spaces shall be used only
for vehicles no larger than full size passenger automobiles or pick-up trucks.
Sublessee shall not permit or allow any vehicles that belong to or are
controlled by Sublessee or Sublessee's employees, suppliers, shippers, customers
or invitees to be loaded, unloaded, or parked in areas other than those
designated by Master Lessor for such activities.
7. Condition of the Subleased Premises. On the Commencement Date, Sublessor
-----------------------------------
shall deliver the Subleased Premises to Sublessee in broom-clean condition, but
otherwise in its "as-is, where-is with all faults" condition. Notwithstanding
the foregoing, on or before the Commencement Date Sublessor shall perform the
following in the Subleased Premises at no cost to Sublessee: (i) repaint the
Subleased Premises; and (ii) replace carpet where the
3
carpet has been damaged or worn, as determined in Sublessor's reasonable
judgment ("Sublessor's Work"). The Sublessor's Work is more particularly
described on Exhibit B attached hereto and incorporated by reference herein.
Sublessee acknowledges that neither Sublessor nor any agent of Sublessor has
made any representation or warranty with respect to the Subleased Premises
(except as provided for in Paragraph 7 and Paragraph 35 hereof) or with respect
to the suitability of any part of the Subleased Premises for the conduct of
Sublessee's business. Sublessee hereby accepts the Subleased Premises and the
Building, Property and Outside Areas (all as defined in the Master Lease), and
all improvements thereon, subject to all applicable laws governing and
regulating the use of the Subleased Premises, and any covenants or restrictions
of record, and accepts this Sublease subject to all of the foregoing and to all
matters disclosed in this Sublease. Sublessee acknowledges that neither
Sublessor nor Sublessor's agents has made any representation or warranty as to
the present or future suitability of the Subleased Premises for the conduct of
Sublessee's business or the uses proposed by Sublessee. Except for the
Sublessor's Work and any work associated with a failure of Sublessor's
representations and warranties in Section 35 of this Sublease to be true and
accurate, Sublessor shall have no obligation whatsoever to make or pay the cost
of any alterations, improvements or repairs to the Subleased Premises,
including, without limitation, any improvement or repair required to comply with
any law, regulation, building code or ordinance (including, without limitation,
the Americans with Disabilities Act of 1990); provided, however, that to the
extent any of the foregoing items are the responsibility of Master Lessor under
the Master Lease, Sublessor's sole responsibility shall be to use commercially
reasonable efforts (without requiring Sublessor to spend more than a nominal
sum) to cause Master Lessor to comply with such obligations.
8. Indemnification.
---------------
A. Sublessee. In addition to the indemnifications set forth in
---------
Sections 2.6, 8.2 and 15.B. (Lease Addendum) of the Master Lease, and except to
the extent caused by Sublessor's active negligence or willful misconduct,
Sublessee shall indemnify, protect, defend with counsel reasonably acceptable to
Sublessor and hold harmless Sublessor from and against any and all claims,
liabilities, judgments, causes of action, damages, costs and expenses (including
reasonable attorneys' and experts' fees), caused by or arising in connection
with: (i) the negligence or willful misconduct of Sublessee or its employees,
contractors, agents, sublessees, assignees or invitees, or (ii) a breach of
Sublessee's obligations under this Sublease or (iii) a breach of Sublessee's
obligations under the Master Lease to the extent incorporated herein with
respect to the Subleased Premises. The foregoing indemnification shall exclude
consequential damages (including, without limitation, lost profits and lost
business opportunity) and punitive damages. The foregoing indemnification shall
survive the expiration or earlier termination of this Sublease.
B. Sublessor. Except to the extent caused by Sublessee's active
---------
negligence or willful misconduct, Sublessor shall indemnify, protect, defend
with counsel reasonably acceptable to Sublessee and hold Sublessee harmless from
and against any and all claims, liabilities, judgments, causes of action,
damages, costs and expenses (including reasonable attorneys' and experts' fees),
caused by or arising in connection with: (i) the negligence or willful
misconduct of Sublessor or its employees, contractors, agents, assignees or
invitees, or (ii) a breach of Sublessor's obligations under this Sublease; or
(iii) a breach of Sublessor's obligations under the Master Lease to the extent
those obligations are not made the obligations of Sublessee pursuant to this
Sublease. The foregoing indemnification shall exclude consequential damages
(including, without limitation, lost profits and lost business opportunity) and
punitive damages. The foregoing indemnification shall survive the expiration or
earlier termination of this Sublease.
9. Right to Cure Defaults. If Sublessee fails to pay any sum of money when
----------------------
due to Sublessor, or fails to perform any other act on its part to be performed
hereunder, in each case within the applicable notice and cure period, then
Sublessor may, but shall not be obligated to, upon two business (2) days' prior
notice to Sublessee, make such payment or perform such act. All such sums paid,
and all costs and expenses of performing any such act, shall be deemed
Additional Rent payable by Sublessee to Sublessor upon demand, together with
interest thereon at the lesser of the rate of ten percent (10%) per annum or the
maximum rate permitted by law ("Interest Rate") from the date of the expenditure
until repaid.
4
10. Assignment and Subletting. Sublessee shall not have the right to assign
-------------------------
this Sublease, sublease the Subleased Premises, transfer any interest of
Sublessee therein, or permit any use of the Subleased Premises by another party
("Transfer") without the prior written consent of Master Lessor and of
Sublessor, which consents shall be granted or denied pursuant to Article 7 of
the Master Lease. Any Transfer without the consents required by this Paragraph
shall be void and shall, at the option of Sublessor, terminate this Sublease.
Sublessor's consent to any assignment or subletting shall be ineffective unless
set forth in writing, and Sublessee shall not be relieved from any of its
obligations under this Sublease, unless the consent expressly so provides. Any
Transfer proposed by Sublessee shall be in strict accordance with the provisions
of Article 7 of the Master Lease. Notwithstanding anything to the contrary
contained in this Paragraph, any assignment consideration resulting from an
assignment of this Sublease by Sublessee or any excess rentals resulting from a
sub-sublease of the Subleased Premises by Sublessee shall be shared equally
between Sublessor and Sublessee after Master Lessor has been paid its share of
assignment consideration or excess rentals pursuant to Section 7.5 of the Master
Lease.
11. Use. Sublessee may use the Subleased Premises only for the uses
---
permitted in Section 1.l.T. of the Master Lease (software development and
design, software sales, software storage and distribution, offices, marketing
and other related support and other related legal uses), and for no other
purpose. Notwithstanding anything to the contrary contained in the foregoing
sentence, Sublessor hereby consents to Sublessee's use of the Subleased Premises
for R&D, testing and engineering purposes so long as Master Lessor consents to
such uses. Sublessee shall not conduct, nor permit to be conducted, either
voluntarily or involuntarily, any auction, or going out of business, fire or
bankruptcy sale upon the Subleased Premises without first having obtained
Sublessor's prior written consent. Sublessee, at Sublessee's sole cost and
expense, shall obtain and maintain in force during the Term of this Sublease all
permits, licenses and approvals required or necessary for the conduct of the
activities of Sublessee on the Subleased Premises. Sublessee shall comply with
all rules and regulations promulgated from time to time by Master Lessor of
which Sublessee receives actual written notice.
12. Effect of Conveyance. As used in this Sublease, the term "Sublessor"
--------------------
means the holder of the tenant's interest under the Master Lease. In the event
of any transfer of said tenant's interest, as of the date of such transfer
Sublessor shall be and hereby is entirely relieved of all covenants and
obligations of the Sublessor hereunder accruing after the date of the transfer,
and it shall be deemed and construed, without further agreement between the
parties, that the transferee has assumed and shall carry out all covenants and
obligations to be performed by Sublessor hereunder from and after the date of
the transfer. Sublessor may not assign Sublessor's interest in the Master Lease
or this Sublease without the prior written consent of Sublessee. Notwithstanding
the foregoing sentence, Sublessor shall be permitted to assign its interest in
the Master Lease, the Subleased Premises or this Sublease without the prior
written consent of Sublessee to (i) a successor corporation related to Sublessor
by merger, consolidation, nonbankruptcy reorganization or government action; or
(ii) a purchaser of substantially all of Sublessor's stock or assets (either of
the foregoing being a "Permitted Transfer").
13. Acceptance. The parties acknowledge and agree that Sublessee is
----------
subleasing the Subleased Premises on an "as is" basis as set forth in Paragraph
7 above, and that Sublessor has made no representations or warranties with
respect to the condition of the Subleased Premises except as set forth in
Paragraph 7 above and Paragraph 35 below. Sublessee hereby represents to
Sublessor that (i) Sublessee has fully inspected the Subleased Premises and the
physical condition thereof, including, without limitation, accessibility and
location of utilities and improvements and earthquake preparedness, which in
Sublessee's judgment affect or influence Sublessee's use of the Subleased
Premises and Sublessee's willingness to enter into this Sublease; (ii) Sublessee
is relying on its inspection in subleasing the Subleased Premises; and (ii)
Sublessee has received no representations or warranties from Sublessor other
than with respect to the physical condition of the Subleased Premises (as set
forth in Paragraph 7 above and Paragraph 35 below) on which Sublessee has relied
in entering into this Sublease.
14. Improvements. No alterations or improvements shall be made to the Subleased
------------
Premises except in strict accordance with this Sublease and Article 6 of the
Master Lease, and with the prior written consent of both Master Lessor and
Sublessor, which consent of Sublessor shall not be unreasonably withheld or
delayed. Any alteration or improvement undertaken by Sublessee shall be
performed with all required governmental permits and in compliance with
applicable laws. Sublessor shall not be required to provide a tenant improvement
allowance to Sublessee in connection with Sublessee's construction of any
improvements to the Subleased Premises. Upon the expiration or
5
earlier termination of this Sublease, Sublessee, at its sole cost, shall be
responsible for removing any and all alterations or improvements installed in
the Subleased Premises by Sublessee (but not alterations or improvements made to
the Subleased Premises by Sublessor or parties other than Sublessee) and
repairing any damage caused by such removal, unless Master Lessor notifies
Sublessee in writing that Master Lessor will not require Sublessee to remove
such alterations or improvements. Sublessee shall not be responsible for
repairing the squeaking noise on the second floor of the Subleased Premises at
any time during the Term or upon the expiration or earlier termination of this
Sublease.
15. Waiver of Subrogation and Release. Sublessor hereby releases Sublessee,
---------------------------------
and Sublessee hereby releases Sublessor and Master Lessor, and each of their
respective partners, principals, members, officers, agents, employees and
servants, from any and all liability for loss, damage or injury to the property
of the other in or about the Subleased Premises which is caused by or results
from a peril or event or happening which is covered by insurance actually
carried and in force at the time of the loss by the party sustaining such loss
or required to be carried hereunder. Sublessee shall give notice to all
insurance carriers that the foregoing mutual waiver of subrogation is contained
in this Sublease, and shall obtain from such insurance carriers a waiver of the
rights of subrogation. Sublessor shall not be liable to Sublessee, nor shall
Sublessee be entitled to terminate this Sublease or to xxxxx Rent for any
reason, including, without limitation: (i) failure or interruption of any
utility system or service for reasons outside of Sublessor's reasonable control;
or (ii) failure of Master Lessor to maintain the Subleased Premises as may be
required under the Master Lease. Notwithstanding the foregoing to the contrary,
to the extent that Rent is abated for Sublessor with respect to the Subleased
Premises pursuant to the terms of the Master Lease, Sublessee's Rent obligations
with respect to the Subleased Premises also shall be abated. Sublessor and
Sublessee are corporations, and the obligations of Sublessor and Sublessee shall
not constitute the personal obligations of the officers, directors, trustees,
partners, joint venturers, members, owners, stockholders or other principals or
representatives of such corporations.
16. Default. Sublessee shall be in material default under this Sublease if
-------
Sublessee fails to perform any of its obligations hereunder after the passage of
applicable notice and cure periods provided for in the Master Lease, modified,
however, as set forth in Paragraph 24.A. below. In addition, Sublessee shall be
in material default of its obligations under this Sublease if Sublessee is
responsible for the occurrence of any of the events of default set forth in
Section 12.1 of the Master Lease.
17. Remedies. In the event of any default by Sublessee under this Sublease
--------
(including, without limitation, a default pursuant to Section 12.1 of the Master
Lease), Sublessor shall have all remedies provided by applicable law and in
equity, including, without limitation, all rights pursuant to 12.2 of the Master
Lease. Sublessor may resort to its remedies cumulatively or in the alternative.
18. Surrender. On or before the Expiration Date or earlier termination of
---------
this Sublease, Sublessee shall remove all of its trade fixtures and all
alterations and improvements (unless Master Lessor has permitted Sublessee to
leave its alterations and improvements), and shall surrender the Subleased
Premises to Sublessor in clean condition and in the same condition required by
Section 2.6 of the Master Lease. Any damage or deterioration of the Subleased
Premises shall not be deemed ordinary wear and tear if the same could have been
prevented by customary and ordinary maintenance practices. Not later than the
expiration of the Term of this Sublease or the date of any sooner termination,
Sublessee shall repair any damage to the Subleased Premises occasioned by the
installation or removal of Sublessee's trade fixtures, furnishings, equipment,
alterations or improvements and personal property. If the Subleased Premises are
not so surrendered, then Sublessee shall be liable to Sublessor for all
reasonable costs incurred by Sublessor in returning the Subleased Premises to
the required condition, plus interest thereon at the Interest Rate. Sublessee
shall indemnify, defend, protect and hold harmless Sublessor against any and all
claims, liabilities, judgments, causes of action, damages, costs, and expenses
(including reasonable attorneys' and experts' fees) resulting from Sublessee's
delay in surrendering the Subleased Premises, including, without limitation, any
claim made by any succeeding tenant founded on or resulting from such failure to
surrender. The indemnification set forth in this Paragraph shall survive the
expiration or earlier termination of this Sublease.
19. Brokers. Sublessor and Sublessee each represent to the other that they
-------
have dealt with no real estate brokers, finders, agents or salesmen in
connection with this transaction, except Colliers International, representing
6
Sublessor and Sublessee in dual agency. Sublessor and Sublessee hereby consent
to such dual agency. Each party agrees to hold the other party harmless from and
against all claims for brokerage commissions, finder's fees, or other
compensation made by any other agent, broker, salesman or finder as a
consequence of said party's actions or dealings with such other agent, broker,
salesman, or finder. The warranties and representations contained in this
Paragraph 19 shall survive the termination of this Sublease. Sublessor shall be
responsible for payment of a brokerage commission in connection with this
transaction pursuant to a separate agreement between Sublessor and Colliers
International.
20. Notices. Unless five (5) days' prior written notice is given in the
-------
manner set forth in this Paragraph, the addresses of Sublessor and Sublessee for
all purposes connected with this Sublease shall be the addresses set forth below
their respective signatures. All notices, demands, or communications in
connection with this Sublease shall be considered received when (i) personally
delivered; or (ii) if properly addressed and sent by either nationally
recognized overnight courier or deposited in the mail (registered or certified,
return receipt requested, and postage prepaid), on the date shown on the return
receipt or other documentation for acceptance or rejection. All notices given to
the Master Lessor under the Master Lease shall be considered received only when
delivered in accordance with Sections 1.1.C. and 13.10 of the Master Lease.
21. Severability. If any term of this Sublease is held to be invalid or
------------
unenforceable by any court of competent jurisdiction, then the remainder of this
Sublease shall remain in full force and effect to the fullest extent possible
under the law, and shall not be affected or impaired.
22. Amendment. This Sublease may not be amended except by the written
---------
agreement of all parties hereto.
23. Attorneys' Fees. In the event of any dispute between the parties
---------------
arising under this Sublease, or the breach of any covenant or condition under
this Sublease, then the prevailing party shall be entitled to have and recover
from the party not so prevailing, the prevailing party's reasonable costs and
reasonable attorneys' fees incurred in any dispute, collection or attempted
collection, negotiation relative to the obligations contained herein, or action
or proceeding brought to enforce this Sublease, whether such costs and fees are
incurred in taking any action under this Sublease or in any judicial proceeding
(including appellate proceedings). "Prevailing party" for the purposes of this
Paragraph 23 shall include, without limitation, the party who receives from the
other party the sums allegedly due, performance of the covenants allegedly
breached, consideration substantially equal to that which was demanded, or
substantially the relief or consideration sought, whether or not any judicial
proceeding is commenced or prosecuted to final judgment, or a party who
dismisses a judicial action in return for substantially the performance or
relief sought or in the payment of the sums allegedly due.
24. Other Sublease Terms.
--------------------
A. Incorporation By Reference. Except as otherwise provided in this
--------------------------
Sublease, the terms and conditions of this Sublease shall include various
Sections of the Master Lease, which are incorporated into this Sublease as if
fully set forth, except that: (i) each reference in such incorporated Sections
to "Lease" shall be deemed a reference to "Sublease"; (ii) each reference to the
"Premises" shall be deemed a reference to the "Subleased Premises"; (iii) each
reference to "Landlord" and "Tenant" shall be deemed a reference to "Sublessor"
and "Sublessee", respectively, except as expressly set forth herein; (iv) with
respect to work, services, repairs, restoration, provision of insurance or the
performance of any other obligation of Master Lessor under the Master Lease, the
sole obligation of Sublessor shall be to request the same in writing from Master
Lessor as and when requested to do so by Sublessee, and to use Sublessor's
commercially reasonable efforts (without requiring Sublessor to spend more than
a nominal sum) to obtain the Master Lessor's performance; (v) with respect to
any obligation of Sublessee to be performed under this Sublease, wherever the
Master Lease grants to Sublessor a specified number of days to perform its
obligations under the Lease, Sublessee shall have two (2) fewer days to perform
the obligation, including, without limitation, curing any defaults; (vi)
Sublessor shall have no liability to Sublessee with respect to (a)
representations and warranties made by Master Lessor under the Master Lease, (b)
any indemnification obligations of Master Lessor under the Master Lease, or
other obligations or liabilities of Master Lessor under the Master Lease with
respect to compliance with laws, condition of the Subleased Premises or
Hazardous Materials, and (c) obligations under the Master Lease to repair,
maintain, restore, or insure all or any portion of the Subleased
7
Premises, regardless of whether the incorporation of one or more provisions of
the Master Lease might otherwise operate to make Sublessor liable therefor; and
(vii) with respect to any approval required to be obtained from the "Landlord"
under the Master Lease, such consent must be obtained from both the Master
Lessor and Sublessor, and the approval of Sublessor may be withheld if the
Master Lessor's consent is not obtained. In the event of a conflict between the
provisions of the Master Lease and the provisions of this Sublease, as between
Sublessor and Sublessee the provisions of this Sublease shall control.
The following Sections of the Master Lease hereby are incorporated into
this Sublease:
Sections 1.1 C., D., L., M., O., P. (except that Sublessor and Sublessee
------------------------------------------------------------------------
agree that the square footage of the Building is 15,000 square feet), Q., R., T.
--------------------------------------------------------------------------------
(subject to Master Lessor's consent to Sublessee's change in use), U. and V.;
-----------------------------------------------------------------------------
Sections 2.1, 2.2 and 2.6, except that (i) in Section 2.1 the words
-------------------------
"reserving and excepting to Landlord the exclusive right to all profits to be
derived from any assignments or subletting by Tenant during the Lease Term by
reason of the appreciation in the fair market rental value of the Leased
Premises" hereby are deleted; and (ii) the reference to "Lease Commencement
Date" in Section 2.6 shall mean the Commencement Date of this Sublease;
Section 3.2, except that references to "Landlord" in Section 3.2 relative
-----------
to costs paid or incurred by Landlord shall mean only costs paid or incurred by
Master Lessor;
Sections 3.3, 3.4, 3.5 and 3.8, except that references to "Landlord" in the
------------------------------
first sentence of Section 3.3 shall mean only Master Lessor;
Article 4, except that references to "Landlord" in all but the last
---------
sentence of Section 4.11 and in Section 4.12 shall mean only Master Lessor;
Article 5, except that references to "Landlord" in Section 5.1B and the
---------
first and third sentences of Section 5.2 and the first sentence of Section 5.4
shall mean only Master Lessor;
Articles 6 through 8;
--------------------
Article 9, except that (i) Section 9.3 is deleted, and (ii) references to
---------
"Landlord" in Section 9.2 shall mean only Master Lessor;
Article 10, except that (i) references to "Landlord" in Sections 10.1,
----------
10.2, 10.3 and 10.4 shall mean only Master Lessor; and (ii) Sublessee shall not
exercise the termination rights set forth in Section 10.4 without five (5) days'
prior written notice to Sublessor;
Article 11, except that references to "Landlord" in Sections 11.1, 11.2,
----------
11.3, 11.4, 11.5 and 11.7 shall mean only Master Lessor, (ii) Sublessee shall
not exercise the termination rights set forth in Section 11.1 without five (5)
days' prior written notice to Sublessor, and (iii) the reference to "Tenant" in
subsection (2) in Section 11.5 shall mean only Sublessor;
Article 12;
----------
Article 13, except that (i) Section 13.12.D hereby is deleted, (ii) the
----------
phrase "Base Monthly Rent" as used in Section 13.2 shall mean the Base Monthly
Rent payable by Sublessor as "Tenant" under the Master Lease; (iii) references
to "Landlord" in Sections 13.3, 13.5 and 13.8 shall mean only Master Lessor;
(iv) Section 13.10 is incorporated only for purposes of providing notices to
Master Lessor; (v) references to "Landlord's business of owning, leasing or
managing the Leased Premises" in Section 13.12.A shall mean only Master Lessor's
business; and (vi) references to "Landlord's Insurance Costs" in Sections
13.12.B, C and E shall mean only Master Lessor's insurance costs;
Article 14, except that Section 14.2 hereby is deleted;
----------
8
Lease Addendum Section 15, except that (i) references to "Landlord" in
-------------------------
Section 15.A. shall mean only Master Lessor, (ii) the representation of Master
Lessor in Section 15.A shall be deemed made by Master Lessor as of the
Commencement Date of the Master Lease, and (iii) the reference to "Lease
Commencement Date" in section 15.B shall mean the Commencement Date of this
Sublease; and
Exhibits A and B.
----------------
A. Agreement to Perform Obligations. This Sublease is and at all times
--------------------------------
shall be subject and subordinate to the Master Lease and the rights of Master
Lessor thereunder. Sublessee hereby expressly agrees, as between Sublessor and
Sublessee: (i) to comply with all provisions of the Master Lease with respect to
the Subleased Premises during the Term to the extent incorporated herein; (ii)
to perform all the obligations on the part of the "Tenant" to be performed under
the terms of the Master Lease with respect to the Subleased Premises during the
Term to the extent incorporated herein; and (iii) to hold Sublessor free and
harmless of and from all liability, judgments, costs, damages, claims, demands,
and expenses (including reasonable attorneys' and experts' fees) arising out of
Sublessee's failure to comply with or to perform Sublessee's obligations
hereunder or the obligations of the "Tenant" under the Master Lease as herein
provided, or to act or omit to act in any manner which will constitute a breach
of the Master Lease. The foregoing indemnification shall exclude consequential
damages (including, without limitation, lost profits and lost business
opportunity) and punitive damages. The foregoing indemnification shall survive
the termination of this Sublease.
B. Sublessor's Obligations. Sublessor hereby agrees to maintain the
-----------------------
Master Lease in force during the entire Term of this Sublease and to pay rent to
Master Lessor in accordance with the terms of the Master Lease, subject,
however, to any earlier termination of the Master Lease without the fault of
Sublessor; provided, however, that, Sublessor hereby agrees not to exercise any
termination rights provided to "Tenant" under the Master Lease unless requested
to do so by Sublessee, in which case this Sublease shall terminate as of the
date of termination of the Master Lease. Sublessor promptly shall deliver to
Sublessee copies of all notices, demands and requests that Sublessor may receive
under the Master Lease.
25. Condition Precedent. The Commencement Date and Sublessor's and
-------------------
Sublessee's rights and obligations hereunder are conditioned upon receipt by
Sublessor of Master Lessor's written consent to this Sublease, in form and
content acceptable to Sublessor and Sublessee in their sole but reasonable
discretion. Without limiting the foregoing, if Master Lessor's consent does not
specifically approve the changes in use set forth in Paragraph 11 above,
Sublessee shall have the right to terminate this Sublease, neither party shall
have any further rights or obligations hereunder and Sublessor shall return to
Sublessee all sums paid by Sublessee to Sublessor in connection with Sublessee's
execution hereof. Sublessee shall provide to Master Lessor all financial and
other information requested by Master Lessor pursuant to Section 7.3 of the
Master Lease. If Sublessor fails to obtain the Master Lessor's consent in the
form required by this Paragraph within fifteen (15) business days after the date
on which Sublessor delivers to Master Lessor a copy of this Sublease executed by
Sublessor and Sublessee, then either Sublessor or Sublessee may terminate this
Sublease by giving the other written notice, neither party shall have any
further rights or obligations hereunder and Sublessor shall return to Sublessee
all sums paid by Sublessee to Sublessor in connection with Sublessee's execution
hereof. The return of all sums paid by Sublessee to Sublessor as set forth in
this Paragraph shall be Sublessee's sole and exclusive remedy in the event of a
termination pursuant to the foregoing sentence.
26. Signage. From or after the Commencement Date, Sublessee shall have the
-------
right, at Sublessee's sole cost and expense, and in accordance with applicable
governmental regulations, to install signage on the existing monument sign
located on the Property and on the Building, subject to Master Lessor's approval
pursuant to Section 4.4 of the Master Lease. Not later than the Commencement
Date, Sublessor, at no cost to Sublessee, shall remove its existing Building and
monument signage.
27. No Offer. Submission of this Sublease for examination or signature by
--------
Sublessee does not constitute a reservation of, option for or option to
sublease, and such submission is not effective as a sublease or otherwise until
9
execution and delivery hereof by both Sublessor and Sublessee, subject, however,
to the provisions of Paragraph 25 above.
28. Sublessee's Financial Statements. Sublessee shall provide to Sublessor
--------------------------------
financial statements when and in the form required by Section 13.7 of the Master
Lease. Sublessor agrees that such financial statements, and the information
contained therein, shall be kept confidential and shall not be disclosed to
third parties without the prior written consent of Sublessee (i) except in
connection with a Permitted Transfer as defined in Paragraph 12 above, and (ii)
except as required by applicable law.
29. Estoppel Certificates. Within seven (7) business days after receipt of
---------------------
demand by Sublessor or Master Lessor, Sublessee shall execute and deliver to
Sublessor an estoppel certificate to Sublessor in connection with this Sublease
in the form required pursuant to Section 13.6 of the Master Lease.
30. Holding Over. No right to hold over in the Premises is granted hereby.
------------
If Sublessee holds over in the Subleased Premises after the expiration or sooner
termination of the Term of this Sublease, the terms and conditions of Section
13.2 of the Master Lease shall apply, as modified by Paragraph 24.A. above. In
addition, Sublessee shall indemnify, defend, protect and hold harmless Sublessor
and Master Lessor from and against any and all claims for damages as the result
of the failure of Sublessee to surrender the Subleased Premises in the condition
required by this Sublease upon the expiration or sooner termination of the Term
of this Sublease, including, without limitation, claims made by any succeeding
tenant or subtenant. The foregoing indemnification shall survive the expiration
or earlier termination of this Sublease.
31. Counterparts. This Sublease may be executed in counterparts, each of
------------
which, when taken together as a whole, shall constitute one (1) original
document.
32. Quiet Enjoyment. Sublessee shall peacefully have, hold and enjoy the
---------------
Subleased Premises, subject to the terms and conditions of this Sublease,
provided that Sublessee pays all Rent and performs all of Sublessee's covenants
and agreements contained herein.
33. Personal Property. During the Term of this Sublease, Sublessor shall
-----------------
provide to Sublessee, at no additional cost to Sublessee, the use of the
furniture and network wiring located within the Subleased Premises on the
Commencement Date (collectively, "Personal Property"). Sublessee acknowledges
that Sublessee is taking possession of the Personal Property on an "as is, where
is with all faults" basis, and that Sublessee is not relying on any
representations or warranties of any kind whatsoever, express or implied,
including, without limitation, any implied warranties as to merchantability or
fitness for a particular purpose; provided, however, that Sublessor represents
for the benefit of Sublessee that Sublessor owns the Personal Property free and
clear of all liens. Sublessor shall have no obligation to repair, maintain,
replace or insure the Personal Property. Upon the expiration or earlier
termination of this Sublease, Sublessee shall return the Personal Property to
Sublessor by leaving the Personal Property on the Subleased Premises in the
configuration and in the condition received, ordinary wear and tear excepted.
Any damage or deterioration of the Subleased Premises shall not be deemed
ordinary wear and tear if the same could have been prevented by customary and
ordinary maintenance practices.
34. 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 this 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:
(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.
10
(ii) Sublessee shall provide to Sublessor concurrently with any
payment to Master Lessor reasonable evidence of such payment.
(iii) Sublessee shall not prepay any amounts owing by Sublessor
without the consent of Sublessor.
(iv) 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 shall be credited toward the amounts payable by Sublessee to
Sublessor under this Sublease. In the event Sublessee tenders payment directly
to Master Lessor in accordance with this Paragraph and Master Lessor refuses to
accept such payment, Sublessee shall have the right to deposit such funds in an
account with a national bank for the benefit of Master Lessor and Sublessor, and
the deposit of said funds in such account shall discharge Sublessee's obligation
under this Sublease to make the payment in question.
35. Sublessor's Representations and Warranties. As an inducement to
------------------------------------------
Sublessee to enter this Sublease, Sublessor represents and warrants with respect
to the Subleased Premises that: (i) the Master Lease is in full force and
effect, and there exists under the Master Lease no event of default, nor has
there occurred any event which, with the giving of notice or passage of time or
both, could constitute an event of default by Sublessor or, to Sublessor's
actual knowledge without duty of inquiry, Master Lessor; (ii) to the best of
Sublessor's actual knowledge, Sublessor has not received any written notice from
any insurance company of any defects or inadequacies in the Subleased Premises
of any part thereof which could adversely affect the Subleased Premises or any
portion thereof; (iii) to the best of Sublessor's actual knowledge, Sublessor
has not received any written notice from governmental authorities that there are
pending or threatened condemnation or similar proceedings affecting the
Subleased Premises or any portion thereof; (iv) Sublessor has not assigned (for
security purposes or otherwise) its interest in the Master Lease or sublet its
interest in the Subleased Premises; (v) Sublessor has provided Sublessee with
true, correct and complete copies of any and all Private Restrictions affecting
the Subleased Premises; (vi) the copy of the Master Lease attached hereto as
Exhibit A is a true, correct and complete copy of the Master Lease, including
all amendments and modifications thereto; and (vii) to the best of Sublessor's
actual knowledge, any handling, transportation, storage, treatment or use of
Hazardous Materials by Sublessor in or on the Subleased Premises has been done
in compliance with all laws which relate to Hazardous Materials. Sublessor also
represents and warrants for the benefit of Sublessee that those portions of the
Subleased Premises which Sublessor, as Tenant under the Master Lease, is
required to keep and maintain pursuant to Section 5.1.A. of the Master Lease
("Tenant's Maintenance Items") will be in good order, condition and repair
during the first thirty (30) days of the Term. If any Tenant Maintenance Item is
not in the required condition during the first thirty (30) days of the Term,
Sublessee shall so notify Sublessor of the need for repair in writing, and
Sublessor shall complete the repair at no cost to Sublessee; provided, however,
that if the need for repair resulted from the action or inaction of Sublessee
(including, without limitation, any action or inaction during Sublessee's period
of early access pursuant to Section 3.D above), Sublessor shall not be obligated
to complete the repair. Time is of the essence with respect to Sublessee's
obligation to notify Sublessor of any need for repair within the first thirty
(30) days of the Term, and if Sublessee does not so notify Sublessor during the
thirty (30)- day period, Sublessor's obligation to repair shall terminate and be
of no further force or effect as of the end of the thirtieth (30th) day of the
Term.
36. Sublessor's Covenants. Sublessor hereby agrees, for the benefit of
---------------------
Sublessee, that during the Term of this Sublease Sublessor shall not, without
the prior written consent of Sublessee, which consent shall not be unreasonably
withheld or delayed, (i) assign or encumber Sublessor's interest as tenant
pursuant to the Master Lease except as permitted by Paragraph 12 above; (ii)
voluntarily terminate the Master Lease unless and until Master Lessor has agreed
in writing to continue this Sublease in full force and effect as a direct lease
between Master Lessor and Sublessee upon and subject to all of the terms,
covenants and conditions of this Sublease for the balance of the Term hereof;
(iii) amend or otherwise modify the Master Lease in any manner which materially
increases Sublessee's obligations or diminishes Sublessee's rights hereunder; or
(iv) enter into any agreement with Master Lessor or any other party which would
have the effect of terminating the Master Lease or disrupting the occupancy and
quiet enjoyment of the Subleased Premises by Sublessee unless and until Master
Lessor or the third
11
party has agreed in writing to continue this Sublease in full force and effect
as a direct lease between Master Lessor and Sublessee upon and subject to all of
the terms, covenants and conditions of this Sublease for the balance of the Term
hereof.
37. Attachments. Attached to this Sublease and made a part hereof is the
-----------
following:
Exhibit A - Master Lease
SUBLESSOR AND SUBLESSEE HAVE CAREFULLY READ AND REVIEWED THIS SUBLEASE AND
EACH TERM AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS SUBLEASE,
SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE
THAT, AT THE TIME THIS SUBLEASE IS EXECUTED, THE TERMS OF THIS SUBLEASE ARE
COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF SUBLESSOR AND
SUBLESSEE WITH RESPECT TO THE SUBLEASED PREMISES.
THIS SUBLEASE HAS BEEN PREPARED FOR SUBMISSION TO YOUR ATTORNEY FOR
APPROVAL. NO REPRESENTATION OR RECOMMENDATION IS MADE BY SUBLESSOR OR ITS AGENTS
OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT OR TAX CONSEQUENCES OF
THIS SUBLEASE OR THE TRANSACTION RELATING THERETO; THE PARTIES SHALL RELY SOLELY
UPON THE ADVICE OF THEIR OWN LEGAL COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES
OF THIS SUBLEASE.
IN WITNESS WHEREOF, Sublessor and Sublessee have caused this Sublease to be
executed by their duly authorized representatives as of the day and year first
above written.
SUBLESSOR:
PUMATECH, INC., a Delaware corporation
By: /s/ XXXXX X. XXXXX
Its:CFO and VP Operations
SUBLESSOR'S ADDRESS FOR NOTICES AND RENT:
PumaTech, Inc.
0000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Kitchen
SUBLESSEE:
ALPHASMART, INC., a California corporation
By: /s/ XXXXX X. XXXXXX
Its: CFO
SUBLESSEE'S ADDRESS FOR NOTICES:
00000 Xxxxxxx Xxxxx Xxxx.
Xxxxxxxxx, XX 00000
12
