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EXHIBIT 10.42
SUBLEASE
This Sublease is made and entered into as of March 14, 2000, by and among
LYON & LYON LLP, a California limited liability partnership ("Sublandlord") and
LIGHTSPAN PARTNERSHIP, INC ., a Delaware corporation ("Subtenant").
RECITALS:
A. Sublandlord and Mitsui Kensetsu Development, Inc., a California
corporation, predecessor in interest to U.S. Property Fund GmbH & Co. KG
("Landlord") have entered into that certain Lease Agreement dated as of December
4, 1997 (the "Suite 500 Lease") whereby Landlord has leased to Sublandlord
approximately 33,908 rentable square feet of space (the "Suite 500 Premises")
located in that certain building (the "Building") at 0000 Xxxxxxxxx Xxxxxx, Xx
Xxxxx, Xxxxxxxxxx. Sublandlord and Landlord have also entered into that certain
Lease Agreement dated as of June 19, 1998 (the "Suite 560 Lease") whereby
Landlord has leased to Sublandlord approximately 799 rentable square feet of
space (the "Suite 560 Premises") located in the Building. The Suite 500 Premises
and the Suite 560 Premises are collectively referred to as the "Premises". The
Suite 500 Lease and the Suite 560 Lease are collectively referred to as the
"Lease". A copy of the Lease has been delivered to Subtenant.
B. Sublandlord and Subtenant now desire to enter into this Sublease to
provide for the sublease by Sublandlord to Subtenant of a portion of the
Premises consisting of 10,499 rentable square feet located on the fifth (5th)
floor of the Building, approximately as shown on Exhibit A attached hereto and
incorporated herein by this reference (such subleased portion of the Premises is
referred to herein as the "Subleased Premises"), all upon the terms and subject
to the conditions set forth in this Sublease.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. SUBLEASE OF THE SUBLEASED PREMISES. Sublandlord hereby subleases to
Subtenant and Subtenant hereby subleases from Sublandlord for the "Sublease
Term" (as hereinafter defined), at the rental, and upon all of the terms and
conditions set forth herein, the Subleased Premises. The Subleased Premises
shall be deemed for all purposes of this Sublease to contain 10,249 rentable
square feet notwithstanding any deviation in the actual rentable square feet of
the Subleased Premises.
2. TERM. The term (the "Term") of this Sublease shall commence on March
15, 2000 (the "Sublease Commencement Date") and end on March 31, 2002, unless
earlier terminated pursuant to any provision hereof. Notwithstanding such
Sublease Commencement Date, if for any reason Sublandlord cannot deliver
possession of the Subleased Premises to Subtenant on such date, Sublandlord
shall not be subject to any liability therefor, nor shall such failure affect
the validity of this Sublease or the obligations of Subtenant hereunder or
extend the Term hereof, but in no event shall Subtenant be obligated to pay rent
or perform any other obligations with respect to the Subleased Premises until
possession of the Subleased Premises is tendered to Subtenant; provided,
however, if Sublandlord shall not have delivered
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possession of the Subleased Premises within sixty (60) days from such Sublease
Commencement Date, Subtenant may, at Subtenant's option, by notice in writing to
Sublandlord within ten (10) days thereafter, terminate this Sublease, in which
event the parties shall be discharged from all obligations hereunder. Any
occupancy of the Subleased Premises by Subtenant prior to the Sublease
Commencement Date shall be subject to all of the provisions of this Sublease.
3. MONTHLY BASE RENT. During the Term, Subtenant shall pay to Sublandlord
as "Monthly Base Rent" for the Subleased Premises the amount of Twenty-Five
Thousand Six Hundred Twenty-Two and 50/100 Dollars ($25,622.50) which amount
shall be payable in advance on the first day of each month without deduction,
setoff, notice or demand. Subtenant shall pay to Sublandlord upon the execution
hereof the amount of Twenty-Five Thousand Six Hundred Twenty-Two and 50/100
Dollars ($25,622.50) as Monthly Base Rent for the first full calendar month of
the Term hereof. If the Sublease Commencement Date is other than the first day
of a calendar month, rent for such partial month shall be due on the Sublease
Commencement Date. Monthly Base Rent for any period during the Term which is for
less than one month shall be a pro rata portion of the monthly installment based
on the actual number of days in such month. Monthly Base Rent and all other
monetary amounts payable by Subtenant to Sublandlord pursuant to this Sublease
(all of which other monetary amounts shall be deemed to constitute additional
rent, whether or not so specified herein) shall be payable in lawful money of
the United States to Sublandlord at 000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000, Xxx
Xxxxxxx, Xxxxxxxxxx 00000, Attention: Executive Director, or to such other
persons or at such other places as Sublandlord may designate in writing.
4. DIRECT OPERATING EXPENSES RENT. In addition to the Monthly Base Rent,
commencing on January 1, 2001, Subtenant shall pay to Sublandlord sixty-nine
percent (69%) ("Subtenant's Suite 560 Pro Rata Share") of the amount of "Excess
Direct Operating Expenses Rent" (as defined in Section 4.3 of the Suite 560
Lease) and twenty-nine percent (29%) ("Subtenant's Suite 500 Pro Rata Share") of
the amount of "Excess Direct Operating Expenses Rent" (as defined in Section 4.3
of the Suite 500 Lease) required to be paid by Sublandlord pursuant to the Suite
560 Lease and the Suite 500 Lease, as applicable, at the same time and in the
same manner (including estimated monthly installments) as is provided in each
such Lease, provided that for purposes of this Sublease the Initial Direct
Operating Expenses shall be based on calendar year 2000.
5. SECURITY DEPOSIT. Subtenant shall deposit with Sublandlord upon
execution hereof $25,622.50 as security for Subtenant's faithful performance of
Subtenant's obligations hereunder. If Subtenant fails to pay rent or other
charges due hereunder, or otherwise defaults with respect to any provision of
this Sublease, Sublandlord may use, apply or retain all or any portion of said
deposit for the payment of any rent or other charge in default or for the
payment of any other sum to which Sublandlord may become obligated by reason of
Subtenant's default, or to compensate Sublandlord for any loss or damage which
Sublandlord may suffer thereby. If Sublandlord so uses or applies all or any
portion of said security deposit, Subtenant shall within ten (10) days after
written demand therefor deposit cash with Sublandlord in an amount sufficient to
restore said security deposit to the full amount hereinabove stated and
Subtenant's failure to do so shall be a default hereunder and Sublandlord shall
be entitled to exercise all rights and remedies available to Sublandlord
hereunder. Sublandlord shall not be required to keep said security deposit
separate from its general accounts. If Subtenant performs all of
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Subtenant's obligations hereunder, said security deposit, or so much thereof as
has not theretofore been applied by Sublandlord, shall be returned, without
payment of interest or other increment for its use, to Subtenant (or at
Sublandlord's option, to the last assignee, if any, of Subtenant's interest
here-under) following the expiration of the Term hereof and after Subtenant has
vacated the Subleased Premises in accordance with this Sublease. No trust
relationship is created herein between Sublandlord and Subtenant with respect to
said security deposit
6. USE.
6.1 USE. The Subleased Premises shall be used and occupied for
general office purposes only and for no other business or purpose whatsoever.
6.2 COMPLIANCE WITH LAW. Subtenant shall, at Subtenant's expense,
comply promptly with all applicable statutes, ordinances, rules, regulations,
orders, restrictions of record, and requirements in effect during the Term or
any part of the Term hereof with respect to the Subleased Premises. Subtenant
shall not use or permit the use of the Subleased Premises in any manner that
will tend to create waste or a nuisance or which shall tend to disturb other
tenants or occupants of the Building. Sublessee shall abide by and adhere to
such rules and regulations as Sublandlord may from time to time institute.
6.3 CONDITION OF SUBLEASED PREMISES. Subtenant hereby agrees to
accept the Subleased Premises in its existing "AS IS" condition as of the date
of delivery of possession of the Subleased Premises, without requiring any
alterations, improvements or repairs to be made by Sublandlord or at
Sublandlord's expense either at the Sublease Commencement Date or at any time
during the Term of this Sublease. Subtenant acknowledges that neither
Sublandlord nor Sublandlord's agents have made any representation or warranty as
to the suitability of the Subleased Premises for the conduct of Subtenant's
business, the physical condition of the Subleased Premises, the Building or the
land on which the Building is located, or any other matter affecting or related
to the Subleased Premises, the Building or the land on which the Building is
located.
7. LEASE.
7.1 This Sublease is and shall be at all times subject and
subordinate to the Lease and shall be subordinate to any mortgage, deed of trust
or any other hypothecation or security now or hereafter placed upon the real
property of which the Subleased Premises are a part and to any and all advances
made on the security thereof and to all renewals, modifications, consolidations,
replacements and extensions thereof.
7.2 Except as otherwise expressly provided to the contrary in this
Sublease or except to the extent the terms and conditions of the Lease are
inconsistent herewith (i) all of the rights and obligations conferred and
imposed by the Lease on the "Tenant" thereunder are hereby conferred and imposed
upon Subtenant, and all of the rights conferred by the Lease upon the "Landlord"
thereunder are hereby conferred upon Sublandlord, and (ii) the terms and
conditions of the Lease applicable to the Subleased Premises are hereby
incorporated herein by reference as if Sublandlord were "Landlord" and Subtenant
were "Tenant" thereunder. Notwithstanding the foregoing or any other provision
of this Sublease to the contrary, Subtenant expressly agrees that
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(i) Sublandlord shall not be obligated to perform, and shall not be liable or
responsible for the performance or failure of performance by Landlord of, any of
the obligations of Landlord under the Lease nor shall Sublandlord be deemed to
make, or be liable or responsible for the breach of, any representation or
warranty made by Landlord under the Lease (to the extent the same relate to the
Subleased Premises or otherwise), (ii) Subtenant shall not require any
performance by Sublandlord hereunder with respect to the Subleased Premises
which is performable by Landlord for the benefit of Sublandlord under the Lease
and (iii) Subtenant shall have no claim against Sublandlord for any default,
breach or failure of performance or other misconduct of Landlord under the Lease
or otherwise. Without limitation of the foregoing, Sublandlord shall have no
obligation during the Term of this Sublease to render any services (such as
those Landlord provides to Sublandlord under the Lease) to Subtenant with
respect to the Subleased Premises or to expend any money for the preservation or
repair of the Subleased Premises.
7.3 During the Term of this Sublease and for all periods subsequent
for obligations which have arisen prior to the termination of this Sublease,
Subtenant does hereby expressly assume and agree to perform and comply with, for
the benefit of Sublandlord and Landlord, each and every obligation of
Sublandlord under the Lease with respect to the Subleased Premises except to the
extent inconsistent with this Sublease. The obligations that Subtenant has
assumed under this Paragraph 7.3 are hereinafter referred to as the "Subtenant's
Assumed Obligations". Without limitation of the foregoing, the following
provisions of the Lease shall be inapplicable to this Sublease: Article 1,
Article 3, Section 4.1, Section 4.2, Section 4.7, Article 6, Article 31, Exhibit
A, Exhibit C, and Rider to Lease.
7.4 Subtenant shall indemnify, defend and hold harmless Sublandlord
from and against any and all liabilities, judgments, damages, claims, demands,
losses, costs and/or expenses (including, without limitation, reasonable
attorneys' fees and expenses), arising out of Subtenant's failure to comply with
or perform Subtenant's Assumed Obligations.
7.5 Sublandlord represents to Subtenant that the Lease is in full
force and effect and that, to Sublandlord's knowledge, no default exists on the
part of any party to the Lease.
7.6 Landlord's acceptance of any payment or performance from
Subtenant, regardless of the circumstances or reasons therefor, shall in no
manner whatsoever be deemed an attornment by Subtenant to Landlord or a
recognition or non-disturbance of Subtenant or this Sublease or to serve to
release Sublandlord from any liability under the terms, covenants, conditions or
provisions under the Lease; provided, however, nothing herein shall in any
manner obligate Landlord to accept any such payment or performance. The Sublease
Term shall expire and come to an end on its stated expiration date or any
earlier termination hereof or concurrently with any termination of the Suite 560
Lease or the Suite 500 Lease for any reason.
8. BROKERS FEE.
8.1 Each of Sublandlord and Subtenant represents and warrants to the
other that it has had no dealing with any real estate broker or agent in
connection with the negotiation of this Sublease other than Xxxxxx X. Xxxxxxx,
Inc., Xxxxx Xxxxxxxxx Xxxxxx Inc. and Xxxxxx Xxxxxx (collectively, "Broker"),
and that it knows of no other real estate broker or agent who is
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entitled to or can claim a commission in connection with this Sublease and each
of Sublandlord and Subtenant hereby agree to indemnify, defend and hold harmless
the other from and against any and all claims, demands, losses, liabilities,
lawsuits, judgments, and costs and expenses (including, without limitation,
reasonable attorneys' fees and expenses) with respect to any alleged leasing
commission or equivalent compensation alleged to be owing on account of such
indemnifying party's dealings with any real estate broker or agent other than
Broker in connection with this Sublease.
8.2 Sublandlord and Subtenant agree that under no circumstances
shall Landlord be liable for any brokerage commission or other charge or expense
in connection with this Sublease and Sublandlord and Subtenant agree to
indemnify, defend and hold harmless Landlord from and against any and all
claims, demands, losses, liabilities, lawsuits, judgments, and costs and
expenses (including, without limitation, reasonable attorneys' fees and
expenses) with respect to any alleged leasing commission or equivalent
compensation alleged to be owing on account of such indemnifying party's
dealings with any real estate broker or agent in connection with this Sublease.
9. CONSENT. This Sublease shall not be effective unless, within thirty
(30) days of the date hereof, Landlord signs this Sublease thereby giving its
consent to this Sublease. Landlord's consent to this Sublease shall not be
construed as a consent by Landlord to any further subletting either by
Sublandlord or by Subtenant or to any assignment by Sublandlord of the Lease or
any assignment by Subtenant of this Sublease. Notwithstanding anything to the
contrary contained in this Sublease, in each case where Landlord's consent or
approval is required under the Lease, Landlord's and Sublandlord's consent or
approval shall be required under this Sublease.
10. PARKING. Subtenant shall be entitled to Subtenant's Suite 560 Pro
Rata Share of parking spaces (i.e., 1 reserved space and 1 non-reserved spaces)
provided to Sublandlord pursuant to the Suite 560 Lease and to Subtenant's Suite
500 Pro Rata Share of parking spaces (i.e., 8 reserved spaces and 26
non-reserved spaces) provided to Sublandlord pursuant to the Suite 500 Lease.
11. ATTORNEYS' FEES. In the event that at any time after the date hereof
either Landlord, Sublandlord or Subtenant shall institute any action or
proceeding against the other(s) relating to this Sublease, then and in that
event, the party(ies) not prevailing in such action or proceeding shall
reimburse the prevailing party for the reasonable expenses of attorneys' fees
and all costs and disbursements incurred therein by the prevailing party. In
addition to the foregoing award of fees, the prevailing party shall be entitled
to its attorneys' fees and costs incurred in any post-judgment proceedings to
collect and enforce the judgment.
12. SUBLANDLORD'S RIGHT TO PERFORM SUBTENANT'S OBLIGATIONS. If Subtenant
fails to perform any of its obligations under this Sublease or the Lease as
required by this Sublease in a manner reasonably satisfactory to Sublandlord,
Sublandlord shall have the right, but not the obligation to take any and all
actions required to be taken by Subtenant pursuant to the provisions hereof or
the Lease which may be necessary to prevent a default under or to assure
complete compliance with the terms of this Sublease or the Lease. All costs and
expenses
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reasonably incurred by Sublandlord pursuant to this Section 12 shall be payable
by Subtenant, as additional rent, within five (5) days after delivery of a
statement of any such costs to Subtenant.
13. HOLDING OVER. If Subtenant remains in possession of the Subleased
Premises or any part thereof after the expiration or earlier termination of this
Sublease, such occupancy shall be a tenancy at sufferance upon all the
provisions of this Sublease pertaining to the obligations of Subtenant, except
that the Monthly Base Rent shall be increased to 150% of the Monthly Base Rent
due at the expiration of the Term. Nothing contained herein shall be construed
as authorizing Subtenant to remain in possession of the Subleased Premises
beyond the expiration or earlier termination of this Sublease.
14. NOTICES. All notices or demands of any kind required or desired to be
given by any party to the other pursuant hereto shall be given in the manner
provided and to the address set forth in the Lease (unless and until a new
address is specified for delivery of notices in the manner set forth in the
Lease), and the address of the Subleased Premises shall be the address for
receipt of notices by Subtenant.
15. COUNTERPARTS. This Sublease may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which when
taken together shall constitute but one and the same instrument.
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IN WITNESS WHEREOF, this Sublease has been entered into by the parties
hereto as of the date first written above.
SUBLANDLORD: SUBTENANT:
LYON & LYON, LLP, a California THE LIGHTSPAN PARTNERSHIP, INC., a
limited liability partnership California corporation
By: /s/ XXXXXX X. XXXXXXXXX By: /s/ XXXXXXXX X. XxXXXXX
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Print Name: XXXXXX X. XXXXXXXXX Print Name: Xxxxxxxx X. XxXxxxx
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Its: MANAGING PARTNER Its: VP Finance & CFO
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[DIAGRAM OF FLOOR PLAN]
SUITE 500 - EXISTING PARTITION PLAN - LJET [LOGO]
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11,929 USABLE SQUARE FEET
13,815 RENTABLE SQUARE FEET
