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EXHIBIT 10.6
SUBLEASE AGREEMENT
THIS SUBLEASE AGREEMENT ("Sublease"), dated as of May __, 1999, is made
between XXXXX INTERNET SOLUTIONS, INC., a Washington corporation
("Sublandlord"), and RIVALNET, INC., a Washington corporation ("Subtenant").
RECITALS
A Sublandlord is tenant under that certain lease dated October 20,
1998, between Xxxxxxxx X. and Xxxx X. Xxxxxx, husband and wife,
as landlord ("Landlord") and Sublandlord as tenant. A true,
complete and correct copy of the direct Lease dated October 20,
1998 ("Lease") is attached to this Sublease as EXHIBIT A.
B Pursuant to the Lease, Sublandlord leases certain space in the
building located at 00 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx,
known as the Xxxxxx Building (the "Building"), consisting of
approximately 30,060 rentable square feet on the 2nd and 3rd
floors of the Building (the "Premises").
C. Sublandlord wishes to sublease to Subtenant a portion of the
Premises on Floor 2 (having approximately 6,827 rentable square
feet) of the Building, as shown as cross-hatched on EXHIBIT B
attached to this Sublease (the "Subleased Premises"). The
Subleased Premises shall exclude the data room. NOW, THEREFORE,
in consideration of the mutual covenants contained in this
Sublease, and for other good and valuable consideration, the
receipt and sufficiency of which are acknowledged by the
parties, Sublandlord and Subtenant agree as follows:
AGREEMENT
1. SUBLEASE
Sublandlord subleases to Subtenant and Subtenant subleases from
Sublandlord, for the Term, at the rental, and upon all of the conditions set
forth in this Sublease, the Subleased Premises, together with the right to use,
in common with others entitled thereto, the hallways, stairways, elevators and
other Common Areas of the Building (as that term is defined in the Lease). The
three (3) doors required by the fire safety regulations of the City of Seattle
between the Subleased Premises and the Premises shall not be used by Subtenant
for ingress and egress to and from the Subleased Premises, or to gain access to
the Premises or for any other non-emergency purpose other than what might be
required for normal business use of Subtenant's space. Subtenant shall use only
the entrance to the Subleased Premises indicated on Exhibit B for ingress and
egress
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to and from the Subleased Premises.
2. TERM AND POSSESSION
2.1 TERM
The term of this Sublease ("Term") shall commence on the later of the
date upon which Subtenant receives a temporary certificate of occupancy or other
evidence of final inspection of the Subleased Premises, which the Subtenant
anticipates receiving on or about June 4, 1999 or upon mutual execution of
sublease documents and any Landlord Consent to Sublease documents as may be
required under the terms and conditions of the Lease ("Commencement Date"). The
Term shall expire on November 30, 2001 ("Expiration Date") unless sooner
terminated in accordance with this Sublease. Sublandlord agrees to use
reasonable best efforts to obtain and then convert the temporary certificate of
occupancy to a certificate of occupancy and at no cost to Subtenant.
2.2 DELIVERY OF POSSESSION; CONDITION OF SUBLEASED PREMISES
Prior to the Commencement Date, Sublandlord shall complete construction
of the tenant improvements to the Subleased Premises in accordance with the
plans and specifications previously submitted by Sublandlord to the City of
Seattle, and consistent with the floor plan attached hereto as Exhibit B.
Subject to the receipt of the temporary certificate of occupancy for the
Subleased Premises referenced in subsection 2.1 above, Sublandlord shall deliver
to Subtenant possession of the Subleased Premises "as-is, where-is" and broom
clean.
2.3 ALTERATIONS
Subtenant shall not make any alterations, modifications or additions to
the Subleased Premises without the prior written consent of Sublandlord and
Landlord, and the consent of Sublandlord shall not be unreasonably delayed or
withheld. Sublandlord may, as a condition to granting such consent, require
Subtenant to remove all or part of any additional improvements added by
Subtenant, and to repair any damage caused by such removal, at Subtenant's sole
cost and expense, at the expiration or earlier termination of the Term of this
Sublease.
2.4 EARLY TERMINATION OPTION
On November 30, 2000 Sublandlord will deliver written notice to
Subtenant stating whether Sublandlord elects to terminate this Sublease. If
Sublandlord indicates its election to terminate in such notice, this Sublease
shall terminate and Subtenant shall surrender the Subleased Premises on or
before 180 days from the delivery of Sublandlord's written notice to Subtenant.
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Provided Subtenant is not in default in any of its obligations under
this Sublease, Subtenant shall have the option to terminate this Sublease
effective June 30, 2001. Subtenant's one time option to terminate may only be
exercised by written notice delivered to Sublandlord on November 30, 2000; if
Subtenant fails to provide such notice, this option shall be void. Subtenant
shall not be required to pay a termination fee.
3. BASE RENT AND OPERATING EXPENSES
3.1 BASE RENT
Commencing thirty (30) days following the Commencement Date as provided
for in Paragraph 2.1, Subtenant shall pay to Sublandlord monthly base rent
("Base Rent") in the amount of Twelve Thousand Eight Hundred Dollars and sixty
two cents ($12,800.62). Base Rent shall thereafter be paid on or before the
first day of each calendar month during the Term. The monthly installment of
Base Rent shall be prorated on a per diem basis for the first month of the Term
if the Commencement Date is not the first day of a calendar month.
3.2 OPERATING EXPENSES
Commencing on January 1, 2000, Subtenant shall pay to Sublandlord, as
additional rent, its pro rata share (based on the ratio of the Subleased
Premises relative to the Premises) of increases in Operating Costs and Real
Property Taxes (as those terms are defined in the Lease) imposed on the Premises
pursuant to Sections 7 and 9 of the Lease (collectively, "Sublandlord's Building
Expenses") to the extent they exceed Sublandlord's Building Expenses for
calendar year 1999. Subtenant shall pay its pro rata share of such increases
with respect to each estimated and final payment due under the terms of Sections
7 and 9 of the Lease, and Sublandlord shall reimburse to Subtenant its pro rata
share of any refunds or reimbursements payable to Sublandlord with respect to
Sublandlord's Building Expenses during the Term. The obligations of Sublandlord
and Subtenant under this Section 3.2 shall survive the expiration or earlier
termination of the Term.
4. USE OF SUBLEASED PREMISES; PARKING
The Subleased Premises shall be used and occupied for general office
purposes and for no other purpose without Landlord's and Sublandlord's written
consent. Commencing on the Commencement Date, Subtenant shall be entitled to
lease one (1) tandem and two (2) normal monthly parking stalls in the Building
parking garage (which is located in the Building). Rates for parking shall be
the then-prevailing market parking rate and shall, at Sublandlord's option, be
paid directly to the parking lot operator or be paid as reimbursement to
Sublandlord.
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5. INCORPORATION OF CERTAIN LEASE TERMS
5.1 SUBLEASE SUBJECT TO LEASE
This Sublease is subject to all of the terms and conditions of the Lease
and to Landlord's rights thereunder.
5.2 INCORPORATION OF LEASE
The terms, conditions and respective obligations of Sublandlord and
Subtenant to each other under this Sublease shall be the terms and conditions of
the Lease, except for those provisions of the Lease which are directly
contradicted by this Sublease, in which event the terms of this Sublease shall
control over the Lease. However, the rights and obligations of Landlord under
the Lease are not, and shall not be deemed to be, amended by this Sublease.
Therefore, for the purposes of this Sublease, wherever in the Lease the word
"Landlord" is used, it shall be deemed to mean the Sublandlord herein, and
wherever in the Lease the word "Tenant" is used, it shall be deemed to mean the
Subtenant herein. With respect to the Subleased Premises, Sublandlord shall be
obligated to Subtenant to the same extent, and under the same terms and
conditions, as Landlord is obligated to Tenant under the Lease and Subtenant,
with respect to the Subleased Premises, shall be obligated to each of Landlord
and Sublandlord to the same extent, and under the same terms and conditions, as
Tenant is obligated to Landlord under the Lease.
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 as the
same are expressly modified herein.
Notwithstanding the foregoing, Subtenant shall have no rights nor
obligations under the following Sections of the Lease: 38, 41, and 45-46.
6. CONDITION PRECEDENT
It is a condition precedent to this Sublease that Landlord shall have
executed and delivered to Sublandlord and Subtenant its consent in the form
attached to this Sublease as EXHIBIT C on or before June ___, 1999.
7. SUBLANDLORD'S REPRESENTATIONS AND WARRANTIES
Sublandlord represents and warrants to Subtenant as follows:
(a) EXHIBIT A is a true, complete copy of the Lease, and the Lease is in
full force and effect and has not been modified, supplemented or amended except
as set forth
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in Recital A of this Sublease.
(b) Sublandlord is not in default under the Lease.
8. COVENANTS REGARDING LEASE
Sublandlord shall use its reasonable efforts to cause Landlord to
perform its obligations under the Lease with respect to the Subleased Premises
for the benefit of Subtenant, and to give any required consent under the Lease
for the benefit of Subtenant. Sublandlord shall deliver to Subtenant a copy of
any notice received from Landlord relating to the Subleased Premises within two
(2) business days of Sublandlord's receipt thereof.
9. ASSIGNMENT AND SUBLETTING
Subtenant shall not assign this Sublease or sublet the Subleased
Premises without Sublandlord's prior written consent which shall not be
unreasonably withheld or delayed.
10. SECURITY DEPOSIT
Concurrently with execution of this Sublease by Subtenant, Subtenant
shall deliver to Sublandlord as security for the faithful performance of all of
its obligations under this Sublease a security deposit in the amount of
Twenty-five Thousand Six Hundred Dollars ($25,600) (the "Security Deposit").
The Security Deposit shall be held by Sublandlord as security for the
faithful performance by Subtenant of all of the provisions of this Sublease to
be performed or observed by Subtenant. If Subtenant fails to pay rent or other
charges due under this Sublease or otherwise defaults with respect to any
provision of this Sublease, Sublandlord may at its sole option apply or retain
all or any portion of the Security Deposit for the payment of any rent or other
charges so in default or the payment of any other sum to which Sublandlord may
become entitled by such 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 the Security Deposit, then within ten (10) business days
after demand therefor, Subtenant shall deposit cash with Sublandlord in an
amount sufficient to restore the amount thereof, and Subtenant's failure to do
so shall be a material breach of this Sublease. Sublandlord's application or
retention of the Security Deposit shall not constitute a waiver of such default
to the extent that the Security Deposit does not fully compensate Sublandlord
for all losses or damages incurred by Sublandlord in connection with such
default and shall not prejudice any other rights or remedies available to
Sublandlord under this Sublease or by law. Sublandlord shall not be required to
keep the Security Deposit separate from its general accounts. The Security
Deposit shall not accrue interest. If Subtenant performs all of Subtenant's
obligations under this Sublease,
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the Security Deposit, or so much thereof as has not theretofore been applied by
Sublandlord, shall be returned to Subtenant within thirty (30) days after the
earlier of (i) expiration of the term of this Sublease, or (ii) vacation of the
Subleased Premises by Subtenant pursuant to the exercise of Subtenant's or
Sublandlord's Early Termination Rights.
11. INDEMNIFICATION; RELEASE AND WAIVER OF SUBROGATION
11.1 SUBTENANT'S INDEMNIFICATION
Subtenant shall indemnify, defend and hold harmless Sublandlord from and
against all losses, costs, damages, expenses and liabilities, including, without
limitation, reasonable attorneys' fees and disbursements, that Sublandlord may
incur or pay out (including, without limitation, to Landlord) by reason of any
breach or default under this Sublease on Subtenant's part, and any action of
Subtenant which causes a default of an obligation of Sublandlord to Landlord or
causes the termination or forfeiture of the Lease.
11.2 SUBLANDLORD'S INDEMNIFICATION
Sublandlord shall indemnify, defend and hold harmless Subtenant from and
against all losses, costs, damages, expenses and liabilities, including, without
limitation, reasonable attorneys' fees and disbursements, that Subtenant may
incur or pay out (including, without limitation, to Landlord) by reason of any
breach or default hereunder or under the Lease on Sublandlord's part.
11.3 WAIVER OF CONSEQUENTIAL DAMAGES
Sublandlord and Subtenant each waive any claim that it may have against
the other under this Sublease for consequential damages.
11.4 RELEASE AND WAIVER OF SUBROGATION
Neither Landlord, Sublandlord nor Subtenant shall be liable to the
other(s) or to any insurance company or companies (by way of subrogation or
otherwise) insuring the other party or parties for any loss or damage to any
building, structure or tangible personal property of the other party or parties
or of any third party occurring in or about the Premises or Building, even
though such loss or damage might have been occasioned by the negligence of such
party, its agents or employees, if such loss or damage would fall within the
scope of a fire and extended coverage (all risk) policy of insurance, whether or
not the party or parties suffering the loss actually maintained such insurance.
Each party shall obtain from its respective insurer under each insurance policy
it maintains a waiver of all rights of subrogation which the insurer of that
party may have against the other parties.
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12. NOTICES
All notices and demands that are required or permitted under this
Sublease shall be in writing, and shall be personally delivered or sent by a
nationally recognized private carrier of overnight mail (e.g., FedEx) or by
United States Certified Mail, return receipt requested and postage prepaid, to
the parties at the addresses listed below or at such other addresses as the
parties may designate by notice from time to time. Notices shall be deemed to
have been given upon receipt or attempted delivery where delivery is not
accepted.
To Sublandlord: Xxxxx Internet Solutions.
00 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn:
-----------------------
================================================================================
To Subtenant: Rivalnet, Inc.
00 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx
13. ATTORNEYS' FEES
If Sublandlord or Subtenant shall commence an action against the other
arising out of or in connection with this Sublease, the substantially prevailing
party shall be entitled to recover its costs of suit and reasonable attorney's
fees.
14. ENTIRE AGREEMENT
This Sublease, including all Exhibits attached to it, constitutes the
entire agreement between Sublandlord and Subtenant with respect to the Subleased
Premises and may not be amended or altered except by written agreement executed
by both parties. The captions and section numbers appearing in this Sublease are
inserted only as a matter of convenience and are not intended to define, limit,
construe, or describe the scope or intent of any section or paragraph.
15. NEGOTIATION AND CONSTRUCTION
This Sublease and each of the terms and provisions of it are deemed to
have been explicitly negotiated between the parties, and the language in all
parts of this Sublease shall, in all cases, be construed according to its fair
meaning and not strictly for or against either party.
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16. BROKERS
Colliers International has represented Subtenant and Xxxxxx X. Xxxxxxx &
Associates has represented Sublandlord (collectively, the "Brokers") in
connection with this Sublease. The entire commission payable to the Brokers as a
result of this Sublease shall be paid by Sublandlord pursuant to separate
agreements, and Subtenant shall not be obligated to pay any such commission.
Each party represents and warrants that it has dealt with no brokers in
connection with this Sublease other than the Brokers, and each party shall
indemnify, protect, defend and hold the other party harmless from all costs and
expenses (including reasonable attorneys' fees) arising from or relating to any
claims to the contrary.
17. PARTIAL INVALIDITY
If any term, covenant or condition of this Lease or the application
thereof to any person or circumstance is, to any extent, invalid or
unenforceable, the remainder of this Sublease, or the application of such term,
covenant or condition to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby and each
other term, covenant or condition of this Sublease shall be valid and be
enforced to the fullest extent permitted by law.
18. BINDING ON SUCCESSORS
This Sublease shall bind the parties' respective heirs, successors,
representatives and permitted assigns.
19. NON-SOLICITATION. Each party agrees that for the term of this agreement and
a period of one (1) year thereafter, neither party will induce, attempt to
induce or assist others to induce any employee, officer, director, agent,
independent contractor, consultant, customer, licenser, licensee, supplier, or
other service provider of the other party to terminate a relationship with or
cease providing services to that party. Notwithstanding the foregoing, both
parties understand that employees, officers, directors, agents, contractors,
customers, licensers, licensees, suppliers, and service providers may
independently elect to cease relations with one or the other party without
solicitation from either party and as such, neither party shall be precluded
from conducting normal business activities, including hiring or subcontracting,
without being liable to one another.
20. EXHIBITS
The following Exhibits are attached to and by this reference
incorporated into this Sublease as though fully set forth in it.
Exhibit A Lease
Exhibit B Plan of Subleased Premises
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Exhibit C Landlord's Consent
IN WITNESS WHEREOF, the parties hereto execute this Sublease as of the
day and year first above written.
SUBLANDLORD: SUBTENANT:
XXXXX INTERNET SOLUTIONS, INC. RIVALNET, INC
By: By
------------------------------- -------------------------------
Name: Name:
----------------------------- -----------------------------
Title: Title:
---------------------------- -----------------------------
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STATE OF ___________ )
) ss.
COUNTY OF ______________ )
On this _____ day of _________________, 1999, before me, the
undersigned, a Notary Public in and for the State of Washington, duly
commissioned and sworn, personally appeared ___________________________________
___________, to me known to be the person who signed as________________________
_______ of XXXXX INTERNET SOLUTIONS INC.., the corporation that executed the
within and foregoing instrument, and acknowledged said instrument to be the free
and voluntary act and deed of said corporation for the uses and purposes therein
mentioned, and on oath stated that _______ was duly elected, qualified and
acting as said officer of the corporation, that _______ was authorized to
execute said instrument and that the seal affixed, if any, is the corporate seal
of said corporation.
IN WITNESS WHEREOF I have hereunto set my hand and official seal the day
and year first above written.
(Signature of Notary)
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the State
of Washington, residing at .
My appointment expires: .
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STATE OF ___________ )
) ss.
COUNTY OF ______________ )
On this _____ day of _________________, 1999, before me, the
undersigned, a Notary Public in and for the State of Washington, duly
commissioned and sworn, personally appeared ___________________________________
___________, to me known to be the person who signed as _______________________
________ of RIVALNET, INC., the corporation that executed the within and
foregoing instrument, and acknowledged said instrument to be the free and
voluntary act and deed of said corporation for the uses and purposes therein
mentioned, and on oath stated that _______ was duly elected, qualified and
acting as said officer of the corporation, that _______ was authorized to
execute said instrument and that the seal affixed, if any, is the corporate seal
of said corporation.
IN WITNESS WHEREOF I have hereunto set my hand and official seal the day
and year first above written.
(Signature of Notary)
(Print or stamp name of Notary)
NOTARY PUBLIC in and for the State
of Washington, residing at .
My appointment expires: .
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EXHIBIT A
LEASE
================================================================================
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EXHIBIT B
FLOOR PLAN OF SUBLEASED PREMISES
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EXHIBIT C
LANDLORD'S CONSENT
================================================================================
[DATE]
Xxxxx Internet Solutions, Inc.
00 Xxxxxxxx Xx., Xxxxx 000
Xxxxxxx, XX 00000
Rivalnet, Inc.
00 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
RE: APPROVAL OF SUBLEASE AGREEMENT DATED MAY __, 1999
BETWEEN XXXXX INTERNET SOLUTIONS, INC. AND RIVALNET, INC.
Ladies and Gentlemen:
The undersigned Landlord consents to the Sublease described above with
respect to premises located on the 2nd floor of the Xxxxxx Building, and agrees
to the following:
1. There are no defaults by Sublandlord under the Lease, and the Lease
is in full force and effect.
2. Landlord consents and agrees to the release and waiver of subrogation
set forth in Section 11.4 of the Sublease.
3. Landlord agrees to furnish to Subtenant a copy of each notice or
request given to Sublandlord at the time that notice is given to Sublandlord.
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4. Landlord agrees to accept from Subtenant any cure it may tender with
respect to a default by Sublandlord under the Lease that is sufficient to cure
the default under the Lease, and to accept payments of Rent and Additional Rent
made under the Sublease from Subtenant.
Very truly yours,
Xxxxxxxx X. Xxxxxx
Xxxx X. Xxxxxx
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