EXHIBIT 10.2
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
STANDARD SUBLEASE
(LONG-FORM TO BE USED WITH PRE-1996 AIR LEASES)
1. PARTIES. This Sublease, dated, for reference purposes only,
September 3, 1997, is made by and between ▇▇▇▇▇▇ Electronics ("SUBLESSOR")and
Corning OCA Corporation ("SUBLESSEE").
2. PREMISES. Sublessor hereby subleases to Sublessee and Sublessee
hereby subleases from Sublessor for the term, at the rental, and upon all of
the conditions set forth herein, that certain real property, including all
improvements therein, and commonly known by the street address of ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇ located in the County of Orange, State of California
and generally described as (describe briefly the nature of the property)
approximately 14,591 square feet of office/R&D space - part of a larger
43,151 square foot freestanding building as further designated on Exhibit "A"
fifty-six (56) non-exclusive and undesignated parking stalls. ("Premises").
3. TERM.
3.1 TERM. The term of this Sublease shall be for twenty-four (24)
months commencing on October 15, 1997 and ending on October 14, 1999 unless
sooner terminated pursuant to any provision hereof.
3.2 DELAY IN COMMENCEMENT. Sublessor agrees to use its best
commercially reasonable efforts to deliver possession of the Premises by the
commencement date. If, despite said efforts, Sublessor is unable to deliver
possession as agreed, Sublessor shall not be subject to any liability therefor,
nor shall such failure affect the validity of this Sublease. Sublessee shall
not, however, be obligated to pay Rent or perform its other obligations until it
receives possession of the Premises. If possession is not delivered within
thirty days after the commencement date, Sublessee may, at its option, by notice
in writing within ten days after the end of such thirty day period, cancel this
Sublease, in which event the Parties shall be discharged from all obligations
hereunder. If such written notice is not received by Sublessor within said ten
day period, Sublessee's right to cancel shall terminate. Except as otherwise
provided, if possession is not tendered to Sublessee when required and Sublessee
does not terminate this Sublease, as aforesaid, any period of rent abatement
that Sublessee would otherwise have enjoyed shall run from the date of delivery
of possession and continue for a period equal to what Sublessee would otherwise
have enjoyed under the terms hereof, but minus any days of delay caused by the
acts or omissions of Sublessee. If possession is not delivered within 120 days
after the commencement date, this Sublease shall automatically terminate unless
the Parties agree, in writing, to the contrary.
4. RENT.
4.1 BASE RENT. Sublessee shall pay to Sublessor as Base Rent for
the Premises equal monthly payments of $9,484.15 in advance, on the first
day of each month of the term hereof. Sublessee shall pay Sublessor upon the
execution hereof 18,968.30 as Base Rent for the month of October 1997 and a
security deposit for the premises. Base Rent for any period during the term
hereof which is for less than one month shall be a pro rata portion of the
monthly installment.
4.2 RENT DEFINED. All monetary obligations of Sublessee to Sublessor
under the terms of this Sublease (except for the Security Deposit) are deemed to
be rent ("RENT"). Rent shall be payable in lawful money of the United States to
Sublessor at the address stated herein or to such other persons or at such other
places as Sublessor may designate in writing.
5. SECURITY DEPOSIT. Sublessee shall deposit with Sublessor upon
execution hereof $9,484.15 as security for Sublessee's faithful performance
of Sublessee's obligations hereunder. If Sublessee fails to pay Rent or
other charges due hereunder, or otherwise defaults with respect to any
provision of this Sublease, Sublessor 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 Sublessor may become
obligated by reason of Sublessee's default, or to compensate Sublessor for
any loss or damage which Sublessor may suffer thereby. If Sublessor so uses
or applies all or any portion of said deposit, Sublessee shall within ten
days after written demand therefore forward to Sublessor an amount sufficient
to restore said Deposit to the full amount provided for herein and
Sublessee's failure to do so shall be a material breach of this Sublease.
Sublessor shall not be required to keep said Deposit separate from its
general accounts. If Sublessee performs all of Sublessee's obligations
hereunder, said Deposit, or so much thereof as has not therefore been applied
by Sublessor, shall be returned, without payment of interest to Sublessee (or
at Sublessor's option, to the last assignee, if any, of Sublessee's interest
hereunder) at the expiration of the term hereof, and after Sublessee has
vacated the Premises. No trust relationship is created herein between
Sublessor and Sublessee with respect to said Security Deposit.
6. USE.
6.1 AGREED USE. The Premises shall be used and occupied only for
general office and engineering of fiber optic products and related purposes.
and for no other purpose.
6.2 COMPLIANCE. Sublessor warrants that the improvements on the
Premises comply with all applicable covenants or restrictions of record and
applicable building codes, regulations and ordinances ("APPLICABLE
REQUIREMENTS") in effect on the commencement date. Said warranty does not apply
to the use to which Sublessee will put the Premises or to any alterations or
utility installations made or to be made by Sublessee. NOTE: Sublessee is
responsible for determining whether or not the zoning is appropriate for its
intended use, and acknowledges that past uses of the Premises may no longer be
allowed. If the Premises do not comply with said warranty, Sublessor shall,
except as otherwise provided, promptly after receipt of written notice from
Sublessee setting forth with specificity the nature and extent of such
non-compliance, rectify the same at the Sublessor's expense. If Sublessee does
not give Sublessor written notice of a non-compliance with this warranty within
six months following the commencement date, correction of that non-compliance
shall be the obligation of Sublessee at its sole cost and expense. If the
Applicable Requirements are hereafter changed so as to require during the term
of this Sublease the construction of an addition to or an alteration of the
Building, the remediation of any Hazardous Substance, or the reinforcement or
other physical modification of the Building ("CAPITAL EXPENDITURE"), Sublessor
and Sublessee shall allocate the cost of such work as follows:
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(a) If such Capital Expenditures are required as a result of the
specific and unique use of the Premises by Sublessee as compared with uses by
tenants in general, Sublessee shall be fully responsible for the cost thereof
provided, however, that if such Capital Expenditure is required during the last
two years of this Sublease and the cost thereof exceeds six months' Base Rent,
Sublessee may instead terminate this Sublease unless Sublessor notifies
Sublessee in writing, within ten days after receipt of Sublessee's termination
notice that Sublessor has elected to pay the difference between the actual cost
thereof and the amount equal to six months' Base Rent. If the Parties elect
termination, Sublessee shall immediately cease the use of the Premises which
requires such Capital Expenditure and deliver to Sublessor written notice
specifying a termination date at least ninety days thereafter. Such termination
date shall, however, in no event be earlier then the last day that Sublessee
could legally utilize the Premises without commencing such Capital Expenditure.
(b) If such Capital Expenditure is not the result of the specific and
unique use of the Premises by Sublessee (such as governmentally mandated seismic
modifications, then Sublessor shall pay for said Capital Expenditure and the
cost thereof shall be prorated between the Sublessor and Sublessee and the
Sublessee shall only be obligated to pay, each month during the remainder of the
term of this Sublease, on the date on which Rent is due, an amount equal to the
product of multiplying the cost of such Capital Expenditure by a fraction, the
numerator of which is one, and the denominator of which is the number of months
of the useful life of such Capital Expenditure as such useful life is specified
pursuant to Federal income tax regulations or guidelines for depreciation
thereof (including interest on the unamortized balance as is then commercially
reasonable in the judgment of Sublessor's accountant), with Sublessee reserving
the right to prepay its obligation at any time. Provided, however, that if such
Capital Expenditure is required during the last two years of this Sublease or if
Sublessor reasonably determines that it is not economically feasible to pay its
share thereof, Sublessor shall have the option to terminate this Sublease upon
ninety days prior written notice to Sublessee unless Sublessee notifies
Sublessor, in writing, within ten days after receipt of Sublessor's termination
notice that Sublessee will pay for such Capital Expenditure. If Sublessor does
not elect to terminate, and fails to tender its share of any such Capital
Expenditure, Sublessee may advance such funds and deduct same, with interest,
from Rent until Sublessor's share of such costs have been fully paid. If
Sublessee is unable to finance Sublessor's share, or if the balance of the Rent
due and payable for the remainder of this Sublease is not sufficient to fully
reimburse Sublessee on an offset basis, Sublessee shall have the right to
terminate this Sublease upon ten days written notice to Sublessor.
(c) Notwithstanding the above, the provisions concerning Capital
Expenditures are intended to apply only to non-voluntary, unexpected, and new
Applicable Requirements. If the Capital Expenditures are instead triggered by
Sublessee as a result of an actual or proposed change in use, change in
intensity of use, or modification to the Premises then, and in that event,
Sublessee shall be fully responsible for the cost thereof, and Sublessee shall
not have any right to terminate this Sublease.
6.3 ACCEPTANCE OF PREMISES AND LESSEE. Sublessee acknowledges that:
(a) it has been advised by Brokers to satisfy itself with respect to
the condition of the Premises (including but not limited to the electrical, HVAC
and fire sprinkler systems, security, environmental aspects, and compliance with
Applicable Requirements), and their suitability for Sublessee's intended use.
(b) Sublessee has made such investigation as it deems necessary with
reference to such matters and assumes all responsibility therefor as the same
relate to its occupancy of the Premises, and
(c) neither Sublessor, Sublessor's agents, nor any Broker has made
any oral or written representations or warranties with respect to said matters
other than as set forth in this Sublease.
In addition, Sublessor acknowledges that:
(a) Broker has made no representations, promises or warranties
concerning Sublessee's ability to honor the Sublease or suitability to occupy
the Premises, and
(b) it is Sublessor's sole responsibility to investigate the
financial capability and/or suitability of all proposed tenants.
7. MASTER LEASE
7.1 Sublessor is the lessee of the Premises by virtue of a lease,
hereinafter the "MASTER LEASE", a copy of which is attached hereto marked
Exhibit 1, wherein PRINCIPAL MUTUAL LIFE INSURANCE COMPANY is the lessor,
hereinafter the "MASTER LESSOR"
7.2 This Sublease is and shall be at all times subject and
subordinate to the Master Lease.
7.3 The terms, conditions and respective obligations of Sublessor and
Sublessee to each other under this Sublease shall be the terms and conditions of
the Master Lease except for those provisions of the Master Lease which are
directly contradicted by this Sublease in which event the terms of this Sublease
document shall control over the Master Lease. Therefore, for the purposes of
this Sublease, wherever in the Master Lease the word "Lessor" is used it
shall be deemed to mean the Sublessor herein and wherever in the Master Lease
the word "Lessee" is used it shall be deemed to mean the Sublessee herein.
7.4 During the term of this Sublease and for all periods subsequent
for obligations which have arisen prior to the termination of this Sublease, and
only with respect to the Premises covered by this Sublease, Sublessee does
hereby expressly assume and agree to perform and comply with, for the benefit
of Sublessor and Master Lessor, each and every obligation of Sublessor under
the Master Lease except for the following paragraphs which are excluded
therefrom: PARAGRAPH 14e
7.5 The obligations that Sublessee has assumed under paragraph 7.4
hereof are hereinafter referred to as the "SUBLESSEE'S ASSUMED OBLIGATIONS".
The obligations that sublessee has not assumed under paragraph 7.4 hereof are
hereinafter referred to as the "SUBLESSOR'S REMAINING OBLIGATIONS".
7.6 Sublessee shall hold Sublessor free and harmless from all
liability, judgments, costs, damages, claims or demands, including reasonable
attorneys fees, arising out of Sublessee's failure to comply with or perform
Sublessee's Assumed Obligations.
7.7 Sublessor agrees to maintain the Master Lease during the entire
term of this Sublease, subject, however, to any earlier termination of the
Master Lease without the fault of the Sublessor, and to comply with or perform
Sublessor's Remaining Obligations and to hold Sublessee free and harmless from
all liability, judgments, costs, damages, including reasonable attorneys fees,
claims or demands arising out of Sublessor's failure to comply with or perform
Sublessor's Remaining Obligations.
7.8 Sublessor represents to Sublessee that the Master Lease is in
full force and effect and that no default exists on the part of any Party to the
Master Lease.
8. ASSIGNMENT OF SUBLEASE AND DEFAULT.
8.1 Sublessor hereby assigns and transfers to Master Lessor the
Sublessor's interest in this Sublease, subject however to the provisions of
Paragraph 8.2 hereof.
8.2 Master Lessor, by executing this document, agrees that until a
Default shall occur in the performance of Sublessor's Obligations under the
Master Lease, that Sublessor may receive, collect and enjoy the Rent accruing
under this Sublease. However, if Sublessor shall Default in the performance of
its obligations to Master Lessor then Master Lessor may, at its option, receive
and collect, directly from Sublessee, all Rent owing and to be owed under this
Sublease. Master Lessor shall not, by reason of this assignment of the Sublease
nor by reason of the collection of the Rent from the Sublessee, be deemed liable
to Sublessee for any failure of the Sublessor to perform and comply with
Sublessor's Remaining Obligations.
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8.3 Sublessor hereby irrevocably authorizes and directs Sublessee
upon receipt of any written notice from the Master Lessor stating that a Default
exists in the performance of Sublessor's obligations under the Master Lease, to
pay to Master Lessor the Rent due and to become due under the Sublease.
Sublessor agrees that Sublessee shall have the right to rely upon any such
statement and request from Master Lessor, and that Sublessee shall pay such Rent
to Master Lessor without any obligation or right to inquire as to whether such
Default exists and notwithstanding any notice from or claim from Sublessor to
the contrary and Sublessor shall have no right or claim against Sublessee for
any such Rent so paid by Sublessee.
8.4 No changes or modifications shall be made to this Sublease
without the consent of Master Lessor.
9. CONSENT OF MASTER LESSOR.
9.1 In the event that the Master Lease requires that Sublessor obtain
the consent of Master Lessor to any subletting by Sublessor then, this Sublease
shall not be effective unless, within ten days of the date hereof, Master Lessor
signs this Sublease thereby giving its consent to this Subletting.
9.2 In the event that the obligations of the Sublessor under the
Master Lease have been guaranteed by third parties then neither this Sublease,
nor the Master Lessor's consent, shall be effective unless, within 10 days of
the date hereof, said guarantors sign this Sublease thereby giving their consent
to this Sublease.
9.3 In the event that Master Lessor does give such consent then:
(a) Such consent shall not release Sublessor of its obligations
or alter the primary liability of Sublessor to pay the Rent and perform and
comply with all of the obligations of Sublessor to be performed under the Master
Lease.
(b) The acceptance of Rent by Master Lessor from Sublessee or
anyone else liable under the Master Lease shall not be deemed a waiver by Master
Lessor of any provisions of the Master Lease.
(c) The consent to this Sublease shall not constitute a consent
to any subsequent subletting or assignment.
(d) In the event of any Default of Sublessor under the Master
Lease, Master Lessor may proceed directly against Sublessor, any guarantors or
anyone else liable under the Master Lease or this Sublease without first
exhausting Master Lessor's remedies against any other person or entity liable
thereon to Master Lessor.
(e) Master Lessor may consent to subsequent sublettings and
assignments of the Master Lease or this Sublease or any amendments or
modifications thereto without notifying Sublessor or anyone else liable under
the Master Lease and without obtaining their consent and such action shall not
relieve such persons from liability.
(f) In the event that Sublessor shall Default in its obligations
under the Master Lease, then Master Lessor, at its option and without being
obligated to do so, may require Sublessee to attorn to Master Lessor in which
event Master Lessor shall undertake the obligations of Sublessor under this
Sublease from the time of the exercise of said option to termination of this
Sublease but Master Lessor shall not be liable for any prepaid Rent nor any
Security Deposit paid by Sublessee, nor shall Master Lessor be liable for any
other Defaults of the Sublessor under the Sublease.
9.4 The signatures of the Master Lessor and any Guarantors of
Sublessor at the end of this document shall constitute their consent to the
terms of this Sublease.
9.5 Master Lessor acknowledges that, to the best of Master Lessor's
knowledge, no Default presently exists under the Master Lease of obligations to
be performed by Sublessor and that the Master Lease is in full force and effect.
9.6 In the event that Sublessor Defaults under its obligations to be
performed under the Master Lease by Sublessor, Master Lessor agrees to deliver
to Sublessee a copy of any such notice of default. Sublessee shall have the
right to cure any Default of Sublessor described in any notice of default within
ten days after service of such notice of default on Sublessee. If such Default
is cured by Sublessee then Sublessee shall have the right of reimbursement and
offset from and against Sublessor.
10. BROKERS FEE.
10.1 Upon execution hereof by the parties, Sublessor shall pay to
▇▇▇ & Associates a licensed real estate broker, ("BROKER"), a fee as set
forth in a separate agreement between Sublessor and Broker, or in the event
there is no such separate agreement, the sum of $9,104.78 for brokerage
services rendered by Broker to Sublessor in this transaction.
10.2 Sublessor agrees that if Sublessee exercises any option or right
of first refusal as granted by Sublessor herein, or any option or right
substantially similar thereto, either to extend the term of this Sublease, to
renew this Sublease, to purchase the Premises, or to lease or purchase adjacent
property which Sublessor may own or in which Sublessor has an interest, then to
Sublessor shall pay to Broker a fee in accordance with the schedule of Broker in
effect at the time of the execution of this Sublease. Notwithstanding the
foregoing, Sublessor's obligation under this Paragraph 10.2 is limited to a
transaction in which Sublessor is acting as a Sublessor, lessor or seller.
10.3 INTENTIONALLY OMITTED.
10.4 INTENTIONALLY OMITTED.
10.5 INTENTIONALLY OMITTED.
11. ATTORNEY'S FEES. If any party or the Broker named herein brings an
action to enforce the terms hereof or to declare rights hereunder, the
prevailing party in any such action, on trial and appeal, shall be entitled to
his reasonable attorney's fees to be paid by the losing party as fixed by the
Court.
12. ADDITIONAL PROVISIONS. [If there are no additional provisions, draw a
line from this point to the next printed word after the space left here. If
there are additional provisions place the same here.]
(A) Prior to commencement, Sublessor shall install new carpeting and
matching base-boards in the office area.
(B) Upon execution of the lease and prior to October 1, 1997, Sublessee
shall be entitled to access to the facility for the purpose of installing
fixtures, phones and data cabling and other occupancy improvements.
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ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN
INDUSTRIAL REAL ESTATE ASSOCIATION OR BY ANY REAL ESTATE BROKER AS TO THE LEGAL
SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS SUBLEASE OR THE
TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO:
1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS
SUBLEASE.
2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF
THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE
POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PROPERTY, THE
STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND THE
SUITABILITY OF THE PREMISES FOR SUBLESSEE'S INTENDED USE.
WARNING: IF THE SUBJECT PROPERTY IS LOCATED IN A STATE OTHER THAN CALIFORNIA,
CERTAIN PROVISIONS OF THE SUBLEASE MAY NEED TO BE REVISED TO COMPLY WITH THE
LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED.
Executed at: ▇▇▇▇▇▇ Electronics
-------------------------- --------------------------------------
on: By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------- ------------------------------------
Address: By
------------------------------ ------------------------------------
"Sublessor" (Corporate Seal)
Executed at: Corning OCA Corporation
-------------------------- --------------------------------------
on: By /s/ J. Child
----------------------------------- ------------------------------------
Address: By
------------------------------ ------------------------------------
"Sublessee" (Corporate Seal)
Executed at: Principal Mutual Life Insurance Company
-------------------------- --------------------------------------
on: By
----------------------------------- ------------------------------------
Address: By
------------------------------ ------------------------------------
"Master Lessor" (Corporate Seal)
NOTE: THESE FORMS ARE OFTEN MODIFIED TO MEET CHANGING REQUIREMENTS OF LAW AND
NEEDS OF THE INDUSTRY. ALWAYS WRITE OR CALL TO MAKE SURE YOU ARE UTILIZING THE
MOST CURRENT FORM: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, ▇▇▇ ▇▇. ▇▇▇▇▇▇
▇▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. (▇▇▇) ▇▇▇-▇▇▇▇.
Paragraph 12 (continued)
(c) Notwithstanding any other terms of the sublease, Sublessee may,
without Sublessor's or Master Lessor's consent, assign this sublease or
sub-sublease any portion of the Premises, to Corning Incorporated or any other
entity of which Corning Incorporated owns (directly or indirectly) at least 50%
of the equity; Sublessor's and Master Lessor's right of entry to, or
inspection of the Premises shall be subject to reasonable notice and
confidentiality provisions, except in cases of emergency. Notwithstanding any
provision of 7.3, and whenever in the Master Lease the word "Premises" is
used, it shall be deemed to mean only the premises which are subject to this
Sublease, and no other property leased to Sublessor.
Notwithstanding any provision of 7.4, Sublessee does not assume any obligation
to pay rent or any other cost or liability with respect to any property other
than the leased Premises. Sublessor's remaining obligation shall include any
contractual or other obligation to the property other than the Premises subject
to this Sublease. (Sublessee shall be responsible for any costs and expenses
attributed to the Premises during the course of the Sublease.)
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EXHIBIT "A"
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇, #▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
(Diagram of Premises)