ASSIGNMENT AND ASSUMPTION OF SUBLEASE AND SUB-SUBLEASES
THIS ASSIGNMENT AND ASSUMPTION OF SUBLEASE AND SUB-SUBLEASES
("Assignment") is made as of June 15, 1999 by and among ValueOptions of
California, Inc., a California corporation ("Sublessor"), Vertel Corporation,
a California corporation ("Assignor"), and Sonoma Systems, Inc., a California
corporation ("Assignee"), with respect to the following facts, intentions and
understandings:
A. Marina Airport Buildings, Ltd., a California limited
partnership, as Landlord ("Master Lessor"), and Sublessor, under its former
name of American PsychManagement of California, Inc., as Tenant, entered into
a written lease dated as of April 2, 1993, as amended ("Master Lease"),
attached hereto as EXHIBIT A and incorporated by reference herein, with
respect to those premises commonly known as Suites 500 and 600 (collectively,
"Premises") of that certain building located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Building").
B. Sublessor, under its former name of Value Behavioral Health of
California, Inc., and Assignor, under the name of its predecessor in
interest, Retix, a California corporation, entered into a written sublease
dated as of May 29, 1996 ("Sublease"), attached hereto as EXHIBIT B and
incorporated by reference herein pursuant to which Assignor, as sublessee,
subleased the Premises from Sublessor.
C. Assignor, under the name of its predecessor in interest, Retix,
as Sub-Sublessor, entered the following sub-subleases with respect to the
Premises: (i) a sub-sublease, dated as of August 22, 1997, with TSN, L.L.C.,
a California limited liability company, for a portion of the Premises located
on the fifth floor of the Building ("TSN Sub-Sublease"); (ii) a sub-sublease,
dated as of December 23, 1997, with Creative Channel Services, Inc., a
California corporation, for a portion of the Premises located on the fifth
floor of the Building ("CCS Sub-Sublease"); and (iii) a sub-sublease, dated
as of December 28, 1997, with Assignee for the portion of the Premises
comprising the sixth floor of the Building ("Sonoma Sub-Sublease"). The TSN
Sub-Sublease, CCS Sub-Sublease and Sonoma Sub-Sublease hereinafter sometimes
collectively shall be referred to as the "Sub-Subleases". The Sub-Subleases
are attached hereto as EXHIBIT C and incorporated by reference herein.
D. As of the Effective Date, defined below, (i) Assignor desires to
assign all of its right, title, interest and obligations under the Sublease
and the Sub-Subleases to Assignee, and Assignee desires to assume all of
Assignor's rights and obligations under the Sublease and the Sub-Subleases;
and (ii) Assignee desires to exercise the option to extend the term of the
Sublease as set forth in Paragraph 19 of the Sublease.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. ASSIGNMENT; MERGER OF INTERESTS: As of August 1, 1999 (the
"Effective Date"), Assignor grants, transfers, assigns and sets over to
Assignee all of Assignor's right, title, interest and obligations of whatever
kind or nature in and to the TSN Sub-Sublease and the CCS Sub-Sublease. Also
as of the Effective Date, the interests of Assignee as sub-sublessee under the
Sonoma Sub-Sublease and as assignee of Assignor's interest as sub-sublessor
under the Sonoma Sub-Sublease shall be deemed merged, and the Sonoma
Sub-Sublease shall be null and void and of no further force or effect.
2. ACCEPTANCE AND ASSUMPTION. As of the Effective Date, Assignee
accepts the foregoing assignment of the Sublease and the TSN and CCS
Sub-Subleases, acknowledges the merger of interests with respect to the Sonoma
Sub-Sublease and assumes the rights and obligations of whatever kind or nature
of Assignor under the Sublease, the TSN Sub-Sublease and the CCS
Sub-Sublease. Assignee hereby expressly assumes and agrees to perform and
fulfill all the terms and obligations to be performed by the "Subtenant"
under the Sublease (including, but not limited to, any obligations related to
the payment of rent and the surrender of the Premises upon the termination or
expiration of the Sublease), and by the "Sub-Sublessor" under the TSN and CCS
Sub-Subleases.
3. REPRESENTATIONS AND WARRANTIES: Assignor represents and warrants
to Assignee as of the date hereof and as of the Effective Date: (i) the
Master Lease, the Sublease and the Sub-Subleases attached hereto as EXHIBITS
A, B and C are true, correct and complete copies of the documents, and there
has been no amendment or modification of the documents except as expressly
set forth therein; (ii) the Sublease represents the entire agreement of
Sublessor and Assignor with respect to the sublease of the Premises, and
there are no oral understandings or other agreements with respect thereto,
except as set forth in the Sublease; (iii) Assignor has made no prior or
inconsistent assignment, encumbrance or other transfer of the Sublease or the
Sub-Subleases, or any interest therein, or of the Premises, or any portion
thereof, except as set forth therein; and (iv) to the best of Assignor's
knowledge, there is no default on the part of either party to the Sublease,
nor on the part of any party to the Sub-Subleases except for (A) the failure
of TSN to pay rent due under the TSN Sub-Sublease for the months of April,
May and June, 1999 and (B) the apparent use of the TSN Sub-Sublease premises
by Sunterra Golf, both situations about which Assignee is fully aware, nor is
there any other condition which, with the passage of time or the giving of
notice, or both, would constitute a default thereunder.
4. OBLIGATIONS OF ASSIGNOR AND ASSIGNEE: Assignor shall perform all
obligations of the "Subtenant" under the Sublease and of the "Sub-Sublessor"
under the Sub-Subleases through and including the day before the Effective
Date of the Assignment, and Assignee shall perform all obligations of the
"Subtenant" under the Sublease and of the "Sub-Sublessor" under the TSN and
CCS Sub-Subleases from and after the Effective Date.
5. INDEMNITIES: Assignor shall indemnify, defend, protect and hold
harmless Assignee from any and all damages, liabilities, claims, judgments,
actions, reasonable attorneys' fees, consultants' fees, costs and expenses
arising under or in connection with any breach by Assignor of any of its
obligations under the terms of the Sublease or the Sub-Subleases occurring
prior to the Effective Date, or any misrepresentation made by Assignor
herein. Assignee shall indemnify,
defend, protect and hold harmless Assignor from any and all damages,
liabilities, claims, judgments, actions reasonable attorneys' fees,
consultants' fees, costs and expenses arising under or in connection with any
breach by Assignee of any of its obligations under the terms of the Sublease
or the TSN and CCS Sub-Subleases occurring from or after the Effective Date.
6. EXERCISE OF OPTION TO EXTEND; SURRENDER. As of the later of the
dates upon which (i) Sublessor has executed this Assignment and (ii) Master
Lessor has consented to this Assignment, Assignee shall be deemed, pursuant
to Paragraph 19 of the Sublease, to timely have exercised its option to extend
the term of the Sublease for an additional period of forty-seven (47) months,
with such extension term commencing on November 1, 1999 and expiring on
September 30, 2003 ("Extension Term"). Rent payable by Assignee for the
extended term of the Sublease shall be as set forth in Paragraph 19 of the
Sublease. Notwithstanding anything to the contrary contained in the Sublease
or the Master Lease, upon the expiration or earlier termination of the
Extension Term, Assignee shall surrender the Premises to Sublessor in its
condition as of the Effective Date, normal wear and tear excepted, and in
broom clean condition, and Assignee shall have no obligation to restore the
Premises to its condition as of the Early Entry Date (as defined in Paragraph
32 of the Sublease).
7. CONSENT BY SUBLESSOR; RELEASE; CONDITIONS.
A. CONSENT. Sublessor hereby consents to the assignment of the
Sublease and Sub-Subleases to Assignee, and to Assignee's assumption of the
Sublease and the Sub-Subleases and Assignor's obligations thereunder; and
acknowledges, subject to obtaining Master Lessor's consent to this
Assignment, Assignee's exercise of the option to extend the term of the
Sublease pursuant to Paragraph 19 thereof. Sublessor agrees not to exercise
any right of partial termination it may have under the Sublease with respect
to either the fifth or sixth floors comprising the Premises.
B. RELEASE OF ASSIGNOR. Sublessor also hereby forever releases
Assignor from each and every obligation of "Subtenant" arising under or in
connection with the Sublease, or of "Sub-Sublessor" arising under or in
connection with the Sub-Subleases, from and after the Effective Date,
including, without limitation, any obligation of "Subtenant" under the
Sublease or of "Sub-Sublessor" under the Sub-Subleases arising during the
Extension Term. Sublessor expressly waives the provisions of California Civil
Code 1542 with respect to the release of Assignor from and after the
Effective Date, which provides:
"A general release does not extend to claims which the
creditor does not know or suspect to exist in his favor
at the time of executing the release, which if known by
him must have materially affected his settlement with
the debtor."
/s/ RWB
______________________________
Sublessor's Initials
C. CONSIDERATION. In consideration of its consent to the
Assignment and its release of Assignor from and after the Effective Date,
Sublessor hereby conditions its consent and release upon its receipt of the
following:
(i) SECURITY DEPOSIT. Sublessor acknowledges that it holds a
security deposit ("Assignor's Security Deposit") from Assignor, pursuant to
Paragraph 9 of the Sublease, in the amount of $47,684.40. On the Effective
Date, Assignee shall deliver to Sublessor, in cash, a replacement security
deposit ("Assignee's Security Deposit") in the amount of $47,684.40.
Sublessor shall return the Assignor's Security Deposit to Assignor within
five (5) business days after receipt from Assignee of the Assignee's Security
Deposit.
(ii) LETTER OF CREDIT. Also on the Effective Date, Assignee
shall deliver to Sublessor an unconditional, irrevocable letter of credit
("LC") in favor of Sublessor in the amount of $200,000.00 from a bank or
other financial institution and in a form reasonably acceptable to Sublessor.
If at any time during the term of the Sublease, as extended, any item
constituting rent under the Sublease, or any other sum payable by Assignee to
Sublessor thereunder, shall be overdue and unpaid, beyond applicable notice
and cure periods, then Sublessor may, at its sole option, draw down or make a
claim or demand for draw against the LC (or, at the election of Sublessor,
against the Assignee's Security Deposit), an amount equal to the overdue and
unpaid amount, together with Sublessor's actual and reasonable expenses
incurred in connection with the default, and apply such sum to payment of
such overdue rent or other sum. The LC shall provide that any draw thereunder
shall be accompanied by a certificate of an officer of Sublessor stating that
Assignee is in default under the Sublease beyond applicable notice and cure
periods, if any, and that Sublessor or its authorized agent is entitled to
draw down on the LC the amount requested pursuant to the terms of the
Sublease. If all or any portion of the LC is drawn down by Sublessor to pay
overdue rent or other sums due and payable by Assignee, then Assignee shall,
within ten (10) days after the receipt of written demand from Sublessor,
promptly remit to Sublessor a sufficient amount in cash or an additional
letter of credit to restore Sublessor's security to the original amount of
the LC. If all or any portion of the Assignee's Security Deposit is charged
against by Sublessor to pay overdue rent or other sums due and payable by
Assignee, then Assignee shall, within ten (10) days after receipt of written
demand from Sublessor, promptly remit to Sublessor a sufficient amount in
cash to restore the Assignee's Security Deposit to the original amount
thereof. Any failure on the part of Assignee to restore the LC or the
Assignee's Security Deposit as set forth in this Paragraph shall constitute a
default by Assignee pursuant to the Sublease.
Notwithstanding anything to the contrary contained in this Paragraph, if
Assignee has not been in default, beyond applicable notice and cure periods,
under the Sublease for the first twelve (12) months following the Effective
Date, the LC shall be returned by Sublessor to Assignee not later than five
(5) business days after the last day of such twelve (12)-month period, and
Assignee's obligation to provide the LC shall be terminated as of such date
and of no further force or effect.
8. MASTER LESSOR'S CONSENT. The Assignment contemplated herein shall
be subject to obtaining the prior written consent of the Master Lessor. If
Master Lessor fails or refuses to
consent to this Assignment, the exercise of the option to extend the term of
the Sublease pursuant to Paragraph 6 above shall be null and void and of no
further force or effect.
9. MISCELLANEOUS. Each person signing this Assignment warrants that he
or she is authorized to do so, and by so doing binds the entity which he or
she represents to perform the obligations set forth herein. This Assignment
sets forth the entire agreement of the parties with respect to the subject
matter set forth herein. No party other than the signatories hereto may rely
on, or enforce, the provisions of this Agreement. If any party commences an
action or proceeding to enforce the obligations set forth herein, the
prevailing party in any such action or proceeding will be entitled to recover
reasonably attorneys' fees and costs from the other party or parties, as
applicable. This Assignment shall be binding upon and inure to the benefit of
the parties hereto and their successors, heirs and assigns. This Assignment
shall be governed by and construed in accordance with the laws of the State
of California. This Assignment may be executed in counterparts and, when
assembled, the counterparts shall be considered a single instrument.
10. ATTORNEYS' FEES. Assignor and Assignee shall share equally all
attorneys' fees incurred in connection with this Assignment.
[SIGNATURES APPEAR ON NEXT PAGE]
IN WITNESS WHEREOF, the parties have executed this Assignment and
Assumption of Sublease and Sub-Subleases as of the date first written above.
ASSIGNOR:
VERTEL CORPORATION,
a California corporation
By: /s/ [illegible]
------------------------------------
Its: V.P. Finance & C.F.O.
------------------------------------
ASSIGNEE:
SONOMA SYSTEMS, INC.,
a California corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Its: Vice President, Finance & Operations CFO
------------------------------------
SUBLESSOR:
VALUEOPTIONS OF CALIFORNIA, INC.,
a California corporation
By: /s/ [illegible]
------------------------------------
Its: VP
------------------------------------
Exhibit B
SUBLEASE AGREEMENT
SUBLEASE AGREEMENT
THIS SUBLEASE ("Sublease"), dated as of the ___ day of May, 1996 for
reference purposes only, between Value Behavioral Health of California, Inc., a
California corporation, formerly known as American PsychManagement of
California, Inc., having an office at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Sublessor"), and Retix, a California corporation having an
office prior to the Commencement Date at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Subtenant").
W I T N E S E T H:
1. DEMISE AND TERM. Sublessor hereby leases to Subtenant, and Subtenant
hereby hires from Sublessor, in the building known as ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Building"), Suites 500 and 600 as shown hatched
on the plan attached hereto as Exhibit A (the "Subleased Premises"), containing
approximately 30,180 rentable square feet, which Subleased Premises are leased
under the Main Lease (as hereinafter defined) to Sublessor. The term of this
Sublease shall be for the period commencing on the later of (a) the date that
the consents referred to in Section 26(a) of this Sublease has been obtained and
(b) July 1, 1996 (the "Commencement Date"), and ending on October 31, 1999,
unless sooner terminated as herein provided. Notwithstanding the foregoing, if
the Commencement Date does not occur on or before August 1, 1996, this Sublease
shall be voidable by either party hereto, and in such event neither Sublessor
nor Sublessee shall be liable for any resulting damage, cost or expense, and
Sublessor promptly shall return to Subtenant all sums paid by Subtenant (as
described in Paragraph 26(b) hereof) to Sublessor in connection with Subtenant's
execution hereof. Within five (5) business days following the Commencement Date,
Sublessor and Subtenant will mutually agree as to computation of actual rentable
square footage for the Subleased Premises.
2. SUBORDINATE TO MAIN LEASE. This Sublease is and shall be subject and
subordinate to the office space lease dated as of April 2, 1993, as amended
(such lease, as so amended, herein called the "Main Lease") between Marina
Airport Buildings, Ltd., a California limited partnership, as landlord, and
Sublessor (under its former name of American PsychManagement of California,
Inc.), as tenant, and to the matters to which the Main Lease is or shall be
subject and subordinate.
3. INCORPORATION BY REFERENCE. The terms, covenants and conditions of the
Main Lease are incorporated herein by reference so that, except to the extent
that they are inapplicable or modified by the provisions of this Sublease for
the purpose of incorporation by reference, each and every term, covenant and
condition of the Main Lease binding or inuring to the benefit of the landlord
thereunder shall, in respect of this Sublease, bind or inure to the benefit of
Sublessor, and each and every term, covenant and condition of the Main Lease
binding or inuring to the benefit of the tenant thereunder shall, in respect of
this Sublease, bind or inure to the benefit of Subtenant, with the same force
and effect as if such terms, covenants and conditions were completely set fort
in this Sublease, and as if the words "Landlord" and "Tenant," or words of
similar import, wherever the same appear in the Main Lease, were construed to
mean, respectively, "Sublessor" and "Subtenant" in this Sublease, and as if the
word "Premises," or words of similar import, wherever the same appear in the
Main Lease, were construed to mean "Subleased Premises" in this Sublease, and as
if the word "Lease," or words of similar import, wherever the same appear in the
Main Lease, were construed to mean this "Sublease." Subtenant shall not be
required to pay any rent or additional rent due
1
under the Main Lease, except that Subtenant shall pay for any special services
or requirements of Subtenant, including, without limitation, overtime air
conditioning, extra cleaning, extra elevator use, and extra water use. Subtenant
shall have the right to request such special services or requirements of
Subtenant, including, without limitation, overtime air conditioning, extra
cleaning, extra elevator use, and extra water use. Subtenant shall have the
right to request such special services or requirements directly from the
landlord under the Main Lease. The time limits contained in the Main Lease for
the giving of notices, making of demands or performing of any act, condition or
covenant on the part of the tenant thereunder, or for the exercise by the tenant
thereunder of any right, remedy or option, are changed for the purposes of
incorporation herein by reference by shortening the same in each instance by two
(2) days, so that in each instance (other than for the times of performance set
forth in Article 36 of the Main Lease) Subtenant shall have two (2) days less
time to observe or perform hereunder than Sublessor has as the tenant under the
Main Lease. Notwithstanding the foregoing, the following articles or sections of
the Main Lease shall be deemed deleted for the purpose of incorporation by
reference in this Sublease: Sections 1(a), (b), (e), (f), (h), (i) and (k);
Article 2; the words "together with any monthly installments of "Operating
Expense Rent" and "Capital Expenditure Rent" in Section 3.1; the first and
fourth sentences of Section 4.1; the last sentence of Section 5.1; Article 6;
Article 7; the first sentence of Section 12.1; the words "provided, however,
that Tenant shall not be required to demolish or remove any Leasehold
Improvements" in Section 12.2; Article 17; Article 25; the first sentence of
Section 34.1; the words "Seven Hundred Forty-One Thousand Nine Hundred
Twenty-Two and 26/100 Dollars ($741,922.26), calculated as set forth on Exhibit
A-1" in Section 36.1 (which words shall be replaced with "Three Hundred Thousand
Dollars ($300,00.00)"); Section 36.2; all but the first sentence of Section
36.4; Sections 36.7 (c); Sections 36.9 through 36.12; Article 37; Article 38;
Article 39; Addendum to Article 3 Section 3.8; Addendum to Article 34; Exhibit
A-1; Broker Registration Agreement; Addendum No. 2, Article 45; and Addendum No.
2, Addendum to Article 1, Sections 1.2 (a) and (c). Also notwithstanding the
foregoing, Sublessor shall not exercise any right to terminate granted to tenant
pursuant to the Main Lease without first having obtained the prior written
consent of Subtenant, which may be withheld in its sole discretion. Also
notwithstanding the foregoing, with respect to Section 36.3, Sublessor shall
approve or disapprove Subtenant's Drawings (as defined therein) within four (4)
business days after receipt thereof from Subtenant. Any non-liability, release,
indemnity or hold harmless provision in the Main Lease for the benefit of the
landlord under the Main Lease, that is incorporated herein by reference, shall
be deemed to inure to the benefit of Sublessor and the landlord under the Main
Lease, for the purpose of incorporation by reference in this Sublease. Any right
of the landlord under the Main Lease of access or inspection and any right of
the landlord under the Main Lease to do work in the premises under the Main
Lease or in the Building and any right of the landlord under the Main Lease in
respect of rules and regulations shall be deemed to inure to the benefit of
Sublessor and the landlord under the Main Lease, for the purpose of
incorporation by reference in this Sublease. If any of the express provisions of
this Sublease shall conflict with any of the provisions incorporated by
reference, such conflict shall be resolved in every instance in favor of the
express provisions of this Sublease.
4. PERFORMANCE BY SUBLESSOR. Any obligation of Sublessor which is
contained in this Sublease by the incorporation by reference of the provisions
of the Main Lease shall be observed or performed by Sublessor using reasonable
efforts to cause the landlord under the Main Lease to observe and/or perform the
same, and Sublessor shall have a reasonable time to enforce its rights to cause
such observance or performance. Sublessor shall not be required to furnish,
supply or install anything under any article of the Main Lease. Subtenant shall
not in any event have any rights in respect of the Subleased Premises greater
than Sublessor's rights under the Main Lease, and notwithstanding any provision
to the contrary, as to obligations that pertain to the Subleased Premises and
are contained in this Sublease by the incorporation by reference of the
provisions of the Main Lease, Sublessor shall not be required to make any
payment or
2
perform any obligation, and Sublessor shall have no liability to Subtenant for
any matter whatsoever, except for Sublessor's obligation to pay the rent and
additional rent due under the Main Lease and for Sublessor's obligation to use
reasonable efforts, upon request of Subtenant, to cause the landlord under the
Main Lease to observe and/or perform its obligations under the Main Lease. If
Sublessor fails, after using reasonable efforts, to cause the landlord under the
Main Lease to observe and/or perform its obligation under the Main Lease,
Subtenant shall have the right, upon notice to Sublessor, to bring an action in
Sublessor's name, to accomplish such purpose. Sublessor shall not be responsible
for any failure or interruption, for any reason whatsoever, of the services or
facilities that may be appurtenant to or supplied at the Building by the
landlord under the Main Lease or otherwise, including, without limitation, heat,
air conditioning, water, electricity, elevator service and cleaning service, if
any; and no failure to furnish, or interruption of, any such services or
facilities shall give rise to any liability on the part of Sublessor except to
the extent caused by Sublessor's failure to use reasonable efforts to cause
landlord to perform such obligations under the Main Lease.
5. NO BREACH OF MAIN LEASE. Subtenant and Sublessor shall not do or
permit to be done any act or thing which may constitute a breach or violation of
any term, covenant or condition of the Main Lease by the tenant thereunder,
whether or not such act or thing is permitted under the provisions of this
Sublease. Sublessor shall perform its obligations under the Main Lease except to
the extent Subtenant is obligated herein to perform same.
6. NO PRIVITY OF ESTATE. Nothing containing in this Sublease shall be
construed to create privity or estate or of contract between Subtenant and the
landlord under the Main Lease.
7. INDEMNITY. Subtenant shall indemnify, protect, defend with counsel
reasonably acceptable to Sublessor and hold harmless Sublessor and the landlord
under the Main Lease from and against all losses, costs, damages, expenses and
liabilities, including, without limitation, reasonable attorneys' fees, which
Sublessor may incur or pay out by reason of (a) any accidents, damages or
injuries to persons or property occurring in, on or about the Subleased
Premises, (b) any breach or default hereunder on Subtenant's part, (c) the
enforcement of Sublessor's rights under this Section or any other section of
this Sublease, (d) any work done after the date hereof in or to the Subleased
Premises except if done by Sublessor, (e) the negligence or willful misconduct
on the part of Subtenant and/or its officers, employees, agents, contractors
and/or invitees, or any person claiming through or under Subtenant, (f) with
respect to Sublessor only, any action brought by Subtenant against the landlord
under the Main Lease pursuant to Sections 4 and 15 of this Sublease, or (g) the
existence of any hazardous substances (as defined in the Main Lease) which are
proven to have been present in or about the Subleased Premises only after the
Early Entry Date (as defined below) which resulted from Subtenant's storage, use
or disposal of hazardous substances in or about the Subleased Premises, or the
storage, use or disposal of Subtenant's agents, employees, contractors or
invitees.
Sublessor shall indemnify, protect, defend with counsel reasonably
acceptable to Subtenant and hold harmless Subtenant from and against all losses,
costs, damages, expenses and liabilities, including without limitation,
reasonable attorney's fees, which Subtenant may incur or pay out by reason of
(a) any accidents, damages or injuries to persons or property occurring in, on
or about the Subleased Premises if the same shall have been caused by
Sublessor's negligence or willful misconduct, or that of its agents, employees,
contractors or invitees, (b) any breach or default hereunder or under the Main
Lease on Sublessor's part, (c) the enforcement of Subtenant's rights under this
Section or any other section of this Sublease, (d) any negligence or willful
misconduct on the part of Sublessor and/or its officers, employees, agents or
contractors, or (e) the
3
existence of any hazardous substances which are proven to have been present in
or about the Subleased Premises on the Early Entry Date which resulted from
Sublessor's storage, use or disposal of hazardous substances in or about the
Subleased Premises, or the storage, use or disposal of Sublessor's agents,
employees, contractors or invitees.
8. BASIC RENT. From and after the Commencement Date, Subtenant shall pay
without deduction or offset, monthly basic rent ("Basic Rent") in the following
amounts:
MONTH BASIC RENT
----- ----------
1-6 No Base Rent
7-28 $47,684.40
29-40 $53,116.80
Basic Rent shall be payable in advance on the first day of each month
during the term of this Sublease, except that the Basic Rent for the seventh
month of the term has been paid on the execution of this Sublease. Basic Rent
and all other amounts payable by Subtenant to Sublessor under the provisions of
this Sublease (such amounts other than Basic Rent being herein called the
"Operating Expenses") shall be paid when due (within five (5) business days
after receipt of demand as to Operating Expenses but without notice as to Basic
Rent). Sublessor shall have the same rights and remedies for the non-payment of
Operating Expenses as for the non-payment of Basic Rent. Basic Rent and
Operating Expenses shall be paid to Sublessor in lawful money of the United
States at the address of Sublessor set forth at the head of this Sublease or to
such other person and/or at such other address as Sublessor may from time to
time designate by notice to Subtenant. No payment by Subtenant or receipt by
Sublessor of any lesser amount than the amount stipulated to be paid hereunder
shall be deemed other than on account of the earliest stipulated Basic Rent or
Operating Expenses; nor shall any endorsement or statement on any check or
letter be deemed an accord and satisfaction, and Sublessor may accept any check
or payment without prejudice to Sublessor's right to recover the balance due or
to pursue any other remedy available to Sublessor. Any provision in the Main
Lease referring to basic rent or operating expenses incorporated herein by
reference shall be deemed to refer to the Basic Rent and Operating Expenses due
under this Sublease.
9. SECURITY DEPOSIT. Concurrently with the execution of this Sublease,
Subtenant shall deposit with Sublessor the amount of $47,684.40 (the "Security
Deposit"). Sublessor shall not be required to pay interest on the Security
Deposit or keep the Security Deposit separate from its general funds. Upon any
Default by Subtenant, Sublessor may use the Security Deposit to the extent
necessary to make good any arrears of sums payable by Subtenant under this
Sublease, or to compensate Sublessor for any damage, injury, expense or
liability caused by Subtenant's Default. If any portion of the Security Deposit
is so used or applied, Sublessor shall, within ten (10) days after receipt of
written demand therefor, deposit a certified or bank cashier's check with
Sublessor in an amount sufficient to restore the Security Deposit to its amount
immediately preceding such use or application of funds and Subtenant's failure
to do so shall be a Default under this Sublease. The balance of the Security
Deposit remaining at the end of the Sublease Term shall be returned after all of
Subtenant's obligations have been fulfilled.
10. OPERATING EXPENSES. Commencing on the first day of the January, 1997,
Subtenant shall pay to Sublessor within five (5) business days after receipt of
demand any amounts that are payable by Sublessor to the landlord under the Main
Lease in respect to the Subleased Premises pursuant to the
4
provisions thereof in respect of (a) "Tax Rent" (as defined in the Main Lease)
in excess of the annual amount payable therefor by Sublessor for the calendar
year 1996, and (b) "Operating Expense Rent" (as defined in the Main Lease) in
excess of the annual amount payable therefor by Sublessor for the calendar year
1996. Subtenant shall not be obligated to pay any Tax Rent due to increases in
Property Taxes of more than 102% per annum (compounded) over the Property Taxes
for the 1996 calendar year.
11. USE. Subtenant shall use and occupy the Subleased Premises for general
office purposes and any other legally permitted non-retail uses compatible with
a first class office building. Subtenant shall use the Subleased Premises for no
other purposes without the consent of Sublessor.
12. CONDITION OF SUBLEASED PREMISES; USE OF FACILITIES. Subtenant is
leasing the Subleased Premises "as is." In making and executing this Sublease,
Subtenant has relied solely on such investigations, examinations and inspections
as Subtenant has chosen to make or has made. Subtenant shall have the right to
use the workstations located in the Subleased Premises at no charge during the
term hereof. Subtenant acknowledges that Sublessor has afforded Subtenant the
opportunity for full and complete investigations, examinations, and inspections.
Any improvements to be made by Subtenant pursuant to this Sublease shall be the
sole responsibility of Subtenant, subject only to Sublessor's obligation to pay
an allowance for tenant improvements of up to $300,000.00 (the "Allowance").
Sublessor shall make monthly disbursements of the Allowance on a progress
payment basis within 10 days after a disbursement request is submitted by
Subtenant, which submittal shall include lien releases and other back up
information as Sublessor shall reasonably require. Notwithstanding anything to
the contrary contained in this Lease, Sublessor shall not be obligated to make
monthly disbursements to Subtenant until ten (10) days after Subtenant has paid
the Cancellation Fee pursuant to Paragraph 31 hereof. In addition, if Subtenant
fails to pay the Cancellation Fee when and as required, Sublessor shall have the
right to offset the Allowance against the Cancellation Fee. Sublessor shall have
the right to inspect the progress of construction in order to insure that the
claimed progress has in fact occurred, provided that Sublessor shall not
unreasonably interfere with work then being performed by Subtenant. Subject to
the foregoing regarding Subtenant's failure to pay the Cancellation Fee, any
unused Allowance shall be applied against rent next coming due.
13. CONSENTS AND APPROVALS. In any instance when Sublessor's consent or
approval is required under this Sublease, Sublessor's refusal to consent to or
approve any matter or thing shall be deemed reasonable if, INTER ALIA, such
consent or approval has not been obtained from the landlord under the Main
Lease. Otherwise, Sublessor's consent or approval as required under this
Sublease shall not be unreasonably withheld or delayed, except with respect to
any use of the Subleased Premises which is not a permitted use.
14. NOTICES. All notices, consents, approvals, demands and requests which
are required or desired to be given by either party to the other hereunder shall
be in writing and shall be either (a) personally delivered or (b) sent by United
States postal service, return receipt requested and postage prepaid or (c) by
nationally recognized overnight courier. Notices, consents, approvals, demands
and requests which are served upon Sublessor or Subtenant in the manner provided
herein shall be deemed to have been given or served for all purposes hereunder
(i) on the date of delivery if personally delivered or sent by courier service
or (ii) on the date on which such notice, consent, approval, demand or request
shall have been mailed if mailed as aforesaid. All notices, consents, approvals,
demands and requests given to Sublessor shall be addressed to Sublessor at the
address for Sublessor set forth above, Attention: ________________, or at such
other place
5
as Sublessor may from time to time designate in a notice given in accordance
with the provisions of this Section. All notices, consents, approvals, demands
and requests given to subtenant shall be addressed to Subtenant at the Subleased
Premises, Attention: Chief Financial Officer, or at such other place as
Subtenant may from time to time designate in a notice given in accordance with
the provisions of this Section. All notices to landlord shall be addressed to
landlord as set forth in the Main Lease.
15. TERMINATION OF MAIN LEASE. If for any reason the term of the Main
Lease shall terminate prior to the expiration date of this Sublease, this
Sublease shall thereupon be terminated and Sublessor shall not be liable to
Subtenant by reason thereof unless said termination shall have been effected
because of the breach or default of Sublessor under the Main Lease or this
Sublease. If the landlord under the Main Lease wrongfully terminates or attempts
to wrongfully terminate the Main Lease, Sublessor shall cooperate with Subtenant
to keep the Main Lease in full force and effect. Such cooperation shall include
permitting Subtenant to bring or defend an action or proceeding in Sublessor's
name (but at Subtenant's expense) in connection with such termination or
attempted termination.
16. INSURANCE. Subtenant shall maintain throughout the term of this
Sublease the insurance required under the Main Lease. All insurance maintained
by Subtenant shall name Sublessor and the landlord under the Main Lease as
additional insureds. Subtenant shall deliver to Sublessor and the landlord under
the Main Lease certificates of insurance issued by the carriers or their duly
authorized agents prior to the Commencement Date. Subtenant shall procure and
pay for renewals of such insurance from time to time before the expiration
thereof, and Subtenant shall deliver to Sublessor and the landlord under the
Main Lease such renewal policies or certificates at least ten (10) days before
the expiration of any existing policy. All such policies shall meet the
requirements in the Main Lease and shall be issued by companies of recognized
responsibility licensed to do business in the State of California and all such
policies shall contain a provision whereby the same cannot be cancelled or
modified unless Sublessor and the landlord under the Main Lease are given at
least 20 days' prior written notice by certified or registered mail of such
cancellation or modification.
17. ESTOPPEL CERTIFICATES. Subtenant and Sublessor shall, within ten (10)
business days after receipt of each and every request by the other party hereto,
execute, acknowledge and deliver to the party that made the request a statement
in writing (a) certifying that this Sublease is unmodified and in full force and
effect (or if there have been modifications, that the same is in full force and
effect as modified and stating the modifications), (b) specifying the dates to
which the Basic Rent and Operating Expenses (as defined in the Main Lease) have
been paid, (c) stating whether or not, to the best knowledge of the party
signing same, Sublessor or Subtenant is in default in performance or observance
of its obligations under this Sublease, and, if so, specifying each such
default, (d) stating whether or not, to the best knowledge of the party signing
same, any event has occurred which with the giving of notice or passage of time,
or both, would constitute a default by Sublessor or Subtenant under this
Sublease, and, if so specifying each such event, and (e) stating whether
Subtenant has exercised any option(s) to extend the term of this Sublease, and,
if so, specifying each such extension.
Any such statement delivered pursuant to this Section may be relied upon by any
prospective assignee or transferee of the leasehold estate under the Main Lease
or the subleasehold estate under this Sublease.
18. ALTERATIONS. Subtenant shall not make, cause or permit the making
of any alterations, addition, change, replacement, or installation in or to
the Subleased Premises without obtaining the prior
6
consent of the Sublessor (which shall not be unreasonably withheld or delayed)
and Subtenant will be required to obtain the consent of the landlord under the
Main Lease in each instance if required under the Main Lease.
19. OPTION TO EXTEND. Provided Subtenant is not in default of any term or
condition of this Lease as of the commencement of the renewal term, Subtenant
shall have one option to renew the term of the Lease for one additional
forty-seven (47)- month term, on the same terms and conditions of this Sublease,
except that the Base Rent shall be adjusted to equal:
Extension Term Months
1-8 $53,116.80
9-47 $46,477.20
Such option shall be exercised (if at all) by Subtenant giving Sublessor at
least 120 days' prior irrevocable written notice.
If Subtenant does not exercise its option to extend, Subtenant shall be
required to restore the Subleased Premises to their condition existing on the
Early Entry Date, unless Sublessor indicates otherwise in writing not later than
the last day of the thirtieth (30th) month of the Term. Any restoration by
Subtenant shall be completed not later than October 31, 1999. Subtenant shall
not be required to remove any alterations or improvements installed in the
Subleased Premises by Sublessor prior to the Early Entry Date.
20. RIGHT TO CURE SUBTENANT'S DEFAULTS. If Subtenant shall at any time
fail to make any payment or perform any other obligation of Subtenant hereunder,
then Sublessor shall have the right, but not the obligation, after 10 days'
notice to Subtenant, or without notice to Subtenant in the case of any
emergency, and without waiving or releasing Subtenant from any obligations of
Subtenant hereunder, to make such payment or perform such other obligation of
Subtenant in such manner and to such extent as Sublessor shall deem necessary,
and in exercising any such right, to pay any incidental costs and expenses,
employ attorneys, and incur and pay reasonable attorneys' fees. Subtenant shall
pay to Sublessor within five (5) days after receipt of demand all sums so paid
by Sublessor and all incidental costs and expenses of Sublessor in connection
therewith, together with interest thereon at the rate of one and one-half
percent per calendar month or any part thereof or the then maximum lawful
interest rate, whichever shall be less, from the date of the making of such
expenditures.
21. BROKERAGE. Subtenant and Sublessor each represents to the other that
it dealt with no broker or other person in bringing about this Sublease other
than Wolf Commercial Brokerage and The ▇▇▇▇▇▇▇ Group (collectively, "Brokers"),
and each party hereto shall pay, and shall indemnity, defend and hold harmless,
the other party from and against, any loss, liability, damage, cost and expense
(including, without limitation, reasonable attorneys' fees) in connection with
(a) any claims made by any other broker or other person for a brokerage
commission, finder's fee, or similar compensation, by reason of or in connection
with this Sublease if such other broker or other person claims to have had
dealings with the indemnifying party and/or (b) the enforcement of the
indemnified party's rights under this Section. Sublessor shall pay the Brokers'
commissions in connection with this Sublease pursuant to separate agreements.
7
22. ARBITRATION. In the event of a dispute under this Sublease or any
exhibit hereto (except as to Basic Rent, unless such dispute involves Basic Rent
as a corollary to such dispute), either party may, but shall not be required to,
refer such dispute to arbitration. Such arbitration shall be conducted in
accordance with the procedures specified in the Main Lease, which are hereby
incorporated herein by reference.
23. NO WAIVER. The failure of Sublessor or Subtenant to insist in any one
or more cases upon the strict performance or observance of any obligation of
Subtenant or Sublessor hereunder or to exercise any right or option contained
herein shall not be construed as a waiver or relinquishment for the future of
any such obligation of Subtenant or Sublessor or any right or option of
Sublessor or Subtenant. Sublessor's receipt and acceptance of Basic Rent or
Operating Expenses, or Sublessor's acceptance of performance of any other
obligation by Subtenant, with knowledge of Subtenant's breach of any provision
of this Sublease, shall not be deemed a waiver of such breach. No waiver by
Sublessor or Subtenant of any term, covenant or condition of this Sublease shall
be deemed to have been made unless expressed in writing and signed by Sublessor
or Subtenant, as the case may be.
24. COMPLETE AGREEMENT. There are no representations, warranties,
agreements, arrangements or understandings, oral or written, between the parties
or their representatives relating to the subject matter of this Sublease which
are not fully expressed in this Sublease. This Sublease cannot be changed or
terminated orally or in any manner other than by a written agreement executed by
both parties.
25. SUCCESSORS AND ASSIGNS. The provisions of this Sublease, except as
herein otherwise specifically provided, shall extend to, bind and inure to the
benefit of the parties hereto and their respective personal representatives,
heirs, successors and permitted assigns. In the event of any assignment or
transfer of Sublessor's interest in the leasehold estate under the Main Lease,
the transferor or assignor, as the vase may be, shall be and hereby is entirely
relieved and freed of all obligations under this Sublease arising after the date
of such assignment or transfer. No such assignment by Sublessor shall be
effective unless and until the transferee assumes in writing all of Sublessor's
obligations under this Sublease.
26. THIRD PARTY CONSENTS. (a) This Sublease shall have no effect until the
landlord under the Main Lease shall have given its written consent hereto. If
the landlord under the Main Lease does not give its consent to this Sublease for
any reason whatsoever on or before thirty (30) days after the date of execution
hereof by Sublessor, then either party may cancel this Sublease by notice given
to the other party.
(b) If this Sublease is cancelled pursuant to Section 26(a) of this
Sublease, (i) this Sublease shall be deemed null and void and of no effect, (ii)
if Subtenant is then in possession of all or any part of the Subleased Premises,
Subtenant shall (x) immediately quit and surrender to Sublessor the Subleased
Premises and (y) remove all of its property and repair all damage caused by such
removal and (z) restore the Subleased Premises to the condition in which they
were prior to the installation of the items so removed, and (iii) Sublessor
shall promptly return to Subtenant the Security Deposit, the amount paid by
Subtenant upon the execution of this Sublease for the payment of the first full
monthly installment of Basic Rent and the Cancellation Charge required pursuant
to Paragraph 31 hereof.
8
27. NO THIRD PARTY BENEFICIARY. None of the provisions of this Sublease
shall be construed to accrue to the benefit of, or be enforceable by, any third
party, other than the landlord under the Main Lease.
28. INTERPRETATION. Irrespective of the place of execution or performance,
this Sublease shall be governed by and construed in accordance with the laws of
the State of California. If any provision of this Sublease or the application
thereof to any person or circumstances shall, for any reason and to any extent,
be invalid or unenforceable, the remainder of this Sublease and the application
of that provision to other persons or circumstances shall not be affected but
rather shall be enforced to the extent permitted by law. The captions, headings
and titles, if any, in this Sublease are solely for convenience or reference and
shall not affect its interpretation. This Sublease shall be construed without
regard to any presumption or other rule requiring construction against the party
causing this Sublease to be drafted. If any words or phrases in this Sublease
shall have been stricken out or otherwise eliminated, whether or not any other
words or words or phrases so stricken out or otherwise eliminated. Each
covenant, agreement, obligation or separate and independent covenant of the
party bound by, undertaking or making same, not dependent on any other provision
of this Sublease unless otherwise expressly provided. All terms and words used
in this Sublease shall mean a natural person or persons, a partnership, a
corporation or any other form of business or legal association or entity.
29. MOVING ALLOWANCE. Upon the Commencement Date, Sublessor shall pay to
Subtenant as a moving allowance the sum of $31,689.00
30. REPRESENTATIONS. Sublessor represents and warrants that:
(a) the Main Lease consists of the instruments listed on EXHIBIT B,
copies of which are attached hereto, and is in full force and effect, has not
been further modified or amended, and, to the best knowledge of Sublessor, there
exists under the Main Lease no default or event of default, nor has there
occurred any event which, with the giving of notice or passage of time or both,
could constitute such a default or event of default;
(b) to the best knowledge of Sublessor, there is no pending
termination of the Main Lease. Sublessor will notify Subtenant promptly if it
becomes aware of any impending termination of the Main Lease;
(c) there are no pending or threatened actions, suits or proceedings
before any court or administrative agency against Sublessor or, to the best of
Sublessor's knowledge, against landlord or third parties which could, in the
aggregate, adversely affect the Subleased Premises or any part thereof or the
ability of landlord to perform its obligations under the Main Lease or of
Sublessor to perform its obligations under this Sublease, and Sublessor is not
aware of any facts which might result in any such actions, suits or proceedings;
and
(d) Sublessor has not received any written notice from any insurance
company of any defects or inadequacies in the Subleased Premises or any part
thereof which could adversely affect the insurability of the Subleased Premises
or the premiums for the insurance thereof.
9
31. CANCELLATION CHARGE. Not later than June 29, 1996, Subtenant shall pay
to Sublessor by check the sum of $200,000.00 (the "Cancellation Fee") in
consideration of the shortened term of this Sublease. In no event, however,
shall Subtenant have the right to cancel this Sublease except as expressly
provided in Sections 1 and 26(a) hereof.
32. EARLY ENTRY. Notwithstanding anything to the contrary contained in
this Sublease, immediately upon Sublessor's execution of this Sublease ("Early
Entry Date"), Sublessor shall deliver the Subleased Premises to Subtenant for
the purpose of constructing the tenant improvements referred to in Paragraph 12
hereof. Such early entry shall be subject to all of the terms and conditions of
this Sublease except for the obligation to pay Basic Rent and Operating
Expenses.
33. ASBESTOS. To the best of Sublessor's actual knowledge, there is no ACM
(as defined in the Main Lease) in the Subleased Premises. If, however, in
constructing the tenant improvements, Sublessee shall find ACM within the
Subleased Premises, Sublessee shall stop all work and notify Sublessor and
landlord of the discovery, and permit landlord's contractors, pursuant to
Exhibit D of the Main Lease, to handle the ACM, which shall occur at no cost to
Sublessee. If, solely as a result of the discovery and treatment of ACM, the
tenant improvements are not completed by July 1, 1996, then, for each day of
delay in completing the tenant improvements beyond July 1, 1996, Subtenant shall
receive one (1) day of rent abatement.
35. AMENDMENT OR MODIFICATION. Sublessor and landlord shall not amend or
modify the Main Lease in any way so as to materially or adversely affect
Subtenant or its interest hereunder or in the Subleased Premises, materially
increase Subtenant's obligations hereunder or materially restrict Subtenant's
rights hereunder, without the prior written consent of Subtenant, which shall
not be unreasonably withheld or delayed.
36. QUIET ENJOYMENT; RIGHT TO CURE. Subtenant shall peacefully have, hold
and enjoy the Subleased Premises, subject to the terms and conditions of this
Sublease, provided that Subtenant pays all Basic Rent and Operating Expenses and
performs all of Subtenant's covenants and agreements contained herein. In the
event, however, that Sublessor defaults in the performance or observance of any
of Sublessor's obligations hereunder or under the Main Lease, then Subtenant
shall give Sublessor notice specifying in what manner Sublessor has defaulted,
and if such default shall not be cured by Sublessor within thirty (30) days
thereafter (except that if such default cannot be cured within said thirty
(30)-day period, this period shall be extended for an additional reasonable
time, provided that Sublessor commences to cure such default within such thirty
(30)-day period and proceeds diligently thereafter to effect such cure as
quickly as possible), then, upon the passage of five (5) business days after the
date of a second written notice from Subtenant of the default, if Sublessor has
failed to so cure, in addition, Subtenant shall be entitled, at Subtenant's
option, to cure such default and promptly collect from Sublessor Subtenant's
reasonable expenses in so doing (including, without limitation, reasonable
attorneys' fees and court costs). Subtenant shall not be required, however, to
wait the entire cure period described herein if earlier action is required to
comply with the Main Lease or with any applicable governmental law, regulation
or order. Sublessor shall provide copies to Subtenant of all notices received
from landlord pursuant to the Main Lease.
37. AUTHORIZATION TO DIRECT SUBLEASE PAYMENTS. Sublessor hereby
acknowledges that Sublessor's failure to pay all Basic Monthly Rent, Operating
Expense Rent, Tax Rent and Capital Expense Rent and other sums owing by
Sublessor to landlord under the Main Lease will cause Subtenant to incur
10
damages, costs and expenses not contemplated by this Sublease, especially in
those cases where Subtenant has paid sums to Sublessor hereunder which
correspond in whole or in part to the amounts owing by Sublessor to landlord
under the Main Lease. Accordingly, Subtenant shall have the right to pay all
rent and other sums owing by Subtenant to Sublessor hereunder for those items
which also are owed by Sublessor to landlord under the Main Lease directly to
landlord on the following terms and conditions:
A. Subtenant reasonably believes that Sublessor has failed to make any
payment required to be made by Sublessor to landlord under the Main Lease and
Sublessor fails to provide adequate proof of payment within two (2) business
days after Subtenant's written demand requesting such proof.
B. Subtenant shall not prepay any amounts owing by Subtenant without
the consent of Sublessor.
C. Subtenant shall provide to Sublessor concurrently with any payment
to landlord reasonable evidence of such payment.
D. If Sublessor notifies Subtenant that it disputes any amount
demanded by landlord, Subtenant shall not make any such payment to landlord
unless landlord has provided a three-day notice to pay such amount or forfeit
the Main Lease.
Any sums paid directly by Subtenant to landlord in accordance with this
Paragraph shall be credited toward the amounts payable by Subtenant to Sublessor
under this Sublease.
38. TERMINATION OF MAIN LEASE BY SUBLESSOR. Sublessor shall not
voluntarily terminate the Main Lease during the Term unless and until landlord
has agreed in writing to continue this Sublease in full force and effect as a
direct lease between landlord and Subtenant upon and subject to all of the
terms, covenants and conditions of this Sublease for the balance of the Term
hereof. If landlord so consents, Subtenant shall attorn to landlord in
connection with any such voluntary termination and shall execute an attornment
agreement in such form as may reasonably be requested by landlord; provided,
however, that the attornment agreement does not materially adversely affect the
use by Subtenant of the Subleased Premises in accordance with the terms of this
Sublease, materially increase Subtenant's obligations under this Sublease or
materially decrease Subtenant's rights under this Sublease. If this Sublease
terminates as a result of Sublessor's default under the Main Lease, then, so
long as Subtenant is not then in default beyond any applicable cure period under
the terms of this Sublease, this Sublease shall continue in full force and
effect as a direct lease between Subtenant and landlord, upon and subject to all
of the terms, covenants and conditions of the Sublease for the balance of the
Term hereof. In such event, Subtenant shall attorn to landlord as set forth in
this Paragraph.
39. WAIVER OF SUBROGATION. Landlord expressly agrees that the provisions
of Section 18.4 of the Main Lease regarding waiver of rights of subrogation
shall be extended to and be between landlord and Subtenant.
40. COUNTERPARTS. This Sublease may be executed in counterparts, each of
which, when taken together as a whole, shall constitute one (1) original
document.
IN WITNESS WHEREOF, Sublessor and Subtenant have hereunto executed this
Sublease as of the day and year first above written.
11
VALUE BEHAVIORAL HEALTH OF CALIFORNIA, INC.,
a California corporation
By:
------------------------------------
RETIX,
a California corporation
By:
------------------------------------
Title:
---------------------------------
12
CONSENT TO ASSIGNMENT
This Consent to Assignment is by and among Marina Airport Buildings,
Ltd., a California limited partnership ("Landlord"), ValueOptions of
California, Inc., a California corporation ("Sublessor"), Vertel Corporation,
a California corporation ("Assignor") and Sonoma Systems, Inc., a California
corporation ("Assignee"), with reference to that certain Lease dated as of
April 2, 1993, as amended, by and between Landlord, and Sublessor as Tenant
under its former name of American PsychManagement of California, Inc.,
concerning Suites 500 and 600 ("Premises"), located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, (hereinafter referred to as the "Master Lease".)
-------------------------------------------------------------------------------
RECITALS
WHEREAS, Sublessor, under its former name of Value Behavioral Health of
California, Inc., and Assignor, under the name of its predecessor in
interest, Retix, a California corporation, entered into a written sublease
dated as of May 29, 1996 ("Sublease"), pursuant to which Assignor subleased
the Premises from Sublessor:
WHEREAS, Assignor, under the name of its predecessor in interest, Retix,
as Sublessor, entered the following sub-leases with respect to the Premises:
(i) a sub-sublease, dated as of August 22, 1997, with TSN, L.L.C., a
California limited liability company, for a portion of the Premises located
on the fifth floor of the Building ("TSN Sub-Sublease"); (ii) a sub-sublease,
dated as of December 23, 1997, with Creative Channel Services, Inc., a
California corporation, for a portion of the Premises located on the fifth
floor of the Building ("CCS Sub-Sublease"); and (iii) a sub-sublease, dated
as of December 28, 1997, with Assignee for the portion of the Premises
comprising the sixth floor of the Building ("Sonoma Sub-Sublease"). The TSN
Sub-Sublease, CCS Sub-Sublease and Sonoma Sub-Sublease hereinafter sometimes
collectively shall be referred to as the "Sub-Subleases".
WHEREAS, Assignor has requested that Landlord consent to the
assignment of the Sublease and Sub-Subleases to Assignee, and to Assignee's
assumption of the Sublease and Sub-Subleases from Assignor, upon the terms
contained in that certain Assignment and Assumption of Sublease and
Sub-Subleases dated as June 15, 1999 ("Assignment"), a copy of which is
attached hereto and by this reference made a part hereof; and
WHEREAS, Landlord will consent to such assignment upon the express terms
and conditions hereinafter set forth;
NOW, THEREFORE, THE PARTIES AGREE:
1. Landlord, hereby consents to Assignor's assignment of the Sublease
and Sub-Subleases to Assignee, and to Assignee's assumption of the Sublease
and Sub-Subleases from Assignor, effective as of August 1, 1999 ("Effective
Date") upon the terms and conditions contained herein.
2. This Consent shall not, in any manner, be construed as a
modification or waiver of any term, condition, covenant or provision of the
Master Lease or a consent to such assignment other than upon the terms
contained in the attached Assignment.
3. This Consent shall not be deemed to be a consent to any subsequent
assignment of the Master Lease or the Sublease, or to a further subletting of
the Premises.
4. This Consent shall not in any manner serve to release or discharge
Sublessor from any obligations, liabilities or duties under the terms of the
Master Lease.
5. Assignee, by executing this Consent, agrees that as of the
Effective Date, Assignee shall be fully and completely bound by each and
every term of the Master Lease to the extent such provision is incorporated
into the Sublease. Any breach of the Sublease by Assignee from and after the
Effective Date shall likewise constitute a breach of the Master Lease to the
extent such provision is incorporated into the Sublease, and shall entitle
Landlord to avail itself of any remedy set out in the Master Lease or
otherwise available at law to Landlord.
6. Assignee, by the execution of this Consent, acknowledges that
Assignee has examined and is familiar with all of the terms, provisions and
conditions of the Sublease and the provisions of the Master Lease
incorporated by reference therein.
7. Sublessor and Assignee acknowledge and agree that from and after
the Effective Date, in accordance with the Master Lease, in the event of a
default by Sublessor, Landlord has the right, power and authority, but not
the obligation, to collect rents due Sublessor from Assignee and apply said
rents toward any and all amounts due Landlord, upon written notice to
Sublessor and Assignee.
8. It is covenanted and agreed that Landlord shall not be liable under
any circumstances for any brokerage commission or other charge or expense in
connection with the Assignment, and that Sublessor, Assignor and Assignee
shall indemnify and hold Landlord harmless from all damages, costs and
expenses, including reasonable attorneys' fees, resulting from any claims
that may be asserted against Landlord by any broker, agent, finder, person or
entity who claims a right to compensation with respect to the Assignment.
9. Sublessor and Assignee agree that to the extent any terms,
conditions, covenants or provisions of the Sublease are contrary to any
terms, covenants or provisions of the Master Lease to the extent those
provisions are incorporated into the Sublease, as of the Effective Date, as
between Sublessor and Assignee only, the contrary terms, conditions and
provisions of the Sublease shall control, and as between Landlord, Sublessor
and Assignee, the contrary terms, conditions, covenants and provisions of the
Master Lease shall govern. Nothing in this Consent shall be deemed to modify
the terms and conditions of the Assignment as among Assignor, Assignee and
Sublessor, however.
10. Sublessor and Assignee are hereby informed that the Building,
Common Areas or Premises may contain fireproofing or other components
consisting of Asbestos Containing Materials ("ACM"), as more specifically set
forth in Exhibit "B", attached hereto. Pursuant to California Health and
Safety Code sections 25915, et seq., Assignee is also required to provide
such notice to Assignee's employees or contractors working within the
Building, and to subtenants, assignees, or new employees of Assignee within
fifteen (15) days of their commencing work in the Building. This provision
shall not be construed to limit Sublessor's or Assignee's duties under common
law or statute, and Sublessor and Assignee shall be required to comply with
the entirety of California Health and Safety Code sections 25915, et seq., or
any other similar applicable provision throughout the Term.
11. Landlord acknowledges that Assignor's predecessor-in-interest,
Retix, installed, with the Landlord's and Sublessor's prior written consent,
certain Alterations in the Premises. Landlord acknowledges that Landlord did
not, pursuant to Article 14.3 of the Master Lease, notify Retix, Assignor or
Sublessor in writing at the time the Landlord consented to the Alterations
that Retix or its successors in interest would be required to remove the
Alterations at the end of the Term, and Landlord acknowledges further,
notwithstanding anything to the contrary contained in the Master Lease or the
Sublease, that neither Sublessor nor Assignor nor Assignee shall have any
obligation to remove any Alterations from the Premises performed to date upon
the expiration or earlier termination of the Sublease. Nothing in the
foregoing sentence shall be deemed to relieve any party hereto of the
obligation to obtain Landlord's consent to future Alterations, or to limit
Landlord's right to require removal of any future Alteration pursuant to
Article 14 of the Master Lease.
12. Landlord expressly agrees, from and after the Effective Date, to
forever release Assignor from each and every obligation of "Subtenant"
arising under or in connection with the Sublease, or of "Sub-Sublessor,
arising under or in connection with the Sub-Subleases, including, without
limitation, any obligation of "Subtenant" under the Sublease or of
"Sub-Sublessor" under the Sub-Subleases, arising during the Extension Term as
defined in the Assignment.
[SIGNATURES APPEAR ON NEXT PAGE]
WHEREUPON, THE PARTIES HERETO HAVE EXECUTED THIS CONSENT
AS OF THE DATE SET FORTH ABOVE
SUBLESSOR:
VALUEOPTIONS OF CALIFORNIA, INC.,
A CALIFORNIA CORPORATION
BY: /s/ [illegible]
-----------------------------------
ITS: VP
-----------------------------------
ASSIGNOR:
VERTEL CORPORATION,
A CALIFORNIA CORPORATION
BY: /s/ [illegible]
-----------------------------------
ITS: V.P. Finance & C.F.O.
-----------------------------------
ASSIGNEE:
SONOMA SYSTEMS, INC.
A CALIFORNIA CORPORATION
BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
ITS: Vice President Finance & Operations
-----------------------------------
CFO
LANDLORD:
MARINA AIRPORT BUILDINGS, LTD.,
A CALIFORNIA LIMITED PARTNERSHIP,
BY: /s/ [illegible]
-----------------------------------
ITS: GENERAL PARTNER
EXHIBIT "B"
NOTIFICATION OF ASBESTOS CONTAINING MATERIALS ("ACM")
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇
This will serve to notify Assignee, its subtenants, employees and
contractors working in the Building that an Asbestos Building Materials
Survey Report has been received by Landlord that confirms the presence of ACM
in the Building.
Airborne asbestos levels in buildings are much lower than those in
industrial work places where serious health effects such as lung cancer and
asbestosis have been observed. However, it is important for employees to
follow proper work practices to minimize the potential for disturbing ACM.
In the office areas of the Building, ACM is enclosed above the ceiling.
Normal activities may be carried on without potential of disturbing ACM.
Certain occasional activities, such as telephone installation, computer cable
installation, electrical work, air conditioning maintenance, as well as many
space remodeling tasks require entry into the ceiling plenum, and should only
be performed by Landlord's authorized personnel who have been properly
trained in procedures for working around ACM. All other unauthorized persons
should refrain from removing ceiling tiles or performing work in the
above-ceiling space.
In other locations where ACM may be present, such as fire evacuation
stairways and the sprayed on acoustical ceiling in the main lobby, the ACM is
generally out of reach and thus unlikely to be damaged or disturbed. If you
find ACM that has been damaged, report it to your supervisor or Landlord's
Building Management. Do not disturb damaged asbestos material or debris.
Landlord has developed procedures and trained and equipped our maintenance
employees to safely remedy such a condition.
ACM pose no threat to your health unless fibers become airborne due to
material aging, deterioration or as the result of some damage. Asbestos
conditions may vary, and where ACM were identified in the building surveys
they were generally in good condition, enclosed, encapsulated or of a type
not likely to release fibers unless disturbed. Specific locations where ACM
have been found are listed below.
Any employee may review the Asbestos Material Survey Report, results of
bulk sampling or air monitoring conducted in this building. All asbestos
related data is available during normal business hours at Landlord's Building
Management Office.
LOCATION TYPE OF ACM
Floor 1 Fireproofing, Acoustic ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ 7 Fireproofing
Floor 9 Fireproofing, with all accessible ACM Removed
Penthouse Boiler Brick
Asbestos Type Chrysotile
Fireproofing 1% to 10% ACM Content
Boiler Brick 11% to 50% ACM Content
Acoustic Ceiling 1% to 10% ACM Content