Exhibit 10.22
SUBLEASE AGREEMENT
THIS SUBLEASE AGREEMENT (the "Sublease" is entered into by and between Novations
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Group, Inc., a Delaware corporation ("Sublessor"), and imall Incorporated, a
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Nevada corporation ("Sublessee").
W I T N E S S E T H
On March 1, 1997, Sublessor and Novations Partners, L.L.C. ("Landlord")
entered into that certain Lease Agreement (the "Base Lease") wherein Landlord
leased to Sublessor and Sublessor leased from Landlord certain premises known as
Unit Nos. 1, 2 and 3, located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇ (the
"Building"), a copy of the Base Lease being attached hereto as Exhibit A.
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Sublessee desires to sublease from Sublessor and Sublessor desires to
sublease to Sublessee the Subleased Premises (as hereinafter defined) subject to
the terms and conditions hereof.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, and for other good and valuable consideration paid by each
party hereto to the other, Sublessor and Sublessee agree as follows:
1. Terms. Capitalized terms used herein but not defined herein shall have
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the meanings specified in the Base Lease.
2. Agreement to Sublease. Sublessor subleases to Sublessee, and Sublessee
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subleases from Sublessor: (a) approximately 4,590 square feet of space (the
"Subleased Premises Rentable Area") consisting of Sublessor's space on the first
(1st) floor of the Building, less and excepting therefrom approximately 1600
square feet (the "Subleased Space"), (b) approximately 350 square feet of
storage space located in the basement of the Building (the "Subleased Storage"),
and (c) fourteen (14) Steelcase workstations, including chairs, (the
"Workstations," with the Subleased Space, Subleased Storage and the Workstations
hereinafter collectively referred to as the "Subleased Premises") in accordance
with and subject to the Base Lease and the terms, conditions and provisions of
this Sublease. A floor plan depicting the Subleased Space is attached hereto as
Exhibit "B."
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3. Term. The term (the "Term") of this Sublease shall commence on
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February 15, 1999 (the "Commencement Date"), and shall expire on the last day of
February 2000, unless earlier terminated pursuant to the terms of this Sublease.
If the Commencement Date should be changed for any reason, Sublessor shall not
be liable or responsible for any claims, damages or liabilities in connection
therewith or by reason thereof.
4. Rent.
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a) Commencing on the Commencement Date (the "Rent Commencement Date")
and continuing on the first day of each month thereafter throughout the
Term, Sublessee shall pay to Sublessor, as rent (collectively, the "Basic
Rent"): (a) for the
Subleased Space, the sum of Seven Thousand Seventy-Six and 25/100 Dollars
($7,076.25) per month; (b) for the Subleased Storage, the sum of Two
Hundred Fifty-Four and 00/100 Dollars ($254.00) per month; and (c) for the
Workstations, the sum of One Hundred Twenty-Six and 00/100 Dollars
($126.00) per month, for a total of Seven Thousand Four Hundred Fifty-Six
and 25/100 Dollars ($7,456.25) per month (prorated for any partial month).
b) Sublessee shall pay all amounts that become payable by Sublessee
under this Sublease to Sublessor at the times and in the manner provided in
this Sublease, without demand, deduction, set-off or counterclaim, at ▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ (or such other address as
Sublessor may designate in writing). In the event any amounts payable by
Sublessee under this Sublease shall not be paid within five (5) days after
the date due, such amounts shall bear interest for each month or fraction
thereof from the due date until paid computed as set forth in the Base
Lease.
5. Additional Charges. Sublessee further agrees to pay Sublessor
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Sublessee's proportionate share of all additional rent and other charges in the
manner provided in the Base Lease. For the purpose of this Sublease, Lessee's
proportionate share shall be a fraction, (1) the numerator of which is 4590, and
(2) the denominator of which is 21,000. Notwithstanding anything contained
herein to the contrary, the Base Rent shall include, and Sublessee shall not be
responsible for any additional charges hereunder with respect to, the following:
janitorial, electricity, gas, landscaping charges, general liability insurance
obtained by Landlord under the Base Lease, and real estate taxes.
6. Use of Subleased Premises. Sublessee may use and occupy the Subleased
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Premises for office purposes, and for no other purpose whatsoever.
7. Acceptance of and Improvements to the Subleased Premises; Modular
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Offices. Upon the Commencement Date, Sublessor shall tender, and Sublessee
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shall accept, possession of the Subleased Premises in its "AS-IS," "WHERE-IS"
and "WITH ALL FAULTS" condition, without the benefit of any further improvement,
and Sublessor shall not be obligated to incur (or to cause Landlord to incur)
any cost or obligation whatsoever for the installation, renovation or demolition
of any improvements to the Subleased Premises. Sublessee may, with the prior
written consent of Sublessee, not to be unreasonably withheld or delayed,
install certain Modular Offices (the "Modular Offices") in the Subleased
Premises. Sublessee shall leave the Modular Offices on the Subleased Premises
upon the expiration or earlier termination of this Sublease.
8. Assumption. Sublessee hereby assumes and agrees, for the benefit of
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Sublessor and Landlord, to comply with and be bound by all of the provisions of
the Base Lease with respect to the Subleased Premises which are to be observed
or performed during the Term hereof by Sublessor as "Tenant" thereunder,
including the rules and regulations applicable to the Building, except as
otherwise inconsistent with the agreements and understandings expressly provided
herein.
9. Indemnification. Subject to the provisions of Paragraph 13 below, and
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except to the extent, if any, of the negligence or intentional acts of
Sublessor, Sublessee shall indemnify and hold Sublessor harmless from and
against claims by third parties for any loss or damage to
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property or person, and all costs (including reasonable attorney's fees)
incurred in connection with the defense of any such claims, to the extent caused
by the acts or omissions or neglect of Sublessee, its agents, invitees,
employees, and contractors in or about the Building, or arising from the
conductor management of Sublessee's business in the Building or Sublessee's use
of the Subleased Premises during the Term hereof.
10. Assignment and Subletting. In no event shall Sublessee assign this
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Sublease or sublease the Subleased Premises or any part thereof without first
obtaining the prior written consent of Sublessor (which consent may be withheld
in Sublessor's sole and absolute discretion). Any such assignment or sublease
shall also be in accordance with and subject to the terms of the Base Lease.
Assignment shall include transfer of Sublessee's interest to parent, subsidiary,
affiliate or related entity. Notwithstanding any such assignment or sublease,
Sublessee shall remain primarily liable and shall continue to make all rental
payments and all other payments that may become due and payable hereunder to
Sublessor in a timely manner. Any violation of this Paragraph by Sublessee
shall constitute an Event of Default under this Sublease, entitling Sublessor to
exercise any and all of the remedies herein provided for an Event of Default by
Sublessee, including, but not limited to, termination of this Sublease.
11. Sublessee Default. All of the terms and provisions of Article 19 of
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the Base Lease are expressly incorporated herein and made applicable hereto,
such that any default by Sublessee under the terms of said Article 19 shall
constitute an event of default ("Event of Default") hereunder. At any time
after such an Event of Default has occurred hereunder, Sublessor may exercise
all rights and remedies provided under the Base Lease for a default thereunder,
including, but not limited to, declaring this Sublease terminated, and Sublessor
may immediately or at any time thereafter re-enter the Subleased Premises and
remove all persons therefrom with or without legal process, and without
prejudice to any of its other legal rights, and all claims for damages by reason
of such re-entry are expressly waived, as well as all claims for damages by
reason of any eviction proceedings or proceedings by way of sequestration or any
other legal proceedings which Sublessor may employ to recover unpaid rents or
possession of the Subleased Premises. In addition, without limiting the
foregoing, in the event Sublessor reasonably believes that Sublessee's failure
to cure any breach under this Sublease will cause a default by Sublessor to
occur under the Base Lease, Sublessor shall specifically have the right, upon
giving Sublessee not less than twenty-four (24) hours' prior written notice
thereof, to cure such breach or default and be reimbursed by Sublessee for all
reasonable expenses incurred by Sublessor in connection therewith upon demand
and presentation of invoices therefor. All rights and remedies of Sublessor
herein enumerated shall be cumulative and none shall exclude any other right or
remedy allowed by law or in equity, and said rights and remedies may be
exercised and enforced concurrently and whenever and as often as occasion
therefore arises.
12. Option to Extend Sublease Term. On the condition that Sublessee is
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not in default of any of its covenants or obligations under this Sublease both
at the time of exercise of the options and as of the commencement of each of the
hereinafter described additional terms, Sublessee shall have the option to
extend the Sublease Term on a month to month basis, for a maximum of six (6)
months, the first such month to commence immediately after the expiration of the
initial Sublease term. If Sublessee desires to extend the Sublease Term as
aforesaid, Sublessee shall give notice thereof to the Sublessor no earlier than
six (6) months and not later than three (3) months prior to the end of the
initial Sublease Term. If Sublessee fails to timely
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give such notice, the Sublessee shall have no right to extend the Sublease Term.
Upon the timely giving of such notice, the Sublease Term shall be deemed
extended upon all the same terms and conditions of this Sublease for one (1)
month, and Sublessee may thereafter continue on a month to month basis for a
maximum of six (6) months. If Sublessee shall exercise its options hereunder for
the full six (6) month period, then this Sublease shall terminate on August 31,
2000. In the event of any such extension, then the word "Term" as used herein
shall thereupon be deemed to include such extension period.
13. Relationship of Parties. Sublessee recognizes that Sublessor is not
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the owner of the Subleased Premises, and that the Landlord is the party with
whom Sublessee should deal regarding matters concerning the Subleased Premises
and the Building, and that the Sublessor shall have no obligation to deliver or
provide any services to the Sublessee or the Subleased Premises except to the
extent and only to the extent Landlord delivers such services to Sublessor.
Accordingly, in the event Sublessee desires any extra services (for example,
additional air-conditioning services) other than those provided to the Subleased
Premises under the Base Lease, has any complaints concerning services required
to be provided by Landlord under the Base Lease to the Subleased Premises, or
the improvements thereto, or has any other matters which would normally be
discussed with a Landlord, Sublessee agrees to contact Landlord directly to
handle such matters; it being the intention of the parties hereto that, as to
such matters, the only connection between Sublessee and Sublessor shall be (a)
the flow-through of rights and obligations of Sublessor under the Base Lease,
and (b) the payment of all amounts payable hereunder by Sublessee to Sublessor
as herein provided. Sublessee also acknowledges that all of the covenants and
obligations of Sublessor hereunder are expressly subject to the terms and
conditions of the Base Lease. In the event Sublessee acquires any additional
services from Landlord for which additional costs are incurred, Sublessee shall
be responsible for paying Landlord directly for such services.
14. Waiver of Subrogation. Anything in this Sublease to the contrary
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notwithstanding, Sublessor and Sublessee each hereby waive any and all rights of
recovery, claim, action or cause of action against the other, its officers,
directors, employees or agents for any damage to their respective property
located in the Subleased Premises or the Premises, regardless of cause or
origin, including the negligence of Sublessor, Sublessee and such parties'
respective officers, directors, employees or agents, and each covenants that no
insurer or other third party shall hold any right of subrogation against such
other party on account thereof. The provisions of this Paragraph shall survive
the expiration or termination of this sublease.
15. Holding Over. In the event Sublessee remains in possession of the
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Subleased Premises after the expiration of this Sublease, then Sublessee, at
Sublessor's option, shall be deemed to be occupying the Subleased Premises as a
tenant at will at the base rental equal to one hundred and twenty five percent
(125%) of the Basic Rent and shall otherwise remain subject to all the
conditions, provisions and obligations of this Sublease insofar as the same are
applicable to a tenancy at will, including without limitation, the payment of
all additions to Basic Rent provided and all other sums payable hereunder. No
holding over by Sublessee after the expiration or termination of this Sublease
shall be construed to extend or renew the Term or in any other manner be
construed as permission by Sublessor to hold over. Sublessee shall indemnify
and hold Sublessor harmless from and against any and all damages (actual,
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consequential or otherwise), losses, costs and expenses, including reasonable
attorneys' fees, incurred by Sublessor by reason of such holding over.
16. Care of the Subleased Premises by Sublessee. Sublessee shall maintain
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and repair the Subleased Premises in the manner required by the Base Lease and
shall not commit or allow any waste to be committed on any portion of the
Subleased Premises. At the expiration or earlier termination of this Sublease,
Sublessee shall deliver up the Subleased Premises to Sublessor in at least the
same condition as of the date of this Sublease, excepting only ordinary wear and
tear and any casualty damage and/or repairs which are the obligation of the
Landlord under the Base Lease, and also excepting any Modular Offices installed
with Sublessor's consent as set forth in Paragraph 7.
17. Incorporation of Base Lease Terms. To the extent not otherwise
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inconsistent with the agreements and understandings expressed in this Sublease
or applicable only to the original parties to the Base Lease, the terms,
provisions, covenants and conditions of the Base Lease are hereby incorporated
into this Sublease by reference as fully as if completely reproduced herein, and
a) The term "Landlord" as used therein shall refer to Sublessor
hereunder and its successors and assigns; the term "Tenant" as used therein
shall refer to Sublessee hereunder; the term "Lease Term" as used therein
shall refer to the Term hereunder; and the term "Premises" as used therein
shall refer to Subleased Premises herein;
b) In any case where Landlord reserves the right to enter the
Subleased Premises, said right shall inure to the benefit of Sublessor as
well as to Landlord;
c) Sublessee hereby expressly assumes and agrees (i) to perform all
of the terms, obligations, covenants and conditions to be performed by
Sublessor pursuant to the Base Lease which accrue during the Sublease Term
and which relate to the Subleased Premises, and (ii) not to do, suffer or
permit anything to be done which would result in a default under the Base
Lease or cause the Base Lease to be terminated or forfeited, and,
accordingly, except as otherwise provided herein, Sublessee shall be
entitled to all of the rights and benefits of Sublessor as Tenant under the
Base Lease with respect to the Subleased Premises;
d) Sublessor hereby expressly agrees not to do, suffer or permit
anything to be done which would result in a default under the Base Lease or
cause the Base Lease to be terminated or forfeited, except pursuant to a
right specifically provided to Sublessor therein;
e) To the extent that any notice or consent is required under this
Sublease, Sublessee shall provide copies of all such notices to Sublessor;
f) Sublessee agrees to promptly provide Sublessor with any notices
received from Landlord which affect the Subleased Premises; and
g) Sublessor agrees to promptly provide Sublessee with any notices
received from Landlord which affect the Subleased Premises.
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18. Security Deposit. Upon the execution of this Sublease, Sublessee
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shall deposit with Sublessor $14,912.50 (the "Security Deposit"), as security
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for the faithful performance and observance by Sublessee of the terms,
provisions, agreements, covenants and conditions of this Sublease. The Security
Deposit shall not be considered an advance payment of Basic Rent or Additional
Charges, and the Security Deposit shall not be considered a measure of
Sublessor's damages in case of the occurrence of any default under this
Sublease. Sublessee shall not be entitled to receive any interest on the
Security Deposit and Sublessor may commingle the same with other monies of
Sublessor. In the event Sublessee defaults in respect to any of the terms,
provisions, agreements, covenants and conditions of this Sublease including, but
not limited to, the payment of Basic Rent or Additional Charges, Sublessor may,
at Sublessor's option, from time to time, without prejudice to any other remedy,
use, apply or retain the whole or any part of the Security Deposit not
theretofore applied to Basic Rent or Additional Charges to the extent necessary
to make good any arrears of Basic Rent or Additional Charges or any damage,
injury, expense or liability caused by such default. If Sublessor shall ever
use the Security Deposit not theretofore applied to Basic Rent to pay the sums
described above, and if this Sublease has not terminated, Sublessee shall
immediately deposit with Sublessor additional monies equal to the amount so used
within ten (10) days after request therefor. If Sublessee shall fully and
faithfully comply with all of the terms, provisions, agreements, covenants and
conditions of this Sublease, then the Security Deposit shall be returned to
Sublessee within thirty (30) days after the termination or expiration of this
Sublease (provided such termination is not a result of a default by Sublessee).
19. Sublessee's Construction. Sublessor consents to the construction by
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Sublessee of a demising wall between the copy room/work room and the space to be
subleased by Sublessee, as shown on Exhibit B hereto. Such work shall be
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completed in a good and workmanlike manner using first class materials and to
Sublessor's reasonable satisfaction, at the sole cost and expense of Sublessee.
At Sublessor's option, Sublessee shall remove the demising wall at the
expiration or earlier termination of this Sublease and restore the affected area
to its condition at the commencement of this Sublease.
20. Notices. All notices or requests provided for hereunder shall be in
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writing and shall be either delivered by hand or sent by United States
Registered or Certified Mail, return receipt requested, postage prepaid, if to
Sublessor, to M. ▇▇▇▇ ▇▇▇▇▇▇▇, Chief Financial Officer, Novations Group, Inc.,
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇; or if for Sublessee, at the
Subleased Premises, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇. All such notices shall be
deemed received either when hand delivered or two (2) business days after being
placed in the United States Mail in the manner set forth above. The parties
hereto shall have the right from time to time to change their respective address
by at least five (5) days prior written notice to the other party.
21. Governing Law. THIS SUBLEASE SHALL BE GOVERNED BY AND CONSTRUED IN
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ACCORDANCE WITH THE LAWS OF THE STATE OF UTAH.
22. Interest on Sublessee's Obligations. All amounts owed by Sublessee to
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Sublessor under this Sublease shall bear interest from the date due until paid
at the lesser of (i) the maximum, nonusurious rate permitted by law or (ii)
eighteen percent (18%) per annum, but the payment of such interest shall not
excuse or cure the Event of Default.
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23. Severability. In the event that any one or more of the provisions
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contained in this Sublease shall be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision hereof; and this Sublease shall be
construed as if such invalid, illegal, or unenforceable provision had never been
contained herein.
24. Attorneys' Fees. If any action at law or in equity, including an
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action for declaratory relief, is brought to enforce or interpret the provision
of this Sublease, the prevailing party shall be entitled to recover reasonable
attorneys' fees from the other party.
25. Amendments. This sublease may not be altered, changed or amended,
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except by an instrument in writing executed by all parties hereto.
26. NO REPRESENTATIONS OR WARRANTIES. SUBLESSEE HEREBY EXPRESSLY
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ACKNOWLEDGES AND AGREES THAT SUBLESSOR HAS MADE NO REPRESENTATIONS OR WARRANTIES
TO SUBLESSEE AS TO THE USE OR CONDITION OF THE SUBLEASED PREMISES OR THE
BUILDING OR AS TO THE ADEQUACY OF ANY EQUIPMENT (INCLUDING THE HEATING,
VENTILATING OR AIR CONDITIONING EQUIPMENT), EITHER EXPRESS OR IMPLIED, AND
SUBLESSOR EXPRESSLY DISCLAIMS ANY IMPLIED WARRANTY THAT THE SUBLEASED PREMISES
ARE SUITABLE FOR SUBLESSEE'S INTENDED COMMERCIAL PURPOSE OR ANY OTHER IMPLIED
WARRANTY REGARDING THE SUBLEASED PREMISES. IN ADDITION, EXCEPT AS HEREIN
EXPRESSLY PROVIDED, SUBLESSEE EXPRESSLY ACKNOWLEDGES AND AGREES THAT SUBLESSEE'S
OBLIGATION TO PAY BASIC RENT OR ANY OTHER SUMS DUE HEREUNDER IS NOT DEPENDENT
UPON THE CONDITION OF THE SUBLEASED PREMISES OR THE PERFORMANCE BY SUBLESSOR OF
ITS DUTIES OR OBLIGATIONS HEREUNDER (OR BY LANDLORD OF ITS DUTIES OR OBLIGATIONS
UNDER THE BASE LEASE), AND THAT SUBLESSEE WILL CONTINUE TO PAY BASIC RENT AND
ALL OTHER SUMS PROVIDED FOR HEREIN TO BE PAID BY SUBLESSEE WITHOUT ABATEMENT,
SET-OFF, OR DEDUCTION, NOTWITHSTANDING ANY BREACH BY SUBLESSOR OF IT DUTIES OR
OBLIGATIONS HEREUNDER (OR BY LANDLORD OF ITS DUTIES OR OBLIGATIONS UNDER THE
BASE LEASE), EXPRESS OF IMPLIED, SUBLESSOR AND SUBLESSEE EXPRESSLY AGREE THAT
THERE ARE AND SHALL BE NO IMPLIED WARRANTIES OF MERCHANTABILITY, HABITABILITY,
FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER KIND ARISING OUT OF THIS SUBLEASE
AND THAT ALL EXPRESS OR IMPLIED WARRANTIES IN CONNECTION HEREWITH ARE EXPRESSLY
DISCLAIMED.
27. Quiet Enjoyment. Provided Sublessee has performed all of the terms,
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covenants, agreements and conditions of this Sublease Agreement, Sublessee shall
peaceably and quietly hold and enjoy the Subleased Premises against Sublessor
and all persons claiming by, through or under Sublessor, for the Term herein
described, subject to the provisions and conditions of this Sublease and of the
Base Lease.
28. Entire Agreement. This Sublease constitutes the entire agreement
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between Sublessee and Sublessor and supersedes all prior agreements (whether
written or otherwise)
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which may exist between the parties with regard to the lease and use of the
Subleased Premises by Sublessee.
29. Consent by Landlord. This Sublease shall be effective only upon
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Landlord's execution of the Landlord Consent set forth below.
30. Brokers. Sublessee warrants and represents that it has not dealt with
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any real estate brokers and/or salesman in connection with the negotiation or
execution of this Sublease and no such broker or salesman has been involved in
connection with this Sublease. Sublessee agrees to defend, indemnify and hold
harmless the Sublessor from and against any and all costs, expenses, attorneys'
fees or liability for any compensation, commission and charges claimed by any
real estate broker and/or salesman, due acts of Sublessee or Sublessee's
representatives.
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EXECUTED in multiple counterparts, each of which shall have the force and
effect of an original, as of this 15th day of February, 1999.
SUBLESSEE: SUBLESSOR:
imall Incorporated Novations Group, Inc.
A Nevada corporation A Delaware corporation
By:_______________________________ By:_____________________________
Name:_____________________________ Name:___________________________
Title:____________________________ Title:__________________________
LANDLORD CONSENT
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The undersigned, being the Landlord under the Base Lease (as that term is
defined in the foregoing Sublease Agreement), hereby consents: (a) to the
foregoing Sublease Agreement, (b) to the installation by Sublessee of the
Modular Offices (as that term is defined in the foregoing Sublease Agreement and
(c) to the alterations to be performed by Sublessee as set forth in Paragraph 19
of the foregoing Sublease Agreement.
Executed under seal as of this 16th day of February, 1999.
Novations Partners, L.L.C.
By:_____________________________
Name:
Title: Managing Member
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