1
EXHIBIT 10.17
SUB-SUBLEASE
THIS SUB-SUBLEASE (this "Sub-Sublease") is entered into this 3rd of
December, 1999 (the "Effective Date"), by and between GENERAL MAGIC, INC., a
Delaware corporation ("Sub-Sublessor"), and AVCOM TECHNOLOGIES, INC., a
California corporation ("Sub-Sublessee").
RECITALS:
A. This Sub-Sublease is made under the terms of that certain lease dated
February 20, 1998, by and between Aetna Life Insurance Company, as landlord
("Master Lessor"), and Classifieds2000, Inc., as tenant ("Classifieds2000") (the
"Master Lease"). The Master Lease pertains to approximately twenty thousand
(20,000) square feet of space located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ (the "Premises"). A copy of the Master Lease is attached hereto as
Exhibit A and, subject to the terms hereof, is incorporated herein by reference.
B. Classifieds2000, as sublandlord, and Sub-Sublessor, as subtenant,
entered into that certain Sublease (the "Sublease") dated December 4, 1998
pursuant to which Sub-Sublessor has subleased the Premises. The Sublease is
attached hereto as Exhibit B and, subject to the terms hereof, is incorporated
herein by reference.
C. Sub-Sublessee desires to sublease a portion of the Premises
consisting of approximately ten thousand (10,000) square feet and shown as the
cross-hatched area on the floor plan attached hereto as Exhibit C (the
"Sub-Sublease Premises"), on the terms and conditions set forth below.
NOW, THEREFORE, for good and valuable consideration, the parties agree
as follows:
1. Sub-Sublease. Sub-Sublessor hereby subleases to Sub-Sublessee, and
Sub-Sublessee hereby subleases from Sub-Sublessor, the Sub-Sublease Premises on
the terms and conditions hereinafter set forth. Sub-Sublessee acknowledges and
agrees that the portion of the Sub-Sublease Premises shown as cross-hatched on
Exhibit C-1 which consists of the front lobby area, the bathrooms and conference
room nos. 102 and 103 (collectively, the "Shared Area") shall be subleased and
used by Sub-Sublessee on a non-exclusive basis together with the other
sub-sublessee within the Building, DataRover Mobile Systems, Inc ("DataRover").
Sub-Sublessee and DataRover shall cooperate with one another in their usage of
the Shared Area and shall work together to establish a system providing for an
equitable allocation of (i) their usage of the conference rooms which shall
generally be on a first-come first-served basis (ii) any utility charges and
janitorial expenses attributable to the Shared Area which are not paid to
Sub-Sublessor as additional rent as provided in Paragraph 3(b) below.
Sub-Sublessee agrees that in no event shall any disputes between Sub-Sublessee
and DataRover regarding the usage of or allocation of expenses attributable to
the Shared Area constitute a basis for withholding or offsetting payments due
hereunder to Sub-Sublessor or for excusing Sub-Sublessee from performing any of
its other obligations hereunder.
1
2
2. Term. The term of this Sub-Sublease (the "Term") shall commence on
the later of (a) December __, 1999, or (b) the date that the consents to this
Sub-Sublease have been obtained from the Master Lessor and Classifieds2000 (the
"Commencement Date"). Subject to Paragraphs 13 and 14 hereof, the Term shall
expire on March 31, 2003 (the "Expiration Date"). Notwithstanding the foregoing,
if for any reason Sub-Sublessor cannot deliver possession of the Sub-Sublease
Premises to Sub-Sublessee on the Commencement Date, Sub-Sublessor shall not be
subject to any liability on account of said failure to deliver, nor shall such
failure affect the validity of the Sub-Sublease or the obligations of the
Sub-Sublessee hereunder, but in such event, Sub-Sublessee shall not be obligated
to pay rent for the Sub-Sublease Premises until possession thereof is tendered
to Sub-Sublessee. Sub-Sublessee shall have no option to extend the Term.
3. Rent.
(a) Base Monthly Rent. Sub-Sublessee shall pay to Sub-Sublessor as
base monthly rent for the Sub-Sublease Premises ("Monthly Rent") the following
amounts for the indicated time periods:
Lease Months Monthly Rent
------------ ------------
1-12 $18,500.00
13-24 $19,000.00
25-36 $19,500.00
37- end of term $20,000.00
Monthly Rent shall be payable, in advance on the first day of each month,
without deduction, offset or abatement to Sub-Sublessor at the address set forth
in Paragraph 12 below or at such other address as may be designated in writing.
Monthly Rent for any partial month during the Term shall be prorated based on a
thirty (30) day month. Monthly Rent for the first month of the Term in the
amount of Eighteen Thousand Five Hundred Dollars ($18,500) shall be paid to
Sub-Sublessor upon the execution hereof.
(b) Additional Rent. Commencing on the Commencement Date and continuing
throughout the Term, in addition to the Monthly Rent described above,
Sub-Sublessee shall pay to Sub-Sublessor one-half (1/2) of all amounts payable
by Sub-Sublessor under the Sublease in connection with the operation,
maintenance and management of the Premises, including, without limitation, all
sums payable by Sub-Sublessor under Section 2.3 of the Sublease and all sums
paid by Sub-Sublessor for janitorial services. Additionally, from and after the
Commencement Date, Sub-Sublessee shall be fully responsible for all of the costs
and expenses incurred in connection with all utilities and services furnished to
the Sub-Sublease Premises whether separately metered or paid by Sub-Sublessor
and apportioned between Sub-Sublessee and DataRover.
2
3
4. Security Deposit. Concurrently with Sub-Sublessee's execution of this
Sub-Sublease, Sub-Sublessee shall deposit with Sub-Sublessor the sum of Forty
Thousand Dollars ($40,000.00), which shall be held by Sub-Sublessor as security
for the faithful performance of all the terms of this Sub-Sublease. If
Sub-Sublessee fails to pay rent or otherwise defaults with respect to any
provision of this Sub-Sublease, then Sub-Sublessor may draw upon, use, apply or
retain all or any portion of the security deposit for the payment of any rent or
other charge in default, for the payment of any other sum which Sub-Sublessor
has become obligated to pay by reason of Sub-Sublessee's default, or to
compensate Sub-Sublessor for any loss or damage which Sub-Sublessor has suffered
thereby. If Sub-Sublessor so uses or applies all or any portion of the security
deposit, then the Sub-Sublessee, within ten (10) days after demand therefor,
shall deposit cash with Sub-Sublessor in the amount required to restore the
security deposit to the full amount stated above. Upon the expiration of this
Sub-Sublease, if Sub-Sublessee is not in default, Sub-Sublessor shall return to
Sub-Sublessee so much of the security deposit as has not been applied by
Sub-Sublessor pursuant to this Paragraph 4, or which is not otherwise required
to cure Sub-Sublessee's defaults.
5. Incorporation of Lease Terms.
(a) Subordination; Sub-Sublessee Obligations. This Sub-Sublease is
subject and subordinate to all of the terms and conditions of the Master Lease
and the Sublease. Except for those provisions of the Master Lease and Sublease
excluded by Paragraph 5(b) below, Sub-Sublessee hereby expressly assumes the
obligations of Sub-Sublessor as "Tenant" under the Master Lease and as
"Subtenant" under the Sublease, to the extent such obligations arise from and
after the Commencement Date and are applicable to the Sub-Sublease Premises. If
Sub-Sublessee fails to pay any sum of money to Sub-Sublessor, or fails, within
any applicable cure period, to perform any other obligation hereunder, then
Sub-Sublessor may, but shall not be required to, make such payment or perform
such act. All such sums paid and all costs and expenses of performing any such
act shall be deemed additional rent payable by Sub-Sublessee to Sub-Sublessor
upon demand, together with interest thereon at the rate described in Section 45
of the Master Lease.
(b) Incorporation. All of the terms and conditions applicable to the
Sub-Sublease Premises contained in the Master Lease are incorporated herein as
terms of this Sub-Sublease (with each reference therein to "Landlord" and
"Tenant" to be deemed to refer to "Sub-Sublessor" and "Sub-Sublessee"
respectively) except for those provisions specifically excluded or modified
under the Sublease, all of which are excluded from this Sub-Sublease. All of the
terms and conditions applicable to the Sub-Sublease Premises contained in the
Sublease, including those terms of the Master Lease which are specifically
incorporated into the Sublease, are incorporated herein as terms of this
Sub-Sublease (with each reference therein to "Sublandlord" and "Subtenant" to be
deemed to refer to "Sub-Sublessor" and "Sub-Sublessee" respectively) except for
those provisions specifically modified by the terms of this Sub-Sublease and
except that Sections 2.1, 2.2, 2.5, 4.1, 7 and 14 of the Sublease are hereby
excluded from this Sub-Sublease.
(c) Sub-Sublessor's Obligations. Notwithstanding the foregoing, it is
understood and agreed that Sub-Sublessor shall not be obligated to perform any
of the obligations of Master Lessor under the Master Lease with respect to the
provisions of the Master
3
4
Lease incorporated into the Sublease, and that Sub-Sublessor shall not be
obligated to perform any of the obligations of Classifieds2000 under the
Sublease with respect to the provisions of the Sublease incorporated into this
Sub-Sublease.
(d) Indemnification. Sub-Sublessee hereby agrees to indemnify and
hold harmless Sub-Sublessor from and against any and all claims, liabilities,
losses, damages and expenses (including reasonable attorneys' fees) incurred by
Sub-Sublessor arising out of, from or in connection with (i) the use or
occupancy of the Sub-Sublease Premises by Sub-Sublessee, or (ii) any breach or
default by Sub-Sublessee under this Sub-Sublease.
6. Use. The Sub-Sublease Premises shall be used and occupied solely for
general office use and other legally related uses.
7. Condition of the Sub-Sublease Premises. Notwithstanding any provision
to the contrary in the Master Lease and the Sublease, by execution of this
Sub-Sublease, Sub-Sublessee accepts the Sub-Sublease Premises as being in good
and sanitary order, condition, and repair, and accepts the Sub-Sublease Premises
"as is" in their present condition without any representation or warranty by
Sub-Sublessor as to the use or occupancy which may be made thereof.
Sub-Sublessee shall have no restoration obligations pursuant to the terms of the
Master Lease with respect to any alterations made by Sub-Sublessor or
Classifieds2000 to the Sub-Sublease Premises prior to the Commencement Date;
provided, however, Sub-Sublessee shall be responsible for all restoration
obligations pursuant to the terms of the Master Lease with respect to
alterations made by Sub-Sublessee to the Sub-Sublease Premises from and after
the Commencement Date. Each party shall indemnify the other against all damages,
costs and expenses which the other party may incur by reason of a breach or
failure on the other party's part to comply with the foregoing sentence,
including reasonable attorneys' fees and court costs.
8. Insurance.
(a) Sub-Sublessee's Insurance. Sub-Sublessee agrees to carry the
insurance coverage described in Section 16 of the Master Lease during the term
of this Sub-Sublease. Sub-Sublessee shall name Sub-Sublessor, Classifieds2000
and Master Lessor as additional insureds under the required insurance policies.
Prior to its occupancy of the Sub-Sublease Premises, Sub-Sublessee shall deliver
certificates of insurance evidencing the above to Sub-Sublessor,
Classifieds2000, and Master Lessor.
(b) Waiver of Subrogation. The waivers of rights of recovery and
subrogation set forth in Paragraph 18 of the Master Lease shall be deemed a four
party agreement binding among and inuring to the benefit of Sub-Sublessor,
Sub-Sublessee, Master Lessor and Classifieds2000.
9. Assignment and Subletting. Notwithstanding any provision in the
Sublease to the contrary, and subject to Section 24 of the Master Lease:
(a) Sub-Sublessor's Consent. Sub-Sublessee shall not transfer, assign
or convey this Sub-Sublease, or any interest therein, voluntarily or
involuntarily, and shall not sublet the Sublease Premises or any part thereof,
or any right or privilege appurtenant thereto, without the prior written consent
of Sub-Sublessor, which consent shall not be unreasonably
4
5
withheld. Any attempted or purported transfer of this Sub-Sublease, or the
Sub-Sublessee's interest in this Sub-Sublease or in and to the Sub-Sublease
Premises without Sub-Sublessor's prior written consent shall be void and confer
no rights upon any third person and at Sub-Sublessor's election shall constitute
a default by Sub-Sublessee under this Sub-Sublease. Consent by Sub-Sublessor to
any such assignment or subletting shall not be deemed a consent to any
subsequent assignment or subletting.
(b) Requirements. Each assignment, sublease or other act which
requires the consent of Sub-Sublessor pursuant to Paragraph 9(a) above, and to
which Sub-Sublessor has consented shall be by an instrument in writing in form
reasonably satisfactory to Sub-Sublessor, and shall be executed by all parties
to the transaction. Each assignee shall agree in writing for the benefit of
Sub-Sublessor to assume, to be bound by and to perform the terms, conditions and
covenants of this Sub-Sublease to be performed by Sub-Sublessee. One executed
copy of such written instrument shall be delivered to Sub-Sublessor.
(c) No Release of Sub-Sublessee. Regardless of Sub-Sublessor's
consent, no subletting or assignment shall release Sub-Sublessee of
Sub-Sublessee's obligation or alter the primary liability of Sub-Sublessee to
pay the rent and to perform all other obligations to be performed by
Sub-Sublessee hereunder. The acceptance of rent by Sub-Sublessor from any other
person shall not be deemed to be a waiver by Sub-Sublessor of any provision
hereof. Consent to one assignment or subletting shall not be deemed consent to
any subsequent assignment or subletting. In the event of default by any assignee
of Sub-Sublessee or any successor of Sub-Sublessee, in the performance of any of
the terms hereof, Sub-Sublessor may proceed directly against Sub-Sublessee
without the necessity of exhausting remedies against said assignee.
(d) Attorney's Fees. In the event Sub-Sublessee shall assign or
sublet the Sub-Sublease Premises or request the consent of Sub-Sublessor to any
assignment or subletting or if Sub-Sublessee shall request the consent of
Sub-Sublessor for any act Sub-Sublessee proposes to do then Sub-Sublessee shall
pay Sub-Sublessor's reasonable attorneys' fees incurred in connection therewith.
10. Consent. Notwithstanding any provision to the contrary in the Master
Lease, whenever the consent of Master Lessor is required under the Master Lease,
Sub-Sublessee shall obtain the consent of each of Sub-Sublessor, Classifieds2000
and Master Lessor, in that order.
11. Notices. All notices given under this Sub-Sublease shall be deemed
delivered on actual receipt or refusal of delivery, and to reflect the following
addresses of the parties to which all communications, notices and demands of any
kind which either party may be required or desires to give to or serve upon the
other party shall be sent:
If to Sub-Sublessor:
General Magic, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
5
6
Attn: General Counsel
Facsimile (▇▇▇) ▇▇▇-▇▇▇▇
If to Sub-Sublessee:
AVCOM TECHNOLOGIES, INC.
▇▇▇ ▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇, CEO
Fax: ▇▇▇-▇▇▇-▇▇▇▇
12. Brokers. Sub-Sublessee has been represented by and shall pay a
brokerage commission in connection with this Sub-Sublease to Cornish & ▇▇▇▇▇
("Broker") pursuant to a separate agreement between Sub-Sublessee and Broker.
Except as provided in the foregoing sentence, each party represents to the other
that no brokerage commission or finder's fee has been incurred in connection
with this transaction, and each party shall indemnify the other against any such
commission or fee which may be alleged to have been incurred by it in connection
with this Sub-Sublease.
13. Default. In addition to all other rights and remedies of
Sub-Sublessor hereunder, should Sub-Sublessee be in default under any of the
covenants or obligations of the Master Lease, the Sublease, or this
Sub-Sublease, including payment of Monthly Rent and other payments, then
Sub-Sublessor shall have the rights of Master Lessor set forth in the Master
Lease in the event of such default.
14. Termination of Master Lease or Sublease. In the event the Master
Lease or Sublease is terminated for any reason, then, on the date of such
termination, this Sub-Sublease shall automatically terminate and be of no
further force or effect. If the termination of the Master Lease or the Sublease
(and resulting termination of the Sublease and/or this Sub-Sublease) occurs
through no fault of Sub-Sublessor, Sub-Sublessor shall have no liability to
Sub-Sublessee for the resultant termination of this Sub-Sublease.
15. Entire Agreement. This Sub-Sublease contains all of the terms,
covenants and conditions agreed to by Sub-Sublessor and Sub-Sublessee and may
not be modified orally or in any manner other than by an agreement in writing
signed by all the parties to this Sub-Sublease or their respective successors in
interest.
16. Exhibits. All exhibits attached hereto are incorporated in this
Sub-Sublease, except as expressly excluded herein.
17. Counterparts. This Sub-Sublease may be executed in any number of
counterparts, each of which shall be deemed an original, and when taken together
they shall constitute one and the same Sublease.
18. Alterations, Additions or Improvements. In addition to the
requirements of Section 13 of the Master Lease as incorporated herein,
Sub-Sublessee shall obtain the written approval of Sub-Sublessor as to the
improvement plans and the general contractor prior to making any alterations,
additions or improvements in or to the Sub-Sublease Premises. Sub-
6
7
Sublessor shall not unreasonably withhold its consent to any proposed
alterations, additions or improvements or to Sub-Sublessee's choice of general
contractor.
19. Parking. Sub-Sublessee shall have the right to use thirty-seven (37)
parking spaces in the Parking Areas as provided in the Master Lease on a
non-exclusive, non-designated basis.
20. Conditions Precedent to Effectiveness. This Sub-Sublease shall not
become effective until Master Lessor and Classifieds2000 have consented to this
Sub-Sublease. If the foregoing has not occurred within thirty (30) days of the
parties execution of this Sub-Sublease, then this Sub-Sublease shall be deemed
void and the parties shall have no further rights or obligations hereunder.
IN WITNESS WHEREOF, the parties hereto have executed this Sub-Sublease
on the date first above written.
SUB-SUBLESSOR:
General Magic, Inc., a Delaware
corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Its: CFO
----------------------------------
SUB-SUBLESSEE:
AVCOM TECHNOLOGIES, INC., a
California corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Its: CFO
----------------------------------
7
8
EXHIBIT A
Master Lease
9
EXHIBIT B
Sublease
10
EXHIBIT C
Sub-Sublease Premises
11
EXHIBIT C - SUB-SUBLEASE PREMISES
[FLOOR PLAN]
12
EXHIBIT C-1
Shared Area
13
EXHIBIT C-1 SHARED AREA
[FLOOR PLAN]