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EXHIBIT 10.62
SUBLEASE
(2828 18TH STREET, SAN FRANCISCO)
THIS SUBLEASE (this "SUBLEASE") dated as of April 1, 2000, made by and
between Xxxxxxxx-Sonoma, Inc., a California corporation ("SUBLANDLORD"), and Red
Xxxxxxx Communications, Inc., a California corporation ("SUBTENANT").
RECITALS
A. Sublandlord is the Tenant under that certain Lease, dated August 12,
1999 (the "MASTER LEASE"), pursuant to which 0000 Xxxxxx Xxxxxx Investors, LLC,
a California limited liability company ("MASTER LANDLORD"), leases to
Sublandlord the land located at 0000 00xx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx and
the building(s) thereon containing approximately 70,000 rentable square feet and
the basement parking garage as more particularly described in the Master Lease
(the "MASTER PREMISES"). A copy of the Master Lease is attached hereto as
Exhibit A and by this reference is incorporated herein.
B. Subtenant desires to sublease from Sublandlord a portion of the
Master Premises consisting of all of the ground floor and second floor,
exclusive of the common areas (the "PREMISES"), and Sublandlord desires to
sublet the Premises to Subtenant, upon all of the terms and conditions set forth
herein.
C. Any capitalized terms used herein and not otherwise defined shall
have the meanings ascribed to them in the Master Lease.
1. PREMISES
Sublandlord subleases the Premises to Subtenant, and Subtenant subleases
the Premises from Sublandlord, on the terms and conditions of this Sublease.
Sublandlord shall have no obligation whatsoever to provide any alterations,
installations, improvements or modifications except as otherwise expressly
provided herein.
2. TERM
2.1. Sublease Term. The term of this Sublease (the "SUBLEASE TERM")
shall commence on the date hereof (the "COMMENCEMENT DATE"), and shall end on
the date that is sixty-five (65) months after the Commencement Date (the
"TERMINATION DATE"), unless terminated sooner in accordance with the provisions
of this Sublease and/or the Master Lease. The Premises shall be delivered to
Subtenant upon Substantial Completion (as defined below) of the Initial
Improvements (the "DELIVERY DATE"). The Delivery Date is currently anticipated
to occur on September 1, 2000.
2.2. Delivery of Possession. If for any reason Sublandlord does not
deliver possession of the Premises to Subtenant on the Delivery Date,
Sublandlord shall not be subject to any claim, damage, expense or liability for
this failure, the Termination Date shall
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not be extended by the delay, and the validity of this Sublease shall not be
impaired. Notwithstanding the foregoing, if the Delivery Date has not occurred
by October 15, 2000, Subtenant's sole and exclusive remedy in such event shall
be the abatement of Rent from that date until the Delivery Date. If the Delivery
Date has not occurred by December 1, 2000, then Subtenant's sole additional
remedy shall be to terminate this Sublease by giving written notice to
Sublandlord within five (5) days thereafter. Upon receipt of such notice,
Sublandlord shall return to Subtenant all Rent previously received from
Subtenant.
2.3. Holding Over. Subtenant shall have no right to retain possession of
the Premises or any portion thereof beyond the expiration or earlier termination
of this Sublease. In the event that Subtenant holds possession of the Premises
after the expiration or termination of the Sublease Term, unless otherwise
agreed by Master Landlord and Sublandlord in writing, then, in addition to all
other rights and remedies available as a result of any such holding over, (a)
Subtenant shall become a tenant at sufferance upon all the applicable terms and
conditions of this Sublease, except that Base Rent shall be increased to equal
175% of the Base Rent then in effect; (b) Subtenant shall indemnify, defend,
protect and hold harmless Sublandlord from any and all liability, loss, damages,
costs or expense (including reasonable attorneys' fees) suffered or incurred by
Sublandlord resulting from Subtenant's failure timely to vacate the Premises;
and (c) such holding over by Subtenant shall constitute a default hereunder.
2.4. Early Entry. Upon at least forty-eight (48) hours notice to
Sublandlord, Subtenant may enter the Premises prior to the Delivery Date for the
purpose of installing its equipment, data, telecommunications and cabling
systems and trade fixtures, so long as Subtenant's activities do not delay or in
any way interfere with the construction of the Base Building and Initial
Improvements.
3. IMPROVEMENTS
3.1. Acceptance. Sublandlord will substantially complete the Initial
Improvements prior to delivery of possession of the Premises to Subtenant.
Subtenant covenants and agrees to accept the Premises "AS IS" and "WITH ALL
FAULTS" (subject, however, to Sublandlord's substantial completion of the
Initial Improvements) Subtenant's taking possession of the Premises shall be
conclusively deemed to constitute its agreement that the Initial Improvements
have been satisfactorily completed by Sublandlord as required pursuant to
Section 3.2 hereof, subject only to such punch list items (if any) as mutually
agreed to by Subtenant and Sublandlord in writing prior to Subtenant's taking
possession. Subtenant acknowledges that it has not relied and will not rely on
any representation or warranty of any kind from Sublandlord or its agents or
representatives as to the condition of the Premises or their compliance with
applicable laws or their suitability for any use or purpose, or as to any other
matters relating to the Premises or Subtenant's proposed operations therein or
the subject matter of this Sublease.
3.2. Initial Improvements. Subject to reimbursement by Subtenant as
provided herein, Sublandlord shall arrange for the construction and installation
of initial improvements to the Subleased Premises substantially in accordance
with the plans prepared by M.B.H. Architects, dated October 28, 1999, subject to
further refinement and changes therein as determined from time to time by
Sublandlord ("INITIAL IMPROVEMENTS"). The
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Initial Improvements shall be completed in a good and workmanlike manner. For
all purposes hereof, construction of the Initial Improvements will be deemed to
be "SUBSTANTIALLY COMPLETE" at such time as Sublandlord, in good faith, notifies
Subtenant that the construction thereof has been completed except for punch list
items and any other items which will not materially interfere with Subtenant's
use and occupancy, and except for equipment and other items to be installed by
Subtenant. Sublandlord shall assign to Subtenant all warranties and guaranties
by the general contractor with respect to such contractor's construction of the
Initial Improvements (which warranties and guaranties shall be substantially
comparable to those obtained by Sublandlord from such general contractor with
respect to the construction of the initial improvements in the respective
portions of the Premises to be occupied by Sublandlord and its other
subtenants), and Subtenant shall look solely to such general contractor for all
claims relating to or arising out of the construction of the Initial
Improvements. Sublandlord shall provide Subtenant, from time to time, with a
statement or statements specifying the amount to be paid on account of the
Initial Improvements and Subtenant shall pay such amount within fifteen (15)
days after receipt of such statement.
3.3. Workstations. Subtenant shall have thirty (30) days from execution
of this Sublease to notify Sublandlord, in writing, of its election to purchase
from Sublandlord the workstations designed for the Premises ("WORKSTATIONS") at
Sublandlord's actual cost. Upon receipt of such notice, Sublandlord shall
provide Subtenant with a statement specifying the amount payable by Subtenant
for the Workstations, together with copies of substantiating invoices, and
Subtenant shall pay such amount within fifteen (15) days after receipt of such
statement.
4. RENT
4.1. Minimum Base Rent. Prior to Substantial Completion, Subtenant shall
pay to Sublandlord as minimum monthly rent ("BASE RENT") its pro rata share of
Sublandlord's Base Rent obligations under the Master Lease, at the rate of (i)
Twenty-Eight Dollars ($28.00) per Rentable Square Foot per year with respect to
the ground floor which is approximately nineteen thousand (19,000) Rentable
Square Feet; and (ii) Twenty-Nine Dollars and Fifty Cents ($29.50) per Rentable
Square Foot per year with respect to the second floor which is approximately
nineteen thousand (19,000) Rentable Square Feet. Following Substantial
Completion, Subtenant shall pay as Base Rent, Two Hundred Twenty Thousand
Dollars ($220,000) per month. Notwithstanding anything to the contrary contained
herein to the contrary, if the date of Substantial Completion is delayed due to
Subtenant's acts or omissions, the foregoing Base Rent shall be due and payable
from and after the date Substantial Completion would have occurred but for
Subtenant's delay. Base Rent shall be paid in advance on the first day of each
month, without deduction, setoff, notice, or demand, at the address of
Sublandlord set forth in Section 18 below, or at any other place Sublandlord
designates by notice to Subtenant. If the Sublease Term begins or ends and/or
Substantial Completion occurs on a day other than the first or last day of a
month, the Rent for any partial months shall be prorated on a per diem basis.
4.2. Additional Rent. Subtenant acknowledges that pursuant to the terms
of the Master Lease, Sublandlord pays additional rent ("ADDITIONAL RENT")
including, but not limited to, Property Taxes, Insurance Costs, and water and
sewer service charge. As part of
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the rental due pursuant to this Sublease, Subtenant hereby agrees to pay to
Sublandlord, commencing with the Commencement Date, its pro rata share of all
such Additional Rent which may become due pursuant to the terms of the Master
Lease during the Sublease Term, upon receipt of an invoice therefor from
Sublandlord. Subtenant shall be entitled to receive, or required to pay, as the
case may be, its pro rata share of any credit or deficiency in Additional Rent
as determined pursuant to Section 3.2(b) of the Master Lease.
4.3. Definition of Rent. As used herein, the term "RENT" shall mean,
collectively, Base Rent, Additional Rent and any other sums required to be paid
by Subtenant hereunder. All payments of Rent required under this Sublease shall
be in lawful money of the United States or by check drawn on a commercial
banking institution chartered in the United States, in immediately available
funds made payable to Sublandlord or such other payee as Sublandlord shall
designate in writing to Subtenant.
4.4. Utilities. Subtenant shall pay its pro rata share of all utilities,
including, without limitation, gas, heat, light, power, telephone, refuse
disposal and other utilities and services supplied to the Master Premises.
Sublandlord shall provide Subtenant with a statement or statements specifying
the amount to be paid on account of such services and Subtenant shall pay such
amount within fifteen (15) days after receipt of such statement. Subtenant's
obligations hereunder shall survive termination or expiration of this Sublease.
5. LATE CHARGE AND INTEREST
5.1. Damage to Sublandlord for Late Payment. The late payment of any
Rent will cause Sublandlord to incur additional costs, including, without
limitation, administration and collection costs, and processing and accounting
expenses. The parties have agreed that Sublandlord should be reimbursed for such
additional costs incurred on account of any late payment by Subtenant,
notwithstanding that the damage Sublandlord will suffer in such event is
difficult to ascertain in advance. Accordingly, the parties have agreed that the
late charge and interest payments described herein constitute a reasonable
estimate of the damage that Sublandlord will suffer in the event of Subtenant's
failure to pay the Rent in a timely fashion. If Sublandlord has not received any
installment of Rent within five (5) days after that amount is due, Subtenant
shall pay to Sublandlord ten percent (10%) of the delinquent amount. In addition
to the payment of the foregoing late charge, all delinquent amounts of Rent
shall bear interest from the date the amount was due until paid in full at the
maximum annual interest rate allowed by law for business loans (not primarily
for personal, family or household purposes) not exempt from the usury law at
such due date or, if there is no such maximum annual interest rate, at the rate
of twelve (12%) per annum. Notwithstanding anything to the contrary in this
Section 5.1, the first time in any calendar year that Subtenant fails to pay
Base Rent or Additional Rent within five (5) days after it is due, Sublandlord
shall give Subtenant written notice of such failure, but no late charge shall be
owed. If a late charge becomes payable hereunder for any three (3) installments
of Rent within any twelve (12) month period, the Rent shall automatically become
payable quarterly in advance.
6. SECURITY DEPOSIT
Intentionally deleted.
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7. USE OF PREMISES
7.1. Permitted Use. The Premises shall be used and occupied only for the
uses expressly permitted in the Master Lease and/or those uses that are
consistent with the density specifications and number of workstations specified
in the plans upon which permits for the Initial Improvements were issued and for
no other use or purpose.
7.2. Acceptance; Prohibited Uses. Subtenant accepts the Premises subject
to all applicable laws, with which Subtenant shall comply at its sole cost as
they relate to the condition, use, or occupancy of the Premises or to
improvements, alterations or installations made to the Premises by or for
Subtenant, or to the operation of Subtenant's business. Subtenant shall not
commit, or suffer to be committed, any waste upon the Premises, or any nuisance
or other act or thing which may disturb the quiet enjoyment of any other tenant
or occupant in or around the Premises. Subtenant shall not place any loads upon
the floor, walls, or ceiling which overload or endanger the structure of the
Premises. Subtenant shall not use or permit the Premises to be used in violation
of any applicable laws, including, without limitation, any laws regarding the
use, presence, transport, handling, generation or storage of Hazardous
Substances.
7.3. Acts Affecting Master Lease, Insurance Coverage. Subtenant shall
not commit any acts on the Premises, nor use or permit the Premises to be used
in any manner that will breach or violate or constitute a default under the
Master Lease and/or increase the existing rates for or cause the cancellation of
any fire, liability, or other insurance policy insuring the Premises.
8. INCORPORATION OF MASTER LEASE TERMS
8.1. Incorporation of Terms of Master Lease. Subject to Section 14
below, the terms and conditions of the Master Lease are incorporated into and
made a part of this Sublease as if Sublandlord were the landlord and Subtenant
the tenant from and after the Commencement Date, except for the following which
shall not be included herein and shall be superceded by the terms of this
Sublease: Basic Lease Information (except reference to Project, Property Taxes
Base Year, Insurance Costs Base Year and Exhibits C and E), Article 1, Article
2, Section 3.1(a), Section 4.1, Article 8, Section 16.8, Article 21, Article 22,
Section 23.1, Section 23.7 (except first sentence), Section 23.8 (including
Exhibit A, except for informational purposes; except for Exhibits C and E),
Section 23.9, Section 23.11. Except for the obligations expressly excluded
pursuant to this Section 8.1, Subtenant agrees to assume, be bound by and
perform the terms, conditions and covenants of the Master Lease to be performed
by Sublandlord, to the extent such obligations are applicable to the Premises.
This Sublease is and shall be at all times subject and subordinate to the Master
Lease, including all rights of Master Landlord thereunder. Any inconsistencies
between the terms of this Sublease and the Master Lease which shall result from
the foregoing incorporation shall be resolved in favor of this Sublease,
provided, however, that if such construction would cause Sublandlord to be in
default under the terms of the Master Lease, then such inconsistency shall be
resolved in favor of the Master Lease.
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8.2. Termination of Master Lease. Notwithstanding anything to the
contrary herein, if the Master Lease terminates for any reason, this Sublease
shall likewise terminate coincidentally therewith without any liability of
Sublandlord to Subtenant.
8.3. Condemnation and Insurance. As between Sublandlord and Subtenant,
in the event of damage to or condemnation of the Premises, all insurance or
condemnation proceeds or awards received by Sublandlord under the Master Lease
shall be deemed the property of Sublandlord, and Sublandlord shall have no
obligation to rebuild or restore the Premises.
9. PARKING
Subtenant shall be entitled to the exclusive use of a pro rata share of
the parking spaces in the basement parking garage in a location to be determined
by Sublandlord. At its option, Subtenant may designate any number of its spaces
as "reserved" or "unreserved."
10. SUBTENANT'S PERSONAL PROPERTY
Subtenant shall be responsible, at its sole cost and expense, for
insuring its leasehold improvements, trade fixtures, equipment, furniture,
furnishings and other personal property located on or about the Premises to the
full replacement cost (collectively, "SUBTENANT'S PERSONAL PROPERTY") and for
paying all taxes charged or assessed against Subtenant's Personal Property.
Sublandlord shall have no liability for, and Subtenant shall indemnify and
defend Sublandlord from and against, any damage to Subtenant's Personal
Property, and/or for any lien, claim, loss, cost or expense that arises out of
or is related to Subtenant's Personal Property.
11. RIGHT OF FIRST OFFER
Provided that no Event of Default then exists under the terms of this
Sublease, Sublandlord hereby grants Subtenant the right of first offer (the
"RIGHT OF FIRST OFFER") to sublease, after the Commencement Date of this
Sublease, available space in the Master Premises (the "FIRST OFFER SPACE"), in
accordance with and subject to the provisions of this Section 11. During the
Sublease Term, prior to subleasing the First Offer Space, or any portion
thereof, to any other unrelated third party, or if Sublandlord has received bona
fide written evidence of interest as to such space which Sublandlord intends to
negotiate in good faith, Sublandlord shall give Subtenant written notice of the
basic terms upon which Sublandlord is willing to sublease such particular First
Offer Space to Subtenant or to a third party. Within five (5) business days
after receipt of such notice, Subtenant must give Sublandlord written notice
pursuant to which Subtenant shall elect to (i) sublease all, but not less than
all, of the First Offer Space specified in Sublandlord's notice upon such terms
as set forth in Sublandlord's notice; or (ii) refuse to sublease such First
Offer Space. In the event that Subtenant does not respond in writing to
Sublandlord's notice within said period strictly in accordance with the
foregoing provisions, Subtenant shall be deemed to have elected clause (ii)
above. If Subtenant fails to duly exercise its right to sublease the subject
First Offer Space, Subtenant's right to sublease the First Offer Space shall be
null and void and Sublandlord shall be free to sublease the subject First Offer
Space or any portion thereof at any time thereafter on any terms and conditions
it deems desirable. If Subtenant duly
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exercises its right to sublease the subject First Offer Space, Subtenant and
Sublandlord shall promptly enter into a sublease in the form of this Sublease,
modified to the extent necessary to reflect the terms contained in Sublandlord's
notice. The Right of First Offer shall be personal to the originally named
Subtenant under this Sublease.
12. TRANSFERS
Subtenant may not assign this Sublease or sublet any portion of the
Premises or permit the use or occupancy of the Premises by any one other than
the entity named in the introductory paragraph of this Sublease without the
prior written consent of Sublandlord and Master Landlord. Sublandlord agrees not
to unreasonably withhold its consent to a proposed assignment of this Sublease
or a sub-subletting, provided that each of the limitations upon assignment and
subletting contained in the Master Lease shall apply to any proposed subletting
or assignment by Subtenant. If Subtenant receives rent or other consideration
for any transfer in excess of the Rent due hereunder, or in case of the sublease
of a portion of the Premises, in excess of the Rent that is proportionately
allocable to that portion based on the area of such portion and the Premises,
Subtenant will pay Sublandlord fifty percent (50%) of the difference between
each payment of rent or other consideration and the required Rent due hereunder.
Subtenant shall be permitted to deduct therefrom the commercially reasonable
costs to Subtenant for leasing commissions and additional improvements, which
amounts shall be amortized over the term of the sublease or assignment. In
addition, Subtenant shall pay, upon demand, Sublandlord's reasonable costs and
expenses, including attorneys' fees, incurred in connection with consideration
of any proposed assignment or subletting, and review and preparation of any
documents in connection therewith, which in no event shall exceed $2,500 per
request for review. Notwithstanding anything to the contrary in this Section 12,
Subtenant may, without obtaining Sublandlord's prior consent, assign or sublet
this Sublease to an entity controlled by or under common control with Subtenant
or resulting from a merger with Subtenant, or to any subsidiary or affiliate of
Subtenant, but Subtenant shall give Sublandlord prior written notice of any such
assignment or sublease.
13. INSURANCE
Subtenant shall maintain the insurance coverage required by Article 14
of the Master Lease (provided that the minimum coverage of Subtenant's liability
insurance shall be at least $2,000,000 per occurrence) and shall provide to
Sublandlord, prior to the commencement of the Sublease Term hereof, a
certificate in form reasonably satisfactory to Sublandlord evidencing that
Subtenant has obtained the required insurance. Such insurance shall name
Sublandlord and Master Landlord as additional insureds.
14. MASTER LANDLORD OBLIGATIONS
Subtenant recognizes that Sublandlord is not in a position to render any
of the services or to perform any of the obligations required of Master Landlord
under the Master Lease. Accordingly, despite anything to the contrary set forth
herein, Subtenant agrees that performance by Sublandlord of its obligations
hereunder is conditioned upon performance by Master Landlord of its
corresponding obligations under the Master Lease, and that Sublandlord will not
be liable to Subtenant for any such failure or default of Master
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Landlord under the Master Lease. Notwithstanding anything to the contrary
contained in this Sublease, Sublandlord shall not be required to (A) provide any
of the services or construction to the Premises that Master Landlord has agreed
to provide pursuant to the Master Lease (or as required by law), (B) provide any
utilities to the Premises that Master Landlord has agreed to furnish pursuant to
the Master Lease (or as required by law), (C) provide any of the insurance or
make any of the repairs that Master Landlord has agreed to make pursuant to the
Master Lease (or as required by law), or (D) take any other action relating to
the operation, maintenance, repair, alteration or servicing of the Premises that
Master Landlord has agreed to provide, furnish, make, comply with, or take, or
cause to be provided, furnished, made, complied with or taken under the Master
Lease; and Sublandlord shall not be deemed to have made to Subtenant, and shall
have no liability or obligations respecting, any representations or warranties
of Master Landlord under the Master Lease.
15. ALTERATIONS AND REPAIRS
Subtenant shall not make any alteration, improvement or installation in
or to the Premises without in each instance obtaining the prior written consent
of Master Landlord and Sublandlord and complying with the applicable terms and
provisions of the Master Lease. Subtenant shall be fully responsible for the
cost of maintenance, repair, replacement and surrender of the Premises as
required by the provisions of the Master Lease.
16. ATTORNEYS' FEES
If either party commences an action against the other arising out of or
in connection with this Sublease (including any proceeding for declaratory
relief), the prevailing party shall be entitled to recover from the losing party
reasonable attorneys' fees, costs of suit, investigation costs and discovery
costs, including costs of appeal.
17. BROKERAGE
Sublandlord and Subtenant each warrant that they have not dealt with any
real estate broker, agent, finder or other person who may claim a brokerage fee
or other compensation in connection with this sublease transaction, other than
C.B. Xxxxxxx Xxxxx ("SUBLANDLORD'S BROKER"). Sublandlord shall pay all brokerage
fees owed to Sublandlord's Broker and hereby indemnifies and agrees to defend
and hold Subtenant harmless from any claims to a commission made by
Sublandlord's Broker in connection with this transaction. Sublandlord and
Subtenant each agree to indemnify, defend, and hold the other harmless against
any claim, liability, expense (including attorneys' fees) or damages incurred as
a result of the breach of the warranty contained in this Section.
18. NOTICES
All notices and demands that may be required or permitted by either
party to the other shall be in writing and shall be delivered personally to the
address set forth below for the addressee, or in lieu of personal delivery may
be given by air courier or other commercial delivery service which guarantees
overnight delivery, or by U.S. certified mail, return receipt requested. Any
notices or demands shall be effective (a) upon receipt if personally delivered,
(b) the next business day if deposited by overnight mail, or (c) three (3)
business day after mailing if deposited by U.S. mail.
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To Sublandlord: Xxxxxxxx-Sonoma, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: J. Xxxxxxx Xxxxx
With a Copy to: Irell & Xxxxxxx LLP
1800 Avenue of the Stars
0xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxxx
To Subtenant: Red Xxxxxxx Communications, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
With a Copy to: Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000-0000
Attention: Xxxxxx Xxx
Either party may by written notice to the other specify a different or
additional address for notice purposes.
19. DEFAULT BY SUBTENANT
19.1. The occurrence of any one or more of the following events ("EVENT
OF DEFAULT") shall constitute a breach of this Sublease by Subtenant:
(a) Subtenant fails to pay any Base Rent or Additional Rent under
Section 4.2 hereof as and when such rent becomes due and payable and such
failure continues for more than three (3) days after Sublandlord gives written
notice thereof to Subtenant (which notice shall not be deemed to be in lieu of
or to satisfy the provision of California Code of Civil Procedure Section 1161
or any successor statute); provided, however, that after the second such failure
in a calendar year, only the passage of time, but no further notice, shall be
required to establish an Event of Default in the same calendar year, or
(b) Subtenant fails to pay any Additional Rent or other amount of
money or charge payable by Subtenant hereunder as and when such Additional Rent
or amount or charge becomes due and payable and such failure continues for more
than five (5) days after Sublandlord gives written notice thereof to Subtenant
(which notice shall not be deemed to be in lieu of or to satisfy the provision
of California Code of Civil Procedure Section 1161 or any successor statute);
provided, however, that after the second such failure in a calendar year, only
the passage of time, but no further notice, shall be required to establish an
Event of Default in the same calendar year; or
(c) Subtenant fails to perform or breaches any other agreement or
covenant of this Sublease to be performed or observed by Subtenant as and when
performance or observance is due and such failure or breach continues for more
than fifteen
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(15) days after Sublandlord gives written notice thereof to Subtenant; provided,
however, that if, by the nature of such agreement or covenant, such failure or
breach cannot reasonably be cured within such period of fifteen (15) days, an
Event of Default shall not exist as long as Subtenant commences with due
diligence and dispatch the curing of such failure or breach within such period
of fifteen (15) days and, having so commenced, thereafter prosecutes with
diligence and dispatch and completes the curing of such failure or breach; or
(d) Subtenant (i) files, or consents by answer or otherwise to
the filing against it of, a petition for relief or reorganization or arrangement
or any other petition in bankruptcy or for liquidation or to take advantage of
any bankruptcy, insolvency or other debtors' relief law of any jurisdiction,
(ii) makes an assignment for the benefit of its creditors, (iii) consents to the
appointment of a custodian, receiver, trustee or other officer with similar
powers of Subtenant or of any substantial part of Subtenant's property, or (iv)
takes action for the purpose of any of the foregoing; or
(e) Without consent by Subtenant, a court or government authority
enters an order, and such order is not vacated within thirty (30) days, (i)
appointing a custodian, receiver, trustee or other officer with similar powers
with respect to Subtenant or with respect to any substantial part of Subtenant's
property, or (ii) constituting an order for relief or approving a petition for
relief or reorganization or arrangement or any other petition in bankruptcy or
for liquidation or to take advantage of any bankruptcy, insolvency or other
debtors' relief law of any jurisdiction, or (iii) ordering the dissolution,
winding up or liquidation of Subtenant; or
(f) This Sublease or any estate of Subtenant hereunder is levied
upon under any attachment or execution and such attachment or execution is not
vacated within thirty (30) days; or
(g) Subtenant assigns this Sublease or subleases the Premises or
takes any other action in violation of Section 12 of this Sublease, if not cured
by Subtenant after ten (10) days written notice; or
(h) Subtenant abandons the Premises, which means for the purpose
of this Sublease that Subtenant is absent from the premises for more than
forty-five (45) consecutive days while in default of any provision of this
Sublease.
19.2. If an Event of Default occurs, Sublandlord shall have the right at
any time to give a written termination notice to Subtenant and, on the date
specified in such notice, Subtenant's right to possession shall terminate and
this Sublease shall terminate. Upon such termination of this Sublease,
Sublandlord may also recover from Subtenant the following damages:
(i) the worth at the time of award of any unpaid Rent
which has been earned at the time of such termination; plus
(ii) the worth at the time of award of the amount by which
the unpaid Rent which would have been earned after termination until the time of
award
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exceeds the amount of such rental loss that Subtenant proves could have been
reasonably avoided; plus
(iii) the worth at the time of award of the amount by
which the unpaid Rent for the balance of the term after the time of award
exceeds the amount of such rental loss that Subtenant proves could have been
reasonably avoided; plus
(iv) any other amount necessary to compensate Sublandlord
for all the detriment proximately caused by Subtenant's failure to perform its
obligations under this Sublease, or which in the ordinary course of things would
be likely to result therefrom.
As used in clauses (i) and (ii) above, the "worth at the time of award"
shall be computed by allowing interest at the Applicable Interest Rate. As used
in clause (iii) above, the "worth at the time of award" shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus one percent (1%).
19.3. If an Event of Default occurs, this Sublease shall continue in
effect for so long as Sublandlord does not terminate Subtenant's right to
possession, and Sublandlord shall have the right to enforce all its rights and
remedies under this Sublease, including the right to recover all rent as it
becomes due under this Sublease. Pursuant to the foregoing, Sublandlord has the
remedy described in California Civil Code Section 1951.4 (Sublandlord may
continue this Sublease in effect after Subtenant's breach and abandonment and
recover rent as it becomes due, if Subtenant has the right to sublet or assign,
subject only to reasonable limitations). Acts of maintenance or preservation or
efforts to relet the Premises or the appointment of a receiver upon initiative
of Sublandlord to protect Sublandlord's interest under this Sublease shall not
constitute a termination of Subtenant's right to possession unless written
notice of termination is given by Sublandlord to Subtenant.
19.4. The remedies provided for in this Sublease are in addition to all
other remedies available to Sublandlord at law or in equity by statute or
otherwise. Exercise by Sublandlord of any remedy shall not be deemed to be an
acceptance of surrender of the Premises by Subtenant, either by agreement or by
operation of law. Surrender of the Premises can be effected only by the written
agreement of Sublandlord and Subtenant.
19.5. All agreements and covenants to be performed or observed by
Subtenant under this Sublease shall be at Subtenant's sole cost and expense and
without any abatement of rent. If Subtenant fails to pay any sum of money to be
paid by Subtenant or to perform any other act to be performed by Subtenant under
this Sublease, Sublandlord shall have the right, but shall not be obligated, and
without waiving or releasing Subtenant from any obligations of Subtenant, to
make any such payment or to perform any such other act on behalf of Subtenant in
accordance with this Sublease. All sums so paid by Sublandlord and all necessary
incidental costs shall be deemed additional rent hereunder and shall be payable
by Subtenant to Sublandlord on demand, together with interest on all such sums
from the date of expenditure by Sublandlord to the date of repayment by
Subtenant at the maximum annual interest rate allowed by law for business loans
(not primarily for personal, family or household purposes) not exempt from the
usury law at the date of expenditure or, if there is no such maximum annual
interest rate, at the rate of twelve percent (12%) per annum.
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19.6. If Subtenant abandons the Premises, or is dispossessed by process
of law or otherwise, any movable furniture, equipment, trade fixtures or
personal property belonging to Subtenant and left in the Premises shall be
deemed to be abandoned, at the option of Sublandlord, and Sublandlord shall have
the right to sell or otherwise dispose of such personal property in any
commercially reasonable manner.
20. DEFAULT BY SUBLANDLORD
A "SUBLANDLORD DEFAULT" shall be deemed to have occurred if Sublandlord
fails to observe or perform in all material respects any of its obligations
hereunder, which failure continues for thirty (30) days after written notice
thereof from Subtenant to Sublandlord; provided, however, that if the nature of
Sublandlord's obligation is such that more than thirty (30) days are required
for its performance, then Sublandlord will not be in default if Sublandlord
commences performance within such thirty (30) days period and thereafter
diligently prosecutes the same to completion. In the event of a Sublandlord
Default, Subtenant may recover from Sublandlord any damages or expenses suffered
or incurred by Subtenant as a result of such Sublandlord Default; provided,
however, that in no event shall Sublandlord be liable for any consequential or
punitive damages (including, but not limited to, damage related to conduct of
the Subtenant's business and any loss of revenue therefrom).
21. MISCELLANEOUS
21.1. No Recording. Without the consent of Sublandlord, to be given in
Sublandlord's sole and absolute discretion, Subtenant shall not record a
memorandum of sublease or any other document regarding this Sublease.
21.2. Entire Agreement; Joint and Several. This Sublease sets forth all
the agreements between Sublandlord and Subtenant concerning the Premises, and
there are no representations, warranties or agreements either oral or written
other than as set forth in this Sublease. This Sublease may be modified, amended
or supplemented only in writing and only if signed by each of the parties
hereto. If more than one entity executes this Sublease on behalf of Subtenant,
then all such entities shall be jointly and severally liable for the performance
of all of the provisions of this Sublease to be performed by Subtenant.
21.3. Severability: Survival. A determination by a court of competent
jurisdiction that any provision of this Sublease or any part thereof is illegal
or unenforceable shall not cancel or invalidate the remainder of such provision
or of this Sublease, which shall remain in full force and effect.
21.4. Counterparts. This Sublease may be executed in counterparts and,
when all counterparts are executed, the same shall constitute a single binding
instrument. This Sublease shall not be binding upon either party until executed
and delivered by both parties.
21.5. Submission of Agreement. Submission of this Sublease for
Subtenant's examination shall in no way be construed as a valid sublease
arrangement, nor as giving Subtenant any occupancy or option rights to the
Premises hereunder.
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21.6. Authority. Subtenant and Sublandlord hereby represent and warrant
to each other that it has the proper authority and is empowered to execute and
perform each of its obligations under this Sublease, and that upon the mutual
execution and delivery of this Sublease, Subtenant and Sublandlord shall be
bound by this Sublease in accordance with the terms hereof.
21.7. Consent of Master Landlord. This Sublease is conditioned upon the
receipt of the consent of the Master Landlord, as required by the Master Lease.
21.8. Confidentiality. Each party covenants and agrees for the benefit
of the other party to endeavor in good faith and use their commercially
reasonable efforts not to disclose the terms or conditions of this transaction,
including, without limitation, any documents or information relating to the
parties, negotiations between the parties, the terms and conditions of this
Sublease, the Premises and the Master Premises to any person other than a
Permitted Person (as hereinafter defined). For purposes of this Agreement, the
term "PERMITTED PERSON" shall mean: the officers, directors, members,
shareholders and partners of the party; persons retained by a party to conduct
studies or investigations; auditors, accountants, lenders and attorneys who have
responsibility for participating in the transaction and governmental agencies or
auditors to whom disclosure is required. This Section 21.8, however, shall not
apply to: (i) any information that, at the time of disclosure, is available
publicly and not as a result of a disclosure in breach of this Sublease by a
party or any of its officers, directors, employees or agents; (ii) any
disclosure made by Sublandlord that it believes in good faith is required by law
or by obligation pursuant to any rules of or listing agreement with any national
securities exchange or the NYSE or (iii) any disclosure in litigation relating
to this Sublease or any proceeding in connection therewith. With respect to any
disclosures otherwise permitted under this Section, prior to any such
disclosures or communications, the party making such disclosure or communication
shall (1) inform each and every such receiving party that such information is
confidential and is subject to a prohibition on further dissemination or
circulation by any means, and (2) shall obtain such receiving party's agreement
to maintain the confidentiality of this Sublease in accordance with the terms
herein. This Section shall survive the termination of this Sublease.
21.9. No Waiver. No waiver by either party of any breach by the other of
any covenant or condition herein contained will be effective unless such waiver
is in writing, signed by the waiving party and delivered to the other party. The
waiver by either party of any such breach or breaches, or the failure by either
party to exercise any right or remedy in respect of any such breach or breaches,
will not constitute a waiver or relinquishment for the future of any such
covenant or condition or of any subsequent breach of any such covenant or
condition nor bar any right or remedy in respect of any such subsequent breach.
21.10. Sublandlord's Representations and Warranties. As an inducement to
Subtenant to enter into this Sublease, Sublandlord represents and warrants that,
to Sublandlord's actual knowledge, (a) the Master Lease is in full force and
effect, and there exists under the Master Lease no default or event of default
by either Master Landlord or Sublandlord and (b) the Master Lease attached
hereto as Exhibit A is a true, correct and complete copy of the Master Lease.
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IN WITNESS WHEREOF, the parties have executed this Sublease as of the
date first above written.
SUBLANDLORD: Xxxxxxxx-Sonoma, Inc.,
a California corporation
By: /s/ J. XXXXXXX XXXXX
-------------------------------
Name: J. Xxxxxxx Xxxxx
-----------------------------
Its: V.P.
------------------------------
SUBTENANT: Red Xxxxxxx Communications, Inc.,
a California corporation
By: /s/ XXXXXXX X. XXXXXXXX
-------------------------------
Name: Xxxxxxx X. Xxxxxxxx
-----------------------------
Its: CFO
------------------------------
CONSENT OF MASTER LANDLORD
The undersigned, the Master Landlord under the Master Lease, as defined
in the foregoing Sublease, hereby consents to the foregoing Sublease. Master
Landlord further agrees that, notwithstanding anything to the contrary in the
Master Lease:
(i) Master Landlord shall deliver to Subtenant at the address set forth
in the Sublease notices of any defaults under the Master Lease at the same time
such notices are sent to Sublandlord as set forth in the Master Lease;
(ii) Master Landlord agrees that the waiver of subrogation in Section
11.5 of the Master Lease and the assignment and subletting provisions in Article
13 of the Master Lease shall apply as between Master Landlord and Subtenant; and
(iii) In the event that the Master Lease terminates prior to the
expiration of the term thereof, the Sublease will not terminate but will instead
continue in full force and effect as a direct lease between Master Landlord and
Subtenant upon all of the terms, covenants and conditions of the Sublease.
0000 Xxxxxx Xxxxxx Investors, LLC
a California limited liability company
By:
-----------------------------------
Its:
----------------------------------
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EXHIBIT A
Master Lease
(see attached)
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