1
EXHIBIT 10.1 - STANDARD INDUSTRIAL SUBLEASE DATED AS OF DECEMBER 11, 2000 BY AND
BETWEEN INNOVADYNE TECHNOLOGIES, INC. AND TRUETIME, INC.
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
STANDARD SUBLEASE
(Long-form to be used with pre-1996 AIR leases)
1. Parties. This Sublease, dated, for reference purposes only, December 11,
2000, is made by and between TrueTime, Inc. a Delaware Corporation ("Sublessor")
and Innovadyne Technologies, Inc. a Delaware Corporation ("Subleasee").
2. Premises. Sublessor hereby subleases to Sublessee and Sublessee hereby
subleases from Sublessor for the term, at the rental, and upon all of the
conditions set forth herein, that certain real property, including all
improvements therein, and commonly known by the street address of 0000 Xxxx
Xxxxx, Xxxxx Xxxx located in the County of Sonoma, State of California and
generally described as (describe briefly the nature of the property) the entire
+ 25,000 square foot building located on Lot #4 and a portion of Lot #5 as shown
on the map of Oak Manor II, subdivision, Santa Xxxx, as shown on the attached
plan marked Exhibit "A" ("Premises").
3. Term.
3.1 Term. The term of this Sublease shall be for Forty-eight and one
half months commencing on January 15, 2001 and ending on January 31, 2005 unless
sooner terminated pursuant to any provision hereof.
3.2 Delay In Commencement. Sublessor agrees to use its best
commercially reasonable efforts to deliver possession of the Premises by the
commencement date. If, despite said efforts, Sublessor is unable to deliver
possession as agreed, Sublessor shall not be subject to any liability therefor,
nor shall such failure affect the validity of this Sublease. Sublessee shall
not, however, be obligated to pay Rent or perform its other obligations until it
receives possession of the Premises. If possession is not delivered within (30)
days after the commencement date, Sublessee may, at its option, by notice in
writing within ten days after the end of such (30) day period, cancel this
Sublease, in which event the Parties shall be discharged from all obligations
hereunder. If such written notice is not received by Sublessor within said ten
day period, Sublessee's right to cancel shall terminate. Except as otherwise
provided, if possession is not tendered to Sublessee when required and Sublessee
does not terminate this Sublease, as aforesaid, any period of rend abatement
that Sublessee would otherwise have enjoyed shall run from the date of delivery
of possession and continue for a period equal to what Sublessee would otherwise
have enjoyed under the terms hereof, but minus any days of delay caused by the
acts or omissions of Sublessee. If possession is not delivered within (60) days
after the commencement date, this Sublease shall automatically terminate unless
the Parties agree, in writing, to the contrary.
4. Rent.
4.1 Base Rent. Sublessee shall pay to Sublessor as Base Rent for the
Premises equal monthly payments of $21,250.00 in advance, on the first day of
each month of the term hereof. Sublessee shall pay Sublessor upon the execution
hereof Twenty-one Thousand Two Hundred Fifty ($21,250.00) as Base Rent for the
first month's rent. See Addendum for annual rent adjustments. Base Rent for any
period during the term hereof which is for less than one month shall be a pro
rata portion of the monthly installment.
4.2 Rent Defined. All monetary obligations of Sublessee to Sublessor
under the terms of this Sublease (except for the Security Deposit) are deemed to
be rent ("Rent"). Rent shall be payable in lawful money of the United States to
Sublessor at the address stated herein or to such other persons or at such other
places as Sublessor may designated in writing.
5. Security Deposit. Sublessee shall deposit with Sublessor upon execution
hereof $21,250.00 as security for Sublessee's faithful performance of
Sublessee's obligations hereunder. If Sublessee fails to pay Rent or other
charges due hereunder, or otherwise defaults with respect to any provision of
this Sublease, Sublessor may use, apply or retain all or any portion of said
deposit for the payment of any Rent or other charge in default or for the
payment of any other sum to which Sublessor may become obligated by reason of
Sublessee's default, or to compensate Sublessor for any loss or damage which
Sublessor may suffer thereby. If Sublessor so uses or applies all or any portion
of said deposit, Sublessee shall within ten days after written demand therefore
forward to Sublessor an amount sufficient to restore said Deposit to the full
amount provided for herein and Sublessee's failure to do so shall be a material
breach of this Sublease. Sublessor shall not be required to keep said Deposit
separate from its general accounts. If Sublessee performs all of Sublessee's
obligations hereunder, said Deposit, or so much thereof as has not therefore
been applied by Sublessor, shall be returned, without payment of interest to
Sublessee (or at Sublessor's option, to the last assignee, if any, of
Sublessee's interest hereunder) at the expiration of the term hereof, and after
Sublessee has vacated the Premises. No trust relationship is created herein
between Sublessor and Sublessee with respect to said Security Deposit.
6. Use.
6.1 Agreed Use. The Premises shall be used and occupied only for
general office and light manufacturing as approved by the City of Santa Xxxx and
for no other purpose.
6.2 Compliance. Sublessor warrants that the improvements on the
Premises comply with all applicable covenants or
2
restrictions of record and applicable building codes, regulations and ordinances
("Applicable Requirements") in effect on the commencement date. Said warranty
does not apply to the use to which Sublessee will put the Premises or to any
alterations or utility installations made or to be made by Sublessee. NOTE:
Sublessee is responsible for determining whether or not the zoning is
appropriate for its intended use, and acknowledges that past uses of the
Premises may no longer be allowed. If the Premises do not comply with said
warranty) Sublessor shall, except as otherwise provided, promptly after receipt
of written notice from Sublessee setting forth with specificity the nature and
extent of such non-compliance, rectify the same at Sublessor's expense. If
Sublessee does not give Sublessor written notice of a non-compliance with this
warranty within six months following the commencement date, correction of that
non-compliance shall be the obligation of Sublessee at its sole cost and
expense.
6.3 Acceptance of Premises and Lessee. Sublessee acknowledges that:
(a) It has been advised by Brokers to satisfy itself with respect to
the condition of the Premises (including but not limited to the electrical, HVAC
and fire sprinkler systems, security, environmental aspects, and compliance with
Applicable Requirements), and their suitability for Sublessee's intended use.
(b) Sublessee has made such investigation as it deems necessary with
reference to such matters and assumes all responsibility therefor as the same
relate to its occupancy of the Premises, and
(c) Neither Sublessor, Sublessor's agents, nor any Broker has made any
oral or written representations or warranties with respect to said matters other
than as set forth in this Sublease. In addition, Sublessor acknowledges that:
(a) Broker has made no representations, promises or warranties
concerning Sublessee's ability to honor the Sublease or suitability to occupy
the Premises, and
(b) It is Sublessor's sole responsibility to investigate the financial
capability and/or suitability of all proposed tenants.
7. Master Lease.
7.1 Sublessor is the lessee of the Premises by virtue of a lease and
addenda and other modifications to the lease hereinafter the "Master Lease", a
copy of which is attached hereto marked Exhibit 1, wherein Xxxxxx and Xxxxxxxxx
Xxxxxxx is the lessor, hereinafter the "Master Lessor".
7.2 This Sublease is and shall be at all times subject and subordinate
to the Master Lease.
7.3 The terms, conditions and respective obligations of Sublessor and
Sublessee to each other under this Sublease shall be the terms and conditions of
the Master Lease except for those provisions of the Master Lease which are
directly contradicted by this Sublease in which event the terms of this Sublease
document shall control over the Master Lease. Therefore, for the purposes of
this Sublease, wherever in the Master Lease the word "Lessor" is used it shall
be deemed to mean the Sublessor herein and wherever in the Master Lease the word
"Lessee" is sued it shall be deemed to mean the Sublessee herein.
7.4 During the term of this Sublease and for all periods subsequent for
obligations which have arisen prior to the termination of this Sublease,
Sublessee does hereby expressly assume and agree to perform and comply with, for
the benefit of Sublessor and Master Lessor, each and every obligation of
Sublessor under the Master Lease except for the following paragraphs which are
excluded therefrom: 4, 5, 46, 48, 49, 50, 51, 52, 53, 3.1, 3.2 and 15.
7.5 The obligations that Sublessee has assumed under paragraph 7.4
hereof are hereinafter referred to as the "Sublessee's Assumed Obligations". The
obligations that sublessee has not assumed under paragraph 7.4 hereof are
hereinafter referred to as the "Sublessor's Remaining Obligations".
7.6 Sublessee shall hold Sublessor free and harmless from all
liability, judgments, costs, damages, claims or demands, including reasonable
attorneys fees, arising out of Sublessee's failure to comply with or perform
Sublessee's Assumed Obligations.
7.7 Sublessor agrees to maintain the Master Lease during the entire
term of this Sublease, subject, however, to any earlier termination of the
Master Lease without the fault of the Sublessor, and to comply with or perform
Sublessor's Remaining Obligations and to hold Sublessee free and harmless from
all liability, judgments, costs, damages, claims or demands arising out of
Sublessor's failure to comply with or perform Sublessor's Remaining Obligations.
7.8 Sublessor represents to Sublessee that the Master Lease is in full
force and effect and that no default exists on the part of any Party to the
Master Lease.
8. Assignment of Sublease and Default.
8.1 Sublessor hereby assigns and transfers to Master Lessor the
Sublessor's interest in this Sublease, subject however to the provisions of
Paragraph 8.2 hereof.
8.2 Master Lessor, by executing this document, agrees that until a
Default shall occur in the performance of Sublessor's Obligations under the
Master Lease, that Sublessor may receive, collect and enjoy the Rent accruing
under this Sublease. However, if Sublessor shall Default in the performance of
its obligations to Master Lessor then Master Lessor may, at its option, receive
and collect, directly from Sublessee, all Rent owing and to be owed under this
Sublease. Master Lessor shall not, by reason of this assignment of the Sublease
nor by reason of the collection of the Rent from the Sublessee, be deemed liable
to Sublessee for any failure of the Sublessor to perform and comply with
Sublessor's Remaining Obligations.
3
8.3 Sublessor hereby irrevocably authorizes and directs Sublessee upon
receipt of any written notice from the Master Lessor stating that a Default
exists in the performance of Sublessor's obligations under the Master Lease, to
pay to Master Lessor the Rent due and to become due under the Sublease.
Sublessor agrees that Sublessee shall have the right to rely upon any such
statement and request from Master Lessor, and that Sublessee shall pay such Rent
to Master Lessor without any obligation or right to inquire as to whether such
Default exists and notwithstanding any notice from or claim from Sublessor to
the contrary and Sublessor shall have no right or claim against Sublessee for
any such Rent so paid by Sublessee.
8.4 No changes or modifications shall be made to this Sublease without
the consent of Master Lessor.
9. Consent of Master Lessor.
9.1 In the event that the Master Lease requires that Sublessor obtain
the consent of Master Lessor to any subletting by Sublessor then, this Sublease
shall not be effective unless, within ten days of the date hereof, Master Lessor
signs this Sublease thereby giving its consent to this Subletting.
9.2 In the event that the obligations of the Sublessor under the Master
Lease have been guaranteed by third parties then neither this Sublease, nor the
Master Lessor's consent, shall be effective unless, within 10 days of the date
hereof, said guarantors sign this Sublease thereby giving their consent to this
Sublease.
9.3 In the event that Master Lessor does give such consent then:
(a) Such consent shall not release Sublessor of its
obligations or alter the primary liability of Sublessor to pay the Rent and
perform and comply with all of the obligations of Sublessor to be performed
under the Master Lease.
(b) The acceptance of Rent by Master Lessor from Sublessee or
anyone else liable under the Master Lease shall not be deemed a waiver by Master
Lessor of any provisions of the Master Lease.
(c) The consent to this Sublease shall not constitute a
consent to any subsequent subletting or assignment.
(d) In the event of any Default of Sublessor under the Master
Lease, Master Lessor may proceed directly against Sublessor, any guarantors or
anyone else liable under the Master Lease or this Sublease without first
exhausting Master Lessor's remedies against any other person or entity liable
thereon to Master Lessor.
(e) Master Lessor may consent to subsequent sublettings and
assignments of the Master Lease or this Sublease or any amendments or
modifications thereto without notifying Sublessor or anyone else liable under
the Master Lease and without obtaining their consent and such action shall not
relieve such persons from liability.
(f) In the event that Sublessor shall Default in its
obligations under the Master Lease, then Master Lessor, at its option and
without being obligated to do so, may require Sublessee to attorn to Master
Lessor in which event Master Lessor shall undertake the obligations of Sublessor
under this Sublease from the time of the exercise of said option to termination
of this Sublease but Master Lessor shall not be liable for any prepaid Rent nor
any Security Deposit paid by Sublessee, nor shall Master Lessor be liable for
any other Defaults of the Sublessor under the Sublease.
9.4 The signatures of the Master Lessor and any Guarantors of Sublessor
at the end of this document shall constitute their consent to the terms of this
Sublease.
9.5 Master Lessor acknowledges that, to the best of Master Lessor's
knowledge, no Default presently exists under the Master Lease of obligations to
be performed by Sublessor and that the Master Lease is in full force and effect.
9.6 In the event that Sublessor Defaults under its obligations to be
performed under the Master Lease by Sublessor, Master Lessor agrees to deliver
to Sublessee a copy of any such notice of default. Sublease shall have the right
to cure any Default of Sublessor described in any notice of default within ten
days after service of such notice of default of Sublessee. If such Default is
cured by Sublessee then Sublessee shall have the right of reimbursement and
offset from and against Sublessor.
10. Brokers Fee.
10.1 Upon execution hereof by all parties, Sublessor shall pay to Orion
Partners Ltd. a licensed real estate broker, ("Broker"), a fee as set forth in a
separate agreement between Sublessor and Broker, or in the event there is no
such separate agreement, the sum of $ per separate agreement for brokerage
services rendered by Broker to Sublessor in this transaction.
11. Attorney's Fees. If any party or the Broker named herein brings an action to
enforce the terms hereof or to declare rights hereunder, the prevailing party in
any such action, on trial and appeal, shall be entitled to his reasonable
attorney's fees to be paid by the losing party as fixed by the Court.
12. Additional Provisions. [If there are no additional provisions, draw a line
from this point to the next printed word after the space left here. If there are
additional provisions place the same here.] See "Addendum"
4
--------------------------------------------------------------------------------
ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN
INDUSTRIAL REAL ESTATE ASSOCIATION OR BY ANY REAL ESTATE BROKER AS TO THE LEGAL
SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS SUBLEASE ON THE
TRANSACTION TO WHICH IT RELATES THE PARTIES ARE URGED TO:
1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS SUBLEASE.
2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF THE
PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE POSSIBLE
PRESENCE OF HAZARDOUS SUBSTANCE, THE ZONING OF THE PROPERTY, THE STRUCTURAL
INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND THE SUITABILITY
OF THE PREMISES FOR SUBLESSEE'S INTENDED USE.
WARNING: IF THE SUBJECT PROPERTY IS LOCATED IN A STATE OTHER THAN CALIFORNIA,
CERTAIN PROVISIONS OF THE SUBLEASE MAY NEED TO BE REVISED TO COMPLY WITH THE
LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED.
--------------------------------------------------------------------------------
Executed at Santa Rosa, California TrueTime, Inc.
----------------------------- -------------------------------
on: Jan 2, 2001 By Xxxx X. Xxxxx
----------------------------------- -------------------------------
Address: 0000 Xxxxxxxx Xxxx. By:
------------------------------ -------------------------------
*Sublessor*(Corporate Seal)
Executed at Xxxxxx Xxxx, GA Innovadyne Technologies, Inc.
----------------------------- -----------------------------------
on: Dec 29th, 2000 By /s/ [signature illegible]
----------------------------------- -------------------------------
Address: By:
------------------------------ -------------------------------
*Sublessee*(Corporate Seal)
Executed at [illegible] [illegible]
----------------------------- -------------------------------
on: January 8, 2001 By
----------------------------------- -----------------------------
Address: By: /s/ [illegible]
------------------------------ -----------------------------
*Master Lessor*(Corporate Seal)
---------------------------------------- /s/ Xxxxxxx Xxxx, agent for
----------------------------------
---------------------------------------- Xxxxxxxxx Xxxxx [illegible]
----------------------------------
NOTE: These forms are often modified to meet changing requirements of law and
need of the Industry. Always write or call to make sure you are utilizing the
most current form: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 000 Xx. Xxxxxx
Xx., Xxxxx 000, Xxx Xxxxxxx, XX 00000 (213) 687-8777.
5
ADDENDUM TO SUBLEASE
This addendum dated this 29th day of December, 2000, is hereby made a part of
the Sublease between TrueTime, Inc., a Delaware corporation ("Sublessor") and
Innovadyne Technologies, Inc., a Delaware corporation ("Sublessee"), and the
provisions hereof shall have the same force and effect as if fully set forth
therein:
6.03(c.) Sublessor represents that the electrical, plumbing, HVAC, fire
sprinkler systems and landscaping watering systems are in good working order on
the commencement date of this sublease, and that Sublessor has maintained such
systems in good working order during its occupancy of the Premises. Sublessor
agrees to make the maintenance records with respect to such systems available to
Sublessee during normal business hours and upon 4 days advance written request.
11. Sublessor shall be entitled to reasonable attorney's fees, costs, and
expenses incurred in preparation and service of notices of default of this
sublease, and consultations in connection therewith, whether or not a legal
action is subsequently commenced in connection with such default or resulting
breach.
12. ADDITIONAL PROVISIONS:
A.) If there exists no uncured material default in Sublease by Sublessee,
Sublessee may extend this Sublease for one additional thirty-six (36) month
period by providing Sublessor with written notification, not less than ninety
(90) days prior to the expiration of the initial term, of Sublessee's intention
to so extend this Sublease. Monthly rent during such lease extension period will
be as follows:
Months 1 - 12 $23,917.00
Months 13 - 24 $24,635.00
Months 25 - 36 $25,374.00
B.) Under Article 4.1 of the Sublease, the monthly rent for the Premises will be
as follows:
Jan. 15 - Jan. 31, 2001: $10,625.00
Feb. 2001 through Jan. 2002: $21,250.00
Feb. 2002 through Jan. 2003: $21,887.50
Feb. 2003 through Jan. 2004: $22,544.00
Feb. 2004 through Jan. 2005: $23,220.50
C.) Before Sublessee takes possession of the Premises, Sublessor agrees, at its
expense, to professionally clean the existing carpets within the Premises, to
wax the vinyl floors, and to paint the interior of the Premises excluding the
demountable walls.
D.) 1. At all times during the course of the Sublease, Sublessee agrees to
maintain a net worth of $1 million (as determined under GAAP, consistently
applied), and to maintain a balance of cash and/or marketable securities in an
amount of at least $500,000. Sublessee will notify Sublessor within five
business days of the end of any calendar quarter for which it fails to comply
with either the net worth or cash balance requirement. Failure by Sublessee to
maintain such net worth and cash balances may be deemed by Sublessor to be a
material breach of the Sublease. No waiver by Sublessor of this provision 12D
shall be deemed a waiver of any subsequent failure by Sublessee to comply with
the provisions of this paragraph 12D.
2. Sublessor may, upon 48 hours advance notice, review the financial
statements of Sublessee for the quarter and year most recently ended. Such
review will occur during normal business hours at the Premises. Sublessor agrees
to keep confidential all information obtained from any such review. If, during
the term of the Sublease, Sublessee becomes a reporting company within the
meaning of applicable SEC rules and regulations, review rights hereunder will
terminate.
E.) Sublessor will use its best efforts to obtain from Lessor permission for
Sublessee to place a sign on the Premises identifying the Premises as the
location of Sublessee's business. Sublessee agrees to place such sign on the
existing concrete monument next to the driveway.
F.) NOTICE. Any notice required or permitted to be given hereunder shall be in
writing and may be given by personal delivery or by certified mail, and if given
by certified mail, shall be deemed sufficiently given if addressed to Sublessee
or Sublessor at the address noted below the signature of the respective parties,
as the case may be. Either party may by notice to the other specify a different
address for notice purposes hereunder. Unless Sublessee otherwise notifies
Sublessor of a change of address, the Premises shall be the notice address for
the Sublessee as of the Commencement Date. A copy of all notices required or
permitted to be given to Sublessor hereunder shall be concurrently transmitted
to such party or parties as Sublessor may from time to time hereafter designate
by notice to Sublessee.
6
G.) MASTER LESSOR CONTACT/RESCISSION. Immediately upon acceptance of this
Sublease, Sublessor will provide Sublessee with the name and phone number of the
Master Lessor and the Master Lessor's property management representative. For
the period of five business days following the receipt of such name and phone
information, Sublessee will have the right, in its sole discretion, to rescind
this Sublease based on adverse information, if any, it may receive from the
Master Lessor.
H.) INSURANCE. The insuring party under the Master Lease shall be Sublessee
Innovadyne Technologies, Inc. Sublessee shall carry the insurance policies
required to be carried by Sublessor pursuant to Paragraph 8 of the Master Lease.
The insurance policies shall: (a) name Master Lessor and Sublessor as additional
insureds; and (b) provide that the insurance carrier will endeavor to provide
thirty (30) days written notice to Master Lessor and Sublessor prior to
cancellation. Sublessor shall deliver evidence of such insurance to Sublessor
prior to occupancy.
SUBLESSOR'S INITIALS: SUBLESSEE'S INITIALS
/s/ XXX /s/ [ILLEGIBLE]
-------------------------- ---------------------------
-------------------------- ---------------------------
MASTER LESSOR'S INITIALS
--------------------------
/s/ [ILLEGIBLE]
--------------------------
