EXHIBIT 10.8
AGREEMENT OF SUBLEASE
BETWEEN
RYSHER ENTERTAINMENT, INC.,
A DELAWARE CORPORATION,
AS SUBLANDLORD,
AND
INTERPACKET GROUP, INC.,
A DELAWARE CORPORATION,
AS SUBTENANT
Dated: February 1, 2000
TABLE OF CONTENTS
PAGE
----
1. Subleasing of the Subleased Premises...................................................................1
2. Sublease Term..........................................................................................1
3. Rent...................................................................................................2
4. Parking................................................................................................4
5. Subordination to and Incorporation of Terms of Master Lease............................................4
6. Use of the Subleased Premises..........................................................................8
7. Subtenant's Insurance..................................................................................8
8. Condition of the Subleased Premises; Alterations.......................................................8
9. Assignment and Subletting.............................................................................10
10. Quiet Enjoyment.......................................................................................10
11. Time Limits...........................................................................................10
12. Brokers and Finders...................................................................................10
13. Rent Abatement........................................................................................11
14. Indemnification.......................................................................................11
15. Right of Entry........................................................................................11
16. Notices...............................................................................................12
17. Authority.............................................................................................13
18. Cancellation of Master Lease..........................................................................13
19. Letter of Credit and Temporary Security Deposit.......................................................14
20. Definition of Sublandlord.............................................................................15
21. No Leasehold Mortgages................................................................................16
22. Signage...............................................................................................16
23. Representations by Sublandlord........................................................................16
24. Consent of Landlord...................................................................................16
25. Landlord Estoppel Certificate.........................................................................16
26. Roof Related Rights...................................................................................17
27. Entire Agreement......................................................................................17
EXHIBITS
EXHIBIT A - SUBLEASED PREMISES
EXHIBIT B - FORM OF MEMORANDUM OF SUBLEASE COMMENCEMENT DATE
EXHIBIT C - EXCLUDED PROVISIONS OF MASTER LEASE
EXHIBIT D - FORM OF LETTER OF CREDIT
INDEX
PAGE(S)
-------
Additional Rent.................................................................................................3
AS IS...........................................................................................................8
Base Year.......................................................................................................3
Basic Rent......................................................................................................2
Building........................................................................................................1
Dedicated HVAC.................................................................................................17
Landlord........................................................................................................1
L-C Amount.....................................................................................................14
L-C Security Deposit...........................................................................................14
Lobby...........................................................................................................9
Master Lease....................................................................................................1
Passenger Elevator..............................................................................................7
Premises........................................................................................................1
Removal Costs...................................................................................................9
Sublandlord.....................................................................................................1
Sublease........................................................................................................1
Sublease Commencement Date......................................................................................1
Sublease Expiration Date........................................................................................1
Sublease Term...................................................................................................1
Subleased Premises..............................................................................................1
Subtenant.......................................................................................................1
Subtenant's Share...............................................................................................3
SUBLEASE
THIS SUBLEASE (the "Sublease") is entered into as of February 1, 2000,
by and between RYSHER ENTERTAINMENT, INC., a Delaware corporation (the
"Sublandlord"), and INTERPACKET GROUP, INC., a Delaware corporation (the
"Subtenant").
R E C I T A L S :
-----------------
A. Maguire Thomas Partners-Colorado Place, a California general
partnership, as landlord ("Landlord"), and Sublandlord, as tenant, entered into
that certain Office Lease (the "Master Lease"), dated May 31, 1996, whereby
Landlord leased to Sublandlord and Sublandlord leased from Landlord certain
space (the "Premises") in the building located at 2401 Colorado Avenue, Santa
Monica, California (the "Building").
B. Sublandlord now desires to sublease to Subtenant and Subtenant
desires to sublease from Sublandlord approximately 28,500 rentable square feet
of space located on the second (2nd) floor of the Building, as more particularly
set forth in Exhibit A, attached hereto (the "Subleased Premises") upon the
terms and conditions set forth in this Sublease.
C. All initially capitalized terms not specifically defined in this
Sublease shall have the meaning ascribed to such terms in the Master Lease.
A G R E E M E N T :
-------------------
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows.
1. SUBLEASING OF THE SUBLEASED PREMISES.
Sublandlord hereby subleases to the Subtenant and Subtenant hereby
leases and hires from Sublandlord the Subleased Premises upon and subject to the
terms and conditions hereinafter set forth. Sublandlord and Subtenant agree that
the rentable area of the Subleased Premises for purposes of this Sublease and
any and all calculations hereunder or in connection herewith shall be deemed to
be 28,500 rentable square feet.
The parties hereby acknowledge and agree that the rentable square footage of the
Subleased Premises, as set forth in this Section 1.1, shall not be subject to
remeasurement or modification.
2. SUBLEASE TERM. Unless sooner terminated as provided for herein, this
Sublease is for the term (the "Sublease Term") commencing upon the date that
Sublandlord delivers the Subleased Premises to Subtenant pursuant to Section 8.1
below (the "Sublease Commencement Date"), which Sublease Commencement Date is
anticipated to be between February 15, 2000 and
March 1, 2000. The term of this Sublease shall expire on October 25, 2006
("Sublease Expiration Date"). Following the Sublease Commencement Date,
Sublandlord may, at its option, deliver to Subtenant a Memorandum of Sublease
Commencement Date in the form attached hereto as Exhibit B which shall confirm
the Sublease Commencement Date and Subtenant shall execute and deliver such
memorandum to Sublandlord within five (5) business days following receipt
thereof. Notwithstanding anything to the contrary set forth in this Sublease or
in the Master Lease, Sublandlord shall not be subject to any liability in the
event Sublandlord fails to tender possession of the Subleased Premises to
Subtenant hereunder, nor shall Sublandlord be liable for any damage or injury
resulting from delay incident to failure to tender possession of the Subleased
Premises to Subtenant in a timely manner, but in such case Subtenant shall not
be obligated to pay rent until possession of the Subleased Premises is tendered
to Subtenant. Notwithstanding anything to the contrary set forth in this
Sublease, if the Sublease Commencement Date does not occur by April 1, 2000 (the
"Outside Date"), Subtenant, as its sole remedy, may terminate this Sublease by
giving Sublandlord written notice of termination on or before April 6, 2000, and
in such event, this Sublease shall be deemed null and void and of no further
force and effect and Sublandlord shall promptly refund any sums previously
advanced by Subtenant under this Sublease and the parties hereto shall have no
further responsibilities or obligations to each other with respect to this
Sublease.
3. RENT.
3.1 BASIC RENT. Commencing on the Sublease Commencement Date, Subtenant
shall pay to Sublandlord annual basic rental (the "Basic Rent") in the amounts
set forth below, in monthly installments, in advance, on the first (1st) day of
each calendar month during the Sublease Term, without demand, offset, abatement
or deduction of any kind, except as expressly provided otherwise in this
Sublease.
MONTHLY BASIC RENT PER
RENTABLE
SUBLEASE MONTH ANNUAL BASIC RENT MONTHLY BASIC RENT SQUARE FOOT
-------------- ----------------- ------------------ -----------
1-12 $820,800.00 $68,400.00 $2.40
13-24 $974,700.00 $81,225.00 $2.85
25-36 $1,005,480.00 $83,790.00 $2.94
37-48 $1,036,260.00 $86,355.00 $3.03
49-60 $1,067,040.00 $88,920.00 $3.12
61-72 $1,097,820.00 $91,485.00 $3.21
73-Sublease $1,132,020.00 $94,335.00 $3.31
Expiration Date
For purposes of the foregoing Basic Rent schedule, the first
(1st) "Sublease Month" shall mean the period commencing on the Sublease
Commencement Date and ending on the day immediately preceding the first (1st)
monthly anniversary of the Sublease
-2-
Commencement Date, and thereafter each succeeding Sublease Month shall
commence on the next monthly anniversary of the Sublease Commencement Date,
provided that the last Sublease Month shall end on the Sublease Expiration
Date. The Basic Rent payable for the first (1st) full month of the Sublease
Term shall be payable by Subtenant to Sublandlord concurrently with
Subtenant's execution and delivery of this Sublease to Sublandlord.
3.2 ADDITIONAL RENT. In addition to the Basic Rent, Subtenant covenants
and agrees to pay to Sublandlord as additional rent (the "Additional Rent"), in
addition to and in the same manner as the Basic Rent, the following:
(i) beginning on the Sublease Commencement Date and monthly
thereafter throughout the Sublease Term, Operating Expenses and Real Property
Taxes in accordance with the terms of Article 5 of the Master Lease, provided
that for purposes of such calculation (a) the rentable square footage of the
Subleased Premises shall be used, (b) Subtenant shall only be obligated to pay
for increases in Operating Expenses and Real Property Taxes over the Operating
Expenses and Real Property Taxes applicable to the calendar year 2000 (the "Base
Year"), (c) "Subtenant's Share," as that term is defined hereinbelow, of actual,
annual calculations of Operating Expenses and Real Property Taxes made by
Landlord (including those with respect to the Base Year), as evidenced by the
statements delivered by Landlord pursuant to Section 5.3 of the Master Lease,
setting forth the amounts payable by Sublandlord to Landlord under the Master
Lease, copies of which statements shall be delivered by Sublandlord to
Subtenant, and (d) Subtenant's Share of Operating Expense and Real Property Tax
estimates made by Landlord pursuant to Section 5.3 of the Master Lease, provided
that Subtenant shall only be obligated to pay Subtenant's Share of the such
estimates to the extent they exceed the Operating Expenses and Real Property
Taxes applicable to the Base Year;
(ii) within five (5) business days after delivery to Subtenant of a
notice of Additional Rent due, which notice shall include a copy of the
applicable bill or escalation statement or other evidence, if any, that
Additional Rent is due, the amount of any and all other costs, charges or
expenses (other than Basic Rent payable by Sublandlord under the Master Lease)
attributable to the Subleased Premises payable by Sublandlord to Landlord
pursuant to the provisions of the Master Lease;
(iii) commencing on the Sublease Commencement Date and monthly
thereafter throughout the Sublease Term, the rent for the parking passes
provided to Subtenant as provided in Section 4 hereof; and
(iv) from time to time as may be applicable, the amount of any
other costs, charges or expenses billed to Sublandlord by Landlord for
reimbursement to Landlord pursuant to the Master Lease for special construction
services or other special services to the extent such items have been
specifically requested by Subtenant in a written notice to Landlord, such
amounts being due from Subtenant to Sublandlord at least five (5) business days
before such amounts are due to Landlord pursuant to the Master Lease, but in no
event more than ten (10) business days after Sublandlord delivers to Subtenant
the applicable statement or bill from Landlord.
-3-
(v) "Subtenant's Share" for purposes of this Sublease shall mean a
fraction, the numerator of which is the rentable square footage of the Subleased
Premises and the denominator of which is 61,279, being the rentable square
footage of the Premises for purposes of this Sublease.
3.3 PRORATION. Rent for any partial month or year during which the
Sublease Commencement Date occurs or the termination or expiration of this
Sublease occurs shall be prorated based on the actual number of days elapsed in
such month or year.
3.4 PLACE FOR PAYMENT OF RENT. All Basic Rent and Additional Rent
payments shall be made in lawful money of the United States of America and shall
be paid to the Sublandlord at the address set forth in Section 16 of this
Sublease, or to such other party or address as Sublandlord may designate in
writing to Subtenant.
4. PARKING. Subtenant shall have the rights and obligations to rent parking
passes as set forth in Section 26 of the Master Lease, provided that (i) the
number of unreserved and reserved parking passes which Subtenant is required, or
may elect, to rent, as applicable, shall be based upon the rentable square
footage of the Subleased Premises, not the Rentable Area in the Premises, (ii)
the phrase at the end of Section 26.1 of the Master Lease, on page 30 thereof,
which reads: "... provided, however, Tenant shall not be obligated to rent any
parking passes during the first six (6) months following the Commencement Date"
shall not apply to this Sublease, (iii) the last sentence of Section 26.2 of the
Master Lease, on page 31 thereof, shall not apply to this Sublease, and (iv)
with respect to Section 26.4 of the Master Lease, Subtenant shall be entitled to
rent abatement for Subtenant's parking rent as set forth in the last sentence of
said Section 26.4 to the extent that Sublandlord actually receives parking rent
abatement for the parking passes and spaces rented by Subtenant, but such
parking rent abatement shall be for the months of the Term under the Master
Lease as set forth therein and shall be without regard to whether Subtenant has
rented such passes and spaces continuously for the prior six (6) months.
Notwithstanding any contrary provision in this Sublease, Subtenant shall rent a
minimum of forty-three (43) parking passes and be entitled to rent up to one
hundred (100) parking passes. Up to ten percent (10%) of all such parking passes
may be for reserved parking spaces and the balance of such parking passes shall
be for unreserved parking spaces. The rates currently being paid by Sublandlord
pursuant to the Master Lease for parking passes in the Building are: One Hundred
Twenty Five and 90/100 Dollars ($125.90) per unreserved parking pass per month,
and One Hundred Fifty Eight and 30/100 Dollars ($158.30) per reserved parking
pass per month. Sublandlord agrees to use commercially reasonable efforts, but
without cost to Sublandlord, to attempt to cause Landlord to rent additional
parking passes to Subtenant, if requested by Subtenant and subject to their
availability.
5. SUBORDINATION TO AND INCORPORATION OF TERMS OF MASTER LEASE.
5.1 SUBORDINATION. This Sublease is in all respects subject and
subordinate to the terms and conditions of the Master Lease and to the matters
to which the Master Lease is subordinate; the Sublease shall also be subject to
and Subtenant accepts the Sublease also subject to any amendments, modifications
or supplements to the Master Lease hereafter made, provided that Sublandlord
shall not enter into any amendment, modification or supplement of the Master
Lease that would (i) prevent or adversely affect the use by the Subtenant of the
Subleased
-4-
Premises in accordance with the terms hereof, (ii) increase the obligations of
the Subtenant or decrease its rights hereunder, or (iii) shorten the term hereof
or increase the rent required to be paid by the Subtenant hereunder, unless
expressly approved in writing by Subtenant. Except as otherwise expressly
provided in this Sublease, the Subtenant assumes and shall keep, observe and
perform every term, provision, covenant and condition on Sublandlord's part to
be kept, observed and performed pursuant to the Master Lease, insofar as such
pertain to the Subleased Premises, for the Sublease Term. The Subtenant hereby
agrees that it will conduct itself and its operations, and cause its agents,
contractors, servants, employees, partners, invitees and any subtenants and
licensees to conduct themselves and their operations, so as not to cause
Landlord or Sublandlord to be in default under the Master Lease.
5.2 INCORPORATION OF TERMS OF MASTER LEASE. Subtenant hereby
acknowledges that it has read and is familiar with the provisions of the Master
Lease and agrees that this Sublease is subordinate to and subject to the Master
Lease. Except as otherwise expressly provided in this Sublease, the terms,
provisions, covenants, stipulations, conditions, rights, obligations, remedies
and agreements contained in the Master Lease are incorporated herein by
reference and are made a part hereof, and shall, as between the Sublandlord and
the Subtenant (as if the Sublandlord were the landlord under the Master Lease
and the Subtenant were the tenant under the Master Lease) constitute the terms
of this Sublease except to the extent that they are inapplicable to,
inconsistent with, or modified by the terms of this Sublease. All waivers of
claims against or exculpations of Landlord contained in the Master Lease shall
run in favor of both Landlord and Sublandlord. Notwithstanding the foregoing, as
between the Sublandlord and the Subtenant, the provisions of the Master Lease
set forth on Exhibit C attached hereto and made a part hereof shall not apply
and shall be of no force or effect with respect to this Sublease.
5.3 ESTATE GRANTED; PROVISION OF SERVICES.
5.3.1 ESTATE GRANTED. Subtenant's estate shall in all respects be
limited to, and be construed in a manner consistent with, the estate granted to
Sublandlord by Landlord.
5.3.2 PROVISION OF SERVICES. The Subtenant agrees that,
notwithstanding anything to the contrary in this Sublease or in the Master
Lease, (i) the Sublandlord shall not be required to keep, observe or perform any
of the Landlord's obligations under the Master Lease, including, without
limitation, to provide any of the services or make any of the repairs or
restorations that the Landlord has agreed to provide or make or cause to be
provided or made under the Master Lease, and Sublandlord's sole obligation with
respect thereto shall be to use reasonable efforts to cause the Landlord to
provide such services and make such repairs or restorations as are required to
be provided or made under the Master Lease, and (ii) any and all requests for
any special or additional services furnished at the expense of Sublandlord under
the Master Lease shall be made only with Sublandlord's prior written consent,
which shall not be unreasonably withheld or delayed, and Sublandlord shall
reasonably cooperate with Subtenant in such requests. Notwithstanding any
contrary provision contained in this Sublease, Sublandlord shall not be liable
under any circumstances for consequential damages (including, but not limited
to, damage or injury to, or interference with, the conduct of Subtenant's
business [and any loss of revenue or profits therefrom]). Subtenant shall pay
all costs and expenses incurred by Sublandlord in connection with (a) any such
requests and (b) the provision by Landlord of any such special or additional
services. The Subtenant shall not make any claim against Sublandlord
-5-
for any damage which may arise and Subtenant's obligations hereunder shall not
be impaired by reason of (I) the failure of Landlord to keep, observe or perform
its obligations pursuant to the Master Lease, or (II) the acts or omissions of
Landlord, its agents, contractors, servants, employees, invitees or licensees.
Notwithstanding any contrary provision of this Sublease, in the event that
Landlord fails to perform its obligations under the Master Lease, Sublandlord
agrees that upon receipt of written notice from Subtenant it shall use
commercially reasonable efforts to attempt to cause Landlord to comply with the
terms of the Master Lease, provided that Sublandlord shall in no event be
required to initiate any litigation against Landlord in connection therewith. In
the event that Landlord continues its failure to perform pursuant to the Master
Lease and Subtenant notifies Sublandlord in writing that Subtenant desires to
initiate litigation against Landlord with respect thereto, then Sublandlord
shall promptly assign to Subtenant any of its rights under the Master Lease to
enforce the applicable terms of the Master Lease against Landlord. Thereafter
Subtenant may initiate and maintain a lawsuit against Landlord to enforce the
applicable terms of the Master Lease, at Subtenant's sole cost and expense,
provided that Subtenant shall indemnify, defend, protect, and hold harmless
Sublandlord from and against any and all loss, cost, claim, damage, expense and
liability (including, without limitation, reasonable attorneys' fees, costs, and
disbursements) incurred in connection with or arising from any such direct
action by Subtenant. Notwithstanding any contrary provision in this Sublease,
but subject to the approval of the Landlord, Subtenant shall have the right at
any time to take any action required to be taken, but not timely taken, by
Sublandlord under the Master Lease that may be necessary to prevent a default by
Sublandlord under the terms of the Master Lease.
5.4 SUBLANDLORD COVENANTS. Sublandlord covenants to perform its
obligations under the Master Lease (subject to the obligations of Subtenant as
set forth in this Sublease). Furthermore, Sublandlord covenants not to take any
action or do or perform any act or fail to perform any act which would result in
the failure or breach of any of the covenants, agreements, terms, provisions or
conditions of the Master Lease on the part of the tenant thereunder (subject to
the obligations of Subtenant as set forth in this Sublease). Sublandlord shall
indemnify, defend, protect, and hold Subtenant harmless from and against, any
and all losses, costs, claims, damages, expenses and liabilities (including,
without limitation, reasonable attorneys' fees, costs and disbursements),
arising from any default by Sublandlord in the performance of any of
Sublandlord's obligations under this Sublease or the Master Lease (subject to
the obligations of Subtenant as set forth in this Sublease). Sublandlord
represents and agrees that: (i) subject to Section 5.5 below, Sublandlord has
delivered to Subtenant a current copy of the Master Lease and there are no other
agreements between Sublandlord and Landlord relating to the Subleased Premises
which will adversely affect or diminish the rights of Subtenant or impose any
greater obligations on Subtenant than as expressly stated therein; (ii) as of
the date of this Sublease, the Master Lease is in full force and effect, and
Sublandlord is not now, and as of the Sublease Commencement Date will not be, in
default thereunder; (iii) the provisions of the Master Lease shall not be
waived, modified, amended or surrendered by Sublandlord in any manner so as to
prevent or adversely affect the use by Subtenant of the Subleased Premises in
accordance with the terms of this Sublease, nor as to impose any greater
obligations on Subtenant than as imposed hereunder, without the prior written
consent of Subtenant in each instance; and (iv) Sublandlord has no actual
knowledge of any claim by Landlord that Sublandlord is in default or breach of
any of the provisions of the Master Lease as of the date of this Sublease.
-6-
5.5 RIGHT TO USE PASSENGER ELEVATORS.
5.5.1 Notwithstanding anything to the contrary in this Sublease or
in the Master Lease, Subtenant shall be entitled to use the passenger elevator
bank (the "Passenger Elevator") servicing the second (2nd) floor of the Building
for the sending and receipt of mail, small packages by Federal Express, UPS or
other courier, or deliveries that require the use of two-wheeled handcarts. A
delivery must not consume more than fifty percent (50%) of the elevator,
including delivery person(s). Each delivery must be expedited in and out of the
Passenger Elevator so as not to interrupt normal passenger elevator operation.
5.5.2 Sublandlord shall be responsible for the purchase of (i) one
(1) set of elevator pads and elevator pad hooks in all three (3) Passenger
Elevators, which shall be approved and installed by Landlord's contractor and
(ii) 1/4 inch masonite sufficient to cover the floor of the Passenger Elevator.
Storage, installation, removal and maintenance of the pads and masonite are the
responsibility and cost of the Subtenant. Elevator pads must be utilized
whenever damage to the elevator could be caused based on the nature of items
being moved.
5.5.3 Deliveries, which are not deliveries and removals described
in Sections 5.5.4 and 5.5.5, or deliveries using four-wheeled carts or that
delay normal Passenger Elevator use are prohibited from utilizing the ground
floor elevator lobby of the Building. Such deliveries, which may not consume
more than fifty percent (50%) of the Passenger Elevator including delivery
person(s), and shall not exceed more than six (6) in any business day, must
occur through the use of the 2425 Colorado Avenue loading dock and freight
elevator, and may occur at any time during normal business hours. Materials must
be transported via the 2425 Colorado Avenue freight elevator through the P-3
level of the parking garage and directly up to the Subleased Premises via the
Passenger Elevator.
5.5.4 Deliveries and removals for the purposes of Subtenant's
refurbishing and/or alterations of the Subleased Premises (construction) shall
be made through the use of the 2425 Colorado Avenue loading dock and freight
elevator. Materials must be transported via the 2425 Colorado Avenue freight
elevator through the P-3 level of the parking garage and directly up to the
Subleased Premises via the Passenger Elevator. Such deliveries/removals shall
occur on the weekend between 9:00 a.m. Saturday and 6:00 a.m. Monday morning and
between 7:00 p.m. and 6:00 a.m., Monday through Friday, and shall be
pre-scheduled with the Building Management Office at least two days prior to
need. A Security Officer must be present to run the elevator during these
periods at a cost of $25.00 per hour (minimum of 4 hours). Cost of said security
officer is the responsibility of Subtenant. Only one (1) Passenger Elevator may
be utilized and must be padded before use. Subtenant must protect the floor of
the Passenger Elevator, and any other areas that could be damaged during the
refurbishment of the space, with 1/4 inch masonite. Subtenant shall cause the
Passenger Elevator and any other affected areas to be cleaned in a first-class
manner after each use at Subtenant's cost.
5.5.5 Deliveries and removals for the purpose of Subtenant's move
into or out of the Subleased Premises and deliveries and removals not covered by
Sections 5.5.1 or 5.5.3, shall be made through the use of the 2425 Colorado
Avenue loading dock and freight elevator. Materials must be transported via the
2425 Colorado Avenue freight elevator through
-7-
the P-3 level of the parking garage and directly up to the Subleased Premises
via the Passenger Elevator. Such deliveries or removals shall occur on the
weekend between 9:00 a.m. Saturday and 6:00 a.m. Monday morning and between 7:00
p.m. and 6:00 a.m., Monday through Friday and must be pre-scheduled with the
Building Management Office at least two days prior to need. A Security Officer
must be present to run the elevator during these periods at a cost of $25.00 per
hour (minimum of 4 hours). Cost of said Security Officer is the responsibility
of Subtenant. Only one (1) Passenger Elevator may be utilized and must be padded
before use. Subtenant must protect the floor of the Passenger Elevator, and any
other areas that could be damaged during Subtenant's move into or out of the
Subleased Premises or during any delivery or removal of furniture or equipment
items, with 1/4 inch masonite. Subtenant shall cause the Passenger Elevator and
any other affected areas to be cleaned in a first-class manner after each use at
Subtenant's cost. Notwithstanding anything to the contrary in this paragraph,
any deliveries or removals covered by this Section, which can be completed
within a period of time not to exceed thirty (30) minutes shall be prescheduled
by 4:00 p.m. the same day, and Subtenant shall not be charged for any security
services.
5.5.6 Subtenant shall not cause elevator lobbies, doorways or corridors
to be blocked from normal occupant usage during deliveries, refurbishing of the
Subleased Premises, or moves into or out of the Subleased Premises.
5.5.7 Any damage to the elevators and surrounding area caused by
Subtenant's use will be repaired by the Building Management Office and charged
back to Sublandlord, who shall not pass on the charge(s) to Subtenant unless
such damage is caused by the gross negligence or willful misconduct of
Subtenant.
5.5.8 If Subtenant violates the provisions set forth in Sections 5.5.1
and 5.5.3, Landlord shall provide Subtenant with written notice and fifteen (15)
days thereafter in which to cure said violation. If Subtenant fails to cure such
violation within the specified cure period, Landlord shall have the right to
cause all deliveries described in Section 5.5.3 to be made after hours.
6. USE OF THE SUBLEASED PREMISES. The Subtenant covenants not to use the
Subleased Premises for any purpose other than any lawful business use permitted
by the terms of the Master Lease and in a manner consistent in all respects with
the provisions of the Master Lease.
7. SUBTENANT'S INSURANCE. Notwithstanding anything in the Master Lease or
this Sublease to the contrary, Subtenant shall cause Subtenant's insurance, as
required to be carried pursuant to the terms of the Master Lease, to name
Landlord and Sublandlord as additional insureds.
8. CONDITION OF THE SUBLEASED PREMISES; ALTERATIONS.
8.1 CONDITION OF SUBLEASED PREMISES. Prior to the Sublease Commencement
Date, Sublandlord shall remove all debris from the Subleased Premises and shall
deliver the Subleased Premises to Subtenant in a broom clean condition. Subject
to the foregoing, Subtenant has examined the Subleased Premises, is familiar
with the physical condition thereof and agrees (except as may be specifically
set forth in this Sublease) to take the same "AS IS" in
-8-
the condition in which it exists as of the date of execution hereof. Subtenant
hereby acknowledges that Sublandlord has made no representations or warranties
with respect to the condition of the Subleased Premises, including, without
limitation the suitability of the Subleased Premises for Subtenant's intended
use, and that Sublandlord shall not, nor or at any time in the future, be
required to make any expenditures whatsoever with respect to the Subleased
Premises, except as otherwise specifically provided herein. Sublandlord and
Subtenant agree that the presently existing receptionist desk in the elevator
vestibule lobby within the Premises (the "Lobby") shall remain in place, and
Subtenant shall have the right to have a receptionist work at such desk. In no
event will Subtenant be permitted to place any other desk or table in the Lobby
for use by Subtenant's receptionist. The Lobby shall be kept in its present size
and configuration, and shall be used by Edmunds.com, Inc., a New York
corporation (or any other third party who may occupy the portion of the Premises
which excludes the Subleased Premises) and its employees and invitees to access
the portion of the Premises which excludes the Subleased Premises (the
"Non-Subleased Premises").
8.2 ALTERATIONS. Subtenant shall have the right to make Alterations to
the Subleased Premises, (i) without Sublandlord's consent but upon prior written
notice to Sublandlord, and (ii) subject to Landlord's approval and any other
requirements of the Master Lease. With respect to any amounts required to be
paid to Landlord pursuant to the Master Lease in connection with any proposed
Alterations to the Subleased Premises by Subtenant, including, without
limitation, amounts required to be paid under Section 8.2 thereof, such amounts
shall be payable by Subtenant not later than five (5) business days following
Sublandlord's delivery of written request therefor to Subtenant, which request
shall include copies of the invoices from Landlord to Sublandlord. Sublandlord
shall not be entitled to reimbursement from Subtenant for any costs, fees or
expenses incurred by Sublandlord in connection with its own independent review
of any Alterations proposed by Subtenant.
8.3 OWNERSHIP AND REMOVAL OF ALTERATIONS. In connection with the
provisions of and the rights of Landlord under the Master Lease, during the term
of this Sublease, Subtenant shall retain ownership of the Alterations made by
Subtenant to the Subleased Premises from and after the date of execution hereof.
Subtenant shall only be required to remove Alterations made by Subtenant to the
Subleased Premises upon the expiration or termination of this Sublease to the
extent required by Landlord in accordance with the terms of the Master Lease,
and in such event Subtenant shall remove such Alterations prior to the
expiration or earlier termination of the Sublease Term, at Subtenant's sole
cost, and restore the applicable portion of the Subleased Premises to its
condition which existed as of the Sublease Commencement Date, reasonable wear
and tear excepted, in accordance with the terms of the Master Lease. In the
event that Subtenant fails to complete such work prior to the expiration or
earlier termination of the Sublease Term, then Sublandlord shall have the right
to perform such work, at Subtenant's cost, and Subtenant shall pay Sublandlord
the amount incurred by Sublandlord therefor (the "REMOVAL COSTS") within five
(5) days of Subtenant's receipt of an invoice. If Subtenant fails to timely pay
Sublandlord the Removal Costs, then Sublandlord shall have the right to draw
upon the "L-C," as that term is defined in Section 19.1 below, in addition to
Sublandlord's other rights and remedies under this Sublease.
-9-
9. ASSIGNMENT AND SUBLETTING.
9.1 CONSENT REQUIRED. Subtenant shall not, directly or indirectly, by
operation of law or otherwise, sell, assign, encumber, pledge, or otherwise
transfer or hypothecate all or any part of the Subleased Premises or Subtenant's
leasehold estate hereunder, or sublet or otherwise permit the occupancy of the
Subleased Premises or any portion thereof (any of the foregoing being referred
to herein as a "Transfer"), without the prior written consent of Sublandlord and
Landlord (in accordance with the provisions of Article 14 of the Master Lease,
it being expressly agreed as between Sublandlord and Subtenant that the
provisions of Section 14.1(b) of the Master Lease shall be applicable as between
Sublandlord and Subtenant under this Sublease) in each instance; any such
Transfer shall be subject to all of the rights of the Landlord under said
Article 14 and, except as otherwise specifically provided for or modified
herein, such rights shall apply equally to Sublandlord. Subtenant agrees that
any consent to any Transfer of this Sublease or the Subleased Premises shall not
be deemed to be a consent to any other Transfer and shall not thereby release or
discharge Subtenant of its obligations or liabilities hereunder. Any assignment
or subletting for which Sublandlord's consent is required hereunder made without
such consent shall be void. Sublandlord agrees to use commercially reasonable
efforts to attempt to cause Landlord to consent to a proposed Transfer of this
Sublease, provided that (i) Subtenant pays any costs incurred by Sublandlord
with respect thereto, and (ii) Sublandlord shall in no event be required to
initiate any litigation against Landlord in connection therewith.
9.2 PROFITS. With respect to Section 14.5(a) of the Master Lease
(incorporated into this Sublease by reference), Subtenant shall pay to
Sublandlord, within five (5) days after receipt of Profits by Subtenant, as
Additional Rent, fifty percent (50%) of any Profits received by Subtenant in
connection with a sub-sublease or assignment of this Sublease (other than to an
Affiliate or Successor of InterPacket Group, Inc., a Delaware corporation,
unless Sublandlord is required to pay Profits to Landlord under the Master Lease
in connection with the Transfer to such Affiliate or Successor).
10. QUIET ENJOYMENT. With respect to Article 25 of the Master Lease
(incorporated into this Sublease by reference), Subtenant's right to quiet
enjoyment of the Subleased Premises shall in any event be subject to Landlord's
rights under the Master Lease.
11. TIME LIMITS. As between Sublandlord and Subtenant, and except as
provided elsewhere in this Sublease, the time limits set forth in the Master
Lease for the giving of notices, making demands, performance of any act,
condition or covenant, or the exercise of any right, remedy or option, shall be
extended or shortened for the purpose of this Sublease in each instance by five
(5) business days, as appropriate (or as otherwise reasonably appropriate if
such time limit is less than five (5) business days), so that notices may be
given, demands made, or any act, condition or covenant performed, or any right,
remedy or option hereunder exercised, by Sublandlord or Subtenant, as the case
may be, within the time limits relating thereto contained in the Master Lease.
12. BROKERS AND FINDERS. In connection with the transaction contemplated by
this Sublease, each party hereby represents and warrants that it has not had,
and shall not have, any dealings with any third party to whom the payment of any
broker's fee, finder's fee, commission
-10-
or other similar compensation shall or may become due or payable, other than
CRESA Partners LLC and Coldwell Banker Commercial (the "Brokers"). Sublandlord
and the Subtenant shall each indemnify, defend and hold the other harmless from
and against any and all loss, cost, damage, liability, claim or expense
(including, without limitation, reasonable attorneys' fees, charges and
disbursements), by reason of a breach of the foregoing provisions or by reason
of any claim of or liability to any broker, finder or like agent who shall claim
to have dealt with Sublandlord or Subtenant, respectively, in connection with
this transaction and this Sublease, except with respect to the Brokers as
provided above. The provisions of this Section shall survive the termination of
this Sublease.
13. RENT ABATEMENT. With respect to Article 6 of the Master Lease
(incorporated by reference into this Sublease), Subtenant shall be entitled to
rent abatement or a rent reduction under this Sublease with respect to the
Subleased Premises, subject to the provisions of said Article 6 of the Master
lease, but only for the time period that Sublandlord receives rent abatement
from Landlord for the Subleased Premises or a portion thereof. The sentence in
Article 6 of the Master Lease which relates to Paragraph 4.3(a) of the Master
Lease, and the penultimate sentence of said Article 6, shall not apply to this
Sublease.
14. INDEMNIFICATION. Neither Sublandlord nor its agents shall be liable to
Subtenant, its employees, agents, contractors and licensees for, and Subtenant
shall indemnify, defend, protect, and hold Sublandlord harmless from and
against, any and all losses, costs, claims, damages, expenses and liabilities
(including, without limitation, reasonable attorneys' fees, costs and
disbursements), incurred in connection with or arising from (i) any injury to
Subtenant or to any other person or for any damage to or loss (by theft or
otherwise) of any of Subtenant's property and/or the property of any other
person, irrespective of the cause of such injury, damage or loss, (ii) any
default by Subtenant in the observance or performance of any of the terms,
covenants, conditions or agreements of this Sublease on Subtenant's part to be
observed or performed, (iii) the use or occupancy or manner of use or occupancy
of the Subleased Premises by Subtenant or any person claiming through or under
Subtenant, (iv) the condition of the Subleased Premises, or (v) any acts,
omissions or negligence of Subtenant, its agents, employees, or licensees, in or
about the Subleased Premises, and any acts, omissions or negligence of
Subtenant's visitors within the Premises, either prior to, during, or after the
expiration of the Sublease Term. Sublandlord shall, however, be responsible for
any of the foregoing to the extent caused by or due to the negligence or willful
misconduct of Sublandlord or its agents.
In connection with any matter covered by an indemnity set forth in this
Section 14 or incorporated into this Sublease by reference to the Master Lease,
the indemnified party shall promptly give the indemnifying party written notice
of any such matter which may be covered by such indemnity provisions, and the
indemnifying party shall have the opportunity to defend any claims relating
thereto with counsel reasonably satisfactory to the indemnified party.
15. RIGHT OF ENTRY. Sublandlord and its agents and representatives shall
have the right, at all reasonable times, upon reasonable prior notice to
Subtenant, but in such manner as to cause as little disturbance to Subtenant as
reasonably practicable, to enter the Subleased Premises for purposes of
inspection, to post notices of non-responsibility, and to protect the interest
of Sublandlord in the Subleased Premises. No such entry shall be construed under
any circumstances as a forcible or unlawful entry into, or a detainer of, the
Subleased Premises, or an
-11-
eviction of Subtenant, and Subtenant hereby waives any claim against Sublandlord
or its agents or representatives for damages for any injury or inconvenience to
or interference with, Subtenant's business or quiet enjoyment of the Subleased
Premises, except to the extent covered by Sublandlord's indemnity of Subtenant
pursuant to Section 16.3 of the Master Lease (as incorporated by reference into
this Sublease).
16. NOTICES. All notices, requests, demands and other communications which
are required or may be given pursuant to the terms of this Sublease shall be
given in accordance with Section 33.6 of the Master Lease at the following
addresses:
If to the Sublandlord:
Rysher Entertainment, Inc.
2401 Colorado Avenue
Second Floor
Santa Monica, California 90404
Attention: Mr. Tim Helfet
With a copy to:
Allen, Matkins, Leck, Gamble & Mallory LLP
1999 Avenue of the Stars
Suite 1800
Los Angeles, California 90067
Attention: Anton N. Natsis, Esq.
If to Subtenant:
InterPacket Group, Inc.
1901 Main Street
Santa Monica, California 90405
Attention: Mr. Allen Sciarillo, Chief Financial Officer
(Prior to Sublease Commencement Date)
or
InterPacket Group, Inc.
2401 Colorado Avenue
Second Floor
Santa Monica, California 90404
Attention: Mr. Allen Sciarillo, Chief Financial Officer
(After Sublease Commencement Date)
-12-
with a copy to:
Gorry & Meyer L.L.P.
2029 Century Park East, Suite 400
Los Angeles, California 90067
Attention: David C. Meyer, Esq.
Promptly upon receipt by Sublandlord, Sublandlord shall
provide Subtenant with copies of all written notices, requests, demands or other
communications relating to the Subleased Premises or the Subtenant given by
Landlord to Sublandlord pursuant to the terms of the Master Lease.
17. AUTHORITY. Subtenant represents that (1) Subtenant is a corporation duly
organized and validly existing under the laws of the State of Delaware, (2)
Subtenant has full power and authority to enter into this Sublease, and (3) each
person signing on behalf of Subtenant is authorized to do so.
18. CANCELLATION OF MASTER LEASE. In the event of the cancellation or
termination of the Master Lease for any reason whatsoever or of the involuntary
surrender of the Master Lease by operation of law prior to the expiration date
of this Sublease, Subtenant agrees to make full and complete attornment to the
Landlord under the Master Lease for the balance of the term of this Sublease and
upon the then executory terms hereof at the option of the Landlord at any time
during Subtenant's occupancy of the Subleased Premises, which attornment shall
be evidenced by an agreement in form and substance reasonably satisfactory to
Landlord, provided that in no event shall Landlord (i) be liable for any
previous act or omission of Sublandlord under this Sublease, (ii) be subject to
any defense or offset previously accrued in favor of Subtenant against
Sublandlord, or (iii) be bound by any pervious modification of the Sublease made
without Landlord's written consent, or by any previous prepayment by the
Subtenant of more than one month's rent. Subtenant agrees to execute and deliver
such an agreement at any time within ten (10) business days after request of the
Landlord, and Subtenant waives the provisions of any law now or hereafter in
effect which may give Subtenant any right or election to terminate this Sublease
or to surrender possession of the Subleased Premises in the event any proceeding
is brought by the Landlord under the Master Lease to terminate the Master Lease.
-13-
19. LETTER OF CREDIT AND TEMPORARY SECURITY DEPOSIT.
19.1 DELIVERY AND FORM OF LETTER OF CREDIT. Subtenant shall deliver to
Sublandlord, within ten (10) days following Subtenant's execution and delivery
of this Sublease to Sublandlord, an unconditional, clean, irrevocable letter of
credit (the "L-C") in the initial amount (the "L-C Amount") of Four Hundred
Eighty-Seven Thousand Three Hundred Fifty and No/100 Dollars ($487,350.00),
which L-C shall be issued by a money-center bank (a bank which accepts deposits,
maintains accounts, has a local Los Angeles office which will negotiate a letter
of credit, and whose deposits are insured by the FDIC) reasonably acceptable to
Sublandlord, and which L-C shall be in form and content as set forth in Exhibit
D attached hereto. Subtenant shall pay all expenses, points and/or fees incurred
by Subtenant in obtaining the L-C.
19.2 APPLICATION OF THE L-C. The L-C shall be held by Sublandlord as
security for the faithful performance by Subtenant of all the terms,
covenants, and conditions of this Sublease to be kept and performed by
Subtenant during the Sublease Term. The L-C shall not be mortgaged, assigned
or encumbered in any manner whatsoever by Subtenant without the prior written
consent of Sublandlord. If Subtenant defaults with respect to any provisions
of this Sublease, including, but not limited to, the provisions relating to
the payment of Rent, and fails to cure such default within the applicable
cure period set forth in this Sublease, or if Subtenant fails to renew the
L-C at least thirty (30) days before its expiration, then Sublandlord may,
but shall not be required to, draw upon all or any portion of the L-C for
payment of any Rent or any other sum in default, or for the payment of any
amount that Sublandlord may reasonably spend or may become obligated to spend
by reason of Subtenant's default, or to compensate Sublandlord for any other
loss or damage that Sublandlord may suffer by reason of Subtenant's default.
The use, application or retention of the L-C, or any portion thereof, by
Sublandlord shall not (a) prevent Sublandlord from exercising any other right
or remedy provided by this Sublease or by law, it being intended that
Sublandlord shall not first be required to proceed against the L-C, nor (b)
operate as a limitation on any recovery to which Sublandlord may otherwise be
entitled. Any amount of the L-C which is drawn upon by Sublandlord, but is
not used or applied by Sublandlord, shall be held by Sublandlord and deemed a
security deposit (the "L-C Security Deposit"). If any portion of the L-C is
drawn upon, Subtenant shall, within five (5) days after written demand
therefor, either (i) deposit cash with Sublandlord (which cash shall be
applied by Sublandlord to the L-C Security Deposit) in an amount sufficient
to cause the sum of the L-C Security Deposit and the amount of the remaining
L-C to be equivalent to the amount of the L-C then required under this
Sublease or (ii) reinstate the L-C to the amount then required under this
Sublease, and if any portion of the L-C Security Deposit is used or applied,
Subtenant shall, within five (5) days after written demand therefor, deposit
cash with Sublandlord (which cash shall be applied by Sublandlord to the L-C
Security Deposit) in an amount sufficient to restore the L-C Security Deposit
to the amount then required under this Sublease, and Subtenant's failure to
do so shall be a default under this Sublease. Subtenant acknowledges that
Sublandlord has the right to transfer its interest in the Master Lease and
this Sublease and Subtenant agrees that in the event of any such transfer,
Sublandlord shall have the right to transfer or assign the L-C Security
Deposit and/or the L-C to the transferee, and in the event of such transfer,
Subtenant shall look solely to such transferee for the return of the L-C
Security Deposit and/or the L-C. If Subtenant has not previously been in
default under the Sublease beyond the applicable cure period provided in this
Sublease, and provided that Subtenant is not then in default under the
Sublease beyond the applicable cure period provided in this Sublease, then
the L-C Amount shall be reduced,
-14-
commencing on the third (3rd) anniversary of the Sublease Commencement Date
and on each anniversary of the Sublease Commencement Date thereafter, by an
amount equal to Ninety-Seven Thousand Four Hundred Seventy and No/100 Dollars
($97,470.00). If Subtenant shall fully and faithfully perform every provision
of this Sublease to be performed by it, the L-C Security Deposit and/or the
L-C, or any balance thereof, shall be returned to Subtenant within thirty
(30) days following either the expiration of the Sublease Term or the earlier
termination of this Sublease for any reason other than a default by Subtenant.
19.3 CASH AS SECURITY DEPOSIT. In lieu of the L-C, Subtenant shall have
the right at any time to deliver cash to Sublandlord (the "SECURITY DEPOSIT") in
the amount then required for the L-C, in which event the Security Deposit shall
be held by Sublandlord as security for the faithful performance by Subtenant of
all of the terms, covenants, and conditions of this Sublease to be kept and
performed by Subtenant during the Sublease Term. If Subtenant defaults with
respect to any provisions of this Sublease, including, but not limited to, the
provisions relating to the payment of Rent, and fails to cure such default
within the applicable cure period set forth in this Sublease, then Sublandlord
may, but shall not be required to, use, apply or retain all or any part of the
Security Deposit for the payment of any Rent or any other sum in default, or for
the payment of any amount that Sublandlord may spend or become obligated to
spend by reason of Subtenant's default, or to compensate Sublandlord for any
other loss or damage that Sublandlord may suffer by reason of Subtenant's
default. If any portion of the Security Deposit is so used or applied, Subtenant
shall, within five (5) days after written demand therefor, deposit cash with
Sublandlord in an amount sufficient to restore the Security Deposit to its
original amount, and Subtenant's failure to do so shall be a default under this
Sublease. If Subtenant shall fully and faithfully perform every provision of
this Sublease to be performed by it, the Security Deposit, or any balance
thereof, shall be returned to Subtenant within thirty (30) days following either
the expiration of the Sublease Term or the earlier termination of this Sublease
for any reason other than a default by Subtenant. Sublandlord shall deposit the
Security Deposit in an interest bearing account selected by Sublandlord, in its
sole discretion, and Subtenant shall be entitled to the interest on the Security
Deposit.
19.4 TEMPORARY SECURITY DEPOSIT. Notwithstanding any contrary provision
of this Section 19, in the event that Subtenant does not deliver the L-C to
Sublandlord concurrently with Subtenant's execution and delivery of this
Sublease to Sublandlord, then concurrently with Subtenant's execution and
delivery of this Sublease to Sublandlord, Subtenant shall deliver to
Sublandlord, as a security deposit, cash in the amount of Two Hundred Thousand
and No/100 Dollars ($200,000.00), which shall temporarily satisfy the Security
Deposit requirement set forth in Section 19.3 above and shall be held and used
by Sublandlord in accordance with said Section 19.3, provided that Tenant shall
not be entitled to any interest on such temporary security deposit. Upon
delivery to Sublandlord of the L-C, Sublandlord shall promptly return such
temporary security deposit to Subtenant. Notwithstanding the foregoing, if
Subtenant fails to deliver the L-C to Sublandlord within ten (10) days following
Subtenant's execution and delivery of this Sublease to Sublandlord, then
Subtenant shall, within such time period, deliver the balance of the Security
Deposit required under Section 19.3 above to Sublandlord, or Subtenant shall be
in material default under this Sublease.
20. DEFINITION OF SUBLANDLORD. The term "Sublandlord" as used in this
Sublease, so far as covenants or obligations on the part of Sublandlord are
concerned, shall be limited to mean
-15-
and include only the Sublandlord, at the time in question, of this Sublease. In
the event of any transfer of such interest, Sublandlord herein named (and in
case of any subsequent transfer or conveyance, the then sublandlord) shall be
automatically freed and relieved from and after the date of such transfer of all
liability for the performance of any covenant or obligation on the part of
Sublandlord contained in this Sublease thereafter to be performed. Without
further agreement, the transferee of such Sublease shall be deemed to have
assumed and agreed to observe and perform any and all obligations of Sublandlord
hereunder, during the period that it is the sublandlord under this Sublease.
Sublandlord may transfer its interest in the Master Lease and this Sublease
without the consent of Subtenant and such transfer or subsequent transfer shall
not be deemed a violation on Sublandlord's part of any term or condition of this
Sublease.
21. NO LEASEHOLD MORTGAGES. Sublandlord represents that there are no
currently existing leasehold mortgages encumbering its leasehold interest in the
Premises.
22. SIGNAGE. With respect to Section 29.1 of the Master Lease (incorporated
by reference into this Sublease), and notwithstanding any contrary provision
thereof, subject to Landlord's approval, during the Sublease Term Subtenant
shall have the right, at its own expense, to designate three (3) names (a
department or individual) for placement on the directory board monument in the
elevator lobby on the ground floor of the Building and one (1) such name per
thousand rentable square feet in the Subleased Premises for placement on the
directory board for the P-1 level elevator lobby of the Building. In addition,
with respect to Section 29.2 of the Master Lease (incorporated by reference into
this Sublease), subject to Landlord's and Sublandlord's approval, Subtenant
shall be permitted to install, at its own expense, appropriate signage
containing Subtenant's name on the wall immediately adjacent to the entrance
doors to the Premises (the "ENTRANCE SIGN"), provided that the Entrance Sign
shall be consistent in size and aesthetics with the entrance sign of the
subtenant subleasing the Non-Subleased Premises, but subject in any event to
Landlord's approval.
23. REPRESENTATIONS BY SUBLANDLORD. Sublandlord represents to Subtenant that
the Master Lease is in full force and effect as of the date hereof, and that, to
the actual knowledge of Sublandlord as of the date hereof, neither Sublandlord
nor Landlord is in default under the Master Lease. Sublandlord further
represents that Landlord installed the initial tenant improvements in the
Premises in accordance with Landlord's Improvement Letter attached to the Master
Lease as Exhibit D, and Sublandlord has not installed any Alterations in the
Subleased Premises.
24. CONSENT OF LANDLORD. The validity of this Sublease shall be subject to
the Landlord's prior written consent hereto pursuant to the terms of the Master
Lease, and if Landlord's consent shall not be obtained and a copy thereof
delivered to Subtenant within thirty (30) days of the date hereof, either
Sublandlord or Subtenant shall have the option to cancel this Sublease by notice
to the non-terminating party within forty (40) days from the date hereof.
25. LANDLORD ESTOPPEL CERTIFICATE. Sublandlord shall within five (5) days
after the full execution and delivery of this Sublease by Sublandlord and
Subtenant request from Landlord a written statement containing the information
set forth in Section 33.15 of the Master Lease.
-16-
26. ROOF RELATED RIGHTS.
26.1 HVAC UNITS ON ROOF. Sublandlord and Subtenant acknowledge that
there are HVAC units ("Dedicated HVAC") currently in place on the roof of the
Building which service all or a portion of the Premises, in addition to the
building standard HVAC. Such Dedicated HVAC units are maintained and repaired by
the Landlord, and the cost therefor, along with the charges for Subtenant's
share of the use of such Dedicated HVAC units, shall be payable by Subtenant in
accordance with the provisions of SECTION 3.2 above.
26.2 SATELLITE DISHES. Sublandlord acknowledges that Subtenant may
negotiate directly with Landlord for the right to install satellite dishes on
the roof of the Building. Sublandlord and Subtenant acknowledge and agree that
Subtenant's right to install, operate, and maintain the satellite dishes on the
roof of the Building is not a condition to the effectiveness of this Sublease.
Sublandlord shall have no liability or responsibility with respect to any such
satellite dishes or Subtenant's use of the Building roof for such purpose and
Subtenant shall be solely responsible for all costs incurred in connection with
the installation, operation, maintenance, repair, replacement, and removal of
Subtenant's satellite dishes.
27. ENTIRE AGREEMENT. This Sublease sets forth the entire agreement between
the parties and there are no other agreements or understandings of any kind or
nature between the parties with respect to the subject matter, except as set
forth herein. This Sublease may not be modified, altered, or amended, other than
by an agreement in writing, signed by the party against whom enforcement of said
agreement is sought.
IN WITNESS WHEREOF, the parties have duly executed this Sublease as of
the date first above written.
SUBLANDLORD:
RYSHER ENTERTAINMENT, INC.,
a Delaware corporation
By: [ILLEGIBLE]
_________________________________________
Its: President and CEO
________________________________________
SUBTENANT:
INTERPACKET GROUP, INC.,
a Delaware corporation
By: /s/ Peter Hirshberg
_________________________________________
Its: Chairman
________________________________________
By: /s/ Steven J. Miller
_________________________________________
Its: Secretary
________________________________________
-17-
EXHIBIT A
SUBLEASED PREMISES
[Diagram of subleased premises]
EXHIBIT B
MEMORANDUM OF SUBLEASE COMMENCEMENT DATE
THIS MEMORANDUM is made and entered into as of ____________ __, 2000,
by and between RYSHER ENTERTAINMENT, INC., a Delaware corporation
("Sublandlord"), and INTERPACKET GROUP, INC., a Delaware corporation
("Subtenant"), with respect to that certain Agreement of Sublease dated as of
____________, 2000 (the "Sublease"), between Sublandlord and Subtenant.
The term of the Sublease commenced on ___________, 2000 with respect to
the Subleased Premises, which date is defined in Section 2 of the Sublease as
the Sublease Commencement Date. The Sublease Term shall expire on October 25,
2006, unless sooner terminated pursuant to the Sublease.
IN WITNESS WHEREOF, Sublandlord and Subtenant have executed this
Memorandum as of the date set forth in the first paragraph hereof.
SUBLANDLORD:
RYSHER ENTERTAINMENT, INC.,
a Delaware corporation
By:__________________________________________
Its:_________________________________________
SUBTENANT:
INTERPACKET GROUP, INC.,
a Delaware corporation
By:__________________________________________
Its:_________________________________________
EXHIBIT B
-1-
EXHIBIT C
EXCLUDED PROVISIONS OF MASTER LEASE
Lease Summary Date, Landlord, Tenant, Premises, Term, Basic Rent
(Net), Parking Passes, Expansion Options, Allowance
and Other Provisions.
Section 1, second sentence Description of Premises
Section 2.2, the phrase in the ninth (9th) line Landlord's Warranty
beginning with "provided that Landlord..." and
ending in the twelfth (12th) line thereof with
"Article 5"
Article 3 Term
Section 4.1 Initial Basic Rent
Section 4.2 Adjustment of Basic Rent
Section 4.3 Rent Abatement
Section 5.2(b), the penultimate sentence Landlord's representation re assessment of Project
Section 8.1(c), last sentence Application of Landlord's Improvement Letter to
Master Lease
Section 8.3, the penultimate sentence Ownership of Tenant Improvements
Section 14.4(e) Recognition Agreement
Article 17 Definition of Landlord
Article 18 Subordination
Article 27 Brokers
Article 28 Rules and Regulations
Section 29.3 Identity
Article 30 Option to Lease Additional Premises
Article 31 Right of First Offer
EXHIBIT C
-1-
Article 32 Appraisal; Fair Market Rental Rate
Section 33.6 (the notice addresses only) Notices
Section 33.14 (the fourth (4th) sentence Applicable Laws
through the end of the Section only)
Section 33.18 Partner Liability
Section 33.19 (the first (1st) sentence only) Hazardous Materials
Section 33.20 Guaranty
Exhibit "A" Floor Plan
Exhibit "B," other than Section 6 thereof Area Definitions
Exhibit "C" Memorandum of Lease Commencement
Exhibit "D" Landlord's Improvement Letter
Exhibit "F" Form of Non-Disturbance Agreement
Exhibit "H" Monument Signage
Exhibit "I" Guaranty of Lease
Exhibit "L" First Premises Unit Description
EXHIBIT C
-2-
EXHIBIT D
FORM OF LETTER OF CREDIT
(Letterhead of a money center bank
acceptable to the Landlord)
__________ __, 2000
Rysher Entertainment, Inc.
2401 Colorado Avenue
Second Floor
Santa Monica, California 90404
Attention: Mr. Tim Helfet
Ladies and Gentlemen:
We hereby establish our Irrevocable Letter of Credit and authorize you
to draw on us at sight for the account of InterPacket Group, Inc., a Delaware
corporation, the aggregate amount of Four Hundred Eighty-Seven Thousand Three
Hundred Fifty and No/100 Dollars ($487,350.00).
Funds under this Letter of Credit are available to the beneficiary
hereof as follows:
Any or all of the sums hereunder may be drawn down at any time and from
time to time from and after the date hereof by Rysher Entertainment, Inc.
("Beneficiary") when accompanied by this Letter of Credit and a written
statement signed by a representative of Beneficiary, certifying that such moneys
are due and owing to Beneficiary as a result of a default by InterPacket Group,
Inc., under that certain sublease for premises located at 2401 Colorado Avenue,
Santa Monica, California, by and between Beneficiary, as sublandlord, and
InterPacket Group, Inc., as subtenant ("Sublease"), and a sight draft executed
and endorsed by a representative of Beneficiary.
This Letter of Credit is transferable in its entirety at no cost of
Beneficiary or the transferee. Should a transfer be desired, such transfer will
be subject to the return to us of this advice, together with written
instructions.
The amount of each draft must be endorsed on the reverse hereof by the
negotiating bank. We hereby agree that this Letter of Credit shall be duly
honored upon presentation and delivery of the certification specified above.
This Letter of Credit shall expire on ______________.
Notwithstanding the above expiration date of this Letter of Credit, the
term of this Letter of Credit shall be automatically renewed for successive,
additional one (1) year periods unless, at least thirty (30) days prior to any
such date of expiration, the undersigned shall give written notice to
Beneficiary, by certified mail, return receipt requested and at the address set
forth above or at such other address as may be given to the undersigned by
Beneficiary, that this Letter of Credit will not be renewed.
EXHIBIT D
-1-
This Letter of Credit is governed by the Uniform Customs and Practice
for Documentary Credits (1993 Revision), International Chamber of Commerce
Publication 500.
Very truly yours,
(Name of Issuing Bank)
By:__________________________________
EXHIBIT D
-2-