Exhibit 10.17
OFFICE SUBLEASE
THIS SUBLEASE (this "Sublease") is made and entered into the 20th day
of March, 1996, between Hughes Aircraft Company ("Sublandlord"), and DIRECTV
("Subtenant").
WITNESSETH:
1. Sublandlord and Subtenant hereby agree as follows:
(a) Sublease. Sublandlord hereby leases to Subtenant and Subtenant hereby
hires from Sublandlord the following described premises (the "Premises") on the
basis of all of the terms, covenants and conditions set forth herein:
Location: 2230 E. Imperial Highway
El Segundo, California 90245
Building Name R08
Rentable Square Feet through 12/31/96: 129,180(Floors 5-11)
Effective 1/1/97: 205,210(Floors 1-11)
(b) Subtenant may use and occupy the Premises for offices, engineering and
all other uses incidental and related thereto and for any other lawful business
and commercial purpose.
2. Term. The Sublease shall have a term commencing on the dates set forth on
Exhibit "A" attached hereto and incorporated herein by reference (the
"Commencement Date") and ending December 31, 2008, provided, however, if the
Commencement Date occurs on a date other than the first day of the calendar
month, there shall be added to the term the partial month from the Commencement
Date to, but not including, the first day of the calendar month following the
Commencement Date.
3. Rent. The monthly rent payable hereunder shall be paid in accordance with the
scheduled attached hereto as Exhibit A and A-1 ("Rent"), payable in advance to
Sublandlord on the
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Commencement Date and thereafter on the first day of every calendar month during
the term. Rent for any period of less than one month shall be apportioned on a
per diem basis for the number of days of such month from and including the
Commencement Date.
4. Operating Expenses.
(a) Effective from the commencement dates set forth on Exhibit A through
December 31, 1996, Subtenant shall pay to Sublandlord as additional rent an
amount equal to "Subtenant's Share" of Operating Expenses as defined in the
Master Lease, a copy of which is attached hereto as Exhibit "B" and incorporated
herein by reference. Subtenant's Share represents a fraction, the numerator of
which is the number of square feet of rentable area in the Premises and the
denominator of which is the number of square feet of rentable area in the
Building, as the same exists from time to time.
(b) Prior to the commencement of each calendar year of the term following
the Commencement Date, Sublandlord shall have the right to give to Subtenant a
written estimate of Subtenant's Share of the projected Operating Expenses for
the ensuing year. Subtenant shall pay such estimated amount to Sublandlord in
equal monthly installments, in advance, on the first day of each month. Within a
reasonable period after the end of each calendar year, Sublandlord shall furnish
Subtenant a statement indicating in reasonable detail the Operating Expenses for
such period and the parties shall, within 30 days thereafter, make any payment
necessary to adjust Subtenant's payments to Subtenant's actual share of such
excess, as indicated by such annual statement.
(c) "Operating Expenses" shall mean, subject to the provisions hereof, all
expenses of Sublandlord, as determined in accordance with sound, generally
accepted accounting principles, consistently applied, actually incurred by
Sublandlord during a particular calendar year (or to the extent applicable, a
portion thereof), in connection with and related solely to the ownership,
management, operation and maintenance of the Building, including all real estate
taxes and assessments on the Building (and
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substitutions and/or additions thereto generally recognized as taxes or
assessments by comparable landlords).
(d) "Operating Expenses" shall specifically exclude: any cost or expense
relating to (i) all repairs, alterations, improvements, additions and
replacements to the Building and Sublandlord's personal property which under
sound and reasonable accounting principles, are properly classified as capital
expenditures, capital repairs or capital improvements; except capital
improvements or alterations (A) intended to effect economies in the operation of
the Building, to the extent of the reduction in other Operating Expenses
reasonably anticipated by Sublandlord at the time of the original expenditure
or (B) required under any governmental Law (defined below) adopted following the
Commencement Date (provided that the cost of any such permitted capital
improvements or alterations shall be amortized, using a reasonable financing
rate over their reasonable, expected useful life); (ii) all financing costs,
including interest and principal payments on any debt, and expenditures required
by any lender; (iii) any income tax, excess profits or revenue tax, excise tax
or inheritance tax, gift tax, franchise tax, corporation tax, estate, succession
or other similar tax; (iv) any voluntary assessments; (v) any casualty repairs
or damage; (vi) payments to Sublandlord or its affiliates in excess of market
rates for services provided; (vii) earthquake insurance; (viii) costs reimbursed
by tenants or others; (ix) tenant work or preparing space for lease; (x)
marketing; (xi) disputes with tenants, lenders and partners; (xii) the
investigation, reporting, disposal, treatment, maintenance, removal or
remediation of Hazardous Materials, (xiii) general corporate overhead of
Sublandlord, and (xiv) items not customarily chargeable as operating expenses by
first class office buildings.
(e) Sublandlord shall, at Subtenant's request, make available to Subtenant
for inspection and examination all books and records that relate to the payment
of Operating Expenses and the matters described therein. If Subtenant disputes
any portion of Sublandlord's statement and the parties cannot resolve their
differences within thirty (30) days thereafter, either party may
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elect to have the matter resolved by arbitration in accordance with the rules of
the American Arbitration Association.
(f) Effective January 1, 1997, this Sublease shall become a triple net
lease and Subtenant shall be responsible for providing all of its own services
and utilities to the entire building as set forth in Exhibit A-1.
5. Compliance with Law. Subtenant shall promptly comply with all governmental
laws, statutes, rules, regulations, orders and ordinances (collectively, "Laws")
affecting the Building or the Premises applicable to use or occupancy of the
Premises, relating to tenant improvements in the Premises, or triggered or made
applicable by any special use of or activity in the Premises by Subtenant (as
opposed to normal office use) (a "Special Use"). Except for application of Laws
affecting the Building or the Premises by reason of a Special Use, Sublandlord
shall promptly comply with all Laws applicable to all common areas in the
Building (outside of the Premises) or applicable to the Building shell, core,
skin, foundation, structural elements, basic building systems (but not
distribution thereof within the Premises) or other areas generally recognized by
landlords of comparable buildings as not constituting tenant improvements.
6. Sublandlord's Title and Other Obligations. Sublandlord covenants, warrants
and agrees (i) that it has the right and authority to execute this Sublease and
to perform its obligations hereunder and (ii) that it will, subject to force
majeure and other delays beyond its control, deliver possession of the Premises
to the Subtenant at or prior to the Commencement Date.
7. Building Services and Equipment. Subtenant shall maintain the Premises and
the tenant improvements therein in reasonable condition, reasonable wear and
tear and acts of God excepted. Sublandlord will maintain the Building shell and
core, common areas and basic building systems (other than distribution thereof
within the Premises) in good condition, and will furnish the following services
and utilities: (i) reasonable elevator service, (ii) heat, ventilating, and
air-conditioning consistent with that provided in first class office buildings
("First Class
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Standard") twenty four hours each day, seven days per week, (iii) cleaning and
janitorial service, including removal of rubbish and furnishing washroom
supplies consistent with a First Class Standard, (iv) hot and cold running fresh
water adequate for Subtenant's purposes, (v) reasonable amounts of electricity
for the lighting of the Premises and operation of Subtenant's office machines,
appliances and equipment, except where particular equipment of Subtenant
utilizes materially more electricity (and as a result the Premises uses
materially more electricity) than generally used in the Building, in which case
Subtenant shall reimburse Sublandlord for such excess usage at Sublandlord's
reasonable cost, (vi) provision, installation, and replacement of all Building
standard light bulbs and tubes, (vii) maintenance of the parking area, walks and
driveways, (viii) removal of ice, snow and litter from walks, driveways and
parking area, and (ix) access to the Premises twenty-four (24) hours a day. In
the event that Subtenant suffers a material interference of its use and
enjoyment of any portion of the Premises by reason of (i) any interruption of
any building service or any utility, (ii) any entry by Sublandlord into the
Premises, or any construction activities by the Sublandlord in or around the
Building, (iii) any interference with access to the Premises, or (iv) any
unhealthful environmental, indoor air or Hazardous Materials condition (other
than those conditions caused by Subtenant) which renders the Premises or a
portion thereof untenantable (and as a result thereof Subtenant actually does
not occupy such space) and such condition continues for five (5) substantially
consecutive days or for ten (10) days in any twelve (12) month period, Rent,
additional rent and all other charges payable by Subtenant hereunder shall abate
in a reasonable amount based upon the degree of interference of Subtenant's use
and enjoyment of its Premises, until the date Subtenant's full use and enjoyment
of the entire Premises is restored (or is otherwise made available).
8. Removal of Goods and Subtenant's Repairs. At the expiration of the term,
Subtenant will remove its personal property, trade fixtures, goods and effects
(except as elsewhere provided herein) and will deliver to Sublandlord the
Premises in reasonable condition, "broom-clean," subject to Sublandlord's
obligations to
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repair, and damage by fire, the elements, casualty, acts of God and
Sublandlord's negligence. Subtenant acknowledges that the Premises are in the
condition depicted on the attached Exhibit "D" incorporated herein by reference
and Subtenant agrees to return the Premises to the same condition at the end of
the term of this Sublease. If at the time of any alteration to the Premises,
Sublandlord notified Subtenant that Sublandlord would require Subtenant to
remove any such alteration at the expiration of the term, and such alteration is
not of a nature which is compatible with and useful in general office premises
of most office tenants, at the expiration or early termination of this Sublease,
Sublandlord may require Subtenant to remove such alteration and to restore the
portion of the Premises affected to its condition prior to such alteration.
Subtenant shall repair any damage to the Premises caused by Subtenant's removal
or restoration of its alterations, personal property, trade fixtures, good and
effects as provided herein.
9. Improvements and Alterations. Subtenant may at its own expense and without
the consent of Sublandlord place partitions, fixtures, personal property, and
the like, in the Premises and may make nonstructural improvements,
installations, changes and alterations (collectively, "Alterations") in the
interior of Premises which do not violate any Laws, do not affect the exterior
appearance of the Building or adversely affect basic Building systems. Subtenant
may make structural and all other Alterations only after first obtaining
Sublandlord's written consent thereto, which consent shall not be unreasonably
withheld, conditioned or delayed.
10. Fire or Casualty.
(a) In the event of damage or destruction to all or any portion of the
Premises or the Building which materially impacts Subtenant's use of, or
business in, the Premises and where full repair and restoration of such damage
cannot be completed within one hundred twenty (120) days of such damage, either
party may terminate this Sublease as of the date of such damage by written
notice to the other party given within 45 days of such damage. In the event this
Sublease is not terminated, Sublandlord shall
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promptly rebuild and restore the Building, the Premises and all improvements
therein to their condition immediately prior to such damage, provided, however,
that if such restoration is not complete within one hundred eighty (180) days
from the date of such damage, Subtenant may, at its option, terminate this
Sublease. In any case, all Rent, additional rent and other charges payable by
Subtenant hereunder shall be reasonably abated on a basis proportionate to the
interference with Subtenant's use, and operation of business in, the Premises
from the date of damage until all damage is restored and Subtenant has been
given a reasonable period to move back in. Sublandlord's duty to restore the
Premises shall not include Subtenant's personal property.
(b) Subtenant waives all claims, actions and rights against Sublandlord,
its agents and contractors with respect to any damage to Subtenant's personal
property in the Premises insurable under a typical ISO "Special Causes of Loss"
(or comparable) policy of insurance and Sublandlord waives all claims against
Subtenant, its agents and contractors with respect to any damage to the
Building, all improvements contained therein and Sublandlord's personal property
insurable under a typical ISO "Special Causes of Loss" (or comparable) policy of
insurance. Each of Sublandlord's and Subtenant's policies of property damage
insurance shall contain customary waivers of all subrogation rights against the
other party.
11. Eminent Domain.
(a) In the event all or any portion of the Premises shall be taken
(permanently or for any period in excess of one hundred twenty (120) days) under
the power of eminent domain, or sold to prevent or under the threat of the
exercise thereof (collectively, a "Taking"), and if, in the reasonable judgment
of Subtenant, the remaining Premises, if any, is insufficient for the operation
of Subtenant's business in the Premises, Subtenant shall have the right to
terminate this Sublease upon delivery of written notice to Sublandlord given at
any time within sixty (60) days following the date Subtenant is notified in
writing of such Taking. In the event that this Sublease is not terminated,
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Sublandlord shall, with reasonable diligence, proceed to restore the Building
and the Premises (other than Subtenant's personal property) to a complete
functioning unit of substantially the same usefulness, design and construction
as that existing immediately prior to the date of the Taking. In such case all
Rent, additional rent and all other charges payable by Subtenant hereunder shall
be reasonably and proportionately abated, based upon the degree of interference
with Subtenant's business operations in the Premises, until the Building and
Premises are fully restored and Subtenant is given a reasonable period to move
in. Sublandlord shall be entitled to receive the entire award in connection with
any Taking and Subtenant shall receive no part of such award, except that
Subtenant shall be entitled to make a separate claim against the condemning
authority (i) for the value of Subtenant's property, fixtures and its
improvements so condemned, (ii) Subtenant's relocation costs, and (iii) any
special condemnation awards available to tenants similarly situated.
12. Insurance and Indemnity.
(a) Subject to the provisions of this Section 12, Subtenant shall maintain
during the term at a minimum a customary commercial general liability insurance
policy with not less than Two Million Dollars ($2,000,000.00) combined single
limit coverage for both bodily injury and property damage. Such insurance shall
provide that the insurer shall endeavor to provide thirty (30) days prior
written notice of cancellation to Sublandlord and Subtenant and in the case of
any commercial general liability policy, shall name Sublandlord as an additional
insured. Subtenant may, at its option, (i) satisfy any of its insurance
obligations under this Sublease with any so-called "blanket" policy or policies
of insurance or self-insurance program now or hereafter carried or maintained by
Subtenant and/or (ii) provide for reasonable deductibles with respect to all
such insurance.
(b) Subtenant shall during the term maintain All Risk Insurance, including
earthquake and flood when reasonably available on the personal property,
equipment, fixtures, trade
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fixtures and machinery therein owned by the Subtenant. Such insurance shall be
for the full replacement cost of such property.
(c) Subject to the provisions of Section 10, Subtenant shall indemnify and
hold harmless Sublandlord, its officers, employees, agents and invitees from and
against any and all claims, actions, losses, damages, costs and expenses
(collectively, "Claims and Damages") arising from the Subtenant's use of the
Building and Land, including the Premises and common areas or from the conduct
of Subtenant's business or from any activity or work permitted by the Subtenant
in or about the Building and Land and shall further indemnify and hold
Sublandlord harmless from Claims and Damages arising from negligence or willful
misconduct of Subtenant. The foregoing indemnity shall not apply to the extent
of any negligence or willful misconduct of Sublandlord or any of Sublandlord's
agents, contractors or employees.
13. Assignment and Sublease. Subtenant shall not assign this Sublease nor
sublease any portion of the Premises without the prior written consent of
Sublandlord, which shall not be unreasonably withheld or delayed.
14. Signs. Subtenant may place its standard signs on the Building and may have
its name placed in the Building Directory in the lobby of the Building.
15. Parking. Sublandlord shall provide Subtenant with its prorata share of the
unreserved parking spaces for the use of Subtenant's employees and invitees in
garages or paved parking areas in or adjacent to the building in which the
Premises are located.
16. Holdover. If Subtenant remains in the Premises beyond the expiration of the
term, the Sublease will continue in force on a month-to-month basis. In the
event that such holdover shall result in Sublandlord losing another lease or
having to delay the commencement of another lease or occupancy, and Subtenant's
holdover shall continue after delivery to Subtenant of written
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notice of the possibility of such loss (and reasonably describing the expected
nature, scope and timing of the new occupancy), Subtenant shall indemnify,
defend and hold Sublandlord harmless from all Claims and Damages resulting from
such continued occupancy.
17. Subtenant Default. Any failure by Subtenant to pay any installment of Rent,
or to make any other payment required to be made by Subtenant hereunder when due
within ten (10) days after receipt of written notice of such failure by
Subtenant from Sublandlord, or to perform or comply with any other material
provision of this Sublease to be performed or complied with by Subtenant, where
such failure continues for thirty (30) days after delivery of written notice of
such failure by Sublandlord to Subtenant shall constitute a default by Subtenant
under this Lease (a "Subtenant Default"); provided, however, that if the nature
of any nonmonetary failure is such that the same cannot reasonably be cured
within such thirty (30) day period, the same shall not constitute a Subtenant
Default if Subtenant shall, within thirty (30) days of such notice, commence
such cure, and thereafter diligently prosecute such cure to completion. Upon the
occurrence of any such Subtenant Default, Sublandlord may pursue, at its option,
any and all statutory and/or common law remedies available for such a default,
including, without limitation, in California, the remedy described in Section
1951.4 of the California Civil Code (lessor may continue lease in effect after
lessee's breach and abandonment and recover rent as it becomes due, if lessee
has the right to sublet or assign, subject only to reasonable limitations).
18. Notices. Any notice or demand by either party to the other must be in
writing and shall be served by personal service, facsimile or overnight express
courier by a nationally recognized courier service. Notices shall be addressed
to Sublandlord and Subtenant at their address shown on the signature page
hereof. Each party may change its address by notice to the other party. Notices
delivered personally or by facsimile shall be deemed received upon delivery, in
the case of personal delivery, and upon confirmation of receipt, in the case of
facsimile transmission, provided that the same are confirmed by regular
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mail sent within two (2) business days thereafter. Notices delivered by
overnight courier shall be deemed received on the next succeeding business day.
19. Quiet Enjoyment. Subtenant, on paying the Rent and performing the covenants
of this Sublease on its part to be performed, shall peaceably and quietly have,
hold, occupy and enjoy the Premises for the term of this Sublease and any
extension or renewal thereof without hindrance, claim, ejection or interference
by Sublandlord or any other person or entity claiming through Sublandlord.
Sublandlord agrees to notify Subtenant at least sixty (60) days prior to the
commencement of any construction in the Building or immediately adjacent
thereto, to the extent such construction is within the control of Sublandlord.
20. Successors. Subject to Section 13, this Sublease shall bind and inure to the
benefit of the parties hereto and their permitted heirs, representatives,
successors and assigns.
21. Additional Provisions. Subtenant may limit and control access to the
Premises in accordance with security procedures required by the United States,
or any department or agency thereof or in accordance with Subtenant's own
reasonable internal security procedures.
22. Hazardous Materials.
(a) Sublandlord hereby represents, warrants and agrees that (i) Sublandlord
has disclosed in writing to Subtenant any release, or disposal of any Hazardous
Material (defined below) known to Sublandlord in, on, under or about the
Premises or the Building (or on or under adjacent land), (ii) all operations or
use of the Building or any portion thereof (except that Sublandlord shall not be
responsible for the operations or use of Subtenant) shall at all times during
the Term be in full compliance with all Laws then governing Hazardous Materials,
and (iii) as to any Hazardous Material in violation of Laws discovered in, on,
under or about the Building during the term caused by Sublandlord (not released
by Subtenant or any agent
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thereof), required to be remediated under applicable Laws or otherwise posing an
unreasonable risk to the health or safety of Subtenant's employees or customers,
Sublandlord shall at its sole expense (A) promptly commence and diligently
prosecute to completion remediation thereof in compliance with all Laws; and (B)
indemnify, defend and hold Subtenant harmless from all Claims and Damages
asserted by any governmental agency or by adjacent and successor landowners or
other lessees arising therefrom.
(b) Subtenant shall (i) comply with all Laws applicable to any Hazardous
Materials stored, used, handled or brought onto the Building by Subtenant or any
contractor, employee or agent thereof, (ii) promptly commence and diligently
prosecute to completion remediation in compliance with all Laws (and shall
indemnify, defend, and hold Sublandlord harmless from all Claims and Damages
related to) any Hazardous Materials released into the environment in, under or
about the Building by Subtenant or any contractor, agent or employee thereof
required to be remediated under applicable Laws or otherwise posing an
unreasonable risk to the health or safety of individuals in or about the
Building.
(c) "Hazardous Material" includes any hazardous, explosive, radioactive or
toxic substance, material or waste which is regulated by any federal, state or
local governmental authority, including any material or substance which is (I)
defined or listed as a "hazardous waste," "extremely hazardous waste,"
"restricted hazardous waste," "hazardous substance," "hazardous material,"
"pollutant" or "contaminant" under any Law, (ii) petroleum or any petroleum
derivative, (iii) any flammable explosive, (iv) any radioactive material, or (v)
any polychlorinated biphenyl."
23. Miscellaneous.
23.1 Counterparts. This Sublease may be executed in one or more counterparts by
the parties hereto. All counterparts shall be construed together and shall
constitute one agreement.
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23.2 Sole Agreement. This Sublease contains all of the understandings of the
parties and all representations made by either party to the other are merged
herein.
23.3 Modification. This Sublease may not be modified in any respect except by a
document in writing executed by both parties hereto or their respective
successors.
23.4 Attorneys' Fees. If any party commences an action against the other, the
prevailing party shall be entitled to recover from the losing party reasonable
attorneys' fees and cost.
23.5 Binding Effect. This Sublease shall be binding on and inure to the benefit
of the parties and their respective heirs, successors and assigns.
23.6 Governing Law. This Sublease shall be governed by and construed in
accordance with the laws of the State in which the Premises is located.
IN WITNESS WHEREOF, this Sublease has been duly executed by the parties
hereto as of the date first above written.
DIRECTV, Hughes Aircraft Company, a
a California corporation Delaware corporation
By: /s/ Illegible By: /s/ Illegible
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Title: President Title: Director of Real Estate
Subtenant Sublandlord
Address for Notice Address for Notice
DIRECTV HUGHES AIRCRAFT COMPANY
Attn. Site Manager P.O. Box 80028
2230 E. Imperial Highway Los Angeles, CA 90080-0028
El Segundo, California 90245 Attn.: Corporate Real Estate
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