California-Sunnyvale-894 Ross Drive Consent of Landlord - Ross Drive Investors, David J. Brown, Verity Inc. and Teleworld Inc.
Consent Of Landlord
-------------------
Pursuant to a Lease and First Addendum to Lease dated for reference
purposes as of January 22, 1996, as modified by a First Amendment to Lease dated
as of June 20, 1996, a Second Amendment to Lease dated as of November 5, 1996,
and a Third Amendment to Lease dated as of January 17, 1997 (referred to
collectively as the "Lease") between Ross Drive Investors, a California general
partnership and David J. Brown, as tenants in common ("Landlord"), as successors
to Ross Drive Investors, a California general partnership ("Former Landlord")
and Verity, Inc., a Delaware corporation ("Tenant"), relating to premises
commonly known as 894 Ross Drive, Sunnyvale, California, in the County of Santa
Clara (the "Premises"), Tenant has requested that Landlord consent to Tenant's
Sublease to Teleworld, Inc., a Delaware corporation ("Subtenant") of the 24,598
rentable square feet of space commonly referred to and identified as Suite 100
of the Premises (the "Subleased Premises") on the terms and conditions set forth
in the Sublease dated February 23, 1998 and attached to this Consent as Exhibit
"A" (the "Sublease").
Landlord is the successor in interest to Former Landlord, and has assumed
ownership and the obligations of the landlord under the Lease. Tenant has
attorned to and recognized Landlord as the owner of the Premises and successor
to Former Landlord under the Lease.
In consideration of Tenant's and Subtenant's execution of this Consent of
Landlord and agreement to the terms and conditions set forth in this Consent,
Landlord consents to the Sublease on the following terms and conditions:
1. Subrent: Tenant represents and warrants to Landlord that the Sublease
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contains a complete and accurate statement of all Subrent (as such term is
defined in the Lease, Article 14) received or to be received from Subtenant.
2. No Waiver: This Consent does not constitute consent to any subsequent
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subletting or assignment, nor a waiver of the restriction on assignment and
subletting contained in Paragraph 14.1 of the Lease.
3. Tenant's Primary Obligations: Nothing herein shall release or alter
----------------------------
the primary obligations of Tenant under the Lease, nor shall this Consent be
deemed to create contractual obligations on the part of Landlord to the
Subtenant. By executing this Consent, Subtenant agrees to assume all
obligations of Tenant under the Lease related to the Subleased Premises arising
after the date hereof and to remain jointly and severally liable therefore with
Tenant.
4. Costs and Attorney's Fees: This consent is conditional upon Landlord's
-------------------------
receipt of the Landlord's reasonable costs and attorney's fees, to which
Landlord is entitled under Paragraph 14.lA of the Lease. Tenant shall
immediately reimburse Landlord for such fees and costs upon receipt of
Landlord's statement.
5. No Effect On Lease: In no event shall Landlord's consent to this
------------------
Sublease be, or be construed as, a modification of the terms of the Lease except
as explicitly set forth herein, and
1.
<PAGE>
in the event of any inconsistency between any term of the Sublease and the terms
of the Lease, the terms of the Lease shall prevail.
6. Hazardous Materials: (a) Subtenant, at its sole cost, shall comply
-------------------
with all laws relating to the storage, use, and disposal of Hazardous Materials
(as defined in the Lease) that Subtenant, its agents, employees, contractors, or
invitees bring or permit to be brought on to the Subleased Premises or on the
Premises or the Property. If Subtenant does store, use, or dispose of any
Hazardous Materials, Subtenant shall notify Landlord in writing at least five
(5) days prior to their first appearance on the Subleased Premises, and unless
disclosed prior to the execution of this Consent in a response provided by
Subtenant to Landlord's Hazardous Materials Questionnaire or other written
disclosure, such Hazardous Materials shall not be stored, used, or disposed of
on the Subleased or Premises without Landlord's advance written approval.
Subtenant shall be subject to all obligations of Tenant under the Lease relating
to Hazardous Materials, including but not limited to the provisions of Paragraph
7.2, Hazardous Materials, of the Lease.
(b) Subtenant shall be responsible for and shall defend, indemnify, and
hold Landlord and its agents harmless from and against all claims, costs and
liabilities, including attorney's fees and costs, arising out of or in
connection with the storage, use, or disposal of Hazardous Materials in or about
the Subleased Premises, the Premises, or the Property by Subtenant, its agents,
employees, contractors, or invitees which occur prior to or after the Effective
Date, but Tenant shall remain responsible for any such matters to the extent set
forth in the Lease, and Subtenant's responsibility and duty as set forth above
shall not relieve Tenant of its responsibilities and duties pursuant to the
Lease.
7. Construction and Signage: Any and all construction to be performed by
------------------------
Tenant or Subtenant on the Subleased Premises shall be subject to the advance
written approval of Landlord as set forth in the Lease. Any signage called for
in the Sublease shall be subject to Landlord's approval as per the terms of the
Lease, and subject to the procurement of approval and permits from the City of
San Jose. By approving the Sublease, Landlord shall not be deemed to have
approved any signage or construction referenced therein.
8. Insurance: The Subtenant shall comply with all of the provisions of
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the Lease, Article 9, as if it were the Tenant named thereunder, and shall name
the Landlord as an additional insured on all policies of insurance required by
the Sublease and Lease, and provide the Landlord with a documentary proof
thereof as required by the Lease.
9. Use: Subtenant shall use the Subleased Premises only for the following
---
uses and for no other purpose: Only those uses and purposes specifically set
forth and authorized in the Lease, and not for manufacturing processes of any
kind under any circumstances.
10. Assignment Of Tenant's Rights: Tenant irrevocably assigns to Landlord,
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as security for the performance of each and all of Tenant's obligations under
the Lease, all rent and other consideration received or to be received from
Subtenant. Landlord, as assignee of Tenant, or a receiver for Tenant appointed
on Landlord's application, may (but is not required to) collect such rent or
other consideration, provided, however, that until and unless Tenant commits an
Event of Default under the Lease, Tenant shall have the right to collect such
rent or other
2.
<PAGE>
consideration (subject to any obligation set forth in the Lease whereby Tenant
is to pay all or a part of such rent or other consideration to Landlord). Such
assignment shall be subject to the following terms and conditions:
(a) Landlord may collect such rent or other consideration from
Subtenant only so long as Tenant shall continue to be in default of its
obligations under the Lease.
(b) Upon Landlord's written request following the occurrence of an
Event of Default under the Lease, Tenant shall execute such documents as
are reasonably requested by Landlord for the purpose of confirming to
Subtenant that Landlord has the right to collect all rent and other
consideration otherwise due to Tenant from such subtenant or assignee.
(c) Subtenant has the right and duty to pay rent or other
consideration otherwise due to Tenant directly to Landlord upon receipt
from Landlord of a declaration under penalty of perjury stating that an
Event of Tenant's Default exists under the Lease, and in such event, each
payment made to Landlord shall be deemed to satisfy the obligations of
Subtenant to Tenant, but only to the extent of such payment.
(d) Subtenant's payment to Landlord pursuant to this assignment shall
not create or evidence any direct landlord tenant relationship between
Subtenant and Landlord, and Landlord may exercise all remedies to terminate
the Lease (including the termination of Subtenant's possession of the
Premises or the Subleased Premises) in the event of any Event of Default by
Tenant, notwithstanding its receipt of any payment from Subtenant pursuant
to this assignment, unless the receipt of such payment completely cures
Tenant's default. The acceptance of a payment from Subtenant pursuant to
this assignment shall not affect Landlord's right to its remedies with
regard to all defaults remaining uncured after such payment.
11. Brokerage Commissions: Notwithstanding anything set forth in the
---------------------
Sublease, Landlord has no obligation to pay and will not pay commissions or fees
to any broker or finder in regard to the Sublease or Landlord's consent thereto.
Tenant and Subtenant will hold Landlord harmless and indemnify and defend
Landlord against any claims for brokerage commissions arising in regard to the
Sublease or Landlord's consent thereto.
3.
<PAGE>
12. Termination: The Sublease is and remains subject and subordinate to
-----------
the Lease, and a termination of the Lease for any reason (including but not
limited to a default of Tenant) shall terminate the Sublease.
LANDLORD: TENANT:
Ross Drive Investors, a California general Verity, Inc., a Delaware corporation
partnership
/s/ James E. Ticehurst
/s/ David J. Brown --------------------------------------
--------------------------------
By: David J. Brown, Manager James E. Ticehurst
By: V.P. Administration & Controller
--------------------------------
David J. Brown, individually [Print Name and Title]
Dated:________________________________
SUBTENANT:
/s/ David J. Brown
--------------------------------
By: David J. Brown Teleworld, Inc., a Delaware corporation
/s/ Michael Ramsay
Dated: 3/17/98 --------------------------------------
-------------------------- By: Michael Ramsay, Pres. & CEO
--------------------------------
[Print Name and Title]
Dated: 3-12-98
--------------------------------
4.
<PAGE>
SUBLEASE AGREEMENT
THIS SUBLEASE AGREEMENT (this "Sublease") is made effective as of the 23rd
day of February, 1998 (the "Effective Date") between Verity, Inc., a Delaware
corporation ("Verity"), as Sublessor, and Teleworld, Inc., a Delaware
corporation ("Teleworld"), as Sublessee.
RECITALS:
A. Verity and Ross Drive Investors, a California general partnership
("RDI"), are parties to that certain Lease dated January 22, 1996, as amended
June 20, 1996, November 5, 1996, and January 17, 1997 (collectively, the
"Lease"), pursuant to which Verity leases from RDI that certain building
containing approximately 43,925 gross leasable square feet of space located at
894 Ross Drive, Suite 100, Sunnyvale, California (the "Master Premises").
B. Verity desires to sublet approximately 24,598 square feet of space
constituting Suite 100 of the Master Premises (the "Premises"), to Teleworld and
Teleworld desires to sublet the same from Verity. The Premises include the
right to use the office cubicles, furniture and network and data wiring
(excluding the T 1 line) currently located in or serving the Premises and set
forth on Exhibit A attached hereto.
NOW, THEREFORE, in consideration of the mutual covenants herein provided
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereby agree as follows:
1. Definitions. Unless otherwise defined, all capitalized terms used
-----------
herein shall have the same meanings as given them in the Lease. A copy of the
Lease is attached hereto as Exhibit B.
2. Sublease.
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2.1 Incorporation of Lease Terms. Verity hereby subleases to
----------------------------
Teleworld and Teleworld hereby subleases from Verity, the Premises. Except as
otherwise expressly herein provided, such sublease of the Premises shall be on
all of the terms, covenants, conditions and provisions in the Lease, which
terms, covenants, conditions and provisions are incorporated in and made a part
hereof as if fully set forth herein, and are imposed upon the respective parties
of this Sublease, with Verity hereunder being substituted for Landlord under the
Lease, and Teleworld hereunder being substituted for Tenant under the Lease;
provided that the following provisions of the Lease are not incorporated into
this Sublease: Section 2.1 (first sentence only), Section 2.2, Section 2.3,
Section 3.1, Section 5.4, Section 7.3, Article 8, First Addendum to Lease dated
January 22, 1996, Second Addendum to Lease dated January 22, 1996, First
Amendment to Lease dated June 20, 1996, Second Amendment to Lease dated November
5, 1996, and Third Amendment to Lease dated January 17, 1997. Teleworld shall
comply with all of the terms and conditions applicable to Tenant under the Lease
in connection with, but only with respect to, its occupancy and use of the
Premises and the Common Area. Teleworld shall have the right to use eighty-
seven (87) parking stalls in the parking areas of the Project. To the
1.
<PAGE>
extent the provisions of this Sublease are inconsistent with or different from
the provisions of the Lease, the provisions of this Sublease shall control the
rights and obligations of Verity and Teleworld with respect to the use and
occupancy of the Premises and the Common Area.
2.2 Limitations to Responsibility. Notwithstanding the incorporation
-----------------------------
of the provisions of the Lease into this Sublease, Verity shall not be held
accountable for any representations and warranties made by RDI as Landlord under
the Lease, nor shall be Verity be responsible for the performance of any
obligations to be performed by Landlord under the Lease, and Teleworld agrees to
look solely to RDI for the performance of such obligations. At Teleworld's
request (and at Teleworld's cost, which shall be paid in advance), Verity shall
use commercially reasonable efforts to cause RDI to perform its obligations
under the Lease, but in no event shall Verity be obligated to initiate or
participate in any legal proceedings or actions intended to compel RDI to
perform or undertake any other action with respect to RDI that may impair
Verity's relations with RDI. The failure by RDI to perform its obligations under
the Lease shall not excuse performance by Verity or Teleworld of their
obligations hereunder.
3. Term. Subject to Paragraph 3.1 below, the term of this Sublease shall
----
be eighteen (18) months, commencing March 15, 1998. Sublessee shall be
permitted early occupancy to install its phone systems and wiring, subject to
all the provisions of this Sublease except the obligation to pay Rent (as
defined in Paragraph 5.1 below), which shall begin on the Commencement Date (as
defined in Paragraph 3.1 below).
3.1 Initial Term. The initial term of the Sublease contemplated
------------
hereby (the "Term") shall commence on the later of: (a) the date which is two
(2) days following receipt by Verity of RDI's written consent to this Sublease,
or (b) March 15, 1998 (the "Commencement Date"). The Term shall expire on
September 30, 1999 (the "Scheduled Expiration Date"), subject to extension in
accordance with and subject to Paragraph 3.2 below.
3.2 Extension Period. Should Teleworld desire to extend the term of
----------------
this Sublease by up to six (6) additional months, Teleworld shall notify Verity
of such desire not less than one hundred eighty (180) days prior to the
Scheduled Expiration Date. Following Verity's receipt of such notice, Verity
shall decide in its sole and absolute discretion whether and on what terms
Verity would make the Premises available to Teleworld following the Scheduled
Expiration Date, provided, however, that the monthly Rent payable during the
first six (6) months following the Scheduled Expiration Date shall not exceed
Seventy Two Thousand Five Hundred Sixty Four Dollars and Ten Cents ($72,564.10).
If Verity decides to make the Premises available to Teleworld following the
Scheduled Expiration Date, Verity shall, not less than ninety (90) days prior to
the Scheduled Expiration Date, give notice thereof to Teleworld, including the
terms on which Verity would be willing to make the Premises available. If
Verity does not give such notice to Teleworld (or does not otherwise respond to
Teleworld regarding the availability of the Premises after the Scheduled
Expiration Date) at least ninety (90) days prior to the Scheduled Expiration
Date, Verity shall be deemed to have decided not to make the Premises available
to Teleworld after the Scheduled Expiration Date and this Sublease shall expire
on the Scheduled Expiration Date. Nothing herein shall be construed so as to
obligate Verity to make the Premises available to Teleworld following the
Scheduled Expiration Date on any terms. If Verity decides to make the Premises
available to Teleworld after the Scheduled Expiration Date and Verity and
Teleworld thereafter are able to agree upon the terms and
2.
<PAGE>
conditions of this Sublease with respect to the time period following the
Scheduled Expiration Date (such period is referred to herein as the "Extension
Period"), then such agreed upon terms and conditions shall be in effect during
the Extension Period. If Verity and Teleworld are unable to agree upon such
terms and conditions of this Sublease prior to the commencement of the Extension
Period, this Sublease shall terminate on the Scheduled Expiration Date.
4. Use. Teleworld shall use the Premises in accordance with the terms
---
set forth in Article 4 of the Lease. The Premises shall not be used for
manufacturing processes of any kind.
5. Rent; Security Deposit.
----------------------
5.1 Monthly Rent. Teleworld agrees to pay to Verity, as rent
------------
("Rent") for the Premises for each month of the term of this Sublease, the sum
of: (a) Seventy Thousand One Hundred Four Dollars and Thirty Cents ($70,104.30)
for the first twelve (12) months of the Term, and (b) Seventy One Thousand Three
Hundred Thirty Four Dollars and Twenty Cents ($71,343.20) for the balance of the
Term up to the Scheduled Expiration Date. The foregoing amount represents the
monthly base rent plus an additional sum to cover Teleworld's share of the
monthly building expenses for the Premises totaling Two and 85/100 Dollars
($2.85) per square foot per month for the first twelve (12) months of the Term,
and Two and 90/100 Dollars ($2.90) per square foot per month for the balance of
the Term up to the Scheduled Expiration Date. Teleworld and Verity acknowledge
and agree that such Rent includes payment for use of the items set forth on
Exhibit A attached hereto at the rate of fifty cents ($.50) per square foot per
month. The first month's Rent shall be due on the Commencement Date, provided
that such amount shall be prorated to reflect the partial month, based on the
number of clays from and including the Commencement Date to and including March
31, 1998. Teleworld shall have no additional obligation to pay for utilities,
heating, ventilation, or air conditioning repairs and maintenance, insurance,
property taxes, or repairs that are the responsibility of Verity under Paragraph
7.3(e) below, or common area maintenance, including janitorial expenses and
Common Operating Expenses, except as expressly provided herein.
5.2 Place of Payment of Rent. The Rent and all other amounts payable
------------------------
to Verity hereunder shall be paid to Verity when due, without prior notice or
demand and without deduction or offset, in lawful money of the United States by
check payable to Verity, Inc. and mailed to: Verity, Inc., 892 Ross Drive,
Sunnyvale, California 94089, Attention: Accounts Receivable.
5.3 Security Deposits. Teleworld shall pay Seventy Two Thousand Five
-----------------
Hundred Sixty Four Dollars and Ten Cents ($72,564.10) on the Effective Date as
security for the performance of Teleworld's obligations under this Sublease.
Teleworld shall also pay One Hundred Forty Five Thousand Dollars ($145,000.00)
on the Effective Date as a security deposit with respect to Teleworld's
obligations to maintain and return in good condition the office cubicles,
furniture and network and data wiring which Teleworld is permitted to use under
this Sublease. Teleworld acknowledges and agrees that Verity shall be entitled
to withhold from such security deposit amounts to perform necessary repair or
replacement of any of the items listed on Exhibit A at the expiration of the
Term of this Sublease.
3.
<PAGE>
5.4 Discounted Payment. Notwithstanding the amount of monthly Rent
------------------
set forth in Paragraph 5.1 above, Teleworld shall have the option to pay all
Rent due under this Sublease in a single payment upon the Commencement Date,
which single payment shall be equal to all amounts of Rent to be paid by
Teleworld under this Sublease, discounted to its present value as of the
Commencement Date utilizing a discount rate of ten percent (10%) per annum.
6. Acceptance and Condition of Premises. Verity shall deliver the
------------------------------------
Premises to Teleworld on the Commencement Date in broom-clean condition.
Teleworld acknowledges that it had the right to inspect the Premises and the
items listed on Exhibit A prior to commencing occupancy. By executing this
Sublease, Teleworld shall be deemed to have accepted the same in their "AS-IS"
condition, subject to any circumstances, defects, or conditions therein, and
without any representations or warranties from Verity.
7. Related Provisions.
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7.1 Insurance. With respect to the tenant's insurance to be provided
---------
by Teleworld as described in Paragraph 9.1 of the Lease, such policies of
insurance shall include as named insureds RDI, Verity and Teleworld.
7.2 Waiver of Subrogation. With respect to the waiver of subrogation
---------------------
contained in Paragraph 9.4 of the Lease, such waiver shall be deemed to be
modified to constitute an agreement by and among RDI, Verity, and Teleworld (and
RDI's consent to this Sublease, if given, shall be deemed to constitute its
approval of this modification).
7.3 Building Services and Repairs and Maintenance.
---------------------------------------------
(a) Teleworld shall be entitled to use of common areas in or
relating to the Master Premises.
(b) Teleworld shall be responsible for keying its locks and
otherwise providing its own security for the Premises. Teleworld shall deliver
two copies of each new key to Verity.
(c) Verity shall make available to Teleworld the janitorial
service serving the balance of the Master Premises, at no additional charge to
Teleworld. Such service shall include removal of Teleworld's waste,
notwithstanding the provisions of the second to last sentence of Section 7.1 of
the Lease to the contrary, provided that such waste is of the type and quantity
generated by typical office use. Verity reserves the right to charge Teleworld
reasonable amounts for removal of wastes if extraordinary types or quantities of
waste are generated by Teleworld.
(d) Teleworld shall be responsible for installation and service
for telephone and data transmission lines; provided Teleworld may use the
network and data wiring set forth on Exhibit A which is already installed in or
serving the Premises, which Teleworld acknowledges does not include the T 1
line.
4.
<PAGE>
(e) Teleworld shall be responsible, at its own expense, for
repair and maintenance as set forth in Paragraph 6.1 of the Lease with respect
only to the Premises, but shall not be responsible for repair and maintenance of
HVAC equipment, utility facilities or other such building systems and equipment
that serve the Master Premises as a whole. Teleworld, at its cost, shall
maintain in good condition all items of office cubicles, furniture and network
and data wiring set forth on Exhibit A attached hereto. Such items shall be
returned by Teleworld to Verity upon the expiration of the Term in the condition
in which they were delivered to Teleworld.
(f) If Verity determines in the reasonable exercise of its
discretion that Teleworld is utilizing a disproportionate share of utilities,
heating, ventilation and/or air conditioning or that Teleworld is regularly
using such utilities and services beyond the base business hours of 8:00 a.m. to
8:00 p.m. Monday through Friday, Verity reserves the right to charge Teleworld
for any such disproportionate or excess usage (and Teleworld shall pay to Verity
within thirty (30) days of Verity's request) at the rate of Ten Cents ($.10) per
rentable foot of the Premises per month; provided that this excess charge shall
apply only for so long as the electrical service capacity of the Premises
remains at the level that exists as of the date of this Sublease, and if
Teleworld increases or otherwise changes such capacity, then Landlord reserves
the right to charge Teleworld the actual charges incurred by Verity for
Teleworld's disproportionate or excess usage, as evidenced by Verity's
calculation thereof.
8. Signage. Teleworld shall have the right, at its sole cost and
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expense, to place a sign on the suite door and the monument sign outside the
Building, and to place standard identification on the lobby directory, provided
any such signs shall be consistent in size and character with existing signage
of other subtenants of Verity and Teleworld obtains the prior written consent of
RDI and Verity (which consent Verity shall not unreasonably withhold) prior to
installing such sign. Upon termination of this Sublease, Teleworld shall remove
the sign and repair any damage caused by the installation or removal of the
sign.
9. Assignment and Subletting. Teleworld shall have no right to assign
-------------------------
this Sublease or any of its rights hereunder or sublet all or any portion of the
Premises, without the prior written consent of Verity (which Verity may grant or
withhold in its sole discretion), and without the consent of RDI to the extent
required under the Lease.
10. Right of Offer. In the event Verity determines to further sublease
--------------
suites 202, 203 or 204 of the Master Premises during the Term of this Sublease,
Verity shall advise Teleworld of the terms and conditions on which Verity is
willing to sublease such space. Within five (5) days of receipt of such
information, Teleworld shall advise Verity in writing whether Teleworld desires
to sublease such space on the terms and conditions delivered to Teleworld by
Verity. In the event Teleworld elects to sublease, such space shall be added to
this Sublease by execution of an appropriate addendum as soon as practical. In
the event Teleworld fails to notify Verity in writing of its acceptance of the
proposed terms and conditions within such five (5) days, then Verity shall be
free to sublease such space to third parties on terms and conditions acceptable
to Verity, in its sole discretion, which terms and conditions may be different
from those previously communicated to Teleworld. The right of offer granted to
Teleworld in this Paragraph 10 shall be subject to any prior rights of first
offer, rights of first refusal or similar rights granted by Verity to any other
subtenant of the Master Premises as of the Effective Date.
5.
<PAGE>
11. Notices. All notices, demands, requests, advices, or designations
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which may be or are required to be given by either party to the other hereunder
shall be in writing. All notices, demands, requests, advices or designations
shall be sufficiently given by personal delivery, by certified or registered
mail, return receipt requested, postage prepaid, or by Federal Express or
similar overnight courier and addressed to Verity at the address specified in
Paragraph 5.2 of this Sublease, or to Teleworld at the Premises. Either party
may by notice to the other specify a different address for notice purposes.
Each notice, request, demand, advice or designation referred to in this
paragraph shall be deemed delivered only upon delivery.
12. Brokers. A commission shall be paid to Cornish & Carey Commercial
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("C&C") under a separate agreement between C&C and Verity. Except for the
foregoing, each party warrants and represents to the other that it has retained
no broker or other party that is entitled to any fee or commission in connection
with this Sublease, and each agrees to indemnify, defend and hold harmless the
other party from any and all liabilities, claims or damages arising out of such
party's breach of the foregoing warranty and representation.
13. Termination of Lease. This Sublease is and shall at all times be
--------------------
subordinate to the Lease. In the event the Lease is terminated for any reason,
then this Sublease shall automatically terminate on the date of such
termination, and shall be of no further force and effect. If Verity has actual
advance knowledge of any termination, Verity shall promptly advise Teleworld
thereof. If the termination of the Lease (and resulting termination of this
Sublease) occurs through no fault of Verity, Verity shall have no liability
therefor to Teleworld.
14. Surrender of the Premises. Upon expiration or termination of this
-------------------------
Sublease, Teleworld shall comply with Paragraph 15.2 of the Lease except that
Teleworld shall have no obligation to (i) have the HVAC system serviced, (ii)
wax the floors, (iii) shampoo the carpets, and/or (iv) paint the walls of the
Premises (or clean the walls so that they appear freshly painted); except that
Teleworld shall be obligated to paint the walls of the Premises (or clean the
walls so that they appear freshly painted) if as a result of holes, other
damage, and/or marring of the walls such painting or cleaning is appropriate to
put the Premises in reasonable condition for use and occupancy for the purposes
permitted by Article 4 of the Lease. Upon expiration or termination of the Term
of this Sublease, Verity and Teleworld shall inspect the Premises and the items
listed on Exhibit A to determine whether any repairs or replacements are
necessary. Verity shall have no obligation to return the security deposits made
by Teleworld under this Sublease until completion of such inspection and
determination of necessary repair or replacement costs, if any.
15. Consent of RDI. Whenever the consent of Landlord is required under the
--------------
Lease, Teleworld acknowledges the consent of Verity and RDI shall be required.
Furthermore, this Sublease shall not be operative or deemed effective for any
purpose whatsoever unless and until the consent of RDI to this Sublease has been
obtained. Teleworld and Verity shall use their commercially reasonable efforts
to obtain such consent on or before March 6, 1998. If such consent is not
obtained by March 31, 1998, Verity shall return to Teleworld all sums paid to
Verity by Teleworld pursuant hereto, and this Sublease shall be of no further
force or effect.
16. Counterparts. This Sublease may be executed in counterparts and
------------
delivered by and to the respective parties by facsimile transmission, and each
such counterpart copy hereof so
7.
<PAGE>
executed and delivered shall constitute an original, and all such counterparts
together shall constitute a single agreement.
IN WITNESS WHEREOF, the parties have caused this instrument to be executed
by their duly authorized representatives as of the day and year first above
written.
VERITY:
Verity, Inc., a Delaware corporation
By: /s/ James E. Ticehurst
-----------------------------------
Its: Vice President and Controller
-------------------------------
Teleworld:
Teleworld, Inc., a Delaware corporation
By: /s/ Michael Ramsay
-----------------------------------
Its: CEO
-----------------------------------
7.