OFFICE SPACE LEASE
BETWEEN
JAHRA INVESTMENTS, N.V.
AS LANDLORD
AND
DVD EXPRESS, INC.,
A CALIFORNIA CORPORATION
AS TENANT
LA REINA BUILDING
0000 XXXXXXXXX XXXXXXXXX
XXXXXXXXX, XXXXXXXXXX
TABLE OF CONTENTS
ARTICLE I. PREMISES....................................................... 3
SECTION 1.1 LEASED PREMISES................................................ 3
SECTION 1.2 ACCEPTANCE OF PREMISES......................................... 3
SECTION 1.3 USE RESERVATIONS............................................... 3
SECTION 1.4 BUILDING NAME AND ADDRESS...................................... 3
ARTICLE II. TERM........................................................... 3
SECTION 2.1 GENERAL........................................................ 3
SECTION 2.2 TENDER OF POSSESSION BY LANDLORD............................... 3
ARTICLE III. RENT AND SECURITY DEPOSIT...................................... 4
SECTION 3.1 BASIC ANNUAL RENT.............................................. 4
SECTION 3.2 SECURITY DEPOSIT............................................... 4
SECTION 3.3 OPERATING EXPENSES............................................. 4
ARTICLE IV. USES........................................................... 6
SECTION 4.1 USE............................................................ 6
SECTION 4.2 PROHIBITION AGAINST SOLICITATION AND OTHER ACTIVITIES WITHOUT
THE PERMISSION OF LANDLORD..................................... 7
SECTION 4.3 EXCLUSIVE CONTROL OVER COMMON AREA............................. 7
SECTION 4.4 SIGNS.......................................................... 7
ARTICLE V. SERVICES....................................................... 7
SECTION 5.1 UTILITIES AND SERVICES......................................... 7
SECTION 5.2 OPERATION AND MAINTENANCE OF COMMON FACILITIES................. 8
SECTION 5.3 USE OF COMMON FACILITIES....................................... 9
SECTION 5.4 PARKING........................................................ 9
SECTION 5.5 SECURITY CARDS................................................. 9
ARTICLE VI. MAINTENANCE OF THE PREMISES.................................... 10
SECTION 6.1 TENANT'S MAINTENANCE AND REPAIR................................ 10
SECTION 6.2 LANDLORD'S MAINTENANCE AND REPAIR.............................. 10
SECTION 6.3 ALTERATIONS BY LANDLORD........................................ 10
SECTION 6.4 TENANT'S ALTERATIONS........................................... 10
SECTION 6.5 MECHANIC'S LIENS............................................... 11
SECTION 6.6 ENTRY AND INSPECTION........................................... 11
ARTICLE VII. TAXES AND ASSESSMENTS ON TENANT'S PROPERTY..................... 11
SECTION 7.1 TAXES ON TENANT'S PROPERTY..................................... 11
ARTICLE VIII. ASSIGNMENT AND SUBLETTING...................................... 12
SECTION 8.1 PROHIBITION AND CONSENT........................................ 12
SECTION 8.2 TRANSFER FEE................................................... 13
ARTICLE IX. INSURANCE AND INDEMNITY........................................ 13
SECTION 9.1 TENANT'S INSURANCE............................................. 13
SECTION 9.2 TENANT'S INDEMNITY............................................. 14
SECTION 9.3 LANDLORD'S INDEMNITY........................................... 14
ARTICLE X. DAMAGE OR DESTRUCTION.......................................... 14
SECTION 10.1 RESTORATION.................................................... 14
SECTION 10.2 LANDLORD'S NON-LIABILITY....................................... 15
SECTION 10.3 TENANT'S WAIVER................................................ 15
ARTICLE XI. EMINENT DOMAIN................................................. 16
ARTICLE XII. SUBORDINATION; ESTOPPEL CERTIFICATE............................ 16
SECTION 12.1 SUBORDINATION.................................................. 16
SECTION 12.2 ESTOPPEL CERTIFICATE........................................... 16
ARTICLE XIII. DEFAULTS AND REMEDIES.......................................... 16
SECTION 13.1 TENANT'S DEFAULTS.............................................. 16
SECTION 13.2 LANDLORD'S REMEDIES............................................ 17
SECTION 13.3 INTEREST ON TENANT'S OBLIGATIONS; LATE PAYMENTS................ 18
SECTION 13.4 RIGHT OF LANDLORD TO PERFORM................................... 18
SECTION 13.5 DEFAULT BY LANDLORD............................................ 19
SECTION 13.6 EXPENSES AND LEGAL FEES........................................ 19
SECTION 13.7 REIMBURSEMENT OF CONCESSIONS................................... 19
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ARTICLE XIV. END OF TERM.................................................... 19
SECTION 14.1 HOLDING OVER................................................... 19
SECTION 14.2 SURRENDER OF PREMISES; REMOVAL OF PROPERTY..................... 19
SECTION 14.3 AFFIXED PROPERTY............................................... 20
ARTICLE XV. NOTICES........................................................ 20
ARTICLE XVI. RULES AND REGULATIONS.......................................... 20
ARTICLE XVII. BROKER'S COMMISSION............................................ 20
ARTICLE XVIII. TRANSFER OF LANDLORD'S INTEREST................................ 20
ARTICLE XIX. INTERPRETATION................................................. 20
SECTION 19.1 GENDER AND NUMBER.............................................. 20
SECTION 19.2 HEADINGS....................................................... 20
ARTICLE XX. EXECUTION AND RECORDING........................................ 21
SECTION 20.1 CORPORATE AUTHORITY............................................ 21
SECTION 20.2 RECORDING...................................................... 21
SECTION 20.3 AMENDMENTS..................................................... 21
ARTICLE XXI. MISCELLANEOUS.................................................. 21
SECTION 21.1 NONDISCLOSURE OF LEASE TERMS................................... 21
SECTION 21.2 FURNISHING OF FINANCIAL STATEMENTS............................. 21
SECTION 21.3 CHANGES REQUESTED BY LENDER.................................... 21
SECTION 21.4 GOVERNMENTAL REQUIREMENTS...................................... 21
SECTION 21.5 COVENANTS AND CONDITIONS....................................... 21
SECTION 21.6 WORK LETTER.................................................... 21
SECTION 21.7 JOINT AND SEVERAL LIABILITY.................................... 21
SECTION 21.8 SUCCESSORS..................................................... 21
SECTION 21.9 TIME OF ESSENCE................................................ 22
SECTION 21.10 CONTROLLING LAW................................................ 22
SECTION 21.11 SEVERABILITY................................................... 22
SECTION 21.12 RELATIONSHIP OF PARTIES........................................ 22
SECTION 21.13 INABILITY TO PERFORM........................................... 22
SECTION 21.14 QUIET ENJOYMENT................................................ 22
SECTION 21.15 HAZARDOUS WASTE AND MATERIALS.................................. 22
SECTION 21.16 ENTIRE AGREEMENT............................................... 22
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LA REINA OFFICE BUILDING LEASE
BASIC LEASE PROVISIONS. In the event of any conflict between any Basic Lease
Provision and the balance of this Lease, the latter shall control.
1. TENANT'S NAME: DVD EXPRESS, INC., A CALIFORNIA CORPORATION.
2. PREMISES, including FLOOR, SUITE NO. and RENTABLE AREA: 0000
XXXXXXXXX XXXXXXXXX, XXXXXXXXX, XXXXXXXXXX, XXXXX 000, CONTAINING
APPROXIMATELY 8,541 RENTABLE SQUARE FEET AND 7,356 USABLE SQUARE FEET ON
THE FIRST (1ST) FLOOR.
3. ESTIMATED COMMENCEMENT: APRIL 1, 1998.
4. LEASE TERM: THREE (3) YEARS.
5. BASIC ANNUAL RENT: Initially $128,115.00 payable at $10,676.25 per month
increased annually by CPI per Section 3.1 below.
6. BASE YEAR: 1998.
7. SPACE PLAN APPROVAL DATE: FEBRUARY 7, 1998.
8. SECURITY DEPOSIT: $21,352.50; payable on execution of Lease.
9. PREPAID RENT: NOT APPLICABLE.
10. BROKER(S): LANDLORD'S BROKER, CB COMMERCIAL PER SEPARATE AGREEMENT:
TENANT'S BROKER: NONE.
11. ADDRESS FOR PAYMENTS AND NOTICES:
TO LANDLORD: Jahra Investments, N.V.
c/o MarGulf Management Co., Inc.
0000 Xxxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxxx, XX 00000
Telephone No.: (000) 000-0000
TO TENANT: DVD Express, a California corporation
0000 Xxxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxxx, XX 00000
Telephone No.: (000) 000-0000
12. MINIMUM COVERAGE FOR COMPREHENSIVE GENERAL LIABILITY POLICY:
$2,000,000.00 combined single limit.
13. NUMBER OF PARKING SPACES: UP TO TWENTY (20) UNRESERVED PARKING SPACES
(OPTIONAL).
14. RENT PER PARKING SPACE: $110.00 PER MONTH PER RESERVED SPACE: $77.00
PER MONTH PER UNRESERVED SPACE.
15. ADDENDUM: An Addendum consisting of three (3) numbered paragraphs is
attached to and forms a part of this Lease.
16. LEASE EXECUTION: In witness whereof the parties hereto have executed
this Lease, consisting of the foregoing provisions and of the Additional
Lease Provisions and Exhibits which follow, as of January 16, 1998.
THIS LEASE SHALL NOT BECOME EFFECTIVE UNTIL EXECUTED BY LANDLORD AND
DELIVERED TO TENANT AND THE SUBMISSION OF THIS FORM OF LEASE BY LANDLORD, OR
LANDLORD'S AGENT, DOES NOT CONSTITUTE AN OFFER TO LEASE. NO EMPLOYEE OR
AGENT OF LANDLORD OR ANY PERSON WITH WHOM TENANT MAY HAVE NEGOTIATED THIS
LEASE HAS ANY AUTHORITY TO MODIFY THE TERMS HEREOF OR TO MAKE ANY AGREEMENTS,
REPRESENTATIONS OR PROMISES UNLESS THE SAME ARE CONTAINED HEREIN OR ADDED
HERETO IN WRITING.
JAHRA INVESTMENTS, N.V.
By: /s/ Xxx Xxxxxxxxxxx
----------------------------------
Xxx Xxxxxxxxxxx
Its: Treasurer
"Landlord"
DVD EXPRESS, INC.,
a California corporation
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------
Its:
------------------------------
"Tenant"
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MEMORANDUM OF ACTUAL COMMENCEMENT AND EXPIRATION DATES
Commencement Date: Expiration Date:
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ADDITIONAL LEASE PROVISIONS
ARTICLE I. PREMISES
SECTION 1.1 LEASED PREMISES - Landlord hereby leases to Tenant and
Tenant hereby hires from Landlord, subject to all the terms and conditions
hereinafter set forth, those certain premises identified in Item 2 of the
Basic Lease Provisions and shown in the drawing attached hereto as EXHIBIT
"A-1" (the "Premises"). The Premises are located on the designated floor(s)
of that certain office structure constructed on the real property legally
described in EXHIBIT "A-2" attached hereto. Said office structure is
hereinafter called the "Building". Said real property, the Building, the
adjoining parking structure and other related improvements as from time to
time constructed upon said real property are hereinafter referred to as the
"Project".
SECTION 1.2 ACCEPTANCE OF PREMISES. Tenant acknowledges that neither
Landlord nor any agent of Landlord has made any representation or warranty
with respect to the Premises, the Building and/or the Project, or the
suitability or fitness thereof for the conduct of Tenant's business or for
any other purpose, except as set forth in this Lease. The taking of
possession or use of the Premises by Tenant for any purpose other than
construction shall conclusively establish that the Premises, the Building and
the Project were at such time in satisfactory condition and in conformity with
the provisions of this Lease in all respects, except as to any items as to
which Tenant shall give Landlord written notice in reasonable detail, which
items shall be limited to any items required to be accomplished by Landlord
pursuant to its standard build out or under that certain Work Letter, if any,
being executed and delivered by Landlord and Tenant concurrently with this
Lease and attached hereto as Exhibit "B" (the "Work Letter"). Such written
notice shall be given within thirty (30) days after the term of this Lease
commences as provided in Article II below. Failure to submit such written
notice in the time provided shall constitute a waiver thereof. Landlord
shall promptly take such action as may be reasonably required to remedy an
actual defects and/or to complete any work of which it is notified as
provided above.
SECTION 1.3 USE RESERVATIONS. Tenant acknowledges that the exterior
demising walls of the Premises and the area between the finished ceiling of
the Premises and the slab of the Building floor or roof there-above and
between the finished floor of the Premises and the foundation or finished
ceiling of the portion of the Building there-below have not been leased to
Tenant. Landlord reserves the use thereof, together with the right to locate
or relocate (both vertically and horizontally), install, maintain, use,
repair and replace pipes, utility lines, ducts, conduits, flues, refrigerant
lines, drains, sprinkler mains and valves, access panels, wires and
appurtenant meters or equipment, and structural elements leading through,
under or above the Premises in locations which will not materially interfere
with Tenant's use of the Premises.
SECTION 1.4 BUILDING NAME AND ADDRESS. Landlord may adopt any name it
may select for the Building and/or the Project, and Landlord reserves the
right to change the name and/or address of the Building and/or the Project at
any time. Tenant shall not use the name of the Building, the Project or such
development for any purpose other than as the address of the business to be
conducted by Tenant in the Premises, and Tenant shall not acquire any
property right in or to any name which contains said word combination as a
part thereof.
ARTICLE II. TERM
SECTION 2.1 GENERAL. The term of this Lease shall be for the period
shown in Item 4 of the Basic Lease Provisions, commencing on the estimated
commencement date as shown in Item 3 of the Basic Lease Provisions, or such
later date as the Premises shall be tendered to Tenant ready for occupancy or
upon such earlier date as Tenant takes possession or commences use of the
Premises for any purpose other than construction (the "Commencement Date").
Within five (5) days following the Commencement Date, the parties shall
execute a supplement in the form attached hereto as Exhibit "A-3", stating
the Commencement Date and the expiration date of the term of this Lease. The
term "ready for occupancy" shall mean when Landlord (a) has put in operation
all Building services essential for the use of the Premises by Tenant; (b)
has provided reasonable access to the Premises for Tenant, its agents,
employees, licensees and invitees so that the same may be used without
unnecessary interference; and (c) subject to the provisions of the Work
Letter, if any, has "substantially completed" (as defined in the Work Letter)
the work required to be done by Landlord within the Premises pursuant to the
Work Letter.
SECTION 2.2 TENDER OF POSSESSION BY LANDLORD. Landlord may tender the
Premises to Tenant prior to, on or after the estimated commencement date
specified in Item 3 of the Basic Lease Provisions upon not less thant five
(5) days' written notice stating that the Premises will be ready for
occupancy on the date specified in such notice. If Landlord, for any reason
whatsoever, cannot deliver possession of the Premises to Tenant on or before
the estimated commencement date, this Lease shall not be void or voidable nor
shall Landlord by liable to Tenant for any loss or damage resulting therefrom.
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ARTICLE III. RENT AND SECURITY DEPOSIT
SECTION 3.1 BASIC ANNUAL RENT.
(a) Tenant shall pay the basic annual rent for the Premises in the
total amount, but payable in the equal monthly installments, shown in Item 5
of the Basic Lease Provisions or in the Addendum, subject to the adjustment
as provided in the Addendum or in Section 3.1(c) hereof, due and payable on
the first day of each month in advance, commencing on the Commencement Date
and continuing throughout the term of this Lease, except that if the
Commencement Date occurs on a day other than the first day of a month, then
the rent payable hereunder shall be prorated on a daily basis and the rent
for the partial month following the Commencement Date shall be payable on the
first day of the term of this Lease. No demand, notice or invoice shall be
required. Tenant shall receive a credit against the first installment or
installments of minimum rental payable under this Section 3.1 in an amount
equal to the prepaid rent specified in Item 9 of the Basic Lease Provisions.
All rents and other sums payable by Tenant to Landlord under this Lease shall
be paid to Landlord, without offset or deduction, in lawful money of the
United States of America at the address for Landlord shown in Item 11 of the
Basic Lease Provisions, or to such other person or at such other place as
Landlord may from time to time designate in writing.
(b) As used herein "Lease Year" shall be a period of twelve (12)
consecutive months commencing on the first full calendar month during the
lease term; provided that the first Lease Year shall also include any partial
calendar month following the Commencement Date.
(c) Basic annual rent, as set forth in Item 5 of the Basic Lease
Provisions, shall be increased once per year if the Consumer Price Index, Los
Angeles-Anaheim-Riverside, All Urban Consumers, All Items (1982-1984=100),
published monthly by the Bureau of Labor Statistics of the U.S. Department of
Labor ("Bureau"), increases over the Base Index. The Base Index shall be the
Consumer Price Index for the calendar month in which the Commencement Date
occurs. The Base Index shall be compared with the Consumer Price Index for
the same calendar month for each subsequent year ("Comparison Month"). If
the Consumer Price Index for any Comparison Month is higher than the Base
Index, then the Minimum Rent for the annual period commencing on the first
day of the second calendar month following such Comparison Month shall be
increased above that payable pursuant to Item 5 of the Basic Lease Provisions
for the initial year of the term by the identical percentage. In no event
shall the Minimum Rent be reduced by reason of the operation of this Section
3.1(c).
(d) In the event that at any time during the term of this Lease, any
governmental law, rule or regulation prohibits or postpones in whole or in
part any increase in the rent or in the payment of other sums payable by
Tenant hereunder to be made pursuant to this Lease, then, and in either of
such events, such increase or payment shall be made to the maximum extent
permissible by law at the time provided in this Lease, and/or at any time or
times thereafter such increase or payment, or any portion thereof, may
lawfully be made and any such increase in rent, or any portion thereof, or
other sums payable hereunder, or portions thereof, the payment of which has
been so prohibited or postponed, shall thereafter become due and payable to
the maximum extent and at the earliest time or times permitted by law.
SECTION 3.2 SECURITY DEPOSIT. Tenant has deposited with Landlord the
sum stated in Item 8 of the Basic Lease Provisions, to be held by Landlord as
security for the full and faithful performance of every Lease provision to be
performed by Tenant. If Tenant defaults with respect to any provision of
this Lease, including, but not limited to, the provisions relating to the
payment of rent, Landlord may (but shall not be required to) use, apply or
retain all or any part of this security deposit for the payment of any rent
or other sum in default, or for the payment of any other amount which
Landlord may spend or become obligated to spend by reason of Tenant's default
or to compensate Landlord for any other loss or damage which Landlord may
suffer by reason of Tenant's default to the full extent permitted by law. If
any portion of said deposit is so used or applied, Tenant shall, within five
(5) days after written demand therefor, deposit cash with the Landlord in an
amount sufficient to restore the security deposit to its original amount.
Landlord shall not be required to keep this security deposit separate from
its general funds, but Landlord shall place the security deposit in an
interest-bearing account selected by Landlord, in its sole discretion, which
interest shall be added to the security deposit. If Tenant shall perform
every provision of this Lease to be performed by it, the security deposit,
together with the interest earned on the security deposit, or any balance
thereof, shall be returned to Tenant (or, at Landlord's option, to the last
assignee of Tenant's interest hereunder) within thirty (30) days after the
expiration of the Lease term, provided that Landlord may retain the security
deposit and interest until such time as any amount due from Tenant in
accordance with any provision hereof has been determined and paid in full.
SECTION 3.3 OPERATING EXPENSES
(a) In addition to paying basic annual rent, Tenant shall pay to
Landlord in installments, as provided in (b) below, the amount by which
Tenant's proportionate share of all "Operating Expenses" (as hereafter
defined) incurred by Landlord in the operation of the Project exceeds
Tenant's proportionate share of the Operating Expenses incurred during the
Base Year specified in Item 6 of the Basic Lease Provisions ("Increase
Operating Costs"). Such payments shall be deemed additional rent. Tenant's
obligation to pay its proportionate share of Increased Operating Costs shall
commence as of the beginning of the first full calendar year following the
Base Year. Tenant shall not be reimbursed or credited if the actual
Operating Expenses incurred during any year of the Lease Term are less than
the Operating Expenses for the Base Year. Tenant's proportionate share shall
be computed by dividing the "rentable area" of the Premises
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identified in Item 2 of the Basic Lease Provisions by the total "rentable
area" of the Building. The term "rentable area" as used herein with respect
to the Premises and the Building shall be computed by measuring from the
inside surface of the permanent outer building walls.
Specifically included within the definition of rentable area shall be
all area within the outside walls, air conditioning shafts and ducts where a
central air conditioning system eliminates floor fan rooms, private stairs,
private elevators, toilets, air conditioning rooms, fan rooms, air ducts,
janitor's closets, slop sinks, electrical closets, telephone closets, and all
enclosing walls for the above items, all of which exclusively serve the floor
in which they are located, and columns and projections necessary to the
Building. The area of air conditioning and fan rooms located on a rental
floor serving more than the one floor in which located, together with their
enclosing walls, shall be apportioned and included as rentable area of the
floors which they serve.
Except as provided above, there shall be excluded from rentable area
building stairs, fire towers, elevator shafts, flues, vents, stacks, pipe
shafts and vertical ducts, with their enclosing walls serving more than one
floor, lobby, public vestibules, public telephone boots, ramps, loading docks
and other public areas on the first floor of the building. Rentable area for
divided floors shall include a proportionate share of public corridors,
public toilets, air conditioning rooms, fan rooms, air ducts, janitor's
closets, electrical closets, telephone equipment closets and their enclosing
walls. Notwithstanding the foregoing, one-half of the total floor area (as
measured by the inside surfaces of perimeter walls) of any exterior balconies
attached to a building shall be considered to be rentable area.
Prior to the Commencement Date, and from time to time thereafter, at
Landlord's option, Landlord's architect shall determine and certify in
writing to Tenant and Landlord the actual rentable area of the Building and
other buildings in the Project, which determination and certification shall
be binding upon Tenant.
(b) Prior to the start of each calendar year of the lease term
following the calendar year during which this Lease is executed, Landlord
shall furnish to Tenant a written estimate of the Operating Expenses and
Tenant's proportionate share of the Increased Operating Costs for the next
calendar year or portion thereof. In addition to tenant's basic annual rent
payments, Tenant shall pay to Landlord the amount by which its proportionate
share of Operation Expenses exceeds Tenant's proportionate share of the
Operating Expenses incurred during the Base Year identified in Item 6 of the
Basic Lease Provisions in equal monthly installments, in advance, together
with the monthly installments of basic annual rent.
Within one hundred twenty (120) days after the end of each calendar
year, including the calendar year during which the lease term commences,
Landlord shall furnish to Tenant a statement showing in reasonable detail the
actual Operating Expenses incurred by Landlord during the previous year and
Tenant's proportionate share thereof. The parties shall adjust Tenant's
estimated payment, if any, to Tenant's actual proportionate share as shown by
such annual statement. Any amount due Tenant shall be credited against
installments next coming due under this Section 3.3, and any deficiency shall
be paid by Tenant in the next such installment. Tenant agrees to accept as
final and determinative the amounts shown in such statement and hereby waives
all claims arising from such statement, except those for which a claim is
made by Tenant within six (6) months after Landlord has furnished such
statement to Tenant. Should there be any dispute with respect to either the
Landlord's written estimate of Tenant's share of Operating Expenses or the
year end statement showing actual Operating Expenses, Tenant shall
nevertheless pay its proportionate share of such expenses but may contest the
accuracy thereof in accordance with the terms set forth above, and any
failure to so pay shall constitute a default by Tenant under this Lease.
(c) Even though the Lease term has expired and Tenant has vacated the
Premises, when the final determination is made of Tenant's Increased
Operating Costs for the year in which the Lease terminates, Tenant shall
immediately pay to Landlord the amount by which such Increased Operating
Costs exceeds the estimated payments made by Tenant under (b) above. Any
overpayment made toward Tenant's Increased Operating Costs shall be promptly
rebated by Landlord to Tenant. Tenant's payment of Increased Operating Costs
shall be prorated for any partial calendar year on a per diem basis in any
reasonable manner selected by Landlord.
(d) Landlord may from time to time during any calendar year
re-estimate Operating Expenses and/or tenant's proportionate share thereof to
reflect changes in circumstances. In such event, Landlord shall notify
Tenant of the change and of the effect of such change on the amount of the
monthly installments to be paid by Tenant pursuant to (b) above. Commencing
on the date specified in such notice from Landlord, the monthly installment
payable by Tenant under (b) above shall be adjusted as specified in such
notice.
(e) The term "Operating Expenses" as used herein shall include all
costs of operation, maintenance, management and repair in a manner deemed
reasonable and appropriate by Landlord, and shall include the following costs
by way of illustration but not limitation; property taxes, including any taxes
described in paragraph (f) next below; general or special assessments; costs
and expenses in contesting the amount or validity of any property tax by
appropriate proceedings; cost of casualty, liability and other insurance and
Landlord's personal property used in connection therewith, including rental
loss, earthquake and/or other endorsements from time to time deemed
appropriate by Landlord; costs of all accounting and professional fees; water
and sewer charges; insurance premiums; license, permit, and inspection fees,
heat; light; power; steam; trash pick up, janitorial and security services
(provided Landlord shall not be required to provide any particular type of
security or liable for any failure of security); air conditioning; supplies,
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materials; equipment; tools; cost of repayment of equipment and all
maintenance, service and warranty agreements on equipment, including alarm
service, building mechanical equipment, window cleaning and elevator
maintenance (provided that Landlord may elect to depreciate the cost of
personal property used in the maintenance, operation, and/or repair of the
Building on a straight line basis and treat such depreciation as an operating
expense, in which event replacement cost shall be reduced by the accumulated
depreciation of the item replaced); amortization of capital investments (such
costs to be amortized over such reasonable period as Landlord may determine
with a return on capital of ten percent (10%) per annum on the unamortized
balance or at such higher rate as may have been paid by Landlord on funds
borrowed for the purpose of constructing such capital improvements) required
by governmental authority or that produced a reduction in operating costs or
which result in energy conservation; labor, wages and salaries, fringe
benefits and payroll taxes for administrative and other personnel; a
management fee not to exceed current market rates, which may be payable to
Landlord; and any expense incurred pursuant to Sections 5.1, 5.2 and 6.2
below. The term "property taxes" as used herein shall include all real
estate taxes or personal property taxes and other taxes, charges and
assessments used in connection with the operation of the Building and/or the
Project and the land upon which they are situated, and any tax, surcharge or
assessment which shall be levied in addition to or in lieu of real estate of
personal property taxes, other than taxes covered by Article VII. The
Operating Expense shall be extrapolated, if necessary, to reflect a completed
Building with at least ninety percent (90%) occupancy of the rentable area
thereof, a full year of operating and a full year of occupancy by Tenant.
(f) Should the United States of America, the State of California or
any political subdivision thereof, or any governmental authority having
jurisdiction (by way of substitution for all or any part of the "taxes"
otherwise required to be paid in whole or in part by Tenant pursuant to this
Section 3.3 or Section 7.1, or in addition thereto) impose a capital levy or
a tax, assessment and/or surcharge of any kind or nature upon, against, in
connection with, measured by, or with respect to the rentals or other charges
payable to Landlord by Tenant or other tenants in or occupants of the
Building and/or the Project or on the income of Landlord derived from the
Building and/or the Project or on Building and/or Project revenue, on
Landlord's ownership of the Building and/or the Project, or any portion
thereof or interest therein, or otherwise, other than on the value of real
and personal property comprising the Building and/or the Project, but
expressly excluding any general net income, franchise, or inheritance tax
levied upon or payable by Landlord, then, in such case, such tax, assessment
and/or surcharge shall be deemed to constitute a tax and/or assessment against
the Building and/or the Project and shall be included in Operating Expenses.
(g) Notwithstanding the foregoing, Operating Expenses shall not
include expenses for which the Landlord is reimbursed (either by an insurer,
condemnor, tenant or otherwise); expenses incurred in leasing or procuring
tenants (including, without limitation, lease commissions, advertising
expenses, legal expenses, and expenses of renovating space for tenants);
legal expenses arising out of disputes with tenants or the enforcement of the
provisions of any lease of space in the Building; interest or amortization
payments on any mortgage or mortgages; wages, salaries or other compensation
paid to any executive employees above the grade of building manager; or the
cost of any work or service performed for or facilities furnished to a tenant
at the tenant's costs; and charges metered separately to other premises
within the Building. To the extent that any of the expenses described in the
preceding paragraph are partially excluded from Operating Expenses due to
reimbursement or payment of a portion thereof by a tenant of the Building, or
by tenants of other floors of the Building, Tenant's proportionate share of
the balance of such expense shall be appropriately adjusted by excluding the
rentable area leased to such tenant or tenants for purposes of the
computation required by Section 3.3.
(h) In the event that Tenant's obligations for the payment of basic
annual rent is abated, in whole or in part, under Article X or Article XI
below, Tenant's share of the Increased Operating Costs shall be reduced in
proportion to the reduction in basic annual rent during any applicable
calendar year and Landlord may make an appropriate adjustment to the
estimated payment required by (b) above for the period of any such rent
abatement.
ARTICLE IV. USES
SECTION 4.1 USE. Tenant shall use and occupy the Premises for general
office purposes only and for no other use or purpose without the prior
written consent of Landlord, which consent Landlord may withhold in it sole
and absolute discretion. Landlord agrees that Tenant may ship, receive and
store software and related items as an incident to its use of the Premises
for general office purposes upon compliance with applicable zoning and other
governmental requirements. Tenant acknowledges that pursuant to that certain
Lease by and between Landlord and Entertainment Industry Development
Corporation ("EIDC") dated April 26, 1996, Landlord has granted EIDC the
exclusive right within the Building to procuring for others, permits necessary
for motion picture and television filming within Los Angeles, Orange, Ventura,
San Bernardino and Riverside Counties. Tenant shall not use or occupy the
Premises in violation or in conflict with any "Governmental Requirement"
(defined below) but shall, at Tenant's expense, promptly comply with all
present and future laws, ordinances, statutes, including without limitation the
Americans with Disabilities Act, orders, rules, restrictions, regulations and
requirements of all governmental authorities having jurisdiction over the
Premises whether or not the same is substantial, foreseen or unforeseen,
ordinary or extraordinary, or whether the same shall necessitate Tenant
making structural changes or improvements to the Premises or interfere with
the use and enjoyment of the Premises (herein collectively, "Governmental
Requirements"). Tenant shall not do or permit anything to be done in or
about the Premises which will in any way obstruct or interfere with the
rights of other tenants or occupants of the Project or of property adjacent
to the Project,
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or injure or annoy them, or use or allow the Premises to be used for any
improper, immoral, unlawful or objectionable purpose, nor shall Tenant cause,
maintain or permit any nuisance or commit any waste in, on or about the
Premises or the Projet. Without limiting the generality of the foregoing,
Tenant shall not (i) obstruct or store anything in the common areas (including
service or exit corridors), (ii) place a load upon any floor of the Premises
which exceeds the floor load per square foot which such floor was designed to
carry, or (iii) permit any objectionable sound or odors to carry outside the
Premises. In particular, Tenant agrees that business machines and mechanical
equipment used by Tenant which cause vibration or noise that may be
transmitted to any other portion of the Building, to such a degree as to be
reasonably objectionable to Landlord or to any occupant, shall be placed and
maintained by Tenant at its expense in setting of cork, rubber or spring-type
vibration isolators sufficient to eliminate such vibrations or noise. Tenant
shall not do or permit to be done anything which will invalidate or increase
the cost of any insurance policy(ies) covering the Building, the Premises,
the Project and/or property located therein and shall comply with all
applicable insurance underwriters rules, orders regulations and requirements of
the Pacific Fire Rating Bureau or other applicable organization performing a
similar function. Tenant shall promptly upon demand reimburse Landlord for
any additional premium charged for such policy(ies) by reason of Tenant's
failure to comply with the provisions of this Section, but such reimbursement
shall not be construed as curing Tenant's default for failing to comply with
the provisions of this Section. Tenant shall not, under any circumstances,
allow alcoholic beverages to be served or consumed within any portion of the
Premises.
SECTION 4.2 PROHIBITION AGAINST SOLICITATION AND OTHER ACTIVITIES
WITHOUT THE PERMISSION OF LANDLORD. Tenant hereby delegates to Landlord full
power, authority and control to regulate, in accordance with the rules and
regulations attached hereto as Exhibit "C" and/or from time to time adopted
pursuant to Article XVI and/or to prohibit the entrance to the Premises, the
Building and/or the Projet of all vendors, suppliers, surveyors, petitioners
and others deemed objectionable by Landlord. In the event said persons are
guests or invitees of Tenant, Tenant shall notify Landlord of this fact. No
such person shall be permitted to enter upon the Project, the Building and/or
Premises unless and until such person shall have executed Landlord's standard
entry permit and Landlord shall have determined, in its sole and absolute
discretion and judgment, that such person's activities will not disturb other
tenants, their customers or invitees or distract from the use of the Building
and/or the Premises for their intended purposes. Tenant agrees that Landlord
may prohibit and exclude, in whole or in part, vendors of sandwiches and other
food items from the Building, as Landlord may elect, in Landlord's sole and
absolute discretion.
SECTION 4.3 EXCLUSIVE CONTROL OVER COMMON AREA. It is expressly agreed
and understood that control over all uses of the "Common Facilities" (defined
in Section 5.2 below) shall reside with and be solely exercisable by
Landlord in its sole and absolute discretion. Said areas shall not be
available for use by Tenant, except as herein expressly provided, nor by
vendors, surveyors, petitioners and others without the express written
consent of Landlord, which Landlord may withhold in its sole and absolute
discretion.
SECTION 4.4 SIGNS. Tenant may not affix a sign to the exterior surface
of the suite front or any other part of the exterior or interior surface of
the Building. Except with the prior written approval of Landlord, which
approval may be withheld in Landlord's sole but reasonable discretion, Tenant
shall not place or allow to be placed, erected or maintained any sign, decal,
placard, name, insignia, trade name, decoration, flashing, moving or hanging
lights, lettering, or any other descriptive words or advertising matter of
any kind or description (herein collectively, "sign" or "signs") on any
exterior door, wall, window, surface or roof of the Premises or of the
Building or on the glass of any window or door of the Building, or in any
deck or balcony area included within the Premises or on any sidewalk or other
location outside the Building, or within any entrance to the Premises. If
Tenant places or causes to be placed or maintained any of the foregoing without
Landlord's prior approval, the same may be removed by Landlord at Tenant's
expense without notice and without such removal constituting a breach of this
Lease or entitling Tenant to claim damages on account thereof. If Tenant
places or causes to be placed or maintained any of the foregoing with
Landlord's prior approval, Tenant shall maintain the same in good condition
and repair at Tenant's sole cost and expense.
ARTICLE V. SERVICES
SECTION 5.1 UTILITIES AND SERVICES. Subject to the provisions set
forth below, Landlord shall furnish to the Premises between the hours of 7:30
a.m. and 6:00 p.m. Monday through Friday, and between the hours of 9:00 a.m.
and 1:00 p.m. Saturday, except those legal holidays designated by Landlord,
such amounts of air conditioning, heating and ventilation as Landlord
furnishes for normal office purposes in other portions of the Building taking
into consideration at any given time the availability of energy resources and
prudent energy conservation practices. During other hours Landlord will
provide such air conditioning, heating and ventilation upon not less than 48
hours' advance written notice from Tenant to Landlord, and Tenant, upon
presentation of a xxxx therefor, shall pay Landlord for such service on an
hourly basis at the rate of Twenty-Five Dollars ($25.00) per hour. If such
service is not a continuation of that furnished during regular business
hours, Tenant shall pay for a minimum of two (2) hours of such service.
Subject to provisions set forth below, Landlord shall at times furnish the
Premises with elevator service, reasonable amounts of electric current for
normal lighting by Building Standard overhead fluorescent and incandescent
fixtures and for fractional horsepower office machines and water for
lavatory and drinking purposes. Landlord shall provide janitor service five
(5) days per week and window washing as reasonably required; provided,
however, that Tenant shall pay for any unusual janitorial services required
by reason of
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any non-Building Standard improvements in the Premises, including without
limitation wall coverings and floor coverings, installed by or for Tenant
under the Work Letter or otherwise. Such janitorial service shall include
the replacement of fluorescent fixtures as required. Tenant shall pay for
replacement of all other bulbs as required.
Tenant will not without the prior written consent of Landlord use any
apparatus or device in the Premises, including without limitation electronic
data processing machines, punch card machines and machines using current in
excess of 110 volts which will in any way increase the amount of electricity,
or water usually furnished or supplied for use of the Premises as general
office space; nor connect any apparatus, machine or device with water pipes
or electric current (except through existing electrical outlets in the
Premises), for the purposes of using electric current or water.
Landlord may impose a reasonable charge plus any surcharges charged for
excess use for any utilities or services, including, without limitation,
electric current, required to be provided by Landlord by reason of any
substantial recurrent use of the Premises at any time other than generally
recognized business hours of generally recognized business days. If Tenant
shall require electric current in excess of that which Landlord is obligated
to furnish under this Section 5.1, Tenant shall first obtain the consent of
Landlord, which Landlord may refuse, to the use thereof and Landlord may
cause an electric current meter to be installed in the Premises to measure
the amount of electric current consumed for any such other use. The cost of
any such meter and of installation, maintenance and repair thereof shall be
paid for by Tenant and Tenant shall reimburse Landlord promptly upon demand
by Landlord for all such electric current consumed for any such other use as
shown by said meter, at the rates charged for such services by the local
public utility furnishing the same, plus any additional expense incurred in
keeping account of the electric current so consumed.
If any lights, machines or equipment (including without limitation
electronic data processing machines) are used by Tenant in the Premises which
materially affect the temperature otherwise maintained by the air conditioning
system, or generate substantially more heat in the Premises than would be
generated by the Building Standard lights and usual fractional horsepower office
equipment, Landlord shall have the right (but shall not be obligated) to
install any machinery and equipment which Landlord reasonably deems necessary
to restore temperature balance, including without limitation, modifications
to the standard air conditioning equipment, and the cost thereof, including
the cost of installation and any additional cost of operation and maintenance
occasioned thereby, shall be paid by Tenant to Landlord upon demand by
Landlord.
Landlord shall furnish water for drinking, cleaning and lavatory
purposes only, but if Tenant requires, uses or consumes water for any purpose
in addition to ordinary drinking, cleaning and lavatory purposes, of which
fact Tenant constitutes Landlord to be the sole judge, Landlord may install a
water meter and thereby measure Tenant's water consumption for all purposes.
Tenant shall pay Landlord for the cost of the meter and the cost of the
installation thereof, and for consumption throughout the duration of Tenant's
occupancy. Tenant shall keep said meter and installed equipment in good
working order and repair at Tenant's own cost and expenses, in default of
which Landlord may cause such meter to be replaced, repaired and collect the
cost thereof from Tenant.
In the event that any such utility service to the Premises is separately
metered or billed to Tenant, Tenant shall pay all charges for such utility
service to the Premises. If any such charges are not paid when due, Landlord
may pay the same, and any amount so paid by Landlord shall thereupon become
due to Landlord from Tenant as additional rent. If Landlord shall elect to
furnish any utility services to the Premises, Tenant shall purchase its
requirements thereof from Landlord so long as the rates charged therefor by
Landlord do not exceed those which Tenant would be required to pay if such
services were furnished it directly by a public utility.
Landlord shall not be liable for any failure to furnish any of the
services or utilities described in this Section 5.1 when such failure is
caused by accidents, breakage, repairs, strikes, lockouts, other labor
troubles or disputes, governmental water, energy or other conservation
programs or any other governmental requirements, action or inaction,
moratorium or other cause beyond Landlord's reasonable control. Landlord may
take into consideration the availability of energy resources and prudent
energy conservation practices, including participation in any energy
conservation association or other arrangements for voluntary cut-back, load
shedding and the like. No failure to furnish any of such service or
utilities shall entitle Tenant to any damages, relieve Tenant of the
obligation to pay the full rent reserved herein or constitute or be construed
as a constructive or other eviction of Tenant. Tenant shall comply with all
rules and regulations which Landlord may reasonably establish for the proper
functioning and protection of the air conditioning, heating, elevator,
plumbing and electrical systems. Landlord shall at all reasonable times have
free access to all mechanical installations of Landlord, including, but not
limited to, the air conditioning equipment and vents, fans, ventilating and
machine rooms and electrical closets. If there is any failure, stoppage or
interruption in said utilities and/or services, Landlord shall use reasonable
diligence to correct the same, repairs and/or corrections that are the
responsibility of a public or private utility company, excepted.
SECTION 5.2 OPERATION AND MAINTENANCE OF COMMON FACILITIES. Landlord
shall operate and maintain during the term of this Lease all common
facilities within the Building and the Project. The term "Common Facilities"
shall mean all areas within the Project which are not held or designated by
Landlord to be held, for exclusive use by persons entitled to occupy space in
the Project. The Common Facilities shall include, without limiting the
generality of the foregoing, the adjoining parking
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structure, driveways, truckways, delivery passages, loading docks, sidewalks,
ramps, landscaped and planted areas, exterior stairways and balconies,
hallways and interior stairwells not located within the premises of any
tenant, common entrances and lobbies, mezzanines, elevators, bus stops,
retaining walls, restrooms not located within the premises of any tenant,
lighting fixtures, Building and/or Project identification signs, irrigation
systems and controllers, drains and sewers.
SECTION 5.3 USE OF COMMON FACILITIES. The use and occupancy by
Tenant of the Premises shall include the use of the Common Facilities in
common with Landlord and with all others for whose convenience and use the
Common Facilities have been or may hereafter be provided by Landlord,
subject, however, to rules and regulations for the use thereof as prescribed
from time to time by Landlord pursuant to Article XVI below. Landlord shall
operate, manage, equip, light, repair, clean and maintain the Common
Facilities in such manner as Landlord may in its sole discretion determine to
be appropriate. Landlord shall at all times during the term of this Lease
have the sole and exclusive control of all Common Facilities, and may at any
time and from time to time during the term hereof restrain any use or
occupancy thereof, except as authorized by such rules and regulations, as may
be changed from time to time. Tenant shall keep said Common Facilities free
and clear of any obstructions related to Tenant's operations. If, in the
opinion of Landlord, unauthorized persons are using any of said Common
Facilities by reason of the presence of Tenant in the Building, Tenant, upon
demand of Landlord, shall restrain such unauthorized use by appropriate
proceedings. Nothing herein shall affect the right of Landlord at any time
to remove any such unauthorized persons or obstructions. Landlord may
temporarily close any Common Facility for repairs or alterations as provided
in Section 6.2 below, to prevent a dedication thereof or the accrual of
prescriptive rights therein, or for any other reason deemed sufficient by
Landlord.
SECTION 5.4 PARKING
(a) Tenant shall be entitled to the non-exclusive use in common with
Landlord and others designated by Landlord of the adjoining parking structure
located in the Project; subject, however, to payment of such monthly rates
and other charges as may be established or allowed by Landlord, or by the
operator of such parking structure, at any time or from time to time during
the term of this Lease. The number of parking spaces to which Tenant is
entitled, and the amount of the initial rent payable for each parking space
("Parking Rent") are described in Paragraphs 13 and 14, respectively of the
Basic Lease Provisions. Parking Rent shall be payable monthly, in advance,
on the first day of each month at the address specified by Landlord from time
to time. Notwithstanding anything to the contrary stated above, the Parking
Rent shall be fixed at the rates described in Paragraph 14 of the Basic Lease
Provisions throughout the Lease term. Tenant agrees to comply with and to
cause its employees and invitees to comply with such reasonable rules and
regulations with respect thereto as Landlord may from time to time establish.
Such rules and regulations may include, but shall not be limited to the
restriction of designated areas for drive-through banking or other
drive-through facilities, or specific parking areas and/or areas for parking
by Tenant, other occupants of the building, or other third parties and their
respective employees and invitees. Landlord shall not be liable to Tenant by
the reason of the failure of any other occupant of the building and/or other
user of the parking facilities to comply with such rules and regulations.
(b) Tenant agrees to park and to cause its employees, subtenants and
the employees of its subtenants to park with parking spaces or areas within
the parking structure from time to time designated by Landlord for such
purpose. Tenant agrees to rent or to cause its officers, partners and/or
employees to rent a parking space for each such car within the parking
structure at the rates from time to time established by the operator of such
parking structure for monthly parking. If Tenant or its officers, directors
and/or employees fail to park their cars in designated parking areas,
Landlord may charge Tenant Thirty-Five Dollars ($35.00) per day for each day
or partial day per car parking in any areas other than those designated;
provided, however, Landlord agrees to give Tenant written notice of the first
violation of this provision and Tenant shall have two (2) days thereafter
within which to cause the violation to be discontinued; and if not
discontinued within said two (2) day period, then the $35.00 per day fine
shall commence. After notice of such first violation, no prior notice of any
subsequent violation shall be required. All amounts due under the provisions
of this Section shall be payable by Tenant within ten (10) days after demand
therefor as additional rent hereunder. Tenant hereby authorizes Landlord to
tow away from the Project any car or cars belonging to Tenant, Tenant's
officers, partners and/or employees and/or to attach violations stickers or
notices to such cars. References herein to cars shall be deemed to include
trucks, motorcycles and other motor vehicles.
(c) In the event that any parking surcharge or regulatory fee, however
designated, should be imposed upon or levied or assessed against the Project,
or any portion thereof, by any governmental agency or authority pursuant to
the "Clean Air Act", or any plan implemented pursuant to such Act or any
enactment amendatory or in substitution thereof, or pursuant to any other
governmental act or decree, Landlord may recover such fees as Operating
Expenses. The foregoing parking provisions are subject to any governmental
regulations which limit parking or otherwise seek to encourage the use of
carpools, public transit or other alternative transportation forms.
SECTION 5.5 SECURITY CARDS. During non-regular business hours,
entry to the Building and the parking structure is presently provided by a 24
hour security guard. Landlord may hereafter elect its agents and employees
for purposes of providing entry to the Building and/or parking structure
and/or to services within the Building (including without limitation elevator
service and HVAC systems) during non-regular business hours. In the event a
security card(s) issued to Tenant is lost or stolen, Tenant shall immediately
report such loss to Landlord. Tenant shall be solely responsible and
accountable to Landlord
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for each security card issued to Tenant and shall pay to Landlord a security
deposit for each security card issued to Tenant, in an amount not to exceed
$25.00 per card. Tenant shall pay for all charges, fees or expenses for
services provided by reason of the use of any security card issued to Tenant,
until the earlier of: (i) return of the security card to the Landlord; or
(b) twenty-four (24) hours after Tenant's written report to Landlord of the
loss of such card. Tenant shall further pay for and defend, indemnify and
hold Landlord harmless from and against any claim, liability, damage, loss,
cost or expense (including reasonable attorneys' fees) resulting by reason of
the actions of any person(s) who gains entry to the Building during
non-regular business hours by use of security card issued to Tenant which has
not been reported as lost or stolen.
The number of security cards provided by Landlord to Tenant shall be
determined by Landlord on a reasonable basis. Any additional or replacement
security cards shall be provided to Tenant at Tenant's expense.
ARTICLE VI. MAINTENANCE OF THE PREMISES
SECTION 6.1 TENANT'S MAINTENANCE AND REPAIR. Tenant at its sole cost
and expense shall make all repairs necessary to keep the Premises, any
components of the HVAC system for the Premises which are located within the
Premises and any utility facilities exclusively servicing the Premises and
located within the Premises in good order and repair and in a safe, clean,
sanitary, orderly and attractive condition. All repairs shall be at least
equal in quality to the original work, shall be made only by a licensed,
bonded contractor approved in advance by Landlord and shall be made only at
such time or times as shall be approved by Landlord. Landlord may impose
reasonable restrictions and requirements with respect to such repairs
including, without limitation, those applicable to Tenant's alterations as
set forth in Section 6.4.
SECTION 6.2 LANDLORD'S MAINTENANCE AND REPAIR.
(a) Landlord shall keep and maintain in good repair the roof (including
the structural integrity thereof), foundations, footings, the exterior
surfaces of the exterior walls and the electrical and mechanical systems in
the Building, reasonable wear and tear expected, except to the extent such
repair is Tenant's responsibility under Section 6.1 above or the
responsibility of a public or private utility company and except that Tenant
at its expense shall make any such repairs relating to the act or negligence
of Tenant, its agents, employees, invitees, licensees or contractors.
Landlord shall not be liable for any failure to make any repairs or to
perform any maintenance unless such failure shall persist for an unreasonable
time after written notice of the need for such repairs or maintenance is
given to Landlord by Tenant.
(b) Except as provided in Section 10.1 and Article XI below, there
shall be no abatement of rent and no liability of Landlord by reason of any
injury to or interference with Tenant's business arising from the making of
any repairs, alterations or improvements in or to any portion of the Project
or the Building, including the Premises, or in or to the fixtures,
appurtenances and equipment therein; provided, however, that in making such
repairs, alterations or improvements, Landlord shall interfere as little as
reasonably practicable with the conduct of Tenant's business in the Premises.
SECTION 6.3 ALTERATIONS BY LANDLORD.
(a) Landlord reserves the right at any time, and from time to time, to
make changes in or to the Building and the fixtures and equipment thereof, to
make alterations or additions to the parking structure, to construct other
buildings (including free standing buildings) and improvements within the
Project, to enlarge or reduce the Project and to make alterations therein or
additions thereto, or to any part thereof, to build additional stories on any
building or structure within the Project and to construct decks. Landlord
reserves the right at any time to change the size, configuration, shape,
number and extent of the Common Facilities, or any of them, all as Landlord
may deem necessary or desirable in its sole discretion. No such change
described in this Section 6.3(a) shall entitle Tenant to any abatement of
rent or other claim against Landlord; provided, however, such changes or
alterations shall not deprive Tenant of reasonable access to or use of the
Premises.
(b) As a material inducement to Landlord's entering into this Lease,
Tenant expressly waives and releases any rights it may have whether granted
by statute or otherwise, to make repairs at Landlord's expense, including,
but not limited to, its rights as contained in Sections 1941, 1941.1 and 1942
of the California Civil Code.
SECTION 6.4 TENANT'S ALTERATIONS. Tenant shall not make
alterations, additions or improvements to the Premises not any repairs,
replacements or restorations to the Premises in excess of TWO THOUSAND FIVE
HUNDRED DOLLARS ($2,500.00) without the prior written consent of Landlord.
Landlord may impose, as a condition to such consent, such requirements as
Landlord, in its sole discretion, may deem reasonable or desirable,
including, but not limited to, a requirement that all work be covered by a
surety bond in favor of Landlord, guaranteeing the completion of such work
free and clear of all subcontractors', mechanics' and materialmen's liens
(which bond shall be satisfactory to Landlord) and requirements as to the
manner, time and contractor or contractors as to or by which such work shall
be done. Notwithstanding the foregoing, no improvements may be made that
would diminish the value of the Premises and, in addition, no improvements
may be made to any mechanical or utility system, the exterior walls or the
roof of the Premises, nor may any improvements of a structural nature be made
without Landlord's
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approval, which approval may be withheld in Landlord's sole and absolute
discretion. In no event shall Tenant make or cause to be made any
penetration through the roof or the floor of the Premises without the prior
written approval of Landlord, which approval may be withheld in Landlord's
sole and absolute discretion. Any requirements of the Work Letter applicable
to any initial construction work performed by or under Tenant shall also be
applicable to any such alterations, additions and/or improvements. All
alterations made by Tenant shall be in accordance with all Governmental
Requirements and to the extent Tenant's alterations trigger alterations or
other modifications within the Building or Project, such alterations or other
modifications shall be performed by Landlord at the expense of Tenant. Any
request for Landlord's consent to such work shall be made in writing and
shall contain three (3) sets of architectural plans and specifications (with
square footages) describing such work in detail reasonably satisfactory to
Landlord. No such plans and specifications or any material change thereto
shall be submitted for approval to any federal, state, county or local
government or other governmental agency or association prior to Landlord's
review and approval of same. Failure of Landlord to respond to such request
within thirty (30) days shall be deemed a denial of such request. Plans and
specifications and governmental applications shall become the property of
Landlord upon the termination or expiration of this Lease and shall be turned
over to Landlord by Tenant upon Landlord's request therefor. Unless Landlord
otherwise agrees in writing, all such alterations, additions or improvements
affixed or built into the Premises (but excluding moveable trade fixtures and
furniture) shall become the property of Landlord as provided in Section 14.3
below, and shall be surrendered with the Premises, as a part thereof, at the
end of the Lease term, except that Landlord may, by written notice to Tenant
given at least thirty (30) days prior to the end of the Lease term, require
Tenant to remove all or any portion of any alterations, decorations,
additions, improvements and the like installed by Tenant, and to repair, or
at Landlord's option, to pay all costs relating to any damage to the Premises
arising from such removal.
SECTION 6.5 MECHANIC'S LIENS. Tenant shall keep the Premises free
from any liens arising out of any work performed, materials furnished, or
obligations incurred or alleged to have been incurred by, for or under
Tenant. In the event that Tenant shall not, within twenty (20) days
following the imposition of any such lien (but in any event before an action
is filed to foreclose such lien), cause the same to be released of record by
payment or posting of a proper bond, Landlord shall have, in addition to all
other remedies provided herein and by law, the right (but not the obligation)
to cause the same to be released by such means as it shall deem proper,
including payment of or defense against the claim giving rise to such lien.
All sums paid by Landlord and all expenses incurred by it in connection
therewith shall create automatically an obligation of Tenant to pay an
equivalent amount, together with interest thereon at the rate provided in
Section 13.3 below, from the date paid by Landlord as additional rent, which
additional rent shall be payable by Tenant on Landlord's demand. Tenant
shall give Landlord no less that twenty (20) days' prior notice in writing
before commencing the construction of any building, structure or other
improvement on the Premises or of any substantial repairs, alterations,
additions, replacements or restorations in and about the Premises so that
Landlord may post and maintain such notices of non-responsibility or other
notices on the Premises as Landlord deems necessary for protection from such
liens.
SECTION 6.6 ENTRY AND INSPECTION. Landlord shall at all times have
the right to enter the Premises to inspect the same, to post notices of
non-responsibility, to alter, improve or repair the Premises or any other
portion of the Building, as otherwise permitted hereunder, all without being
deemed to have evicted Tenant and without abatement of rent and may for that
purpose erect scaffolding and other necessary structures and store materials,
supplies and tools where reasonably required by the character of the work to
be performed, provided that the business of Tenant shall be interfered with
as little as is reasonably practicable. If during the last month of the term
hereof, Tenant shall have removed substantially all of Tenant's property and
personnel from the Premises, Landlord may enter the Premises and repair,
alter and redecorate the same, without abatement of rent and without
liability to Tenant, and such acts shall have no effect on this Lease.
Tenant hereby waives any claim for damages or abatement of rent for any
injury, inconvenience to or interference with Tenant's business, loss of
occupancy or quiet enjoyment of the Premises, and any other loss occasioned
thereby; provided, however, this provision shall not excuse Landlord for its
own gross negligence or willful misconduct. As used in this Lease, the term
"gross negligence" shall mean the failure to perform a manifest duty in
reckless disregard of the consequences as affecting the life or property of
another. Landlord shall have the right to use any and all means which
Landlord may deem proper to open said doors in an emergency in order to
obtain entry to the Premises, and any entry to the Premises obtained by
Landlord by any of said means shall not under any circumstances be construed
or deemed to be a forcible or unlawful entry into, or a detainer of, the
Premises, or any eviction of Tenant from the Premises or any portion thereof.
During the last one hundred eighty (180) days of the lease term, or when an
uncured default on the part of Tenant exists hereunder, Landlord may, at all
reasonable times, enter the Premises for the purpose of displaying the
Premises to prospective tenants.
ARTICLE VII. TAXES AND
ASSESSMENTS ON TENANT'S PROPERTY
SECTION 7.1 TAXES ON TENANT'S PROPERTY.
(a) Tenant shall be liable for and shall pay at least forty (40) days
before delinquency, all taxes and assessments levied against all fixtures,
furnishings, equipment and other personal property of Tenant located in or
about the Premises, and when possible, Tenant shall cause said fixtures,
furnishings, equipment and other personal property to be assessed and billed
separately from the real property of which the Premises form a part. If any
such taxes on Tenant's personal property or trade fixtures are levied against
Landlord
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or Landlord's property and if Landlord pays the same (which Landlord shall
have the right to do regardless of the validity of such levy), or if the
assessed value of Landlord's property is increased by the inclusion therein
of a value placed upon such personal property or trade fixtures of Tenant and
if Landlord pays the taxes based upon such increased assessment. Tenant
shall pay to Landlord the taxes so levied against Landlord or the proportion
of such taxes resulting from such increase in the assessment.
(b) If the tenant improvements in the Premises, whether installed
and/or paid for by Landlord or Tenant and whether or not affixed to the real
property so as to become a part thereof, are assessed for real property tax
purposes at a valuation higher than the valuation at which tenant
improvements conforming to Landlord's building standards in other space in
the Buildings are assessed, then the real property taxes and assessments
levied against Landlord or Landlord's property by reason of such excess
assessed valuation may, at Landlord's option, be deemed to be taxes levied
against personal property of Tenant and shall, under such circumstances, be
governed by the Provisions of Section 7.1(a) above.
(c) Upon request, Tenant agrees to provide receipts, cancelled checks
or other documents reasonably requested by Landlord to confirm Tenant's
payment of any taxes and/or assessments payable by Tenant directly to the
taxing authority under this Lease.
ARTICLE VIII. ASSIGNMENT AND SUBLETTING
SECTION 8.1 PROHIBITION AND CONSENT.
(a) Tenant shall not voluntarily assign or encumber its interest in this
Lease or in the Premises, or sublease all or any part of the Premises, or
allow any other person or entity to occupy or use all or any part of the
Premises, without first obtaining Landlord's prior written consent, which
consent will not be unreasonably withheld. Any assignment, encumbrance or
sublease without Landlord's prior written consent shall be voidable, at
Landlord's election, and shall constitute a default. For purposes hereof, in
the event Tenant is a partnership, a withdrawal or change of partners owning
more that a fifty percent (50%) interest in the partnership, or if Tenant is
a corporation, any transfer of fifty percent (50%) of its stock, shall
constitute a voluntary assignment and shall be subject to these provisions.
No consent to any assignment, encumbrance, or sublease shall constitute a
further waiver of the provisions of this paragraph.
(b) Tenant shall notify Landlord in writing of Tenant's intent to
assign, encumber, or sublease this Lease, the name of the proposed assignee
or sublessee, information concerning the financial responsibility of the
proposed assignee or sublessee and the terms of the proposed assignment or
subletting, and Landlord shall, within thirty (30) days of receipt of such
written notice, and additional information requested by Landlord concerning
the proposed assignee's or sublessee's financial responsibility, notify
Tenant, in writing, of whether Landlord consents to such proposed assignment,
encumbrance or sublease. As a condition to granting its consent to any
assignment, encumbrance or sublease, Landlord may require that the assignee
or sublessee remit directly to Landlord on a monthly basis, all monies due to
Tenant by said assignee or sublessee. Landlord shall not be acting
unreasonably in refusing to consent to any proposed assignment or sublet if
at the date such consent is sought Tenant is in default hereunder.
(c) Landlord's waiver or consent to any assignment or subletting shall
not relieve Tenant from any obligation under this Lease. Occupancy of all or
part of the Premises by parent, subsidiary, or affiliated companies of Tenant
shall not be deemed an assignment or subletting. In the event that Landlord
shall consent to an assignment or sublease under the provisions of this
Section 8.1(b). Tenant shall pay Landlord's processing costs and attorneys'
fees incurred in giving such consent. If for any proposed assignment or
sublease, Tenant receives rent or other consideration, either initially or
over the term of the assignment or sublease, in excess of the rent called for
hereunder, or, in case of the sublease of a portion of the Premises, in
excess of such rent fairly allocable to such portion, after appropriate
adjustments to assure hat all other payments called for hereunder are taken
into account, Tenant shall pay to Landlord as additional rent hereunder fifty
percent (50%) of the excess of each such payment of rent or other consideration
received by Tenant promptly after its receipt.
(d) Regardless of landlord's consent, the following terms and
conditions shall apply to any subletting by Tenant of all or any part of the
Premises and shall be included in all subleases:
(i) Tenant hereby irrevocably authorizes and directs any sublessee
of all or any portion of the Premises to pay to Landlord the rents due and
to become due under the sublease upon receipt of a written notice from
Landlord stating that a default exists in the performance of Tenant's
obligations under this Lease. Tenant agrees that such sublessee shall
have the right to rely upon any such statement and request from Landlord,
and that such sublessee shall pay such rents to Landlord without any
obligation or right to inquire as to whether such default exists and
notwithstanding any notice from or claim from Tenant to the contrary.
Tenant shall have no right or claim against such sublessee or Landlord
for any such rents so paid by said sublessee to Landlord.
(ii) No sublease entered into by Tenant shall be effective unless
and until it has been approved in writing by Landlord. In entering into
any sublease, Tenant shall use only such form of sublease as is
satisfactory to Landlord, and once approved by Landlord, such sublease
shall not be changed or modified without Landlord's prior written
consent. Any sublessee shall, by reason
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of entering into a sublease under this Lease, be deemed for the benefit
of Landlord to have assumed and agreed to conform and comply with each and
every obligation herein to be performed by Tenant other than such
obligations as are contrary to or inconsistent with provisions contained in
a sublease to which Landlord has expressly consented in writing.
(iii) In the event Tenant shall default in the performance of its
obligations under this Lease, Landlord, at its option, and without any
obligation to do so, may require any sublessee to attorn to Landlord, in
which event Landlord shall undertake the obligations of Tenant under such
sublease from the time of exercise of said option to the termination of
such sublease; provided, however, Landlord shall not be liable for any
prepaid rents or security deposit paid by such sublessee to Tenant or for
any other prior defaults of Tenant under such sublease.
(iv) Each and every consent required of Tenant under a sublease shall
also require the consent of Landlord.
(v) No sublessee shall further assign or sublet all or any part of
the Premises without Landlord's prior written consent.
(vi) Landlord's written consent to any subletting of the Premises by
Tenant shall not constitute an acknowledgement that no default then exists
under this Lease of the obligations to be performed by Tenant nor shall
such consent be deemed a waiver of any then existing default, except as may
be otherwise stated by Landlord at the time.
(e) If Tenant's obligations under this Lease have been guaranteed by
third parties, then any sublease or assignment, and Landlord's consent
thereto, shall not be effective unless said guarantors give their written
consent to such sublease or assignment and the terms thereof. In the event of
any default under this Lease, Landlord may proceed directly against Tenant,
any guarantors or anyone else responsible for the performance of this Lease,
including the sublessee or assignee, without first exhausting Landlord's
remedies against any other person or entity responsible therefor to
Landlord, or any security held by Landlord or Tenant.
SECTION 8.2 TRANSFER FEE. If Landlord consents to an assignment,
sublease or any other transfer by Tenant of all or a portion of Tenant's
interest under this Lease, Tenant shall pay, or cause to be paid, in each
case a transfer fee of FIVE HUNDRED DOLLARS ($500.00) in connection with the
processing, documentation and other administrative costs thereof, along with
Landlord's reasonable attorneys' fees incurred in connection therewith.
ARTICLE IX. INSURANCE AND INDEMNITY
SECTION 9.1 TENANT'S INSURANCE.
(a) Tenant hereby agrees to maintain in full force and effect at all
times during the term of this Lease, at its own expense, for the protection
of Tenant, Landlord and such other parties as Landlord may from time to time
designate, as their interests may appear, policies of insurance issued by a
carrier rated as B+VIII, or better, in the latest edition of Best's Insurance
Guide (or a comparable rating in a comparable guide selected by Landlord, if
Best's Insurance Guide is no longer published) which afford the following
coverages:
(i) Workers' Compensation -- Statutory
(including broad form all states)
(ii) Comprehensive General
Liability Insurance, -- Not less than
including Blanket amount stated
Contractual Liability, in Item 12 of
Broad Form Property Basic Lease
Damage, Personal Provisions.
Injury, Completed
Operations, Products
Liability, Fire
Legal Liability
(iii) So-called "All Risk-Insurance" including without
limitation Fire and Extended Coverage, Vandalism and
Malicious Mischief, and Sprinkler Leakage Insurance, in an
amount sufficient to cover the full cost of replacement of
all improvements and betterments to the Premises made by
or on behalf of Tenant (except to the extent installed by
Landlord, at Landlord's expense, pursuant to the Work Letter)
and all of Tenant's fixtures and other personal property.
(b) Tenant shall deliver to Landlord and to such other named insureds
designated by Landlord at least thirty (30) days prior to the time such
insurance is first required to be carried by Tenant, and thereafter at least
twenty (20) days prior to expiration of such policy, certificates of
insurance evidencing the
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above coverage with limits not less than those specified above. Such
certificates, with the exception of Worker's Compensation, shall name Landlord
and such other parties as Landlord may designate as additional insureds and
shall expressly provide that the interest of same therein shall not be
affected by any breach by Tenant of any policy provision for which such
certificates evidence coverage. Further, all certificates shall expressly
provide that 1) no less than thirty (30) days prior written notice shall be
given Landlord and such other named insureds in the event of material
alteration to or cancellation of the coverages evidenced by such certificates
and 2) such coverage evidenced by the certificate is primary and that any
coverage carried by Landlord and such other named insureds shall be excess
and non-contributory with respect to any policies carried by Tenant.
(c) Upon demand, Tenant shall provide Landlord, at Tenant's expense,
with such increased amount of existing insurance, and such other insurance in
such limits, as Landlord may require and such other hazard insurance as the
nature and condition of the Premises may require in the sole judgment of
Landlord, to afford Landlord and additional insureds designated by Landlord
adequate protection for said risks.
(d) Landlord makes no representation that the limits of liability
specified to be carried by Tenant under this Article IX, are adequate to
protect Tenant against Tenant's undertaking under this Lease, and in the event
Tenant believes that any such insurance coverage called for under this Lease
is insufficient, Tenant shall provide at its own expense, such additional
insurance as Tenant deems adequate.
(e) Landlord and Tenant hereby release the other from any and all
liability from or to the other party of every kind and nature which may
result form the perils of fire, lightning or extended coverage perils which
cause damage on or to the Premises, the Building and/or property within the
Building owned by it, such waiver to include situations where the negligence
of one of the parties hereto or his agent, servant or representative causes
or contributes to the occurrence or the result of damage.
(f) Insurance carried by Tenant against loss or damage by fire or other
casualty shall contain a clause whereby the insurer waives its right of
subrogation against Landlord. Tenant shall also obtain and furnish evidence to
Landlord of the waiver by Tenant's worker's compensation carrier of any right
of subrogation against Landlord.
(g) The policy of insurance required to be maintained by Tenant pursuant
to Section 9.1(a)(ii) shall include coverage of Tenant's indemnity in favor
of Landlord as provided in Section 9.2 below.
SECTION 9.2 TENANT'S INDEMNITY. Tenant shall defend, indemnify and hold
harmless Landlord, its agents, attorneys-in-fact and any and all affiliates
of Landlord, including, without limitation, any corporation or other entities
controlling, controlled by or under common control with Landlord, from and
against any and all claims or liabilities arising from Tenant's use or
occupancy of the Premises, and shall further defend, indemnify and hold
harmless Landlord, its agents and affiliates against and from any and all
claims or liabilities arising from any breach or default in the performance
of any obligations on Tenant's part to be performed hereunder, or arising
from any act or negligence of Tenant, or of its agents, employees, invitees
or licensees, and from and against all costs, attorneys' fees, expenses and
liabilities incurred in or about any such claims or liabilities or any
actions or proceedings brought thereon. Notwithstanding the foregoing, Tenant
shall not be liable for damage or injury occasioned by the gross negligence
or willful misconduct of Landlord or its designated agents, servants or
employees, unless covered by insurance Tenant is required to provide. This
obligation to indemnify shall include Tenant's payment of reasonable
attorneys' fees and investigation costs and all other reasonable costs,
expenses and liabilities incurred or suffered by Landlord from Landlord's
receipt of the first notice that any claim or demand is to be made or may be
made. Landlord may, at is options, require Tenant to assume Landlord's
defense in any action covered by this Section 9.2 through counsel
satisfactory to Landlord. As used in this Lease, the term "gross negligence"
shall mean the failure to perform a manifest duty in reckless disregard of
the consequences as affecting the life or property of another.
SECTION 9.3 LANDLORD'S INDEMNITY. Landlord shall defend, indemnify and
hold harmless Tenant, its agents, employees and any and all affiliates of
Tenant, including, without limitation, any corporation or other entities
controlling, controlled by or under common control with Tenant, from and
against any and all claims or liabilities arising from Landlord's negligence
in Landlord's use, operation and/or maintenance of the Building, the Project
or the Common Areas, and shall further defend, indemnify and hold harmless
Tenant, its agents and affiliates against and from any and all claims or
liabilities arising from any breach or default in the performance of any
obligation on Landlord's part to be performed under this Lease and from and
against all costs, attorneys' fees, expenses and liabilities incurred in
connection with any such claims or liabilities or any actions or proceedings
brought thereon.
ARTICLE X. DAMAGE OR DESTRUCTION
SECTION 10.1 RESTORATION.
(a) In the event the Building is damaged by fire or other perils
covered by extended coverage insurance to an extent not exceeding twenty-five
percent (25%) of the full insurable value thereof and if the damage thereto
is such that the Building may be repaired, reconstructed or restored within a
period of ninety (90) days from the date of the happening of such casualty
and Landlord will receive insurance proceeds
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sufficient to cover the cost of such repairs, Landlord shall commence and
proceed diligently with the work of repair, reconstruction and restoration and
the Lease shall continue in full force and effect. If such work of repair,
reconstruction and restoration is such as to require a period longer than
ninety (90) days or exceeds twenty-five percent (25%) of the full insurable
value thereof or if said insurance proceeds will not be sufficient to cover
the cost of such repairs, Landlord may either elect to so repair, reconstruct
or restore and this Lease shall continue in full force and effect, or
Landlord may elect not to repair, reconstruct or restore and the Lease shall
in such event terminate. Under any of said conditions, Landlord shall give
written notice to Tenant of its intention within ninety (90) days of the
occurrence of such damage. In the event Landlord elects not to restore the
Building, this Lease shall terminate on the date thirty (30) days following
the date Tenant receives Landlord's written notice indicating Landlord's
election to terminate.
(b) In the event the Premises or the Building is damaged or
destroyed to the extent of more than ten percent (10%) of its replacement
cost by a casualty not covered by a standard fire and extended coverage
policy of fire insurance, Landlord may elect to terminate this Lease on the
date thirty (30) days following Tenant's receipt of Landlord's written
notice of Landlord's election to terminate this Lease. If such damage or
destruction is not to such extent, or if Landlord does not elect to terminate
this Lease following such damage, Landlord shall commence and proceed
diligently with the work of repair, reconstruction and restoration and this
Lease shall continue in full force and effect.
(c) In the event of any casualty damage, the rental provided to be
paid under this Lease shall be abated proportionately in the ratio which the
Premises are rendered unusable from the date of destruction through the
period of such repair, reconstruction or restoration unless (i) the Premises
were unusable for a period of three (3) business days or less, or (ii) the
damage is due to the fault or neglect of Tenant, its agents or employees.
Tenant shall not be released from any of its obligations under this Lease
except to the extent and upon the conditions expressly stated in this
Section 10.1.
(d) If the then existing laws do not permit the restoration
described in this Section 10.1, Landlord may terminate this Lease by giving
written notice to Tenant, in which event this Lease shall terminate thirty
(30) days following Tenant's receipt of such notice.
(e) Notwithstanding anything to the contrary contained in this
Article, Landlord shall not have any obligation whatsoever to repair,
reconstruct or restore the Premises or any portion of the Building when the
damage occurs during the last twenty-four (24) months of the term of this
Lease or any extension thereof.
(f) No damages, compensation or claim shall be payable by Landlord
by reason of any injury to or interference with Tenant's business or property
arising from any damage or destruction or the making of any repairs,
alterations or improvements in or to any portion of the Building or the
Premises or in or to fixtures, appurtenances and equipment therein.
(g) Landlord's obligation to repair, reconstruct or restore
Tenant's leasehold improvements in the Premises shall be limited to those
leasehold improvements originally installed at Landlord's expense; the repair
and restoration of any other leasehold improvements shall be promptly
performed by Tenant, at Tenant's sole cost and expense, subject to the
requirements of Section 6.4 applicable to Tenant's alterations to the
Premises.
SECTION 10.2 LANDLORD'S NON-LIABILITY. Landlord shall not be liable to
Tenant, and Tenant hereby waives all claims against Landlord for any injury
or damage to any person or property in or about the Premises, the Building or
the Project from any cause whatsoever, except to the extent caused by the
gross negligence or willful misconduct by Landlord, its agents or employees.
Specifically, Landlord or its agents or employees shall not be liable for any
damage to property entrusted to Landlord's employees in the Building, nor for
loss of or damage to any property by theft or otherwise, nor for any injury
or damage to persons or property by loss or interruption of business or loss
of income resulting from the following causes, except to the extent caused by
the gross negligence or willful misconduct of Landlord, its agents, servants
or employees; fire, explosion, falling plaster, steam, gas, electricity,
water or rain which may leak or flow from or into any part of the Premises or
from the breakage, leakage, obstruction or other defects of the pipes,
sprinklers, wires, appliances or plumbing or air-conditioning or electrical
works therein, whether such damage or injury results from conditions arising
in the Premises or in other portions of the Building, or from other sources.
Neither Landlord nor its agents shall be liable for interference with the
light or other incorporeal hereditaments, nor shall Landlord be liable for
damages from any latent defect in the Premises, the Building or the Project.
Tenant shall give prompt notice to Landlord in case of fire or accidents in
the Premises or in the Building and of defects therein or in the fixtures or
equipment.
Tenant understands that Landlord will not carry insurance of any kind on
Tenant's furniture or furnishings, fixtures or equipment, and that Landlord
shall not be obligated to repair any damage thereto or replace the same.
SECTION 10.3 TENANT'S WAIVER. With respect to any damage which Landlord
is obligated to repair or elects to repair, Tenant, as a material inducement
to Landlord entering into this Lease, irrevocably waives and releases its
rights under the provisions of Section 1932(2) and 1933(4) of the California
Civil Code and all comparable statutes or rules of law now or hereafter in
effect.
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ARTICLE XI. EMINENT DOMAIN
If the whole of the Premises or so much thereof as to render the balance
unusable by Tenant shall be taken under power of eminent domain or if so much
of the Building or of the Common Facilities is/are taken under power of
eminent domain as, in Landlord's reasonable judgment, prevents or
substantially impairs the use of the Building for the uses and purposes then
being made or proposed to be made by Landlord of the Building, this Lease
shall automatically terminate as of the date of such condemnation, or as of
the date possession is taken by the condemning authority, whichever is
earlier. No award for any partial or entire taking shall be apportioned, and
Tenant hereby assigns to Landlord any award which may be made in any taking
or condemnation affecting the Premises or any portion of the Project,
together with any and all rights of Tenant now or hereafter arising in or to
the same or any part thereof, provided, however, that nothing contained
herein shall be deemed to give Landlord any interest in or to require Tenant
to assign to Landlord any award made to Tenant for the taking of personal
property and trade fixtures belonging to Tenant and/or for the interruption
of or damage to Tenant's business and/or for relocation expenses.
In the event of a partial taking of any portion of the Premises which
does not result in a termination of this Lease, the basic annual rent shall
be reduced in proportion to the part of the Premises taken, taking into
account any restoration and repair by Landlord.
No temporary taking of the Premises and/or of Tenant's rights therein or
under this Lease shall terminate this Lease or give Tenant any right to any
abatement of rent hereunder. Any award made by reason of any such temporary
taking shall belong entirely to Landlord and shall be applied by Landlord
against the rent and the other obligations of Tenant hereunder when such rent
and other obligations first accrue.
Except as provided above, any award or damages payable in connection
with a taking of the Building and/or the Project, or any portion thereof,
under the power of eminent domain shall belong entirely to Landlord and
Tenant shall have no right or interest therein.
ARTICLE XII. SUBORDINATION; ESTOPPEL CERTIFICATE
SECTION 12.1 SUBORDINATION. On request of Landlord, Tenant will in
writing subordinate its rights hereunder to the lien of any first mortgage or
first deed of trust now or hereafter in force against the Premises and to all
advances made or hereafter to be made upon the security thereof, in the form
required by the holder of such mortgage or deed of trust. In the event any
proceedings are brought for foreclosure, or in the event of the exercise of
any power of sale under any mortgage or deed of trust made by Landlord
covering the Premises, Tenant shall attorn to the purchaser upon any such
foreclosure or sale and recognize such purchaser as the Landlord under this
Lease.
SECTION 12.2 ESTOPPEL CERTIFICATE. Tenant shall, at any time and from
time to time, within ten (10) days' after notice from Landlord, execute,
acknowledge and deliver to Landlord a statement in writing (i) certifying
that this Lease is unmodified and in full force and effect (or, if modified,
stating the nature of such modification and certifying that this Lease, as so
modified, is in full force and effect) and the dates to which basic annual
rental, additional rent and other charges have been paid in advance, if any,
(ii) acknowledging that, to Tenant's knowledge, there are no uncured defaults
on the part of Landlord hereunder, or specifying such defaults if any are
claimed, (iii) certifying that Tenant has no existing offsets and no right of
offset against Landlord, and (iv) certifying that Tenant has accepted
possession of the Premises. Any such statement may be relied upon by any
prospective purchaser or encumbrancer of all or any portion of the Premises,
Building and/or Project.
ARTICLE XIII. DEFAULTS AND REMEDIES
SECTION 13.1 TENANT'S DEFAULTS. The occurrence of any one or more of
the following events shall constitute a default hereunder by Tenant:
(a) The abandonment or vacation of the Premises by Tenant.
(b) The failure by Tenant to make any payment of basic annual rent
or additional rent required to be made by Tenant hereunder, as and when due,
where such failure shall continue for a period of three (3) days after
written notice thereof from Landlord to Tenant; provided, however, that any
such notice shall be in lieu of, and not in addition to, any notice required
under California Code of Civil Procedure Section 1161 ET SEQ. For purposes
of these default and remedies provisions, the term "additional rent" shall be
deemed to include all amounts of any type whatsoever other than basic annual
rent to be paid by Tenant pursuant to the terms of this Lease.
(c) Use of the Premises for any purpose other than as authorized
in this Lease.
(d) Assignment or sublease of this Lease or of any interest
therein by Tenant, either voluntarily or by operation of law (including
transfer by testacy or intestacy), whether by judgment, execution, or other
means, without the prior written consent of Landlord.
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(e) The failure or inability by Tenant as may be determined by
Landlord to observe or perform any of the express or implied covenants or
provisions of this Lease to be observed or performed by Tenant, other than
those specified in (a) through (d) above, where such failure shall continue
for a period of fifteen (15) days after written notice thereof from Landlord
to Tenant; provided, however, that any such notice shall be in lieu of, and
not in addition to, any notice required under California Code of Civil
Procedure Section 1161 ET SEQ.
(f) (i) The making by Tenant of any general assignment for the
benefit of creditors; (ii) a case is commenced by or against Tenant under
Chapters 7, 11 or 13 of the Bankruptcy Code, Title 11 of the United States
Code as now in force or hereafter amended and if so commenced against Tenant,
the same is not dismissed within sixty (60) days; (iii) the appointment of a
trustee or receiver to take possession of substantially all of Tenant's
assets located at the Premises or of Tenant's interest in this Lease, where
possession is not restored to Tenant within thirty (30) days; (iv) the
attachment, execution or other judicial seizure of substantially all of
Tenant's assets located at the Premises or of Tenant's interest in this
Lease, where such seizure is not discharged within thirty (30) days; or (v)
Tenant's convening of a meeting of its creditors or any class thereof for the
purpose of effecting a moratorium upon or composition of its debts.
SECTION 13.2 LANDLORD'S REMEDIES.
(a) In the event of any default by Tenant, then, in addition to
any other remedies available to Landlord at law or in equity, Landlord may
exercise the following remedies:
(i) Landlord may terminate this Lease and all rights of
Tenant hereunder by giving written notice of such termination to Tenant. In
the event that Landlord shall so elect to terminate the Lease, then Landlord
may recover from Tenant:
The worth at the time of award of the unpaid rent, charges,
and additional rent which had been earned as of the date of the termination
hereof;
The worth at the time of award of the amount by which the
unpaid rent and additional rent which would have been earned after the date of
the termination hereof until the time of award exceeds the amount of such
rental loss that Tenant proves could have been reasonably avoided;
The worth at the time of award of the amount by which the
unpaid rent, charges, and additional rent for the balance of the term hereof
after the time of award exceeds the amount of such rental loss that Tenant
proves could have been reasonably avoided;
Any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform its obligations
under this Lease or which in the ordinary course of things would be likely to
result therefrom, including, but not limited to, the cost of recovering
possession of the Premises, expenses of reletting, including brokerage
commissions, necessary repair, renovation and alteration of the Premises,
reasonable attorneys' fees, expert witness costs, and any other reasonable
costs; and
Any other amount which Landlord may by law hereafter be
permitted to recover from Tenant to compensate Landlord for the detriment
caused by Tenant's default. As used in subparagraphs (i) and (ii) above, the
"worth at the time of award" shall be computed by allowing interest at the
maximum rate permitted by law.
As used in subparagraph (iii) above, the "worth at the time of award" shall
be computed by discounting such amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of award plus one percent (1%), but
not in excess of ten percent (10%) per annum.
(ii) Pursue the remedy described in California Civil Code
Section 1951.4 and continue this Lease in effect without terminating Tenant's
right to possession even though Tenant has breached this Lease and abandoned
the Premises and to enforce all of Landlord's rights and remedies under this
Lease, at law or in equity, including the right to recover the rent as it
becomes due under this Lease; provided, however, that Landlord may at any
time thereafter elect to terminate this Lease for such previous breach by
notifying Tenant in writing that Tenant's right to possession of the Premises
has been terminated.
(iii) Nothing in this Article XIII shall be deemed to affect
Tenant's indemnity of Landlord, for liability or liabilities based upon
occurrences prior to the termination of this Lease for personal injuries or
property damage under the indemnification clause or clauses contained in this
Lease. Such covenants of indemnification shall survive the termination of
this Lease.
(iv) In the event of default by reason of any of the events
stated in subparagraph (f) of Section 13.1 above, this Lease or any interest
in and to the Premises shall not become an asset in any of such proceedings
and, in any such event and in addition to any and all rights or remedies of
the Landlord hereunder or by law provided, it shall be lawful for the
Landlord to declare the term hereof ended and to re-enter the Premises and
take possession thereof and remove all persons therefrom, and Tenant and its
creditors (other than Landlord) shall have no further claim thereon or
hereunder.
(b) Landlord shall be under no obligation to observe or perform
any covenant of this Lease on its part to be observed or performed which
accrues after the date of any default by Tenant hereunder. In
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any action for unlawful detainer commenced by Landlord against Tenant by
reason of any default hereunder, the reasonable rental value of the Premises
for the period of the unlawful detainer shall be deemed to be the amount of
the basic annual rent and additional rent reserved in this Lease for such
period, unless Landlord or Tenant shall prove to the contrary by competent
evidence. The various rights, powers and remedies reserved to Landlord
herein, and those rights, powers and remedies of Landlord under any other
agreement now or hereafter in force between Landlord and Tenant, including
those not specifically described herein, shall be cumulative, and, except as
otherwise provided by California statutory law in effect at the time,
Landlord may pursue any or all of such rights and remedies, at the same time,
or otherwise.
(c) No delay or omission of Landlord to exercise any right or remedy
shall be construed as a waiver of any such right or remedy or of any default
by Tenant hereunder. The acceptance by Landlord of rent or any additional
rent hereunder shall not be (i) a waiver of any preceding breach or default
by Tenant of any provision thereof, other than the failure of Tenant to pay
the particular rent or any additional rent accepted, regardless of Landlord's
knowledge of such preceding breach or default at the time of acceptance of
such rent or additional rent, or (ii) a waiver of Landlord's right to
exercise any remedy available to Landlord by virtue of such breach or
default. No payment by Tenant or receipt by Landlord of a lesser amount than
the rent herein stipulated shall be deemed to be other than on account of the
earliest due stipulated rent, nor shall any endorsement or statement on any
check or any letter accompanying any check or payment as rent be deemed an
accord and satisfaction, and Landlord shall accept such check or payment
without prejudice to Landlord's right to recover the balance of such rent or
pursue any other remedy in this Lease provided. Tenant hereby waives any
right of redemption or relief from forfeiture under California Code of Civil
Procedure Sections 1174 or 1179, or under any other present or future law, in
the event Tenant is evicted or Landlord takes possession of the Premises by
reason of any default by Tenant hereunder. No act or thing done by Landlord
or Landlord's agents during the term of this Lease shall be deemed an
acceptance of a surrender of the Premises, and no agreement to accept a
surrender shall be valid unless in writing and signed by Landlord. No
employee of Landlord or of Landlord's agents shall have any power to accept
the keys to the Premises prior to the termination of this Lease, and the
delivery of the keys to any such employee shall not operate a termination of
this Lease or a surrender of the Premises.
SECTION 13.3 INTEREST ON TENANT'S OBLIGATIONS; LATE PAYMENTS.
(a) Any installment of rent due under this Lease or any other sum
not paid to Landlord when due (other than interest) shall bear interest at
the maximum rate allowed by law from the date such payment is due until paid,
provided, however, that the payment of such interest shall not excuse or cure
the default.
(b) Tenant hereby acknowledges that the late payment by Tenant to
Landlord of rent and other sums due hereunder will cause Landlord to incur
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs may include, but are not limited
to, administrative, processing and accounting charges, and late charges which
may be imposed on Landlord by the terms of any mortgage or trust deed
covering the premises. Accordingly, if any installment of rent or any other
sum due from Tenant shall not be received by Landlord or Landlord's designee
within five (5) business days after the date due, then Tenant shall pay to
Landlord, in addition to the interest provided above, a late charge in the
amount of five percent (5%) of the delinquent installment of rent. The
parties agree that such late charge represents a fair and reasonable estimate
of the cost Landlord will incur by reason of late payment by Tenant.
Acceptance of such late charge by Landlord shall in no event constitute a
waiver of Tenant's default with respect to such overdue amount, nor prevent
Landlord from exercising any of the other rights and remedies granted
hereunder.
(c) Following each third consecutive late payment of rent, Landlord
shall have the option (i) to require that beginning with the first payment of
rent next due, rent shall no longer be paid in monthly installments but shall
be payable quarterly three (3) months in advance and/or (ii) to require that
Tenant increase the amount, if any, of the security deposit required under
Section 3.2 as listed in Item 9 of the Basic Lease Provisions by one hundred
percent (100%), which additional security deposit shall be retained by
Landlord, and may be applied by Landlord, in the manner provided in Section
3.2.
SECTION 13.4 RIGHT OF LANDLORD TO PERFORM. All covenants and
agreements to be performed by Tenant under any of the terms of this Lease
shall be performed by Tenant at Tenant's sole cost and expense and without
any abatement of rent. If Tenant shall fail to pay any sum of money, other
than rent, required to be paid by it hereunder or shall fail to perform any
other act on its part to be performed hereunder, or to provide any insurance
or evidence of insurance to be provided by Tenant, and such failure shall
continue beyond any applicable grace period set forth in Section 13.1, then
in addition to any other remedies provided herein, Landlord may, but shall
not be obligated so to do, and without waiving or releasing Tenant from any
obligations of Tenant, make any such payment or perform any such act on
Tenant's part to be made or performed as provided in this Lease or to provide
such insurance. Any payment or performance of any act or the provision of any
such insurance by Landlord on Tenant's behalf shall not give rise to any
responsibility of Landlord to continue making the same or similar payments or
performing the same or similar acts. All costs, expenses and other sums
incurred or paid by Landlord in connection therewith, together with interest
at the maximum rate permitted by law from the date incurred or paid by
Landlord shall be deemed to be additional rent hereunder and shall be paid by
Tenant with and at the same time as the next monthly installment of basic
annual rent hereunder, and any default therein shall constitute a breach of
the covenants and conditions of this Lease.
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SECTION 13.5 DEFAULT BY LANDLORD. Landlord shall not be deemed to be
in default in the performance of any obligation required to be performed by
it under this Lease unless and until it has failed to perform such obligation
within thirty (30) days after written notice by Tenant to Landlord, and to
any mortgagee or beneficiary of a deed of trust with an interest in any
encumbrance affecting Landlord's interest in the Premises, specifying in
reasonable detail the nature and extent of any such failure; provided,
however, that if the nature of Landlord's obligation is such that more than
thirty (30) days are required for its performance, then Landlord shall not be
deemed to be in default if it commences such performance within such thirty
(30) day period and thereafter diligently prosecutes the same to completion.
If, after notice to Landlord of default, Landlord fails to cure such default
as provided herein, then Tenant shall have the right to cure such default at
Landlord's expense. Tenant shall not have the right to terminate this Lease
or to withhold, reduce or offset any amount against any payments of basic
annual rent or any other charges due and payable hereunder, and Tenant's
remedy shall be limited to damages and/or an injunction. It is expressly
understood and agreed to that any money judgment resulting from any default
or other claim arising under this Lease shall be satisfied only out of the
rents, issues, profits or other income ("Income") actually received from the
operation of the Building and no other real, personal or mixed property of
Landlord (the term "Landlord" for purposes of this Section only shall mean
any and all investors, owners, managers and agents, if any, of Landlord),
wherever situated, shall be subject to levy on any such judgment obtained
against Landlord and whether or not such Income is sufficient for the payment
of such judgment, Tenant will not institute any further action, suit, claim
or demand, in law or in equity, against Landlord for or on the account of
such deficiency. Tenant hereby waives, to the extent waivable under law, any
right to satisfy said money judgment against Landlord except from Income
received by Landlord for the operation of the Building.
SECTION 13.6 EXPENSES AND LEGAL FEES. If Tenant or Landlord shall
bring any action for any relief against the other, declaratory or otherwise,
arising out of or under this Lease, including any suit by Landlord for the
recovery of rent or possession of the Premises, the prevailing party shall be
entitled to recover its attorney's fees and costs, including without
limitation, expert witness fees, photocopying, facsimile and delivery costs,
in such suit, and such attorney's fees and costs shall be deemed to have
accrued on the commencement of such action and shall be paid whether or not
such action is prosecuted to judgment.
SECTION 13.7 REIMBURSEMENT OF CONCESSIONS. Any agreement by Landlord
contained in this Lease for free or abated rent, tenant improvement
allowances, above-standard tenant improvements or other charges applicable to
the Premises, or for the giving or paying by Landlord to or for Tenant of any
cash or other bonus, or consideration for Tenant's entering into this Lease
(hereinafter collectively "Concessions") shall be deemed conditioned upon
Tenant's full and faithful performance of all of the terms, covenants and
conditions of this Lease to be performed and observed by Tenant during the
term hereof. Upon the occurrence of a default or breach of this Lease, as
defined in Section 13.1, by Tenant and the filing of an action by Landlord
for recovery of amounts owed to Landlord and/or recovery of possession of the
Premises, then any such Concessions shall automatically be deemed deleted from
this Lease and of no further force or effect and any free rent, abated rent,
tenant allowance, above-standard tenant improvement, signing bonus, abated,
given or paid by Landlord under such Concessions, shall be immediately due
and payable by Tenant to Landlord and recoverable by Landlord as additional
rent under this Lease whether or not the action proceeds to judgment,
notwithstanding any subsequent cure of said breach by Tenant. The acceptance
by Landlord of rent or the cure of a breach which initiated operation of this
Section shall not be deemed a waiver by Landlord of the provisions of this
Section 13.7 unless specifically stated in writing by Landlord at the time of
such acceptance.
ARTICLE XIV. END OF TERM
SECTION 14.1 HOLDING OVER. This Lease shall terminate and become null
and void without further notice upon the expiration of the term herein
specified, and any holding over by Tenant after such expiration shall not
constitute a renewal or extension hereof or give Tenant any rights under this
Lease, except when in writing signed by both parties hereto or as otherwise
herein provided. If Tenant shall hold over for any period after the
expiration of the Lease term, Landlord may, at its option, treat Tenant as a
tenant at sufferance only commencing on the first (1st) day following the
expiration of this Lease and subject to all of the terms and conditions
herein contained, except that the basic annual rent, and monthly installments
thereof, shall be one hundred fifty percent (150%) of that payable at the
date of expiration.
SECTION 14.2 SURRENDER OF PREMISES; REMOVAL OF PROPERTY. Upon the
expiration of the term of this Lease, or upon any earlier termination of this
Lease, Tenant shall quit and surrender possession of the Premises to Landlord
in as good order, condition and repair as when received or as hereafter may be
improved by Landlord or Tenant, reasonable wear and tear and repairs which
are Landlord's obligation excepted, and shall, without expense to Landlord,
remove or cause to be removed from the Premises all debris and rubbish, all
furniture, equipment, and trade fixtures, free-standing cabinet work and other
articles of any other persons claiming under Tenant unless Landlord exercises
its option to have any subleases or subtenancies assigned to it. Tenant shall
repair all damage to the Premises resulting from such removal, which repair
shall include the patching and filling of holes and repair of structural
damage. In the event that Tenant shall fail to comply with the provisions of
this Section 14.2, Landlord may make such repairs and the cost thereof shall
be additional rent payable by Tenant upon demand. If requested by Landlord,
Tenant shall execute, acknowledge and deliver to Landlord an instrument in
writing releasing and quitclaiming to Landlord all right, title and interest
of Tenant in and to the Premises by reason of this Lease or otherwise.
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SECTION 14.3 AFFIXED PROPERTY. All fixtures, equipment, alterations,
additions, improvements and/or appurtenances attached to or built into the
Premises prior to or during the term hereof, whether by Landlord at its
expense or at the expense of Tenant or both, shall be and remain part of the
Premises and shall belong to Landlord unless otherwise expressly provided for
in this Lease or unless such removal is required by Landlord pursuant to the
provisions of Section 6.4 hereof. Such fixtures, equipment, alterations,
additions, improvements and/or appurtenances shall include, without
limitation, floor coverings, drapes, paneling, molding, built-in cabinets,
doors, vaults, (exclusive of vault doors), plumbing, electrical
communications and lighting systems, silencing equipment, all fixtures and
outlets for the systems mentioned above and for all telephone, radio,
telegraph and television purposes, and any special flooring or ceiling
installations.
ARTICLE XV. NOTICES
Any notice, election, demand, consent, approval or other communication
to be given or other document to be delivered by either party to the other
hereunder may be delivered in person to an officer or duly authorized
representative of the other party, or may be deposited in the United States
mail, duly registered or certified, postage prepaid, return receipt
requested, and addressed to the other party at the address set forth in Item
12 of the Basic Lease Provisions hereof, or if to Tenant, at such address or,
from and after the Commencement Date, at the Premises (whether or not Tenant
has departed from, abandoned or vacated the Premises). Either party may from
time to time, by written notice to the other, served in the manner herein
provided, designate a different address. If any notice or other documents is
sent by mail as aforesaid, the same shall be deemed served or delivered
twenty-four (24) hours after the mailing thereof. If more than one Tenant is
named under this Lease, service of any notice upon any one of said Tenants
shall be deemed as service upon all of them.
ARTICLE XVI. RULES AND REGULATIONS
The Rules and Regulations attached hereto as Exhibit "C" by this
reference are hereby incorporated herein and made a part hereof. Tenant
agrees to observe faithfully and comply strictly with such Rules and
Regulations, and any reasonable amendments, modifications and/or additions
thereto as may hereafter be adopted and published by written notice to
tenants by Landlord for the safety, care, security (including restrictions on
hours and manner of access to the Building) good order, cleanliness of the
Premises, Building and/or the Project, or portions thereof. Landlord shall
not be liable to Tenant for any violation of such Rules and Regulations or
the breach of any covenant or condition in any lease by any other tenant. One
or more waivers by Landlord of any breach of such Rules and Regulations by
Tenant or by any other tenant(s) shall not be a waiver of any subsequent
breach of that rule or any other. In the case of any conflict between such
Rules and Regulations and this Lease, this Lease shall control.
ARTICLE XVII. BROKER'S COMMISSION
The parties recognize as the broker(s) who procured this Lease the
firm(s), if any, stated in Item 10 of the Basic Lease Provisions, and agree
that Landlord shall be solely responsible for the payment of brokerage
commissions to said broker(s), and that Tenant shall have no responsibility
therefor unless otherwise provided in this Lease. Tenant warrants that it has
had no dealings with any other real estate broker or agent in connection with
the negotiation of this Lease, and agrees to indemnify, defend and hold
Landlord harmless from any cost, expense or liability (including reasonable
attorneys' fees in connection therewith) for any compensation, commissions or
charges claimed by any other real estate broker or agent employed or claiming
to represent or to have been employed by Tenant in connection with the
negotiation of this Lease. The foregoing agreement shall survive the
termination of this Lease.
ARTICLE XVIII. TRANSFER OF LANDLORD'S INTEREST
In the event of any transfer or transfers of Landlord's interest in the
Premises, including a so-called sale-leaseback, the transferor shall be
automatically relieved of any and all obligations on the part of Landlord
accruing under this Lease from and after the date of such transfer. It is
intended hereby that the covenants and obligations contained in this Lease on
the part of Landlord shall, subject to the foregoing, be binding on Landlord,
its successors and assigns, only during and in respect of their respective
periods of ownership.
ARTICLE XIX. INTERPRETATION
SECTION 19.1 GENDER AND NUMBER. Whenever the context of this Lease
requires, the words "Landlord" and Tenant", as used herein, shall include the
plural as well as the singular and words used in neuter, masculine or feminine
genders shall include the others.
SECTION 19.2 HEADINGS. The captions, headings, title, numbering and
indexing of the Articles and Sections of this Lease are for convenience only,
are not a part of this Lease and shall have no effect upon the construction
or interpretation of any part hereof.
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ARTICLE XX. EXECUTION AND RECORDING
SECTION 20.1 CORPORATE AUTHORITY. If Tenant is a corporation, each
individual executing this Lease on behalf of said corporation represents and
warrants that he is duly authorized to execute and deliver this Lease on
behalf of said corporation in accordance with said corporation's by-laws or a
duly adopted resolution of its board of directors, and that this Lease is
binding upon said corporation in accordance with its terms. Tenant shall, at
Landlord's request, deliver a certified copy of its board of directors'
resolution authorizing or ratifying such execution.
SECTION 20.2 RECORDING. Tenant shall not record this Lease without the
prior written consent of Landlord. Tenant, upon the request of Landlord,
shall execute and acknowledge a "short form" memorandum of this Lease for
recording purposes.
SECTION 20.3 AMENDMENTS. No amendment, addition, revocation or
ratification of this Lease shall be effective unless in writing signed by the
parties hereto. No actions, policies, oral or informal arrangements,
business dealings or other course of conduct by or between the parties shall
be deemed to amend this Lease or revise this Lease in any respect.
ARTICLE XXI. MISCELLANEOUS
SECTION 21.1 NONDISCLOSURE OF LEASE TERMS. Tenant acknowledges and
agrees that the terms of this Lease are confidential and constitute
proprietary information of Landlord. Disclosure of the terms hereof could
adversely affect the ability of Landlord to negotiate other leases with
respect to the Project. Tenant agrees that it, and its partners, officers,
directors, employees and attorneys shall not disclose the terms and
conditions of this Lease to any other person without the prior written
consent of Landlord, provided, however, that Tenant may disclose the terms
hereof to the independent accountants who audit its financial statements. It
is understood and agreed that damages would be an inadequate remedy for the
breach of this provision by Tenant, and Landlord shall have the right to
specific performance of this provision and to injunctive relief to prevent its
breach or continued breach.
SECTION 21.2 FURNISHING OF FINANCIAL STATEMENTS. Landlord has reviewed
financial statements and tax returns if so requested of the Tenant and has
relied upon the truth and accuracy thereof with Tenant's knowledge and
representations of the truth and accuracy of same and that said statements
accurately and fairly depict the financial condition of Tenant. Said
statements are an inducing factor and consideration for the Tenant. Tenant
and/or guarantors shall promptly furnish Landlord, upon request, with annual
financial statements reflecting the then current financial condition of
Tenant and/or guarantors throughout the term of this Lease.
SECTION 21.3 CHANGES REQUESTED BY LENDER. If, in connection with
obtaining financing for the Building, any lender shall request reasonable
modifications in this Lease as a condition to such financing, Tenant will not
unreasonably withhold, delay or defer its consent thereto, provided that such
modifications do not materially increase the obligations of Tenant hereunder
or materially and adversely affect the leasehold interest hereby created.
SECTION 21.4 GOVERNMENTAL REQUIREMENTS. Tenant covenants at all
times during the term of this Lease to comply with the requirements of the
Occupational Safety and Health Act of 1970, 29 U.S.C., Section 651 et seq.,
and any analogous legislation in California (collectively, the "Act"), to the
extent that the Act applies to the Premises and any activities therein, and
to comply with all other Governmental Requirements, including, but not
limited to, all laws prohibiting discrimination against any person or group of
persons on account of race, color, creed, sex, national origin or ancestry
and all laws described in Section 4.1 above. Without limiting the generality
of the foregoing, Tenant covenants to maintain all working areas, all
machinery, equipment, appliances, structures, electrical facilities and the
like upon the Premises in a condition that full complies with the
requirements of the Act, including such requirements as would be applicable
with respect to agents, employees or contractors of Landlord who may from
time to time be present upon the Premises.
SECTION 21.5 COVENANTS AND CONDITIONS. All of the provisions of this
Lease shall be construed to be "conditions" as well as "covenants" as though
the words specifically expressing or imparting covenants and conditions were
used in each separate provision.
SECTION 21.6 WORK LETTER. Landlord and Tenant each agree to fully
perform their obligations under the Work Letter, if any. Any default by
either party in the performance of its obligations under the Work Letter shall
constitute a default by such party under this Lease.
SECTION 21.7 JOINT AND SEVERAL LIABILITY. If there be more than one
Tenant, the obligations hereunder imposed upon Tenant shall be joint and
several and the act of or notice from, or notice or refund to, or the signature
of, any one or more of such persons, with respect to the tenancy of this Lease,
shall be binding upon each and all of the persons executing this Lease as
Tenant with the same force and effect as if each and all of them had so acted
or so given or received such notice or refund or so signed.
SECTION 21.8 SUCCESSORS. Subject to Articles VIII and XVIII above, all
rights and liabilities herein given to, or imposed upon, the respective
parties hereto shall extend to and bind the several respective
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heirs, executors, administrators, successors, and assigns of the parties.
Nothing contained herein is intended, or shall be construed, to confer upon
or grant to any person other than Landlord and Tenant any rights or remedies
under this Lease.
SECTION 21.9 TIME OF ESSENCE. Time is of the essence with respect to
the performance of every provision of this Lease in which time of performance
is a factor.
SECTION 21.10 CONTROLLING LAW. This Lease shall be governed by and
interpreted in accordance with the laws of the State of California.
SECTION 21.11 SEVERABILITY. If any term or provision of this Lease
shall be held invalid or unenforceable to any extent, the remainder of this
Lease shall not be affected thereby and for each term and provision of this
Lease shall be valid and enforceable to the fullest extent permitted by law.
SECTION 21.12 RELATIONSHIP OF PARTIES. Nothing contained herein shall
be deemed or construed by the parties hereto, or by any third party, as
creating the relationship of principal and agent or of partnership or joint
venture between the parties hereto, it being understood and agreed that
neither the method of computation of rent, nor any other provision contained
herein, nor any acts of the parties herein, shall be deemed to create any
relationship between the parties hereto other than the relationship of Tenant
and Landlord.
SECTION 21.13 INABILITY TO PERFORM. In the event that Landlord shall
be delayed or hindered in or prevented from the performance of any work or in
performing any act required hereunder by reason of: strikes; lockouts; labor
troubles; inability to procure materials, labor or energy; failure of power;
disruption, reduction, interruption, curtailment or failure of utility, solid
waste disposal or other services; restrictive Governmental Requirements;
voluntary or involuntary participation, at the request of a governmental
agency or otherwise, in any plan or program involving allocations, priorities,
limitations or restraints regarding water, fuel or other energy, or otherwise;
other governmental action or inaction; riots, insurrection; war, fires;
floods; earthquakes; storms; droughts, other Acts of God; or any other reason
of a similar or dissimilar nature not the fault of Landlord in performing
work or doing acts required under the terms of this Lease, then the
performance of such work or the doing of such act shall be excused for the
period of the delay, and the period for the performance of any work or the
doing of such act shall be extended for a period equivalent to the period of
such delay. The occurence of any event constituting a cause for excusable
delay shall not relieve Tenant from any obligations, including payment of
rent, under this Lease.
SECTION 21.14 QUIET ENJOYMENT. Upon payment by Tenant of the basic
annual rent, additional rent and all the charges herein provided, and upon
the observance and performance of all the covenants, terms and conditions of
this Lease on Tenant's part to be observed and performed, Tenant shall
peaceably and quietly hold and enjoy the Premises for the term hereby
demised without hindrance or interruption by Landlord or any other person or
persons lawfully or equitably claiming by, through or under Landlord.
SECTION 21.15 HAZARDOUS WASTE AND MATERIALS. Tenant shall not engage
in any activity on or about the Premises or the Project that violates any
Environmental Law, and shall promptly, at Tenant's sole cost and expense,
take all investigatory and/or remedial action required or ordered by any
governmental agency or Environmental Law for clean-up and removal of any
contamination involving any Hazardous Material created or caused directly or
indirectly by Tenant. The term "Environmental Law" shall mean any federal,
state or local law, statute, ordinance or regulation pertaining to health,
industrial hygiene or the environmental conditions on, under or about the
Premises, including, without limitation, (i) the Comprehensive Environmental
Response, Compensation and Liability of 1980 ("CERCLA"), 42 U.S.C. Sections
9601 ET SEQ.; (ii) the Resource Conservation and Recovery Act of 1976
("RCRA"), 42 U.S.C. Sections 6901 ET SEQ.; (iii) California Health and Safety
Code Sections 25100 ET SEQ.; (iv) the Safe Drinking Water and Toxic
Enforcement Act of 1986, California Health and Safety Code Section 25249.5 ET
SEQ.; (v) the Federal Water Pollution Control Act, 33 U.S.C. Sections 1317 ET
SEQ.; (vi) California Water Code Section 1300 ET SEQ.; and (vii) California
Civil Code Section 3479 ET SEQ., as such laws are amended and the regulations
and administrative codes applicable thereto. The term "Hazardous Material"
includes, without limitation, any material or substance which is (i) defined
or listed as a "hazardous waste", "extremely hazardous waste", "restrictive
hazardous waste" or "hazardous substance" or considered a waste, condition of
pollution or nuisance under the Environmental Laws; (ii) petroleum or a
petroleum product or fraction thereof; (iii) asbestos; and/or (iv) substances
known by the State of California to cause cancer and/or reproductive
toxicity. It is the intent of the parties hereto to construe the term
"Hazardous Materials" and "Environmental Laws" in its broadest sense. Tenant
shall provide all notices required pursuant to the Safe Drinking Water and
Toxic Enforcement Act of 1986, California Health and Safety Code Section
25249.5 ET SEQ. Tenant shall provide prompt written notice to Landlord of
the existence of Hazardous Substances on the Premises and all notices of
violation of the Environmental Laws received by Tenant. Tenant's obligations
pursuant to this Section 21.15 shall be referred to in this Lease as
"Environmental Compliance".
SECTION 21.16 ENTIRE AGREEMENT. This Lease and the Exhibits and other
attachments hereto cover in full each and every agreement of every kind or
nature whatsoever between the parties hereto concerning the Premises and the
Building or Project, and all preliminary negotiations, oral agreements,
understandings and/or practices of whatsoever kind with respect to the
Premises or the Building or Project, except those contained herein or
therein, are superseded and of no further force or effect; no person, firm or
corporation has at any time had an authority from Landlord to make any
representations or promises on
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behalf of Landlord, and Tenant agrees that if any such representations or
promises have been made by Landlord or others, Tenant hereby waives all
rights to rely thereon. No verbal agreement or implied covenant shall be
held to vary the provisions hereof, any statute, law, or custom to the
contrary notwithstanding.
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EXHIBIT "A-1"
Prior to the execution of the Lease to which this Exhibit A-1 is attached,
attach a floor plan(s) of the Building designating the location of the Premises.
[FLOOR PLAN]
EXHIBIT "A-1"
TO OFFICE SPACE LEASE
EXHIBIT "A-2"
LEGAL DESCRIPTION OF THE PROJECT
All that certain real property located in the State of California, County
of Los Angeles, more particularly described as follows:
PARCEL A:
THAT PART OF XXX 00 XX XXX XXXXXXXXX XXXXX XXXXX, XX THE CITY OF LOS
ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 2 PAGE 80 OF
MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
BEGINNING AT A POINT IN THE WESTERLY LINE OF SAID LOT 30, DISTANT 50 FEET
NORTH OF THE SOUTHWESTERLY CORNER OF SAID LOT; THENCE NORTHERLY ALONG THE
WESTERLY LINE OF SAID LOT, 64.60 FEET; THENCE EASTERLY PARALLEL WITH THE
SOUTHERLY LINE OF SAID LOT TO THE EASTERLY LINE THEREOF; THENCE WESTERLY
PARALLEL WITH THE SOUTHERLY LINE OF SAID LOT TO THE POINT OF BEGINNING.
PARCEL B:
THE SOUTH 50 FEET OF XXX 00 XX XXXXXXXXX XXXXX XXXXX, XX THE CITY OF LOS
ANGELES, IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP
RECORDED IN BOOK 2 PAGE 80 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF
SAID COUNTY.
PARCEL C:
XXX 00 XX XXXXXXXXX XXXXX XXXXX, XX THE CITY OF LOS ANGELES, IN THE COUNTY
OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 2 PAGE 80
OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXHIBIT "A-2"
TO OFFICE SPACE LEASE
EXHIBIT "A-3"
CONFIRMATION OF TERM
The undersigned as the Landlord and Tenant under that certain Office Space
Lease dated _________, for space within 0000 Xxxxxxxxx Xxxxxxxxx, Xxx Xxxxxxx,
Xxxxxxxxxx, hereby confirm that the term of said Lease has commenced __________,
and that the expiration date of the term of said Lease is ______________.
JAHRA INVESTMENTS, N.V.
By:
------------------------------------
Xxx Xxxxxxxxxxx
Its: Treasurer
"Landlord"
DVD EXPRESS, INC.,
a California corporation
By:
------------------------------------
Its:
--------------------------------
"Tenant"
EXHIBIT "A-3"
TO OFFICE SPACE LEASE
EXHIBIT "B"
THE WORK LETTER
In addition to the mutual covenants contained in the Lease to which this
Work Letter is attached, Landlord and Tenant further mutually agree as follows:
1. PLANS AND SPECIFICATIONS FOR THE PREMISES; TIMING AND PAYMENT OF
CONSTRUCTION
(a) Tenant agrees to cooperate with Landlord's architects and
engineers, who shall prepare, within fifteen (15) days of the execution
of this Lease, detailed space plans and specifications ("Plans") for the
tenant improvement work to be conducted on the Premises ("Work"). The
Plans shall include, but shall not be limited to, locations of doors,
partitioning, reflected ceiling, electrical fixtures, outlets and
switches, telephone outlets, plumbing fixtures, extraordinary floor
loads, and the other special requirements, and Tenant shall approve the
Plans in writing on or before the Space Plan Approval Date set forth in
Item 7 of the Basic Lease Provisions.
(b) Upon approval of the Plans by Tenant, Landlord shall cause
Xxxxxxx Construction and at least two (2) other responsible licensed
general contractors acceptable to Landlord to submit a fixed sum bid
detailing the construction costs of the Work (the "Contract Sum"). Upon
receipt of the Contract Sum, Tenant shall have three (3) business days
to approve the lowest responsible Contract Sum in writing, or
alternatively, to modify the Plans. In the event Tenant modifies the
Plans, the revised plans shall be submitted to the contractor
("Contractor") submitting the lowest responsible bid. Tenant shall have
three (3) business days from its receipt of the revised Contract Sum to
approve the same in writing. Any revisions to the Plans and the Contract
Sum must also be approved by Landlord, which approval shall not be
unreasonably withheld or delayed. Immediately following Tenant's written
approval of the Contract Sum, Landlord shall cause Contractor to prepare
a construction contract in a form acceptable to Landlord (the
"Construction Contract") for construction of the Work for the Contract
Sum. Landlord shall be responsible for payment of amounts owing to
Contractor under the Construction Contract and shall be reimbursed by
Tenant in accordance with the terms set forth herein. Contractor shall
construct the Work in accordance with the Plans.
(c) Following approval of the Contract Sum by Tenant and
Landlord, and the Construction Contract by Landlord, and the acquisition
of all necessary governmental permits, including building permits,
Landlord shall instruct the Contractor to proceed and to complete the
Work no later than eight (8) weeks following the commencement of the
Work.
(d) The term "Costs" shall include, (i) amounts incurred by
Landlord to design the Work; (ii) amounts payable to Contractor pursuant
to the Construction Contract; (iii) the cost of permits, licenses,
inspections and certificates, including without limitation, plan check
fees, structural, mechanical and other engineering, consulting fees for
ADA and fire hazard compliance, architectural and space planning fees
incurred by Landlord and/or Tenant in compliance with this Work Letter;
and (iv) any additional cost or expense incurred in connection with any
Change Orders. Costs shall only include costs and expenses incurred in
connection with the design and construction of permanent improvements to
the Premises, and shall not include the cost or expense of any
cabinetry, shelving, furniture, fixtures or equipment to be located on
or about the Premises which Tenant may remove from the Premises.
(e) All Costs of the Work shall be paid for by Tenant. The Cost
of the Work, up to a maximum of One Hundred Ten Thousand Three Hundred
Forty Dollars ($110,340.30)(based on a calculation of Fifteen Dollars
($15.00) per usable square foot) together with interest at the rate of
nine percent (9%) per annum, shall be fully amortized over the term of
the Lease in equal monthly installments, such sum to be added to and
paid by Tenant monthly as Basic Rent. For example, assuming the cost of
the Work equals One Hundred Ten Thousand Three Hundred Forty Dollars
($110,340.00), Tenant shall pay Landlord Three Thousand Five Hundred
Eight and 81/100 Dollars ($3,508.81) during each month of the Lease
Term. If the cost of the Work exceeds One Hundred Ten Thousand Three
Hundred Forty Dollars ($110,340), Tenant shall pay to Landlord such
excess prior to the Commencement Date of the Lease.
2. BUILDING STANDARD WORK
All improvements installed by Landlord shall be to Landlord's
Building Standard identified in EXHIBIT "B-1" attached hereto, unless
otherwise specified on the plans or approved by Landlord and Tenant, and
only in the quantities specified by Landlord as indicated on the plans.
EXHIBIT "B"
TO OFFICE SPACE LEASE
Page 1
3. SUBSTANTIAL COMPLETION
The Work shall be deemed to be substantially complete for purposes
of this Lease upon (a) completion of the Work in substantial conformance
with the Plans; and (b) if required for Tenant to legally occupy the
Premises, issuance of a certificate of occupancy. Typical "punchlist"
items need not be completed prior or as a condition to substantial
completion of the Work, provided, however, that none of such punchlist
items shall adversely affect Tenant's occupancy of the Premises in any
material respect. Tenant shall be given the opportunity to inspect and
approve the Work within two (2) days following substantial completion of
same. Typical punchlist items shall not be grounds to withhold approval
of the Work, provided, however, that Tenant may notify Landlord of
typical punchlist items after commencement of this Lease as prescribed
in Section 1.2 of the Lease, and Landlord shall endeavor to remedy any
such items in accordance with said Section 1.2 within thirty (30) days
following delivery of such notice.
5. CHANGES IN THE WORK
Once the Plans are approved, Tenant shall have the right to request
of Landlord that changes be made to the Work, but only as provided in
this Section 6. Landlord agrees not to withhold its approval to any such
changes. Tenant shall be responsible for the cost of any such changes
together with Landlord's fee of fifteen percent (15%) for Landlord's
overhead and coordination of the Work. Prior to commencing any such
changes, Landlord shall submit to Tenant a written estimate of the cost
thereof. If Tenant approves such estimate, it shall notify Landlord in
writing within three (3) business days following the date Landlord
submits the written cost estimate to Tenant and, at the same time, pay
Landlord in full the amount of such estimate, and the Contractor shall
proceed with such work. If Tenant shall fail to approve any such
estimate in writing within the three (3) business day period, such
failure shall be deemed a disapproval thereof, and the Contractor shall
not proceed with any such changes but shall continue with the Work as
though the changes had not been requested. Tenant may at its election
waive the requirement that Landlord provide the cost estimate. If Tenant
shall request any change without notifying Landlord or if Tenant waives
the requirement that Landlord provide the cost estimate, Tenant shall
pay for the actual cost of the changes together with Landlord's fee.
Nothing herein shall be deemed to excuse Tenant from the consequences of
its default in failing to notify Landlord of the requested changes.
6. DELAYS
Tenant and Landlord both acknowledge that time is of the essence.
If Tenant, or persons within Tenant's control, delay the progress of
completion of Work required to be performed by Landlord hereunder or
pursuant to any separate agreement by interfering with, or delaying,
Landlord's completion of the Premises, then the date of substantial
completion of the Premises for purposes of this Lease, shall be deemed
to be the date upon which the Premises would have been substantially
completed but for the acts or omissions of Tenant or persons within
Tenant's control. In addition, Landlord's performance within the time
periods provided herein shall be extended for a period of time equal to
any period of delay caused by strikes, lockouts, fire or other casualty,
the elements or acts of God, or governmental action or other cause,
other than financial, beyond the reasonable control of Landlord.
EXHIBIT "B"
TO OFFICE SPACE LEASE
Page 2
EXHIBIT "B-1"
BUILDING STANDARDS APPLICABLE TO THE PREMISES
A. HEATING, VENTILATION AND AIR CONDITIONING:
Interior spaces shall be provided with a minimum of one
thermostatically controlled zone per 1,000 square feet of usable floor area.
Air conditioning shall be provided at a rate not to exceed one ton per 400
square feet, or as required by the building's mechanical engineer.
B. PARTITIONS, DOOR FRAMES AND HARDWARE:
As indicated on the approved preliminary floor plan, or a maximum of
one lineal foot of interior drywall partitioning per 10 feet of usable floor
area (which includes fifty percent of demising wall) and one building
standard door, frame and hardware for every 000 xxxxxx xxxx xx xxxxxx xxxxx
xxxx, including the public corridor entrance door, (corridor door allowance
shall be required by code). Said hardware shall include mortise locksets on
all public corridor and entrance doors and rim type latchsets on all interior
doors. Doors are flush type, solid core, 3 feet wide, 8 feet high,
stain-grade, vertical grain Xxxxxxx fir veneer, with clear lacquer finish.
Latchsets are Schalge AL series with "Neptune" levers. Frames are extruded
aluminum (Western Integrated 300 series or equal) with commercial clear
anodized finish.
C. PAINTING:
Initial painting (egg shell sheen) throughout the Premises in
Building Standard manner, with colors to be selected by Tenant from
Landlord's Building Standard color chart, but not more than two colors in any
suite, and no more than one color in any room.
D. CEILINGS:
Suspended acoustical ceiling (2'X 2' tegular (OK?) tiles Xxxxxxxxx
704A or equal) and 15/16" standard exposed 1-grid throughout the Premises.
E. LIGHTING:
Recessed fluorescent light fixtures (2'X 4' 3-tube with 18 cell
parabolic diffuser) not to exceed one fixture for each 100 square feet of
usable floor area, including switches for said fixtures as required by code.
All lamps shall be T-8 with energy-saving ballasts.
F. ELECTRIC OUTLETS:
One wall mounted duplex electric convenience outlet for each 100
square feet of usable floor area.
G. TELEPHONE OUTLETS/TELEPHONE BACKBOARD:
One roughed in telephone outlet location consisting of 3/4" conduit
to 6" above the ceiling and plaster ring at +15 inches for each 150 square
feet of usable floor area. One 4' X 4' plywood backboard shall be provided for
the Tenant's installation of telephone equipment.
H. FLOOR COVERINGS:
Tenant's carpet allowance shall consist of approximately 80% of
Tenant's usable floor are and shall be Atlas Carpet Xxxxx, "Oxford" or
"Mayfair" glued directly to the slab, color to be selected by Tenant from the
manufacturer's standard colors. The remaining 20% of Tenant's usable floor
area to be covered with 1/8" thick vinyl composition tile (Xxxxxxxxx Standard
Excelon) or equal. All carpeted areas shall receive a 4" wall/carpet base;
all tiled areas shall receive a 4" coved rubber base.
I. WINDOW TREATMENTS:
Three inch vertical blinds (Levelor or equal) ceiling to window sill
on all exterior windows shall be provided in color and style as selected by
the Landlord. Window coverings on interior windows are at the Tenant's option
and sole expense.
J. PERIMETER BEAM AND COLUMN FINISHES:
The concrete beams at the perimeter wall shall be covered with a
black plastic laminate top and painted drywall front. All concrete columns
are covered with drywall.
EXHIBIT "B-1"
TO OFFICE SPACE LEASE
PAGE 1
K. PREMISES IDENTIFICATION:
One building standard suite sign, with suit number and a maximum of
four lines of copy as approved by the Landlord's representative, adjacent to
the primary entrance door to the Premises.
EXHIBIT "B-1"
TO OFFICE SPACE LEASE
PAGE 2
EXHIBIT "C"
RULES AND REGULATIONS
ATTACHED TO AND WHICH CONSTITUTE
A PART OF OFFICE SPACE LEASE
The following Rules and Regulations shall be in effect at the Project.
Landlord reserves the right to adopt reasonable modifications and additions
hereto.
(1) The sidewalks, entrances, passages, courts, elevators, vestibules,
stairways, corridors or halls of the Building shall not be obstructed by any
tenant or used for any purpose other than ingress and egress from the
respective premises. The halls, passages, entrances, elevators, stairways,
balconies and roof are not for the use of the general public, and Landlord
shall in all cases retain the right to control and prevent access thereto of
all persons whose presence in the judgment of Landlord shall be prejudicial
to the safety, character, reputation and interests of the Building and its
tenants, provided that nothing herein contained shall be construed to prevent
such access to persons with whom Tenant normally deals only for the purpose
of conducting its business on the Premises (such as clients, customers,
office suppliers and equipment vendors, and the like) unless such persons are
engaged in illegal activities. No tenant and no employees of any tenant shall
go upon the roof of the Building without the written consent of Landlord.
(2) No awnings or other projection shall be attached to the outside
walls of the Building or to balconies without the prior written consent of
Landlord. No hanging planters, television sets or other objects shall be
attached to or suspended from ceilings without the prior written consent of
Landlord. No curtains, blinds, shades or screens shall be attached to or hung
in, or used in connection with, any window or door of the Premises without
the prior written consent of Landlord. All electrical ceiling fixtures hung
in offices or spaces along the perimeter of the Building must be fluorescent
and/or of a quality, type, design and bulb color approved by Landlord. No
awnings, furniture, trees or plants or other personal property shall be
placed upon any balcony or patio, without Landlord's prior written approval.
(3) No sign, advertisement or notice shall be exhibited, painted or
affixed by any tenant on any part of, or so as to be seen from the outside
of, the Premises or the Building without the prior written consent of
Landlord. In the event of the violation of the foregoing by any tenant,
Landlord may remove such sign, advertisement or notice without any liability
and may charge the expense incurred in such removal to the tenant violating
this rule. Interior signs on doors and director tablet shall be inscribed,
painted or affixed for each tenant by Landlord at the expense of such tenant,
and shall be of a size, color and style acceptable to Landlord.
(4) The sashes, sash doors, skylights, windows and doors that
reflect or admit light and air into the halls, passageways or other public
places in the Building shall not be covered or obstructed by any tenant, nor
shall any bottles, parcels or other articles be placed on the windowsills,
balcony or patio railings.
(5) The water and wash closets and other plumbing fixtures shall not
be used for any purpose other than those for which they were constructed, and
no foreign substance of any kind shall be thrown herein. All damages
resulting from any misuse of the fixtures shall be borne by the tenant who,
or whose servants, employees, agents, visitors or licensees shall have caused
the same.
(6) No tenant shall xxxx, paint, drill into, or in any way deface
any part of the Premises or the Building. No boring, curring or stringing of
wires or laying of linoleum or other floor coverings shall be permitted,
except with the prior written consent of Landlord, and as Landlord may
direct. Any tenant permitted by Landlord to lay linoleum or other similar
floor covering shall not affix the same to the floor of the Premises in any
manner except by a paste, or other material which may easily be removed with
water, the use of cement or other similar adhesive materials being expressly
prohibited. The method of affixing any such linoleum or other similar floor
covering to the floor, as well as the method of affixing carpets or rugs to
the Premises, shall be subject to approval by Landlord. The expense of
repairing any damage resulting from a violation of this rule shall be borne
by the tenant by whom, or by those agents, clerks, employees or visitors, the
damage shall have been caused.
(7) If Tenant desires telephone or telegraph connections, Landlord
will direct electricians as to where and how the wires are to be introduced.
(8) No bicycles, vehicles or animals of any kind shall be brought
into or kept in or about the Premises, and no cooking shall be done or
permitted by any tenant in the Premises, except that the preparation of
coffee, tea, hot chocolate and similar items for tenants, their employees and
visitors shall be permitted. No tenant shall cause or permit any unusual or
objectionable odors to be produced in or permeate from or throughout the
Premises.
(9) No portion of the Building shall be used for manufacturing or
for the storage of merchandise except as such storage may be incidental to
the use of the Premises for general office purposes without Landlord's prior
written approval. No tenant shall, without the prior written consent of the
Landlord, occupy or permit any portion of his premises to be occupied or used
for the manufacture or sale of liquor,
EXHIBIT "C"
TO OFFICE SPACE LEASE
Page 1
narcotics, or tobacco in any form, as a medical office, chiropractor's
office, as a xxxxxx or manicure shop, or as an employment bureau or any
business other than that specifically provided for in the Lease. No tenant
shall engage or pay any employees on its premises except those actually
working for such tenant on its premises nor advertise for laborers giving an
address at its premises. The Building shall not be used for lodging or
sleeping or for any immoral or illegal purposes.
(10) Except with the prior written consent of the Landlord, no tenant
shall sell, or permit the sale at retail, of newspapers, magazines,
periodicals, or theater tickets, in or from the Building, nor shall any
tenant carry on, or permit or allow any employee or other person to carry on,
the business of stenography, typewriting or any similar business in or from
the Building for the service or accommodation of occupants of any other
portion of the Building.
(11) Landlord reserves the right to prohibit personal goods and
services vendors (as such term is defined below) from access to the Building.
To the extent that Landlord permits such vendors access to the Building, such
access shall be upon such reasonable terms and conditions, including but not
limited to the payment of a reasonable fee and provision for insurance
coverage, as are related to the safety, care and cleanliness of the Building,
the preservation of good order thereon, and the relief of any financial or
other burden on Landlord occasioned by the presence of such vendors or the
sale by them of personal goods or services (as such term is defined below) to
a tenant or its employees. If reasonably necessary for the accomplishment of
the aforementioned purposes, Landlord may exclude a particular vendor
entirely or limit the number of vendors who may be present at any one time in
the Building. The term "personal goods or services vendors" means persons
who periodically enter the Building for the purpose of selling goods or
services to a tenant, other than goods or services which are used by a tenant
only for the purpose of conducting its business on its premises. "Personal
goods or services" include, but are not limited to, drinking water and other
beverages, food, barbering services, and shoe shining services.
(12) No tenant shall make, or permit to be made, any unseemly or
disturbing noises or disturb or interfere with occupants of this or
neighboring buildings or premises or those having business with them by the
use of any musical instrument, radio, phonograph or unusual noise, or in any
other way.
(13) No tenant shall throw anything out of doors, windows or
skylights or down the passageways.
(14) No tenant, nor any of a tenant' servants, employees, agents,
visitors or licensees, shall at any time bring, keep or use on the Building
any kerosene, gasoline, or inflammable, combustible, explosive, or corrosive
fluid, or any other illuminating material, or use any method of heating other
than that supplied by Landlord.
(15) No tenant shall sweep or throw or permit to be swept or thrown
from the Premises any dirt or other substance into any of the corridors or
halls or elevators, or out of the doors, windows, stairways, patios or
balconies of the Building, and Tenant shall not use, keep or permit to be
used or kept any foul or noxious gas or substance in the Premises, or permit
or suffer the Premises to be occupied or used in a manner offensive or
objectionable to Landlord or other occupants of the Building by reason of
noise, odors and/or vibrations, or interfere in any way with other tenants or
those having business therein, nor shall any animals or birds be kept in or
about the Building. Smoking or carrying lighted cigars, cigarettes, pipes, or
other lighted smoking materials, in the elevators and all other common and/or
public areas of the Building is prohibited.
(16) No additional locks or bolts or any kind shall be placed upon
any of the doors or windows by any tenant, nor shall any changes be made in
existing locks or the mechanisms thereof unless Landlord is first notified
thereof and gives written approval. Each tenant must, upon termination of his
tenancy, give to Landlord all keys of stores, offices, or toilets and toilet
rooms, either furnished to, or otherwise procured by, such tenant, and in the
event of the loss of any keys so furnished, such tenant shall pay Landlord
the cost of replacing the same or of changing the lock or locks opened by
such lost key if Landlord shall deem it necessary to make such change.
(17) All removals, or the carrying in or out of any safes, freight,
furniture, or bulky matter of any description must take place during the hours
which Landlord may determine from time to time. The moving of safes or other
fixtures or bulky matter of any kind must be made upon previous notice to the
manager of the Building and under his/her supervision, and the persons
employed by any tenant for such work must be acceptable to Landlord. Landlord
reserves the right to inspect all safes, freight or other bulky articles to
be brought into the Building and to exclude from the Building and all such
bulky articles which violate any of the Rules and Regulations or the Lease of
which these Rules and Regulations are a part. Landlord reserves the right to
prescribe the weight and position of all safes, which must be placed upon
supports approved by Landlord to distributed the weight.
(18) No tenant shall purchase janitorial, maintenance or other
services from any company or persons not approved by Landlord. Any person
employed by any tenant to do janitorial work shall, while in the Building and
outside of the Premises, be subject to and under the control and direction of
the office or management of the Building (but not as an agent or servant of
Landlord, and the tenant shall be responsible for all acts of such persons).
Except with Landlord's prior written approval, not tenant shall
EXHIBIT "C"
TO OFFICE SPACE LEASE
Page 2
permit janitorial services to be performed during the hours of 7:00 a.m. to
6:00 p.m., Monday through Friday.
(19) Landlord shall have the right to prohibit any advertising by any
tenant which, in Landlord's opinion, tends to impair the reputation of the
Building or its desirability as an office/retail building and upon written
notice from Landlord any tenant shall refrain from and discontinue such
advertising.
(20) On Saturdays from 12:00 p.m. to 8:00 a.m., Sundays, those legal
holidays designated by Landlord, and on other days between the hours of 6:00
p.m. and 7:00 a.m., access to the Building or to the halls, corridors,
elevators or stairways in the Building, or to the Premises may be refused
unless the person seeking access is known to the building watchman, if any,
in charge and has a pass or is properly identified. Landlord shall in no case
be liable for damages for the admission to or exclusion from the Building of
any person whom Landlord has the right to exclude. Each tenant shall be
responsible for all persons for whom he requests after hours access and shall
be liable to Landlord for all acts of such persons. In case of invasion, mob
riot, public excitement, or other commotion, Landlord reserves the right but
shall not be obligated to prevent access to the Building during the
continuance of the same by closing the doors or otherwise, for the safety of
the tenants and protection of property in the Building.
(21) All doors opening into public corridors shall be kept closed,
except when in use for ingress and egress. Tenants shall see that the window,
transoms and doors of their premises are closed and securely locked before
leaving the Building.
(22) The requirements of tenants will be attended to only upon
application to the manager of the Building.
(23) Canvassing, soliciting and peddling in the Building are
prohibited and each tenant shall cooperate to prevent the same.
(24) There shall not be used in any space, or in the public halls of
the Building, either by any tenant or others, any hand trucks except those
equipped with rubber tires and side guards.
(25) No vending or coin operated machines shall be placed by any
tenant within his premises without the prior consent of Landlord.
EXHIBIT "C"
TO OFFICE SPACE LEASE
Page 3
EXHIBIT "D"
GUARANTY
WHEREAS, JAHRA INVESTMENTS, N.V. ("Landlord") and DVD EXPRESS, INC., a
California corporation (Tenant"), are about to execute a document entitled
Office Space Lease ("Lease") dated January 16, 1998 concerning the premises
delineated on EXHIBIT "A-1" to the Lease (the "Premises") wherein Landlord
will lease the Premises to Tenant, and
WHEREAS, XXXXXXX XXXXXXX, hereinafter referred to as "Guarantor," has a
financial interest in Tenant, and
WHEREAS, Landlord would not execute the Lease if Guarantor did not
execute and deliver to Landlord this Guaranty of Lease.
NOW THEREFORE, for and in consideration of the execution of the Lease
by Landlord and as a material inducement to Landlord to execute the Lease,
Guarantor hereby jointly, severally, unconditionally and irrevocably
guarantees the prompt payment by Tenant of all rentals and all other sums
payable by Tenant under the Lease and the faithful and prompt performance by
Tenant of each and every one of the terms, conditions and covenants of the
Lease to be kept and performed by Tenant, but only such sums and performances
required to be performed by Tenant during the period commencing upon
execution of the Lease and terminating one (1) year following the
Commencement Date of the Lease ("Effective Period").
It is specifically agreed and understood that the terms of the Lease may
be altered, affected, modified or changed by agreement between Landlord and
Tenant, or by a course of conduct, and the Lease may be assigned by Landlord
or any assignee of Landlord without consent or notice to Guarantor and that
this Guaranty shall thereupon and thereafter guarantee the performance of the
Lease as so changed, modified altered or assigned.
This Guaranty shall not be released, modified or affected by failure or
delay on the part of Landlord to enforce any of the rights or remedies of the
Landlord under the Lease, whether pursuant to the terms thereof or at law or
in equity.
No notice of default need be given to Guarantor, it being specifically
agreed and understood that the guarantee of the undersigned is a continuing
guarantee under which Landlord may proceed forthwith and immediately against
Tenant or against Guarantor following any breach or default by Tenant or for
the enforcement of any rights which Landlord may have as against Tenant
pursuant to or under the terms of the Lease or at law or in equity.
Landlord shall have the right to proceed against Guarantor hereunder
following any breach or default by Tenant without first proceeding against
Tenant and without previous notice to or demand upon either Tenant or
Guarantor.
Guarantor hereby waives (a) notice of acceptance of this Guaranty, (b)
demand of payment, presentation and protest, (c) all right to assert or plead
any statute of limitations as to or relating to this Guaranty and the Lease,
(d) any right to require the Landlord to proceed against the Tenant or any
other Guarantor or any other person or entity liable to Landlord, (e) any
right to require Landlord to apply to any default any security deposit or
other security it may hold under the Lease, (f) any right to require Landlord
to proceed under any other remedy Landlord may have before proceeding against
Guarantor, [and?] (g) any right of subrogation.
Guarantor does hereby subrogate all existing or future indebtedness of
Tenant to Guarantor to the obligations owed to Landlord under the Lease and
this Guaranty.
The term "Landlord" whenever hereinabove used refers to and means the
Landlord in the Lease specifically named and also any assignee of said
Landlord, whether by outright assignment or by assignment for security, and
also any successor to the interest of said Landlord or of any assignee in the
Lease or any part thereof, whether by assignment or otherwise. So long as the
Landlord's interest in or to the premises or the rents, issues and profits
therefrom, or in, to or under the Lease, are subject to any mortgage or deed
of trust or assignment for security, no acquisition by Guarantor of the
Landlord's interest in the premises or under the Lease shall affect the
continuing obligation of Guarantor under this Guaranty which shall
nevertheless continue in full force and effect for the benefit of the
mortgagee, beneficiary, trustee or assignee under such mortgage, deed of
trust or assignment, of any purchase at sale by judicial foreclosure or under
private power of sale, and the successors and assigns of any such mortgagee,
beneficiary, trustee, assignee or purchaser.
The term "Tenant" whenever hereinabove used refers to and means the
Tenant in the Lease specifically named and also any assignee or sublessee of
the Lease and also any successor to the interests of
EXHIBIT "D"
TO OFFICE SPACE LEASE
Page 1
said Tenant, assignee or sublessee of such Lease or any part thereof, whether
by assignment, sublease or otherwise.
Neither the Guarantor's obligations hereunder nor any remedy for the
enforcement thereof shall be impaired, modified, changed, released or limited
in any manner whatsoever by the impairment, modification change, release or
limitation of the liability of the Tenant under the Lease, or its estate in
bankruptcy or any remedy for the enforcement thereof, resulting from the
operation of any present or future provision of the National Bankruptcy Act
or any statute, or from the decision of any court.
In the event any action be brought by said Landlord against Guarantor
hereunder to enforce the obligation of guarantor hereunder, the
unsuccessful party in such action shall pay to the prevailing party therein
reasonable attorneys' fees.
This Guaranty shall terminate and be of no further force or effect from
and after the date that Tenant has paid all sums and performed all other
obligations to have been paid or performed by Tenant under the Lease during the
Effective Period.
Executed at Hollywood, California
on January 16, 1998
/s/ Xxxxxxx Xxxxxxx
--------------------------------------
XXXXXXX XXXXXXX
"GUARANTOR"
EXHIBIT "D"
TO OFFICE SPACE LEASE
Page 2
LEASE ADDENDUM
This Addendum is attached to and made a part of that certain La
Reina Office Building Lease dated January 16, 1998, between JAHRA INVESTMENTS,
N.V., as Landlord, and DVD EXPRESS, INC., a California corporation, as Tenant.
In the event of conflict between the provisions of this Addendum and the
provisions of the foregoing Lease, the provisions of this Addendum shall
control.
The following are additional provisions.
1. BASIC RENT INCREASE. Tenant acknowledges that the Basic Rent shall be
increased to include the amounts described in Section 1(d) of the Work Letter
attached to the Lease as EXHIBIT "B". Such increased portion of the Basic Rent
shall not be subject to the annual cost of living increase provided for in
Section 3.1.
2. EARLY TERMINATION RIGHT. Tenant shall have the right to terminate the
Lease prior to expiration of the Lease term by delivering to Landlord at any
time after the twenty-fourth (24th) month of the Lease term written notice
specifying an early termination date, which early termination date shall be the
last day of a calendar month occurring not earlier than ninety (90) days after
Landlord's receipt of Tenant's notice. Thus, the earliest date Tenant shall be
able to terminate the Lease pursuant to this paragraph 2 shall be at the
conclusion of the twenty-seventh (27th) month. Tenant's right to terminate the
Lease prior to expiration of the original three (3) year lease term shall be
conditioned on paying to Landlord, prior to the early termination date, an
amount ("Termination Amount") equal to the sum of the following: (a) the
unamortized portion of the broker commissions and other leasing costs incurred
by Landlord upon entering into the Lease; (b) two (2) monthly installments of
Basic Rent (in addition to the Basic Rent payable through the early termination
date specified by Tenant); and (c) the unamortized portion of the Costs for the
Work defined in Section 1 of the Work Letter. The unamortized portion of the
broker and other leasing costs and the costs of the Work shall be a percentage
of the original costs so incurred, which percentage shall be determined by
dividing the total number of months for which Tenant has paid Basic Rent under
the Lease by 36. Tenant's failure to pay the Termination Amount or any other
amounts then owing to Landlord under the Lease prior to the early termination
date specified by Tenant shall automatically revoke the early termination of the
Lease.
3. CURRENT OCCUPANCY OF PREMISES. Tenant acknowledges that Xxxxxx-Xxxxx
("Current Tenant") currently occupies the Premises and that Landlord has
provided Current Tenant written notice to relocate to another space in the
Building as of February 5, 1998. The date that Current Tenant actually vacates
the Premise shall be referred to herein as the "Relocation Date". All the terms
and conditions contained herein are contingent on the Current Tenant's vacation
of the Premises.
4. TERMINATION OF EXISTING LEASE. Tenant currently occupies other space on
the third floor of the Building ("Existing Premises") pursuant to Lease dated
September 1, 1997 as amended by Amendment No. 1 to La Reina Office Building
Lease dated as of November 1, 1997 ("Existing Lease"). Tenant agrees to fully
vacate the Existing Premises and return the Existing Premises to Landlord in the
condition required by the terms of the Existing Lease within three (3) business
days following the Commencement Date under this Lease. The Existing Lease shall
terminate and Landlord and Tenant shall each be relieved from all obligations to
be performed under the Existing Lease arising after such termination, provided
that Tenant shall remain responsible for performing any obligations to have been
performed by Tenant under the Existing Lease prior to the Commencement Date and
any prepaid rent or security deposit held by Landlord under the Existing Lease
shall be applied to the rent or security deposit to be paid by Tenant to
Landlord under this Lease.
FIRST AMENDMENT TO OFFICE BUILDING LEASE
THIS FIRST AMENDMENT TO THE OFFICE SPACE LEASE ("Amendment") is dated for
reference purposes on August 5, 1998, by and between JAHRA INVESTMENTS, N.V.
("Landlord"), as Landlord and DVD EXPRESS, INC., a California corporation
("Tenant"), as Tenant, with reference to the following recitals.
R E C I T A L S
A. Landlord and Tenant previously entered into that certain Office Space
Lease dated as of January 16, 1998 (the "Original Lease"). Pursuant to the
Original Lease, Landlord is leasing to Tenant certain premises consisting of
approximately eight thousand five hundred forty-one (8,541) rentable square feet
of space on the first (1st) floor ("Existing Premises") in the office building
located at 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxxxxxxxxx, as more particularly
described in the Original Lease. Terms defined in the Original Lease shall have
the above meaning when used in this Amendment.
B. Landlord and Tenant desire to amend the Original Lease to expand the
Existing Premises to include an additional approximately ten thousand two
hundred fifty-nine (10,259) rentable square feet of space on the fourth (4th)
floor of the Building as shown on the floor plan of the fourth floor attached
hereto as EXHIBIT "A" and incorporated herein by this reference ("Expansion
Premises") in accordance with the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the foregoing, Landlord and Tenant hereby
agree as follows:
1. EXPANSION OF PREMISES. Effective upon the Delivery Date (as hereinafter
defined), the Premises shall be expanded to include the Expansion Premises.
Unless specified to the contrary herein, from and after the Delivery date, all
references in the Lease to the "Premises" shall mean and refer to the entirety
of the space in the Existing Premises and the Expansion Premises.
2. OCCUPANCY OF EXPANSION PREMISES. Tenant shall occupy only seven
thousand (7,000) rentable square feet of space in the Expansion Premises during
months one (1), two (2), and three (3) of the "Expansion Premises Term" (as
hereafter defined), and Tenant shall occupy the entire Expansion Premises during
the remainder of the Expansion Premises Term.
3. BASIC RENT. Commencing on the Delivery Date, the monthly installments
of the annual basic rent for the Expansion Premises shall be the product of
rentable square feet of the Expansion Premises, multiplied by One Dollar and
Sixty Cents ($1.60). Notwithstanding the foregoing, due to Tenant's partial
occupancy of the Expansion Premises pursuant to Section 2, the basic rent for
the Expansion Premises for months one (1), two (2) and three (3) of the
Expansion Premises Term shall be Eleven Thousand Two Hundred Dollars
($11,200.00) per month. The basic rent for the Expansion Premises for months 4
through 12 shall be Sixteen Thousand Four Hundred Fourteen and 40/100 Dollars
($16,414.40) per month. The basic annual rent for the Expansion Premises shall
be increased on the first anniversary of the Delivery Date to One Dollar and
Sixty-Five Cents ($1.65) per rentable square foot and shall increase by an
additional Five Cents ($.05) per rentable square foot on such anniversary date
each year thereafter.
4. SECURITY DEPOSIT. The Security Deposit is hereby increased by the sum
of Thirty-Two Thousand Eight Hundred Twenty-Eight and 80/100 Dollars
($32,828.80) to a total of Fifty-Four Thousand One Hundred Eight-One and 30/100
Dollars ($54,181.30). Such increase in the Security Deposit shall be paid by
Tenant to Landlord concurrently with the execution of this Amendment.
5. LEASEHOLD IMPROVEMENTS. With respect to the Landlord's improvement of
the Expansion Premises, Landlord and Tenant each agree to abide by the terms of
the Expansion Work Letter attached hereto as EXHIBIT "B".
6. EXPANSION PREMISES TERM. The term of the Lease with respect to the
Expansion Premises shall commence on the Delivery Date and shall terminate five
(5) years thereafter ("Expansion Premises Term"). The Delivery Date shall be the
date that Landlord substantially completes the leasehold improvements required
by Section 5 above ("Leasehold Improvements") and delivers possession of the
Expansion Premises to Tenant. The parties acknowledge and agree that Landlord
anticipates that the Delivery Date of the Expansion Premises will be November 1,
1998. Landlord shall use commercially reasonable efforts to delivery the
Expansion Premises to Tenant by such date, but Landlord shall have no liability
for any failure to delivery the Expansion Premises to Tenant by such date.
Commencing on the Delivery Date and continuing until the expiration or earlier
termination of the Expansion Premises Term, in addition to Tenant's obligation
under the Lease with respect to the Existing Premises, Tenant agrees, with
respect to the Expansion Premises, that Tenant shall observe and perform all of
the terms, covenants and provisions set forth in the Lease.
7. EARLY TERMINATION RIGHT FOR EXPANSION PREMISES. The early termination
right in Paragraph 2 of the Lease Addendum shall apply only to the Existing
Premises and if exercised, the Lease shall continue as to the Expansion
Premises. Tenant shall have the right to terminate the Lease as to the Expansion
Premises, prior to expiration expiration of the Expansion Premises Term, by
delivering to Landlord at any time after the thirty-third (33rd) month of the
Expansion Premises Term written notice specifying an early termination date,
which early termination date shall be the last day of a calendar month occurring
not earlier than ninety (90) days after Landlord's receipt of Tenant's notice.
Thus, the earliest date Tenant shall be able to terminate the Expansion Premises
Term
-2-
pursuant to this Section 7 shall be at the conclusion of the thirty-sixth (36th)
month of the Expiration Premises Term. Tenant's right to terminate the Lease as
to the Expansion Premises prior to the expiration of the Expansion Premises Term
shall be conditioned on paying to Landlord, prior to the early termination date,
an amount ("Termination Amount") equal to the sum of the following: (a) the
unamortized portion of the broker commission incurred by Landlord in leasing the
Expansion Premises to Tenant; (b) two (2) monthly installments of Basic Rent for
the Expansion Premises (in addition to the Basic Rent payable for the Expansion
Premises though the early termination date specified by Tenant) for the
Premises; and (c) the unamortized portion of the Tenant Allowance paid by
Landlord for the Work defined in Section 1 of the Expansion Work Letter. The
unamortized portion of the broker commissions and the Tenant Allowance shall be
a percentage of the original costs so incurred, which percentage shall be
determined by subtracting from 100% the percentage obtained by dividing the
total number of months for which Tenant has paid Basic Rent under the Lease by
sixty (60). Tenant's failure to pay the Termination Amount or any other amounts
then owing to Landlord under the Lease prior to the early termination date
specified by Tenant shall automatically revoke the early termination of the
Lease as to the Expansion Premises.
8. OPTION TO EXTEND EXISTING PREMISES LEASE TERM. Landlord and Tenant
acknowledge the term of the Lease with respect to the Existing Premises
expires on April 20, 2001 ("Existing Premises Term"). Tenant shall have one
(1) option ("Extension Option") to extend the Existing Premises Term with
respect to the Existing Premises for an additional term ("Extension Term")
ending concurrently with the Expansion Premises Term. The Extension Option is
personal to Tenant and may not be assigned or exercised by an assignee or
sublessee. The Extension Option may be exercised by Tenant by delivery of
written notice ("Option Notice") to Landlord not later than October 20, 2000.
The Option Notice shall state Tenant's irrevocable and unconditional election
to extend the Lease as to the Existing Premises for the Extension Term. If
Tenant fails to timely deliver the Option Notice in the manner herein
provided, the Extension Option shall automatically terminate, without notice,
and be of no further force or effect and the Lease shall terminate as to the
Existing Premises upon expiration of the Existing Premises Term. If Tenant
timely delivers the Extension Notice, (a) all references to the termination
or to the end of the term as to all of the Premises shall be considered to
mean the termination of the Expansion Premises Term; and (b) the Early
Termination Right provided for in Section 2 of the Lease Addendum to the
Original Lease shall automatically terminate and be of no force or effect.
Notwithstanding the foregoing, the Basic Rent payable during the Extended
Term with respect to the Existing Premises shall be adjusted upon
commencement of the Extended Term to the then-existing "market rate",
provided that, in no event will the Basic Rent with respect to the Existing
Premises be less than that payable immediately prior to commencement of the
Extension Term, exclusive of that portion of the prior Basic Rent payable
under Paragraph 1(d) of the Work Letter for the Existing Premises.
-3-
The "market rate" shall be the then current rent charged by Landlord for the
lease of office space then available for lease in the Building ("Building
Rate"), or if none then available for lease, the then prevailing rent charged
in comparable Class A buildings in Hollywood within a one-half (1/2) mile
radius of the Building ("Comparable Rate"). To determine the Building Rate,
Tenant may request Landlord during the final year of the Existing Premises
Term to provide to Tenant the following: (a) the average per square foot rent
at which any vacate space then located in the Building is being offered for
lease by Landlord; and (b) the average per square foot rental rate charged
for any lease(s) entered into by landlord in the Building with a term which
commences or is scheduled to commence within the last year of the Existing
Premises Term. If there is no vacant or newly leased space within the
Building during the last year of the Existing Premises Term, then the
Comparable Rate shall be determined by three (3) commercial real estate
brokers each of whom has devoted during the immediately prior five (5) year
period a predominant portion of his or her time to the leasing of office
space located in Hollywood and the surrounding areas of Los Angeles
("Qualified Broker"). Either Landlord or Tenant shall appoint in writing a
Qualified Broker and give written notice and a copy of the resume of the
Qualified Broker to the other. Within fifteen (15) days after delivery by
such party of such notice, the other party shall, in a like manner, designate
a Qualified Broker and give written notice along with the resume of its
designated Qualified Broker to the other party. The Qualified Brokers
designated by Landlord and Tenant shall be requested to jointly designate a
third Qualified Broker and provide Landlord and Tenant with the name and
resume of the third Qualified Broker within ten (10) business days after
delivery of notice identifying the second Qualified Broker. The three (3)
Qualified Brokers so selected shall promptly fix a time for completion of
determination of the Comparable Rate as defined above, which time shall be no
later than forty-five (45) days from the date of the appointment of the last
Qualified Broker. The three (3) Qualified Brokers shall notify Landlord and
Tenant as to the date fixed for such completion. On that date, the three (3)
Qualified Brokers shall submit their determination of the Comparable Rate in
writing to Landlord and Tenant which writing shall identify the Comparable
Buildings and rates used in reaching the Comparable Rate. The parties agree
that for the purpose of calculating the comparable Rate, the Comparable Rate
shall be deemed to be that amount which is determined by taking the average
of the two (2) rates identified by the two (2) Qualified Brokers which are
closest to each other. Each of the parties hereto shall pay for the services
of its appointed Qualified Broker and one-half (1/2) of the costs of the
services for the third Qualified Broker. Notwithstanding anything to the
contrary above-stated, if either party fails to designate a second Qualified
Broker in the time and manner specified above, the Comparable Rate shall be
determined by the Qualified Broker first designated, which determination
shall be conclusive on the parties.
-4-
The Base Rent established for the Extended Term for the Existing Premises
shall be adjusted annually in the same manner as the annual increases applied
during the initial term.
THE EXTENSION OPTION SHALL AUTOMATICALLY TERMINATE FOLLOWING A DEFAULT OR
BREACH OF THE LEASE BY TENANT.
9. CURRENT OCCUPANCY OF THE EXPANSION PREMISES. Tenant acknowledges
that 7.23 Productions ("Current Tenant") currently occupies the Expansion
Premises, that the Lease with the current Tenant expires September 14, 1998
and that Landlord has delivered written notice to Current Tenant to vacate
the Expansion Premises no later than September 15, 1998. Landlord shall use
reasonable efforts to recover possession of the Expansion Premises by
September 15, 1998 but shall not be liable to Tenant for delays resulting
from the failure of the Current Tenant to timely vacate the Expansion
Premises.
10. GUARANTY. Tenant agrees to cause the Guaranty attached hereto as
EXHIBIT "C" and incorporated herein by this reference to be executed by
Xxxxxxx Xxxxxxx and delivered to Landlord concurrently with and as a
condition to the effectiveness of this Amendment.
11. PARKING. In connection with the Expansion Premises, Tenant shall be
entitled to twenty-four (24) parking spaces at the initial rent of
Seventy-Seven Dollars ($77.00) per month per unreserved space and One Hundred
Ten Dollars ($110.00) per month per reserved space. Notwithstanding the
provisions of Section 5.4(a) of the Original Lease, the rent payable for the
parking spaces granted under this Section may be adjusted by Landlord from
time to time during the Expanded Premises Term.
12. OPERATING EXPENSES. Commencing January 1, 2000, Tenant shall pay
its pro rata share of increased Operating Costs attributable to the Expansion
Premises in accordance with Section 3.3 of the Lease. Tenant's proportionate
share of the Increased Operating Costs shall be computed separately for the
Expansion Premises based on a 1999 Base Year.
13. RATIFICATION AND CONFIRMATION OF LEASE. Except as expressly amended
by this Amendment, all of the terms, covenants, conditions, provisions and
agreements of the Lease shall remain in full force and effect. This Amendment
shall be construed to be part of the Lease and shall be deemed incorporated
into the Lease by this reference. In the event of any conflict between the
Lease and the Amendment, this Amendment shall control.
14. MISCELLANEOUS PROVISIONS.
(a) This Amendment may be executed in any number of counterparts, each
of which shall constitute an original and all of which together shall
constitute one and the same instrument.
-5-
(b) Each individual and entity executing this Amendment hereby
represents and warrants that he, she or it has the capacity set forth on the
signature pages hereof with full power and authority to bind the party on
whose behalf he, she or it is executing this Amendment to the terms hereof.
The parties have read and understood this Amendment and have had the
opportunity to consult with counsel with respect hereto.
IN WITNESS WHEREOF, Landlord and Tenant have caused their duly authorized
representatives to execute this Amendment as of the date first above written.
JAHRA INVESTMENTS, N.V.
By: /s/ Xxx Xxxxxxxxxxx
----------------------------------
Its: Treasurer
-------------------------------
"Landlord"
DVD EXPRESS, INC.,
a California corporation
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------
Its: President
-------------------------------
"Tenant"
-6-
EXHIBIT "A"
FLOOR PLAN OF FOURTH FLOOR ON WHICH LOCATION OF EXPANSION
PREMISES IS DESIGNATED
[FLOOR PLAN]
EXHIBIT "A"
to First Amendment to Office Space Lease
EXHIBIT "B"
THE WORK LETTER
In addition to the mutual covenants contained in the Lease to which
this Work Letter is attached, Landlord and Tenant further mutually agree as
follows:
1. PLANS AND SPECIFICATIONS FOR THE EXPANDED PREMISES; TIMING AND
PAYMENT OF CONSTRUCTION
(a) Tenant agrees to cooperate with Landlord's architects
and engineers, who shall prepare, within ten (10) days of the
execution of this Lease, detailed space plans and specifications
("Plans") for the tenant improvement work to be conducted on the
Expanded Premises ("Work"). The Plans shall include, but shall not be
limited to, locations of doors, partitioning, reflected ceiling,
electrical fixtures, outlets and switches, telephone outlets,
plumbing fixtures, extraordinary floor loads, and the other special
requirements, and Tenant shall approve the Plans in writing on or
before three (3) days following receipt.
(b) Upon approval of the Plans by Tenant, Landlord shall
cause Xxxxxxx Construction and, if requested by Tenant, at least two
(2) other responsible licensed general contractors acceptable to
Landlord to submit a fixed sum bid detailing the construction costs of
the Work (the "Contract Sum"). Upon receipt of the Contract Sum,
Tenant shall have three (3) business days to approve the lowest
responsible Contract Sum in writing, or alternatively, to modify the
Plans. In the event Tenant modifies the Plans, the revised plans
shall be submitted to the contractor ("Contractor") submitting the
lowest responsible bid. Tenant shall have three (3) business days
from its receipt of the revised Contract Sum to approve the same in
writing. Any revisions to the Plans and the Contract Sum must also be
approved by Landlord, which approval shall not be unreasonably
withheld or delayed. Immediately following Tenant's written approval
of the Contract Sum, Landlord shall cause Contractor to prepare a
construction contract in a form acceptable to Landlord (the
"Construction Contract") for construction of the Work for the
Contract Sum. Landlord shall be responsible for payment of amounts
owing to Contractor under the Construction Contract and shall be
reimbursed by Tenant in accordance with the terms set forth herein.
Contractor shall construct the Work in accordance with the Plans.
(c) Following approval of the Contract Sum by Tenant and
Landlord, and the Construction Contract by Landlord, the acquisition
of all necessary governmental permits, including
EXHIBIT "B"
to First Amendment to Office Space Lease
Page 1 of 2
building permits, and Tenant's deposit with Landlord of any excess
costs referred to in Section 1(f) below, Landlord shall instruct the
Contractor to proceed and to complete the Work no later than eight
(8) weeks following the commencement of the Work.
(d) The term "Costs" shall include, (i) amounts incurred by
Landlord to design the Work; (ii) amounts payable to Contractor
pursuant to the Construction Contract; (iii) the cost of permits,
licenses, inspections and certificates, including without limitation,
plan check fees, structural, mechanical and other engineering,
consulting fees for ADA and fire hazard compliance, architectural and
space planning fees incurred by Landlord and/or Tenant in compliance
with this Work Letter; and (iv) any additional cost or expense
incurred in connection with any Change Orders. Costs shall only
include costs and expenses incurred in connection with the design and
construction of permanent improvements to the Expanded Premises, and
shall not include the cost or expense of any cabinetry, shelving,
furniture, fixtures or equipment to be located on or about the
Expanded Premises which Tenant may remove from the Expanded Premises.
(e) Landlord shall pay and be responsible for the Costs up to
an amount equal to ONE HUNDRED SEVENTY-EIGHT THOUSAND FOUR HUNDRED
TWENTY DOLLARS ($178,420.00). The above-described amount to be paid
by Landlord is herein sometimes referred to as "the Tenant Allowance."
(f) Tenant shall be responsible for all Costs in excess of
the Tenant Allowance. Landlord shall determine all Costs incurred in
connection with the Work, and shall notify Tenant in writing if any
additional sums are owing by Tenant pursuant to this Work Letter
after deduction of the Tenant Allowance. Tenant shall pay Landlord
any such additional amounts within five (5) business days following
the later (a) receipt of Landlord's demand for payment; or (b) the
Commencement Date. In the event Tenant has overpaid its share of the
Costs, Tenant may credit such overpayment against the first
installment(s) of Basic Annual Rent due under the Lease, and Landlord
shall have no obligation to make a cash payment to Tenant for any
such overpayment. Landlord shall apply all funds received from
Tenant to the Costs, as incurred, and shall provide Tenant, on request,
with copies of all payment requests or vouchers paid by Landlord in
constructing the Work.
2. BUILDING STANDARD WORK
All improvements installed by Landlord shall be to Landlord's
Building Standard unless otherwise specified on the plans or approved
by Landlord and Tenant, and only in the quantities specified by
Landlord as indicated on the plans.
EXHIBIT "B"
TO OFFICE SPACE LEASE
Page 2
3. SUBSTANTIAL COMPLETION
The Work shall be deemed to be substantially complete for purposes of
this Lease upon (a) completion of the Work in substantial conformance with
the Plans; and (b) if required for Tenant to legally occupy the Expanded
Premises, issuance of a certificate of occupancy. Typical "punchlist" items
need not be completed prior or as a condition to substantial completion of
the Work, provided, however, that none of such punchlist items shall
adversely affect Tenant's occupancy of the Expanded Premises in any material
respect. Tenant shall be given the opportunity to inspect and approve the
Work within two (2) days following substantial completion of same. Typical
punchlist items shall not be grounds to withhold approval of the Work,
provided, however, that Tenant may notify Landlord of typical punchlist items
after commencement of this Lease as prescribed in Section 1.2 of the Lease,
and Landlord shall endeavor to remedy any such items in accordance with said
Section 1.2 within thirty (30) days following delivery of such notice.
4. CHANGES IN THE WORK
Once the Plans are approved, Tenant shall have the right to request
of Landlord that changes be made to the Work, but only as provided in this
Section 5. Landlord agrees not to unreasonably withhold its approval to any
such changes. Tenant shall be responsible for the cost of any such changes.
Prior to commencing any such changes, Landlord shall submit to Tenant a
written estimate of the cost thereof. If Tenant approves such estimate, it
shall notify Landlord in writing within three (3) business days following the
date Landlord submits the written cost estimate to Tenant and, at the same
time, pay Landlord in full the amount of such estimate, and the Contractor
shall proceed with such work. If Tenant shall fail to approve any such
estimate in writing within the three (3) business day period, such failure
shall be deemed a disapproval thereof, and the Contractor shall not proceed
with any such changes but shall continue with the Work as though the changes
had not been requested. Tenant may at its election waive the requirement that
Landlord provide the cost estimate. If Tenant shall request any change
without notifying Landlord or if Tenant waives the requirement that Landlord
provide the cost estimate, Tenant shall pay for the actual cost of the
changes together with Landlord's fee. Nothing herein shall be deemed to
excuse Tenant from the consequences of its default in failing to notify
Landlord of the requested changes.
5. DELAYS
Tenant and Landlord both acknowledge that time is of the essence. If
Tenant, or persons within Tenant's control, delay
EXHIBIT "B"
-----------
TO OFFICE SPACE LEASE
Page 3
the progress of completion of Work required to be performed by Landlord
hereunder or pursuant to any separate agreement by interfering with, or
delaying, Landlord's completion of the Expanded Premises, then the date of
substantial completion of the Expanded Premises for purposes of this Lease,
shall be deemed to be the date upon which the Expanded Premises would have
been substantially completed but for the acts or omissions of Tenant or
persons within Tenant's control. In addition, Landlord's performance within
the time periods provided herein shall be extended for a period of time equal
to any period of delay caused by strikes, lockouts, fire or other casualty,
the elements or acts of God, or governmental action or other cause, other
than financial, beyond the reasonable control of Landlord.
EXHIBIT "B"
-----------
TO OFFICE SPACE LEASE
Page 4
EXHIBIT "C"
GUARANTY
WHEREAS, JAHRA INVESTMENTS, N.V. ("Landlord") and DVD EXPRESS, INC.,
a California corporation ("Tenant"), have executed an Office Space Lease
dated January 16, 1998 and are about to execute an amendment to such Lease
(the "Amendment") entitled First Amendment to Office Space Lease dated August
5, 1998, which lease, as amended by the Amendment is hereinafter referred to
as the "Lease", and
WHEREAS, Xxxxxxx Xxxxxxx, hereinafter referred to as "Guarantor," has
a financial interest in Tenant, and
WHEREAS, Landlord would not execute the Amendment to the Lease if
Guarantor did not execute and deliver to Landlord this Guaranty of Lease.
NOW THEREFORE, for and in consideration of the execution of the
Amendment by Landlord and as a material inducement to Landlord to execute the
Amendment, Guarantor hereby jointly, severally, unconditionally and
irrevocably guarantees the prompt payment by Tenant of all rent and all other
sums payable by Tenant under the Lease. Notwithstanding the foregoing,
Guarantor's liability under this Guaranty shall not exceed an amount
("Maximum Amount") equal to the sum of the unamortized Tenant Allowance and
broker's commission paid in connection with the Expansion Premises. The
Maximum Amount shall be computed as of the first date that Tenant has failed
to correct any default under the Lease within the applicable grace period, if
any. The Maximum Amount shall be computed in the same manner and with the
same interest rate (i.e. 9%), as the Termination Amount under Section 7 of
the Amendment.
It is specifically agreed and understood that the terms of the Lease
may be altered, affected, modified or changed by agreement between Landlord
and Tenant, or by a course of conduct, and the Lease may be assigned by
Landlord or any assignee of Landlord without consent or notice to Guarantor
and that this Guaranty shall thereupon and thereafter guarantee the
performance of the Lease as so changed, modified, altered or assigned.
This Guaranty shall not be released, modified or affected by failure
or delay on the part of Landlord to enforce any of the rights or remedies of
the Landlord under the Lease, whether pursuant to the terms thereof or at law
or in equity.
No notice of default need be given to Guarantor, it being
specifically agreed and understood that the guarantee of the undersigned is a
continuing guarantee under which Landlord may proceed forthwith and
immediately against Tenant or against Guarantor following any breach or
default by Tenant or for the
EXHIBIT "C"
-----------
TO FIRST AMENDMENT
enforcement of any rights which Landlord may have as against Tenant pursuant
to or under the terms of the Lease or at law or in equity.
Landlord shall have the right to proceed against Guarantor hereunder
following any breach or default by Tenant without first proceeding against
Tenant and without previous notice to or demand upon either Tenant or
Guarantor.
Guarantor hereby waives (a) notice of acceptance of this Guaranty,
(b) demand of payment, presentation and protest, (c) all right to assert or
plead any statute of limitations as to or relating to this Guaranty and the
Lease, (d) any right to require the Landlord to proceed against the Tenant or
any other Guarantor or any other person or entity liable to Landlord, (e) any
right to require Landlord to apply to any default any security deposit or
other security it may hold under the Lease, (f) any right to require Landlord
to proceed under any other remedy Landlord may have before proceeding against
Guarantor, and (g) any right of subrogation.
Guarantor does hereby subrogate all existing or future indebtedness
of Tenant to Guarantor to the obligations owed to Landlord under the Lease
and this Guaranty.
The term "Landlord" whenever hereinabove used refers to and means the
Landlord in the Lease specifically named and also any assignee of said
Landlord, whether by outright assignment or by assignment for security, and
also any successor to the interest of said Landlord or of any assignee in the
Lease or any part thereof, whether by assignment or otherwise. So long as the
Landlord's interest in or to the premises or the rents, issues and profits
therefrom, or in, to or under the Lease, are subject to any mortgage or deed
of trust or assignment for security, no acquisition by Guarantor of the
Landlord's interest in the premises or under the Lease shall affect the
continuing obligation of Guarantor under this Guaranty which shall
nevertheless continue in full force and effect for the benefit of the
mortgagee, beneficiary, trustee or assignee under such mortgage, deed of
trust or assignment, of any purchase at sale by judicial foreclosure or under
private power of sale, and the successors and assigns of any such mortgagee,
beneficiary, trustee, assignee or purchaser.
The term "Tenant" whenever hereinabove used refers to and means the
Tenant in the Lease specifically named and also any assignee or sublessee of
the Lease and also any successor to the interests of said Tenant, assignee or
sublessee of such Lease or any part thereof, whether by assignment, sublease
or otherwise.
Neither the Guarantor's obligations hereunder nor any remedy for the
enforcement thereof shall be impaired, modified, changed, released or limited
in any manner whatsoever by the impairment, modification, change, release or
limitation of the liability of the Tenant under the Lease, or its estate in
bankruptcy or any remedy for the enforcement thereof, resulting from the
operation of any
EXHIBIT "C"
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TO FIRST AMENDMENT
present or future provision of the National Bankruptcy Act or any statute, or
from the decision of any court.
In the event any action be brought by said Landlord against Guarantor
hereunder to enforce the obligation of Guarantor hereunder, the unsuccessful
party in such action shall pay to the prevailing party therein reasonable
attorneys' fees.
This Guaranty shall terminate and be of no further force or effect
from and after the date that Tenant has paid all sums and preformed all other
obligations to have been paid or performed by Tenant for which this Guaranty
was entered into.
Executed at Hollywood, California, on _____________________________, 1998.
_________________________________
XXXXXXX XXXXXXX
"GUARANTOR"
EXHIBIT "C"
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TO FIRST AMENDMENT
