BUILDING LEASE
1. PARTIES. This Building Lease ("Lease"), dated for reference purposes
only, June 11, 1998, is made by and between ALL POST, INC., a California
corporation, herein called "Landlord" and VDI MEDIA, a California corporation,
herein called "Tenant."
2. PREMISES.
2.1 Landlord does hereby lease to Tenant and Tenant hereby leases
from Landlord that certain real property (herein called "Premises") indicated on
EXHIBIT A attached hereto and by reference thereto made a part hereof. Said
Premises are commonly known as 0000 Xxxx Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx and
have been improved with a building of approximately 33,000 square feet (the
"Building"). The Premises are more particularly described in EXHIBIT A hereto.
Any statement of size set forth in this Lease or that may have been used in
calculating rental is an approximation which Tenant and Landlord agree is
reasonable. Notwithstanding the foregoing, the Tenant or Landlord may elect, at
its sole cost, to cause the square footage of the Building to be measured by a
California licensed architect according to the following criteria: (i) the
square footage of each above ground floor shall be based on measurements from
the exterior of all exterior walls; and (ii) the square footage of the basement
area shall be based on measurements from the interior of all basement exterior
walls. When completed, Tenant or Landlord, as the case may be, may deliver its
measurements and calculations to the other and, if within ten (10) business days
of delivery, the other party does not object in writing to the calculated square
footage of the Building, such square footage shall be used to recalculate
Monthly Rent as provided at Paragraph 5 below. If the other party disagrees in
writing with the calculated square footage within such ten (10) business-day
period, then it may conduct its own calculation thereof in accordance with this
paragraph which shall be completed as soon as reasonably possible. If after the
time periods provided in this paragraph have elapsed and Landlord and Tenant are
still in disagreement as to the appropriate square
Page 1
footage after the second calculation, the matter shall be submitted to a
California licensed architect selected by the other two architects and such
architect shall determine which of the two previously made calculations of
square footage shall be used. Such architect's determination shall be binding
on Landlord and Tenant. Notwithstanding anything herein to the contrary, the
recalculation of the square footage of the Building must be commenced by the
delivery no later than August 15, 1998 of the initial recalculation by one party
to the other. Failure to do so shall be deemed both parties' agreement that the
Building contains 33,000 square feet for all purposes under this Lease.
2.2 This Lease is subject to the terms, covenants and conditions
herein set forth and Tenant and Landlord each covenant to the other as a
material part of the consideration for this Lease to keep and perform each and
all of said terms, covenants and conditions to be kept and performed by Tenant
or Landlord, as applicable, and that this Lease is made upon the condition of
said performance.
2.3 Landlord shall deliver the Premises to Tenant broom clean and
free of debris and in good operating order, condition and repair on the
Commencement Date (as defined below) and warrants that the existing electrical,
plumbing, fire sprinkler, lighting, heating, ventilating and air condition
systems ("HVAC"), loading doors, if any, and all other such elements in the
Premises, other than those constructed by Tenant shall be in good, operating
condition on the Commencement Date and that the structural elements of the roof,
bearing walls and foundation of the Building shall be free of material defects.
2.4 Landlord warrants that the improvements on the Premises
materially comply with all applicable laws, covenants or restrictions of record,
building codes, regulations and ordinances ("Applicable Requirements") in effect
on the Commencement Date. This warranty does not apply to the use to which
Tenant will put the Premises or to any alterations or modifications made or to
be made to the Premises by Tenant.
3. TERM. The term of this Lease shall be for nine (9) months, commencing
on the 11th day of June, 1998 ("Commencement Date"), and ending on the 10th day
of March, 1999 ("Term"), subject to earlier termination as provided herein.
Notwithstanding the foregoing, Landlord may terminate this Lease on not less
than thirty (30) days' advance written notice to Tenant with such termination to
be effective on the
Page 2
date set forth in such notice which date shall not be earlier than December 10,
1998. In addition to Landlord's foregoing right to terminate the Lease, Tenant
may, on thirty (30) days' advance written notice to Landlord, (i) terminate this
Lease or (ii) reduce the size of the Premises by returning to Landlord portions
of the Premises as described in SCHEDULE 1 hereto. Any portion of the Premises
returned to Landlord pursuant to this Paragraph 3 is referred to herein as
"Former Premises." Effective on the date on which any portion of the Premises
are transitioned to Former Premises, the Monthly Rent shall be reduced in an
amount equal to the Monthly Rent allocable to the Former Premises as more
particularly set forth in SCHEDULE 1. Additionally, "Premises" shall then be
defined to exclude all Former Premises. Tenant acknowledges that any Former
Premises may be leased by Landlord to third parties. In such event Landlord
shall have the right to designate portions of the Premises as "common areas" for
joint use by Landlord, Tenant, such third party tenants and others. The common
areas shall include only such minimal areas as are necessary to provide for
ingress and egress to the Former Premises and areas for use by others in
connection with the Former Premises including, by way of example, restroom
facilities, stairs, elevators, and parking areas.
4. POSSESSION. Landlord shall deliver possession of the Premises to Tenant
on the Commencement Date.
5. MONTHLY RENT. Tenant agrees to pay to Landlord as "Monthly Rent,"
without prior notice, offset, deduction or demand, for the Premises the sum of
Sixty Two Thousand Seven Hundred Dollars ($62,700) ( which equates to One and
90/100 Dollar ($1.90) per square foot of the Building and which is subject to
adjustment as provided at Subparagraph 2.1 above), in advance, on or before the
first day of the first full calendar month of the term hereof and a like sum on
or before the first day of each and every successive calendar month thereafter
during the Term, except that the first month's rent shall be paid upon execution
hereof. Monthly Rent for any period during the term hereof which is for less
than one (1) month shall be a prorated portion of the monthly installment
herein, based upon a thirty (30) day month.
Page 3
Monthly Rent shall be paid to Landlord in lawful money of the United States of
America, which shall be legal tender at the time of payment, at such place as
Landlord may from time to time designate in writing.
6. [INTENTIONALLY DELETED.]
7. [INTENTIONALLY DELETED.]
8. USE. Tenant shall use the Premises for video duplication and audio
production services, vault storage of videos and any ancillary general office
use, and shall not use or permit the Premises to be used for any other purpose
without the prior written consent of Landlord which consent shall not be
unreasonably withheld. Tenant shall not do or permit anything to be done in or
about the Premises, nor bring or keep anything therein, which will in any way
increase the existing rate of, or adversely affect, any fire insurance upon the
improvements at the Premises or any of its contents, or cause cancellation of
any insurance policy covering said improvements or any part thereof or any of
its contents. Tenant shall not allow the Premises to be used for any improper,
immoral or unlawful purpose, nor shall Tenant cause, maintain or permit any
nuisance in, on or about the Premises. Tenant shall not do or permit to be
done anything in or about the Premises which will in any way materially and
adversely obstruct or interfere with the rights of other tenants or occupants of
the improvements at the Premises or injure or annoy them on or about the
Building. Tenant, its employees, agents and contractors shall not commit any
waste in or upon the Premises. 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 sounds or odors to carry
outside the Premises. Except for the specific uses described in the first
sentence of this Paragraph 8 (i.e., video duplication, audio production services
and vault storage of videos), Landlord shall require similar restrictions on use
as contained in this paragraph from any tenants of the Former Premises, if any,
for the benefit of Tenant and such other tenants.
Page 4
9. COMPLIANCE WITH LAW. Tenant shall not use the Premises or permit
anything to be done in or about the Premises which will in any way conflict with
any law, statute, ordinance or governmental rule or regulation now in force or
which may hereafter be enacted or promulgated. Tenant shall, at its sole cost
and expense, promptly comply with all laws, statutes, ordinances and
governmental rules, regulations or requirements now in force or which may
hereafter be in force, and with the requirements of any board of fire insurance
underwriters or other similar bodies now or hereafter constituted, relating to,
or affecting the condition, use or occupancy of the Premises, excluding
structural changes not related to or affected by Tenant's improvement or acts.
The judgment of any court of competent jurisdiction or the admission of Tenant
in any action against Tenant, whether Landlord be a party thereto or not, that
Tenant has violated any law, statute, ordinance or governmental rule, regulation
or requirement, shall be conclusive of the fact as between the Landlord and
Tenant.
10. ALTERATIONS AND ADDITIONS.
10.1 Only in the event Tenant returns possession of a portion of the
Premises to Landlord pursuant to Paragraph 3 above, Landlord shall have the
right, at any time thereafter, to change the arrangement and/or location of
entrances or passageways, doors and doorways, corridors, elevators, stairs,
toilets, and other public parts of the improvements at the Premises. Only if
required by law or government regulations and upon giving Tenant as much advance
notice thereof as is reasonably practical, Landlord shall have the right to
change the name, number or designation by which the Premises are commonly known.
10.2 Tenant shall not make any alterations, additions or improvements
without the prior written consent of Landlord which shall not be unreasonably
withheld. All such alterations, additions and improvements shall be made in
conformity with plans therefor reasonably approved by Landlord in writing prior
to the commencement of such work and shall be performed by a tenant improvements
contractor reasonably approved by Landlord. All such alterations, additions and
improvements (except movable furniture, equipment, furnishings and trade
fixtures) shall become the property of Landlord and shall be
Page 5
surrendered with the Premises, as a part thereof, at the expiration or earlier
termination of the term hereof. All such alterations, additions or improvements
shall, however, be made by Tenant at Tenant's sole expense. Upon termination of
this Lease, Tenant shall, upon demand by Landlord, at Tenant's sole cost and
expense, forthwith remove any alterations, additions or improvements (except
those made initially at the commencement of Tenant's possession of the Premises
with Landlord's written approval) made by Tenant and designated by Landlord at
the time of Landlord's initial approval to be removed, and repair and restore
the Premises to their original condition, reasonable wear and tear excepted.
Any personal property left on or in the Premises at the expiration or earlier
termination of this Lease may, at the option of Landlord, after fifteen (15)
days' written notice to Tenant, either be deemed abandoned and retained by
Landlord, or be placed in storage at a public warehouse in the name of, for the
account of and at the expense and risk of Tenant, or otherwise disposed of by
Landlord in a manner provided by law. Tenant releases Landlord of and from any
and all claims and liability for damage to, or destruction or loss of, property
left by Tenant upon the Premises at the expiration or other termination of this
Lease. Tenant further waives all claims to all property (and the proceeds
thereof) abandoned by Tenant and retained or disposed of by Landlord.
All alterations, additions and/or improvements to the Premises made by
Tenant shall comply with the plans therefor approved in advance by Landlord.
Such plans and any specifications associated therewith shall be prepared by an
architect or interior designer reasonably approved in advance by Landlord. All
such work by Tenant shall comply with all applicable requirements of all
governmental authorities having jurisdiction of the Premises and shall comply
with all reasonable rules and regulations established by Landlord to ensure the
safety, cleanliness and good order of the Premises and its occupants, including
but not limited to those relating to usage of elevators and loading docks,
establishment of off-Premises staging areas, disposal of refuse and the hours of
performing operations which result in the creation of noise, dust and odors. No
such alterations, additions or improvements by Tenant shall incorporate therein
any hazardous materials, as defined in Paragraph 27.
Page 6
10.3 No antenna, satellite dish, microwave receiver or other
receiving or transmission equipment shall be installed by Tenant in or on the
roof of the improvements at the Premises or elsewhere at the Premises except
with the prior written consent of Landlord which shall not be unreasonably
withheld. Landlord's consent shall not be withheld unless such installation
would materially injure the Premises. Any such installation by Tenant shall be
only the particular equipment specifically approved by Landlord, shall be
limited to the manner and location approved by Landlord and shall be subject to
such terms and conditions as are provided by Landlord to Tenant at the time
Landlord approves such installation.
11. SURRENDER/REPAIRS.
11.1 Tenant shall surrender the Premises by the end of the Term or
any earlier Termination Date with all the improvements, parts and services
thereof, room clean and free of debris, and in good operating order, condition
and state of repair, ordinary wear and tear accepted. "Ordinary wear and tear"
shall not include any damage or deterioration that would have been prevented by
good maintenance practice. Tenant shall repair any damage occasioned by the
installation, maintenance removal of its trade fixtures, furnishings and
personal property.
11.2 Subject to the provisions of Paragraph 22 hereof, Landlord shall
repair and maintain the structural portions of the Premises, including the basic
plumbing, air conditioning, heating, and electrical systems, installed or
furnished by Landlord, unless such maintenance and repairs are necessitated in
part or in whole by the act, neglect, fault or omission of any duty of Tenant,
its agents, servants, employees or invitees, in which case Tenant shall pay to
Landlord the reasonable cost of such maintenance and repairs. Landlord shall
not be liable for any failure to make any such repairs or to perform any
maintenance unless such failure shall persist for an unreasonable time after
written notice of the need of such repairs or maintenance is given to Landlord
by Tenant. Except as provided in Paragraph 22 hereof, 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 Premises or in or to
fixtures, appurtenances and/or equipment therein. As a material inducement to
Page 7
Landlord's entering into this Lease, Tenant expressly waives any right to make
repairs at Landlord's expense whether granted by law, statute, ordinance or
otherwise now or hereafter in effect, including but not limited to California
Civil Code Sections 1941, 1941.1. and 1942.
12. LIENS. Tenant shall keep the Premises free from any liens arising out
of any work performed, materials furnished or obligations incurred by or for
Tenant. In the event that Tenant shall not, within ten (10) business days
following the imposition of any such lien, cause the same to be released of
record by payment or posting of a proper lien release 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
reasonably deem proper, including payment of or defense against the claim giving
rise to such lien. All sums paid by Landlord, and all reasonable expenses
incurred by it in connection therewith, shall create automatically an obligation
of Tenant to pay an equivalent amount as additional rent, which additional rent
shall be payable by Tenant within five (5) days after Tenant's receipt of
Landlord's demand therefor with interest at the rate of ten percent (10%)
interest per annum to be charged from date of payment by Landlord until paid by
Tenant. Nothing herein shall imply any consent by Landlord to subject
Landlord's estate to liability under any mechanics' or other lien law. Tenant
shall give Landlord adequate opportunity, and Landlord shall have the right, to
post in or on the Premises such notices of nonresponsibility as are provided for
in the mechanics lien laws of the State of California.
13. ASSIGNMENT AND SUBLETTING.
13.1 Tenant shall not, either voluntarily, involuntarily or by
operation of law, assign, sublet, mortgage or otherwise encumber all or any
portion of its interest in this Lease or in the Premises or permit the Premises
to be occupied by anyone other than Tenant or Tenant's employees without
obtaining the prior written consent of Landlord, which consent shall be subject
to the provisions of subparagraphs 13.2 through 13.8 below. Any such attempted
assignment, subletting, mortgage or other encumbrance without such consent shall
be null and void and of no effect.
Page 8
13.2 No assignment, subletting, mortgage or other encumbrance of
Tenant's interest in this Lease shall relieve Tenant of its obligation to pay
the rent and to perform all of the other obligations to be performed by Tenant
hereunder. The acceptance of rent by Landlord from any person other than Tenant
shall not be deemed to be a waiver by Landlord of any provision of this Lease or
to be a consent to any subletting, assignment, mortgage or other encumbrance.
Landlord's consent to one sublease, assignment, mortgage or other encumbrance
shall not be deemed to constitute consent to any subsequent attempted
subletting, assignment, mortgage or other encumbrance.
13.3 If Tenant desires at any time to assign this Lease or to sublet
the Premises or any portion thereof, it shall first notify Landlord of its
desire to do so and shall submit in writing to Landlord: (i) the name of the
proposed subtenant or assignee; (ii) the nature of the proposed subtenant's or
assignee's business to be carried on in the Premises; (iii) the terms,
conditions and provisions of the proposed sublease or assignment and the
proposed effective date thereof; (iv) such financial information as Landlord may
reasonably request concerning the proposed subtenant or assignee; and (v) the
minimum payment of $500.00 required pursuant to subparagraph 13.8 below. The
submission pursuant to clause (iii) shall include a copy of any agreement,
escrow instructions or other document which contains or memorializes the terms
and provisions of the transaction for which Landlord's consent is required.
Similarly, if Tenant desires to mortgage or encumber its interest in this Lease,
Tenant shall first supply to Landlord in writing such information as to such
transaction as may be reasonably requested by Landlord.
13.4 [INTENTIONALLY DELETED]
13.5 At any time within thirty (30) days after Landlord's receipt of
the last of the information specified in subparagraph 13.3 above, Landlord may,
by written notice to Tenant, (i) approve the proposed assignment or sublease; or
(ii) subject to the provisions of subparagraph 13.6 below, reasonably disapprove
the proposed assignment or sublease. If Landlord does not disapprove the
proposed subletting or assignment in writing within said thirty (30) day period,
Tenant may thereafter, within ninety (90) days after the expiration of said
thirty (30) day period, enter into a valid assignment or sublease of the
Premises or portion thereof, upon the terms and conditions set forth in the
information
Page 9
furnished by Tenant to Landlord pursuant to subparagraph 13.3 above. Provided,
however, that any material change in such terms shall be subject to Landlord's
consent as provided in this Paragraph and, provided further, that any amount to
be paid by Tenant in connection with such subletting or assignment pursuant to
subparagraph 13.4 above shall be paid to Landlord upon and as a condition to
consummation of such transaction.
13.6 Landlord shall have the right to reasonably approve or
disapprove any proposed assignee or sublessee. In exercising such right of
reasonable approval or disapproval, Landlord shall be entitled to take into
account any fact or factor which Landlord reasonably deems relevant to such
decision, including, but not necessarily limited to, the following, all of which
are agreed to be reasonable factors for Landlord's consideration:
(a) The financial strength of the proposed assignee or
subtenant.
(b) The proposed use of the Premises by such proposed
assignee or subtenant and the compatibility of such proposed use with the
quality of the other uses in the Building.
(c) Any violation which the proposed use by such proposed
assignee or subtenant would cause of any other rights granted by Landlord to
other tenants of the Building.
(d) Any materially adverse impact of the proposed use of the
Premises by such proposed assignee or subtenant upon the parking or other
services provided for Building tenants generally.
(e) Whether there then exists any default by Tenant pursuant
to this Lease or any non-payment or non-performance by Tenant under this Lease
which, with the passage of time and/or the giving of notice, would constitute a
default under this Lease.
(f) Whether the proposed assignee or subtenant is a public
or governmental agency.
Moreover, Landlord shall be entitled to be reasonably satisfied that each and
every covenant, condition or obligation imposed upon Tenant by this Lease, and
each and every right, remedy or benefit afforded Landlord by this Lease, is not
impaired or diminished by such assignment or subletting. Landlord and Tenant
acknowledge that the express standards and provisions set forth in this Lease
dealing with
Page 10
assignment and subletting, including those set forth in this subparagraph 13.6,
have been freely negotiated and are reasonable at the date hereof taking into
account Tenant's proposed use of the Premises and the nature and quality of the
Premises. No withholding of consent by Landlord shall give rise to any claim by
Tenant or any proposed assignee or subtenant or entitle Tenant to terminate this
Lease or to any abatement of rent. Approval of any assignment of Tenant's
interest shall, whether or not expressly so stated, be conditioned upon such
assignee assuming, in writing, all obligations of Tenant hereunder. In the
event Landlord withholds its consent to an assignment or subletting proposed by
Tenant and Tenant believes such withholding is unreasonable, Tenant may submit
such matter to binding arbitration in accordance with subparagraph 13.9 below.
13.7 All exterior sign rights contained in this Lease are personal to
Tenant. Consent by Landlord to any assignment or subletting shall not include
consent to the assignment or transfer of any such rights with respect to the
Premises or any other special privileges or extra services granted to Tenant by
this Lease, any addendum or amendment hereto or any letter agreement. All such
rights, privileges and extra services shall terminate upon such subletting or
assignment unless Landlord specifically grants the same, in writing, to such
assignee or subtenant.
13.8 The voluntary or other surrender of this Lease by Tenant or a
mutual cancellation hereof, shall not work a merger and shall, at the option of
Landlord, terminate all or any existing subleases or subtenancies or shall
operate as an assignment to Landlord of such subleases or subtenancies. If
Tenant is a corporation which is not required under the Securities Exchange Act
of 1934 to file periodic information reports with the Securities and Exchange
Commission, or is an unincorporated association or partnership, the transfer,
assignment or hypothecation of any stock or interest in such corporation,
association or partnership in the aggregate in excess of twenty-five percent
(25%) shall be deemed and assignment within the meaning and provisions of this
Paragraph 13. Tenant agrees to reimburse Landlord not less than $500.00 for
each proposed transfer, for Landlord's administrative time and reasonable costs
and attorneys' fees incurred in connection with the processing and documentation
of
Page 11
any such requested assignment, subletting, transfer, change of ownership or
hypothecation of this Lease or Tenant's interest in and to the Premises or any
portion thereof.
13.9 For purposes of this Lease, an assignment or sublease shall
include the merger or consolidation of Tenant. Landlord's consent to such,
merger or consolidation shall not be required where (i) the
transferee/successor-in-interest to Tenant's rights under this Lease has assumed
Tenant's obligations hereunder in writing, (ii) the
transferee/successor-in-interest has provided written notice to Landlord of such
merger or consolidation, and (iii) the shareholders' equity of such
transferee/successor-in-interest immediately after such merger or consolidation
is equal to or greater than the lesser of (y) Tenant's shareholders' equity as
of March 31, 1998 or (z) Tenant's shareholders' equity on the day immediately
preceding such merger or consolidation.
13.10 In the event Tenant believes that Landlord's refusal to consent
to an assignment or subletting is unreasonable, Tenant may submit the matter to
binding arbitration before a single arbitrator appointed by Judicial Arbitration
and Mediation Services (J.A.M.S.). The request for arbitration shall be
submitted by Tenant in writing to J.A.M.S. no later than ten (10) business days
after delivery of Landlord's written notice to Tenant of its refusal to consent.
Tenant's notice to J.A.M.S. shall be sent concurrently to Landlord. Landlord
and Tenant may each supply written briefs to the arbitrator and the other party
within ten (10) days after receipt of written notice of the appointment of the
arbitrator by J.A.M.S. Landlord and Tenant may also deliver written reply
briefs to the arbitrator and the other party within five (5) days after receipt
of the other party's brief. The arbitrator shall render his/her decision, in
writing, as soon as reasonably possible after the last day on which the parties
can submit reply briefs. The cost of the arbitrator shall be shared equally by
Landlord and Tenant.
14. HOLD HARMLESS.
14.1 Except for Landlord's gross negligence or willful misconduct,
Tenant shall indemnify, protect, defend and hold harmless the Premises, Landlord
and its employees and agents from and against any and all claims, loss of rents
and/or damages, liens, judgments, penalties, attorneys' and consultant's fees,
expenses and/or liabilities arising out of, involving or in connection with, the
use and/or occupancy of
Page 12
the Premises by Tenant and/or Tenant's breach of the terms of this Lease. If
any action or proceeding is brought against Landlord by reason of any of the
foregoing matters, Tenant shall, upon notice, defend the same at Tenant's
expense by counsel reasonably satisfactory to Landlord and Landlord shall
cooperate with Tenant in such defense. Landlord need not have first paid any
such claim in order to be defended or indemnified.
14.2 Landlord or its agents shall not be liable for any damage to
property entrusted to employees of Landlord, nor for loss or damage to any
property by theft or otherwise, nor for any injury to or damage to persons or
property resulting from fire, explosion, falling plaster, steam, gas,
electricity, water or rain which may leak from any part of the Premises
(including improvements which comprise a part of the Premises), or from the
pipes, appliances or plumbing works therein or from the roof, street or
subsurface or from any other place, resulting from dampness or any other cause
whatsoever, unless caused by or due to the gross negligence or willful
misconduct of Landlord, its agents, servants or employees. Landlord or its
agents shall not be liable to Tenant for interference with the light or other
incorporeal hereditaments, loss of business by Tenant. Landlord or its agents
shall not be liable to Tenant for any damages caused by the act or neglect of
any other tenant in the Building. Tenant shall give prompt notice to Landlord
in case of fire or accidents in the Premises or of defects therein or in the
fixtures or equipment.
14.3 Except for Tenant's negligence or willful misconduct, Landlord
shall indemnify, protect, defend and hold harmless Tenant and its agents and
employees from and against any and all claims, damages, liens, judgments,
penalties, attorneys' and consultant's fees, expenses and/or liabilities arising
out of, involving or in connection with the gross negligence or willful
misconduct of Landlord, its employees and agents in, on or about the Premises
and/or Landlord's breach of the terms of this Lease.
15. SUBROGATION. Landlord and Tenant each hereby waive any and all rights
of recovery against the other, and (to the extent such parties have waived
rights of recovery as to Landlord or Tenant, as the case may be) against any
other tenant or occupant of the Building and against the officers, employees,
agents, representatives, customers and business visitors of such other party and
of such other tenant or
Page 13
occupant of the Building for loss of, or damage to, such waiving party or its
property or the property of others under its control arising from any cause
insured against under any policy of property insurance required to be carried by
such waiving party pursuant to the provisions of this Lease (or any other policy
of insurance carried by such waiving party in lieu thereof) at the time of such
loss or damage. Landlord and Tenant shall, upon obtaining the policies of
insurance which they are required to maintain under this Lease, give notice to
their respective insurance carrier(s) that the foregoing mutual waiver of
subrogation is contained in this Lease.
16. LIABILITY INSURANCE.
16.1 At all times during the Term, Tenant shall maintain in effect
policies of fire insurance covering: (i) all leasehold improvements (including
any alterations, additions or improvements as may be made by Tenant pursuant to
provisions of Article 10 hereof) in which Tenant may have an insurable interest,
and (ii) trade fixtures, merchandise and other personal property which from time
to time are in, on or upon the Premises, in an amount not less than one hundred
percent (100%) of their actual replacement cost from time to time during the
term of this Lease, providing protection against any peril included within the
classification "All-Risk". The proceeds of such insurance shall be used for the
repair or replacement of the property so insured. Upon termination of this
Lease following a casualty as set forth herein, the proceeds under subpart (i)
above shall be paid to Landlord and, the proceeds under subpart (ii) above shall
be paid to Tenant.
16.2 Tenant shall, at all times during the Term and at its own cost
and expense, procure and continue in force comprehensive general liability
insurance for bodily injury and property damage adequate to protect Landlord
against liability for injury to or death of any person arising in connection
with the use, operation or condition of the premises or construction of
improvements thereon. Such insurance at all times shall be in an amount of not
less than a combined single limit of Two Million Dollars ($2,000,000.00),
insuring against any and all liability of the insured with respect to the
Premises or arising out of the use or occupancy thereof.
Page 14
16.3 Tenant shall, at all times during the Term and at its own cost
and expense, procure and continue in force worker's compensation coverage as
required by law together with employees' liability coverage.
16.4 If required by Landlord, Tenant shall, at all times during the
term hereof and at its own cost and expense, procure and continue in force
business interruption and/or loss of income insurance in amounts satisfactory to
Landlord.
16.5 In no event shall the then limits of any policy be considered as
limiting the liability of Tenant under this Lease.
16.6 All insurance required to be carried by Tenant hereunder shall
be issued by responsible insurance companies, qualified to do business in the
State of California, rated A + XII or better in the current Bests' Insurance
Guide. Each insurance policy required to be maintained by Tenant hereunder
pursuant to subparagraphs 16.1 and 16.2 shall name Landlord, its officers,
agents, and employees, and at Landlord's request any mortgagee of Landlord, as
additional insureds, as their respective interests may appear, and copies of all
policies or certificates evidencing the existence and amounts of such insurance
shall be delivered to Landlord by Tenant prior to Tenant's occupancy of the
Premises. No such policy shall be cancelable or materially reduced except after
thirty (30) days prior written notice to Landlord. Tenant shall furnish
Landlord with renewals or "binders" of any such policy at least ten (10) days
prior to the expiration thereof. Tenant agrees that if Tenant does not take out
and maintain such insurance, Landlord may (but shall not be required to), after
fifteen (15) days notice to Tenant, procure said insurance on Tenant's behalf
and charge the Tenant the premium, payable upon demand. Tenant shall have the
right to provide such insurance coverage pursuant to blanket policies obtained
by the Tenant provided such blanket policies expressly afford coverage to the
Premises and to Tenant as required by this Lease.
16.7 [INTENTIONALLY DELETED.]
16.8 At all times during the Term, Landlord shall maintain in effect
a policy or policies of property insurance covering the building improvements at
the Premises in an amount not less than the
Page 15
replacement cost thereof, providing protection against any peril included within
the classification "All Risk," excluding coverage for flood or earthquake
(unless Landlord in its sole discretion elects to obtain endorsements for flood
or earthquake).
16.9 [INTENTIONALLY DELETED.]
17. SERVICES AND UTILITIES. Landlord shall pay for all water, sewer, gas,
heat, electrical and trash disposal services supplied to the Premises, together
with any taxes thereon. Tenant shall be responsible and pay for any telephone,
cable or other communication services supplied to the Premises.
18. PROPERTY TAXES.
18.1 Tenant shall be liable for, and shall pay thirty (30) days
before delinquency, all taxes, levies and assessments levied against any
personal property or trade fixtures placed by Tenant in or about the Premises,
and, when possible, Tenant shall cause such personal property and trade fixtures
to be assessed and billed separately from the Premises. If any such taxes,
levies and assessments on Tenant's personal property or trade fixtures are
levied against Landlord or Landlord's property, or if the assessed value of the
Premises 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,
levies and assessments based upon such increased assessment, which Landlord
shall have the right to do regardless of the validity thereof, but only under
proper protest if requested by Tenant, Tenant shall repay to Landlord upon
demand, as additional rent, the taxes, levies and assessments so levied against
Landlord, or the proportion of such taxes, levies and assessments resulting from
such increase in the assessment, together with interest thereon from the date of
payment by Landlord to the date of reimbursement by Tenant at the rate of ten
percent (10%) per year. Provided, however, that in any such event, Tenant shall
have the right, in the name of Landlord and with Landlord's full cooperation but
without any cost to Landlord, to bring suit in any court of competent
jurisdiction to recover the amount of any such taxes, levies and assessments so
paid under protest, any amount so recovered to belong to Tenant.
Page 16
18.2 If the tenant improvements in the Premises, installed and/or
paid for by 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 standard" for the Premises are assessed, then the real
property taxes and assessments levied against Landlord or the Premises by reason
of such excess assessed valuation shall be deemed to be taxes levied against
personal property of Tenant and shall be governed by the provisions of
subparagraph 18.1 above. If the records of the County Assessor are available
and sufficiently detailed to serve as a basis for determining whether said
tenant improvements are assessed at a higher valuation than Landlord's "building
standard', such records shall be binding on both Landlord and Tenant; otherwise
the actual cost of construction shall be the basis for such determination.
19. RULES AND REGULATIONS. Tenant agrees to abide by all rules and
regulations of the Building and the Premises imposed by Landlord as set forth in
EXHIBIT "B" attached hereto, as the same may be reasonably changed from time to
time by Landlord upon reasonable notice to Tenant. Any such change shall be
effective upon delivery of a copy thereof to Tenant. These rules and
regulations are imposed for the cleanliness, good appearance, proper
maintenance, good order and reasonable use of the Premises, and as may be
necessary for the enjoyment of the Premises and the Former Premises by all
tenants and their clients, customers and employees.
20. HOLDING OVER. If Tenant remains in possession of the Premises or any
part thereof after the expiration of the term hereof, with the express written
consent of Landlord, such occupancy shall be a tenancy from month to month at a
rental in the amount of the last monthly rental, plus all other charges payable
hereunder, and upon all the terms hereof applicable to a month to month tenancy.
Any holding over without the express written consent obtained from Landlord by
Tenant, shall not constitute a renewal or extension hereof or give Tenant any
rights under this Lease. If Tenant shall hold over without the express written
consent of Landlord, Landlord may, at its option, treat Tenant as a tenant at
sufferance only and subject to all of the terms and conditions herein contained,
except that the monthly rental shall be one-hundred fifty percent (150%) of the
Monthly Rent applicable at the date of expiration plus all other
Page 17
charges payable hereunder, and upon all the terms hereof applicable to a month
to month tenancy, or at the then currently scheduled rent for comparable space
in the Building without regard to any tenant concessions, whichever is greater.
If Tenant fails to surrender the Premises upon the expiration of this Lease,
Tenant shall indemnify and hold Landlord harmless from all loss or liability,
including without limitation, any claims made by any succeeding tenant or by a
purchaser of the Premises founded on or resulting from such failure to
surrender. Acceptance by Landlord of rent after such expiration or earlier
termination shall not constitute a consent to a holdover hereunder or result in
a renewal of this Lease.
21. ENTRY BY LANDLORD. Landlord reserves, and shall at reasonable times,
upon twenty-four (24) hours prior notice (except in the case of an emergency
when prior notice will not be required), have the right to enter the Premises,
inspect the same, provide any and all services which are to be provided by
Landlord to Tenant hereunder, to submit said Premises to prospective purchasers
or tenants, to post notices of non-responsibility, to post "for sale" and "for
rent" signs, and to alter, improve or repair the Premises and any portion of the
improvements at the Building that Landlord may deem necessary or desirable and
may for that purpose erect scaffolding and other necessary structures where
reasonably required by the character of the work to be performed, without
abatement of rent so long as access to and use of the Premises shall not be
blocked or prevented thereby, and further providing that the business of Tenant
shall not be interfered with unreasonably. So long as access to and use of the
Premises is not blocked or prevented by Landlord's actions contemplated by the
immediately preceding sentence, Tenant shall have no claim for damages or for
any injury or inconvenience to or interference with Tenant's business occasioned
thereby. For each of the aforesaid purposes, Landlord shall at all times have
and retain a key with which to unlock all of the doors in, upon and about the
Premises, excluding Tenant's vaults, safes and files, and 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, without
liability to Tenant except for any failure to exercise due care for Tenant's
property. Any entry to the Premises obtained by Landlord by any of said means,
or otherwise, shall not under any circumstances be construed
Page 18
or deemed to be a forcible or unlawful entry into, or a detainer of, the
Premises, or an eviction of Tenant from the Premises or any portion thereof.
22. RECONSTRUCTION.
22.1 In the event the Premises are damaged by any peril:
(a) In the event of total destruction of the Premises, this
Lease shall terminate effective as of the date of such destruction.
(b) In the event of partial destruction of the Premises,
Landlord or Tenant on written notice to the other given within thirty (30) days
of such partial destruction, may terminate this Lease. If neither Landlord nor
Tenant so elects to terminate, Landlord shall be responsible for repairing such
damage and restoring the Premises.
(c) As used herein, a total destruction of the Premises
shall have occurred where (a) the repair or restoration thereof, in Landlord's
opinion, cannot be completed within one hundred eighty (180) days of
commencement of repair or restoration; (b) the estimated cost thereof exceeds
the insurance proceeds available for repair or restoration plus any amount which
Tenant is obligated or elects to pay for such repair or restoration; (c) the
estimated cost of repair or restoration of the Premises exceeds fifty percent
(50%) of the full replacement cost of the Premises; or (d) the Premises cannot
be restored except in a substantially different structural or architectural form
than existed before the damage and destruction. Any other destruction of the
Premises shall be deemed a partial destruction. In the event of a partial
destruction and either Landlord or Tenant elects to terminate this Lease, this
Lease shall expire, and all interest of Tenant in the Premises shall terminate,
on the date specified in the notice and rent shall be paid up to the date of
termination. Landlord shall refund to Tenant the rent theretofore paid for any
period of time subsequent to such date of termination.
(d) Notwithstanding anything herein to the contrary, any
damage to the Premises not affecting more than ten percent (10%) of the floor
area of the Premises may be repaired by Landlord at its
Page 19
election and, in such event, Landlord shall diligently pursue such repair to
completion and neither Landlord nor Tenant shall have the right to terminate
this Lease.
22.2 Upon any termination of this Lease under any of the provisions
of this Paragraph 22, the parties shall be released thereby, without further
obligation to the other, from the date possession of the Premises is surrendered
to the Landlord, except for items which have theretofore accrued and are then
unpaid.
22.3 Unless the damage or destruction is caused by the gross
negligence of Tenant or its employees or agents, or unless the Premises were
unusable for a period of less than five (5) days, if the Premises are rendered
totally or partially untenantable, Monthly Rent shall xxxxx during the period of
reconstruction in the same proportion to the total Monthly Rent as the portion
of the Premises rendered untenantable bears to the entire Premises. In no event
shall Tenant be entitled to any compensation or damages for loss of use of the
whole or any part of the Premises or for any inconvenience occasioned by any
such destruction, rebuilding or restoration of the Premises or access thereto.
Tenant waives the provisions of California Civil Code Sections 1932(2) and
1933(4) and any present and future laws and case decisions to the same effect.
22.4 Notwithstanding any destruction or damage to the Premises,
including the parking facilities, 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 Paragraph 22.
22.5 [INTENTIONALLY DELETED.]
22.6 It is hereby acknowledged that if Landlord is obligated to, or
elects to, repair or restore the Premises as herein provided, Landlord shall be
obligated to make repairs or restoration only of those portions of the Premises
which were originally provided at Landlord's expense, and the repair and
restoration of items not provided at Landlord's expense shall be the obligation
of Tenant. Tenant understands that Landlord will not carry insurance of any
kind on Tenant's furniture, furnishings, fixtures, equipment or other personal
property, and that Landlord shall not be obligated to repair any damage thereto
or replace the same.
Page 20
22.7 [INTENTIONALLY DELETED.]
23. DEFAULT. The occurrence of any of the following shall constitute a
material default and breach of this Lease by Tenant:
23.1 Any failure by Tenant to pay the rent or to make any other
payment required to be made by Tenant hereunder at the time specified for
payment. Landlord shall give Tenant three (3) days' written notice of default,
which notice shall be in lieu of, and not in addition to, any notice required
under Section 1161 ET SEQ. of the California Code of Civil Procedure, as
amended.
23.2 The abandonment or vacation of the Premises by Tenant.
Abandonment is herein defined to include, but is not limited to, any absence by
Tenant from the Premises for thirty (30) days or longer except where Tenant has
advised Landlord in writing that Tenant has not abandoned the Premises and
Tenant continues during such absence to perform all of its obligations under
this Lease.
23.3 Any failure by Tenant to observe and perform any other provision
of this Lease to be observed or performed by Tenant, where such failure
continues for thirty (30) days (except where a different period of time is
specified in this Lease) after written notice by Landlord to Tenant; provided,
however, that any such notice shall be in lieu of, and not in addition to, any
notice required under Section 1161 ET SEQ. of the California Code of Civil
Procedure, as amended. If the nature of such default is such that the same
cannot reasonably be cured within such thirty (30) day period Tenant shall not
be deemed to be in default if Tenant shall within such period commence such cure
and thereafter diligently prosecute the same to completion.
23.4 Tenant makes or has made, or furnishes or has furnished, any
warranty, representation or statement to Landlord in connection with this Lease,
or any other agreement to which Tenant and Landlord are parties, which is or was
false or misleading in any material respect when made or furnished.
23.5 [INTENTIONALLY DELETED.]
23.6 The making by Tenant of any general assignment for the benefit
of creditors; the filing by or against Tenant of a petition to have Tenant
adjudged a bankrupt or of a petition for reorganization or arrangement under any
law relating to bankruptcy (unless, in the case of a petition filed against
Tenant,
Page 21
the same is dismissed within sixty (60) days); 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 sixty (60) days; 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 sixty (60) days; or 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.
24. REMEDIES FOR DEFAULT.
24.1 In the event of any default by Tenant pursuant to Paragraph 23
above, then in addition to any other remedies available to Landlord at law or in
equity, Landlord shall have the immediate option to terminate this Lease and all
rights of Tenant hereunder by giving written notice of such intention to
terminate. In the event that Landlord shall elect to so terminate this Lease
then Landlord may recover from Tenant:
(a) The worth at the time of award of any unpaid rent which
had been earned at the time of such termination; plus
(b) The worth at the time of award of the amount by which
the unpaid rent which would have been earned after termination until the time of
award exceeds the amount of such rental loss which Tenant proves reasonably
could have been avoided; plus
(c) The worth at the time of award of the amount by which
the unpaid rent for the balance of the term of this Lease after the time of
award exceeds the amount of such rental loss that Tenant proves reasonably could
be avoided; plus
(d) 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 without limitation the unamortized balance
of any tenant improvement allowance provided to Tenant by Landlord or of any
tenant improvements constructed or paid for by Landlord at the commencement of
the term hereof, which amount shall be deemed additional rent automatically due
and payable hereunder upon the occurrence of an event of
Page 22
default by Tenant and shall be recoverable as rent in any unlawful detainer or
other action arising out of or pertaining to such default, whether or not
specified in any notice given by Landlord as a condition or prior to the
commencement of any such action; and
(e) At Landlord's election, such other amounts in addition
to or in lieu of the foregoing as may be permitted from time to time by
applicable California law.
24.2 As used in subparagraphs 24.1(a) and (b) above, the "worth at
the time of award" is computed by allowing interest at the rate of ten percent
(10%) per annum. As used in subparagraph 24.1(c) above, the "worth at the time
of award" is computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of the award plus one percent.
24.3 In the event of any such default by Tenant, Landlord shall also
have the right, with or without terminating this Lease, to re-enter the Premises
and remove all persons and property from the Premises; such property may be
removed and stored in a public warehouse or elsewhere at the cost of and for the
account of Tenant.
24.4 In the event of the vacation or abandonment of the Premises by
Tenant or in the event that Landlord shall elect to re-enter as provided above
or shall take possession of the Premises pursuant to legal proceedings or
pursuant to any notice provided by law, then if Landlord does not elect to
terminate this Lease as provided in this Xxxxxxxxx 00, Xxxxxxxx may from time to
time, without terminating this Lease, either recover all rental as it becomes
due or relet the Premises, or any part thereof, for such term or terms and at
such rental or rentals and upon such other terms and conditions as Landlord in
its sole discretion may deem advisable, with the right to make alterations and
repairs to the Premises. Election by Landlord to proceed pursuant to this
subparagraph shall be made upon written notice to Tenant and shall be deemed an
election of the remedy described in California Civil Code Section 1951.4 and,
unless Landlord relets the Premises, Tenant shall have the right to sublet or
assign subject to the prior written consent of Landlord. Such consent shall not
be unreasonably withheld and shall be subject to all of the terms and provisions
of Paragraph 13.
Page 23
24.5 In the event that Landlord shall elect to so relet, then rentals
received by Landlord from such reletting shall be applied: first, to the payment
of any indebtedness other than rent due hereunder from Tenant to Landlord;
second, to the payment of any reasonable cost of such reletting; third, to the
payment of the cost of any repairs to the Premises necessitated by Tenant's use;
fourth, to the payment of rent due and unpaid hereunder; and the residue if any,
shall be held by Landlord and applied in payment of future amounts as the same
may become due and payable hereunder. Should the rent for such reletting,
during any month for which the payment of rent is required hereunder, be less
than the rent payable during that month by Tenant hereunder, then Tenant shall
pay such deficiency to Landlord immediately upon demand therefor by Landlord.
Such deficiency shall be calculated and paid monthly. Tenant shall also pay to
Landlord as soon as ascertained, any reasonable costs and expenses incurred by
Landlord in such reletting or in making such repairs not covered by the rentals
received from such reletting.
24.6 No re-entry or taking possession of the Premises by Landlord
pursuant to this Paragraph 24 shall be construed as an election to terminate
this Lease unless a written notice of such intention be given to Tenant or
unless the termination thereof be decreed by a court of competent jurisdiction.
Notwithstanding any reletting without termination by Landlord because of any
default by Tenant, Landlord may at any time after such reletting elect to
terminate this Lease for any such default.
24.7 In 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 the amount of
rent reserved in this Lease for such period. The rights and remedies reserved
to Landlord herein, including those not specifically described, 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.
24.8 All covenants and agreements to be performed by Tenant under
this Lease shall be performed by Tenant at Tenant's sole cost and expense and
without any abatement of rent. If Tenant fails to pay any sum of money, other
than rent, required to be paid by it or fails to perform any other act on its
Page 24
part to be performed, and such failure continues beyond any applicable grace
period set forth in the Paragraph providing for such obligation (or if no grace
period is set forth in such Paragraph, then the applicable grace period pursuant
to Paragraph 23), then in addition to any other remedies provided herein
Landlord may, but shall not be obligated so to do, without waiving or releasing
Tenant from any obligations of Tenant, make any such payment or perform any such
other act on Tenant's part. Landlord's election to make any such payment or
perform any such act on Tenant's part shall not give rise to any responsibility
of Landlord to continue making the same or similar payments or performing the
same or similar acts. Tenant shall, within ten (10) days after written demand
therefor by Landlord, reimburse Landlord for all sums so paid by Landlord and
all necessary incidental costs, together with interest thereon at the rate of
ten percent (10%) per annum, accruing from the date of such payment by Landlord:
and Landlord shall have the same rights and remedies in the event of failure by
Tenant to pay such amounts as Landlord would have in the event of a default by
Tenant in payment of rent.
25. LANDLORD'S LIABILITY. The liability of any successor-in-interest to
Landlord under this Lease ("Successor Landlord") shall be limited to the
Successor Landlord's estate in the Premises.
26. EMINENT DOMAIN. If the whole of the Premises shall be taken, or such
part thereof shall be taken as shall substantially interfere with Tenant's use
and occupancy of the balance thereof, under power of eminent domain, or sold,
transferred, or conveyed in lieu thereof, either Tenant or Landlord may
terminate this Lease as of the date of such condemnation or as of the date
possession is taken by the condemning authority, whichever date occurs later.
If any part of the Premises shall be so taken, sold, transferred or conveyed in
lieu thereof, which does not substantially interfere with Tenant's use and
occupancy of the balance thereof, this Lease shall not terminate but Landlord's
and Tenant's rights shall be as set forth below. No award for any partial or
entire taking shall be apportioned, and Tenant hereby assigns to Landlord any
award which may be made in such taking or condemnation, 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 require Tenant to assign to Landlord any award
made to Tenant for the taking of personal property and fixtures belonging to
Tenant
Page 25
and removable by Tenant at the expiration of the term hereof, as provided
hereunder, or for the interruption of, or damage to Tenant's business or for
relocation expenses recovered therefor, against the condemning authority. In
the event of a partial taking, or a sale, transfer, or conveyance in lieu
thereof, which does not result in a termination of this Lease, Landlord shall,
to the extent of any funds received from the condemning authority for repair or
restoration, restore the Premises substantially to their condition prior to such
partial taking, and thereafter Monthly Rent shall be abated in the proportion
which the square footage of the part of the Premises so made unusable bears to
the amount of area rented immediately prior to the taking. No taking for a
period of less than thirty (30) days of all or a part of the Premises, including
parking facilities, shall give Tenant any right to terminate this Lease, but
Tenant shall receive an abatement of Monthly Rent.
27. HAZARDOUS MATERIALS.
27.1 Without limiting the generality of Paragraphs 8 and 9 of this
Lease, Tenant covenants and agrees that Tenant, its employees, agents and other
third parties entering upon the Premises at the request or invitation of Tenant
shall not bring into, maintain upon, generate, produce, use, store, dispose of
or release or discharge in or about the Premises any hazardous or toxic
substances or hazardous waste, as more fully defined below (collectively,
"hazardous materials"). The foregoing covenant shall not extend to substances
typically found or used in applications of the type permitted by this Lease so
long as: (a) such substances are maintained only in such quantities as are
reasonably necessary for Tenant's operations in the Premises; (b) such
substances and all equipment which generates such substances are used strictly
in accordance with the manufacturer's instructions therefor; (c) such substances
are not disposed of in or about the Premises in a manner which would constitute
a release or discharge thereof; and (d) all such substances and all equipment
which generates such substances are removed from the Premises by Tenant upon the
expiration or earlier termination of this Lease. Any introduction, use,
storage, generation, maintenance, production, disposal, release or discharge by
Tenant of hazardous materials in or about the Project as is permitted pursuant
to this Paragraph shall be carried out in
Page 26
compliance with all applicable federal, state and local laws, ordinances, rules
and regulations. Moreover, no hazardous waste resulting from any operations by
Tenant shall be stored or maintained by Tenant in or about the Premises for more
than thirty (30) days prior to removal by Tenant. In no event shall Tenant
install any chemical storage tank in or about the Premises. Tenant shall,
annually within thirty (30) days after Tenant's receipt of Landlord's written
request therefor, provide to Landlord a written list identifying any hazardous
materials then maintained by Tenant in the Premises, the use of each such
hazardous material and the approximate quantity of each such hazardous material
so maintained by Tenant, together with written certification by Tenant stating,
in substance, that neither Tenant nor any person for whom Tenant is responsible
has released or discharged any hazardous materials in or about the Premises.
27.2 In the event that Tenant proposes to conduct any use, or to
operate or store any equipment, which will or may utilize or generate a
hazardous material other than as specified in subparagraph 27.1, Tenant shall
first submit in writing such use, storage or equipment proposal to Landlord for
approval. No approval by Landlord shall relieve Tenant of any obligation of
Tenant pursuant to this Paragraph, including the removal, clean-up and
indemnification obligations imposed upon Tenant by this Paragraph. Tenant
shall, within five (5) days after receipt thereof, furnish to Landlord copies of
all notices or other communications received by Tenant with respect to any
actual or alleged release or discharge of any hazardous material in or about the
Premises and shall, whether or not Tenant receives any such notice or
communication, notify Landlord in writing of any discharge or release of
hazardous material in or about the Premises.
27.3 Upon any violation of the foregoing covenants, Tenant shall be
obligated at Tenant's sole cost, to clean-up and remove from the Premises all
hazardous materials introduced into the Premises by Tenant or any third party
for whom Tenant is responsible. Such clean-up and removal shall include all
testing and investigation required by any governmental authorities having
jurisdiction, and preparation and implementation of any remedial action plan
required by any governmental authorities having jurisdiction. All such clean-up
and removal activities of Tenant shall, in each instance, be conducted to the
reasonable satisfaction of Landlord and all governmental authorities having
jurisdiction. Landlord's right of entry
Page 27
pursuant to Paragraph 21 shall include the right to enter and inspect the
Premises for violations of Tenant's covenants herein.
27.4 Tenant shall indemnify, defend (with counsel approved by
Landlord) and hold harmless Landlord, its partners, directors, officers,
employees, agents, lenders and attorneys and their respective successors and
assigns from and against any and all claims, liabilities, losses, actions, costs
and expenses (including attorneys' fees and costs of defense) incurred by such
indemnified persons, or any of them, as the result of: (i) the introduction
into or about the Premises any hazardous materials by Tenant, its employees,
agents or contractors; (ii) the usage, storage, maintenance, generation,
production, disposal, release or discharge of hazardous materials in or about
the Premises by Tenant its employees, agents or contractors; (iii) any injury to
or death of persons or damage to or destruction of property resulting from the
use, introduction, maintenance, production, storage, generation, disposal,
disposition, release or discharge of hazardous materials in or about the
Premises by Tenant its employees, agents or contractors; and/or (iv) any failure
of Tenant its employees, agents or contractors to observe the covenants of this
Paragraph 27. Payment shall not be a condition precedent to enforcement of the
foregoing indemnification provision. If any claim for indemnification is made
by Landlord hereunder, or if Tenant is required hereunder to perform any
remedial activity pursuant to this Paragraph, Landlord agrees to grant to Tenant
such access to portions of the Project as is reasonably necessary for the
purpose of effecting a remediation of the occurrence giving rise to such claim
for indemnification or duty of remediation.
27.5 In the event that Tenant is required by any governmental
authority to maintain any hazardous materials license or permit in connection
with any use conducted by Tenant or any equipment operated by Tenant in, on or
about the Premises, copies of such license or permit, each renewal or revocation
thereof, and any communication relating to suspension, renewal or revocation
thereof shall be furnished to Landlord within five (5) days after receipt
thereof by Tenant. Compliance by Tenant with the provisions of this paragraph
and the second paragraph of this Paragraph shall not relieve Tenant of any other
obligation of Tenant pursuant to this Paragraph.
Page 28
27.6 Upon any violation of the foregoing covenants Landlord shall be
entitled to exercise all remedies available to a landlord against a defaulting
tenant, including, but not limited to these set forth in Paragraph 24. Without
limiting the generality of the foregoing, Tenant expressly agrees that upon any
such violation Landlord may, at its option: (i) immediately terminate this
Lease, or (ii) continue this Lease in effect until compliance by Tenant with its
clean-up and removal covenant notwithstanding any earlier expiration date of the
term of this Lease. No action by Landlord hereunder shall impair the
obligations of Tenant pursuant to this Paragraph.
27.7 As used in this Paragraph 27, the term "hazardous materials"
shall mean any hazardous materials, hazardous wastes or hazardous or toxic
substances as defined by Environmental Laws. As used in this Paragraph 27,
"Environmental Laws" means the Recourse Conservation and Liability Act, and
Superfund Amendments and Reauthorization Act, the Federal Water Pollution
Control Act, the Safe Drinking Water Act, the Clean Air Act, the toxic
Substances Control Act, the Atomic Energy Act, the Endangered Species Act,
California Health and Safety Code Section 25316, and any similar laws affecting
the Premises or the use thereof, and any amendments to any of the foregoing.
27.8 Landlord represents and warrants that, as of the Commencement
Date, the Premises are in compliance with the applicable environmental laws,
rules, regulations, directives or orders of any governmental authority relating
to the protection of human health or the environment, relating to the injury or
damage to, or restoration or replacement of, natural resources, or relating to
land reclamation, including, but not limited to, to the extent applicable,
requirements under Environmental Laws. To Landlord's knowledge as of the
Commencement Date, there has not been any notice, written or oral, provided to
Landlord by any governmental agency or authority, or by any previous tenant or
owner, or any other party of any violation, alleging violation, of, or
investigation relating to, any Environmental Law. To Landlord's knowledge as of
the Commencement Date, there is no legal, administrative, investigatory or other
proceedings, pending or threatened against Landlord which relate to any
violation of Environmental Law. These representations and warranties, and the
indemnification obligations set forth below, shall survive the termination or
expiration of the Lease until the lapse of all applicable statutes of
limitations, if
Page 29
any. Landlord hereby agrees to indemnify and hold Tenant (including its
officers, directors, employees, agents, successors and assigns) harmless from
any damages, losses, costs or expenses, suffered or paid as a result of any
and all claims, damages, suits, causes of action, proceedings, judgments,
liabilities, penalties, interest, losses, damages, costs or expenses,
including reasonable attorney's fees incurred in litigation or otherwise,
assessed, incurred or sustained by or against Tenant with respect to or
arising out of the failure or breach of any representation or warranty
contained herein and made by Landlord with respect to Environmental Laws or
hazardous materials, or the use, production, storage, maintenance,
generation, disposal, release or discharge of any hazardous materials into
the environment from or at the Premises or from materials which Landlord or
any prior tenant or owner of the Premises disposed of or arranged for the
disposal of offsite, or any adverse effect or potential adverse effect on
humans or the environment deriving therefrom.
27.9 Attached to this Lease at EXHIBIT "D" is a true copy of
Environmental Audit Report for the Premises prepared by Xxxxx Xxxxx and Company,
Inc.
27.10 Tenant acknowledges that Landlord has advised Tenant that the
Building contains asbestos containing materials ("ACMs"). If Tenant undertakes
any alterations, additions, or improvements to the Premises, Tenant shall, in
addition to complying with the other provisions of this Lease, undertake the
alterations, additions, or improvements in a manner that avoids disturbing any
ACMs present in the Building. If ACMs are likely to be disturbed in the course
of such work, Tenant shall encapsulate or remove the ACMs in accordance with an
approved asbestos-removal plan and otherwise in accordance with all applicable
Environmental Laws, including giving all notices required by California Health
and Safety Code Sections 25915-25919.7.
28. OFFSET STATEMENT. Tenant shall at any time and from time to time upon
not less ten (10) days' prior written notice from Landlord execute, acknowledge
and deliver to Landlord a statement in writing, (a) 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 date to which the rental and other charges are paid in
advance, if any, and (b) acknowledging that there
Page 30
are not, to Tenant's knowledge, any uncured defaults if any are claimed. Any
such statement may be relied upon by any prospective purchaser or encumbrancer
of all or any portion of the real property of which the Premises are a part. In
the event Tenant does not provide Landlord with an offset statement as required
in this paragraph within the ten (10) day period mentioned therein, Tenant shall
be deemed to have acknowledged all of the matters set forth herein.
29. TRAFFIC AND ENERGY MANAGEMENT.
29.1 Tenant agrees to cooperate and use reasonable efforts to
participate in governmentally mandated traffic management programs generally
applicable to businesses located in Burbank, California or to the Premises.
Neither this Paragraph nor any other provision in this Lease, however, is
intended to or shall create any rights or benefits in any other person, firm,
company, governmental entity or the public.
29.2 Tenant agrees to cooperate and use reasonable efforts to comply
with any and all mandatory guidelines or controls imposed upon either Landlord
or Tenant by federal or state governmental organizations or by any energy
conservation association to which Landlord is a party concerning energy
management.
29.3 [INTENTIONALLY DELETED.]
30. [INTENTIONALLY DELETED.]
31. COMMON FACILITIES; PARKING. Tenant shall have the non-exclusive right,
in common with Landlord and other tenants and occupants of the Building and
their employees, agents and business visitors, to the use of all common
facilities which constitute a part of the Premises, subject to such reasonable,
nondiscriminatory rules and regulations relating to such use as Landlord may
from time to time establish. Common facilities shall be identified by Landlord
in a writing to Tenant upon creation of any Former Premises and may include any
building lobby, elevators, restrooms, stairways and stairwells, elevator lobbies
and common entrances, corridors, passageways and serviceways which are not
located within the Premises of Tenant or another tenant of the Former Premises.
Common facilities also include landscaping, hardscaping and any fountains
adjacent to the Building, any parking facilities serving the
Page 31
Building (the "Parking Facilities"), all sidewalks, driveways, vehicle and
pedestrian entrances and accessways, loading docks, truck tunnels, truck parking
and truck turn-around areas, vehicle and pedestrian ramps serving the Building,
and any pedestrian walkway connecting the Parking Facilities. The common
facilities are depicted on EXHIBIT C attached hereto. Landlord may make
reasonable changes at any time and from time to time to the common facilities,
and no such change shall entitle Tenant to any abatement of rent. Landlord
shall at all times have the sole and exclusive control of the common facilities.
To the extent that any common facilities located outside of the Premises are
maintained jointly or for the common benefit of Landlord and the owners of
adjacent structures, (i) Tenant's non-exclusive right of use of such common
facilities shall be in common with Landlord, other tenants and occupants of and
visitors to the Former Premises and Premises and the owners, tenants, occupants
of and visitors to such other structures.
Tenant shall keep all common facilities free and clear of any
obstructions created or permitted by Tenant or resulting from Tenant's
operations. Nothing herein shall affect the right of Landlord at any time to
remove any persons not authorized to use the common facilities or to prevent the
use of such facilities by unauthorized persons. Landlord reserves the right,
from time to time, to: (a) make alterations in or additions to the common
facilities, including without limitation, constructing new structures or
changing the location, size, shape and/or number of the driveways, entrances,
parking spaces, parking areas, loading and unloading areas, landscape areas and
walkways; (b) temporarily close any of the common facilities for maintenance or
other purposes as long as reasonable access to the Premises remains available;
(c) designate property to be included in, or eliminate property from, the common
facilities; and (d) use the common facilities while engaged in making
alterations in or additions or repairs to the Premises or Former Premises.
32. AUTHORITY OF PARTIES. Each individual executing this Lease on behalf of
Landlord and Tenant represents and warrants that the execution and delivery of
this Lease on behalf of the party for whom such person is executing is duly
authorized, that he or she is authorized to execute and deliver this Lease and
that this Lease is binding upon such party in accordance with its terms. If
Tenant is a
Page 32
corporation, Tenant shall, within ten (10) days after execution of this Lease,
deliver to Landlord a certified copy of a resolution of the Board of Directors
of Tenant, or any executive committee thereof, authorizing or ratifying the
execution of this Lease. Failure of Tenant to provided such resolution shall
not, however, relieve Tenant of its obligations pursuant to this Lease.
33. GENERAL PROVISIONS.
33.1 CLAUSES, PLATS AND RIDERS. Clauses, plats, and riders, if any,
signed by the Landlord and the Tenant and endorsed on or affixed to this Lease
are a part hereof.
33.2 WAIVER. No waiver by Landlord of any provision of this Lease or
of any breach by Tenant hereunder shall be deemed to be a waiver of any other
provision hereof, or of any subsequent breach by Tenant of the same or any other
provision. Landlord's consent to or approval of any act by Tenant requiring
Landlord's consent or approval shall not be deemed to render unnecessary the
obtaining of Landlord's consent to or approval of any subsequent act of Tenant.
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, unless done
in a writing signed by Landlord. Tenant's delivery of keys to any employee or
agent of Landlord shall not operate as a termination of this Lease or a
surrender of the Premises unless done pursuant to a written agreement to such
effect executed by Landlord. The acceptance of any rent by Landlord following a
breach of this Lease by Tenant shall not constitute a waiver by Landlord of such
breach (other than the failure to pay the particular rent so accepted) or any
other breach unless such waiver is expressly stated in a writing signed by
Landlord. The acceptance of any payment from a debtor in possession, a trustee,
a receiver or any other person acting on behalf of Tenant or Tenant's estate
shall not waive or cure a default under Paragraph 23.6 or waive the provisions
of Paragraph 13.
33.3 NOTICES. All notices and demands which may or are to be
required or permitted to be given by either party to the other hereunder shall
be in writing. All notices and demands by the Landlord to the Tenant shall be
personally served on Tenant at the Premises or shall be sent by United States
certified mail, return receipt requested, postage prepaid, addressed to the
Tenant at the Premises, or to
Page 33
such other place as Tenant may from time to time designate in a notice to the
Landlord. All notices and demands by the Tenant to the Landlord shall be
personally served on Landlord at the office of the Building or shall be sent by
United States certified mail, return receipt requested, postage prepaid,
addressed to the Landlord in care of Xxxx X. Xxxxx, Esq., XxXxxxxxx, Will &
Xxxxx at 0000 Xxxx Xxxxxx, Xxxxx 000, Xxxxxxx Xxxxx, Xxxxxxxxxx 00000, or to
such other person or place as the Landlord may from time to time designate in a
notice to the Tenant. All notices shall be deemed effective upon receipt. If
personally delivered, notices shall be deemed received at the time of delivery.
If any notice is sent by mail, the same shall be deemed delivered and received
on the date of receipt, refusal or nondelivery indicated on the return receipt.
Any notice provided for herein may also be sent by facsimile transmission or by
any reputable overnight courier so long as written confirmation of delivery of
such notice is obtained by the sender.
33.4 [INTENTIONALLY DELETED.]
33.5 MARGINAL HEADINGS. The marginal headings and Paragraph titles
to the Paragraphs of this Lease are not a part of this Lease and shall have no
effect upon the construction or interpretation of any part hereof.
33.6 TIME. Time is of the essence of this Lease and of each and all
of its provisions in which performance is a factor.
33.7 SUCCESSORS AND ASSIGNS. The covenants and conditions herein
contained, subject to the provisions as to assignment, apply to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.
33.8 LATE CHARGES. Tenant hereby acknowledges that late payment by
Tenant to Landlord of rent or 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 include, but are not limited to,
processing and accounting charges, and late charges which may be imposed upon
Landlord by terms of any mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or of sum due from Tenant shall not be
received by Landlord or Landlord's designee within five (5) days after said
Page 34
amount is due, then Tenant shall pay to Landlord a late charge equal to three
percent (3%) of such overdue amount for the first late payment during any twelve
(12) month period and six percent (6%) of such overdue amount for any other late
payment during such twelve (12) month period. In addition, any amount not paid
when due shall bear interest at the rate of ten percent (10%) per year from the
due date until paid. The parties hereby agree that such late charges and
interest represent a fair and reasonable estimate of the cost that Landlord will
incur by reason of the late payment by Tenant. Acceptance of such late charges
and interest by the 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 regardless of
any indication to the contrary on the check cashed. In the event that any check
or other payment device for rent, or any other charge hereunder, is returned due
to insufficient funds or any other reason, the foregoing late payment and
interest charges shall apply and Landlord may require all further payments to be
made by money order, cashier's check or in cash.
33.9 PRIOR AGREEMENTS. This Lease and the Exhibits hereto contains
all of the agreements of the parties hereto with respect to any matter covered
or mentioned in this Lease, and no prior agreements or understanding pertaining
to any such matters shall be effective for any purpose. No provision of this
Lease may be amended or added to except by an agreement in writing signed by the
parties hereto or their respective successors in interest. This Lease shall not
be effective or binding on any party until fully executed by both parties
hereto.
33.10 INABILITY TO PERFORM. This Lease and the obligations of each
party hereunder shall not be affected or impaired because the other party is
unable to fulfill any of its obligations hereunder or is delayed in doing so, if
such liability or delay is caused by reason of strike, labor troubles, acts of
God, or any other cause beyond the reasonable control of such other party.
33.11 ATTORNEYS' FEES. In the event of any action or proceeding
brought by either party against the other under this Lease, the prevailing party
shall be entitled to recover all costs and expenses including the fees of its
attorneys in such action or proceeding in such amount as the court may adjudge
reasonable as attorneys' fees. If Landlord is involuntarily made a party
defendant to any litigation
Page 35
concerning this Lease or the Premises by reason of any act or omission of
Tenant, then Tenant shall hold Landlord harmless from all costs, liabilities,
damages and expenses by reason thereof, including attorneys' fees and all costs
incurred by Landlord in such litigation.
33.12 SALE OF PREMISES BY LANDLORD. In the event of any sale of the
Premises or Former Premises, Landlord shall be, and is hereby, entirely freed
and relieved of all liability under any and all of its covenants and obligations
contained in or derived from this Lease arising out of any act, occurrence or
omission occurring after the consummation of such sale; and the purchaser, at
such sale or any subsequent sale of the Premises or Former Premises shall be
deemed, without any further agreement between the parties or their successors in
interest or between the parties and any such purchaser, to have assumed and
agreed to carry out any and all of the covenants and obligations of the Landlord
under this Lease arising out of any act, occurrence or omission occurring after
the consummation of such sale.
33.13 SUBORDINATION, ATTORNMENT. Without the necessity of any
additional documents being executed by Tenant for the purpose of effecting a
subordination and at the election of Landlord or any mortgagees with a lien on
the Building or ground lessor with respect to Building, this Lease is subject
and subordinate to any and all ground or underlying leases, mortgages or deeds
of trust which may hereafter be executed covering the Premises and the real
property of which it is a part, or any renewals, modifications, consolidations,
replacements or extensions thereof, for the full amount of all advances made or
to be made thereunder and without regard to the time or character of such
advances, together with interest thereon and subject to all the terms and
provisions thereof. Notwithstanding the foregoing, Tenant agrees, within ten
(10) days after Landlord's written request therefor, to (a) execute, acknowledge
and deliver any and all documents or instruments requested by Landlord, or that
are necessary or proper to assure the subordination of this Lease to any such
mortgages, deeds of trust, or leasehold estates, and (b) supply such financial
information concerning Tenant as may be requested by any ground lessor or
lender. Notwithstanding such subordination, Tenant's quiet enjoyment of the
Premises will not be disturbed so long as Tenant pays rent and observes and
performs all of the provisions of this Lease to be observed and performed by
Tenant. Notwithstanding anything to the contrary set forth in this Paragraph,
Page 36
Tenant hereby attorns and agrees to attorn to (at the option of) any person,
firm, or corporation purchasing or otherwise acquiring the building and the real
property of which it is a part, at any sale or other proceeding or pursuant to
the exercise of any other rights, powers, or remedies under such mortgages, or
deeds of trust, or ground or underlying leases, as if such person, firm or
corporation had been named as Landlord herein, provided that such person, firm,
or corporation shall accept the Premises subject to this Lease. Tenant hereby
appoints Landlord the attorney-in-fact of Tenant, irrevocably, to execute and
deliver any documents provided for herein for and in the name of Tenant; such
power, being coupled with an interest, being irrevocable. The provisions of
this Paragraph to the contrary notwithstanding, and so long as Tenant is not in
default hereunder, this Lease shall remain in full force and affect for the full
term hereof.
33.14 NAME. Tenant shall not use the name of the property of which
the Premises are a part for any purpose other than as an address of the business
to be conducted by the Tenant in the Premises.
33.15 SEPARABILITY. Any provision of this Lease which shall prove to
be invalid, void or illegal shall in no way affect, impair or invalidate any
other provision hereof and such other provision shall remain in full force and
affect.
33.16 CUMULATIVE REMEDIES. No remedy or election hereunder shall be
deemed exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.
33.17 CHOICE OF LAW. This Lease shall be governed by the laws of the
State of California.
33.18 SIGNS AND AUCTIONS. Tenant may, at its sole cost and expense,
place its signage on the Premises so long as Tenant has received Landlord's
prior written consent (which consent shall not be unreasonably withheld), has
complied with all applicable laws and has agreed to remove such signage at its
sole cost upon termination of this Lease. Tenant shall not conduct any auction
on the Premises without Landlord's prior written consent.
33.19 [INTENTIONALLY DELETED.]
33.20 NEGOTIATED TRANSACTION. This Lease has been negotiated at arm's
length. Accordingly, the provisions of this Lease shall be deemed to have been
drafted by all of the parties and any rule of law
Page 37
that would require interpretation of this Lease against the party that has
drafted it is not applicable and is waived.
33.21 [INTENTIONALLY DELETED.]
33.22 QUITCLAIM OF INTEREST. At the expiration or earlier termination
of this Lease, Tenant shall execute, acknowledge and deliver to Landlord, within
five (5) days after written demand from Landlord to Tenant, any quitclaim deed
or other document which may be reasonably requested by any reputable title
insurance company to remove this Lease as a matter affecting title to the
Premises on a preliminary title report or title policy issued with respect to
the Premises.
33.23 [INTENTIONALLY DELETED]
33.24 SURVIVAL OF INDEMNITIES. The obligations of the indemnifying
party under each and every indemnification and hold harmless provision in this
Lease shall survive the expiration or earlier termination of this Lease to and
until the last to occur of (A) the last date permitted by law for the bringing
of any claim or action with respect to which indemnification may be claimed by
the indemnified party against the indemnifying party under such provisions, or
(B) the date on which any claim or action for which indemnification may be
claimed under such provision is fully and finally resolved and, if applicable,
any compromise thereof or judgment or award thereon is paid in full by the
indemnifying party and the indemnified party is reimbursed by the indemnifying
party for any amounts paid by the indemnified party in compromise thereof or
upon a judgment or award thereon and in defense of such action or claim,
including reasonable attorneys' fees incurred. Notwithstanding anything to the
contrary in that certain Asset Purchase Agreement or Secured Indemnity
Agreement, each dated approximately of even date herewith and executed by
Landlord and Tenant, or that certain Deed of Trust, dated approximately of even
date herewith and executed by Landlord, as trustor, in favor of Tenant, as
beneficiary, none of the representations, warranties, or other covenants or
obligations herein are secured by such Deed of Trust.
33.25 NO REPRESENTATION BY LANDLORD. In no event shall the review,
approval, inspection or examination by Landlord of any item to be reviewed,
approved, inspected or examined by Landlord under the terms of this Lease be
deemed to be an approval of, or representation or warranty as to, the
Page 38
adequacy, accuracy, sufficiency or soundness of any such item or the quality or
suitability of such item for its intended use. Any such review, approval,
inspection or examination by Landlord shall be for the sole purpose of
protecting Landlord's interests in the Premises under this Lease, and no third
parties shall have any rights pursuant thereto. Notwithstanding anything to the
contrary in that certain Asset Purchase Agreement or Secured Indemnity
Agreement, each dated approximately of even date herewith and executed by
Landlord and Tenant, or that certain Deed of Trust, dated approximately of even
date herewith and executed by Landlord, as trustor, in favor of Tenant, as
beneficiary, none of the representations, warranties, or other covenants or
obligations herein are secured by such Deed of Trust.
34. BROKERS. Tenant warrants that it has had no dealings with any real
estate broker or agents in connection with the negotiation of this Lease and it
knows of no real estate broker or agent who is entitled to a commission in
connection with his Lease.
35. QUIET ENJOYMENT. Upon the payment by Tenant of Monthly Rent and all
other sums to be paid hereunder by Tenant and the observance and performance of
all covenants, conditions and provisions on Tenant's part to be observed and
performed under this Lease, Tenant shall have quiet possession of the Premises
for the entire Term subject to all of the provisions of this Lease.
[SIGNATURES ON FOLLOWING PAGE]
Page 39
The parties hereto have executed this Lease at the place and on the
dates specified immediately adjacent to their respective signatures.
ALL POST, INC., a California corporation
By:
---------------------------------
By:
---------------------------------
Address Execution Date: , 1998
------------------------ ---------------
"Landlord"
--------------------------------
VDI MEDIA, a California corporation
By:
---------------------------------
By:
---------------------------------
Address Execution Date: , 1998
------------------------ ---------------
"Tenant"
--------------------------------
Page 40
SCHEDULE 1
DELINEATION OF PREMISES PORTIONS
Area Monthly Rent Reduction
---- ----------------------
Audio $ 9,897.63
Duplication (including engineering,
preproduction and shipping) $19,866.77
Editing $ 3,038.35
Vault (including 6,000 sq. ft. at Mariposa) $23,089.05
Accounting / HR $ 6,808.20
----------
TOTAL $62,700.00
--------------------------------
1. Any area delineated above, or piece thereof, shall become part of the
Former Premises if returned to Landlord in accord with paragraph 3 of
this Lease.
2. Tenant must return all of any area of the Premises delineated above in
order to receive a Monthly Rent reduction. Tenant shall not receive any
Monthly Rent reduction whatsoever for returning less than all of any
such area of the Premises.
Schedule 1
EXHIBIT A
PREMISES DESCRIPTION
EXHIBIT A
EXHIBIT B
BUILDING RULES AND REGULATIONS
[TO BE MUTUALLY AGREED UPON BY TENANT AND LANDLORD,
SUCH AGREEMENT NOT TO BE UNREASONABLY WITHHELD OR DELAYED]
EXHIBIT B
EXHIBIT C
COMMON FACILITIES
EXHIBIT C
EXHIBIT D
ENVIRONMENTAL AUDIT REPORT
EXHIBIT D
