EXHIBIT 10.1
SUBLEASE
This sublease is executed this 27th day of April, 2006, by and between AZTECA
PRODUCTION INTERNATIONAL, INC., a California corporation (the "Sublessor"),
whose principal business address is located at 0000 X. Xxxxxxx Xxxxxx, Xxxx xx
Xxxxxxxx, Xxxxxxxxxx 00000 and BLUE HOLDINGS, INC., whose principal business
address is located at 0000 X. Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx 00000 (the
"Sublessee").
RECITALS
A. NEWCROW, a California joint-venture, as Landlord ("Landlord"), and
COMMERCE CLOTHING COMPANY, LLC, as Tenant, executed a lease dated August 28,
1997 (the "Master Lease"), as amended by that certain First Amendment to Lease
Agreement dated April 26, 2002, and as further amended by that certain Second
Amendment to Lease Agreement dated August 15, 2002 (collectively, the "Lease
Amendments"). By the terms of the Master Lease, the real property described in
Paragraph 1.1 of the Master Lease was leased to COMMERCE CLOTHING COMPANY, LLC,
for a term of 24 months, commencing on October 1, 1997, subject to earlier
termination as provided in the Master Lease. A copy of the Master Lease is
attached to this sublease. By the terms of the Master Lease and the Lease
Amendments, the premises have been expanded and the lease terms modified, as
follows:
(i) to include an additional 266 square feet, designated
as Suite 121, with the tenancy therein continuing on a month to month
basis;
(ii) to designate Azteca Production International, Inc. as
successor-in-interest to Commerce Clothing Company, LLC.; and
(iii) to expand the lease to include Suite 120 (consisting
of approximately 326 rentable square feet) and Suite 104 (consisting of
approximately 3,464 rentable square feet), with the tenancy therein
commencing on August 15, 2002 and terminating on August 14, 2004.
B. Sublessor desires to sublease to Sublessee a portion of the property
currently occupied by Sublessor under the terms of the Master Lease, and
Sublessee desires to lease that property from Sublessor.
NOW, THEREFORE, Sublessor and Sublessee agree as follows:
1. PREMISES AND TERM
1.1 SUBLEASE OF PREMISES. Subject to the terms, conditions, and
covenants set forth in this sublease, Sublessor hereby Subleases to Sublessee,
and Sublessee hereby Subleases from Sublessor, the premises located in Los
Angeles, County, California, described as follows: 73,193 square feet of office
and warehouse space located at 0000 X. Xxxxxxx Xxxxxx, in the City of Commerce,
California, and currently occupied by Sublessee (referred to herein as the
"Premises").
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1.2 TERM. This sublease shall commence on January 1, 2006, and
shall continue on a month to month basis. Either party may terminate this
Sublease upon ninety (90) days prior written notice to the other party.
1.3 CONDITION OF PREMISES. Sublessee acknowledges that it has
inspected and accepts the Premises in their present condition as suitable for
the purpose for which the Premises are sublet. The taking of possession by
Sublessee shall be conclusive to establish that the Premises are in good and
satisfactory condition when possession is taken. Sublessee further acknowledges
that no representations or promises were made by Sublessor or any agent of
Sublessor to repair, alter, remodel or improve the Premises, except as expressly
set forth in this Sublease.
2. RENT AND SECURITY DEPOSIT.
2.1 RENT. Sublessee shall pay to Sublessor, as total rent for the
subleased Premises, an aggregate amount equal to $19030.18 per month (based on
$.26 per rentable square foot for 73,193 rentable square feet), payable in
advance on the first day of each calendar month during the term, commencing on
January 1, 2006 (the "Rent"). Rent shall be paid to Sublessor at 0000 X. Xxxxxxx
Xxxxxx, Xxxx xx Xxxxxxxx, Xxxxxxxxxx 00000, or at any other place designated in
writing by Sublessor. The Rent payable for any portion of a calendar month shall
be a pro rata portion of the Rent payable for a full calendar month.
2.2 ADJUSTMENT OF RENT. Rent shall be increased pro-rata, based
upon increases that are made by Landlord to Sublessor in accordance with the
Master Lease.
2.3 OPERATING EXPENSES. The aggregate Rent set forth in Section
2.1 above is set forth on an "industrial gross basis," and is, and shall at all
times be deemed to include Sublessee's pro-rata portion of operating expenses
set forth under the Master Lease. For the avoidance of doubt and notwithstanding
any provisions of the Master lease to the contrary, Sublessor acknowledges and
agrees that the aggregate monthly Rent set forth in Section 2.1 shall be the
total aggregate amount due and owing by Sublessee to Sublessee under this
Sublease in any given calendar month during the term of this Sublease (subject
to the provisions of Section 2.2 hereunder).
2.3 SECURITY DEPOSIT. Sublessee shall not be required to pay a
Security Deposit.
2.4 PAYMENT. Sublessee shall pay Sublessor all amounts due from
Sublessee to Sublessor hereunder, in lawful money of the United States, at the
place designated in accordance with Section 2.1 above without any deduction or
offset whatsoever.
2.5 LATE CHARGES. Sublessee acknowledges that late payment by
Sublessee of any sum owed to Sublessor under this Sublease will cause Sublessor
to incur costs not contemplated by this Sublease, the exact amounts of which are
extremely difficult and impracticable to fix. Such costs include, without
limitation, processing and accounting charges, time spent addressing the issue
with Sublessee, and late charges that may be imposed on Sublessor by the terms
of any obligation or note secured by any encumbrance covering the Premises.
Therefore, if any installment of Rent due from Sublessee is not received by
Sublessor within five (5) days' from when due, Sublessee shall pay to Sublessor
an additional sum equal to ten percent (10%) of the overdue Rent or other
payment as a late
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charge (provided, however, Sublessee shall not be charged a late charge for up
to a maximum of two (2) payments in any consecutive twelve (12) month period so
long as the installment of Rent is received by Sublessor within ten (10) days
from when due). Late charges shall be deemed Additional Rent hereunder. The
parties agree that this late charge represents a fair and reasonable estimate of
the administrative and other costs that Sublessor will incur by reason of a late
payment by Sublessee. Acceptance of any late payment charge shall not constitute
a waiver of Sublessee's default with respect to the overdue payment, nor prevent
Sublessor from exercising any of, the other rights and remedies available to
Sublessor under this Sublease, at law or in equity, including, but not limited
to, the interest charge imposed pursuant to Paragraph 22.2.
3. USE.
3.1 USE OF PREMISES. The Premises shall be used only for such
lawful purposes as may be directly related or incidental to the operation of an
apparel company, and for no other use or purpose. Sublessee acknowledges that
Sublessor has not made any representations or warranties with respect to the
suitability of the Premises for Sublessee's uses. Sublessee and Sublessee's
Parties shall at all times comply with all rules and regulations regarding the
Premises, as Sublessor may establish from time to time.
Sublessee shall be responsible for and shall, at its own cost and
expense, obtain any and all licenses and permits necessary for any use by
Sublessee of the Premises. Sublessee shall comply with all governmental laws,
ordinances and regulations applicable to the use of the Premises, including,
without limitation, the Americans with Disabilities Act of 1990 triggered
subsequent to the Commencement Date as a result of Sublessee's alterations or
use of the Premises. Without limiting the generality of the foregoing, and
subject to Paragraph 7 below, Sublessee shall at its own cost and expense
install and construct all physical improvements to or needed to serve the
Premises (i) required by any federal, state or local building code or other law
or regulation enacted or becoming effective after the Commencement Date,
including, but not limited to, special plumbing, railings, ramps and other
improvements for use by the handicapped, or (ii) made necessary by the nature of
Sublessee's use of the Premises, provided, however, that Sublessor shall have
the option to install and construct such improvements, in which case the cost
thereof shall be equitably allocated by Sublessor in its reasonable discretion
among the benefited premises, and Sublessee, upon demand, shall pay to
Sublessor, as Additional Rent, such portion of the cost thereof as may be
allocated equitably, in Sublessor's reasonable discretion, to the Premises.
Sublessee shall not place a load upon the floor of the Premises that exceeds the
load per square foot that such floor was designed to carry and which is allowed
by law. Sublessee shall promptly comply with all governmental orders and
directives for the correction, prevention and abatement of nuisances in or upon,
or connected with, the Premises, all at Sublessee's sole expense. Sublessee
shall not permit any objectionable or unpleasant odors, smoke, dust, gas, noise
or vibrations to emanate from the Premises.
Sublessee shall not permit the Premises to be used for any purpose or
in any manner (including without limitation any method of storage) that would
render the insurance thereon void or the insurance risk more hazardous or cause
the state insurance authority to disallow any sprinkler credits. If any increase
in the fire and extended coverage insurance premiums paid by Sublessor is caused
by Sublessee's use and occupancy of the Premises, or if Sublessee vacates the
Premises and causes any increase in such premiums, then Sublessee shall pay as
additional Rent the amount of such increase to
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Sublessor, and, upon demand by Sublessor, correct at Sublessee's expense the
cause of such disallowance, increased cost, penalty or surcharge to the
satisfaction of the particular insurance provider or authority, as applicable.
3.2 HAZARDOUS MATERIAL. Sublessee hereby represents, warrants and
covenants that Sublessee's business operations in the Premises do not and will
not involve the use, storage or generation of "Hazardous Materials" (as defined
below). Sublessee shall not cause or permit any Hazardous Material to be brought
upon, stored, manufactured, generated, blended, handled, recycled, disposed of,
used or released on, in, under or about the Premises by Sublessee or Sublessees
Parties and Sublessee shall keep, operate and maintain the Premises in
compliance with all, and shall not permit the Premises to be in violation of
any, federal (including, but not limited to, the Comprehensive Environmental
Response Claim and Liability Act of 1980, 42 U.S.C. ss. 9601 ET. SEQ.), state or
local environmental, health and/or safety related law, decision of any court of
law, ordinance, rule, regulation, code, order, directive, guideline, permit or
permit condition currently existing and as amended, enacted, issued or adopted
in the future which is applicable to the Premises (collectively, "ENVIRONMENTAL
LAWS").
Without limiting in any way Sublessee's obligations under any other
provision of this Sublease, Sublessee and its successors and assigns shall
indemnify, protect, defend and hold Sublessor, its partners, officers,
directors, shareholders, employees, agents, lenders, contractors and each of
their respective successors and assigns (collectively, the "INDEMNIFIED
PARTIES") harmless from any and all claims, judgments, damages, penalties,
enforcement actions, taxes, fines, remedial actions, liabilities, losses, costs
and expenses (including, without limitation, actual attorneys' fees, litigation,
arbitration and administrative proceeding costs, expert and consultant fees and
laboratory costs). Without limiting the foregoing, if any Hazardous Material is
found in, on, under or about the Premises at any time during or after the Term,
the presence of which was caused by Sublessee and/or Sublessee's Parties,
Sublessee shall, at its sole cost and expense, promptly take all actions as are
necessary to return the Premises to the condition existing prior to the
introduction or release of such Hazardous Material in accordance with applicable
Environmental Laws and Sublessor's prior written approval.
For purposes of this Sublease, the term "HAZARDOUS. MATERIAL" means any
chemical, substance, material, controlled substance, object, condition, waste or
combination thereof which is or may be hazardous to human health or safety or to
the environment due to its radioactivity, ignitability, corrosiveness,
reactivity, explosiveness, toxicity, carcinogenicity, infectiousness or other
harmful or potentially harmful properties or effects, including, without
limitation, petroleum and petroleum products, asbestos, radon, polychlorinated
biphenyls (PCB's) and all of those chemicals, substances, materials, controlled
substances, objects, conditions, wastes or combinations thereof which are now or
become in the future listed, defined or regulated in any manner by any
Environmental Law based upon, directly or indirectly, such properties or
effects.
3.3 USE OF COMMON AREAS. Sublessee and Sublessee's Parties shall have the
non-exclusive right, in common with the other parties occupying areas adjacent
to the Premises, to use the grounds, sidewalks parking areas, driveways and
alleys of the Premises, subject to such reasonable rules and regulations as
Landlord may from time to time prescribe. Sublessee and Sublessee's Parties may
park automobiles on a non-exclusive basis near the Premises in an area
designated for the parking of vehicles during normal business hours. Outside
storage, including without limitation, trucks and other
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vehicles, is prohibited without Landlord's prior written consent, which may be
withheld in Landlord's sole and absolute discretion. Sublessee shall not succeed
to any of Landlord's easement rights over and relating to the Premises, nor
shall Sublessee obtain any rights to common areas, as designated by Landlord,
other than those rights specifically granted to Sublessee in this Sublease.
Landlord shall have the sole right of control over the use, maintenance,
configuration, repair and improvement of the common area. Landlord may make such
changes to the use or configuration of, or improvements comprising, the common
area as Landlord may elect without liability to Sublessee (including the right
to add or eliminate buildings from the Premises), subject only to Sublessee's
vehicular parking rights shown above.
4. TAXES.
4.1 LIABILITY FOR ALL PERSONAL PROPERTY TAXES. Sublessee shall be
liable for all taxes levied or assessed against personal property, furniture,
fixtures, above standard Sublessee improvements and alterations, additions or
improvements placed by or for Sublessee in the Premises. If any such taxes for
which Sublessee is liable are levied or assessed against Sublessor or
Sublessor's property and if Sublessor elects to pay the same or if the assessed
value of Landlord's property is increased by inclusion of personal property,
furniture, fixtures, above standard Sublessee improvements or alterations,
additions or improvements placed by or for Sublessee in the Premises, and
Landlord elects to pay the Taxes based on such increase, Sublessee shall pay to
Landlord upon demand that portion of the Taxes.
5. SUBLESSOR'S MAINTENANCE AND REPAIR.
5.1 SUBLESSOR'S MAINTENANCE. Landlord shall maintain and repair
only the exterior portions of the roof, and the foundation and the structural
soundness of the exterior walls of the Building and utility facilities stubbed
to the Premises in good condition, reasonable wear and tear excepted. The term
"WALLS" as used herein shall not include windows, glass or plate glass, doors,
special storefronts or office entries, unless otherwise specified by Landlord in
writing. Landlord shall maintain, repair and repaint the exterior walls,
overhead doors, canopies, entries, handrails, gutters and other exposed parts of
the Building as deemed necessary by Landlord to maintain safety and aesthetic
standards. Landlord shall maintain, repair, and operate the common areas of the
Premises, including but not limited to, mowing grass and general landscaping,
maintenance of parking areas, driveways and alleys, parking lot sweeping, paving
and restriping, exterior lighting, painting, pest control and window washing.
5.2 PROCEDURE AND LIABILITY. Sublessee shall immediately give
Sublessor written notice of any defect or the need for repair of the items for
which Landlord is responsible, after which Sublessor shall have reasonable time
to notify Landlord, and allow Landlord a reasonable opportunity to repair the
same or cure such defect. Landlord's liability with respect to any defects,
repairs or maintenance for which Landlord is responsible under any of the
provisions of this Sublease shall be limited to the cost of such repairs or
maintenance or the curing of such defects. If Sublessee or Sublessee's Parties
caused any damage necessitating such repair, then Sublessee shall pay the cost
thereof, upon demand. Sublessee hereby waives the benefit of California Civil
Code Sections 1941 and 1942, and any other statute providing a right to make
repairs and deduct the cost thereof from the Rent. Sublessee waives any right to
terminate this Sublease or offset or xxxxx Rent by reason of any failure of
Sublessor to make repairs to the Premises.
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6. SUBLESSEE'S MAINTENANCE AND REPAIR.
6.1 SUBLESSEE'S MAINTENANCE. Sublessee shall, at its own cost and
expenses, keep and maintain all parts of the Premises (except those listed as
Sublessor's responsibility in Paragraph 5.1 above) in good and sanitary
condition, promptly making all necessary repairs and replacements, including but
not limited to, windows, glass and plate glass, doors, any special storefront or
office entry, interior walls and finish work, floors and floor covering, heating
and air conditioning systems, dock boards, truck doors, dock bumpers, plumbing
work and fixtures, termite and pest extermination, and regular removal of trash
and debris. If Sublessee shall fail to make any repair for which Sublessee is
responsible within ten (10) days following notice from Sublessor requiring the
same, Sublessor and its agents and contractors shall have the right, but not the
obligation, to enter upon the Premises and perform such repairs, the full cost
of which shall be deemed to be Rent and shall be due and payable by Sublessee to
Sublessor immediately upon demand. In the case of emergency, Sublessor, its
agents and contractors may enter upon the Premises to perform such repairs
without the necessity of prior notice to Sublessee. Sublessee shall maintain its
trash receptacles within the Premises. Repairs shall be made in accordance with
all applicable laws, including without limitation, the Americans with
Disabilities Act of 1990. The cost of maintenance and repair of any common party
wall (any wall, divider, partition or any other structure separating the
Premises from any adjacent premises occupied by other Sublessees) shall be
shared equally by Sublessee and the Sublessee(s) occupying such adjacent
premises. Sublessee shall not damage any party wall or disturb the integrity and
support provided by any party wall and shall, at its sole cost and expense,
promptly repair any damage or injury to any party wall caused by Sublessee or
Sublessee's Parties.
7. ALTERATIONS.
Sublessee shall make no alterations, additions or improvements to the
Premises (including, without limitation, roof and wall penetrations) or any part
thereof without obtaining the prior written consent of Sublessor and Landlord in
each instance. Such consent may be granted or withheld in Sublessor and/or
Landlord's sole and absolute discretion. Sublessor and/or Landlord may impose as
a condition to such consent such requirements as Sublessor and/or Landlord may
deem necessary, in its sole and absolute discretion, including, without
limitation that: (a) Sublessor and/or Landlord be furnished with working
drawings before work commences; (b) performance and labor and material payment
bonds inform and amount and issued by a company satisfactory to Sublessor and/or
Landlord be furnished; (c) Sublessor and/or Landlord approve the contractor by
whom the work is to be performed; (d) adequate course of construction and
general liability insurance be in place and Sublessor and Landlord be named as
additional insureds under the contractor's liability and property insurance
policies; and (e) Sublessor's and Landlord's instructions relating to the manner
in which the work is to be performed and the times during which it is to be
accomplished shall be complied with. All such alterations, additions or
improvements must be performed in a good and workmanlike manner in compliance
with all laws, rules and regulations, including, without limitation, the
Americans with Disabilities Act of 1990, and diligently prosecuted to
completion. Sublessee shall deliver to Sublessor and Landlord upon commencement
of such work, a copy of the building permit with respect thereto, and a
certificate of occupancy, if applicable, immediately upon completion of the
work. Should Sublessee make any alterations without Sublessor's and/or
Landlord's prior written consent, or without satisfaction of any of the
conditions established by Sublessor and/or Landlord in conjunction with granting
such consent, Sublessor and/or Landlord shall have the right, in addition to and
without
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limitation of any right or remedy Sublessor and/or Landlord may have under this
Sublease, at law or in equity, to require Sublessee to remove all or some of the
alterations, additions or improvements at Sublessee's sole cost and restore the
Premises to the same condition as existed prior to undertaking the alterations,
or if Sublessee shall fail to do so, Sublessor and/or Landlord may cause such
removal or restoration to be performed at Sublessee's expense and the cost
thereof shall be Additional Rent to be paid by Sublessee immediately upon
demand. Sublessor and/or Landlord shall have the right to require Sublessee, at
Sublessee's expense, to remove any and all alterations, additions or
improvements and to restore the Premises to its prior condition upon the
expiration or sooner termination of this Sublease. Sublessee shall notify
Sublessor and/or Landlord in writing at least ten (10) days prior to the
commencement of any such work in or about the Premises, and Sublessor and/or
Landlord shall have the right at any time and from time to time to post and
maintain notices of non-responsibility in or about the Premises.
8. LIENS.
Sublessee shall have no authority, express or implied, to create or
place any lien or encumbrance of any kind or nature whatsoever upon, or in any
manner to bind, the interest of Sublessor and/or Landlord or Sublessee in the
Premises or to charge the Rent payable hereunder for any claim in favor of any
person dealing with Sublessee, including those who may furnish materials or
perform labor for any construction or repairs. Sublessee shall pay or cause to
be paid all sums legally due and payable by it on account of any labor performed
or materials furnished in connection with any work performed by Sublessee on the
Premises. Sublessee shall discharge of record by payment, bonding or otherwise
any lien filed against the Premises on account of any labor performed or
materials furnished in connection with any work performed by Sublessee on the
Premises immediately upon the filing of any claim of lien. Sublessee shall
indemnify, defend and hold Sublessor and/or Landlord harmless from any and all
liability, loss, cost or expense based on or arising out of asserted claims or
liens against the leasehold estate or against the right, title and interest of
Sublessor and/or Landlord in the Premises or this Sublease arising from the act
or agreement of Sublessee. Sublessee agrees to give Sublessor immediate written
notice of the placing of any lien or encumbrance against the Premises. Sublessor
and/or Landlord shall have the right, at Sublessor's and/or Landlord's option,
of paying and discharging the same or any portion thereof without inquiry as to
the validity thereof, and any amounts so paid, including expenses and applicable
late charge, shall be Additional Rent immediately due and payable by Sublessee
upon rendition of a xxxx therefor.
9. UTILITIES.
Sublessor shall pay for all water, gas, heat, light, telephone, and
sewer charges and for other utilities and services used on or from the Premises,
together with any taxes, penalties, surcharges or the like pertaining thereto
and any maintenance charges for utilities, and shall furnish all electric light
bulbs and tubes. Sublessor shall in no event be liable for any damages directly
or indirectly resulting from or arising out of the interruption or failure of
utility services on the Premises. Sublessee shall have no right to terminate
this Sublease nor shall Sublessee be entitled to any abatement in Rent as a
result of any such interruption or failure of utility services. No such
interruption or failure of utility services shall be deemed to constitute a
constructive eviction of Sublessee.
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10. FIRE AND CASUALTY DAMAGE.
10.1 NOTICE OF DESTRUCTION. If the Premises are damaged or
destroyed by fire, earthquake or other casualty, Sublessee shall give immediate
written notice thereof to Sublessor.
10.2 LOSS COVERED BY INSURANCE. If at any time prior to the
expiration or termination of this Sublease, the Premises are wholly or partially
damaged or destroyed, the loss from which renders the Premises totally or
partially inaccessible or unusable of use by Sublessee in the ordinary conduct
of Sublessee's business, then:
(a) If all repairs to the Premises can, in Sublessor's
judgment, be completed within two hundred (200) days following the date of
notice to Sublessor of such damage or destruction without the payment of
overtime or other premiums, and if such damage or destruction is not the result
of the negligence or willful misconduct or omission of Sublessee or Sublessee's
Parties (as contemplated in Paragraph 11.4), Sublessor shall, at Sublessor's
expense (provided Sublessor can obtain all necessary governmental permits and
approvals therefor at reasonable cost and on reasonable conditions), repair the
same, and this Sublease shall remain in full force and effect and a
proportionate reduction of Rent shall be allowed Sublessee for such portion of
the Premises as shall be rendered inaccessible or unusable to Sublessee during
the period of time that such portion is unusable or inaccessible. There shall be
no proportionate reduction of Rent by reason of any portion of the Premises
being unusable or inaccessible for a period equal to five (5) consecutive
business days or less.
(b) If such damage or destruction is not the result of
the negligence or willful misconduct or omission of Sublessee or Sublessee's
Parties, and if all such repairs cannot, in Sublessor's judgment, be completed
within two hundred (200) days following the date of notice to Sublessor of such
damage or destruction without the payment of overtime or other premiums,
Sublessor shall notify Sublessee within forty-five (45) days following the date
of notice to Sublessor of such damage or destruction, that all such repairs
cannot, in Sublessor's judgment, be completed within said two hundred (200)
days. If Sublessor so notifies Sublessee, either party may terminate this
Sublease upon written notice to the other party given within twenty (20) days
after Sublessor's notice to Sublessee that all such repairs cannot, in
Sublessor's judgment, be completed within said two hundred (200) days; provided,
however, if Sublessee fails to terminate this Sublease within said twenty (20)
day period from Sublessor's notice, then Sublessee shall have no further right
to terminate this Sublease under this Paragraph 11.2(b).
Sublessee shall pay to Sublessor, within ten (10) days
following Sublessor's demand therefor, the amount of the deductible under
Sublessor's insurance policy. If the damage involves portions other than the
Premises, Sublessee shall pay only a portion of the deductible based on the
ratio of the cost of repairing the damage in the Premises to the total cost of
repairing all of the damage.
10.3 LOSS NOT COVERED BY INSURANCE. If, at any time prior to the
expiration or termination of this Sublease, the Premises are totally or
partially damaged or destroyed from a risk, the loss to Sublessor from which is
not fully covered by insurance maintained by Sublessor or for Sublessor's
benefit, which damage renders the Premises inaccessible or unusable to Sublessee
in the ordinary course of its business, and if such damage or destruction is not
the result of the negligence or willful misconduct or omission of Sublessee or
Sublessee's Parties, Sublessor may, at its option, upon written
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notice to Sublessee within forty-five (45) days after notice to Sublessor of the
occurrence of such damage or destruction, elect to repair or restore such damage
or destruction or Sublessor may elect to terminate this Sublease. If Sublessor
elects to terminate this Sublease, such termination shall be effective as of the
date of the occurrence of such damage or destruction. Notwithstanding the
foregoing, if Sublessor elects to repair or restore such damage or destruction,
Sublessor shall notify Sublessee within forty-five (45) days following the date
of notice to Sublessor of such damage or destruction, if such repairs cannot, in
Sublessor's judgment, be completed within two hundred (200) days following the
date of notice to Sublessor without the payment of overtime or other premiums.
If Sublessor notifies Sublessee that such repairs cannot, in Sublessor's
judgment, be completed within said two hundred (200) days, Sublessee may
terminate this Sublease upon written notice to the Sublessor given within ten
(10) days after Sublessor's notice to Sublessee that all such repairs cannot, in
Sublessor's judgment, be completed within said two hundred (200) days; provided,
however, if Sublessee fails to terminate this Sublease within said ten (10) day
period from Sublessor's notice, then Sublessee shall have no further right to
terminate this Sublease under this Paragraph 11.3.
10.4 LOSS CAUSED BY SUBLESSEE OR SUBLESSEE'S PARTIES. If the
Premises are wholly or partially damaged or destroyed as a result of the
negligence or willful misconduct or omission of Sublessee or Sublessee's
Parties, Sublessee shall forthwith diligently undertake to repair or restore all
such damage or destruction at Sublessee's sole cost and expense, or Sublessor
may at its option undertake such repair or restoration at Sublessee's sole cost
and expense; provided, however, that Sublessee shall be relieved of its repair
and payment obligations pursuant to this Paragraph 11.4 to the extent that
insurance proceeds are collectible by Sublessor to repair such damage, although
Sublessee shall in all such events pay to Sublessor the full amount of the
deductible under Sublessor's insurance policy and any amounts not insured. This
Sublease shall continue in full force and effect without any abatement or
reduction in Rent or other payments owed by Sublessee.
10.5 DESTRUCTION NEAR END OF TERM. Notwithstanding the foregoing,
if the Premises are wholly or partially damaged or destroyed within the final
six (6) months of the Term, Sublessor may, at its option, elect to terminate
this Sublease upon written notice given to Sublessee within thirty (30) days
following such damage or destruction.
10.6 DESTRUCTION OF IMPROVEMENTS AND PERSONAL PROPERTY. In the
event of any damage to or destruction of the Premises, under no circumstances
shall Sublessor and/or Landlord be required to repair, replace or compensate
Sublessee, Sublessee's Parties or any other person for the personal property,
trade fixtures, machinery, equipment or furniture of Sublessee or any of
Sublessee's Parties, or any alterations, additions or improvements installed in
the Premises by Sublessee, and Sublessee shall promptly repair and replace all
such personal property and improvements at Sublessee's sole cost and expense.
10.7 EXCLUSIVE REMEDY. The provisions of this Paragraph 10 shall
constitute Sublessee's sole and exclusive remedy in the event of damage or
destruction to the Premises, and Sublessee waives and releases all statutory
rights and remedies in favor of Sublessee in the event of damage or destruction,
including without limitation those available under California Civil Code
Sections 1932 and 1933(4). No damages, compensation or claim shall be payable by
Sublessor for any inconvenience, any interruption or cessation of Sublessee's
business, or any annoyance, arising from any damage or
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destruction of all or any portion of the Premises.
10.8 LENDER DISCRETION. Notwithstanding anything herein to the
contrary, in the event the holder of any indebtedness secured by a mortgage or
deed of trust covering the Premises requires that the insurance proceeds from
insurance held by Sublessor and/or Landlord be applied to such indebtedness,
then Sublessor and/or Landlord shall have the right to deliver written notice to
Sublessee terminating this Sublease.
11. INDEMNITY AND INSURANCE.
11.1 INDEMNITY. Sublessee hereby releases all Indemnified Parties,
and shall indemnify, protect, defend and hold the Indemnified Parties harmless
from any and all claims, judgments, damages, liabilities, losses, sums paid in
settlement of claims, costs and expenses (including, but not limited to,
reasonable attorneys' fees and litigation costs), obligations, liens and causes
of action, whether threatened or actual, direct or indirect (collectively,
"Claims"), which arise in any way, directly or indirectly, resulting from or in
connection with, in whole or in part, Sublessee's or Sublessee's Parties'
activities in, on or about the Premises, including, without limitation,
Sublessee's breach or default of any obligation of Sublessee to be performed
..under the terms of this Sublease, the conduct of Sublessee's business, the
nonobservance or nonperformance of any law, ordinance or regulation or the
negligence or misconduct of Sublessee or Sublessee's Parties, the buildings and
improvements located on the Premises becoming out of repair, the leakage of gas,
oil, water, steam or electricity emanating from their usual conduits, or due to
any cause whatsoever; except injury to persons or damage to property the sole
cause of which is the active, gross negligence or willful misconduct of
Landlord, or the wrongful failure of Landlord to repair any part of the Premises
which Landlord is obligated to repair and maintain hereunder within a reasonable
time after the receipt of written notice from Sublessee of needed repairs.
11.2 SUBLESSOR'S INSURANCE. Sublessor shall maintain insurance
covering Sublessor's portion of the leased premises not subleased to Sublessee
in such types and amounts as required of Sublessor under the Master Lease
11.3 SUBLESSEE'S INSURANCE OBLIGATIONS. Sublessee agrees that at
all times from and after the date Sublessee is given access to the Premises for
any reason, Sublessee shall carry and maintain, at its sole cost and expenses
the following types, amounts and forms of insurance:
11.3.1 GENERAL LIABILITY INSURANCE. A broad form
comprehensive general liability or commercial general liability policy covering
property damage, personal injury, advertising injury and bodily injury, and
including blanket contractual liability coverage for obligations under this
Sublease, covering the Premises in an amount of not less than Two Million
Dollars ($2,000,000) per occurrence. Such policy shall be in the occurrence form
with a per location general aggregate. Each policy shall name Sublessor and/or
Landlord as an additional insured, and shall provide primary coverage to
Sublessor and/or Landlord; when any policy issued to Sublessor and/or Landlord
provides duplicate coverage or is similar in coverage, Sublessor's and/or
Landlord policy will be excess over Sublessee's policies. No deductibles in
excess of Twenty-Five Thousand Dollars ($25,000) per occurrence shall be
permitted. Sublessee shall pay any deductibles. The amounts of such insurance
required hereunder shall be subject to adjustment from time to time as required
by Sublessor and/or Landlord based upon
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Landlord's determination as to (a) the amounts of such insurance generally
required at such time for comparable subleases, premises and buildings in the
general geographical location of the Building; (b) as requested by any lender
with an interest in the Premises; (c) Sublessee's activities; (d) increases in
recovered liability claims; (e) increased claims consciousness by the public; or
(f) any combination of the foregoing.
11.3.2 PROPERTY INSURANCE. A policy or policies, including
the Boiler and Machinery Perils and the Special Causes of Loss form of coverage
("All Risks"), including vandalism and malicious mischief, theft, sprinkler
leakage (including earthquake sprinkler leakage) and water damage coverage in an
amount equal to the full replacement value, new without deduction for
depreciation, on an agreed amount basis (no co-insurance requirement), of all
trade fixtures, furniture and equipment in the Premises, and all alterations,
additions and improvements to the Premises installed by or for Sublessee or
provided to Sublessee. Such insurance shall also include business interruption
and extra expense coverage for Sublessee's operations and debris removal
coverage for removal of property of Sublessee and Sublessee's Parties that may
be damaged within the Premises. Such coverage shall name the Sublessor and
Landlord as additional insureds and/or loss payees as its interest may appear.
No deductibles in excess of Twenty-Five Thousand Dollars ($25,000) shall be
permitted. Sublessee shall pay any deductibles.
11.3.3 WORKERS' COMPENSATION INSURANCE. Workers'
compensation insurance, including employers' liability coverage, in compliance
with applicable California law. Such insurance shall include a waiver of
subrogation in favor of Sublessor and Landlord, if available.
11.4 EVIDENCE OF COVERAGE. All of the policies required to be
obtained by Sublessee pursuant to Paragraph 11.3 shall be with companies and in
form satisfactory to Sublessor and Landlord. Each insurance company providing
coverage shall have a current Best's Rating of "A-XII" or better. Upon notice
from Sublessor and/or Landlord, Sublessee shall add any mortgagee of Landlord as
an additional insured or loss payee, as applicable. Sublessee shall provide
Sublessor and Landlord with certificates and copies of endorsements (and upon
request, policies) of insurance acceptable to Sublessor and/or Landlord issued
by each of the insurance companies issuing any of the policies required pursuant
to the provisions of Paragraph 11.3, and said certificates and endorsements
shall provide that the insurance issued thereunder shall not be altered,
canceled or non-renewed until after thirty (30) days' written notice to
Sublessor and/or Landlord. "Claims Made" policies shall not be permitted. Each
policy shall permit the waiver in Section 11.5 below. Evidence of insurance
coverage shall be furnished to Sublessor and Landlord prior to Sublessee's
possession of the Premises and thereafter not fewer than fifteen (15) days prior
to the expiration date of any required policy. Sublessee may satisfy its
insurance obligations hereunder by carrying such insurance under a so-called
blanket policy or policies of insurance that are acceptable to Sublessor. If
Sublessee fails to obtain any insurance required hereby or provide evidence
thereof to Sublessor and Landlord, Sublessor and/or Landlord may, but shall not
be obligated to, and Sublessee hereby appoints Sublessor and/or Landlord as its
agent to, procure such insurance and xxxx the cost of the insurance plus a
twenty percent (20%) handling charge to Sublessee. Sublessee shall pay such
costs to Sublessor and/or Landlord as Additional Rent with the next monthly
payment of Rent.
11.5 WAIVERS OF SUBROGATION. Sublessor waives any and all rights of
recovery against Sublessee for or arising out of damage to, or destruction of
the Building or the Premises to the extent
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that Sublessor's and/or Landlord's insurance policies then in force insure
against such damage or destruction and permit such waiver and only to the extent
of insurance proceeds actually received by Sublessor and/or Landlord for such
damage or destruction. Sublessee waives any and all rights of recovery against
Sublessor and/or Landlord for or arising out of damage to or destruction of any
property of Sublessee to the extent that Sublessee's insurance policies then in
force or the policies required by this Sublease, whichever is broader, insure
against such damage or destruction.
12. SUBLESSOR'S RIGHT OF ACCESS.
Sublessee shall permit Sublessor and/or Landlord and its employees and
agents, at all reasonable times and at any time in case of emergency, in such
manner as to cause as little disturbance to Sublessee as reasonably practicable
(a) to enter into and upon the Premises to inspect them, to protect the
Sublessor's interest therein, or to post notices of non-responsibility, (b) to
take all necessary materials and equipment into the Premises, and perform
necessary work therein, and (c) to perform environmental testing, monitoring,
sampling, digging, drilling and analysis for Hazardous Materials on, under or
about the Premises, Building and/or Land and to review and copy any documents,
materials, data, inventories, financial data, notices or correspondence to or
from private parties or governmental authorities in connection therewith. No
such work shall cause or permit any rebate of Rent to Sublessee for any loss of
occupancy or quiet enjoyment of the Premises, or damage, injury or inconvenience
thereby occasioned, or constitute constructive eviction. Sublessor and/or
Landlord may at any time place on or about the Building any ordinary "for sale"
and "for lease" signs. Sublessee shall also permit Sublessor and/or Landlord and
its employees and agents, upon request, to enter the Premises or any part
thereof, at reasonable times during normal business hours, to show the Premises
to any fee owners, lessors of superior leases, holders of encumbrances on the
interest of Sublessor and/or Landlord under the Sublease, or prospective
purchasers, mortgagees or lessees of the Premises as an entirety. During the
period of six (6) months prior to the expiration date of this sublease,
Sublessor may exhibit the Premises to prospective Sublessees.
13. ASSIGNMENT AND SUBLETTING.
13.1 SUBLESSOR'S CONSENT. Sublessee shall not assign all or any
portion of its interest in this Sublease, whether voluntarily, by operation of
law or otherwise, and shall not sublet all or any portion of the Premises,
including, but not limited to, sharing them, permitting another party to occupy
them or granting concessions or licenses to another party, except with the prior
written consent of Sublessor, which Sublessor may withhold for any reasonable
condition, including, but not limited to: (a) if Sublessee is in default of this
Sublease; (b) if the assignee or sublessee is unwilling to assume in writing all
of Sublessee's obligations hereunder; (c) if the assignee or sublessee has a
financial condition which is reasonably unsatisfactory to Sublessor or Landlord;
(d) if the Premises will be used for different purposes than those set forth in
Paragraph 3 or for a use requiring or generating increased or different
Hazardous Materials; (e) if the proposed assignee or sublessee or its business
is subject to compliance with additional requirements of the law beyond those
requirements applicable to Sublessee; (f) if Sublessee proposes to assign less
than all of its interest in this Sublease or to sublet the Premises in units
that are unusually small for the Premises; or (g) if the assignee or sublessee
requires extensive alterations to the Premises.
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13.2 FEES. Sublessee shall pay Sublessor's and Landlord reasonable
attorneys' fees incurred in evaluating any proposed assignment or sublease and
documenting Sublessor's and/or Landlord's consent.
13.3 PROCEDURE. Whenever Sublessee has obtained an offer to assign
any interest in this Sublease or to sublease all or any portion of the Premises,
Sublessee shall provide to Sublessor the name and address of said proposed
assignee or sublessee, the base rent and all other compensation to be paid to
Sublessee, the proposed use by the proposed assignee or sublessee, the proposed
effective date of the assignment or subletting, and any other business terms
which are material to the offer and/or which differ from the provisions of this
Sublease ("Notice of Offer"). Sublessee shall also provide to Sublessor the
nature of business, financial statement and business experience resume for the
immediately preceding five (5) years of the proposed assignee or sublessee and
such other information concerning such proposed assignee or sublessee as
Sublessor may require. The foregoing information shall be in writing and shall
be received by Sublessor no less than ninety (90) days prior to the effective
date of the proposed assignment or sublease.
Within thirty (30) days following its receipt of a Notice of Offer for
the proposed assignment or subletting, Sublessor shall be entitled to terminate
this Sublease as to all of the Premises (unless Sublessee proposes a sublease of
a portion of the Premises, in which event Sublessor may terminate this Sublease
as to such portion) by written notice to Sublessee ("Termination Notice"), and
such termination shall be effective as of the proposed effective date of the
proposed assignment or sublease. If Sublessor does not elect to terminate this
Sublease, Sublessor shall either notify Sublessee that Sublessor consents to the
proposed assignment or subletting or withholds its consent for reasons to be
specified in the notice. If Sublessor does not provide a Termination Notice or a
notice withholding its consent to Sublessee within thirty (30) days following
its receipt of a Notice of Offer, Sublessor shall be deemed to have consented to
the proposed assignment or subletting.
13.4 BONUS RENT. If any interest in this Sublease is assigned or
all or any portion of the Premises is subleased, Sublessor shall receive all of
the "bonus rent" to be realized from such assignment or subletting. The bonus
rent shall mean any lump sum payment or other value received by Sublessee, plus
any base rent, percentage rent or periodic compensation received by Sublessee
from or for the benefit of an assignee or sublessee in excess of (a) all amounts
owed for Rent and other charges pursuant to this Sublease, and (b) all
reasonable commissions and fees paid to any real estate broker or finder who is
unaffiliated with Sublessee in connection with the assignment or subletting. If
a portion of the Premises is subleased, the amount in clause (a) shall be
prorated based on the portion of the Premises' rentable area to be subleased.
The bonus rent shall be paid on the first (1st) day of each calendar month next
following Sublessee's receipt of each payment from its assignee or sublessee,
after reduction for all amounts described in clauses (a) and (b) above,
amortized over the full term of the assignment or sublease.
13.5 CONTINUING SUBLESSEE OBLIGATIONS. No subleasing or assignment
shall relieve Sublessee from liability for payment of all forms of Rent and
other charges herein provided or from Sublessee's obligations to keep and be
bound by the terms, conditions and covenants of this Sublease.
- 13 -
13.6 WAIVER, DEFAULT AND CONSENT. The acceptance of Rent from any
other person shall not be deemed to be a waiver of any of the provisions of this
Sublease or consent to the assignment or subletting of the Premises. Any
assignment or sublease without the Sublessor's and Landlord's prior written
consent shall be voidable, at Sublessor's or Landlord's election, and shall
constitute a non-curable event of default under this Sublease. Consent to any
assignment or subletting shall not be deemed consent to any future assignment or
subletting.
13.7 ASSIGNMENT OF SUBLEASE RENT. Sublessee immediately and
irrevocably assigns to Sublessor, as security for Sublessee's obligations under
this Sublease, all rents from any subletting of all or any part of the Premises,
and Sublessor, as assignee and as attorney-in-fact for Sublessee for purposes
hereof, or a receiver for Sublessee appointed on Sublessor's application, may
collect such rents and apply same toward Sublessee's obligations under this
Sublease, except that, until the occurrence of an event of default by Sublessee,
Sublessee shall have the right and license to collect such rents.
13.8 ASSIGNMENT IN BANKRUPTCY. If this Sublease is assigned to any
person or entity pursuant to the provisions of the United States Bankruptcy
Code, 11 U.S.C. ss. 101 et seq., or such similar laws or amendments thereto
which may be enacted from time to time (the "Bankruptcy Code"), any and all
money or other consideration payable or otherwise to be delivered in connection
with such assignment shall be paid or delivered to Sublessor, shall be and
remain the exclusive property of Sublessor and shall not constitute property of
Sublessee or of the estate of Sublessee within the meaning of the Bankruptcy
Code. Any and all money or other consideration constituting Sublessor's property
under the preceding sentence not paid or delivered to Sublessor shall be held in
trust for the benefit of Sublessor and be promptly paid or delivered to
Sublessor.
13.9 ASSUMPTION OF OBLIGATIONS. Any person or entity to which this
Sublease is assigned pursuant to the provisions of the Bankruptcy Code shall be
deemed, without further act or deed, to have assumed all of the obligations
arising under this Sublease on and after the date of such assignment. Any such
assignee shall upon demand execute and deliver to Sublessor an instrument
confirming such assumption.
14. CONDEMNATION.
14.1 TOTAL TAKING. If the whole or any substantial part of the
Premises shall be taken or damaged because of the exercise of the power of
eminent domain, whether by condemnation proceedings or otherwise, including acts
or omissions constituting inverse condemnation, or any transfer of the Premises
or portion thereof in avoidance of the exercise of the power of eminent domain
(collectively, a "'Taking"), and the Taking would prevent or materially
interfere with the use of the Premises for the purpose for which they are being
used, this Sublease shall terminate effective when the physical Taking of the
Premises shall occur.
14.2 PARTIAL TAKING. If part of the Premises shall be subject to a
Taking and this Sublease is not terminated as provided in Paragraph 14.1 above,
this Sublease shall not terminate but the Rent payable hereunder during the
unexpired portion of this Sublease shall be reduced in proportion to the area of
the Premises rendered unusable by Sublessee.
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14.3 CONDEMNATION AWARD. The entire award or compensation for any
Taking of the Premises, or any part thereof, or for diminution in value, shall
be the property of Landlord, and Sublessee hereby assigns its interest in any
such award to Landlord; provided, however, Sublessor and/or Landlord shall have
no interest in any separate award made to Sublessee for loss of business, for
relocation purposes, or for the taking of Sublessee's fixtures and improvements.
14.4 EXCLUSIVE REMEDY. This Paragraph 14 shall be Sublessee's sole
and exclusive remedy in the event of any Taking. Sublessee hereby waives the
benefits of California Code of Civil Procedure ss. 1265.130 or any other statute
granting Sublessee specific rights in the event of a Taking, which are contrary
to the provisions of this Paragraph 14.
15. SURRENDER AND HOLDING OVER.
15.1 SURRENDER. Upon the expiration or sooner termination of this
Sublease, Sublessee shall surrender the Premises in as good condition as when
received, reasonable wear and tear excepted, broom clean and free of trash and
rubbish, and free from all tenancies or occupancies by any person. Subject to
Sublessor's and/or Landlord's rights under Xxxxxxxxx 00, Xxxxxxxxx shall remove
all trade fixtures, furniture, equipment and other personal property installed
in the Premises prior to the expiration or earlier termination of this Sublease.
Unless otherwise provided in Paragraph 7 or waived by Sublessor in writing prior
to the expiration or earlier termination of this Sublease, Sublessee shall
remove at its sole cost all alterations, additions and improvements made by
Sublessee to the Premises other than the Sublessee improvements. Alterations,
additions and improvements remaining on the Premises at the expiration or
earlier termination of this Sublease shall become the property of Sublessor.
Sublessee shall, at its own cost, completely repair any and all damage to the
Premises and the Building resulting from or caused by such removal. The
provisions of Paragraph 7 shall apply to such removal and repair work.
15.2 HOLDING OVER. If Sublessor agrees in writing that Sublessee
may hold over after the expiration or earlier termination of this Sublease,
unless the parties hereto otherwise agree in writing as to the terms of such
holding over, the holdover tenancy shall be subject to termination by Sublessor
or Sublessee at any time upon not less than thirty (30) days' prior written
notice. If Sublessee holds over without the consent of Sublessor, the same shall
be a tenancy at will terminable at any time, and Sublessee shall be liable to
Sublessor for, and Sublessee shall indemnify, protect, defend and hold Sublessor
harmless from and against, any damages, liabilities, losses, costs, expenses or
claims suffered or caused by such holdover, including damages and costs related
to any successor Sublessee of the Premises to whom Sublessor could not deliver
possession of the Premises when promised. All of the other terms and provisions
of this Sublease shall be applicable during any holdover period, with or without
consent, except that Sublessee shall pay to Sublessor from time to time upon
demand, as Rent for the period of any holdover, an amount equal to two hundred
percent (200%) of the then applicable Base Rent plus all Additional Rent in
effect on the termination date, computed on a daily basis for each day of the
holdover period. No holding over by Sublessee, whether with or without consent
of Sublessor, shall operate to extend this Sublease. The preceding provisions of
this Paragraph 15.2 shall not be construed as Sublessor's consent to any holding
over by Sublessee.
15.3 ENTRY AT END OF TERM. If during the last month of the Term
Sublessee shall have removed substantially all of Sublessee's property and
personnel from the Premises, Sublessor may enter
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the Premises and repair, alter and redecorate the same, without abatement of
Rent and without liability to Sublessee, and such acts shall have no effect on
this Sublease. Sublessee shall give written notices to Sublessor at least thirty
(30) days prior to vacating the Premises and shall arrange to meet with
Sublessor for a joint inspection of the Premises prior to vacating. In the event
of Sublessee's failure to give such notice or arrange such joint inspection,
Sublessor's inspection at or after Sublessee's vacation of the Premises shall be
conclusively deemed, correct for purposes of determining Sublessee's
responsibility for repairs and restoration.
16. QUIET ENJOYMENT.
Sublessor represents and warrants that it has full rights and authority
to enter into this Sublease and that Sublessee, upon paying the Rent and
performing its other covenants and agreements herein set forth, shall peaceably
and quietly have, hold and enjoy the Premises for the Term without hindrance or
molestation from Sublessor, subject to the terms and provisions of this
Sublease, Master Lease, any ground lease, any mortgage or deed of trust now or
hereafter encumbering the Premises, and all matters of record.
17. EVENTS OF DEFAULT.
The following events shall be deemed to be events of default by
Sublessee under this Sublease:
17.1 FAILURE TO PAY RENT. Sublessee shall fail to pay any
installment of the Rent herein reserved when due, or any other payment or
reimbursement to Sublessor required herein when due.
17.2 INSOLVENCY. Sublessee or any guarantor of Sublessee's
obligations hereunder shall generally not pay its debts as they become due or
shall admit in writing the inability to pay its debts or shall make a general
assignment for the benefit of creditors.
17.3 APPOINTMENT OF RECEIVER. A receiver or trustee (or similar
official) shall be appointed for all or substantially all of the assets of
Sublessee.
17.4 BANKRUPTCY. The filing of any voluntary petition by Sublessee
under the Bankruptcy Code, or the filing of an involuntary petition by
Sublessee's creditors, which involuntary petition remains undischarged for a
period of forty-five (45) days.
17.5 ATTACHMENT. The attachment, execution or other judicial
seizure or non-judicial seizure of all or substantially all of Sublessee's
assets located at the Premises or of Sublessee's interest in this Sublease or
the Premises, if such attachment or other seizure remains undismissed or
undischarged for a period of ten (10) business days after the levy thereof.
17.6 VACATION OF PREMISES. Sublessee shall vacate all or a
substantial portion of the Premises, whether or not Sublessee is in default of
the Rent or other charges due under this Sublease.
17.7 CERTIFICATES. Sublessee shall fail to deliver to Sublessor
and/or Landlord any subordination agreement within the time limit prescribed in
Paragraph 20 below, or a Certificate of Occupancy, all financial statements or
an estoppel certificate within the time limits prescribed in
- 16 -
Paragraph 21.7 below.
17.8 FAILURE TO DISCHARGE LIENS. Sublessee shall fail to discharge
any lien placed upon the Premises in violation of Paragraph 8 hereof.
17.9 FALSE FINANCIAL STATEMENT. Sublessor discovers that any
financial statement given to Sublessor by Sublessee, any assignee, sublessee or
successor in interest of Sublessee, or any guarantor of Sublessee's obligations
hereunder, or any of them, was materially false when given to Sublessor.
17.10 FAILURE TO COMPLY WITH SUBLEASE TERMS. Sublessee shall fail to
comply with any other term, provision or covenant of this Sublease, and shall
not cure such failure within twenty (30) days after written notice thereof to
Sublessee.
18. SUBLESSOR'S REMEDIES.
Upon the occurrence of any event of default, Sublessor may, at its
option without further notice or demand and in addition to any other rights and
remedies hereunder or at law or in equity, do any or all of the following:
18.1 TERMINATION. Terminate Sublessee's right to possession of the
Premises by any lawful means upon at least 3 days' written notice, in which case
Sublessee shall immediately surrender possession of the Premises to Sublessor
and, in addition to any rights and remedies Sublessor may have at law or in
equity, Sublessor shall have the following rights:
(a) To re-enter the Premises then or at any time
thereafter and remove all persons and property and possess the Premises, without
prejudice to any other remedies Sublessor may have by reason of Sublessee's
default or of such termination, and Sublessee shall have no further claim
hereunder;
(b) To recover all damages incurred by Sublessor by
reason of the default, including without limitation (i) the worth at the time of
the award of the payments owed by Sublessee to Sublessor under this Sublease
that were earned but unpaid at the time of termination; (ii) the worth at the
time of the award of the amount by which the payments owed by Sublessee to
Sublessor under the sublease that would have been earned after the date of
termination until the time of the award exceeds the amount of the loss of
payments owed by Sublessee to Sublessor under this Sublease for the same period
that Sublessee proves could have been reasonably avoided; (iii) the worth at the
time of the award of the amount by which the payments owed by Sublessee to
Sublessor for the balance of the Term after the time of the award exceeds the
amount of the loss of payments owed by Sublessee for the same period that
Sublessee proves could have been reasonably avoided; (iv) all costs incurred by
Sublessor in retaking possession of the Premises and restoring them to good
order and condition; (v) all costs, including without limitation brokerage
commissions, advertising costs and restoration and remodeling costs, incurred by
Sublessor in reletting the Premises; plus (vi) any other amount, including
without limitation attorneys' fees and audit expenses, necessary to compensate
Sublessor for all detriment proximately caused by Sublessee's failure to perform
its obligations under this Sublease or which in the ordinary course of things
would be likely to result therefrom. "The worth at the time of the award," as
used in clauses (i) and (ii) of this paragraph, is to be determined by computing
interest as to
- 17 -
each unpaid payment owed by Sublessee to Sublessor under the Sublease, at the
highest interest rate permitted by law. "The worth at the time of the award," as
referred to in clause (iii) of this paragraph, is to be determined by
discounting such amount, as of the time of award, at the discount rate of the
San Francisco Federal Reserve Bank, plus 1%.
(c) To remove, at Sublessee's sole risk, any and all
personal property in the Premises and place such in a public or private
warehouse or elsewhere at the sole cost and expense and in the name of
Sublessee. Any such warehouse shall have all of the rights and remedies provided
by law against Sublessee as owner of such property. If Sublessee shall not pay
the cost of such storage within thirty (30) days following Sublessor's demand,
Sublessor may, subject to the provisions of applicable law, sell any or all such
property at a public or private sale in such manner and at such times and places
as Sublessor deems proper, without notice to or demand upon Sublessee. Sublessee
waives all claims for damages caused by Sublessor's removal, storage or sale of
the property and shall indemnify and hold Sublessor free and harmless from and
against any and all loss, cost and damage, including without limitation court
costs and attorneys' fees. Sublessee hereby irrevocably appoints Sublessor as
Sublessee's attorney-in-fact, coupled with an interest, with all rights and
powers necessary to effectuate the provisions of this subparagraph.
18.2 CONTINUATION OF SUBLEASE. Maintain Sublessee's right to
possession, in which case this Sublease shall continue in effect whether or not
Sublessee shall have abandoned the Premises. In such event, Sublessor may
enforce all of Sublessor's rights and remedies under this Sublease, including
the right to recover rent as it becomes due hereunder, and, at Sublessor's
election, to re-enter and relet the Premises on such terms and conditions as
Sublessor deems appropriate. Without limiting the generality of the foregoing,
Sublessor shall have the remedy described in California Civil Code Section
1951.4 (lessor may continue Sublease in effect after lessee's breach and
abandonment and recover rent as it becomes due, if lessee has right to sublet or
assign, subject only to reasonable limitations). If Sublessor relets the
Premises or any portion thereof, any rent collected shall be applied against
amounts due from Sublessee. Sublessor may execute any Sublease made pursuant
hereto in its own name, and Sublessee shall have no right to collect any such
rent or other proceeds. Sublessor's reentry and/or reletting of the Premises, or
any other acts, shall not be deemed an acceptance of surrender of the Premises
or Sublessee's interest therein, a termination of this Sublease or a waiver or
release of Sublessee's obligations hereunder. Sublessor shall have the same
rights with respect to Sublessee's improvements and personal property as under
Paragraph 18.1 above, even though such re-entry and/or reletting do not
constitute acceptance of surrender of the Premises or termination of this
Sublease.
18.3 APPOINTMENT OF RECEIVER. Cause a receiver to be appointed in
any action against Sublessee and to cause such receiver to take possession of
the Premises and to collect the rents or bonus rent derived therefrom. The
foregoing shall not constitute an election by Sublessor to terminate this
Sublease unless specific notice of such intent is given.
18.4 LATE CHARGE. Charge late charges as provided in Paragraph 2.5.
18.5 INTEREST. Charge interest on any amount not paid when due as
provided in Paragraph 22.2. Interest shall accrue from the date funds are first
due or, if the payment is for funds expended by Sublessor on Sublessee's behalf,
from the date Sublessor expends such funds.
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18.6 ATTORNEYS' FEES. Collect, upon demand, all reasonable
attorneys' fees and expenses incurred by Sublessor in enforcing its rights and
remedies hereunder.
18.7 INJUNCTION. To restrain by injunction or other equitable means
any breach or anticipated breach of this Sublease.
19. SUBLESSEE'S REMEDIES.
19.1 SUBLESSOR'S DEFAULT. Sublessor shall not be in default under
this Sublease unless Sublessor fails to perform obligations required of
Sublessor and/or Landlord within sixty (60) days after written notice is
delivered by Sublessee to Sublessor and/or Landlord and to the holder of any
mortgages or deeds of trust (collectively, "Lender") covering the Premises whose
name and address shall have theretofore been furnished to Sublessee in writing,
specifying the obligation which Sublessor and/or Landlord has failed to perform;
provided, however, that if the nature of Sublessor's and/or Landlord's
obligation is such that more than sixty (60) days are required for performance,
then Sublessor and/or Landlord shall not be in default if Sublessor and/or
Landlord or Lender commences performance within such forty-five (45) day period
and thereafter diligently prosecutes the same to completion. All obligations of
Sublessor and/or Landlord hereunder shall be construed as covenants, not
conditions.
19.2 SUBLESSEE'S REMEDIES. In the event of any default, breach or
violation of Sublessee's rights under this Sublease by Sublessor and/or
Landlord, Sublessee's exclusive remedies shall be an action for specific
performance or action for damages. Sublessee hereby waives the benefit of any
laws granting it the right to perform Sublessor's and/or Landlord's obligation,
a lien upon the property of Sublessor and/or Landlord and/or upon Rent due
Sublessor, or the right to terminate this Sublease or withhold Rent on account
of any Sublessor and/or Landlord default. Notwithstanding the foregoing
provisions of this paragraph 19.2, if Sublessor has failed to make any repair,
provide any improvement or perform any other obligation required of Sublessor
hereunder within the sixty (60) day period following written notice from
Sublessee, as provided in paragraph 19.1, then five (5) business days following
Sublessor's and/or Landlord's receipt of a new written notice from Sublessee
stating that such failure remains uncured (and provided such cure has not been
then performed), Sublessee shall be entitled to cause the same to be performed
and Sublessor shall reimburse Sublessee for the reasonable cost thereof, within
thirty (30) days following presentation to Sublessor of copies of paid invoices
for all such work. Notwithstanding anything to the contrary set forth herein,
Sublessee may not make any repairs to, or perform any other work affecting, the
structural integrity or external appearance of the Premises.
19.3 NON-RECOURSE. Notwithstanding anything to the contrary in this
Sublease, any judgment obtained by Sublessee or any of Sublessee's Parties
against Sublessor or any Indemnified Parties shall be satisfied only out of
Sublessor's interest in the Building and the legal parcel of land on which it
sits. Neither Sublessor nor any Indemnified Parties shall have any personal
liability for any matter in connection with this Sublease or its obligations as
Sublessor of the Premises, except as provided above. Sublessee shall not
institute, seek or enforce any personal or deficiency judgment against Sublessor
or any Indemnified Parties, and none of their property shall be available to
satisfy any judgment hereunder, except as provided in this Paragraph 19.3.
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20. MORTGAGES.
Sublessee accepts this Sublease subject and subordinate to any Master
Lease, ground lease, mortgage and/or deed of trust now or at any time hereafter
constituting a lien or encumbrance upon the Premises. Notwithstanding any such
subordination, Sublessee's right to quiet possession of the Premises shall not
be disturbed if Sublessee is not in default and so long as Sublessee shall pay
the Rent and observe and perform all of its obligations hereunder, unless this
Sublease is otherwise terminated pursuant to its terms. If any ground lessor,
mortgagee or beneficiary under a deed of trust elects to have Sublessee's
interest in this Sublease superior to any such instrument, then by notice to
Sublessee from such ground lessor, mortgagee or beneficiary, this Sublease shall
be deemed superior to such ground lease or lien, whether this Sublease was
executed before or after said ground lease, mortgage or deed of trust. Sublessee
shall at any time hereafter on demand execute any instruments, releases or other
documents which may be required by any ground lessor or mortgagee for the
purpose of attornment or subjecting and subordinating this Sublease to any
ground lease or the lien of any such mortgage. Sublessee's failure to execute
each instrument, release or document within ten (10) days after written demand
shall constitute an event of default by Sublessee hereunder without further
notice to Sublessee, or at Sublessor's and/or Landlord's option Sublessor and/or
Landlord shall execute such instrument, release or document on behalf of
Sublessee as Sublessee's attorney-in-fact. Sublessee does hereby make,
constitute and irrevocably appoint Sublessor and/or Landlord as Sublessee's
attorney-in-fact, coupled with an interest, and in Sublessee's name, place and
stead, to execute such documents in accordance with this Paragraph 20.
21. GENERAL PROVISIONS.
21.1 SINGULAR AND PLURAL. Words of any gender used in this Sublease
shall be held and construed to include any other gender, and words in the
singular number shall be held to include the plural, unless the context
otherwise requires.
21.2 INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly herein
provided to the contrary, any amount due to Sublessor not paid when due shall
bear interest at the maximum rate then allowable by law from the date due.
Payment of such interest shall not excuse or cure any default by Sublessee under
this Sublease, provided, however, that interest shall not be payable on late
charges incurred by Sublessee.
21.3 TIME OF ESSENCE. Time is of the essence in every provision of
this agreement where a time for performance or notice is specified.
21.4 BINDING EFFECT. The terms, provisions and covenants and
conditions contained in this Sublease shall apply to, inure to the benefit of,
and be binding upon, the parties hereto and upon their respective heirs, legal
representatives, successors and permitted assigns, except as otherwise herein
expressly provided.
21.5 CHOICE OF LAW. This Sublease and any and all matters arising
therefrom shall be governed by the laws of the State of California applicable to
contracts made and to be performed in such state.
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21.6 CAPTIONS. The captions inserted in this Sublease are for
convenience only and in no way define, limit or otherwise describe the scope or
intent of this Sublease, or any provision hereof, or in any way affect the
interpretation of this Sublease.
21.7 CERTIFICATES. Sublessee agrees from time to time within ten
(10) days after request of Sublessor and/or Landlord, to deliver to Sublessor
and/or Landlord, or Sublessor's designee, a Certificate of Occupancy for work
performed by Sublessee or Sublessee's Parties in the Premises, annual financial
statements for each of the previous three (3) fiscal years of Sublessee, and an
estoppel certificate stating that this Sublease is unmodified and in full force
and effect (or, if modified, stating the nature of such modification and
certifying that this Sublease, as so modified, is in full force and effect), the
date to which Rent has been paid, the unexpired Term of this Sublease and such
other matters pertaining to this Sublease as may be requested by Sublessor
and/or Landlord or Sublessor's designee. Any such certificate may be
conclusively relied upon by Sublessor or Sublessor's designee. At Sublessor's
option, Sublessee's failure to timely deliver such certificate shall be an event
of default by Sublessee, without further notice to Sublessee, or it shall be
conclusive upon Sublesssee that this Sublease is in full force and effect,
without modification except as may be represented by Sublessor and/or Landlord,
that there are no uncured defaults in Sublessor's performance, and that not more
than one (1) month's rent has been paid in advance.
21.8 APPLICABILITY OF MASTER LEASE. This Sublease is subject and
subordinate to the terms and conditions of the Master Lease.
21.9 ASSUMPTION. Sublessee hereby expressly assumes and agrees to
perform and comply with all the obligations required to be kept or performed by
the Lessee under the provisions of the Master Lease identified in Paragraph 6 of
this Sublease, to the extent that they are applicable to the subleased Premises,
except the obligation and covenant to pay rent to the Lessor required by
Paragraph 2.1; 2.2; 2.3; 2.4; 2.5; and 2.8, of the Master Lease shall be
considered performed by Sublessee to the extent and in the amount rent is paid
to Sublessor in accordance with Paragraph 2 of this Sublease.
21.10 SUBLESSEE'S RIGHTS REGARDING CONTINUING POSSESSION. Sublessee
shall have the right at any time, at Sublessor's expense, to take any action
required to be taken, but not timely taken, by Sublessor, that may be necessary
to prevent a default under the terms of the Master Lease.
21.11 OBLIGATIONS OF SUBLESSOR. Sublessor agrees to maintain the
Master Lease during the entire term of this Sublease, subject, however, to any
earlier termination of the Master Lease without the fault of Sublessor.
Sublessor also agrees to pay all rents provided for in the Master Lease in
accordance with its terms, and to comply with or perform all obligations of the
Lessor under the Master Lease that Sublessee has not assumed under this
Sublease. Sublessor further agrees to assume and to perform all of those
obligations required to be kept or performed by the Lessor under the Master
Lease to the extent that they apply to the subleased premises under the terms of
this Sublease.
21.12 TERMINATION OF MASTER LEASE. If the Master Lease is
terminated, this Sublease shall terminate simultaneously and the Sublessor and
Sublessee shall thereafter be released from all obligations under this Sublease,
and Sublessor shall refund to Sublessee any unearned rent paid in advance.
- 21 -
21.13 AMENDMENTS. This Sublease may not be altered, changed or
amended except by an instrument in writing signed and dated by both parties
hereto. Sublessee agrees to make such reasonable modifications to this Sublease
as may be required by any lender in connection with the obtaining of financing
or refinancing of the Premises or any portion thereof.
21.14 SEVERABILITY. If any clause or provision of this Sublease is
illegal, invalid or unenforceable under present or future laws effective during
the Term, the remainder of this Sublease shall not be affected thereby, and in
lieu of each clause or provision of this Sublease that is illegal, invalid or
unenforceable, there shall be added as a part of this Sublease a clause or
provision as similar in terms to such illegal, invalid or unenforceable clause
or provision as may be possible and be legal, valid and enforceable.
21.15 SECURITY MEASURES. Sublessee hereby acknowledges that the Rent
payable to Sublessor hereunder does not include the cost of guard service or
other security measures, and that Sublessor and/or Landlord shall have no
obligation whatsoever to provide such services or measures. Sublessee assumes
all responsibility for the protection of Sublessee, Sublessees' Parties and
their property from acts of third parties.
21.16 EASEMENTS. Landlord reserves to itself the right, from time to
time, to grant such easements, rights and dedications that Landlord deems
necessary or desirable, and to cause the recordation of parcel maps, easement
agreements and covenants, conditions and restrictions, so long as such
easements, rights, dedications, maps and covenants, conditions and restrictions
do not unreasonably interfere with the permitted use of the Premises by
Sublessee. Sublessee shall sign any of the aforementioned documents upon request
of Landlord and failure to do so shall constitute a material breach of this
Sublease.
21.17 MULTIPLE PARTIES. If more than one person or entity is named
as Sublessee herein, the obligations of Sublessee hereunder shall be the joint
and several responsibility of all persons or entities so named.
21.18 NO THIRD PARTY BENEFICIARIES. This Sublease is not intended by
either party to confer any benefit on any third party, including without
limitations any broker, finder, or brokerage firm.
21.19 NOTICES. Each provision of this Sublease or of any applicable
governmental laws, ordinances, regulations and other requirements with reference
to the sending, mailing or delivery of any notice or the making of any payment
by one party to the other shall be deemed to be complied with when and if the
following steps are taken:
(a) All Rent and other payments required to be made
hereunder shall be payable to the applicable party hereto as follows:
To Sublessor at:
AZTECA PRODUCTION INTERNATIONAL, INC.
0000 X. Xxxxxxx Xxxxxx
Xxxx Xx Xxxxxxxx, XX 00000
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and to Sublessee at the Premises, or at such other addresses as the parties may
have hereafter specified by written notice. All obligations to pay Rent and/or
any other amounts under the terms of this Sublease shall not be deemed satisfied
until such Rent and other amounts have been actually received by the respective
party.
(b) Wherever any notice is required or permitted
hereunder, such notice shall be in writing. Any notice or document required or
permitted to be delivered hereunder shall be deemed to be delivered (i) upon
personal delivery; (ii) seventy-two (72) hours after deposit thereof in the
United States mail, postage prepaid, certified or registered mail, return
receipt requested; (iii) upon confirmation of delivery by Federal Express or
other reputable overnight delivery service; or (iv) upon written confirmation of
delivery by telegraph, telecopy or other electronic written transmission device;
correctly addressed to the parties hereto as follows: if to Sublessee before the
Commencement Date, then at the address specified in Recital of this Sublease; if
to Sublessee after the Commencement Date, then at the Premises; and if to
Sublessor, then at the address specified above; or at such other address (but no
more than one (1) address at a time) as the recipient may theretofore have
specified by written notice.
21.20 WATER, OIL AND MINERAL RIGHTS. Landlord reserves all right,
title or interest in water, oil, gas or other hydrocarbons, other mineral rights
and air and development rights, together with the sole and exclusive right of
Landlord to sell, lease, assign or otherwise transfer the same, but without any
right of Sublessor or any such transferee to enter upon the Premises during the
Term except as otherwise provided herein.
21.21 CONFIDENTIALITY. Sublessee agrees to keep the Sublease and the
Master Lease and its terms, covenants, obligations and conditions strictly
confidential and not to disclose such matters to any other Sublessor, Sublessee,
prospective Sublessee, or broker; provided, however, Sublessee may provide a
copy of this Sublease to its attorneys, accountants and bankers, and to a
non-party solely in conjunction with Sublessee's reasonable and good faith
effort to secure an assignee or sublessee for the Premises.
21.22 BROKER'S FEES. Sublessee represents and warrants that it has
dealt with no broker, agent or other person in connection with this transaction
and that no broker, agent or other person brought about this transaction, and
Sublessee shall indemnify, defend, protect and hold Sublessor harmless from and
against any claims, losses, liabilities, demands, costs, expenses or causes of
action by any broker, agent or other person claiming a commission or other form
of compensation by virtue of having dealt with Sublessee with regard to this
leasing transaction.
21.23 REMEDIES CUMULATIVE. All rights, privileges and remedies of
the parties are cumulative and not alternative or exclusive to the extent
permitted by law, except as otherwise provided herein.
21.24 RETURN OF CHECK. If Sublessee's check, given to Sublessor in
payment of any sum, is returned by the bank for nonpayment, Sublessee shall pay
to Sublessor immediately on demand, as Additional Rent, all expenses incurred by
Sublessor as a result thereof.
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21.25 ENTIRE AGREEMENT. This Sublease constitutes the entire
understanding and agreement of Sublessor and Sublessee with respect to the
subject matter of this Sublease, and contains all of the covenants and
agreements of Sublessor and Sublessee with respect thereto, and supersedes all
prior agreements or understandings. Sublessor and Sublessee each acknowledge
that no representations, inducements, promises or agreements, oral or written,
have been made by Sublessor or Sublessee, or anyone acting on behalf of
Sublessor or Sublessee, which are not contained herein, and any prior
agreements, promises, negotiations, or representations not expressly set forth
in this Sublease are of no force or effect.
21.26 WAIVERS. The waiver by Sublessor of any term, covenant,
agreement or condition herein contained shall not be deemed to be a waiver of
any subsequent breach of the same or any other term, covenant, agreement or
condition herein contained, nor shall any custom or practice which may arise
between the parties in the administration of this Sublease be construed to waive
or lessen the right of Sublessor to insist upon the performance by Sublessee in
strict accordance with all of the provisions of this Sublease. The subsequent
acceptance of Rent hereunder by Sublessor shall not be deemed to be a waiver of
any preceding breach by Sublessee of any provisions, covenant, agreement or
condition of this Sublease, other than the failure of Sublessee to pay the
particular Rent so accepted, regardless of Sublessor's knowledge of such
preceding breach at the time of acceptance of such Rent.
21.27 ATTORNEYS' FEES. If either Sublessor or Sublessee commences or
engages in, or threatens to commence or engage in, an action by or against the
other party arising out of or in connection with this Sublease or the Premises,
including but not limited to any action for recovery of Rent due and unpaid, to
recover possession or for damages for breach of this Sublease, the prevailing
party shall be entitled to have and recover from the losing party reasonable
attorneys' fees and other costs incurred in connection with the action,
preparation for such action, any appeals relating thereto and enforcing any
judgments rendered in connection therewith. If Sublessor becomes involved in any
action, threatened or actual, by or against anyone not a party to this Sublease,
but arising by reason of or related to any act or omission of Sublessee or
Sublessee's Parties, Sublessee agrees to pay Sublessor's reasonable attorneys'
fees and other costs incurred in connection with the action, preparation for
such action, any appeals relating thereto and enforcing any judgments rendered
in connection therewith.
21.28 MERGER. The voluntary or other surrender of this Sublease by
Sublessee or a mutual cancellation hereof shall not constitute a merger. Such
event shall, at the option of Sublessor, either terminate all or any existing
subtenancies or operate as an assignment to Sublessor of any or all of such
subtenancies.
21.29 SURVIVAL OF OBLIGATIONS. All obligations of Sublessee
hereunder not fully performed as of the expiration or earlier termination of the
Term shall survive the expiration or earlier termination of the Term, including
without limitation, all payment obligations with respect to Rent and all
obligations concerning the condition of the Premises. Upon the expiration or
earlier termination of the Term, and prior to Sublessee vacating the Premises,
Sublessee shall pay to Sublessor any amount reasonably estimated by Sublessor
(i) as necessary to perform Sublessee's duties under paragraphs 6.1 and put the
Premises, including without limitation, all heating and air conditioning systems
and equipment therein, in good condition and repair, and (ii) as sufficient to
meet Sublessee's obligation hereunder for prorated Additional Rent for the year
in which the Sublease expires or terminates. All such amounts shall be used and
held by Sublessor for payment of such obligations, with Sublessee being liable
for any
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additional costs therefor upon demand by Sublessor, or with any excess to be
returned to Sublessee after all such obligations have been determined and
satisfied as the case may be. Any Security Deposit held by Sublessor shall be
credited against the amounts payable by Sublessee under this Paragraph 21.29.
21.30 NO RECORDATION OF SUBLEASE. Neither this Sublease nor any
memorandum hereof may be recorded.
21.31 AUTHORITY. If Sublessee is a corporation or partnership, each
individual executing this Sublease on behalf of such entity represents and
warrants that he or she is duly authorized to execute and deliver this Sublease.
Sublessee shall, within thirty (30) days following execution of this Sublease,
deliver to Sublessor evidence of such authority satisfactory to Sublessor.
21.32 INTERPRETATION. This Sublease shall be construed fairly
according to its terms without regard to which party, or which party's
attorneys, prepared its form.
21.33 SUBLESSOR'S APPROVALS. Except where the provisions of this
Sublease expressly provide that Sublessor's consent or approval must be
reasonably given, all consents or approvals of Sublessor sought or required
pursuant to the terms of this Sublease may be given or withheld in Sublessor's
sole and absolute discretion. SUBLESSOR:
AZTECA PRODUCTION INTERNATIONAL, INC., a
California corporation
By: /S/ XXXXXX XXXX
---------------------------------------
Xxxxxx Xxxx its Chief Executive Officer
SUBLESSEE:
BLUE HOLDINGS, INC.
a California corporation
By: /S/ XXXX XXXX
-------------------------------------
Xxxx Xxxx its Chief Executive Officer
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