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EXHIBIT 10.54
FIRST AMENDMENT TO OFFICE LEASE
THIS FIRST AMENDMENT TO OFFICE LEASE (the "First Amendment"), dated
November 2, 1999, is made by and between XXXXXXX XXXXXX REALTY FUND 1997, A
California limited partnership ("Landlord"), WITH OFFICES AT 00000 Xxxxxxxx
Xxxxxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, and XXXX XXX MEDIA, INC., a
Delaware corporation ("Tenant"), with offices at 00000 Xxxxxxx Xxxxxxxxx, Xxxxx
000, Xxxxxx, Xxxxxxxxxx 00000.
WHEREAS,
A. Landlord, pursuant to the provisions of that certain written Office
Lease, dated September 22, 1999 (the "Lease"), leased to Tenant space in the
property located at 00000 Xxxxxxx Xxxxxxxxx, Xxxxxx, Xxxxxxxxxx 00000 (the
"Building"), commonly known as Suite 100 (the "Original Premises");
B. Pursuant to Article 24 of the Lease, Tenant holds a Right of First
Offer to lease Suite 145 on the ground floor of the Building (the "Expansion
Premises") as shown on Exhibit 1A attached hereto, which Expansion Premises
shall be conclusively deemed to contain 6,807 square feet of Rentable Area and
5,678 square feet of Usable Area;
C. Tenant wishes to exercise its right to add the Expansion Premises to
the original Premises; and
D. Landlord and Tenant, for their mutual benefit, wish to revise certain
other covenants and provisions of the Lease.
NOW, THEREFORE, IN CONSIDERATION of the covenants and provisions contained
herein, and other good and valuable consideration, the sufficiency of which
Landlord and Tenant hereby acknowledge, Landlord and Tenant agree:
1. CONFIRMATION OF DEFINED TERMS. Unless modified herein, all terms
previously defined and capitalized in the Lease shall hold the same
meaning for the purposes of this First Amendment.
2. EFFECTIVE DATE OF EXPANSION. The expansion contemplated hereunder shall
be effective the next business day after the date Landlord substantially
completes the Improvements contemplated under Exhibit 1B attached hereto
(the "Effective Date"). The anticipated Effective Date is December 15,
1999. Landlord and Tenant shall promptly execute a further amendment
confirming the finalized Effective Date and Term as soon as they are
established.
Landlord shall use commercially reasonable efforts to provide
Tenant a minimum of two (2) weeks prior written notice of the date
Landlord reasonable anticipates Tenant shall be able to take possession
of the Expansion Premises.
Provided that Tenant does not delay Landlord's completion of any
work within the Expansion Premises, Tenant may enter the Expansion
Premises up to one (1) calendar week prior to the anticipated Effective
Date, solely for the purpose of installing Tenant's furniture, fixtures
and equipment, computer and telephone cabling. Said early entry shall be
subject to Tenant complying with all of the provisions and covenants
contained herein, except that Tenant shall not be obligated to pay any
increase in Monthly Fixed Rent or Additional Rent that Tenant is
required to pay hereunder until the Effective Date. If Tenant's early
possession does so delay completion of the
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repairs, then such delay shall be chargeable to Tenant by reducing the
Allowance by an amount equal to the per-diem Monthly Fixed Rent payable
hereunder, multiplied by the total number of days Landlord is so
delayed.
If for any reason Landlord is unable to deliver possession of
the Expansion Premises to Tenant on the anticipated Effective Date, the
provisions of this First Amendment shall not be void or voidable, nor
shall Landlord be liable to Tenant for any damage resulting from
Landlord's inability to deliver such possession. However, Tenant shall
not be obligated to pay Fixed Monthly Rent or Additional Rent with
regard to the Expansion Premises until possession of the Expansion
Premises has been delivered to Tenant. Except for such delay in the
commencement of the payment of Rent, Landlord's failure to give
possession on the anticipated Effective Date shall in no way affect
Tenant's obligations hereunder.
If possession of the Expansion Premises is not tendered by
Landlord within one hundred twenty (120) days after the anticipated
Effective Date, then Tenant shall have the right to terminate the
provisions of this First Amendment by giving written notice to Landlord,
which notice shall be given within ten (10) days after the expiration of
such one hundred twenty (120 day period. If such notice of termination
is not given by Tenant within such ten (10) day time period, then this
First Amendment shall continue in full force and effect.
If possession of the Expansion Premises is not tendered within
one hundred eighty (180) days after the anticipated Effective Date, then
this First Amendment, and the rights and obligations of Landlord and
Tenant hereunder, shall terminate automatically, without further
liability by either party to the other, and without further
documentation being required.
3. EXPANSION OF PREMISES. As of the Effective Date, the definition of the
Premises shall be revised to include both the Original Premises and the
Expansion Premises, and wherever in the original Lease the word
"Premises" is found, it shall thereafter refer to both the Original
Premises and the Expansion Premises together, as if the same had been
originally included in the Lease.
As of the Effective Date, the Usable Area of the Premises shall
increase from 6,207 square feet to 11,885 square feet and the Rentable
Area of the Premises shall increase from 7,442 square feet to 14,249
square feet.
Landlord and Tenant agree that the Usable Area of the Premises
has been measured according to the June, 1996 standards published by the
Building Owners' and Managers' Association ("BOMA"), and that Landlord
is utilizing a deemed add-on factor of 19.89% to compute the Rentable
Area of the Premises. Rentable Area herein is calculated as 1.1989 times
the estimated Usable Area, regardless of what the actual square footage
of the common areas of the Building may be, and whether or not they are
more or less than 19.89% of the total estimated Usable Area of the
Building. The purpose of this calculation is solely to provide a general
basis for comparison and pricing of this space in relation to other
spaces in the market area.
Landlord and Tenant further agree that even if the Rentable Area
of Usable Area of the Premises and/or the total Building Area are later
determined to be more or less than the figures
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stated herein, for all purposes of the Lease, the figures stated herein
shall be conclusively deemed to be the actual Rentable Area and Usable
Area of the premises.
4. REVISION IN FIXED MONTHLY RENT. Subject to Tenant's Rent Deferral rights
as set forth in Section 3.1 of the Lease (which Rent Deferral rights
shall apply only to the Original Premises), commencing on the Effective
Date and continuing through the last day of the twelfth (12th) calendar
month of the Term, the Fixed Monthly Rent to be paid by Tenant shall
increase from $13,767.70 per month to $26,360.65 per month; and
Commencing on the first (1st) day of the thirteenth (13th)
calendar month of the Term and continuing through the last day of the
twenty-fourth (24th) calendar month of the Term, the Fixed Monthly Rent
to be paid by Tenant shall increase from $26,360.65 per month to
$27,151.47 per month; and
Commencing on the first (1st) day of the twenty-fifth (25th)
calendar month of the Term, and continuing through the last day of the
thirty-sixth (36th calendar month of the Term, the Fixed Monthly Rent to
be paid by Tenant shall increase from $27,151.47 per month to $27,966.01
per month; and
Commencing on the first (1st) day of the thirty-seventh (37th)
calendar month of the Term, and continuing through the last day of the
forty-eighth (48th) calendar month of the Term, the Fixed Monthly Rent
to be paid by Tenant shall increase from $27,966.01 per month to
$28,805.00 per month; and
Commencing on the first (1st) day of the forty-ninth (49th)
calendar month of the Term, and continuing throughout the remainder of
the initial Term, the Fixed Monthly Rent to be paid by Tenant shall
increase from $28,805.00 per month to $29,669.14 per month.
Concurrently with Tenant's execution and delivery of this First
Amendment, Tenant shall pay to Landlord an amount equal to the first
(1st) month's rent for the Expansion Premises and the Security Deposit
referred to in Section 10 below.
5. REVISION IN TENANT'S SHARE. As of the Effective Date, Tenant's Share, as
specified in Article 5 of the original Lease, solely as it relates to
the Expansion Premises shall be 1.61%.
6. USE. The Expansion Premises shall only be used for administration and
animation production offices (the "Specified Use") and for no other
purposes, without Landlord's prior written consent as provided in
Article 2 of the Lease.
7. INCREASE IN PARKING PERMITS. As of the Effective Date, Tenant shall be
entitled to rent a total of thirty-five (35), rather than nineteen (19),
unreserved parking permits with a corresponding increase in Tenant's
minimum rental obligation from nine (9) to seventeen (17) permits.
8. ACCEPTANCE OF EXPANSION PREMISES. Tenant acknowledges that it has made
its own inspection of and inquiries regarding the Expansion Premises.
Therefore, except for the Improvements to be made by Landlord pursuant
to the provisions of the attached Exhibit 1B, Tenant accepts the
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Expansion Premises in their "as-is" condition. Tenant further
acknowledges that Landlord has made no representation or warranty,
express or implied except as are contained in this First Amendment and
its Exhibits, regarding the condition, suitability or usability of the
Expansion Premises or the Building for the purposes intended by Tenant.
9. SECURITY DEPOSIT. Landlord acknowledges that it currently holds the sum
of $15,495.67 as a Security Deposit under the Lease, which amount
Landlord shall continue to hold throughout the Initial Term, unless
otherwise depleted pursuant to the provisions of the Lease. Concurrent
with Tenant's execution and tendering to Landlord of this First
Amendment, Tenant shall tender the sum of $14,173.47, which amount
Landlord shall add to the Security Deposit already held by Landlord, so
that thereafter, throughout the Extended Term, provided the same is not
otherwise depleted, Landlord shall hold a total of $29,669.14 as a
Security Deposit on behalf of Tenant.
10. BROKER REPRESENTATION. Landlord and Tenant represent to one another that
it has dealt with no broker in connection with this First Amendment
other than XXXXXXX, XXXXXX & COMPANY and XXXXXX X. XXXXXXX, INC..
Landlord and Tenant shall hold one another harmless from and against any
and all liability, loss, damage, expense, claim, action, demand, suit or
obligation arising out of or relating to a breach by the indemnifying
party of such representation. Landlord agrees to pay all commissions due
to the brokers listed above created by Tenant's execution of this First
Amendment.
11. SUCCESSORS AND HEIRS. The provisions of this First Amendment shall inure
to the benefit of Landlord's and Tenant's respective successors,
assigns, heirs and all persons claiming by, through or under them.
12. CONFIDENTIALITY. Landlord and Tenant shall each use commercially
reasonable efforts to ensure that the covenants and provisions of this
First Amendment are not discussed with anyone not directly involved in
the management, administration, ownership, lending against, or
subleasing of the Premises, other than Tenant's or Landlord's
counsel-of-record or leasing or sub-leasing broker-of-record.
13. SUBMISSION OF DOCUMENT. No expanded contractual or other rights shall
exist between Landlord and Tenant with respect to the Expansion
Premises, as contemplated under this First Amendment, until both
Landlord and Tenant have executed and delivered this First Amendment,
whether or not any additional rental or security deposits have been
received by Landlord, and notwithstanding that Landlord has delivered to
Tenant an unexecuted copy of this First Amendment.
14. GOVERNING LAW. The provisions of this First Amendment shall be governed
by the laws of the State of California.
15. REAFFIRMATION. Landlord and Tenant acknowledge and agree that the Lease,
as amended herein, constitutes the entire agreement by and between
Landlord and Tenant, and supersedes any and all other agreements written
or oral between the parties hereto. Furthermore, except as modified
herein, all other covenants and provisions of the Lease shall remain
unmodified and in full force and effect.
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IN WITNESS WHEREOF, Landlord and Tenant have duly executed this document as of
the day and year written below.
LANDLORD: TENANT:
XXXXXXX XXXXXX REALTY FUND 1997, XXXX XXX MEDIA, INC.,
A California limited partnership a Delaware corporation
By: XXXXXXX, XXXXXX & COMPANY, By: /s/ Gill Champion
its agent -----------------------------
By: /s/ Xxxxxxx Xxxxxx Signer's Name: Gill Champion
---------------------------------- -------------------
Xxxxxxx Xxxxxx [ ] President [X] Vice President
or [ ] Chief Executive Officer
(Check Title Above)
AND
Dated: November 30, 1999
------------------------ By: /s/ XXXXXXX X. XXXXXX
------------------------------
Signer's Name: Xxxxxxx X. Xxxxxx
------------------
[ ] Secretary [X] Treasurer
or [ ] Chief Financial Officer
(Check Title Above)
AFFIX CORPORATE SEAL HERE
GUARANTOR:
By their signatures hereinbelow, Tenant and
Guarantor(s) acknowledge and agree that, as
a material element of the consideration for
Landlord entering into this First Amendment,
The provisions and covenants contained in
That certain Guaranty of Lease, executed by
Guarantor on September 22, 1999 (the
"Guaranty"), shall extend to and include the
provisions of this First Amendment, as if
the same had been originally incorporated
into the Lease referenced in said Guaranty.
/s/ Xxxx Xxx
---------------------------------
Mr. Xxxx Xxx, an individual
Dated: November 16, 1999
---------------------------
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EXHIBIT 1B
IMPROVEMENT CONSTRUCTION AGREEMENT
CONSTRUCTION TO BE PERFORMED BY LANDLORD WITH AN ALLOWANCE
SECTION 1. COMPLETION OF IMPROVEMENTS. Landlord, through its general contractor
("Contractor"), shall furnish and install within the Expansion Premises those
items of general construction, shown on the final Plans and Specifications
approved by Landlord and Tenant pursuant to the Schedule of Approvals below, in
compliance with all applicable codes and regulations, and complete any
construction required in the common areas of the Building when such construction
is required by or arises out of completion of the Improvements (collectively the
"Improvements").
The definition of Improvements shall include all costs associated with
completing the Tenant Improvements, including but not limited to, space
planning, design, architectural, and engineering fees, contracting, labor and
material costs, municipal fees and permit costs, and document development and/or
reproduction.
Tenant acknowledges and agrees that any change in the scope of work or
details of construction after Tenant's sign off of the finalized working
drawings shall constitute a "Tenant Change," the costs of which Tenant shall pay
pursuant to the provisions of Subsection 2 (d) hereinbelow.
SECTION 2. LANDLORD'S ALLOWANCE.
a) Tenant shall bear all costs of construction of the Improvements in
excess of the Allowance, and shall deposit such excess costs with
Landlord pursuant to the provisions of Subsection 2 (d) hereinbelow.
Landlord shall have no obligation whatsoever to commence construction of
the Improvements until such time as Tenant has deposited the excess
costs of construction, and Tenant's failure to make such deposit timely,
as required, shall be assessed against Tenant as a Tenant delay,
pursuant to the provisions contained in subsection 2 (e).
b) Landlord shall contribute a maximum sum of $35.00 per square foot of
Usable Area contained in the Expansion Premises (the "allowance") which
may solely be applied towards completion of the Improvements, and which
Landlord shall pay directly to Contractor for Tenant's account.
c) Prior to commencing construction of the Improvements, Landlord shall
submit to Tenant a written statement showing the total anticipated cost
of the Improvements, which statement shall include Contractor's
estimated charges for general conditions, overhead and profit (which
shall in no event exceed, in the aggregate, twelve percent (12%) of the
total cost of the Improvements) and an estimate of all other costs,
including a five percent (5%) administrative fee payable to the managing
agent of Landlord for supervision of completion of the construction.
Landlord shall require Contractor to obtain competitive bids from a
minimum of three (3) sub-contractors for each trade involved in the
construction of the Improvements, except with regard to any portion
affecting the Building's mechanical, electrical or plumbing systems,
which aspects shall nonetheless be required to be competitively priced.
Tenant's failure to give written approval of such statement
within five (5) working days after submission thereof shall be
conclusively deemed a disapproval of such statement, and Contractor
shall not commence the Improvements. Any delay of Tenant, after the
expiration of
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ten (10) days from receipt of Landlord's statement, to provide Landlord
with a revised scope of work and written approval of a revised cost
statement therefore shall be considered a Tenant delay, assessable
against Tenant pursuant to the Provisions of Subsection 2 (e)
hereinbelow.
d) Tenant agrees to pay Landlord within five (5) working days after receipt
of Landlord's billing for the estimated cost of all the Improvements in
excess of the Allowance and/or for the actual costs of any Tenant
Change. Tenant's failure to make such payment timely, as specified
herein, shall release Landlord from any obligation to commence or
continue construction of the Improvements, and each of Tenant's
continued failure to make payment shall be treated as a Tenant delay,
assessable against Tenant pursuant to the provisions of Subsection 2 (e)
hereinbelow.
Tenant hereby authorizes Landlord to pay Contractor interim
payments from the funds so deposited towards completion of the
Improvements, except that Landlord shall retain the sum of ten percent
(10%) of the total cost of Improvements, as revised by Tenant Changes,
if any, until such time as:
(i) Tenant has advised Landlord of its approval of completion of the
Improvements, which approval shall not be unreasonably withheld,
conditioned or delayed; or
(ii) Contractor has provided reasonable documentation that the
Improvements, pursuant to the original scope of work, have been
reasonably completed.
Within thirty (30) business days after Contractor has
reasonably completed the Improvements, Landlord shall provide
Tenant with a final statement, indicating any difference between
the estimated cost of the Improvements, the final cost of the
Improvements; any initial or interim payments made by Tenant
towards completion thereof; the amount of Allowance contributed
and the balance owing from or to Tenant. Any balance owed to
Tenant shall be returned with such statement, and any shortfall
due Landlord shall be paid within five (5) days after Tenant's
receipt of Landlord's billing.
e) Any delay caused by Tenant shall be a material breach of this Lease, and
in addition to any other remedies available to Landlord hereunder,
Tenant shall be assessed a penalty therefore, by decreasing the
Allowance in an amount equal to the daily value of Monthly Fixed Rent,
computed by dividing the Monthly Fixed Rent by 30 days, and multiplying
this figure by the total number of days Tenant failed to perform as
required hereunder.
f) Landlord and Tenant agree that if the Improvements are actually
constructed by Contractor at a cost which is less than the Allowance,
there shall be no monetary adjustment between Landlord and Tenant and
the cost savings shall accrue to the benefit of Landlord.
SECTION 3. PLANS AND SPECIFICATIONS. Tenant shall, through Landlord's architect
or space planner, provide such information and directions as are necessary to
complete the architectural and engineering Plans and Specifications required for
the construction of the Improvements. Tenant shall provide instructions to
Landlord's architect or space planner so as to meet the Schedule of Approvals
set forth in Paragraph 5 below. Notwithstanding Tenant's obligation to provide
instructions to Landlord's architect or space planner, all Plans and
Specifications referred to herein are subject to Landlord's approval, which
shall not be unreasonably withheld, conditioned or delayed.
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SECTION 4. COMPLETION OF WORK NOT INCLUDED AS IMPROVEMENTS. Any work not shown
in the final construction Plans and Specifications, including but not limited
to, telephone service, furnishings, installation of Tenant's trade fixtures or
cabinetry (collectively "Tenant Work"), shall be separately contracted and paid
for by Tenant. Tenant shall obtain Landlord's written approval of Tenant's
suppliers and contractors prior to commencement of any Tenant Work.
Landlord shall give reasonable access to Tenant's suppliers and
contractors so as to achieve timely completion of any Tenant Work.
Notwithstanding Landlord's obligation to provide such access, completion of all
Tenant Work shall be subject to Landlord's supervision, policies and procedures,
and shall be scheduled with Contractor and completed in such as manner as to not
unreasonably hinder or delay completion of the Improvements.
SECTION 5. SCHEDULE OF APPROVALS. Subject to Force Majeure, Tenant shall comply
with the following Schedule of Approvals:
EVENT TIME
----- ----
A) Deadline by which Tenant shall have met Completed
with Landlord's space planner.
B) Deadline for space plan approval. November 1, 1999
C) Deadline for notifying Landlord of Tenant's November 8, 1999
selection of finishes and materials.
D) Deadline for Tenant's approval of final November 15, 1999
Plans, Specifications and working drawings.
E) Deadline for Tenant's approval of Landlord's November 22, 1999
cost estimate of Improvements.
SECTION 6. CONSTRUCTION INSURANCE REQUIREMENTS. Contractor, at its sole expense,
shall obtain and maintain public liability and workmen's compensation insurance
adequate to protect Tenant and Landlord from and against any and all liability
for death or injury to persons or damage to property caused in or about the
Expansion Premises by reason of completion of the Improvements.
Tenant shall, at Tenant's sole expense, either obtain and maintain
public liability and workmen's compensation insurance adequate to fully protect
Landlord as well as Tenant from and against any and all liability for death or
injury to persons or damage to property caused in or about the Expansion
Premises by reason completion of any Tenant Work, or shall cause Tenant's
contractors or subcontractors to provide such insurance.
SECTION 7. COMPLETION OF PUNCH LIST. Within twenty (20) days after occupancy of
the Expansion Premises, Tenant shall submit to Landlord a "punch list" of Tenant
Improvement items that require repair or correction by Landlord. Provided that
said items were included within the original plans and/or part of
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change orders to such plans approved by Landlord in writing, Landlord shall
diligently proceed to correct those items within thirty (30) days of receipt of
Tenant's list.
SECTION 8. CONSTRUCTION WARRANTIES. Landlord agrees that, subject to Tenant's
performance hereunder, Landlord shall complete the Improvements, and shall
correct any construction defects about which Tenant notifies Landlord in writing
within one (1) year following the Commencement Date. Tenant's right to repair of
any defect shall be extended for such longer period as may be covered by
warranties provided by Contractor or subcontractor(s).
LANDLORD: TENANT:
XXXXXXX XXXXXX REALTY FUND 1997, XXXX XXX MEDIA, INC.,
A California limited partnership a Delaware corporation
By: XXXXXXX, XXXXXX & COMPANY, By: /s/ GILL CHAMPION
--------------------------------- ------------------------------
its agent
Signer's Name: Gill Champion
--------------------
[ ] President [X] Vice President
or [ ] Chief Executive Officer
(Check Title Above)
By: /s/ XXXXXXX XXXXXX
---------------------------------
Xxxxxxx Xxxxxx and
Dated: By: /s/ XXXXXXX X. XXXXXX
----------------------------- -------------------------------
Signer's Name: Xxxxxxx X. Xxxxxx
--------------------
[ ] Secretary [X] Treasurer
or [ ] Chief Financial Officer
(Check Title Above)
AFFIX CORPORATE SEAL HERE
Dated:
----------------------------
GUARANTOR:
/s/ XXXX XXX
----------------------------------
Mr. Xxxx Xxx, an individual
Dated:
----------------------------
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