EXHIBIT 10.1
FOURTH AMENDMENT TO LEASE
-------------------------
(VON KARMAN CORPORATE CENTER)
THIS FOURTH AMENDMENT TO LEASE ("Fourth Amendment") is made and entered
into as of the 29th day of July, 1998, by and between ARDEN REALTY FINANCE IV,
L.L.C., a Delaware limited liability company ("Landlord") and INTERPLAY
ENTERTAINMENT CORP., a Delaware corporation, as successor-in-interest to
Interplay Productions ("Tenant").
R E C I T A L S :
----------------
A. AETNA LIFE INSURANCE COMPANY OF ILLINOIS, an Illinois corporation
("Original Landlord") and INTERPLAY PRODUCTIONS, a California corporation
("Interplay Productions") entered into that certain Office Building Lease dated
as of September 8, 1995 (the "Original Lease") as amended by that certain First
Amendment to Lease dated as of December 1, 1995 by and between Original Landlord
and Interplay Productions ("First Amendment"), that certain Second Amendment to
Lease dated as of January 5, 1996 by and between Original Landlord and Interplay
Productions ("Second Amendment") and that certain Third Amendment to Lease dated
as of June 30, 1997 by and between THE STANDARD FIRE INSURANCE COMPANY, a
Connecticut corporation, as successor to Original Landlord ("Standard Fire") and
Interplay Productions whereby Original Landlord and Standard Fire leased to
Interplay Productions and Interplay Productions leased from Original Landlord
and Standard Fire certain office space located in those certain buildings
located and addressed at 00000 Xxx Xxxxxx Xxxxxx ("Xxxxxxxx Xxxxx"), 00000 Xxx
Xxxxxx Avenue ("Building Four") and 16795 Xxx Xxxxxx Avenue ("Building Five") in
Irvine, California (collectively, the "Buildings"). The Original Lease, as
amended by the First Amendment, the Second Amendment and the Third Amendment may
be referred to herein as the "Lease." Landlord is the successor-in-interest to
Standard Fire and Tenant is the successor-in-interest to Interplay Productions.
B. By this Fourth Amendment, Landlord and Tenant desire to relocate
portions of the Existing Premises and to otherwise modify the Lease as provided
herein.
C. Unless otherwise defined herein, capitalized terms as used herein shall
have the same meanings as given thereto in the Original Lease.
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
A G R E E M E N T :
------------------
1. The Existing Premises. Landlord and Tenant hereby agree that pursuant
---------------------
to the Lease, Landlord currently leases to Tenant and Tenant currently leases
from Landlord (i) that certain space on the second (2nd) floor of Building Three
containing 23,456 rentable square feet as outlined on Exhibit "A" to the Second
Amendment (the "Building Three Space"), (ii) all of Building Four consisting of
50,379 rentable square feet (the "Building Four Space") and (iii) the entire
second (2nd) floor of Building Five consisting of 27,490 rentable square feet as
shown on Exhibit "A-II" to the Original Lease (the "Building Five Space"), for a
total of 101,325 rentable square feet (collectively, the "Existing Premises").
2. Phase 1 Relocation. That certain portion of the Building Three Space
------------------
consisting of a total of approximately 11,977 rentable square feet as shown on
the floor plan attached hereto as Exhibit "A-1" may be referred to herein as the
"Phase 1 Surrender Space." That certain portion of the Building Four Space
located on the ground floor of Building Four and consisting of 8,275 rentable
square feet as outlined on Exhibit "A-2" may be referred to herein as the
"Building
Initials:
--------
--------
Four Improvement Space." Tenant shall construct improvements within
the Building Four Improvement Space pursuant to the Tenant Work Letter attached
hereto as Exhibit "B" and made a part hereof. Tenant agrees to vacate the Phase
1 Surrender Space and to surrender possession of the Phase 1 Surrender Space to
Landlord in accordance with Section 11(a) of the Original Lease on or before the
date ("Phase 1 Surrender Date") which is the earlier of (i) Substantial
Completion of the Improvements in the Building Four Improvement Space, or (ii)
September 30, 1998. Upon the Phase 1 Surrender Date, Tenant shall have no
further rights to occupy the Phase 1 Surrender Space and the Lease shall
terminate as to the Phase 1 Surrender Space upon the Phase 1 Surrender Date,
except that Tenant's obligation to pay Monthly Base Rent and Operating Expense
payments for the Phase 1 Surrender Space shall continue beyond the Phase 1
Surrender Date until December 31, 1998. Tenant acknowledges that from and after
the Phase 1 Surrender Date, Landlord shall be entitled to market the Phase 1
Surrender Space to a third party and that Tenant shall not be entitled to share
in any rental proceeds received by Landlord in connection with the leasing of
such space, nor shall Tenant be required to share in any expenses of obtaining
such third party tenant(s).
3. Phase 2 Relocation. That certain space on the ground floor of
------------------
Building Five consisting of approximately 8,000 rentable square feet (the exact
number of rentable square feet to be determined in good faith by Landlord and
Tenant in accordance with the Standard Method for Measuring Floor Area in Office
Buildings ANSI/BOMA Z65.1-1996, and which may be increased upon request of
Tenant prior to the existing tenant's vacation of such space) consisting of the
portion of Suite 100 of Building Five as such portion is reasonably designated
by Landlord and reasonably approved by Tenant on or before the date the existing
tenant vacates such space, with such designation to be made in a manner which
maintains the remaining portion of Suite 100 in a reasonably leasable condition,
may be referred to herein as the "Expansion Space." Upon the date the existing
tenant of the Expansion Space vacates such space, Tenant shall renovate the
Improvements therein pursuant to the Tenant Work Letter attached hereto as
Exhibit "B." Upon the date ("Phase 2 Effective Date") which is the earlier of
(i) the date Tenant commences business operations from the Expansion Space, or
(ii) the date which is sixty (60) days after the date that the existing tenant
vacates the Expansion Space (which sixty (60) day period shall be subject to
extension pursuant to Section 5.2 of Exhibit "B" for any Landlord Delays),
Tenant shall lease from Landlord and Landlord shall lease to Tenant the
Expansion Space and Tenant shall vacate and surrender the remaining Building
Three Space to Landlord in accordance with Section 11(a) of the Original Lease
and the Lease shall terminate as to the remaining Building Three Space.
Accordingly, effective upon the later of (1) January 1, 1999, or (2) the Phase 2
Effective Date, the Existing Premises shall be modified to consist of the
Building Four Space, the Building Five Space, and the Expansion Space for a
total of approximately 85,869 rentable square feet (subject to adjustment upon
determination of the exact number of rentable square feet of the Expansion
Space, and which total space may be collectively referred to herein as the "New
Premises"). If Tenant fails to vacate the Phase 1 Surrender Space on or before
the Phase 1 Surrender Date, or if Tenant fails to vacate the remaining Building
Three Space on or before the Phase 2 Effective Date, the provisions of Section
11(b) of the Original Lease shall apply to the space which is the subject of
such holdover at Landlord's sole discretion.
4. Rent.
----
4.1 Monthly Base Rent. Subject to the last sentence of this Section
-----------------
4.1 below, Tenant's obligation to pay Monthly Base Rent shall remain unchanged
until the Phase 2 Effective Date. However, effective as of the Phase 2
Effective Date, Monthly Base Rent for the New Premises shall be as follow:
Monthly Base Rent Per
Period Monthly Base Rent* Rentable Square Foot
------ ------------------ --------------------
Phase 2 Effective Date - $111,629.70 $1.30
6/14/2001
6/15/2001 - 12/14/2003 $115,923.15 $1.35
12/15/2003 - 6/14/2006 $128,803.50 $1.50
Initials:
--------
--------
-2-
*Subject to adjustment upon determination of the exact number of rentable square
feet of the Expansion Space.
Notwithstanding the foregoing provisions of this Section 4.1, Landlord
and Tenant acknowledge that the foregoing chart assumes that the Phase 2
Effective Date shall occur on January 1, 1999. If, however, (i) the Phase 2
Effective Date occurs prior to January 1, 1999, then in addition to the Monthly
Base Rent specified in this chart above, during the period from the Phase 2
Effective Date through and including December 31, 1998, Monthly Base Rent shall
be increased by Fifteen Thousand Five Hundred Seventy and 10/100 Dollars
($15,570.10) per month (i.e., $1.30 per rentable square foot of the Phase 1
Surrender Space) and (ii) the Phase 2 Effective Date occurs after January 1,
1999, then Monthly Base Rent payable by Tenant from January 1, 1999 through and
including the day immediately preceding the Phase 2 Effective Date shall be
reduced by Fifteen Thousand Five Hundred Seventy and 10/100 Dollars ($15,570.10)
per month.
4.2 Additional Monthly Base Rent. In addition to the then Monthly
----------------------------
Base Rent payable by Tenant pursuant to Section 4.1 above, (i) effective as of
the first day of the calendar month after Landlord has notified Tenant that
Landlord has funded fifty percent (50%) of the Building Four Allowance, and
continuing for a total of sixty (60) consecutive calendar months, Monthly Base
Rent shall be increased by the amount calculated to fully amortize the Building
Four Allowance utilized by Tenant over said sixty (60) month period, based upon
equal monthly payments of principal and interest, with interest imputed on the
outstanding principal balance at the rate of twelve percent (12%) per annum, and
(ii) effective as of the first day of the calendar month after Landlord has
notified Tenant that Landlord has funded fifty percent (50%) of the Expansion
Space Allowance, and continuing for a total of sixty (60) consecutive calendar
months, Monthly Base Rent shall increase by the amount calculated to fully
amortize the Expansion Space Allowance utilized by Tenant over said sixty (60)
month period, based upon equal monthly payments of principal and interest, with
interest imputed on the outstanding principal balance at the rate of twelve
percent (12%) per annum.
5. Tenant's Percentage Share and Base Year. Notwithstanding anything to
---------------------------------------
the contrary in the Lease, effective upon the Phase 2 Effective Date, Tenant's
Percentage shall be reduced to nineteen point zero two percent (19.02%), subject
to adjustment upon determination of the exact number of rentable square feet of
the Expansion Space. The Base Year shall remain the calendar year 1996
throughout the Term of Tenant's Lease (as amended by this Fourth Amendment).
6. Tenant Improvements. Tenant Improvements in the Building Four
-------------------
Improvement Space and in the Expansion Space shall be installed and constructed
in accordance with the terms of the Tenant Work Letter attached hereto as
Exhibit "B" and made a part hereof.
7. Parking. Effective as of the Phase 2 Effective Date and continuing
-------
throughout the Term of Tenant's Lease (as amended by this Fourth Amendment) the
number of unreserved parking passes which Tenant is entitled to use shall be
reduced to three hundred forty-three (343), which number shall be adjusted upon
determination of the exact number of rentable square feet of the Expansion Space
so that the total number of unreserved parking passes to which Tenant is
entitled shall be four (4) per 1,000 rentable square feet of the New Premises.
Tenant's use of such parking passes shall be in accordance with, and subject to,
all provisions of Section 32 of the Original Lease and the Rules and Regulations
regarding parking contained in Exhibit "H" to the Original Lease.
8. Expansion Rights. Sections 2(e), 2(g), 3(b)(ii), 3(b)(iii), and
----------------
3(b)(iv) of the Original Lease are hereby deleted and shall be of no force or
effect. In lieu thereof, Landlord hereby grants to Tenant a right of first
offer with respect to all of Building Three, the remaining space in Building
Five and all of that certain building located and addressed at 16775 Xxx Xxxxxx
Avenue ("Building Six") (collectively, the "First Offer Space").
Notwithstanding the foregoing (i) such first offer right of Tenant shall
commence only following the expiration or earlier termination of any then
existing lease pertaining to the First Offer Space (collectively, the "Superior
Leases"), including any renewal or extension of such existing lease, whether or
not such renewal or extension is pursuant to an express written provision in
such lease, and regardless of whether any such renewal or extension is
consummated pursuant to a lease amendment or a new lease, and (ii) such first
offer right shall be subordinate and secondary to all rights of
Initials:
--------
--------
-3-
expansion, first refusal, first offer or similar rights granted as of the date
of this Fourth Amendment to I T with respect to Suite 150 in Building 6 (the
rights described in items (i) and (ii), above to be known collectively as
"Superior Rights"). Tenant's right of first offer shall be on the terms and
conditions set forth in this Section 8.
8.1 Procedure for Offer. With respect to First Offer Space which is
-------------------
occupied, Landlord shall notify Tenant (the "First Offer Notice") from time to
time when Landlord determines that Landlord shall commence the marketing of any
First Offer Space because such space shall become available for lease to third
parties, where no holder of a Superior Right desires to lease such space. With
respect to First Offer Space which is vacant, Landlord shall deliver the First
Offer Notice to Tenant when Landlord receives a proposal or request for proposal
for such space which Landlord would seriously consider. In either case, the
First Offer Notice shall describe the space so offered to Tenant and shall set
forth Landlord's proposed economic terms and conditions applicable to Tenant's
lease of such space (collectively, the "Economic Terms") including, without
limitation, monthly base rent, any contribution by Landlord to the cost of
renovation of leasehold improvements and the term of Tenant's lease of such
space. Landlord's determination of the Economic Terms shall be based upon the
then-current market rate for similarly situated space in Irvine, California.
Notwithstanding the foregoing, Landlord's obligation to deliver the First Offer
Notice shall not apply after June 14, 2005 unless Tenant has extended the term
of the Lease (as amended by this Fourth Amendment) pursuant to Section 3(c) of
the Original Lease (as modified by Section 9 below).
8.2 Procedure for Acceptance. If Tenant wishes to exercise Tenant's
------------------------
right of first offer with respect to the space described in the First Offer
Notice, then within five (5) business days after delivery of the First Offer
Notice to Tenant, Tenant shall deliver notice to Landlord of Tenant's intention
to exercise its right of first offer with respect to the entire space described
in the First Offer Notice. If concurrently with Tenant's exercise of the first
offer right, Tenant notifies Landlord that it does not accept the Economic Terms
set forth in the First Offer Notice, Landlord and Tenant shall, for a period of
fifteen (15) days after Tenant's exercise, negotiate in good faith to reach
agreement as to such Economic Terms. If Tenant does not so notify Landlord that
it does not accept the Economic Terms set forth in the First Offer Notice
concurrently with Tenant's exercise of the first offer right, the Economic Terms
shall be as set forth in the First Offer Notice. In addition, if Tenant does
not exercise its right of first offer within the five (5) business day period,
or, if Tenant exercises its first offer right but timely objects to Landlord's
determination of the Economic Terms and if Landlord and Tenant are unable to
reach agreement on such Economic Terms within said fifteen (15) day period, then
Landlord shall be free to lease the space described in the First Offer Notice to
anyone to whom Landlord desires on any terms Landlord desires ; provided,
however, that if Landlord intends to enter into a lease upon Economic Terms
which are more favorable to a third (3rd) party tenant than those Economic Terms
proposed by Landlord in the First Offer Notice, Landlord shall first deliver
written notice to Tenant ("Second Chance Notice") providing Tenant with the
opportunity to lease the First Offer Space on such more favorable Economic
Terms. Tenant's failure to elect to lease the First Offer Space upon such more
favorable Economic Terms by written notice to Landlord within three (3) business
days after Tenant's receipt of such Second Chance Notice from Landlord shall be
deemed to constitute Tenant's election not to lease such space upon such more
favorable Economic Terms, in which case Landlord shall be entitled to lease such
space to any third (3rd) party on terms no more favorable to the third (3rd)
party than those set forth in the Second Chance Notice. If Landlord leases any
First Offer Space to a third (3rd) party tenant (subject to the terms and
conditions of this Article 8 above), and if such third party lease terminates or
expires during the period that Tenant's right of first offer remains in effect
(as specified in the last sentence of Section 8.1 above), the process described
in this Article 8 shall repeat. Notwithstanding anything to the contrary
contained herein, Tenant must elect to exercise its right of first offer, if at
all, with respect to all of the space offered by Landlord to Tenant at any
particular time, and Tenant may not elect to lease only a portion thereof.
8.3 Lease of First Offer Space. If Tenant timely exercises Tenant's
--------------------------
right to lease the First Offer Space as set forth herein, Landlord and Tenant
shall execute an amendment adding such First Offer Space to the Lease upon the
same non-economic terms and conditions as applicable to the New Premises, and
the economic terms and conditions as provided in this
Initials:
--------
--------
-4-
Section 8. Tenant shall commence payment of rent for the First Offer Space and
the Lease Term of the First Offer Space shall commence upon the date of delivery
of such space to Tenant.
8.4 No Defaults. The rights contained in this Section 8 shall be
-----------
personal to the Tenant named in the first grammatical paragraph of this Fourth
Amendment ("Referenced Tenant"), and may only be exercised by the
Referenced Tenant or any "Affiliated Assignee" (and not any other assignee,
sublessee or other transferee). The term "Affiliated Assignee" shall mean any
assignee of Tenant's entire interest in the Lease (as amended by this Fourth
Amendment) where such assignment is a "Permitted Transfer" (as that term is
defined in Section 24(c) of the Original Lease). Tenant shall not have the
right to lease First Offer Space as provided in this Section 8 if, as of the
date of the First Offer Notice, or, at Landlord's option, as of the scheduled
date of delivery of such First Offer Space to Tenant, Tenant is in default under
the Lease (as amended by this Fourth Amendment).
9. Extension Option. Tenant shall be entitled to extend the term of the
----------------
Lease (as amended by this Fourth Amendment) for a period of five (5) years in
accordance with, and subject to the terms and conditions of Section 3(c) of the
Original Lease; provided, however, the words "and specifying the length of the
extension" shall be deleted from the end of the second (2nd) sentence of Section
3(c) of the Original Lease.
10. Notice of Lease Term Dates. Landlord may deliver to Tenant a
--------------------------
commencement letter in a form substantially similar to that attached hereto as
Exhibit "C" and made a part hereof at any time after the Phase 2 Effective Date.
Tenant agrees to execute and return to Landlord said commencement letter within
five (5) days after Tenant's receipt thereof.
11. Brokers. Each party represents and warrants to the other that no
-------
broker, agent or finder negotiated or was instrumental in negotiating or
consummating this Fourth Amendment. Each party further agrees to defend,
indemnify and hold harmless the other party from and against any claim for
commission or finder's fee by any entity who claims or alleges that they were
retained or engaged by the first party or at the request of such party in
connection with this Fourth Amendment.
12. Defaults. Tenant hereby represents and warrants to Landlord that, as
--------
of the date of this Fourth Amendment, Tenant is in full compliance with all
terms, covenants and conditions of the Lease and that there are no breaches or
defaults under the Lease by Landlord or Tenant, and that Tenant knows of no
events or circumstances which, given the passage of time, would constitute a
default under the Lease by either Landlord or Tenant.
13. Signing Authority. Concurrently with Tenant's execution of this
-----------------
Fourth Amendment, Tenant shall provide to Landlord a copy of a resolution of the
Board of Directors of Tenant authorizing the execution of this Fourth Amendment
on behalf of such corporation, which copy of resolution shall be duly certified
by the secretary or an assistant secretary of the corporation to be a true copy
of a resolution duly adopted by the Board of Directors of said corporation and
shall be in the form of Exhibit "D" or in some other form reasonably acceptable
to Landlord.
14. Assignment and Subletting. The parties hereby agree that Section
-------------------------
24(b) of the Original Lease shall not apply so long as Tenant is a publicly-held
corporation.
15. No Further Modification. Except as set forth in this Fourth
-----------------------
Amendment, all of the terms and provisions of the Lease shall apply and shall
remain unmodified and in full force and effect and all references to the "Lease"
shall refer to the Lease as amended by this Fourth Amendment.
Initials:
--------
--------
-5-
IN WITNESS WHEREOF, this Fourth Amendment has been executed as of the day
and year first above written.
"Landlord":
ARDEN REALTY FINANCE IV, L.L.C.,
a Delaware limited liability company
By: /s/ XXXXXX X. XXXXXXX
------------------------------------
Xxxxxx X. Xxxxxxx
Its: President and COO
By:
------------------------------------
Its:
------------------------------------
"Tenant":
INTERPLAY ENTERTAINMENT CORPORATION,
a Delaware corporation
By: /s/ XXXXX XXXXXXXXXX
------------------------------------
Print Name: Xxxxx Xxxxxxxxxx
-----------------------------
Its: President
-----------------------------
By: /s/ XXXXX X. XXXXXX
------------------------------------
Print Name: Xxxxx X. Xxxxxx
-----------------------------
Its: Chief Financial Officer
-----------------------------
Initials:
--------
--------
-6-
EXHIBIT "A-1"
-------------
OUTLINE OF PHASE 1 SURRENDER SPACE
----------------------------------
[DIAGRAM OF SURRENDER SPACE]
EXHIBIT "A-1" - Page 1
Initials:
--------
--------
-7-
EXHIBIT "A-2"
-------------
OUTLINE OF BUILDING FOUR IMPROVEMENT SPACE
------------------------------------------
[DIAGRAM OF BUILDING FOUR IMPROVEMENT SPACE]
EXHIBIT "A-2" - Page 1
Initials: _________
_________
EXHIBIT "B"
-----------
TENANT WORK LETTER
------------------
This Tenant Work Letter shall set forth the terms and conditions relating
to the renovation of the tenant improvements in the Building Four Improvement
Space and the Expansion Space. The Building Four Improvement Space and the
Expansion Space may be collectively referred to herein as the "Improvement
Space." This Tenant Work Letter is essentially organized chronologically and
addresses the issues of the renovation of the Improvement Space, in sequence, as
such issues will arise.
SECTION 1
---------
LANDLORD'S INITIAL CONSTRUCTION IN THE IMPROVEMENT SPACE
--------------------------------------------------------
Landlord has constructed, at its sole cost and expense, the base, shell and
core (i) of the Improvement Space, and (ii) of the floor of the Building on
which the Improvement Space is located (collectively, the "Base, Shell and
Core"). Tenant has inspected and hereby approves the condition of the Base,
Shell and Core and the Improvement Space, and agrees that the Base, Shell and
Core and the Improvement Space shall be delivered to Tenant in their current
"as-is" condition. The improvements to be renovated in the Improvement Space
shall be designed and constructed pursuant to this Tenant Work Letter.
SECTION 2
---------
IMPROVEMENTS
------------
2.1 Improvement Allowance. Tenant shall be entitled to a one-time
---------------------
improvement allowance (the "Improvement Allowance ") in the amount of Fifteen
Dollars ($15.00) per rentable square foot of the Building Four Improvement Space
(the "Building Four Allowance") and Ten Dollars ($10.00) per rentable square
foot of the Expansion Space (the "Expansion Space Allowance") for the costs
relating to the initial design and construction of Tenant's improvements which
are permanently affixed to the applicable Improvement Space (the
"Improvements"). In no event shall Tenant be entitled to utilize any portion of
the Building Four Allowance for the improvement of any space other than the
Building Four Improvement Space and in no event shall Tenant be entitled to
utilize any portion of the Expansion Space Allowance for the improvement of any
space other than the Expansion Space. In addition, in no event shall Landlord be
obligated to make disbursements pursuant to this Tenant Work Letter in a total
amount which exceeds the Improvement Allowance and in no event shall Tenant be
entitled to any credit for any unused portion of the Improvement Allowance not
used by Tenant by the date which is three (3) months after the Phase 2 Effective
Date.
2.2 Disbursement of the Improvement Allowance. Except as otherwise set
-----------------------------------------
forth in this Tenant Work Letter, the Improvement Allowance shall be disbursed
by Landlord pursuant to this Section 2.2 for costs related to the construction
of the Improvements and for the following items and costs (collectively, the
"Improvement Allowance Items "): (i) payment of the fees of the "Architect" and
the "Engineers," as those terms are defined in Section 3.1 of this Tenant Work
Letter, and payment of the fees incurred by, and the cost of documents and
materials supplied by, Landlord and Landlord's consultants in connection with
the preparation and review of the "Construction Drawings," as that term is
defined in Section 3.1 of this Tenant Work Letter; (ii) the cost of permits,
construction supervision fees; (iii) the cost of any changes in the Base, Shell
and Core required by the Construction Drawings; and (iv) the cost of any changes
to the Construction Drawings or Improvements required by applicable building
codes (the "Code"). During the construction of the Improvements, Landlord
shall make monthly disbursements of the Improvement Allowance for Improvement
Allowance Items for the benefit of Tenant and shall authorize the release of
monies for the benefit of Tenant as follows.
EXHIBIT "B" - Page 1
Initials: _________
_________
2.2.1 Monthly Disbursements. On or before the first day of each
---------------------
calendar month, during the construction of the Improvements (or such other date
as Landlord may designate), Tenant shall deliver to Landlord: (i) a request for
payment of the "Contractor," as that term is defined in Section 4.1 of this
Tenant Work Letter, approved by Tenant, in a form to be provided by Landlord,
showing the schedule, by trade, of percentage of completion of the Improvements
in the applicable Improvement Space, detailing the portion of the work completed
and the portion not completed; (ii) invoices from all of "Tenant's Agents," as
that term is defined in Section 4.2 of this Tenant Work Letter, for labor
rendered and materials delivered to the applicable Improvement Space; (iii)
executed mechanic's lien releases from all of Tenant's Agents which shall comply
with the appropriate provisions, as reasonably determined by Landlord, of
California Civil Code Section 3262(d); and (iv) all other information reasonably
requested by Landlord. Tenant's request for payment shall be deemed Tenant's
acceptance and approval of the work furnished and/or the materials supplied as
set forth in Tenant's payment request. Within thirty (30) days thereafter,
Landlord shall deliver a check to Tenant in payment of the lesser of: (A) the
amounts so requested by Tenant, as set forth in this Section 2.2.1, above, less
a ten percent (10%) retention (the aggregate amount of such retentions to be
known as the "Final Retention"), and (B) the balance of any remaining available
portion of the Improvement Allowance (not including the Final Retention),
provided that Landlord does not dispute any request for payment based on non-
compliance of any work with the "Approved Working Drawings," as that term is
defined in Section 3.4 below, or due to any substandard work. Landlord's
payment of such amounts shall not be deemed Landlord's approval or acceptance of
the work furnished or materials supplied as set forth in Tenant's payment
request.
2.2.2. Final Retention. Subject to the provisions of this Tenant
---------------
Work Letter, a check for the Final Retention payable to Tenant shall be
delivered by Landlord to Tenant following the completion of construction of the
applicable Improvement Space, within thirty (30) days after (i) Tenant delivers
to Landlord properly executed mechanics lien releases in compliance with both
California Civil Code Section 3262(d)(2) and either Section 3262(d)(3) or
Section 3262(d)(4), and (ii) Architect delivers to Landlord a certificate, in a
form reasonably acceptable to Landlord, certifying that the construction of the
Improvements in the applicable Improvement Space has been substantially
completed. However, if Landlord determines that substandard work exists which
adversely effects the mechanical, electrical, plumbing, heating, ventilating and
air conditioning, life-safety or other systems of the Building, the curtain wall
of the Building, the structure or exterior appearance of the Building, or any
other tenant's use of such other tenant's leased premises in the Building,
Landlord shall be entitled to withhold the Final Retention until the Contractor
corrects such items to Landlord's reasonable satisfaction.
2.2.3 Other Terms. Landlord shall only be obligated to make
-----------
disbursements from the Improvement Allowance to the extent costs are incurred by
Tenant for Improvement Allowance Items. All Improvement Allowance Items for
which the Improvement Allowance has been made available shall be deemed
Landlord's property.
2.3 Standard Tenant Improvement Package. Landlord has established
-----------------------------------
specifications (the "Specifications ") for the Building standard components to
be used in the construction of the Improvements in the Improvement Space
(collectively, the "Standard Improvement Package"), which Specifications are
available upon request. The quality of Improvements shall be equal to or of
greater quality than the quality of the Specifications, provided that Landlord
may, at Landlord's option, require the Improvements to comply with certain
Specifications.
SECTION 3
---------
CONSTRUCTION DRAWINGS
---------------------
3.1 Selection of Architect/Construction Drawings. The procedures
--------------------------------------------
described in this Section 3 and in Section 4 below shall apply separately with
respect to the improvement of the Building Four Improvement Space and the
Expansion Space (i.e., separate Construction Drawings shall be prepared for each
such space). Tenant shall retain an architect/space planner designated by Tenant
and reasonably approved by Landlord (the "Architect ") to prepare the
"Construction Drawings," as that term is defined in this Section 3.1. Tenant
shall also retain the engineering consultants designated by Tenant and
reasonably approved by Landlord (the
EXHIBIT "B" - Page 2
Initials: _________
_________
"Engineers") to prepare all plans and engineering working drawings relating to
the structural, mechanical, electrical, plumbing, HVAC and lifesafety work of
the Tenant Improvements. The plans and drawings to be prepared by Architect and
the Engineers hereunder shall be known collectively as the "Construction
Drawings." All Construction Drawings shall comply with the drawing format and
specifications as reasonably determined by Landlord, and shall be subject to
Landlord's reasonable approval. Tenant and Architect shall verify, in the field,
the dimensions and conditions as shown on the relevant portions of the base
building plans, and Tenant and Architect shall be solely responsible for the
same, and Landlord shall have no responsibility in connection therewith.
Landlord's review of the Construction Drawings as set forth in this Section 3,
shall be for its sole purpose and shall not imply Landlord's review of the same,
or obligate Landlord to review the same, for quality, design, Code compliance or
other like matters. Accordingly, notwithstanding that any Construction Drawings
are reviewed by Landlord or its space planner, architect, engineers and
consultants, and notwithstanding any advice or assistance which may be rendered
to Tenant by Landlord or Landlord's space planner, architect, engineers, and
consultants, Landlord shall have no liability whatsoever in connection therewith
and shall not be responsible for any omissions or errors contained in the
Construction Drawings.
3.2 Final Space Plan. Tenant and the Architect shall prepare the final
----------------
space plan for Improvements in the applicable Improvement Space (collectively,
the "Final Space Plan"), which Final Space Plan shall include a layout and
designation of all offices, rooms and other partitioning, their intended use,
and equipment to be contained therein, and shall deliver the Final Space Plan to
Landlord for Landlord's approval, which approval shall not be unreasonably
withheld or delayed. Landlord shall approve or disapprove any draft of the Final
Space Plan within five (5) business days after Landlord receipt thereof.
3.3 Final Working Drawings. Tenant, the Architect and the Engineers shall
----------------------
complete the architectural and engineering drawings for the applicable
Improvement Space, and the final architectural working drawings in a form which
is complete to allow subcontractors to bid on the work and to obtain all
applicable permits (collectively, the "Final Working Drawings") and shall
submit the same to Landlord for Landlord's approval, which approval shall not be
unreasonably withheld or delayed. Landlord shall approve or disapprove any draft
of the Final Working Drawings within five (5) business days after Landlord
receipt thereof.
3.4 Permits. The Final Working Drawings shall be approved by Landlord
-------
(the "Approved Working Drawings") prior to the commencement of the construction
of the Improvements. Tenant shall cause the Architect to immediately submit the
Approved Working Drawings to the appropriate municipal authorities for all
applicable building permits necessary to allow "Contractor," as that term is
defined in Section 4.1, below, to commence and fully complete the construction
of the Improvements (the "Permits"). No changes, modifications or alterations
in the Approved Working Drawings may be made without the prior written consent
of Landlord, which consent shall not be unreasonably withheld or delayed.
3.5 Time Deadlines. Tenant shall use commercially reasonable efforts and
--------------
good faith due diligence to cooperate with the Architect, the Engineers, and
Landlord to complete all phases of the Construction Drawings and the permitting
process and to receive the permits as soon as commercially practicable after the
execution of the Fourth Amendment, and, in that regard, shall meet with Landlord
on a scheduled basis to be determined by Landlord, to discuss Tenant's progress
in connection with the same.
SECTION 4
---------
CONSTRUCTION OF THE IMPROVEMENTS
--------------------------------
4.1 Contractor. The contractor which shall construct the Improvements
----------
shall be a contractor designated by Tenant and approved by Landlord, such
approval not to be unreasonably withheld or delayed. The contractor selected may
be referred to herein as the "Contractor".
4.2 Tenant's Agents. All subcontractors, laborers, materialmen, and
---------------
suppliers used by the Tenant (such subcontractors, laborers, materialmen, and
suppliers, and the Contractor to be known collectively as "Tenant's Agents")
must be approved in writing by Landlord, which
EXHIBIT "B" - Page 3
Initials: _________
_________
approval shall not be unreasonably withheld or delayed. If Landlord does not
approve any of the Tenant's proposed subcontractors, laborers, materialmen or
suppliers, the Tenant shall submit other proposed subcontractors, laborers,
materialmen or suppliers for Landlord's written approval. Notwithstanding the
foregoing, the Tenant shall be required to utilize subcontractors approved by
Landlord for any mechanical, electrical, plumbing, life-safety, sprinkler,
structural and air-balancing work.
4.3 Construction of Improvements by Contractor.
------------------------------------------
Tenant shall independently retain, in accordance with Section 4.1
above, the Contractor to construct the Improvements in accordance with the
Approved Working Drawings. Should the cost related to the construction of the
Improvements and the Improvement Allowance Items exceed the Building Four
Allowance or the Expansion Space Allowance (as applicable) Tenant shall be
responsible for such excess.
4.4 Indemnification & Insurance.
---------------------------
4.4.1 Indemnity. Tenant's indemnity of Landlord as set forth in
---------
Section 18.5 of the Original Lease shall also apply with respect to any and all
costs, losses, damages, injuries and liabilities related in any way to any act
or omission of Tenant or Tenant's Agents.
4.4.2 Requirements of Tenant's Agents. Each of Tenant's Agents shall
-------------------------------
guarantee to Tenant and for the benefit of Landlord that the portion of the
Improvements for which it is responsible shall be free from any defects in
workmanship and materials for a period of not less than one (1) year from the
date of completion thereof. All such warranties or guarantees as to materials
or workmanship of or with respect to the Improvements shall be contained in the
contract or subcontract and shall be written such that such guarantees or
warranties shall inure to the benefit of both Landlord and Tenant, as their
respective interests may appear, and can be directly enforced by either. Tenant
covenants to give to Landlord any assignment or other assurances which may be
necessary to effect such right of direct enforcement.
4.4.3 Insurance Requirements.
----------------------
4.4.3.1 General Coverages. All of Tenant's Agents shall carry
-----------------
worker's compensation insurance covering all of their respective employees, and
shall also carry public liability insurance, including property damage, all with
limits, in form and with companies as are required to be carried by Tenant as
set forth in Article 19 of the Original Lease.
4.4.3.2 Special Coverages. Tenant shall carry "Builder's All
-----------------
Risk" insurance in an amount approved by Landlord covering the construction of
the Improvements, and such other insurance as Landlord may reasonably require.
Such insurance shall be in amounts and shall include such extended coverage
endorsements as may be reasonably required by Landlord.
4.4.3.3 General Terms. Certificates for all insurance carried
-------------
pursuant to this Section 4.4.3.3 shall be delivered to Landlord before the
commencement of construction of the Improvements and before the Contractor's
equipment is moved onto the site. In the event that the Improvements are
damaged by any cause during the course of the construction thereof, Tenant shall
immediately repair the same at Tenant's sole cost and expense.
SECTION 5
---------
COMPLETION OF THE IMPROVEMENTS
------------------------------
5.1 Substantial Completion. For purposes of this Fourth Amendment,
----------------------
"Substantial Completion" of the Improvements in an Improvement Space shall
occur upon the completion of construction of the Improvements in the applicable
Improvement Space pursuant to the Approved Working Drawings, with the exception
of any punch list items.
5.2 Landlord Delays. The sixty (60) day period specified in Section 3(ii)
---------------
of the Fourth Amendment shall be extended by one (1) day for each day that
Tenant is delayed in the
EXHIBIT "B" - Page 4
Initials: _________
_________
Substantial Completion of the Improvements in the Expansion Space as the result
of a "Landlord Delay." The term "Landlord Delay" shall mean an actual delay in
the Substantial Completion of the Improvements in the Expansion Space which is
caused by (i) the failure of Landlord to provide authorizations or approvals
within the time periods set forth in this Tenant Work Letter, (ii) the failure
by Landlord to pay the Expansion Space Allowance within the time periods
specified in this Tenant Work Letter, or (iii) Landlord's failure to provide
Tenant with possession of the Expansion Space for the purpose of constructing
the Improvements therein after the Final Working Drawings have been approved by
Landlord and Tenant has received all necessary governmental permits and
approvals. Notwithstanding anything to the contrary contained herein, no
Landlord Delay shall be deemed to have occurred until and unless Tenant has
given Landlord written notice that an act or omission on the part of Landlord is
about to occur or has occurred which will cause a delay in the Substantial
Completion of the Improvements in the Expansion Space and Landlord has failed to
cure such delay within one (1) business day after Landlord's receipt of such
notice, in which case the number of days of delay after such notice shall be
deemed a Landlord Delay to the extent such delay actually delays the Substantial
Completion of the Improvements in the Expansion Space.
SECTION 6
---------
MISCELLANEOUS
-------------
6.1 Tenant's Representative. Tenant has designated Xxxxxx "Xxxxx" Camps
-----------------------
as its sole representative with respect to the matters set forth in this Tenant
Work Letter, who, until further notice to Landlord, shall have full authority
and responsibility to act on behalf of the Tenant as required in this Tenant
Work Letter.
6.2 Landlord's Representative. Prior to commencement of construction of
-------------------------
Improvements, Landlord shall designate a representative with respect to the
matters set forth in this Tenant Work Letter, who, until further notice to
Tenant, shall have full authority and responsibility to act on behalf of the
Landlord as required in this Tenant Work Letter.
6.3 Time of the Essence in This Tenant Work Letter. Unless otherwise
----------------------------------------------
indicated, all references herein to a "number of days" shall mean and refer to
calendar days.
6.4 Construction During Term. Tenant acknowledges that construction of
------------------------
the Improvements in the Building Four Improvement Space shall be conducted
during the Term of Tenant's lease of such space and that Tenant shall not be
entitled to any abatement of rent nor shall Tenant be deemed to be
constructively evicted from such space as a result of such construction or as a
result of any inconveniences associated with such construction.
EXHIBIT "B" - Page 5
Initials: _________
_________
EXHIBIT "C"
-----------
NOTICE OF LEASE TERM DATES
--------------------------
TO: ______________________________________ DATE: ________________, 199_
______________________________________
______________________________________
Attention: ___________________________
RE: Fourth Amendment dated ________________, 1998 between ARDEN REALTY FINANCE
IV, L.L.C., a Delaware limited liability company ("Landlord"), and
INTERPLAY ENTERTAINMENT CORP., a Delaware corporation ("Tenant"),
concerning Suite ____ (the "Expansion Space"), located at 00000 Xxx Xxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxx.
Dear Mr. [or Ms.] ____________:
In accordance with the Fourth Amendment, Landlord wishes to advise and/or
confirm the following:
1. That the Tenant is in possession of the Expansion Space and
acknowledges that under the provisions of the Fourth Amendment, the Phase 2
Effective Date has occurred as of ________________, 199_ and Tenant's lease of
such space shall expire on June 14, 2006.
2. The exact number of rentable square feet within the Expansion
Space is _________ square feet.
3. Tenant's Percentage, as adjusted based upon the number of rentable
square feet within the Expansion Space, is _______%.
AGREED AND ACCEPTED:
TENANT:
INTERPLAY ENTERTAINMENT CORP.,
a Delaware corporation
By: ______________________________________
Print Name: _______________________________
Its: _________________________________
By: ______________________________________
Print Name: _______________________________
Its: _________________________________
EXHIBIT "C" - Page 1
Initials: _________
_________
EXHIBIT "D"
-----------
CERTIFIED COPY OF
BOARD OF DIRECTORS RESOLUTIONS
OF
INTERPLAY ENTERTAINMENT CORP.
-----------------------------
The undersigned, being the duly elected Corporate Secretary of Interplay
Entertainment Corp., a Delaware corporation ("Corporation"), hereby certifies
that the following is a true, full and correct copy of the resolutions adopted
by the Corporation by unanimous written consent in lieu of a special meeting of
its Board of Directors, and that said resolutions have not been amended or
revoked as of the date hereof.
RESOLVED, that the Corporation, is hereby authorized to execute, deliver
and fully perform that certain document entitled Fourth Amendment to Lease
("Amendment") by and between the Corporation and Arden Realty Finance IV,
L.L.C., a Delaware limited liability company, for the lease of space at Von
Karman Corporate Center, Irvine, California.
RESOLVED FURTHER, that the Corporation is hereby authorized and directed to
make, execute and deliver any and all, consents, certificates, documents,
instruments, amendments, confirmations, guarantees, papers or writings as may be
required in connection with or in furtherance of the Amendment (collectively
with the Amendment, the "Documents") or any transactions described therein, and
to do any and all other acts necessary or desirable to effectuate the foregoing
resolution.
RESOLVED FURTHER, that the following officers acting together:
_______________ as _____________ and ____________ as _______________ are
authorized to execute and deliver the Documents on behalf of the Corporation,
together with any other documents and/or instruments evidencing or ancillary to
the Documents, and in such forms and on such terms as such officer(s) shall
approve, the execution thereof to be conclusive evidence of such approval and to
execute and deliver on behalf of the Corporation all other documents necessary
to effectuate said transaction in conformance with these resolutions.
Date: _____________, 199_ _______________________________________
__________________, Corporate Secretary
EXHIBIT "D" - Page 1
Initials: _________
_________
