Exhibit 10.54
STANDARD OFFICE LEASE--GROSS
AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
1. Basic Lease Provisions ("Basic Lease Provisions").
1.1 Parties: This Lease dated for reference purposes only, November 26,
1996 is made by and between ENCINO TERRACE CENTER (herein called "Lessor") and
Positive Response Television, Inc. and Director America Corporation doing
business under the name of _________________ , (herein called "Lessee").
1.2 Premises: Suite Number(s)_______________ floors, consisting of
approximately 23,180 feet, more or less, as outlined in paragraph 2 and as
shown on Exhibit "A" hereto (the "Premises").
1.3 Building: Commonly described as being located at * ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ in the City of LOS ANGELES County of LOS ANGELES State of CALIFORNIA
as more particularly described in Exhibit _____ hereto, and as defined in
paragraph 2.
1.4 Use: General office use
See Addendum 1.4 subject to paragraph 6.
1.5 Term: Ten (10) years commencing May 1, 1997** ("Commencement Date")
and ending Ten (10) years thereafter as defined in paragraph 3.
1.6 Base Rent:______________ per month, payable on the 1st day of each
month per paragraph 4.21 See Addendum 1.6.1.
1.7 Base Rent Increase: On See Addendum 1.6.1. the monthly Base Rent
payable under paragraph 1.6 above shall be adjusted as provided in See Addendum
1.6.1.
1.8 Rent Paid Upon Execution: _____________________________________
for _______________________________________________________________________
1.9 Security Deposit: ______________________________________________
1.10 Lessee's Share of Operating Expense Increase: __________________
as defined in paragraph 4.2.
2. Premises, Parking and Common Areas.
2.1 Premises: The Premises are a portion of a building, herein sometimes
referred to as the "Building" identified in paragraph 1.3 of the Basic Lease
Provisions. "Building" shall include adjacent parking structures used in
connection therewith. The Premises, the Building, the Common Areas, the land
upon which the same are located, along with all other buildings and improvements
thereon or thereunder, are herein collectively referred to as the "Office
Building Project." Lessor hereby leases to Lessee and Lessee leases from Lessor
for the term, at the rental, and upon all of the conditions set forth herein,
the real property referred to in the Basic Lease Provisions, paragraph 1.2, as
the "Premises,", Including rights to the Common Areas as hereinafter specified.
2.2 Vehicle Parking: So long as Lessee is not in default, and subject to
the rules and regulations attached hereto, and as established by Lessor from
time to time, Lessee shall be entitled to park cars in the Office Building at
the monthly rate applicable from time to time for monthly parking as set by
Lessor and/or its licensee.
2.2.1 If Lessee commits, permits or allows any of the prohibited
activities described in the Lease or the rules then in effect, then Lessor shall
have the right, without notice, in addition to such other rights and remedies
that it may have, to remove or tow aware the vehicle involved and charge the
cost to Lessee, which cost shall be immediately payable upon demand by Lessor.
2.2.2. The monthly parking rate per car will be $70.00 per month at
the commencement of the term of this Lease and is subject to change upon five
(5) days prior written notice to Lessee. Monthly parking fees shall be payable
one month in advance prior to the first day of each calendar month. - See
Addendum 2.2.3.
2.3 Common Areas--Definition. The term "Common Areas" is defined as all
areas and facilities outside the Premises and within the exterior boundary line
of the Office Building Project that are provided and designated by the Lessor
from time to time for the general non-exclusive use of Lessor, Lessee and of
other lessees of the Office
--------------------
* Suites 570
-------
** or under Tender of Possession (as hereinafter defined), whichever
occurs earlier
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Building Project and their respective employees, suppliers, shippers,
customers and invitees, including but not limited to common entrances,
lobbies, corridors, stairways and stairwells, public restrooms, elevators,
escalators, parking areas to the extent not otherwise prohibited by this
Lease, loading and unloading areas, trash areas, roadways, sidewalks,
walkways, parkways, ramps, driveways, landscaped areas and decorative walls.
2.4 Common Areas--Rules and Regulations. Lessee agrees to abide by and
conform to the rules and regulations attached hereto as Exhibit B with
respect to the Office Building Project and Common Areas, and to cause its
employees, suppliers, shippers, customers and invitees to so abide and
confirm. Lessor of such other person(s) as Lessor may appoint shall have the
exclusive control and management of the Common Areas and shall have the
right, from time to time, to modify, amend and enforce said rules and
regulations. Lessor shall not be responsible to Lessee for the non-compliance
with said rules and regulations by other Lessees, their agents, employees and
invitees of the Office Building Project.
2.5 Common Areas--Changes. Lessor shall have the right, in Lessor's
sole discretion, from time to time:
(a) To make changes to the Building interior and exterior and Common
Areas, including, without limitation, changes in the location, size, shape,
number, and appearance thereof, including but not limited to the lobbies,
windows, stairways, air shafts, elevators, escalators, restrooms, driveways,
entrances, parking spaces, parking areas, loading and unloading areas, ingress,
egress, direction of traffic, decorative walls, landscaped areas and walkways,
provided, however, Lessor shall at all times provide the parking facilities
required by applicable law;
(b) To close temporarily any of the Common Areas for maintenance
purposes so long as reasonable access to the Premises remains available;
(c) To designate other land and improvements outside the boundaries
of the Office Building Project to be a part of the Common Areas, provided that
such other land and improvements have a reasonable and functional relationship
to the Office Building Project;
(d) To add additional buildings and improvements to the Common Areas;
(e) To use the common Areas while engaged in making additional
improvements, repairs or alterations to the Office Building Project, or any
portion thereof;
(f) To do and perform such other acts and make such other changes in,
to or with respect to the Common Areas and Office Building Project as Lessor
may, in the exercise of sound business judgment deem to be appropriate.
3. Term.
3.1 Term. The term and Commencement Date of this Lease shall be ads
specified in paragraph 1.5 of the Basic Lease Provisions.
3.2 Delay in Possession. Notwithstanding said Commencement Date, if for any
reason Lessor cannot deliver possession of the Premises to Lessee on said date
and subject to paragraph 3.2.2 Lessor shall not be subject to any liability
therefor, nor shall such failure affect the validity of this Lease or the
obligations of Lessee hereunder or extent the term hereof; but, in such case,
Lessee shall not be obligated to pay rent or perform any other obligations of
Lessee under the terms of this Lease, except as may be otherwise prohibited in
this Lease, until possession of the Premises is tendered to Lessee as
hereinafter defined; provided, however, that if Lessor shall not have delivered
possession of the Premises within 90 days following said Commencement Date as
the same may be extended under the terms of a Work Letter executed by Lessor and
Lessee. Lessee may, at Lessee's option, by notice in writing to Lessor within
thirty (3) days thereafter, cancel this Lease. In which event the parties shall
be discharged from all obligations hereunder; provided, however, Less shall
return any money previously deposited by Lessee (less any offsets due Lessor for
NonStandard improvements); and provided further, that if such written notice by
Lessee is not received by Lessor within thirty (30) day period. Lessee's right
to cancel this Lease hereunder shall terminate and be of no further force or
effect.
3.2.1 Possession Tendered--Defined. Possession of the Premises shall be
deemed tendered to Lessee ("Tender of Possession") when (1) the improvements to
be provided by Lessor under this Lease are substantially completed, (2) the
Building utilities are ready for use in the Premises, (3) Lessee has reasonable
access to the Premises, and (4) ten (10) days shall have expired following
advance written notice to Lessee of the occurrence of the matters described in
(1), (2), and (3) above of this paragraph 3.2.1. SEE ADDENDUM 3.2.1
3.2.2. Delays Caused By Lessee. There shall be no abatement of rent,
and the 90 day period following the Commencement Date before which Lessee's
right to cancel this Lease accrues under paragraph 3.2, shall be deemed
extended to the extent of any delays caused by acts or omission of Lessee.
Lessee's agent, employees and contractors.
3.3 Early Possession. If Lessor occupies the Premises prior to said
Commencement Date, such occupancy shall be subject to all provisions of this
Lease, such occupancy shall not change the termination date, and Lessee
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shall after the first seven (7) days of such occupancy pay rent for such
occupancy after such seven (7) day period.
3.4 Uncertain Commencement. In the event commencement of the Lease
term is defined as the completion of the improvements, Lessee and Lessor
shall execute an amendment to this Lease establishing the date of Tender of
Possession (as defined in paragraph 3.2.1) or the actual taking of possession
by lessee, whichever first occurs, as the Commencement Date.
4. Rent.
4.1 Base Rent. Subject to adjustment as hereinafter provided in
paragraph 4.3, and except as may be otherwise expressly provided in this
Lease, Lessee shall pay to Lessor the Base Rent for the Premises set forth in
paragraph 1.6 of the Basic Lease Provisions. Rent for any period during the
term hereof which is for less than one month shall be prorated based upon the
actual number of days of the calendar month involved. Rent shall be payable
in lawful money of the United States to Lessor at the address stated herein
or to such other persons or at such other places as Lessor may designate in
writing.
4.2 Operating Expense Increase. Lessee shall pay to Lessor
during the term hereof, in addition to the Base Rent, Lessee's share, as
hereinafter defined, of the amount by which all Operating Expenses, as
hereinafter defined, for each Comparison Year exceeds the amount of all
Operating Expenses for the Base Year, such excess being hereinafter referred
to as the "Operating Expense Increase," in accordance with the following
provisions:
(a) "Lessee's Share" is defined, for purposes of this Lease, as
the percentage set forth in paragraph 1.10 of the Basic Lease Provisions,
which percentage has been determined by dividing the approximate square
footage of the Premises by the total approximate square footage of the
rentable space contained in the Office Building Project. It is understood and
agreed that the square footage figures set forth in the Basic Lease Provision
are approximations which Lessor and Lessee agree are reasonable and shall not
be subject to revision except in connection with an actual change in the size
of the Premises or a change in the space available for lease in the Office
Building Project;
(b) "Base Year" is defined as the calendar year in which the Lease
term commences;
(c) "Comparison Year" is defined as each calendar year during the
term of this Lease subsequent tot he base Year; provided, however, lessee shall
have no obligation to pay a share of the Operating Expense increase applicable
to the first twelve (12) months of the Lease Term (other than such as are
mandated by a governmental authority, as to which government mandated expenses
Lessee shall pay Lessee's Share, notwithstanding they occur during the first
twelve (12) months). Lessee's Share of the Operating Expense Increase for the
first and last Comparison years of the Lease Term shall be prorated according to
that portion of such Comparison Year as to which lessee is responsible for a
share of such increase;
(d) "Operating Expense" is defined, for purposes of this Lease, to
include all reasonable and necessary costs, if any, incurred by Lessor in the
exercise of its reasonable discretion, for:
(i) The operation, repair, maintenance, and replacement, in
net, clean, safe, good order and condition, of the Office Building Project,
including but not limited to, the following:
(aa) The Common Areas, including their surfaces,
coverings, decorative items, carpets, drapes and window coverings, and including
parking areas, loading and unloading areas, trash areas, roadways, sidewalks,
walkways, stairways, parkways, driveways, landscaped areas, striping, bumpers,
irrigation systems, Common Area lighting facilities, building exterior and
roofs, fences and gates;
(bb) All hearing, air conditioning, plumbing,
electrical systems, life safety equipment, telecommunication and other equipment
used in common by, or for the benefit of, lessees or occupants of the Office
Building Project, including elevators and escalators, tenant directories, fire
detection systems including sprinkler system maintenance and repair.
(ii) Trash disposal, janitorial and security services;
(iii) Any other service to be provided by Lessor that is
elsewhere in this Lease stated as being an "Operating Expense;"
(iv) The cost of the premises for the liability and property
insurance policies to be maintained by Lessor under paragraph 8 hereof;
(v) (INTENTIONALLY OMITTED)
(vi) The cost of water, sewer, gas, electricity, and other
publicly mandated services to the Office Building Project;
(vii) Labor, salaries and applicable fringe benefits and
costs, materials, supplies and tools, used in maintaining and/or cleaning the
Office Building Project and accounting and a management fee not to exceed 4%
attributable to the operation of the Office Building Project;
(viii) Replacing and/or adding improvements mandated by any
governmental agency and any
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repairs or removals necessitated thereby amortized over its useful lie according
to the Federal Income tax regulations or guidelines for depreciation thereof
(including interest on the amortized balance as is then reasonable in the
judgment of Lessor's accountants;
(ix) Replacements of equipment or improvements that have a
useful life for depreciation purposes according to Federal income tax guidelines
of five (5) years or less, as amortized over such life.
(e) Operating Expenses shall not include the costs of replacements of
equipment or improvements that have a useful life for Federal income tax
purposes in excess of five (5) years unless it is of the type described in
paragraph 4.2(d)(viii), in which case their cost shall be included as above
provided.
(f) Operating Expenses shall not include any expenses paid by any
Lessee directly to third parties, or as to which Lessor is otherwise reimbursed
by any third party, other tenant, or by insurance proceeds. See Addendum 4.2(f).
(g) Lessee's Share of Operating Expense Increase shall be payable by
lessee within ten (10) days after a reasonably detailed statement of actual
expenses is presented to Lessee by Lessor. At Lessor's option, however, an
amount to be estimated by Lessor from time to time in advance of Lessee' Share
of the Operating Expense Increase for any Comparison Year, and the same shall be
payable monthly or quarterly, as Lessor shall designate, during each Comparison
Year of the Lease term, on the same day as the Base Rent is due hereunder In the
event that Lessee pays Lessor's estimate of Lessee's Share of Operating Expenses
Increase as aforesaid, Lessor shall deliver to Lessee within sixty (60) days
after the expiration of each Comparison Year a reasonably detailed statement
showing Lessee's Share of the actual Operating Expenses Increase incurred during
such year. If Lessee's payments under this paragraph 4.2(g) during said
Comparison Year exceed Lessee's Share as indicated on said statement, Lessee
shall be entitled to credit the amount of such overpayment against Lessee's
Share of Operating Expense Increase next falling. due. If Lessee's payment under
this paragraph during said Comparison Year were less than Lessee's Share as
indicated on said statement, Lessee shall pay to Lessor the amount of the
deficiency within ten (10) days after delivery by Lessor to Lessee of said
statement. Lessor and Lessee shall forthwith adjust between them by cash payment
any balance determined to exist with respect to that portion of the last
Comparison Year for which Lessee is responsible as to Operating Expense
increase, notwithstanding that the Lease term may have terminated before the end
of such Comparison Year.
4.3 Rent increase. See Addendum 4.2(h).
4.3.1 (Intentionally omitted).
4.3.2 (Intentionally omitted).
4.3.3 (Intentionally omitted).
4.3.4 (Intentionally omitted).
4.3.5 (Intentionally omitted).
5. Security Deposit. Lessee shall deposit with Lessor upon execution hereof the
security deposit set forth in paragraph 1.9 of the Basic Lease Provisions as
security for Lessee's faithful performance of Lease, after the expiration of any
applicable notice or grace periods, Lessor may use, apply or retain all or any
portion of said deposit for the payment of any rent or other charge in default
for the payment of any other sum to which Lessor may become obligated by reason
of Lessee's or to compensate Lessor for any loss or damage which Lessor may
suffer thereby. Lessor shall not be required to keep said security deposition
separate from its general accounts. If Lessee performs all of Lessee's
obligations hereunder, said deposit, or so much thereof as has not heretofore
been applied by Lessor, shall be returned, without payments of interest or other
increment for its use, to Lessor (or, at Lessor's option, to the last assignee,
if any, of Lessee's interest hereunder at the expiration of the term hereof, and
after Lessee has vacated the Premises. No trust relationship is created herein
between Lessor and Lessee with respect to said Security Deposit.
6. Use.
6.1 Use. The Premises shall be used and occupied only for the purpose set
forth in paragraph 1.4 of the Basis Lease Provisions or any other use which is
reasonably comparable to that use and for no other purpose.
6.2 Compliance with Law.
(a) Lessor warrants to Lessee that the Premises in the state existing
on the date that the Lease term commences but without regard to alterations or
improvements made by Lessee or the use for which Lessee will occupy the Premises
does not violate any covenants or restrictions of record or any applicable
building code, regulation or ordinance in effect on such Lease term Commencement
Date. In the event it is determined that this warranty has been violated, then
it shall be the obligation of the Lessor, after written notice from Lessee, to
promptly, at Lessor's sole cost and expense rectify any such violation.
(b) Except as provided in paragraph 6.2(a) Lessee shall, at Lessee's
expense, promptly comply with
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all applicable statutes, ordinances, rules, regulations, orders, covenants and
restrictions or records, and requirements of any fire insurance underwriters or
rating bureaus, now in effect or which may hereafter come into effect, whether
or not they reflect a change in policy that now existing, during their term or
any part of the term hereof, relating in any manner to the use by Lessee of the
Premises. Lessee shall conduct its business in a lawful manner and shall not use
or permit the use of the Premises or the Common Area in any manner that will
tend to create waste or a nuisance or shall tend to disturb other occupants of
the Office Building Project. See Addendum 6.2(c).
6.3 Condition of Premises.
(a) Lessor shall deliver the Premises to Lessee in a clean condition
on the Lease Commencement Date (unless Lessee is already in possession) and
Lessor warrants to the Lessee that the plumbing, lighting, air conditioning, and
heating systems in the Premises shall be in good operating condition in the
event that it is determined that this warranty has been violated, then it shall
be the obligation of Lessor, alter receipt of written notice from Lessee setting
forth with specificity the nature of the violation, to promptly, at Lessor's
sole cost, rectify such violation.
(b) Except at otherwise provided in this Lease, Lessee hereby accepts
the Premises and the Office Building Project in their condition existing as of
the Lease Commencement Date or the date that Lessee takes possession of the
Premises, whichever is earlier, subject to all applicable zoning, municipal,
county and state laws, ordinance and regulations governing and regulating the
use of the Premises, and any easements, covenants or restrictions of record, and
accepts this Lease subject thereto and to all matters disclosed thereby and by
any exhibits attached hereto. Lessee acknowledges that it has satisfied itself
by its own independent investigation that the Premises are suitable for its
intended use, and that neither Lessor not Lessor's agent or agents has made any
representation or warranty as to the present or future suitability of Premises,
Common Areas or Office Building Project for the conduct of Lessee's business.
7. Maintenance, Repairs, Alternation and Common Area Services.
7.1 Lessor's Obligations. Lessor shall keep the Office Building Project,
including the Premises, interior and exterior walls, roof, and common areas, and
the equipment whether used exclusively for the Premises or in common with other
premises, in good condition and repair; provided, however, Lessor shall not be
obligated to paint, repair or replace wall coverings, or to repair or replace
any improvements in the Premises that are not ordinarily a part of the Building
or are above then Building standards. Except as provided in paragraph 9.5, there
shall be no abatement of rent or liability of Lessee on account of any injury or
interference with Lessee's business with respect to any improvements,
alternations or repairs made by Lessor to the Office Building Project any part
thereof, provided that Lessor shall use its best efforts not interfere with
Lessee's business operation. Lessee expressly waives the benefits of any statute
now or hereafter in effect which would otherwise afford Lessee the right to make
repairs at Lessor's expense or to terminate this Lease because of Lessor's
failure to keep the Premises in good order, condition and repair. SEE ADDENDUM.
7.2 Lessee's Obligations.
(a) Notwithstanding Lessor's obligation to keep the Premises in good
condition and repair, Lessee shall be responsible for payment of the cost
thereof to Lessor as additional rent for that portion of the cost of any
maintenance and repair of the Premises, or any equipment (wherever located) that
serves only Lessee or the Premises, to the extent such cost is attributable to
causes by Lessor's negligence. Lessee shall be responsible for the cost of
painting, repairing or replacing wall coverings, and to repair or replace any
Premises improvements that are not ordinarily a part of the Building or that are
above then Building standards. Lessor may, as its option, upon reasonable
notice, elect to have Lessee perform any particular such maintenance or repairs
the costs of which is otherwise Lessee's responsibility hereunder.
(b) On the last day of their term hereof, or on any soon termination,
Lessee shall surrender the Premises to Lessor in the same condition as received,
ordinary wear and tear casualty and condemnation excepted, clean and free of
debris. Any damage or deterioration of the Premises shall not be deemed ordinary
wear and tear if the same could have been prevented by good maintenance
practices by Lessee. Lessee shall repair any damage to the Premises occasioned
by the installation or removal of Lessee's trade fixtures, alternations,
furnishings and equipment. Except as otherwise stated in this Lease, Lessee
shall leave the air lines, power panels, electrical distribution systems,
lighting fixtures, air conditioning, window covering, wall coverings, carpets,
call paneling, ceiling and plumbing on the Premises and in good operating
condition.
7.3 Alternations and Additions.
(a) Lessee shall not, with Lessor's prior written consent make any
alternations, improvements, additions, utility installations or repairs in, on
or about the Premises, or the Office Building Project. As used in the paragraph
7.3 the term "Utility Installation" shall mean carpeting, window and wall
coverings, power panels,
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electrical distribution systems, light fixtures, air conditioning plumbing and
telephone and telecommunication wiring and equipment. At the expiration of the
term, Lessor may require the removal of any or all of said alternation,
improvements, additions or Utility installations, and the restoration of the
Premises of the Office Building Project to their prior condition, at Lessee's
expense. Should Lessor permit Lessee to make its own alternations, improvements,
additions or utility installations, Lessee shall use only such contractors as
has been expressly approved by Lessor, and Lessor may require Lessee to provide
Lessor, at Lessee's sole cost and expense, a lien and completion bond in an
amount equal to one and one-half times the estimated cost of such improvements,
to insure Lessor against any liability for mechanic's and materialmen's liens
and to insure completion of the work. Should Lessee make and alternations,
improvements, addition or utility installations without the prior approval of
Lessor, of use a contractor not expressly approved by Lessor, Lessor, may, at
any time during the term of this Lease, require that Lessee remove any part or
all of the same.
(b) Any alternations, improvements, additions or utility
installations in or about the Premises or the Office Building Project that Less
shall desire make shall be presented to Lessor in written form, with proposed
detailed plans. If Lessor shall give its consent to Lessee's making such
alternation, improvement, addition or utility installation, the consent shall be
deemed conditioned upon Lessee acquiring a permit to do so from the applicable
governmental agencies, furnishing a copy thereof to Lessor prior to the
commencement of the work, and compliance by Lessee with all conditions of said
permit in a prompt and expeditious manner.
(c) Lessee shall pay, when due, all claims for labor or materials
furnished or alleged to have been furnished to or for Lessee at or for use in
the Premises, which claims are or may be secured by any mechanic's or
materialmen's lien against the Premises, the Building or the Office Building
Project, or any interest therein.
(d) Lessee shall give Lessor not less than ten (10) days' notice
prior to the commencement of any work in the Premises by Lessee, and Lessor
shall have the right to post notices of non-responsibility in or on the Premises
of the Building as provided by law. If Lessee, shall, in good faith, contest the
validity of any such lien, claim or demand, then Lessee shall, at its sole
expense defend itself and Lessor against the same and shall pay and satisfy .
any such adverse judgment that may be rendered thereon before the enforcement
thereof against the Lessor or the Premises, the Building or the Office Building
Project, upon the condition that if Lessor, shall require, Lessee shall furnish
to Lessor a surety bond satisfactory to Lessor in an amount equal to such
contested lien claim or demand indemnifying Lessor against liability for the
same and holding the Premises, the Building and the Office Building Project free
from the effect of such lien or claim, in addition, Lessor may require Lessee to
pay Lessor's reasonable attorneys' fees and costs in participating such action
if Lessor shall decide it is to Lessor's best interest so to do.
(e) All alternations, improvements, additions and Utility
installations (unless such Utility installations constitute trade fixtures of
Lessee) which may be made to the Premises by Lessee, including but not limited
to, floor coverings, paneling, doors, drapes, built-ins, moldings, sound
attenuation, and lighting and telephone or communications systems, conduct,
wiring and outlets, shall be made and done in a good and workmanlike manner and
of good and sufficient quality and materials and shall be the property of Lessor
and remain upon and be surrendered with the Premises at the expiration of Lease
term unless Lessor requires their removal pursuant to paragraph 7.3(a). Provided
Lessee is not in default, notwithstanding the provisions of this paragraph
7.3(e), Lessee's personal property and equipment, other than that which is
affixed to the Premises so that it cannot be removed with material damage to the
Premises or the Building, and other than Utility installations, shall remain the
property of Lessee and may be removed by Lessee subject to the provisions of
paragraph 7.2. SEE ADDENDUM 7.3(e).
(f) Lessee shall provide Lessor with as-built plans and
specifications for any alterations, improvements, additions or Utility
installations.
7.4 Utility Additions. Lessor reserves the right to install now or
additional utility facilities throughout the Office Building Project for the
benefit of Lessor or Lessee, or any other lessee of the Office Building Project,
including, but not by way of limitation, such utilities as plumbing, electrical
systems, communication systems, and fire protection and detection systems, so
long as such installations do not unreasonably interfere with Lessee's use of
the Premises.
8. Insurance; Indemnity.
8.1 Liability Insurance--Lessee. Lessee shall, at Lessee's expense, obtain
and keep in force during the term of this Lease a policy of Comprehensive
General Liability Insurance utilizing an Insurance Services Office standard form
with Broad Form General Liability Endorsement (GL040-4). or equivalent, in an
amount of not less than $1,000,000.00 per occurrence of bodily injury and
property damage combined or in a grater amount as reasonably determined by
Lessor and shall insure Lessee with Lessor as an additional insured against
liability arising out of the
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use, occupancy or maintenance of the Premises. Compliance with the above
requirement shall not, however, limit the liability of Lessee hereunder.
8.2 Liability Insurance--Lessor. Lessor shall obtain and keep in force
during the term of this Lease a policy of Combined Single Limit Bodily Injury
and Broad Form Property Damage Insurance, plus coverage against such other risks
Lessor deems advisable from time to time, insuring Lessor, but not Lessee,
against liability arising out of the ownership, use, occupancy or maintenance of
the Office Building Project in an amount not less than $5,000,000.00 per
occurrence.
8.3 Property Insurance--Lessee. Lessee shall, at Lessee's expense, obtain
and keep in force during the term of this Lease for the benefit of Lessee,
replacement cost fire and extended coverage insurance, with vandalism and
malicious mischief, sprinkler leakage and earthquake sprinkler leakage
endorsement in an amount sufficient to cover not less than 100% of the full
replacement cost, as the same may exist from time to time, on all of Lessee's
personal property, fixtures, equipment and tenant Improvements.
8.4 Property Insurance--Lessor. Lessor shall obtain and keep in force
during the term of this Lease a policy or policies of insurance covering loss or
damage to the Office Building Project Improvements, but not Lessee's personal
property, fixtures, equipment or tenant Improvements, in the amount of the full
replacement cost thereof, as the same may exist from time to time, utilizing
Insurance Services Office standard form, or equivalent, providing protection
against all perils included within the classification of fire, extended overage,
vandalism, malicious mischief, plate glass, and such other perils as Lessor
deems advisable or may be required by a lender having a lien on the Office
Building Project. In addition, Lessor shall obtain and keep in force, during the
term of this Lease, a policy of rental value insurance covering a period of one
year, with loss payable to Lessor, which insurance shall also cover all
Operating Expenses for said period. Lessee will not be named in any such
policies carried by lessor and shall have no right to any proceeds therefrom.
The policies required by these paragraph 8.2 and 8.4 shall contain such
deductibles as Lessor or the aforesaid lender may determined. In the event that
the Premises shall suffer an Insured Loss as defined in paragraph 9.1(f) hereof,
the deductible amounts under the applicable insurance policies shall be deemed
an Operating Expense, Lessee shall not do or permit to be done anything which
shall invalidate the insurance policies carried by lessor. Lessee shall pay the
entirety of any increase in the property insurance premium for the Office
Building Project over what it was immediately prior to the commencement of the
term of this Lease if the increase is specified by Lessor's Insurance carrier as
being caused by the nature of Lessee's occupancy or any act or omission of
Lessee.
8.5 Insurance Policies. Lessee and Lessor shall deliver to each other
copies of liability insurance policies required under paragraph 8.2 or
certificates evidencing the existence and amounts of such insurance within seven
(7) days after the Commencement Date of this Lease. No such policy shall be
cancelable or subject to reduction of coverage or other modification except
after thirty (30) days prior written notice to the other. Lessee and Lessor
shall, at least thirty (30) days prior to the expiration of such policies,
furnish the other with renewals thereof.
8.6 Waiver of Subrogation. Lessee and Lessor each hereby release and
relieve the other, and waive their entire right of recovery against the other,
for direct or consequential loss or damage arising out of or incident to the
perils covered by property insurance carried by such party, whether due to the
negligence of Lessor or Lessee or their agent, employees, contractors and/or
invitees. If necessary all property insurance policies required under this Lease
shall be endorsed to so provide.
8.7 Indemnity. Lessee shall indemnify and hold harmless Lessor and its
agent, Lessor's mater or ground lessor, partners and lenders, from and against
any and all claims for damage to the person or property of anyone or any entity
arising from lessee's use of the Office Building Project, or from the conduct of
Lessee's business or from any activity, work or things done, permitted or
suffered by Lessee in or about the Premises and shall further indemnify and hold
harmless Lessor from and against any and all claims, costs and expenses arising
from any breach or default in the performance of any obligation on Lessee's part
to be performed under the terms of the Lease, or arising from any act or
omission of Lessee, or any of Lessee's agents, contractors, employees, or
invitees, and from and against all costs, attorney's fees, expenses and
liabilities incurred by Lessor as the result of any such use, conduct, activity,
work, things done, permitted or suffered, breach, default or negligence, and in
dealing reasonably therewith, including but not limited to the defense or
pursuit of any claim or any action or proceeding involved therein; and in case
any action or proceeding be brought against Lessor by reason of any such mater,
Lessee upon notice from Lessor shall defend the same at Lessee's expense by
counsel reasonably satisfactory to Lessor and Lessor shall cooperate with Lessee
in such defense. Lessor need not have first paid any such claim in order to be
so indemnified. Lessee, as a material part of the consideration to Lessor,
hereby assumes all risk of damage to property of Lessee or injury to persons,
in, upon or about the Office Building Project arising from any cause and Lessee
hereby waives all claims in respect hereof against Lessor. See Addendum 8.7 and
8.8.
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8.8 Exemption of Lessor from Liability. Lessee hereby agrees that Lessor
shall not be liable for injury to Lessee's business or any loss of income
herefrom or for loss of or damage to the goods, wares, merchandise or other
property of Lessee, Lessee's employees, invitees, customers, or any other person
in or about the Premises or the Office Building Project, nor shall Lessor be
liable for injury to the person of Lessee, Lessee's employees, agents or
contractors, whether such damage or injury is caused by or results from theft,
fire, steam, electricity, gas, water or rain, or from the breakage, leakage,
obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing,
air conditioning or light fixtures, or from any other cause, whether said damage
or injury results from conditions arising upon the Premises or upon other
portions of the Office Building Project, or from other sources or places, or
from new construction or the repair, alteration or improvement of any part of
the Office Building Project, or of the equipment, fixtures or appurtenances
applicable thereto and regardless of whether the means of repairing the same is
inaccessible. Lessor shall not be liable for any damages arising from any act or
neglect of any other lessee, occupant or use of the Office Building Project, nor
from the failure of Lessor to enforce the provisions of any other lease of any
other lessee of the Office Building Project.
8.9 No Representation of Adequate Coverage. Lessor makes no representation
that the limits or forms of coverage of Insurance specified in this paragraph 8
are adequate to cover Lessee's property or obligations under this Lease. 9.
Damage or Destruction.
9.1 Definitions.
(a) "Premises Damage" shall mean if the Premises are damaged or
destroyed to any extent.
(b) "Premises Building Partial Damage" shall mean if the Building
of which the Premises are a part is damaged or destroyed to the extent that
the cost to repair is less than fifty percent (50%) of the then Replacement
Cost of the building.
(c) "Premises Building Total Destruction" shall mean if the
Building of which the Premises are a part is damaged or destroyed to the
extent that the cost to repair is fifty percent (50%) or more of the then
Replacement Cost of the Building.
(d) "Office Building Project Buildings" shall mean all of the
buildings on the Office Building Project site.
(e) "Office Building Project Buildings Total Destruction" shall
mean if the Office Building Project Buildings are damaged or destroyed to the
extent that the cost of repair is fifty percent (50%) or more of the then
Replacement Cost of the Office Building Project Buildings.
(f) "Insured Loss" shall mean damage or destruction which was
caused by an event required to be covered by the insurance described in
paragraph 8. The fact that an insured Loss has a deductible amount shall not
make the loss an uninsured loss.
(g) "Replacement Cost" shall mean the amount of money necessary
to be spent in order to repair or rebuilt the damaged area to the condition
that existed immediately prior to the damage occurring, excluding all
improvements made by lessees, other than those installed by Lessor at
Lessee's expense.
9.2 Premises Damage; Premises Building Partial Damage.
(a) Insured Loss: Subject to the provisions of paragraphs 9.4 and
9.5, if at any time during the term of this Lease there is damage which is an
insured Loss and which falls into the classification of either Premises
Damage or Premises Building Partial Damage, then Lessor shall as soon as
reasonably possible and to the extent the required materials and labor are
readily available through usual commercial channels, at Lessor' expense
repair such damage (but not Lessee's fixtures, equipment or tenant
improvements originally paid for directly by Lessee) to its condition
existing at the time of the damage, and this Lease shall continue in full
force and effect.
(b) Uninsured Loss: Subject to the provisions of paragraphs 9.4
and 9.5, if at any time during the term of this Lease there is damage which
is not an Insured Loss and which falls within the classification of Premises
Damage or Premises Building Partial Damage, unless caused by a negligent or
willful act of Lessee (in which event Lessee shall make the repairs at
Lessee's expense), which damage prevents Lessee from making any substantial
use of the Premises. Lessor may at Lessor's option either (i) repair such
damage as soon as reasonably possible at Lessor's expense, in which event
this Lease shall continue in full force and effect, or (ii) given written
notice to Lessee within thirty (30) days after the date of occurrence of such
damage of Lessor's intention to cancel and terminate this Lease as of the
date of the occurrence of such damage, in which event this Lease shall
terminate as of the date of the occurrence of such damage.
9.3 Premises Building Total Destruction; Office Building Project Total
Destruction. Subject to the provisions of paragraphs 9.4 and 9.5, if at any
time during the term of this Lease there is damage, whether or not it is an
Insured Loss, which falls within the classifications of either (i) Premises
Building Total Destruction, or
8
(ii) Office Building Project Total Destruction, then Lessor may at Lessor's
option either (i) repair such damage of destruction as soon as reasonably
possible at Lessor's expense (to the extent the required materials are readily
available through usual commercial channels) to its condition existing at the
time of the damage, but not Lessee's fixtures, equipment or tenant improvements,
and this shall continue in full force and effect, or (ii) given written notice
to Lessee within thirty (30) days after the date of occurrence of such damage of
Lessor's intention to cancel and terminate this Lease, in which case this Lease
shall terminate as of the date of the occurrence of such damage.
9.4 Damage Near End of Term.
(a) Subject to paragraph 9.4(b), if at any time during the last
twelve (12) months of the term of this Lease there is substantial damage to the
Premises, Lessor may at Lessor or Lessee's option cancel and terminate this
Lease as of the date of occurrence of such damage by giving written notice to
the other of such party's election to do so within 30 days after the date of
occurrence of such damage.
(b) Notwithstanding paragraph (.4(a), in the event that Lessee has an
option to extend or renew this Lease, and the time within which said option
maybe exercised has not yet expired, Lessee shall exercise such option, if it is
to be exercised at all, no later than twenty (20) days after the occurrence of
an Insured Loss falling within the classification of Premises Damage during the
last twelve (12) months of the terms of this Lease. If Lessee duly exercises
such option during said twenty (20) day period, Lessor shall, at Lessor's
expense, repair such damage, but not Lessee's fixtures, equipment or tenant
improvements, as soon as reasonably possible and this Lease shall continue in
full force and effect. If Lessee fails to exercise such option during said
twenty (20) day period, then Lessor may at Lessor's option terminate and cancel
this Lease as of the expiration of said twenty (20) day period by giving written
notice to Lessee of Lessor's election to do so within ten (10) days after the
expiration of said twenty (20) day period notwithstanding any term or provision
in the grant of option to the contrary.
9.5 Abatement of Rent; Lessee's Remedies.
(a) In the event Lessor repairs or resolves the Building or Premises
pursuant to the provisions of this paragraph 9, and any part of the Premises are
not usable (including loss of use due to loss of access or essential services),
the rent payable hereunder (including Lessee's Share of Operating Expense
Increase) for the period during which such damage, repair or restoration
continues shall be abated, provided (1) the damage was not the result of the
negligence of Lessee, and (2) such abatement shall only be to the extent the
operation and profitability of Lessee's business as operated from the Premises
is adversely affected. Except for said abatement of rent, if any, Lessee shall
have no claim against Lessor for any damage suffered by reason of any such
damage, destruction, repair or restoration.
(b) If Lessor shall be obligated to repair or restore the Premises or
the Building under the provisions of this paragraph 9 and shall not commence
such repair or restoration within ninety (90) days after such occurrence, or if
Lessor shall not complete the restoration and repair within six (6) months after
such occurrence, Lessee may at Lessee's option cancel and terminate this lease
by giving Lessor written notice of Lessee's election to do so at any time prior
to the commencement or completion, respectively, of such repair or restoration.
In such event this Lease shall terminate as of the date of such notice.
(c) Lessee agrees to cooperate with Lessor in connection with any
such restoration and repair, including but not limited to the approval and/or
execution of plans and specifications required.
9.6 Termination--Advance Payments. Upon termination of this Lease pursuant
to this paragraph 9, an equitable adjustment shall be made concerning advance
rent and any advance payments made by Lessee to Lessor. Lessor shall, in
addition, return to Lessee so much of Lessee's security deposit as has not
theretofore been applied by Lessor.
9.7 Waiver. Lessor and Lessee waive the provisions of any statute which
relate to termination of leases when leased property is destroyed and agree that
such event shall be governed by the terms of this Lease.
10. Real Property Taxes.
10.1. Payment of Taxes. Lessor shall pay the real property tax, as defined
in paragraph 10.3, applicable to the Office Building Project subject to
reimbursement by Lessee of Lessee's Share of such taxes in accordance with the
provisions of paragraph 4.2, except as otherwise provided in paragraph 10.2.
10.2 Additional Improvements. Lessor shall not be responsible for paying
any increase in real property tax specified in the tax assessor's records and
work sheets as being caused by additional improvements placed upon the Office
Building Project by other lessees or by Lessor for the exclusive enjoyment of
any other lessee. Lessee shall, however, pay to Lessor at the time that
Operating Expenses are payable under paragraph 4.2(c) the entirety of any
increase in real property tax if assessed solely by reason of additional
improvements placed upon the premises by Lessee or at Lessee's request.
10.3 Definition of "Real Property Tax" As used herein, the term "real
property tax" shall include any form of
9
real estate tax or assessment, general special, ordinary or extraordinary, and
any license fee, commercial rental tax, levy or tax (other than inheritance,
personal income or estate taxes) imposed on the Office Building Project or any
portion thereof by any authority having the direct or indirect power to tax
including any city, county, state or federal government, or any school,
agricultural, sanitary, fire, street, drainage or other improvement district
thereof as against any legal or equitable interest of Lessor in the Office
Building Project. The term "real property tax" shall also include any tax, fee,
levy, assessment of charge (i) in substitution of, partially or totally, any
tax, fee, levy, assessment or charge hereinabove included within the definition
of "real property tax," or (ii) the nature of which was hereinbefore included
within the definition of "real property tax,", or (iii) which is imposed for a
service or right not charged prior to June 1, 1978, or, if previously charged,
has been increased since June 1, 1978, or (iv) which is imposed as a result of a
change in ownership, as defined by applicable local statutes for property tax
purposes, of the Office Building Project or which is added to a tax or charge
hereinbefore included within the definition of real property tax by reason of
such change of ownership, or (v) which is imposed by reason of this transaction,
any modifications or changes hereto, or any transfers hereof.
10.4 Joint Assessment. If the Improvements or property, the taxes for which
are to be paid separately by Lessee under paragraph 10.2 or 10.5 are not
separately assessed, Lessee's portion of that tax shall be equitably determined
by Lessor from the respective valuations assigned in the assessor's work sheets
or such other information (which may include the cost of construction) as may be
reasonably available. Lessor's reasonable determination thereof, in good, faith,
shall be conclusive.
10.5. Personal Property Taxes.
(a) Lessee shall pay prior to delinquency all taxes assess against
and levied upon trade fixtures, furnishings, equipment and all other personal
property of Lessee contained in the Premises or elsewhere.
(b) If any of Lessee's said personal property shall be assessed with
Lessor's real property, Lessee shall pay to Lessor the taxes attributable to
Lessee within ten (10) days after receipt of a written statement setting forth
the taxes applicable to Lessee's property.
11.1 Services Provided by Lessor. Lessor shall provide heating,
ventilation, air conditioning, and janitorial service as reasonably required,
reasonable amounts of electricity for normal lighting and office machines, water
for reasonable and normal drinking and lavatory use, and replacement light bulbs
and/or fluorescent lubes and ballasts for standard overhead fixtures.
11.2 Services Exclusive to Lessee. Lessee shall pay for all water, gas,
heat, light, power, telephone and other utilities and services specially or
exclusively supplied and/or metered exclusively to the Premises or to Lessee,
together with any taxes thereon. If any such services are not separately metered
to the Premises, Lessee shall pay Lessee's share.
11.3 Hours of Service. Said services and utilities shall be provided during
generally accepted business days and hours or such other days or hours as may
hereafter be set forth. Utilities and services required at other times shall be
subject to advance request and reimbursement by Lessee to Lessor of the cost
thereof. See Addendum 11.3(a)
11.4 Excess Usage by lessee. Lessee shall not make connection to the
utilities except by or through existing outlets and shall not install or use
machinery or equipment in or about the Premises that uses excess water, lighting
or power, or suffer or permit any act that causes extra burden upon utilities or
services including but not limited to security services over standard office
usage for the Office Building Project. Lessor shall require Lessee to reimburse
Lessor for any excess expenses or costs that may arise out of a breach of this
subparagraph by Lessee. Lessor may, in its sole discretion, install at Lessee's
expense supplemental equipment and/or separate metering applicable to Lessee's
excess usage or loading.
11.5 Interruptions. There shall be no abatement of rent and Lessor shall
not be liable in any respect whatsoever for the inadequacy, stoppage,
interruption or discontinuance of any utility or service due to riot, strike,
labor dispute, breakdown, accident, repair or other cause beyond Lessor's
reasonable control or in cooperation with governmental request or directions.
12. Assignment and Subletting.
12.1 Lessor's Consent Required. Lessee shall not voluntarily or by
operation of law assign, transfer, mortgage, sublet, or otherwise transfer or
encumber all or any part of Lessee's interest in the Lease or in the Premises
without Lessor's prior written consent which Lessor shall not unreasonably
withhold. Lessor shall respond to Lessee's request for consent hereunder in a
timely manner and any attempted assignment, transfer, mortgage encumbrance or
subletting without such consent shall be void, and shall constitute a material
default and breach of this Lease without the need to notice Lessee under
paragraph 13.1 "Transfer" within the meaning of this paragraph 12 shall include
the transfer or transfers aggregating: (a) Lessee is a corporation more than
fifty percent (50%) of
10
the voting stock of such corporation, or (b) if Lessee is a partnership, more
than fifty percent (50%) of the profit and loss participation in such
partnership.
12.2 Lessee Affiliate. Notwithstanding the provisions of paragraph 12.1
hereof, Lessee may assign or sublet the Premises, or any portion thereof without
Lessor's consent to any corporation which controls, is controlled by or is under
common control with Lessee or to any corporation resulting from the merger of
consolidation with Lessee or to any person or entity which acquires all the
assets of Lessee as a going concern of the business that is being conducted on
the Premises, all of which are referred to as "Lessee Affiliate"; provided that
before such assignment shall be effective (a) said assignee shall assume, in
full, the obligations of Lessee under this Lease and (b) Lessor shall be given
written notice of such assignment and assumption. Any such assignment shall not,
in any way, affect or limit the liability of Lessee under the terms of this
Lease even if after such assignment or subletting the terms of this Lease are
materially changed or altered without the consent of Lessee, the consent of whom
shall not be necessary.
12.3 Terms and Conditions Applicable to Assignment and Subletting.
(a) Regardless of Lessor's consent, no assignment or subletting shall
release Lessee of Lessee's obligations hereunder or alter the primary liability
of Lessee to pay the rent and other sums due Lessor hereunder including Lessee's
Share of Operating Expense Increase, and to perform any other obligations to be
performed by Lessee hereunder.
(b) Lessor may accept rent from any person other than Lessee pending
approval or disapproval of such assignment.
(c) Neither a delay in the approval or disapproval of such assignment
or subletting, nor the acceptance of rent, shall constitute a waiver of estoppel
of Lessor's right to exercise its remedies for the breach of any of the terms or
conditions of this paragraph 12 of this Lease.
(d) If Lessee's obligations under this Lease have been guaranteed by
third parties, then an assignment or sublease, and Lessor's consent thereto,
shall not be effective unless said guarantors give their written consent to such
sublease and the terms thereof.
(e) The consent by Lessor to any assignment or subletting shall not
constitute a consent to any subsequent assignment or subletting by Lessee or to
any subsequent or successive assignment or subletting by the sublessee. However,
Lessor may consent to subsequent sublettings and assignments of the sublease or
any amendments or modifications thereto without notifying Lessee or anyone else
liable on the Lease or sublease and without obtaining their consent and such
action shall not relieve such persons from liability under this Lease or said
sublease: however, such persons shall not be responsible to the extent any such
amendment or modification enlarges or increases the obligations of the Lessee or
sublessee under this Lease or such sublease.
(f) In the event of any default under this Lease, Lessor may proceed
directly against Lessee, any guarantors or any one else responsible for the
performance of this Lease, including the sublessee, without first exhausting
Lessor's remedies against any other person or entity responsible therefor to
Lessor, or any security held by Lessor or Lessee.
(g) Lessor's written consent to any assignment or subletting of the
Premises by Lessee shall not constitute an acknowledgment that no default then
exists under this Lease of the obligations to be performed by Lessee nor shall
such consent be deemed a waiver of any then existing default, except as may be
otherwise stated by Lessor at the time.
(h) The discovery of the fact that any financial statement relied
upon by Lessor in giving its consent to an assignment or subletting was
materially false shall, at Lessor's election, render Lessor's said consent null
and void.
12.4 Additional Terms and Conditions Applicable to Subletting. Regardless
of Lessor's consent, the following terms and conditions shall apply to any
subletting by Lessee of all or any part of the Premises and shall be deemed
included in all subleases under this Lease whether or not expressly incorporated
therein:
(a) Lessee hereby assigns and transfers to Lessor all of Lessee's
interest in all rentals and income arising from any sublease heretofore or
hereafter made by Lessee and Lessor may collect such rent and income and apply
same toward Lessee's obligations under this Lease: provided, however, that until
a default shall occur in the performance of Lessee's obligations under this
Lease, Lessee may receive, collect and enjoy the rents accruing under such
sublease. Lessor shall not by reason of this or any other assignment of such
sublease to Lessor nor by reason of the collection of the rents from a
sublessee, be deemed liable to the sublessee for any failure of Lessee to
perform and comply with any of Lessee's obligations to such sublessee under such
sublease. Lessee hereby irrevocably authorizes and directs any such sublessee,
upon receipt of a written notice from Lessor stating that a default exists in
the performance of Lessee's obligations under this Lease, to pay to Lessor the
rents due and to
11
become due under the sublease. Lessee agrees that such sublessee shall have the
right to rely upon any such statement and request from Lessor, and that such
sublessee shall pay such rents to Lessor without any obligation or right to
inquire as to whether such default exists and notwithstanding any notice from or
claim from Lessee to the contrary. Lessee shall have no right or claim against
said sublessee or Lessor for any such rents so paid by said sublessee to Lessor.
(b) No sublease entered into by Lessee shall be effective unless and
until it has been approved in writing by Lessor. In entering into any sublease,
Lessee shall use only such form of sublease as is satisfactory to Lessor, and
once approved by Lessor, such sublease shall not be changed or modified without
Lessor's prior written consent. Any such sublease shall by reason of entering
into a sublease under this Lease, be deemed, for the benefit of Lessor, to have
assured and agreed to conform and comply with each and every obligation herein
to be performed by Lessee other than such obligations as are contrary to or
inconsistent with provisions contained in a sublease to which Lessor has
expressly consented in writing.
(c) In the event Lessee shall default in the performance of its
obligations under this Lease, Lessor at its option and without any obligation to
do so, may require any sublessee to attorn to Lessor, in which event Lessor
shall undertake the obligations of Lessee under such sublease from the time of
the exercise of said option to the termination of such sublease: provided,
however, Lessor shall not be liable for any prepaid rents or security deposit
paid by such sublessee to Lessee or for any other prior defaults of Lessee under
such sublease.
(d) No sublessee shall further assign or sublet all or any part of
the Premises without Lessor's prior written consent.
(e) With respect to any subletting to which Lessor has consented,
Lessor agrees to deliver a copy of any notice of default by Lessee to the
sublessee. Such sublessee shall have the right to cure a default of Lessee
within three (3) days after service of said notice of default upon such
sublessee, and the sublessee shall have a right of reimbursement and offset from
and against Lessee for any such defaults cured by the sublessee.
12.5 Lessor's Expenses. In the event Lessee shall assign or sublet the
Premises or request the consent of Lessor to any assignment or subletting or if
Lessee shall request the consent of Lessor for any act Lessee proposes to do
then Lessee shall pay Lessor's reasonable costs and expenses incurred in
connection therewith, including attorneys', architects', engineers' or other
consultants' fees.
12.6 Conditions to Consent. Lessor reserves the right to condition any
approval to assign or sublet upon Lessor's determination that (a) the proposed
assignee or sublessee shall conduct a business on the Premises of a quality
substantially equal to that of Lessee and consistent with the general character
of the other occupants of the Office Building Project and not in violation of
any exclusives or rights then held by other tenants, and (b) the proposed
assignee or sublessee be at least as financially responsible as Lessee was
expected to be at the time of the execution of this Lease or of such assignment
or subletting, whichever is greater.
13. Default; Remedies.
13.1 Default. The occurrence of any one or more of the following events
shall constitute a material default of this Lease by Lessee:
(a) The vacation or abandonment of the Premises by Lessee combined
with a failure to pay rent.
(b) The breach by Lessee of any of the covenants, conditions or
provisions of paragraphs 7.3(a), (b) or (d) (alterations), 12.1 (assignment of
subletting), 13.1(a) (vacation or abandonment), 13.1(e) (insolvency), 13.2(f)
(false statement), 16(a) (estoppel certificate), 30(b) (subordination), 33
(auctions), or 411 (easements), all of which are hereby deemed to be material,
non-curable defaults without the necessity of any notice by Lessor to Lessee
thereof.
(c) The failure by Lessee to make any payment of rent or any other
payment required to be made by Lessee hereunder, as and when due, where such
failure shall continue for a period of three (3) days after written notice
thereof from Lessor to Lessee. In the event that Lessor serves Lessee with a
Notice to Pay Rent or Quit pursuant to applicable Unlawful Detainer statutes
such Notice to Pay Rent or Quit shall also constitute the notice required by
this subparagraph.
(d) The failure by Lessee to observe or perform any of the covenants,
conditions or provisions of this Lease to be observed or performed by Lessee
other than those referenced in subparagraphs (b) and (c), above, where such
failure shall continue for a period of thirty (30) days after written notice
thereof from Lessor to Lessee: provided, however, that if the nature of Lessee's
noncompliance is such that more than thirty (30) days are reasonably required
for its cure, then Lessee shall not be deemed to be in default if Lessee
commenced such cure within said thirty (30) day period and thereafter diligently
pursues such cure to completion. To the extent permitted by law, such thirty
(30) day notice shall constitute the sole and exclusive notice required to be
given to Lessee under applicable Unlawful Detainer statutes.
12
(e) (i) The making by Lessee of any general arrangement or general
assignment for the benefit of creditors: (ii) Lessee becoming a "debtor" as
defined in 11 U.S.C. ss. 101 or any successor statute thereto (unless, in the
case of a petition filed against Lessee, the same is dismissed within sixty (60)
days; (iii) the appointment of a trustee or receiver to take possession of
substantially all of Lessee's assets located at the Premises or of Lessee's
interests in this Lease, where possession is not restored to Lessee within
thirty (30) days; or (iv) the attachment, execution or other judicial seizure of
substantially all of Lessee's assets located at the Premises or at Lessee's
interests in this Lease, where such seizure is not discharged within thirty (30)
days. In the event that any provision of this paragraph 13.1(e) is contrary to
any applicable law, such provision shall be of no force or effect.
(f) The discovery by Lessor that any financial statement given to
Lessor by Lessee, or its successor in interest or by any guarantor of Lessee's
obligation hereunder was materially false.
13.2 Remedies. In the event of any material default or breach of this Lease
by Lessee, Lessor may at any time thereafter, with or without notice or demand
and without limiting Lessor in the exercise of any right or remedy which Lessor
may have by reason of such default:
(a) Terminate Lessee's right to possession of the Premises by any
lawful means. In which case this Lease and the term hereof shall terminate and
Lessee shall immediately surrender possession of the Premises to Lessor. In such
event Lessor shall be entitled to recover from Lessee all direct damages
incurred by Lessor by reason of Lessee's default including, but not limited to,
the cost of recovering possession of the Premises: reasonable expenses of
reletting including necessary renovation and alteration of the Premises,
reasonable attorneys' fees, and any real estate commission actually paid: the
worth at the time of award by the court having jurisdiction thereof of the
amount by which the unpaid rent for the balance of the term after the time of
such award exceeds the amount of such rental loss for the same period that
Lessee proves could be reasonably avoided; that portion of the leasing
commission paid by Lessor pursuant to paragraph 15 applicable to the unexpired
term of this Lease.
(b) Maintain Lessee's right to possession in which case this Lease
shall continue in effect whether or not Lessee shall have vacated or abandon the
Premises. In such event Lessor shall be entitled to enforce all of Lessor's
rights and remedies under this Lease. Including the right to recover the rent as
it becomes due hereunder.
(c) Pursue any other remedy now or hereafter available to Lessor
under the laws or judicial decisions of the state wherein the Premises are
located. Unpaid installments of rent and other unpaid monetary obligations of
Lessee under the terms of this Lease shall bear interest from the date due at
the maximum rate then allowable by law.
13.3 Default by Lessor. Lessor shall not be in default unless Lessor fails
to perform obligations required of Lessor within a reasonable time, but in no
event later than thirty (30) days after written notice by Lessee to Lessor and
to the holder of any first mortgage or deed of trust covering the Premises whose
name and address shall have theretofore been furnished to Lessee in writing,
specifying wherein Lessor has failed to perform such obligation: provided,
however, that if the nature of Lessor's obligation is such that more than thirty
(30) days are required for performance then Lessor shall not be in default if
Lessor commences performance within such 30-day period and thereafter diligently
pursues the same to completion.
13.4 Late Charges. Lessee hereby acknowledges that late payment by Lessee
to Lessor of Base Rent, Lessee's Share of Operating Expense Increase or other
sums due hereunder will cause Lessor to incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult to ascertain. Such
costs include, but are not limited to, processing and accounting charges, and
late charges which may be imposed on Lessor by the terms of any mortgage or
trust deed covering the Office Building Project. Accordingly, if any installment
of Base Rent, Operating Expense Increase, or any other sum due from Lessee shall
not be received by Lessor or Lessor's designee within ten (10) days after such
amount shall be due, then, without any requirement for notice to Lessee, Lessee
shall pay to Lessor a late charge equal to 6% of such overdue amount. The
parties hereby agree that such late charge represents a fair and reasonable
estimate of the costs Lessor will incur by reason of late payment by Lessee.
Acceptance of such late charge by Lessor shall in no event constitute a waiver
of Lessee's default with respect to such overdue amount, nor prevent Lessor from
exercising any of the other rights and remedies granted hereunder.
14. Condemnation. If the Premises or any portion thereof or the Office Building
Project are taken under the power of eminent domain, or sold under the threat of
the exercise of said power (all of which are herein called "condemnation"), this
Lease shall terminate as to the part so taken as of the date the condemning
authority takes title or possession, whichever first occurs: provided that if so
much of the Premises or the Office Building Project are taken by such
condemnation as would substantially and adversely affect the operation and
profitability of Lessee's business conducted from the Premises, Lessee shall
have the option, to be exercised only in writing within thirty (30) days after
Lessor shall have given Lessee written notice of such taking (or in the absence
of such notice, within thirty (30) days after the condemning authority shall
have taken possession), to terminate this Lease as of the date
13
the condemning authority takes such possession. If Lessee does not terminate
this Lease in accordance with the foregoing, this Lease shall remain in full
force and effect as to the portion of the Premises remaining, except that the
rent and Lessee's Share of Operating Expense Increase shall be reduced in the
proportion that the floor area of the Premises taken bears to the total floor
area of the Premises. Common Areas taken shall be excluded from the Common Areas
usable by Lessee and no reduction of rent shall occur with respect thereto or by
reason thereof. Lessor shall have the option in its sole discretion to terminate
this Lease as of the taking of possession by the condemning authority, by giving
written notice to Lessee of such election within thirty (30) days after receipt
of notice of a taking by condemnation of any part of the Premises or the Office
Building Project. Any award for the taking of all or any part of the Premises or
the Office Building Project under the power of eminent domain or any payment
made under threat of the exercise of such power shall be the property of Lessor,
whether such award shall be made as compensation for diminution in value of the
leasehold or for the taking of the fee, or as severance damages: provided,
however, that Lessee shall be entitled to any separate award for loss of or
damage to Lessee's trade fixtures, removable personal property and unamortized
tenant improvements that have been paid for by Lessee. For that purpose the cost
of such improvements shall be amortized over the original term of this Lease
excluding any options. In the event that this Lease is not terminated by reason
of such condemnation, Lessor shall to the extent of severance damages received
by Lessor in connection with such condemnation, repair any damage to the
Premises caused by such condemnation except to the extent that Lessee has been
reimbursed therefore by the condemning authority. Lessee shall pay any amount in
excess of such severance damages required to complete such repair.
15. Broker's Fee.
(a) The brokers involved in this transaction are ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, INC. as
"listing broker" and Estmac Commercial Brokerage & ▇▇▇▇ ▇▇▇▇▇ Commercial as
"cooperating broker," licensed real estate broker(s). A "cooperating broker" is
defined as any broker other than the listing broker entitled to a share of any
commission arising under this Lease. Upon execution of this Lease by both
parties, Lessor shall pay to said brokers jointly, or in such separate shares as
they may mutually designate in writing, a fee as set forth in a separate
agreement between Lessor and said broker(s).
(b) (Intentionally Omitted)
(c) (Intentionally Omitted)
(d) Lessee and Lessor each represent and warrant to the other that neither
has had any dealings with any person, firm, broker or finder (other than the
person(s). If any, whose names are set forth in paragraph 15(a), above) in
connection with the negotiation of this Lease and/or the consummation of the
transaction contemplated hereby, and no other broker or other person, firm or
entity is entitled to any commission or finder's fee in connection with said
transaction and Lessee and Lessor do each hereby indemnify and hold the other
harmless from and against any costs, expenses, attorneys' fees or liability for
compensation or charges which may be claimed by any such unnamed broker, finder
or other similar party by reason of any dealings or actions of the indemnifying
party.
16. Estoppel Certificate.
(a) Each party (as "responding party") shall at any time upon not less than
ten (10) days' prior written notice from the other party ("requesting party")
executed, acknowledge and deliver to the requesting party a statement in writing
(i) certifying that the Lease is unmodified and in full force and effect (or, if
modified, stating the nature of such modification and certifying that this
Lease, as so modified, is in full force and effect) and the date to which the
rent and other charges are paid in advance, if any, and (ii) acknowledging that
there are not, to the responding party's knowledge, any uncured defaults on the
part of the requesting party, or specifying such defaults if any are claimed.
Any such statement may be conclusively relied upon by any prospective purchaser
or encumbrancer of the Office Building Project or of the business of Lessee.
(b) At the requesting party's option, the failure to deliver such statement
within such time shall be a material default of this Lease by the party who is
to respond, without any further notice to such party, or it shall be conclusive
upon such party that (i) this Lease is in full force and effect without
modification except as may be represented by the requesting party, (ii) there
are no uncured defaults in the requesting party's performance and (iii) if
Lessor is the requesting party, not more than one month's rent has been paid in
advance.
(c) If Lessor desires to finance, refinance, or sell the Office Building
Project, or any part thereof, Lessee hereby agrees to deliver to any lender or
purchaser designated by Lessor such financial statements of Guarantors as may be
reasonably required by such lender or purchaser. Such statement shall include
the past three (3) years' financial statements of Guarantors. All such financial
statements shall be received by Lessor and such lender or purchaser in
confidence and shall be used only for the purposes herein set forth.
17.Lessor's Liability. The term "Lessor" as used herein shall mean only the
owner or owners, at the time in
14
question, of the fee title or a lessee's interest in a ground lease of the
Office Building Project to the extent all obligations, past and present, and all
liabilities are assumed by a successor Lessor. In the event of any transfer of
such title or interest, Lessor herein named (and in case of any subsequent
transfers than the grantor) shall be relieved from and after the date of such
transfer of all liability as respects Lessor's obligations thereafter to be
performed, provided that any funds in the hands of Lessor or the then grantor at
the time of such transfer, in which Lessee has an interest, shall be delivered
to the grantee. The obligations contained in this Lease to be performed by
Lessor shall, subject as aforesaid, be binding on Lessor's successors and
assigns, only during their respective periods of ownership.
18. Severability. The invalidity of any provision of this Lease as determined by
a court of competent jurisdiction shall in no way affect the validity of any
other provision hereof.
19. Interest on Past-Due Obligations. Except as expressly herein provided, any
amount due to Lessor not paid when due shall bear interest at the maximum rate
than allowable by lay or judgments from the date due. Payment of such interest
shall not excuse or cure any default by Lessee under this Lease: provided,
however, that interest shall not be payable on late charges incurred by Lessee
nor on any amounts upon which late charges are paid by Lessee.
20. Time of Essence. Time is of the essence with respect to the obligations to
be performed under this Lease.
21. Additional Rent. All monetary obligations of Lessee to Lessor under the
terms of this Lease, including but not limited to lessee's Share of Operating
Expense Increase and any other expenses payable by Lessee hereunder shall be
deemed to be rent.
22. Incorporation of Prior Agreements; Amendments. This Lease contains all
agreements of the parties with respect to any matter mentioned herein. No prior
or contemporaneous agreement or understanding pertaining to any such matter
shall be effective. This Lease may be modified in writing only, signed by the
parties in interest at the time of the modification. Except as otherwise stated
in this Lease, Lessee hereby acknowledges that neither the real estate broker
listed in paragraph 15 hereof nor any cooperating broker on this transaction nor
the Lessor or any employee or agents of any of said persons has made any oral or
written warranties or representations to Lessee relative to the condition or use
by Lessee of the Premises of the Office Building Project and Lessee acknowledges
that Lessee assumes all responsibility regarding the Occupational Safety Health
Act, the legal use and adaptability of the Premises and the compliance thereof
with all applicable laws and regulations in effect during the term of this
Lease.
23. Notices. Any notice required or permitted to be given hereunder shall
be in writing and may be given by personal delivery or by certified or
registered mail, and shall be deemed sufficiently given if delivered or
addressed to Lessee or to Lessor at the address noted below or adjacent to the
signature of the respective parties, as the case may be. Mailed notices shall be
deemed given upon actual receipt at the address required, or forty-eight hours
following deposit in the mail, postage prepaid, whichever first occurs. Either
party may by notice to the other specify a different address for notice purposes
except that upon Lessee's taking possession of the Premises, the Premises shall
constitute Lessee's address for notice purposes. A copy of all notices required
or permitted to be given to Lessor hereunder shall be concurrently transmitted
to such party or parties at such addresses as Lessor may from time to time
hereafter designate by notice of Lessee.
24. Waivers. No waiver by Lessor of any provision hereof shall be deemed a
waiver of any other provision hereof or of any subsequent breach by Lessee of
the same or any other provision. Lessor's consent to, or approval of, any act
shall not be deemed to render unnecessary the obtaining of Lessor's consent to
or approval of any subsequent act by Lessee. The acceptance of rent hereunder by
Lessor shall not be a waiver of any preceding breach by Lessee of any provision
hereof, other than the failure of Lessee to pay the particular rent so accepted,
regardless of Lessor's knowledge of such preceding breach at the time of
acceptance of such rent.
25. (Intentionally omitted)
26. Holding Over. If Lessee, with Lessor's consent, remains in possession of the
Premises or any party thereof after the expiration of the term hereof, such
occupancy shall be a tenancy from month to month upon all the provisions of this
Lease pertaining to the obligations of Lessee, except that the rent payable
shall be one hundred fifty percent (150%) of the rent payable immediately
preceding the termination date of this Lease, and all Options, if any, granted
under the terms of this Lease shall be deemed terminated and be of no further
effect during said month to month tenancy.
27. Cumulative Remedies. No remedy or election hereunder shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
28. Covenants and Conditions. Each provision of this Lease performable
by Lessee shall be deemed both a covenant and a condition.
29. Binding Effect; Choice of Law. Subject to any provisions hereof restricting
assignment or subletting by Lessee
15
and subject to the provisions of paragraph 17, this Lease shall bind the
parties, their personal representatives, successors and assigns. This Lease
shall be governed by the laws of the State where the Office Building Project is
located and any litigation concerning this Lease between the parties hereto
shall be initiated in the County in which the Office Building Project is
located.
30. Subordination.
(a) This Lease, and any Option or right of first refusal granted hereby, at
Lessor's option, shall be subordinate to any ground lease, mortgage, deed of
trust, or any other hypothecation or security now or hereafter placed upon the
Office Building Project and to any and all advances made on the security thereof
and to all renewals, modifications, consolidations, replacements and extensions
thereof. Notwithstanding such subordination, Lessee's right to quiet possession
of the Premises shall not be disturbed if Lessee is not in default and so long
as Lessee shall pay the rent and observe and perform all of the provisions of
this Lease, unless this Lease is otherwise terminated pursuant to its terms. If
any mortgagee, trustee or ground lessor shall elect to have this Lease and any
Options granted hereby prior to the lien of its mortgage, deed of trust or
ground lease, and shall give written notice thereof to Lessee, this Lease and
such Options shall be deemed prior to such mortgage, deed of trust or ground
lease, whether this Lease or such Options are dated prior or subsequent to the
date of said mortgage, deed of trust or ground lease or the date of recording
thereof.
(b) Lessee agrees to execute any documents required to effectuate an
attornment, a subordination, or to make this Lease or any Option granted herein
prior to the lien of any mortgage, deed of trust or ground lease, as the case
may be provided such documents contain a non-disturbance provision in form and
substance reasonably acceptable to Lessee. Lessee's failure to execute such
documents within ____ days after written demand shall constitute a material
default by Lessee hereunder without further notice to Lessee or, at Lessor's
option, Lessor shall execute such documents on behalf of Lessee as Lessee's
attorney-in-fact. Lessee does hereby make, constitute and irrevocably appoint
Lessor as Lessee's attorney-in-fact and in Lessee's name, place and stead, to
execute such documents in accordance with this paragraph 30(b). 31. Attorney's
Fees.
31.1 If either party or the broker(s) named herein bring an action to
enforce the terms hereof or declare rights hereunder, the prevailing party in
any such action, trial or appeal thereon, shall be entitled to his reasonable
attorneys' fees to be paid by the losing party as fixed by the court in the same
or a separate suit, and whether or not such action is pursued to decision or
judgment.
31.2 The attorneys' fee award shall not be computed in accordance with any
court fee schedule, but shall be such as to fully reimburse all attorney's fees
reasonably incurred in good faith.
31.3 Lessor shall be entitled to reasonable attorneys' fees and all other
costs and expenses incurred in the preparation and service of notice of default
and consultations in connection therewith, whether or not a legal transaction is
subsequently commenced in connection with such default.
32. Lessor's Access.
32.1 Lessor and Lessor's agents after prior notice to Lessee, except in the
case of emergency shall have the right to enter the Premises at reasonable times
for the purpose of inspecting the same, performing any services required of
Lessor, showing the same to prospective purchasers, lenders, or lessees, taking
such safety measures, erecting such scaffolding or other necessary structures,
making such alterations, repairs, improvements or additions to the Premises or
to the Office Building Project as Lessor may reasonably deem necessary or
desirable and the erecting, using and maintaining of utilities, services, pipes
and conduits through the Premises and/or other premises as long as there is no
material adverse effect to Lessee's use of the Premises. Lessor may at any time
place on or about the Premises or the Building any ordinary "For Sale" signs and
Lessor may at any time during the last 120 days of the term hereof place on or
about the Premises any ordinary "For Lease" signs.
32.2 All activities of Lessor pursuant to this paragraph shall be without
abatement of rent, nor shall Lessor have any liability to Lessee for the same.
32.3 Lessor shall have the right to retain keys to the Premises and to
unlock all doors in or upon the Premises other than to files, vaults and safes
and in the case of emergency to enter the Premises by any reasonably appropriate
means, and any such entry shall not be deemed a foreseeable unlawful entry or
detainer of the Premises or an eviction. Lessee waives any charges for damages
or injuries or interference with Lessee's property or business in connection
therewith.
33. Auctions. Lessee shall not conduct, nor permit to be conducted either
voluntarily or involuntarily, any auction upon the Premises or the Common Areas
without first having obtained Lessor's prior written consent. Notwithstanding
anything to the contrary in this Lease, Lessor shall not be obligated to
exercise any standard of reasonableness in determining whether to grant such
consent. The holding of any auction on the Premises
16
or Common Areas in violation of this paragraph shall constitute a material
default of this Lease.
34. Signs. Lessee shall not place any sign upon the Premises or the
Office Building Project without Lessor's prior written consent. Under no
circumstances shall Lessee place a sign on any roof of the Office Building
Project.
35. Merger. The voluntary or other surrender of this Lease by Lessee, or a
mutual cancellation thereof, or a termination by Lessor shall not work merger,
and shall, at the option of Lessor, terminate all or any existing subtenancies
or may, at the option of Lessor, operate as an assignment to Lessor of any or
all of such subtenancies.
36. (Intentionally omitted)
37. Guarantor. In the event that there is a guarantor of this Lease, said
guarantor shall have the same obligations as Lessee under this Lease. 38. Quiet
Possession. Upon Lessee paying the rent for the Premises and observing and
performing all of the Covenants, conditions and provisions of Lessee's part to
be observed and performed hereunder, Lessee shall have quite possession of the
Premises for the entire term hereof subject to a ____ of the provisions of this
Lease. The individuals executing this Lease on behalf of Lessor represent and
warrant to Lessee that they are fully authorized and legally capable of
executing this Lease on behalf of Lessor and that such execution is binding upon
all parties holding an ownership interest in the Office Building Project. 39.
Options.
39.1 Definition. As used in this paragraph the word "Option" has the
following meaning: (1) the right or option to extend the term of this Lease or
to renew this Lease or to extend or renew any lease that Lessee has on other
property of Lessor; (2) the option of right of first refusal to lease in
Premises or the right of first offer to lease the Premises or the right of first
refusal to lease other space within the Office Building Project or other
property of Lessor or the right of first offer to lease other space within the
Office Building Project or other property of Lessor; (3) the right or option to
purchase the Premises or the Office Building Project, or the right of first
refusal to purchase the Premises or the Office Building Project or the right of
first offer to purchase the Premises or the Office Building Project, or the
right or option to purchase other property of Lessor, or the right of first
refusal to purchase other property of Lessor or the right of first offer to
purchase other property of Lessor.
39.2 Options Personal. Each Option granted to Lessee in this Lease is
personal to the original Lessee and may be exercised only by the original Lessee
while occupying the Premises who does so without the intent of thereafter
assigning this Lease or subletting the Premises or any portion thereof, and may
not be exercised or be assigned, voluntarily or involuntarily, by or to any
person or entity other than Lessee; provided, however, that an Option may be
exercised by or assigned to any Lessee Affiliate as defined in paragraph 12.2 of
this Lease. The Options, if any, herein granted to lessee are not assignable
separate and apart from this Lease, nor may any Option be separated from this
Lease in any manner, either by reservation or otherwise.
39.3 Multiple Options. In the event that Lessee has any multiple options to
extend or renew this Lease a later option cannot be exercised unless the prior
option to extend or renew this Lease has been so exercised.
39.4 Effect of Default on Options.
(a) Lessee shall have no right to exercise an Option, notwithstanding
any provision in the grant of Option to the contrary, (i) during the time
commencing from the date Lessor gives to Lessee a notice of default pursuant to
paragraph 13.1(c) or 13.1(d) and continuing until the noncompliance alleged in
said notice of default is cured, or (ii) during the period of time commencing on
the day after a monetary obligation to Lessor is due from Lessee and unpaid
(without any necessity for notice thereof to Lessee) and continuing until the
obligation is paid, or (iii) in the event that Lessor has given to Lessee three
or more notices of default under paragraph 13.1(c), or paragraph 13.1(d),
whether or not the defaults are cured, during the 12 month period of time
immediately prior to the time that Lessee attempts to exercise the subject
Option, (iv) if Lessee has committed any non-curable breach. Including without
limitation those described in paragraph 13.1(b), or is otherwise in default of
any of the terms, covenants or conditions of this Lease.
(b) The period of time within which an Option may be exercised shall
not be extended or enlarged by reason of Lessee's inability to exercise an
Option because of the provisions of paragraph 39.4(a).
(c) All rights of Lessee under the provisions of an Option shall
terminate and be of no further force or effect, notwithstanding Lessee's due and
timely exercise of the Option, if, after such exercise and during the term of
this Lease, (i) Lessee fails to pay to Lessor a monetary obligation of Lessee
for a period of thirty (30) days after such obligation becomes due (without any
necessity of Lessor to give notice thereof to Lessee), or (ii) Lessee fails to
commence to cure a default specified in paragraph 13.1(d) within thirty (30)
days after the date that Lessor gives notice to Lessee of such default and/or
Lessee fails thereafter to diligently prosecute said cure to completion, or
(iii) Lessor gives to Lessee three or more notices of default under paragraph
13.1(c), or paragraph 13.1(d), whether or not the defaults are cured, or (iv) if
Lessee has committed any non-curable breach, including without limitation
17
those described in paragraph 13.1(b), or is otherwise in default of any of the
terms, covenants and conditions of this Lease.
40. Security Measures--Lessor's Reservations.
40.1 Lessee hereby acknowledges that Lessor shall provide guard service or
other security measures for the benefit of the Premises or the Office Building
Project. The cost thereof shall be included within the definition of Operating
Expenses, as set forth in paragraph 4.2(b).
40.2 Lessor shall have the following rights:
(a) To change the name, address or title of the Office Building
Project or building in which the Premises are located upon not less than 90 days
prior written notice;
(b) To, at Lessee's expense, provide and install Building standard
graphics on the door of the Premises and such portions of the Common Areas as
Lessor shall reasonably deem appropriate;
(c) To permit any lessee the exclusive right to conduct any business
as long as such exclusive does not conflict with any rights expressly given
herein;
(d) To place such signs, notices or displays as Lessor reasonably
deems necessary or advisable upon the roof, exterior of the buildings or the
Office Building Project or on pole signs in the Common Areas;
40.3 Lessee shall not:
(a) Use a representation (photographic or otherwise) of the Building
or the Office Building Project or their name(s) in connection with Lessee's
business;
(b) Suffer or permit anyone, except in emergency, to go upon the roof
of the Building.
41. Easements.
41.1 Lessor reserves to itself the right, from time to time, to grant such
easements, rights and dedications that Lessor deems necessary or desirable, and
to cause the recordation of Parcel Maps and restrictions, so long as such
easements, rights, dedications, Maps and restrictions do not unreasonably
interfere with the use of the Premises by Lessee. Lessee shall sign any of the
aforementioned documents upon request of Lessor and failure to do so shall
constitute a material default of this Lease by Lessee without the need for
further notice to Lessee.
41.2 The obstruction of Lessee's view, air, or light by any structure
erected in the vicinity of the Building, whether by Lessor or third parties,
shall in no way affect this Lease or impose any liability upon Lessor.
42. Performance Under Protest. If at any time a dispute shall arise as to any
amount or sum of money to be paid by one party to the other under the provisions
hereof, the party against whom the obligation to pay the money is asserted shall
have the right to make payment "under protest" and such payment shall not be
regarded as a voluntary payment, and there shall survive the right on the part
of said party to institute suit for recovery of such sum. If it shall be
adjudged that there was no legal obligation on the part of said party to pay
such sum or any part thereof, said party shall be entitled to recover such sum
or so much thereof as it was not legally required to pay under the provisions of
this Lease.
43. Authority. If Lessee is a corporation, individual or general or limited
partnership, Lessee or Lessor and an individual executing this Lease on behalf
of such entity represents and warrants that such individual is authorized to
execute and deliver this Lease on behalf of said entity. If Lessee is a
corporation, trust or partnership, Lessee shall, within thirty (30) days after
execution of this Lease, deliver to the other party evidence of such authority
satisfactory to the other party.
44. Conflict. Any conflict between the printed provisions, Exhibits or Addenda
of this Lease and the typewritten or handwritten provisions, if any, shall be
controlled by the typewritten or handwritten provisions.
45. No Offer. Preparation of this Lease by Lessor or Lessor's agent and
submission of same to Lessee shall not be deemed an offer to Lessee to lease.
This Lease shall become binding upon Lessor and Lessee only when fully executed
by both parties.
46. Intentionally Omitted.
47. Multiple Parties. If more than one person or entity is named as either
Lessor or Lessee herein, except as otherwise expressly provided herein, the
obligations of the Lessor or Lessee herein shall be the joint and several
responsibility of all persons or entities named herein as such Lessor or lessee,
respectively.
48. Work Letter. This Lease is supplemented by that certain Work Letter of even
date executed by Lessor and Lessee, attached hereto as Exhibit C.
49. Attachments. Attached hereto are the following documents which constitute a
part of this Lease:
EXHIBIT A: FLOOR PLAN
EXHIBIT B: RULES AND REGULATIONS
EXHIBIT C: SPACE PLAN AND SPECIFICATIONS
18
EXHIBIT D: Signage
Addendum
19
LESSOR AND LESSEE HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND
PROVISION CONTAINED HEREIN AND BE EXECUTION OF THIS LEASE, SHOW THEIR INFORMED
AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS
LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND
EFFECTUATE THE INTENT AND PURPOSE OF LESSOR AND LESSEE WITH RESPECT TO THE
PREMISES.
IF THIS LEASE HAS BEEN FILLED IN IT HAS BEEN PREPARED FOR SUBMISSION
TO YOUR ATTORNEY FOR HIS APPROVAL. NO REPRESENTATION OR
RECOMMENDATION IS MADE BY THE AMERICAN INDUSTRIAL REAL ESTATE
ASSOCIATION OR BY THE REAL ESTATE BROKER OR ITS AGENTS OR EMPLOYEES
AS TO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF
THIS LESE OR THE TRANSACTION RELATING THERETO; THE PARTIES SHALL RELY
SOLELY UPON THE ADVICE OF THEIR OWN LEGAL COUNSEL AS TO THE LEGAL AND
TAX CONSEQUENCES OF THIS LEASE.
LESSOR LESSEE
ENCINO TERRACE CENTER POSITIVE RESPONSE TELEVISION, INC.,
a Delaware corporation
By: /s/ ▇.▇. ▇▇▇▇▇ By: /s/ ▇▇▇ ▇▇▇▇
--------------------------- ----------------------------------
▇. ▇. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇
its President its Director
DIRECT AMERICA CORPORATION,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------
▇▇▇▇ ▇▇▇▇▇
its Vice President & General Manager
20
RULES AND REGULATIONS FOR
STANDARD OFFICE LEASE
Dated:
---------------------------------------------
BY and
between:
---------------------------------------------------------------
GENERAL RULES
1. Lessee shall not suffer or permit the obstruction of any Common Areas,
including driveways, walkways and stairways.
2. Lessor reserves the right to refuse access to any persons Lessor in good
faith judges to be a threat to the safety, reputation, or property of the Office
Building Project and its occupants.
3. Lessee shall not make or permit any noise or odors that annoy or interfere
with other lessees or persons having business within the Office Building
Project.
4. Lessee shall not keep animals or birds within the Office Building Project,
and shall not bring bicycles, motorcycles or other vehicles into areas not
designated as authorized for same.
5. Lessee shall not make, suffer or permit litter except in appropriate
receptacles for that purpose.
6. Lessee shall not altar any lock or install new or additional locks or bolts.
7. Lessee shall be responsible for the inappropriate use of any toilet rooms,
plumbing or other utilities. No foreign substances of any kind are to be
inserted therein.
8. Lessee shall not deface the walls, partitions or other surfaces of the
premises of Office Building Project.
9. Lessee shall not suffer or permit any thing in or around the Premises or
Building that causes excessive vibration or floor loading in any part of the
Office Building Project.
10. Furniture, significant freight and equipment shall be moved into or out of
the Building only with the Lessor's knowledge and consent, and subject to such
reasonable limitations, techniques and timing, as may be designated by Lessor.
Lessee shall be responsible for any damage to the Office Building Project
arising from any such activity.
11. Lessee shall not employ any service or contractor for services or work to be
performed in the Building, except as approved by Lessor.
12. Lessor reserves the right to close and lock the Building on Saturdays and
legal holidays, and on other days between the hours of _____ p.m. and _____ a.m.
of the following day. If Lessee uses the Premises during such periods, Lessee
shall be responsible for securely locking any doors it may have opened for
entry.
13. Lessee shall return all keys at the termination of its tenancy and shall be
responsible for the cost of replacing any keys that are lost.
14. No window coverings, shades or awnings shall be installed or used by Lessee.
15. No Lessee, employee or invites shall go upon the roof of the Building.
16. Lessee shall not suffer or permit smoking or carrying of lighted cigars or
cigarettes in areas reasonably designated by Lessor or by applicable
governmental agencies as non-smoking areas.
17. Lessee shall not use any method of heating or air conditioning other than as
provided by Lessor.
18. Lessee shall not install, maintain or operate any vending machines upon the
Premises without Lessor's written consent.
19. The Premises shall not be used for lodging or manufacturing, cooking or food
preparation.
1
20. Lessee shall comply with all safety, fire protection and evacuation
regulations established by Lessor or any applicable governmental agency.
21. Lessor reserves the right to waive any one of these rules or regulations,
and/or as to any particular Lessee, and any such waiver shall not constitute a
waiver or any other rule or regulation or any subsequent application thereof to
such Lessee.
22. Lessee assumes all risks from theft or vandalism and agrees to keep its
Premises locked as may be required.
23. Lessor reserves the right to make such other reasonable rues and regulations
as it may from time to time deem necessary for the appropriate operation and
safety of the Office Building Project and its occupants. Lessee agrees to abide
by these and such rules and regulations.
24. Lessee shall not place any furniture or equipment on any terrace that does
not conform to Lessor's furniture or equipment standards.
25. Lessee shall not offer any lottery tickets for public sale on the Premises
or in the Building.
PARKING RULES
1. Parking areas shall be used only for parking by vehicles no longer than full
size, passenger automobiles herein called "Permitted Size Vehicles." Vehicles
other than Permitted Size Vehicles are herein referred to as "Oversized
Vehicles."
2. Lessee shall not permit or allow any vehicles that belong to or are
controlled by Lessee's employees, suppliers, shippers, customers or invitees to
be loaded, unloaded, or parked in areas other than those designated by Lessor
for such activities.
3. Parking stickers or identification devices shall be the property of Lessor
and be returned to Lessor by the holder thereof upon termination of the holder's
parking privileges. Lessee will pay such replacement charge as is reasonably
established by Lessor for the loss of such devices.
4. Lessor reserves the right to refuse the sale of monthly identification
devices to any person or entity that willfully refuses to comply with the
applicable rules, regulations, laws and/or agreements.
5. Lessor reserves the right to relocate all or a part of parking spaces from
floor to floor, within one floor, and/or to reasonably adjacent offsite
location(s), and to reasonably allocate them between compact and standard size
spaces, as long as the same complies with applicable laws, ordinances and
regulations.
6. Users of the parking area will obey all posted signs and park only in the
areas designated for vehicle parking.
7. Unless otherwise instructed, every person using the parking area is required
to park and lock his own vehicle. Lessor will not be responsible for any damage
to vehicles, injury to persons or loss of property, all of which risks are
assumed by the party using the parking area.
8. Validation, if established, will be permissible only by such method or
methods as Lessor and/or its licensee may establish at rates generally
applicable to visitor parking.
9. The maintenance, washing, waxing or cleaning of vehicles in the parking
structure or Common Areas is prohibited.
10. Lessee shall be responsible for seeing that all of its employees, agents and
invitees comply with the applicable parking rules, regulations, laws and
agreements.
11. Lessor reserves the right to modify these rules and/or adopt such other
reasonable and non-discriminatory rules and regulations as it may deem necessary
for the proper operation of the parking area.
12. Such parking use as is herein provided is intended merely as a license only
and no bailment is intended or shall be created hereby.
2
GUARANTY AGREEMENT
THIS AGREEMENT is made on the date signed below between Encino Terrace Center
("ETC") and National Media Corporation, a Delaware Corporation herein called
"Guarantor."
RECITALS
A. Positive Response Television, Inc. and Direct America Corp. ("Lessee")
is, or is about to become, the Lessee of certain premises in the County of Los
Angeles, State of California (the "Property"), located at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇.
B. Lessee has sought a lease from ETC, to be evidenced by a written lease
(the "Lease").
C. Guarantor, at the solicitation of Lessee, requests that ETC execute the
Lease. ETC is willing to make the Lease on the condition that Guarantor execute
this Guaranty Agreement.
AGREEMENT
Therefore, in consideration of the above and of the making of the Lease by ETC,
Guarantor unconditionally guarantees and promises to pay ETC or order, in lawful
money of the United States, any and all indebtedness of Lessee to ETC evidenced
by or growing out of, o in any way connected with the Lease. Guarantor further
unconditionally guarantees and promises ETC to perform all agreements to be
performed by Lessee under the Lease, and any other agreement executed by Lessee
to ETC pertaining to or additionally securing the Lease. Guarantor further
agrees as follows:
1. The obligations of Guarantor hereunder are independent of the
obligations of Lessee, and a separate action or actions may be brought and
prosecuted against Guarantor, whether action is brought against lessee or
whether Lessee by joined in any such action or actions.
2. In giving ETC this Guaranty, Guarantor is not concerned with Lessee's
financial condition or with the condition of title of or the value of the
Leasehold and waives any right that ETC disclose any information it may now have
or hereafter acquire concerning Lessee's character, credit, or financial
condition or any information affecting or concerning the condition of title of
the Property or the value of the Lease. Guarantor assumes the responsibility for
being and keeping informed of the financial condition of Lessee and of all
circumstances bearing upon the risk of nonpayment or non-performance of the
Lease hereunder. If Lessee is a corporation or a partnership or a trust, ETC
need not inquire into the power of Lessee or the authority of its officers,
directors, partners, trustees or agents acting or purporting to act on its
behalf and the Lease granted in reliance upon the purported exercise of such
power or authority is hereby guaranteed. Guarantor waives any and all notices of
any type whatsoever, whether relating to any act or condition of ETC, or Lessee
or of others, or relating in any other way to the subject matter of this
Guaranty.
3. ETC is authorized at any time, without notice or demand and in such
manner, upon such terms and for such time as it deems fit to alter, accelerate,
extend or change the time or manner for the payment or performance of the Lease
or any part thereof; or to release, substitute or add assignee, subtenants or
guarantors; or to add, exchange, release, substitute or waive any security; and
no action by ETC shall affect Guarantor's liability hereunder in any manner.
4. Until the Lease has been paid and performed in full, Guarantor shall not
have any right of subrogation. Guarantor waives any benefit of and any right to
participate in security, and authorized and empowers ETC, at its sole
discretion, to exercise any right or remedy which it may have including, but not
limited to, unlawful detainer, exercise of rights, or taking a possession or an
assignment in lieu of unlawful detainer as to the Leasehold and as to any other
security interest in real or personal property which ETC may hold for the Lease,
and Guarantor shall be liable for any deficiency existing after the exercise of
any such remedy, even though rights which Guarantor may have against other s
might be destroyed or diminished by the exercise of such remedy.
1
5. Any indebtedness of Lessee now or hereafter owing to Guarantor is hereby
subordinated to the Lease. Guarantor shall not accept any payment of or on
account of any such indebtedness at any time while any part of the Lease is in
default and unpaid. At the request of ETC, Lessee shall pay ETC all or any part
of any such indebtedness and any amount so paid to ETC at its request shall be
applied to the Lease obligation. Payment on any indebtedness of Lessee to
Guarantor received in violation of any of the provisions of this agreement shall
be deemed to have been received by Guarantor as trustee for ETC and shall be
paid over to ETC immediately. Notwithstanding these provision, Guarantor
reserves the right to collect and accept payment of salary for personal services
which Guarantor may become entitled to receive from Lessee so long as Lessee is
not then in default.
6. Guarantor's liability shall continue notwithstanding the incapacity,
lack of authority, death or disability of, or revocation hereof, by any others.
The failure by ETC to file or enforce a claim against the estate (either in
administration, bankruptcy or other proceedings) of any others shall not release
Guarantor from liability hereunder. Guarantor shall not be released from
liability hereunder if recovery from Lessee or from any other guarantor is or
hereafter becomes barred by any statute of limitations or if such liability is
or becomes otherwise unenforceable. Guarantor agrees that this Guaranty shall be
reinstated if and to the extent that for any reason any payment by or on behalf
of Lessee is rescinded or must be otherwise restored by ETC whether as a result
of any proceedings in bankruptcy or reorganization or otherwise.
7. Guarantor waives any right to require ETC (a) to proceed against Lessee
or any other person or entity; (b) to proceed against or exhaust any security
held from Lessee; (c) to foreclose on the Property; (d) to pursue any other
remedy. Guarantor further waives (a) any right to participate in any security
now or hereafter held by ETC; (b) the right of subrogation against Lessee; (c)
any defense based upon Sections 580 and 726 of the Code of Civil Procedure of
the State of California, or either of them; (d) any defense based upon, or
involving the assertion of, the invalidity or unenforceability, in whole or in
part, of the Lease, or any security or the lack of legal capacity of any party
thereto or the nonexistence or cessation of the liability of any party thereon;
(e) all presentments, demands for performance and notices of nonperformance,
notices of dishonor, and of the existence, creation or incurring of new or
additional indebtedness.
8. ETC may apply any payment or recovery from or for the benefit of Lessee
to any obligation of Lessee as it deems fit and in such order of priority as it
deems fit, whether or not such obligation relates to the Lease or is secured or
is due at the time.
9. Any married person who sighs this Guaranty hereby agrees that recourse
may be had against his or her separate property for all obligations under this
Guaranty. If this Guaranty be signed by more than one person, form or
corporation, then all obligations thereof hereunder shall be joint and several.
10. As used herein, the term "Lessee" means and includes the Lessee of the
lease agreement, and all successors and assignees thereof, and all present and
subsequent owners of the Leasehold. This Guaranty shall inure to the benefit of
and bind ETC, its successors and assigns, including the assignees of the Lease,
and Guarantor's heirs, executors, administrators, successors and assigns.
11. No delay or failure on the part of ETC in exercising any right,
privilege or remedy hereunder shall operate as waiver of such or any other
right, privilege or remedy, and no waiver whatsoever shall be valid unless in
writing, signed by ETC, and then only to the extent set forth therein.
12. All rights, powers and remedies of ETC hereunder shall be cumulative
and not alternative and shall be in addition to all rights, powers and remedies
given by law.
13. All words used herein in the singular shall be deemed to have been used
in the plural when the context and construction so require.
14. Guarantor agrees without demand to pay and reimburse ETC for all costs.
attorneys' fees (whether or not for the services of salaried employees in the
regular employ of ETC) and other expenses which it expends or incurs in the
collection of the Lease or in the enforcement of this Guaranty or the Lease
agreement.
2
First Addendum
This First Addendum is made as of December 9, 1996 to the Lease dated November
26, 1996 by and between Encino Terrace Center, as Lessor, and Positive Response
Television, Inc. and Direct America Corporation, as Lessees, for a portion of
the Building located at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ as follows:
Section 1.8: Insert "$43,346.60"
Section 1.9: Insert "0"
Section 1.10: Insert "5.877%"
Section 2.2: Insert "70"
LESSOR LESSEE
ENCINO TERRACE CENTER POSITIVE RESPONSE TELEVISION, INC.
A DELAWARE CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------
DIRECTAMERICA CORPORATION,
A DELAWARE CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------
ACCEPTED AND AGREED BY GUARANTOR
NATIONAL MEDIA CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇▇▇▇▇, Vice President
Corporate Development
Addendum
This Addendum to the Lease dated November 26, 1996 by and between Encino Terrace
Center, as Lessor, and Positive Response Television, Inc. and Direct America
Corporation, as Lessee, for a portion of the Building located at ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, shall be attached and made a part thereto. To the
extent of any conflicts between the Lease and the Addendum, the Addendum shall
control.
1.4 Use.
Lessee's use shall include those activities related to the conduct of
Lessee's direct television and radio business including, but not
limited to, telemarketing, video editing and production and radio
broadcasting. In no event shall the Lessee use the Premises or any part
thereof for auctions, religious activities, dating services,
liquidation sales, warehousing, manufacturing, day care centers,
schools, public lectures, retail sales (other than direct marketing) or
public invitees without the express prior written consent of Lessor.
1.6.1 Base Rent (cont'd)
Notwithstanding the provisions of Paragraph 1.6 hereof, the monthly
Base Rent payable hereunder shall be adjusted as follows:
Months 1- 30: $43,346.60 per month ($1.87 per rentable square foot per
month)
Months 31- 60: $45,896.40 per month ($1.98 per rentable square foot
per month)
Months 61- 90: $50,532.40 per month ($2.18 per rentable square foot
per month)
Months 91-126: $55,168.40 per month ($2.38 per rentable square foot
per month)
2.2.3 Vehicle Parking (cont'd)
Notwithstanding the provisions of the Lease to the contrary: all of
Lessee's cars shall be parked in unreserved parking areas as designated
by Lessor, at an initial monthly rental of $70.00 per car, plus
applicable parking taxes. Up to ten (10) of the cars provided for in
Paragraph 2.2 of the Lease may, at Lessee's option, park in single
reserved parking spaces in locations designated by Lessor, at a monthly
rental of $120.00 per car, plus applicable parking taxes. Increases to
the initial parking rates, exclusive of city taxes, shall be capped at
five percent (5%) per annum.
There are no garage attendants or supervision during non-Building
hours.
3.2 Possession Tendered (cont'd)
The definition of "Tender of Possession" shall also include (iv) Lessor
has obtained a Final Inspection for Tenant Improvements on the
Premises. The ten (IO) day notice specified in 3.2.1 shall apply to
this item.
3.2.3 Failure to Deliver. Notwithstanding anything to the contrary contained
in this Section 3.2, in the event Lessor does not deliver possession of
the Premises to Lessee on or before the scheduled Commencement Date as
may be extended, Lessee shall be entitled to one day's free rent for
each day after the Commencement Date that the Premises are not
delivered to Lessee until Tender of Possession. Such free rent shall
commence after the date possession of the Premises is tendered to
Lessee.
4.2(f) Operating Expense Increases (cont'd)
It is agreed that any cost allocable to the items specified below shall
be excluded from Additional Rent and Operating Expenses:
(a) the cost of correcting structural defects (latent or otherwise) in
the design, construction or equipping of the Building or in the
Building equipment;
(b) salaries or other employee benefits of officers and executives of
Lessor, above the grade of building or property manager;
(c) the cost of any items for which Lessor is reimbursed by insurance
or otherwise;
(d) the cost of any repairs, alterations, additions, changes,
replacements and other items which under sound accounting principles
are properly classified as capital expenditures or which are made in
order to prepare for a new lessee's occupancy;
(e) interest on debt or amortization payments on any mortgage and
rental under any ground lease or other underlying lease;
(f) any real estate brokerage commissions or other costs incurred in
procuring other lessees;
(g) any costs or expenses arising from Lessor's repair, cleanup,
remediation, or detoxification of Hazardous Materials in, on, or about
the Premises, the Building, or the Common Areas, for which Lessor is
responsible by law or pursuant to the terms of this Lease;
(h) repairs and construction work for specific tenants;
(i) legal fees for tenant disputes;
(j) brokers commissions; and
(k) repairs, alterations, replacements, or additions to the Building
(other than the Premises) relating to compliance with any governmental
laws, codes, orders or regulations.
4.2(h) Operating Expenses (cont'd)
Lessor shall use reasonable efforts to reduce operating expenses to the
minimum which is reasonably possible, commensurate with the standards
of operation and maintenance provided for in this Lease and of similar
A buildings in the immediate vicinity. All estimates of Operating
Expenses shall be determined in good faith.
4.2(i) Audit.
Lessee shall have the right upon request and at reasonable times, to
examine and copy Lessor's books and records relating to items referred
to in this Section 4 and Lessee may recover any overcharges of
Operating Expenses.
6.2(c) Compliance with Law (cont'd)
Lessor represents that, to the best of its actual knowledge: 1) Lessor
has received no notice of violation of environmental law from any
applicable governmental authority, and 2) the Building contains no
asbestos insulation or fireproofing. Lessor shall comply with all
statutes, orders and rules now in effect or which may hereafter come
into effect in the future including, but not limited to, the Americans
With Disabilities Act, the Clean Air Act and all environmental laws.
7.1 Lessor's Obligations.
Lessor shall be responsible for the repair and replacement of all
plumbing, lighting, air conditioning, heating systems, mechanical
systems, electrical systems, the Common Areas and all structural
components of the Office Building Project. Lessor shall maintain the
Building in a condition comparable to other first class A office
buildings in the immediate vicinity.
7.3 Alterations and Additions (cont'd)
Lessee shall have the right to remove all Tenant's telephone and data
systems, computer systems and audio and video equipment from the
Premises, providing that the Premises are restored to prior condition.
8.7 and
8.8 Indemnity and Exemption of Lessor from Liability (cont'd)
Lessee's indemnity pursuant to Paragraph 8.7 and Lessor's exemption
from liability pursuant to Paragraph 8.8 shall not apply to damage or
injury caused by Lessor's negligence or willful misconduct or
emissions.
9. Premises Building Total Destruction; Office Building Project Total
Destruction.
Subject to the provisions of paragraphs 9.4 and 9.5, if at any time
during the term of this Lease there is damage, whether or not it is an
insured loss, which falls into the classifications of either (i)
Premises Building Total Destruction, or (ii) Office Building Project
Total Destruction, then Lessee may, at Lessee's option, terminate this
lease by giving written notice to Lessor within thirty (30) days after
the date of the occurrence of such damage, in which case this Lease
shall terminate as of the occurrence of such damage.
10.3 Real Property Taxes.
Real property taxes shall also not include transfer taxes or penalties
or interest caused by the failure to pay taxes.
11.1 Services Provided by Lessor.
Lessor shall also provide maintenance of all Common Areas including
cleaning, landscaping and illumination; extermination and pest control;
and freight elevators and passenger elevators service.
11.3(a) Hours of Service (cont'd)
Notwithstanding the provisions of Paragraph 11.3 to the contrary,
Lessee shall have access to the Building, the Premises, elevator
service and the Building parking structure 24 hours per day, 365 days
per year, subject to Lessor's security measures for the Building.
Lessee's access shall not require Lessor to station garage attendants
in the Building or the Building garage 24 hours per day. Heating,
ventilating and air conditioning shall be provided 7:00 a.m. to
7:00 p.m. Monday through Friday, and 9:00 a.m. to 1:00 p.m. Saturdays,
holidays excepted. HVAC services furnished after these hours will be
charges to Lessee at Lessor's actual cost, which cost shall not exceed,
$45.00 per hour for the first twelve (12) months of the Lease Term.
Lessee's use of separate HVAC package unit(s) for Lessee's phone/data
room or other rooms within the Premises shall be separately metered and
billed directly to Lessee.
11.5(a) Interruption of Services (cont'd)
3
In the event that any utilities or services to be furnished by Lessor
to the Premises are interrupted, disrupted, or terminated due to the
gross negligence or willful misconduct of Lessor, or due to Lessor's
failure to pay for such services or utilities and thereby prevents the
normal conduct of Lessee's business at the Premises, then the base rent
and any other amounts owing as rent hereunder shall ▇▇▇▇▇, based upon
the portion or portions of the Premises so affected by the
interruption, disruption, or termination until normal business at the
Premises may be resumed.
13.4 Late Charges (cont'd)
Notwithstanding anything to the contrary contained in Section 13.4, if
Lessee pays any amounts due under this Lease within twelve days after
such amount shall be due, Lessee shall not be required to pay to Lessor
a late charge of more than $500.00.
23. Notices (cont'd)
Notwithstanding the provisions of Paragraph 23 hereof, it is hereby
agreed that all notices to Lessee shall include a copy to: National
Media Corporation, 11th Floor, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Controller.
32.1 Lessor's Access (cont'd)
Except in the case of an emergency, Lessor shall provide prior
reasonable notice to Lessee of Lessor's intent to enter the Premises.
34.1 Signage (cont'd)
Notwithstanding the provisions of Paragraph 34 hereof, Lessee, at
Lessee's sole cost and expense, shall have the right to install one
sign in the Building's sign monument, as shown in Exhibit "D"
reflecting the names of Lessee and/or Guarantor. All such signage shall
be in accordance with Building signage regulations and the signage
specifications shown on Exhibit "D", and subject to all applicable
governmental regulations. Lessee shall not have the right to change
said signage without Lessor's prior written approval.
50. Lessee Improvements.
Lessor shall provide a total allowance of up to $692,852.00 ($34.00 per
usable square foot initially leased by Lessee), ( hereinafter
"Improvement Allowance"), based upon 20,378 usable square feet, for any
and all Lessee improvement costs, including, but not limited to, space
planning, design and architectural fees, a Lessor supervision and
coordination fee, construction drawings, mechanical and electrical
engineering, permits and other fees, plan check and construction of
Lessee's real property improvements in the Premises. The Improvement
Allowance shall not be utilized for personal property improvement items
(i.e. furniture, removable fixtures, computers, phone systems and
related equipment, and cabling). All costs to complete Lessee's
Improvements (as set forth in the lump sum construction contract) in
excess of said Improvement Allowance and all costs incurred by Lessor
as a result of Lessee's additions or modifications to said mutually
approved construction drawings shall be paid by Lessee to Lessor after
completion of such Lessee Improvements within fifteen (15) calendar
days of Lessor's written notice.
Except for this Paragraph 50 and the Improvement Allowance provided
herein, and the provisions provided for in Paragraph 6, and Paragraph
7.1 or otherwise specifically set forth in the Lease, Lessor shall have
no obligation whatsoever to modify, construct, or otherwise alter the
Premises or the Office Building Project for Lessee's occupancy.
4
Lessee shall have the right to enhance the tiled floor in the elevator
lobby on the western portion of 5th floor of the Building, subject to
Lessor's prior written approval. The cost of such enhancement may be
deducted from the Improvement Allowance by the Lessor.
Lessor shall utilize the Lessor's Building standard ceiling grid,
lights, hardware, locksets, doors and window coverings for the
Premises. Attached as Exhibit "C" is a preliminary space plan and
specifications, prepared by Lessor's architect for the improvements to
Lessee's Premises, which shall be mutually approved by Lessee and
Lessor prior to the commencement of construction drawings ("Lessee's
Improvements"), which approval shall not be unreasonably withheld.
Construction documents shall be completed by Chelsea Design. Lessee
shall approve a final space plan for the Premises by December 10, 1996.
Lessor shall promptly deliver to Lessee working drawings and
specifications for the interior finishes to the Premises. Lessee shall
notify Lessor of any required changes to such working drawings within
five (5) calendar days following Lessee's receipt of same and, if
applicable, Lessor shall cause its architect and engineers to make such
changes and deliver the revised final working drawings to Lessee for
its approval within five (5) calendar days of Lessor's receipt of
notice of such required changes. Lessee shall provide approval of the
revised working drawings within two (2) business days of its receipt.
Upon Lessee's approval of the final working drawings, Lessor shall
instruct its approved mechanical and electrical engineers to commence
engineering for Lessee's Improvements. Upon completion of engineering,
Lessor shall submit the completed set of plans to the list of approved
general contractors for the Building.
Lessee's space plans and working drawings shall not conflict with the
building codes for the City of Los Angeles, or with any other
applicable governmental law or regulation, or with applicable insurance
regulations. All space plans and working drawings shall be in a form
satisfactory to appropriate governmental authorities responsible for
issuing permits and licenses required for construction.
Lessee hereby designates ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ as its representative with
respect to the construction of the Lessee Improvements, to act on
behalf of and in the name of Lessee and may make all decisions and give
all approvals required of Lessee with respect to such construction. All
notices shall be sent to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ at the following address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇, by hand
delivery or overnight delivery. Lessor shall competitively bid the
project to at least three (3) qualified general contractors reasonably
approved by Lessee. Lessee may name a fourth (4th) general contractor,
subject to Lessor's prior reasonable approval of said general
contractor.
Lessor shall enter into a lump sum construction contract (subject to
Lessee's reasonable approval which approval or denial must be made
within 72 hours or such contract shall be deemed approved) with the
selected contractor for the installation of the Lessee Improvements in
accordance with the approved plans and working drawings. Lessor shall
supervise the completion of such work and shall use commercially
reasonable efforts to secure substantial completion of the work in
accordance with a work schedule, to be defined prior to finalizing the
constriction contract. There shall be a Lessor coordination,
supervision and observation fee of $13,857.00, which shall be deducted
from the Improvement Allowance defined above.
Lessor shall obtain permits for Lessee's Improvements, and shall
construct and complete Lessee's Improvements in the Premises in
accordance with the approved plans.
Lessor's approved mechanical contractors, Preferred Mechanical or
Westco Air Conditioning, and Lessor's approved electrical contractor
which is Hye-line Electric,
5
may be utilized by the approved general contractor. Lessor agrees to
competitively bid the mechanical and electrical components of the
project to at least two other qualified mechanical and electrical
contractors reasonably approved by Lessee. All telephone line
installation shall be undertaken by Lessee at its expense. Such
expense shall not constitute Tenant Improvement. The general
contractor shall coordinate such installation with Lessee's Tenant
Improvements.
Prior to any contractor entering the Building, said contractors shall
provide Lessor with a waiver of any and all mechanic and lien rights,
and the contractors shall name Lessor as additional insured in its
liability policy (which shall be for not less than $1,000,000 per
occurrence) and in Lessee's workmen's compensation insurance policy.
All contractors shall schedule all work and deliveries, including the
use of loading docks and elevators, through Lessor (Lessor's contact is
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (818-990-8410)), and shall comply with all construction
regulations established by Lessor for the Building. All contractor and
subcontractors shall use service elevators only, shall park and load in
designated areas only, and shall protect the Building, its Common
Areas, and Lessor's property (i.e. carpeting, walls, tile, finishes,
etc.). In no event shall any construction personnel use tenant
restrooms or enter tenant offices. The general contractor shall provide
construction toilets and dumpsters per Lessor's direction.
In the event: (i) of any Lessee requested additions, modifications, or
changes to said approved plans or drawings, (ii) Lessee's failure to
approve any item or perform any other obligation within the timelines
contained herein, (iii) Lessee's request to materials, finishes or
installations which are not part of the Building standards or which are
not readily available of which Lessor shall provide Lessee written
notice following Lessor's receipt of the approved working drawings,
cause a delay in the construction of Lessee's Improvements, then
notwithstanding the provisions of Paragraph 1.5 hereof, the
Commencement Date under this Lease shall be the date that Tender of
Possession should have occurred were it not for such Lessee caused
delay(s).
If Lessor shall be delayed at any time in the progress of the
construction of Lessee's Improvements or any portion thereof by
strikes, lockouts, fire, delay in transportation, unavoidable
casualties, severe weather conditions, unforeseeable government delays,
then the Commencement Date established in Paragraph 1.5 of the Lease
shall be extended by the period of such delay.
The term "Completion," as used in the Lease, is hereby defined to mean
the date the building department of the municipality having
jurisdiction of the Premises shall have made a final inspection of
Lessee's Improvements and Lessee's punchlist has been substantially
completed.
51. Directory Board and Identity.
Lessor, at Lessee's sole cost and expense, shall install Lessee's
and/or Guarantor's name on all ground floor Building directories.
Lessee shall have the right to two (2) Directory Board strips on the
west Directory Board for Lessee's and/or Guarantor's name only, two (2)
Directory Board strips on the east Directory Board for Lessee's and/or
Guarantor's name only, and ten (10) Directory Board strips on the
center Directory Board for Lessee's and/or Guarantor's name and
executives.
52. Jury Waiver.
The parties waive their respective right to trial by jury of any cause
whatsoever in any action, proceeding or hearing by either party against
the other on any subject whatsoever arising out of this lease, the use
or occupancy of the Premises, the relationship of the parties or for
any claim for injury or damage or enforcement of any remedy under any
law, statute, regulation, or otherwise, now or hereafter in effect.
6
53. Extension Options.
In the event and on the condition that Lessee has timely performed each
and every, all and singular, of the terms, covenants and conditions on
Lessee's part to be performed, then Lessee shall have two (2) options
to renew this lease for a period of five (5) years ("Renewal Term")
each, exercisable by written notice to Lessor not less than nine (9)
months and not more than twelve (12) months prior to the expiration of
the initial Lease Term or subsequent Renewal Term. The initial Base
Rent for the Renewal Term shall be Ninety-Five percent (95%) of the
then prevailing market rental rates, as of the commencement of the
applicable Renewal Term, for comparable class buildings in the
Encino/▇▇▇▇▇▇▇ Oaks area.
54. Expansion Space.
Lessee shall have the right of first refusal to lease Suites 567 and
550, hereinafter the "Option Space". Such right of first refusal shall
expire on December 31, 1997. The right of first refusal shall be
exercised under the following terms and conditions. In the event that a
bonafide written proposal or request for proposal has been received by
Lessor from a prospective third party tenant, for the lease of all or a
portion of the Option Space, Lessee shall have ten (IO) calendar days
from Lessor's written notice to Lessee of the receipt of the written
proposal or request for proposal for all or a portion of the Option
Space to either, (i) lease the premises described in Lessor's written
notice at the Option Space Terms described below, or (ii) not lease the
premises described in Lessor's written notice. In the event Lessee sd
notifies Lessor in writing of Lessee's intent to exercise said right of
first refusal, within said ten (10) calendar day period, then Lessor
and Lessee shall promptly thereafter execute an amendment to the Lease
incorporating the Option Space into the Lease, at the Option Space
Terms described below. All such Option Space leased by Lessee will be
coterminous with the initial Lease Term. In the event Lessee fails to
notify Lessor within said ten (10) calendar day period, then Lessor
shall have the right to proceed with the lease of said Option Space to
the prospective third party tenant.
Option Space Terms.
The Lease Term for the Option Space shall be coterminous with the
initial Premises.
The Base Rental Rate for the Option Space shall be the Base Rental
Rates stated in Addendum Paragraph 1.6 hereof, subject to the
expiration of the right of first refusal.
Lessee shall have the right to rent additional parking for the
Expansion Space per Paragraph 2.2 of the Lease, based upon the terms
and vehicle parking ratios contained in Paragraph 2.2 of the Lease and
Addendum Paragraph 2.2.3.
55. Load Factor.
The usable to rentable add-on factor for the Building is 1.1375.
56. Patios.
Lessee, at Lessee's sole cost and expense, may utilize the Building's
standard patio furniture manufactured by ▇▇▇▇▇ ▇▇▇▇▇▇. Umbrellas and
other objects shall not be placed upon the terraces.
57. Cable TV.
Lessor shall cooperate with Lessee in effectuating the installation of
cable TV in the
7
Building, however, Lessor shall not be responsible for any costs
involved with the installation or maintenance of cable TV in the
Building.
58. Temporary Premises.
Suite 520, consisting of approximately 3,914 rentable square feet, on
the 5th floor of the Building shall be made available upon fall Lease
execution. The Temporary Space shall be provided to Lessee on an
"as-is" basis. Lessee may, at Lessee's option, apply a portion of the
Improvement Allowance towards the costs of stripping the wallcovering
and repainting the walls in Suite 520. Base Rent for said Temporary
Space shall be $1.75 per rentable square foot per month, full service
gross, prorated for any partial month.
59. Ground Floor Option Space.
Lessee shall have the option to lease Suite 165 consisting of 3,530
rentable square feet, located on the First Floor of the Building (the
"Suite 165") for (i) a term commencing on January 1, 1998 and expiring
on the Fifth (5th) anniversary of the Commencement Date (the "Initial
Space Term"); and (ii) a Tenn of an addition Five (5) years (the
"Second Space Term"). The option for the Initial Space Term must be
exercised by written notice by Lessee to Lessor on or prior to 5:00
P.M. Pacific Standard Time on October 31, 1997. The Option for the
Second Space Term must be executed in writing no later than Ninety (90)
days prior to the expiration of the Initial Space Term. The Base Rent
for Suite 165 during the Initial Space Term shall be $5,295.00 per
month (based upon 3,530 rentable square feet.) The Base Rent for the
Second Space Term shall be Ninety-Five (95%) percent of the then
prevailing market rental rates for similar space in comparable class
buildings in the Encino/▇▇▇▇▇▇▇ Oaks area.
8
December 4, 1996
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
NATIONAL MEDIA CORP.
c/o FPM Group
▇▇▇ ▇. ▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
RE: National Media Temporary Space
Dear ▇▇▇▇▇▇:
You have brought to my attention National Media's desire to occupy as Temporary
Space Suite 530, consisting of approximately 4,231 rentable square feet on the
5th floor of the building, rather than Suite 520 as specified in Paragraph 58 of
the lease.
Encino Terrace Center is agreeable to this change under the same terms and
conditions as outlined in the lease. The monthly rental rate shall be
$7,404.25/month.
This letter shall also confirm the agreement which was made at the time of lease
execution (via coin toss) whereby National Media will be allowed to occupy the
Temporary Space as early as December 7, 1996, yet the rental charges will begin
on December 15, 1996.
Sincerely,
ENCINO TERRACE CENTER
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Manager of Operations
SHF/md
cc: ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇
SECOND LEASE AMENDMENT
DATED FOR REFERENCE PURPOSES ONLY, JANUARY 28,1997
Reference is made to that certain lease dated November 26, 1996 and the First
Addendum dated December 9, 1996 between Encino Terrace Center ("Lessor") and
Positive Response Television, Inc. and Direct America Corporation ("Lessee") for
Suite Number 570 in the building located at ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇.
It is hereby agreed that all terms and conditions of the Lease shall remain in
full force and effect except for the following:
1) Addendum Paragraph 58 (Temporary Premises) shall be amended by adding
the following terms:
"On February 15, 1997, Lessor shall make available that portion of
Suite 275, outlined in attached Exhibit 1 consisting of approximately
6,673 rentable square feet, on the 2nd floor of the building. Lessee
will be allowed to move from current Temporary Space (Suite 530) to new
Temporary Space (portion of Suite 275) and shall thereafter not be
responsible for payment of any rent or other amount pertaining to the
initial temporary space. The new Temporary Space shall be provided on
an "as-is" basis. Base Rent for said new Temporary Space shall be $1.75
per rentable square foot per month, full service gross, prorated for
any partial month. Any tenant improvements to said Temporary Space must
be submitted in writing to and approved by building management."
Agreed and Accepted: Agreed and Accepted
ENCINO TERRACE CENTER ("Lessor") POSITIVE RESPONSE TELEVISION, INC.,
A DELAWARE CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice President By: /s/ ▇▇▇ ▇▇▇▇
---------------------------------- -------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice President
Dated: 3/5/97 Dated: 2/10/97
---------------------------------- -------------------------------
DIRECTAMERICA CORPORATION,
A DELAWARE CORPORATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------
Dated: /2/10/97
-------------------------------
Agreed and Accepted by Guarantor:
NATIONAL MEDIA CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Dated: 2/10/97
-------------------------------