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EXHIBIT 10.14
CONSENT BY LANDLORD TO ASSIGNMENT
The undersigned, as Landlord under that certain Lease dated April 17, 1990,
with Kaman Music Corporation, Coast Wholesale Music Division ("Assignor") for
certain premises at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇, ▇▇, (the "Lease"), hereby
consents to the entering into of the foregoing Assignment, dated June 27, 1997
("Assignment"), between Assignor and Raster Graphics, Inc., a Delaware
Corporation ("Assignee") upon the express understandings and conditions that:
a. Landlord neither approves nor disapproves the terms, conditions
and agreements contained in the Assignment and assumes no
liability or obligation of any kind whatsoever on account of
anything contained in the Assignment;
b. By executing this consent, Landlord shall not be deemed to have
waived any rights under the Lease nor shall Landlord be deemed
to have waived the tenant's obligations to obtain any required
consents under the Lease (other than consent to the Assignment
itself);
c. Notwithstanding anything in the Assignment to the contrary,
Assignor shall be and continue to remain liable for the payment
of rent and the full and prompt performance of all of the
obligations of the tenant under and as set forth in the Lease;
d. Nothing contained in the Assignment shall be taken or construed
to in any way modify, alter, waive or affect any of the terms,
covenants or conditions contained in the Lease; and
e. There shall be no further subletting or assignment of all or any
portion of the premises demised under the Lease except in
accordance with the terms and conditions of the Lease.
LANDLORD
SCI Limited Partnership-I,a.
Delaware Limited Partnership
By: [SIG]
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Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: SVP
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Dated: 7/1/97
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ASSIGNMENT
This Assignment is made on this 27 day of June, 1997, by and between
Kaman Music Corporation, Coast Wholesale Music Division, a Connecticut
corporation ("Assignor"), and Raster Graphics, Inc., a Delaware corporation,
("Assignee"). ▇▇▇▇ & ▇▇▇▇▇, a California partnership, and ▇▇▇▇▇▇▇▇ have entered
into a written Lease Agreement dated as of April 17, 1990, (the "Lease"), a copy
of which is attached hereto as Exhibit "A." Assignor desires to assign all its
right, title, and interest in the Lease to Assignee on the terms and conditions
set forth herein.
Section 1. Assignment. Assignor hereby assigns and transfers to Assignee
all of its right, title, and interest in the Lease effective as of July 1, 1997
("Effective Date"), and ▇▇▇▇▇▇▇▇ accepts the assignment and assumes and agrees
to perform as a direct obligation to Landlord, all of the provisions of the
Lease accruing from the Effective Date. Assignee shall not be liable for any
payments due or other obligations required to be performed under the Lease prior
to the Effective Date.
Section 2. Security Deposit and Prorations. The parties acknowledge that
▇▇▇▇▇▇▇▇ holds a security deposit in the amount of $10,979.00 ("Deposit"). Upon
the execution of this Assignment, Assignee shall reimburse Assignor in cash for
said amount. Assignor and Assignee acknowledge that certain expenses are paid on
a shared basis under the terms of the Lease and that tenants share of such
expenses is ten and seven one-hundredths percent (10.07%). Assignor and Assignee
agree that such shared expenses shall be prorated as of the Effective Date,
(i.e. if the shared expense is related to a one year period from January 1st -
December 31st), such costs shall be shared equally by Assignor and Assignee.
Section 3. Assignor's Representations. Assignor represents and warrants
to Assignee that:
▇. ▇▇▇▇▇▇▇▇ is the lawful owner of all rights, title, and interest
in the Lease and has the right to make this Assignment;
B. The rights, title or interest in the Lease are free and clear of
any pledge, security interest, lien, claim or other encumbrance
or claim of any kind;
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C. The Lease and this Assignment are genuine, valid and
enforceable, and Assignor is not in default under the terms of
the Lease;
▇. ▇▇▇▇▇▇▇▇ holds a Deposit under the terms of the Lease; and
▇. ▇▇▇▇▇▇▇▇, for itself and its successors, does hereby agree to
defend the rights, title, and interest hereby assigned to
Assignee against claims and demands of all persons or companies
whomever.
Section 4. Notice. Any notice, request, instruction, or other document
to be given hereunder or pursuant to the Lease shall be in writing and shall be
deemed to have been given when delivered personally or mailed by certified mail,
postage prepaid, addressed to the intended recipient thereof at the address
shown below. Any party may change its address for the purpose of this Assignment
and Consent by giving the other parties written notice of such change in the
manner set forth herein.
Section 5. Necessary and Further Acts. Assignor agrees to perform such
additional acts and execute such additional documents as are necessary to carry
out this Assignment.
Section 6. Governing Law. This Assignment shall be construed, performed,
and enforced in accordance with the laws of the State of California applicable
to transactions negotiated, agreed to, and performed entirely within the State
of California. Assignor consents to the jurisdiction of all federal and state
courts in California. Any action concerning this Agreement shall be brought and
tried in the United States District Court for the Northern District of
California in San Jose, California, or the Santa ▇▇▇▇▇ County Superior or
Municipal Court.
The undersigned have executed this Agreement as of the date first
written above. THIS ASSIGNMENT IS SUBJECT TO THE APPROVAL OF THE LANDLORD.
"Assignor" "Assignee"
Kaman Music Corporation, Raster Graphics, Inc.,
Coast Wholesale Music Division ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
________________________ San Jose, CA 95134
________________________
By: /s/ [SIG] By: /s/ [SIG]
---------------------------- ----------------------------
Authorized Officer Authorized Officer
Vice President/CFO Vice President/CFO
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STANDARD INDUSTRIAL LEASE-NET
Lease Summary
The following information affects the terms of the Basic Lease.
I. LANDLORD: King & ▇▇▇▇▇, a California Partnership
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II. TENANT: Kaman Music Corporation, Coast Wholesale Music Division
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III. PREMISES: A 33,000 square foot portion of Building D at 8648 ▇▇▇▇▇▇▇▇
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Avenue, Newark, CA (see Exhibit A).
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IV. TERM:
Lease Term: One Hundred Twenty (120) months.
Lease Commencement [check one]:
[X] Subject to completion of improvements. ▇▇▇▇▇▇▇▇'s current
estimate of the substantial completion date is July 1, 1990.
[ ] Comencement Date: __________________________________, 19__.
[Landlord initials:____] [Tenant initials:____]
SEE EXHIBIT C
V. CHARGES:
Base Monthly Rent: See Addendum ($________).
Security Deposit: Ten Thousand Nine Hundred Seventy-Nine Dollars
(10,979)
Percentage Share of Expenses: Ten and Seven One-Hundredths percent
(10.07%)
Estimated Monthly Expenses: One Thousand Four Hundred Eighty-Five
Dollars ( 1,485)
Rental Adjustment Period or Date(s): N/A
VI. ATTACHMENTS: The following Exhibits are attached to and a part of this
Lease, for the purposes stated in the Basic Lease:
Addendum, Exhibits A, B and I and Exhibit C.
VII. EXECUTION: The undersigned Landlord and ▇▇▇▇▇▇ agree to the provisions
of this Lease, including the attached Basic Lease and the Exhibits
identified above.
VIII. ADDENDUM: The parties further agree to the modifications/changes to this
Lease. (labeled Exhibit C)
LANDLORD TENANT
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Kaman Music Corporation,
King & ▇▇▇▇▇ Coast Wholesale Music Division
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By: /s/ [SIG] By: /s/ [SIG]
-------------------------------- --------------------------------
Its: Partner Its: Vice President
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Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Address: ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Fremont, CA 94538 Compton, CA 90224-5686
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-------------------------------- --------------------------------
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Dated As Of April 17, 1990
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BASIC LEASE
1. Parties. This Lease entered into by and between the parties identified in
the Lease Summary as Landlord and Tenant.
2. Premises. Landlord leases to Tenant, and ▇▇▇▇▇▇ hires from Landlord, all
or a portion of (the "Premises") of a building (the "Building"), as identified
in the Lease Summary. The Premises encompass all space bounded by the inside
surface of the exterior walls and roof, the outside surface of all windows and
exterior doors, the centerline of any partition walls, and the upper surface of
the floor slab. A floor or plot plan depicting the building containing the
Premises may be attached hereto as an Exhibit, with the Premises outlined in
some suitable manner, solely for the purpose of designating the location of the
Premises.
3. Term. This Lease shall begin on the commencement date and continue for
the term stated in the Lease Summary, in accordance with the following:
3.1 Commencement. The commencement date shall be the Commencement Date
stated in the Lease Summary or, if no Commencement Date is stated, the earlier
of (i) the date of substantial completion of the improvements to be constructed
by Landlord on the Premises, according to any description of Landlord work set
forth on an Exhibit or Addendum to this Lease, or (ii) the date on which Tenant
first uses a portion of the Premises in its business. "Substantial completion"
shall have occurred on the first date on which (1) the governmental authority
having jurisdiction has authorized occupancy of the Premises, (ii) electric
power is available at the Premises, and (iii) the architect, engineer, or other
person supervising construction of the improvements certifies that they are
substantially complete and ready for occupancy, subject only to "punch-list"
defects that do not materially diminish the usefulness of the Premises. Landlord
shall advise Tenant, from time to time and in good faith, of the estimated
completion date. Upon ascertaining the commencement date, the parties shall
insert that date in the Lease Summary, as the "Commencement Date" and initial
the insertion. If the commencement date is other than the first day of a
calendar month, then the lease term shall extend for the number of months stated
in the Lease Summary, beginning with the first day of the month following the
commencement date.
3.2 Postponement. If, for any reason, ▇▇▇▇▇▇▇▇ is unable to deliver
possession of the Premises to Tenant on the Commencement Date stated in the
Lease Summary, the commencement of the lease term will be postponed, without
liability to either party or affecting the validity of this Lease, and the term
shall begin on such date as Landlord is able to deliver possession. However, if
▇▇▇▇▇▇▇▇ is unable to deliver possession within three months after any such
stated Commencement Date, or within one year after execution of this Lease if no
Commencement Date is stated in the Lease Summary, then this Lease shall
thereupon terminate without liability to either party. SEE EXHIBIT C.
4. Rental. As rental for the Premises, Tenant shall pay to Landlord, when
due and in lawful money of the United States, all sums required to be paid by
Tenant under this Lease, without deduction or offset, and shall promptly
discharge all other monetary obligations of the Tenant hereunder. Any payment
not received by Landlord when due shall thereafter bear interest, at the rate
stated in paragraph 17.1, until received, provided that Landlord will waive
interest on any monthly rental payment received not later than the fifth day of
that month (or the first business day following the fifth if the fifth falls on
a weekend or holiday). All such sums shall be paid to Landlord at Menlo Park,
California, or such other place in California as Landlord may designate.
4.1. Base Monthly Rent. The base monthly rent shall be the amount stated
in the Lease Summary, payable in monthly installments in advance, on the first
day of each calendar month during the lease term. If the commencement date is a
day other than the first day of a calendar month, then the rent for that partial
month shall be a fraction of the base monthly rent, based on the number of days
in that partial month, including the commencement date, in proportion to the
total number of days in the month; such rent shall be payable on the first day
of the following month. Rent for the first calendar month of the term is payable
upon execution of this Lease.
5. Security. As security for the performance of its obligations under this
Lease, ▇▇▇▇▇▇ gives Landlord the security described in this paragraph.
5.1 Deposit. Tenant shall deposit with Landlord, upon execution of this
Lease, the sum stated in the Lease Summary as the security deposit, which
Landlord shall retain as a debtor and not as a trustee. Tenant acknowledges that
the use value of the security deposit has been considered in determining the
appropriate monthly rent for the Premises, and Tenant shall be entitled to no
credit or compensation, by way of Interest or otherwise, for Landlord's
possession of the security deposit, which may be commingled with ▇▇▇▇▇▇▇▇'s own
funds. If Tenant defaults in the performance of any of its obligations
hereunder, Landlord may apply any portion of the deposit as necessary to cure
the default or to compensate Landlord for its damages from the default, and
Tenant shall, within ten days after
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Landlord's demand therefor, deposit with Landlord the sum that is necessary to
restore the deposit to the full original amount. Upon termination of this Lease,
and after ▇▇▇▇▇▇ has vacated the Premises, the amount of such deposit remaining,
after curing Tenant's defaults and compensating Landlord for damages caused by
Tenant, shall be returned to Tenant at its last address known to Landlord.
6. Use.
6.1 Premises. The Premises shall be used only for general industrial,
warehousing, and office purposes. Notwithstanding these permitted uses, Tenant
will engage in no activity on the Premises that would, in the judgment of any
insurer of the Premises, increase the premium on any of Landlord's insurance
over the amount otherwise charged therefor or cause such insurance to be
canceled. In its use of the Premises, Tenant will comply with all applicable
laws, governmental regulations, and tract restrictions. Tenant will commit no
nuisance or waste on the Premises and will not cause any unreasonable odors,
noise, vibration, electronic emissions, or any other item to emanate from the
Premises so as to damage Landlord's property or interfere with any other person.
6.2 Exterior. No portion of the area outside of the Building is leased
to Tenant. However, Tenant may utilize truck access and turning areas in a
reasonable manner, and Tenant may utilize designated parking areas, in common
with Landlord's other tenants, for daily parking of passenger vehicles. No
rubbish containers or other materials may be stored outside of the Premises.
Tenant may not erect or maintain any sign or other marking on, or visible from,
the exterior of the Premises without Landlord's prior written consent; such
consent will not be unreasonably withheld for any sign that conforms to sign
standards described on an Exhibit to this Lease. Tenant shall have no right of
access to the Building roof, and Tenant shall make no penetrations in the roof
without Landlord's prior written consent. SEE EXHIBIT C.
6.3. Waste Materials. Tenant shall not discharge commercial or
industrial wastes into the sewer system serving the Premises. All such wastes
shall be disposed of only in sanitary containers that are regularly collected by
a properly licensed waste disposal firm. If Tenant causes any waste materials to
contaminate the Premises or any other property, Tenant shall indemnify Landlord
and hold it harmless from all claims, demand, liabilities, and expenses,
including attorney's fees, arising out of such contamination.
7. Maintenance and Repair.
7.1 Original Condition. If the Premises are complete and vacant when
this Lease is signed, ▇▇▇▇▇▇ acknowledges that the Premises are now in good
condition and are not in need of repair. If this Lease is executed while the
Premises are occupied by another tenant or before the Landlord has completed
improvements on the Premises that are required by this Lease, then the Premises
shall be deemed to be in good condition and not in need of repair as of the
commencement date of the lease term, excepting only defects that could not be
ascertained by reasonable inspection, unless, within thirty days thereafter,
Tenant delivers to Landlord a written notice specifying the manner in which the
Premises are not then in good condition and repair.
7.2 Landlord's Obligations. Subject to the provisions of this Lease
dealing with damage or destruction, Landlord shall maintain, at its expense, the
structural soundness of the Building foundation, walls, floors, and roof.
Subject to Tenant's obligation to pay a percentage share of the cost in
accordance with paragraph 8, Landlord shall maintain the exterior of the
Building and the landscaping, sidewalks, and parking areas (the "Common Area")
serving the Building.
7.3. Tenant's Obligations. Throughout the lease term, Tenant shall
maintain the Premises, all improvements on the Premises, and all equipment and
systems that service the Premises in good condition and repair. The items to be
repaired by Tenant include, for example and not as a limitation: plumbing,
heating, air conditioning, ventilating, and electrical equipment; walls, floor
slab surface and coverings, ceilings, doors, and glass. Tenant will cause all
heating, ventilating, air conditioning, and electrical equipment to be
maintained in accordance with the manufacturers' recommendations and
specifications, and Tenant will place such equipment under service contract as
required for proper preventative maintenance. At the end of the lease term,
▇▇▇▇▇▇ shall surrender the Premises to Landlord broom clean, in the same
condition as they existed at the commencement of this Lease, together with such
changes as are permitted to remain pursuant to this Lease, excepting only such
ordinary wear as could not have been avoided by routine maintenance. If Tenant
fails to perform proper maintenance or repair, including preventative
maintenance where appropriate, Landlord may, after reasonable notice to Tenant
(or without notice for emergency repairs), cause the same to be performed, and
the cost thereof will promptly be paid by Tenant upon receipt of a statement
from Landlord setting forth the amount due. SEE EXHIBIT C.
8. Costs. Tenant shall pay all utility and maintenance costs, property
taxes, and insurance premiums associated with the Premises, as described below.
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8.1. Utility and Maintenance Costs. Tenant shall pay for all costs of
utility services to the premises, including fire sprinkler monitoring; if
utilities are not separately metered to the premises, Tenants shall pay for its
percentage share. Tenant shall pay its percentage share of all costs incurred by
Landlord for maintenance and repair of the building exterior and Common Area
during the lease term, including but not limited to painting, parking lot
surfacing, and roof maintenance (excluding, in the case of roof maintenance,
expenditures for capital items.)
8.2. Property Taxes. Tenant shall pay its percentage share of all taxes,
general and special assessments, and other charges imposed by any taxing
authority and levied against the property containing the Premises or against
Landlord by virtue of its ownership thereof or collection of rental income
therefrom (excepting only estate taxes, inheritance taxes, and income taxes that
are payable on nonrental as well as rental income). "Taxing Authority" includes
all entities having taxing or assessment authority by law or by virtue of any
recorded instrument binding on the owner of the Premises.
8.3. Insurance. Tenant shall pay its percentage share of all premiums
for such insurance, if any, as may be carried by Landlord to insure: the
Building, to its full insurable value, against all perils included in the
classifications of fire, extended coverage, vandalism, malicious mischief,
special extended perils, earthquake and all-risk sprinkler leakage; against loss
of Building rents, property taxes, and insurance costs for a period of not more
than six months; against personal injury and property damage liability to the
extent such insurance is not provided by Tenant under this Lease; against such
other hazards as are then normally insured against by owners of commercial
buildings of the sort containing the Premises.
8.4. Percentage Share. Tenant's percentage share of the costs described
above shall be the percentage stated in the Lease Summary, or, if no percentage
is there stated, shall be determined by the square footage of the Premises
divided by the square footage of the Building. However, if Tenant utilizes more
than its proportionate share of the Common Area, for parking or other purposes,
or more than a normal amount of any utility service, then Landlord may equitably
increase Tenant's percentage share of costs associated with those items to
account for such additional usage. Tenant's percentage share of property taxes
may also be equitably adjusted by Landlord to take account of any
disproportionate tax burden imposed by special improvements or valuations
relating to other portions of the Building or to other buildings on the tax
parcel, which adjustment may raise or lower Tenant's percentage share; valuation
data contained on the tax assessor's worksheets, if available, shall
conclusively determine the manner in which any equitable adjustment is to be
made.
8.5. Payment. At Landlord's election, Tenant shall pay its percentage
share of such costs to Landlord either (i) when incurred, on the basis on
Landlord's periodic billing, or (ii) monthly in advance, on the first day of
each calendar month, and the monthly amount shall be determined by ▇▇▇▇▇▇▇▇'s
then-current estimate of the average monthly costs. If periodic ▇▇▇▇▇▇▇▇ are
utilized, ▇▇▇▇▇▇'s payment shall be due ten days after the billing date.
▇▇▇▇▇▇▇▇'s initial estimate of the average monthly cost may be stated in the
Lease Summary. Periodically, but not less frequently than annually, Landlord
will provide Tenant with an accounting of all such costs for the preceding
period, and an appropriate sum will be credited or debited against ▇▇▇▇▇▇'s next
monthly rental payment so as to equalize Tenant's actual payments and ▇▇▇▇▇▇'s
actual share of costs for the period. Landlord may revise its monthly cost
estimate, and provide Tenant with an accounting for the previous period, at any
time during the lease term. If the lease term includes only a portion of a
taxing or insured period, then Tenant shall pay a pro rata portion of the total
property taxes or insurance premiums, based upon the number of days in the lease
term that are included in the taxing or insured period; however, Tenant shall
pay the entire amount of any property tax, for the tax year in which this Lease
terminates (or for the succeeding tax year if this Lease terminates after the
lien date for that tax year), levied on or attributable to improvements or
property that is to be removed from the Premises by Tenant prior to or at the
end of the lease term. If the Lease terminates before the property taxes for the
then-current fiscal year are known, the amount of the tax shall be reasonably
estimated on the basis of the best available information on current assessments
and tax rates or, if no such information is available, shall be projected at the
same rate as was imposed for the last previous taxing period, plus 28%. SEE
EXHIBIT C.
9. Alterations.
9.1. Tenant Work. Tenant shall make no alteration, addition, or utility
installation ("Changes") on or to the Premises without ▇▇▇▇▇▇▇▇'s prior written
consent. In making approved Changes, Tenant shall comply with all applicable
building code requirements. Unless Landlord has specifically waived this
provision in writing prior to the Installation of Changes, such Changes (i)
shall be removed from the Premises, and all damage resulting from such removal
repaired by Tenant , prior to the end of the lease term, or (ii) shall remain on
the Premises at the end of the lease term and become the property of Landlord,
at Landlord's election. If Landlord does not notify Tenant, at least three
months prior to the end of the lease term, of its election to have Changes
remain on the Premises, then Landlord shall thereby have elected to require
Tenant to remove such Changes. In making all Changes, Tenant shall hold Landlord
harmless from mechanics' liens and all other liability resulting therefrom. SEE
EXHIBIT C.
9.2. Landlord Work and Entry. Upon execution of this Lease, or at such
later time as is feasible and consistent with the terms hereof, Landlord shall
commence construction of any improvements depicted or described as Landlord work
on an Exhibit or Addendum to this Lease. Construction of such improvements shall
be pursued to completion with reasonable diligence, subject to delays for
reasons beyond Landlord's reasonable control ("Unexpected Events"). Unexpected
events include, for example, labor difficulties, inclement
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weather, rationing or other governmental controls, and shortage of materials or
services. All such improvements shall become part of the Premises and remain
thereon at the termination of the Lease. Landlord may enter the Premises at any
time for Inspection purposes, and may enter during normal business hours to show
the Premises to prospective tenants in the last 180 days of the lease term. If
it may be done without interfering with ▇▇▇▇▇▇'s business, Landlord may also
enter the Premises during the last 60 days of the lease term to prepare the
Premises for a subsequent tenant. SEE EXHIBIT C.
10. Damage. If any structural portion of the Premises that Landlord is
obligated to maintain is damaged or destroyed by any cause, if such damage is
insured against, and if the insurance proceeds are available for rebuilding,
then this Lease will not terminate and Landlord will cause such damage to be
repaired with reasonable diligence, subject to delays in the disbursement of
insurance proceeds and Unexpected Events. ▇▇▇▇▇▇▇▇'s obligation in this regard
shall be enforceable by Tenant only if such damage interferes with ▇▇▇▇▇▇'s
reasonable occupancy of the Premises. ▇▇▇▇▇▇'s rent will ▇▇▇▇▇ to the extent
that the damage and repair period interfere with ▇▇▇▇▇▇'s use of the Premises.
If the damage is not insured against, if the available insurance proceeds are
insufficient for the repair, or if the damage occurs within the last six months
of the lease term, Landlord may, at its option exercised by notice to Tenant
within thirty days of the date that Landlord acquires knowledge of the damage,
elect either to complete the repair at its expense, or to terminate this Lease
as of the date of damage. If Landlord elects to repair, rent will ▇▇▇▇▇ in the
manner described above; other than the obligation to repair stated above,
Landlord shall have no liability to Tenant on account of the damage.
SEE EXHIBIT C.
11. Condemnation. If there is a taking by eminent domain or a transfer under
threat thereof (i) the entire Premises, or (ii) so much of the Premises, for the
balance of the Lease term, as prevents the continued reasonable conduct of
Tenant's business thereon, then this Lease shall terminate as of the date that
possession of the condemned premises is delivered to the condemnor. No other
such taking or transfer shall terminate this Lease. All condemnation proceeds
shall be the property of Landlord, excepting only such portion thereof as is
designated by the condemnor as compensation for ▇▇▇▇▇▇'s moving expenses, loss
of ▇▇▇▇▇▇'s goodwill, or for Tenant's trade fixtures. SEE EXHIBIT C.
12. Liability.
12.1. Insurance. Tenant shall, at its expense, maintain in force during
the lease term a combined single limit policy of bodily injury and property
damage insurance, having a liability limit of not less than One Million Dollars
($1,000,000), with contractual liability endorsement, insuring Landlord and
Tenant against all liability arising out of the ownership, use, occupancy, or
maintenance of the Premises and appurtenant areas. Such insurance shall be
endorsed as primary and non-contributing, as to any policy carried by Landlord.
Tenant will deliver to Landlord a certificate evidencing such insurance and
providing that the insurance will not be canceled except on at least 30 days
notice to Landlord.
12.2. Indemnity. Tenant shall indemnify Landlord and hold it harmless
from all claims, demands, liabilities, and expenses, including attorney's fees,
arising out of Tenant's use of the Premises or from any acts permitted by Tenant
on the Premises, excluding claims or actions based upon ▇▇▇▇▇▇▇▇'s active
negligence or willful misconduct.
12.3. Waiver of Liability (No Subrogation). To the extent allowable by
the applicable insurance policy without reduction of coverage, Landlord and
Tenant hereby waive all rights of recovery against the other for loss or damage
that is compensable by insurance then in force.
13. Transfer.
13.1. Transfer by Tenant. Tenant shall not assign, sublet, or otherwise
transfer, or permit a transfer of, all or any portion of its interest in this
Lease, the Premises, or of a controlling interest in any Tenant entity, without
Landlord's prior written consent, which shall not be unreasonably withheld. No
such consent shall relieve Tenant of any liability under this Lease, nor shall
it constitute consent to any further transfer. As a condition of such consent,
the transferee must assume all of ▇▇▇▇▇▇'s liabilities hereunder.
13.2. Transfer by Landlord. The liability of Landlord hereunder shall
exist only with respect to the period that Landlord is the owner of the
Premises, but all of Landlord's obligations shall run with the land and be
binding upon all subsequent owners thereof. Upon any transfer of Landlord's
interest in the Premises, and notification thereof to Tenant, Landlord shall be
relieved of all liability hereunder except such as may have accrued prior to the
transfer.
14. Default.
14.1. Events. The occurrence of any of the following events shall
constitute a material breach of this Lease and default by Tenant:
14.1.1. Failure to pay rental within three days after Landlord's
delivery to Tenant, in the manner described in Section 1162 of the California
Code of Civil Procedure, of written notice of default;
14.1.2. Failure by Tenant to perform any nonmonetary obligation
under this Lease where such failure continues for more than thirty days or, if
the failure cannot reasonably be cured within thirty days, for a period
exceeding the time within which such failure could be cured with reasonable
diligence; SEE EXHIBIT C.
14.1.3. A general assignment by ▇▇▇▇▇▇ for the benefit of creditors;
the filing of a petition by or against ▇▇▇▇▇▇, seeking adjudication or
reorganization under the Bankruptcy Code; the appointment of a receiver to take
possession of, or a levy by way of attachment or execution upon, substantially
all of Tenant's assets at the Premises;
14.1.4. Tenant falsely stating its financial condition to Landlord,
either before or after the execution of this Lease. SEE EXHIBIT C.
14.2. Remedies. After any breach or default by ▇▇▇▇▇▇, Landlord shall
have all rights and remedies afforded by law, including but not limited to the
following:
- 5 -
9
14.2.1. If Tenant's right to possession is expressly terminated by,
Landlord because of such breach, Landlord may recover from Tenant such damages
as may be allowed under the laws of California, with interest at the rate
specified in paragraph 17.1, including the worth at the time of the award of the
amount by which the unpaid rent, for the balance of the term after the time of
the award, exceeds the amount of such rental loss that the Tenant proves could
have been reasonably avoided, as discounted to the then present value at a rate
equal to one percent (1%) over the discount rate of the Federal Reserve Bank of
San Francisco at the time of the award.
14.2.2. Without terminating ▇▇▇▇▇▇'s right to possession, Landlord may
enforce all of its rights and remedies under this Lease, including the right to
recover rent as it becomes due. For purposes of this provision, any reletting of
the Premises for a term of less than the unexpired term of this Lease or any
reletting of a portion of the Premises shall, at Landlord's option, be deemed to
terminate the Tenant's right to possession only with respect to such portion of
the unexpired term or such portion of the Premises as is the subject of such
reletting.
15. Subordination. At the option of the holder of any security interest
encumbering the Premises, this Lease shall be either prior to, or subordinate
to, the lien of such security interest, provided that subordination to a
security interest created after execution of this Lease shall occur only if the
security holder agrees that ▇▇▇▇▇▇'s occupancy of the Premises will not be
disturbed by such security holder, or its successor in interest, so long as
Tenant is not in default in the performance of its obligations hereunder.
16. Tenant Statements.
16.1. Offset. At the request of any prospective purchaser or
encumbrancer of the Premises, and for the benefit of such person, Tenant will,
from time to time as required, within ten days after notice from Landlord,
execute a written statement certifying that, to the best of Tenant's knowledge,
(i) this Lease is then unmodified and is in effect, (ii) no rent other than that
for the current month has been paid in advance, (iii) Landlord is not then in
default in the performance of any of its obligations, or specifying the manner
in which any of said matters is untrue. Tenant's failure to execute such written
statement within the time required shall constitute an admission by Tenant,
which may be relied upon by such person, that this Lease is then in effect
without modification, that no advance rent has been paid, and that Landlord is
not then in default. SEE EXHIBIT C.
16.2. Occupancy Certificate. Upon accepting occupancy of the Premises,
Tenant will, if required by any mortgagee or prospective mortgagee of the
Premises, complete, execute, and deliver to Landlord a certificate reflecting
▇▇▇▇▇▇'s acceptance of the Premises, in such reasonable form as may be required
by the mortgagee.
17. General Provisions.
17.1. Monetary Tenant when due shall thereafter bear interest at the
rate of one and one-half percent (1 1/2%) per month, unless such rate exceeds
the maximum rate that the parties may agree upon as permitted by law, in which
case such maximum rate shall apply. No acceptance by Landlord of any monetary
payment shall constitute a waiver by Landlord of any default by Tenant
hereunder.
17.2. Quite Enjoyment. So long as Tenant is not in default hereunder,
Landlord warrants to Tenant the quiet possession of the Premises throughout the
lease term, commencing upon Tenant's actual possession of the Premises, against
all persons lawfully claiming possession thereof.
17.3. Construction. The rent payable under this Lease has been
determined in light of all other provisions hereof. Both parties have had equal
opportunity to review this Lease and eliminate any ambiguities contained herein,
and this Lease shall be fairly interpreted in accordance with its reasonable
meaning, neither for nor against either party, neither of which is to be
considered as having drafted this Lease. Captions are for convenience only and
do not define or limit the provisions of this Lease.
17.4. Notices. Any written notice required to be given to a party
hereunder will be effective upon the earlier of (i) the date that it is
delivered in the manner required by applicable law, or (ii) three days after
mailing, if mailed by first class, certified United States mail, posted in
California, and addressed to the party at its address stated in the Lease
Summary, or, if no address is there stated, to Tenant at the Premises and to
Landlord at its then current address for payment of rent.
17.5. Entire Agreement. This Lease constitutes the entire agreement
between the parties concerning the subject matter; neither party has made any
representations or warranties to the other except as set forth herein.
17.6. Attorney's Fees. In any suit commenced by ▇▇▇▇▇▇▇▇ to collect rent
or recover possession of the Premises, the prevailing party shall be entitled to
recover its attorney's fees from the other. SEE EXHIBIT C.
17.7. Time. Time is of the essence in the performance of all obligations
required by this Lease.
17.8. Addendum. If an Addendum containing additional provisions is
attached to this Lease, the provisions of that Addendum override the provisions
of the Basic Lease to the extent they are inconsistent herewith.
17.9. Counsel. If a party was represented by counsel in connection with
the negotiation and execution of this Lease, that fact is indicated by party's
initials below Landlord's initials: Tenant's Initials:
ADDENDUM (EXHIBIT C) FOLLOWS
- 6 -
10
ADDENDUM
LANDLORD: King & ▇▇▇▇▇, a California Partnership
TENANT: Coast Wholesale Music
PREMISES: A 33,000 square foot portion of Building D located at ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (see Exhibit A)
19.0 Base Monthly Rental. The base monthly rent payable during the lease
term is summarized as follows:
Months Rent
------ ----
1-5 -0-
6-60 $10,979
61-120 $12,845
The rent for month six of the lease term shall be payable by Tenant upon
execution of this Lease.
END OF ADDENDUM
11
EXHIBIT C
SECOND ADDENDUM TO LEASE
The following modifications/changes to the Basic Lease (Building D at
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇) are hereby incorporated and made a
part of the Basic Lease:
18. Tenant's proper legal name is Kaman Music Corporation, Coast
Wholesale Music Division.
18.1. Section 3.2. is amended to read as follows:
"3.2. Postponement. If, for any reason, ▇▇▇▇▇▇▇▇ is unable to
deliver possession of the Premises to Tenant on or before August 1, 1990, the
commencement of the lease term will be postponed and Landlord will grant Tenant
a credit against future rental after the active commencement of the lease equal
to one day's free rent for each day of delay, and the term shall begin on such
date as Landlord is able to deliver possession. However, if Landlord is unable
to deliver possession on or before September 1, 1990 Tenant shall have the right
to terminate this lease without further liability or obligation and Landlord
will refund all deposits paid by Tenant."
18.2. Section 4.2 is deleted in its entirety.
18.3. Section 5.2 is deleted in its entirety.
18.4. Section 6.1 is amended to insert the word "unreasonably"
before the word "interfere" appearing in the last line.
18.5. Section 6.2 is amended to add the following as a second
sentence: "In addition, Landlord will provide Tenant with undesignated but
adequate parking space for at least fifteen (15) vehicles at all times."
18.6. Section 7.3 is hereby amended to add the following sentence:
"In the event Tenant's obligations under this lease shall involve any
expenditures in the nature of capital expenditures, Tenant's share of such
expenditures shall be pro rated (i) in the same proportion as set forth in the
Lease Summary and (ii) in the same proportion as the number of years remaining
in the lease term bears to the useful life of the improvement. For example, if
three (3) years remain in the lease term and Landlord incurs $10,000 in cost of
painting the building and the average time between painting is seven (7) years,
▇▇▇▇▇▇'s share would be 10,000 x 10.0% = $1,007 x 3/7th = $431.57."
18.7. Section 8.5 is hereby amended to add the following sentence:
"Tenant shall have the right to seek reimbursement for any taxes which it
reasonably believes it has overpaid, and for this purpose, Landlord will
cooperate with ▇▇▇▇▇▇ as Tenant may reasonably request."
18.8. Section 9.1 is hereby amended to delete subsection (ii)
through the end of Section 9.1, except for the last sentence which can remain
12
ADDENDUM TO LEASE
(cont'd)
and the deleted portion should be replaced with the following: "...if Tenant
elects not to so remove such Changes or if Landlord does not notify Tenant at
least three (3) months prior to the end of the Lease Term of its election to
have such Changes removed, such Changes shall remain on the premises and become
the property of the Landlord." In addition, the following should be added to the
first sentence of Section 9.1: "...except non-structural changes not exceeding
$5,000 in costs."
18.9. Section 9.2 is hereby amended to delete the last sentence;
change 180 days to 90 days in the second to the last sentence; and add the words
"during normal business hours" also appearing in the second to the last
sentence.
18.10. Section 10 is hereby amended to add the following sentence:
"Notwithstanding anything herein to the contrary, in the event such damage
cannot be, or is not in fact, repaired within one hundred twenty (120) days of
the written notification to Landlord of such damage, Tenant may terminate this
Lease without cause or further liability upon the giving of written notice to
Landlord."
18.11. Section 11 is hereby amended as follows: at the end of the
first sentence, the words "possession of the condemned premises is delivered to
the condemnor" is hereby deleted and replaced with the following "...▇▇▇▇▇▇'s
occupancy ends as a result thereof."
18.12. Section 14.1.2. is hereby amended by adding the word
"material" before "nonmonetary" and by adding a requirement for written notice
after the reference to thirty days.
18.13. Section 14.1.4. is hereby amended by replacing the word
"stating" with the following "and materially misstating".
18.14. Section 14.2.3. is hereby deleted.
18.15. In Section 16.1., the reference to notice in the first
sentence is hereby changed to read "written notice."
18.16. Section 17.6. is hereby amended to delete the words "Landlord
to collect rent or recover possession of the Premises" and replace such words
with the following: "either party to enforce its rights hereunder".
END OF BASIC LEASE
Landlord's Initials Tenant's Initials
---- ----
13
Exhibit A
[Map indicating location of building]
14
Exhibit I
[Floor plan of Building D]
15
Exhibit I
[Floor plan of Building D]