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Exhibit 10.24
OFFICE LEASE
BY AND BETWEEN
EDWARDS THEATRES CIRCUIT, INC.
AS LANDLORD
AND
BEVERAGE WORKS, INC.
AS TENANT
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Table of Contents
Article 1 LEASE OF PREMISES . . . . . . . . . . . . . . . . . . 1
Article 2 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . 1
Article 3 EXHIBITS AND ADDENDA . . . . . . . . . . . . . . . . 2
Article 4 DELIVERY OF POSSESSION . . . . . . . . . . . . . . . 2
Article 5 RENT . . . . . . . . . . . . . . . . . . . . . . . . 2
Article 6 INTEREST AND LATE CHARGES . . . . . . . . . . . . . . 5
Article 7 SECURITY DEPOSIT . . . . . . . . . . . . . . . . . . 5
Article 8 TENANT'S USE OF THE PREMISES . . . . . . . . . . . . 6
Article 9 SERVICES AND UTILITIES . . . . . . . . . . . . . . . 6
Article 10 CONDITION OF THE PREMISES . . . . . . . . . . . . . . 7
Article 11 CONSTRUCTION, REPAIRS AND MAINTENANCE . . . . . . . . 7
Article 12 ALTERATIONS AND ADDITIONS . . . . . . . . . . . . . . 8
Article 13 LEASEHOLD IMPROVEMENTS; TENANTS PROPERTY . . . . . . 9
Article 14 RULES AND REGULATIONS . . . . . . . . . . . . . . . . 9
Article 15 CERTAIN RIGHTS RESERVED BY LANDLORD . . . . . . . . . 9
Article 16 ASSIGNMENT AND SUBLETTING . . . . . . . . . . . . . . 10
Article 17 HOLDING OVER . . . . . . . . . . . . . . . . . . . . 11
Article 18 SURRENDER OF PREMISES . . . . . . . . . . . . . . . . 11
Article 19 DESTRUCTION OR DAMAGE . . . . . . . . . . . . . . . . 11
Article 20 EMINENT DOMAIN . . . . . . . . . . . . . . . . . . . 12
Article 21 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . 12
Article 22 TENANT'S INSURANCE . . . . . . . . . . . . . . . . . 13
Article 23 WAIVER OF SUBROGATION . . . . . . . . . . . . . . . . 13
Article 24 SUBORDINATION AND ATTORNMENT . . . . . . . . . . . . 13
Article 25 TENANT ESTOPPEL CERTIFICATES . . . . . . . . . . . . 14
Article 26 TRANSFER OF LANDLORD'S INTEREST . . . . . . . . . . . 14
Article 27 DEFAULT . . . . . . . . . . . . . . . . . . . . . . . 14
Article 28 BROKERAGE FEES . . . . . . . . . . . . . . . . . . . 16
Article 29 NOTICES . . . . . . . . . . . . . . . . . . . . . . . 16
Article 30 GOVERNMENT ENERGY OR UTILITY CONTROLS . . . . . . . . 16
Article 31 RELOCATION OF PREMISES . . . . . . . . . . . . . . . 16
Article 32 QUIET ENJOYMENT . . . . . . . . . . . . . . . . . . . 17
Article 33 OBSERVANCE OF LAW . . . . . . . . . . . . . . . . . . 17
Article 34 FORCE MAJEURE . . . . . . . . . . . . . . . . . . . . 17
Article 35 CURING TENANT'S DEFAULTS . . . . . . . . . . . . . . 17
Article 36 SIGN CONTROL . . . . . . . . . . . . . . . . . . . . 17
Article 37 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . 17
(i)
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This Lease between EDWARDS THEATRES CIRCUIT, INC., a California
Corporation ("Landlord"), and BEVERAGE WORKS INC., a Corporation ("Tenant"), is
dated NOVEMBER 22, 1996.
1. LEASE OF PREMISES
In consideration of the Rent (as defined at Section 5.4) and
the provisions of this Lease, Landlord leases to Tenant and Tenant leases from
Landlord the Premises shown by diagonal lines on the floor plan attached hereto
as Exhibit "A", and further described at Section 21. The Premises are located
within the Building and Project described in Section 2m. Tenant shall have the
non-exclusive right (unless otherwise provided herein) in common with Landlord,
other tenants, subtenants and invitees, to use of the Common Areas (as defined
at Section 2e).
2. DEFINITIONS
As used in this Lease the following terms shall have the
following meanings:
a. Base Rent (initial): Ten Thousand Nine Hundred Seventy
Five and 20/100 Dollars ($10,975.20) per year.
b. Base Year: The calendar year of 1996.
c. Broker(s)
Landlord's: Edwards Theatres Circuit, Inc.
Tenant's: Edwards Theatres Circuit, Inc.
In the event that Edwards Theatres Circuit, Inc.
represents both Landlord and Tenant, Landlord and Tenant hereby confirm that
they were timely advised of the dual representation and that they consent to
the same, and that they do not expect said broker to disclose to either of them
the confidential information of the other party.
d. Commencement Date: December 1, 1996.
e. Common Areas: the building lobbies, common corridors
and hallways, restrooms, garage and parking areas, stairways, elevators, and
other generally understood public or common areas. Landlord shall have the
right to regulate or restrict the use of the Common Areas.
f. Expense Stop: (fill in if applicable): N/A.
g. Expiration Date: November 30, 1999, unless otherwise
sooner terminated in accordance with the provisions of this Lease.
h. Index (Section 5.2): United States Department of
Labor, Bureau of Labor Statistics Consumer Price Index for All Urban
Consumers. Los Angeles, Riverside and Orange Counties Average, Subgroup "All
Items" (1967=100).
i. Landlord's Mailing Address: Edwards Theatres Circuit,
Inc., 300 Newport Center Drive, Newport Beach, CA 92660.
Tenant's Mailing Address: 200 Newport Center Drive,
Suite 205, Newport Beach, CA 92660.
j. Monthly Installments of Base Rent (initial): Nine
Hundred Fourteen and 60/100 Dollars ($914.60) per month.
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k. Parking: Tenant shall be permitted, upon payment of the
then prevailing monthly rate (as set by Landlord from time to time) to park N/A
cars on a non-exclusive basis in the area(s) designated by the Landlord for
parking. Tenant shall abide by any and all parking regulations and rules
established from time to time by Landlord or Landlord's parking operator.
Landlord reserves the right to separately charge Tenant's guests and visitors
for parking.
l. Premises: That portion of the Building containing
approximately 538 square feet of Usable Area, shown by diagonal lines on
Exhibit "A", located on the second floor of the Building and known as Suite 205.
m. Project: the building of which the Premises are a part
(the "Building") and any other buildings or improvements on the real property
(the "Property") located at 200 Newport Center Drive, Newport Beach, CA 92660
and further described at Exhibit "B". The Project is known as 200 Newport
Center Drive.
n. Rentable Area: as to both the Premises and the
Project, the respective measurements of floor area as may from time to time be
subject to lease by Tenant and all tenants of the Project, respectively, as
determined by Landlord and applied on a consistent basis throughout the Project.
o. Security Deposit (Section 7): Eighteen Hundred Twenty
Nine and 20/100 Dollars ($1,829.20).
p. State: the State of California.
q. Tenant's First Adjustment Date (Section 5.2): the
first day of the calendar month following the Commencement Date plus Twelve
(12) months.
r. Tenant's Proportionate Share: 2.08%. Such share is a
fraction, the numerator of which is the Rentable Area of the Premises, and the
denominator of which is the Rentable Area of the Project, as determined by
Landlord from time to time. The Project consists of One building(s) containing
a total Rentable Area of 25,928 square feet.
s. Tenant's Use Clause (Article 8): General Office Use.
t. Term: the period commencing on the Commencement Date
and expiring at midnight on the Expiration Date.
3. EXHIBITS AND ADDENDA.
The exhibits and addenda listed below (unless lined out) are
incorporated by reference in this Lease:
a. Exhibit "A" - Floor Plan showing the Premises.
b. Exhibit "B" - Site Plan of the Project.
[STRUCK OUT TEXT]
d. Exhibit "D" - Rules and Regulations.
4. DELIVERY OF POSSESSION.
[STRUCK OUT TEXT]
5. RENT.
5.1 Payment of Base Rent. Tenant agrees to pay the Base
Rent for the Premises. Monthly
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installments of Base Rent shall be payable in advance on the first day of each
calendar month of the Term. If the Term begins (or ends) on other than the
first (or last) day of a calendar month, the Base Rent for the partial month
shall be prorated one per diem basis. Tenant shall pay Landlord the first
Monthly Installment of Base Rent when Tenant executes the Lease.
5.2 Adjusted Base Rent.
a. The Base Rent (and the corresponding Monthly
Installments of Base Rent) set forth at Section 8 as shall be adjusted annually
(the "Adjustment Date"), commencing on Tenant's First Adjustment Date.
Adjustments, if any, shall be based upon increases (if any) in the Index. The
Index in publication three (3) months before the Commencement Date shall be the
"Base Index." The Index in publication three (3) months before each Adjustment
Date shall be the "Comparison Index." As of each Adjustment Date, the Base Rent
payable during the ensuing twelve-month period shall be determined by
increasing the initial Base Rent by a percentage equal the percentage increase,
if any, in the Comparison Index over the Base Index. If the Comparison Index
for any Adjustment Date is equal to or less than the Comparison Index for the
preceding Adjustment Date (or the Base Index, in the case of the First
Adjustment Date), the Base Rent for the ensuing twelve-month period shall
remain the amount of Base Rent payable during the preceding twelve-month
period. When the Base Rent payable as of each Adjustment Date is determined,
Landlord shall promptly give Tenant written notice of such adjusted Base Rent
and the manner in which it was computed. The Base Rent as so adjusted from time
to time shall be the "Base Rent" for all purposes under this Lease.
b. If at any Adjustment Date the Index no longer
exists in the form described in this Lease, Landlord may substitute any
substantially equivalent official index published by the Bureau of Labor
Statistics or its successor. Landlord shall use any appropriate conversion
factors to accomplish such substitution. The substitute index shall then become
the "Index" hereunder.
5.3 Project Operating Costs.
a. In order that the Rent payable during the Term
reflect any increase in Project Operating Costs, Tenant agrees to pay to
Landlord as Rent, Tenant's Proportionate Share of all increases in costs,
expenses and obligations attributable to the Project and its operation, all as
provided below.
b. If, during any calendar year during the Term,
Project Operating Costs exceed the Project Operating Costs for the Base Year,
Tenant shall pay to Landlord, in addition to Base Rent and all other payments
due under this Lease, an amount equal to Tenant's Proportionate Share of such
excess Project Operating Costs in accordance with the provisions of this
Section 5.3b.
(1) The term "Project Operating Costs" shall
include all those items described in the following subparagraphs (a) and (b).
(a) All taxes, assessments, water
and sewer charges and other similar governmental charges levied on or
attributable to the Building or Project or their operation, including without
limitation, (i) real property taxes or assessments levied or assessed against
the Building or Project, (ii) assessments or changes levied or assessed against
the Building or Project by any redevelopment agency, (iii) any tax measured by
gross rentals received from the leasing of the Premises, Building or Project,
excluding any net income, franchise, capital stock, estate or inheritance taxes
imposed by the State of federal government or their agencies, branches, or
departments; provided that if at any time during the Term any governmental
entity levies, assesses or imposes on Landlord any (1) general or special, ad
valorem or specific, excise, capital levy or other tax, assessment, levy or
charge directly on the Rent received under this Lease or on the rent received
under any other leases of space in the Building or Project, or (2) any license
fee, excise or franchise tax, assessment, levy or charge measured by or based,
in whole or in part, upon such rent, or (3) any transfer, transaction, or
similar tax, assessment, levy or charge based directly or indirectly upon the
transaction represented by this Lease or such other leases, or (4) any
occupancy, use, per capita or other tax, assessment, levy or charge based
directly or indirectly upon the use or occupancy of the Premises or other
premises within the Building or Project, then any such taxes, assessments,
levies and charges shall be deemed to be included in the term Project Operating
Costs. If at any time during the Term the assessed valuation of, or taxes on,
the Project are not based on a completed Project having at least eighty-five
percent (85%) of the Rentable Area occupied, then the "taxes" component of
Project Operating Costs shall be adjusted by Landlord to reasonably approximate
the taxes which would have been payable if the Project were completed and at
lease eighty-five (85%) occupied.
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(b) Operating costs incurred by
Landlord in maintaining and operating the Building and Project, including
without limitation the following: costs of (1) utilities; (2) supplies; (3)
insurance (including public liability, property damage, earthquake, and fire
and extended coverage insurance for the full replacement cost of the Building
and Project) as required by Landlord or its lenders for the Project; (4)
services of independent contractors; (5) compensation (including employment
taxes and fringe benefits) of all persons who perform duties connected with the
operation, maintenance, repair or overhaul of the Building or Project, and
equipment, improvements and facilities located within the Project, including
without limitation engineers, janitors, painters, floor waxers, window washers,
security and parking personnel and gardeners (but excluding persons performing
services not uniformly available to or performed for substantially all building
or Project tenants); (6) operation and maintenance of a room for delivery and
distribution of mail to tenants of the Building or Project as required by the
U.S. Postal Service (including, without limitation, an amount equal to the fair
market rental value of the mail room premises); (7) management of the Building
or Project, whether managed by Landlord or an independent contractor
(including, without limitation, an amount equal to the fair market value of any
on-site manager's office); (8) rental expenses for (or a reasonable
depreciation allowance on) personal property used in maintenance, operation or
repair of the Building or Project; (9) costs, expenditures or charges (whether
capitalized or not) required by any governmental or quasi-governmental
authority; (10) amortization of capital expenses (including financing costs)
(i) required by governmental entity for energy conservation or life safety
purposes, or (ii) made by Landlord to reduce Project Operating Costs; and (11)
any other costs or expenses incurred by Landlord under this Lease and not
otherwise reimbursed by tenants of the Project. If at any time during the Term,
less than eighty-five percent (85%) of the Rentable Area of the Project is
occupied, the "operating costs" component of Project Operating Costs shall be
adjusted by Landlord to reasonably approximate the operating costs which would
have been at least eighty-five percent (85%) occupied.
(2) Tenant's Proportionate Share of Project
Operating Costs shall be payable by Tenant to Landlord as follows:
(a) Beginning with the calendar
year following the Base Year and for each calendar year thereafter ("Comparison
Year"), Tenant shall pay Landlord an amount equal to Tenant's Proportionate
Share of the Project Operating Costs incurred by Landlord in the Comparison
Year which exceeds the total amount of Project Operating Costs payable by
Landlord for the Base Year. This excess is referred to as the "Excess Expenses."
(b) To provide for current payments
of Excess Expenses. Tenant shall, at Landlord's request, pay as additional rent
during each Comparison Year, an amount equal to Tenant's Proportionate Share of
the Excess Expenses payable during such Comparison Year, as estimated by
Landlord from time to time. Such payments shall be made in monthly installments
commencing on the first day of the month following the month in which Landlord
notifies Tenant of the amount it is to pay hereunder and continuing until the
first day of the month following the month in which the Landlord gives Tenant a
new notice of estimated Excess Expenses. It is the intention hereunder to
estimate from time to time the amount of the Excess Expenses of each Comparison
Year and Tenant's Proportionate Share thereof, and then to make an adjustment
in the following year based on the actual Excess Expenses incurred for that
Comparison Year.
(c) On or before April 1 of each
Comparison Year (or as soon thereafter as is practical), Landlord shall deliver
to Tenant a statement setting forth Tenant's Proportionate Share of the Excess
Expenses for the preceding Comparison Year. If Tenant's Proportionate Share of
the actual Excess Expenses for the previous Comparison Year exceeds the total
of the estimated monthly payments made by Tenant for such year, Tenant shall
pay Landlord the amount of the deficiency within ten (10) days of the receipt
of the statement. If such total exceeds Tenant's Proportionate Share of the
actual Excess Expenses for such Comparison Year, then Landlord shall credit
against Tenant's next ensuing monthly installment(s) of additional rent an
amount equal to the difference until the credit is exhausted. If a credit is
due from Landlord on the Expiration Date, Landlord shall pay Tenant the amount
of the credit. The obligations of Tenant and Landlord to make payments required
under this Section 5.3 shall survive the Expiration Date.
(d) Tenant's proportionate Share of
Excess Expenses in any Comparison Year having less than 365 days shall be
appropriately prorated.
(e) If any dispute arises as the
amount of any additional rent due hereunder, Tenant shall have the right after
reasonable times to inspect Landlord's accounting office and, if after such
inspection Tenant still disputes the amount of additional rent owed, a
certification as to the proper amount shall be made by Landlord's certified
public accountant, which certification shall be final and conclusive. Tenant
agrees to pay the cost of such certification unless it is determined that
Landlord's original statement overstated Project Operating Costs by
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more than five percent (5%).
(f) If this Lease sets forth an Expense
Stop at Section 2f, then during the Term Tenant shall be liable for Tenant's
Proportionate Share of any actual Project Operating Costs which exceed the
amount of the Expense Stop. Tenant shall make current payments of such excess
during the Term in the same manner as is provided for payment of Excess
Expenses under the applicable provisions of Section 5.3b(2)(b) and (c) above.
5.4 Definition of Rent. All costs and expenses which
Tenant assumes or agrees to pay to Landlord under this Lease shall be deemed
additional rent (which, together with the Base Rent is sometimes referred to as
the "Rent"). The Rent shall be paid to the Building manager (or other person)
and at such place, as Landlord may from time to time designate in writing,
without any prior demand therefore and without deduction or offset, unlawful
money of the United States of America.
5.5 Rent Control. If the amount of Rent or any other
payment due under this Lease violates the terms of any governmental
restrictions on such Rent or payment, then the Rent or payment due during the
period of such restrictions shall be the maximum amount allowable under those
restrictions. Upon termination of the restrictions, Landlord shall, to the
extent it is legally permitted, recover from Tenant the difference between the
amounts received during the period of the restrictions and the amounts Landlord
would have received had there been no restrictions.
5.6 Taxes Payable by Tenant. In addition to the Rent and
any other charges to be paid by Tenant hereunder, Tenant shall reimburse
Landlord upon demand for any and all taxes payable by Landlord (other than net
income taxes) which are not otherwise reimbursable under this Lease, whether
or not now customary or within the contemplation of the parties, where such
taxes are upon, measured by or reasonably attributable to (a) the cost or value
of Tenant's equipment, furniture, fixtures and other personal property located
in the Premises, or the cost or value of any leasehold improvements made in or
to the Premises by or for Tenant, other than Building Standard Work made by
Landlord, regardless of whether title to such improvements is held by Tenant or
Landlord; (b) the gross or net Rent payable under this Lease, including,
without limitation, any rental or gross receipts tax levied by any taxing
authority with respect to the receipt of the Rent hereunder; (c) the
possession, leasing, operation, manage, maintenance, alteration, repair, use or
occupancy by Tenant of the Premises or any portion thereof; or (d) this
transaction or any document to which Tenant is a party creating or transferring
an interest or an estate in the Premises. If it becomes unlawful for Tenant to
reimburse Landlord for any costs as required under this Lease, the Base Rent
shall be revised to net Landlord the same net Rent after imposition of any tax
of other charge upon Landlord as would have been payable to Landlord but for
the reimbursement being unlawful.
6. INTEREST AND LATE CHARGES.
If Tenant fails to pay when due any Rent or other amounts or
charges which Tenant is obligated to pay under the terms of this Lease, the
unpaid amounts shall bear interest at the maximum rate then allowed by law.
Tenant acknowledges that the late payment of any Monthly Installment of Base
Rent will cause Landlord to lose the use of that money and incur costs and
processing and accounting expenses, the exact amount of which is extremely
difficult to ascertain. Therefore, in addition to interest, if any such
installment is not received by Landlord within ten (10) days from the date it
is due, Tenant shall pay Landlord a late charge equal to ten percent (10%) of
such installment. Landlord and Tenant agree that this late charge represents a
reasonable estimate of such costs and expenses and is fair compensation to
Landlord for the loss suffered from such nonpayment by Tenant. Acceptance of
any interest or late charge shall not constitute a waiver of Tenant's default
with respect to such nonpayment by Tenant nor prevent Landlord from exercising
any other rights or remedies available to Landlord under this Lease.
7. SECURITY DEPOSIT.
Tenant agrees to deposit with Landlord the Security Deposit set
forth at Section 2.0 upon execution of this Lease, as security for Tenant's
faithful performance of its obligations under this Lease. Landlord and Tenant
agree that the Security Deposit may be commingled with funds of Landlord and
Landlord shall have no obligation or liability for payment of interest on such
deposit. Tenant shall not mortgage, assign, transfer or encumber the Security
Deposit without the prior written consent of Landlord and any attempt by Tenant
to do so shall be void, without force or effect and shall not be binding upon
Landlord.
If Tenant fails to pay any Rent or other amount when due and
payable under this Lease, or fails to perform any of the terms hereof, Landlord
may appropriate and apply or use all or any portion of the Security Deposit for
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Rent payments or any other amount then due and unpaid, for payment of any
amount for which Landlord has become obligated as a result of Tenant's default
or breach, and for any loss or damage sustained by Landlord as a result of
Tenant's default or breach, and Landlord may so apply or use this deposit
without prejudice to any other remedy Landlord may have by reason of Tenant's
default or breach. If Landlord so uses any of the Security Deposit, Tenant
shall, within ten (10) days after written demand therefore, restore the
Security Deposit to the full amount originally deposited; Tenant's failure to
do so shall constitute an act of default hereunder and Landlord shall have the
right to exercise any remedy provided for at Article 27 hereof. Within fifteen
(15) days after the Term (or any extension thereof) has expired or Tenant has
vacated the Premises, whichever shall last occur, and provided Tenant is not
then in default on any of its obligations hereunder, Landlord shall return the
Security Deposit to Tenant, or, if Tenant has assigned its interest under this
Lease, to the last assignee of Tenant. If Landlord sells its interest in the
Premises, Landlord may deliver this deposit to the purchaser of Landlord's
interest and thereupon be relieved of any further liability or obligation with
respect to the Security Deposit.
8. TENANT'S USE OF THE PREMISES.
Tenant shall use the Premises solely for the purpose set forth
in Tenant's Use Clause. Tenant shall not use or occupy the Premises in
violation of law or any covenant, condition or restriction affecting the
Building or Project or the certificate of occupancy issued for the Building or
Project, and shall, upon notice from Landlord, immediately discontinue any use
of the Premises which is declared by any governmental authority having
jurisdiction to be a violation of law or the certificate of occupancy. Tenant,
at Tenant's own cost and expense, shall comply with all laws, ordinances,
regulations, rules and/or any directions of any governmental agencies or
authorities having jurisdiction which shall, by reason of the nature of
Tenant's use or occupancy of the Premises, impose any duty upon Tenant or
Landlord with respect to the Premises or its use or occupation. A judgment of
any court of competent jurisdiction or the admission by Tenant in any action or
proceeding against Tenant that Tenant has violated any such laws, ordinances,
regulations, rules and/or directions in the use of the Premises shall be deemed
to be a conclusive determination of that fact as between Landlord and Tenant.
Tenant shall not do or permit to be done anything which will invalidate or
increase the cost of any fire, extended coverage or other insurance policy
covering the Building or Project and/or property located therein, and shall
comply with all rules, orders, regulations, requirements and recommendations
of the Insurance Services Office or any other organization performing a similar
function. Tenant shall promptly upon demand reimburse Landlord for any
additional premium charged for such policy by reason of Tenant's failure to
comply with the provisions of the Article. Tenant shall not do or permit
anything to be done in or about the Premises which will in any way obstruct or
interfere with the rights of other tenants or occupants of the Building or
Project, or injure or annoy them, or use or allow the Premises to be used for
any improper, immoral, unlawful of objectionable purpose, nor shall Tenant
cause, maintain or permit any nuisance in, on or about the Premises. Tenant
shall not commit or suffer to be committed any waste in or upon the Premises.
9. SERVICES AND UTILITIES.
Provided that Tenant is not in default hereunder, Landlord
agrees to furnish to the Premises during generally recognized business days,
and during hours determined by Landlord in its sole discretion, and subject to
the Rules and Regulations of the Building or Project, electricity for normal
desk top office equipment and normal copying equipment, and heating,
ventilation and air conditioning ("HVAC") as required in Landlord's judgment
for the comfortable use and occupancy of the Premises. If Tenant desires HVAC
at any other time, Landlord shall use reasonable notice from Tenant and Tenant
shall pay Landlord's charges therefor on demand. Landlord shall also maintain
and keep lighted the common stairs, common entries and restrooms in the
Building. Landlord shall not be in default hereunder or be liable for any
damages directly or indirectly resulting from, nor shall the Rent be abated by
reason of (i) the installation, use or interruption of use of any equipment in
connection with the furnishing of any of the foregoing services, (ii) failure
to furnish or delay in furnishing any such services where such failure or delay
is caused by accident or any condition or event beyond the reasonable control
of Landlord, or by the making of necessary repairs or improvements to the
Premises, Building or Project, or (iii) the limitation, curtailment or
rationing of, or restrictions on, use of water, electricity, gas or any other
form of energy serving the Premises, Building or Project. Landlord shall not
be liable under any circumstances for a loss of or injury to property or
business, however occurring, through or in connection with or incidental to
failure to furnish any such services. If Tenant uses heat generating machines
or equipment in the Premises which affect the temperature otherwise maintained
by the HVAC system, Landlord reserves the right to install supplementary air
conditioning units in the Premises and the cost thereof, including the cost of
installation, operation and maintenance thereof shall be paid by Tenant to
Landlord upon demand by Landlord.
Tenant shall not, without the written consent of Landlord, use
any apparatus or device in the Premises,
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including without limitation, electronic data processing machines, punch card
machines using in excess of 120 volts, which consumes more electricity than is
usually furnished or supplied for the use of premises as general office space,
as determined by Landlord. Tenant shall not connect any apparatus with electric
current except through existing electrical outlets in the Premises. Tenant shall
not consume water or electric current in excess of that usually furnished or
supplied for the use of Premises as general office space (as determined by
Landlord), without first procuring the written consent of Landlord, which
Landlord may refuse, and in the event of consent, Landlord may have installed a
water meter or electrical current meter in the Premises to measure the amount of
water or electric current consumed. The cost of any such meter and of its
installation, maintenance and repair shall be paid for by the Tenant and Tenant
agrees to pay to Landlord promptly upon demand for all such water and electric
current consumed as shown by said meters, at the rates charged for such services
by the local public utility plus any additional expense incurred in keeping
account of the water and electric current so consumed. If a separate meter is
not installed, the excess cost for such water and electric current shall be
established by an estimate made by a utility company or electrical engineer
hired by Landlord at Tenant's expense.
Nothing contained in this Article shall restrict Landlord's
right to require at any time separate metering of utilities furnished to the
Premises. In the event utilities are separately metered, Tenant shall pay
promptly upon demand for all utilities consumed at utility rates charged by the
local public utility plus any additional expense incurred by Landlord in
keeping account of the utilities so consumed. Tenant shall be responsible for
the maintenance and repair of any such meters at its sole cost.
Landlord shall furnish elevator service, lighting replacement
for building standard lights, restroom supplies, window washing and janitor
services in a manner that such services are customarily furnished to comparable
office buildings in the area.
10. CONDITION OF THE PREMISES.
Tenant's taking possession of the Premises shall be deemed
conclusive evidence that as of the date of taking possession the Premises are
in good order and satisfactory condition, except for such matters as to which
Tenant gave Landlord notice on or before the Commencement date. No promise of
Landlord to alter, remodel, repair or improve the Premises, the Building or the
Project and no representation, express or implied, respecting any matter or
thing relating to the Premises, Building, project or this Lease (including,
without limitation, the condition of the Premises, the Building or the Project)
have been made to Tenant by Landlord or its Broker or Sales Agent, other than
as may be contained herein or in separate exhibit or addendum signed by
Landlord and Tenant.
11. CONSTRUCTION, REPAIRS, AND MAINTENANCE.
a. Landlord's Obligation. [Struck out text] Landlord shall
maintain in good order, condition and repair the Building and all other portions
of the Premises not the obligation of Tenant or of any other tenant in the
Building.
b. Tenant's Obligations.
[Struck out text]
(2) Tenant at Tenant's sole expense shall expect
for services furnished by Landlord pursuant to Article 9 hereof, maintain the
Premises in good order, condition and repair, including the interior of
surfaces of the ceilings, walls and floors, all doors, all interior windows, all
plumbing, pipes and fixtures, electrical wiring, switches and fixtures,
Building Standard furnishings and special items and equipment installed by or at
the expense of Tenant.
(3) Tenant shall be responsible for all repair and
alterations in and to the Premises, Building and Project and the facilities and
systems thereof, the need for which arises out of (i) Tenant's use or occupancy
of the premises, (ii) the installation, removal, use or operation of Tenant's
Property (as defined in Article 13) in the Premises, (iii) the moving of
Tenant's Property into or out of the Building, or (iv) the act, omission,
misuse or negligence of Tenant, its agents, contractors, employees or invitees.
(4) If Tenant fails to maintain the Premises in
good order, condition and repair, Landlord shall give Tenant notice to do such
acts as are reasonably required to so maintain the Premises. If Tenant fails
to promptly commence such work and diligently prosecute it to completion, then
Landlord shall have the right to do such
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acts and expend such funds at the expense of Tenant as are reasonably required
to perform such work. Any amount so expended by Landlord shall be paid by
Tenant promptly after demand with interest at the prime commercial rate then
being charged by Bank of America NT & SA plus two percent (2%) per annum, from
the date of such work, but not to exceed the maximum rate then allowed by law.
Landlord shall have no liability to Tenant for any damage, inconvenience, or
interference with the use of the Premises by Tenant as a result of performing
any such work.
c. Compliance with Law. Landlord and Tenant shall each do
all acts required to comply with all applicable laws, ordinances, and rules of
any public authority relating to their respective maintenance obligations as set
forth herein.
d. Waiver by Tenant. Tenant expressly waives the benefits of
any statute now or hereafter in effect which would otherwise afford the right to
make repairs at Landlord's expense or to terminate this Lease because of
Landlord's failure to keep the Premises in good order, condition and repair.
e. Load and Equipment Limits. Tenant shall not place a load
upon any floor of the Premises which exceeds the load per square foot which such
floor was designed to carry, as determined by Landlord or Landlord's structural
engineer. The cost of any such determination made by Landlord's structural
engineer shall be paid for by Tenant upon demand. Tenant shall not install
business machines or mechanical equipment which cause noise or vibration to such
a degree as to be objectionable to Landlord or other Building tenants.
f. Except as otherwise expressly provided in this Lease,
Landlord shall have no liability to Tenant nor shall Tenant's obligations under
this Lease be reduced or abated in any manner whatsoever by reason of any
inconvenience, annoyance, interruption or injury to business arising from
Landlord's making any repairs or changes which Landlord is required or permitted
by this Lease or by any other Tenant's lease or required by law to make in or to
any portion of the Project, Building or the Premises. Landlord shall
nevertheless use reasonable efforts to minimize any interference with Tenant's
business in the Premises.
g. Tenant shall give Landlord prompt notice of any damage to
or defective condition in any part or appurtenance of the Building's mechanical,
electrical, plumbing, HVAC or other systems serving, located in, or passing
through the Premises.
h. Upon the expiration or earlier termination of this Lease,
Tenant shall return the Premises to Landlord clean and in the same condition as
on the date Tenant took possession, except for normal wear and tear. Any damage
to the Premises, including any structural damage, resulting from Tenant's use or
from the removal of Tenant's fixtures, furnishings and equipment pursuant to
Section 13b shall be repaired by Tenant at Tenant's expense.
12. ALTERATIONS AND ADDITIONS
a. Tenant shall not make any additions, alterations or
improvements to the Premises without obtaining the prior written consent of
Landlord. Landlord's consent may be conditioned on Tenant's removing any such
additions, alterations or improvements upon the expiration of the Term and
restoring the Premises to the same condition as on the date Tenant took
possession. All work with respect to any addition, alteration or improvement
shall be done in a good and workmanlike manner by properly qualified and
licensed personnel approved by Landlord, and such work shall be diligently
prosecuted to completion. Landlord may, at Landlord's option, require that any
such work be performed by Landlord's contractor, in which case the cost of such
work shall be paid for before commencement of the work. Tenant shall pay to
Landlord upon completion of any such work by Landlord's contractor, an
administrative fee of fifteen percent (15%) of the cost of the work.
b. Tenant shall pay the costs of any work done on the
Premises pursuant to Section 12a, and shall keep the Premises, Building and
Project free and clear of liens of any kind. Tenant shall indemnify, defend
against and keep Landlord free and harmless from all liability, loss damage,
costs, attorneys' fees and any other expense incurred on account of claims by
any person performing work or furnishing materials or supplies for Tenant or
any person claiming under Tenant.
Tenant shall keep Tenant's leasehold interest, and any additions or
improvements which are or become the property of Landlord under this Lease,
free and clear of all attachment or judgment liens. Before the actual
commencement of any work for which a claim or lien may be filed, Tenant shall
give Landlord notice of the intended
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commencement date a sufficient time before that date to enable Landlord to post
notices of non-responsibility or any other notices which Landlord deems
necessary for the proper protection of Landlord's interest in the Premises,
Building or the Project, and Landlord shall have the right to enter the
Premises and post such notices at any reasonable time.
c. Landlord may require, at Landlord's sole option, that
Tenant provide to Landlord, at Tenant's expense, a lien and completion bond in
an amount equal to at lease one and one-half (1 1/2) times the total estimated
cost of any additions, alterations or improvements to be made in or to the
Premises, to protect Landlord against any liability for mechanic's and
materialmen's liens and to insure timely completion of the work. Nothing
contained in this Section 12c shall relieve Tenant of its obligation under
Section 12b to keep the Premises, Building and Project free of all liens.
d. Unless their removal is required by Landlord as provided
in Section 12a, all additions, alterations and improvements made to the
Premises shall become the property of Landlord and be surrendered with the
Premises upon the expiration of the Term; provided, however, Tenant's
equipment, machinery and trade fixtures which can be removed without damage to
the Premises shall remain the property of Tenant and may be removed, subject to
the provisions of Section 13b.
13. LEASEHOLD IMPROVEMENTS; TENANT'S PROPERTY.
a. All fixtures, equipment, improvements and appurtenances
attached to or built into the Premises at the commencement of or during the
Term, whether or not by or at the expense of Tenant ("Leasehold Improvements"),
shall be and remain a part of the Premises, shall be the property of Landlord
and shall not be removed by Tenant, except as expressly provided in Section 13b.
b. All movable partitions, business and trade fixtures,
machinery and equipment, communications equipment and office equipment located
in the Premises and acquired by or for the account of Tenant, without expense
to Landlord, which can be removed without structural damage to the Building,
and all furniture, furnishings and other articles of movable personal property
owned by Tenant and located in the Premises (collectively "Tenant's Property")
shall be and shall remain the property of Tenant and may be removed by Tenant
at any time during the Term; provided that if any of Tenant's Property is
removed, Tenant shall promptly repair any damage to the Premises or to the
Building resulting from such removal.
14. RULES AND REGULATION.
Tenant agrees to comply with (and cause its agents, contractors,
employees and invitees to comply with) the rules and regulations attached hereto
as Exhibit "D" and with such reasonable modification thereof and additions
thereto as Landlord may from time to time make. Landlord shall not be
responsible for any violation of said rules and regulations by other tenants or
occupants of the Building or Project.
15. CERTAIN RIGHTS RESERVED BY LANDLORD.
Landlord reserves the following rights, exercisable without
liability to Tenant for (a) damage or injury to property, person or business,
(b) causing an actual or constructive eviction from the Premises, or (c)
disturbing Tenant's use or possession of the Premises:
a. To name the Building and Project and to change the name
or street address of the Building or Project;
b. To install and maintain all signs on the exterior and
interior of the Building and Project;
c. To have pass keys to the Premises and all doors within
the Premises, excluding Tenant's vaults and safes;
d. At any time during the Term, and on reasonable prior
notice to Tenant, to inspect the Premises, and to show the Premises to any
prospective purchaser or mortgagee of the Project, or to any assignee of any
mortgage on the Project, or to others having an interest in the Project or
Landlord, and during the last six months of the Term, to show the Premises to
prospective tenants thereof; and
e. To enter the Premises for the purpose of making
inspections, repairs, alterations, additions or improvements to the Premises or
the Building (including, without limitation, checking, calibrating, adjusting
or balancing
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controls and other parts of the HVAC system), and to take all steps as may be
necessary or desirable for the safety, protection, maintenance or preservation
of the Premises of the Building or Landlord's interest therein, or as may be
necessary or desirable for the operation or improvement of the Building or in
order to comply with laws, orders or requirements of governmental or other
authority. Landlord agrees to use its best efforts (except in an emergency) to
minimize interference with Tenant's business in the Premises in the course of
any such entry.
16. ASSIGNMENT AND SUBLETTING.
No assignment of this Lease or sublease of all or any part of
the Premises shall be permitted, except as provided in this Article 16.
a. Tenant shall not, without the prior written consent of
Landlord, assign or hypothecate this Lease or any interest herein or sublet the
Premises or any part thereof, or permit the use of the Premises by any party
other than Tenant. Any of the foregoing acts without such consent shall be void
and shall, at the option of Landlord, terminate this Lease. This Lease shall
not, nor shall any interest of Tenant herein, be assignable by operation of law
without written consent of Landlord.
b. If at any time or from time to time during the Term
Tenant desires to assign this Lease or sublet all or any part of the Premises,
Tenant shall give notice to Landlord setting forth the terms and provisions of
the proposed assignment or sublease, and the identity of the proposed assignee
or subtenant. Tenant shall promptly supply Landlord with such information
concerning the business background and financial condition of such proposed
assignee or subtenant as Landlord may reasonably request. Landlord shall have
the option, exercisable by notice given to Tenant within twenty (20) days after
Tenant's notice is given, either to sublet such space from Tenant at the rental
and on other terms set forth in this Lease for the term set forth in Tenant's
notice, or, in the case of an assignment, to terminate this Lease. If Landlord
does not exercise such option, Tenant may assign the Lease or sublet such space
to such proposed assignee or subtenant on the following further conditions:
(1) Landlord shall have the right to approve such
proposed assignee or subtenant, which approval shall not be reasonably withheld;
(2) The assignment or sublease shall be on the same
terms set forth in the notice given to Landlord;
(3) No assignment or sublease shall be valid and no
assignee or sublessee shall take possession of the Premises until an executed
counterpart of such assignment or sublease has been delivered to Landlord;
(4) No assignee or sublessee shall have a further
right to assign or sublet except on the terms herein contained; and
(5) Any sums or other economic consideration
received by Tenant as a result of such assignment or subletting, however
denominated under the assignment or sublease, which exceed, in the aggregate,
(i) the total sums which Tenant is obligated to pay Landlord under this Lease
(prorated to reflect obligations allocable to any portion of the Premises
subleased), plus (ii) any real estate brokerage commissions or fees payable in
connection with such assignment or subletting, shall be paid to Landlord as
additional rent under this Lease without affecting or reducing any other
obligations of Tenant hereunder.
c. Notwithstanding the provisions of paragraphs a and b
above, Tenant may assign this Lease or sublet the Premises or any portion
thereof, without Landlord's consent and without extending any recapture or
termination option to Landlord, to any corporation which controls, is controlled
by or is under common control with Tenant, or to any corporation resulting from
a merger or consolidation with Tenant, or to any person or entity which acquires
all the assets of Tenant's business as a going concern, provided that (i) the
assignee or sublessee assumes, in full, the obligations of Tenant under this
Lease, (ii) Tenant remains fully liable under this Lease, and (iii) the use of
the Premises under Article 8 remains unchanged.
d. No subletting or assignment shall release Tenant of
Tenant's obligation under this Lease or alter the primary liability of Tenant to
pay the Rent and to perform all other obligations to be performed by Tenant
hereunder. The acceptance of Rent by Landlord from any other person shall not
be deemed to be a waiver by Landlord of any provision hereof. Consent to one
assignment or subletting shall not be deemed consent to any subsequent
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assignment or subletting. In the event of default by an assignee or subtenant
of Tenant in the performance of any of the terms hereof, Landlord may proceed
directly against Tenant without the necessity of exhausting remedies against
such assignee, subtenant or successor. Landlord may consent to subsequent
assignments of the Lease or sublettings or amendments or modifications to the
Lease with assignees of Tenant, without notifying Tenant, or any successor of
Tenant, and without obtaining its or their consent thereto and any such actions
shall not relieve Tenant of liability under this Lease.
e. If Tenant assigns the Lease or sublets the Premises or
requests the consent of Landlord to any assignment or subletting or if Tenant
requests the consent of Landlord for any act that Tenant proposes to do, then
Tenant shall, upon demand, pay Landlord an administrative fee of One Hundred
Fifty and No/100ths Dollars ($150.00) plus any attorneys' fees reasonably
incurred by Landlord in connection with such act or request.
17. HOLDING OVER.
If after expiration of the Term, Tenant remains in possession
of the Premises with Landlord's permission (express or implied), Tenant shall
become a tenant from month to month only, upon all the provisions of this Lease
(except as to term and Base Rent), but the "Monthly Installments of Base Rent"
payable by Tenant shall be increased to one hundred fifty percent (150%) of the
Monthly Installments of Base Rent payable by Tenant at the expiration of the
Term. Such monthly rent shall be payable in advance on or before the first day
of each month. If either party desires to terminate such month to month
tenancy, it shall give the other party not less than thirty (30) days' advance
written notice of the date of termination.
18. SURRENDER OF PREMISES.
a. Tenant shall peaceably surrender the Premises to
Landlord on the Expiration Date, in broom-clean condition and in as good
condition as when Tenant took possession, except for (i) reasonable wear and
tear, (ii) loss by fire or other casualty, and (iii) loss by condemnation.
Tenant shall, on Landlord's request, remove Tenant's Property on or before the
Expiration Date and promptly repair all damage to the Premises or Building
caused by such removal.
b. If Tenant abandons or surrenders the Premises, or is
dispossessed by process of law or otherwise, any of Tenant's Property left on
the Premises shall be deemed to be abandoned, and, at Landlord's option, title
shall pass to Landlord removal, including repairing any damage to the Premises
or Building caused by such removal, shall be paid by Tenant. On the Expiration
Date Tenant shall surrender all keys to the Premises.
19. DESTRUCTION OR DAMAGE.
a. If the Premises or the portion of the Building
necessary for Tenant's occupancy is damaged by fire, earthquake, act of God, the
elements or other casualty, Landlord shall, subject to the provisions of this
Article, promptly repair the damage, if such repairs can, in Landlord's
opinion, be completed within (90) ninety days. If Landlord determines that
repairs can be completed within ninety (90) days, this Lease shall remain in
full force and effect, except that if such damage is not the result of the
negligence or willful misconduct of Tenant or Tenant's agents, employees,
contractors, licensees or invitees, the Base Rent shall be abated to the extent
Tenant's use of the Premises is impaired, commencing with the date of damage
and continuing until completion of the repairs required of Landlord under
Section 19d.
b. If in Landlord's opinion, such repairs to the Premises
or portion of the Building necessary for Tenant's occupancy cannot be completed
within ninety (90) days, Landlord may elect, upon notice to Tenant given within
thirty (30) days after the date of such fire or other casualty, to repair such
damage, in which event this Lease shall continue in full force and effect, but
the Base Rent shall be partially abated as provided in Section 19a. If Landlord
does not so elect to make such repairs, this Lease shall terminate as of the
date of such fire or other casualty.
c. If any other portion of the Building or Project is
totally destroyed or damaged to the extent that in Landlord's opinion repair
thereof cannot be completed within ninety (90) days, Landlord may elect upon
notice to Tenant given within thirty (30) days after the date of such fire or
other casualty, to repair such damage, in which event this Lease shall continue
in full force and effect, but the Base Rent shall be partially abated as
provided in Section 19a. If Landlord does not elect to make such repairs, this
Lease shall terminate as of the date of such fire or other casualty.
d. If the Premises are to be repaired under this Article,
Landlord shall repair at its cost any injury or damage to the Building and
Building Standard Work in the Premises. Tenant shall be responsible at its sole
cost and
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expense for the repair, restoration and replacement of any other Leasehold
Improvements and Tenant's Property. Landlord shall not be liable for any loss of
business, inconvenience or annoyance arising from any repair or restoration of
any portion of the Premises, Building or Project as a result of any damage from
fire or other casualty.
e. This Lease shall be considered an express agreement
governing any case of damage to or destruction of the Premises, Building or
Project by fire or other casualty, and any present or future law which purports
to govern the rights of Landlord and Tenant in such circumstances in the
absence of express agreement, shall have no application.
20. EMINENT DOMAIN.
a. If the whole of the Building or Premises is lawfully
taken by condemnation or in any other manner for any public or quasi-public
purpose, this Lease shall terminate as of the date of such taking, and Rent
shall be prorated to such date. If less than the whole of the Building or
Premises is so taken, this Lease shall be unaffected by such taking, provided
that (i) Tenant shall have the right to terminate this Lease by notice to
Landlord given within ninety (90) days after the date of such taking if twenty
percent (20%) or more of the Premises is taken and the remaining area of the
Premises is not reasonably sufficient for Tenant to continue operation of its
business, and (ii) Landlord shall have the right to terminate this Lease by
notice to Tenant given within ninety (90) days after the date of such taking. If
either Landlord or Tenant so elects to terminate this Lease, the Lease shall
terminate on the thirtieth (30th) day after either such notice. The Rent shall
be prorated to the date of termination. If this Lease continues in force upon
such partial taking, the Base Rent and Tenant's Proportionate Share shall be
equitably adjusted according to the remaining Rentable Area of the Premises and
Project.
b. In the event of any taking, partial or whole, all of
the proceeds of any award, judgment or settlement payable by the condemning
authority shall be the exclusive property of Landlord, and Tenant hereby
assigns to Landlord all of its right, title and interest in any award, judgment
or settlement from the condemning authority. Tenant, however, shall have the
right, to the extent that Landlord's award is not reduced or prejudiced, to
claim from the condemning authority (but not from Landlord) such compensation
as may be recoverable by Tenant in its own right for relocation expenses and
damage to Tenant's personal property.
c. In the event of a partial taking of the Premises which
does not result in a termination of this Lease, Landlord shall restore the
remaining portion of the Premises as nearly as practicable to its condition
prior to the condemnation or taking, but only to the extent of Building
Standard Work. Tenant shall be responsible at its sole cost and expense for the
repair, restoration and replacement of any other Leasehold Improvements and
Tenant's Property.
21. INDEMNIFICATION.
a. Tenant shall indemnify and hold Landlord harmless
against and from liability and claims of any kind for loss or damage to property
of Tenant or any other person, or for any injury to or death of any person,
arising out of: (1) Tenant's use and occupancy of the Premises, or any work,
activity or other things allowed or suffered by Tenant to be done in, on or
about the Premises; (2) any breach or default by Tenant of any of Tenant's
obligations under this Lease; or (3) any negligent or otherwise tortious act or
omission of Tenant, its agents, employees, invitees or contractors. Tenant shall
at Tenant's expense, and by counsel satisfactory to Landlord in any action or
proceeding arising from any such claim and shall indemnify Landlord against all
costs, attorneys' fees, expert witness fees and any other expenses incurred in
such action or proceeding. As a material part of the consideration for
Landlord's execution of this Lease, Tenant hereby assumes all risk of damage or
injury to any person or property in, on or about the Premises from any cause.
b. Landlord shall not be liable for injury or damage which
may be sustained by the person or property of Tenant, its employees, invitees or
customers, or any other person in or about the Premises, caused by or resulting
from fire, steam, electricity, gas, water or rain which may leak or flow from or
into any part of the Premises, or from the breakage, leakage, obstruction or
other defects of pipes, sprinklers, wires, appliances, plumbing, air
conditioning or lighting fixtures, whether such damage or injury results from
conditions arising upon the Premises or upon other portions of the Building or
Project or from other sources. Landlord shall not be liable for any damages
arising from any act or omission of any other tenant of the Building or Project.
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22. TENANT'S INSURANCE.
a. All insurance required to be carried by Tenant hereunder
shall be issued by responsible insurance companies acceptable to landlord and
Landlord's lender and qualified to do business in the State. Each policy shall
name Landlord, and at Landlord's request any mortgagee of Landlord, as an
additional insured, as their respective interests may appear. Each policy shall
contain (i) a cross-liability endorsement, (ii) a provision that such policy and
the coverage evidenced thereby shall be primary and non-contributing with
respect to any policies carried by Landlord and that any coverage carried by
Landlord shall be excess insurance, and (iii) a waiver by the insurer of any
right of subrogation against Landlord, its agents, employees and
representatives, which arises or might arise by reason of any payment under such
policy or by reason of any act or omission of Landlord, its agents, employees or
representatives. A copy of each paid up policy (authenticated by the insurer) or
certificate of the insurer evidencing the existence and amount of each insurance
policy required hereunder shall be delivered to Landlord before the date Tenant
is first given the right of possession of the Premises, and thereafter within
thirty (30) days after any demand by Landlord therefor, Landlord may, at any
time and from time to time, inspect and/or copy any insurance policies required
to be maintained by Tenant hereunder. No such policy shall be cancelable except
after twenty (20) days' written notice to Landlord and Landlord's lender. Tenant
shall furnish Landlord with renewals or "binders" of any such policy at least
ten (10) days prior to the expiration thereof. Tenant agrees that if Tenant does
not take out and maintain such insurance, Landlord may (but shall not be
required to) procure said insurance on Tenant's behalf and charge the Tenant the
premiums together with a twenty-five percent (25%) handling charge, payable upon
demand. Tenant shall have the right to provide such insurance coverage pursuant
to blanket policies obtained by the Tenant, provided such blanket policies
expressly afford coverage to the Premises, Landlord, Landlord's mortgagee and
Tenant as required by this Lease.
b. Beginning on the day Tenant is given access to the
Premises for any purpose and continuing until expiration of the Term, Tenant
shall procure, pay for and maintain in effect policies of casualty insurance
covering (i) all Leasehold Improvements (including any alterations, additions or
improvements as may be made by Tenant pursuant to the provisions of Article 12
hereof), and (ii) trade fixtures, merchandise and other personal property from
time to time in, on or about the Premises, in an amount not less than one
hundred percent (100%) of their actual replacement cost from time to time,
providing protection against any peril included within the classification "Fire
and Extended Coverage" together with insurance against sprinkler damage,
vandalism and malicious mischief. The proceeds of such insurance shall be used
for the repair or replacement of the property so insured. Upon termination of
this Lease following a casualty as set forth herein, the proceeds under (ii)
above shall be paid to Tenant.
c. Beginning on the date Tenant is given access to the
Premises for any purpose and continuing until expiration of the term, Tenant
shall procure, pay for and maintain in effect workers' compensation insurance
as required by law and comprehensive public liability and property damage
insurance with respect to the construction of improvements on the Premises, the
use, operation or condition of the Premises and the operations of Tenant in, on
or about the Premises, providing personal injury and broad form property damage
coverage for not less than One Million Dollars ($1,000,000.00) combined single
limit for bodily injury, death and property damage liability.
d. Not less than every three (3) years during the Term,
Landlord and Tenant shall mutually agree to increases in all of Tenant's
insurance policy limits for all insurance to be carried by Tenant as set forth
in this Article. In the event Landlord and Tenant cannot mutually agree upon
the amounts of said increases, then Tenant agrees that all insurance policy
limits as set forth in this Article shall be adjusted for increases in the cost
of living in the same manner as is set forth in Section 5.2 hereof for the
adjustment of the Base Rent.
23. WAIVER OF SUBROGATION.
Landlord and Tenant waive all rights of recovery against the
other and against the officers, employees, agents and representatives of the
other, on account of loss by or damage to the waiving party of its property of
others under its control, to the extent that such loss or damage is insured
against under any fire and extended coverage insurance policy which either may
have in force at the time of the loss or damage. Tenant shall, upon obtaining
the policies of insurance required under this Lease, give notice to its
insurance carrier or carriers that the foregoing mutual waiver of subrogation
is contained in this Lease.
24. SUBORDINATION AND ATTORNMENT.
Upon written request of Landlord, or any first mortgagee of
first deed of trust beneficiary of Landlord, or ground lessor of Landlord,
Tenant shall, in writing, subordinate its rights under this Lease to the lien
of any first mortgage or first deed of trust, or to the interest of any lease
in which Landlord is lessee, and to all advances made or
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hereafter to be made thereunder. However, before signing any subordination
agreement, Tenant shall have the right to obtain from any lender or lessor or
Landlord requesting such subordination, an agreement in writing providing that,
as long as Tenant is not in default hereunder, this Lease shall remain in effect
for the full Term. The holder of any security interest may, upon written notice
to Tenant, elect to have this Lease prior to its security interest regardless of
the time of the granting or recording of such security interest.
In the event of any foreclosure sale, transfer in lieu of
foreclosure or termination of the lease in which Landlord is lessee, Tenant
shall attorn to the purchaser, transferee or lessor as the case may be, and
recognize that party as Landlord under this Lease provided such party acquires
and accepts the Premises subject to this Lease.
25. TENANT ESTOPPEL CERTIFICATES.
Within ten (10) days after written request from Landlord, Tenant
shall execute and deliver to Landlord or Landlord's designee, a written
statement certifying (a) that this Lease is unmodified and in full force and
effect, or is in full force and effect as modified and stating the
modifications; (b) the amount of Base Rents and the date to which Base Rent and
additional rent have been paid in advance; (c) the amount of any security
deposited with Landlord; and (d) that Landlord is not in default hereunder or,
if Landlord is claimed default. Any such statement may be relied upon by
purchaser, assignee or lender. Tenant's failure to execute and deliver such
statement within the time required shall at Landlord's election be a default
under this Lease and shall also be conclusive upon Tenant that: (1) this Lease
is in full force and effect and has not been modified except as represented by
Landlord; (2) there are no uncured defaults in Landlord's performance and that
Tenant has no right of offset, counter-claim or deduction against Rent; and (3)
not more than one month's Rent has been paid in advance.
26. TRANSFER OF LANDLORD'S INTEREST.
In the event of any sale or transfer by Landlord of the
Premises, Building or Project, and assignment of this Lease by Landlord,
Landlord shall be and is hereby entirely freed and relieved of any and all
liability and obligations contained in or derived from this Lease arising out
of any act, occurrence or omission relating to the Premises, Building, Project
or Lease occurring after the consummation of such sale or transfer, providing
the purchaser shall expressly assume all of the covenants and obligations of
Landlord under this Lease. If any security deposit or prepaid rent has been
paid by Tenant, Landlord may transfer the security deposit or prepaid Rent to
Landlord's successor and upon such transfer, Landlord shall be relieved of any
and all further liability with respect thereto.
27. DEFAULT.
27.1 Tenant's Default. The occurrence of any one or more of
the following events shall constitute a default and breach of this Lease by
Tenant:
a. If Tenant abandons or vacates the Premises; or
b. If Tenant fails to pay any Rent or any other
charges required to be paid by Tenant under this Lease and such failure
continues for five (5) days after such payment is due and payable; or
c. If Tenant fails to promptly and fully perform
any other covenant, condition or agreement contained in this Lease and such
failure continues for thirty (30) days after written notice thereof from
Landlord to Tenant; or
d. If a writ of attachment or execution is levied
on this Lease or on any of Tenant's Property; or
e. If Tenant makes a general assignment for the
benefit of creditors, or provides for an arrangement, composition, extension or
adjustment with its creditors; or
f. If Tenant files a voluntary petition for relief
or if a petition against Tenant in a proceeding under the federal bankruptcy
laws or other insolvency laws is filed and not withdrawn or dismissed within
forty-five (45) days thereafter, or if under the provisions of any law providing
for reorganization or winding up of corporations, any court of competent
jurisdiction assumes jurisdiction, custody or control of Tenant or any
substantial part of its property and such jurisdiction, custody or control
remains in force unrelinquished, unstayed or unterminated for a period of
forty-five (45) days; or
g. If in any proceeding or action in which Tenant
is a party, a trustee, receiver, agent or custodian is appointed to take charge
of the Premises or Tenant's Property (or has the authority to do so) for the
purpose
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of enforcing a lien against the Premises or Tenant's Property; or
h. If Tenant is a partnership or consists of more
than one (1) person or entity, if any partner of the partnership or other
person or entity is involved in any of the acts or events described in
subparagraphs d through g above.
27.2 Remedies. In the event of Tenant's default hereunder
then in addition to any other rights or remedies Landlord may have under any
law, Landlord shall have the right, at Landlord's option, without further
notice or demand of any kind to do the following:
a. Terminate this Lease and Tenant's right to
possession of the Premises and reenter the Premises and take possession
thereof, and Tenant shall have no further claim to the Premises or under this
Lease; or
b. Continue this Lease in effect, reenter and
occupy the Premises for the account of Tenant, and collect any unpaid Rent or
other charges which have or thereafter become due and payable; or
c. Reenter the Premises under the provisions of
subparagraph b, and thereafter elect to terminate this Lease and Tenant's
right to possession of the Premises.
If Landlord reenters the Premises under the provisions
of subparagraphs b or c above, Landlord shall not be deemed to have terminated
this Lease or the obligation of Tenant to pay any Rent or other charges
thereafter accruing, unless Landlord notifies Tenant in writing of Landlord's
election to terminate this Lease. In the event of any reentry or retaking of
possession by Landlord, Landlord shall have the right, but not the obligation,
to remove all or any part of Tenant's Property in the Premises and to place
such property in storage at a public warehouse at the expense and risk of
Tenant. If Landlord elects to relet the Premises for the account of Tenant,
the rent received by Landlord from such reletting shall be applied as follows:
first, to the payment of any indebtedness other than Rent due hereunder from
Tenant to Landlord; second to the payment of any costs of such reletting;
third, to the payment of the cost of any alterations or repairs to the
Premises; fourth to the payment of Rent due and unpaid hereunder, and the
balance, if any, shall be held by Landlord and applied in payment of future
Rent as it becomes due. If that portion of Rent received from the reletting
which is applied against the Rent due hereunder is less than the amount of the
Rent due, Tenant shall pay the deficiency to Landlord promptly upon demand by
Landlord. Such deficiency shall be calculated and paid monthly. Tenant shall
also pay to Landlord, as soon as determined, any costs and expenses incurred by
Landlord in connection with reletting or in making alterations and repairs to
the Premises, which are not covered by the rent received from the reletting.
Should Landlord elect to terminate this Lease under the
provisions of subparagraph a or c above, Landlord may recover as damages from
the Tenant the following:
1. Past Rent. The worth at the time of the award
of any unpaid Rent which had been earned at the time of termination; plus
2. Rent Prior to Award. The worth at the time of
the award of the amount by which the unpaid Rent which would have been earned
after termination until the time of award exceeds the amount of such rental
loss that Tenant proves could have been reasonably avoided; plus
3. Rent After Award. 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 award exceeds the amount of the rental loss that Tenant proves
could be reasonably avoided; plus
4. Proximately Caused Damages. Any other amount
necessary to compensate Landlord for all detriment proximately caused by
Tenant's failure to perform its obligations under this Lease or which in the
ordinary course of things would be likely to result therefrom, including, but
not limited to, any costs or expenses (including attorneys' fees), incurred by
landlord in (a) retaking possession of the Premises, (b) maintaining the
Premises after Tenant's default, (c) preparing the Premises for reletting to a
new tenant, including any repairs or alterations, and (d) reletting the
Premises, including broker's commissions.
"The worth at the time of the award" as used in
subparagraphs 1 and 2 above, is to be
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computed by allowing interest at the rate of ten percent (10%) per annum. "The
worth at the time of the award" as used in subparagraph 3 above, is to be
compupted by discounting the amount at the discount rate of the Federal Reserve
Bank situated nearest to the Premises at the time of the award plus one percent
(1%).
The waiver by Landlord of any breach of any term,
covenant or condition of this Lease shall not be deemed a waiver of such term,
covenant or condition or of any subsequent breach of the same or any other
term, covenant or condition. Acceptance of Rent by Landlord subsequent to any
breach hereof shall not be deemed a waiver of any preceding breach other than
the failure to pay the particular Rent so accepted, regardless of Landlord's
knowledge of any breach at the time of such acceptance of Rent. Landlord shall
not be deemed to have waived any term, covenant or condition unless Landlord
gives Tenant written notice of such waiver.
27.3 Landlord's Default If Landlord fails to perform any
covenant, condition or agreement contained in this Lease within thirty (30)
days after receipt of written notice from Tenant specifying such default, or if
such default cannot reasonably be cured within thirty (30) days, if Landlord
fails to commence to cure within that thirty (30) day period, then, Landlord
shall be liable to Tenant for any damages sustained by Tenant as a result of
Landlord's breach; provided, however, it is expressly understood and agreed
that if Tenant obtains a money judgment against Landlord resulting from any
default or other claim arising under this Lease, that judgment shall be
satisfied only out of the rents, issues, profits, and other income actually
received on account of Landlord's right title and interest in the Premises,
Building or Project, and no other real, personal or mixed property of Landlord
(or of any of the partners which comprise Landlord, if any) wherever situated,
shall be subject to levy to satisfy such judgment. If, after notice to
Landlord or default, Landlord (or any first mortgagee or first deed of trust
beneficiary of Landlord) fails to cure the default, Landlord (or any first
mortgagee or first deed of trust beneficiary of Landlord) fails to cure the
default as provided herein, then Tenant shall have the right to cure that
default at Landlord's expense. Tenant shall not have the right to terminate
this Lease or to withhold, reduce or offset any amount against any payments of
Rent or any other charges due and payable under this Lease except as otherwise
specifically provided herein.
28. BROKERAGE FEES.
Tenant warrants and represents that it has not dealt with any
real estate broker or agent in connection with this Lease or its negotiation
except those noted in Section 2.c. Tenant shall indemnify and hold Landlord
harmless from any cost, expense or liability (including costs of suit and
reasonable attorneys' fees) for any compensation, commission or fees claimed
by any other real estate broker or agent in connection with this Lease or its
negotiation by reason of any act of Tenant.
29. NOTICES.
All notices, approvals and demands permitted or required to be
given under this Lease shall be in writing and deemed duly served or given if
personally delivered or sent by certified or registered U.S. mail, postage
prepaid, and addressed as follows: (a) if to Landlord, to Landlord's Mailing
Address and to the Building manager, and (b) if to Tenant, to Tenant's Mailing
Address; provided, however, notices to Tenant shall be deemed duly served or
given if delivered or mailed to Tenant at the Premises. Landlord and Tenant
may from time to time by notice to the other designate another place for
receipt of future notices.
30. GOVERNMENT ENERGY OR UTILITY CONTROLS.
In the even of imposition of federal, state or local government
controls, rules regulations, or restrictions on the use or consumption of
energy or other utilities during the Term, both Landlord and Tenant shall be
bound thereby. In the event of a difference in interpretation by Landlord and
Tenant of any such controls, the interpretation of Landlord shall prevail, and
Landlord shall have the right to enforce compliance therewith, including the
right of entry into the Premises to effect compliance.
31. RELOCATION OF PREMISES.
Landlord shall have the right to relocate the premises to
another part of the Building in accordance with the following:
a. The new premises shall be substantially the same in
size, dimensions, configuration, decor and nature as the Premises described in
this Lease, and if relocation occurs after the Commencement Date, shall be
placed in that condition by Landlord at its cost.
b. Landlord shall give Tenant at least thirty (30) days'
written notice of Landlord's intention to
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relocate the Premises.
c. As nearly as practicable, the physical relocation of
the Premises shall take place on a weekend and shall be completed before the
following Monday. If the physical relocation has not been completed in that
time, Base Rent shall abate in full from the time the physical relocation
commences to the time it is completed. Upon completion of such relocation, the
new premises shall become the "Premises" under this Lease.
d. All reasonable costs incurred by Tenant as a result of
the relocation shall be paid by Landlord.
e. If the new premises are smaller than the Premises as it
existed before the relocation, Base Rent shall be reduced proportionately.
f. The parties hereto shall immediately execute an
amendment to this Lease setting forth the relocation of the Premises and the
reduction of Base Rent, if any.
32. QUIET ENJOYMENT.
Tenant, upon paying the Rent and performing all of its
obligations under this Lease, shall peaceably and quietly enjoy the Premises,
subject to the terms of this Lease and to any mortgage, lease, or other
agreement to which this Lease may be subordinate.
33. OBSERVANCE OF LAW.
Tenant shall not use the Premises or permit anything to be done
in or about the Premises which will in any way conflict with any law, statute,
ordinance or governmental rule or regulation now in force or which may
hereafter be enacted or promulgated. Tenant shall, at its sole cost and
expense, promptly comply with all laws, statutes, ordinances and governmental
rules, regulations and requirements now in force or which may hereafter be in
force, and with the requirements of any board of fire insurance underwriters or
other similar bodies now or hereafter constituted, relating to, or affecting
the condition, use of occupancy of the Premises, excluding structural changes
not related to or affected by Tenant's improvements or acts. The judgment of
any court of competent jurisdiction or the admission of Tenant in any action
against Tenant, whether Landlord is a party thereto or not, that Tenant has
violated any law, ordinance or governmental rule, regulation or requirement,
shall be conclusive of that fact as between Landlord and Tenant.
34. FORCE MAJEURE.
Any prevention, delay or stoppage of work to be performed by
Landlord or Tenant which is due to strikes, labor disputes, inability to obtain
labor, materials, equipment or reasonable substitutes therefor, acts of God,
governmental restrictions or regulations or controls, judicial orders, enemy or
hostile government actions, civil commotion, fire or other casualty, or other
causes beyond the reasonable control of the party obligated to perform
hereunder, shall excuse performances of the work by that party for a period
equal to the duration of that prevention, delay or stoppage. Nothing in this
Article 34 shall excuse or delay Tenant's obligation to pay Rent or other
charges under this Lease.
35. CURING TENANT'S DEFAULTS.
If Tenant defaults in the performance of any of its obligations
under this Lease, Landlord may (but shall not be obligated to) without waiving
such default, perform the same for the account at the expense of Tenant.
Tenant shall pay Landlord all costs of such performances promptly upon receipt
of a bill therefor.
36. SIGN CONTROL.
Tenant shall not affix, paint, erect, or inscribe any sign,
projection, awning, signal or advertisement of any kind to any part of the
Premises, Building or Project, including without limitation, the inside or
outside of windows or doors, without the written consent of Landlord. Landlord
shall have the right to remove any signs or other matter, installed without
Landlord's permission, without being liable to Tenant by reason of such
removal, and to charge the cost of removal to Tenant as additional rent
hereunder, payable within ten (10) days of written demand by Landlord.
37. MISCELLANEOUS.
a. Accord and Satisfaction; Allocation of Payments. No
Payment by Tenant or receipt by Landlord of a lesser amount than the Rent
provided for in this Lease shall be deemed to be other than on account of the
earliest due Rent, nor shall any endorsement or statement on any check or
letter accompanying any check or payment as
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Rent be deemed an accord and satisfaction, and Landlord may accept such check
or payment without prejudice to Landlord's right to recover the balance of the
Rent or pursue any other remedy provided for in this Lease. In connection with
the foregoing, Landlord shall have the absolute right in its sole discretion to
apply any payment received from Tenant to any account or other payment of
Tenant then not current and due or delinquent.
b. Addenda. If any provision contained in an addendum to
this Lease is inconsistent with any provision herein, the provision contained
in the addendum shall control, unless otherwise provided in the addendum.
c. Attorneys' Fees. If any action or proceeding is brought
by either party against the other pertaining to or arising out of this Lease,
the finally prevailing party shall be entitled to recover all costs and
expenses, including reasonable attorneys' fees, incurred on account of such
action or proceeding.
d. Captions, Articles and Section Numbers. The captions
appearing within the body of this Lease have been inserted as a matter of
convenience and for reference only and in no way define, limit or enlarge the
scope or meaning of this Lease. All references to Article and Section numbers
refer to Articles and Sections in this Lease.
e. Changes Requested by Lender. Neither Landlord or Tenant
shall unreasonably withhold its consent to changes or amendments to this Lease
requested by the lender on Landlord's interest, so long as these changes do
not alter the basic business terms of this Lease or otherwise materially
diminish any rights or materially increase any obligations of the party from
whom consent to such charge or amendment is requested.
f. Choice of Law. This Lease shall be construed and
enforced in accordance with the laws of the State.
g. Consent. Notwithstanding anything contained in this
Lease to the contrary, Tenant shall have no claim, and hereby waives the right
to any claim against Landlord for money damages by reason of any refusal,
withholding or delaying by Landlord of any consent, approval or statement of
satisfaction, and in such event, Tenant's only remedies therefor shall be an
action for specific performance, injunction or declaratory judgment to enforce
any right to such consent, etc.
h. Corporate Authority. If Tenant is a corporation, each
individual signing this Lease on behalf of Tenant represents and warrants that
he is duly authorized to execute and deliver this Lease on behalf of the
corporation, and that this Lease is binding on Tenant in accordance with its
terms. Tenant shall, at Landlord's request, deliver a certified copy of a
resolution of its board of directors authorizing such execution.
i. Counterparts. This Lease may be executed in multiple
counterparts, all of which shall constitute one and the same Lease.
j. Execution of Lease; No Option. The submission of this
Lease to Tenant shall be for examination purposes only, and does not and shall
not constitute a reservation of or option for Tenant to lease, or otherwise
create any interest of Tenant in the Premises or any other premises within the
Building or Project. Execution of this Lease by Tenant and its return to
Landlord shall not be binding on Landlord notwithstanding any time interval,
until Landlord has in fact signed and delivered this Lease to Tenant.
k. Furnishing of Financial Statements; Tenant's
Representations. In order to induce Landlord to enter into this Lease Tenant
agrees that it shall promptly furnish Landlord from time to time, upon
Landlord's written request, with financial statements reflecting Tenant's
current financial condition. Tenant represents and warrants that all financial
statements, records and information furnished by Tenant to Landlord in
connection with this Lease are true, correct and complete in all respects.
l. Further Assurances. The parties agree to promptly sign
all documents reasonably requested to give effect to the provisions of this
Lease.
m. Mortgagee Protection Tenant agrees to send by certified
or registered mail to any first mortgagee or first deed of trust beneficiary of
Landlord whose address has been furnished to Tenant, a copy of any notice of
default served by Tenant on Landlord. If Landlord fails to cure such default
within the time provided for in this Lease, such mortgagee or beneficiary shall
have an additional thirty (30) days to cure such default; cannot reasonably
be cured
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within that thirty (30) day period, then such mortgagee or beneficiary shall
have such additional time to cure the default as is reasonably necessary under
the circumstances.
n. Prior Agreements; Amendments. This Lease contains all
of the agreements of the parties with respect to any matter covered or
mentioned in this Lease, and no prior agreement or understanding pertaining to
any such matter shall be effective for any purpose. No provisions of this
Lease may be amended or added to except by an agreement in writing signed by
the parties or their respective successors in interest.
o. Recording. Tenant shall not record this Lease without
prior written consent of Landlord. Tenant, upon the request of Landlord, shall
execute and acknowledge a "short form" memorandum of this Lease for recording
purposes.
p. Severability. A final determination by a court of
competent jurisdiction that any provision of this Lease is invalid shall not
affect the validity of any other provision, and any provision so determined to
be invalid shall, to the extent possible, be construed to accomplish its
intended effect.
q. Successors and Assigns. This Lease shall apply to and
bind the heirs, personal representatives, and permitted successors and assigns
of the parties.
r. Time of the Essence. Time is of the essence of this
Lease.
s. Waiver. No delay or omission in the exercise of any
right or remedy of Landlord upon any default by Tenant shall impair such right
or remedy or be construed as a waiver of such default.
The receipt and acceptance by Landlord of delinquent Rent shall
not constitute a waiver of any other default; it shall constitute only a waiver
of timely payment for the particular Rent payment involved.
No act or conduct of Landlord, including, without limitation,
the acceptance of keys to the Premises, shall constitute an acceptance of the
surrender of the Premises by Tenant before the expiration of the Term. Only a
written notice from Landlord to Tenant shall constitute acceptance of the
surrender of the Premises and accomplish a termination of the Lease.
Landlord's consent to or approval of any act by Tenant
requiring Landlord's consent or approval shall not be deemed to waive or render
unnecessary Landlord's consent to or approval of any subsequent act by Tenant.
Any waiver by Landlord of any default must be in writing and
shall not be a waiver of any other default concerning the same or any other
provision of the Lease.
The parties hereto have executed this Lease as of the dates set
forth below.
LANDLORD: TENANT:
Edwards Theatres Circuit, Inc. Beverage Works, Inc.
a California Corporation
By: [SIG] By: /s/ FREDERIK G.M. RODENHUIS
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Frederik G.M. Rodenhuis
Title: Corporate Secretary Title: President
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Date: Dec. 5, 1996 Date: 11-27-96
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