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EXHIBIT 10.5
OFFICE LEASE
BETWEEN
TCW REALTY FUND VA (CALIFORNIA) HOLDING COMPANY, a California corporation
and
TCW REALTY FUND VB, a California limited partnership,
as Tenants in Common,
the Landlord,
AND
DSL ENTERTAINMENT GROUP, INC., a California corporation
the Tenant
Dated: April 25, 1995
For Premises Located
At 12300 Wilshire Boulevard
Los Angeles, California 90025
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TABLE OF CONTENTS
1. DEFINED TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. PREMISES DEMISED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3. TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4. SECURITY DEPOSIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
5. RENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
6. INITIAL CONSTRUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
7. REPAIRS & ALTERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
8. FIRE OR CASUALTY DAMAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
9. INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
10. WAIVER AND INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
11. USE OF PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
12. SIGNS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
13. ASSIGNMENT AND SUBLETTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
14. EMINENT DOMAIN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
15. WAIVER AND SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
16. USE OF COMMON FACILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
17. SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
18. ENTRY OF LANDLORD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
19. SUBSTITUTED PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
20. SUBORDINATION AND ATTORNMENT; NONDISTURBANCE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
21. ESTOPPEL CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
22. BUILDING RULES AND REGULATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
23. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
24. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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25. LANDLORD'S REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
26. RIGHT OF LANDLORD TO CURE TENANT'S DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
27. COMPLIANCE WITH LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
28. BENEFIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
29. PROHIBITION AGAINST RECORDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
30. TRANSFER OF LANDLORD'S INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
31. FORCE MAJEURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
32. LANDLORD EXCULPATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
33. BUILDING RENOVATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
34. ATTORNEYS' FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
35. SURRENDER OF THE PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
36. HOLDING OVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
37. JOINT AND SEVERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
38. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
39. SUBMISSION OF LEASE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
40. BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
41. HAZARDOUS MATERIALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
42. LANDLORD'S RESERVATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
43. PARKING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
44. ACKNOWLEDGEMENT AND DISCLAIMER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
45. DIRECTORY BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
46. OPTION TO RENEW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
47. GUARANTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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OFFICE LEASE
This Lease is made as of April 25, 1995 (the "Date of Lease"), by TCW
REALTY FUND VA (CALIFORNIA) HOLDING COMPANY, a California corporation, and TCW
REALTY FUND VB, a California limited partnership, as tenants in common
(collectively, "LANDLORD"), and DSL ENTERTAINMENT GROUP, INC. ("TENANT").
Landlord and Tenant, intending to be legally bound, and in
consideration of their mutual covenants and all conditions of this Lease,
covenant and agree as follows.
BASIC LEASE PROVISIONS
1. DEFINED TERMS
In this Lease the following terms have the meanings set forth below.
1.1 PREMISES. Approximately 4,588 rentable square feet, known as
Suite 400 and located on the fourth floor of the Building, as outlined on
Exhibit A attached to and a part of this Lease.
1.2 BUILDING. The building containing approximately 45,638
rentable square feet, and all future alterations, additions, improvements,
restorations or replacements, with an address of 12300 Wilshire Boulevard, Los
Angeles, California 90025.
1.3 TERM. Thirty-six (36) months.
1.4 COMMENCEMENT DATE. May 15, 1995, subject to Article 3.
1.5 EXPIRATION DATE. Thirty-six (36) months after the
Commencement Date.
1.6 BASE RENT. $1.75 per rentable square foot of the Premises per
month, payable in equal monthly installments of $8,029.00. There shall be no
annual escalations of the Base Rent during the initial term of the Lease.
1.7 SECURITY DEPOSIT. $8,029.00.
1.8 BASE YEAR. The Base Year for calculation of Operating Costs
shall be calendar year 1995.
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1.9 TENANT'S PROPORTIONATE SHARE OF OPERATING COSTS. 10.053% of
the Operating Costs as defined in Article 5 allocable to the Building, based
upon the rentable square feet of the Premises, compared to the total rentable
square feet of the Building.
1.10 PERMITTED USE. General Office purposes.
1.11 TENANT'S TRADE NAMES. Not applicable.
1.12 BROKER(S). LANDLORD'S: CB Commercial Real Estate
Group, Inc.
TENANT'S: Equis of California.
1.13 LANDLORD'S ADDRESS. TCW Realty Advisors
865 South Figueroa Street
Suite 3400
Los Angeles, California
90017-2543
Attention: Portfolio Manager
1.14 TENANT'S ADDRESS:
before occupancy: after occupancy: the Premises
9150 Wilshire Blvd., #205
Beverly Hills, CA 90212
1.15 PARKING. fourteen (14) spaces on an unreserved basis.
Exhibit A, Outline of Premises
Exhibit B, Tenant Work Letter
Exhibit C, Notice of Lease Term Dates
Exhibit D, Rules and Regulations
Exhibit E, Intentionally Omitted
Exhibit F, Guarantee of Lease
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2. PREMISES DEMISED
Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord the premises described in Section 1.1 ("Premises") on the terms and
conditions set forth in this Lease. As used in this Lease, the term "Project"
includes the Building, adjoining parking areas and garages, if any, and the
surrounding land and air space which are the site and grounds for the Building
and parking areas and garages.
3. TERM
The Term, Commencement Date and Expiration Date shall be as specified
in Sections 1.3, 1.4, and 1.5, respectively. However, the Commencement Date
shall be adjusted if necessary, and documented in the form of Exhibit C
attached hereto, to the date the Premises are "Ready for Occupancy," as that
term is defined in the Tenant Work Letter, attached hereto as Exhibit B, and
the Expiration Date shall be adjusted accordingly. For purposes of this Lease,
the term "Lease Year" shall mean each consecutive twelve (12) month period
during the Term, commencing on the Commencement Date. The terms and provisions
of this Lease shall be effective as of the Date of this Lease.
4. SECURITY DEPOSIT
Concurrent with Tenant's execution of this Lease, Tenant shall deposit
with Landlord in the amount set forth in Section 1.7, a security deposit for
the performance of all of Tenant's obligations under this Lease. Upon
expiration of the Term, Landlord shall (provided that Tenant is not in default
under this Lease) return the security deposit to Tenant, less such portion as
Landlord shall have appropriated to make good any default by Tenant. Landlord
shall have the right, but not the obligation, to apply all or any portion of
the security deposit to cure any Tenant default at any time, in which event
Tenant shall be obligated to restore the security deposit to its original
amount within ten (10) business days. Tenant hereby waives the provisions of
Section 1950.7 of the California Civil Code, and all other provisions of law,
now or hereafter in force, which provide that Landlord may claim from a
security deposit only those sums reasonably necessary to remedy defaults in the
payment of rent, to repair damage caused by Tenant or to clean the Premises, it
being agreed that Landlord may, in addition, claim those sums reasonably
necessary to compensate Landlord for any other loss or damage, foreseeable or
unforeseeable, caused by the act or omission of Tenant or any officer,
employee, agent or invitee of Tenant.
5. RENT
5.1 Tenant agrees to pay the Base Rent set forth in Section 1.6
for each month of the Term, payable in advance on the first day of each month
commencing with the Commencement Date, without any deduction or setoff
whatsoever. If the Commencement Date is not the first day of a month, or if
the Expiration Date is not the last day of a month, a prorated monthly
installment shall be paid at the then current rate for the fractional month
during which this Lease commences or terminates. At the time of execution of
this Lease, Tenant shall promptly pay the first month's rent due after the
expiration of any rent credit period.
In addition to Base Rent, Tenant shall pay Tenant's Proportionate
Share of Operating Costs for each calendar year to compensate for changes in
Landlord's Operating Costs. Landlord's Operating Costs for the Project shall
be determined for the Base Year specified in Section 1.8. The rentable area in
the Building and the rentable area in the Premises, and Tenant's Proportionate
Share of the Operating Costs are set forth in Article 1. Base Rent and
Tenant's Proportionate Share of Operating Costs are sometimes referred to
herein collectively as the "Rent."
"Operating Costs" shall be determined for each calendar year by taking
into account on a consistent basis all costs of management, maintenance, and
operation of the Project. Operating Costs shall include but not be limited to:
(i) the cost of supplying all utilities, the cost of operating, maintaining,
repairing, renovating and managing the utility systems, mechanical systems,
sanitary and storm drainage systems, and escalator and elevator systems, and
the cost of supplies and equipment and maintenance and service contracts in
connection therewith; (ii) the cost of licenses,
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certificates, permits and inspections and the cost of contesting the validity
or applicability of any governmental enactments which may affect Operating
Costs, and the costs incurred in connection with the implementation and
operation of a transportation system management program or similar program;
(iii) the cost of insurance carried by Landlord, in such amounts as Landlord
may reasonably determine; (iv) fees, charges and other costs, including
management fees, consulting fees, legal fees and accounting fees, of all
persons engaged by Landlord or otherwise reasonably incurred by Landlord in
connection with the management, operation, maintenance and repair of the
Project; (v) wages, salaries and other compensation and benefits of all persons
engaged in the operation, maintenance or security of the Building, and
employer's Social Security taxes, unemployment taxes or insurance, and any
other taxes which may be levied on such wages, salaries, compensation and
benefits; provided, that if any employees of Landlord provide services for more
than one building of Landlord, then a prorated portion of such employees'
wages, benefits and taxes shall be included in Operating Costs based on the
portion of their working time devoted to the Building; (vi) payments under any
easement, license, operating agreement, declaration, restrictive covenant, or
instrument pertaining to the sharing of costs by the Building; (vii) operation,
repair, maintenance and replacement of all systems, equipment or facilities
which serve the Building in the whole or in part; (viii) amortization
(including interest on the unamortized cost at a rate equal to the floating
commercial loan rate announced from time to time by Bank of America, a national
banking association, as its prime rate, plus 2% per annum) of the cost of
acquiring or the rental expense of personal property used in the maintenance,
operation and repair of the Building and Project; and (ix) all federal, state,
county, or local governmental or municipal taxes, fees, charges or other
impositions of every kind and nature, whether general, special, ordinary or
extraordinary because of or in connection with the ownership, leasing and
operation of the Project, including, without limitation, any assessment, tax,
fee, levy or charge in addition to, or in substitution, partially or totally,
of any assessment, tax, fee, levy or charge previously included within the
definition of real property tax, it being acknowledged by Tenant and Landlord
that Proposition 13 was adopted by the voters of the State of California in the
June 1978 election and that assessments, taxes, fees, levies and charges may be
imposed by governmental agencies for such services as fire protection, street,
sidewalk and road maintenance, conservation, refuse removal and for other
governmental services formerly provided without charge to property owners or
occupants; and (x) the cost of capital improvements or other costs incurred in
connection with the Project (A) which are intended as a labor-saving device or
to effect other economies in the operation or maintenance of the Project, or
any portion thereof, or (B) that are required under any governmental law or
regulation but which were not so required in connection with the Project at the
time that permits for the construction of the Building were obtained provided,
however, that each such permitted capital expenditure shall be amortized
(including interest on the unamortized cost) over its useful life as Landlord
shall reasonably determine. Landlord shall have the right, from time to time,
to equitably allocate some or all of the Operating Costs among different
tenants of the building (the "Cost Pools"). The amount of all taxes payable
under this Lease for the Base Year attributable to the valuation of the
Project, inclusive of tenant improvements, shall be known as "Base Taxes". If
in any comparison year subsequent to the Base Year, the amount of Base Taxes
decreases, then for purposes of all subsequent comparison years, including the
comparison year in which such decrease in all taxes payable under this Lease
occurred, the Base Year shall be decreased by an amount equal to the decrease
in Base Taxes. Such Cost Pools may included, but shall not be limited to, the
office space tenants of the Building and the retail space tenants of the
Building. If the Building is not fully occupied during all or a portion of the
Base Year or a subsequent calendar year, the variable components of the
Operating Costs as determined by Landlord shall be calculated as if the
Building had been 95% occupied for the full calendar year. The following are
not included in Operating Costs: property additions, alterations for tenants,
leasing commissions, advertising, depreciation, interest, income taxes and
administrative costs not specifically incurred in the management, maintenance
and operation of the Project. Notwithstanding the foregoing definition of
"Operating Costs," Tenant's Proportionate Share of Operating Costs shall not
include costs incurred by Landlord to remove or remediate any asbestos
materials from the Project.
For each calendar year beginning after the Base Year, Tenant shall pay
to Landlord on the first day of each and every month of this Lease one-twelfth
(1/12th) of the Landlord's reasonable estimate of Tenant's Proportionate Share
of the Operating Costs for that calendar year in excess of the actual Base Year
Operating Costs.
Within one hundred twenty (120) days after December 31 of each
calendar year, or as soon thereafter as
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possible, the total of the Operating Costs for said calendar year just
completed shall be determined on an accrual basis by Landlord.
Landlord shall give Tenant notice of such determination, and Tenant
within thirty (30) days thereafter shall pay to Landlord Tenant's Proportionate
Share of the Operating Costs for such calendar year in excess of the Base Year
Operating Costs, less the payments made by Tenant to Landlord during such
calendar year for Operating Costs in excess of the Base Year Operating Costs,
or if Tenant has overpaid such amount, Landlord shall credit any excess paid
toward Tenant's next rental payment due. During the first and last years of
the Term, Tenant's Proportionate Share of the Operating Costs shall be adjusted
in proportion to the number of days of that calendar year during which this
Lease is in effect over the total days in that calendar year.
In addition to Tenant's Proportionate Share of Operating Costs, Tenant
shall reimburse Landlord upon demand for any and all taxes required to be paid
by Landlord when such taxes are measured by or reasonably attributable to the
cost or value of Tenant's equipment, furniture, fixtures and other personal
property located in the Premises.
6. INITIAL CONSTRUCTION
Construction to be completed by Landlord will be in accordance with
Article 3. Landlord will not be obligated to construct or install any
improvements or facilities of any kind other than those called for in Article
3. Landlord agrees to commence and complete the Tenant Improvements (as
defined in Article 3). Upon termination of this Lease, Tenant shall deliver
the Premises to Landlord in good condition, normal wear and tear excepted.
7. REPAIRS & ALTERATIONS
(a) Landlord agrees to make all necessary repairs to the
exterior walls, exterior doors, windows and corridors of the Building.
Landlord agrees to keep the Building in a clean, neat and attractive condition.
Landlord agrees to keep all building standard equipment such as elevators,
plumbing, heating, air conditioning and similar equipment in good repair
(excluding, however, any plumbing in the Premises or any above
Building-standard heating, air conditioning or lighting equipment in the
Premises, which repair shall be Tenant's sole responsibility) but Landlord
shall not be liable or responsible for breakdowns or temporary interruptions in
service where reasonable efforts are used to restore service. Landlord agrees
to make repairs, if necessary, to interior walls, floors and ceilings installed
by Landlord resulting from any defects in construction.
(b) Tenant agrees that it will pay for the cost of all
repairs to the Premises not required to be made by Landlord and Tenant is
responsible for all redecorating, remodeling, alteration and painting required
by Tenant during the Term. Tenant will pay for any repairs to the Premises or
the Building made necessary by any negligence or carelessness of Tenant or its
employees or persons permitted in the Building by Tenant, and will maintain the
Premises in clean, neat and sanitary condition. Tenant covenants and agrees
not to suffer or permit any lien of mechanics or materialmen or others to be
placed against the Project, the Building or the Premises with respect to work
or services claimed to have been performed for or materials claimed to have
been furnished to Tenant or the Premises under this Article 7 or otherwise,
and, in case of any such lien attaching or notice of any lien, Tenant covenants
and agrees to cause it to be immediately released and removed of record or
Landlord, at its sole option, may immediately take all action necessary to
release and remove such lien. Tenant hereby waives and releases its right to
make repairs at Landlord's expense under Sections 1941 and 1942 of the
California Civil Code or under any similar law, statute, or ordinance now or
hereafter in effect.
(c) Tenant may not make any improvements, alterations,
additions or changes to the Premises (collectively, the "Alterations") without
first procuring the prior written consent of Landlord to such Alterations,
which consent shall be requested by Tenant not less than thirty (30) days prior
to the commencement thereof, and which consent shall not be unreasonably
withheld by Landlord. The construction of the initial improvements to the
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Premises shall be governed by the terms of the Tenant Work Letter, attached
hereto as Exhibit B, and not the terms of this Article 7.
(d) Except to the extent Tenant requests and Landlord
designates otherwise at the time Landlord approves such alterations, all or any
part of the alterations (including without limitation, wall-to-wall carpet and
wiring), whether made with or without the consent of Landlord, shall, at the
election of Landlord, either be removed by Tenant at its expense before the
expiration of the Term or shall remain upon the Premises and be surrendered
therewith at the Expiration Date or earlier termination of this Lease as the
property of Landlord without disturbance or injury. If Landlord requires the
removal of all or part of any alterations, Tenant, at its expense, shall repair
any damage to the Premises or the Building caused by such removal. If Tenant
fails to remove the alterations upon Landlord's request, then Landlord may (but
shall not be obligated to) remove them and the cost of removal and repair of
any damage together with all other damages which Landlord may suffer by reason
of the failure of Tenant to remove alterations, shall be charged to Tenant and
paid upon demand.
(e) Tenant shall construct such Alterations and perform
such repairs in conformance with any and all applicable rules and regulations
of any federal, state, county or municipal code or ordinance and pursuant to a
valid building permit, issued by the applicable municipality, in conformance
with Landlord's construction rules and regulations. All work with respect to
any Alterations must be done in a good and workmanlike manner and diligently
prosecuted to completion to the end that the Premises shall at all times be a
complete unit except during the period of work. In performing the work of any
such Alterations, Tenant shall have the work performed in such manner as not to
obstruct access to the Building or the common areas for any other tenant of the
Building, and as not to obstruct the business of Landlord or other tenants in
the Building, or interfere with the labor force working in the Building. Upon
completion of any Alterations, Tenant agrees to cause a Notice of Completion to
be recorded in the office of the Recorder of the County of Los Angeles in
accordance with Section 3093 of the Civil Code of the State of California or
any successor statute, and Tenant shall deliver to the Building management
office a reproducible copy of the "as built" drawings of the Alterations.
(f) The charges for such work performed by a contractor
selected by Landlord shall be deemed Rent under this Lease, payable upon
billing therefor, either periodically during construction or upon the
substantial completion of such work, at Landlord's option. Upon completion of
such work, Tenant shall deliver to Landlord evidence of payment, contractors'
affidavits and full and final waivers of all liens for labor, services or
materials. Tenant shall pay to Landlord a percentage of the cost of such work
sufficient to compensate landlord for all overhead, general conditions, fees
and other costs and expenses arising from Landlord's involvement with such
work.
(g) In the event that Tenant makes any Alterations,
Tenant agrees to carry "Builder's All Risk" insurance in an amount approved by
Landlord covering the construction of such Alterations, and such other
insurance as Landlord may require, it being understood and agreed that all of
such Alterations shall be insured by Tenant pursuant to Article 9 of this Lease
immediately upon completion thereof. In addition, Landlord may, in its
discretion, require Tenant to obtain a lien and completion bond or some
alternate form of security satisfactory to Landlord in an amount sufficient to
ensure the lien-free completion of such Alterations and naming Landlord a
co-obligee.
8. FIRE OR CASUALTY DAMAGE
If the Premises or any portion of the Project is damaged by fire or
other cause without the fault or negligence of Tenant or its agents, Landlord
shall diligently, and as soon as practicable after Landlord has discovered the
full extent and nature of such damage, as well as the means necessary to repair
such damage, and subject to delays caused by events beyond Landlord's
reasonable control (including, without limitation, the settlement by Landlord
of all insurance and lender and ground lessor claims relating to such damage or
insurance proceeds relating thereto) (such date, including described extensions
and delays, to be collectively referred to as the "DAMAGE DISCOVERY DATE")
repair the damage at the expense of Landlord; provided, however, that Landlord
may elect not to rebuild and/or restore the Premises or portion of the Project,
and instead terminate this Lease by notifying Tenant in writing
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of such termination within ninety (90) days after the Damage Discovery Date,
such notice to include a termination date for Tenant to vacate the Premises,
but Landlord may so elect only if the Building shall be damaged by fire or
other casualty or cause, whether or not the Premises are affected, and one or
more of the following conditions is present: (i) repairs cannot reasonably be
completed within two hundred (200) days after the Damage Discovery Date or the
Damage Discovery Date occurs during the last two (2) Lease Years; (ii) the
holder of any mortgage on the Building or ground lessor with respect to the
Project shall require that the insurance proceeds or any portion thereof be
used to retire all or a portion of the mortgage debt, or shall terminate the
ground lease, as the case may be; (iii) the damage is not fully covered, except
for deductible amounts, by Landlord's insurance policies; (iv) twenty percent
(20%) or more of the rentable floor area of the Project is unusable, damaged or
destroyed, or (v) in Landlord's sole and absolute discretion, twenty percent
(20%) or more of the rentable floor area of the Project is unmarketable. If
Landlord terminates this Lease, the Base Monthly Rent and Tenant's
Proportionate Share of increases in Operating Costs (collectively, "PERIODIC
RENT") shall be apportioned and paid to the date of termination. If Landlord
does not so elect to terminate this Lease but the damage required to be
repaired by Landlord is not repaired within two hundred (200) days from the
Damage Discovery Date, either Landlord or Tenant, within thirty (30) days from
the expiration of the two hundred (200) day period, may terminate this Lease by
written notice to the other party. During the period that the damaged portion
of the Premises is rendered untenantable by the damage, and provided the damage
is not the consequence or the fault or negligence of Tenant or its agents,
Periodic Rent shall be reduced by the ratio that the rentable square footage of
the Premises thereby rendered untenantable bears to the total rentable square
footage of the Premises, provided that (i) Tenant does not occupy or use such
untenantable portion of the Premises during such rent abatement period, and
(ii) Tenant shall, within ten days after any event purportedly giving rise to
rent abatement, give written notice to Landlord of Tenant's claim for rent
abatement and the basis therefor, including the date and nature of the damage,
the portion of the Premises so affected, and the date (if any) when Tenant
vacated the Premises or portion thereof as a result of the damage.
Notwithstanding the preceding provisions of this Section 8, there shall be no
rent abatement under the terms of this Section 8 if, under the terms of this
Section 8, the abatement would be for a period of ten days or less. All injury
or damage to the Premises or the Building resulting from the fault or
negligence of Tenant or its agents shall be repaired by Tenant, at Tenant's
expense, and Periodic Rent shall not abate. If Tenant shall fail to do so, or
if Landlord shall so elect, Landlord shall have the right to make repairs to
the standard tenant improvements, not including any tenant extras, Alterations,
or personal property, and any expense incurred by Landlord, together with
interest thereon at the rate specified in Section 25.3, shall be paid by Tenant
upon demand. The provisions of this Lease, including this Section 8,
constitute an express agreement between Landlord and Tenant with respect to any
and all damage to, or destruction of, all or any part of the Premises, the
Building or any other portion of the Project, and any statute or regulation of
the State of California, including, without limitation, Sections 1932(2) and
1933(4) of the California Civil Code, with respect to any rights or obligations
concerning damage or destruction in the absence of an express agreement between
the parties, and any other statute or regulation, now or hereafter in effect,
shall have no application to this Lease or any damage or destruction to all or
any part of the Premises, the Building or any other portion of the Project.
9. INSURANCE
9.1 Tenant shall during the entire Term maintain the following
insurance coverage:
(a) Commercial General Liability Insurance for personal
injury and property damage claims arising out of Tenant's occupation or use of
the Premises and from its business operations, and including liability arising
under any indemnity set forth in this Lease in amounts of not less than $1
million for each occurrence and $2 million for all occurrences each year.
(b) Property damage insurance covering all Tenant's
furniture, trade fixtures, office equipment, merchandise and other property in
the Premises and all original and later-installed tenant improvements in the
Premises. This insurance should be an "all risk" policy covering the full
replacement cost of the items covered and including vandalism and malicious
mischief and ordinary and earthquake sprinkler leakage coverage.
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(c) The Tenant will maintain in force all required
workers' compensation or other similar insurance pursuant to all applicable
state and local statues and regulations.
Landlord shall have the right and option, but not the obligation, to maintain
any or all of the insurance which is required in Section 9.1 to be provided by
the Tenant if Tenant fails to maintain the insurance required in this Section
9.1. All costs of Tenant's insurance provided by the Landlord shall be
obtained at Tenant's expense.
9.2 The minimum insurance requirements set forth in this Lease
shall not limit the liability of Tenant under this Lease. The Landlord, and
any parties specified by the Landlord, shall be named as additional insureds
under the Tenant's insurance. All insurance companies providing insurance
pursuant to this Article shall be rated at least A-XII in Best's Key Rating
Guide and shall be otherwise reasonably acceptable to Landlord and licensed and
qualified to do business in the State of California. Insurance provided by the
Tenant shall be primary as to all covered claims and any insurance carried by
Landlord is excess and is non-contributing. Each Tenant's insurance policy
must not be cancelable or modifiable except upon thirty (30) days prior written
notice to Landlord and any specified mortgagee of Landlord. The insurance must
also contain a cross-liability endorsement or severability of interest clause
acceptable to Landlord. Copies of policies or original certificates of
insurance with respect to each policy shall be delivered to the Landlord prior
to the Commencement Date, and thereafter, at least thirty (30) days before the
expiration of each existing policy.
9.3 Landlord has the right at any time, but not the obligation, to
change, cancel, decrease or increase any insurance required or specified under
this Lease, but in no event shall any such increased amounts of insurance or
such other reasonable types of insurance be in excess of that required by
comparable landlords in the vicinity of the Building. Landlord at its option
may obtain any of the required insurance directly or through umbrella policies
covering the Building and other assets owned by Landlord.
9.4 Landlord and Tenant each release the other and their
respective agents and employees from all liability to each other, or anyone
claiming through or under them, by way of subrogation or otherwise, for any
loss or damage to property caused by or resulting from risks insured against
under this Lease, pursuant to insurance policies carried by the parties which
are in force at the time of the loss or damage. Landlord and Tenant will each
request its insurance carrier to include in policies provided pursuant to this
Lease an endorsement recognizing this waiver of subrogation. The waiver of
subrogation endorsement need not be obtained if it incurs an additional cost
for the affected policy, unless following written notice, the other party
elects to pay that additional cost to obtain the waiver of subrogation
endorsement.
10. WAIVER AND INDEMNIFICATION
To the extent not prohibited by law, Landlord, its partners, trustees,
ancillary trustees and their respective officers, directors, shareholders,
beneficiaries, agents, servants, employees, and independent contractors shall
not be liable for any damage either to person or property or resulting from the
loss of use thereof, which damage is sustained by Tenant or by other persons
claiming through Tenant. Tenant indemnifies and holds Landlord harmless from
all claims and all costs, including reasonable attorneys' fees, expenses and
liabilities, except those caused by Landlord's negligence, arising or resulting
from (a) any accident, injury, death, loss or damage to any person or to any
property including the person and property of Tenant and its employees, agents,
officers, guests, and all other persons at any time in the Building or the
Premises or the common areas, (b) the occupancy or use of the Premises by the
Tenant, or (c) any act or omission or negligence of Tenant or any agent,
licensee, or invitee of Tenant, or its contractors, employees, or any subtenant
or subtenant's agents, employees, contractors, or invitees.
11. USE OF PREMISES
The Premises are leased to Tenant for the sole purpose set forth in
Section 1.10 and Tenant shall not use or permit the Premises to be used for any
other purposes without the prior written consent of Landlord, and shall not
allow occupancy density of use of the Premises which is greater than the
average density of the other tenants of the
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Building. Tenant further covenants and agrees that it shall not use, or permit
any person or persons to use, the Premises or any part thereof for any use or
purpose contrary to the rules and regulations, attached hereto as Exhibit D, or
in violation of the laws of the United States of America, the State of
California, or the ordinances, regulations or requirements of the local
municipal or county governing body or other lawful authorities having
jurisdiction over the Building. Landlord shall not be responsible to Tenant
for the nonperformance of any of such rules and regulations by or otherwise
with respect to the acts or omissions of any other tenants or occupants of the
Building. Tenant shall comply with all recorded covenants, conditions, and
restrictions now or hereafter affecting the real property underlying the
Project.
12. SIGNS
Landlord retains absolute control over the exterior appearance of the
Building and Project and the exterior appearance of the Premises as viewed from
the public halls and public areas. Tenant will not install, or permit to be
installed, any drapes, furnishings, signs, lettering, advertising or any items
that will in any way alter the exterior appearance of the Building or the
exterior appearance of the Premises as viewed from the public halls and public
areas.
13. ASSIGNMENT AND SUBLETTING
13.1 Tenant shall not assign, transfer, mortgage or otherwise
encumber this Lease or sublet or rent (or permit a third party to occupy or
use) (collectively, a "Transfer") the Premises, or any part thereof, nor shall
any Transfer of this Lease or the right of occupancy be effected by operation
of law or otherwise, without the prior written consent of Landlord which shall
not be unreasonably withheld or delayed; provided, however, that the parties
hereby agree that it shall be deemed to be reasonable under this Lease and
under any applicable law for Landlord to withhold consent to any proposed
Transfer where, without limitation as to other reasonable grounds for
withholding consent, either the transferee is of a character or reputation or
engaged in a business which is not consistent with the quality of the Building,
or the transferee is either a governmental agency or instrumentality thereof,
or the transferee is not a party of reasonable financial worth and/or financial
stability in light of the responsibilities involved under this Lease on the
date consent is requested. For purposes of the foregoing prohibitions, a
transfer at any one time or from time to time of forty-nine percent (49%) or
more of an interest in Tenant (whether stock, partnership interest or other
form of ownership or control) by any person(s) or entity(ties) having an
interest in ownership or control of Tenant at the Date of Lease shall be deemed
to be a Transfer of this Lease. Notwithstanding the foregoing, however,
neither an assignment of the Premises to a transferee which is the resulting
entity of a merger or consolidation of Tenant with another entity, nor an
assignment or subletting of all or a portion of the Premises to an affiliate of
Tenant (an entity which is controlled by, controls, or is under common control
with, Tenant), shall be deemed a Transfer, provided that Tenant notifies
Landlord of any such assignment or sublease and promptly supplies Landlord with
any documents or information reasonably requested by Landlord regarding such
Transfer or transferee, and that such assignment or sublease is not a
subterfuge by Tenant to avoid its obligations under this Lease. If Landlord
consents to the proposed Transfer, the initial Tenant and any guarantor shall
remain liable under this Lease. Any Transfer without Landlord's written
consent shall be voidable by Landlord and, at Landlord's election, constitute
an "Event of Default," as that term is defined in Article 24 of this Lease.
Neither the consent by Landlord to any Transfer nor the collection or
acceptance by Landlord of rent from any assignee, subtenant or occupant shall
be construed as a waiver or release of the initial Tenant or any guarantor from
the terms and conditions of this Lease or relieve Tenant or any subtenant,
assignee or other party from obtaining the consent in writing of Landlord to
any further Transfer. Tenant hereby assigns to Landlord the rent and other
sums due from any subtenant, assignee or other occupant of the Premises and
hereby authorizes and directs each such subtenant, assignee or other occupant
to pay such rent or other sums directly to Landlord; provided, however, that
until the occurrence of an Event of Default, Tenant shall have the license to
continue collecting such rent and other sums.
If Landlord consents to a Transfer under this Section 13.1,
Tenant will pay Landlord's processing costs and attorneys' fees incurred in
giving such consent. If, for any proposed Transfer, Tenant contracts to
receive total rent or other consideration exceeding the total rent called for
hereunder after deduction (amortized over the
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term of the assignment or sublease) of Tenant's reasonable costs for tenant
improvements and free rent concessions (prorated by the ratio that the
assignment or sublease term and square footage bears to the term and square
footage of this Lease), Tenant will pay one-half of the excess to Landlord as
additional rent promptly upon receipt.
13.2 In the event of a proposed assignment or subletting, Landlord
shall also have the right, by notice to Tenant, to terminate this Lease in the
event of an assignment as to all of the Premises and, in the event of a
sublease, as to the subleased portion of the Premises and to require that all
or part, as the case may be, of the Premises be surrendered to Landlord for the
balance of the Term.
14. EMINENT DOMAIN
In the event any portion of the Premises is taken from Tenant under
eminent domain proceedings, Tenant shall have no right, title or interest in
any award made for such taking, except for any separate award for fixtures and
improvements installed by Tenant. If ten percent (10%) or more of the Premises
or Building shall be taken by power of eminent domain or condemned by any
competent authority for any public or quasi-public use or purpose, or if
Landlord shall grant a deed or other instrument in lieu of such taking by
eminent domain or condemnation, Landlord shall have the option to terminate
this Lease upon ninety (90) days notice, provided such notice is given no later
than one hundred eighty (180) days after the date of such taking, condemnation,
reconfiguration, vacation, deed or other instrument. Tenant hereby waives any
and all rights it might otherwise have pursuant to Section 1265.130 of the
California Code of Civil Procedure.
15. WAIVER AND SEVERABILITY
15.1 The consent of Landlord in any instance to any variation of
the terms of this Lease, or the receipt of Rent with knowledge of any breach,
shall not be deemed to be a waiver as to any breach of any Lease covenant or
condition, nor shall any waiver occur to any provision of this Lease except in
writing, signed by Landlord or Landlord's authorized agent. It is understood
and acknowledged that there are no oral agreements between the parties hereto
affecting this Lease and this Lease supersedes and cancels any and all previous
negotiations and understandings, if any, between the parties hereto and none
thereof shall be used to interpret or construe this Lease. This Lease and any
side letter or separate agreement executed by Landlord and Tenant in connection
with this Lease and dated of even date herewith contain all of the terms,
covenants and agreements of the parties relating in any manner to the Premises,
and shall be considered to be the only agreement between the parties hereto and
their representatives and agents.
15.2 If any term or provision of this Lease or any application
shall be invalid or unenforceable, then the remaining terms and provisions of
this Lease shall not be affected.
16. USE OF COMMON FACILITIES
All elevators, stairways, halls and areas for the common use of all
tenants in the Building shall be open to reasonable use at all reasonable times
by Tenant, its customers, clients and employees.
17. SERVICES
17.1 Landlord shall furnish to the Premises throughout the Term (i)
electricity, heating and air conditioning appropriate for the Tenant's use
between 8:00 a.m. and 6:00 p.m., Monday through Friday, and between 9:00 a.m.
and 1:00 p.m. on Saturday, except for legal holidays, observed by the federal
government, (ii) reasonable janitorial service, (iii) regular trash removal
from the Premises, (iv) hot and cold water from points of supply, (v) restrooms
as required by applicable code, and (vi) elevator service, provided that
Landlord shall have the right to remove such elevators from service as may be
required for moving freight or for servicing or maintaining the
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elevators or the Building. The cost of all services provided by Landlord shall
be included within Operating Costs, unless charged directly (and not as a part
of Operating Costs) to Tenant or another tenant of the Building. Landlord
agrees to furnish landscaping and grounds maintenance for the areas used in
common by the tenants of the Building. Services shall be furnished by Landlord
and reimbursed by Tenant as part of Operating Costs; however, Landlord shall be
under no responsibility or liability for failure or interruption in such
services caused by breakage, accident, strikes, repairs or for any other causes
beyond the control of Landlord, nor in any event for any indirect or
consequential damages; and failure or omission on the part of Landlord to
furnish service shall not be construed as an eviction of Tenant, nor work an
abatement of Rent, nor render Landlord liable in damages, nor release Tenant
from prompt fulfillment of any of the covenants under this Lease.
17.2 If Tenant requires or requests that the services to be
furnished by Landlord (except Building standard electricity and elevator
service) be provided during periods in addition to the periods set forth in
Section 17.1, then Tenant shall obtain Landlord's consent and, if consent is
granted, shall pay upon demand the cost of such excess consumption, the cost of
the installation, operation, and maintenance of equipment which is installed in
order to supply or meter such excess consumption, and the cost of the increased
wear and tear on existing equipment caused by such excess consumption.
Landlord may, from time to time during the Term, set a per hour charge for
after-hours service which shall include the cost of utility service, labor
costs, administrative costs and a cost for depreciation of the equipment used
to provide after-hours service.
17.3 All telephone, electricity, gas, heat and other utility
service furnished to the Premises shall be paid for by Tenant except to the
extent the cost is included within Operating Costs. Landlord reserves the
right to separately meter or monitor the utility services provided to the
Premises. The cost of any meter shall be borne by Tenant.
18. ENTRY OF LANDLORD
Landlord reserves the right to enter upon the Premises at all
reasonable times and reserves the right, during the last nine (9) months of the
Term, to show the Premises at reasonable times to prospective tenants and to
affix for lease/rent signs to the Building at the Landlord's discretion.
19. SUBSTITUTED PREMISES
Landlord reserves the right on thirty (30) days written notice to
Tenant to substitute other premises within the Building for the Premises for
all uses and purposes as though originally leased to Tenant by this Lease. The
substituted premises shall contain at least the same square footage as the
original Premises without increase of Rent. Landlord shall pay all reasonable
moving expenses of Tenant incidental to the substitution of premises.
20. SUBORDINATION AND ATTORNMENT; NONDISTURBANCE AGREEMENT
20.1 This Lease is subject and subordinate to all ground or
underlying leases and to any first mortgage(s) which may now or hereafter
affect those leases or the land and to all renewals, modifications,
consolidations, replacements and extensions thereof. This subordination shall
be self-operative; however, Tenant shall execute promptly any instrument that
Landlord or any first mortgagee may request confirming subordination. Tenant
hereby constitutes and appoints Landlord as Tenant's attorney-in-fact to
execute any such instrument on behalf of Tenant. Before any foreclosure sale
under a mortgage, the mortgagee shall have the right to subordinate the
mortgage to this Lease, and, in the event of a foreclosure, this Lease may
continue in full force and effect and Tenant shall attorn to and recognize as
its landlord the purchaser of Landlord's interest under this Lease. Tenant
shall, upon the request of a mortgagee or purchaser at foreclosure, execute,
acknowledge and deliver any instrument that has for its purpose and effect the
subordination of the lien of any mortgage to this Lease or Tenant's attornment
to the purchaser.
20.2 At such time as Landlord attempts to obtain financing secured
by a mortgage or trust deed encumbering the Project, Landlord shall use
diligent efforts to obtain a written agreement (the "Non-Disturbance
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Agreement") from the lender (the "Lender") providing such financing providing
that so long as Tenant timely pays Rent due under this Lease, and is not
otherwise in default under this Lease, Lender will not disturb Tenant's
possession under this Lease. In no event shall Landlord be obligated in using
diligent efforts to obtain a Non-Disturbance Agreement: (i) to incur any costs
or expenses, including without limitation, attorneys' fees and costs; (ii) to
accept less favorable terms or conditions for any financing (as determined by
Landlord in its sole and absolute discretion) in order to obtain such
Non-Disturbance Agreement, (iii) pay any amount to the Lender, including
without limitation, attorneys' fees and costs which the Lender may otherwise
charge in connection with such Non-Disturbance Agreement; or (iv) amend this
Lease. The Non-Disturbance Agreement may be subject to such conditions and
limitations upon the rights of Tenant in the event of succession by Lender, and
upon the obligations of Lender, as Lender may deem appropriate. Tenant
acknowledges that Landlord may not compel Lender to sign any Non-Disturbance
Agreement nor to agree to any specific terms in any Non-Disturbance Agreement.
Consequently, Tenant agrees that Landlord's only obligation under this
subparagraph shall be to use diligent efforts to obtain a Non-Disturbance
Agreement as provided above, and if Landlord fails to obtain a Non-Disturbance
Agreement (or one which is acceptable to Tenant), such failure shall not
excuse Tenant from its obligations under any provision of this Lease,
including, without limitation, the provisions of Section 20.1, nor shall such
failure give rise to any claim, rental offset or deduction, or cause of action
by Tenant against Landlord, nor shall the Lease be terminated by reason
thereof.
21. ESTOPPEL CERTIFICATES
Tenant shall at any time upon not less than ten (10) days prior
written notice from Landlord execute, acknowledge and deliver to Landlord a
statement in writing (i) certifying that this Lease is unmodified and in full
force and effect (or, if modified, stating the nature of such modification and
certifying that this Lease, as so modified, is in full force and effect) and
the date to which the Rent and other charges are paid in advance, if any, and
(ii) acknowledging that there are not, to Tenant's knowledge, any uncured
Landlord defaults, or specifying such defaults if any are claimed. Any such
statement may be conclusively relied upon by a prospective purchaser or
encumbrancer of the Premises. Tenant's failure to deliver this statement
within such time shall be conclusive upon Tenant (i) that this Lease is in full
force, without modification except as may be represented by Landlord, (ii) that
there are no uncured defaults in Landlord's performance, and (iii) that not
more than one month's Base Rent has been paid in advance. If Landlord desires
to finance or refinance the Premises, or any part thereof, Tenant agrees to
deliver to any lender designated by Landlord such financial statements of
Tenant as may be reasonably required by that lender, including the past three
years' financial statements. All such financial statements shall be received
by Landlord in confidence and shall be used only for the specified purposes.
22. BUILDING RULES AND REGULATIONS
Tenant agrees to abide by all rules and regulations of the Building
imposed by Landlord. These regulations, presented as Exhibit D, are imposed
for the cleanliness, good appearance, proper maintenance, good order and
reasonable use of the Premises and the Building, and as may be reasonably
necessary for the proper enjoyment of the Building by all tenants and their
clients, customers and employees. The rules and regulations may be changed
from time to time by the Landlord on reasonable notice to Tenant.
23. NOTICES
All notices or other communications between the parties shall be in
writing and shall be deemed duly given, if delivered in person, or upon the
earlier of receipt, if mailed by certified or registered mail, or three (3)
days after certified or registered mailing, return receipt requested, postage
prepaid, addressed and sent to the parties at their addresses set forth in
Sections 1.13 and 1.14. Landlord and Tenant may from time to time by written
notice to the other designate another address for receipt of future notices.
24. EVENTS OF DEFAULT
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Each of the following shall constitute an "Event of Default:" (i)
Tenant fails to pay Rent or any other charge required to be paid under this
Lease when due, (ii) Tenant fails to observe or perform any other term,
condition or covenant binding upon or obligating Tenant within ten (10) days
after notice from Landlord, (iii) Tenant abandons the Premises; (iv) Tenant or
any guarantor makes or consents to a general assignment for the benefit of
creditors or a common law composition of creditors, or a receiver of the
Premises or all or substantially all of Tenant's or guarantor's assets is
appointed, (v) Tenant or any guarantor files a voluntary petition in any
bankruptcy or insolvency proceeding, or an involuntary petition in any
bankruptcy or insolvency proceeding is filed against Tenant or any guarantor
and is not discharged by Tenant or the guarantor within sixty (60) days, (vi)
any guarantor repudiates or breaches its guarantee in any way, or (vii) Tenant
fails to occupy the Premises within ten (10) business days after the Premises
are substantially completed.
25. LANDLORD'S REMEDIES
25.1 Upon the occurrence of an Event of Default, Landlord, at its
option, without further notice or demand to Tenant, shall have in addition to
all other rights and remedies provided in this Lease, at law or in equity, the
option to pursue any one or more of the following remedies, each and all of
which shall be cumulative and nonexclusive, without any notice or demand
whatsoever.
(a) Terminate this Lease, in which event Tenant shall
immediately surrender the Premises to Landlord, and if Tenant fails to do so,
Landlord may, without prejudice to any other remedy which it may have for
possession or arrearages in rent, enter upon and take possession of the
Premises and expel or remove Tenant and any other person who may be occupying
the Premises or any part thereof, without being liable for prosecution or any
claim or damages therefor; and Landlord may recover from Tenant the following:
(i) The worth at the time of award of any unpaid
rent which has been earned at the time of such termination; plus
(ii) The worth at the time of 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
(iii) The worth at the time of award of the amount
by which the unpaid rent for the balance of the Lease Term after the
time of award exceeds the amount of such rental loss that Tenant
proves could have been reasonably avoided; plus
(iv) Any other amount necessary to compensate
Landlord for all the 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, specifically
including but not limited to, brokerage commissions and advertising
expenses incurred, expenses of remodeling the Premises or any portion
thereof for a new tenant, whether for the same or a different use, and
any special concessions made to obtain a new tenant; and
(v) At Landlord's election, such other amounts in
addition to or in lieu of the foregoing as may be permitted from time
to time by applicable law.
The term "rent" as used in this Section 25.1 shall be deemed to be and to mean
all sums of every nature required to be paid by Tenant pursuant to the terms of
this Lease, whether to Landlord or to others, including, without limitation,
late charges and interest. As used in Sections 25.1(a)(i) and (ii), above, the
"worth at the time of award" shall be computed by allowing interest at the rate
set forth in Section 25.3, below, but in no case greater than the maximum
amount of such interest permitted by law. As used in Section 25.1(a)(iii)
above, the "worth at the time of award" shall be computed by discounting such
amount at the discount rate of the Federal Reserve Bank of San Francisco at the
time of award plus one percent (1%).
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(b) Landlord shall have the remedy described in
California Civil Code Section 1951.4 (lessor may continue lease in effect after
lessee's breach and abandonment and recover rent as it becomes due, if lessee
has the right to sublet or assign, subject only to reasonable limitations).
Accordingly, if Landlord does not elect to terminate this Lease on account of
any default by Tenant, Landlord may, from time to time, without terminating
this Lease, enforce all of its rights and remedies under this Lease, including
the right to recover all rent as it becomes due.
25.2 Whether or not Landlord elects to terminate this Lease on
account of any default by Tenant, as set forth in this Article 25, Landlord
shall have the right to terminate any and all subleases, licenses, concessions
or other consensual arrangements for possession entered into by Tenant and
affecting the Premises or may, in Landlord's sole discretion, succeed to
Tenant's interest in such subleases, licenses, concessions or arrangements. In
the event of Landlord's election to succeed to Tenant's interest in any such
subleases, licenses, concessions or arrangements, Tenant shall, as of the date
of notice by Landlord of such election, have no further right to or interest in
the rent or other consideration receivable thereunder.
25.3 If Tenant fails to pay any Rent within five (5) days after the
Rent becomes due and payable, Tenant shall pay to Landlord a late charge of ten
percent (10%) of the amount of overdue Rent. Notwithstanding the preceding
sentence, Tenant shall not be required to pay a late charge for the first time
that Tenant fails to pay any Rent within five days after the Rent payment
became due; thereafter however, a late charge shall apply to any late payment
of Rent in accordance with the preceding sentence. In addition, any late Rent
payment shall bear interest from the date that Rent became due and payable to
the date of payment by Tenant at the interest rate of fifteen percent (15%) per
annum, provided that in no case shall such rate be higher than the highest rate
permitted by applicable law. Late charges and interest shall be due and
payable within two (2) days after written demand from Landlord.
26. RIGHT OF LANDLORD TO CURE TENANT'S DEFAULT
If an Event of Default occurs, then Landlord may (but shall not be
obligated to) make such payment or do such act to cure the Event of Default,
and charge the expense, together with interest, at the interest rate set forth
in Section 25.3, to Tenant. Payment for the cure shall be due and payable by
the Tenant upon demand; however, the making of any payment or the taking of
such action by Landlord shall not be deemed to cure the Event of Default or to
stop Landlord from the pursuit of any remedy to which Landlord would otherwise
be entitled.
27. COMPLIANCE WITH LAW
Tenant shall not do anything or suffer anything to be done in or about
the Premises which will in any way conflict with any law, statute, ordinance or
other governmental rule, regulation or requirement now in force or which may
hereafter be enacted or promulgated. At its sole cost and expense, Tenant
shall promptly comply with all such governmental measures, other than the
making of structural changes or changes to the Building's life safety system.
Should any standard or regulation now or hereafter be imposed on Landlord or
Tenant by a state, federal or local governmental body charged with the
establishment, regulation and enforcement of occupational, health or safety
standards for employers, employees, landlords or tenants, then Tenant agrees,
at its sole cost and expense, to comply promptly with such standards or
regulations. The judgment of any court of competent jurisdiction or the
admission of Tenant in any judicial action, regardless of whether Landlord is a
party thereto, that Tenant has violated any of said governmental measures,
shall be conclusive of that fact as between Landlord and Tenant.
28. BENEFIT
Subject to the provisions of Section 9 hereof, the rights, duties and
liabilities created hereunder shall inure to the benefit of and be binding upon
the parties hereto, their heirs, personal representatives, successors and
assigns.
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29. PROHIBITION AGAINST RECORDING
Except as provided in this Lease, neither this Lease, nor any
memorandum, affidavit or other writing with respect thereto, shall be recorded
by Tenant or by anyone acting through, under, or on behalf of Tenant, and the
recording thereof in violation of this provision shall make this Lease null and
void at Landlord's election.
30. TRANSFER OF LANDLORD'S INTEREST
Tenant acknowledges that Landlord has the right to transfer all or any
portion of its interest in the Project and Building and in this Lease, and
Tenant agrees that in the event of any such transfer and a transfer of the
security deposit, Landlord shall automatically be released from all liability
under this Lease and Tenant agrees to look solely to such transferee for the
performance of Landlord's obligations hereunder after the date of transfer.
Tenant further acknowledges that Landlord may assign its interest in this Lease
to a mortgage lender as additional security and agrees that such an assignment
shall not release Landlord from its obligations hereunder and that Tenant shall
continue to look to Landlord for the performance of its obligations hereunder.
31. FORCE MAJEURE
Any prevention, delay or stoppage due to strikes, lockouts, labor
disputes, acts of God, inability to obtain services, labor or materials or
reasonable substitutes therefore, governmental actions, civil commotions, fire
or other casualty, and other causes beyond the reasonable control of the party
obligated to perform (collectively, the "Force Majeure"), except with respect
to the obligations imposed with regard to Rent and other charges to be paid by
Tenant pursuant to this Lease, and Tenant's obligations under Articles 11 and
27 of this Lease notwithstanding anything to the contrary contained in this
Lease, shall excuse the performance of such party for a period equal to any
such prevention, delay, or stoppage and, therefore, if this Lease specifies a
time period for performance of an obligation of either party, that time period
shall be extended by the period of any delay in such party's performance caused
by a Force Majeure.
32. LANDLORD EXCULPATION
It is expressly understood and agreed that notwithstanding anything in
this Lease to the contrary, and notwithstanding any applicable law to the
contrary, the liability of Landlord hereunder (including any successor
landlord) and any recourse by Tenant against Landlord shall be limited solely
and exclusively to the interest of Landlord in and to the Project and Building,
and neither Landlord, nor any of its constituent partners, shall have any
personal liability therefor, and Tenant hereby expressly waives and releases
such personal liability on behalf of itself and all persons claiming by,
through or under Tenant.
33. BUILDING RENOVATIONS
Tenant hereby acknowledges that Landlord is currently renovating or
may during the Lease Term renovate, improve, alter, or modify (collectively,
the "Renovations") the Building and/or the Premises, which Renovations may
include, without limitation, (i) installing sprinklers in the Building common
areas and tenant spaces, (ii) modifying the common areas and tenant spaces to
comply with applicable laws and regulations, including regulations relating to
the physically disabled, and (iii) installing new carpeting, lighting, and wall
coverings in the building common areas. Tenant hereby agrees that such
Renovations shall in no way constitute a constructive eviction of Tenant nor
entitle Tenant to any abatement of Rent. Landlord shall have no
responsibility, or for any reason be liable, to Tenant for any injury to or
interference with Tenant's business arising from the Renovations, nor shall
Tenant be entitled to any compensation or damages from Landlord for loss of the
use of the whole or any part of the Premises or of tenant's personal property
or improvements resulting from the Renovations, or for any inconvenience or
annoyance occasioned by such Renovations.
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34. ATTORNEYS' FEES
If either party commences litigation against the other for the
specific performance of this Lease, for damages for breach hereof or otherwise
for enforcement of any remedy hereunder, the parties hereto agree to and hereby
do waive any right to a trial by jury and, in the event of any such
commencement of litigation, the prevailing party shall be entitled to recover
from the other party such costs and reasonable attorney's fees as may have been
incurred.
35. SURRENDER OF THE PREMISES
Tenant shall peaceably surrender the Premises to Landlord on the
Expiration Date or earlier termination of this Lease, in broom-clean condition
and in as good condition as when Tenant took possession, including, without
limitation, the repair of any damage to the Premises caused by the removal of
any of Tenant's personal property or trade fixtures from the Premises, except
for reasonable wear and tear and loss by fire or other casualty not caused by
Tenant or its agents. Any of Tenant's personal property left on or in the
Premises, the Building or the common areas after the Expiration Date or earlier
termination of this Lease shall be deemed to be abandoned, and, at Landlord's
option, title shall pass to Landlord under this Lease.
36. HOLDING OVER
In the event that Tenant shall not immediately surrender the Premises
to Landlord on the Expiration Date or earlier termination of this Lease, Tenant
shall be deemed to be a month to month tenant upon all of the terms and
provisions of this Lease, except the monthly Rent shall be one hundred fifty
percent (150%) of the monthly Rent in effect during the last month of the Term.
If Tenant shall hold over after the Expiration Date or earlier termination of
this Lease, and Landlord shall desire to regain possession of the Premises,
then Landlord may forthwith re-enter and take possession of the Premises
without process, or by any legal process in force in the State of California.
Tenant shall indemnify Landlord against all liabilities and damages sustained
by Landlord by reason of holding over.
37. JOINT AND SEVERAL
If there is more than one Tenant, the obligations imposed upon Tenant
under this Lease shall be joint and several.
38. GOVERNING LAW
This Lease shall be construed and enforced in accordance with the laws
of the State of California.
39. SUBMISSION OF LEASE
Submission of this instrument for examination or signature by Tenant
does not constitute a reservation of or an option for lease, and it is not
effective as a lease or otherwise until execution and delivery by both Landlord
and Tenant.
40. BROKERS
Landlord and Tenant hereby warrant to each other that they have had no
dealings with any real estate broker or agent in connection with the
negotiation of this Lease, excepting only the real estate brokers or agents
specified in Section 1.12 (the "Brokers"), and that they know of no other real
estate broker or agent who is entitled to a commission in connection with this
Lease. Each party agrees to indemnify and defend the other party against and
hold the other party harmless from any and all claims, demands, losses,
liabilities, lawsuits, judgments, and costs and expenses (including without
limitation reasonable attorneys' fees) with respect to any leasing commission
or equivalent compensation alleged to be owing on account of the indemnifying
party's dealings with any real estate
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broker or agent other than the Brokers. The terms of this Article 40 shall
survive the expiration or earlier termination of the Term.
41. HAZARDOUS MATERIALS
41.1 As used in this Lease, the term "Hazardous Material" means any
flammable items, explosives, radioactive materials, hazardous or toxic
substances, material or waste or related materials, including any substances
defined as or included in the definition of "hazardous substances", "hazardous
wastes", "infectious wastes", "hazardous materials" or "toxic substances" now
or subsequently regulated under any federal, state or local laws or regulations
including, without limitation, petroleum-based products, printing inks, acids,
pesticides, asbestos, PCBs and similar compounds, and including any different
products and materials which are subsequently found to have adverse effects on
the environment or the health and safety of persons.
41.2 Tenant shall not cause or permit any Hazardous Material to be
generated, produced, brought upon, used, stored, treated or disposed of in or
about the Premises or the Project by Tenant, its agents, employees,
contractors, affiliates, sublessees or invitees. Tenant shall indemnify,
defend and hold Landlord harmless from all actions (including, without
limitation, remedial or enforcement actions of any kind, and administrative or
judicial proceedings and orders or judgments), costs, claims, damages,
(including punitive damages), expenses (including, attorneys', consultants' and
experts' fees, court costs) amounts paid in settlement, fines, forfeitures or
other civil, administrative or criminal penalties, injunctive or other relief,
liabilities or losses arising from a breach of this prohibition by Tenant, its
agents, employees, contractors, affiliates, sublessees or invitees. Upon
expiration or earlier termination of this Lease, Tenant shall cause any
Hazardous Materials arising out of or related to the use or occupancy of the
Premises by Tenant or its agents, affiliates, customers, employees, business
associates or assigns to be removed from the Premises and the Project and
properly transported for use, storage or disposal in accordance with all
applicable laws, regulations and ordinances.
42. LANDLORD'S RESERVATIONS
In addition to the other rights of Landlord under this Lease, Landlord
reserves the right (i) to change the street address and/or name of the Building
without being deemed to be guilty of an eviction, actual or constructive, or a
disturbance or interruption of the business of Tenant or Tenant's use or
occupancy of the Premises.
43. PARKING
Tenant shall receive the use of the number of parking spaces set forth
in Section 1.15 upon Tenant's compliance with all parking rules and regulations
and upon payment of prevailing parking rates as in effect from time to time,
provided however, if at any time during the Term, Tenant ceases to pay for one
or more of the parking spaces provided to Tenant under Section 1.15, then
Tenant shall have no further right to rent such unused spaces except as
provided in the following sentence. Tenant shall have the right to lease from
Landlord for the Tenant's use, additional spaces at the prevailing market rates
established from time to time by Landlord, as and when available to Tenant by
Landlord. The current parking rates charged by Landlord are $93.50 for
unreserved spaces and $132.00 for reserved spaces, inclusive of city parking
taxes
44. ACKNOWLEDGEMENT AND DISCLAIMER
Landlord does not make any representations, warranties, promises or
statements, express or implied, as to the possible impact of the January 17,
1994 earthquake, or any subsequent seismic activity, on the structural
integrity of the Building. Landlord has made available to Tenant copies of
written reports regarding the Building which Landlord received after the
January 17, 1994 earthquake from EQE International ("EQE"), and from John A.
Martin and Associates ("JAMA"). In addition, Landlord has disclosed to Tenant
that additional inspections and tests are being undertaken by JAMA at this
time. Written results of such tests will be available for Tenant's review
after receipt by Landlord from JAMA. The EQE and JAMA reports are available to
Tenant solely as an accommodation
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to Tenant with Tenant's express acknowledgement that Tenant will use the
reports at Tenant's own risk. The reports have been prepared by EQE and JAMA,
which are both outside consultants retained on Landlord's behalf, and the
reports are based solely upon work undertaken by or at the direction of EQE or
JAMA in accordance with a specific scope of work prepared by them. The reports
contain the professional opinions of EQE or JAMA, and do not contain any
opinions, warranties or representations by Landlord. Landlord makes no
representation or warranty with respect to, and takes no responsibility for,
the truth or accuracy of the information or conclusions in the reports, and the
Tenant expressly agrees that it has not relied on any representations,
warranties, promises or statements of Landlord. Tenant has agreed that (1)
Tenant will not release, deliver or disclose the reports to any third party
without Landlord's prior written consent, (2) Tenant will not rely on the
reports, (3) Tenant will use the reports solely at its own risk, and (4)
Tenant waives and relinquishes, and will indemnify, defend and agree to hold
Landlord, and any of its agents, representatives, advisors, trustees, partners,
shareholders or related entities, harmless from and against, any and all claims
Tenant, or any party claiming through Tenant, may believe it may have against
Landlord and Landlord's consultant arising out of (i) the delivery of the
reports to Tenant, (ii) any misuse of the reports, or (iii) any inaccuracy or
incompleteness of the reports.
45. DIRECTORY BOARD
At Landlord's cost, Landlord shall provide Tenant five lines on the
Building directory board.
46. OPTION TO RENEW
46.1 OPTION RIGHT. Tenant shall have one (1) option to extend the
Lease Term for a period of three (3) years (the "Option Term"), which
option shall be exercisable only by written notice delivered by Tenant
to Landlord as provided below, provided that, as of the date of
delivery of such notice, Tenant is not in default under this Lease and
Tenant has not previously been in default under this Lease more than
once. Upon the proper exercise of such option to extend, and provided
that, as of end of the initial Lease Term, Tenant is not in default
under this Lease and Tenant has not previously been in default under
this Lease more than once, the Lease Term shall be extended for a
period of three (3) years. The rights contained in this Section 46
shall be personal to Tenant and may be exercised by Tenant only (and
not by any assignee, sublessee or other transferee of Tenant's
interest in this Lease) and only if Tenant occupies the entire
Premises at the end of the initial Lease Term.
46.2 OPTION RENT. The Rent payable by Tenant during the Option Term
(the "Option Rent") shall be equal to the greater of (i) the initial
Base Rent described in Section 1.6, and (ii) the face or stated rent,
including all escalations and concessions such as free rent and tenant
improvements, being quoted by Landlord for space comparable in size,
location and quality to the Premises in the Building.
46.3 EXERCISE OF OPTION. The option contained in this Section 46
shall be exercised by Tenant, if at all, only in the following manner:
(i) Tenant shall deliver written notice to Landlord not more than
twelve (12) months nor less than nine (9) months prior to the
expiration of the initial Lease Term, stating that Tenant is
interested in exercising its option; (ii) Landlord, after receipt of
Tenant's notice shall deliver notice (the "Option Rent Notice") to
Tenant not less than seven (7) months prior to the expiration of the
initial Lease Term, setting forth the Option Rent; and (iii) if Tenant
wishes to exercise such option, Tenant shall, on or before the earlier
of (A) the date occurring six (6) months prior to the expiration of
the initial Lease Term, and (B) the date occurring thirty (30) days
after Tenant's receipt of the Option Rent Notice, exercise the option
by delivering written notice thereof to Landlord.
47. GUARANTEE
Landlord's execution of this Lease is conditioned upon its receipt of
a guarantee of Tenant's obligations under this Lease in the form of Exhibit F
hereto, executed by Drew Levin and Laurie S. Levin. The execution of such
guarantee is a material inducement to Landlord to enter into this Lease.
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IN WITNESS WHEREOF, the parties have executed, or caused this Lease to
be executed by their authorized agents.
TENANT:
DSL ENTERTAINMENT GROUP, INC.
a California corporation
By: /s/ HUNT BARNETT
-------------------------------
Authorized Signatory
By: _______________________________
Authorized Signatory
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
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LANDLORD:
TCW REALTY FUND VA (CALIFORNIA) HOLDING COMPANY,
a California corporation
By: /s/ C. A. LEUTY
-------------------------------
Authorized Signatory
By: /s/ JOEL MARKLING
-------------------------------
Authorized Signatory
TCW REALTY FUND VB,
a California limited partnership,
as tenant in common
By: TCW ASSET MANAGEMENT COMPANY,
a California corporation,
as General Partner
By: /s/ C. A. LEUTY
---------------------------------
Authorized Signatory
By: /s/ JOEL MARKLING
---------------------------------
Authorized Signatory
By: WESTMARK REALTY ADVISORS L.L.C.,
a Delaware limited liability company,
as General Partner
By: /s/ C. A. LEUTY
----------------------------------
Authorized Signatory
By: /s/ JOEL MARKLING
-----------------------------------
Authorized Signatory
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EXHIBIT B
Wilshire Centre
DSL Entertainment Group, Inc.
TENANT WORK LETTER
This Tenant Work Letter shall set forth the terms and conditions
relating to the construction of the tenant improvements in the Premises. This
Tenant Work Letter is essentially organized chronologically and addresses the
issues of the construction of the Premises, in sequence, as such issues will
arise during the actual construction of the Premises. All references in this
Tenant Work Letter to Articles or Sections of "THIS LEASE" shall mean the
relevant portion of Articles 1 through 47 of the Standard Form Office Lease to
which this Tenant Work Letter is attached as Exhibit B and of which this Tenant
Work Letter forms a part, and all references in this Tenant Work Letter to
Sections of "this Tenant Work Letter" shall mean the relevant portion of
Sections 1 through 6 of this Tenant Work Letter.
SECTION 1
CONSTRUCTION DRAWINGS FOR THE PREMISES
Landlord shall construct tenant improvements in the Premises (the
"TENANT IMPROVEMENTS"). The Tenant Improvements shall consist of such physical
improvements to the Premises as Tenant shall reasonably request, provided the
Cost of Construction (as defined below) does not exceed the TI Allowance (as
defined below) and subject to Landlord's standards and requirements for the
Building. Tenant shall make all selections and decisions concerning the Tenant
Improvements as requested by Landlord no later than two days after execution of
this Lease by Tenant. After all such selections and decisions have been made,
Tenant shall make no changes or modifications to the Tenant Improvements
without the prior written consent of Landlord, which consent may be withheld in
Landlord's sole discretion if such change or modification would directly or
indirectly delay the "SUBSTANTIAL COMPLETION," as that term is defined in
Section 5.1 of this Tenant Work Letter, of the Premises or increase the cost of
designing or constructing the Tenant Improvements.
SECTION 2
OVER-ALLOWANCE AMOUNT
2.1 Grant of Allowance. Subject to the provisions of Section 6.7
below, Landlord grants Tenant an allowance for construction of the Tenant
Improvements in the amount of $19,950.00 (the "TI ALLOWANCE"). Tenant shall
not be required to pay any portion of the Cost of Construction unless Tenant's
acts or omissions (including, without limitation, changes or modifications to
the Tenant Improvements, or defaults by Tenant in the Lease) cause the Cost of
Construction to exceed the TI Allowance, in which case, Tenant shall, upon
demand from Landlord, pay such increased cost to Landlord.
2.2 Excess TI Allowance. Within fourteen days after completion of
the Tenant Improvements, Landlord shall inform Tenant of the amount, if any, by
which the TI Allowance exceeded the Cost of Construction of the Tenant
Improvements (the difference shall be referred to as the "EXCESS TI
ALLOWANCE"). If there is any Excess TI Allowance, Tenant shall be permitted to
use such amount for additional tenant improvements which Tenant wishes to make
to the Premises. Tenant shall inform Landlord in writing by August 31, 1995 of
the manner in which Tenant wishes to apply the Excess TI Allowance (if any),
such notice (the "ADDITIONAL TI NOTICE") to include all pertinent detail
concerning the nature and cost of such additional tenant improvements.
B-1
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2.3 Construction of Additional Tenant Improvements. The
construction of such additional tenant improvements shall be subject to the
pertinent provisions of Article 7 of the Lease, and shall be done through the
use of a contractor approved by Landlord. At Landlord's option, such
contractor shall contract directly with Landlord. If the Cost of Construction
of the additional tenant improvements requested by Tenant will exceed the
amount of the Excess TI Allowance, then Tenant shall be solely responsible for
such overage, and shall, upon demand from Landlord, pay the difference to
Landlord or other person designated by Landlord. If Tenant does not deliver
the Additional TI Notice within the period described above, then Tenant shall
be deemed to have waived Tenant's right to apply the Excess TI Allowance. The
Excess TI Allowance may not be used as a credit against any Rent due under the
Lease or for any other purposes except as expressly stated in this paragraph.
2.4 "Cost of Construction." "COST OF CONSTRUCTION" shall mean
the costs and expenses incurred in connection with the construction of the
Tenant Improvements and any other work required in connection therewith,
including without limitation, payments made to contractors, subcontractors,
materialmen and laborers performing work or supplying any goods, services,
supplies or equipment in connection with the Tenant Improvements; all
architectural and engineering fees and costs; fees and costs of other
consultants retained in connection with the Tenant Improvements; costs of all
construction materials and equipment, including but not limited to all
necessary mechanical systems; fees and costs for processing and obtaining
building permits, licenses, and inspection; costs of supervision of the
construction, whether by third parties or by Landlord; and such other costs as
customarily may be incurred in connection with the construction of the Tenant
Improvements. Notwithstanding the previous sentence, the Cost of Construction
shall not include the costs associated with the upgrading of the interior
partition and addition of a new door for fire safety purposes.
SECTION 3
CONTRACTOR'S WARRANTIES AND GUARANTIES
Landlord hereby assigns to Tenant all warranties and guaranties by the
contractor who constructs the Tenant Improvements (the "Contractor") relating
to the Tenant Improvements, and Tenant hereby waives all claims against
Landlord relating to, or arising out of the construction of, the Tenant
Improvements. Notwithstanding any estimate, projection or statement which may
have been made or may be made in the future by Landlord or any contractor,
representative or agent of Landlord, Landlord shall not be deemed to guarantee
the Cost of Construction of the Tenant Improvements, unless Landlord shall do
so in a writing signed by the persons signing this Lease on Landlord's behalf.
SECTION 4
TENANT'S INDEMNITY
Tenant indemnifies and holds Landlord harmless from all claims and all
costs, including reasonable attorneys' fees, expenses and liabilities, except
those caused by Landlord's negligence, arising or resulting from (a) any
accident, injury, death, loss or damage to any person or to any property
including the person and property of Tenant and its employees, agents,
officers, guests, and all other persons at any time in the Building or the
Premises or the common areas caused by Tenant, (b) the occupancy or use of the
Premises by the Tenant, or (c) any act or omission or negligence of Tenant or
any agent, licensee, or invitee of Tenant, or its contractors, employees, or
any subtenant or subtenant's agents, employees, contractors, or invitees.
SECTION 5
COMPLETION OF THE TENANT IMPROVEMENTS;
COMMENCEMENT DATE
B-2
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5.1 Ready for Occupancy. The Premises shall be deemed "READY FOR
OCCUPANCY" upon the Substantial Completion of the Premises. For purposes of
this Lease, "Substantial Completion" of the Premises shall occur upon the
completion of construction of the Tenant Improvements in the Premises, with the
exception of any punch list items and any tenant fixtures, work-stations,
built-in furniture, or equipment to be installed by Tenant or under the
supervision of Contractor.
5.2 Delay of the Substantial Completion of the Premises. Except as
provided in this Section 5.2, the Commencement Date shall occur as set forth in
Article 3 of the Lease and Section 5.1, above. If there shall be a delay or
there are delays in the Substantial Completion of the Premises or in the
occurrence of any of the other conditions precedent to the Commencement Date,
as set forth in Article 3 of the Lease, as a direct, indirect, partial, or
total result of:
5.2.1 Tenant's failure to timely approve any matter requiring
Tenant's approval;
5.2.2 A breach by Tenant of the terms of this Tenant Work
Letter or the Lease;
5.2.3 Tenant's request for changes in the Tenant
Improvements;
5.2.4 Changes in any of the Tenant Improvements because the
same do not comply with applicable laws;
5.2.5 Tenant's requirement for materials, components,
finishes or improvements which are not available in a commercially reasonable
time given the anticipated date of Substantial Completion of the Premises, as
set forth in the Lease, or which are different from, or not included in,
Landlord's standard improvement package items for the Building;
5.2.6 Changes to the base, shell and core work of the
Building in connection with the Tenant Improvements; or
5.2.7 Any other acts or omissions of Tenant, or its agents,
or employees;
then, notwithstanding anything to the contrary set forth in the Lease or this
Tenant Work Letter and regardless of the actual date of the Substantial
Completion of the Premises, the Commencement Date shall be deemed to be the
date the Commencement Date would have occurred if no Tenant delay or delays, as
set forth above, had occurred.
SECTION 6
MISCELLANEOUS
6.1 Tenant's Entry Into the Premises Prior to Substantial
Completion. Provided that Tenant and its agents do not interfere with
Contractor's work in the Building and the Premises, Contractor shall allow
Tenant to occupy the Premises beginning on May 13, 1995 although the Tenant
Improvements may not yet have been completed as of such date, provided however:
(a) Tenant acknowledges and agrees that the provisions of Section 4 hereof and
all provisions of the Lease shall apply to Tenant's use of the Premises during
any period prior to the Commencement Date, except that Base Rent shall not
accrue prior to the Commencement Date, (b) Tenant shall strictly comply with
all requirements of Landlord and Contractor concerning Tenant's use of the
Premises before Substantial Completion of the Tenant Improvements, and (c)
Tenant acknowledges and agrees that in addition to all other Construction Costs
in connection with the Tenant Improvements, the Construction Costs shall also
include any additional costs incurred by Landlord by reason of Tenant's use of
the Premises before Substantial Completion of the Tenant Improvements (which
additional costs are not included in any previous estimates given to Tenant by
B-3
27
Landlord or others). Tenant further acknowledges that the Substantial
Completion of the Tenant Improvements may be delayed by reason of Tenant's
occupancy and use of the Premises prior to Substantial Completion.
6.2 Freight Elevators. Landlord shall, consistent with its
obligations to other tenants of the Building, make the freight elevator
reasonably available to Tenant in connection with initial decorating,
furnishing and moving into the Premises.
6.3 Tenant's Representative. Tenant has designated Drew Levin as
its sole representative with respect to the matters set forth in this Tenant
Work Letter, who, until further notice to Landlord, shall have full authority
and responsibility to act on behalf of the Tenant as required in this Tenant
Work Letter.
6.4 Landlord's Representative. Landlord has designated Bill
Bessolo as its sole representative with respect to the matters set forth in
this Tenant Work Letter, who, until further notice to Tenant, shall have full
authority and responsibility to act on behalf of the Landlord as required in
this Tenant Work Letter.
6.5 Tenant's Agents. All subcontractors, laborers, materialmen,
and suppliers retained directly by Tenant shall all be union labor in
compliance with the master labor agreements existing between trade unions and
the Southern California Chapter of the Associated General Contractors of
America.
6.6 Time of the Essence in This Tenant Work Letter. Unless
otherwise indicated, all references herein to a "number of days" shall mean and
refer to calendar days. In all instances where Tenant is required to approve
or deliver an item, if no written notice of approval is given or the item is
not delivered within the stated time period, at Landlord's sole option, at the
end of such period the item shall automatically be deemed approved or delivered
by Tenant and the next succeeding time period shall commence.
6.7 Tenant's Lease Default. Notwithstanding any provision to the
contrary contained in this Lease, if an event of default as described in
Article 24 of the Lease, or a default by Tenant under this Tenant Work Letter,
has occurred at any time on or before the Substantial Completion of the
Premises, then (i) in addition to all other rights and remedies granted to
Landlord pursuant to the Lease, Landlord shall have the right to cause
Contractor to cease the construction of the Premises (in which case, Tenant
shall be responsible for any delay in the Substantial Completion of the
Premises caused by such work stoppage as set forth in Section 5 of this Tenant
Work Letter), and (ii) all other obligations of Landlord under the terms of
this Tenant Work Letter shall be forgiven until such time as such default is
cured pursuant to the terms of the Lease.
B-4
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EXHIBIT C
NOTICE OF LEASE TERM DATES
To: DSL Entertainment Group, Inc.
12300 Wilshire Blvd., Suite 400
Los Angeles, California 90025
Re: Office Lease dated April 25, 1995 between TCW REALTY FUND VA
(CALIFORNIA) HOLDING COMPANY, a California corporation, and TCW REALTY
FUND VB, a California limited partnership, as tenants in common
(collectively, "LANDLORD"), and DSL ENTERTAINMENT GROUP, INC. ("TENANT")
concerning Suite 400 of the office building located at 12300 Wilshire
Boulevard, Los Angeles, California.
Gentlemen:
In accordance with the Office Lease (the "Lease"), we wish to advise you
and/or confirm as follows:
1. The Premises are substantially completed, and the Term shall commence on
or has commenced on _______ __, 1995, for a term of thirty-six months
ending on __________________.
2. Rent commenced to accrue on ____________________, in the amount of
___________________.
3. If the Commencement Date is other than the first day of the month, the
first billing will contain a pro rata adjustment. Each billing
thereafter, with the exception of the final billing, shall be for the
full amount of the monthly installment as provided for in the Lease.
4. Your rent checks should be made payable to ___________________
_______________________ at___________________________________.
5. The exact number of rentable square feet within the Premises is
_________ square feet.
6. Tenant's Proportionate Share as adjusted based upon the exact number of
rentable square feet within the Premises is _________%.
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LANDLORD:
TCW REALTY FUND VA (CALIFORNIA) HOLDING COMPANY,
a California corporation
By: /s/ C. A. LEUTY
--------------------------------
Authorized Signatory
By: /s/ JOEL MARKLING
-------------------------------
Authorized Signatory
TCW REALTY FUND VB,
a California limited partnership,
as tenant in common
By: TCW ASSET MANAGEMENT COMPANY,
a California corporation,
as General Partner
By: /s/ C. A. LEUTY
---------------------------------
Authorized Signatory
By: /s/ JOEL MARKLING
---------------------------------
Authorized Signatory
By: WESTMARK REALTY ADVISORS L.L.C.,
a Delaware limited liability company,
as General Partner
By: /s/ C. A. LEUTY
-----------------------------
Authorized Signatory
By: /s/ JOEL MARKLING
------------------------------
Authorized Signatory
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Agreed and Accepted as of _____________________, 1995
TENANT:
DSL ENTERTAINMENT GROUP, INC.
a California corporation
By: /s/ HUNT BARNETT
-------------------------------
Authorized Signatory
By: _______________________________
Authorized Signatory
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EXHIBIT D
RULES AND REGULATIONS
Tenant shall faithfully observe and comply with the following Rules and
Regulations. Landlord shall not be responsible to Tenant for the
nonperformance of any of said Rules and Regulations by or otherwise with
respect to the acts or omissions of any other tenants or occupants of the
Project.
1. Tenant shall not alter any lock or install any new or additional
locks or bolts on any doors or windows of the Premises without obtaining
Landlord's prior written consent. Tenant shall bear the cost of any lock
changes or repairs required by Tenant. Two keys will be furnished by Landlord
for the Premises, and any additional keys required by Tenant must be obtained
from Landlord at a reasonable cost to be established by Landlord.
2. All doors opening to public corridors shall be kept closed at
all times except for normal ingress and egress to the Premises.
3. Landlord reserves the right to close and keep locked all
entrance and exit doors of the Building during such hours as are customary for
comparable buildings in the greater Los Angeles area. Tenant, its employees
and agents must be sure that the doors to the Building are securely closed and
locked when leaving the Premises if it is after the normal hours of business
for the Building. Any tenant, its employees, agents or any other persons
entering or leaving the Building at any time when it is so locked, or any time
when it is considered to be after normal business hours for the Building, may
be required to sign the Building register. Access to the Building may be
refused unless the person seeking access has proper identification or has a
previously arranged pass for access to the Building. Landlord and his agents
shall in no case be liable for damages for any error with regard to the
admission to or exclusion from the Building of any person. In case of
invasion, mob, riot, public excitement, or other commotion, Landlord reserves
the right to prevent access to the Building or the Project during the
continuance thereof by any means it deems appropriate for the safety and
protection of life and property.
4. No furniture, freight or equipment of any kind shall be brought
into the Building without prior notice to Landlord. All moving activity into
or out of the Building shall be scheduled with Landlord and done only at such
time and in such manner as Landlord designates. No service deliveries (other
than messenger services) will be allowed between hours of 4:00 p.m. to 6:00
p.m., Monday through Friday. Landlord shall have the right to prescribe the
weight, size and position of all safes and other heavy property brought into
the Building and also the times and manner of moving the same in and out of the
Building. Safes and other heavy objects shall, if considered necessary by
Landlord, stand on supports of such thickness as is necessary to properly
distribute the weight. Landlord will not be responsible for loss of or damage
to any such safe or property in any case. Any damage to any part of the
Building, its contents, occupants or visitors by moving or maintaining any such
safe or other property shall be the sole responsibility and expense of Tenant.
5. No furniture, packages, supplies, equipment or merchandise will
be received in the Building or carried up or down in the elevators, except
between such hours and in such specific elevator as shall be designated by
Landlord.
6. The requirements of Tenant will be attended to only upon
application at the management office for the Project or at such office location
designated by Landlord. Employees of Landlord shall not perform any work or do
anything outside their regular duties unless under special instructions from
Landlord.
7. Tenant shall not disturb, solicit, or canvass any occupant of
the Project and shall cooperate with Landlord and its agents of Landlord to
prevent the same.
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8. The toilet rooms, urinals, wash bowls and other apparatus shall
not be used for any purpose other than that for which they were constructed,
and no foreign substance of any kind whatsoever shall be thrown therein. The
expense of any breakage, stoppage or damage resulting from the violation of
this rule shall be borne by the tenant who, or whose employees or agents, shall
have caused it.
9. Tenant shall not overload the floor of the Premises, nor mark,
drive nails or screws, or drill into the partitions, woodwork or plaster or in
any way deface the Premises or any part thereof without Landlord's prior
written consent.
10. Except for vending machines intended for the sole use of
Tenant's employees and invitees, no vending machine or machines other than
fractional horsepower office machines shall be installed, maintained or
operated upon the Premises without the written consent of Landlord.
11. Tenant shall not use or keep in or on the Premises, the
Building, or the Project any kerosene, gasoline or other inflammable or
combustible fluid or material.
12. Tenant shall not without the prior written consent of Landlord
use any method of heating or air conditioning other than that supplied by
Landlord.
13. Tenant shall not use, keep or permit to be used or kept, any
foul or noxious gas or substance in or on the Premises, or permit or allow the
Premises to be occupied or used in a manner offensive or objectionable to
Landlord or other occupants of the Project by reason of noise, odors, or
vibrations, or interfere in any way with other tenants or those having business
therein.
14. Tenant shall not bring into or keep within the Project, the
Building or the Premises any animals, birds, bicycles or other vehicles.
15. No cooking shall be done or permitted on the Premises, nor shall
the Premises be used for the storage of merchandise, for lodging or for any
improper, objectionable or immoral purposes. Notwithstanding the foregoing,
Underwriters' laboratory-approved equipment and microwave ovens may be used in
the Premises for heating food and brewing coffee, tea, hot chocolate and
similar beverages for employees and visitors, provided that such use is in
accordance with all applicable federal, state and city laws, codes, ordinances,
rules and regulations.
16. Landlord will approve where and how telephone and telegraph
wires are to be introduced to the Premises. No boring or cutting for wires
shall be allowed without the consent of Landlord. The location of telephone,
call boxes and other office equipment affixed to the Premises shall be subject
to the approval of Landlord.
17. Landlord reserves the right to exclude or expel from the Project
any person who, in the judgment of Landlord, is intoxicated or under the
influence of liquor or drugs, or who shall in any manner do any act in
violation of any of these Rules and Regulations.
18. Tenant, its employees and agents shall not loiter in or on the
entrances, corridors, sidewalks, lobbies, halls, stairways, elevators, or any
common areas for the purpose of smoking tobacco products or for any other
purpose, nor in any way obstruct such areas, and shall use them only as a means
of ingress and egress for the Premises.
19. Tenant shall not waste electricity, water or air conditioning
and agrees to cooperate fully with Landlord to ensure the most effective
operation of the Building's heating and air conditioning system, and shall
refrain from attempting to adjust any controls.
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20. Tenant shall store all its trash and garbage within the interior
of the Premises. No material shall be placed in the trash boxes or receptacles
if such material is of such nature that it may not be disposed of in the
ordinary and customary manner of removing and disposing of trash in the
vicinity of the Building without violation of any law or ordinance governing
such disposal. All trash, garbage and refuse disposal shall be made only
through entry-ways and elevators provided for such purposes at such times as
Landlord shall designate.
21. Tenant shall comply with all safety, fire protection and
evacuation procedures and regulations established by Landlord or any
governmental agency.
22. Tenant shall assume any and all responsibility for protecting
the Premises from theft, robbery and pilferage, which includes keeping doors
locked and other means of entry to the Premises closed.
23. No awnings or other projection shall be attached to the outside
walls of the Building without the prior written consent of Landlord. No
curtains, blinds, shades or screens shall be attached to or hung in, or used in
connection with, any window or door of the Premises without the prior written
consent of Landlord. All electrical ceiling fixtures hung in offices or spaces
along the perimeter of the Building must be fluorescent and/or of a quality,
type, design and bulb color approved by Landlord. Tenant shall abide by
Landlord's regulations concerning the opening and closing of window coverings
which are attached to the windows in the Premises, if any, which have a view of
any interior portion of the Building or Building common areas.
24. The sashes, sash doors, skylights, windows, and doors that
reflect or admit light and air into the halls, passageways or other public
places in the Building shall not be covered or obstructed by Tenant, nor shall
any bottles, parcels or other articles be placed on the windowsills.
25. Tenant must comply with requests by Landlord concerning the
informing of their employees of items of importance to Landlord.
Landlord reserves the right at any time to change or rescind any one or
more of these Rules and Regulations, or to make such other and further
reasonable Rules and Regulations as in Landlord's judgment may from time to
time be necessary for the management, safety, care and cleanliness of the
Premises, Building, and the Project, and for the preservation of good order
therein, as well as for the convenience of other occupants and tenants therein.
Landlord may waive any one or more of these Rules and Regulations for the
benefit of any particular tenants, but no such waiver by Landlord shall be
construed as a waiver of such Rules and Regulations in favor of any other
tenant, nor prevent Landlord from thereafter enforcing any such Rules or
Regulations against any or all tenants of the Project. Tenant shall be deemed
to have read these Rules and Regulations and to have agreed to abide by them as
a condition of its occupancy of the Premises.
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EXHIBIT F
GUARANTEE OF LEASE
1. Guarantee. Drew Levin and his wife, Laurie S. Levin (collectively,
"Guarantor"), whose address is 101 S. Rockingham, Los Angeles, CA 90049, and
whose respective social security numbers are 101564-28-2183 and ###-##-####, as
a material inducement to and in consideration of TCW REALTY FUND VA
(CALIFORNIA) HOLDING COMPANY, a California corporation, and TCW REALTY FUND VB,
a California limited partnership, as tenants in common (collectively,
"LANDLORD"), entering into that certain lease (the "LEASE") dated as of April
25, 1995, with DSL Entertainment Group, Inc., a California corporation, as
Tenant, concerning office space located at Suite 400, 12300 Wilshire Boulevard,
Los Angeles, California, hereby unconditionally, irrevocably, absolutely and
jointly and severally, guarantees and promises to and for the benefit of
Landlord that Tenant shall perform all of its covenants under the Lease,
including but not limited to the payment of rent and all other sums now or
hereafter becoming due or payable under the Lease.
2. Standard Provisions. A separate action may be brought or prosecuted
against any Guarantor whether or not the action is brought or prosecuted
against any other Guarantor or Tenant. If Tenant defaults under the Lease,
Landlord may proceed immediately against Guarantor or Tenant, or both, or
Landlord may enforce against Guarantor or Tenant, or both, any rights that it
has under the Lease or against Guarantor pursuant to this Guarantee. If the
Lease terminates, Landlord may enforce any remaining rights thereunder against
Guarantor without giving previous notice to Tenant or Guarantor, and without
making any demand on either of them. This Guarantee shall not be affected by
Landlord's failure or delay to enforce any of its rights hereunder or under the
Lease. Guarantor hereby waives notice of or the giving of its consent to any
amendments which may hereafter be made to the terms of the Lease, and this
Guarantee shall guarantee the performance of the Lease as amended, or as the
same may be assigned from time to time. Guarantor waives the right to require
Landlord to (i) proceed against Tenant; (ii) proceed against or exhaust any
security that Landlord holds from Tenant; or (iii) pursue any remedy in
Landlord's power. Until all of Tenant's obligations to Landlord have been
discharged in full, Guarantor shall have no right of subrogation against
Tenant. Guarantor waives its right to enforce any remedies that Landlord now
has, or later may have, against Tenant. Guarantor waives any right to
participate in any security now or later held by Landlord. Guarantor waives
all presentments, demands for performance, notices of nonperformance, protests,
notices of protest, notices of dishonor, and notices of acceptance of this
Guarantee, and waives all notices of existence, creation, or incurring of new
or additional obligations from Tenant to Landlord. Without limiting the
generality of the preceding waivers, Guarantor hereby expressly waives any and
all benefits under California Civil Code Sections 2809, 2810, 2819, 2845, 2849
and 2850. Guarantor waives all rights and defenses arising out of an election
of remedies by the creditor, even though that election of remedies, such as a
nonjudicial foreclosure with respect to security for a guaranteed obligation,
has destroyed the guarantor's rights of subrogation and reimbursement against
the principal by the operation of Section 580d of the Code of Civil Procedure
or otherwise. If Landlord disposes of its interest in the Lease, "Landlord,"
as used in this Guarantee, shall mean Landlord's successors in interest and
assigns. At any time, upon five days written notice from Landlord, Guarantor
shall affirm in writing that this Guarantee has not been modified or cancelled
and remains in full force and effect (or if there have been any modifications,
attaching copies of the documents constituting or evidencing such
modifications, and stating that this
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Guarantee is in full force and effect as so modified). If Landlord is required
to enforce Guarantor's obligations by legal proceedings, Guarantor shall pay to
Landlord all costs incurred by Landlord (collectively, "Landlord's Fees and
Costs"), including, without limitation, Landlord's reasonable attorneys' fees
and all costs and other expenses incurred in any collection or attempted
collection or in any negotiations relative to the obligations hereby
guaranteed, or in enforcing this Guarantee against the undersigned,
individually and jointly. This Guarantee will continue unchanged by any
bankruptcy, reorganization, receivership or insolvency of the Tenant or any
successor or assignee thereof or by any disaffirmance or abandonment by a
trustee of Tenant. Guarantor's obligations under this Guarantee may not be
assigned and shall be binding upon Guarantor's heirs and successors. Guarantor
hereby agrees that Guarantor's liability under this Guarantee is a guarantee of
payment and a guarantee of performance of Tenant's obligations under the Lease,
and not a guarantee of collectibility, and such liability is not conditioned or
contingent upon the genuineness, validity, regularity or present or future
enforceability of the Lease. This Guarantee may not be modified, nor may any
rights of Landlord be waived except in a writing signed by Guarantor and
Landlord. This Guarantee embodies the entire agreement between Guarantor and
Landlord with respect to the matters set forth herein, and no prior or
contemporaneous agreement, understanding, inducement, promise, representation
or warranty, oral or written, concerning the subject matter hereof shall be
binding upon Guarantor or Landlord unless expressed herein. This Guarantee
shall be governed by the laws of, and may be enforced in the courts of, the
State of California.
3. Limitations on Guarantor's Liability. Guarantor's liability under
this Guarantee shall be reduced on the first, second and third anniversaries of
the Commencement Date of the Lease (as defined in the Lease) provided that: (a)
there is then (as of the date of such respective reduction) no Event of Default
(as defined in Article 24 of the Lease), (b) Guarantor is not then in default
of this Guarantee, and (c) there are no conditions or events which, with the
passage of time and/or the giving of notice by Landlord or others, would result
in an Event of Default, or would render Guarantor in default of this Guarantee.
If conditions (a) through (c) are each satisfied, then, subject to the last
sentence of this paragraph, the maximum liability of Guarantor shall be reduced
as follows: (a) on the first anniversary, the maximum liability of Guarantor
under this Guarantee shall be $85,000, (b) on the second anniversary, the
maximum liability of Guarantor under this Guarantee shall be $65,000, and (c)
on the third anniversary, the maximum liability of Guarantor under this
Guarantee shall be $45,000. If any of conditions (a) through (c) are not
satisfied on any respective anniversary date, then this Guarantee shall remain
in full force and effect without any further reduction in the maximum liability
of Guarantor. There shall be no additional reductions of Guarantor's liability
under this Guarantee whether or not Tenant properly exercises the option to
renew contained in Section 46 of the Lease. Notwithstanding the limitations on
Guarantor's liability contained in this paragraph, in addition to the
respective maximum liability of Guarantor under this paragraph, Guarantor shall
at all times remain liable for Landlord's Fees and Costs.
[SIGNATURES ON FOLLOWING PAGE]
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THE UNDERSIGNED GUARANTOR HEREBY ACKNOWLEDGES THAT IT WAS AFFORDED THE
OPPORTUNITY TO CAREFULLY READ THIS DOCUMENT AND ALL OTHER DOCUMENTS REFERRED TO
HEREIN AND TO REVIEW THEM WITH AN ATTORNEY OF ITS CHOICE BEFORE SIGNING THIS
DOCUMENT. THE UNDERSIGNED GUARANTOR FURTHER ACKNOWLEDGES HAVING READ AND
UNDERSTOOD THE MEANING AND EFFECT OF THIS DOCUMENT BEFORE SIGNING IT.
Guarantor:
Dated: May 9, 1995 /s/ DREW LEVIN
-----------------------
Drew Levin
Dated: _________ __, 1995 ______________________
Laurie S. Levin
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