Exhibit 10.17
[LOGO] AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
STANDARD SUBLEASE
(LONG-FORM TO BE USED WITH PRE-1996 AIR LEASES)
1. PARTIES. This Sublease, dated, for reference purposes only, July
28, 1998, is made by and between NATIONAL TELEPHONE & COMMUNICATIONS, INC., a
Delaware corporation ("SUBLESSOR") and VISION CAPITAL SERVICES CORPORATION, a
California corporation and PERFORMANCE CAPITAL MANAGEMENT, INC., a California
corporation (jointly and severally "SUBLESSEE").
2. PREMISES. Sublessor hereby subleases to Sublessee and Sublessee
hereby subleases from Sublessor for the term, at the rental, and upon all of
the conditions set forth herein, that certain real property, including all
improvements therein, and commonly known by the street address of 2811 E.
Main Street, Irvine located in the County of Orange, State of California and
generally described as (describe briefly the nature of the property) an
industrial building containing approximately 18,320 rentable square feet as
more particularly described in Exhibit A hereto ("Premises").
3. TERM.
3.1 TERM. The term of this Sublease shall be for approximately
forty-four (44) months commencing on September 10, 1998 and ending on April
30, 2002 unless sooner terminated pursuant to any provision hereof.
3.2 (See Addendum)
4. RENT.
4.1 BASE RENT. Sublessee shall pay to Sublessor as Base Rent for
the Premises equal monthly payments of $20,152.00 in advance, on the first
day of each month of the term hereof. Sublessee shall pay Sublessor upon the
execution hereof $40,304.00 as Base Rent for September, 1998 and September,
2000. Base Rent for any period during the term hereof which is for less than
one month shall be a pro rata portion of the monthly installment.
4.2 RENT DEFINED. All monetary obligations of Sublessee to
Sublessor under the terms of this Sublease (except for the Security Deposit)
are deemed to be rent ("RENT"). Rent shall be payable in lawful money of the
United States to Sublessor at the address stated herein or to such other
persons or at such other places as Sublessor may designate in writing.
5. SECURITY DEPOSIT. Sublessee shall deposit with Sublessor upon
execution hereof $22,167.20 as security for Sublessee's faithful performance
of Sublessee's obligations hereunder. If Sublessee fails to pay Rent or other
changes due hereunder, or otherwise defaults with respect to any provision of
this Sublease, Sublessor may use, apply or retain all or any portion of said
deposit for the payment of any Rent or other charge in default or for the
payment of any other sum to which Sublessor may become obligated by reason of
Sublessee's default, or to compensate Sublessor for any loss or damage which
Sublessor may suffer thereby. If Sublessor so uses or applies all or any
portion of said deposit, Sublessee shall within ten days after written demand
therefore forward to Sublessor an amount sufficient to restore said Deposit
to the full amount provided for herein and Sublessee's failure to do so shall
be a material breach of this Sublease. Sublessor shall not be required to
keep said Deposit separate from its general accounts. If Sublessee performs
all of Sublessee's obligations hereunder, said Deposit, or so much thereof as
has not therefore been applied by Sublessor, shall be returned, without
payment of interest to Sublessee (or at Sublessor's option, to the last
assignee, if any, of Sublessee's interest hereunder) at the expiration of the
term hereof, and after Sublessee has vacated the Premises. No trust
relationship is created herein between Sublessor and Sublessee with respect
to said Security Deposit.
6. USE.
6.1 AGREED USE. The Premises shall be used and occupied only for
general office use and for no other purpose.
6.2 (See Addendum)
Page 1 of 4
6.3 ACCEPTANCE OF PREMISES. Sublessee acknowledges that:
(a) it has been advised by Brokers to satisfy itself with respect
to the condition of the Premises (including but not limited to the electrical,
HVAC and fire sprinkler systems, security, environmental aspects, and
compliance with *), and their suitability for Sublessee's intended use,
(b) Sublessee has made such investigation as it deems necessary
with reference to such matters and assumes all responsibility therefor as the
same relate to its occupancy of the Premises, and
(c) neither Sublessor, Sublessor's agents, nor any Broker has made
any oral or written representations or warranties with respect to said
matters other than as set forth in this Sublease.
7. MASTER LEASE
7.1 Sublessor is the lessee of the Premises by virtue of a lease,
hereinafter the "MASTER LEASE", a copy of which is attached hereto marked
Exhibit 1, wherein The Carter Family Investment Partnership L.P., A California
Limited Partnership is the lessor, hereinafter the "MASTER LESSOR".
7.2 This Sublease is and shall be at all times subject and
subordinate to the Master Lease.
7.3 The terms, conditions and respective obligations of Sublessor
and Sublessee to each other under this Sublease shall be the terms and
conditions of the Master Lease except for those provisions of the Master
Lease which are directly contradicted by this Sublease in which event the
terms of this Sublease document shall control over the Master Lease.
Therefore, for the purposes of this Sublease, wherever in the Master Lease
the word "Lessor" is used it shall be deemed to mean the Sublessor herein and
wherever in the Master lease the word "Lessee" is used it shall be deemed to
mean the Sublessee herein.
7.4 During the term of this Sublease and for all periods
subsequent for obligations which have arisen prior to the termination of this
Sublease, Sublessee does hereby expressly assume and agree to perform and
comply with, for the benefit of Sublessor and Master Lessor, each and every
obligation of Sublessor under the Master Lease except for the following
paragraphs which are excluded therefrom: 1.5, 1.7, 5, Lease Addendum Items 1,
5, 6, 18, 32, 38, and Exhibit B.
7.5 The obligations that Sublessee has assumed under paragraph 7.4
hereof are hereinafter referred to as the "SUBLESSEE'S ASSUMED OBLIGATIONS".
The obligations that sublessee has not assumed under paragraph 7.4 hereof are
hereinafter referred to as the "SUBLESSOR'S REMAINING OBLIGATIONS".
7.6 Sublessee shall hold Sublessor free and harmless from all
liability, judgments, costs, damages, claims or demands, including reasonable
attorneys fees, arising out of Sublessee's failure to comply with or perform
Sublessee's Assumed Obligations.
7.7 Sublessor agrees to maintain the Master Lease during the
entire term of this Sublease, subject, however, to any earlier termination of
the Master Lease without the fault of the Sublessor, and to comply with or
perform Sublessor's Remaining Obligations and to hold Sublessee free and
harmless from all liability, judgments, costs, damages, claims or demands
arising out of Sublessor's failure to comply with or perform Sublessor's
Remaining Obligations.
7.8 Sublessor represents to Sublessee that the Master Lease is in
full force and effect and that to Sublessor's actual knowledge no default
exists on the part of any Party to the Master Lease.
8. ASSIGNMENT OF SUBLEASE AND DEFAULT.
8.1 Sublessor hereby assigns and transfers to Master Lessor the
Sublessor's interest in this Sublease, subject however to the provisions of
Paragraph 8.2 hereof.
8.2 Master Lessor, by executing this document, agrees that until a
Default shall occur in the performance of Sublessor's Obligations under the
Master Lease, that Sublessor may receive, collect and enjoy the Rent accruing
under this Sublease. However, if Sublessor shall Default in the performance
of its obligations to Master Lessor then Master Lessor may, at its option,
receive and collect, directly from Sublessee, all Rent owing and to be owed
under this Sublease. Master Lessor shall not, by reason of this assignment of
the Sublease nor by reason of the collection of the Rent from the Sublessee,
be deemed liable to Sublessee for any failure of the Sublessor to perform and
comply with Sublessor's Remaining Obligations.
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8.3 Sublessor hereby irrevocably authorizes and directs Sublessee
upon receipt of any written notices from the Master Lessor stating that a
Default exists in the performance of Sublessor's obligations under the Master
Lease, to pay to Master Lessor the Rent due and to become due under the
Sublease. Sublessor agrees that Sublessee shall have the right to rely upon
any such statement and request from Master Lessor, and that Sublessee shall
pay such Rent to Master Lessor without any obligation or right to inquire as
to whether such Default exists and notwithstanding any notice from or claim
from Sublessor to the contrary and Sublessor shall have no right or claim
against Sublessee for any such Rent so paid by Sublessee.
8.4 No changes or modifications shall be made to this Sublease
without the consent of Master Lessor.
9. CONSENT OF MASTER LESSOR. (See Addendum)
10. BROKERS
10.1 Sublessor shall pay to Cushman Realty Corporation a licensed
real estate broker, ("BROKER"), a fee as set forth in a separate agreement
between Sublessor and Broker.
11. ATTORNEY'S FEES. If any party or the Broker named herein brings an
action to enforce the terms hereof or to declare rights hereunder, the
prevailing party in any such action, on trial and appeal, shall be entitled
to his reasonable attorney's fees to be paid by the losing party as fixed by
the Court.
12. ADDITIONAL PROVISIONS. (See Addendum)
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ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN
INDUSTRIAL REAL ESTATE ASSOCIATION OR BY ANY REAL ESTATE BROKER AS TO THE
LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS SUBLEASE OR THE
TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO:
1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS
SUBLEASE.
2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF
THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE
POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PROPERTY, THE
STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND
THE SUITABILITY OF THE PREMISES FOR SUBLESSEE'S INTENDED USE.
WARNING: IF THE SUBJECT PROPERTY IS LOCATED IN A STATE OTHER THAN CALIFORNIA,
CERTAIN PROVISIONS OF THE SUBLEASE MAY NEED TO BE REVISED TO COMPLY WITH THE
LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED.
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NATIONAL TELEPHONE & COMMUNICATIONS,
Executed at: INC., a Delaware corporation
----------------------------
[ILLEGIBLE] By /s/ Victor Streufert
---------------------------- ----------------------------------
Address: By /s/ James Quandt
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"Sublessor" (Corporate Seal)
VISION CAPITAL SERVICES CORPORATION,
Executed at: a California corporation
----------------------------
[ILLEGIBLE] By /s/ Vincent Galewick
---------------------------- ----------------------------------
Address: By /s/ Vincent Galewick
------------------------------- ----------------------------------
"Sublessee" (Corporate Seal)
PERFORMANCE CAPITAL MANAGEMENT, INC.,
Executed at: a California corporation
----------------------------
[ILLEGIBLE] By /s/ Vincent Galewick
---------------------------- ----------------------------------
Address: By /s/ Vincent Galewick
------------------------------- ----------------------------------
"Sublessee" (Corporate Seal)
NOTE: THESE FORMS ARE OFTEN MODIFIED TO MEET CHANGING REQUIREMENTS OF LAW AND
NEEDS OF THE INDUSTRY. ALWAYS WRITE OR CALL TO MAKE SURE YOU ARE UTILIZING
THE MOST CURRENT FORM: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION, 700 SO.
FLOWER ST., SUITE 600, LOS ANGELES, CA 90017, (213) 687-8777.
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MASTER LEASE
EXHIBIT 1 TO STANDARD SUBLEASE
FIRST AMENDMENT TO LEASE
This FIRST AMENDMENT TO LEASE ("First Amendment") is entered into as of
this 25th day of April, 1997, between THE CARTER FAMILY INVESTMENT
PARTNERSHIP, L.P., a California limited partnership ("Lessor") and NATIONAL
TELEPHONE & COMMUNICATIONS, INC., a Delaware corporation ("Lessee").
RECITALS:
WHEREAS, Lessor as the lessor entered into that certain Standard
Industrial/Commercial Single-Tenant Lease-Net dated April 18, 1997 (the
"Lease") with Lessee, as lessee, with respect to those certain premises more
particularly described in the Lease (the "Premises"); and
WHEREAS, Lessor and Lessee entered into the Lease as part of a series of
transactions required by the terms of a Memorandum of Agreement dated March
27, 1997 (the "Memorandum Agreement"); and
WHEREAS, the parties now desire to modify certain of the terms and
provisions of the Lease; and
WHEREAS, the parties now desire to modify the Lease as a consequence of
Lessee having waived certain conditions and covenants of the Memorandum
Agreement; and
WHEREAS, Lessor has borrowed the amount of $5,004,000 from Lessee, which
loan is secured by a first deed of trust ("NTC Loan") encumbering the
Premises and Lessee desires that the NTC Loan be discharged in whole or in
part with the proceeds of a new loan to be obtained from First Bank & Trust
Co. et al. in the amount of $5,000,000 to be secured by a first trust deed
encumbering the Premises ("First Bank Loan"); and
WHEREAS, Lessor is desirous of obtaining financing on terms different
from the First Bank Loan and Lessee desires to have the NTC Loan repaid as
soon as possible;
NOW, THEREFORE, in consideration of the mutual covenants herein conveyed
and the willingness of Lessor accepting the First Bank Loan to pay the NTC
Loan, the parties hereto agree as follows:
1. DEFINED TERMS: Defined terms herein which appear as defined terms in
the Lease shall have the meaning given to such terms in the Lease except as
herein provided.
2. ADDITIONAL INSURANCE. Lessee shall obtain earthquake and flood damage
insurance for the Premises in an amount equal to the full replacement value
of the Premises, but in no event less than the principal balance of the First
Bank Loan and the Lessee's Note. Lessee shall be relieved of the obligation
to maintain such insurance on the earlier of the date on which
Lessor's obligations become "non-recourse" pursuant to the terms of the
First Bank Loan and the date on which Lessor obtains a non-recourse loan
with respect to the Premises. Except for the foregoing, all provisions
contained in Section 8 of the Lease shall continue in full force and
effect.
3. EXERCISE OF OPTION. The time by which Lessee must exercise any option
to extend the term of the Lease shall be twenty-four (24) months prior to
expiration of the Lease.
4. LEASE MODIFICATION FOR FINANCING. Provided that Lessee's obligations
or liability under the Lease are not increased in any material respect as a
result thereof, Lessee shall execute such reasonable modifications to the
Lease as may be required by any institutional lender making a non-recourse
loan to Lessor secured by a first trust deed encumbering the Premises having
a principal balance of $5,000,000. Any such institutional lender shall
provide Lessee with a non-disturbance agreement reasonably satisfactory to
Lessee in the event such lender requires that the Lease be subordinate to the
lien of such lender's deed of trust. If Lessee considers the requirements of
any such lender to be unreasonable, the reasonableness of such requirements
shall be submitted to arbitration in accordance with the terms of the Lease.
5. INCREASED SECURITY DEPOSIT. At the commencement of each extension,
Lessee shall increase its deposit to an amount equal to one month's Base Rent
for the first month of such extension term.
6. ESTOPPEL/RENT ACKNOWLEDGMENT. On May 1 of each calendar year, or such
time as any lender or Lessor may request, the parties will execute an
acknowledgement of the amount of monthly rent to be paid during the
succeeding twelve (12) calendar month period in accordance with the rent
formula set forth on EXHIBIT "B" of the Lease.
7. RESERVED.
8. RENT ABATEMENT. The rent abatement allowed pursuant to Item 15 of the
Addendum to the Lease shall be conditioned upon Lessor receiving insurance
for rental interruption which shall pay Lessor the amount of such abatement
unless the event giving rise to the right of abatement is the result of
Lessor's willful misconduct.
9. COOPERATION WITH LENDER. Lessee shall provide reasonable,
non-privileged information as a prospective lender of Lessor may reasonably
require as a condition of making such loan, including an inspection of the
Premises, and providing current financial information on Lessee. Lessee shall
provide such information reasonably requested by Lessor or a prospective
Lender making such request, but no later than twenty (20) days.
10. LATE CHARGES. Item 23 of the Lease Addendum referring to Paragraph
13.4 of the Lease shall be further amended to provide that in lieu of the
late charge imposed by said Paragraph, there shall be imposed a late charge
equal to One Thousand Two Hundred Fifty Dollars ($1,250) plus any penalty or
increased interest on the First Bank Loan, if any, charged by the Lender
solely as a result of a Base Rent payment not being made by Lessee when due
and Lessor's consequent failure to make timely payment to First Bank. The
parties acknowledge that Lessor is depending on the income stream from the
rent to pay debt service on the First Bank
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Loan, and that the amount of any late charge reflects the actual losses
sustained by Lessor as a result of the inability to timely make payment on
the First Bank Loan. Upon the termination (repayment) of the First Bank loan,
all references to First Bank or Lenders shall mean and refer to any lender
making any replacement loan (refinancing).
11. RIGHT OF FIRST REFUSAL. If Lessee exercises the right of first
refusal contained in Item 38 of the Addendum to the Lease, such exercise
shall be in writing and delivered to Lessor within such thirty (30) day
period and shall be subject to the following: the amount of any earnest money
deposit shall be delivered to Lessor upon the exercise of Lessee's right of
first refusal and Lessee shall waive any due diligence contingencies and/or
Seller's warranties concerning the condition of the Premises. Title shall be
transferred to Lessee in such condition as existed at the inception of the
Lease unless any additional exceptions to title are approved by Lessor.
12. NO VIOLATION OF LOAN. Lessee hereby agrees that the lease terms
pertaining to the use of casualty and condemnation proceeds shall be subject
to the terms and conditions of the First Bank Loan. Lessee will not commit
any act which would constitute a default under any deed of trust encumbering
the Premises which secures the loan of an institutional lender to Lessor.
13. SUPERSEDING AGREEMENT. This First Amendment shall modify the Lease
and supersede all terms and conditions contained therein. Furthermore, the
terms of the Lease and this First Amendment shall modify the agreement of
March 27, 1997 to the extent any terms are inconsistent therewith.
IN WITNESS WHEREOF, the parties hereto have executed this
first amendment on the 25th day of April, 1997 at Irvine, California.
LESSEE: NATIONAL TELEPHONE &
COMMUNICATIONS, INC., a Delaware corporation
By: /s/ Ed Jacobs
---------------------------------------
Ed Jacobs, Chairman of the Board
LESSOR: THE CARTER FAMILY INVESTMENT
PARTNERSHIP, L.P., a California limited
partnership
By: /s/ James C. Carter
---------------------------------------
James C. Carter, General Partner
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SECOND AMENDMENT TO LEASE AGREEMENT
-----------------------------------
This Second Amendment to Lease Agreement ("Amendment") is made this
__ day of November 1997 by and between The Carter Family Investment
Partnership L.P., a California Limited Partnership ("Lessor") and National
Telephone & Communications, Inc., a Delaware corporation ("Lessee").
1. DEFINITIONS: The definitions used in this Amendment shall have the
same meanings as those used in the Lease dated April 18,1997, as amended by
that certain First Amendment to Lease Agreement dated April 25, 1997.
2. COMMENCEMENT OF AGREEMENT: The provisions of this Amendment shall
become effective upon the funding of a loan to the Lessor from Allstate Life
Insurance Company ("Allstate").
3. BASE RENT: Exhibit B, Item (b) of the lease shall be deleted and
replaced with the following:
(b) Forty-Two Thousand Eight-Hundred Nineteen Dollars and Nine Cents
($42,819.09)
4. MODIFICATION; SURVIVAL. Any modification of the provisions of this
Amendment shall require the prior written consent of Allstate. The provisions of
this Amendment shall survive any acquisition by Allstate of the property of
which the Premises are a part, including, but not limited to acquisition by
judicial foreclosure, non-judicial foreclosure or deed-in-lieu of foreclosure.
5. SUPERSEDING PROVISIONS: In the event of a conflict between the
term(s) of this Amendment and the original terms of the Lease, such term(s)
of this Amendment shall control.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Second Amendment
to Lease Agreement on the date hereinabove stated at Irvine, California.
LESSEE: LESSOR:
National Telephone & Communications The Carter Family Investment Partnership
Inc., A Delaware Corporation L.P., a California Limited Partnership
By: /s/ Victor C. Streufert By: /s/ James C. Carter
------------------------------- ----------------------------------
Victor C. Streufert, Sr VP James C. Carter
Address: 8424 Paseo Del Ocaso
La Jolla, CA 92037
By:
-------------------------------
, Secretary
Address: 2801 East Main St.
Irvine, CA 92714
ADDENDUM TO STANDARD SUBLEASE
-----------------------------
This ADDENDUM TO STANDARD SUBLEASE ("Addendum") is attached to,
incorporated into and amends and supplements that certain Standard Sublease (the
"Sublease") dated as of the 28th day of July, 1998 by and between NATIONAL
TELEPHONE & COMMUNICATIONS, INC., a Delaware corporation ("Sublessor"), and
VISION CAPITAL SERVICES CORPORATION, a California corporation, and PERFORMANCE
CAPITAL MANAGEMENT, INC., a California corporation (jointly and severally,
"Sublessee"). Sublessor and Sublessee agree that notwithstanding anything
contained in the Sublease to the contrary, the Sublease as modified by the
provisions set forth in this Addendum represents the full negotiated agreement
of the parties, and the provisions of this Addendum will be deemed to be a part
of the Sublease and will supersede any contrary or conflicting provision in the
Sublease and prevail and control for all purposes. This Addendum, together with
the Sublease itself, and all other Exhibits, Riders and Addenda attached thereto
represents the fully integrated and binding agreement of the parties. All
references in the Sublease and in this Addendum to "Sublease" are to be
construed to mean the Sublease as amended and supplemented by this Addendum. All
terms used in this Addendum, unless specifically defined in this Addendum, have
the same meaning as such terms have in the Sublease.
2. PREMISES. The Premises shall be delivered by Sublessor to Sublessee
in their present As-Is condition and initially shall be improved by Sublessee by
the demolition of certain demising walls as depicted on Schedule X attached
hereto and the repair of dry wall damaged by such removal and repainting and
installation of carpet (herein, the "Initial Tenant Improvements"). The Initial
Tenant Improvements installation shall be governed by the provisions of the Work
Letter Agreement attached and made a part hereof as EXHIBIT "C" the ("Work
Letter") (except that Paragraph 4 of the Work Letter shall not apply to the
Initial Tenant Improvements) and the provisions of the Master Lease governing
alterations and improvements. Any and all costs of the Initial Tenant
Improvements shall be borne solely by Sublessee. Sublessor shall have no
obligation whatsoever to improve the Premises in conjunction with this Sublease.
Any subsequent alterations shall be installed in accordance with the provisions
of the Work Letter, the Sublease and the Master Lease. Any alterations which do
not require the consent of the Master Lessor under the Master Lease shall also
not require the consent of Sublessor under the Sublease.
3.2 DELIVERY OF POSSESSION. Sublessor shall use commercially
reasonable efforts to deliver and Sublessee shall accept possession of the
Premises AS-IS, in broom clean condition on the date (the "Delivery Date") which
is the later of (a) the date Sublessor obtains Master Lessor's consent to this
Sublease or (b) August 10, 1998. From and after the Delivery Date, Sublessee
shall have the right to occupy the Premises for purposes of completing the
improvements described in the Work Letter. Such period of early occupancy shall
be subject in all respects to the terms and conditions of this Sublease and of
the Master Lease except for the payment of Rent.
4.2 RENT. As set forth in Section 12.5 hereinafter, Sublessee shall be
obligated to pay Sublessee's share of Operating Expenses for the Project. Such
amount shall be due and payable as Rent hereunder.
6.1 AGREED USE. Sublessee agrees that in no event shall any of the
Premises be used for offices for any telecommunications service company or
telecommunications services including, without limitation, paging and internet
services.
6.2 COMPLIANCE. Sublessee shall comply with the provisions of Section
6 of the Master Lease as said provision applies to the Premises, including,
without limitation the provisions of Title III of the Americans With
Disabilities Act of 1990, as same has been or may be amended hereafter (the
"ADA") as it pertains to Sublessee's use, occupancy, improvement and alteration
of the Premises. Sublessee hereby acknowledges: (a) that it has satisfied itself
with respect to the condition of the Premises (including but not limited to the
electrical and fire sprinkler systems, security, elevator access, environmental
aspects, seismic and earthquake requirements, and compliance with the ADA and
applicable zoning, municipal, county, state and federal laws, ordinances and
regulations and any covenants or restrictions of record and the present and
future suitability of the Premises for Sublessee's intended use; (b) that
Sublessee has made such investigation as it deems necessary with reference to
such matters, is satisfied with
reference thereto, and assumes all responsibility therefore as the same
relate to Sublessee's occupancy and use of the Premises and/or the terms of
this Sublease; and (c) that neither Sublessor, nor any of Sublessor's agents,
has made any oral or written representations or warranties with respect to
said matters.
Notwithstanding any contrary provision hereinabove, Sublessor warrants
to its actual knowledge, without any independent investigation or inquiry, that
the Premises do not contain levels of Hazardous Substances (as defined in the
Master Lease) in violation of Applicable Requirements.
9. OMITTED.
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12.1 SIGNS. Subject to Sublessee obtaining all necessary governmental
permits and approvals and Master Lessor's approval (collectively, the
"Approvals"), Sublessee, at its sole cost and expense, shall have the exclusive
right to install and maintain upon the building throughout the Sublease term,
two (2) building-top signs on the exterior of the Premises plus a sign in the
lobby of the Premises behind the reception desk bearing either the name "VISION
CAPITAL SERVICES CORPORATION" or the name "PERFORMANCE CAPITAL MANAGEMENT, INC."
All costs of design, fabrication, acquisition, installation,
maintenance, repair and removal of Sublessee's signs, and all other costs
associated with such signs, including, without limitation, utility charges and
hook-up fees, and permits, shall be the sole responsibility of Sublessee. Upon
the expiration or earlier termination of this Sublease, Sublessee shall, at its
sole cost and expense, remove Sublessee's signs from the exterior and interior
of the Premises and shall cause the Premises to be restored to the condition
existing prior to the placement of Sublessee's signs.
The sign rights granted herein are personal to Vision Capital Services
Corporation and Performance Capital Management, Inc. (collectively, "Vision
Capital") and may not be assigned, voluntarily or involuntarily, by any person
or entity other than Vision Capital. The rights granted to Vision Capital
hereunder are not assignable separate and apart from the Sublease, nor may any
right granted herein be separated from the Sublease in any manner, either by
reservation or otherwise. Sublessee acknowledges that Sublessor has no control
over the placement of signs on the Premises and agrees that Sublessor shall have
no obligation to procure any one or all of the Approvals, Sublessee being solely
responsible therefor.
12.2 PARKING. Sublessee shall have the non-exclusive right in common
with Sublessor and other tenants of the Project to use up to a maximum of
ninety-one (91) parking spaces at no charge during the term of this Sublease. Of
such ninety one (91) spaces, twelve (12) spaces in the area facing Jamboree may
be reserved at Sublessee's election for Sublessee's exclusive use.
If Sublessee requires additional parking spaces and such spaces are
not designated for use by others and are therefore available for Sublessee's
use, Sublessee may rent such additional spaces as are available from time to
time and desired by Sublessee at the rate of $30.00 per stall per month. Such
parking fees shall be due and payable by Sublessee as additional rent
concurrently with Sublessee's monthly payments of Base Rent to Sublessor.
12.3 INSURANCE. Sublessee agrees that it shall name Sublessor and
Master Lessor as additional insureds on all insurance carried by Sublessee as
required under Section 8 of the Master Lease.
12.4 PROJECT. The Premises are part of that certain development
consisting of the parcel(s) of real property located at 2801-2811 Main Street,
Irvine, County of Orange, State of California, which are legally described on
EXHIBIT "B" hereto (the "Property"), and all buildings, improvements and
facilities, now or subsequently located on the Property from time to time,
including, without limitation, the three (3) buildings (including the Premises)
currently located on the Property (the "Project"). The aggregate rentable square
feet of the three (3) buildings (including the Premises) located within the
Project is approximately 64,730 rentable square feet.
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12.5 COMMON AREAS: OPERATING EXPENSES.
---------------------------------
12.5.1 DEFINITIONS; SUBLESSEE'S RIGHTS. During the Term of this
Sublease, Sublessee shall have the non-exclusive right to use, in common with
other tenants in the Project, and subject to the rules and regulations
referred to Paragraph 40 of the Master Lease, those portions of the Project
(the "Common Areas") not leased or designated for lease to tenants that are
provided for use in common by Sublessor, Sublessee and any other tenants of
the Project (or by the Sublessee's agents, employees, customers invitees,
guests or licensees of any such party), whether or not those areas are open
to the general public. The Common Areas shall include, without limitation,
the outdoor patio area at the southern end of the Project, any fixtures,
systems, decor, facilities and landscaping contained, maintained or used in
connection with those areas, and shall be deemed to include any city
sidewalks adjacent to the Project, any pedestrian walkway system, park or
other facilities located on the Property and open to the general public, the
parking areas, roadways, sidewalks, walkways, parkways, and driveways on the
Property.
12.5.2 SUBLESSOR'S RESERVED RIGHTS. Sublessor reserves the right from
time to time to use any of the Common Areas and to do any of the following, as
long as such acts do not unreasonably interfere with Sublessee's use of or
access to the Premises:
(a) construct or alter other buildings or improvements on the
Property;
(b) make any changes, additions, improvements, repairs or replacements
in or to the Project, the Common Areas and/or the Premises (if required to do so
by any law or regulation) and the fixtures and equipment thereof, including,
without limitation: (i) maintenance, replacement and relocation of pipes, ducts,
conduits, wires and meters; and (ii) changes in the location, size, shape and
number of driveways, entrances, stairways, elevators, loading and unloading
areas, ingress, egress, direction of traffic, landscaped areas and walkways and
parking spaces and parking areas;
(c) close temporarily any of the Common Areas while engaged in making
repairs, improvements or alterations to the Project or any portion thereof; and
(d) perform such other acts and make such other changes with respect
to the Project or Common Areas, as Sublessor may, in the exercise of good faith
business judgment, deem to be appropriate.
12.5.3 EXPENSES. In addition to the Base Rent required to be paid by
Sublessee hereunder, during each month during the term of this Sublease,
Sublessee shall pay to Sublessor as a reimbursement to Sublessor of "Operating
Expenses" associated with Sublessee's use and occupancy of the Premises, the
amount of $0.30 per month per square foot, such amount to be increased annually
by four percent (4%) per annum effective as of each anniversary of the
commencement of the Sublease.
12.5.4 DEFINITION OF OPERATING EXPENSES. As used in this Sublease, the
term "Operating Expenses" shall consist of all costs and expenses of operation
and maintenance of the Common Areas and the Property, as determined by standard
accounting practices, calculated assuming the Project is one hundred percent
(100%) occupied, including the following costs by way of illustration but not
limitation: (a) Real Property Taxes (as defined in the Master Lease) and any
taxes or assessments imposed in lieu thereof; (b) any and all assessments
imposed with respect to the Premises, Common Areas, and/or Property pursuant to
any covenants, conditions and restrictions affecting the Property; (c) water and
sewer charges and the costs of electricity, heating, ventilating, air
conditioning and other utilities for the Common Areas; (d) utilities surcharges
and any other costs, levies or assessments resulting from statutes or
regulations promulgated by any government authority in correction with the use
or occupancy of the Project or the Common Areas; (e) costs of insurance obtained
by Sublessor pursuant to this Sublease; (f) waste disposal services; (g) roof
maintenance; (h) costs incurred in the management of the Project and Common
Areas, including, without limitation: (1) supplies, (2) wages and salaries (and
payroll taxes and similar governmental charges related thereto) of employees
used in the operation and maintenance of the Property and Common Areas, and (3)
a management/administrative fee not to exceed five percent (5%) of the annual
gross receipts of the Project; (i) supplies, materials, equipment and tools; (j)
repair and maintenance of the elevators and the structural portions of the
Premises, including the plumbing, heating, ventilating, air-conditioning and
electrical systems; (k) maintenance, costs and upkeep of all Common Areas;
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(l) amortization on a straight-line basis over the useful life together with
interest at ten percent (10%) on the unamortized balance of all costs of a
capital nature (including, without limitation, capital improvements, capital
replacements, capital repairs, capital equipment and capital tools): (1)
reasonably intended to produce a reduction in operating charges or energy
consumption; or (2) required after the date of this Sublease under any
governmental law or regulation that was not applicable to the Project at the
time it was originally constructed; or (3) for repair or replacement of any
equipment needed to operate the Common Areas at the same quality levels as
prior to the replacement; (m) costs and expenses of gardening and
landscaping; (n) maintenance of signs (other than Sublessee's signs);
(o) personal property taxes levied on or attributable to personal property used
in connection with the Premises, the Common Areas and/or the Property; and
(p) costs and expenses of repairs, resurfacing, repairing, maintenance,
painting, lighting, cleaning, refuse removal, security and similar items,
including appropriate reserves.
12.6 FURNITURE. Sublessee shall lease for the Sublease term at the
rate of One Thousand Dollars ($1,000.00) per month, the furniture and other
personal property of Sublessor described on SCHEDULE 1 hereto (the "Furniture").
Such amount shall be due and payable as additional rent concurrently with
Sublessee's monthly payments of Base Rent hereunder. The Furniture is leased to
Sublessee on an AS-IS basis and shall be surrendered to Sublessor upon the
expiration or sooner termination of this Sublease in good condition, reasonable
wear and tear excepted.
12.7 RIGHT TO LEASE ADDITIONAL SPACE.
(a) Subject to the terms of this Section 12.7, throughout the Term of
the Sublease, Sublessee shall have a continuing right to lease ("Sublessee's
Right to Lease") any space in the building in the Project commonly known as 2801
Main Street (the "2801 Building") to the extent any such space becomes available
for lease to third parties (all such space being referred to herein as "First
Offer Space"). Sublessee's Right to Lease is subject and subordinate to the
rights of all other existing tenants of the 2801 Building with prior expansion
or lease rights relative to any such First Offer Space.
(b) Sublessor will give Sublessee written notice of the availability
of such First Offer Space setting forth the basic economic terms, including, but
not limited to, the Base Rent, and all other economic terms and conditions
(collectively, the "Economic Terms"), upon which Sublessor is willing to lease
the First Offer Space to Sublessee including the date the existing tenant or
occupant, if any, is expected to vacate such space ("Sublessor's Availability
Notice").
(c) Within five (5) business days after Sublessee's receipt of
Sublessor's Availability Notice, Sublessee must give Sublessor written notice
pursuant to which Sublessee shall elect to either: (i) lease such First Offer
Space upon the Economic Terms set forth in Sublessor's Availability Notice and
the same non-Economic Terms as set forth in the Sublease with respect to the
Premises; or (ii) refuse to lease such First Offer Space. Sublessee's failure to
timely choose either clause (i) or clause (ii) above will be deemed to be
Sublessee's choice of clause (ii) above.
(d) If Sublessee chooses (or is deemed to have chosen) clause (c)(ii)
above, Sublessee's Right to Lease such First Offer Space will be null and void.
If Sublessee exercises its Right to Lease as provided herein, the parties will
promptly thereafter execute an amendment to this Lease to include the First
Offer Space in the Premises and to document the lease terms thereof.
(e) As provided above, Sublessee's Right to Lease is subject to all
expansion and extension rights and other rights to lease, as applicable, which
Sublessor may have granted to other tenants prior to the date of this Sublease
or following any refusal by Sublessee to lease First Offer Space as set forth
above. Thus, Sublessor's Economic Terms will be delivered to Sublessee only
after Sublessor has appropriately notified and received negative responses from
all other tenants with rights in the First Offer Space superior to Sublessee's
rights, if any.
The Right to Lease granted herein is personal to the original
Sublessee executing this Sublease and any successor in interest to Sublessee
provided such successor has been approved by the Master Lessor if so required
and such successor has a net worth which is equal to or greater than the net
worth of Sublessee as of the date hereof (such a successor being described
herein as a "Permitted Successor"). The Right to Lease granted herein may be
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exercised only by the original Sublessee executing this Sublease or a
Permitted Successor while occupying the entire Premises and without the
intent of thereafter subletting the Premises and may not be exercised or be
assigned, voluntarily or involuntarily, by any person or entity other than
the original Sublessee executing this Sublease or a Permitted Successor.
Sublessee's Right to Lease is not assignable separate and apart from this
Sublease, nor may the Right to Lease be separated from this Sublease in any
manner, either by reservation or otherwise.
Sublessee will have no right to exercise its Right to Lease,
notwithstanding any provision of the grant hereinabove to the contrary, and
Sublessee's exercise of the Right to Lease may be nullified by Sublessor and
deemed of no further force or effect, if (i) Sublessee is in default of any
monetary obligation or material non-monetary obligation under the terms of this
Sublease or the Master Lease (or if Sublessee would be in such default under
this Sublease or the Master Lease but for the passage of time or the giving of
notice, or both) as of Sublessee's exercise of the Right to Lease or at any time
after the exercise thereof, or (ii) Landlord has given Tenant two (2) or more
notices of default, whether or not such defaults are subsequently cured, during
any twelve (12) consecutive month period of this Sublease.
12.8 ASSIGNMENT AND SUBLETTING. Notwithstanding any contrary provision
in the Master Lease, Sublessee shall have no right whatsoever to voluntarily or
by operation of law, assign, transfer, mortgage, pledge or otherwise transfer or
encumber or sublet all or any part of Sublessee's interest in the Premises
and/or this Sublease.
12.9 RENEWAL. Notwithstanding any contrary provision in the Master
Lease, including, without limitation, Item 1 of the Lease Addendum, Sublessee
shall have no option to extend the Sublease term.
IN WITNESS WHEREOF, the parties hereto have executed this Addendum as
of the day and year of execution of the Sublease.
SUBLESSEE: SUBLESSOR:
VISION CAPITAL SERVICES NATIONAL TELEPHONE &
CORPORATION, a California corporation COMMUNICATIONS, INC., a Delaware
corporation
By: /s/ Vincent Galewick
----------------------------------
Print Name: Vincent Galewick By: /s/ Vincent Galewick
--------------------- -----------------------------------
(Vice) President Print Name: Vincent Galewick
-----------------------
SVP CFO
By: /s/ Vincent Galewick
----------------------------------
Print Name: Vincent Galewick By: /s/ James Quandt
--------------------- -----------------------------------
(Assistant) Secretary Print Name: James Quandt
-----------------------
PRESIDENT & C.E.O.
PERFORMANCE CAPITAL
MANAGEMENT, INC., a California
corporation
By: /s/ Vincent Galewick
-----------------------------------
Print Name: Vincent Galewick
-----------------------
(Vice) President
By: /s/ Vincent Galewick
-----------------------------------
Print Name: Vincent Galewick
-----------------------
(Assistant) Secretary
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