California-Costa Mesa-535 Anton Sublease - Paine & Associates and Castleworks LLC
CB SUBLEASE
COMMERCIAL CB RICHARD ELLIS, INC.
BROKERAGE AND MANAGEMENT
LICENSED REAL ESTATE BROKER
1. PARTIES.
This Sublease, dated September 28, 1999, is made between Paine &
Associates ("Sublessor"), and Castleworks, LLC ("Sublessee").
2. MASTER LEASE.
Sublessor is the lessee under written lease dated November 10, 1994
wherein Curci-England Co.("Lessor") leased to Sublessor the real property
located in the City of Costa Mesa County of Orange, State of California
described as 535 Anton, Fourth Floor ("Master Premises"). Said lease has
been amended by the following amendments Amendment to Lease and Parking
License Agreement dated February 16, 1996; said lease and amendments are
herein collectively referred to as the "Master Lease" and are attached
hereto as Exhibit "A."
3. PREMISES.
Sublessor hereby subleases to Sublessee on the terms and conditions set
forth in this Sublease the following portion of the Master Premises
("Premises"): Suite 400, containing 4,489 rentable square feet
4. WARRANTY BY SUBLESSOR.
Sublessor warrants and represents to Sublessee that the Master Lease has
not been amended or modified except as expressly set forth herein, that
Sublessor is not now, and as of the commencement of the Term hereof will
not be, in default or breach of any of the provisions of the Master Lease,
and that Sublessor has no knowledge of any claim by Lessor that Sublessor
is in default or breach of any of the provisions of the Master Lease.
5. TERM.
The Term of this Sublease shall commence on November 15, 1999
("Commencement Date"), or when Lessor consents to this Sublease (if such
consent is required under the Master Lease), whichever shall last occur,
and end on May 15, 2002, ("Termination Date"), unless otherwise sooner
terminated in accordance with the provisions of this Sublease. In the
event the Term commences on a date other than the Commencement Date,
Sublessor and Sublessee shall execute a memorandum setting forth the
actual date of commencement of the Term. Possession of the Premises
("Possession") shall be delivered to Sublessee on the commencement of the
Term. If for any reason Sublessor does not deliver Possession to
Sublessee on the commencement of the Term, Sublessor shall not be subject
to any liability for such failure, the Termination Date shall not be
extended by the delay, and the validity of this Sublease shall not be
impaired. Notwithstanding the foregoing, if Sublessor has not delivered
Possession to Sublessee within thirty (30) days after the Commencement
Date, then at any time thereafter and before delivery of Possession,
Sublessee may give written notice to Sublessor of Sublessee's intention
to cancel this Sublease. Said notice shall set forth an effective date
for such cancellation which shall be at least ten (10) days after
delivery of said notice to Sublessor. If Sublessor delivers Possession
to Sublessee on or before such effective date, this Sublease shall remain
in full force and effect. If Sublessor fails to deliver Possession to
Sublessee on or before such effective date, this Sublease shall be
cancelled, in which case all consideration previously paid by Sublessee
to Sublessor on account of this Sublease shall be returned to Sublessee,
this Sublease shall thereafter be of no further force or effect, and
Sublessor shall have no further liability to Sublessee on account of such
delay or cancellation. If Sublessor permits Sublessee to take Possession
prior to the commencement of the Term, such early Possession shall not
advance the Termination Date and shall be subject to the provisions of
this Sublease, including without limitation the payment of rent. In no
event shall any such delays be caused by subleasing to any other entity
or the space being returned to Landlord.
6. RENT.
6.1 MINIMUM RENT. Sublessee shall pay to Sublessor as minimum rent,
without deduction, setoff, notice, or demand, at 535 Anton, Suite
450, Costa Mesa, California or at such other place as Sublessor shall
designate from time to time by notice to Sublessee, the sum of Eight
Thousand Three Hundred Four and 65/100 Dollars ($8,304.65) per month,
in advance on the first day of each month of the Term. Sublessee
shall pay to Sublessor upon execution of this Sublease the sum of
Eight Thousand Three Hundred Four and 65/100 Dollars ($8,304.65) as
rent for the first month. If the Term begins or ends on a day other
than the first or last day of a month, the rent for the partial
months shall be prorated on a per diem basis. Additional provisions:
Rent shall increase annually by five cents ($0.05) per square foot
per month, Full Service Gross.
6.2 OPERATING COSTS. If the Master Lease requires Sublessor to pay to
Lessor all, or a portion of the expenses of operating the building
and/or project of which the Premises are a part ("Operating Costs"),
including but not limited to taxes, utilities, or insurance, then
Sublessee shall pay to Sublessor as additional rent Twenty-two and 6/10
percent (22.6%) of the amounts payable by Sublessor for Operating
Costs incurred during the Term. Such
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additional rent shall be payable as paid when Operating Costs are
payable by Sublessor to Lessor. If the Master Lease provides for the
payment by Sublessor of Operating Costs on the basis of an estimate
thereof, then as and when adjustments between estimated and actual
Operating Costs are made under the Master Lease, the obligations of
Sublessor and Sublessee hereunder shall be adjusted in a like manner;
and if any such adjustment shall occur after the expiration or earlier
termination of the Term, then the obligations of Sublessor and
Sublessee under this Subsection 6.2 shall survive such expiration or
termination. Sublessor shall, upon request by Sublessee, furnish
Sublessee with copies of all statements submitted by Lessor of actual
or estimated Operating Costs during the Term, 2000 Base Year.
7. SECURITY DEPOSIT.
Sublessee shall deposit with Sublessor upon execution of this Sublease the
sum of Eight Thousand Seven Hundred Fifty-Three and 55/100 Dollars
($8,753.55) as security for Sublessee's faithful performance of Sublessee's
obligations hereunder ("Security Deposit"). If Sublessee fails to pay rent
or other charges when due under this Sublease, or fails to perform any of
its other obligations hereunder [ILLEGIBLE] hereunder and unpaid, for the
payment of any other sum for which Sublessor may become obligated by reason
of Sublessee's default or breach, or for any loss or damage sustained by
Sublessor as a result of Sublessee's default or breach. If Sublessor so
uses any portion of the Security Deposit, Sublessee shall, within ten (10)
days after written demand by Sublessor, restore the Security Deposit to the
full amount originally deposited, and Sublessee's failure to do so shall
constitute a default under this Sublease. Sublessor shall not be required
to keep the Security Deposit separate from its general accounts, and shall
have no obligation or liability for payment of interest on the Security
Deposit. In the event Sublessor assigns its interest in this Sublease,
Sublessor shall deliver to its assignee so much of the Security Deposit as
is then held by Sublessor. Within ten (10) days after the Term has
expired, or Sublessee has vacated the Premises, or any final adjustment
pursuant to Subsection 6.2 hereof has been made, whichever shall last
occur, and provided Sublessee is not then in default of any of its
obligations hereunder, the Security Deposit, or so much thereof as had not
theretofore been applied by Sublessor, shall be returned to Sublessee or to
the last assignee, if any, of Sublessee's interest hereunder.
8. USE OF PREMISES.
The Premises shall be used and occupied only for general office use -
computer software + hardware integration, and for no other use or purpose.
9. ASSIGNMENT AND SUBLETTING.
Sublessee shall not assign this Sublease or further sublet all or any
part of the Premises without the prior written consent of Sublessor (and
the consent of Lessor, if such is required under the terms of the Master
Lease).
10. OTHER PROVISIONS OF SUBLEASE.
All applicable terms and conditions of the Master Lease are incorporated
into and made a part of this Sublease as if Sublessor were the lessor
thereunder, Sublessee the lessee thereunder, and the Premises the Master
Premises, except for the following: . Sublessee assumes and agrees to
perform the lessee's obligations under the Master Lease during the Term
to the extent that such obligations are applicable to the Premises,
except that the obligation to pay rent to Lessor under the Master Lease
shall be considered performed by Sublessee to the extent and in the
amount rent is paid to Sublessor in accordance with Section 6 of this
Sublease. Sublessee shall not commit or suffer any act or omission that
will violate any of the provisions of the Master Lease. Sublessor shall
exercise due diligence in attempting to cause Lessor to peform its
obligations under the Master Lease for the benefit of Sublessee. If the
Master Lease terminates, this Sublease shall terminate and the parties
shall be relieved of any further liability or obligation under this
Sublease, provided however, that if the Master Lease terminates as a
result of a default or breach by Sublessor or Sublessee under this
Sublease and/or the Master Lease, then the defaulting party shall be
liable to the nondefaulting party for the damage suffered as a result of
such termination. Notwithstanding the foregoing, if the Master Lease
gives Sublessor any right to terminate the Master Lease in the event of
the partial or total damage, destruction, or condemnation of the Master
Premises or the building or project of which the Master Premises are a
part, the exercise of such right by Sublessor shall not constitute a
default or breach hereunder.
11. ATTORNEYS' FEES.
If Sublessor, Sublessee, or Broker shall commence an action against the
other arising out of or in connection with this Sublease, the prevailing
party shall be entitled to recover its costs of suit and reasonable
attorney's fees.
12. AGENCY DISCLOSURE:
Sublessor and Sublessee each warrant that they have dealt with no other
real estate broker in connection with this transaction except: CB RICHARD
ELLIS, INC., who represents Sublessor and Grubb & Ellis, who represents
Sublessee. In the event that CB RICHARD ELLIS, INC. represents both
Sublessor and Sublessee, Sublessor and Sublessee hereby confirm that they
were timely advised of the dual representation and that they consent to the
same, and that they do not expect said broker to disclose to either of them
the confidential information of the other party.
13. COMMISSION.
Upon execution of this Sublease, and consent thereto by Lessor (if such
consent is required under the terms of the Master Lease), Sublessor shall
pay Broker a real estate brokerage commission in accordance with
Sublessor's contract with Broker for the subleasing of the Premises, if
any, and otherwise in the amount of per separate agreement Dollars ($ ),
for services rendered in effecting this Sublease. Broker is hereby made a
third party beneficiary of this Sublease for the purpose of enforcing its
right to said commission.
14. NOTICES.
All notices and demands which may or are to be required or permitted to
be given by either party on the other hereunder shall be in writing. All
notices and demands by the Sublessor to Sublessee shall be sent by United
States Mail, postage prepaid, addressed to the Sublessee at the Premises,
and to the address hereinbelow, or to such other place as Sublesssee may
from
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time to time designate in a notice to the Sublessor. All notices and
demands by the Sublessee to Sublessor shall be sent by United States
Mail, postage prepaid, addressed to the Sublessor at the address set
forth herein, and to such other person or place as the Sublessor may
from time to time designate in a notice to the Sublessee.
To Sublessor: 535 Anton, Suite 450, Costa Mesa, California
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To Sublessee: 535 Anton, Suite 400, Costa Mesa, California
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15. CONSENT BY LESSOR.
THIS SUBLEASE SHALL BE OF NO FORCE OR EFFECT UNLESS CONSENTED TO BY
LESSOR WITHIN 10 DAYS AFTER EXECUTION HEREOF, IF SUCH CONSENT IS REQUIRED
UNDER THE TERMS OF THE MASTER LEASE.
16. COMPLIANCE.
The parties hereto agree to comply with all applicable federal, state
and local laws, regulations, codes, ordinances and administrative orders
having jurisdiction over the parties, property or the subject matter of
this Agreement, including, but not limited to, the 1964 Civil Rights Act
and all amendments thereto, the Foreign Investment in Real Property Tax
Act, the Comprehensive Environmental Response Compensation and Liability
Act, and The Americans With Disabilities Act.
Please see 17. and 18. below
Sublessor: Paine & Associates Sublessee: Castleworks, LLC
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By: /s/ David M. Paine By: /s/ John Olson
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Title: President Title: C.E.O.
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By: By: /s/ Jerry Krant
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Title: Title: MEMBER
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Date: Date: 10/25/99
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LESSOR'S CONSENT TO SUBLEASE
The undersigned ("Lessor"), lessor under the Master Lease, hereby consents to
the foregoing Sublease without waiver of any restriction in the Master Lease
concerning further assignment or subletting. Lessor certifies that, as of the
date of Lessor's execution hereof, Sublessor is not in default or breach of
any of the provisions of the Master Lease, and that the Master Lease has not
been amended or modified except as expressly set forth in the foregoing
Sublease.
Lessor: Curci-England Co.
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By:
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Title:
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By:
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Title:
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Date:
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CONSULT YOUR ADVISORS - This document has been prepared for approval by
your attorney. No representation or recommendation is made by Broker as to
the legal sufficiency or tax consequences of this document or the transaction
to which it relates. These are questions for your attorney.
In any real estate transaction, it is recommended that you consult with a
professional, such as a civil engineer, industrial hygienist or other person,
with experience in evaluating the condition of the property, including the
possible presence of asbestos, hazardous materials and underground storage
tanks.
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17. PARKING.
Sublessor shall provide Sublessee four (4) parking spaces per 1,000
usable square feet, free of charge up to May 17, 2001. Thereafter, parking
shall be available at a cost of $25.00 per stall per month for the balance
of the Term. Sublessee shall be subject to a one-time fee of $15.00 per
parking card.
18. TENANT IMPROVEMENTS.
Sublessor shall grant Sublessee a concession package of $13,232.
$10,000 shall be allocated to Tenant Improvements, and $3,232 shall
offset the commission shortfall from a market fee.
19. BASE YEAR.
Sublessor shall grant Sublessee a 2000 base year for calculating
operating expenses.
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LEASE GUARANTY
THIS LEASE GUARANTY ("Guaranty") is made by John Olson, Jerry Krant and Bing
Byington, as individuals ("Guarantor") in favor of Paine & Associates Inc., a
California corporation ("Sublessor") in connection with that certain Sublease
dated as of September 28, 1999 (the "Agreement") pursuant to which Sublessor
and Castle Works LLC, a California Limited Liability Corporation ("Sublessee")
are to enter into that certain Office Sublease dated as of September 28, 1999
("Sublease"), concerning certain premises (the "Premises") located at Suite
400 of the building at 535 Anton Boulevard, Costa Mesa, California (the
"Building"). As a material inducement to and in consideration of Sublessor
entering into the Sublease, Sublessor having indicated that it would not
enter into the Sublease without the execution of this Guaranty, Guarantor
does hereby covenant and agree with Sublessor as follows:
1. The Sublease is hereby incorporated into this Guaranty and made a part
hereof by this reference and is referred to herein as the "Sublease".
2. Guarantor hereby unconditionally and irrevocably guarantees, as a
primary obligor and not as a surety, and promises to perform and be
liable for, any and all obligations and liabilities of Sublessee under
the Sublease, including, without limitation the payment of rent and
all other sums now or hereafter becoming due or payable under the Sublease
and the full timely performance of all other covenants, obligations and
duties to be performed by Sublessee under the Sublease. Guarantor's
obligations under this Guaranty are continuing and unconditional.
3. A separate action be brought or prosecuted against Guarantor whether
or not can action is brought or prosecuted against any other Guarantor or
Sublessee. If Sublessee defaults under the Sublease, Sublessor may proceed
immediately against Guarantor or Sublessee, or both, or Sublessor may
enforce against Guarantor or Sublessee, or both, any rights that it has
under the Sublease or against Guarantor pursuant to this Guaranty. If the
Sublease terminates, Sublessor may enforce any remaining rights thereunder
against Guarantor without giving prior notice to Sublessee or Guarantor,
and without making any demand on either of them. This Guaranty shall not be
affected by Sublessor's failure to delay in enforcing any of its rights
hereunder or under this Sublease.
4. Guarantor hereby waives notice or the giving of its consent to any
extensions, amendments or modifications which may hereafter be made to the
terms of the Sublease, and this Guaranty shall guarantee the performance
of the Sublease as extended, amended or modified, or as the same may be
assigned from time to time. Guarantor waives the right to require Sublessor
to (i) proceed against Sublessee, (ii) proceed against or exhaust any
security that Sublessor holds from Sublessee, or (iii) pursue any remedy in
Sublessor's power. Guarantor waives any defense by reason of any disability
of Sublessee, any statute of limitations and any other defense based on any
termination of Sublessee's liability under the Sublease for any cause.
Until all of Sublessee's obligations to Sublessor have been discharged in
full, Guarantor shall have no right of subrogation against Sublessee.
5. Guarantor waives its right to enforce any remedies that Sublessor now
has, or later may have, against Sublessee. Guarantor waives any right to
participate in any security now or later held by Sublessor. Guarantor
waives all presentments, demands for performance, notices of
non-performance, protests, notice of protests, notices of dishonor and
notices of acceptance of this Guaranty, and waives all notices of
existence, creation, or incurring of new or additional obligations from
Sublessee to Sublessor. Without limiting the generality of the waivers
contained in this Guaranty, Guarantor hereby expressly waives any and all
benefits arising under California Civil Code Sections 2809, 2810, 2819,
2845, 2848, 2849 and 2850.
6. If Sublessor disposes of its interest in the Sublease, "Sublessor" as
used in Guaranty, shall mean Sublessor's successors-in-interest and
assigns. If Sublessor is required to enforce Guarantor's obligations by
legal proceedings, Guarantor shall pay to Sublessor all costs incurred,
including, without limitation, Sublessor's reasonable attorney's 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 Guaranty against the undersigned,
individually and jointly.
7. This Guaranty will continue unchanged by any bankruptcy, reorganization
or insolvency of Sublessee or any successor or assignee thereof or by
any disaffirmance or abandonment by a trustee of Sublessee.
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EXHIBIT B
8. Guarantor's obligations under this Guaranty may not be assigned and shall
be binding upon Guarantor's heirs and successors. This Guaranty may not
be modified or amended in any way without the express written consent of
Sublessor. If any provision of this Guaranty shall be invalid or
unenforceable, the remainder of this Guaranty shall not be affected
thereby and shall otherwise remain valid and enforceable. This Guaranty
shall be governed by the laws of, and may be enforced in the courts of,
the State of California.
9. The use of the singular herein shall include the plural. The obligation
of two or more parties shall be joint and several. The terms and provisions
of this Guarantee shall be binding upon and inure to the benefit of the
respective successors and assigns of the parties herein named.
10. Any married person who executed this Guarantee thereby obligates his or
her separate property as well as his or her share of the community property
for the performance of this Guarantee.
THE UNDERSIGNED HAS READ AND UNDERSTANDS THE TERMS II: THIS GUARANTY,
INCLUDING, WIHTOUT LIMITATION, THE WAIVERS CONTAINED IN THIS GUARANTY.
Executed on this 4th day of October, 1999.
Address of Guarantor:
By: /s/ John Olson
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John Olson
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By: /s/ Jerry Krant
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Jerry Krant
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By:
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B-2
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FIRST AMENDMENT TO SUBLEASE
This First Amendment ("First Amendment") is made between Castle Works LLC
("Sublessee") and Paine & Associates, Inc. ("Sublessor") in connection with
that certain Sublease dated September 28, 1999 (the "Agreement") pursuant to
which Sublessor and Sublessee have entered into that certain office sublease
dated September 28, 1999 ("Sublease") concerning certain premises (the
"Premises") located at Suite 400 of the building at 535 Alton Boulevard,
Costa Mesa, California (the "Building"). Sublessee does hereby covenant and
agree with Sublessor as follows:
1. The Sublease is hereby incorporated into this First Amendment and a part
hereof by this reference and is referred to herein as the Sublease.
2. ADDITIONAL SPACE TERM AND COMMENCEMENT DATE. The term for Sublessee's
subleasing of the Additional Space shall commence on November 15, 1999
("Additional Space Commencement Date") and shall be coterminous with
Sublessee's leasing of the Original Premises, expiring on May 15, 2002.
3. RENT. Commencing as of Additional Space Commencement Date and for the
duration of the Additional Space Term, Sublessee shall pay Monthly Base Rent
for the Additional Space in accordance with the following schedule:
Months Monthly Base Rent
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*-12 $9,353.60
13-24 $9,606.40
25-5/15/02 $9,859.20
*Additional Space Commencement Date
5. TENANT IMPROVEMENTS. Sublessee, at Sublessee's sole cost and expense,
shall install two (2) doors labeled Door #1 and Door #2 on Exhibit "C"
attached hereto and incorporated as part of the Sublease.
If as a result of Sublessee desired Tenant Improvements, Sublessor or
Master Lessor is required for any reason (i.e. governmental codes, ADA
requirements, Fire Life Safety etc.) to upgrade portions of Sublessor's or
Sublessee's Premises, Sublessee shall at Sublessee's sole cost pay for the
expense of said required upgrades. See Exhibit "A" attached
(Section 1134B).
6. ADDITIONAL SECURITY DEPOSIT. Upon execution of this Amendment, Sublessee
shall deposit with Sublessor an additional $1,105.65 worth of Security
Deposit (for a total Security Deposit of $9,859.20), which shall be held by
Sublessor pursuant to Paragraph 7 of the Sublease as additional security for
the performance of Sublessee's obligations under the Sublease as amended
hereby.
7. BROKER. Real estate brokers specified in Paragraph 12 of the Sublease
shall be paid a commission on Additional Space per the listing agreement
between CB Richard Ellis and Sublessor.
AGREED TO:
SUBLESSEE: CASTLE WORKS LLC SUBLESSOR: PAINE & ASSOCIATES, INC.
By: /s/ John Olson /s/ Jerry Krant By: /s/ David M. Paine
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Title: CEO Title: President
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Date: 11/15/99 Date: 11/15/99
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CONSENT TO SUBLEASE
THIS CONSENT TO SUBLEASE (this "AGREEMENT") is made as of November 2,
1999, by and among BRE/South Coast, L.L.C., a Delaware limited liability
company ("LANDLORD"), Paine & Associates, a California corporation,
("TENANT"), and Castleworks, LLC, a California limited liability company
("SUBTENANT").
RECITALS
A. Reference is hereby made to that certain Office Lease, dated
November 10, 1994, by and between Landlord and Tenant, and any amendments
thereto (collectively, the "LEASE"), for space on the 4th floor (the
"PREMISES") in that certain office building located at 535 Anton Boulevard,
Costa Mesa, California (the "BUILDING").
B. Pursuant to the terms of ARTICLE 28 of the Lease, Tenant has
requested Landlord's consent to that certain Sublease, dated SEPTEMBER 28,
1999, by and between Tenant and Subtenant (the "SUBLEASE"), with respect to a
subletting by Subtenant of a portion of the Premises, as more particularly
described in the Sublease (the "SUBLEASED PREMISES"). A copy of the Sublease
is attached hereto as EXHIBIT A. Landlord is willing to consent to the
Sublease on the terms and conditions contained herein.
C. All defined terms not otherwise expressly defined herein shall
have the respective meanings given in the Lease.
AGREEMENT
NOW THEREFORE, in consideration of the mutual covenants contained
herein, the sufficiency of which is hereby acknowledged, the parties hereto
agree as follows.
1. LANDLORD'S CONSENT. Landlord hereby consents to the Sublease;
provided however, notwithstanding anything contained in the Sublease to the
contrary, such consent is granted by Landlord only upon the terms and
conditions set forth in this Agreement. The Sublease is subject and
subordinate to the Lease. Landlord shall not be bound by any of the terms,
covenants, conditions, provisions or agreements of the Sublease.
2. NON-RELEASE OF TENANT; FURTHER TRANSFERS. Neither the Sublease
nor this consent thereto shall release or discharge Tenant from any
liability, whether past, present or future, under the Lease or alter the
primary liability of Tenant to pay the rent and perform and comply with all
of the obligations of Tenant to be performed under the Lease (including the
payment of all bills rendered by Landlord for charges incurred by Subtenant
for services and materials supplied to the Subleased Premises). Neither the
Sublease nor this consent thereto shall be construed as a waiver of
Landlord's right to consent to any further subleasing either by Tenant or by
Subtenant or to any assignment by Tenant of the Lease or assignment by
Subtenant of the Sublease, or as a consent to any portion of the Subleased
Premises being used or occupied by any other party. Landlord may consent to
subsequent subleasing and assignments of the Lease or the Sublease or any
amendments or modifications thereto without notifying Tenant nor anyone else
liable under the Lease and without obtaining their consent. No such action by
Landlord shall relieve such persons from any liability to Landlord or
otherwise with regard to the Subleased Premises.
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3. RELATIONSHIP WITH LANDLORD. Tenant hereby assigns and
transfers to Landlord Tenant's interest in the Sublease and all rentals and
income arising therefrom, subject to the terms of this SECTION 3. Landlord,
by consenting to the Sublease agrees that until a default shall occur in the
performance of Tenant's obligations under the Lease, Tenant may receive,
collect and enjoy the rents accruing under the Sublease. In the event Tenant
shall default in the performance of its obligations to Landlord under
SECTION 21.1 of the Lease (whether or not Landlord terminates the Lease),
Landlord may, in connection with SECTION 22.1 of the Lease, at its option by
notice to Tenant, either (i) terminate the Sublease, (ii) elect to receive and
collect, directly from Subtenant, all rent and any other sums owing and to be
owed under the Sublease, as further set forth in SECTION 3.1, below, or (iii)
elect to succeed to Tenant's interest in the Sublease and cause Subtenant to
attorn to Landlord, as further set forth in SECTION 3.2, below.
3.1 LANDLORD'S ELECTION TO RECEIVE RENTS. Landlord shall
not, by reason of the Sublease, nor by reason of the collection of rents or
any other sums from the Subtenant pursuant to SECTION 3(ii), above, be deemed
liable to Subtenant for any failure of Tenant to perform and comply with any
obligation of Tenant, and Tenant hereby irrevocably authorizes and directs
Subtenant, upon receipt of any written notice from Landlord stating that a
default exists in the performance of Tenant's obligations under the Lease, to
pay to Landlord the rents and any other sums due and to become due under the
Sublease. Tenant agrees that Subtenant shall have the right to rely upon any
such statement and request from Landlord, and that Subtenant shall pay any
such rents and any other sums to Landlord without any obligation or right to
inquire as to whether such default exists and notwithstanding any notice from
or claim from Tenant to the contrary. Tenant shall not have any right or
claim against Subtenant for any such rents or any other sums so paid by
Subtenant to Landlord. Landlord shall credit Tenant with any rent received by
Landlord under such assignment but the acceptance of any payment on account
of rent from Subtenant as the result of any such default shall in no manner
whatsoever be deemed an attornment by Landlord to Subtenant or by Subtenant
to Landlord, be deemed a waiver by Landlord of any provision of the Lease or
serve to release Tenant from any liability under the terms, covenants,
conditions, provisions or agreements under the Lease. Notwithstanding the
foregoing, any other payment of rent from Subtenant directly to Landlord,
regardless of the circumstances or reasons therefor, shall in no manner
whatsoever be deemed an attornment by Subtenant to Landlord in the absence of
a specific written agreement signed by Landlord to such an effect.
3.2 LANDLORD'S ELECTION OF TENANT'S ATTORNMENT. In the event
Landlord elects, at its option, to cause Subtenant to attorn to Landlord
pursuant to SECTION 3(iii), above, Landlord shall undertake the obligations
of Tenant under the Sublease from the time of the exercise of the option, but
Landlord shall not (i) be liable for any prepayment of more than one month's
rent or any security deposit paid by Subtenant, (ii) be liable for any
previous act or omission of Tenant under the Lease or for any other defaults
of Tenant under the Sublease, (iii) be subject to any defenses or offsets
previously accrued which Subtenant may have against Tenant, or (iv) be bound
by any changes or modifications made to the Sublease without the written
consent of Landlord.
4. TENANT IMPROVEMENTS. Tenant and Landlord hereby agree to amend
SECTION 6 of the Second Amendment to Office Lease and Parking License
Agreement by and between Landlord and Tenant and dated July 27, 1997 (the
"SECOND AMENDMENT"). The "$47,628.00" Allowance referenced in the Second
Amendment shall be deleted and inserted in its place shall be the following:
"Thirteen Thousand, Two Hundred and Thirty Two Dollars ($13,232.00)".
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With respect to said Allowance, in no event shall Landlord be responsible for
paying more than $13,232.00 toward any costs associated with the subleasing
or improvement of said Sublease Premises. Tenant hereby forfeits all rights
to the original Allowance noted in SECTION 6, amounting to $47,628.00. Tenant
may attribute up to $13,232.00 Dollars of the new Allowance toward the
payment of leasing commissions in connection with subleasing the Sublease
Premises.
5. GENERAL PROVISIONS.
5.1 CONSIDERATION FOR SUBLEASE. Tenant and Subtenant
represent and warrant that there are no additional payments of rent or any
other consideration of any type payable by Subtenant to Tenant with regard to
the Subleased Premises other than as disclosed in the Sublease.
5.2 BROKERAGE COMMISSION. Tenant and Subtenant covenant and
agree that under no circumstances shall Landlord be liable for any brokerage
commission or other charge or expense in connection with the Sublease and
Tenant and Subtenant agree to protect, defend, indemnify and hold Landlord
harmless from the same and from any cost or expense (including but not
limited to attorneys' fees) incurred by Landlord in resisting any claim for
any such brokerage commission.
5.3 RECAPTURE. This consent shall in no manner be construed
as limiting Landlord's ability to exercise its rights to recapture any
portion of the Premises, as set forth in SECTION 28.3 of the Lease, in the
event of a proposed future sublease or assignment of such portion of the
Premises.
5.4 GOVERNING LAW. The terms and provisions of this
Agreement shall be construed in accordance with and governed by the laws of
the State of California.
5.5 BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto, their heirs, successors and
assigns. As used herein, the singular number includes the plural and the
masculine gender includes the feminine and neuter.
5.6 CAPTIONS. The paragraph captions utilized herein are in
no way intended to interpret or limit the terms and conditions hereof;
rather, they are intended for purposes of convenience only.
5.7 SEVERABILITY. If any term, provision or condition
contained in this Agreement shall, to any extent, be invalid or
unenforceable, the remainder of this Agreement, or the application of such
term, provision or condition to persons or circumstances other than those
with respect to which it is invalid or unenforceable, shall not be affected
thereby, and each and every other term, provision and condition of this
Agreement shall be valid and enforceable to the fullest extent possible
permitted by law.
5.8 ATTORNEYS' FEES. If either party commences litigation
against the other for the specific performance of this Agreement, for damages
for the 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
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shall be entitled to recover from the other party such costs and reasonable
attorneys' fees as may have been incurred.
IN WITNESS WHEREOF, the parties have executed this Consent to Sublease
Agreement as of the day and year first above written.
"LANDLORD":
BRE/SOUTH COAST L.L.C.,
a Delaware limited liability company
By: /s/ [ILLEGIBLE]
--------------------------------------
Its: Vice President
----------------------------------
By:
--------------------------------------
Its:
----------------------------------
"TENANT":
PAINE & ASSOCIATES
a California corporation
By: /s/ David M. Paine
--------------------------------------
Its: President
----------------------------------
By:
--------------------------------------
Its:
----------------------------------
"SUBTENANT":
CASTLEWORKS, LLC.,
a California limited liability company
By: /s/ John Olson
--------------------------------------
Its: Manager
----------------------------------
By: /s/ Jerry Krant
--------------------------------------
Its: CEO
----------------------------------
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<Page>
EXHIBIT A
THE SUBLEASE
EXHIBIT A - Page 1
<Page>
SECOND AMENDMENT TO OFFICE LEASE
AND PARKING LICENSE AGREEMENT
THIS SECOND AMENDMENT TO OFFICE LEASE AND PARKING LICENSE AGREEMENT
("Amendment") is made and entered into as of July 27, 1997, by and between
CURCI-ENGLAND CO. L.P., a California limited partnership ("Landlord"),
successor-in-interest to Curci England Co. ("Curci"), and PAINE & ASSOCIATES,
INC., a California corporation ("Tenant").
RECITALS:
A. Curci and Tenant entered into that certain Office Lease dated as
of November 10, 1994, which was amended by that certain Amendment to Lease
and Parking License Agreement dated February 16, 1996 ("First Amendment")
between Landlord and Tenant (as amended, the "Lease"), concerning certain
premises (the "Premises") located at Suite 450 of the building at 535 Anton
Boulevard [1B], Costa Mesa, California (the "Building"), and more
particularly described in the Lease, a copy of which is attached hereto as
EXHIBIT A.
B. Concurrently with the execution of the Lease, Landlord and Tenant
entered into that certain Parking License Agreement pertaining to Tenant's
parking rights at the Building (the "Parking Agreement"), a copy of which is
attached hereto as EXHIBIT B.
C. Landlord and Tenant desire to expand the Premises to include an
additional approximately 4,489 rentable square feet of area on the fourth
floor of the Building, to extend the Term of the Lease and to otherwise
modify the Lease and the Parking Agreement as set forth in this Amendment,
which modifications shall be deemed effective as of the "New Commencement
Date" referenced in Paragraph 2 below.
AGREEMENT:
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Landlord and
Tenant hereby amend the Lease and the Parking Agreement and agree as follows:
1. INCORPORATION; DEFINED TERMS. The Lease and the Parking Agreement
are hereby incorporated into this Amendment by this reference. All
capitalized terms used and not otherwise defined in this Amendment, but
defined in the Lease or in the Parking Agreement, shall have the same meaning
in this Amendment as in the Lease or the Parking Agreement, as the case may
be.
2. EXPANSION OF PREMISES. Tenant has exercised Tenant's First Right
to Lease the First Offer Space described in Paragraph 9 of the First
Amendment. Effective as of the date hereof, Landlord hereby leases to Tenant
and Tenant hereby leases from Landlord, the additional premises located
contiguous to the Premises, containing approximately 4,489 rentable square
feet as shown on. EXHIBIT C attached hereto (the "First Offer Space"), upon and
subject to all of the terms and conditions of the Lease as amended by this
Amendment. EXHIBIT C attached hereto showing the original Premises, the
Additional Space added pursuant to the First Amendment ("Additional Space")
and the First Offer Space shall replace EXHIBIT A to the Lease as the
description of the Premises. From and after the "New Commencement Date"
referenced in Paragraph 3 below, the Premises, the Additional Space and the
First Offer Space shall be referred to as Suites 400 and 450 of the Building
and all references in the Lease and in the Parking Agreement to the "Premises",
as amended by this Amendment, shall mean and refer to Suites 400 and 450 of
the Building which shall include the original Premises, the Additional Space
and the First Offer Space. References herein to the First Offer Space shall
mean the First Offer Space shown on EXHIBIT C attached hereto and references
herein to the "Existing Premises" shall mean only Suite 450 of the Building
as shown in the Lease consisting of the original Premises and the Additional
Space.
3. NEW COMMENCEMENT DATE. Tenant's leasing of the First Offer Space
shall commence as of the date hereof, however, Tenant's obligation to pay
rent with respect to the First Offer Space shall commence July 27, 1997 (the
"New Commencement Date")
4. EXTENSION OF LEASE TERM. Effective as of the date hereof, the
Term of the Lease as to both the Existing Premises and the First Offer Space
shall be extended to expire on May 16, 2002 (herein, the "Extended Term").
5. SUBSTITUTION OF FUNDAMENTAL LEASE PROVISIONS. Effective as of the
New Commencement Date, the Fundamental Lease Provisions which (a) the parties
desire to amend or (b) are affected by the addition of the First Offer Space
to the Existing Premises and the extension of the Lease Term, shall be
modified to read as follows:
1.1 Premises: Project: South Coast Metro Center
Building: 535 Anton Boulevard [1B]
Suites: 400 and 450 Floor: 4th
City: Costa Mesa County: Orange
State: California
1.2 Floor Area: Rentable Area: 19,838 square feet
Usable Area: 17,541 square feet
1.3 Term: Approximately Fifty-Seven (57) months
New Commencement Date: July 27, 1997
New Expiration Date: May 16, 2002.
1.4 Basic Rent: Period Rent Per Month
------ --------------
Suite 450 8/1/97-5/16/01 $23,023.50
5/17/01-5/16/02 $26,860.75
Suite 400 7/27/97-5/16/01 $7,631.30*
5/17/01-5/16/02 $7,855.75
*The first month's rent for the First Offer Space shall be due and
payable upon Tenant's execution of this Amendment.
1.5 Expenses: As to both the Existing Premises and the First Offer
Space, Tenant shall pay Tenant's Share of all Expenses that exceed Landlord's
Base Year Costs together with other items of Expense as set forth in
Article 6. Tenant's Share as to the original Premises consisting of 9,557
rentable square feet is 3.94%. The Base Year for purposes of determining
Tenant's Share of Expenses for the original Premises shall remain calendar
year 1994. Tenant's Share as to the Additional Space consisting of 5,792
rentable square feet shall be 2.37%. The Base Year for purposes of
determining Tenant's Share of Expenses for the Additional Space shall remain
calendar year 1996. Tenant's Share as to the First Offer Space consisting of
4,489 rentable square feet shall be 1.83%. The Base Year for purposes of
determining Tenant's Share of Expenses for the First Offer Space shall be
calendar year 1997. Expenses shall be grossed up to reflect a minimum
occupancy of ninety five percent (95%) as provided in the Lease.
1.6 After-Hours Charges: Fixed for the Extended Term at the rates set
forth in Section 1.6 of the Lease.
1.8 Security Deposit: Upon execution of this Amendment, Tenant shall
pay to Landlord the sum of $7,855.75 to be held by Landlord in accordance
with Article 9 of the Lease as additional security deposit together with the
$26,535.00 presently held by Landlord as a security deposit for the Original
Premises (for a total security deposit of $34,390.75).
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1.9 Landlord's Address for Notices: Curci-England Co., L.P.
c/o Lakeside Realty
535 Anton Boulevard, Suite 150
Costa Mesa, California 92626
1.10 Tenant's Address for Notices: From and after the New
Commencement Date: 535 Anton Boulevard, Suite 450, Costa Mesa, California
92626; prior to the New Commencement Date, as set forth in Section 1.10 of
the Lease.
1.11 Brokers: CB Commercial Real Estate Group, Inc. and Lakeside
Realty as to the leasing of the First Offer Space.
1.12 Guarantee: The performance of Tenant's obligations under the
Lease as amended by this Amendment shall be guaranteed by David M. Paine and
Patricia Paine, pursuant to a Lease Guaranty in the form attached hereto as
EXHIBIT E to be executed by the Guarantors prior to Landlord's execution of
this Amendment. Such Lease Guaranty shall supplement the existing Guarantee of
Lease executed by the Guarantors as a condition to Landlord's execution of the
Lease.
6. CONDITION OF FIRST OFFER SPACE. During the first twenty-four
(24) months of the Extended Term, the First Offer Space will be occupied by
the existing occupant. The Falcor Group, Inc. d/b/a ARTEX ("Artex") pursuant
to a sublease agreement between Tenant and Artex which must be negotiated and
executed by such parties on or before July 27, 1997 as a condition to
Landlord's obligations under this Amendment. Consequently, Tenant hereby
accepts possession of the First Offer Space in its current as-is condition,
and acknowledges and agrees that Landlord shall have no obligation whatsoever
to improve the First Offer Space while Artex is in possession of the First
Offer Space. Upon the vacation of the First Offer Space by Artex, Landlord
shall provide Tenant with a tenant improvement allowance of $47,628.00 (the
"Allowance"), in accordance with the Work Letter Agreement attached hereto as
EXHIBIT D (the "Work Letter"). The Allowance shall be used by Tenant to
improve the First Offer Space as provided in the Work Letter. Tenant shall
use Landlord's contractor to construct the Tenant improvements as provided in
the Work Letter.
7. AMENDMENT TO PARKING AGREEMENT. Commencing upon the New
Commencement Date, Tenant, as Licensee under the Parking Agreement, shall be
entitled to use an additional eighteen (18) unassigned parking spaces for its
employees for a total of seventy-seven (77) unassigned parking spaces upon
and subject to all terms and conditions of the Parking Agreement, except that
throughout the Extended Term of the Lease, Tenant shall pay a monthly fee of
$25.00 per stall per month for the eighteen (18) additional parking spaces in
addition to Tenant's Share of Expenses which are attributable to parking in
excess of such Expenses for the Base Year. Tenant shall not be charged for
any parking access cards except for the costs to replace lost or stolen
cards. Visitor parking is available on a non-exclusive, first-come-first
served basis. Tenant may purchase validations for its visitors from the
parking operator.
Effective May 17, 2001, Tenant shall pay a monthly fee of $25.00
per stall per month for all of Tenant's seventy-seven (77) unreserved parking
spaces.
8. OPTION TO EXTEND. Tenant's Option to Extend contained in
Section 43 of the Lease shall remain in full force and effect as to the
combined Existing Premises and the First Offer Space such that Tenant may
extend the Term of the Lease for an additional five (5) year period beyond
the Extended Term in accordance with the provisions of Section 43.
9. INAPPLICABLE PROVISIONS. Section 44 of the original Lease and
Paragraph 9 of the First Amendment are hereby deleted as inapplicable to the
Lease, as amended hereby.
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10. MISCELLANEOUS.
(a) EFFECT OF AMENDMENT. Except to the extent the Lease and
the Parking Agreement are modified by this Amendment, the remaining terms and
provisions of the Lease and the Parking Agreement shall remain unmodified and
in full force and effect. In the event of conflict between the terms of the
Lease or the terms of the Parking Agreement and the terms of this Amendment,
the terms of this Amendment shall prevail.
(b) ENTIRE AGREEMENT. This Amendment embodies the entire
understanding between Landlord and Tenant with respect to its subject matter
and can be changed only by an instrument in writing signed by Landlord and
Tenant.
(c) COUNTERPARTS. This Amendment may be executed in
counterparts, each of which shall be deemed an original, but all of which,
together, shall constitute one in the same Amendment.
(d) CORPORATE AND PARTNERSHIP AUTHORITY. If Tenant is a
corporation or partnership, or is comprised of either or both of them, each
individual executing this Amendment for the corporation or partnership
represents that he or she is duly authorized to execute and deliver this
Amendment for the corporation or partnership and that this Amendment is
binding upon the corporation or partnership in accordance with its terms.
(e) ATTORNEYS' FEES. The provisions of the Lease respecting
payment of attorneys' fees shall also apply to this Amendment.
IN WITNESS WHEREOF, the parties have executed this Amendment as
of the date and year first set forth above.
LANDLORD: CURCI-ENGLAND CO. L.P.,
a California limited partnership
By: Copley Investors Limited Partnership,
a Delaware limited partnership,
its general partner
3By: Copley Management Partnership,
a Massachusetts general partnership,
its general partner
By: AEW Advisors, Inc.
a Massachusetts corporation,
its managing general partner
By: /s/[ILLEGIBLE]
-------------------
Its: Managing Director
"TENANT" PAINE & ASSOCIATES, INC.,
a California corporation
By: /s/ David M. Paine
------------------------------------------
David M. Paine
President
By: /s/ David M. Paine
------------------------------------------
David M. Paine
Secretary
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<Page>
AMENDMENT TO LEASE AND PARKING LICENSE AGREEMENT
THIS AMENDMENT TO LEASE AND PARKING LICENSE AGREEMENT ("Amendment") is
made and entered into as of February 16th, 1996, by and between CURCI-ENGLAND
CO. L.P., a California limited partnership ("Landlord"), and PAINE & ASSOCIATES,
INC., a California corporation ("Tenant").
RECITALS:
A. Landlord and Tenant entered into that certain Office Lease dated as
of November 10, 1994 (as amended, the "Lease"), concerning certain premises (the
"Premises") located at Suites 420 and 450 of the building at 535 Anton Boulevard
[1B], Costa Mesa, California (the "Building"), and more particularly described
in the Lease, a copy of which is attached hereto as EXHIBIT A.
B. Concurrently with the execution of the Lease, Landlord and Tenant
entered into that certain Parking License Agreement pertaining to Tenant's
parking rights at the Building (the "Parking Agreement"), a copy of which is
attached hereto as EXHIBIT B.
C. Landlord and Tenant desire to expand the Premises to include an
additional approximately 5,792 rentable square feet of area on the fourth floor
of the Building, to extend the Term of the Lease and to otherwise modify the
Lease and the Parking Agreement as set forth in this Amendment, which
modifications shall be deemed effective as of the "New Commencement Date"
referenced in Paragraph 2 below.
AGREEMENT:
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant hereby amend
the Lease and the Parking Agreement and agree as follows:
1. INCORPORATION; DEFINED TERMS. The Lease and the Parking Agreement
are hereby incorporated into this Amendment by this reference. All capitalized
terms used and not otherwise defined in this Amendment, but defined in the Lease
or in the Parking Agreement, shall have the same meaning in this Amendment as in
the Lease or the Parking Agreement, as the case may be.
2. EXPANSION OF PREMISES. Effective as of the date hereof, Landlord
hereby leases to Tenant and Tenant hereby leases from Landlord, the additional
premises located contiguous to the Premises, containing approximately 5,792
rentable square feet as shown on EXHIBIT C attached hereto (the "Additional
Space"), upon and subject to all of the terms and conditions of the Lease as
amended by this Amendment. EXHIBIT C attached hereto showing both the original
Premises and the Additional Space shall replace EXHIBIT A to the Lease as the
Description of the Premises. From and after the "New Commencement Date"
referenced in Paragraph 3 below, the Premises and the Additional Space shall be
referred to together as Suite 450 of the Building and all references in the
Lease and in the Parking Agreement to the "Premises," as amended by this
Amendment shall mean and refer to Suite 450 of the Building which shall include
both the original Premises and the Additional Space. References herein to the
Additional Space shall mean the Additional Space shown on EXHIBIT C attached
hereto and references herein to the "Original Premises" shall mean only Suites
420 and 450 of the Building as shown in the Lease.
3. NEW COMMENCEMENT DATE. Tenant's leasing of the Additional Space
shall commence as of the date hereof, however, Tenant's obligation to pay rent
with respect to the Additional Space shall commence upon the date (the "New
Commencement Date") which is the earlier to occur of (i) the date Landlord has
substantially completed the Tenant Improvements substantially in accordance with
the Final Plans as described in EXHIBIT D attached hereto, or (ii) the date
Tenant takes occupancy of the Additional Space and commences to conduct business
therefrom. The parties anticipate that the New Commencement Date will occur on
or before April 1, 1996.
EXHIBIT "A" TO
SECOND AMENDMENT TO OFFICE LEASE AND PARKING LICENSE AGREEMENT
<Page>
4. EXTENSION OF LEASE TERM. Effective as of the date hereof, the Term
of the Lease as to both the Original Premises and the Additional Space shall be
extended to expire on the date which is one day prior to the date which is five
(5) years after the New Commencement Date (herein, the "Extended Term").
5. SUBSTITUTION OF FUNDAMENTAL LEASE PROVISIONS. Effective as of the
New Commencement Date, the Fundamental Lease Provisions which are affected by
the addition of the Additional Space to the Premises and the extension of the
Lease Term shall be modified to read as follows:
1.1 Premises: Project: South Coast Metro Center
Building: 535 Anton Boulevard [1B]
Suite: 450 Floor: 4th
City: Costa Mesa County: Orange
State: California
1.2 Floor Area: Rentable Area: 15,349 square feet
Usable Area: 13,572 square feet
1.3 Term: Five (5) years
New Commencement Date: Determined as provided in
Paragraph 3 above. Estimated New
Commencement Date - April 1, 1996.
New Expiration Date: Five (5) years after New
Commencement Date. Estimated New Expiration
Date: March 31, 2001.
1.4 Basic Rent: Months Rent Per Month
------ --------------
1 - 60 $23,023.50 FSG*
* Full Service Gross
1.5 Expenses: As to both the Original Premises and the Additional
Space, Tenant shall pay Tenant's Share of all Expenses that exceed Landlord's
Base Year Costs together with other items of Expense as set forth in Article 6.
Tenant's Share as to the Original Premises is 3.94%. The Base Year for purposes
of determining Tenant's Share of Expenses for the Original Premises shall remain
calendar year 1994. Tenant's Share as to the Additional Space shall be 2.367%.
The Base Year for purposes of determining Tenant's Share of Expenses for the
Additional Space shall be calendar year 1996. Expenses shall be grossed up to
reflect a minimum occupancy of ninety five percent (95%) as provided in the
Lease.
1.6 After-Hours Charges: Fixed for the Extended Term at the rates set
forth in Section 1.6 of the Lease.
1.7 Prepaid Rent: None.
1.8 Security Deposit: Upon execution of this Amendment, Tenant shall
pay to Landlord the sum of $8,688.30 to be held by Landlord in accordance with
Article 9 of the Lease as additional security deposit together with the
$17,846.70 presently held by Landlord as a security deposit for the Original
Premises (for a total security deposit of $26,535.00).
1.10 Tenant's Address for Notices: From and after the New Commencement
Date: 535 Anton Boulevard, Suite 450, Costa Mesa, California 92696; prior to the
New Commencement Date, as set forth in Section 1.10 of the Lease.
1.11 Brokers: Grubb & Ellis; Commission payable based upon Agreement
dated March 9, 1994 and letter dated October 3, 1995.
1.12 Guarantee: The performance of Tenant's obligations under the Lease
as amended by this Amendment shall be guaranteed by David M. Paine and Patricia
Paine, pursuant to a Lease Guaranty in the form attached hereto as EXHIBIT E to
be executed by the Guarantors prior to Landlord's execution of this Amendment.
Such Lease Guaranty shall supplement the existing Guarantee of Lease executed by
the Guarantors as a condition to Landlord's execution of the Lease.
6. CONDITION OF ADDITIONAL SPACE. Landlord shall provide Tenant with a
tenant improvement allowance of $78,550.00, plus $34,450 - $113,000
(collectively the "Allowance"), in accordance with the Work Letter Agreement
attached hereto as EXHIBIT D (the
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"Work Letter") The Allowance shall be used by Tenant to improve the Additional
Space as provided in the Work Letter. Tenant shall use Landlord's contractor to
construct the Tenant Improvements as provided in the Work Letter.
7. AMENDMENT TO PARKING AGREEMENT. Commencing upon the New Commencement
Date, Tenant, as Licensee under the Parking Agreement, shall be entitled to use
an additional twenty three (23) unassigned parking spaces for its employees for
a total of fifty nine (59) unassigned parking spaces upon and subject to all
terms and conditions of the Parking Agreement, except that throughout the five
(5) year Extended Term of the Lease, Tenant shall not be obligated to pay any
monthly fee for any such parking spaces other than Tenant's Share of Expenses
which are attributable to parking in excess of such Expenses for the Base Year.
Tenant shall not be charged for any parking access cards except for the costs to
replace lost or stolen cards. Visitor parking is available on a non-exclusive,
first come - first served basis. Tenant may purchase validations for its
visitors from the parking operator.
8. OPTION TO EXTEND. Tenant's Option to Extend contained in Section 43
of the Lease shall remain in full force and effect such that Tenant may extend
the Term of the Lease for an additional five (5) year period beyond the Extended
Term in accordance with the provisions of Section 43.
9. RIGHT TO LEASE ADDITIONAL SPACE.
(a) Subject to the terms of this Paragraph 9, through the
remainder of the Extended Term, Tenant shall have a continuing first right to
lease ("Tenant's First Right to Lease") the balance of space located contiguous
to the Premises on the fourth floor of the Building within the area depicted on
EXHIBIT C attached hereto (the "First Offer Space") to the extent such space
becomes available for lease to third parties after the expiration of any
existing lease for such space during the Lease Term, including the expiration of
all renewal or extension options, and after the existing tenant or occupant
vacates such space. The First Offer Space contains approximately 4,489 rentable
square feet of space. Tenant's First Right to Lease is subject and subordinate
to the rights of all other existing tenants of the Building with prior expansion
or lease rights relative to such First Offer Space. Without limiting the
foregoing, Landlord advises Tenant that the First Offer Space has been leased to
another tenant for a term which is presently scheduled to expire as of July 31,
1997.
(b) From time to time during the Lease Term, as and when the First
Offer Space shall become available to lease, Landlord will give Tenant written
notice of the availability of the First Offer Space and the date the existing
tenant or occupant, if any, is expected to vacate such space ("Landlord's
Availability Notice"). Landlord agrees to deliver the first Landlord's
Availability Notice to Tenant as to the existing tenant in the First Offer Space
on or before February 1, 1997. Landlord's Availability Notice will contain the
basic economic terms, including, but not limited to, Landlord's determination of
the Monthly Base Rent, tenant improvement allowance, if any, and all other
economic terms and conditions (collectively, the "Economic Terms"), upon which
Landlord is willing to lease the First Offer Space desired by Tenant, either to
Tenant or to a third party. Such Economic Terms will represent Landlord's
reasonable determination of the fair market rental rate for such First Offer
Space. Such fair market rental rate will mean the annual amount per rentable
square foot, projected during the relevant period, that a willing, comparable,
non-equity tenant (excluding sublease and assignment transactions) would pay,
and a willing, comparable landlord of a comparable Class "A" quality office
building located in the South Coast Plaza/John Wayne Airport area would accept,
at arm's length (what Landlord is accepting in current transactions for the
Building and in the building at 575 Anton Boulevard may be considered), for
space of comparable size and quality as the leased area at issue taking into
account the age, quality and layout of the existing improvements in the leased
area at issue and taking into account items that professional real estate
brokers customarily consider, including, but not limited to, rental rates,
office space availability, tenant size, tenant improvement allowances, operating
expenses and allowance, parking charges, free rent, reduced rent, free parking,
reduced parking, and any other lease concessions, if any, then being charged or
granted by Landlord or the lessors of such similar office buildings. The fair
market rental rate will be an effective rate, not specifically including, but
accounting for, the appropriate economic concessions described above.
(c) Within five (5) business days after receipt of Landlord's
Availability Notice, Tenant must give Landlord written notice pursuant to
which Tenant
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shall elect to either: (i) lease such First Offer Space upon such Economic
Terms and the same non-Economic Terms as set forth in the Lease with
respect to the Premises; (ii) refuse to lease such First Offer Space,
specifying that such refusal is not based upon the Economic Terms, but upon
Tenant's lack of need for such First Offer Space, in which event Landlord
may at any time within one hundred eighty (180) days thereafter lease such
First Offer Space to any party upon any terms Landlord deems appropriate;
or (iii) refuse to lease the First Offer Space, specifying that such
refusal is based upon the Economic Terms, in which event Tenant will also
specify revised Economic Terms upon which Tenant is willing to lease such
First Offer Space (provided that Tenant may not specify a different lease
term for the First Offer Space). Tenant's failure to timely choose either
clause (i), clause (ii) or clause (iii) above will be deemed to be Tenant's
choice of clause (ii) above.
(d) If Tenant gives Landlord notice pursuant to clause
(c)(iii) above, Landlord may elect, within five (5) days following receipt
of such notice from Tenant, either to: (i) lease such First Offer Space to
Tenant upon such revised Economic Terms proposed by Tenant, and the same
other non-Economic Terms as set forth in this Lease; or (ii) lease the
First Offer Space at any time within one hundred eighty (180) days
thereafter to any third party upon terms which are not substantially more
favorable to said party than the Economic Terms originally proposed by
Tenant. Landlord's failure to timely choose either clause (i) or clause
(ii) above will be deemed to be Landlord's choice of clause (ii) above.
(e) If Tenant chooses (or is deemed to have chosen) clause
(c)(ii) above, or if Landlord chooses (or is deemed to have chosen) clause
(d)(ii) above, and within one hundred eighty (180) days following such
election or deemed election Landlord does not enter into a binding written
lease for the First Offer Space with a third party upon terms permitted
under clause (c)(ii) or (d)(ii) above, as the case may be, Tenant's Right
of First Offer shall be reinstated and the parties shall again follow the
procedures set forth in this Paragraph 9 as to the First Offer Space. If
Landlord enters into a binding written lease for the First Offer Space
within one hundred eighty (180) days following the applicable election
by Landlord or Tenant, Tenant's First Right to Lease and First Offer shall
again arise only if and when the First Offer Space shall again become
available for lease as provided in this Paragraph 9. If Tenant exercises
its Right to Lease as provided herein, the parties will promptly
thereafter execute an amendment to the Lease to include the First Offer
Space in the Premises and to document the lease terms thereof.
(f) As provided above, Tenant's Right to Lease is subject to
all expansion and extension rights and other rights to lease, as
applicable, which Landlord has granted to other tenants prior to the date
of this Amendment. Thus, Landlord's Availablility Notice will be delivered
to Tenant only after Landlord has appropriately notified and received
negative responses from all other tenants with rights in the First Offer
Space superior to Tenant's rights.
(g) Tenant's Right to Lease the First Offer Space is
personal to the original Tenant executing this Lease and may be
exercised only by the original Tenant executing this Lease while occupying
the entire Premises and without the intent of thereafter assigning this
Lease or subletting the Premises and may not be exercised or be assigned,
voluntarily or involuntarily, by any person or entity other than the
original Tenant executing this Lease. Tenant's Right to Lease the First
Offer Space is not assignable separate and apart from this Lease, nor may
such right be separated from this Lease in any manner, either by
reservation or otherwise.
(h) Tenant will have no right to exercise its Right to Lease
the First Offer Space, notwithstanding any provision of the grant of option
to the contrary, and Tenant's exercise of its Right to Lease the First
Offer Space may be nullified by Landlord and deemed of no further force or
effect, if (i) Tenant is in default of any monetary obligation or material
non-monetary obligation under the terms of this Lease (or if Tenant would
be in such default under this Lease but for the passage of time or the
giving of notice, or both) as of Tenant's exercise of its Right to Lease
the First Offer Space or at any time after the exercise of such right and
prior to the commencement of Tenant's occupancy of the First Offer Space,
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 the Lease.
-4-
<Page>
11. MISCELLANEOUS.
(a) EFFECT OF AMENDMENT. Except to the extent the Lease and
the Parking Agreement are modified by this Amendment, the remaining terms
and provisions of the Lease and the Parking Agreement shall remain
unmodified and in full force and effect. In the event of conflict between
the terms of the Lease or the terms of the Parking Agreement and the terms
of this Amendment, the terms of this Amendment shall prevail.
(b) ENTIRE AGREEMENT. This Amendment embodies the entire
understanding between Landlord and Tenant with respect to its subject
matter and can be changed only by an instrument in writing signed by
Landlord and Tenant.
(c) COUNTERPARTS. This Amendment may be executed in
counterparts, each of which shall be deemed an original, but all of which,
together, shall constitute one in the same Amendment.
(d) CORPORATE AND PARTENERSHIP AUTHORITY. If Tenant is a
corporation or partnership, or is comprised of either or both of them,
each individual executing this Amendment for the corporation or
partnership represents that he or she is duly authorized to execute and
deliver this Amendment for the corporation or partnership and that this
Amendment is binding upon the corporation or partnership in accordance
with its terms.
(e) ATTORNEYS' FEES. The provisions of the Lease respecting
payment of attorneys' fees shall also apply to this Amendment.
IN WITNESS WHEREOF, the parties have executed this Amendment as of
the date and year first set forth above.
LANDLORD: CURCI-ENGLAND CO. L.P.,
a California limited partnership
By: Copley Investors Limited Partnership,
a Delaware limited partnership,
its general partner
By: Copley Management Partnership,
a Massachusetts general
partnership,
its general partner
By: Copely Advisors, Inc.
a Massachusetts corporation,
its managing general partner
By: /s/ [ILLEGIBLE]
--------------------------
Its: /s/ [ILLEGIBLE]
----------------------
"TENANT" PAINE & ASSOCIATES, INC.,
a California corporation
By: /s/ David M. Paine
--------------------------------------
David M. Paine
President
By: /s/ David M. Paine
--------------------------------------
David M. Paine
Secretary
-5-
<Page>
LEASE
(REFER TO LEASE DATED NOVEMBER 10, 1994 ATTACHED)
EXHIBIT A
<Page>
PARKING LICENSE AGREEMENT
(REFER TO PARKING LICENSE AGREEMENT DATED NOVEMBER 10, 1994 ATTACHED)
EXHIBIT B
<Page>
FLOOR PLAN OF PREMISES
[FLOOR PLAN]
EXHIBIT C