California-Rocklin-233 Technology Way Lease - Joseph H. Lackey and ICS Entertainment Inc.
EXECUTION COPY
LEASE AGREEMENT
THIS LEASE AGREEMENT (this "Lease"), is made as of this 21ST day of
September, 2005, by JOSEPH H. LACKEY, an individual residing in the state of
California ("Landlord"), and ICS ENTERTAINMENT, INC., a Delaware corporation
("Tenant").
FOR AND IN CONSIDERATION of the mutual covenants and conditions contained
herein, the parties hereto do hereby agree as follows:
1. BASIC LEASE INFORMATION. Each use of the terms capitalized and
defined in this Section 1 shall be deemed to refer to, and shall have the
respective meanings set forth in, this Section 1.
1.1 Location.
1.1.1 "Land" shall mean that certain parcel of land commonly
known as 233 Technology Way, Rocklin, California 95765.
1.1.2 "Building" shall mean the office building containing
approximately 90,000 rentable square feet located on the Land commonly known as
233 Technology Way, Rocklin, California 95765.
1.1.3 "Premises" shall mean that portion of Building located
on the 1st and 2nd floors of the Building, presently known as Suite Number 9
thereof.
1.1.4 "Project" shall mean the Land and all improvements
thereon, including, without limitation, the Building and all Common Areas.
1.1.5 "Rentable Area of Premises" shall mean 5760 rentable
square feet. The parties stipulate and agree that this square footage
measurement is conclusive for all purposes of this Lease. Notwithstanding the
foregoing, this measurement shall be subject to adjustment in the event of an
expansion of the Premises.
1.1.6 "Common Areas" shall mean those certain areas and
facilities of the Building that are from time to time provided by Landlord, in
its discretion, for the use of tenants of the Building and their employees,
clients, customers, licensees and invitees, or for use by the public, which
facilities and improvements might include any and all halls, corridors, elevator
foyers, vending areas, restrooms, electrical and telephone rooms, mechanical
rooms, janitorial areas and other similar facilities of the Building, and any
and all grounds, parks, landscaped areas, outside sitting areas, sidewalks,
walkways, pedestrian ways, loading docks, non-reserved parking areas, driveways
and generally all other improvements located on the Land and designed for use in
common by tenants, their employees, clients, customers, licensees and invitees.
1.2 Occupancy.
1.2.1 "Term" shall mean the approximately 27 month period
beginning on the Commencement Date and ending at 11:59 P.M. on the Lease
Expiration Date, unless this Lease is sooner terminated as provided herein.
1.2.2 "Commencement Date" shall mean September 21, 2005.
1.2.3 "Lease Expiration Date" shall mean December 31, 2007.
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1.2.4 "Lease Year" shall mean each twelve (12) month period
beginning on the Commencement Date; provided, however, if the Commencement Date
is not the first day of the month, the first Lease Year shall commence on the
Commencement Date and end on the last day of the twelfth (12th) month thereafter
and the second and each succeeding Lease Year shall commence on the first day of
the next calendar month.
1.3 Rent.
1.3.1 "Rent" shall mean Base Rent and Additional Rent due
from Tenant to Landlord hereunder.
1.3.2 "Base Rent" shall mean monthly installments of base
rent in the amounts set forth below:
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Month Monthly Base Rent
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Commencement Date through
December 31, 2005 $ 9,978.00
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January 1, 2006 -
December 31, 2006 $10,476.90
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January 1, 2007 -
December 31, 2007 $11,000.75
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1.3.3 "Additional Rent" shall mean all sums other than Base
Rent payable by Tenant to Landlord under this Lease, including Tenant's
Proportionate Share of CAM and Taxes.
1.4 "Tenant's Proportionate Share" shall equal a number calculated
by dividing the Rentable Area of Premises by the total rentable square footage
of the Building as set forth in Section 1.1.2 above.
1.5 "Tenant's Permitted Uses" shall mean any lawful purpose.
1.6 Addresses.
1.6.1 "Landlord's Address" shall mean:
Joseph Lackey
1.6.2 "Tenant's Address" shall mean:
ICS Entertainment, Inc.
680 North Lake Shore Drive
Chicago, Illinois 60611
Attention: Sue Shoemaker
Attention: Howard Shapiro, Esq.
1.7 "Rules and Regulations" shall mean the rules and regulations
set forth in Exhibit "A," attached hereto and incorporated herein by this
reference.
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1.8 Miscellaneous Definitions.
1.8.1 "Mortgage" shall mean any mortgage, deed of trust, deed
to secure debt, ground lease or other security instrument encumbering the
Premises, Building or Project.
1.8.2 "Mortgagee" shall mean any mortgagee, trustee, grantee,
ground lessor or other holder of a Mortgage.
1.8.5 "Tenant's Property" shall mean Tenant's movable
fixtures and movable partitions, telephone and other equipment, computer
systems, trade fixtures, inventory, furniture, furnishings and other items of
personal property.
1.8.6 "Prohibited Uses" shall mean the use of the Premises
for the purposes of storing, manufacturing, or selling any explosives,
flammables or other inherently dangerous substance, chemical or device.
1.8.7 "Legal Requirements" shall mean all present and future
federal, state and local laws, orders, statutes, requirements and ordinances,
all building, plumbing, electrical, fire and other codes and rules and
regulations of governmental entities, and any laws of like import, which are
applicable to the Premises, Building or Project, or the maintenance, use or
occupation thereof, including, the Americans with Disabilities Act (title "ADA")
and all regulations and orders promulgated pursuant to the ADA.
2. PREMISES AND TERM. Landlord hereby demises and leases the Premises
to Tenant and Tenant hereby accepts and leases the Premises from Landlord for
the Term. During the Term, Tenant shall have the right to use the Common Areas
in common with others and in accordance with this Lease and the Rules and
Regulations, including the non-exclusive use of not more than fourteen (14)
parking spaces located in the parking areas provided that Tenant shall not use
those parking spaces located directly in front of other tenant's leased
premises.
3. BASE RENT AND ADDITIONAL RENT.
3.1 Payment of Rent. Tenant shall pay to Landlord, without notice,
in lawful money of the United States of America, at Landlord's Address, or at
such other place as Landlord shall designate in writing from time to time: (a)
Base Rent, in equal monthly installments in advance on the first day of each
calendar month during the Term; and (b) Additional Rent, at the times and in the
amounts set forth in this Lease. If the Term of this Lease shall commence other
than on the first day of the month, or if the Term of this Lease shall end other
than on the last day of the month, the Base Rent for such month shall be
pro-rated at the then current monthly Base Rent and shall be payable, in the
case of termination hereof, in advance or the first day of the month in which
the termination of the Lease occurs.
3.2 Late Fees. All installments of Rent, and all other amounts of
money payable by Tenant to Landlord under this Lease, if not received by
Landlord within five (5) days after written notice, shall be subject to a late
fee equal to five percent (5%) of the amount past due.
3.3 Common Area Maintenance Charges. For the purposes of this
Lease, the term "CAM" shall mean all expenses and disbursements which Landlord
incurs in connection with the maintenance of the Common Areas, determined in
accordance with generally accepted accounting principles consistently applied,
including the following:
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3.3.1 All supplies and materials used in the operation,
maintenance, repair, replacement and security of the Building and Common Areas;
3.3.2 The cost of all electricity, water and other utilities
serving the Common Areas;
3.3.3 The cost of any insurance or insurance related expense
applicable to the Building and the Common Areas;
3.3.4 The cost of repairs and general maintenance of the
Common Areas (including light bulbs and glass breakage; the redecorating,
repainting, recarpeting and other such work in any Common Areas; trash removal;
janitorial service; basic HVAC maintenance; grounds maintenance; alarm services;
window cleaning; parking areas and landscaping), whether performed by Landlord
or pursuant to service or maintenance contracts with independent contractors;
There are specifically excluded from the definition of the term "CAM" expenses:
(a) for capital improvements made to the Building or Project except for items
which, though capital for accounting purposes, are properly considered routine
maintenance and repair items, such as painting of Common Areas and the like; (b)
for repair, replacement and general maintenance paid by proceeds of insurance or
by Tenant or other third parties and alterations or repairs attributable solely
to tenants of the Building other than Tenant; (c) for interest, amortization or
other payments on loans to Landlord; (d) for depreciation of the Building; (e)
for leasing commissions; (f) for legal expenses with respect to disputes with
individual tenants and negotiation of tenant leases; (g) for renovating or
otherwise improving space for particular occupants of the Building or vacant
space in the Building; (h) for federal income taxes imposed on or measured by
the income of Landlord from the operation of the Building; (i) the cost of
electric service to the premises of tenants (including Tenant), which electric
service shall be separately metered and paid directly by such tenants (including
Tenant).
3.4 Taxes. The term "Taxes" shall mean all real property taxes and
assessments, whether federal, state, county or municipal, attributable to the
Building and the Project (or their operation) (excluding, however, federal and
state taxes on income), and any expenses, including reasonable fees and
disbursements of attorneys, incurred by Landlord in contesting any taxes or
assessments of all or any part of the Project.
3.5 Payment of CAM and Taxes. Tenant shall pay as Additional Rent
for each Lease Year, Tenant's Proportionate Share CAM and Taxes as and when
specified below.
3.6 Estimates of CAM and Taxes. Prior to the actual determination
of CAM and Taxes for any Lease Year, Landlord may, if it so elects, estimate the
amount of such CAM and Taxes that will be paid or incurred in such year and
require Tenant to pay estimated CAM and Taxes on a quarterly basis throughout
the Lease year by giving Tenant written notice of the amount of such estimated
amounts and the amount of such estimate that will be due each quarter from
Tenant. Landlord shall then give Tenant a written bill for such estimated CAM
and Taxes no less than thirty (30) days prior to each quarterly due date. In
such event, Tenant shall, subsequent to receipt of such written notice, pay
quarterly Tenant's Proportionate Share of such excess at the same time and in
the same manner as Base Rent is due from Tenant hereunder.
3.7 Annual Reconciliation. An annual statement (the "Statement")
of CAM and Taxes shall be prepared by Landlord and provided to Tenant along with
reasonable supporting documentation for the amounts contained therein. If the
total amount Tenant actually paid for estimated CAM and Taxes is less than
Tenant's Proportionate Share of the Taxes, Tenant shall pay to Landlord as
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Additional Rent in one lump sum the difference between the total amount actually
paid by Tenant for Lease Year and the amount of Tenant's Proportionate Share of
CAM and Taxes; this lump sum payment shall be made within thirty (30) days after
receipt of the Statement; or if the total amount Tenant actually paid for CAM
and Taxes is more than Tenant's Proportionate Share of CAM and Taxes, then
Landlord shall, at its option: (a) credit such amount against the next monthly
installment of Rent; or (b) remit the excess to Tenant within thirty (30) days
after the issuance of the Statement. Landlord shall have the right to modify any
Statement after such Statement has been delivered to Tenant to correct any
errors or reflect any new information received by Landlord with respect to CAM
or Taxes shown on such Statement by delivery to Tenant of a revised statement
(the "Revised Statement"), and if such Revised Statement shows an amount due
from Tenant to Landlord, or a refund due from Landlord to Tenant, Tenant shall
pay, or Landlord shall refund, such additional amount in accordance with this
Section 3.7.
3.8 Prorations. If the Commencement Date is other than January 1
or if the Lease Expiration Date is other than December 31, Tenant's
Proportionate Share of Taxes for such year shall be prorated based upon a thirty
(30) day month. Even if the Term has expired, and Tenant has vacated the
Premises when the final determination is made of Tenant's Proportionate Share of
Taxes for the year in which this Lease expires, Tenant shall pay any increase
due over the estimated amount paid and conversely any overpayment made shall be
rebated by Landlord to Tenant, all as specified above. The provisions of Section
4 shall survive the expiration or earlier termination of this Lease.
4. USE OF PREMISES. Tenant shall use the Premises solely for Tenant's
Permitted Uses. Tenant shall not use the Premises for any Prohibited Uses or
illegal purpose, or violate any Legal Requirements, or do any act in or about
the Premises, or bring anything onto or in the Premises or the Building which
will in any way increase the rate of insurance on the Premises or the Building,
deface or injure the Premises or the Building or overload the floor of the
Premises.
5. COMPLIANCE WITH LAWS.
5.1 Landlord's Compliance. During the Term of this Lease, Landlord
shall comply with (or cause to be complied with) all Legal Requirements.
Landlord shall be responsible for making any modifications to the Project and
Building, including the Common Areas, required pursuant to any Legal
Requirements except as otherwise expressly stated herein. Unless Tenant is
responsible for such costs as set forth elsewhere in this Lease, the costs of
compliance with Legal Requirements by Landlord and any modifications to the
Project and/or the Building made by Landlord pursuant to the provisions of this
Section shall be at Landlord's expense.
5.2 Tenant's Compliance. Tenant shall comply with all Legal
Requirements regarding the Premises. In addition, Tenant shall be responsible
for making any modifications to the Premises if such modifications are necessary
to comply with any Legal Requirements that arise as a result of Tenant's
specific use of the Premises.
5.3 Mutual Indemnity. Landlord shall indemnity, defend and hold
Tenant harmless from and against any claims, losses or causes of action arising
out of Landlord's failure to comply with the provisions of Section 5.1 above.
Tenant shall indemnify, defend and hold Landlord harmless from and against any
claims, losses or causes of action arising out of Tenant's failure to comply
with the provisions of Section 5.2 above. The indemnities set forth in this
Section shall survive the expiration or earlier termination of this Lease.
6. STANDARD SERVICES TO TENANT. Landlord shall provide, as Landlord
reasonably deems necessary, subject to Legal Requirements and limitations
contained in any
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governmental controls now or hereafter imposed, or "Force Majeure" (as
hereinafter defined) and subject to cessation for reasonable necessity, the
following services:
6.1 HVAC. Heated and chilled water or other heating/cooling medium
to the Premises for use in the heat pump system installed in the Premises as
necessary within temperature ranges for normal office use.
6.2 Electricity. The Premises are equipped with a separate meter
to monitor the amount of electricity used to operate the lights and any
equipment, machinery or other items connected to the power outlets in the
Premises, as well as the HVAC system serving the Premises. The cost of all
electricity furnished to the Premises will be billed to Tenant directly from the
utility company furnishing such electricity. Tenant will not use any equipment
which in Landlord's reasonable opinion will overload the wiring installations or
interfere with the reasonable use thereof by other users in the Building.
6.3 Other Utilities. Tenant shall pay for all water, sewer, gas,
telephone and other service and utilities used by Tenant on the Premises unless
otherwise expressly agreed to in writing by Landlord. In the event that any such
utility to the Premises is not separately metered, Landlord shall pay the amount
due and separately invoice Tenant for Tenant's Proportionate Share of the
charges. Any such invoice shall including reasonable supporting documentation of
the charges set forth therein. Tenant shall reimburse Landlord for any such
amounts as Additional Rent within fifteen (15) days of the receipt of such an
invoice.
7. REPAIRS.
7.1 Repairs by Landlord. Landlord shall repair and maintain all
Common Areas of the Project and the structural portions of the Building,
including without limitation the roof, mechanical systems, basic plumbing, air
conditioning, heating and electrical systems, unless the condition requiring
such maintenance is caused by the willful act or gross negligence of Tenant, its
agents, servants, employees or invitees, in which case Tenant shall pay Landlord
the reasonable cost of such maintenance or repairs. Landlord shall have no
obligation to replace or repair Tenant's Property.
7.2 Repairs by Tenant. With the exception of those items set forth
in this Lease that are required to be repaired by Landlord, Tenant shall, at its
sole cost and expense, make all repairs which are reasonably necessary to keep
the Premises in good condition and repair, except for ordinary wear, loss by
fire or other casualty and Condemnation.
8. LANDLORD'S RIGHT TO ENTER PREMISES.
8.1 Landlord's Right to Enter to Make Repairs and Provide
Services. Landlord and its agents, employees and independent contractors shall
have the right to enter the Premises at any time in the event of an emergency
(in such event of emergency, Landlord shall have the right to use any means that
Landlord may deem reasonably necessary to open the doors in and to the
Premises), and at reasonable times during normal business hours upon at least
two (2) days prior written notice in all other cases to perform maintenance and
make repairs, additions, alterations and improvements that are required by this
Lease, to provide the services to be provided by Landlord under this Lease, to
post notices of non-responsibility (where applicable) and to inspect the
Premises to ascertain that Tenant is complying with all of its covenants and
obligations hereunder.
8.2 Condition of Entry. Landlord and its agents, employees, and
independent contractors agree to use reasonable efforts to minimize any
interference with Tenant's business caused by any entry pursuant to Section 8.1
above.
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9. ALTERATIONS.
9.1 Tenant's Alterations. Tenant may make alterations without
Landlord's consent in the case that those alterations: (a) are decorative; (b)
are not structural, excluding alterations to walls, windows and doors; (c) cost
less than Ten Thousand and 00/100 Dollars ($10,000) per project. All other
alterations to the Premises shall be made with the consent of Landlord, which
consent shall not be unreasonably withheld, conditioned or delayed.
9.2 Manner of Alterations. All alterations shall be performed: (a)
in a good and workmanlike manner and free from defects and (b) in compliance
with all Legal Requirements, the terms of this Lease and all construction
procedures and regulations then prescribed by Landlord.
9.3 Removal of Tenant's Property. Tenant's Property shall remain
the property of Tenant and Tenant may remove the same at any time on or before
the Lease Expiration Date. To the extent requested by Landlord at least 30 days
prior to the Lease Expiration Date, Tenant shall remove any alterations
performed by Tenant from the Premises on or before the Lease Expiration Date,
ordinary wear and tear excepted. Tenant shall repair and restore, in a good and
workmanlike manner, any damage to the Premises or the Building caused by
Tenant's removal of any alterations or Tenant's Property, and, upon default
thereof, Tenant shall reimburse Landlord for Landlord's cost of repairing and
restoring such damage. Any alterations or Tenant's Property not so removed shall
be deemed abandoned, and Landlord may remove and dispose of same in any manner
it deems proper, in its sole discretion, and repair and restore any damage
caused thereby, at Tenant's cost. Tenant's obligations under this Section 9.3
shall survive the expiration or earlier termination of this Lease.
10. ASSIGNMENT AND SUBLETTING. Tenant shall not assign, sublet, mortgage
or otherwise encumber this Lease, without the prior written consent of Landlord
in each instance, which consent shall not be unreasonably withheld, delayed or
conditioned. The consent by Landlord to an assignment shall not be construed to
relieve Tenant from obtaining the consent of the Landlord to any further
assignment. Notwithstanding anything to the contrary contained within this
Section 10, Tenant may assign this Lease or sublet all or a portion of the
Premises without Landlord's prior written consent (a) to any corporation with
which Tenant is merged or consolidated, (b) to any person, corporation or other
entity to which substantially all of Tenant's assets or common stock are
transferred or (c) to any person, corporation, or other entity that controls, or
is controlled by, or is under common control with Tenant.
11. EMINENT DOMAIN.
11.1 Condemnation of Building. In the event the whole or
substantially the whole of the Building or the Premises are taken or condemned
by eminent domain or by any conveyance in lieu thereof (such taking,
condemnation or conveyance in lieu thereof being hereinafter referred to as
"Condemnation"), the Term shall cease and this Lease shall terminate on the
earlier of the date the condemning authority takes possession or the date title
vests in the condemning authority.
11.2 Inability to Restore. In the event any portion of the Building
shall be taken by Condemnation (whether or not such taking includes any portion
of the Premises), which taking, in Landlord's reasonable judgment, is such that
the Building cannot be restored in an economically feasible manner for use
substantially as originally designed, then Landlord shall have the right, at
Landlord's option, to terminate this Lease, effective as of the date specified
by Landlord in a written notice of termination from Landlord to Tenant.
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11.3 Condemnation of Premises. In the event that a portion, but
less than substantially the whole, of the Premises shall be taken by
Condemnation, then this Lease shall be terminated as of the date of such
Condemnation as to the portion of the Premises so taken, and, unless Landlord
exercises its option to terminate this Lease pursuant to Section 11.2, this
Lease shall remain in full force and effect as to the remainder of the Premises.
If a Condemnation shall result in a taking of less than all of the Project, and
in Tenant's reasonable judgment such Condemnation shall render the Premises
untenantable or unsuitable for Tenant's current use of the Premises (including
as to the availability of adequate parking for Tenant's use of the Premises),
Tenant shall have the right to terminate this Lease forthwith upon written
notice to Landlord given no later than thirty (30) days after the date such
Condemnation occurred. In the event of such a termination, all Base Rent paid in
advance shall be apportioned as of the date the Condemnation occurred and
refunded to Tenant, as appropriate. All amounts due for Taxes shall be
apportioned as of the date the Condemnation occurred.
11.4 Apportionment of Rent. In the event of termination of this
Lease pursuant to the provisions of Section 11.1 or Section 11.2, the Rent shall
be apportioned as of such date of termination; provided, however, that those
provisions of this Lease which are designated to cover matters of termination
and the period thereafter shall survive the termination hereof.
11.5 Award. All compensation awarded or paid upon a Condemnation of
any portion of the Project shall belong to and be the property of Landlord
without participation by Tenant, Nothing herein shall be construed, however, to
preclude Tenant from prosecuting any claim directly against the condemning
authority for moving expenses and damage to, and cost of removal of, Tenant's
Property.
12. DESTRUCTION OR DAMAGE TO PREMISES OR BUILDING.
12.1 Tenant's Termination Right. If the Premises are damaged by
fire, casualty or structural defect so that the Premises, in Tenant's reasonable
judgment, cannot be used of Tenant's current or intended use thereof, or if the
Building shall be partially damaged that Tenant is deprived of reasonable access
to the Premises or as a result of the damage or any other occurrence which is
beyond Tenant's reasonable control renders the Premises, or any appurtenance
thereto, inoperable or unfit for Tenant's occupancy or current or intended use
in whole or in part, then Tenant shall have the right to terminate this Lease by
giving notice (the "Termination Notice") to Landlord not later than ninety (90)
days following the date that the damage occurred. If Tenant delivers a
Termination Notice, this Lease shall be deemed to have terminated in the manner
set forth in Section 12.3 below.
12.2 Restoration. If the Premises are damaged by fire or other
casualty, or if the Building and the Tenant does not elect to terminate the
Lease pursuant to Section 12.1 above, the damage shall be repaired by Landlord,
at Landlord's cost, to substantially the condition of the Premises prior to the
damage. Until the restoration of the Premises is substantially completed or
would have been substantially completed but for delays caused by Tenant, the
Rent shall be reduced beginning on the date the damage occurred in the
proportion by which the area of the part of the Premises which is not usable (or
accessible) and is not used by Tenant bears to the Rentable Area of Premises.
12.3 Effect of Termination. If this Lease is terminated by Tenant
pursuant to Section 12.1 above: (a) the Term shall expire upon the thirtieth
(30th) day after notice of such termination is given; (b) Tenant shall vacate
the Premises and surrender the same to Landlord; (c) Tenant's liability for Rent
shall cease as of the date of the damage; (d) any prepaid Rent for any period
after the date of the damage shall be promptly refunded by Landlord to Tenant;
and (e) those provisions of this Lease which are expressly stated to survive
expiration or earlier termination of this Lease shall survive.
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13. INDEMNIFICATION.
13.1 Tenant's Indemnity. Except as to property damage covered by
the waiver of subrogation set forth in Section 14.4 of this Lease, Tenant hereby
indemnifies Landlord from, and agrees to hold Landlord harmless against, any and
all liability for any loss, injury or damage (collectively, a "Loss") incurred
by Landlord, including, without limitation, all costs, expenses, court costs and
reasonable attorneys' fees imposed on Landlord by any person whomsoever, caused
by or resulting from the gross negligence or willful misconduct of Tenant, its
employees, agents or contractors as it pertains to the Premises.
13.2 Landlord's Indemnity. Except as to property damage covered by
the waiver of subrogation set forth in Section 14.4 of this Lease, Landlord
hereby indemnifies Tenant from, and agrees to hold Tenant harmless against, any
and all Losses incurred by Tenant, caused by or resulting from the gross
negligence or willful misconduct of Landlord or its employees, agents or
contractors.
13.3 Survival of Indemnities. The provisions of this Section 13
shall survive the expiration or earlier termination of this Lease.
14. INSURANCE.
14.1 Landlord's Insurance. Landlord shall obtain and keep in force
during the Term of this Lease the following insurance:
14.1.1 An insurance policy or policies of Special Form (all
risk) coverage, covering loss or damage to the Project and the Common Areas, as
well as all improvements thereto, and the structural improvements to the
Premises.
14.1.2 Commercial General Liability Insurance pertaining to
the Project and the Common Areas, and bodily injuries, death and property damage
arising or occurring therein.
14.1.3 Such other insurance in such amounts and with such
policy provisions as it shall deem necessary or appropriate.
14.2 Tenant's Insurance. During the Term of this Lease, Tenant, at
its sole cost and expense, shall carry and maintain the following occurrence
policies of insurance unless with insurance companies licensed or authorized to
do business in the State in which the Premises are located, insuring Landlord
and Tenant and any Mortgagee, if requested by Landlord, and shall deliver to
Landlord a certificate of insurance evidencing such coverage both prior to
taking possession of the Premises and annually thereafter.
14.2.1 Property insurance covering Tenant's Property located
in the Premises in an amount determined by Tenant of all items.
14.2.2 Commercial General Liability Insurance with limits of
no less than $1,000,000 combined single limit coverage of bodily injury,
property damage or combination thereof.
The Commercial General Liability Insurance shall name Landlord and Mortgagee, if
any, as additional insureds. All insurance required by this Section 14.2 shall
provide for ten (10) days' prior written notice to Landlord before any
modification or termination of said insurance.
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14.3 Increased Insurance Costs. Tenant shall reimburse Landlord for
any increase in the cost of any of Landlord's insurance pertaining to the
Project if said increase is caused by or results from Tenant's use or occupancy
of the Premises, the breach of this Lease by Tenant or the acts, omissions or
gross negligence of Tenant, its employees, officers, agents or contractors.
14.4 Waiver of Subrogation. Landlord and Tenant shall each have
included in all policies of property insurance, obtained by them covering the
Premises, the Building and contents therein, a waiver by the insurer of all
right of subrogation against the other in connection with any loss or damage
thereby insured against. Any additional premium for such waiver shall be paid by
the primary insured. To the full extent permitted by law, Landlord and Tenant
each waives all right of recovery against the other (and any officers,
directors, partners, employees, agents and representatives of the other), and
agrees to release the other from liability, for loss or damage to the extent
such loss or damage is covered by valid insurance, in effect covering the party
seeking recovery at the time of such loss or damage or would be covered by the
insurance required to be maintained under this Lease by the party seeking
recovery. If the release of either party, as set forth above, should contravene
any law with respect to exculpatory agreements, the liability of the party in
question shall be deemed not released but shall be secondary to the liability of
the other's insurer.
14.5 Evidence of Insurance. On or before the Commencement Date and,
thereafter, prior to the expiration of the insurance policy in question, Tenant
shall deliver to Landlord a certificate of insurance issued by the insurer or
its agent, together with evidence satisfactory to Landlord of the payment of all
premiums for such policy, as to each policy of insurance required to be
maintained by Tenant under this Lease.
15. SUBORDINATION AND ATTORNMENT. This Lease is subject and subordinate
to the lien or security title of any presently existing or hereafter created
Mortgage, and to all existing recorded restrictions, covenants, easements and
agreements with respect to the Project, or any part thereof, and all renewals,
extensions, amendments, modifications and restatements thereof. The
subordination created hereby is self-operative and no further instrument shall
be required to effect such subordination of this Lease. Nevertheless, Tenant
agrees to execute such documents as Landlord may reasonably request to evidence
and memorialize such subordination. If the interest of Landlord under this Lease
shall be transferred by reason of exercise of a power of sale, foreclosure or
other proceeding for enforcement of any Mortgage, Tenant shall be bound to the
transferee (hereinafter referred to as the "Purchaser"), at the option of the
Purchaser, under the terms, covenants and conditions of this Lease for the
balance of the Term remaining, and any extensions or renewals, with the same
force and effect as if the Purchaser were the "landlord" hereunder, and, if
requested by the Purchaser, Tenant shall attorn to such Purchaser and agrees to
be bound and obligated hereunder to the Purchaser as the "landlord" under this
Lease. The foregoing provisions are self-operative and require no further
instruments to give effect thereto; provided, however, that Tenant shall
promptly execute and deliver any instrument that such Purchaser may reasonably
request: (a) evidencing such attornment; (b) setting forth the terms and
conditions of Tenant's tenancy; and (c) containing such other terms and
conditions as may be required by such Purchaser, provided such terms and
conditions do not increase the Rent of otherwise increase or adversely affect
Tenant's obligations hereunder or adversely affect Tenant's rights under this
Lease.
16. DEFAULT. The occurrence of any of the following shall constitute an
event of default hereunder by Tenant (each, an "Event of Default");
16.1 Failure to Pay Rent. The Rent payable under this Lease
(including any Additional Rent) or any sum of money due hereunder is not paid
when due, and such failure to pay continues for more than fifteen (15) days
after written notice thereof from Landlord to Tenant
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16.2 Other Defaults. Tenant fails to observe, perform and keep each
and every one of the other covenants, agreements, provisions, stipulations and
conditions contained in this Lease to be observed, performed and kept by Tenant,
including, without limitation, the Rules and Regulations, and, unless otherwise
specified herein, such failure continues for thirty (30) days after notice from
Landlord to Tenant requiring that Tenant correct such failure; provided,
however, that in the event any such failure is not reasonably susceptible of
cure within such thirty (30) day period, Tenant shall have a reasonable time to
cure such failure, provided Tenant commences cure as soon as is reasonably
possible, and prosecutes such cure diligently to completion.
17. REMEDIES.
17.1 Landlord's Remedies. Upon the occurrence and during the
continuance of an Event of Default, Landlord may terminate this Lease by notice
in writing to Tenant (such termination to be effective forthwith, or on a later
date stated in said notice, if any), and if possession of the Premises is not
surrendered by Tenant, Landlord may enter into and upon the Premises or any part
thereof in the name of the whole and repossess the same. In addition to the
foregoing remedies, Landlord shall have any other right or remedy available to
Landlord on the account of any Event of Default that has occurred and is
continuing to the extent that such other remedies as are available at law or in
equity. The exercise by Landlord of any one or more of the rights and remedies
provided in this Lease shall not prevent the subsequent exercise by Landlord of
one or more of the other rights and remedies herein provided. Notwithstanding
anything to the contrary provided herein, Landlord shall use reasonable efforts
to mitigate any damages its suffers as a result of the occurrence and
continuance of an Event of Default hereunder.
17.2 Survival. The foregoing provisions of this Section 17 shall
survive the expiration or earlier termination of this Lease and shall apply to
any renewal or extension of this Lease.
18. QUIET ENJOYMENT. Landlord covenants that it has the full right and
authority to enter into this Lease and that Tenant, while paying Rent and
performing its other covenants and agreements contained in this Lease, shall
peaceably and quietly have, hold and enjoy the Premises for the Term without
hindrance or disturbance from Landlord, subject to the terms and provisions of
this Lease.
19. SURRENDER OF PREMISES. At the expiration or any earlier termination
of this Lease, Tenant shall peacefully vacate and surrender the Premises and
keys thereto to Landlord in good order, broom clean and in the same condition as
at commencement of the Term (including the removal of any alterations in
accordance with the provisions of Section 9.3), ordinary wear and tear, loss by
fire or other casualty and Condemnation excepted.
20. HOLDING OVER. Should Tenant continue to hold the Premises after the
expiration or earlier termination of this Lease, such holding over, unless
otherwise agreed to by Landlord in writing, shall constitute and be construed as
a tenancy at sufferance and not a tenancy at will, at monthly installments of
Rent equal to one hundred fifty percent (150%) of the monthly portion of Base
Rent in effect as of the Lease Expiration Date or date of earlier termination,
as the case may be, and, subject to all of the other terms, charges and expenses
set forth herein. No holding over by Tenant, whether with or without consent of
Landlord, shall operate to extend or renew the Term except as otherwise
expressly provided in a written agreement executed by both Landlord and Tenant.
The provisions of this Section 20 shall survive the expiration or earlier
termination of this Lease.
21. NOTICES. Except for legal process, which may also be served as by
law provided any notice or communication required or permitted hereunder shall
be in writing and shall be sent either by: (a) personal delivery service with
charges therefor billed to shipper; (b) nationally recognized overnight
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delivery service (such as Federal Express, United Parcel Service, Airborne,
etc.) with charges therefor billed to shipper, or (c) United States Mail,
postage prepaid, registered or certified mail, return receipt requested. Any
notice or communication sent as above provided shall be deemed given or
delivered: (i) upon receipt, if personally delivered (provided delivery is
confirmed by the courier delivery service); (ii) on the date of delivery by any
nationally recognized overnight delivery service; or (iii) if sent by United
States Mail, on the date appearing on the return receipt therefor, or if there
is no date on such return receipt, the receipt date shall be presumed to be the
postmark date appearing on such return receipt. Any notice or communication
which cannot be delivered because of failure to provide notice of a change of
address as herein provided or for which delivery is refused shall be deemed to
have been given and received on the date of attempted delivery. Any notice or
communication required or permitted hereunder shall be addressed to Landlord at
Landlord's Address and to Tenant at Tenant's Address, or at such other addresses
as Landlord or Tenant may have designated by notice to the other given as
provided above.
22. AGENCY DISCLOSURE.
22.1 Brokers. Landlord and Tenant each represent and warrant that
there are no claims for brokerage commissions or finder's fees in connection
with the execution of this Lease and each of the parties agrees to indemnify the
other against and hold it harmless from all liabilities arising from any such
claim (including without limitations, the cost of counsel fees in connection
therewith) of any broker engaged by such party.
22.2 Survival. The provisions of this Section 22 shall survive the
expiration or earlier termination of this Lease.
23. TAXES PAYABLE BY TENANT. Tenant covenants and agrees to be liable
for and pay in a timely manner all taxes and assessments levied or assessed
against Tenant's Property.
24. SIGNAGE. Landlord agrees that Tenant's name shall be initially
listed on the Building directory at no cost or expense to Tenant. Tenant shall
not place any signs, decals or other materials upon the windows or suite doors
of the Premises, nor on the exterior walls of the Premises without the prior
written consent of Landlord, not to be unreasonably, withheld, conditioned or
delayed.
25. AUTHORITY. Landlord and Tenant each hereby represent to the other
party that it has capacity and authority to enter into this Lease.
26. RULES AND REGULATIONS. Landlord may hereafter, from time to time,
adopt and promulgate additional rules and regulations for the government and
management of the Building as Landlord may reasonably determine to be necessary
and all such additional rules and regulations shall be deemed to be part of the
Rules and Regulations. During the Term of this Lease, Tenant shall at all times
comply with the Rules and Regulations and shall ensure compliance with the Rules
and Regulations by Tenant's employees, agents, contractors, customers and
visitors. Landlord agrees that all such Rules and Regulations shall be
non-discriminatory in substance and in application to the tenants of the
Building. In the case of any conflict between the Rules and Regulations
established by Landlord and this Lease, the provisions of this Lease shall
control. Landlord hereby represents and warrants that the prior tenant of the
Premises, Internet Commerce Services, Inc., was in compliance at all times with
the Rules and Regulations.
27. MISCELLANEOUS.
27.1 Landlord and Tenant. "Landlord" as used in this Lease shall
include the first party named in this Lease, and its representatives, assigns
and successors in title to the Premises.
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"Tenant" shall include the second party named in this Lease, and his, hers or
its heirs and representatives, and if this Lease shall be validly assigned or
sublet, shall include also Tenant's assignees or subtenants, as to the portion
of the Premises covered by such assignment or sublease.
27.2 Terminology. Words of any gender used in this Lease shall be
held and construed to include any other gender and words in the singular number
shall be held to include the plural, unless the context otherwise requires.
27.3 Successors. The terms, provisions, covenants and conditions
contained in this Lease shall apply to, inure to the benefit of and be binding
upon the parties hereto and upon their respective heirs, legal representatives,
successors and permitted assigns.
27.4 Captions. The captions inserted in this Lease are for
convenience only and in no way define, limit or otherwise describe the scope or
intent of this Lease, or any provision hereof, or in any way affect the
interpretation of this Lease.
27.5 No Modification. This Lease may not be altered, changed or
amended except by an instrument in writing signed by both parties hereto.
27.6 Severability. If any clause or provision of this Lease is
illegal, invalid or unenforceable under present or future Legal Requirements
effective during the Term, then and in that event it is the intention of the
parties hereto that the remainder of this Lease shall not be affected thereby,
and it is also the intention of the parties to this Lease that, in lieu of each
clause or provision of this Lease that is illegal, invalid or unenforceable,
there be added as a part of this Lease contract a clause or provision as
similar in terms to such illegal, invalid or unenforceable clause or provision
as may be possible and that is legal, valid and enforceable.
27.7 Time of Essence. Time is of the essence of this Lease and all
of its provisions.
27.8 Entire Agreement. This Lease and the Exhibits attached hereto
set forth the entire agreement between the parties and all prior negotiations,
arrangements, brochures, agreements and understandings, if any, between Landlord
and Tenant regarding the subject matter of this Lease.
27.9 Governing Law. This Lease shall be governed by and construed
under the laws of the State of California. Should any provision of this Lease
require judicial interpretation, Landlord and Tenant hereby agree and stipulate
that the court interpreting or considering same shall not apply the presumption
that the terms hereof shall be more strictly construed against a party by reason
of any rule or conclusion that a document should be construed more strictly
against the party who itself or through its agent prepared the same, it being
agreed that all parties hereto have participated in the preparation of this
Lease and that each party had full opportunity to consult legal counsel of its
choice before the execution of this Lease.
27.10 No Waiver. No Event of Default or provision of this Lease
shall be deemed to have been waived by Landlord unless such waiver is in writing
and signed by Landlord. No custom or practice which may develop between the
parties in connection with the terms of this Lease shall be construed to waive
or lessen Landlord's right to insist upon strict performance of the terms of
this Lease without a written notice thereof to Tenant.
27.11 Force Majeure. Whenever a period of time is herein prescribed
for action to be taken by Landlord or Tenant, the applicable party shall not be
liable or responsible for, and there shall be excluded from the computation for
any such period of time, any delays due to "Force Majeure," which
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term shall include strikes, riots, acts of God, war, terrorism, bioterrorism or
governmental laws, regulations and restrictions, or any other cause of any kind
whatsoever which is beyond the reasonable control of such party.
27.12 Memorandum of Lease. At the request of either party, a
memorandum of lease with respect to this Lease will be recorded, at the
requesting party's expense, in the office of the recorder for Placer County,
California for the purpose of giving record notice of the existence and term of
this Lease.
27.14 Performance of Landlord's Obligations. If Landlord fails to
perform its obligations and covenants hereunder, and if such failure to perform
continues for fifteen (15) days after written notice from Tenant to Landlord,
Tenant may, but shall not be obligated to, perform such obligations and Landlord
shall reimburse Tenant for any expenditures of Tenant related to such
performance within ten (10) days of receipt of an invoice from Tenant for the
same. Until Landlord fully reimburses Tenant for such expenditures, Tenant may
setoff such costs against any Rent payable under this Lease until Tenant shall
have fully recovered its expenditures relating to such performance.
27.15 Interest. Any amounts past due under this Lease to Landlord or
Tenant that remain past due for more than ten (10) days after written notice to
the delinquent party indicating that such amounts are past due shall accrue
interest at a rate equal to the lesser of twelve percent (12%) per annum or the
highest interest rate then permitted under applicable law. The delinquent party
shall pay such interest charges along with the payment of the past-due amount.
27.16 Estoppel Certificate. Upon Landlord's request, Tenant shall
execute and deliver to Landlord, within fifteen (15) days after Tenant's receipt
of such request a statement in writing, in a form generally consistent with the
requirements of institutional lenders and prudent purchasers, certifying: (i)
that this Lease is in full force and effect and unmodified (or, if there have
been modifications, that the same is in full force and effect as modified and
stating the modifications); (ii) the dates to which the Rent has been paid;
(iii) that, to the knowledge of Tenant, Landlord is not then in default under
this Lease; and (iv) such other matters as may be reasonably requested by
Landlord.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have hereunto set their hands and seals
the day and year first above written.
TENANT:
ICS ENTERTAINMENT, INC.,
a Delaware corporation
By: /s/ ICS Entertainment, Inc.
---------------------------------
Name:
Title:
LANDLORD:
JOSEPH H. LACKEY, an individual
residing in the state of California
By: _________________________________
Joseph H. Lackey
[Signature Page to Rocklin Lease]
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals
the day and year first above written.
TENANT:
ICS ENTERTAINMENT, INC.,
a Delaware corporation
By: /s/ ICS Entertainment, Inc.
---------------------------------
Name:
Title:
LANDLORD:
JOSEPH H. LACKEY, an individual
residing in the state of California
By: /s/ Joseph H. Lackey
---------------------------------
Joseph H. Lackey
[Signature Page to Rocklin Lease]
<PAGE>
EXHIBIT "A"
RULES AND REGULATIONS
To be provided to Tenant by Landlord within three (3) days of the Commencement
Date.