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LEASE AGREEMENT
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LANDLORD
KYUNG PARK AND BANG PARK
AND
TENANT
MEGAMEDIA NETWORKS, INC.
- Third Floor -
LEASE AGREEMENT
THIS LEASE was entered into effective the ___ day of June, 1999, by and
between KYUNG PARK and BANG PARK, his wife ("Landlord") and MEGAMEDIA NETWORKS,
INC., a Florida Corporation ("Tenant"). In consideration of the obligation of
Tenant to pay rent as herein provided and in consideration of the terms,
covenants, and conditions of this agreement, Landlord leases to Tenant, and
Tenant takes from Landlord the Premises for the Term as provided below.
ARTICLE I
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DEFINITIONS AND ENUMERATION OF EXHIBITS
1.1 DEFINITIONS. In addition to other terms which are defined in this
lease, the following terms shall have the meanings and only such meanings,
unless such meanings are expressly limited or expanded elsewhere in this
agreement:
(a) BUILDING. (i) The real estate depicted or described on Exhibit "A",
(ii) such contiguous real estate as Landlord may from time to time designate in
writing as being included in Building, (iii) the buildings and improvements
constructed on such real estate together with all alterations and additions, and
(iv) such improvements as may be constructed on such real estate after the
Rental Commencement Date.
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(b) THE PREMISES. That portion of Building which is outlined on the
floor plan or plans, marked Exhibit "B". The Premises are deemed to contain
approximately 3663 square feet of Gross Rentable Area being the Third floor of
the existing building, but reserving and excepting to Landlord the use of the
roof and exterior walls and the right to install, maintain, use, repair and
replace pipes, ducts, conduits, wires and appurtenant fixtures, leading through
the Premises in locations which will not materially interfere with Tenant's use
thereof. The parties accept the above computation as the actual size of the
premises and waive any right to seek adjustments if it is subsequently
determined to be incorrect.
Tenant has an option to add the second floor of the building to the
Premises. This option shall expire on August 10, 1999. Tenant may exercise the
option by notifying Landlord in writing prior to the expiration date and
tendering therewith the security deposit of $3,000.00 and the first months rent
together with prorated rent for any partial month.
(c) READY FOR OCCUPANCY. The Premises are accepted "as is" and are
therefore ready for occupancy by Tenant, subject to completion of any
improvements by Tenant for its benefit. Tenant may take occupancy upon execution
of this lease and payment of the required deposit.
(d) RENTAL COMMENCEMENT DATE. The rental commencement date shall be
June 14, 1999.
(e) LEASE TERM. June 4, 1999 until May 30, 2002, unless extended
pursuant to the option to extend for the term of two (2) years as provided
below.
(f) MINIMUM GUARANTEE RENTAL. The Base Rent provided herein.
(g) ADVANCED DEPOSIT. One month's rent of $4,273.50 plus $256.41 sales
tax paid with execution of the Lease (to be applied to the first obligations
that accrue hereunder).
(h) SECURITY DEPOSIT. $5,000.00. Additional $3,000.00 if option to add
second floor is exercised.
(i) TENANT'S WORK. Not Applicable.
(j) LANDLORD'S WORK. None.
(k) LANDLORD'S MAILING ADDRESS:
KYUNG and BANG PARK
21 South Orange Avenue
Orlando, Florida 32801
Or such other address as Landlord designates to Tenant in writing.
(l) TENANT'S MAILING ADDRESS:
MEGAMEDIA NETWORK, INC.
ATTN: WILLIAM MOBLEY
829 Hickory Hill Court
Orlando, Fl 32828
Or such other address as Tenant designates in writing to Landlord.
(m) USE OF PREMISES. The Premises may be used only for a business
office.
(n) LANDLORD'S CONTRIBUTION TO TENANT'S WORK. None.
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(o) COMMON AREAS. Those areas of the Building which are from time to
time for joint use by the tenants of Building or by the public including,
without limiting the generality of the elevator, fire escapes, delivery
passages, walkways, backyard and landscaped areas which are not leased to or
reserved for individual tenants.
(p) GROSS RENTABLE AREA. Floor area designed for tenant occupancy and
exclusive use which is the third floor of the Building and will include the
second floor if the Tenant exercises the option to include it in the Premises.
(q) ASSESSMENT PERCENTAGE. 36%. This percentage is intended to
represent Tenant's Premises proportionate size of the Gross Rental Area of the
Building. The parties agree to use
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this percentage even if there are minor variations from the actual number. If
the Tenant exercises the option to include the second floor in the Premises the
total Assessment Percentage shall increase by 28% and total 64%.
(r) LEASE YEAR. The Term "Lease Year" shall mean, in the case of the
first Lease Year, that period from the Rental Commencement Date to the first
succeeding December 31; thereafter, "Lease Year" shall mean each successive
twelve (12) calendar month period following the expiration of the first Lease
Year, in each case commencing on January 1 and ending the next succeeding
December 31, except that in the event of the termination of this lease on any
day other than December 31, then the last Lease Year shall be the period from
the end of the preceding Lease Year to such date of termination.
(s) LIABILITY INSURANCE LIMITS. $1,000,000 with respect to injuries to
or death of any one person and $1,000,000.00 with respect to any one occurrence
and $500,000.00 with respect to property damage or a combined single limit of
$2,000,000.00. Limits are subject to adjustment as provided in this Lease.
1.2 EXHIBITS. The exhibits enumerated in this section (if used) and
attached to this lease are incorporated in this lease by this reference and are
to be construed as a part of this lease.
(a) EXHIBIT "A". Building.
(b) EXHIBIT "B". General Floor area plan of Premises and building
containing Premises.
(c) EXHIBIT "C". (DELETED)
(d) EXHIBIT "D". Rules and Regulations. (None at this time).
(e) EXHIBIT "E". Guarantee.
(f) EXHIBIT "F". (NONE)
ARTICLE II
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CONSTRUCTION, ACCEPTANCE AND FINANCING OF PREMISES
2.1 LANDLORD'S CONSTRUCTION. The Landlord's work has been completed and
the Premises are accepted by the Tenant "as is".
2.2 TENANT'S PLANS. Tenant agrees to submit to Landlord the date of
this Lease, plans and specifications in such detail as Landlord may reasonably
for work which Tenant proposes to do on the Premises. Such plans and
specifications shall comply with all requirements as set forth herein. Tenant
shall not commence work on the Premises until Landlord has approved such plans
and specifications in writing, which approval shall not be unreasonably withheld
or delayed.
<PAGE>
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2.3 TENANT'S WORK. Tenant agrees to proceed with due diligence to
perform the work described in such plans and specifications which have been
approved by Landlord, and to install its fixtures, furniture and equipment on
the Premises. By occupying the Premises, Tenant shall be deemed to have
acknowledged that the Landlord has complied with all of its covenants and
obligations with respect to the construction of the Premises, except for defects
in Landlord's work which are latent at the time the Premises are occupied. In
the event of any dispute concerning work performed or required to be performed
in the Premises by Landlord or Tenant, the matter in dispute shall be submitted
to Landlord's architect for determination and his certificate with respect
thereto shall be binding on Landlord and Tenant. Tenant will pay all impact
fees, permitting costs and other charges associated with the construction and
opening of the Premises for business.
2.4 OCCUPANCY. (Deleted)
2.5 LEASE MODIFICATION. (Deleted)
2.6 SITE MODIFICATIONS. Landlord may do any one or more of the
following with respect to the Building and the Common Areas provided that
reasonable access to the Premises shall not be materially impaired: (i)
construct alterations and signs; (ii) construct additions thereto; (iii) connect
to then-existing buildings.
ARTICLE III
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TERM AND OPTION TO EXTEND
3.1 INITIAL TERM. The Initial Term shall run from the Rental
Commencement Date until May 30, 2002.
3.2 OPTION TO EXTEND. Tenant shall have the option to extend the Term
for two (2) years, upon the same terms and conditions as in effect immediately
prior to each extension except that the monthly Base Rent shall be the amount
established below. The option to renew shall be deemed waived unless Tenant
notifies Landlord in writing at least one hundred and twenty (120) days before
the expiration of the existing Term.
Conditions to the valid exercise of the renewal term are: Tenant shall
not be in default hereunder beyond any applicable period to cure (a) at the time
of exercise of the option through commencement of the renewal term, or (b) more
than once during any twelve (12) month period prior to the exercise date.
3.3 HOLDING OVER. If Tenant continues in possession of the Premises
after expiration of the Term without the written consent of Landlord, Tenant
shall be deemed a tenant at sufferance. Landlord's acceptance of payments from
Tenant during any such holdover shall not convert Tenant's occupancy to anything
other that a tenancy at sufferance, nor shall it be deemed to renew the term of
this Lease. During any such tenancy at sufferance, Tenant shall pay during each
month of the period of Tenant's holdover double the Monthly Base Rental charged
Tenant during the month immediately preceding the expiration or termination of
this Lease.
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Alternatively, at the election of Landlord expressed in written notice to
Tenant, and not otherwise, Tenant's retention of possession after the
termination hereof shall constitute a renewal of this Lease for one year at the
annual Base Rental that would have been in effect for and additional year; but
acceptance by Landlord of rent after termination shall not of itself constitute
a renewal. If Tenant continues in possession of the Premises after the
expiration of the term of this Lease with the prior written consent of Landlord
Tenant shall become a tenant at will of the Premises. In that event, either
<PAGE>
party may terminate such tenancy by giving thirty (30) days prior written notice
to the other party of such termination. All terms of this Lease, so far as
applicable shall govern Tenant's occupancy as a Tenant at will, except that the
Base Monthly Rental for such tenancy shall be at a rate equal to 200% of the
Base Monthly Rental paid by Tenant at the time of the expiration hereof. This
provision shall not be construed to confer any rights whatsoever on Tenant to
hold over without written consent of Landlord.
ARTICLE IV
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RENT
4.1 BASE RENT. Tenant shall pay to the Landlord the rent in equal
monthly installments in advance on the first day of each month. The Base Rent
for the Term is as follows:
(a) June 1, 1999 through and including May 30, 2000
$4,273.50 per month
(b) June 1, 2000 through and including May 30, 2001
$4,578.75 per month
(c) June 1, 2001 through and including May 30, 2002
$4,884.00 per month
If the Tenant exercises the option to acquire the second floor then the
following additional rent shall be due:
(a) Date option is exercised through and including May 30, 2000
$2,367.50 per month
(b) June 1, 2000 through and including May 30, 2001
$2,604.25 per month
(c) June 1, 2001 through and including May 30, 2002
$2,841 .00 per month
If the Tenant exercises the option to extend the Term, for Lease Years
commencing with 2002, the Base Rent shall be adjusted in, and effective for,
January of each Lease Year by increasing, never decreasing, the previous Lease
Year's monthly rent by the percentage increase in the "Consumer Price Index" as
published by the Bureau of Labor Statistics of the United States Department of
Labor with adjustments being determined by using as a basis the index number for
the then last preceding October, compared to the same index for the month
preceding the Rental Commencement Date of this Lease. For example, Base Rent for
2002 shall be computed by comparing the index for December, 2001 with the index
for December, 1999.
NOTE: Notwithstanding the foregoing, this adjustment shall not affect
the rent for June 1, 2001 through May 30, 2002.
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Should such index number become unavailable, or if there is a
substantial change in the method of computing the index, the index to be used
will be the "Index Number of Wholesale Prices of All Commodities Revised"
published by the United States Department of Labor; if the aforementioned index
also become unavailable or its method of computation is substantially changed,
the index to be used is the "Index of the General Price Level" issued by the
Federal Reserve Bank of New York. In the event that the parties are unable to
<PAGE>
agree with regard to the amount of such increase, either party may at any time
submit the controversy to arbitration in Orange County, Florida, according to
the rules of the American Arbitration Association. The cost incurred by such
determination shall be shared equally by the parties and the award therefrom may
be enforced in any court of competent jurisdiction. The Tenant shall not
withhold rent if there is a misunderstanding or problem determining the
adjustment.
RENTAL ADJUSTMENT. Notwithstanding the foregoing, If the option to
extend the Term is exercised, the Base Rent for the shall be adjusted and
changed by increasing the Base Rent by whichever of the following procedures
results in the largest Base Rent:
(a) The first 12 months Base Rent shall be 3% larger than the rate for
the prior 12 months; the second 12 month period shall have a Base
Rent 3% higher than the prior 12 months Base Rent.
(b) The CPI adjustment provided for above.
4.2 ADDITIONAL. (deleted)
4.3 NO SETOFF. It is the purpose and intent of the parties that the
rent is absolutely net and shall be paid without offset, counterclaim, abatement
or defense, and this Lease shall not be subject to termination by Tenant for any
cause unless expressly provided herein.
4.4 LATE FEE. All rent and charges hereunder are to be delivered or
mailed to Landlord on or before the eighth (8th) business day of each month.
Tenant shall pay a late fee of $200 for each payment that is late, the parties
agreeing that this represents an agreed estimation of the liquidated damages and
is not to be considered interest, forfeiture or penalty. Landlord shall notify
Tenant of the late receipt and the late fee shall be due with the next rent
obligation. This provision is not intended to waive any other remedy Landlord
may have.
4.5 SALES TAX. Tenant shall also pay all sales and other taxes now or
hereafter imposed on Tenant in connection with this agreement which shall be
paid to Landlord when Landlord is required by law to collect the tax.
4.6 RENT ABATEMENT AND RENT INSURANCE. (deleted)
4.7 LIEN. Landlord shall have a lien on all property of the Tenant on
the Premises or in the Shopping Center as security for the payment of all sums
due under this lease and Landlord shall have, in addition to any other rights
allowed by law, all of the rights of a secured party under the Uniform
Commercial Code as adopted by Florida, including a right to possession of
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the property upon a default by Tenant. The lien of the Landlord shall be
subordinate to any prior liens encumbering said property at the time it is
brought upon the Premises.
ARTICLE V
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COMMON AREAS
5.1 USE OF COMMON AREAS. Tenant, and its licensees, invitees, employees
and clients shall have the non-exclusive right to use the Common Areas, subject
to such reasonable rules and regulations as Landlord may from time to time
prescribe. Tenant shall not solicit business, distribute handbills or display
merchandise or signs within the Common Area.
The entryway depicted on Exhibit "B" attached hereto shall be for the
exclusive use of the Tenants of the third floor and second floor. Tenant may
install an access control device on the gate if the second floor is included in
<PAGE>
the Premises. Tenant shall maintain the entryway at its expense, including the
landscaping within the entryway, however, Tenant may, by written notice to
Landlord, require Landlord to assume responsibility for same as provided for
below.
The grounds at the rear of the Building and the landscaping in the
front shall be for the exclusive use of the tenant of the first floor and
expenses of maintaining same shall be paid solely by the Landlord or the tenant
of the first floor
5.2 MAINTENANCE. Except as provided herein, Landlord shall maintain the
Common Areas in good order, condition, and repair. Tenant agrees to pay to
Landlord, as additional rent, its share of any and all expenses incurred by
Landlord with respect to the operation, maintenance and repair, of the Common
Areas, including, without limiting the generality of the foregoing, the
following: landscaping, utilities, fire protection, security services, all
insurance coverages (including rent coverage) carried by Landlord for the
Building, and overhead costs equal to fifteen percent (15%) of all such costs.
Notwithstanding the foregoing to the contrary, Landlord may cause all or any
portion of the foregoing services to be provided by independent contractors.
Common area maintenance shall be deemed to include the normal maintenance
expenses incurred in the maintenance of the exterior walls and roof of the
building.
Tenant shall be responsible for the day to day maintenance of the air
conditioning (including regular replacement of the filters) system servicing the
third floor (and the second floor if Tenant includes it in the Premises) and the
elevator which Landlord represents are in good order and repair. If the Tenant
does not include the elevator in the Premises the Landlord shall require any
Tenant who subsequently leases the second floor to contribute 1/3 of the
maintenance cost of the elevator which Landlord shall be responsible for
collecting and timely remitting to Tenant. The Landlord shall be responsible for
any major repairs or replacements of the air conditioning or elevator system
reasonably deemed other than normal maintenance items.
5.3 ASSESSMENTS. The share to be paid by Tenant shall be that
percentage of such costs which the Gross Rentable Area of the Premises bears to
the total Gross Rentable Area of the Building which is set forth in Article I
subject to the adjustments in Paragraph 5.2 above regarding the elevator.
Landlord may, at its option, make monthly or other periodic charges
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based upon the estimated annual cost of operation and maintenance of the Common
Areas, payable in advance but subject to adjustment after the end of each
calendar year on the basis of the actual costs for such year. Within ninety (90)
days after the close of calendar year, upon written request from Tenant,
Landlord will furnish to Tenant a detailed statement of the expenses relating to
the Common Areas for such year, such statement to include Tenant's proportionate
share of the expenses relating to the Common Areas computed as herein provided.
ARTICLE VI
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USE AND CARE OF PREMISES
6.1 BUSINESS OPERATION. The Premises shall not be used for any other
purpose than that provided in Section 1.1. Tenant shall occupy the Leased
Premises, conduct its business and control its agents, employees, invitees and
visitors in such a manner as is lawful, reputable and will not create a nuisance
to other tenants in the Property. Tenants shall not permit any operation which
emits any odor or matter which intrudes into other portions of the Property, use
any apparatus or machine which makes undue noise or caused vibration in any
portion of the Property or otherwise interfere with, annoy or disturb any other
tenant in its normal business operations or Landlord in its management of the
Property. Tenant shall neither permit any waste on the Leased Premises nor allow
the Leased Premises to be used in any way which would, in the opinion of
<PAGE>
Landlord, be extra hazardous on account of fire or which would in any way
increase or render void the fire insurance on the Property.
6.2 LAWFUL COMPLIANCE. In the use and occupancy of the Premises, the
Tenant shall comply with all laws and ordinances and all valid rules and
regulations of any governmental authority having jurisdiction over the Premises
and all requirements of any public or private agency having authority over the
Premises.
6.3 HAZARDOUS SUBSTANCES. Tenant represents and warrants to Landlord
that the activities Tenant will conduct on the Premises pose no hazard to human
health or the environment nor do they violate any applicable federal, state or
local laws, ordinances, rules or regulations pertaining to Hazardous Materials
(to be hereinafter defined) or industrial hygiene or environmental conditions
("Environmental Laws"). Tenant shall not cause or permit the Premises to be used
for the generation handling, storage, transportation, disposal, or release of
any Hazardous Materials except as exempted or permitted under applicable
Environmental Laws and Tenant shall not cause or permit the Premises or any
activities conducted thereunto be in violation of any applicable Environmental
Laws. Tenant shall acquire and maintain all permits, approvals, licenses and the
like required by Environmental Laws for Tenant's activities on the Premises and
Tenant shall keep those permits approvals, licenses, and the like current, and
shall comply with all regulations, rules and restrictions thereto. Tenant agrees
to indemnify Landlord and hold Landlord harmless from all claims, losses,
damages (including all foreseeable and unforeseeable consequential damages)
liabilities, fines, penalties, and charges, and all costs and expenses incurred
in connection therewith (including without limitation attorney's fees and
expenses) directly or indirectly resulting in whole or in part from Tenant's
violation of any Environmental Laws applicable to the Premises or to any
activity conducted thereon, or from any
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use, generation, handling, storage, transportation, disposal or release of
Hazardous Materials at or in connection with the Premises, or any cleanup or
other remedial measures required with respect to the Premises under any
Environmental Laws. Tenant shall reimburse Landlord immediately upon demand for
all sums paid and costs incurred by Landlord with respect to the foregoing
matters. This indemnity shall survive the full performance and expiration of
this Lease and shall inure to the benefit of any transferee of title to the
Premises. For purposes of this Lease, the term "Hazardous Materials" shall
include any substances defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "toxic substances",
"contaminants", "regulated substances", or other pollution under any applicable
federal, state or local law ordinances, rules or regulations now or hereafter in
effect.
ARTICLE VII
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TENANT'S COVENANTS
7.1 GENERAL. Tenant shall not, nor shall Tenant at any time permit any
occupant of the Premises to: (i) use or permit to be used any portion of the
Premises for any unlawful purpose or use or permit the use of any portion of the
Premises as regular living quarters, sleeping apartments or lodging rooms or for
the conduct of any manufacturing business, (ii) use the Premises for or conduct
therein activities, the purpose for which is excluded from or inconsistent with
or not including within the purpose for which the Premises may be used according
to Section 1. I of this lease, or (iii) use, operate or maintain the Premises in
such manner that any of the rates for any insurance carried by Landlord, or the
occupant of any premises within the Building, shall thereby be increased, unless
Tenant shall pay to Landlord or such occupant within the Building, as the case
may be, an amount equal to any such increase in rates, such payment to be made
promptly on demand as each premium which shall include such increase shall
become due and payable.
<PAGE>
7.2 GLASS AND REFUSE. Tenant (i) will maintain the Premises in a clean,
orderly and sanitary condition and free of insects, rodents, vermin, and other
pests; and (ii) will not permit undue accumulation of garbage, trash, rubbish or
other refuse in the Premises and Landlord shall provide a suitable location for
Tenant's outside trash receptacle which Tenant shall use and not allow refuse to
be left outside of the receptacle.
7.3 RULES AND REGULATIONS. The rules and regulations as shown on
Exhibit "D" are hereby made a part of this Lease and Tenant agrees to comply
with them. Tenant's failure to observe the rules and regulations shall
constitute a breach of this Lease. Landlord reserves the right to amend or
supplement the rules and regulations. Notice of such additional rules and
regulations, if any, shall be given to Tenant and Tenant agrees to comply with
the rules and regulations, and amendments thereto, provided the same shall apply
uniformly to all tenants of the Building.
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ARTICLE VIII
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MAINTENANCE AND REPAIR OF PREMISES,
ALTERATIONS AND LANDLORD'S RIGHT OF ACCESS
8.1 MAINTENANCE FOR TENANT. Landlord shall keep, at the Landlord's
expense, the foundation, the roof and the exterior and interior load bearing
walls and supports of the Premises (except plate glass doors, door closures,
door frames, store fronts, windows and window frames located in exterior
building walls) in good repair. In the event that the Premises should become in
need of repairs required to be made by Landlord hereunder, Tenant shall give
immediate written notice thereof to Landlord, and Landlord shall not be
responsible in any way for failure to make any such repairs until a reasonable
time shall have elapsed after the giving of such written notice.
8.2 MAINTENANCE BY TENANT. Tenant shall, at its sole expense, keep the
Premises in a safe, sightly, and serviceable condition and free from any
infestation by insects, rodents, or other pests, and except as specifically
otherwise provided, make all needed maintenance including maintaining standard
service contracts for (i) the heating, ventilating and air conditioning systems
serving the Premises: (ii) the exterior and interior portion of all doors,
windows, window frames, plate glass, door closures and door frames; (iii) all
plumbing and sewage facilities within the Premises, including free flow up to
the connection to the main sewer line; (iv) all sprinkler systems serving the
Premises; (vii) all interior walls, floors, and ceilings; (viii) any of Tenant's
Work and repairs related to Tenants alterations; and (x) all necessary repairs
and replacements of Tenant's trade fixtures required for the proper conduct and
operation of Tenant's business. If at any time and from time to time during the
Term, and any extensions and renewals thereof, Tenant shall fail to make any
maintenance, repairs, or replacements in and to the Premises as required in this
lease, Landlord shall have the right, but not the obligation, to enter the
Premises and to make such maintenance, repairs and replacements for and on
behalf of Tenant and all sums expended by Landlord for such maintenance,
repairs, and replacements shall be deemed to be additional rent hereunder and
shall be payable to Landlord upon demand. At the termination of this lease,
Tenant shall surrender the Premises in good condition, reasonable wear and tear
and loss by fire or other casualty alone excepted.
8.3 NO ALTERATIONS. Tenant shall not make any alterations, additions,
or replacements to the Premises without prior written consent of Landlord,
except for Tenant's Work and the installation of unattached moveable fixtures
which may be installed without drilling, cutting, or otherwise defacing the
Premises. All alterations, additions, and improvements made in and to the
Premises and all floor covering that is cemented or adhesively fixed to the
floor and all fixtures (other than trade fixtures) which are installed in the
Premises shall remain in and be surrendered with the Premises and shall become
the property of Landlord at the expiration of this lease. So long as Tenant is
<PAGE>
not in default hereunder, Tenant shall have the right to remove its trade
fixtures from the Premises, provided that Tenant shall repair and restore any
damage to the Premises, caused or occasioned by such removal.
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8.4 WORKMANLIKE WORK. All Tenant's Work and all repairs, alterations,
additions and improvements done by Tenant within the Premises shall be performed
in a good and workmanlike manner, in compliance with all governmental
requirements, and at such times and in the such manner as will cause a minimum
of interference with other construction in progress and with the transaction of
business in the Building. Whenever Tenant proposes to do any construction work
within the Premises, Tenant shall first furnish to Landlord plans and
specifications covering such work in such detail as Landlord may reasonably
request. Such plans and specifications shall comply with such requirements as
Landlord may from time to time prescribe for construction within the Building.
In no event shall any construction work be commenced within the Premises without
Landlord's written approval of such plans and specifications.
8.5 RIGHT OF ENTRY. Landlord shall have the right, but not the duty, to
enter upon the Premises, at any time for emergencies and otherwise with at least
one business day advance notice for the purpose of inspecting the same, or of
making repairs to the Premises, or of making repairs, alterations, or additions
to adjacent property, or of showing the Premises to lenders or to prospective
purchasers or tenants.
8.6 NO LIENS. Tenant shall not suffer or permit any materialmen's,
mechanics', artisans' or other liens to be filed or placed or exist against the
land or building of which the Premises are a part, or Tenant's interest in
Premises by reason of work, services, or materials supplied or claimed to have
been supplied to Tenant or anyone holding the Premises or any part thereof
through or under the Tenant, and nothing contained in this lease shall be deemed
or construed in any way as constituting the consent or request of Landlord,
expressed or implied, to any contractor, subcontractor, laborer or materialman
for the performance of any labor or the furnishing of any materials for any
improvements, alterations or repairs of or to the Premises or any part thereof,
nor as giving Tenant any right, power or authority to contract for or permit the
rendering of any services or the furnishing of any materials that would give
rise to the filing of a materialmen's mechanics' or other lien against the
Premises. If any such lien should, at any time, be filed, Tenant shall cause the
same to be discharged of record within fifteen (15) days after the date of
filing the same. If Tenant shall fall to discharge such lien within such period,
then, in addition to any other right or remedy of Landlord, Landlord may, but
shall not be obligated to discharge the same either by paying the amount claimed
to be due or by procuring the discharge of such lien by a deposit in court or by
posting a bond. Any amount paid by Landlord for any of the aforesaid purposes or
for the satisfaction of any other lien not caused by Landlord, and all
reasonable expenses of Landlord in defending any such action or in procuring the
discharge of such lien, shall be deemed additional rent hereunder and shall be
repaid by Tenant to Landlord on demand.
This Lease shall serve as notice to all potential construction lienors
that neither Landlord nor the Premises shall be liable or subject to liens for
any work performed or materials supplied at Tenant's request or at the request
of anyone claiming interest through Tenant. Landlord reserves the right to
record a copy of this Lease or a memorandum hereof in the public records of the
County where the Premises are located, or to post a notice on the Premises
containing this provision, for the purpose of alerting potential claimants of
construction liens that neither
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Landlord nor the Premises are obligated for such liens, and Tenant shall execute
any document requested by Landlord in order to make record of such.
8.7 INTERRUPTION OF BUSINESS. Landlord shall not be liable to Tenant
for any interruption of Tenant's business or inconvenience caused Tenant or
<PAGE>
Tenant's assigns, sublessees, clients, invitees, employees or licensees in the
Premises on account of Landlord's performance of any repair, maintenance or
replacement in the Premises or any other work therein pursuant to Landlord's
rights or obligations under this lease so long as such work is being conducted
by Landlord in accordance with the term of this lease and without gross
negligence or gross disregard for Tenant's business operations.
ARTICLE IX
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SIGNS, DISPLAYS, DIRECTORY
9.1 SIGNS/DISPLAYS. Tenant shall not, without the prior written consent
of Landlord, (i) paint, decorate or make any changes to the front of the
Premises; (ii) install any exterior lighting, awning or protrusions, or any
exterior signs, advertising matter, decoration or painting; (iii) affix any
window or door lettering, sign decoration or advertising matter to any window or
door glass; or (iv) erect or install any signs, window or door lettering,
placards, decorations or advertising media of any type which can be viewed from
the exterior of the Premises, excepting only dignified displays of customary
type in store windows. Use of the roof of the Premises is reserved to Landlord,
and Landlord may install upon the roof equipment, signs, antenna, displays, and
other objects and may construct additional stories above the Premises, provided
any such use does not unreasonably interfere with Tenant's occupancy of the
Premises.
9.2 SIGN/DIRECTORY. Tenant shall have the use of 1/3 of any approved
signage. The Landlord may impose reasonable rules for the use of the signage.
ARTICLE X
---------
UTILITIES
10.1 SUPPLY. Landlord agrees to cause to be provided such mains,
conduits and other facilities necessary to supply electricity, water, sewer and
telephone to the Premises, in accordance with and subject to any special
provisions contained in Exhibit "C" and shall provide Tenant with separate
meters for utilities serving the Premises.
10.2 CHARGES. Tenant shall promptly pay all charges for electricity,
water, sewer and telephone (where applicable) furnished to the Premises, and
Landlord may, if it so elects, furnish one or more of such services to Tenant,
and, in such event, Tenant shall purchase such services as are tendered by
Landlord and shall pay for such services at the rates established therefore by
Landlord, provided that such rates shall not exceed the rates which would be
charged for the same service if furnished directly by the applicable public
utility then furnishing such service. In the event that at any time during the
Term, or any extensions and renewals thereof, Tenant shall fail to promptly pay
any of the foregoing charges, Landlord shall have the right, but not the
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obligation, to pay such charge or charges for and on behalf of Tenant and such
amounts so paid shall be deemed to be additional rent hereunder and shall be
payable by Tenant to Landlord upon demand.
10.3 INTERRUPTION. Landlord shall not be liable in the event of any
interruption in the supply of any utilities including, without limitation, any
heating and air-conditioning (if provided). Tenant agrees that it will not
install any equipment which will exceed or overload the capacity of any utility
facilities serving the Premises and that if any equipment installed by Tenant
shall require additional utility facilities, the same shall be installed at
Tenant's expense in accordance with plans and specifications to be approved in
writing by Landlord.
ARTICLE XI
<PAGE>
----------
INDEMNITY AND NON-LIABILITY
11.1 INDEMNIFICATION. Tenant does hereby agree to indemnify and save
Landlord harmless from and against any and all liability for any injury to or
death of any person or persons or any damage to property in any way arising out
of or connected with the condition other than latent defects, use or occupancy
of the Premises, or in any way arising out of the activities in the Premises,
Common Areas or other portions of the Building, of the Tenant, its assigns or
sublessees or of the respective agents, employees, licensees or invitees of
Tenant, its assigns, or sublessees and from all costs expenses and liabilities,
including, but not limited to, court costs and reasonable attorneys' fees,
incurred by Landlord in connection therewith, excepting however, liability
caused by Landlord's gross negligence.
11.2 NON-LIABILITY. Tenant covenants and agrees that Landlord shall not
be liable to Tenant for any injury to or death of any person or persons or for
damage to any property of Tenant, or any person claiming through Tenant, arising
out of any accident or occurrence on the Premises or any other portion of the
Building, including, without limiting the generality of the foregoing, injury,
death or damage caused by the Premises or other portions of the Building
becoming out of repair or caused by any defect in or failure of equipment,
pipes, or wiring, or caused by broken glass, or caused by the backing up of
drains, or caused by gas, water, steam, electricity, or oil leaking, escaping or
flowing into the Premises, or caused by fire or smoke, or caused by the acts or
omissions of other tenants of the Building.
11.3 DISCLAIMER. Except for the gross negligence of the Landlord,
Landlord shall not be responsible or liable at any time for any loss or damage
to Tenant's merchandise, equipment, fixtures or other personal property or to
Tenant's business; and Landlord shall not be responsible or liable for any
defect, latent or otherwise, in the Building or any of the equipment, machinery,
utilities, appliances or apparatus therein.
13
ARTICLE XII
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INSURANCE
12.1 PUBLIC LIABILITY INSURANCE. Tenant shall, at its sole cost and
expense, procure and maintain throughout The Term of this lease a policy or
policies of insurance, insuring Tenant, Landlord and any other persons
designated by Landlord against any and all liability for injury to or death of a
person or persons and for damage to property occasioned by or arising out of the
condition of the Premises, the use or occupancy of the Premises or any
construction work being done on the Premises by Tenant, or if applicable, boiler
explosion. The limits of such policy shall be in an amount not less than the
Liability Insurance Limits as specified in 1.1 and shall be written by an
insurance company or companies reasonably satisfactory to Landlord. Such
policies shall be non-cancelable except after ten (10) days written notice to
Landlord and designees of Landlord. Such policies or duly executed certificates
of insurance with respect thereto shall be delivered to Landlord prior to the
Rental Commencement Date and renewals thereof as required shall be delivered to
Landlord at least thirty (30) days prior to the expiration of the respective
policy terms. The policy limits may be adjusted from time to time by Landlord if
reasonable men would agree that the limits are too low for good business
judgment.
ARTICLE XIII
------------
DAMAGE BY CASUALTY
<PAGE>
13.1 DAMAGE. Tenant shall give immediate written notice to Landlord of
any damage to the Premises caused by fire or other casualty, and if Landlord
does not elect to terminate this lease as hereinafter provided, Landlord shall
proceed with reasonable diligence and at its sole expense to rebuild and repair
the Premises. Notwithstanding the foregoing, in the event that (i) the insurance
proceeds payable in connection with such damage and destruction shall be
insufficient to make such restoration, (ii) the Building in which the Premises
are located shall be destroyed or substantially damaged by casualty not covered
by standard fire or extended coverage insurance, (iii) said building shall be
destroyed or rendered unrentable by any casualty to the extent of at least fifty
percent (50%) of the Gross Rentable Area of said building, (iv) Landlord shall
not have actual and unconditional receipt of the insurance proceeds payable in
connection with such damage and destruction, (v) the holder of any mortgage,
which encumbers Landlord's interest hereunder or in the Premises shall
unrentable by any casualty to the extent of at least fifty percent (50%) of the
Gross Rentable Area of said building, (iv) Landlord shall not have actual and
unconditional receipt of the insurance proceeds payable in connection with such
damage and destruction, (v) the holder of any mortgage, which encumbers
Landlord's interest hereunder or in the Premises shall require that such
proceeds shall be applied against any indebtedness owed to such holder, or (vi)
there shall be less than two (2) years remaining in the Term, or any extension
or renewal thereof, then, in any of such events, Landlord may elect either to
terminate this lease or to proceed to rebuild and repair the Premises. Landlord
shall give written notice to Tenant of such election within ninety (90) days
after the occurrence of such casualty.
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13.2 RESTORATION. Landlord's obligation to rebuild and repair the
Premises under this Article XIII shall in any event be limited to restoring
Landlord's Work to substantially the condition in which the same existed prior
to the casualty, and Tenant agrees that promptly after the completion of such
work by Landlord, Tenant will proceed with reasonable diligence and at its sole
cost and expense to restore Tenant's Work to substantially the condition in
which the same existed prior to the casualty.
13.3 RENT. Tenant agrees that during any period of reconstruction or
repair of the Premises, it will continue the operation of its business within
the Premises to the extent practicable. Tenant shall maintain a "business
interruption" insurance policy, naming Landlord as an additional insured to
assure continuation of the payment of the Minimum Guaranteed Rental. A copy of
the policy shall be provided to Landlord.
13.4 POLICIES. Tenant agrees at all times at its expense to keep its
equipment, fixtures, Tenant's Work (excluding any portion of said work deemed a
fixture properly covered by the building hazard policy) and its other property
situated within the Premises insured against fire, with extended coverage, to
the extent of at least eighty (80%) percent of the full insurable value thereof
Such insurance shall be carried with companies reasonably satisfactory to
Landlord. Such insurance shall be non-cancelable except for ten (10) days
written notice to Landlord. Such policies or duly executed certificates of
insurance with respect thereto shall be delivered to Landlord prior to the
Rental Commencement Date and renewals thereof as required shall be delivered to
Landlord at least thirty (30) days prior to the expiration of the respective
policy terms. The proceeds of such insurance shall be for use by Tenant, except
with the consent of Landlord, for the repair or replacement of merchandise,
fixtures, Tenant's Work, or other property which was situated within the
Premises.
13.5 WAIVER OF SUBROGATION. All fire and extended coverage insurance
carried by Landlord or Tenant covering losses arising out of destruction of or
damage to the Premises or its contents shall, to the extent reasonably
obtainable, provide for waiver of subrogation against Landlord, Tenant and other
tenants in the Building, on the part of the insurance carrier. Evidence of the
<PAGE>
existence of such waiver will be furnished by either party to the other party on
request.
13.6 RIGHT TO TERMINATE. In the event that Fifty (50%) percent or more
of the Gross Rentable Area of the Building shall be destroyed or substantially
damaged by any casualty, notwithstanding that the Premises may be unaffected by
such casualty, either Landlord or Tenant may terminate this lease by giving
thirty (30) days prior written notice of election to do so, which notice shall
be given, if at all, within ninety (90) days following the date of said
occurrence. Rent shall be adjusted as of the date of such termination.
15
ARTICLE XIV
-----------
EMINENT DOMAIN
14.1 RIGHT TO CANCEL. If more than ten (10%) percent of the Gross
Rentable Area of the Premises is taken for any public or quasi-public use under
any governmental law, ordinance, or regulation, or by right of eminent domain,
or by private purchase under threat thereof, this lease shall terminate upon the
election of either party effective on the date possession of a portion of the
Premises is taken by the condemning authority.
14.2 RENT ADJUSTMENT. If less than ten percent (10%) of the Gross
Rentable Area of the Premises is taken for any public or quasi-public use under
any governmental law, ordinance or regulation, or by right of eminent domain, or
by private purchase under threat thereof, this lease shall not terminate, or if
more than ten percent (10%) of the Gross Rentable Area of the Premises is so
taken and this lease is not terminated in accordance with Section 14.1, then in
either of such events the Minimum Guaranteed Rental (but not percentage rental)
payable hereunder during the unexpired portion of the Term shall be reduced by
the percentage which the area taken bears to the area of the Premises prior to
the date possession of such portion of the Premises is taken by the condemning
authority.
14.3 NOTICE. Any election to terminate this lease following
condemnation shall be evidenced by written notice of termination delivered to
the other party within thirty (30) days after the date by which both Landlord
and Tenant are notified of such taking or such sale, and, in the event that
neither Landlord nor Tenant shall so exercise such election to terminate this
lease, then this lease shall continue in full force and effect.
14.4 RESTORATION. If this lease is not terminated following any
condemnation, Landlord shall make all necessary repairs or alterations within
the scope of Landlord's Work necessary to make the Premises an architectural
whole, and Tenant agrees that promptly after completion of such work by
Landlord, Tenant will proceed with reasonable diligence and at its sole cost and
expense to make all necessary repairs or alterations within the scope of
Tenant's Work necessary to make the Premises an architectural whole.
14.5 COMPENSATION. All compensation awarded for any taking (or the
proceeds of private sale under threat thereof), whether for the whole or a part
of the Premises, shall be the property of Landlord, whether such award is
compensation for damages to Landlord's or Tenant's interest in the Premises, and
Tenant hereby assigns all of its interest in any such award to Landlord;
provided, however, Landlord shall have no interest in any award made to Tenant
for loss of business or for the taking of Tenant's fixtures personal property
within the Premises if a separate award for such items if made to Tenant.
16
ARTICLE XV
----------
<PAGE>
ASSIGNMENT AND SUBLETTING
15.1 ASSIGNMENT. This lease (and all options) may be assigned, sublet
or transferred by Tenant, provided (a) Landlord prior to any assignments
consents thereto in writing which consent may not be unreasonably withheld, (b)
Tenant is not in default of any term of this Lease (c) the sublessee or assignee
provides Landlord with such financial information as Landlord reasonably
requires and agrees in writing to be bound by the terms of this Lease, and (d)
the Base Rent is increased, not decreased, to an amount equal to the then
current market rental rate (as determined by and MAI appraisal prepared by an
appraiser selected by a mutually agreeable third party).
15.2 LANDLORD'S TRANSFER. The term "Landlord" as used in this lease
means only the owner or entity from time to time owning the building containing
the Premises, so that in the event of any sale or sales thereof, the Landlord
who is a grantor in any such sale shall be and hereby is, without further
agreement, entirely freed and relieved of all the obligations of Landlord
hereunder. Any such sale or sales of the Premises, unless pursuant to a
foreclosure sale or deed in lieu of such foreclosure, shall be subject to this
lease and it shall be deemed and construed without further agreement that the
purchaser at any such sale has assumed and agreed to carry out any and all
obligations of Landlord under this lease so long as such purchaser shall be the
owner of the building containing the Premises.
15.3 NO ENCUMBRANCE. Tenant shall not pledge or otherwise encumber its
interest under this lease. Tenant has only a usufruct, not subject to levy, sale
or other transfer, whether voluntary or by operation of law, except in
accordance with this Article XIV.
ARTICLE XVI
-----------
TAXES
16.1 GENERAL. Tenant shall be liable for and shall pay all taxes levied
against personal property, fixtures, and Tenant's Work in the Premises; if such
taxes for which Tenant is liable are levied against Landlord or Landlord's
property and if Landlord elects to pay the same or if the assessed value of
Landlord's property is increased by inclusion of any such items and Landlord
elects to pay the taxes based on such increase, Tenant shall pay to Landlord
upon demand that part of such taxes for which tenant is liable hereunder.
16.2 REAL ESTATE TAXES. Tenant agrees to pay as additional rent, its
share of the general real estate taxes, assessments, and governmental charges
levied against the Building for each calendar year beginning with the Rental
Commencement Date and during the Lease Term and any renewals or extensions
thereof Said taxes, assessments, and governmental charges shall be appropriately
prorated during the first and last years of the lease term if such years are
less than full calendar years. The proportionate share to be paid by Tenant
shall be the same percentage used to determine Tenant's share of the maintenance
expenses provided for in paragraph 1.1(q). Landlord may at its option make
monthly or other periodic charges based upon
17
the estimated annual taxes, payable in advance but subject to adjustment after
receipt of the tax statement Landlord; adjustments shall be paid within fifteen
(15) days of presentation of the tax statement.
16.3 RENT TAX. Tenant agrees to pay as additional rent any rent or use
tax imposed on rent payments or imposed upon Landlord based upon rent payments
by Tenant, however, Tenant shall not be required to pay any income tax of
Landlord.
ARTICLE XVII
------------
<PAGE>
DEFAULTS AND REMEDIES
17.1 DEFAULT BY LANDLORD. If Landlord defaults in the performance of
any term, covenant or condition required to be performed by Landlord under this
Lease, Landlord shall have thirty (30) day period, Landlord shall have all
reasonable and necessary time to complete such cure, as long as Landlord is upon
the occurrence of nay default set forth in this Lease and subsequent failure by
Landlord to cure or commence actions to cure as provided above. Tenant shall, as
Tenant's sole remedy, have the right to maintain an action against Landlord for
specific performance or injunctive relief.
17.2 INJUNCTION. If Tenant fails to keep or perform or violates any
covenant or provision of this lease (except payment of any installment of rent
or other charge or money obligation herein required to be paid by Tenant)
Landlord may without notice and in addition to any other remedy enjoin Tenant
from any such failure or violation hereunder.
17.3 DEFAULT BY TENANT. If, except as otherwise provided in Sections
9.2, 9.6 and 11.2 hereof, Tenant fails to perform or violates any covenant or
provision of this Lease (except the payment of any installment of rent or other
charge or money obligation herein required to be paid by Tenant) and such
failure or violation continues for a period of ten (10) days after written
notice by Landlord, or in case of a failure or violation which cannot with due
diligence be cured within a period of ten (10) days, if Tenant fails to cure
such failure or violation promptly after the service of such notice and with all
due diligence, then Landlord may in addition to any other remedies cure or
prosecute the curing of such failure or violation at reasonable expense, which
expense shall be deemed to be additional rental and shall be paid to Landlord by
Tenant on demand. Tenant agrees that neither Landlord nor any person acting on
Landlord's behalf shall be liable for any loss or damage suffered by Tenant
resulting from the exercise of the rights granted under this section.
17.4 INTEREST. Any installment of rent or any other charge or money
obligation herein required to be paid by Tenant which is not paid within ten
(10) days of when due shall bear interest at the maximum rate allowed by law,
from the due date until paid and the Landlord may treat any such charge or money
obligation as additional rent hereunder.
17.5 ACTS OF DEFAULT. The happening of any one or more of the following
shall be deemed to be events of default under this lease:
18
(a) The making by Tenant of an assignment for the benefit
of its creditors.
(b) The levying of a writ of execution or attachment on
or against the property of Tenant within the Premises
or against Tenant's leasehold interest and the same
not being released or discharged within thirty (30)
days thereafter;
(c) The institution of proceedings in a court of
competent jurisdiction for the reorganization,
liquidation, or voluntary or involuntary dissolution
of Tenant, or for its adjudication as a bankrupt or
insolvent, or for the appointment of a receiver of
the property of Tenant, and/or for the appointment of
a receiver of the property of Tenant, and said
proceedings not being dismissed, and any receiver,
trustee or liquidator appointed therein not being
discharged within thirty (30) days after the
institution of such proceedings.
(d) The doing or permitting of any act by Tenant which
creates a lien or claim therefore against the land or
<PAGE>
building of which the Premises are a part and the
same not being released or otherwise provided for by
indemnification satisfactory to Landlord within
thirty (30) days thereafter.
(e) Failure of Tenant to pay any installment of rent or
other charge or money obligation herein required to
be paid by Tenant as and when such payment is due and
payable; notwithstanding the foregoing, Landlord
agrees to allow Tenant ten (10) days from the date of
receipt of written notice of any failure to pay
before the Landlord will assert a default to
accommodate justified oversights of the Tenant, but
the Landlord reserves the right, and shall be
entitled to find the Tenant in default if the Tenant
has unreasonably and habitually compels the Landlord
to enforce timely payment of the rent by giving a
written notice.
(f) Failure of Tenant to comply with any covenant or
provision of this lease (except payment of any
installment of rent or other charge or money
obligation herein required to be paid by Tenant)
within fifteen (15) days after written notice of such
failure to comply is given by Landlord, or if it is
not feasible to cure such failure within such period,
to begin performance of such covenant within such
period and to diligently pursue performance to
completion in a reasonable time thereafter.
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17.6 LANDLORD'S REMEDIES. Upon the occurrence of any of such events of
default, Landlord shall have the option to pursue any one or more of the
following remedies without any notice or demand whatsoever;
(a) Terminate this Lease, in which event Tenant shall immediately
surrender the Premises to Landlord. Landlord may, without
prejudice to any other remedy which it may have, enter upon
and take possession of the Premises and expel or remove Tenant
and any other person who may be occupying the Premises or any
part thereof, by force, if necessary, without being liable for
prosecution or any claim of damages therefore.
(b) Not terminate this lease but rather enter upon and take
possession of the Premises and, if Landlord so elects, make
such alterations and repairs as may be necessary to relet the
Premises, and relet the Premises or any part thereof, as the
agent of Tenant, at such rent and for such term and subject to
such terms and conditions as Landlord may deem advisable and
receive the rent therefore. Upon each such reletting all
rentals received by the Landlord from such relenting shall be
applied, first, to the payment of any indebtedness other than
rent due hereunder from Tenant to Landlord; second, to the
payment of any loss and expenses of such relenting, including
brokerage fees and attorneys' fees and costs of such
alterations and repairs; third, to the payment of rent due and
unpaid hereunder; and the residue, if any, shall be held by
Landlord and applied in payment of future rent as the same may
become due and payable hereunder, and Tenant agrees to pay to
Landlord on demand any deficiency that may arise by reason of
such relenting. Notwithstanding any such relenting without
termination, Landlord may at any time thereafter elect to
terminate this lease for such previous breach.
(c) Should Landlord at any time terminate this lease for any
breach, in addition to any other remedies it may have, it may
<PAGE>
recover from Tenant all damages it may incur by reason of such
breach, including the cost of recovering the Premises
reasonable attorneys' fees, and the worth at the time of such
termination of the excess, if any, of the amount of rent and
charges equivalent to rent, reserved in this lease for the
remainder of the Term over the then reasonable rental value of
the Premises for the remaining portion of the Term, all of
which amounts shall be immediately due and payable from Tenant
to Landlord. In determining the rent which would be payable by
Tenant hereunder, subsequent to default, the annual rent for
each year of the unexpired term shall be equal to the average
Minimum Guaranteed Rental and percentage rent paid by Tenant
from the Rental Commencement Date to the time of default or
during the preceding two (2) calendar years, whichever period
is shorter.
(d) Pursuit of any of the foregoing remedies shall not preclude
pursuit of any of the other remedies herein provided or any
other remedies provided by law, nor shall pursuit of any
remedy herein provided constitute a forfeiture or waiver of
any rent due to Landlord hereunder or of any damages accruing
to Landlord by reason of
20
the violation of any of the covenants and provisions herein
contained. Forbearance by Landlord to enforce one or more of
the remedies herein provided upon an event of default shall
not be deemed or construe to constitute a waiver of such
default.
17.7 LEGAL FEES. If, because of any breach or default hereunder, it
shall become necessary for the Landlord to employ an attorney to enforce or
defend any of the rights remedies hereunder, the Tenant agrees to pay any such
fees or costs incurred by the Landlord.
17.8 DEPOSITS. Landlord hereby acknowledges receipt from tenant of an
Advance Deposit, which shall be applied to rent due for April and May, 1997.
Landlord further acknowledges receipt from Tenant of the Security Deposit, which
shall be held by Landlord without interest as security for this lease, it being
expressly understood that such deposit is not an advance payment of rent or a
measure of Landlord's damages in case of default by Tenant. Upon the occurrence
of any event of default by Tenant, Landlord may, from time to time, without
prejudice to any other remedy provided herein, or provided by law, use the
Security deposit to the extent necessary to make good any arrears of rent and
any other damage, injury, expense or liability caused to Landlord by such event
of default. Following any such application of the Security Deposit, Tenant shall
pay to Landlord on demand the amount so applied in order to restore the Security
Deposit to its original amount. If Tenant is not then in default hereunder, any
remaining balance of the Security Deposit shall be returned by Landlord to
Tenant upon termination of this lease.
ARTICLE XVIII
-------------
SUBORDINATION
18.1 SUBORDINATION. This lease and all rights of Tenant hereunder are
and shall be subject and subordinate to the lien of any mortgage now or
hereafter encumbering the Premises or Landlord's interest. In confirmation of
such subordination, Tenant shall, upon demand at any time or times, execute,
seal and deliver to Landlord, without expense to Landlord, all instruments in
recordable form that may be requested to evidence this subordination to the lien
of any such mortgage and each renewal, modification, consolidation, replacement,
and extension thereof. All said instruments shall be drafted and prepared by the
Landlord and delivered to the Tenant at Landlord's expense. If Tenant shall fail
to execute, seal and deliver any such instrument, Landlord in addition to any
<PAGE>
other remedies available to it in consequence thereof may execute, seal and
deliver the same as the attorney in fact of Tenant and in Tenant's name, place
and stead, and Tenant hereby irrevocably makes, constitutes, and appoints
Landlord, its successors and assigns, as such attorney in fact for that purpose.
18.2 ATTORNMENT. If the holder of any mortgage, shall hereafter succeed
to the rights of Landlord under this Lease, whether through possession or
foreclosure action or delivery of a new lease, then, at the option of such
holder, Tenant shall attorn to and recognize such successor as Tenant's landlord
under this lease and shah promptly execute and deliver any instrument that may
be necessary to evidence such attornment.
21
18.3 NONDISTURBANCE. Upon attornment this lease shall continue in full
force and effect as a direct lease between such successor landlord and Tenant,
subject to all the terms, covenants, and conditions of this lease.
ARTICLE XIX
-----------
MISCELLANEOUS
19.1 NOTICES. Whenever any notice is required or permitted, such notice
shall be in writing, deposited in the United States Mail, postage prepaid,
certified mail, return receipt requested, addressed to the address specified in
Section 1.1.
19.2 NOTICES TO LENDER. Tenant agrees that upon the request of either
Landlord or the holder of any mortgage, encumbering Landlord's interest
hereunder or in the Premises, Tenant shall send to such holder copies of all
notices sent to Landlord; Tenant agrees that it may not exercise any of its
remedies on account of a default by Landlord under this lease until such holder
shall have received written notice from Tenant and a period of thirty (30) days
after receipt of such notice for curing such default shall thereafter have
elapsed.
19.3 CAPTIONS. The captions and the contents used in this lease are for
convenience only and do not in any way limit or amplify the terms and provisions
hereof Whenever the singular number is used the same shall include the plural,
and words of any gender shall include each other gender.
19.4 WAIVER. Failure of Landlord to declare an event of default
immediately upon its occurrence, or delay in taking any action in connection
with an event of default, shall not constitute a waiver of the default, but
Landlord shall have the right to declare the default at any time and take such
action as is lawful or authorized under this Lease. Pursuit of any on e or more
of the remedies set forth in Article II above shall not preclude pursuit of any
one or more of the any remedy hereunder or at law constitute forfeiture or
waiver of any rent or damages accruing to Landlord by reason of the violation of
any of the terms, provisions or covenants of this Lease. Failure by Landlord to
enforce one or more of the remedies provided hereunder or at law upon any event
of default shall not be deemed or construed to constitute a waiver of the
default or of any other violation or breach or any of the terms, provisions and
covenants contained in this Lease. Landlord may collect and receive rent due
from tenant without waiving or affecting any rights or remedies that Landlord
may have at law or in equity or by virtue of this Lease at the time of such
payment. Institution of nay action to reenter the Leased Premises shall not be
construed to be an election by Landlord to terminate this Lease.
19.5 ACT OF GOD OR FORCE MAJEURE. An "Act of God" or "Force Majeure" is
defined for purposes of this Lease as strikes, lockouts, sitdowns, material or
labor restrictions by any governmental authority, unusual transportation delays,
riots, floods, washouts, explosions, earthquakes, fire storms, weather
(including wet grounds or inclement weather which prevents constructions), acts
of the public enemy, wars, insurrections, and/or any other cause not reasonable
<PAGE>
within the control of Landlord or which by the exercise of due diligence
Landlord is unable wholly or in part, to prevent or overcome. Landlord shall not
be required to perform any
22
covenant or obligation in this Lease, or be liable in damages to Tenant, so long
as the performance or nonperformance of the covenant or obligation is delayed or
prevented by an "Act of God", "Force Majeure" or by Tenant.
19.6 ENTIRE AGREEMENT. This lease contains the entire agreement between
the parties and no agreement, representation or inducement shall be effective to
change, modify or terminate this lease in whole or in part unless in writing and
signed by the parties.
19.7 JURY TRIAL. The parties waive the right to a trial by jury in any
legal proceeding.
19.8 ESTOPPEL INFORMATION. Tenant, after reasonable notice, shall
execute, acknowledge and deliver to Landlord a certificate evidencing whether or
not:
(a) This lease is in full force and effect;
(b) This lease has been amended in any way;
(c) There are any existing defaults hereunder to the knowledge of
Tenant and specifying the nature of such default, if any; and
(d) The date to which rent, including percentage rental, if any, has
been paid. Each certificate delivered pursuant to this Section may
be relied on by an prospective purchaser or transferee of the
Building or of Landlord's interest hereunder or by any mortgagee of
the Building or of Landlord's interest hereunder or by any assignee
of any such mortgagee.
19.9 SUCCESSORS BOUND. The terms, provisions and covenants contained in
this lease shall apply to, inure to the benefit of, and be binding upon the
parties hereto and their respective heirs, assigns, successors in interest and
legal representatives except as otherwise provided; however, all claims,
demands, or causes of action which Tenant may have against Landlord shall be
enforceable solely against Landlord's right, title and interest in Building and
no other property of Landlord shall be subject to any such claim, demand or
cause of action.
19.10 TIME OF ESSENCE. Time is of the essence in this agreement.
19.11 LAW. The laws of the State of Florida shall govern the
interpretation, of this lease. If any provision of this lease shall be held to
be invalid or unenforceable, the validity and enforce-ability of the remaining
provisions of this lease shall not be affected.
19.12 SURRENDER PREMISES. Tenant shall, on or before the last day of
the Term hereof, or when sooner terminated, peaceably and quietly surrender the
Premises to Landlord with all alterations, additions, improvements, fixtures and
equipment, including air conditioning equipment (excluding trade fixtures and
other personal property of Tenant), be in good order and repair, ordinary wear
and tear excepted. All such property not removed shall be deemed abandoned by
Tenant and conveyed to Landlord unless Landlord shall give notice to Tenant to
23
remove all or any part hereof, in which event Tenant shall promptly at its
expense remove same, or Landlord may do so at Tenant's expense.
19.13 VENUE. Venue for any litigation regarding this agreement shall
<PAGE>
lie in Orange County, Florida.
19.14 NO PARTNERSHIP. Deleted.
19.15 LANDLORD'S LIABILITY. (Deleted)
19.16 MULTIPLE TENANTS. If this Lease is executed by more than one
person or entity as "Tenant", each such person or entity shall be jointly and
severally liable hereunder. It is expressly understood that any one of the named
Tenants shall be empowered to execute any modification, amendment, exhibit,
floor plan, or other documents herein referred to and bind all of the named
Tenants thereto; and Landlord shall be entitled to rely on same to the extent as
if all of the named Tenants had executed same.
19.17 LIMITATION OF WARRANTIES. Landlord and Tenant expressly agree
that there are and shall be no implied Warranties of merchantability,
habitability, suitability, fitness for a particular purpose of or of any other
kind arising out of this Lease, and there are no warranties which extend beyond
those expressly set forth in this Lease. Without limiting the generality of the
foregoing, Tenant expressly acknowledges that Landlord has made no warranties or
representations concerning any hazardous substances or other environmental
matters affecting any part of the Property, and Landlord hereby expressly
disclaims and Tenant waives any express or implied warranties with respect to
any such matters.
19.18 SPECIAL STIPULATIONS CONTROL. To the extent that the Special
Stipulations set forth in Exhibit "F" conflict with any of the printed
provisions of this lease, such Special Stipulations shall control.
19.19 RADON GAS. Notice to Prospective Purchaser/Tenant: Radon is a
naturally occurring gas that, when it has accumulated in a building in
sufficient quantities, may present health risks to persons who are exposed to it
over time. Levels of radon that exceed Federal and State guidelines have been
found in buildings in Florida. Additional information regarding radon and radon
testing may be obtained from your county public health unit. (pursuant to
Section 404.056(8), Florida Statutes.)
19.20 SHORT FORM OF LEASE. Simultaneously with the execution and
delivery hereof the parties have executed a Memorandum if Lease Agreement and
the LESSOR or the LESSEE may record such Memorandum of Lease Agreement in lieu
of recording this lease.
19.21 BROKER. The parties represent to each other that no brokers are
affiliated with this transaction.
19.22 CONDITION PRECEDENT. This lease shall not be binding unless it is
executed and delivered by and to both parties on or before
24
19.23 ACCEPTANCE BY FACSIMILE. Either party may demonstrate its
acceptance or execution of this Lease by facsimile transmitted by facsimile
showing the transmitting parties' signature thereon. Such a facsimile, once
received by the other party, shall bind the transmitting party to the same
extent as would delivery of this Lease (or a counterpart) containing the parties
actual signature.
IN WITNESS WHEREOF, the parties have caused this Lease to be executed
by their duly authorized officers the day and year first above written.
AS TO LANDLORD:
/s/ A. J. Stanton, Jr. /s/ Kyung Park
Print Name: A. J. Stanton, Jr. KYUNG PARK
/s/ Amanda R. Moody
Print Name: Amanda R. Moody
<PAGE>
/s/ Bank Park
/s/ A. J. Stanton, Jr. BANG PARK
Print Name: A. J. Stanton, Jr.
/s/ Amanda R. Moody
Print Name: Amanda R. Moody
AS TO TENANT:
MEGAMEDIA NETWORKS, INC.
/s/ A. J. Stanton, Jr.
Print Name: A. J. Stanton, Jr. By: /s/ William Mobley, President
/a/ Amanda R. Moody
Print Name: Amanda R. Moody
25
EXHIBIT A
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[Space Plan]
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A-1
EXHIBIT B
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[FLOOR PLAN]
B-1
EXHIBIT E
GUARANTEE AGREEMENT
THIS AGREEMENT was entered into on 14th day of June, 1999, between
Kyung Park and Bang Park, individually and as Landlord ("Landlord") and the
individuals signing hereto ("Guarantors") and secure performance of the lease
between Landlord and MEGAMEDIA NETWORKS, INC.("Lease").
RECITALS
a. Guarantors desire to induce the Landlord to enter into the
Lease between the Landlord and the Tenant.
b. The Landlord is unwilling to enter into the Lease without the
<PAGE>
assurances afforded by the Guarantors set forth below.
NOW, THEREFORE, in consideration of the Lease being entered into
between the Landlord and Tenant, which benefits the Guarantors herein, and in
further consideration of the sum of One Dollar ($1.00), receipt of which is
acknowledged by the Guarantors, the Guarantors covenant and agree as follows:
1. The Guarantors hereby absolutely and unconditionally guarantee to
the Landlord the prompt, punctual payment and performance, when due, of all of
the Tenant's obligations to the Landlord under the terms and conditions of the
Lease between the Landlord and Tenant. The Guarantors agree that all payments
and other obligations under this Guarantee will be made promptly on demand.
2. The obligations hereunder are joint and several, and independent of
the obligations of the Tenant, and a separate action or actions may be brought
or prosecuted against one or more of the Guarantors whether action is brought
against the Tenant or whether the Tenant be joined in any such action or
actions- and Guarantors waive the benefit of any statute of limitations
affecting their liability hereunder or the enforcement thereof.
3. The Guarantors authorize the Landlord without notice, consent or
demand, at any time, and from time to time, either before or after the maturity
thereof, to extend the time for payment of any obligation of the Tenant; to
amend in any respect whatsoever, any provision of the Lease without notice or
assent from the Guarantors.
4. No delay on the part of the Landlord in exercising any right shall
operate as a waiver.
5. In the event that the Tenant is now or is hereafter indebted to any
of the Guarantors, the Guarantors agree that said indebtedness held by them is
hereby subordinated to the indebtedness of the Tenant to the landlord as long as
this Guarantee is in full force and effect.
E-1
6. Guarantors waive any right to require Landlord to (a) proceed
against the Tenant, (b) proceed against or exhaust any security held or to which
Landlord is entitled, or (c) pursue any other remedy in Landlord's power
whatsoever. Guarantors waive any defense arising by reason of any disability,
lack of corporate authority or power, or other defense of the Tenant or any
other Guarantor, and shall remain liable regardless of whether Tenant or any
other Guarantor is found not liable for any reason. Until all the obligations
have been paid or complied with in U], Guarantors shall not have right of
subordination, and each waives any right to enforce any remedy which Landlord
now has or may hereafter hold or to which the Landlord is entitled.
7. This Guarantee Agreement she remain in full force and effect until
all of the terms and conditions of the Lease have been complied with and shall
be binding upon Guarantors, and the respective heirs, legal representatives,
successors and assigns of Guarantors and, along with all rights, title, benefits
and securities existing and to exist hereunder, shall inure to the benefit of
and be available to Landlord, his successors and assigns.
IN WITNESS WHEREOF, the undersigned Guarantors have set their hands and
seals.
/s/ William A. Mobley
WILLIAM A. MOBLEY
