EXHIBIT-10.9
SUBLEASE made as of the 1st day of October, 1996, by and
between INTERTEC, A DIVISION OF INNOVATIVE CAPITAL MANAGEMENT, INC., a
California corporation, having an office at 00 Xxxxx Xxxxxx Xxxxxx, Xxxx Xxxxxx,
Xxxxxxxxxx 00000 (hereinafter called "Sublandlord"), and ELECTRONIC HAIR
STYLING, INC., a Delaware corporation, having an office at Xxx Xxxxxx Xxxxxx,
Xxxx Xxxxxx, Xxxxxxxxxx 00000 (hereinafter called "Subtenant").
W I T N E S S E T H:
WHEREAS: A. By lease (hereinafter called the "Xxxxxxxxx") dated as of
October 1, 1996, RAINIER CONCEPTS, LTD. (hereinafter called "Overlandlord")
leased to Sublandlord the building known as Xxx Xxxxxx Xxxxxx, Xxxx Xxxxxx,
Xxxxxxxxxx (hereinafter called the "Building") in accordance with the terms of
the Xxxxxxxxx. A copy of the Xxxxxxxxx (from which certain terms which do not
relate to Subtenant's obligations hereunder have been deleted) has been
previously delivered by Sublandlord to Subtenant; and B. Sublandlord and
Subtenant desire to consummate a subleasing of a portion of the Building on
terms and conditions contained in this agreement (hereinafter called the
"Sublease"). NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter contained, it is hereby agreed as follows: 1. 1.1.
Sublandlord hereby leases to Subtenant and Subtenant hereby hires from
Sublandlord the portion of the Building (approximately 6,008 square feet) shown
on Exhibit A annexed hereto and made a part hereof (hereinafter called the
"Premises") for a term (hereinafter called the "Sublease Term") to commence on
the date hereof (hereinafter called the "Sublease Commencement Date") and to end
on the day preceding the expiration of the Xxxxxxxxx, as same may be extended in
accordance with the provisions thereof (hereinafter called the "Sublease
Expiration Date"), at an annual fixed rent (hereinafter called "fixed annual
rent") of $108,144 per annum, to be paid by Subtenant to Sublandlord at
Sublandlord's office (or such other location as Sublandlord shall designate) in
equal monthly installments of $9,012 in advance, on the first day of each month
during the Sublease Term without any setoff, offset, abatement or reduction
whatsoever. Sublandlord shall not, without the consent of Subtenant (which, so
long as Subtenant is fully performing hereunder, may be withheld in Subtenant's
sole discretion), modify the Xxxxxxxxx or exercise any option granted to
Sublandlord so as to provide for the termination of the Xxxxxxxxx prior to the
Sublease Expiration Date. 1.2. Subtenant shall also be permitted to use the
fixtures and equipment listed on Exhibit B annexed hereto and made a part here
during the term of this Sublease for an additional monthly charge of $1,774.00
per month. 2. 2.1. Subtenant shall not (a) assign this Sublease, nor (b) permit
this Sublease to be assigned by operation of law or otherwise, nor (c) underlet
all or any part of the Premises nor (d) permit the Premises or any desk space
therein to be occupied by any person(s) other than employees or consultants of
Subtenant, without first obtaining: (i) Overlandlord's consent and all other
required consents and requirements with respect to such assignment or subletting
as set forth in and pursuant to the Xxxxxxxxx, and (ii) Sublandlord's consent
which, so long as Overlandlord's consent is obtained, shall not be unreasonably
withheld or delayed and shall be given or withheld within the time periods
provided therefor under the Xxxxxxxxx. 2.2. Sublandlord shall cooperate with
Subtenant and, after notice, shall, at Subtenant's expense, use reasonable good
faith efforts in seeking to obtain Overlandlord's consent and/or performance
under the Xxxxxxxxx. 2.3. If Overlandlord shall default in any of its
obligations with respect to the Premises, or there shall exist a bona fide
dispute with Overlandlord under the terms, covenants, conditions, provisions and
agreements of this Sublease and/or the Xxxxxxxxx and Subtenant notifies
Sublandlord in writing that Subtenant has previously notified Overlandlord of
such dispute and that such default or notice has been disregarded or not
reasonably satisfactorily acted upon, then Sublandlord shall notify Overlandlord
of such default or dispute in its name on Subtenant's behalf. Subtenant shall be
entitled to participate with Sublandlord in the enforcement of Sublandlord's
rights against Overlandlord, but Sublandlord shall have no obligation to bring
any action or proceeding nor to take any steps to enforce Sublandlord's rights
against Overlandlord. If, after written request from Subtenant, Sublandlord
shall fail or refuse to take appropriate action for the enforcement of
Sublandlord's rights against Overlandlord with respect to the Premises,
Subtenant shall have the right to take such action in its own name, and for such
purpose and only to such extent, all of the rights of Sublandlord under the
Xxxxxxxxx are hereby conferred upon and assigned to Subtenant and Subtenant
hereby is subrogated to such rights to the extent that the same shall apply to
the Premises. If any such action against Overlandlord, in Subtenant's name,
shall be barred by reason of lack of privity, non-assignability or otherwise,
Subtenant may take such action in Sublandlord's name provided Subtenant has
obtained the prior written consent of Sublandlord (in each instance), which
consent shall not be unreasonably withheld or delayed (and if it is apparent
that Subtenant must act promptly in order to preserve its rights, any failure on
Sublandlord's part to respond to Subtenant's request to take action in
Sublandlord's name within ten (10) days after Subtenant's request shall be
automatically deemed Sublandlord's consent thereto), and in connection
therewith, Subtenant does hereby agree to indemnify and hold Sublandlord
harmless from and against all liability, loss or damage including, without
limitation, reasonable attorneys' fees and disbursements, which Sublandlord
shall suffer by reason of such action. In any event, Subtenant shall not be
allowed any abatement or diminution of fixed rent or additional rent under this
Sublease because of Overlandlord's failure to perform any of its obligations
under the Xxxxxxxxx.
2.4. If Sublandlord elects to pursue any remedy provided for
in the Xxxxxxxxx in addition to or in cooperation with Subtenant, Subtenant
shall not be required to reimburse Sublandlord for its expenses in connection
therewith if such reimbursement would be in addition to its own expenses, so
that Subtenant shall only be required to pay legal fees and expenses one time
(per occasion) in connection with the pursuit of its remedies under the
Xxxxxxxxx.
3.
3.1. Except as herein otherwise expressly provided and except
for the obligation to pay rent and additional rent under the Xxxxxxxxx, all of
the terms, covenants, conditions, benefits, enjoyments, privileges, services,
and provisions set forth in the Xxxxxxxxx are hereby incorporated in, and made a
part of this Sublease, and such rights and obligations as are contained in the
Xxxxxxxxx are hereby imposed upon and granted to the respective parties hereto;
the Sublandlord herein being substituted for the Landlord in the Xxxxxxxxx and
the Subtenant herein being substituted for the Tenant named in the Xxxxxxxxx;
provided, however, that Sublandlord herein shall not be liable for any defaults
by Overlandlord other than those caused (i) solely as a result of the gross
negligence or wilful misconduct of Sublandlord or (ii) by breach of the
Underlying Lease not occasioned in whole or in part by any act, omission or
breach hereunder by Subtenant; and, if Overlandlord is not the fee owner, the
owner in fee of the land and Building of which the Premises are a part. If the
Xxxxxxxxx shall be terminated for any reason during the term hereof, then and in
that event this Sublease shall thereupon automatically terminate and Sublandlord
shall have no liability to Subtenant by reason thereof. Upon the termination of
this Sublease, whether by forfeiture, lapse of time or otherwise, or upon the
termination of Subtenant's right to possession, Subtenant will at once surrender
and deliver up the Premises in good condition and repairs, reasonable wear and
tear excepted.
3.2. For the purposes of this Sublease, the Witnesseth clause,
Articles 2, 15, 34, 39 and 43 of the Xxxxxxxxx shall not be deemed incorporated
in or made a part hereof and shall be deemed deleted from the Xxxxxxxxx for
purposes of this Sublease.
3.3. Notwithstanding anything to the contrary contained
elsewhere herein, in the event that Sublandlord's rights under the Xxxxxxxxx are
terminated or Sublandlord surrenders the Premises, for any reason whatsoever,
Overlandlord shall have the right (but not the obligation) to recognize
Subtenant as a direct tenant of the Premises, upon notice to Subtenant given on
or before the date which is fifteen (15) days following the termination of
Sublandlord's rights under the Xxxxxxxxx or the surrender of the Premises, in
which event Subtenant shall attorn to and recognize Overlandlord as Landlord
(with Subtenant as Tenant) under the Xxxxxxxxx upon all of the terms and
conditions thereof; provided, however, that in such event, the financial terms
(i.e. the rent, additional rent and other charges) under the Xxxxxxxxx shall be
deemed automatically modified so that such financial terms shall in no event be
more onerous than the financial terms contained in this Sublease.
4.
4.1. Subtenant has examined the Premises, is aware of the
physical condition thereof, and agrees to take the same "as is," with the
understanding that there shall be no obligation on the part of Sublandlord to
incur any expense whatsoever in connection with the preparation of the Premises
for Subtenant's occupancy thereof.
4.2. Notwithstanding anything to the contrary contained in
Section 4.1 above, Sublandlord represents that, to the best of its knowledge,
the cabling and phone switching presently existing in the Premises is in working
order as of the date hereof.
5.
5.1. Subtenant agrees that the Premises shall be occupied only as executive,
administrative and general offices for Subtenant's business.
6.
6.1. This Sublease is conditioned upon the consent thereto by
Overlandlord which consent shall be evidenced by Overlandlord's signature
appended hereto or a separate consent in the form utilized by Overlandlord for
such purposes.
6.2. Except as otherwise specifically provided herein,
wherever in this Sublease Subtenant is required to obtain Sublandlord's consent
or approval, Subtenant understands that Sublandlord may be required to first
obtain the consent or approval of Overlandlord. Sublandlord agrees to reasonably
cooperate (without expenditure of funds or resort to or threat of litigation)
with Subtenant in obtaining Overlandlord's consent or approval as provided in
the Xxxxxxxxx.
7.
7.1. Subtenant acknowledges that the services to be rendered
to the Premises are to be rendered by Overlandlord. Anything in this Sublease to
the contrary notwithstanding, if there exists a breach by Sublandlord of any of
its obligations under this Sublease and, concurrently, a corresponding breach by
Overlandlord under the Xxxxxxxxx of its obligations under the Xxxxxxxxx exists,
then and in such event, Subtenant's sole remedy against Sublandlord in the event
of any breach of obligations under this Sublease shall be the right to pursue a
claim in the name of Sublandlord against Overlandlord, and Sublandlord agrees
that it will, at Subtenant's expense, cooperate with Subtenant in the pursuit of
such claim.
7.2. Anything contained in any provisions of this Sublease to
the contrary notwithstanding, Subtenant agrees, with respect to the Premises, to
comply with and remedy any default claimed by Overlandlord and caused by
Subtenant, within the period allowed to Sublandlord as tenant under the
Xxxxxxxxx, even if such time period is shorter than the period otherwise allowed
in the Xxxxxxxxx, due to the fact that notice of default from Sublandlord to
Subtenant is given after the corresponding notice of default from Overlandlord.
Provided that the corresponding payment has been made by Subtenant to
Sublandlord hereunder, Sublandlord agrees to pay the then due installment(s) of
rent and additional rent due under the Xxxxxxxxx. Sublandlord agrees to forward
to Subtenant, upon receipt thereof by Sublandlord, a copy of each notice of
default received by Sublandlord in its capacity as tenant under the Xxxxxxxxx.
Subtenant agrees to forward to Sublandlord, upon receipt thereof, copies of any
notices received by Subtenant with respect to the Premises from Overlandlord or
from any governmental authorities. Sublandlord agrees that in the event
Sublandlord receives any abatement under the Xxxxxxxxx as a result of
Overlandlord's failure to provide services thereunder, Subtenant shall be
entitled to a corresponding abatement hereunder.
8.
8.1. Sublandlord represents (a) that it is the holder of the
interest of the tenant under the Xxxxxxxxx, (b) that the xxxxxxxxx is in full
force and effect and (c) that the copy of the Xxxxxxxxx delivered to Subtenant,
as referenced above, remains unamended and unmodified.
9.
9.1. This Sublease is subject to, and Subtenant accepts this
Sublease subject to, any amendments and supplements to the Xxxxxxxxx hereafter
made between Overlandlord and Sublandlord, provided that any such amendment or
supplement to the xxxxxxxxx will not prevent or adversely affect the use by
Subtenant of the Premises in accordance with the terms of this Sublease,
increase the obligations of Subtenant or decrease its rights under the Sublease
or in any other way materially adversely affect Subtenant.
9.2. This Sublease is subject and subordinate to the Xxxxxxxxx
and to all ground or underlying leases and to all mortgages which may now or
hereafter affect such leases or the real property of which the Premises are a
part and all renewals, modifications, replacements and extensions of any of the
foregoing. This Section 9.2 shall be selfoperative and no further instrument of
subordination shall be required. To confirm such subordination, Subtenant shall
execute promptly any certificate that Sublandlord may request.
10.
10.1. Subtenant covenants, represents and warrants that
Subtenant has had no dealings or communications with any broker or agent in
connection with the consummation of this Sublease, and Subtenant covenants and
agrees to pay, hold harmless and indemnify Sublandlord from and against any and
all cost, expense (including reasonable attorneys' fees) or liability for any
compensation, commissions or charges claimed by any broker or agent other than
such brokers with respect to this Sublease or the negotiation thereof.
11.
11.1. Subtenant acknowledges that it is familiar with the
provisions of the Xxxxxxxxx. In the event any payment of Additional Rent (as
defined in the Xxxxxxxxx) is due and owing by Sublandlord to Overlandlord during
the term of this Sublease, then Subtenant shall pay as additional rent pursuant
to this Sublease an amount equal to 100% of such Additional Rent. At any time
payment of any Additional Rent is due under the Xxxxxxxxx, Sublandlord may
deliver to Subtenant a statement with respect to such payment, within ten (10)
days after delivery of such statement, Subtenant shall pay to Sublandlord
additional rent determined as aforesaid in this Section 11.1.
12.
12.1. Any notice, demand or communication which, under the
terms of this Sublease or under any statute or municipal regulation must or may
be given or made by the parties hereto, shall be in writing and given or made by
either hand delivery, overnight delivery by a nationally recognized courier
service or by mailing the same by certified mail, return receipt requested,
addressed to the party for whom intended at its address set forth above. Either
party, however, may designate such new or other address to which such notices,
demands or communications thereafter shall be given, made or mailed by notice
given in the manner prescribed herein. Any such notice, demand or communication
shall be deemed given or served, as the case may be, on the date of first
attempted delivery, if by hand or overnight delivery, or three (3) days after
delivery to the Post Office, if delivery by certified mail, return receipt
requested.
13.
13.1. Subtenant may make no changes, alterations, additions,
improvements or decorations in, to or about the Premises without Sublandlord's
prior written consent in each instance.
14.
14.1. So long as Subtenant pays all of the rent and additional
rent due under this Sublease and performs all of Subtenant's other obligations
hereunder, Subtenant shall peacefully and quietly have, hold and enjoy the
Premises subject, however, to the terms, provisions and obligations of this
Sublease and the Xxxxxxxxx.
14.2. Sublandlord agrees that, in the event Sublandlord
defaults under the terms, covenants, conditions, provisions and agreements of
the Xxxxxxxxx (provided same was not caused by Subtenant or was the result of
Subtenant's actions or inactions with respect to Subtenant's obligations
hereunder), then in such event, Sublandlord covenants and agrees to defend,
indemnify and hold Subtenant harmless from any and all claims, causes of action
against or damages to Subtenant resulting solely and directly therefrom.
15.
15.1. This Sublease may not be changed orally, but only by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, modification or discharge is sought.
15.2. This Sublease shall not be binding upon Sublandlord
unless and until it is signed by Sublandlord and delivered to Subtenant. This
Section 15.2 shall not be deemed to modify the provisions of Article 6 hereof.
15.3. This Sublease constitutes the entire agreement between
the parties and all representations and understandings have been merged herein.
15.4. This Sublease shall inure to the benefit of all of the
parties hereto, their successors and (subject to the provisions hereof) their
assigns.
15.5. This Sublease may be executed in one or more
counterparts, all of which together shall constitute one and the
same instrument.
15.6. Nothing herein contained shall be deemed to release
Sublandlord from its obligations under the Xxxxxxxxx, which such obligations
shall remain throughout the term of the Xxxxxxxxx.
15.7.This Sublease shall be governed by or construed in accordance
with the laws of the State of California.
16.
16.1. "Change of Control" means the occurrence of any of the
following events:
(i) Any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing 50% or more of the total
voting power represented by the Company's then outstanding voting securities; or
(ii) A change in the composition of the Board of directors of
the Company as a result of which fewer than a majority of the directors are
"Incumbent Directors." "Incumbent Directors" shall mean directors who either (A)
are directors of the Company as of the date hereof, or (B) are elected, or
nominated for election, to the Board of Directors with the affirmative votes
(either by a specific vote or by approval of the proxy statement of the Company
in which such person is named as a nominee for election as a director without
objection to such nominations) of at least three-quarters of the Incumbent
Directors at the time of such election or nomination (but shall not include an
individual whose election or nomination is in connection with an actual or
threatened proxy contest relating to the election of directors of the Company);
or
(iii) The shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the shareholders
of the Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or substantially all
of the Company's assets.
16.2 Notwithstanding any other provision in this Sublease or
the Xxxxxxxxx, in the event of a Change of Control Sublandlord may at any time
thereafter terminate the term of this Sublease provided in Section 1.1 upon 30
days written notice to Subtenant.
IN WITNESS WHEREOF, the parties have hereunto set their hands
and seals as of the day and year first above written.
INTERTEC, A DIVISION OF INNOVATIVE CAPITAL MANAGEMENT, INC.
Sublandlord
By_____/s/ Xxxxxx X. Hoff_____
Xxxxxx X. Xxxx, Vice President
ELECTRONIC HAIR STYLING, INC.,
Subtenant
By _/s/ Xxxx X. Hellmann_____________
Xxxx X. Xxxxxxxx, Vice President, Chief Financial Officer
THE FOREGOING IS CONSENTED
TO BY RAINIER CONCEPTS, LTD.,
Overlandlord
By__/s/ Xxxxxx X. Hoff______
Partner
