EXHIBIT - 10.7.2


 


 


MOSSIMO,
INC.


 


SECOND
AMENDMENT TO OFFICE LEASE DATED JANUARY 1, 2004


 


THIS SECOND AMENDMENT TO
LEASE (this “AMENDMENT”) is entered into between CF SANTA MONICA OFFICE II,
L.P., a Delaware limited partnership (“LANDLORD”), and MOSSIMO, INC., a
Delaware corporation (“TENANT”), with reference to the following:


 


A. Lexington-Broadway Place,
L.L.C. (predecessor-in-interest to Landlord) and Tenant entered into that
certain Lease dated June 29, 2000 and that certain First Amendment to Office Lease
dated as of June 26, 2002 (as amended, the “LEASE”) currently covering
approximately 5,994 rentable square feet consisting of 2016 Broadway Boulevard
and 2018 Broadway Boulevard (the “CURRENT PREMISES”) of Broadway Place, Santa
Monica, California (the “PROJECT”).


 


B. Tenant desires, inter
alia, to expand the Premises to include 2032A Broadway Boulevard, and to extend
the Lease Term.


 


C. Landlord and Tenant now
desire to further amend the Lease as set forth below. Unless otherwise
expressly provided in this Amendment, capitalized terms used in this Amendment
shall have the same meanings as in the Lease.


 


FOR GOOD AND VALUABLE
CONSIDERATION, the receipt and sufficiency of which are acknowledged, the
parties agree as follows:


 


1. FIRST EXTENSION PERIOD.
Although the Lease Term (until this Amendment) expires on July 31, 2005, the
parties have agreed that, as part of the business terms of the transaction
memorialized in this Amendment, the current Lease Term (i.e., as to the Current
Premises) will expire on March 31, 2004. Thereafter, Lease Term as to the
entire Premises (i.e., the Current Premises and the Second  Expansion Space, as defined below) is
extended for a period of four (4) years (the “FIRST EXTENSION PERIOD”)
commencing on April 1, 2004 and expiring on March 31, 2008.


 


2. SECOND EXPANSION SPACE.
Landlord leases to Tenant and Tenant leases from Landlord 2032A Broadway
Boulevard, consisting of approximately 3,406 additional rentable square feet
(the “SECOND EXPANSION SPACE”) in the Project as shown on the attached EXHIBIT
A, which is incorporated into this Amendment for all purposes. The outline of
the Premises attached to the Lease as EXHIBIT A-X is deleted and replaced with
EXHIBIT A attached to this Amendment, and the term “PREMISES” as used in the Lease
means and includes approximately 9,400 rentable square feet, being the sum of
the rentable square footage of the Current Premises (5,994 rentable square
feet) and the Second Expansion Space. The lease of the Second Expansion Space
is subject to all of the terms and conditions of the Lease currently in effect,
except as modified in this Amendment. Landlord shall tender the Second
Expansion Space to Tenant on April 1, 2004, at which time Tenant’s obligation
to pay Rent pursuant to the Lease (as amended) for the Second Expansion Space
shall commence. Possession of space to commence on Jan. 5, 04.


 


3. MINIMUM RENT. Commencing
on April 1, 2004 and continuing through the First Extension Period, Tenant
shall, at the time and place and in the manner provided in the Lease, pay to
Landlord as Minimum Rent for the entire Premises the amounts set forth in the
following rent schedule, plus any applicable tax thereon:


 


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  PERIOD

  	
   

  	
  MINIMUM

  RENT

  	
   

  	
  RATE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  April 1, 2004 thru March 31, 2005

  	
   

  	
  $

  	
  24,910.00

  	
   

  	
  $

  	
  2.65

  	
   

  
	
  April 1, 2005 thru March 31, 2006

  	
   

  	
  $

  	
  25,662.00

  	
   

  	
  $

  	
  2.73

  	
   

  
	
  April 1, 2006 thru March 31, 2007

  	
   

  	
  $

  	
  26,414.00

  	
   

  	
  $

  	
  2.81

  	
   

  
	
  April 1, 2007 thru March 31, 2008

  	
   

  	
  $

  	
  27,166.00

  	
   

  	
  $

  	
  2.89

  	
   

  
	
  April 1, 2008 thru July 31, 2009

  	
   

  	
  $

  	
  28,012.00

  	
   

  	
  $

  	
  2.98

  	
   

  



 


4. ADDITIONAL RENT.
Commencing on April 1, 2004, Tenant’s Share of Direct Expenses payable in
accordance with Section 4 of the Lease shall increase to 12.47% to take the
Second Expansion Space into consideration.


 


5. CONDITION OF PREMISES.


 


(a) Tenant accepts the
Current Premises and the Second Expansion Space in their “as-is” condition “with
all faults” without any agreements, representations, undertakings or
obligations on the part of Landlord to perform any alterations, repairs or
improvements.


 


(b) Tenant shall, at Tenant’s
expense, cause to be constructed and installed in the Second Expansion Space in
a good and workmanlike manner and in strict compliance with applicable laws,
codes, regulations and ordinances the permanent leasehold improvements desired
by Tenant and approved by Landlord (the “IMPROVEMENTS”). Tenant acknowledges
that Landlord is not an architect or  engineer. Accordingly, Landlord’s approval of the proposed Improvements
is not a representation by Landlord that the Improvements will comply with
applicable laws, codes, regulations and ordinances or be free from errors,
omissions, or defects, and Landlord will have no liability therefor, it being
expressly understood and agreed by Tenant that such matters are Tenant’s
responsibility.


 


(c) Landlord shall reimburse
Tenant for costs and expenses of the Improvements up to a maximum of
$150,000.00 (the “IMPROVEMENT ALLOWANCE”) upon delivery by Tenant to Landlord
of (i) Tenant’s written request for the Improvement Allowance made no earlier
than April 1, 2004 nor later than June 30, 2004, and (ii) evidence satisfactory
to Landlord, which evidence must include  (but is not limited to) original invoices marked “paid” by the issuer
and final lien releases from all contractors, subcontractors and materials
suppliers involved in the Improvements, that Tenant paid no less than
$150,000.00 for the Improvements. In the event Tenant fails to comply with the
immediately preceding sentence, Tenant shall, for itself and its successors and
assigns, forfeit and renounce
any right to the Improvement Allowance, and Landlord shall have no further
obligation to provide the Improvement Allowance to Tenant. If Tenant does so
comply, Landlord shall reimburse Tenant as set forth above within thirty (30)
days following Landlord’s receipt of the items enumerated in (i) and (ii).


 


(d) LIABILITIES ARISING FROM
CONSTRUCTION; INDEMNITY. LANDLORD SHALL NOT BE LIABLE IN ANY WAY FOR ANY
INJURY, LOSS OR DAMAGE WHICH MAY OCCUR TO ANY OF TENANT’S INSTALLATIONS DURING
CONSTRUCTION OF THE IMPROVEMENTS, THE SAME BEING SOLELY AT TENANT’S RISK, EVEN
IF CAUSED BY THE SOLE OR CONCURRENT NEGLIGENCE OF LANDLORD. TENANT HEREBY
INDEMNIFIES AND FOREVER HOLDS HARMLESS LANDLORD AND LANDLORD’S PROPERTY MANAGER
FOR THE PROJECT, TOGETHER WITH THEIR RESPECTIVE OFFICERS, SHAREHOLDERS,
SUCCESSORS AND ASSIGNS, AGAINST ANY AND ALL CLAIMS, DAMAGES, LOSSES, INJURIES,
PENALTIES, COSTS, EXPENSES (INCLUDING ATTORNEYS’ FEES AND EXPERT AND CONSULTING
FEES), DEMANDS, LITIGATION, SETTLEMENT PAYMENTS, CAUSES OF ACTION OR JUDGMENTS,
LOSSES, LIABILITIES, AND EXPENSES ARISING OUT OF THE PERFORMANCE OF ANY WORK BY
TENANT’S CONTRACTORS AND TENANT’S SUBCONTRACTORS, EVEN IF CAUSED BY THE
CONCURRENT NEGLIGENCE, BUT NOT THE GROSS NEGLIGENCE OR RECKLESSNESS, OF
LANDLORD. While in or upon the Premises and the Project for the purposes of
performing the Improvements, Tenant and Tenant’s


 


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contractors and
subcontractors shall comply with all terms and provisions of the Lease and
Landlord’s Rules and Regulations, which shall govern the relationship of the
parties.


 


(e) Landlord and Tenant each
agrees that this PARAGRAPH 5 constitutes the entire agreement of the parties
regarding the Improvements and the Improvement Allowance, and that there were
no verbal representations, warranties or understandings pertaining to the
Improvements, the Improvement Allowance, or this Amendment. TENANT FURTHER
ACKNOWLEDGES AND AGREES THAT LANDLORD DOES HEREBY DISCLAIM ANY AND ALL WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THOSE OF FITNESS FOR A
PARTICULAR PURPOSE, WITH RESPECT TO THE LEASED PREMISES AND/OR THE IMPROVEMENTS
LOCATED OR TO BE CONSTRUCTED THEREIN.


 


6. ADA COMPLIANCE.


 


(a) Please be advised that
an owner or lessee of real property may be subject to the Americans With
Disabilities Act (the “ADA”), a Federal law codified at 42 USC Section 12101 et
seq. Among other requirements of the ADA that could apply to the Premises,
Title III of the ADA requires lessors and lessees of “public accommodations” to
remove barriers to access by disabled persons and provide auxiliary aids and
services for hearing, vision or speech impaired persons by January 26, 1992.
The regulations under Title III of the ADA are codified at 28 CFR Part 36.
Lessor is not and shall not be responsible for determining whether Lessee is a
public accommodation under ADA or whether any construction documents or plans
prepared by or for Lessee comply with ADA requirements, including submission of
such documents or plans for review by appropriate state agencies. Such
determinations, if desired by Lessee, shall be the sole responsibility of
Lessee.


 


(b) Tenant shall, at its
expense, be responsible for ADA compliance in the Premises, including restrooms
within space now or hereafter leased or occupied in its entirety by Tenant, its
affiliates or Transferees, as well as any modifications to the Premises or the
Project required by the ADA by reason of Tenant’s lease of the Premises, or the
use or occupancy of the Premises by Tenant and/or its Transferees and their
respective employees, agents, contractors, invitees, licensees, successors and
assigns.


 


7. PARKING. Commencing on
January 5, 2004, the provisions of the Lease pertaining to parking no longer
apply. However, commencing on April 1, 2004, Landlord shall provide parking
permits in connection with the Premises on the following terms and conditions:


 


(a) Within thirty (30) days
following April 1, 2004, Tenant may elect to take, by giving Landlord written
notice within such thirty (30) day period, and Landlord shall then provide, up
to eighteen (18) reserved and/or tandem/reserved parking spaces in the Project
at the monthly rate(s) applicable from time to time for monthly parking as set
by Landlord and/or its licensee, plus any applicable taxes thereon. Monthly
parking fees shall be payable one month in advance prior to the first day of
each calendar month. As of the Effective Date (as defined below), the monthly
parking rate per reserved and/or tandem/reserved parking space is $0.00,
subject to change upon five (5) days’ prior written notice to Tenant. Tenant’s
failure to elect to take any parking spaces within the time allotted and as
otherwise required by the immediately preceding sentence shall be deemed Tenant’s
election to take no parking spaces.


 


(b) Tenant’s right to use
any parking spaces duly and timely taken by Tenant in accordance with PARAGRAPH
7(a) (“TENANT’S PARKING SPACES”) shall be contingent on Tenant’s compliance
with all applicable rules, regulations (as may be modified by Landlord from
time to time), applicable laws, and this PARAGRAPH 7, and shall continue unless
and until a material default of the Lease by  Tenant. If Tenant commits, permits or allows
any of the prohibited activities described in the Lease or the rules then in
effect, then Landlord shall have the right, without notice, in addition to such
other rights and remedies that it may have, to remove or tow away the vehicle
involved and charge the cost to Tenant,


 


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which cost shall be
immediately payable upon demand by Landlord. Tenant’s repeated noncompliance
shall empower landlord to discontinue Tenant’s access to one or more of Tenant’s
Parking Spaces, and Tenant shall thereafter be excused for paying from such
parking space(s).


 


(c) Tenant may permanently
return all or any of Tenant’s Parking Spaces by giving Landlord thirty (30)
days’ written notice of the effective date of the return. Upon such effective
date, Landlord’s obligation to provide, and Tenant’s obligation to pay for,
such returned parking spaces shall terminate. Prior to such effective date,
Tenant shall return any key-card, sticker, or other  identification or entrance enabling device
provided by Landlord. Landlord shall have no obligation to provide Tenant, and
Tenant shall have no right to, any parking spaces that are returned or that
Tenant does not timely elect to take.


 


(d) Landlord shall provide
Tenant’s Parking Spaces, which shall allow “in-and-out” privileges to the
designated parking facilities area or areas using parking access cards or
permits, as applicable. No deductions from the monthly charge shall be made for
days on which the parking facilities are not used by Tenant. Landlord shall
have the continuing right to change the designation of  such parking facilities or areas. Tenant, its
employees, contractors and invitees, shall at all times comply with the
applicable parking rules issued from time to time. Neither Tenant nor its
employees shall use any parking spaces designated for visitors or other
occupants of the Project. Tenant shall, within fifteen (15) days of Landlord’s
written request, furnish Landlord a complete list of license plate numbers for
all vehicles to be parked in the Project by an employee, licensee, invitee or
contractor of Tenant. If there is a change in employees, Tenant shall provide
Landlord with the revised information within five (5) days. Tenant’s sole
remedy for any period during which Tenant’s use of any of Tenant’s Parking Spaces
is precluded for any reason shall be abatement of parking charges for such
precluded spaces. Landlord shall not be obligated to control any unauthorized
parking in any of Tenant’s Parking Spaces. Landlord shall not be liable for any
damage of any nature whatsoever to, or any theft of, vehicles, or contents
therein, or injury (fatal or non-fatal) to persons, in or about such parking
garage, INCLUDING, WITHOUT LIMITATION, THAT CAUSED BY LANDLORD’S SOLE OR
CONCURRENT NEGLIGENCE, BUT NOT TO THE EXTENT CAUSED BY LANDLORD’S GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT.


 


(e) Notwithstanding anything
to the contrary contained in this PARAGRAPH 7, upon thirty (30) days’ prior
written notice from Tenant and subject to availability, Landlord shall provide
Tenant, and Tenant shall have the right to take, any parking permits that
Tenant did not take in accordance with Paragraph 7(a) or that Tenant previously
returned pursuant to Paragraph 7(e), subject to the limitation that the total
number of Tenant’s Parking Spaces, including the parking permits Tenant desires
to take pursuant to this PARAGRAPH 7(e), does not exceed eighteen (18).


 


8. JANITORIAL SERVICES.
Tenant acknowledges and agrees that Landlord does not provide janitorial
services to the Premises. Tenant shall contract for janitorial services
necessary to comply with the requirements of the Lease with a reputable third
party provider (“TENANT’S PROVIDER”) for Tenant’s own account, subject to
Landlord’s approval of Tenant’s Provider, which approval shall not be unreasonably
withheld, conditioned or delayed. Tenant shall not permit entry to the Project
to a third party provider unless and until Tenant has received Landlord’s
consent in accordance with the immediately preceding sentence, and shall
require Tenant’s Provider (once so approved) to comply with the Rules and
Regulations, applicable laws, codes and ordinances, and Landlord’s reasonable
policies and practices for the Project.


 


9. PERMITTED USE. The
Permitted Use of the Premises is production and design studios. Tenant
acknowledges that the Permitted Use must comply with Part 9.04.08.35 of the
Code of Ordinances of Santa Monica, CA as it may be amended or modified or
renumbered. Tenant hereby, represents and warrants that it has read and
understands Part 9.04.08.35 of the Code of Ordinances and Covenants that Tenant
will at all times during the Lease Term (as it may be hereafter modified,
extended or renewed) comply with it.


 


10. ASSIGNMENT AND
SUBLETTING. ARTICLE 14 of the Lease is amended as follows:


 


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(a) The second sentence of
SECTION 14.3 is modified to read as follows:


 


“TRANSFER PREMIUM” shall
mean fifty percent (50%) of all rent, additional rent or other consideration
payable by such Transferee in excess of the Rent (as defined in Section 4.1)
payable by Tenant under this Lease on a per rentable square foot basis (after
deducting therefrom reasonable leasing commissions, marketing expenses and
legal fees, and reasonable costs of tenant improvements paid to unaffiliated
third parties in connection with the Transfer, with proof of same provided to
Landlord).


 


(b) A new SECTION 14.7 is
added as follows:


 


14.7 TENANT AFFILIATE.
Notwithstanding the provisions of SECTIONS 14.1 and 14.6, Tenant may sublet a
portion of the Premises without Landlord’s consent to any corporation which
controls, is controlled by or is under common control with Tenant (any such
corporation, a “TENANT AFFILIATE”) provided that before such sublease shall be
effective, a fully executed counterpart of such sublease shall be delivered to
Landlord prior to the commencement of the term of such Transfer. Any such
sublease shall not, in any way, affect or limit the liability of Tenant under
the terms of the Lease even if after such subletting the terms of this Lease
are materially changed or altered.


 


11. CONSENT. This Amendment
is subject to, and conditioned upon, any required consent or approval being
unconditionally granted by Landlord’s mortgagee(s). If any such consent shall
be denied, or granted subject to an unacceptable condition, this Amendment
shall be null and void and the Lease shall remain unchanged and in full force
and effect.


 


12. BROKER. Tenant
represents and warrants that it has not been represented by any broker or agent
in connection with the execution of this Amendment other than Lee &
Associates - Los Angeles West, Inc., which is acting as agent for both Landlord
and Tenant. Tenant shall indemnify and hold harmless Landlord and its
designated property management, construction and marketing firms, and their
respective partners, members, affiliates and subsidiaries, and all of their
respective officers, directors, shareholders, employees, servants, partners,
members, representatives, insurers and agents from and against all claims (including
costs of defense and investigation) of any other broker or agent or similar
party claiming by, through or under Tenant in connection with this Amendment.


 


13. TIME OF THE ESSENCE.
Time is of the essence with respect to Tenant’s execution and delivery to
Landlord of this Amendment. If Tenant fails to execute and deliver a signed
copy of this Amendment to Landlord by 5:00 p.m. (in the city in which the
Premises is located) on January 1, 2004, this Amendment shall be deemed null
and void and shall have no force or effect, unless otherwise agreed in writing
by Landlord. Landlord’s acceptance, execution and return of this Amendment
shall constitute Landlord’s agreement to waive Tenant’s failure to meet such
deadline.


 


14. MISCELLANEOUS. This
Amendment shall become effective only upon full execution and delivery of this
Amendment by Landlord and Tenant. This Amendment contains the parties’ entire
agreement regarding the subject matter covered by this Amendment, and
supersedes all prior correspondence, negotiations, and agreements, if any,
whether oral or written, between the parties concerning such subject matter.
There are no contemporaneous oral agreements, and there are no representations
or warranties between the parties not contained in this Amendment. Except as
modified by this Amendment, the terms and provisions of the Lease shall remain
in full force and effect, and the Lease, as modified by this Amendment, shall
be binding upon and shall inure to the benefit of the parties  hereto, their successors and permitted
assigns.


 


LANDLORD AND TENANT HAVE
CAREFULLY READ AND REVIEWED THIS AMENDMENT AND EACH TERM AND PROVISION
CONTAINED HEREIN AND, BY EXECUTION OF THIS AMENDMENT, SHOW THEIR INFORMED AND
VOLUNTARY  CONSENT
THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS AMENDMENT IS EXECUTED,
THE TERMS OF THIS AMENDMENT AND OF THE LEASE (AS MODIFIED BY THIS AMENDMENT)
ARE COMMERCIALLY REASONABLE


 


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AND EFFECTUATE THE INTENT
AND PURPOSE OF LANDLORD AND TENANT WITH RESPECT TO THE PREMISES.


 


LANDLORD AND TENANT enter
into this Amendment as of JANUARY 1, 2004 (the “EFFECTIVE DATE”).


 


LANDLORD: CF SANTA MONICA
OFFICE II, L.P., a Delaware limited partnership


 


	
   

  	
  By:

  	
  CFO SM II, LLC, a Delaware
  limited

  liability company, its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kathleen Damilobick

  	
   

  
	
   

  	
   

  	
  Name: Kathleen Damilobick

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  	
   

  



 


TENANT: MOSSIMO, INC., a
Delaware corporation


 


	
   

  	
  By:

  	
  /s/ Edwin Lewis

  	
   

  
	
   

  	
   

  	
  Name: Edwin
  Lewis

  	
   

  
	
   

  	
  Title:

  	
  V-Chair -
  President

  	
   

  



 


1 MONTH SECURITY DEPOSIT


 


6