Unassociated Document


    FIRST
      AMENDMENT TO LEASE

    


    FIRST
      AMENDMENT TO THAT CERTAIN LEASE
      AND
      ADDENDUM TO LEASE (“ADDENDUM TO LEASE”) DATED DECEMBER 15, 2000, BETWEEN GUITAR
      CENTER, INC., A DELAWARE CORPORATION, (“TENANT”), AND 5795 LINDERO CANYON, L.P.,
      SUCCESSOR IN INTEREST TO THE J. DAVID GLADSTONE INSTITUTES, A CHARITABLE TRUST
      (“LANDLORD”) (COLLECTIVELY “LEASE”)

    


    THIS
      FIRST AMENDMENT TO LEASE, dated for reference purposes only, May 15, 2007,
      (this
“Amendment”), is entered into between Landlord and Tenant, in light of the
      following facts:

    


    WHEREAS,
      Landlord and Tenant have previously entered into that certain Lease for the
      office building containing approximately 69,060 square feet, located at 5795
      Lindero Canyon Road, Westlake Village, California, 91362
      (“Premises”);

    


    WHEREAS,
      Landlord and Tenant have agreed to extend the term of the Lease upon the terms
      and conditions set forth herein; and

    


    WHEREAS,
      subject to the terms and conditions herein, Landlord and Tenant have agreed
      to
      so amend and modify the Lease.

     

    NOW,
      THEREFORE, in consideration of the above promises and mutual covenants,
      conditions and provisions contained herein, the parties hereto agree as
      follows:

    


    1. Defined
      Terms and Conditions.
      All
      initially capitalized terms used in this Amendment shall have the meaning
      ascribed thereto in the Lease unless specifically defined herein.

    


    2.
       Incorporation
      of Recitals.
      The
      recitals to this Amendment are an integral part hereof and are hereby
      incorporated herein verbatim as part of this Amendment as if set forth
      herein.

    


    3. Renewal
      Term.
      Paragraph 1.3 of the Lease is hereby amended to extend the Original Term of
      the
      Lease for an additional eight (8) years commencing April 15, 2009 and ending
      April 14, 2017 (such extended period, the “Original Term”). 

    


    4. Base
      Rent.
      Paragraph 1.5 of the Lease is hereby deleted in its entirety. Paragraph 7 of
      the
      Addendum to Lease is hereby modified as follows: 

    


    “Commencing
      upon April 15, 2009, the Base Rent for the remainder of the Original Term shall
      be $85,634.40 monthly, payable on the fifteenth (15th)
      day of
      each month. The Base Rent shall thereafter escalate 2.5% annually during the
      remainder of the Original Term as set forth below:


    
      
         

      

      
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              Period

            	 	
              Monthly

            
	
              April
                15, 2009 - April 14, 2010

            	 	
              $85,634.40

            
	
              April
                15, 2010 - April 14, 2011

            	 	
              $87,775.26

            
	
              April
                15, 2011 - April 14, 2012

            	 	
              $89,969.64

            
	
              April
                15, 2012 - April 14, 2013

            	 	
              $92,218,88

            
	
              April
                15, 2013 - April 14, 2014

            	 	
              $94,524.35

            
	
              April
                15, 2014 - April 14, 2015

            	 	
              $96,887.46

            
	
              April
                15, 2015 - April 14, 2016

            	 	
              $99,309.65

            
	
              April
                15, 2016 - April 14, 2017

            	 	
              $101,792.38”

            
	 	 	 


    

    5. Security
      Deposit.
      The
      security deposit in the amount of $71,000, as set forth in Paragraph 1.7 of
      the
      Lease, shall be credited against Base Rent for the month of May 2009. Paragraph
      5 of the Lease is hereby deleted in its entirety.

    


    6.  Options.
      Paragraph 6 of the Addendum to Lease is hereby deleted in its entirety. The
      following paragraph shall be substituted in its place: 

    


    “Options.
      Landlord
      hereby grants to Tenant two (2) options to extend the Original Term of this
      Lease, the first for an additional five years (through April 14, 2022) and
      the
      second for an additional five years (through April 14, 2027) (each, an
“Extension Term”). The first Extension Term shall commence as of the end of the
      Original Term. To exercise an Extension Term, Tenant must give written notice
      of
      exercise to Landlord no later than the date which is nine (9) months prior
      to
      the expiration of the Original Term (July 14, 2016) or the first Extension
      Term
      (July 14, 2021), which ever the case may be. If Tenant properly and timely
      exercises an Extension Option, then the then current term shall be extended
      by
      the Extension Term and all terms and conditions of this Lease shall remain
      in
      full force and effect. The Base Rent for the first year of the Extension Term
      shall escalate by 2.5% over the previous year and shall thereafter escalate
      2.5%
      annually as set forth below:

    


    
      	
              First
                Extension Term

            	 	
              Monthly

            
	
              April
                15, 2017 - April 14, 2018

            	 	
              $104,337.18

            
	
              April
                15, 2018 - April 14, 2019

            	 	
              $106,945.60

            
	
              April
                15, 2019 - April 14, 2020

            	 	
              $109,619.24

            
	
              April
                15, 2020 - April 14, 2021

            	 	
              $112,359.72

            
	
              April
                15, 2021 - April 14, 2022

            	 	
              $115,168.71

            
	 	 	 
	
              Second
                Extension Term

            	 	
              Monthly

            
	
              April
                15, 2022 - April 14, 2023

            	 	
              $118,047.92

            
	
              April
                15, 2023 - April 14, 2024

            	 	
              $120,999.11

            
	
              April
                15, 2024 - April 14, 2025

            	 	
              $124,024.08

            
	
              April
                15, 2025 - April 14, 2026

            	 	
              $127,124.68

            
	
              April
                15, 2026 - April 14, 2027

            	 	
              $130,302.79”

            
	 	 	 


    

    7.
      Existing
      Equipment.
      Paragraph 5 of the Addendum to Lease is hereby deleted in its
      entirety.

    



    
      
         

      

      
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    8. Assignment
      and Subletting.
      Paragraph 12.1 (a) of the Lease and Paragraph 20 of the Addendum to Lease are
      hereby deleted in their entirety. The following paragraph shall be substituted:
      

    


    “Tenant
      shall not voluntarily or by operation of law assign, transfer, mortgage or
      otherwise transfer or encumber (collectively, “Assignment”) or sublet all or any
      part of Tenant's interest in this Lease or in the Premises without Landlord's
      prior written consent given under and subject to the terms of Section 12 of
      the
      Lease. Notwithstanding anything contained herein to the contrary, Tenant may,
      without Landlord’s consent, assign this Lease or sublet all of the Premises or
      any portion thereof to: (i) any parent, subsidiary, or affiliate of Tenant;
      (ii)
      any successor to Tenant, by way of merger, reorganization, consolidation, sale
      of assets, sale of capital stock or the like; or (iii) an entity which controls,
      is controlled by, or is under common control with Tenant, provided, however,
      that in the event of an assignment: (a) the surviving entity assumes the Lease,
      and, in the case of an assignment or sublet, (b) Landlord receives notice of
      the
      assignment, or subletting, and a copy of the assignment and assumption
      agreement, or sublease.”

    


    
      	
              9.

            	
              Termination
                Right of First Refusal.
                The following new Paragraphs are added to the
                Lease:

            


    

    


    Paragraph
      51. Termination
      Right:
      Tenant
      shall have the right to terminate the Lease, by delivery of written notice
      to
      Landlord, at any time between June 1, 2011 to August 31, 2011. Additionally,
      Tenant shall have the right to terminate the Lease, by delivery of written
      notice to Landlord, at any time between September 1, 2013 and November 30,
      2013.
      Tenant shall provide nine (9) month’s written notice and shall pay an amount
      equal to the sum of three (3) months Base Rent, at the then current rental
      rate,
      and the unamortized portion based on a straight-line calculation of the
      brokerage commission as set forth in the broker commission agreement attached
      hereto as EXHIBIT
      A - COMMISSION AGREEMENT
      (“Commission Agreement”). Tenant’s rights to cancel shall be conditioned upon
      the City of Westlake Village (or other governmental agency) denying Tenant’s
      reasonable request for additional occupancy rights at 5775 Lindero Canyon
      Road.

    


    Paragraph
      52. Right
      of First Refusal.
      Subject
      to the terms of this Lease, if at any time during the Original Term and any
      subsequent renewal term, Landlord receives and desires to accept a bona fide
      third-party offer (i.e. a Letter of Intent or similar offer) to purchase the
      Premises, then Tenant shall have thirty (30) days following receipt from
      Landlord of a written itemization of the relevant terms relating to such
      third-party offer (the “Term Sheet”) in which to enter into a binding purchase
      and sale contract acceptable to the parties to purchase the Premises on the
      same
      economic terms and conditions as were contained in the Term Sheet, in addition
      to such other non-economic terms and conditions as may be acceptable to the
      parties, if any (the “Binding Agreement”). If, for any good faith reason
      (including, without limitation, the parties’ failure to agree upon the form of
      the Binding Agreement or any of the terms contained therein), the parties do
      not
      enter into a mutually acceptable Binding Agreement containing the economic
      terms
      set forth in the Term Sheet, within such thirty (30) day period, then Tenant
      will be deemed to have elected not to purchase the Premises on the terms
      contained in the Term Sheet. In such event, Landlord shall thereafter have
      one
      hundred eighty (180) days from the expiration of such thirty (30) day period
      in
      which to consummate the transaction with such third party or any other person
      or
      entity at a purchase price of not less than ninety-five percent (95%) of the
      purchase price contained in the Term Sheet. In the event Landlord fails to
      consummate the transaction within such one hundred eighty (180) day period,
      Tenant’s right of first refusal shall be restored. Tenant acknowledges and
      agrees that its right of first refusal to purchase the Premises contained in
      this Paragraph will not be triggered by the following events: (i) the assignment
      of the Lease by Landlord to an affiliate of Landlord, or (ii) transfers by
      and
      between or among shareholders, limited partners, general partners, or members
      of
      Landlord or any of the constituents thereof. To exercise its right, Tenant
      must,
      within the same thirty (30) day time period as above, deposit in escrow with
      Chicago Title in Westlake Village, California, all moneys and instruments
      required by the terms of the offer to be paid or delivered to Landlord on close
      of escrow and shall also give Landlord written notice of the deposit. In the
      event Tenant fails to exercise the option to purchase in accordance with the
      provisions of this Section, Landlord may sell the Premises to the third party
      making the offer on the same terms and conditions set forth in that offer.
      If
      for any reason the Premises are not sold to the party making the offer, Landlord
      shall give Tenant the same right to purchase the Premises on receiving any
      subsequent offer from any third party that is acceptable to Landlord. If this
      property is sold to any third party during the term of this lease, then the
      provisions of this section shall thereafter be of no further force or effect.
      Additionally, the transfer of Landlord’s title to the Premises resulting from
      Landlord’s death or by will or intestacy shall not be deemed to be a sale under
      the provisions of this Paragraph. 

    



    
      
         

      

      
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    10. Effectiveness.
      This
      Amendment may be executed in any number of counterparts, each of which when
      so
      executed and delivered shall be deemed an original. All of such counterparts
      shall constitute but one and the same instrument. This Amendment shall be
      effective, as of the date last executed below.

    


    11. No
      Further Amendments.
      Except
      as expressly modified and amended by this Amendment, the provisions of the
      Lease
      shall remain in full force and effect in accordance with its terms.

    



    
      
         

      

      
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    IN
      WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
      and delivered as of the date set forth below.

    


    
      	
              LANDLORD:

            	
              TENANT:

            
	
              5795
                LINDERO CANYON, L.P.

            	
              GUITAR
                CENTER, INC.,

            
	
               

            	
              a
                Delaware corporation 

            
	 	 
	 	 
	
              By:
                ___________________________

            	
              By:
                __________________________

            
	
              Name:

            	
                     
                Leland P. Smith

            
	
              Title:

            	
              Title:
                EVP & General Counsel

            
	
              Date:
                June 1, 2007

            	
              Date:
                June 1, 2007

            


    

    


    
      
         

      

      
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