EXHIBIT 10.3
COMMERCIAL LEASE FORM
1. Parties. This
Lease dated July 12, 1993, is made by and between The Richlar
Partnership (herein called “Lessor”) and Digital Domain
(a New York General Partnership) (herein called
“Lessee”).
2. Premises. Lessor
hereby leases to Lessee and Lessee leases from Lessor for the term,
at the rental, and upon all of the conditions set forth herein,
that certain premises situated in the County of Los Angeles, State
of California, commonly known as 300 Rose Avenue and 320 Hampton
Drive, Venice, California, consisting of four buildings totaling
approximately 67,570 square feet and adjacent perking areas as
shown on the attached plan (herein called “The
Premises”). (See Addendum-Paragraph 22.)
3. Term.
3.1 Term. The
term of this Lease shall be for ten (10) years commencing on
January 1, 1994 and ending on December 31, 2003 unless sooner
terminated pursuant to any provision hereof.
3.2 Delay
In Commencement. Notwithstanding
said commencement date, if for any reason Lessor cannot deliver
possession of the Premises to Lessee on said date, Lessor shall not
be subject to any liability therefor, nor shall such failure affect
the validity of this Lease or the obligations of Lessee hereunder
or extend the term hereof, but in such case Lessee shall not be
obligated to pay rent until possession of the Premises is tendered
to Lessee. If Lessee occupies the Premises prior to said
commencement date (any such occupancy to be only with Lessor's
consent), such occupancy shall be subject to all provisions hereof,
such occupancy shall not advance the termination date, and Lessee
shall pay rent for such period at the initial monthly rates set
forth below.
4. Rent. Lessee
shall pay to Lessor rent for the Premises at an annual rate of
$
------------------- payable
in equal monthly payments of $
------------------- (See
Addendum - Paragraph 17) in advance, on the first day of each month
of the term hereof. Lessee shall pay Lessor upon execution hereof
$67,500.00 as rent for January, 1994. Rent for any period during
the term hereof which is for less than one month shall be a pro
rata portion of the monthly installment. Rent shall be payable
without deduction or offset in lawful money of the United States,
to Lessor at the address stated herein or to such other persons or
at such other places as Lessor may designate in
writing.
4.1 Adjustments to Rent.
(a) Definitions. “Index”
shall mean the Consumer Price Index for All Urban Consumers for the
Los Angeles-Riverside-Anaheim Metropolitan Area: All Items
(1982-84=100), issued by the Bureau of Labor Statistics of the
United States Department of Labor. In the event the Index shall
hereafter be converted to a different standard reference base or
otherwise revised, the determination of the Percentage Increase
(defined below) shall be made with the use of such conversion
factor, formula or table for converting the Index as may be
published by the Bureau of Labor Statistics or any successor or
substitute governmental entity or, if said Bureau (or any successor
or substitute governmental entity) shall not publish the same, then
with the use of such conversion factor, formula or table as may be
published by Prentice Hall, Inc. or, failing such publication, by
any other nationally recognized publisher of similar statistical
information. In the event the Index shall cease to be published,
then, for the purposes of this Lease, there shall be substituted
for the Index such other index as Lessor and Lessee shall agree
upon, and, if they are unable to agree within ninety (90) days
after the Index ceases to be published, such matter shall be
determined in Los Angeles by arbitration in accordance with the
rules of the American Arbitration Association.
“Base
Index” (See Addendum-Paragraph 33.)
“Anniversary
Month” shall mean December of each calendar year during
the terms of the Options to Extend set forth in Paragraph 33
of the Addendum.
“Percentage
Increase” shall mean the percentage equal to the
fraction, the numerator of which shall be the Index in the
Anniversary Month less the Base Index, and the denominator of
which shall be the Base Index.
(b) Rental Adjustment. If
the Index in an Anniversary Month shall exceed the Base Index, then
the Rent payable for the ensuing calendar year, and thereafter
until a new index comparative statement is sent to Lessee, shall be
increased by an amount equal to the Percentage Increase multiplied
by the Annual Rent set forth in the first sentence of Article 4. At
any time after January 1
st of
the said ensuing calendar year, Lessor shall send Lessee an index
comparative statement setting forth (a) the Index in the
Anniversary Month preceding the date of the statement, (b) the Base
Index, (c) the Percentage Increase, and (d) the increase in the
Annual Rent. On the first day of the calendar month (“current
month”) following the month in which the Index comparative
statement was sent (i) Lessee shall pay to Lessor a sum equal to
one-twelfth of said Increase in the Annual Rent multiplied by the
number of calendar months of the Lease term then elapsed since said
January 1
st ,
and (ii) thereafter, commencing with the current month and
continuing monthly thereafter until a different index comparative
statement is sent to Lessee, the monthly installments of rent shall
be increased by an amount equal to one-twelfth of said increase. In
the event the last mentioned increased monthly installments of rent
shall continue beyond the end of the calendar year for which such
payments were payable, any necessary adjustment will be made when
the next succeeding index comparative statement is sent to Lessee.
In no event shall the rent computed for any Lease Year be less than
the rent for any prior Lease Year.
5. Security Deposit. Lessee
shall deposit with Lessor upon execution hereof $
------------------- (See
Addendum-Paragraph 25.) as security for Lessee's faithful
performance of Lessee's obligation hereunder. If Lessee falls to
pay rent or other charges due hereunder, or otherwise defaults with
respect to any provision of this Lease, Lessor may use, apply or
retain all or any portion of said deposit for the payment of any
rent or any other charge in default beyond any applicable grace
period or for the payment of any other sum which the Lessor may
spend or become obligated to spend by reason of Lessee's default,
or to compensate Lessor for any loss or damage which Lessor may
suffer thereby. If Lessor so uses or applies all or any portion of
said deposit, Lessee shall within ten (10) days after demand
therefor deposit cash with Lessor in an amount sufficient to
restore said deposit to the full amount hereinbefore stated and
Lessee's failure to do so shall be material breach of this Lease.
Lessor shall not be required to keep said deposit separate from its
general accounts if Lessee performs all of Lessee's obligations
hereunder as of the expiration of the Lease, said deposit, or so
much thereof as has not been theretofore applied by Lessor, shall
be returned, without payment of interest or other increment for its
use, to Lessee (or, at Lessor's option, to the last assignee, if
any, of Lessee's inheres hereunder) at the expiration of the term
hereof, and after Lessee has vacated the Premises. No trust
relationship is created herein between Lessor and Lessee with
respect to said Security Deposit.
6. Use
6.1 Use. The
Premises shell be used and occupied only for an entertainment,
communications, computer applications and film production firm and
related office and support functions and parking therefor and for
no other purpose.
6.2 Compliance with Law. Lessee
shall, at Lessee's expense, comply promptly with all applicable
statutes, ordinances, rules, regulations, orders, restrictions of
record, and requirements in effect during the term or any part of
the term hereof regulating the use by Lessee of the Premises.
Lessee shall not use nor permit the use of the Premises in any
manner that will tend to create waste or a nuisance or, if there
shall be more than one tenant in the building containing the
Premises, shall tend to disturb other tenants.
6.3 Condition of Premises. Lessee
hereby accepts the Premises in their condition existing as of the
date of the execution hereof, subject to all applicable zoning,
municipal, county and state laws, ordinances and regulations
governing and regulating the use of the Premises, and accepts this
Lease subject thereto and to all matters disclosed thereby and by
any exhibits attached hereto. Lessee acknowledges that neither
Lessor nor Lessor’s agent has made any representation or
warranty as to the suitability of the Premises for the conduct of
Lessee s business.
7. Maintenance, Repairs and Alterations.
7.1 Lessee's Obligations. (See
Addendum-Paragraphs 18, 19, and 28.) Lessee shall keep in good
order, condition and repair the Premises and every part thereof,
structural and nonstructural whether or not such portion of the
Premises requiring repair, or the means of repairing the same are
reasonable or readily accessible to Lessee and whether or not the
need for such repairs occurs as a result of Lessee's use, any prior
use, the elements or age of such portion of the equipment within
the Premises, fixtures, walls (interior and exterior), foundations,
ceilings, roofs (interior and exterior), floors, windows, doors,
plate glass and skylights located within the Premises, and all
landscaping, driveways, parking lots, fences and signs located on
the Premises and sidewalks and parkways adjacent to the
Premises.
7.2 Surrender. On
the last day of the term hereof, or on any sooner termination,
Lessee shall surrender the Premises to Lessor in good condition and
repair, broom clean, ordinary wear and tear and casualty excepted.
Lessee shall repair any damage to the Premises occasioned by the
installation and/or removal of Lessee's trade fixtures, furnishings
and equipment pursuant to Paragraph 7.5(d), which repair shall
include without limitation the patching and filling of holes and
repair of structural damage. (See Addendum-Paragraph
28.)
7.3 Lessor's Rights. (See
Addendum-Paragraphs 18 arid 19.) If Lessee fails to perform
Lessee's obligations under this Paragraph 7, Lessor may at its
option (but shall not be required to) enter upon the Premises,
after ten (10) days' prior notice to Lessee, and put the same in
good order, condition and repair, and the reasonable cost thereof
together with interest thereon at the maximum rate permitted by law
shall become due and shall be collectible as additional rental to
Lessor together with Lessee's next rental Installment.
7.4 Lessor's Obligation. Except
for the obligations of Lessor under Paragraph 9 (relating to
destruction of the Premises) and under Paragraph 14 (relating to
condemnation of the Premises), it is intended by the parties hereto
that Lessor have no obligation, in any manner whatsoever, to repair
and maintain the Premises nor the building located thereon nor the
equipment therein, whether structured or non-structural, all of
which obligations are Intended to be those of Lessee under
Paragraph 7.1 hereof. Lessee expressly waives the benefit of any
statute now or hereinafter in effect which would otherwise afford
Lessee the right to make repairs at Lessor's expense or to
terminate this Lease because of Lessor's failure to keep the
Premises in good order, condition and repair.
7.5 Alterations and Additions. (See
Addendum-Paragraph 28.)
(a)
Lessor may require Lessee to provide Lessor, at Lessee's sole
cost and expense, a lien and completion bond in an amount
equal to one and one-half times the estimated cost of such
improvements, to insure Lessor against any liability for
mechanic's and materialmen's liens and to insure completion of
the work. Should Lessee make any alterations, improvements,
additions or Utility Installations without the prior approval
of Lessor, Lessor may require that Lessee remove any or all of
the same.
(b)
Deleted.
(c)
Lessee shall pay, when due, all claims for labor or materials
furnished or alleged to have been furnished to or for Lessee
at or for use in the Premises, which claims are or may be
secured by any mechanic's or materialmen's lien against the
Premises or any interest therein. Lessee shall give Lessor not
less than ten (10) days' notice prior to the commencement of
any work In the Premises, and Lessor shall have the right to
post notices of non-responsibility in or on the Premises as
provided by law. Lessee shall discharge, by bond or otherwise,
within ten (10) days after the filing thereof, any mechanic's
lien filed against the Premises for work claimed to have been
done for, or materials claimed to have been furnished to,
Lessee. If Lessee shall, in good faith, contest the validity
of any such lien, claim or demand, then Lessee shall, at its
sole expense, defend itself and Lessor against the same and
shall pay and satisfy any such adverse judgment that may be
rendered thereon before the enforcement thereof against the
Lessor or the Premises, upon condition that Lessor may require
Lessee to furnish to Lessor a surety bond satisfactory to
Lessor in an amount equal to such contested lien, claim or
demand indemnifying Lessor against liability for the same and
holding the Premises free from the effect of such a lien or
claim. In addition, Lessor may require Lessee to pay Lessor's
attorneys' fees and costs in participating in such an action
if Lessor shall decide it is to its best interest to do
so.
(d)
Unless Lessor requires their removal, as set forth in
Paragraph 7.5(a), all alterations, improvements, additions and
Utility Installations (whether or not such Utility
Installations constitute trade fixtures of Lessee), which may
be made on the Premises, shall become the property of Lessor
and remain upon and be surrendered with the Premises at the
expiration of the term. Notwithstanding the provisions of this
Paragraph 7.5(d), Lessee's machinery and equipment, other than
that which is affixed to the Premises so that it cannot be
removed without material damage to the Premises, shall remain
the property of Lessee and may be removed by Lessee subject to
the provisions of Paragraph 7.2. (See Addendum-Paragraph
28.)
7.6 Lessor's Option. (See
Addendum-Paragraph 36.) Upon reasonable advance notice and
notwithstanding anything to the contrary contained herein and in
addition to the rights provided Lessor in Paragraph 7.3, Lessor may
at its option (but shall not be required to) enter upon the
Premises at any time during the term hereof and perform any
maintenance, repairs or alterations which Lessor is entitled to
perform under the terms of the Lease, and Lessee shall pay Lessor
Lessee's share of the cost of any such maintenance, repairs or
alterations, as such share shall be equitably determined by Lessor,
promptly upon Lessor's billing Lessee therefor. Lessor's reasonable
determination thereof, in good faith, shall be conclusive. Lessor
agrees to perform any such work in a manner which reasonably
minimizes disruption to Lessee's business activities.
8. Insurance and Indemnity. (See
Addendum-Paragraph 24.)
8.1 Insuring Party. As
used in this Paragraph 8, the term “insuring party”
shall mean Lessor. Lessee shall reimburse Lessor for the cost of
the insurance obtained in monthly installments as additional rent
hereunder in accordance with the provisions of Paragraph 16.24. If
the Premises is a part of a larger building or group of buildings
and is not separately insured, Lessee's liability shall be an
equitable proportion of the insurance costs for all of the insured
property, such equitable proportion to be reasonably determined by
Lessor in a manner reasonably satisfactory to Lessee.
8.2 Liability Insurance. Lessee,
at its sole cost and expense, shall maintain during the term hereof
comprehensive (commercial) general liability insurance on an
“occurrence basis” against claims for “personal
injury”, including without limitation bodily injury, death
and/or damage, occurring upon, in or about the Premises in a
combined single limit or not less than $1,000,000 per occurrence
and with policy aggregate limit of no less than $2,000,000 (or such
higher amounts thereof as may be reasonably requested by Lessor not
to exceed a policy aggregate limit of $5,000,000 from time to time
during this Lease). Said insurance shall name Lessor as an
additional insured; shall be written by companies and in form
satisfactory to Lessor (which companies shall be authorized to do
business in California); shall apply primary to any other
comparable liability coverage; and shall contain an endorsement
requiring thirty (30) days' prior written notice sent by certified
or registered mail, return receipt requested, to Lessor at the
address set forth below, or such other address as may be provided
to any such insurer by Lessor, before cancellation thereof or
change in the coverage, scope or amount of such policy or policies.
Lessee shall provide Lessor with a Certificate of Insurance as
evidence of such Insurance within twenty (20) days of the date of
this Lease. In the event Lessee fails to obtain such insurance as
provided in this Lease, Lessor may obtain any such insurance, and
the cost thereof shall be paid by Lessee as additional rent with
the first payment of rent which is due subsequent to Lessor's
incurring such cost, and Lessor shall have all remedies to collect
the same as rent in the Lease provided, and/or as otherwise
provided by law for the collection of rent. The policy shall
contain “cross-liability” or “separation of
insureds” coverage and shall insure performance by Lessee of
the indemnity provisions of this Paragraph 8. The limits of said
Insurance shall not, however, limit the liability of Lessee
hereunder. In the event that the Premises constitutes a part of a
larger property, said insurance shall have a Lessor's Protective
Liability endorsement attached thereto.
Deleted.
8.3 Property Insurance.
(a)
The insuring party shall obtain and keep in force during the
term of this lease a policy or policies of insurance covering
loss or damage to the Premises, in the amount of the full
replacement value thereof, as the same may exist from time to
time, which replacement value is now $4,000,000.00, against
all perils included within the classification of fire,
extended coverage, vandalism, malicious mischief, special
extended perils (all risk), sprinkler leakage and, at Lessor's
option, earthquake. Said insurance shall provide for payment
of loss thereunder to lessor or to the holders of mortgages or
deeds of trust on the Premises. The insuring party shall, in
addition, obtain and keep in force during the term of this
Lease a policy of rental income insurance covering a period of
twelve (12) months, with loss payable to Lessor, which
Insurance shall also cover all real estate taxes and insurance
costs for said period. If such insurance coverage has a
deductible clause, Lessee shall be liable for the deductible
amount.
(b)
If the Premises are part of a larger building, or if the
Premises are part of a group of buildings owned by Lessor
which are adjacent to the Premises, then Lessee shall pay for
any increase in the property Insurance of such other building
or buildings if said increase is caused by Lessee's acts,
omissions, use or occupancy of the Premises.
(c)
Lessee shall not do or permit to be done anything which shall
invalidate the insurance policies referred to in Paragraph
8.3. If Lessee does or permits to be done anything which shall
Increase the cost of the insurance policies referred to in
Paragraph 8.3, then Lessee shall forthwith upon Lessor's
demand reimburse Lessor for any additional premiums
attributable to any act or omission or operation of Lessee
causing such increase in the cost of insurance.
8.4 Waiver of Subrogation. Lessee
and Lessor each hereby waive any and all rights of recovery against
the other, or against the officers, employees, agents and
representatives of the other, for loss of or damage to such waiving
party or its property or the property of others under its control
to the extent that such loss or damage is insured against under any
insurance policy in force at the time of such loss or damage. The
insuring party shall, if possible, in obtaining the policies of
insurance required hereunder, obtain policies which permit such
waver.
8.5 Indemnity. Lessee
shall indemnify and hold harmless Lessor from and against any and
all claims arising out of any alleged defective or unsafe condition
of the Premises and from Lessee's use of the Premises, or from the
conduct of Lessee's business or from any activity, work or things
done, permitted or suffered by Lessee in or about the Premises or
elsewhere unless due to the willful acts or gross negligence of
Lessor, its employees, agents or contractors and shall further
indemnify and hold harmless Lessor from and against any and all
claims arising from any breach or default in the performance of any
obligation on Lessee's part to be performed under the terms of this
Lease, or arising from willful acts or gross negligence of Lessee,
or any of Lessee's agents, contractors, or employees, and from and
against all costs, attorneys' fees, expenses and liabilities
incurred in the defense of any such claim or any action or
proceeding brought thereon; and in case any action or proceeding be
brought against Lessor by reason of any such claim, Lessee upon
notice from Lessor shall defend the same at Lessee's expense by
counsel satisfactory to Lessor. Lessee, as a material part of the
consideration to Lessor, hereby assumes all risk of damage to
property or injury to persons in, upon, or about the Premises
arising from any cause and Lessee hereby waives all claims in
respect thereof against Lessor.
8.6 Exemption of Lessor from Liability.
Unless due to the willful acts or gross negligence of Lessor, its
employees, agents or contractors, Lessor shall not be liable for
injury to Lessee's business or any loss of income therefrom or for
damage to the goods, wares, merchandise or other property of
Lessee, Lessee's employees, invitees, customers, agents,
contractors, or any other person in or about the Premises, nor
shall Lessor be liable for injury to the person of Lessee, Lessee's
employees, invitees, customers, agents or contractors, whether such
damage or injury is caused by or results from fire, steam,
electricity, gas, water or rain, or from the breakage, leakage,
obstruction or other defects of pipes, sprinklers, wires,
appliances, plumbing, air conditioning or lighting fixtures, or
from any other cause, whether the said damage or injury results
from conditions arising upon the Premises or upon other portions of
the building of which the Premises is a part, or from other sources
or places, and regardless of whether the cause of such damage or
injury or the means of repairing the same is inaccessible to
Lessee. Lessor shall not be liable for any damages arising from any
act or neglect of any other tenant, if any, of the building in
which the Premises is located.
9. Damage or Destruction
9.1 If
the Premises shall be partially damaged by fire of other cause,
then the Premises shall be repaired by and at the expense of Lessor
and the rent, until such repairs shall be made, shall be
apportioned according to the part of the Premises which is usable
by Lessee. No penalty shall accrue for reasonable delay which may
arise by reason of adjustment of fire insurance on the part of
Lessor or Lessee, for reasonable delay on account of “labor
troubles”, or any other cause beyond Lessor’s control.
If (i) the Premises are totally damaged or are rendered wholly
untenantable, (ii) the Premises are totally or partially damaged by
uninsured fire or other uninsured cause, or (iii) the Premises
shall be so damaged that Lessor shall decide to demolish the entire
Premises, then within ninety (90) days after the occurrence of the
event or damage or destruction Lessor may elect, by written notice
to Lessee, to terminate this Lease. In such event, the term of this
Lease shall expire by lapse of time upon the third day after such
notice is given, and Lessee shall vacate the Premises and surrender
the same to the repair of the Premises, to substantially their
condition immediately prior to the even tof damage or destruction;
and rent shall be apportioned according to the part of the Premises
which is usable by Lessee, until such restoration or rebuilding is
complete. Notwithstanding anything to the contrary contained
herein, if Lessor notifies Lessee of Lessor’s election to
terminate this Lease pursuant to the foregoing, then for a period
of ten (10) days following Lessee’s receipt of written notice
of such election, Lessee may elect, by written notice to Lessor, at
Lessee’s own cost and expense, to restore or rebuild the
Premises to substantially their condition immediately prior to the
event of damage or destruction, in which event: (i) this Lease
shall continue thereafter in full force and effect, as if
Lessor’s election to terminate had never been made; (ii)
Lessee shall diligently cause the Premises to be restored or
rebuilt in accordance with the foregoing; and (iii) rent shall be
apportioned according to the part of the Premises which is usable
by Lessee until such restoration or rebuilding is complete, to the
extent of rental loss insurance available to Lessor.
Notwithstanding
anything to the contrary contained herein, in the event that
Lessor does not or may not elect to terminate this Lease
pursuant to the terms of this Paragraph 9.1, then within sixty
(60) following the occurrence of any event of damage or
destruction to the Premises, Lessor shall provide Lessee with
written notice, prepared by a licensed California contractor,
reasonably estimating the period of time which will be
required to repair or rebuild the Premises to substantially
the condition in which they existed immediately prior to such
damage or destruction. If such reparation or rebuilding is not
reasonable estimated to be complete within two hundred forty
(240) days following the occurrence of such damage or
destruction, then Lessee may elect by written notice to Lessor
with ten (10) business days of Lessor’s notice to
terminate this Lease in which event: (i) the term of this
Lease shall expire by lapse of time upon the third day after
such notice is given, and (ii) Lessee shall vacate the
Premises and surrender the same to Lessor.
No
penalty shall accrue for reasonable delay which may arise by
reason of adjustment of fire insurance on part of Lessor or
Lessee, for reasonable delay on account of “labor
troubles”, or any other cause beyond the control of
Lessor or Lessee.
9.2 Damage Near End of Term. If
the Premises are partially destroyed or damaged during the last six
(6) months of the term of this Lease, either party hereto may at
its option cancel and terminate this Lease as of the date of
occurrence of such damage by giving notice to the other party of
its election to do so within thirty (30) days after the date of
occurrence of such damage.
9.3 Termination - Advance Payments. Upon
termination of this Lease pursuant to this Paragraph 9, an
equitable adjustment shall be made concerning advance rent and any
advance payments made by Lessee to Lessor. Lessor shall, in
addition, return to Lessee so much of Lessee’s security
deposit as has not theretofore been applied by Lessor.
9.4 Waiver .
Lessee waives the provisions of California Civil Code Sections
1932(2) and 1933(4) which relate to termination of leases when the
thing leased is destroyed and all rights under any law in existence
during the term of this Lease authorizing a tenant to make repairs
at the expense of a landlord or to terminate a lease on complete or
partial destruction of the leased premises, and agrees that any
such event shall be governed by the terms of this
Lease.
10. Real Property Taxes. (See
Addendum-Paragraph 20.)
10.1 Payment of Taxes. Lessee
shall pay to Lessor in monthly installments, as additional rent,
Lessee’s share of the real property taxes applicable to the
Premises in accordance with the Provisions of Paragraph
16.24.
10.2 Definition of “Real Property” Tax.
As
used herein, the term “real property tax” shall include
any form of assessment, license fee, commercial rental tax, levy,
penalty, or tax (other than inheritance or estate tax or State or
Federal income tax of Lessor), imposed by any authority having the
direct or indirect power to tax, including any city, county, state
or federal government, or any school, agricultural, lighting,
drainage or other improvement district thereof, as against any
legal or equitable interest of Lessor in the Premises or in the
real property of which the Premises are a part, as against
Lessor’s right to rent or other income therefrom, or as
against Lessor’s business of leasing the Premises or any tax
imposed in substitution, partially or totally, of any tax
previously included within the definition of real property tax, or
any additional tax the nature of which was previously included
within the definition of real property tax. Any surcharge or
regulatory fee imposed by any governmental entity with reference to
parking applicable to the Premises shall also be included within
the term “real property tax.”
10.3 Proration of Taxes. If
the Premises are not separately assessed, Lessee’s liability
shall be an equitable proportion of the real property taxes for all
of the land and improvements included within the tax parcel
assessed, such proportion to be determined by Lessor from the
respective valuations assigned in the assessor’s work sheets
or such other information as may be reasonable available.
Lessor’s reasonable determination thereof shall be reasonably
acceptable to Lessee.
10.4 Personal Property Taxes.
(a)
Lessee shall pay prior to delinquency all taxes assessed
against and levied upon trade fixtures, furnishings, equipment
and all other personal property of Lessee contained in the
Premises or elsewhere. When possible, Lessee, shall cause said
trade fixtures, furnishings, equipment and all other personal
property to be assessed and billed separately from the real
property of Lessor.
(b)
If any of Lessee’s said personal property shall be
assessed with Lessor’s real property, lessee shall pay
Lessor the taxes attributable to lessee in accordance with the
provisions of Paragraph 16.24.
11. Utilities.
Lessee
shall pay for all water, gas heat, light, power, telephone and
other utilities and services supplied to the Premises,
together with any taxes thereon. If any such services are not
separately metered to Lessee, Lessee shall pay a reasonable
proportion to be determined by Lessor of all charges jointly
metered with other premises.
12. Assignment, Mortgage and Subletting.
(See
Addendum-Paragraph 27.)
12.1 Lessor’s Consent. Neither
Lessee, nor Lessee’s legal representatives, successors or
assigns, shall assign, mortgage or encumber this Lease, or sublet,
or use or occupy or permit the Premises or any part thereof to be
used or occupied by others, without the prior consent of Lessor and
the payment shall be voidable at the option of Lessor and, at the
further option of Lessor, shall terminate this Lease subject to the
provisions of Paragraph 13 “Defaults; Remedies”. If
this Lease be assigned, or if the Premises or any part thereof be
sublet or occupied by any party other than Lessee, Lessor may,
after default by Lessee, collect rent from the assignee, subtenant
of occupant, and apply the net amount collected to the rent herein
reserved, but no such assignment, subletting, occupancy or
collection shall be deemed a waiver of this covenant or the
acceptance of the assignee or the subtenant form obtaining the
express consent of Lessor to any further assignment or subletting
or to release lessee from any liability, whether past, present or
future, under this Lease or to release Lessee from any liability
under this Lease because of Lessor’s failure to give notice
of default under or in respect of any of the terms, covenants,
conditions, provisions or agreements of this lease. Notwithstanding
the consent of Lessor to such assignment or subletting, Lessee
shall remain liable for the payment of all bills rendered by Lessor
for the charges incurred by the assignee or subtenant for services
and materials supplied to the Premises. A transfer of control of
Lessee shall be deemed an assignment under this Lease and shall be
subject to all provisions of this Article, including but not
limited to the requirement of obtaining Lessor’s prior
consent, unless Lessee at the time of the proposed transfer is then
a publicly held corporation freely traded on a major stock
exchange.
Notwithstanding
any contrary provisions of the immediately preceding
provisions of this Paragraph 12.1, but subject to the
provisions of Subparagraph 12.2(b), Lessee may assign this
Lease or sublet the Premises or any portion thereof upon the
following express conditions:
(1)
that the proposed assignee or subtenant shall be subject to
the prior consent of Lessor, which consent will not be
unreasonably withheld or delayed more than ten (10) business
days after Lessor’s receipt of all information required
from Lessee but, without limiting the generality of the
foregoing, it shall be reasonable for Lessor to deny such
consent if:
(a)
the use to be made of the Premises by the proposed assignee or
subtenant is a use which would be prohibited by any other
portion of this Lease (including but not limited to any Rules
and Regulations then in effect) or a use which would impose
any additional burden upon Lessor in the operation of the
Building; however, Lessor shall not unreasonably withhold its
consent to a use differing from those set forth in Paragraph
6.1 of this Lease; or
(b)
the character, moral stability, reputation and financial
responsibility of the proposed assignee or subtenant are not
reasonably satisfactory to Lessor or in any event not at least
equal to those which were possessed by Lessee as a date of
execution of this Lease;
(2)
that Lessee shall reimburse Lessor for all reasonable costs
incurred by Lessor in connection with such assignment or
subletting including without limitation all attorneys’
fees applicable thereto;
(3)
that the proposed assignee or subtenant shall execute an
agreement pursuant to which it shall agree to perform
faithfully and be bound by all of the terms, covenants,
conditions, provisions and agreements of this
Lease;
(4)
that an executed duplicate original of said assignment and
sublease, as the case may be, on Lessor’s then standard
form, shall be delivered to Lessor within five (5) days after
the execution thereof, and that such assignment or subletting
shall not be binding upon Lessor until the delivery thereof to
Lessor; and
(5)
that Lessee shall pay to Lessor, as additional rent, one-half
(1/2) of any consideration given to Lessee by the proposed
assignee or subtenant for or in connection with such
assignment or subletting. Lessor and Lessee have each given
full consideration to the possibility that the rental value of
the Premises may appreciate during the term of the Lease. In
such regard, Lessor and Lessee have expressly allocated the
possibility of such rental value increase as part of their
negotiations of this Lease. Lessor and Lessee freely
negotiated all of the terms and conditions of this Lease,
including but not limited to, the possibility that this Lease
may be terminated by Lessor pursuant to this Paragraph 12.
Lessor and Lessee expressly thus agree that any such rental
increase value is not an element of value or property right
granted to Lessee, and that Lessor retains all rights thereto,
including, but not limited to, the termination and allocation
rights herein and set forth.
12.2 Procedure.
(a)
At least thirty (30) days prior to any proposed subletting or
assignment or mortgage, Lessee shall submit to Lessor a
statement containing the name and address for the proposed
subtenant or assignee or mortgagee and all of the principal
terms and conditions of the proposed subletting or assignment
or mortgage included, but not limited to, in the event of a
subletting the proposed commencement and expiration dates of
the term thereof. If the proposed sublet area shall not
constitute the entire Premises, such statement shall be
accompanied by a floor plan delineating the proposed sublet
area. Lessor shall have a reasonable amount of time but in no
event less than the (10) business days from the receipt of any
such notice to consent, decline to consent to make one of the
elections provided in Subparagraph (b) below.
(b)
In lieu of consenting or not consenting, Lessor may, at its
option (i) terminate this Lease in its entirety if Lessee
submits a written request for an assignment of subletting, for
substantially the entire remaining term of the Lease, of the
Premises in its entirety, (ii) elect to enter into a lease
directly with the proposed assignee or with the proposed
subtenant as to that portion of the Premises which Lessee has
proposed to sublet, (iii) terminate this lease as to that
portion of the Premises which Lessee had proposed to sublet,
or (iv) elect, where the rental charged in the sublease exceed
the pro rata portion of the rental for such space charged in
this Lease, to receive from Lessee monthly, as additional
rent, one-half (1/2) of the excess of the rental charged in
the sublease, over the rental charged in this Lease for the
subleased space, after deducting from such one-half of the
excess the amounts, if any, which Lessee has reimbursed Lessor
pursuant to paragraph 12.1(2), Lessor�
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