EXHIBIT 10.4
COMMERCIAL LEASE FORM
1.
Parties .
This Lease date April 27, 1995, is made by and between The Richlar
Partnership (a California general 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 362 Main Street,
Venice, California, consisting of approximately 13,100 square feet
of mezzanine offices and warehouse (herein called “The
Premises”).
3.
Term .
3.1 Term. The
term of this Lease shall be for one (1) year commencing on June 1,
1995 and ending on May 31, 1996 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
$125,760.00 payable in equal monthly payments of
$10,480.00 in advance, on the first day of each month of the term
hereof. Lessee shall pay Lessor upon execution hereof
$10,480.00 as
rent for June, 1995. 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.
5.
Security Deposit .
Lessee shall deposit with Lessor upon execution hereof $10,480.00
as security for Lessee's faithful performance
of Lessee's obligation hereunder. If Lessee fails 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 a 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
interest 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 shall 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. (See Addendum-Paragraph
27.) 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. Lessee
shall keep in good order, condition and repair the Premises and
every part thereof, structural (excepting pre-existing structural
defect) 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.
7.3 Lessor's Rights. 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. (See Addendum-Paragraph
23.) 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 structural or non-structural, excepting
pre-existing structural defects, 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.
(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 Lessors 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.
7.6 Lessor's Option. 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. Lessors 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.
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.
8.3 Property Insurance. (See Addendum-Paragraph
24.)
(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 $2,000,000.00, 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 waiver.
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 Lessees 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 or 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 Lessor.
If Lessor does not elect to terminate this Lease pursuant to
the
preceding sentence, then: Lessor shall diligently undertake and
prosecute to completion the repair of the Premises, to
substantially
their condition immediately prior to the event of 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 reasonably 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 the 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.
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
33.)
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 of any applicable
processing fee in each instance, and any such assignment,
mortgage, encumbrance,
sublease or permission without such consent and 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, alter default
by Lessee, collect rent from the assignee, subtenant or 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, subtenant or occupant as tenant, or a release of Lessee
from the further performance by Lessee of the obligations on
the
part of Lessee herein contained. The consent by Lessor to an
assignment or subletting shall not in any wise be construed
to relieve
Lessee, the assignee or the subtenant from 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 the
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 provision 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 of the 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
assumption agreement or 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 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 of the proposed
subtenant or assignee or mortgagee and all of the principal
terms and conditions of the
proposed subletting or assignment or mortgage including, 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 ten (10) business days from the receipt
of any such notice to consent, decline to consent or 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 or 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
exceeds 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's
termination rights under this subparagraph shall be
exercisable only in the case of (i) a sublease or assignment
occurring with the last two (2) years of the Lease Term or
(ii) a sublease
or assignment of more than fifty percent (50%) of the floor
area of the buildings comprising the Premises.
12.3 Bankruptcy.
(a)
If
Lessee shall file a petition for voluntary bankruptcy or
reorganization under any provision of the Bankruptcy Code as
then in effect,
or if Lessee be
adjudicated
a bankrupt in involuntary bankruptcy proceedings and such
adjudication shall not have been vacated
within ninety (90) days from the date thereof, or a receiver or
trustee be appointed of Lessee's property in any involuntary
proceeding
and the order appointing such receiver or trustee be not set aside
or vacated within ninety (90) days after the entry
thereof,
or if Lessee shall assign Lessee's estate or effects for the
benefit of creditors, or if Lessee becomes insolvent, or if this
Lease shall
otherwise by operation of law devolve or pass to any person or
persons other than Lessee, then and in any such events
Lessor may,
at its option, with or without notice of such election and with or
without entry or action by Lessor, forthwith terminate this
Lease, and
notwithstanding any other provisions of this Lease, Lessor, in
addition to any and all rights and remedies allowed by law
or equity,
shall upon such termination be entitled to recover damages in an
amount equal to the then present value of the rent reserved
in
this Lease for the entire residue of the stated term hereof, less
the fair rental value of the Premises for the residue of the
stated term
hereof, and neither Lessee nor any person claiming through or under
Lessee or by
virtue
of any statute or order of any court shall
be entitled to possession of the Premises but shall forthwith quit
and surrender the
Premises
to Lessor.
(b)
Without
limiting any of the foregoing provisions of this Paragraph, if
pursuant to the Bankruptcy Reform Act of 1978 Lessee is
permitted to assign this Lease notwithstanding the
restrictions contained in this Lease, Lessee agrees that
adequate assurance of future
performance by an assignee expressly permitted under such Code
shall be deemed to mean the deposit of cash security in an
amount equal to the sum of one year's rent reserved hereby
plus an amount equal to additional rent under Paragraph 4.1
hereof for the
calendar year preceding the year in which such assignment is
intended to
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