EXHIBIT 10.1
LEASE AGREEMENT
Between
GENERAL ELECTRIC CAPITAL BUSINESS
ASSET FUNDING CORPORATION,
as Lessor
and
POINT.360,
as Lessee
Dated as of November 26, 2003
TABLE OF CONTENTS
PAGE
Article I
Section 1.01. Lease of Premises; Title and Condition.....................1
Section 1.02. Use........................................................1
Section 1.03. Term.......................................................2
Section 1.04. Rent.......................................................3
Section 1.05. Payment of Rent............................................3
Section 1.06. Late Payment Charge........................................3
Article II
Section 2.01. Disclaimer of Representation by Lessor.....................3
Section 2.02. Premises Leased "As Is"....................................3
Section 2.03. Maintenance and Repair.....................................4
Section 2.04. Alterations, Replacements and Additions....................4
Section 2.05. Encumbrances...............................................5
Section 2.06. Replacement of Lessor's Fixtures and Lessor's Equipment....5
Section 2.07. Lessee To Comply With Covenants............................5
Section 2.08. Lessor's Cooperation Clause................................6
Section 2.09. No Third-party Claims Against Lessor.......................6
Article III
Section 3.01. Removal....................................................6
Article IV
Section 4.01. Restriction on Assignment or Other Transfer................6
Section 4.02. Information About Proposed Transferee......................6
Section 4.03. Terms Relating to Consent..................................6
Section 4.04. Subleases..................................................7
Section 4.05. Original Documents to Lessor...............................7
Section 4.06. Effect of Transfer.........................................7
Section 4.07. Collection of Rent.........................................7
Article V
Section 5.01. Net Lease..................................................7
Section 5.02. Taxes and Assessments; Compliance With Law.................8
Section 5.03. Utility Services...........................................9
Section 5.04. No Adverse Possession......................................9
Section 5.05. Entry by Lessor............................................9
Section 5.06. Liens......................................................9
Section 5.07. Indemnification............................................9
Section 5.08. Environmental Compliance..................................10
Article VI
Section 6.01. Compensation..............................................11
Section 6.02. Casualty..................................................11
Section 6.03. Condemnation..............................................12
Section 6.04. Required Insurance Coverage...............................13
Section 6.05. Separate Insurance Coverages..............................14
Section 6.06. Compliance With Insurance Requirements....................14
Section 6.07. Additional Coverages......................................14
Section 6.08. Policy Provisions.........................................14
Section 6.09. Companies and Form of Policies............................14
Section 6.10. Handling of Proceeds by Lessee............................14
Section 6.11. Handling of Proceeds by Depository........................15
Section 6.12. Certificates of Coverage..................................15
Section 6.13. Procurement by Lessor.....................................15
Article VII
Section 7.01. Events of Default.........................................15
Section 7.02. Remedies Upon Lessee's Default............................16
Article VIII
Section 8.01. Lessee's Notices and Remedies.............................18
Section 8.02. Fee Mortgagee's Right To Cure.............................18
Article IX
Section 9.01. Subordination and Nondisturbance..........................18
Section 9.02. Election Not To Subordinate...............................19
Section 9.03. Attornment................................................19
Section 9.04. Limitations on Lessee.....................................19
Section 9.05. No Merger of Fee and Leasehold Estates....................19
Section 9.06. Changes to Lease Required by Fee Mortgagee................19
Article X
Section 10.01. Estoppel Certificate......................................19
Section 10.02. Financial Information.....................................19
Article XI
Section 11.01. Quiet Enjoyment...........................................20
Article XII
Section 12.01. Lessor's Reversionary Interest; Surrender of Premises.....20
Section 12.02. Delivery of Rents and Records.............................20
Section 12.03. Acceptance of Surrender...................................20
Section 12.04. Holding Over..............................................20
Article XIII
Section 13.01. Definition of "Lessor.....................................20
Section 13.02. Exculpation of Lessor.....................................21
Article XIV
Section 14.01. No Waiver, etc., by Parties...............................21
Section 14.02. Notices, Etc..............................................21
Section 14.03. Separability..............................................21
Section 14.04. Headings..................................................21
Section 14.05. Relationship of Parties; Disclaimer.......................21
Section 14.06. Operating Lease...........................................21
Section 14.07. Joint Obligation..........................................22
Section 14.08. Prior Agreements..........................................22
Section 14.09. Recording.................................................22
Section 14.10. Proration of Rent.........................................22
Section 14.11. Authorization of Lease....................................22
Section 14.12. Applicable Law............................................22
Section 14.13. United States Funds.......................................22
Section 14.14. Time of Performance.......................................22
Section 14.15. "Force Majeure" Delays....................................22
Section 14.16. Waiver of Jury Trial......................................22
Section 14.17. Attorneys' Fees...........................................22
Section 14.18. Amendments................................................23
Section 14.19. Successors and Assigns....................................23
Section 14.20. Brokers...................................................23
Section 14.21. Construction..............................................23
Section 14.22. Execution in Counterparts.................................23
Section 14.23. Exhibits and Riders.......................................23
SCHEDULE A........LEGAL DESCRIPTION
SCHEDULE B........CONTRACTUAL REQUIREMENTS
SCHEDULE C........PERMITTED EXCEPTIONS
SCHEDULE D........LESSEE INSURANCE REQUIREMENTS
SCHEDULE E........PERMANENT LOAN INSURANCE REQUIREMENTS
LEASE AGREEMENT
THIS LEASE AGREEMENT (this "Lease") is made and entered into as of the
day of November, 2003 by and between GENERAL ELECTRIC CAPITAL BUSINESS ASSET
FUNDING CORPORATION, a Delaware corporation ("Lessor"), and Point.360, a
California corporation (herein, together with permitted successors and assigns,
called "Lessee").
Article I.........
Section 1.01...... Lease of Premises; Title and Condition. In
consideration of the rents and covenants herein stipulated to be paid and
performed by Lessee and upon the terms and conditions herein specified, Lessor
hereby leases to Lessee, and Lessee hereby leases from Lessor, the premises (the
"Premises") consisting of:
(a) that parcel of land more particularly described in
Schedule A attached hereto and made a part hereof (the "Land") having an
address at 2701 Media Center Drive, Los Angeles, California;
(b) all of the buildings, structures, facilities,
installations and other improvements of every kind and description now
or hereafter in, on, over and under the Land (collectively, the
"Improvements");
(c) any movable or not permanently affixed fixtures,
machinery, equipment, furnishings, moveable walls or partitions, or
other personal property used or procured for use in connection with the
operation, maintenance and protection of the Premises, which are located
on or in the Improvements on the Commencement Date (as defined in
Section 1.03), including (without limitation) plumbing, gas, electrical,
heating, ventilating, lighting and air conditioning systems, facilities
used to provide any utility services, parking and common area
facilities, refrigeration, garbage disposal, and all landscaping, paving
and parking areas, but except items, if any, included within the
category of Lessee's Equipment (collectively referred to herein as
"Lessor's Equipment"). "Lessee's Equipment" shall mean all machinery,
equipment, furniture, furnishings and other personal property (i)
installed by Lessee or its permitted sublessees or permitted occupants
in, on or about the Premises and (ii) not used or procured for use in
connection with the operation, maintenance and protection of the
Premises, as such, but used or procured for use directly in connection
with the business conducted thereon;
(d) all fixtures, machinery, equipment, and other items of
property, now or hereafter permanently affixed to or incorporated into
the Improvements, including (without limitation) boilers, furnaces,
heaters, electrical equipment, incineration, air and water pollution
control, waste disposal, sprinkler systems, fire and theft protection
equipment, plumbing, heating, ventilating, lighting and air conditioning
systems, facilities used to provide any utility services, parking and
common area facilities, and refrigeration systems and equipment,
together with all replacements, modifications, and alterations thereto,
all of which, to the greatest extent permitted by law, are hereby deemed
by the parties hereto to constitute real estate (collectively referred
to herein as "Lessor's Fixtures") (all the foregoing being included
within the term "Improvements"); and
(e) all of Lessor's right, title and interest, if any, in and
to all easements, rights-of-way, appurtenances and other rights and
benefits associated with the Land and to all public or private streets,
roads, avenues, alleys or passways, open or proposed, on or abutting the
Land, including (without limitation) the Contractual Requirements (as
defined in Section 2.07 hereof) attached hereto as Exhibit B (all of the
foregoing being included within the term "Land").
The Premises are leased to Lessee in their present condition without
representation or warranty by Lessor and subject to the rights of parties in
possession, to the existing state of title, the existing state and quality of
Improvements, any state of facts that an accurate survey or physical inspection
thereof might show, all zoning regulations, restrictions, rules and ordinances,
building restrictions and other laws and regulations now in effect or hereafter
adopted by any governmental authority having jurisdiction, to all applicable
Legal Requirements (as defined in Subsection 5.02(b)) now or hereafter in effect
and to Permitted Exceptions listed in Schedule C attached hereto. Lessee has
examined the Premises and title to the Premises and has found all of the same
satisfactory for all purposes.
Section 1.02...... Use. Lessee may use the Premises or cause it to be
used only for Permitted Uses. "Permitted Uses" are defined as all uses permitted
by law, the certificate of occupancy and regulations of the applicable local
planning, building and other agencies. Lessee shall not use the Premises for any
other purpose without the prior written consent of Lessor, which consent may be
withheld in its absolute discretion. Without limiting the generality of the
foregoing, Lessor may condition or withhold such consent if the proposed use
will significantly alter the character or purpose or detract or diminish the
value or operating efficiency of the Premises, significantly impair the
revenue-producing capability of the Premises, adversely affect the ability of
Lessee to comply with this Lease, increase the use, handling, generation,
storage, transportation or disposal of any Hazardous Materials or constitute a
nuisance.
Section 1.03...... Term.
(a) This Lease shall be for a term (the "Initial Lease Term")
commencing on November __, 2003 (the "Commencement Date") and ending at
midnight on November ___, 2018 (the "Expiration Date") or such earlier
date as this Lease is terminated pursuant to its terms.
(b) On the Commencement Date, Lessor shall provide Lessee the
sum of Eight Hundred Thousand Dollars ($800,000) to be used by Lessee to
pay costs incurred by Lessee for alterations, additions or improvements
to the Premises (the "Tenant Improvements"). Such Tenant Improvements
shall be completed within one (1) year of the Commencement Date. All
Tenant Improvements shall be completed in a good and workmanlike manner
and in compliance with all applicable Legal Requirements and Insurance
Requirements.
(c) Lessee shall have the right and option to extend the
Initial Lease Term for two additional periods of five years each, each
commencing at midnight on the day on which the then existing term of
this Lease expires (each an "Extended Term" and, together with the
Initial Lease Term, referred to herein as the "Lease Term"), unless this
Lease shall have expired or be terminated pursuant to any provision
hereof or Lessee is in default under this Lease. Lessee shall, if at
all, exercise its option to extend the Lease Term for any Extended Term
by giving written notice of exercise of such option (the "Extension
Notice") no sooner than 30 months and no later than 24 months prior to
expiration of the then existing term of this Lease. Upon the delivery of
the Extension Notice, the Lease Term shall be automatically extended for
the next succeeding Extended Term on the terms and conditions provided
herein. Upon the request of Lessor or Lessee, the parties hereto will,
at the expense of Lessee, execute and exchange an instrument in
recordable form setting forth the extension of the Lease Term in
accordance with this Section 1.03. All terms and conditions of this
Lease shall remain in full force and effect during any and all Extended
Terms. Lessee may not exercise its right to deliver an Extension Notice
at any time that an Event of Default has occurred and is continuing
hereunder.
(d) At the end of the eighteenth (18th) month of this Lease
("Closing"), Lessee shall have the option to purchase the Premises (the
"Purchase Option") for the original purchase price of $8,571,500 (the
"Purchase Price"). The Purchase Option may be exercised only if Lessee
has given written notice to Lessor of its intent to exercise the
Purchase Option prior to the end of the fifteenth (15th) month of this
Lease (the "Purchase Notice"). Lessee may not exercise its right to
deliver the Purchase Notice (i) at any time that an Event of Default has
occurred and is continuing or (ii) if this Lease has been cancelled or
terminated. Lessee shall pay a fee of $600,000 to Lessor at the
inception of this Lease as consideration for the Purchase Option. Lessee
may assign the Purchase Option.
(1) The Purchase Price shall be payable in full at
the Closing of the purchase in immediately available funds
denominated in United States currency. Lessee shall pay all
costs and expenses associated with the purchase including,
without limitation, recording and transfer fees and taxes,
reasonable attorney fees of Lessor, title insurance premiums,
survey costs and escrow fees. There shall be no proration of
real estate taxes or any other adjustment to the Purchase
Price. Lessee shall be liable for the Basic Rent and all other
sums due hereunder through the Closing date.
(2) At Closing Lessor shall convey title to Lessee
through a quitclaim deed. Lessor's conveyance of the Premises
shall be strictly "AS IS" without representation or warranty
or any kind except with respect to Lessor's actions as owner
of the Premises.
(3) If Lessee shall fail to complete the purchase of
the Premises at the end of the 18th month of the Lease in
accordance with the terms set forth above, then (i) Lessee's
right to exercise the Purchase Option shall terminate, (ii)
Lessee shall reimburse Lessor for all costs and expenses
incurred in connection with any attempted exercise of the
Purchase Option and (iii) Lessee shall remain as Lessee
hereunder through the remainder of the Initial Lease Term with
the right to extend the Initial Lease Term as set forth in
Section 1.03(b) hereof.
(4) Upon exercising the Purchase Option, provided
there is no material adverse change in Lessee's financial
conditions Lessor agrees to provide Lessee, upon Lessee's
request, with permanent mortgage financing on the Premises.
The terms of such financing shall include: a loan to value
ratio of 75% (based upon an MAI appraisal of the Premises), a
fixed interest rate of 7.75%, a 15 year term with an
amortization period of 20 years. Lessee will not be obligated
to pay an origination fee, but will be responsible for all of
Lessor's out of pocket costs, including but not limited to
transfer taxes, legal costs, appraisal fees, title and escrow
expenses. This agreement by Lessor to provide financing to
Lessee shall not be assignable or transferable by Lessee.
Section 1.04...... Rent.
(a) During the first year of the Lease Term, Lessee shall pay
to Lessor the Basic Rent of $736,679.00 per annum. On each Adjustment
Date (as defined below), the Basic Rent shall be Adjusted for the period
from such Adjustment Date until the next Adjustment Date. "Adjusted"
shall mean that the Basic Rent for such period shall be increased from
the Basic Rent in effect just prior to the Adjustment Date by the annual
percentage increase in the Consumer Price Index (defined below) in
effect on such Adjustment Date. The "Consumer Price Index" is that
Consumer Price Index for All Urban Consumers (Los
Angeles-Riverside-Orange County, California) computed and issued
bimonthly by the Bureau of Labor Statistics of the U.S. Department of
Labor. "Adjustment Date" means, each of the thirteenth (13th),
eighteenth (18th) and thirtieth (30th) month anniversaries of this Lease
and each one year anniversary of the thirtieth (30th) month of this
Lease through the Initial Lease Term and any Extended Term. The Basic
Rent shall be payable in equal monthly installments, in advance, on the
first day of each and every month. Lessee shall perform all its
obligations under this Lease at its sole cost and expense, and shall pay
all Basic Rent, additional charges and any other sum due hereunder when
due and payable, without notice or demand.
(b) Lessee shall pay, as additional rent, all other amounts,
costs, expenses, liabilities and obligations that Lessee herein assumes
or agrees to pay, and will reimburse Lessor for any payments thereof
made by Lessor in accordance with the terms and requirements of this
Lease (collectively, "Additional Rent"). Such expenses shall include
(without limitation) (i) the cost of air conditioning, electricity,
heating, mechanical, ventilation, water and sewer, and any elevator
systems and all other utilities, and the cost of supplies and equipment,
and maintenance and service contracts in connection therewith, (ii) the
cost of repairs, maintenance and cleaning of any common areas, (iii) the
cost of fire, extended coverage, sprinkler, public liability, property
damage and other insurance, (iv) wages, salaries and other labor costs,
including taxes, insurance, retirement, medical and other employee
benefits, (v) fees, charges and other costs, including management fees,
consulting fees, legal fees and accounting fees, of all independent
contractors engaged by Lessor or reasonably charged by Lessor if Lessor
performs management services in connection with the Premises, (vi) the
cost of any license, permit or inspection fees, (vii) reasonable
reserves to cover costs of long-term programmed maintenance, including
(without limitation) HVAC and any elevator system maintenance, (viii)
all taxes and assessments pursuant to Section 5.02(a) and (ix) any other
costs and expenses of any other kind whatsoever reasonably incurred in
managing, operating, maintaining and repairing the Premises, but
excluding costs of any special services rendered to individual tenants
(including Lessee) for which a special charge is made, other costs
billed to and paid by individual tenants (including Lessee) and costs
paid by proceeds of insurance. In the event of any failure by Lessee to
pay any of the Additional Rent, Lessor shall have all rights, powers and
remedies provided for herein or by law as in the case of nonpayment of
the Basic Rent.
Section 1.05...... Payment of Rent. Lessee will pay to Lessor all Basic
Rent and Additional Rent by good check or checks subject to collection, at the
principal office of Lessor, or at such other place or to such agent as Lessor
from time to time may designate by written notice to Lessee given not later than
the twentieth day of the month for the following and subsequent months.
Section 1.06...... Late Payment Charge. If Lessee shall fail to make
payment of any installment of Basic Rent, any payment of Additional Rent or any
payment of any other sums required by this Lease as provided in this Lease
within ten days after such payment is due (regardless of any notice requirements
for purposes of Article VII), Lessee shall pay to Lessor, in addition to such
Basic Rent, Additional Rent or other sum, a late charge equal to 5% of the
amount so delinquent, said charge being intended as stipulated compensation for
the additional costs and expenses incurred by Lessor because of such late
payment and not as a penalty.
Article II........
Section 2.01...... Disclaimer of Representation by Lessor. Lessee is
fully familiar with the physical condition of the Premises and all Improvements.
Lessor has made no representation as to the condition of the Premises or
Improvements or the fitness or availability thereof for any particular use and
none shall be implied from this Lease, and Lessor shall not be liable for any
latent or patent defect therein.
Section 2.02...... Premises Leased "As Is". THE PREMISES, INCLUDING
IMPROVEMENTS, ARE DEMISED AND LEASED TO LESSEE "AS IS" AND IN THEIR PRESENT
CONDITION WITHOUT ANY REPRESENTATION OR WARRANTY BY LESSOR AS TO THEIR
COMPLIANCE WITH APPLICABLE LEGAL REQUIREMENTS AND INSURANCE REQUIREMENTS (AS
DEFINED IN SECTION 6.04) NOW OR HEREAFTER IN EFFECT OR AS TO THEIR COMPLIANCE
WITH APPLICABLE TERMS AND CONDITIONS OF ANY CONTRACTUAL REQUIREMENTS (AS DEFINED
IN SECTION 2.07).
LESSEE HAS INSPECTED, IS FULLY FAMILIAR WITH AND HEREBY ACCEPTS THE
PREMISES AND HAS FOUND THE SAME TO BE SATISFACTORY TO IT FOR ALL PURPOSES
RELATING TO THIS LEASE. LESSOR SHALL HAVE NO LIABILITY WHATSOEVER TO LESSEE IN
RESPECT OF OR ARISING OUT OF THE EXISTING STATE OF TITLE TO THE PREMISES OR OF
THE EXISTING CONDITION, STAGE OF COMPLETION OR QUALITY OF CONSTRUCTION OF THE
IMPROVEMENTS.
LESSOR MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH
RESPECT TO THE PREMISES OR OF ANY FIXTURES OR OTHER ITEMS CONSTITUTING ANY
PORTION THEREOF, OR THE LOCATION, USE, DESCRIPTION, DESIGN, MERCHANTABILITY,
FITNESS FOR USE FOR A PARTICULAR PURPOSE, CONDITION OR DURABILITY THEREOF, OR AS
TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, OR WITH RESPECT TO
LESSOR'S TITLE THERETO OR OWNERSHIP THEREOF, AND ALL RISKS INCIDENT THERETO
SHALL BE BORNE BY LESSEE.
Section 2.03...... Maintenance and Repair.
(a) Lessee acknowledges that it has received the Premises in
good order and repair. Lessee, at its own expense, will maintain all
parts of the Premises in good repair and condition and will take all
action and will make all structural and nonstructural, foreseen and
unforeseen and ordinary and extraordinary changes and repairs that may
be required to keep all parts of the Premises in good repair and
condition (including, without limitation, all painting, glass,
utilities, conduits, fixtures and equipment, foundation, roof, exterior
walls, heating and air conditioning systems, wiring, plumbing, sprinkler
systems and other utilities, and all paving, sidewalks, roads, parking
areas, curbs and gutters and fences). Lessor shall not be required to
maintain, repair or rebuild all or any part of the Premises. Lessee
waives the right to require Lessor to maintain, repair or rebuild all or
any part of the Premises or make repairs at the expense of Lessor
pursuant to any Legal Requirement, agreement, contract, covenant,
condition or restrictions at any time.
(b) Replacement of or major repairs to all structural or
mechanical systems shall be undertaken by Lessee at its sole cost and
expense. Such replacements shall be made pursuant to and in accordance
with plans and specifications approved in advance by Lessor as required
for Major Alterations.
(c) Lessee shall have the benefit of, and the right to
enforce, all builders' and manufacturers' warranties issued for the
benefit of the Premises so long as Lessee is not in default under the
terms of this Lease and all costs of Lessor's cooperation are borne by
Lessee. Lessor agrees to promptly cooperate with Lessee to the extent
necessary or desirable to enforce the provisions of all warranties.
Section 2.04...... Alterations, Replacements and Additions. With respect
to any alteration, change, addition or improvement (herein collectively referred
to as an "Alteration") to any portion of the Premises:
(a) If such Alteration is not structural in nature and does
not affect the condition of the Improvements or any utilities and does
not lessen the value of the Premises as it is at the commencement of
such work, and if the cost thereof is less than $125,000, Lessor's
consent to such Alteration shall not be required. Such Alterations
(referred to herein as "Minor Alterations") shall be expeditiously
completed in a good and workmanlike manner and in compliance with all
applicable Legal Requirements and Insurance Requirements. Lessee shall
pay the increased premium, if any, charged by the insurance companies
carrying insurance policies on the Premises, to cover the additional
risk during the course of such work. Lessee shall provide Lessor upon
request with evidence of payment for all work done within 90 days after
completion thereof. All such Alterations made by Lessee to the existing
(as of the date of this Lease) Improvements, Lessor's Fixtures and
Lessor's Equipment shall be and become part of the Premises.
(b) If such Alteration is structural in nature or adversely
affects the value or utility of the Improvements or lessens the value of
the Premises as it is at the commencement of such work in any material
respect, or if the cost thereof is $125,000 or more, Lessor's prior
written consent to such alteration thereto shall be required, which
consent shall not be unreasonably withheld, delayed or conditioned. Such
Alterations (referred to herein as "Major Alterations") shall be
performed in accordance with the following requirements:
(i) Before commencing any Major Alteration, Lessee
shall, upon request, at Lessee's own cost and expense, deliver
to Lessor an endorsement to the commercial general liability
policy required by this Lease, which endorsement shall provide
that such insurance will cover work in progress;
(ii) Lessee shall pay the increased premium, if any,
charged by the insurance companies carrying insurance policies
on the Premises, to cover the additional risk during the
course of such work;
(iii) All such Alterations made by Lessee to the
existing (as of the date of this Lease) Improvements, Lessor's
Fixtures and Lessor's Equipment shall be and become a part of
the Premises;
(iv) Lessee shall, prior to the commencement of such
work, submit plans and specifications to Lessor for Lessor's
approval. If Lessor approves such plans and specifications,
Lessee shall obtain all necessary approvals from municipal
departments and bureaus and from any other municipal, state
and federal authorities having supervision or jurisdiction of
the Premises, and a copy of all such necessary approvals shall
be delivered to Lessor;
(v) All of such work shall be completed
substantially in accordance with the plans and specifications
approved by Lessor and in accordance with all Legal
Requirements;
(vi) No building now or hereafter erected upon the
Premises shall be demolished, nor shall Major Alteration be
made thereto, without the prior written consent of Lessor;
(vii) Lessee shall provide Lessor upon request with
evidence of payment for all work done within 90 days after
completion thereof; and
(viii) Prior to the commencement of any such work,
Lessee shall furnish Lessor such security or assurances as are
reasonably required by Lessor to assure completion of the
Major Alteration and payment of the costs thereof, including
Lessor's reasonable approval of the proposed construction
budget or estimated costs of construction and Lessee's
assurance that Lessee can and will pay all costs of
construction and will discharge all construction liens which
may be asserted on account of the work.
(c) The provisions of this Section shall also apply with
respect to any Alterations undertaken by any subtenant of any portion of
the Premises.
Section 2.05...... Encumbrances. If all or any part of the Improvements
shall encroach upon any property, street or right-of-way adjoining or adjacent
to the Premises, or shall violate the agreements or conditions affecting the
Premises or any part thereof, or shall hinder, obstruct or impair any easement
or right-of-way to which the Premises are subject, then, promptly after written
request of Lessor (unless such encroachment, violation, hindrance, obstruction
or impairment is not material) or of any person so affected, Lessee shall, at
its expense, either (a) obtain valid and effective waivers or settlements of all
claims, liabilities and damages resulting therefrom or (b) if Lessor consents
thereto, make such changes, including alteration or removal, to the Improvements
and take such other action as shall be necessary to remove or eliminate such
encroachments, violations, hindrances, obstructions or impairments.
Section 2.06...... Replacement of Lessor's Fixtures and Lessor's
Equipment.
(a) Lessee may, from time to time, and upon not less than 30
days' prior written notice to Lessor, remove and dispose of any of
Lessor's Fixtures and Lessor's Equipment constituting a major component
of the Premises (i.e. plumbing, gas, electrical, heating, ventilating,
lighting and air conditioning systems) with Lessor's prior written
consent. Such consent shall not be unreasonably withheld so long as
Lessee immediately replaces such Lessor's Fixtures and Lessor's
Equipment, constituting a major component of the Premises, with items
which are at least equal in value and general utility to those removed,
which are free of any liens or security interests and the fee title to
which is conveyed directly to Lessor and made subject to this Lease.
(b) Lessee may, from time to time, and upon not less than 30
days' prior written notice to Lessor, remove and dispose of any of
Lessor's Fixtures and Lessor's Equipment which does not constitute a
major component of the Premises so long as Lessee immediately replaces
such Lessor's Fixtures and Lessor's Equipment which are not major
components of the Premises with items which are at least equal in value
and general utility to those removed. Such components must be free of
any liens or security interests and the fee title to such must be, upon
placement of such components upon the Premises, conveyed directly to
Lessor and made subject of this Lease.
Section 2.07...... Lessee To Comply With Covenants. Lessee agrees that
it will not use the Premises, or any part thereof, or suffer or permit the same
to be used in any manner or suffer or do anything upon the Premises or any part
thereof which may violate any material covenant, condition, reservation,
agreement, easement or restriction to which the Premises may be subject on the
Commencement Date or which may be imposed after said date which are consented to
in writing by Lessee, and Lessee agrees that it will observe and perform and
will comply with and carry out the provisions of all Contractual Requirements
during the Lease Term. "Contractual Requirements" are defined as all obligations
required under any covenants, conditions and restrictions, easement agreements,
operating agreements, equipment leases or other contractual obligations
applicable to and binding upon the Premises.
Section 2.08...... Lessor's Cooperation Clause. Upon reasonable request
from time to time, Lessor shall join with Lessee in executing: (a) any
conveyance, dedication, grant of easement or license or other instrument as
shall be reasonably necessary to provide public utility service to the Premises
or in order to allow the Permitted Uses of the Premises by Lessee and (b) to the
extent that the signature or approval of Lessor is required by any governmental
body, applications for such permits or other governmental authorization or
approvals. Lessor will join in such applications or other documentation without
any cost or liability to Lessor in connection therewith, and Lessee shall
indemnify and hold Lessor harmless from any cost, liability or expense arising
therefrom.
Section 2.09...... No Third-party Claims Against Lessor. Nothing
contained in this Lease shall constitute the consent or request of Lessor,
express or implied, by inference or otherwise, to any person, firm or entity for
the performance of any labor or the furnishing of any materials or other
property in respect of the Premises or any part thereof, or as giving Lessee any
authority to contract for or permit the rendering of any services or the
furnishing of any materials or other property so as to permit the making of any
claim against Lessor. Nothing in this Lease shall be deemed as giving Lessee any
right, power or authority to contract for or permit the rendering of any service
or the furnishing of any material that would give rise to any mechanic's or
other lien against Lessor's interest in the Premises. NOTICE IS HEREBY GIVEN
THAT LESSOR WILL NOT BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR
TO BE FURNISHED TO LESSEE, OR TO ANYONE HOLDING AN INTEREST IN THE PREMISES (OR
ANY PART THEREOF) THROUGH OR UNDER LESSEE, AND THAT NO CONSTRUCTION, MECHANIC'S
OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR
AFFECT THE INTEREST OF LESSOR IN THE PREMISES.
Article III.......
Section 3.01...... Removal. Lessee may remove Lessee's Equipment at any
time during the Lease Term. Any of Lessee's Equipment not removed by Lessee
prior to the expiration of the Lease or earlier termination shall be considered
abandoned by Lessee and may be appropriated, sold, destroyed or otherwise
disposed of by Lessor without notice to Lessee. Lessee shall pay Lessor upon
demand all reasonable costs and expenses incurred by Lessee in removing, storing
and disposing of same. Lessee will repair at its expense all damage to the
Premises necessarily caused by the removal of Lessee's Equipment, whether
effected by Lessee or by Lessor.
Article IV........
Section 4.01...... Restriction on Assignment or Other Transfer. Lessee
covenants and agrees for Lessee and its successors, assigns and legal
representatives that neither this Lease nor the Lease Term and estate hereby
granted, nor any part hereof or thereof, will be assigned or mortgaged, pledged
or encumbered by Lessee or otherwise transferred (whether voluntarily,
involuntarily, by operation of law, or otherwise) or for any purpose other than
as set forth herein, without the prior written consent of Lessor in every case
(a "Transfer"), except in accordance with this Section. For the purposes of this
Section, a Transfer shall be deemed to include any transfer, assignment or
encumbrance of the controlling interests in Lessee, whether occurring by reason
of one transaction or cumulatively in any two or more transactions; provided,
however, for purposes of this Section, a change in the control of Lessee, a
corporation whose stock is publicly traded on a national stock exchange, shall
not be deemed a Transfer.
Any sublease of more than 20% of the leaseable floor area of the
Premises will be deemed a Transfer; provided, however, that room rental or
occupancy agreements, however designated, in the ordinary course of business
will not require Lessor's consent or be deemed a Transfer. If the Transfer
involves an assignment of this Lease, the assignee shall execute and deliver to
Lessor an agreement in form and substance in all respects reasonably
satisfactory to Lessor whereby such assignee assumes and agrees to be bound by
and perform all of the obligations of Lessee under this Lease.
Section 4.02...... Information About Proposed Transferee.
Notwithstanding anything contained in Section 4.01, in the event Lessee wishes
to assign or otherwise make a Transfer of this Lease, Lessee shall first notify
Lessor of the name of the proposed transferee and of the material terms,
provisions and conditions contained in the proposed Transfer, and shall provide
Lessor with such information as to the proposed transferee's financial
condition, business experience and standing as Lessor may reasonably require.
Section 4.03...... Terms Relating to Consent. Lessor shall have the
absolute right to withhold or condition its consent to any proposed Transfer
unless the following conditions are met:
(a) the proposed transferee is of a financial standing which
in Lessor's judgment will allow such proposed transferee to meet its
obligations under this Lease as they become due;
(b) the Premises will be used by such transferee for a
Permitted Use;
(c) there shall be no material default by Lessee which has not
been cured within any (if any) applicable cure period under any of the
terms, covenants and conditions of this Lease at the time that Lessor's
consent to any such Transfer is requested or on the effective date of
the Transfer; and
(d) Lessee shall reimburse Lessor for any reasonable expenses
that may be incurred by Lessor in connection with the proposed Transfer,
including (without limitation) the costs of making investigations as to
the acceptability of a proposed transferee and all legal expenses
incurred in connection with the granting of any requested consent to the
Transfer;
(e) any request for an assignment of this Lease shall be
accompanied by the proposed instrument of assignment and the assignment
document will provide that the assignee cannot further transfer its
interest without complying with the transfer requirements of this Lease.
Section 4.04...... Subleases. Lessee may sublease up to 20% in the
aggregate of the Premises to one or more subtenants without the consent of
Lessor and otherwise with Lessor's consent, provided the sublease is subordinate
to this Lease and to the Fee Mortgage, and the sublessee does not require a
nondisturbance agreement with Lessor. "Fee Mortgage" means any mortgage, deed of
trust or similar instrument encumbering real property to secure an obligation
made by Lessor which is at any time a lien on Lessor's interest in the Premises,
the beneficiary of which is referred to herein as "Fee Mortgagee." To the extent
Lessor's consent is required, the sublease shall be submitted to Lessor for
review and approval. All subleases shall expressly be made subject to the
provisions of this Lease. Any sublease of all or a portion of the Premises shall
specifically state that it is subject and subordinate to the terms and
conditions of this Lease and to the Fee Mortgage, that it shall be limited by
the provisions hereof and that the lessee thereunder shall not have any other or
further rights than Lessee has under this Lease. No sublease shall extend for
any period longer than the term of this Lease.
Section 4.05...... Original Documents to Lessor. In the event this Lease
is assigned or if more than 10% of the Premises is sublet a duplicate original
of the instrument of assignment or subletting, as the case may be, shall be sent
to Lessor within 10 days after the effective date thereof. Any assignee of this
Lease shall assume the obligations of Lessee hereunder and a duplicate original
of such assumption shall be delivered to Lessor together with the aforesaid
duplicate original of the assignment instrument.
Section 4.06...... Effect of Transfer. No such assignment, Transfer or
sublease shall release Lessee from liability hereunder or affect or reduce any
obligations of Lessee named herein or of any other Lessee assuming this Lease or
affect or reduce the rights of Lessor hereunder. All obligations of Lessee named
herein and of any other Lessee assuming this Lease shall continue in full effect
as the joint and several obligations of a principal and not of a guarantor or
surety, as though no assignment, Transfer or sublease had been made. In
connection therewith, Lessee named herein and each succeeding Lessee assuming
this Lease agrees that the joint and several liability of each hereunder shall
continue in full force and effect and shall not be terminated or affected by any
action which Lessor may take or fail to take against any Lessee hereunder or by
reason of any waiver of, or failure to enforce, any rights or remedies reserved
to Lessor, or otherwise.
Section 4.07...... Collection of Rent. If Lessee's interest in this
Lease is assigned, whether or not in violation of the provisions hereof, Lessor
may collect Basic Rent and Additional Rent from the assignee. If the Premises is
sublet to, or occupied by, or used by, any person other than Lessee, whether or
not in violation hereof, Lessor after default by Lessee under this Lease, may
collect Basic Rent and Additional Rent from the subtenant, user or occupant. In
either case, no such assignment, sublease or collection shall affect Lessee's
obligations hereunder, and Lessor shall apply the net amount collected to the
Basic Rent, Additional Rent and other obligations of Lessee reserved in this
Lease in such order as Lessor elects.
Article V.........
Section 5.01...... Net Lease.
(a) It is expressly understood and agreed by and between the
parties that this Lease is an absolute net lease, and the Basic Rent and
all other sums payable hereunder to or on behalf of Lessor shall be paid
without notice or demand and without setoff, counterclaim, abatement,
suspension, deduction or defense.
(b) Except as otherwise expressly provided in the Lease, this
Lease shall not terminate, nor shall Lessee have any right to terminate
this Lease or be entitled to the abatement of any rent or any reduction
thereof, nor shall the obligations hereunder of Lessee be otherwise
affected, by reason of any damage to or destruction of all or any part
of the demised premises from whatever cause, the taking of the demised
premises or any portion thereof by condemnation or otherwise, the
prohibition, limitation or restriction of Lessee's use of the demised
premises, or interference with such use by any private person or
corporation, or by reason of any eviction by paramount title or
otherwise, or for any other cause whether similar or dissimilar to the
foregoing, any present or future law to the contrary notwithstanding, it
being the intention of the parties hereto that the rent and all other
charges payable hereunder to or on behalf of Lessor shall continue to be
payable in all events and the obligations of Lessee hereunder shall
continue unaffected, unless the requirement to pay or perform the same
shall be terminated pursuant to an express provision of this Lease.
Nothing contained in this Section shall be deemed a waiver by Lessee of
any rights that it may have to bring a separate action with respect to
any default by Lessor hereunder or under any other agreement.
(c) Lessee covenants and agrees that it will remain obligated
under this Lease in accordance with its terms and that Lessee will not
take any action to terminate, rescind or avoid this Lease,
notwithstanding the bankruptcy, insolvency, reorganization, composition,
readjustment, liquidation, dissolution, winding-up or other proceeding
affecting Lessor in any such proceeding and notwithstanding any action
with respect to this Lease which may be taken by any trustee or receiver
of Lessor in any such proceeding or by any court in any such proceeding.
(d) Lessee waives all rights now or hereafter conferred by law
(i) to quit, terminate or surrender this Lease or the demised premises
or any part thereof or (ii) to any abatement, suspension, deferment or
reduction of the rent, or any other sums payable hereunder to or on
behalf of Lessor, regardless of whether such rights shall arise from any
present or future constitution, statute or rule of law.
Section 5.02...... Taxes and Assessments; Compliance With Law.
(a) Lessee shall pay, prior to any interest, penalty, fine or
cost that may be added for nonpayment: (i) all taxes, assessments,
levies, fees, water and sewer rents and charges and all other
governmental charges, general and special, ordinary and extraordinary,
foreseen and unforeseen, which are, at any time prior to or during the
Lease Term hereof, imposed or levied upon or assessed against or which
arise with respect to (A) the Premises, (B) any Basic Rent, Additional
Rent or other sums payable hereunder, (C) this Lease or the leasehold
estate hereby created or (D) the operation, possession or use of the
Premises; (ii) all gross receipts or similar taxes (i.e., taxes based
upon gross income which fail to take into account deductions with
respect to depreciation, interest, taxes or ordinary and necessary
business expenses, in each case relating to the Premises) imposed or
levied upon, assessed against or measured by any Basic Rent, Additional
Rent or other sums payable hereunder; (iii) all sales, value added, ad
valorem, use and similar taxes at any time levied, assessed or payable
on account of the acquisition, ownership, leasing, operation, possession
or use of the Premises; and (iv) all charges of utilities,
communications and similar services serving the Premises. Lessee shall
not be required to pay any franchise, estate, inheritance, transfer,
income, capital gains or similar tax of Lessor unless such tax is
imposed, levied or assessed in substitution for any other tax,
assessment, charge or levy which Lessee is required to pay pursuant to
this Section; provided, however, that if, at any time during the Lease
Term, the method of taxation shall be such that there shall be assessed,
levied, charged or imposed on Lessor a capital levy or other tax
directly on the rents received therefrom, or upon the value of the
Premises or any present or future improvement or improvements on the
Premises, then all such levies and taxes or the part thereof so measured
or based shall be payable by Lessee, and Lessee shall pay and discharge
the same as herein provided. Lessee will furnish to Lessor, promptly
after demand therefor, proof of payment of all items referred to above
which are payable by Lessee. If any such assessment may legally be paid
in installments, Lessee may pay such assessment in installments; in such
event, Lessee shall be liable only for installments which become due and
payable with respect to any tax period occurring in whole or in part
during the Lease Term hereof; provided, however, that all amounts
referred to in this Section for the fiscal or tax year in which the
Lease Term shall expire shall be apportioned so that Lessee shall pay
those portions thereof which correspond with the portion of such year as
are within the Lease Term hereby demised.
(b) Lessee shall comply with and cause the Premises to comply
with and shall assume all obligations and liabilities with respect to
(i) all laws, ordinances and regulations and other governmental rules,
orders and determinations presently in effect or hereafter enacted, made
or issued, whether or not presently contemplated (collectively, "Legal
Requirements"), applicable to the Premises or the ownership, operation,
use or possession thereof and (ii) all agreements, contracts, insurance
policies (including, without limitation, to the extent necessary to
prevent cancellation thereof and to insure full payment of any claims
made under such policies), agreements, covenants, conditions and
restrictions now or hereafter applicable to the Premises or the
ownership, operation, use or possession thereof, including (without
limitation) all such Legal Requirements, contracts, agreements,
covenants, conditions and restrictions that require structural,
unforeseen or extraordinary changes; provided, however, that, with
respect to any of the obligations of Lessee in clause (ii) above which
are not now in existence, Lessee shall not be required to so comply
unless Lessee is either a party thereto or has given its written consent
thereto, or unless the same is occasioned by Legal Requirements or
Lessee's default (including any failure or omission by Lessee) under
this Lease. Nothing in clause (ii) of the immediately preceding sentence
or the following sentence shall modify the obligations of Lessee under
Section 5.07.
(c) If an Event of Default shall occur and be continuing, upon
the request of Lessor, Lessee shall, in addition to and concurrently
with the payment of Basic Rent as required in Subsection 1.04(a), each
month pay one-twelfth of the amount (as estimated by Lessor) of the
annual taxes and assessments described in Subsection 5.02(a) and the
annual premiums for insurance required in Section 6.04 next becoming due
and payable with respect to the Premises, and Lessee shall also pay to
Lessor on demand therefor the amount by which the actual taxes and
assessments and insurance premiums exceed the payment by Lessee required
in this subsection.
Section 5.03...... Utility Services. Lessee agrees to arrange for, and
to pay or cause to be paid all charges for, gas, water, sewer, electricity,
light, heat, power, telephone or other communication service or other utility or
service used, rendered or supplied to, upon or in connection with the Premises
or any portion thereof, throughout the Lease Term, and to indemnify Lessor and
save it harmless against any liability or damages arising from any interruption,
curtailment or stoppage of any such utility or service. Lessee shall also, at
its sole cost and expense, procure or cause to be procured any and all necessary
permits, licenses or other authorizations required for the lawful and proper use
and for the installation and maintenance upon the Premises of wires, pipes,
conduits, tubes and other equipment and appliances for use in supplying any such
utility service to or upon the Premises. Lessee expressly agrees that Lessor is
not, nor shall it be, required to furnish to Lessee or any other occupant of the
Premises, during the demised term, any water, sewer service, gas, heat,
electricity, light, power or any other facilities, equipment, labor, materials
or services of any kind whatsoever.
Section 5.04...... No Adverse Possession. Lessee shall not suffer or
permit the Premises or any part or parts thereof to be used in such manner as
might reasonably tend to impair Lessor's title to the Premises or any portion
thereof, or in such manner as might reasonably make possible a claim or claims
of adverse usage or adverse possession, or of implied dedication of the Premises
or any portion thereof.
Section 5.05...... Entry by Lessor. Lessor, the Fee Mortgagee and their
authorized representatives shall have the right to enter the Premises or any
portion thereof at all reasonable times upon reasonable prior notice (except in
cases of emergency, where no notice will be required) to Lessee (a) for the
purpose of inspecting the same (including without limitation any environmental
inspection) or, after the occurrence of an Event of Default by Lessee in
completing any alterations or repairs required hereunder, for the purpose of
doing any work, and may take all such action thereon as may be necessary or
appropriate for any such purpose (but nothing contained in this Lease or
otherwise shall create or imply any duty upon the part of Lessor to make any
such inspection or do any such work), and (b) for the purpose of showing the
Premises to prospective purchasers and mortgagees and, within 12 months prior to
the expiration of the Lease Term, for the purpose of showing the same to
prospective lessees. No such entry shall constitute an eviction of Lessee.
Section 5.06...... Liens. Lessee will remove and discharge any charge,
lien, security interest or encumbrance upon the Premises or upon any Basic Rent,
Additional Rent or other sums payable hereunder which arises for any reason,
including (without limitation) all liens which arise out of the possession, use,
occupancy, construction, repair or rebuilding of the Premises or by reason of
labor or materials furnished or claimed to have been furnished to Lessee or for
the Premises, but not including (a) the liens and encumbrances set forth in
Schedule C, (b) this Lease and any assignment hereof or any sublease permitted
hereunder and (c) any mortgage, charge, lien, security interest or encumbrance
created or caused by Lessor or its agents, employees or representatives without
the consent of Lessee. Lessee may provide a bond or other security acceptable to
Lessor to remove or pay all costs associated with the removal of any such lien.
Nothing contained in this Lease shall be construed as constituting the consent
or request of Lessor, express or implied, to or for the performance (on behalf
of or for the benefit of Lessor) by any contractor, laborer, materialman or
vendor, of any labor or services or for the furnishing of any materials for any
construction, alteration, addition, repair or demolition of or to the Premises
or any part thereof. Notice is hereby given that Lessor will not be liable for
any labor, services or materials furnished or to be furnished to Lessee, or to
anyone holding an interest in the Premises or any part thereof through or under
Lessee, and that no mechanic's or other liens for any such labor, services or
materials shall attach to or affect the interest of Lessor in and to the
Premises.
Section 5.07...... Indemnification. Lessee will defend, protect,
indemnify and save harmless Lessor, its agents and employees and the Fee
Mortgagee, from and against any and all liabilities, obligations, damages,
losses, penalties, claims, causes of action, costs, charges and/or expenses,
including reasonable attorneys' fees and expenses, which may be imposed upon or
incurred by or asserted against Lessor, its agents or employees or the Fee
Mortgagee by reason of (a) any accident, injury to any person (including death)
or damage to property occurring on or about the Premises from all causes
whatsoever (except to the extent caused by any act of sole negligence or willful
misconduct of Lessor or Fee Mortgagee), (b) any loss arising out of any work
performed on Premises by Lessee or any agent, employee or contractor of Lessee
or by any assignee or sublessee of Lessee or any agent, employee or contractor
of any such assignee or sublessee, (c) any default on the part of Lessee to
perform or comply with any term of this Lease, (d) any claim for the performance
of labor or the furnishing of materials or other property at Lessee's request or
at the request of anyone claiming under Lessee or performed by Lessor in respect
of the Premises or any part thereof, (e) any action or proceeding pertaining to
the Premises to which Lessor, its agents or employees or the Fee Mortgagee is
made a party or in which it becomes necessary in the judgment of Lessor to
defend or uphold the validity of the interest of Lessor in the Premises and (f)
any acts, omissions, or negligence of Lessee or the sublessees, contractors,
agents, employees, invitees, customers, concessionaires or licensees of Lessee
(except to the extent caused by any act of sole negligence or willful misconduct
of Lessor or Fee Mortgagee).
Lessor will defend, protect, indemnify and save harmless Lessee, its
agents and employees, from and against any and all liabilities, obligations,
damages, losses, penalities, claims, causes of action, costs, charges and/or
expense, including reasonable attarneys' fees and expenses, which may be imposed
upon or incurred by or asserted against Lessee, its agents or employees by
reason of willful misconduct or any actively negligent act of Lessor.
Section 5.08...... Environmental Compliance.
(a) Lessee's Representations. As a material inducement for
Lessor to enter into this Lease, Lessee represents and warrants that (i)
except as may be permitted by applicable law, throughout the Lease Term
(A) all parts of the Premises will be kept free (by Lessee and others)
of Hazardous Materials (as defined below) and (B) no part of the
Premises will be used by Lessee or others to generate, manufacture,
refine, transport, treat, store, handle, dispose of, transfer, produce
or process Hazardous Materials and (ii) Lessee will not suffer or permit
any activity in, at or from all or any part of the Premises that will
cause or contribute to pollution (by petroleum or petroleum products, or
otherwise) of the Premises in whole or in part or any other property.
"Hazardous Materials" shall mean all materials which because of their
quantity, concentration or physical, chemical or infectious
characteristics may cause or pose a present or potential hazard to human
health or the environment when improperly handled, treated, stored,
transported, disposed of or otherwise managed. The term shall include
(without limitation) all petroleum, petroleum products, explosives,
radioactive materials, hazardous wastes, hazardous or toxic substances,
asbestos or any other substance or material now or hereafter defined as
a "hazardous" or "toxic" substance, material or product by the U.S.
Environmental Protection Agency or the state in which the Premises is
located under the Comprehensive Environmental Response, Compensation and
Liability Act (CERCLA), the Resource Conservation and Recovery Act
(RCRA), the Toxic Substances Control Act (TSCA), the Federal Water
Pollution Control Act (FWPCA) or comparable state statutes and other
Environmental Requirements (as defined below). Lessee shall comply fully
with all Environmental Requirements. "Environmental Requirements" shall
mean all applicable laws (including without limitation statutes,
regulations and common law) pertaining to the protection of human health
and the environment, including (without limitation) employee and
community right-to-know laws and all laws regarding the use, generation,
storage, transportation, treatment, disposal or other handling of
Hazardous Materials. The only Hazardous Materials permitted on the
Premises are cleaning products and other materials in ordinary
quantities which are used in the ordinary course of business and
necessary for the conduct of the Permitted Uses and which Lessee uses in
strict compliance with all applicable Environmental Requirements.
(b) Lessee's Remediation. If during the Lease Term any
Hazardous Materials are dumped, released, discharged, spilled or leaked
onto or into the Premises or found to be contaminating the Premises (or
if a party has reasonable cause to believe that such dumping, releasing,
discharge, spilling or leak may have occurred or that such Hazardous
Materials may be contaminating the Premises), the party will notify the
other party in writing (except in cases of an emergency as described in
Section 5.05 in which event the party shall have the right to take
action without such notice as provided therein) as to the matter in
question. In such event or at any other time as may be requested by
Lessor, the parties will cooperate in having reasonable examinations,
tests or investigations performed at Lessee's expense to determine the
extent of the problem and nature of appropriate corrective action (or if
Lessee fails to cause such examinations or investigations to be
performed after notice of the required action Lessor will have the right
to perform them on Lessee's behalf and at Lessee's expense). If such
examinations demonstrate that the Premises is contaminated by Hazardous
Materials at levels requiring remedial action under applicable laws,
Lessee will have 30 days (or such longer time as may be reasonably
necessary under the circumstances or such lesser time as may be required
by emergency conditions, by law, regulation or judicial order, or by any
governmental entity, whichever is sooner) after written notice from
Lessor to eliminate same and (to the extent necessary) to restore the
Premises to prior condition but with new non-Hazardous Materials,
failing which Lessor may either terminate this Lease on written notice
to Lessee or take all action deemed desirable by Lessor to effect such
elimination and (to the extent necessary) restoration. If Lessor elects
the latter, upon request and as Additional Rent, and without limiting
the indemnification set forth in subparagraph (c) below, Lessor will be
entitled to receive from Lessee all reasonable costs and expenses in any
way associated therewith, plus interest at the rate provided in Section
7.02(k) hereof.
(c) Lessee's Indemnity. Lessee, for itself, its successors and
assigns, hereby agrees to defend, indemnify, hold harmless and reimburse
Lessor, its successors and assigns, and any Fee Mortgagee from, against
and for any and all damages, claims, demands, liabilities, losses,
penalties and expenses (including, without limitation, any and all
clean-up costs, remediation costs, court costs, reasonable attorneys'
fees and diminution in the value of the Premises) which are in any
manner caused in whole or in part by the presence of any Hazardous
Materials on or about the Premises or the failure of Lessee or any
subtenant, agent, employee or contractor of Lessee or the Premises to
comply with any Environmental Requirements, whether or not the same are
known to or caused by Lessee and whether the same occur during the term
of this Lease, any time prior to the term of this Lease or, with respect
to any occurrence or condition on or about the Premises which is caused
by any condition, act or omission prior to the expiration of this Lease,
after the term of the Lease. Claims which are the subject of this
indemnification include without limitation remedial actions, violations
of law and claims for personal injury, wrongful death, property damage
or natural resource damages. This indemnity shall survive the
termination, expiration or forfeiture of this Lease.
(d) Lessor's Cooperation. Unless an Event of Default shall
exist hereunder or Lessee shall not be diligently performing its
obligations under subsections (b) and (c) above, Lessor agrees to
cooperate with Lessee in connection with (i) any claim Lessor and/or
Lessee may have against any third party for the cost of any remediation
conducted or to be conducted on, in and under the Premises or with
respect to any damage caused to the Premises, and (ii) any insurance
covering such remediation and/or damage to the Premises. Lessor hereby
assigns to Lessee any and all rights, claims or causes of action Lessor
may have with against such third party or in connection with such
insurance to the extent of any sums paid by Lessee in fulfillment of its
obligations under subsections (b) and (c) above except to the extent
that such rights, claims, causes of action or insurance proceeds are
necessary to fully compensate Lessor with respect to any such
remediation or damage to the Premises. Lessee agrees to pay all Lessor's
out-of-pocket costs incurred by Lessor in connection with such
cooperation. Article VI........
Section 6.01...... Compensation. Except as provided in Subsection
6.02(a)(i), Lessee hereby irrevocably assigns to Lessor any award, compensation
or insurance payment to which Lessee may become entitled by reason of Lessee's
interest in the Premises (a) if the use, occupancy or title of the Premises or
any part thereof is taken, requisitioned or sold in, by or on account of any
actual or threatened eminent domain proceeding or other action by any person
having the power of eminent domain ("Condemnation") or (b) if the Premises or
any part thereof is damaged or destroyed by fire, flood or other casualty,
including (without limitation) vandalism ("Casualty"). All awards,
compensations, damages and insurance payments on account of any Condemnation or
Casualty are herein collectively called "Compensation." Lessor may appear in any
such proceeding or action to negotiate, prosecute and adjust any claim for any
Compensation, and Lessor shall collect any such Compensation. Lessee shall pay
all of Lessor's reasonable costs and expenses in connection with each such
proceeding, action, negotiation, prosecution and adjustment. Lessee shall be
entitled to participate in any such proceeding, action, negotiation,
prosecution, appeal or adjustment as contemplated herein. Notwithstanding
anything to the contrary contained in this Article VI, if permissible under
applicable law, any separate Compensation made to Lessee for its moving and
relocation expenses, anticipated loss of business profits, loss of goodwill or
fixtures and equipment paid for by Lessee and which are not part of the Premises
(including, without limitation, Lessee's Equipment) shall be paid directly to
and shall be retained by Lessee (and shall not be deemed to be Compensation).
All Compensation shall be applied pursuant to this Article VI, and all such
Compensation (less the expense of collecting such Compensation) may be called
the "Net Proceeds."
Section 6.02...... Casualty.
(a) Payment of Proceeds.
(i) In case of any Casualty to the Premises or any
part thereof where the insurance proceeds to be collected are
less than $75,000, the proceeds of any such insurance shall be
paid to, and may be adjusted by, Lessee alone.
(ii) In case of any Casualty to the Premises or any
part thereof where the insurance proceeds to be collected are
$75,000 or more, the proceeds of any such insurance shall be
paid to a depository (the "Depository") chosen by Lessor or,
if there is a Fee Mortgagee, by the Fee Mortgagee, to be
disbursed in accordance with Section 6.02(e) below, and will
be adjusted by Lessee with the reasonable approval of Lessor
or, if there is a Fee Mortgagee, the Fee Mortgagee. Lessor or
the Fee Mortgagee may be the Depository.
(b) Restoration of Premises. In case of any Casualty to the
Premises or any part thereof, Lessee will, at Lessee's expense, whether
or not there are insurance proceeds available or sufficient for the
purpose, promptly commence and complete with due diligence the
restoration of the Premises to as nearly as possible its value,
condition and character immediately prior to such Casualty.
(c) Prompt Performance. Restoration of the Premises under this
Section 6.02 shall be performed in accordance with Section 2.04(b)
hereof. If the work of repairing, replacing or rebuilding said damaged
or destroyed Premises or portion thereof shall not have been commenced
promptly following the receipt of all required approvals of Lessee's
plans and specifications, or having been commenced, shall not be
expeditiously proceeding, Lessor shall have all rights under this Lease
in respect of a default by Lessee.
(d) No Abatement. Regardless of any Casualty to the Premises
or any part thereof, Lessee shall not be entitled to any abatement of
Basic Rent, Additional Rent, or any other payment Lessee is required to
make pursuant to this Lease except as set forth in Sections 6.3(b),
6.3(d)(i) and 6.04(c) hereof,
(e) Substantial Casualty; Proceeds Held by Depository. If the
insurance proceeds to be collected following a Casualty exceed $75,000
(a "Substantial Casualty"), then Lessee shall promptly notify Lessor and
the Fee Mortgagee in writing of such Casualty. In case of any
Substantial Casualty, the proceeds of insurance (excluding, however,
proceeds payable or on account of Lessee's Equipment) will be paid
directly to the Depository and remitted by the Depository to Lessee or
to the persons designated by Lessee for the costs of labor and materials
as the work of repair, replacement and/or restoration progresses upon
Lessee's request and against:
(i) a certificate by Lessee dated not more than 15
days prior to the request, setting forth the following: (A)
that the sum then requested either has been paid by Lessee or
is justly due to contractors, subcontractors, materialmen,
engineers, architects or other persons who have rendered
services or furnished materials for the work therein
specified, and giving a brief description of such services and
materials and the several amounts so paid or due to each of
said persons in respect thereto and (B) that the cost, as
estimated by the person signing such certificate, of the work
required to be done subsequent to the date of such certificate
in order to complete it does not exceed the funds remaining in
the hands of the Depository after payment of the sum requested
in such certificate; and
(ii) lien waivers or other evidence reasonably
satisfactory to the Depository and Lessor, to the effect that
there has not been or may not be filed with respect to the
Premises or any part thereof any construction, mechanics',
laborers', materialmen's or other like lien which has not been
discharged of record except such as will be discharged by
payment of the amount requested or contested by appropriate
legal action by Lessee in accordance with Section 5.06.
In the event the insurance proceeds exceed the cost of
restoration work, such excess shall be paid equally to the Lessee and
the Lessor or the Fee Mortgagee, as applicable.
Any structural work required to be performed by Lessee under
the provisions of Section 6.02(b) which involves a cost of $25,000 or
more (as estimated by a licensed architect selected by Lessee and
reasonably acceptable to Lessor and the Fee Mortgagee) shall be
performed under the supervision of an architect selected by Lessee and
reasonably satisfactory to Lessor and the holder of the first Fee
Mortgage, and the aforesaid certificate shall also be signed by such
architect as to the matters in paragraph (e)(i) above. Any nonstructural
work required to be performed by Lessee under the provisions of Section
6.02(b) which involves a cost of $50,000 or more (as estimated by a
licensed architect selected by Lessee and reasonably acceptable to
Lessor and the Fee Mortgagee) shall be performed under the supervision
of an architect selected by Lessee and reasonably satisfactory to Lessor
and the holder of the first Fee Mortgage, and the aforesaid certificate
shall also be signed by such architect as to the matters in paragraph
(e)(i) above.
(f) Requirements of Fee Mortgagee. Subject to Section 9.06
hereof, in the event the Fee Mortgagee requires changes to this Lease
with respect to the amounts or types of insurance coverages, the duties
for repair or restoration, the handling of proceeds, the application of
casualty or condemnation proceeds to the restoration of the Premises or
to the indebtedness secured by the Fee Mortgage or other matters, Lessee
will cooperate in executing any clarification or amendment of this Lease
required by the Fee Mortgagee as a condition to providing financing to
Lessor.
Section 6.03...... Condemnation.
(a) Notice of Condemnation. In the event of a Condemnation of
any or all of the Premises, Lessee shall provide notice of such
Condemnation to Lessor.
(b) Substantial Condemnation. In the event of any Condemnation
of all of the Premises or so much thereof that the remainder is
insufficient to permit the continued operation of Lessee's business
thereon, even if restored to an architectural unit under the provisions
of this Lease (any such event being a "Substantial Condemnation"), then
this Lease and the term hereby granted shall cease and expire on the
date when possession of the Premises or such portion thereof shall be
taken, and all rents, taxes and other charges shall be prorated and paid
to such date.
(c) Award on Substantial Condemnation. In the event of a
termination of this Lease by reason of a Substantial Condemnation, the
whole of any Compensation shall be paid solely to Lessor, who shall be
entitled to keep said award, including consequential and other damages
and compensation of any sort for such Substantial Condemnation, with
deduction therefrom only for any award specifically made to Lessee for
its moving and relocation expenses, anticipated loss of business
profits, loss of goodwill or fixtures and equipment paid for by Lessee
and which are not part of the Premises (including, without limitation,
Lessee's Equipment) which amount, if any, shall be remitted by Lessor to
Lessee, and in no event (except in the event Lessee shall purchase the
Premises pursuant to subsection (b) above) shall Lessee be entitled to
any other part of an award for Substantial Condemnation. Lessee agrees
to execute any documents that may be required to facilitate collection
by Lessor of any Compensation.
(d) Continuance of Lease on Less Than Substantial
Condemnation. In the event of a Condemnation of any part of the Premises
and if the part not taken is sufficient to permit the reasonable
operation of Lessee's business if restored as an architectural unit,
this Lease shall remain in full force and effect, except:
(i) The annual Basic Rent under this Lease,
commencing on the date that title shall vest by reason of such
taking (the "Vesting Date"), shall be reduced by an amount
which bears the same proportion to the Basic Rent payable
immediately prior to such taking as the then fair market
rental value of the part of the Premises so taken shall bear
to the then fair market rental value of the whole of the
Premises immediately prior to such taking.
(ii) Lessor shall be entitled to and shall receive
and retain the Compensation payable in respect of the portion
of the Premises so taken, subject to the provisions of
subdivision (iii) below.
(iii) Promptly after such taking Lessee shall at
Lessee's expense, whether or not there are condemnation
proceeds available or sufficient for the purpose, restore that
part of the Premises which remains to as nearly its former
condition as circumstances will permit. The award with respect
to any Improvements shall be payable to the Depository for
disbursement subject to the provisions of Section 6.02(e).
Subject to the same provisions and limitations set forth for
payments in Section 6.02(e), Lessee shall receive advances
from said award for the payment of the costs of labor and
materials as the restoration and construction progresses. Any
balance remaining after payment of all such costs of labor and
materials shall be paid to Lessor.
(e) Cooperation of Parties. Nothing herein contained shall be
construed or deemed to vest in Lessee any ownership or title of or to
the Premises. Lessor and Lessee shall cooperate with each other and
Lessor shall have the right to designate counsel to represent Lessor and
Lessee to represent the parties in any proceeding relating to a
Condemnation.
(f) Temporary Condemnation. In the event of a Condemnation of
all or any portion of the Premises for temporary use, the foregoing
provisions of this Section shall be inapplicable thereto, this Lease
shall continue in full force and effect without reduction or abatement
of Basic Rent or Additional Rent. In such event, Lessee alone shall be
entitled to make claim for, recover and retain any Compensation
recoverable in respect of such temporary use whether in the form of
rental or otherwise; provided, that any Compensation paid for any period
beyond the term of this Lease shall be paid to Lessor.
Section 6.04...... Required Insurance Coverage. During the Lease Term,
Lessee shall, at Lessee's sole cost and expense, secure and keep the following
insurance (the "Insurance Requirements") in full force and effect:
(a) "All-risk" of physical damage coverage insurance,
including earthquake damage coverage, covering the Improvements,
Lessor's Fixtures and Lessor's Equipment on a replacement cost basis, in
an amount sufficient to avoid application of any co-insurance clause and
with an "agreed amount" endorsement voiding co-insurance, including a
full "replacement cost" endorsement together with appropriate
"demolition and increased costs of construction" endorsements. Lessee
shall be responsible for determining the applicability of "demolition
and increased costs of construction" endorsements. Lessor reserves the
right to reasonably disapprove any exclusions from the "all-risk"
coverage furnished hereunder. If Lessee elects to provide blanket
"all-risk" coverage over locations in addition to the Premises, Lessor
reserves the right to require a specific endorsement or endorsements
from the insurance companies affording such coverage evidencing coverage
over the Premises in a sufficient amount to provide recovery on a
replacement cost basis. Lessee's coverage may provide for reasonable
self-insured retentions.
(b) Commercial general liability insurance for the benefit of
Lessor, Lessee and the Fee Mortgagee, fully protecting Lessor, Lessee
and the Fee Mortgagee in respect of personal injuries and death to
persons and property damage, with a combined single limit of not less
than $5,000,000 for personal injuries and death to persons and property
damage. In the event Lessee maintains blanket liability coverage, the
total limits of liability required hereunder must be available to the
Premises.
(c) Business interruption/loss of rents insurance covering all
risks referenced in Section 6.04(a) for the benefit of Lessor, Lessee
and, if Lessor so directs, for the benefit of the Fee Mortgagee, as
their interests may appear, covering risk of loss during the lesser of
the first 12 months of reconstruction or the actual reconstruction
period necessitated by the occurrence of any of the covered hazards, in
such amounts as may be customary for comparable properties in the area
and in an amount sufficient to prevent Lessor or Lessee from becoming a
co-insurer. Lessee's obligation for payment of rent shall be reduced
dollar for dollar by the amount of rent insurance received by Lessor or
Fee Mortgagee.
(d) Boiler and machinery coverage covering loss or damage, on
a replacement cost basis, from explosion of any steam and pressure
boilers, hot water heaters, and similar apparatus located in, on or
about the Premises with limits of not less than the replacement cost of
the Improvements. In the event coverage hereunder is afforded by more
than one insurance company, all such companies shall furnish a joint
loss endorsement to the policies covering the risk set forth in this
Section.
(e) Flood (if the Premises is located in whole or in part
within any flood plain area as designated by any department or agency of
the United States Government having jurisdiction) and such other hazards
and in such amounts as may be customary for comparable properties in the
area, provided the same is available at rates which are economically
practical in relation to the risks covered, as determined by Lessee and
reasonably approved by Lessor.
(f) Workers' compensation insurance coverage for all persons
employed by Lessee on the Premises with statutory limits and otherwise
with limits of and provisions in accordance with the requirements of
applicable local, state and federal law.
(g) During the course of any construction or reconstruction in
connection with any addition, renovation or any Casualty or
Condemnation, "builder's risk" coverage for the Premises written on an
"all risk" basis with privilege granted to occupy in an amount not less
than the full amount of the construction or reconstruction cost, during
the period of any Major Alteration, which shall include the value of
building materials on the Premises, covering loss or damage by fire,
lightning, windstorm, hail, explosion, riot, riot attending a strike,
civil commotion, aircraft vehicles, smoke, earthquakes, vandalism and
malicious mischief, and flood insurance (if the Premises is in a flood
hazard area), and such other hazards as may be included in broad form of
extended coverage from time to time available.
(h) Without limiting the generality of the foregoing, during
the Lease Term, Lessee shall, at Lessee's sole cost and expense, secure
and keep the insurance coverages as required in Schedule D hereto in
full force and effect.
Section 6.05...... Separate Insurance Coverages. Without the prior
written consent of Lessor, Lessee shall not obtain or carry separate insurance
concurrent in form or contributing in the event of loss with that required by
Section 6.04 to be furnished by Lessee unless Lessor and Lessee are included
therein as additional named insureds, with loss payable as in this Lease. Lessee
shall immediately notify Lessor whenever any such separate insurance is obtained
and shall deliver to Lessor certificates evidencing the same.
Section 6.06...... Compliance With Insurance Requirements. Lessee shall
not violate or permit to be violated any of the conditions or provisions of any
of the insurance policies, and Lessee shall so perform and satisfy the
requirements of the companies writing such policies. Lessee further agrees to
reasonably cooperate with Lessor as and when requested to comply with loss
prevention programs.
Section 6.07...... Additional Coverages. On reasonable demand of Lessor
or the Fee Mortgagee, Lessee shall provide such other forms of insurance in such
amounts, and/or the foregoing insurance in such additional amounts as the
parties may from time to time approve, as are customarily furnished by Lessees
under comparable leases in the case of property similar in use to the Premises
and located in the area in which the Premises is situated, provided the same is
available at rates which are economically practical in relation to the risk
covered. Without limiting the generality of the foregoing, if Lessor is or
becomes the Fee Mortgagee with respect to the Premises, then Lessee shall be
required to maintain insurance meeting the requirements specified in Schedule E
hereto and such other requirements as Lessor may specify.
Section 6.08...... Policy Provisions. All insurance policies maintained
by Lessee pursuant to Section 6.04 shall name Lessee as insured, and Lessor and
the Fee Mortgagee as additional insureds and shall provide (a) that losses shall
be payable notwithstanding any act or negligence of Lessee and (b) that no
cancellation, nonrenewal, or material alteration in the terms and conditions of
coverage thereof shall be effective until at least 30 days after written notice
thereof delivered by certified mail, return-receipt requested, is given to
Lessor and to the Fee Mortgagee.
Section 6.09...... Companies and Form of Policies. All policies of
insurance procured by Lessee shall be issued by insurance companies licensed to
do business in the State in which the Premises are located and authorized to
issue such policy or policies. All policies shall be in a form and with
companies reasonably acceptable to Lessor and may be part of blanket coverage
relating to various properties operated by Lessee.
Section 6.10...... Handling of Proceeds by Lessee. Insurance proceeds
which are payable to Lessee alone in accordance with the provisions of Section
6.02(a)(i) shall be held by Lessee and used solely by Lessee to pay for the cost
of making repairs, alterations and improvements to the Premises and doing such
work as may be necessary to protect the Premises against further damage and for
no other purpose. If the proceeds of insurance payable to Lessee alone under
Section 6.02(a)(i) shall exceed such costs, one-half of such excess shall be
promptly paid by Lessee to Lessor.
Section 6.11...... Handling of Proceeds by Depository. The Compensation
payable to the Depository in accordance with the provisions of this Lease shall
be held in trust for the purpose of paying for the cost of the work required to
be performed by Lessee under Sections 6.02 and 6.03 and the cost of making
repairs, alterations and improvements to the Premises and doing such work as may
be necessary to protect the Premises against further injury and shall be
disbursed as provided in Section 6.02(e). The Depository shall be entitled to
reasonable compensation payable out of such funds. If the insurance proceeds
held by the Depository shall exceed such cost, such excess shall belong to and
be paid over to the Lessor upon the completion of and payment for such work.
Section 6.12...... Certificates of Coverage. Upon the execution of this
Lease, Lessee shall deliver to Lessor and to the Fee Mortgagee a certificate of
insurance coverage as to the policies required by this Lease evidencing
compliance with the terms of this Lease and bearing evidence of payment of all
premiums therefor. Thereafter, as to policy renewals, Lessee will provide Lessor
and the Fee Mortgagee with certificates or assurances of continued coverage
within 15 days prior to expiration of such policies.
Section 6.13...... Procurement by Lessor. If premiums on any insurance
policy shall not be paid or if the memoranda of policies or certificates or
evidence of payment of the premiums thereon shall not be so delivered to Lessor
as required herein, or if Lessor learns of any cancellation of any policy
required hereunder, Lessor may procure and/or pay for any such insurance for
Lessor's benefit only and not for the benefit of Lessee, with or without notice
to Lessee. Lessee may restore such coverage effective one year after the
effective date of the insurance procured by Lessor provided Lessee furnishes
evidence of such coverage and payment therefor at least 60 days prior to the
expiration of said one-year policy in the form required by Section 6.04. The
amount so paid by Lessor with interest thereon at the interest rate specified in
Section 7.02(k) hereof from the date of payment shall become due and payable by
Lessee as Additional Rent with the next or any subsequent installment of Basic
Rent which shall become due after such payment by Lessor; it being expressly
covenanted that payment by Lessor of any such premium shall not be deemed to
waive or release the default in the payment thereof by Lessee, or the right of
Lessor to take such action as may be permissible hereunder as in the case of
default in the payment of Basic Rent.
Article VII.......
Section 7.01...... Events of Default. Lessee shall be in default under
this Lease if any one or more of the following events (referred to herein as
"Events of Default" or "Event of Default") shall occur:
(a) if default shall be made in the procurement or maintenance
of any insurance required under this Lease; or
(b) if default shall be made in the payment when due of any
Basic Rent or Additional Rent and such default shall continue for ten
days after written notice from Lessor to Lessee of such nonpayment
becomes effective as provided in Section 14.02 hereof; or
(c) if default shall be made in the payment of any other sum
payable under this Lease and such default shall continue for 10 days
after written notice from Lessor to Lessee of nonpayment becomes
effective as provided in Section 14.02 hereof; or
(d) if default shall be made by Lessee in the performance of
or compliance with any of the terms of this Lease other than those
referred to in any of the other subparagraphs in this Section, and such
default shall continue for a period of 60 days after written notice
thereof from Lessor to Lessee becomes effective as provided in Section
14.02 hereof; or
(e) if Lessee or any guarantor of Lessee's obligations under
this Lease (each, if any, a "Guarantor") shall file a voluntary petition
in bankruptcy or shall be adjudicated a bankrupt or insolvent, or shall
file any petition or answer seeking any reorganization, arrangement,
composition or readjustment, or similar relief for itself under any
present or future federal, state or other statute, law or regulation, or
shall seek or consent to or acquiesce in the appointment of any trustee,
receiver or liquidator of itself or of all or any substantial part of
its or of the property, or shall take any general assignment for the
benefit of creditors or shall admit in writing its inability to pay
debts generally as they become due; or
(f) if a petition shall be filed against Lessee or any
Guarantor seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any
present or future federal, state or other statute, law or regulation,
and shall remain undismissed or unstayed for a period of 60 days, or if
in connection with any such event any trustee, receiver or liquidator of
Lessee or such Guarantor, or of all or any substantial part of any of
its property, shall be appointed without its consent or acquiescence and
such appointment shall remain unvacated or unstayed for a period of 30
days; or
(g) if Lessee shall vacate or abandon the Property; or
(h) if this Lease or the estate of Lessee hereunder shall be
transferred to or shall pass to or devolve upon any other person except
in a manner expressly permitted herein.
Section 7.02...... Remedies Upon Lessee's Default.
(a) Repossession, Reletting, etc., by Lessor. At any time
after any Event of Default, Lessor, without further notice except as
required by applicable law and with no liability to Lessee for any
action in accordance with applicable law, may repossess the Property by
any means provided by law, including (without limitation) summary or
eviction proceedings, ejectment or otherwise, and may remove Lessee and
all other persons and any and all property from the same. Unless
otherwise required by case law or statutory law, at any time or from
time to time thereafter, Lessor may (but shall be under no obligation
to) relet the Property or any part thereof for the account of Lessee, in
the name of Lessee or Lessor or otherwise, without notice to Lessee, for
such term or terms (which may be greater or less than the period which
would otherwise have constituted the balance of the term of this Lease)
and on such conditions (which may include concessions or free rent) and
for such purposes as Lessor in its discretion may determine, and may
collect and receive the rents therefor. Lessor shall not be liable for
any failure to collect any rent due upon any such reletting.
(b) Payment of Damages. No such expiration or sooner
termination of this Lease or of Lessee's right of possession shall
relieve Lessee of its liability and obligations under this Lease, all of
which shall survive any such expiration or sooner termination. In the
event of any such expiration or sooner termination, Lessee will pay to
Lessor the Basic Rent and all Additional Rent and other sums required to
be paid by Lessee up to the time of such expiration or sooner
termination, and thereafter Lessee, until the end of what would have
been the term of this Lease in the absence of such expiration or sooner
termination, and whether or not the Property or any part thereof shall
have been relet, shall be liable to Lessor for, and shall pay to Lessor,
as and for liquidated and agreed current damages for Lessee's default,
the Basic Rent and all Additional Rent and other sums which would be
payable thereafter under this Lease by Lessee, less the net proceeds, if
any, of any reletting effected for the account of Lessee pursuant to
Section 7.02(a) during the period which would otherwise have constituted
the balance of the term of this Lease, after deducting all of Lessor's
reasonable expenses in connection with such reletting, including
(without limitation) all repossession costs, brokerage commissions,
attorneys' fees, expenses of employees, costs incurred in alterations to
the Improvements required in connection with the reletting of the
Property for use by another lessee and expenses of preparation for such
reletting. Lessee will pay such amounts to Lessor monthly on the days on
which such Basic Rent, Additional Rent and all other sums would have
been payable under this Lease, and Lessor shall be entitled to recover
the same from Lessee on each such day.
(c) Lump-sum Damage Payment. At any time after such expiration
or sooner termination of this Lease as provided herein or pursuant to
law, whether or not Lessor shall have recovered any amounts under
Section 7.02(b), Lessor shall be entitled to recover from Lessee and
Lessee shall pay to Lessor, on demand, as and for liquidated and agreed
final damages for Lessee's default, an amount equal to the sum of the
following, as of the date of such payment by Lessee:
(i) the worth of the unpaid Basic Rent and
Additional Rent and other sums due and payable which had been
earned at the time of such expiration or sooner termination;
plus
(ii) the worth of the unpaid Basic Rent and
Additional Rent and other sums due and payable after such
expiration or sooner termination and on or before the time of
Lessee's lump-sum payment pursuant hereto, after deducting
from such unpaid amounts any (if any) portion thereof that
Lessee proves could have been reasonably avoided; plus
(iii) the worth of the unpaid Basic Rent and
Additional Rent and other sums due and payable for the balance
of the Lease Term or, if termination occurs during an
Extension Period, such Extension Period, after deducting from
such unpaid amounts any (if any) portion thereof that Lessee
proves can be reasonably avoided; plus
(iv) any other amount which is necessary to
compensate Lessor for all the detriment proximately caused by
Lessee's failure to perform Lessee's obligations under this
Lease or which would be likely to result therefrom, including
(without limitation) any costs or expense incurred by Lessor:
(A) in retaking possession of the Premises; (B) in
maintaining, repairing, preserving, restoring, replacing,
cleaning, altering or rehabilitating the Premises or any
portion thereof, including such acts for reletting to a new
tenant or tenants; (C) for leasing commissions; or (D) for any
other costs necessary or appropriate to relet the Premises.
The "worth" of the amounts referred to in subparagraphs (i)
and (ii) of this Section is computed by accruing interest at the Default
Rate on the unpaid rent and other sums due and payable from the
respective due dates for such amounts until Lessee's lump-sum payment
pursuant hereto. The "worth" of the amount referred to in subparagraph
(iii) of this Section is computed by discounting such amount at a rate
equal to the weekly average yield 10-year U.S. Treasury Constant
Maturities (as published in Federal Reserve Statistical Release H-15
[519]) on or nearest to the Friday immediately preceding the date of
Lessee's lump-sum payment pursuant hereto.
(d) Receiver. Lessor may have a receiver appointed for Lessee
to take possession of the Premises and to apply any rent collected from
the Premises and to exercise all other rights and remedies granted to
Lessor as an attorney-in-fact for Lessee.
(e) Lessee's Equipment. At any time after the occurrence of an
Event of Default, Lessor may send written notice to Lessee to remove all
of Lessee's Equipment and property from the Premises. If Lessee shall
fail to remove such Equipment and property within five business days
after receipt of such notice from Lessor, then Lessor may remove such
Equipment and property from the Premises and arrange for storage of such
Equipment and property at another location, all at the sole cost and
expense of Lessee. In the event of any such removal of Lessee's
Equipment and other property from the Premises by Lessor, Lessee waives
any and all claims against Lessor regarding the removal and storage of
its Equipment and property including, without limitation, the manner of
removal, cost of removal, location of storage, cost of storage and
damage to or missing Equipment and property.
(f) Bankruptcy or Insolvency.
(i) If Lessee shall become a debtor in a case filed
under Chapter 7 or Chapter 11 of the Bankruptcy Code and
Lessee or Lessee's trustee shall fail to elect to assume this
Lease within 60 days after the filing of such petition or such
additional time as provided by the court, this Lease shall be
deemed to have been rejected. Immediately thereupon, Lessor
shall be entitled to possession of the Premises without
further obligation to Lessee or Lessee's trustee, and this
Lease, upon the election of Lessor, shall terminate, but
Lessor's right to be compensated for damages (including,
without limitation, liquidated damages pursuant to any
provision hereof) or the exercise of any other remedies in any
such proceeding shall survive, whether or not this Lease shall
be terminated.
(ii) An assumption of this Lease in accordance with
Section 7.02(f)(i) shall not limit Lessor's right to declare
an Event of Default hereunder and exercise any and all
remedies available to it if, at any time after such
assumption, Lessee is liquidated or files or has filed against
it a subsequent petition under Chapter 7 or Chapter 11 of the
Bankruptcy Code.
(iii) When, pursuant to the Bankruptcy Code,
Lessee's trustee or the debtor-in-possession shall be
obligated to pay reasonable use and occupancy charges for the
use of the Premises, such charges shall not be less than the
Basic Rent, Additional Rent and other sums payable by Lessee
under this Lease.
(iv) Neither the whole nor any portion of Lessee's
interest in this Lease or its estate in the Premises shall
pass to any trustee, receiver, assignee for the benefit of
creditors or any other person or entity, by operation of law
or otherwise under the laws of any state having jurisdiction
of the person or property of Lessee, unless Lessor shall have
consented to such transfer. No acceptance by Lessor of rent or
any other payments from any such trustee, receiver, assignee,
person or other entity shall be deemed to constitute such
consent by Lessor nor shall it be deemed a waiver of Lessor's
right to terminate this Lease for any transfer of Lessee's
interest under this Lease without such consent.
(v) In the event of an assignment of Lessee's
interests pursuant to this Section, the right of any assignee
to extend the Lease Term shall be extinguished.
(g) Limitation by Law. If any statute or rule of law governing
a proceeding in which liquidated final damages provided for in Section
7.02 are to be proved shall validly limit the amount thereof to an
amount less than the amount above agreed upon, Lessor shall be entitled
to the maximum amount allowable under such statute or rule of law.
(h) Remedies Cumulative, Etc. Each right, power and remedy
provided for in this Lease or now or hereafter existing at law or in
equity or by statute or otherwise shall be cumulative and concurrent and
shall be in addition to every other right, power or remedy provided for
in this Lease or now or hereafter existing at law or in equity or by
statute or otherwise, and the exercise or beginning of the exercise of
any one or more of the rights, powers or remedies provided for in this
Lease or now or hereafter existing in law or in equity or by statute or
otherwise shall not preclude the simultaneous or later exercise of any
or all other such rights, powers or remedies. The collection of any late
payment charge or any interest at the Default Rate shall not be deemed
an election of remedies or in lieu of any other remedies or damages.
Lessor shall have the right to specifically enforce this Lease and to
enjoin any default or prospective or anticipated default hereunder.
(i) Statutory Rights. Lessee retains any rights of notice or
rights of redemption, if any, as may be required by applicable State
law. "State" shall mean the State where the Premises are located.
However, any such notice required by law may be given by Lessor in (or,
at Lessor's option, separate from) any notice required to be given by
Lessor under this Lease, and the time periods provided in this Lease and
required under applicable law will not be "tacked" onto each other but
will commence running from the original date of delivery of such
notices.
(j) Application of Funds. Any payments received by Lessor
under any of the provisions of this Lease during the existence or
continuance of any Event of Default (and any payment made to Lessor
rather than Lessee due to the existence of an Event of Default) shall be
applied to Lessee's obligations in such order as Lessor may determine
or, if prescribed by the laws of the State, in accordance with such
laws.
(k) Late Interest. If Lessee shall fail to make any payment of
any sums required by this Lease within ten days after Lessor gives
notice of nonpayment, Lessee shall pay to Lessor, in addition to such
sums, interest thereon at the rate of 5% per annum higher than and
varying daily with the highest prime rate then being quoted from time to
time by Chase Manhattan Bank, New York, New York, as an interest index
for loans to its commercial customers (the "Default Rate"), computed
from the date such payment was due to and including the date of payment
in full. If Chase Manhattan Bank ceases to do business or quote such
rate, Lessor shall have the right to substitute a reasonably comparable
index for such prime rate.
(l) No Usury. The intention of the parties being to conform
strictly to the usury laws now in force, whenever any provision in this
Lease provides for payment by Lessee to Lessor of interest at a rate in
excess of the legal rate permitted to be charged, such rate herein
provided to be paid shall be deemed reduced to such legal rate.
Article VIII......
Section 8.01...... Lessee's Notices and Remedies. In the event Lessor
fails to perform its responsibilities pursuant to this Lease, Lessee's notice as
to Lessor's nonperformance will be sent simultaneously to Lessor and the Fee
Mortgagee. Lessor will be in default under this Lease if Lessor fails to cause
such responsibilities to be fully performed within 30 days after written notice
by Lessee to Lessor specifying the nature of the default with reasonable
particularity. If the default is of such a nature that it cannot be remedied
fully within the 30-day period, this requirement shall be satisfied if Lessor
begins correction of the default within the 30-day period and thereafter
proceeds with reasonable diligence and in good faith to effect the remedy as
soon as reasonably practicable. Lessee shall not have the right to terminate
this Lease as a result of Lessor's default. In the event of such default, Lessee
shall have all remedies available under law for breach of contract, including
(without limitation) the right of specific performance. In addition, Lessee may
elect in its discretion to perform the required action or take corrective action
reasonably required to cure the default if it pertains to the Premises, in which
event Lessor shall reimburse Lessee for the reasonable out-of-pocket costs of
such action, together with reasonable and necessary costs and disbursements and
interest, and such amounts may be deducted from the rent thereafter to become
due under this Lease, after at least 20 days' written notice to Lessor (and the
Fee Mortgagee) as to the costs so incurred.
Section 8.02...... Fee Mortgagee's Right To Cure. The Fee Mortgagee that
has notified Lessee of its address in the manner provided for notices in this
Lease will have the right to cure any default by Lessor. The cure period will
commence on delivery of notice to such Fee Mortgagee of the default and extend
for a period ending 30 days after the end of the time period for Lessor to cure
a default. In this connection, any representative of the Fee Mortgagee shall
have the right to enter upon the Premises for the purpose of curing Lessor's
default.
Article IX........
Section 9.01...... Subordination and Nondisturbance. This Lease and all
rights of Lessee under this Lease are, and shall at the option of Lessor remain,
subject and subordinate in all respects to the Fee Mortgage and to all advances
made or hereafter to be made under any such mortgage, and to all renewals,
modifications, consolidations, correlations, replacements and extensions of, and
substitutions for, the Fee Mortgage, provided that the Fee Mortgagee shall
execute and deliver to Lessee a nondisturbance and attornment agreement in form
and substance approved by the Fee Mortgagee and reasonably acceptable to Lessee
which provides in substance that (a) if Lessor defaults under its mortgage, the
Fee Mortgagee will not disturb the occupancy of Lessee and this Lease shall
remain in full force and effect in accordance with its terms, provided that no
Event of Default has occurred and is continuing (in the event of any such Event
of Default, the Fee Mortgagee shall have such rights and remedies with respect
to such default as are provided herein) and (b) Lessee shall, at the Fee
Mortgagee's option, attorn to such Fee Mortgagee and the Lease shall continue as
a direct lease between such Fee Mortgagee and Lessee. The provisions of this
Section shall be self-operative. Lessee shall also provide to the Fee Mortgagee
any and all other assurances or instruments the Fee Mortgagee may reasonably
request to evidence and confirm such provisions. All such agreements shall be in
form suitable for recording.
Section 9.02...... Election Not To Subordinate. Notwithstanding the
provisions of Section 9.01, the holder of any mortgage to which this Lease is
subject and subordinate, as provided in said Section 9.01, shall have the right,
at its sole option, at any time, to subordinate and subject its mortgage, in
whole or in part, to this Lease by recording a unilateral declaration to such
effect.
Section 9.03...... Attornment. At any time prior to the expiration of
the Lease Term, Lessee agrees, at the election and upon demand of any owner of
the Premises, or of the Fee Mortgagee, to attorn, from time to time, to any such
owner or holder, upon the then executors' terms and conditions of this Lease,
for the remainder of the term originally demised in this Lease and for any
renewal term, provided that such owner or holder, as the case may be, shall then
be entitled to possession of the Premises subject to the provisions of this
Lease. The provisions of this Section shall inure to the benefit of any such
owner or holder, shall apply notwithstanding that, as a matter of law, this
Lease may terminate upon the foreclosure of any such mortgage, shall be
self-operative upon any such demand, and no further instrument shall be required
to give effect to said provisions. Lessee, however, upon demand of any such
owner or holder agrees to execute, from time to time, instruments in
confirmation of the foregoing provisions of this Section, satisfactory to any
such owner or holder acknowledging such attornment and setting forth the terms
and conditions of its tenancy. Nothing contained in this Section shall be
construed to impair any right otherwise exercisable by any such owner or holder.
Section 9.04...... Limitations on Lessee. Lessee agrees that, if
requested by Lessor or the Fee Mortgagee, Lessee shall enter into an agreement
with the Fee Mortgagee whereby Lessee shall agree for the benefit of such Fee
Mortgagee that Lessee will not, without in each case the prior written consent
of such Fee Mortgagee, (a) amend, modify, cancel or surrender the term of this
Lease except as expressly permitted by the provisions of this Lease, or enter
into any agreement with Lessor so to do or (b) pay any installment of Basic Rent
more than one month in advance of the due date thereof or otherwise than in the
manner provided for in this Lease.
Section 9.05...... No Merger of Fee and Leasehold Estates. There shall
be no merger of this Lease nor of the leasehold estate created by this Lease
with the fee estate in the Premises or any part thereof by reason of the fact
that the same person, firm or corporation or other entity may acquire or own
such estates directly or indirectly; and no such merger shall occur until all
persons, firms, corporations and other entitled, including the Fee Mortgagee,
having any interest in this Lease and the leasehold estate created hereby and
the fee estate in the Premises or any party thereof shall join in a written
instrument effecting such merger and shall duly record it.
Section 9.06...... Changes to Lease Required by Fee Mortgagee. In the
event the Fee Mortgagee shall require reasonable modifications of this Lease
which do not materially increase the obligation of Lessee hereunder or interfere
with or diminish Lessee's rights, Lessee agrees to execute such modification(s)
upon request of Lessor.
Article X.........
Section 10.01..... Estoppel Certificate. Upon request, either party
will, without charge, execute, acknowledge and deliver to the other party,
within 15 days after request therefor, a certificate certifying (a) that this
Lease is unmodified and in full force and effect (or, if there have been
modifications, that this Lease is in full force and effect as modified and
stating the modifications), (b) the date, if any, to which the Basic Rent has
been paid, (c) whether or not there are, to the knowledge of the party, then
existing any defaults under this Lease (if so, specifying the same) and (d) such
other matters as may be reasonably required. Any such certificate may be relied
upon as to the facts stated therein by any actual or prospective mortgagee or
purchaser of the Premises from Lessor or any actual or prospective sublessee or
assignee of Lessee's interest in this Lease in connection with one of the
transactions permitted or approved under Article IV.
Section 10.02..... Financial Information. Upon reasonable request in
writing by Lessor, Lessee will deliver to Lessor within 10 days (except as set
forth below) of filing, sending or otherwise making public, copies of all
periodic reports filed by Lessee with the Securities and Exchange Commission
("SEC") (including, without limitation, all 8-K, 10-K and 10-Q reports pursuant
to Section 13(a) of the Securities Act of 1934, as amended (the "1934 Act")),
and all proxy statements of Lessee to its stockholders; provided, however, that,
if such statements and reports are not required to be filed or do not include
the following information, Lessee will deliver to Lessor with respect to Lessee
the following:
(a) Within 10 days after filing with the SEC but in no event
more than 105 days after the end of each fiscal year of Lessee, (i) a
balance sheet of Lessee and its consolidated subsidiaries as of the end
of such year, (ii) a statement of profits and losses of Lessee and its
consolidated subsidiaries for such year and (iii) a statement of cash
flows of Lessee and its consolidated subsidiaries for such year, setting
forth in each of (i), (ii) and (iii) above, in comparative form, the
corresponding figures for the preceding fiscal year in reasonable detail
and scope audited by independent certified public accountants of
recognized national standing selected by Lessee, and within 90 days
after the end of each fiscal quarter of Lessee a balance sheet of Lessee
and its consolidated subsidiaries as of the end of such quarter and
statements of profits and losses of Lessee and its consolidated
subsidiaries for such quarter, setting forth in each case, in
comparative form, the corresponding figures for the similar quarter of
the preceding year, in reasonable detail and scope, and certified by an
officer of Lessee, all of the foregoing financial statements being
prepared in accordance with generally accepted accounting principles,
consistently applied, except as otherwise indicated in such statements;
and
(b) Upon request of Lessor, with reasonable promptness, such
additional, public financial statements and information (including,
without limitation, copies of public reports filed by Lessee or
financial statements and information delivered by Lessee to its
shareholders or lenders and, if Lessee is part of a consolidated group,
its financial statement consolidating entries in reasonable detail)
regarding the business affairs and financial condition of Lessee as
Lessor may reasonably request, for so long as same do not violate any
federal or state laws limiting the dissemination of information by
publicly-held companies.
Article XI........
Section 11.01..... Quiet Enjoyment. Lessor covenants that Lessee, upon
paying the Basic Rent and all Additional Rent and other sums payable hereunder
and performing and complying with all the terms hereof, shall, subject to the
terms of this Lease, lawfully, peaceably and quietly hold, occupy, possess and
enjoy the Premises during the term of this Lease, without hindrance or
molestation by Lessor or others claiming through Lessor, subject, however, to
the terms of this Lease.
Article XII.......
Section 12.01..... Lessor's Reversionary Interest; Surrender of
Premises. Upon expiration or termination of this Lease, Lessor shall, at no
charge to Lessor, become the owner of, and have the reversionary interest in,
all of the Improvements. Lessee shall surrender the Premises to Lessor in good
repair, operating condition, working order and appearance, subject to reasonable
wear and tear and (to the extent provided herein for termination after casualty)
damage by fire and other casualty. All repairs for which Lessee is responsible
will be completed to the latest practical date prior to such surrender. If this
Lease is terminated in connection with a Casualty, Lessee will assign to Lessor
the entire insurance proceeds pertaining to the Premises that revert to Lessor.
Lessee shall promptly remove all of its own signs, inventory, Lessee's Equipment
and other personal property that remain the property of Lessee and will restore
any physical damage caused by such removal.
Section 12.02..... Delivery of Rents and Records. Upon surrendering the
Premises to Lessor, Lessee will pay to Lessor all deposits or other security and
all prepaid rents received from subtenants and other occupants whose tenancies
may continue beyond the last day of the Lease Term or the sooner termination
thereof and will deliver to Lessor all original subleases and modifications
thereof, lease files, plans, records, registers and all other papers and
documents which may be required for the proper operation and management of the
Premises and are then in Lessee's possession or under its control. Lessee shall
have access to any records, papers and documents so delivered to such extent and
at such times as the same may be reasonably required after the last day of the
term of this Lease Term or such sooner termination thereof. Nothing herein shall
require Lessor to recognize any such existing sublease as continuing in effect
after such last day or sooner termination. The provisions of this Section shall
survive the expiration or sooner termination of this Lease.
Section 12.03..... Acceptance of Surrender. No surrender to Lessor of
this Lease or of the Premises or any part thereof, or of any interest therein,
prior to the expiration of the Lease Term, shall be valid or effective unless
agreed to and accepted in writing by Lessor, and no act by Lessor or any
representative or agent of Lessor, other than such a written acceptance by
Lessor, shall constitute an acceptance of any such surrender.
Section 12.04..... Holding Over. If Lessee remains in possession of the
Premises or any part thereof after the expiration or sooner termination of the
term of this Lease (or any renewal term hereof) without the execution of a new
lease, such holding over, in the absence of a written agreement to the contrary,
shall be deemed, if Lessor so elects, to have created a tenancy from
month-to-month terminable on 30 days' notice by either party to the other. Such
month-to-month tenancy will be at a monthly rental equal to 125% of the sum of
the monthly installment of Basic Rent payable during the last year of the Lease
Term, and Lessee will otherwise continue to pay Additional Rent as provided in
this Lease and perform its other obligations hereunder.
Article XIII......
Section 13.01..... Definition of "Lessor. The term "Lessor," as used in
this Lease so far as covenants or obligations on the part of Lessor are
concerned, shall be limited to mean and include only the owner or owners of the
Premises or holder of the Fee Mortgage in possession at the time in question of
the Premises. In the event of any transfer or transfers of the title of the
Premises, Lessor herein named (and in case of any subsequent transfers or
conveyances, the then grantor) shall be automatically freed and relieved of its
liabilities accruing from and after the date of such transfer and conveyance of
all liability as respects the performance of any covenants or obligations on the
part of Lessor contained in this Lease thereafter to be performed.
Section 13.02..... Exculpation of Lessor. Notwithstanding anything
contained in the preceding paragraph or in any other provision hereof, Lessee
shall look solely to the estate and interest of Lessor, its successors and
assigns in the Premises (and any condemnation, insurance or other proceeds
thereof) for the collection of any judgment recovered against Lessor based upon
the breach by Lessor of any of the terms, conditions or covenants of this Lease
on the part of Lessor to be performed, and no other property or assets of Lessor
shall be subject to levy, execution or other enforcement procedures for the
satisfaction of Lessee's remedies under or with respect to either this Lease,
the relationship of Lessor and Lessee hereunder or Lessee's use and occupancy of
the Premises.
Article XIV.......
Section 14.01..... No Waiver, etc., by Parties. No failure by a party to
insist upon the strict performance of any term of this Lease or to exercise any
right, power or remedy consequent upon a breach thereof, and no acceptance of
full or partial rent by Lessor during the continuance of any such breach, shall
constitute a waiver of any such breach or of any such term.
Section 14.02..... Notices, Etc. All notices and demands which are
required or permitted to be given by either party on the other hereunder shall
be in writing. All notices and demands shall be sent by United States Mail,
certified or registered mail, return-receipt requested, or by recognized
overnight courier service (such as Federal Express), or by facsimile or other
telecommunication device capable of transmitting and creating a written record.
Notices shall be effective two business days following the date they are
deposited in the United States Mail, one business day after delivery to an
overnight courier and on the day they are telefaxed (if a confirmation report
results). Unless a party designates another address for notices (by notice given
pursuant to this Section, notices shall be sent to the following address:
If to Lessor: General Electric Capital Business Asset Funding
Corporation
Suite 500
10900 NE 4th Street
Bellevue, WA 98004
Attention: Vice President/Manager, Real Estate
If to Lessee: Point.360
7803 Hollywood Blvd.
Hollywood, CA 90028
Attention: Vice President, Finance
Any notices to be provided to the Fee Mortgagee shall be to such address
as shall be provided to the parties in writing by the Fee Mortgagee.
Section 14.03..... Separability. Each and every covenant and agreement
contained in this Lease is, and shall be construed to be, a separate and
independent covenant and agreement, and the breach of any such covenant or
agreement by Lessor shall not discharge or relieve Lessee from its obligation to
perform the same. If any term or provision of this Lease or the application
thereof to any person or circumstance shall to any extent be invalid and
unenforceable, the remainder of this Lease, or the application of the term or
provision to persons or circumstances other than those as to which it is invalid
or unenforceable, shall not be affected thereby, and each term and provision of
this Lease shall be valid and shall be enforced to the extent permitted by law.
Section 14.04..... Headings. The headings to the various Sections of
this Lease have been inserted for convenience of reference only and shall not
limit or otherwise affect the meaning thereof.
Section 14.05..... Relationship of Parties; Disclaimer. The relationship
of the parties to this Lease is landlord and tenant. Lessor is not a partner,
joint venturer, joint employer, principal or agent of or with or a lender to
Lessee in any respect or for any purpose in the conduct of Lessee's business or
otherwise. No provision of this Lease or previous (or subsequent) conduct or
activities of Lessee or Lessor will be construed:
(a) as making either party a partner, joint venturer, joint
employer, principal or agent of or with each other or
(b) as making Lessee or Lessor responsible for payment or
reimbursement of any costs incurred by each other (except as may be
expressly set forth herein or as expressly set forth in other written
agreements executed by the parties).
Section 14.06..... Operating Lease. This Lease is specifically intended
by the parties to be a true lease. Lessor holds fee simple absolute title to the
Premises, and such title was not acquired or intended to be held as any type of
mortgage or security interest. This Lease is intended by Lessor and Lessee to be
an operating lease under generally accepted accounting principles.
Section 14.07..... Joint Obligation. If there be more than one Lessee or
assignee of Lessee, the obligations imposed upon Lessee hereunder shall be joint
and several.
Section 14.08..... Prior Agreements. This Lease (including attached
Exhibits) is the entire, final and complete agreement of the parties only with
respect to the specific matters set forth in this Lease and supersedes and
replaces all written and oral agreements previously or contemporaneously made or
existing by and between the parties or their representatives with respect to
such specific matters.
Section 14.09..... Recording. This Lease shall not be recorded, but,
upon the request of either party, the parties shall execute and acknowledge a
memorandum of this Lease in recordable form which may be recorded by Lessor or
Lessee.
Section 14.10..... Proration of Rent. If this Lease starts or ends
during a rental period, Rent and Additional Rent shall be prorated as of such
date using a 30-day month and a 360-day year. Upon termination other than for
default, prepaid rent shall be refunded, if applicable.
Section 14.11..... Authorization of Lease. Each of Lessee and Lessor
hereby covenants and warrants to the other that (a) it is duly qualified to do
business in the state in which the Premises is located, (b) it has full right
and authority to enter into this Lease and to perform all of its obligations
hereunder and (c) each person (and all of the persons if more than one signs)
signing this on its behalf is duly and validly authorized to do so.
Section 14.12..... Applicable Law. This Lease shall be governed by and
construed and enforced in accordance with the laws of the State (as defined in
Section 7.02(i)).
Section 14.13..... United States Funds. All sums herein mentioned shall
be conclusively deemed to refer to and shall be measured by and payable in the
lawful currency of the United States.
Section 14.14..... Time of Performance. Time is of the essence of this
Lease and each and all of its provisions in which performance is a factor.
Section 14.15..... "Force Majeure" Delays. In the event that either
party hereto shall be delayed or hindered in or prevented from the performance
of any act required hereunder by reason of strikes, lockouts, labor troubles,
inability to procure materials, failure of power, restrictive governmental laws
or regulations, riots, insurrection, war or other reason of like nature not the
fault of the party delayed in performing work of doing acts required under the
terms of this Lease (a delay resulting from financial inability to perform,
excepted) (collectively, "force majeure" events), then performance of such work
or act shall be excused for the period of the delay, and the period for the
performance of any such work or act shall be extended for a period equivalent to
the period of such delay. This provision shall not operate to excuse Lessee from
prompt payment of Basic Rent, Additional Rent or any other payments required by
the terms of this Lease, unless the commencement date or periods permitting
Lessee to abatement of rent are postponed or extended by such delays.
Section 14.16..... Waiver of Jury Trial. LESSOR AND LESSEE HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS LEASE, ANY OF THE RELATED
DOCUMENTS, ANY DEALINGS AMONG LESSEE OR LESSOR RELATING TO THE SUBJECT MATTER OF
THE TRANSACTIONS CONTEMPLATED BY THIS LEASE OR ANY RELATED TRANSACTIONS, AND/OR
THE RELATIONSHIP THAT IS BEING ESTABLISHED AMONG LESSOR AND LESSEE. THE SCOPE OF
THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY
BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT
CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS).
THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR
IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS LEASE, ANY RELATED DOCUMENTS, OR TO ANY
OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE TRANSACTIONS CONTEMPLATED BY THIS
LEASE OR ANY RELATED TRANSACTIONS. IN THE EVENT OF LITIGATION, THIS LEASE MAY BE
FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
Section 14.17..... Attorneys' Fees. In the event of any action or
proceeding by either party against the other under this Lease, the prevailing
party shall be entitled to recover for the fees of its attorneys in such action
or proceeding, including costs of appeal, if any, in such amount as the court
may adjudge reasonable as attorneys' fees.
Section 14.18..... Amendments. Neither this Lease nor any term hereof
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against whom the enforcement of the
change, waiver, discharge or termination is sought.
Section 14.19..... Successors and Assigns. This Lease shall bind and
inure to the benefit of Lessor and its successors and assigns and Lessee and its
successors and, without limiting Article IV hereof, its assigns. Any assignment
of this Lease by Lessor shall not terminate such Lessor's rights under the
environmental and other indemnities provided by Lessee in this Lease. In
furtherance of any proposed assignment by Lessor, Lessor may share with the
proposed assignee Lessee's financial information and Property information,
provided such proposed assignee is directed to treat such information
confidentially (Lessor hereby agreeing to be responsible for any failure of any
such proposed assignee to so treat any such information).
Section 14.20..... Brokers. Lessee shall indemnify Lessor, and its
successors, assigns and employees, from and against any and all claims,
commissions, fees, costs (including attorneys' fees and disbursements) incurred
or suffered by it in connection with any claim by Mr. Lee Black and/or Newmark
of Southern California, Inc. (or any affiliate, successor, assignee, agent or
employee thereof) for a commission or fee with regard to Lessor's purchase of
the Premises or this Lease.
Section 14.21..... Construction. Each party to this Lease has had the
opportunity to consult with its legal counsel, and this Lease shall not be
construed against either party. All pronouns or any variation thereof in this
Lease shall be deemed to refer to masculine, feminine, neuter, singular or
plural as the identity of the person or persons may require. All of the
provisions of this Lease shall be deemed and construed to be "conditions" as
well as "covenants" as though the words specifically expressing or importing
covenants and conditions be used in each separate provision hereof.
Section 14.22..... Execution in Counterparts. This Lease may be executed
in any number of counterparts, each of which shall be an original, but all of
which shall constitute one and the same instrument.
Section 14.23..... Exhibits and Riders. All Exhibits, schedules, plats,
riders and addenda, if any, and other attachments to this Lease are a part
hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;
EXECUTION PAGE FOLLOWS.]
EXECUTION PAGE OF LEASE AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Lease to be
executed as of the date first above written.
Lessor:
GENERAL ELECTRIC CAPITAL BUSINESS
ASSET FUNDING CORPORATION, a Delaware
corporation
By: /s/ Linda K. Bracken
--------------------
Print: Linda K. Bracken
Its: Vice President
Lessee:
POINT.360, a California corporation
By: /s/ Alan R. Steel
Print: Alan R. Steel
Its: Executive Vice President,
Finance and Administration, and
Chief Financial Officer
[EXECUTION PAGE OF LEASE AGREEMENT]
SCHEDULE A
LEGAL DESCRIPTION
PARCEL A:
LOT 3 OF TRACT NO. 53696-01, IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES,
STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 1282, PAGES 41 TO 43 INCLUSIVE
OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
PARCEL B:
NONEXCLUSIVE COMMUNITY DRIVEWAY EASEMENT FOR INGRESS AND EGRESS APPURTENANT AND
FOR THE BENEFIT OF LOT 3 DESCRIBED ABOVE AS SAID EASEMENT IS MORE PARTICULARLY
DESCRIBED AS THE "NORTH DRIVEWAY EASEMENT" IN THAT CERTAIN "COVENANT AND
AGREEMENT FOR COMMUNITY DRIVEWAY" RECORDED AS INSTRUMENT NO. 03-2894319.
NONEXCLUSIVE COMMUNITY DRIVEWAY EASEMENT FOR INGRESS AND EGRESS APPURTENANT AND
FOR THE BENEFIT OF LOT 3 DESCRIBED ABOVE AS SAID EASEMENT IS MORE PARTICULARLY
DESCRIBED AS THE "SOUTH DRIVEWAY EASEMENT" IN THAT CERTAIN "CONVENANT AND
AGREEMENT FOR COMMUNITY DRIVEWAY" RECORDED SEPTEMBER 30, 2003 AS INSTRUMENT NO.
03-2894318.
PARCEL C:
WATER LINE AND EMERGENCY ACCESS EASEMENTS APPURTENANT AND FOR THE BENEFIT OF LOT
3 DESCRIBE ABOVE, AS SAID EASEMENTS ARE MORE PARTICULARY DESCRIBED AND DEPICTED
IN THAT CERTAIN RECIPROCAL EASEMENT AGREEMENT DATED SEPTEMBER 26, 2003 AND
RECORDED 9/30/03 AS INSTRUMENT NUMBER 03-2894321 AND RERECORDED AS INSTRUMENT
NUMBER IN THE OFFICE OF THE COUNTY RECORDER OF LOS ANGELES COUNTY.
PARCEL D:
THOSE CERTAIN EASEMENTS APPURTENANT AND FOR THE BENEFIT OF LOT 3 DESCRIBED
ABOVE, AS SAID EASEMENTS ARE MORE PARTICULARLY DESCRIBED AND DEPICTED IN THAT
CERTAIN DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS DATED SEPTEMBER
26, 2003 AND RECORDED OCTOBER 1, 2003 AS INSTRUMENT NUMBER 03-2894320 IN THE
OFFICE OF THE COUNTY RECORDER OF LOS ANGELES COUNTY.
SCHEDULE B
CONTRACTUAL REQUIREMENTS
1. A covenant and agreement upon and subject to the terms and conditions
therein
Executed by: Southern Pacific Transportation Company
In Favor of: The City of Los Angeles
Recorded: October 18, 1990 as Instrument No. 90-1770557
Reference is made to said document for full particulars.
2. An easement for the purpose shown below and rights incidental thereto as
set forth in a document
Granted to: Union Pacific Railroad Company
Purpose: Communications Recorded: December 30, 1998 as Instrument No.
98-2364968
Affects: A portion of said land
Among other things, said document provides:
That Union Pacific Railroad Company shall have the right to grant
subeasements, licenses or other interests within the easement area.
3. An easement for the purpose shown below and rights incidental thereto as
set forth in a document
Granted to: Los Angeles County Flood Control District
Purpose: Ditch or Channel
Recorded: June 15, 1939 in Book 16673 Page 244, official records
Affects: A portion of said land
4. Covenants, conditions and restrictions (but omitting therefrom any
covenant or restriction based on race, color, religion, sex, handicap,
familial status or national origin, if any, unless and only to the
extent that said covenant (a) is exempt under Chapter 42, Section 3607
of the United States Code or (b) relates to handicap but does not
discriminate against handicapped persons) as set forth in the document.
Recorded: In Book 8171 Page 117, official records
Said covenants, conditions and restrictions provide that a violation
thereof shall not defeat the lien of any mortgage or deed of trust made
in good faith and for value.
5. Covenants, conditions and restrictions (but omitting therefrom any
covenant or restriction based on race, color religion, sex, handicap,
familial status or national origin, if any, unless and only to the
extent that said covenant (a) is exempt under Chapter 42, Section 3607
of the United States Code or (b) relates to handicap but does not
discriminate against handicapped persons) as set forth in the document.
Recorded: In Book 8147 Page 113, official records
Said covenants, conditions and restrictions provide that a violation
thereof shall not defeat the lien of any mortgage or deed of trust made
in good faith and for value.
6. A document entitled "Affidavit Regarding Maintenance of Automatic Duplex
Sump Pump", dated January 31,1995 executed by Hughes Markets, Inc.; Norb
Parsoneault; V.P. Eng. Const. And City of Los Angeles, subject to all
the terms, provisions and conditions therein contained, recorded
February 1, 1995 as Instrument No. 95-170741.
7. An easement for the purpose shown below and rights incidental thereto as
set forth in a document Granted to: Southern California Gas Company, a
California corporation Purpose: Transportation of gas, petroleum
products and other substances
Recorded: August 2, 2000 as Instrument No. 00-1206218
Affects: A portion of said land
8. An easement for the purpose shown below and rights incidental thereto as
set forth in a document
Granted to: McMahon/Oliphant-Glendale, a California Corporation
Purpose: Storm water drainage
Recorded: September 30, 1997 as Instrument No. 97-1512343
Affects: A portion of said land
9. A covenant and agreement upon and subject to the terms and conditions
therein
Executed by: Los Angeles Media Tech Center, LLC
In Favor of: The City of Los Angeles
Recorded: July 9, 1999 as Instrument No. 99-1259747
Reference is made to said document for full particulars.
10. A covenant and agreement upon and subject to the terms and conditions
therein
Executed by: Los Angeles Media Tech Center, LLC
In Favor of: City of Los Angeles
Recorded: April 11, 2000 as Instrument No. 00-0541357
Reference is made to said document for full particulars.
11. A covenant and agreement upon and subject to the terms and conditions
therein
Executed by: Los Angeles Media Tech Center, LLC
In Favor of: City of Los Angeles
Recorded: May 3, 2000 as Instrument No. 00-0669795
Reference is made to said document for full particulars.
12. An easement for the purpose shown below and rights incidental thereto as
set forth in a document Granted to: City of Los Angeles, a municipal
corporation Purpose: Public street and public storm drain Recorded: July
19, 2001 as Instrument No. 01-1267598 Affects: Said land as more
particularly described therein
13. A covenant and agreement upon and subject to the terms and conditions
therein
Executed by: Los Angeles Media Tech Center
In Favor of: The City of Los Angeles
Recorded: November 27, 2001 as Instrument No. 01-2245204
Reference is made to said document for full particulars.
14. A covenant and agreement upon and subject to the terms and conditions
therein
Executed by: LA Media Tech Center
In Favor of: The City of Los Angeles
Recorded: April 17, 2002 as Instrument No. 02-0898358
Reference is made to said document for full particulars.
15. A covenant and agreement upon and subject to the terms and conditions
therein
Executed by: Los Angeles Media Tech Center, LLC, a Delaware Limited
Liability Company
In Favor of: The City of Los Angeles
Recorded: May 2, 2002 as Instrument No. 02-1014727
Reference is made to said document for full particulars.
16. A covenant and agreement upon and subject to the terms and conditions
therein
Executed by: Los Angeles Media Tech Center, LLC
By: Legacy Partners 2361, L.P.
In Favor of: The City of Los Angeles
Recorded: October 1, 2003 as Instrument No. 03-2894319
Reference is made to said document for full particulars.
17. Covenants, Conditions and Restrictions as set forth in the document
recorded February 25. 1873, in Book 24 Page 15 of Deeds.
18. An easement affecting the portion of said land and for the purposes
stated therein, and incidental purposes, condemned by final decree:
Purpose: Electric light, heat and power lines
Case No.: 43195 of the Superior Court
Recorded: In Book 2185 Page 65 of Deeds
Affects: A portion of said land
19. An easement for the purpose shown below and rights incidental thereto as
set forth in a document
Granted to: L.A. Media Center
Purpose: Emergency Access, waterline, public utilities
Recorded: October 1, 2003 as Instrument No. 03-2894320
Affects: Lots 1-7
20. Covenants, conditions and restrictions (but omitting therefrom any
covenant or restriction based on race, color, religion, sex, handicap,
familial status or national origin, if any, unless and only to the
extent that said covenant (A) is exempt under Chapter 42, Section 3607
of the United States Code or (B) relates to handicap but does not
discriminate against handicapped persons) as set forth in the document
referred to in item 19 above.
21. A covenant and agreement upon and subject to the terms and conditions
therein:
Executed by: Los Angeles Media Tech Center, LLC
By: Legacy Partners 2361, L.P.
In Favor of: The City of Los Angeles
Recorded: August 11, 2003 as Instrument No. 03-2313041
Reference is made to said document for full particulars
22. A document entitled "Reciprocal Easement Agreement Water Line and
Emergency Access," dated September 26, 2003 executed by Los Angeles
Media Tech Center, LLC a California Limited Liability Company ("LAMTC"),
and UCV Media Tech Center, LLC, a Delaware Limited Liability Company,
subject to all the terms, provisions and conditions therein contained,
recorded November ___, 2003 as Instrument No. 03-______________.
SCHEDULE C
PERMITTED EXCEPTIONS
1. A covenant and agreement upon and subject to the terms and conditions
therein
Executed by: Southern Pacific Transportation Company
In Favor of: The City of Los Angeles
Recorded: October 18, 1990 as Instrument No. 90-1770557
Reference is made to said document for full particulars.
2. An easement for the purpose shown below and rights incidental thereto as
set forth in a document
Granted to: Union Pacific Railroad Company
Purpose: Communications
Recorded: December 30, 1998 as Instrument No. 98-2364968
Affects: A portion of said land
Among other things, said document provides:
That Union Pacific Railroad Company shall have the right to grant
subeasements, licenses or other interests within the easement area.
3. An easement for the purpose shown below and rights incidental thereto as
set forth in a document
Granted to: Los Angeles County Flood Control District
Purpose: Ditch or Channel
Recorded: June 15, 1939 in Book 16673 Page 244, official records
Affects: A portion of said land
4. Covenants, conditions and restrictions (but omitting therefrom any
covenant or restriction based on race, color, religion, sex, handicap,
familial status or national origin, if any, unless and only to the
extent that said covenant (a) is exempt under Chapter 42, Section 3607
of the United States Code or (b) relates to handicap but does not
discriminate against handicapped persons) as set forth in the document.
Recorded: In Book 8171 Page 117, official records
Said covenants, conditions and restrictions provide that a violation
thereof shall not defeat the lien of any mortgage or deed of trust made
in good faith and for value.
5. Covenants, conditions and restrictions (but omitting therefrom any
covenant or restriction based on race, color religion, sex, handicap,
familial status or national origin, if any, unless and only to the
extent that said covenant (a) is exempt under Chapter 42, Section 3607
of the United States Code or (b) relates to handicap but does not
discriminate against handicapped persons) as set forth in the document.
Recorded: In Book 8147 Page 113, official records
Said covenants, conditions and restrictions provide that a violation
thereof shall not defeat the lien of any mortgage or deed of trust made
in good faith and for value.
6. A document entitled "Affidavit Regarding Maintenance of Automatic Duplex
Sump Pump", dated January 31,1995 executed by Hughes Markets, Inc.; Norb
Parsoneault; V.P. Eng. Const. And City of Los Angeles, subject to all
the terms, provisions and conditions therein contained, recorded
February 1, 1995 as Instrument No. 95-170741.
7. An easement for the purpose shown below and rights incidental thereto as
set forth in a document
Granted to: Southern California Gas Company, a California corporation
Purpose: Transportation of gas, petroleum products and other substances
Recorded: August 2, 2000 as Instrument No. 00-1206218
Affects: A portion of said land
8. An easement for the purpose shown below and rights incidental thereto as
set forth in a document
Granted to: McMahon/Oliphant-Glendale, a California Corporation
Purpose: Storm water drainage
Recorded: September 30, 1997 as Instrument No. 97-1512343
Affects: A portion of said land
9. A covenant and agreement upon and subject to the terms and conditions
therein
Executed by: Los Angeles Media Tech Center, LLC
In Favor of: The City of Los Angeles
Recorded: July 9, 1999 as Instrument No. 99-1259747
Reference is made to said document for full particulars.
10. A covenant and agreement upon and subject to the terms and conditions
therein
Executed by: Los Angeles Media Tech Center, LLC
In Favor of: City of Los Angeles
Recorded: April 11, 2000 as Instrument No. 00-0541357
Reference is made to said document for full particulars.
11. A covenant and agreement upon and subject to the terms and conditions
therein
Executed by: Los Angeles Media Tech Center, LLC
In Favor of: City of Los Angeles
Recorded: May 3, 2000 as Instrument No. 00-0669795
Reference is made to said document for full particulars.
12. An easement for the purpose shown below and rights incidental thereto as
set forth in a document
Granted to: City of Los Angeles, a municipal corporation
Purpose: Public street and public storm drain
Recorded: July 19, 2001 as Instrument No. 01-1267598
Affects: Said land as more particularly described therein
13. A covenant and agreement upon and subject to the terms and conditions
therein
Executed by: Los Angeles Media Tech Center
In Favor of: The City of Los Angeles
Recorded: November 27, 2001 as Instrument No. 01-2245204
Reference is made to said document for full particulars.
14. A covenant and agreement upon and subject to the terms and conditions
therein
Executed by: LA Media Tech Center
In Favor of: The City of Los Angeles
Recorded: April 17, 2002 as Instrument No. 02-0898358
Reference is made to said document for full particulars.
15. A covenant and agreement upon and subject to the terms and conditions
therein
Executed by: Los Angeles Media Tech Center, LLC, a Delaware
Limited Liability Company
In Favor of: The City of Los Angeles
Recorded: May 2, 2002 as Instrument No. 02-1014727
Reference is made to said document for full particulars.
16. A covenant and agreement upon and subject to the terms and
conditions therein
Executed by: Los Angeles Media Tech Center, LLC
By: Legacy Partners 2361, L.P.
In Favor of: The City of Los Angeles
Recorded: October 1, 2003 as Instrument No. 03-2894319
Reference is made to said document for full particulars.
17. Covenants, Conditions and Restrictions as set forth in the document
recorded February 25, 1873, in Book 24 Page 15 of Deeds.
18. An easement affecting the portion of said land and for the purposes
stated therein, and incidental purposes, condemned by final decree:
Purpose: Electric light, heat and power lines
Case No.: 43195 of the Superior Court
Recorded: In Book 2185 Page 65 of Deeds
Affects: A portion of said land
19. An easement for the purpose shown below and rights incidental thereto as
set forth in a document
Granted to: L.A. Media Center
Purpose: Emergency Access, waterline, public utilities
Recorded: October 1, 2003 as Instrument No. 03-2894320
Affects: Lots 1-7
20. Covenants, conditions and restrictions (but omitting therefrom any
covenant or restriction based on race, color, religion, sex, handicap,
familial status or national origin, if any, unless and only to the
extent that said covenant (A) is exempt under Chapter 42, Section 3607
of the United States Code or (B) relates to handicap but does not
discriminate against handicapped persons) as set forth in the document
referred to in item 19 above.
21. A covenant and agreement upon and subject to the terms and conditions
therein:
Executed by: Los Angeles Media Tech Center, LLC
By: Legacy Partners 2361, L.P.
In Favor of: The City of Los Angeles
Recorded: August 11, 2003 as Instrument No. 03-2313041
Reference is made to said document for full particulars
22. A document entitled "Reciprocal Easement Agreement Water Line and
Emergency Access," dated September 26, 2003 executed by Los Angeles
Media Tech Center, LLC a California Limited Liability Company ("LAMTC"),
and UCV Media Tech Center, LLC, a Delaware Limited Liability Company,
subject to all the terms, provisions and conditions therein contained,
recorded November ___, 2003 as Instrument No. 03-______________.
SCHEDULE D
LESSEE INSURANCE REQUIREMENTS
NAME OF INSURED: (Tenant's name to appear here)
INSURED MAILING ADDRESS: (Tenant's mailing address s/b inserted)
PROPERTY ADDRESS(s):
ADDITIONAL INSURED:
General Electric Capital Business Asset Funding Corporation ("GE Capital"), a
Delaware Corporation, its successors and assigns 10900 NE 4th Street, Suite 500
Bellevue, WA 98004
LEASE NO.:
INSURANCE REQUIREMENTS:
HAZARD INSURANCE:
Evidenced on Form Acord 27 - Evidence of Insurance, naming General
Electric Capital Business Asset Funding Corporation, its successors and/or
assigns, as Additional Insured as respects the subject property.
Perils: Fire and Extended coverage, vandalism and malicious mischief,
Boiler and Machinery, and if applicable, Flood and Earthquake Insurance.
Values: 100% Replacement cost value of property/Limit of $10,000
deductible
Endorsements Required:
o Inflation Guard, and Agreed Amount and Replacement Cost
endorsements
o List of Locations and Schedule of Values, if Blanket Policy
o 30 Days Notice of Cancellation
o Agreed Amount endorsement
Co-insurance should not be a condition of any insurance provided.
Loss of Rents/Business Interruption for 12 months (or in an amount
equivalent to at least 12 months rent) is required.
Boiler and Machinery Coverage will be required.
LIABILITY:
Coverage to be On Occurrence basis only.
Evidence of Insurance, showing comprehensive general liability on an
Occurrence Basis, in an amount not less than $5,000,000 (per occurrence) to
include:
Bodily injury and property damage liability (primary and excess umbrella
acceptable to satisfy limits).
General Electric Capital Business Asset Funding Corporation is to be
named Additional Insured as respects this property and the Additional Insured
endorsement should be attached to the certificate.
SPECIAL INSTRUCTIONS
General Electric Capital Business Asset Funding Corporation is to be
provided with an Evidence of Insurance and a Certificate of Insurance from an
insurance company having a Best's Rating of A/X or better for, respectively,
hazard and liability coverage and must be executed by the insurance company or
its authorized agent. The evidence and certificate must itemize the above
coverage and endorsements. WITHIN 90 DAYS OF ISSUANCE OF THE EVIDENCE OF
INSURANCE, THE INSURANCE COMPANY IS TO PROVIDE A CERTIFIED COPY OF THE INSURANCE
POLICY INCLUDING ALL ENDORSEMENTS AND AMENDMENTS.
SCHEDULE E
PERMANENT LOAN INSURANCE REQUIREMENTS
NAME OF INSURED:
INSURED MAILING ADDRESS:
PROPERTY ADDRESS(s):
MORTGAGEE/LOSS PAYEE:
General Electric Capital Business Asset Funding Corporation, a Delaware
Corporation, its successors and assigns 10900 NE 4th Street, Suite 500 Bellevue,
WA 98004
LOAN NO.:
INSURANCE REQUIREMENTS:
HAZARD INSURANCE:
Evidenced on Form Acord 27 - Evidence of Property Insurance, naming
General Electric Capital Business Asset Funding Corporation, its successors
and/or assigns, as Loss Payee and Mortgagee as respects the subject property. If
the credit tenant is to provide the insurance coverage, the Borrower must be
named as Additional Insured.
Perils: Fire and Extended coverage, vandalism and malicious mischief,
Boiler and Machinery, and if applicable, Flood and Earthquake Insurance.
Values: l00% Replacement cost value of property/Limit of $5,000
deductible
Endorsements Required:
o Inflation Guard, and Agreed Amount and Replacement Cost
endorsements
o List of Locations and Schedule of Values, if Blanket Policy
o 438BFU (Loss Payee Endorsement - see copy attached, with
enlargement of same for easier reading), in favor of General
Electric Capital Business Asset Funding Corporation amended to 30
days notice of change, cancellation or non-renewal.
o 30 Days Notice of Cancellation
Waiver of Subrogation endorsement is required, unless property is owner
occupied.
Co-insurance should not be a condition of any insurance provided.
Loss of Rents/Business Interruption for 12 months (or in an amount
equivalent to at least 12 months rent) is required.
Boiler and Machinery coverage is required. If the insurance carrier for
the Boiler & Machinery coverage is different from that of the Property Coverage,
a Joint Loss Agreement endorsement must be reflected on the evidences of
insurance for both Property coverage and Boiler & Machinery coverage.
If the 438BFU Lender's Loss Payable Endorsement is not available, please
submit another Loss Payable endorsement for review by General Electric Capital
Business Asset Funding Corporation.
LIABILITY:
Evidenced on Form Acord 25 - Certificate of Liability Insurance
Coverage to be On Occurrence basis only.
Evidence of Insurance, showing comprehensive general liability on an
Occurrence Basis, in an amount not less than $2,000,000 (per occurrence) to
include;
Bodily injury and property damage liability (primary and excess umbrella
acceptable to satisfy limits).
General Electric Capital Business Asset Funding Corporation is to be
named Additional Insured as respects this property only and the Additional
Insured endorsement should be attached to the certificate. If the credit tenant
is to provide the insurance coverage, the Borrower must be named as Additional
Insured as well.
SPECIAL INSTRUCTIONS
General Electric Capital Business Asset Funding Corporation is to be provided
with an Evidence of Property Insurance and a Certificate of Liability Insurance
from an insurance company having a Best's Rating of A/X or better for both
hazard and liability coverage and must be executed by the insurance company or
its authorized agent. The evidence and certificate must itemize all the above
endorsements and the evidence must include a copy of the completed and signed
438BFU endorsement (a copy of which is attached). WITHIN 90 DAYS OF ISSUANCE OF
THE EVIDENCE OF INSURANCE, THE INSURANCE COMPANY IS TO PROVIDE A CERTIFIED COPY
OF THE INSURANCE POLICY INCLUDING ALL ENDORSEMENTS AND AMENDMENTS.
LENDER'S LOSS PAYABLE ENDORSEMENT - 438 BFU
1. Loss or damage, if any, under this policy shall be paid to General
Electric Capital Business Asset Funding Corporation, its successors and
assigns, hereinafter referred to as the "Lender," in whatever form or
capacity its interests may appear and whether said interest be vested in
said Lender in its individual or in its disclosed or undisclosed
fiduciary or representative capacity, or otherwise, or vested in a
nominee or trustee of said Lender.
2. The insurance under this policy, or any rider or endorsement attached
thereto, as to the interest only of the Lender, its successors and
assigns, shall not be invalidated nor suspended: (a) by any error,
omission or change respecting the ownership, description, possession or
location of the subject of the insurance or the interest therein, or the
title thereto; (b) by the commencement of foreclosure proceedings or the
giving of notice of sale of any of the property covered by this policy
by virtue of any mortgage or trust deed; (c) by any breach of warranty,
act, omission, neglect or noncompliance with any of the provisions of
this policy, including any and all riders now or hereafter attached
thereto, by the named insured, the borrower, mortgagor, trustor, vendee,
owner, tenant, warehouseman, custodian, occupant, or by the agents of
either of any of them or by the happening of any event permitted by them
or either of them, or their agents, or which they failed to prevent,
whether occurring before or after the attachment of this endorsement, or
whether before or after a loss, which under the provisions of this
policy of insurance or of any rider or endorsement attached thereto
would invalidate or suspend the insurance as to the named insured,
excluding herefrom, however, any acts or omissions of the Lender while
exercising active control and management of the property.
3. In the event of failure of the insured to pay any premium or additional
premium which shall be or become due under the terms of this policy or
on account of any change in occupancy or increase in hazard not
permitted by this policy, this Company agrees to give written notice to
the Lender of such nonpayment of premium after sixty (60) days from and
within one hundred and twenty (120) days after due date of such premium
and it is a condition of the continuance of the rights of the Lender
hereunder that the Lender when so notified in writing by this Company of
failure of the insured to pay such premium shall pay or cause to be paid
the premium due within ten (10) days following receipt of the Company's
demand in writing therefor. If the Lender shall decline to pay said
premium or additional premium, the rights of the Lender under this
Lender's Loss Payable Endorsement shall not be terminated before ten
(10) days after receipt of said written notice by the Lender.
4. Whenever this Company shall pay to the Lender any sum for loss or damage
under this policy and shall claim that as to the insured no liability
therefor exists, this Company, at its option, may pay to the Lender the
whole principal sum and interest and other indebtedness due or to become
due from the insured, whether secured or unsecured (with refund of all
interest not accrued), and this Company, to the extent of such payment,
shall thereupon receive a full assignment and transfer, without
recourse, of the debt and all rights and securities held as collateral
thereto.
5. If there be any other insurance upon the within described property, this
Company shall be liable under this policy as to the Lender for the
proportion of such loss or damage that the sum hereby insured bears to
the entire insurance of similar character on said property under
policies held by, payable to and expressly consented to by the Lender.
Any Contribution Clause included in any Fallen Building Clause Waiver or
any Extended Coverage Endorsement attached to this contract of insurance
is hereby nullified, and also any Contribution Clause in any other
endorsement or rider attached to this contract of insurance is hereby
nullified except Contribution Clauses for the compliance with which the
insured has received reduction in the rate charged or has received
extension of the coverage to include hazards other than fire and
compliance with such Contribution Clause is made a part of the
consideration for insuring such other hazards. The Lender upon the
payment to if of the full amount of its claim will subrogate this
Company (pro rata with all other insurers contributing to said payment)
to all of the Lender's rights of contribution under said other
insurance.
6. This Company reserves the right to cancel this policy at any time, as
provided by its terms, but in such case this policy shall continue in
force for the benefit of the Lender for thirty (30) days after written
notice of such cancellation is received by the Lender and shall then
cease.
7. This policy shall remain in full force and effect as to the interest of
the Lender for a period of ten (10) days after its expiration unless an
acceptable policy in renewal therefor with loss thereunder payable to
the Lender in accordance with the terms of this Lender's Loss Payable
Endorsement shall have been issued by some insurance company accepted by
the Lender.
8. Should legal title to and beneficial ownership of any of the property
covered under this policy become vested in the Lender or its agents,
insurance under this policy shall continue for the term thereof for the
benefit of the Lender, but, in such event, any privileges granted by
this Lender's Loss Payable Endorsement which are not also granted the
insured under the terms and conditions of this policy and/or under other
riders or endorsements attached thereto shall not apply to the insurance
hereunder as respects such property.
9. All notices herein provided to be given by the Company to the Lender in
connection with this policy and this Lender's Loss Payable Endorsement
shall be mailed to or be delivered to the Lender at its office or branch
at: Suite 500, 10900 NE 4th Street, Bellevue, WA 98004.
Attached to Policy No.
Of:
Issued to:
Agency at: Date: