EXHIBIT 10.27
AGREEMENT OF SUBLEASE
BETWEEN
XXXXX XXXXXXX & ASSOCIATES, INC.,
a California corporation,
doing business as THINK NEW IDEAS, INC.
AS SUBLANDLORD,
AND
FIRST LOOK MEDIA, INC.,
a Delaware corporation,
AS SUBTENANT
Dated: November 15, 2001
SUBLEASE
THIS SUBLEASE (the "Sublease") is entered into as of November 15, 2001,
by and between XXXXX XXXXXXX & ASSOCIATES, INC., a California corporation, doing
business as THINK NEW IDEAS, INC. (the "Sublandlord"), and FIRST LOOK MEDIA,
INC., a Delaware corporation (the "Subtenant").
RECITALS:
A. 8000 Sunset, Ltd., a California limited partnership, as landlord
("Landlord"), and Sublandlord, as tenant, entered into that certain Shopping
Center Lease, dated December 1, 1996, as amended by that certain First Amendment
to Shopping Center Lease ("First Amendment"), dated as of August 14, 1997
(collectively, the "Master Lease"), whereby Landlord leased to Sublandlord and
Sublandlord leased from Landlord approximately 15,491 usable square feet of
space (the "Premises") in that certain shopping center located at 0000 Xxxxxx
Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx (the "Shopping Center"). Sublandlord is a
wholly-owned subsidiary of Think New Ideas, Inc., a Delaware corporation.
B. Sublandlord now desires to sublease to Subtenant and Subtenant desires
to sublease from Sublandlord the Premises, which are located on the third (3rd)
level of Building B of the Shopping Center, as more particularly set forth in
Exhibit A attached hereto upon the terms and conditions set forth in this
Sublease.
C. All initially capitalized terms not specifically defined in this
Sublease shall have the meaning ascribed to such terms in the Master Lease.
AGREEMENT:
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows.
1. Subleasing of the Premises. Sublandlord hereby subleases to Subtenant and
Subtenant hereby leases and hires from Sublandlord the Premises upon and subject
to the terms and conditions hereinafter set forth. Sublandlord and Subtenant
agree that the area of the Premises for purposes of this Sublease and any and
all calculations hereunder or in connection herewith shall be deemed to be
15,491 usable square feet. The parties hereby acknowledge and agree that the
usable square footage of the Premises, as set forth in this Section 1.1, shall
not be subject to remeasurement or modification.
2. Sublease Term; Delivery of Premises. Unless sooner terminated as provided for
herein, this Sublease is for the term (the "Sublease Term") commencing upon the
date that Sublandlord delivers the Premises to Subtenant pursuant to Section 8.1
below (the "Sublease Commencement Date"), which Sublease Commencement Date is
anticipated to be not later than December 6, 2001. The term of this Sublease
shall expire on May 31, 2007 ("Sublease Expiration Date"). Following the
Sublease Commencement Date, Sublandlord may, at its option, deliver to Subtenant
a Memorandum of Sublease Commencement Date in the form attached hereto as
Exhibit B which shall confirm the Sublease Commencement Date, and Subtenant
shall execute and deliver such memorandum to Sublandlord within five (5)
business days following receipt thereof. On or before the Sublease Commencement
Date, Sublandlord shall deliver the Premises to Subtenant in a neat and clean
condition comparable to the condition that existed when Subtenant inspected the
Premises on August 30, 2001.
3. Rent.
3.1 Minimum Rent. Commencing on the Rent Commencement Date (as
hereinafter defined), Subtenant shall pay to Sublandlord annual basic
rental (the "Minimum Rent") in the amounts set forth below, in equal
monthly installments, in advance, on the first day of each month during the
Sublease Term, without demand, offset, abatement or deduction of any kind,
except as expressly provided otherwise in this Sublease. (There will be no
rent charged for any period prior to the Rent Commencement Date.)
Annual Monthly Minimum
Month of Sublease Minimum Monthly Minimum Rent Per Usable
Term Rent Rent Square Foot
--------------------------------------------------------------------------------
Sublease Commencement
Date -
Rent Commencement
Date 0 0 0
--------------------------------------------------------------------------------
Rent Commencement
Date -
5/31/03 $408,962.40 $34,080.20 $2.20
--------------------------------------------------------------------------------
6/1/03 - 5/31/04 $464,730.00 $38,727.50 $2.50
--------------------------------------------------------------------------------
6/1/04 - Sublease
Expiration
Date $492,613.80 $41,051.15 $2.65
--------------------------------------------------------------------------------
As used in this Sublease, the term "Rent Commencement Date" shall mean
April 1, 2002, subject to adjustment as provided below:
(i) In the event the Sublease Commencement Date does not occur by
December 6, 2001 (excluding any delays caused by Subtenant), the Rent
Commencement Date shall be extended until the date that is the same
number of days beyond April 1, 2002 that the Sublease Commencement Date
is beyond December 6, 2001.
-2-
(ii) Sublandlord has advised Tenant that Operating Expenses for the
Base Year (as referenced in Section 5.5 of the Master Lease) were equal
to $12.32 per useable square foot of space, and Sublandlord anticipates
total Operating Expenses for calendar year 2001 will be $15.25 per
useable square foot of space. By virtue of the foregoing, it is
anticipated that the total amount of Operating Expenses for which the
Tenant under the Master Lease will be responsible in calendar year 2001
will be no greater than $45,388.63 (($15.25 - $12.32) x 15,491 square
feet). If it turns out, based on the Landlord's statement of Operating
Expenses for calendar year 2001, that the total amount of 2001
Operating Expenses for which the lessee under the Lease will be
responsible will exceed $45,388.93, then the Rent Commencement Date
shall be extended (beyond any extension called for by subparagraph (i)
above). The number of days by which the Rent Commencement Date shall be
extended shall be calculated as follows:
(a) First, calculate the amount by which 2001Operating
Expenses exceed $45,388.93 (the "Overage Amount").
(b) Then, calculate the present discounted value (using an
interest rate of five percent) of monthly payments in an
amount equal to one twelfth of the Overage Amount commencing
on April 1, 2002, and continuing until May 31, 2007.
(c) Finally, divide the present discounted value figure
obtained in subparagraph (b) above by the daily rental figure
of $1,136 to obtain the number of days by which the Rent
Commencement Date is to be extended.
3.2 Additional Rent. In addition to the Minimum Rent, Subtenant shall
pay to Sublandlord as additional rent (the "Additional Rent"), in the same
manner as the Minimum Rent, the following:
(i) beginning on the Rent Commencement Date and monthly thereafter
throughout the Sublease Term, Subtenant's Share (as defined below) of
Operating Expenses in accordance with the terms of Article 5 of the
Master Lease. Such payments shall be based on estimates and actual,
annual calculations of Operating Expenses made by Landlord, as
evidenced by the statements delivered by Landlord pursuant to Section
5.5(b) of the Master Lease, setting forth the amounts payable by
Sublandlord to Landlord under the Master Lease, copies of which
statements shall be delivered by Sublandlord to Subtenant;
"Subtenant's Share" for purposes of this Section shall mean "Tenant's
Proportionate Share" pursuant to Section 5.5 of the Master Lease.
(ii) within five (5) business days after delivery to Subtenant of a
notice of Additional Rent due, which notice shall include a copy of
the applicable xxxx or other evidence, that Additional Rent is due
under the Master Lease, the amount of any and all other costs, charges
or expenses attributable to the Premises payable by Sublandlord to
Landlord pursuant to the provisions of the Master Lease.
(iii) from time to time as may be applicable, the amount of any other
costs, charges or expenses billed to Sublandlord by Landlord for
reimbursement to Landlord pursuant to the Master Lease for special
construction services or other special services to the extent such
items have been specifically requested by Subtenant in a written
notice to Landlord, such amounts being due from Subtenant to
Sublandlord at least five (5) business days before such amounts are
due to Landlord pursuant to the Master Lease, but in no event more
than ten (10) business days after Sublandlord delivers to Subtenant
the applicable statement or xxxx from Landlord.
-3-
The parties acknowledge that for calendar year 2002, the parties will
make Operating Expense payments based on Landlord estimates (as provided in
the Master Lease), with Sublandlord making such payments until the Rent
Commencement Date, and Tenant making the same thereafter. When the final
statement of 2002 Operating Expenses is sent by Landlord, Sublandlord and
Tenant shall make appropriate adjustments between themselves so that
Sublandlord will pay a proportion of total 2002 Operating Expenses equal to
(i) the number of days from January 1, 2002 until the Rent Commencement
Date (ii) divided by 365, and so that Tenant will pay a proportion of total
2002 Operating Expenses equal to (i) the number of days from the Rent
Commencement Date until December 31, 2002, (ii) divided by 365.
3.3 Proration. Rent for any partial month or year during which the
Sublease Commencement Date occurs or the termination or expiration of this
Sublease occurs shall be prorated based on the actual number of days
elapsed in such month or year.
3.4 Place for Payment of Rent. All Minimum Rent and Additional Rent
payments shall be made in lawful money of the United States of America and
shall be paid by Subtenant directly to Landlord at the address set forth in
Section 4.1 of the Master Lease, or to such other party or address as
Landlord may designate in writing to Subtenant; provided, however, that the
Annual Minimum Rent and the Minimum Monthly Rent payable to Landlord during
the period from and after June 1, 2004 through the Sublease Expiration Date
shall remain unchanged, and the difference between (i) the Annual Minimum
Rent and the Monthly Minimum Rent, respectively, for such period and (ii)
the Annual Minimum Rent and Monthly Minimum Rent, respectively, for the
period from and after June 1, 2003 through May 31, 2004 (that is,
$27,883.80 and $2,323.65, respectively) shall be paid directly to
Sublandlord as partial reimbursement for Sublandlord's expenses actually
incurred directly in connection with this Sublease. Subtenant shall provide
Sublandlord with written evidence of such payments to Landlord at the same
time such payments are made.
4. Parking. Subtenant shall have the same rights and obligations of Sublandlord
as Tenant with respect to the utilization of parking spaces at the Shopping
Center as set forth in Section 5.3(c) of the Master Lease, as amended by the
First Amendment.
5. Subordination to and Incorporation of Terms of Master Lease.
5.1 Subordination. This Sublease is in all respects subject and
subordinate to the terms and conditions of the Master Lease and to the
matters to which the Master Lease is subordinate; the Sublease shall also
be subject to, and Subtenant accepts this Sublease subject to, any
amendments, modifications or supplements to the Master Lease hereafter
made, provided that Sublandlord shall not enter into any amendment,
modification or supplement of the Master Lease, unless expressly approved
in writing by Subtenant. Except as otherwise expressly provided in this
Sublease, Subtenant assumes and shall keep, observe and perform every term,
provision, covenant and condition on Sublandlord's part to be kept,
observed and performed pursuant to the Master Lease for the Sublease Term.
Subtenant hereby agrees that it will conduct itself and its operations, and
cause its agents, contractors, servants, employees, partners, invitees and
any subtenants and licensees to conduct themselves and their operations, so
as not to cause Sublandlord to be in default under the Master Lease.
-4-
5.2 Incorporation of Terms of Master Lease. Subtenant hereby
acknowledges that it has read and is familiar with the provisions of the
Master Lease and agrees that this Sublease is subordinate to and subject to
the Master Lease. Except as otherwise expressly provided in this Sublease,
the terms, provisions, covenants, stipulations, conditions, rights,
obligations, remedies and agreements contained in the Master Lease
(including, but not limited to, those relating to default, remedies and
indemnities) are incorporated herein by reference and are made a part
hereof, and shall, as between Sublandlord and Subtenant (as if Sublandlord
were the landlord under the Master Lease and Subtenant were the tenant
under the Master Lease) constitute the terms of this Sublease except to the
extent that they are inapplicable to, inconsistent with, or modified by the
terms of this Sublease. All waivers of claims against or exculpations of
Landlord contained in the Master Lease shall run in favor of both Landlord
and Sublandlord. Notwithstanding the foregoing, as between Sublandlord and
Subtenant, the provisions of the Master Lease set forth on Exhibit C
attached hereto and made a part hereof shall not apply and shall be of no
force or effect with respect to this Sublease.
5.3 Estate Granted; Provision of Services.
5.3.1 Estate Granted. Subtenant's estate shall in all respects be
limited to, and be construed in a manner consistent with, the estate
granted to Sublandlord by Landlord.
5.3.2 Provision of Services; Limitation of Liability.
Notwithstanding anything to the contrary in this Sublease or in the
Master Lease:
(i) Sublandlord shall not be required to keep, observe or perform
any of Landlord's obligations under the Master Lease, including,
without limitation, to provide any of the services or make any of
the repairs or restorations that Landlord has agreed to provide
or make or cause to be provided or made under the Master Lease;
and Sublandlord's sole obligation with respect thereto shall be
to use reasonable efforts to cause Landlord to provide such
services and make such repairs or restorations as are required to
be provided or made under the Master Lease; and
(ii) any and all requests for any special or additional services
furnished at the expense of Sublandlord under the Master Lease
shall be made only with Sublandlord's prior written consent,
which shall not be unreasonably withheld or delayed, and
Sublandlord shall reasonably cooperate with Subtenant in such
requests.
Notwithstanding any contrary provision contained in this Sublease,
Sublandlord shall not be liable under any circumstances for consequential
or punitive damages (including, but not limited to, for damage or injury
to, or interference with, the conduct of Subtenant's business and any loss
of revenue or profits therefrom). Subtenant shall pay all reasonable costs
and expenses incurred by Sublandlord in connection with (a) any such
requests and (b) the provision by Landlord of any such special or
additional services. Subtenant shall not make any claim against Sublandlord
for any damage which may arise, and Subtenant's obligations hereunder shall
not be impaired, by reason of (I) the failure of Landlord to keep, observe
or perform its obligations pursuant to the Master Lease, or (II) the acts
or omissions of Landlord, its agents, contractors, servants, employees,
invitees or licensees. Notwithstanding any contrary provision of this
-5-
Sublease, in the event that Landlord fails to perform its obligations under
the Master Lease, Sublandlord agrees that upon receipt of written notice
from Subtenant it shall use commercially reasonable efforts to attempt to
cause Landlord to comply with the terms of the Master Lease, provided that
Sublandlord shall in no event be required to initiate any litigation
against Landlord in connection therewith. In the event that Landlord
continues its failure to perform pursuant to the Master Lease and Subtenant
notifies Sublandlord in writing that Subtenant desires to initiate
litigation against Landlord with respect thereto, Sublandlord shall assign
to Subtenant any of its rights under the Master Lease to enforce the
applicable terms of the Master Lease against Landlord. Thereafter Subtenant
may initiate and maintain a lawsuit against Landlord to enforce the
applicable terms of the Master Lease, at Subtenant's sole cost and expense,
provided that Subtenant shall indemnify, defend, protect, and hold harmless
Sublandlord from and against any and all loss, cost, claim, damage, expense
and liability (including, without limitation, reasonable attorneys' fees,
costs, and disbursements) incurred in connection with or arising from any
such direct action by Subtenant.
5.4 Sublandlord Covenants. Sublandlord shall perform its obligations
under the Master Lease, subject to the obligations of Subtenant as set
forth in this Sublease. Furthermore, Sublandlord shall not to take any
action or do or perform any act or fail to perform any act which would
result in the failure or breach of any of the covenants, agreements, terms,
provisions or conditions of the Master Lease on the part of the tenant
thereunder, subject again to the obligations of Subtenant as set forth in
this Sublease. Sublandlord shall indemnify, defend, protect, and hold
Subtenant harmless from and against, any and all losses, costs, claims,
damages, expenses and liabilities (including, without limitation,
reasonable attorneys' fees, costs and disbursements), arising from any
default by Sublandlord in the performance of any of Sublandlord's
obligations under this Sublease or the Master Lease, unless those
obligations are those of Subtenant under this Sublease.
6. Use of the Premises. Subtenant covenants not to use the Premises for any
purpose other than any lawful business use specifically permitted by the terms
of the Master Lease and in a manner consistent in all respects with the
provisions of the Master Lease.
7. Subtenant's Insurance. Notwithstanding anything in the Master Lease or this
Sublease to the contrary, Subtenant shall cause Subtenant's insurance, as
required to be carried by Tenant pursuant to the terms of the Master Lease, to
name Landlord and Sublandlord as additional insureds.
8. Condition of the Premises; Alterations.
8.1 Condition of Premises. Subtenant has examined the Premises, is
familiar with the physical condition thereof and agrees (except as may be
otherwise specifically set forth in this Sublease) to take the same "AS IS"
in the condition in which it exists as of the date of execution hereof.
Subtenant hereby acknowledges that Sublandlord has made no representations
or warranties with respect to the condition of the Premises, including,
without limitation the suitability of the Premises for Subtenant's intended
use, and that Sublandlord shall not, nor or at any time in the future, be
required to make any expenditures whatsoever with respect to the Premises,
except as otherwise specifically provided herein.
-6-
8.2 Alterations. Subtenant shall have the right to make Alterations to
the Premises, (i) without Sublandlord's consent but upon prior written
notice to Sublandlord, and (ii) subject to Landlord's approval and any
other requirements of the Master Lease.
8.3 Ownership and Removal of Alterations. In connection with
the provisions of and the rights of Landlord under the Master Lease,
during the term of this Sublease, Subtenant shall retain ownership of
the Alterations made by Subtenant to the Premises from and after the
date of execution hereof. Subtenant shall only be required to remove
Alterations made by Subtenant to the Premises upon the expiration or
termination of this Sublease to the extent required by Landlord in
accordance with the terms of the Master Lease, and in such event
Subtenant shall remove such Alterations prior to the expiration or
earlier termination of the Sublease Term, at Subtenant's sole cost, and
restore the applicable portion of the Premises to its condition which
existed as of the Sublease Commencement Date, reasonable wear and tear
excepted, in accordance with the terms of the Master Lease. In the
event that Subtenant fails to complete such work prior to the
expiration or earlier termination of the Sublease Term, Sublandlord
shall have the right to perform such work, at Subtenant's cost, and
Subtenant shall pay Sublandlord the amount incurred by Sublandlord
therefor (the "Removal Costs") within five (5) days of Subtenant's
receipt of an invoice therefor. If Subtenant fails to timely pay
Sublandlord the Removal Costs, then Sublandlord shall have the right to
draw upon the "L-C," as that term is defined in Section 19.1 below to
pay the same, in addition to Sublandlord's other rights and remedies
under this Sublease. Subtenant shall have no obligation to remove any
Alterations made by Sublandlord or any other person prior to the
Sublease Commencement Date.
9. Assignment and Subletting; Consent Required. Subtenant shall not, directly or
indirectly, by operation of law or otherwise, sell, assign, encumber, pledge, or
otherwise transfer or hypothecate all or any part of the Premises or Subtenant's
leasehold estate hereunder, or sublet or otherwise permit the occupancy of the
Premises or any portion thereof (any of the foregoing being referred to herein
as a "Transfer"), without the prior written consent of Sublandlord and Landlord
in accordance with the provisions of Article XVI of the Master Lease. Any such
Transfer shall be subject to all of the rights of Landlord (and of Sublandlord)
under said Article XVI and, except as otherwise specifically provided for or
modified herein, such rights shall apply equally to Sublandlord. Subtenant
agrees that any consent to any Transfer of this Sublease or the Premises shall
not be deemed to be a consent to any other Transfer and shall not thereby
release or discharge Subtenant from its obligations and liabilities hereunder.
Any assignment or subletting for which Sublandlord's consent is required
hereunder made without such consent shall be void. Sublandlord agrees to use
commercially reasonable efforts to attempt to cause Landlord to consent to a
proposed Transfer of this Sublease, provided that (i) Subtenant pays any costs
incurred by Sublandlord with respect thereto, and (ii) Sublandlord shall in no
event be required to initiate any litigation or other dispute resolution
procedure against Landlord in connection therewith.
10. Quiet Enjoyment. With respect to Section 29.5 of the Master Lease,
Subtenant's right to quiet enjoyment of the Premises shall in any event be
subject to Landlord's rights under the Master Lease.
-7-
11. Time Limits. As between Sublandlord and Subtenant, and except as provided
elsewhere in this Sublease, the time limits set forth in the Master Lease for
the giving of notices, making demands, performance of any act, condition or
covenant, or the exercise of any right, remedy or option, shall be shortened for
the purpose of this Sublease in each instance by the lesser of (i) five (5)
days, or (ii) one-half of the applicable time limit set forth in the Master
Lease, so that notices may be given, demands made, or any act, condition or
covenant performed, or any right, remedy or option hereunder exercised, by
Sublandlord or Subtenant, as the case may be, within the time limits relating
thereto contained in the Master Lease.
12. Brokers and Finders. In connection with the transaction contemplated by this
Sublease, each party hereby represents and warrants that it has not had, and
shall not have, any dealings with any third party to whom the payment of any
broker's fee, finder's fee, commission or other similar compensation shall or
may become due or payable, other than Lincoln Property Company and CB Xxxxxxx
Xxxxx (the "Brokers"). Sublandlord and Subtenant shall each indemnify, defend
and hold the other harmless from and against any and all loss, cost, damage,
liability, claim or expense (including, without limitation, reasonable
attorneys' fees, charges and disbursements), by reason of a breach of the
foregoing provisions or by reason of any claim of or liability to any broker,
finder or like agent who shall claim to have dealt with Sublandlord or
Subtenant, respectively, in connection with this transaction and this Sublease,
except with respect to the Brokers as provided above. The provisions of this
Section shall survive the termination of this Sublease.
13. Rent Abatement. With respect to Section 14.4 of the Master Lease, Subtenant
shall be entitled to rent abatement or a rent reduction under this Sublease with
respect to the Premises, subject to the provisions of said Section 14.4 of the
Master Lease, but only for the time period that Sublandlord receives rent
abatement from Landlord for the Premises or a portion thereof.
14. Indemnification. Neither Sublandlord nor its agents shall be liable to
Subtenant, its employees, agents, contractors and licensees for, and Subtenant
shall indemnify, defend, protect, and hold Sublandlord harmless from and
against, any and all losses, costs, claims, damages, expenses and liabilities
(including, without limitation, reasonable attorneys' fees, costs and
disbursements), incurred in connection with or arising from (i) any injury,
damage or loss (by theft or otherwise) to Subtenant or to any other person
occurring on the Premises, irrespective of the cause of such injury, damage or
loss, (ii) any default by Subtenant in the observance or performance of any of
the terms, covenants, conditions or agreements of this Sublease on Subtenant's
part to be observed or performed, (iii) the use or occupancy or manner of use or
occupancy of the Premises by Subtenant or any person claiming through or under
Subtenant, (iv) the condition of the Premises, or (v) any acts, omissions or
negligence of Subtenant, its agents, employees, or licensees, in or about the
Premises, and any acts, omissions or negligence of Subtenant's visitors within
the Premises, either prior to, during, or after the expiration of the Sublease
Term. Sublandlord shall, however, be responsible for any of the foregoing to the
extent caused by or due to the negligence or willful misconduct of Sublandlord
or its agents, employees or contractors.
-8-
In connection with any matter covered by an indemnity set forth in this
Section 14 or incorporated into this Sublease by reference to the Master Lease,
the indemnified party shall promptly give the indemnifying party written notice
of any such matter which may be covered by such indemnity provisions, and the
indemnifying party shall have the opportunity to defend any claims relating
thereto with counsel reasonably satisfactory to the indemnified party.
15. Right of Entry. Sublandlord and its agents and representatives shall have
the right, at all reasonable times, upon reasonable prior notice to Subtenant,
but in such manner as to cause as little disturbance to Subtenant as reasonably
practicable, to enter the Premises for purposes of inspection, to post notices
of non-responsibility, and to protect the interest of Sublandlord in the
Premises. No such entry shall be construed under any circumstances as a forcible
or unlawful entry into, or a detainer of, the Premises, or an eviction of
Subtenant, and Subtenant hereby waives any claim against Sublandlord or its
agents or representatives for damages for any injury or inconvenience to or
interference with, Subtenant's business or quiet enjoyment of the Premises.
16. Notices. All notices, requests, demands and other communications which are
required or may be given pursuant to the terms of this Sublease shall be given
in accordance with Section 26.1 of the Master Lease at the following addresses:
If to Sublandlord:
Xxxxx Xxxxxxx & Associates, Inc.
doing business as Think New Ideas, Inc.
0000 Xxxxxxxx Xxx Xxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxxx
Telefax no.: (000) 000-0000
With a copy to:
Xxxxx Xxxxx & Xxxx L.L.P.
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Telefax no.: (000) 000-0000
If to Subtenant:
First Look Media, Inc.
0000 Xxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxx Xxxxxxx
Telefax no.: (000) 000-0000
(Prior to Sublease Commencement Date)
or
-9-
First Look Media, Inc.
0000 Xxxxxx Xxxxxxxxx
Xxxxx X000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xx. Xxxx Xxxxxxx
Telefax no.: _________________
(After Sublease Commencement Date)
and, in either case, with a copy to:
Xxxxxxxx, Xxxxxxxxxx & Xxxxx LLP
00000 Xxxx Xxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxx, Esq.
Telefax no.: (000) 000-0000
17. Authority. Subtenant represents that (1) Subtenant is a corporation duly
organized and validly existing under the laws of the State of Delaware, (2)
Subtenant has full power and authority to enter into this Sublease, and (3) each
person signing on behalf of Subtenant is authorized to do so.
18. Cancellation of Master Lease. In the event of the early cancellation or
termination of the Master Lease for any reason whatsoever or of the involuntary
surrender of the Master Lease by operation of law prior to the expiration date
of this Sublease, Subtenant agrees to make full and complete attornment to
Landlord under the Master Lease for the balance of the term of this Sublease and
upon the then executory terms hereof at the option of Landlord at any time
during Subtenant's occupancy of the Premises, which attornment shall be
evidenced by an agreement in form and substance reasonably satisfactory to
Landlord and Subtenant, provided that in no event shall Landlord (i) be liable
for any previous act or omission of Sublandlord under this Sublease, (ii) be
subject to any defense or offset previously accrued in favor of Subtenant
against Sublandlord, or (iii) be bound by any previous modification of the
Sublease made without Landlord's written consent, or by any previous prepayment
by Subtenant of more than one month's rent. Subtenant agrees to execute and
deliver such an agreement at any time within ten (10) business days after
request of Landlord, and Subtenant waives the provisions of any law now or
hereafter in effect which may give Subtenant any right or election to terminate
this Sublease or to surrender possession of the Premises in the event any
proceeding is brought by Landlord under the Master Lease to terminate the Master
Lease.
19. Letter of Credit.
19.1 Delivery and Form of Letter of Credit. Subtenant shall deliver to
Sublandlord, concurrently with Subtenant's execution and delivery of this
Sublease to Sublandlord, an unconditional, clean, irrevocable letter of
credit (the "L-C") in the initial amount of One Hundred Thirty Six Thousand
Three Hundred Twenty and 80/100 Dollars ($136,320.80) (the "L-C Amount"),
which L-C shall be issued by a recognized bank (a bank which accepts
deposits, maintains accounts, has a local office in Los Angeles,
California, which will negotiate a letter of credit, and whose deposits are
insured by the FDIC) reasonably acceptable to Sublandlord, and which L-C
shall be in form and content as set forth in Exhibit D attached hereto.
Subtenant shall pay all expenses, points and/or fees incurred by Subtenant
in obtaining the L-C.
-10-
19.2 Application of the L-C. The L-C shall be held by Sublandlord as
security for the faithful performance by Subtenant of all the terms,
covenants, and conditions of this Sublease to be kept and performed by
Subtenant during the Sublease Term. The L-C shall not be terminated,
assigned or encumbered in any manner whatsoever by Subtenant without the
prior written consent of Sublandlord. If Subtenant defaults with respect to
any provisions of this Sublease, including, but not limited to, the
provisions relating to the payment of Rent, and fails to cure such default
within the applicable cure period set forth in this Sublease, or if
Subtenant fails to renew the L-C at least thirty (30) days before its
expiration or fails to timely pay Sublandlord for any Removal Costs, then
Sublandlord may, but shall not be required to, draw upon all or any portion
of the L-C for payment of any Rent or any other sum in default, or for the
payment of any amount that Sublandlord may reasonably spend or may become
obligated to spend by reason of Subtenant's default or failure to pay, or
to compensate Sublandlord for any other loss or damage that Sublandlord may
suffer by reason of Subtenant's default or failure to pay. The use,
application or retention of the L-C, or any portion thereof, by Sublandlord
shall not (a) prevent Sublandlord from exercising any other right or remedy
provided by this Sublease or by law, it being intended that Sublandlord
shall not first be required to proceed against the L-C, or (b) operate as a
limitation on any recovery to which Sublandlord may otherwise be entitled.
Any amount of the L-C which is drawn upon by Sublandlord, but is not used
or applied by Sublandlord, shall be held by Sublandlord and deemed a
security deposit (the "L-C Security Deposit"). If any portion of the L-C is
drawn upon, Subtenant shall, within five (5) days after written demand
therefor, either (i) deposit cash with Sublandlord (which cash shall be
applied by Sublandlord to the L-C Security Deposit) in an amount sufficient
to cause the sum of the L-C Security Deposit and the amount of the
remaining L-C to be equivalent to the amount of the L-C then required under
this Sublease or (ii) reinstate the L-C to the amount then required under
this Sublease. If any portion of the L-C Security Deposit is used or
applied, Subtenant shall, within five (5) days after written demand
therefor, deposit cash with Sublandlord (which cash shall be applied by
Sublandlord to the L-C Security Deposit) in an amount sufficient to restore
the L-C Security Deposit to the amount then required under this Sublease,
and Subtenant's failure to do so shall be a default under this Sublease.
Subtenant acknowledges that Sublandlord has the right to transfer its
interest in the Master Lease and this Sublease with the consent of
Subtenant, which consent shall not be unreasonably withheld or delayed.
Subtenant agrees that in the event of any such transfer, Sublandlord shall
have the right to transfer or assign the L-C Security Deposit and/or the
L-C to the transferee. If Subtenant has not previously been in default
under the Sublease beyond the applicable cure period provided in this
Sublease, and provided that Subtenant is not then in default under the
Sublease beyond the applicable cure period provided in this Sublease, the
L-C Amount shall be reduced on the third (3rd) anniversary of the Sublease
Commencement Date to an amount equal to Eighty Two Thousand One Hundred Two
and 30/100 Dollars ($82,102.30). If Subtenant shall fully and faithfully
perform every provision of this Sublease to be performed by it, the L-C
Security Deposit and/or the L-C, or any balance thereof, shall be returned
to Subtenant within thirty (30) days following either the expiration of the
Sublease Term or the earlier termination of this Sublease for any reason
other than a default by Subtenant.
-11-
19.3 Cash as Security Deposit. In lieu of the L-C, Subtenant shall
have the right at any time to deliver cash to Sublandlord (the "Security
Deposit") in the L-C Amount then required, in which event the Security
Deposit shall be held by Sublandlord as security for the faithful
performance by Subtenant of all of the terms, covenants, and conditions of
this Sublease to be kept and performed by Subtenant during the Sublease
Term. If Subtenant defaults with respect to any provisions of this
Sublease, including, but not limited to, the provisions relating to the
payment of Rent, and fails to cure such default within the applicable cure
period set forth in this Sublease, Sublandlord may, but shall not be
required to, use, apply or retain all or any part of the Security Deposit
for the payment of any Rent or any other sum in default, or for the payment
of any amount that Sublandlord may spend or become obligated to spend by
reason of Subtenant's default, or to compensate Sublandlord for any other
loss or damage that Sublandlord may suffer by reason of Subtenant's
default. If any portion of the Security Deposit is so used or applied,
Subtenant shall, within five (5) days after written demand therefor,
deposit cash with Sublandlord in an amount sufficient to restore the
Security Deposit to its original amount, and Subtenant's failure to do so
shall be a default under this Sublease. If Subtenant shall fully and
faithfully perform every provision of this Sublease to be performed by it,
the Security Deposit, or any balance thereof, shall be returned to
Subtenant within thirty (30) days following either the expiration of the
Sublease Term or the earlier termination of this Sublease for any reason
other than a default by Subtenant. Sublandlord shall deposit the Security
Deposit in an interest bearing account selected by Sublandlord, in its sole
discretion, and Subtenant shall be entitled to the interest on the Security
Deposit.
20. Transfer by Sublandlord. Sublandlord may transfer its interest in the Master
Lease and this Sublease with the consent of Subtenant, which consent shall not
be unreasonably withheld or delayed.
21. No Leasehold Mortgages. Sublandlord represents that there are no currently
existing leasehold mortgages encumbering its leasehold interest in the Premises.
22. Signage. Subject to Article X of the Master Lease and to Landlord's and
Sublandlord's approval, Subtenant shall be entitled to the installation and
operation of tenant signage, at its own expense, at those locations on the
exterior of the Premises approved by Landlord within its sole discretion.
23. Representations by Sublandlord. Sublandlord represents to Subtenant that the
Master Lease is in full force and effect as of the date hereof, and that,
neither Sublandlord nor (to the actual knowledge of Sublandlord as of the date
hereof) Landlord is in default under the Master Lease.
24. Consent of Landlord. This Sublease shall not be effective unless Landlord
gives its written consent hereto pursuant to the terms of the Master Lease. If
Landlord's consent shall not be obtained and a copy thereof delivered to
Subtenant within thirty (30) days of the date hereof, either Sublandlord or
Subtenant shall have the option to cancel this Sublease by notice to the
non-terminating party at any time after such thirty (30) day period and prior to
the date on which such consent is received. Landlord's written consent shall be
in form and substance reasonably acceptable to Subtenant, and without limiting
the generality of the foregoing, shall include provisions in substantially the
following form:
-12-
(i) In the event Sublandlord defaults under its obligations to be
performed under the Master Lease, Landlord shall deliver to Subtenant a
copy of any notice of default or other notice related thereto.
Subtenant shall have the right to cure any default by Sublandlord
within ten (10) days after Subtenant's receipt of written notice
thereof.
(ii) In the event the Master Lease is terminated because of a default
by Sublandlord under the Master Lease, Landlord shall so notify
Subtenant and shall recognize the entire estate of Subtenant created by
this Sublease; provided that Subtenant attorns to Landlord and performs
all of the obligations of Subtenant under this Sublease to Landlord, in
which event Landlord shall continue this Sublease with the same force
and effect as if Landlord and Subtenant had entered into a lease with
the same provisions as this Sublease.
25. Entire Agreement. This Sublease sets forth the entire agreement between the
parties and there are no other agreements or understandings of any kind or
nature between the parties with respect to the subject matter, except as set
forth herein. This Sublease may not be modified, altered, or amended, other than
by an agreement in writing, signed by the party against whom enforcement of said
agreement is sought.
[Signatures continue on next page]
-13-
IN WITNESS WHEREOF, the parties have duly executed this Sublease as of
the date first above written.
SUBLANDLORD:
XXXXX XXXXXXX & ASSOCIATES, INC.,
a California corporation, doing business as
THINK NEW IDEAS, INC.
By: /s/ Xxxxx Zomerfield
-------------------------------------
Its:
-------------------------------
SUBTENANT:
FIRST LOOK MEDIA, INC.,
a Delaware corporation
By: Xxxxxxx X. Xxxxxxx
-------------------------------------
Its:
-------------------------------
CONSENTED TO AND ACKNOWLEDGED BY:
Guarantor:
THINK NEW IDEAS, INC.,
a Delaware corporation
By: /s/ Xxxxx Zomerfield
-------------------------------------
Its: -------------------------------------
-14-
EXHIBIT A
PREMISES
[drawing of premises not included]
EXHIBIT A
-1-
EXHIBIT B
MEMORANDUM OF SUBLEASE COMMENCEMENT DATE
THIS MEMORANDUM is made and entered into as of ____________ __, 2001,
by and between XXXXX XXXXXXX & ASSOCIATES, INC., a California corporation, doing
business as THINK NEW IDEAS, INC. ("Sublandlord"), and FIRST LOOK MEDIA, INC., a
Delaware corporation ("Subtenant"), with respect to that certain Agreement of
Sublease dated as of ____________, 2001 (the "Sublease"), between Sublandlord
and Subtenant.
The term of the Sublease commenced on ___________, 2001 with respect to
the Premises, which date is defined in Section 2 of the Sublease as the Sublease
Commencement Date. The Sublease Term shall expire on May 31, 2007, unless sooner
terminated pursuant to the Sublease.
IN WITNESS WHEREOF, Sublandlord and Subtenant have executed this
Memorandum as of the date set forth in the first paragraph hereof.
SUBLANDLORD:
XXXXX XXXXXXX & ASSOCIATES, INC.,
a California corporation, doing business as
THINK NEW IDEAS, INC.
By:
-------------------------------------
Its:
-------------------------------
SUBTENANT:
FIRST LOOK MEDIA, INC.,
a Delaware corporation
By:
-------------------------------------
Its:
-------------------------------
EXHIBIT B
-1-
EXHIBIT C
EXCLUDED PROVISIONS OF MASTER LEASE
Section 1.1, the subparagraphs Landlord, Landlord's Mailing Address,
with the following titles: Tenant, Tenant's Mailing Address, Lease
Term, Target Commencement Date, Initial
Minimum Rent, Landlord's Broker, Tenant's
Broker and Guarantor.
Article 3 Term and Commencement Date
Article 4 Minimum Rent
Section 8.1, the following phrase "other than as specifically set
in the 2nd line: forth in the Work Letter"
Article XIX Lease Guaranty
Article XX Letter of Credit
Article XXIV Subordination; Non-Disturbance
Article XXV Option for Renewal
Section 29.7 Brokers
Section 29.22 Landlord Liability
Section 29.23 Rules and Regulations
Exhibit "C" Work Letter Agreement (other than as
generally applicable to all
works of improvement in the Premises)
Exhibit "D" Memorandum of Lease Commencement
Exhibit "G" Guaranty
Exhibit "H" Subordination and Non-Disturbance Agreement
Exhibit "K" Option Space
EXHIBIT C
-1-
EXHIBIT D
FORM OF LETTER OF CREDIT
(Letterhead of a bank
acceptable to Landlord)
__________ __, 2001
Think New Ideas, Inc.
0000 Xxxxxxxx Xxx Xxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxx Xxxxxxx
Ladies and Gentlemen:
We hereby establish our Irrevocable Letter of Credit and authorize you
to draw on us at sight for the account of First Look Media, Inc., a Delaware
corporation, the aggregate amount of One Hundred Thirty Six Thousand Three
Hundred Twenty and 80/100 Dollars ($136,320.00).
Funds under this Letter of Credit are available to the beneficiary
hereof as follows:
Any or all of the sums hereunder may be drawn down at any time and from
time to time from and after the date hereof by Think New Ideas, Inc.
("Beneficiary") when accompanied by this Letter of Credit and a written
statement signed by a representative of Beneficiary, certifying that such moneys
are due, unpaid and owing to Beneficiary by First Look Media, Inc. ("First
Look") under that certain Agreement of Sublease dated November 15, 2001, between
Beneficiary and Xxxxx Xxxxxxx & Associates, Inc., doing business as First Look,
and a sight draft executed and endorsed by a representative of Beneficiary.
This Letter of Credit is transferable in its entirety at no cost of
Beneficiary or the transferee. Should a transfer be desired, such transfer will
be subject to the return to us of this advice, together with written
instructions.
The amount of each draft must be endorsed on the reverse hereof by the
negotiating bank. We hereby agree that this Letter of Credit shall be duly
honored upon presentation and delivery of the certification specified above.
This Letter of Credit shall expire on ______________.
Notwithstanding the above expiration date of this Letter of Credit, the
term of this Letter of Credit shall be automatically renewed for successive,
additional one (1) year periods (but in no event beyond May 31, 2007) unless, at
least thirty (30) days prior to any such date of expiration, the undersigned
shall give written notice to Beneficiary, by certified mail, return receipt
requested and at the address set forth above or at such other address as may be
given in writing to the undersigned by Beneficiary, that this Letter of Credit
will not be renewed.
EXHIBIT D
-1-
This Letter of Credit is governed by the Uniform Customs and Practice
for Documentary Credits (1993 Revision), International Chamber of Commerce
Publication 500.
Very truly yours,
(Name of Issuing Bank)
By:_________________________________
EXHIBIT D
-2-
