LICENSE AND REVENUE SHARING AGREEMENT
Exhibit
10.1
LICENSE AND REVENUE
SHARING AGREEMENT
This
License and Revenue Sharing Agreement (the “Agreement”) is entered into
this 15 day of June, 2010, by and among Advance Display Technologies,
Inc., a Colorado corporation, with its principal offices located at 00000
Xxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx, 00000, Xxxxxx Xxxxxx of America (the "Screen Owner"), and Times Square Tower Associates
LLC, a Delaware limited liability company, with its principal offices
located at c/o Boston Properties Limited Partnership, 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Xxxxxx Xxxxxx of America (the “Building Owner”).
WHEREAS, Screen Owner owns a
SkyNet™ flexible mesh video display screen, with accompanying hardware [Serial
Number Sky30-00005] (the “Screen”), the specifications
of which are attached hereto as Exhibit A, and various trademarks and
intellectual property rights appurtenant thereto;
WHEREAS, Screen Owner wishes
to exhibit the Screen, subject to the Building Owner’s approval of plans and
compliance with the Building Owner’s rules and regulations in connection with
the installation and construction thereof, on the building located at 0 Xxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Xxxxxx Xxxxxx of America (the “Building”) for the Term (as
defined below) of this Agreement;
WHEREAS, Screen Owner is
willing to provide a limited right of possession, but not ownership, of the
Screen to Building Owner on a temporary basis for the limited purpose set forth
herein; and
WHEREAS, Building Owner agrees
to provide access to and use of the Building by Screen Owner for the
installation, maintenance and use of the Screen, and for other purposes as more
fully set forth herein; and
WHEREAS, Screen Owner will sell,
or arrange for the sale of, Advertising (as defined below) on the Screen to
third parties during the Term of this Agreement;
WHEREAS, the Eligible Revenue
(as defined below) derived from the Advertising sold by Screen Owner will be
shared between Screen Owner and Building Owner as more fully set forth in this
Agreement;
NOW, THEREFORE, Screen Owner
and Building Owner (individually a “Party” and collectively the
“Parties”) agree as
follows:
AGREEMENT
In
consideration of the foregoing, and other good and valuable consideration, the
receipt and sufficiency of which the Parties acknowledge, the Parties agree as
follows:
ARTICLE
1
Possession of Screen; Rights
of Screen Owner
1.1 Building
Owner does hereby give and grant unto Screen Owner the sole and exclusive right,
title and license to place the Screen on the Building at the location and for
the Term of this Agreement, as may be necessary or convenient for Screen Owner
to carry out and implement the terms of this Agreement. The location
as aforesaid is described and shown on the attached Exhibit A-1. Upon
satisfaction of the conditions set forth herein, including, but not limited to,
compliance with Building Owner’s rules and regulations and Buildings Owner’s
approval of Screen Owner’s plans therefor, Screen Owner will install the Screen
on the Building, for the purpose of operation and maintenance thereof for the
display of Advertising as may be sold by Screen Owner, or its designee, from
time to time. Subject to requirements of law and conditions beyond
Building Owner’s control, Building Owner covenants and agrees that it will not
hide, cover, remove power from, or otherwise hinder or restrict the visibility
of the Screen on or at the Building at any time during the Term
hereof. The delivery of the Screen at the Building and the hanging of
the Screen thereon is the responsibility of the Screen Owner, which will bear
the direct cost thereof. Screen Owner shall also be responsible for
the routine maintenance of the Screen while it is installed at the Building and
for its removal from the Building at the end of the Term, and will bear the cost
thereof.
1.2 Intentionally
Deleted.
1.3 Subject
to the conditions precedent set forth in this Agreement, installation of the
Screen by the Screen Owner on the conditions set forth herein will be completed
by the latter of: (a) October 30, 2010, or (b) Sixteen (16) weeks from the date
that this Agreement is fully executed by the parties hereto (the latter of (a)
and (b), the “Outside Date”). In the event that the Screen is not
installed on or before the Outside Date, (which date shall be extended for up to
sixty (60) days on account of Force Majeure) then Building Owner shall have the
right, upon thirty (30) days prior written notice to Screen Owner, to terminate
this Agreement unless within such thirty (30) day period, Screen Owner completes
the installation of the Screen.
1.4 Screen
Owner shall be solely responsible for maintenance of the Screen and Building
Owner shall not perform any maintenance whatsoever thereon under any
circumstances (except in the case of emergency); provided, however, that
Building Owner shall be required to give prompt notice by phone call to Screen
Owner of any problems with the operation or performance of the Screen and to
follow the reasonable instructions of Screen Owner with respect to such
problems, and Screen Owner shall be entitled to cease all operation of the
Screen until such time as it can make appropriate repairs or
adjustments.
1.5 In
addition to any other rights of Screen Owner under this Agreement, Screen Owner
shall also have the right to access or enter the Building at any time during the
Term upon reasonable notice to Building Owner and accompanied by a
representative of Building Owner: (a) to repair, engineer or maintain the
Screen; or (b) to otherwise access and use the Screen or monitor its use,
operation and performance if and to the extent that Screen Owner believes it is
necessary or appropriate to ensure the fulfillment of the Parties’ respective
obligations under this Agreement, as determined by Screen Owner, in its
reasonable discretion.
ARTICLE
2
Manner of Use and
Installation
2.1 Screen
Owner is solely responsible for obtaining all applicable building, use and other
permits (the “Permits”)
necessary to allow for the installation, operation and maintenance of the Screen
on the Building at Screen Owner’s sole and exclusive cost and expense, unless
the Building Owner already has the necessary Permits, in which case Screen Owner
will reimburse Building Owner for the cost and expense of maintaining only those
Permits, or share of such Permits, necessary to allow for the installation,
operation and maintenance of the Screen. If Building Owner does not
have the necessary Permits, Building Owner will cooperate with Screen Owner to
obtain such Permits. If Building Owner has the necessary Permits,
Building Owner shall supply copies of all necessary Permits as may be required
by law to Screen Owner if and to the extent that they are requested by Screen
Owner. Screen Owner, at its sole cost and expense, shall comply with
all applicable laws and regulations related to the Screen.
2.2 Building
Owner is solely responsible for providing electric power for the installation,
operation and maintenance of the Screen at the Building at Building Owner’s sole
and exclusive cost and expense. It is expressly understood and agreed
by Building Owner that it will need to provide 480 volt, 3 phase electrical
power service panel to operate the Screen.
2.3 (a) Screen
Owner shall not perform any work at the Building without Building Owner’s
approval. Screen Owner shall submit to Building Owner a detailed
description of the equipment to be installed, a detailed description of the
proposed work and a schedule in connection therewith (the “Proposed Work
Plan").
(b) Each
Proposed Work Plan shall be subject to Building Owner’s written approval, which
approval shall not be unreasonably withheld, conditioned or
delayed. The Proposed Work Plan, once approved by the Building Owner,
shall be known as the “Approved Work Plan”. Minor modifications to an
Approved Work Plan shall require only Building Owner’s approval stamp or
initials indicating acceptance of the changes marked on the Approved Work
Plan.
(c) Screen
Owner shall ensure that no mechanics or other liens are filed against the
Building. In performing the installation work, removal work and any
other work in the Building, all contractors and subcontractors shall be subject
to Building Owner’s prior approval and such contractors and subcontractors shall
not unreasonably disrupt or interfere with the use and operation of the Building
by Building Owner, its tenants, and its and their employees and
invitees.
2.4 Building
Owner shall not permit any persons to operate or access the Screen unless and
until the Building Owner has received Screen Owner’s prior written permission to
operate or access the Screen.
2.5 Screen
Owner acknowledges that access to the Screen will be through the premises
demised to O’Melveny & Xxxxx LLP (“OMM”) and that (i) Screen Owner shall be
required to give reasonable prior notice to OMM of its intent to enter into
OMM’s premises, (ii) such access must be at reasonable times from time to time,
(iii) Screen Owner must perform all work in a manner so as to minimize
interference with OMM’s operations and to minimize any damage that might result
to the appearance or function of the affected areas of OMM’s premises and (iv)
Screen Owner must promptly repair any damage caused during such entry, including
any repair or replacement required to any finishes in OMM’s premises as a result
of Screen Owner’s entry therein.
ARTICLE
3
Ownership of Screen and
Rights of Screen Owner to Building
3.1 Building
Owner specifically agrees to and recognizes: (a) the validity of, and the sole
right, title and interest of Screen Owner in, and as the sole owner of, the
Screen; and (b) that Screen Owner, in such capacity, controls the exclusive
right to use of the Screen, subject to the terms of this
Agreement. Subject to the provisions of Section 9.2 hereof, Building
Owner specifically waives and disclaims any right, title, interest or ownership
in the Screen other than the license created herein. Building Owner
shall not at any time claim that this Agreement or any matters undertaken
pursuant hereto has created for Building Owner any right, title, goodwill or
interest in the Screen. Building Owner promises not to contest
ownership or rights of Screen Owner to the Screen under any circumstances unless
the Screen is not removed by Screen Owner within ninety (90) days following the
expiration or earlier termination of this Agreement.
3.2 Building
Owner shall at all times indicate that the Screen is owned by Screen Owner and
is used with Screen Owner’s permission and at Screen Owner’s direction and
control. Building Owner will comply with any reasonable requests and
restrictions that Screen Owner may make with respect to notices of ownership, in
any applicable language, concerning the Screen. Screen Owner agrees
to display advertising of Building Owner’s property management business on the
Screen when such display will not conflict with, reduce or otherwise negatively
impact any revenue generating Advertising which Screen Owner may desire to
display on the Screen. Screen Owner may also use the Screen, when such display
will not conflict with, reduce or otherwise negatively impact any revenue
generating Advertising, for purposes of promoting SkyNet™ and its versatility
and for any other related marketing activity related to sale or use of the
Screen, including any kind of reasonable branding of the Screen with Screen
Owner’s name and/or interest in the Screen as Screen Owner may desire from time
to time during any use of or reference to the Screen, and further including,
without limitation, a “Powered by ADTI Media” logo (or such other logo as Screen
Owner may reasonably select from time to time) in a regularly recurring corner
shadow on the content displayed on the Screen or as a discrete intermittent
message or both.
ARTICLE
4
Building Owner’s Other
Obligations
4.1 From
time to time, and provided there is then no Advertising on the Screen, Building
Owner may request that Screen Owner post messages or content on the Screen
pertaining directly to Building Owner or Boston Properties, Inc.
4.2 (a) Prior
to the installation of the Screen on the Building by Screen Owner, Screen Owner
shall file a “Fixture filing,” as such term is defined under N.Y. Uniform
Commercial Code Law § 9-102(a)(40) (2010), and any other filing(s) as may be
necessary under New York’s uniform commercial code or real property law, to
ensure that Screen Owner’s security interest in the Screen continues and has
priority over a conflicting interest of an encumbrancer or owner or the Building
or the real property upon which the Building exists, subject to Screen Owner’s
removal obligations hereunder. Building Owner acknowledges Screen
Owner’s continuing unrestricted ownership, control and right to remove the
Screen.
(b) When
this Agreement has been terminated, Screen Owner hereby authorizes Building
Owner to file on behalf of Screen Owner any UCC termination statements, releases
of fixture filings, lien releases, discharges of security interests, and other
similar discharge or release documents, and, if applicable, in recordable form,
and, upon request of Building Owner, Screen Owner shall sign and deliver any
such UCC termination statements, releases of fixture filings, lien releases,
discharges of security interests, and other similar discharge or release
documents as are reasonably necessary to release, as of record, all of Screen
Owner’s notices of security interests and liens previously filed by Screen Owner
with respect to this Agreement, and any such UCC termination statements,
releases of fixture filings, lien releases, discharges of security interests,
and other similar discharge or release documents filed by Building Owner,
whether or not signed by Screen Owner shall be deemed authorized by Screen Owner
under section 9-509(d) of the UCC and under otherwise applicable
law.
ARTICLE
5
Duties of Parties with
Respect to Advertising
5.1 During
the Term of this Agreement, Screen Owner shall diligently contact entities
involved in the sale of Advertising in the out of home advertising market for
the possible placement of Advertising on the Screen during the Term
hereof. Screen Owner, in order to fulfill its obligations under this
Section 5.1, will use its best efforts to engage such a third-party
advertiser(s) (the “Advertiser”) for the purposes
set forth in the preceding sentence. If an Advertiser is engaged by
Screen Owner, Screen Owner and Building Owner will share in Screen Owner’s share
of Eligible Revenue (as defined below) that Screen Owner actually receives under
any agreement between any such Advertiser and Screen Owner as described
below. The terms of any such agreement between any Advertiser and
Screen Owner will be as set forth in a mutually acceptable agreement executed
between Screen Owner and Advertiser (and approved by Building Owner) and nothing
contained in this Agreement shall require Screen Owner to accede to any demand
or to enter into any such agreement except as it may deem appropriate in the
reasonable exercise of its discretion. Screen Owner shall not, to the
detriment of Building Owner or the Building, enter into agreements for
advertising on screens located at other buildings and Screen Owner shall use
best efforts to ensure that the Screen is continuously
“active” (i.e. the Screen shall contain Advertising or
other content 24 hours a day, 7 days a week). If Building Owner
enters into any agreement with any Advertiser for the placement of Advertising
on the Screen, then any revenues actually received by Building Owner pursuant to
any such agreement shall constitute Eligible Revenue hereunder and be subject to
the terms of Article 6 below.
5.2 The
Advertising on the Screen shall not contain content which: (a) infringes on
proprietary rights of others; (b) is obscene or pornographic; (c) is defamatory,
libelous, or slanderous; (d) advocates any politically partisan, religious or
other publicly controversial, non-commercial viewpoint or agenda; (e) advertises
tobacco products or businesses or which relates to sexually-oriented products or
businesses; (f) advertises Kohl’s or X.X. Xxxxx; or (g) advertises alcohol
products or businesses where such advertisement is not otherwise in compliance
with the standards set forth on Exhibit B attached hereto. Building
Owner may reasonably request that Screen Owner remove selected content that is
of particular offense to Building Owner or a tenant within the Building or to
Target (or any other advertiser that advertises on Target’s sign locations) and
Screen Owner shall promptly remove such content. Screen Owner shall
not advertise persons or entities primarily engaged in the business of owning
and/or managing office properties, whether directly, indirectly or through
affiliates, anywhere in the world and/or any advertising for any entity that
directly promotes the sale, acquisition or leasing of commercial real
estate. In addition to the foregoing, Screen Owner shall not display
any advertisements at the Building for a direct competitor of a “Major Tenant”
of the Building, unless and until Screen Owner obtains the written consent of
the Building Owner, which may be withheld in Building Owner’s sole
discretion. Upon Building Owner’s issuance of the written consent to
Screen Owner under this Section 5.2, Screen Owner shall not be liable for any
claims, losses or damage, whether direct, indirect or consequential, asserted
against or sustained by Building Owner, its employees, officers, directors,
agents or contractors arising from or relating to any issuance of such written
consent. “Major Tenant” means any tenant of the Building leasing one
full floor or more.
ARTICLE
6
Revenue
Sharing
6.1 All
monies actually received by Screen Owner or Building Owner from the sale (either
directly by Screen Owner or Building Owner or by way of sale by an Advertiser)
of any form of advertising which is displayed or to be displayed on the Screen,
however arising, and which is sold by Screen Owner, Building Owner or Advertiser
(the “Advertising”) is
covered by this Agreement (“Revenue”). The term
“Eligible Revenue” as used herein shall mean all Revenue actually received
during the Term hereof or thereafter, to the extent such Revenue is attributable
to any Advertising placed or displayed upon the Screen during the Term hereof,
after deducting therefrom (i) commissions to Screen Owner for Advertising sold
directly by Screen Owner (as opposed to by way of sale by an Advertiser), which
commission shall in no event exceed 15% and (ii) commercially reasonable
commissions for Advertising sold by a third party Advertiser.
6.2 Screen
Owner and Building Owner shall receive the following portion of Eligible Revenue
(to the extent such Eligible Revenue exists) hereunder:
(a)
From and after the date that the Screen is installed and first becomes fully
operational during the Initial Term (as hereinafter defined):
(1) The
first Eligible Revenue shall be paid to the Building Owner in the
amount of $5,000 times the number of months remaining in the Initial Term (any
unpaid amounts to Building Owner shall accrue and earn simple interest at the
rate of 8% per annum);
(2)
Screen Owner shall receive the next $100,000.00 of Eligible Revenue during the
Initial Term; and
(3)
Thereafter all additional Eligible Revenue during the Initial Term shall be
shared equally between the Parties; and
(b)
On an annual basis commencing on the first day after the Initial
Term:
(1) The
first $60,000 of Eligible Revenue shall be paid to the Building Owner, at the
rate of $5,000.00 per month (any unpaid amounts to Building Owner shall accrue
and earn simple interest at the rate of 8% per annum);
(2)
Screen Owner shall receive the next $200,000.00 of Eligible Revenue;
and
(3)
Thereafter all additional Eligible Revenue on an annual basis shall be shared
equally between the Parties.
For
purposes of this Section 6.2, the term “Initial Term” shall mean the period of
time between the execution date of this Agreement and June 30, 2011, and the
term “annual basis” shall mean each of the following 12 month periods: (a) the
12 month period between the July 1, 2011 and June 30, 2012, inclusive; (b) the
12 month period between July 1, 2012 and June 30, 2013, inclusive; (c) the 12
month period between July 1, 2013, and June 30, 2014, inclusive; and (d) each 12
month period thereafter during any continuation of this Agreement beyond June
30, 2014. Any Eligible Revenue that is to be paid to the Building
Owner hereunder during the Initial Term shall be prorated on a daily basis for
any partial month during such Initial Term.
6.3 (a) All
Eligible Revenue which is to be paid hereunder shall be paid by the initial
recipient thereof to the other Party within 30 days of its receipt thereof by
such initial recipient.
(b) Either
Party shall be entitled, upon prior notice to the other Party, to direct the
withholding from distribution such funds as it determines appropriate as
determined in the reasonable exercise of its discretion for set asides for
possible claims or disputes arising with any Advertiser or third
party.
6.4 Each
Party shall bear responsibility for all taxes and withholdings applicable to its
portion of Eligible Revenue.
6.5 Screen
Owner shall maintain such customary controls over accounting and financial
transactions relating to the Advertising as is necessary to minimize the risk of
error, omission, or theft or fraudulent activity by employees of Screen
Owner. Screen Owner shall prepare and deliver to Building Owner
monthly sales information as reasonably requested by Building
Owner. Building Owner may perform any audit or investigation relating
to the Screen and Screen Owner shall deliver to Building Owner all relevant
documentation and support relating to such audit or investigation. If
Building Owner’s appointees discover deficiencies in internal controls or errors
in bookkeeping, Screen Owner shall correct the same within the shortest possible
time and shall inform Building Owner in writing of the action taken to effect
such correction.
6.6 In
the event Screen Owner enters into a single agreement for the placement of
Advertising on screens at multiple locations (i.e. - for locations in addition
to the Building), Screen Owner agrees that any revenues generated from such
Advertising shall be equitably allocated to the Screen.
ARTICLE
7
Liability and
Insurance
7.1 Screen
Owner shall not be liable for any indirect or consequential claims, losses or
damages, asserted against or sustained by Building Owner, its employees,
officers, directors, agents or contractors arising from or relating to any use
of the Screen unless such claims, losses or damages are as a result of the gross
negligence or wilful misconduct of Screen Owner.
7.2 Screen
Owner shall indemnify, defend and hold harmless Building Owner from and against
all loss, cost, damage, expense, fines, claims, liabilities, and suits
(including reasonable attorneys’ fees and reasonable costs and expenses of
defending against the same) (collectively “Loss”) resulting from or in
connection with (1) any negligence, or reckless or intentional misconduct by
Screen Owner, its representatives, agents, contractors, and/or subcontractors,
and its and their respective employees, agents, and representatives (except if
and to the extent such Loss results from the negligence or reckless or
intentional misconduct of the Building Owner), (2) any claim, dispute, action or
cause of action concerning copyright, trademark, patent or other intellectual
property in connection with the Screen, and/or the use or operation thereof, (3)
any work performed in or at the Building by Screen Owner, its contractors or
subcontractors, or its or their employees (including, without limitation,
Building Contractors), and/or (4) any claim, dispute, action or cause of action
concerning the content of the Advertising.
7.3 Building
Owner shall indemnify, defend and hold harmless Screen Owner from and against
all Loss resulting from or in connection with any negligence, or reckless or
intentional misconduct of Building Owner, its representatives, agents,
contractors (other than Screen Owner), and/or subcontractors (other than Screen
Owner’s subcontractors), and its and their respective employees, agents, and
representatives (except if and to the extent such Loss results from the
negligence or reckless or intentional misconduct of Screen Owner).
7.4 (a) During
the Term, Screen Owner shall maintain at its sole cost and expense, in an amount
equal to full replacement cost, fire and extended coverage insurance on an “all
risk” basis on the Screen (including builder’s risk coverage during the
performance of any work, it being agreed that Screen Owner and its contractors
shall also be required to maintain such builder’s risk
coverage). Coverage shall be written with an insurance company that
has an A.M. Best rating of A/X or better and is permitted to provide such
insurance in the state where the Building is located.
(b) During
the Term, Screen Owner shall maintain, at its sole cost and expense, at least
the following insurance on an occurrence basis, at its expense, (i) Workers
Compensation insurance in accordance with the laws of the state of New York;
(ii) Employer's liability insurance in an amount not less than $1,000,000; (iii)
Commercial General Liability for bodily injury liability and property damage
liability with limits of $20,000,000 each occurrence, including contractual
liability coverage; and (iv) unless included in the commercial general liability
coverage required to be maintained by Screen Owner, personal injury and
advertising injury insurance in an amount not less than $20,000,000 per
occurrence.
(c) Screen
Owner shall also (i) name Building Owner and the other parties set forth on
Exhibit B attached hereto (or such other parties as are in privity of estate
with Building Owner as may from time to time be designated in a written notice
by Building Owner to Screen Owner) as additional insureds to Screen Owner’s
Commercial General Liability (including the coverage required under Section
7.4(b)(iv) above) and excess liability coverage policies, (ii) require each
insurer to endeavor to give at least thirty (30) days prior written notice to
Building Owner of any policy cancellation, and (iii) ensure that each insurance
company has an A.M. Best Rating of A/X or better and each is permitted under
applicable law to provide such insurance in the state of New
York. Screen Owner shall provide certificates of insurance to
Building Owner, at Building Owner’s request, evidencing the foregoing for each
policy year during the term of this Agreement.
(d) During
the performance of any work or alterations, including but not limited to, the
installation and removal of the Screen, Screen Owner and its contractors and
sub-contractors shall maintain, at its and their sole cost and expense, such
other insurance as Building Owner may reasonably require based upon adverse,
material unexpected developments encountered during the installation or
alteration process which exposes Building Owner to substantial additional risks
that were not known, and which could not have been known after diligent inquiry,
by Building Owner.
(e) Building
Owner and Screen Owner waive (and shall cause their respective insurance
carriers to waive) any and all rights of recovery and claims against the other
for any loss or damage that may occur to Building Owner or Screen Owner or any
party claiming by, through or under Building Owner or Screen Owner, as the case
may be, with respect to the Building or the Screen, any addition or improvements
thereto, or any contents therein, by reason of fire, the elements or any other
cause or casualty, regardless of cause or origin, including the negligence of
Building Owner or Screen Owner, to the extent such loss or damage is covered by,
and proceeds received under, any policies of insurance maintained by the waiving
party (or which would have been covered had the waiving party maintained the
insurance required to be maintained by it pursuant to this
Agreement).
7.5 In
the event of a major casualty to the Building or if the Screen is damaged as a
result of a casualty, either Party shall have the right to terminate this
Agreement upon ten (10) days notice to the other Party.
7.6 THE
LIABILITY OF BUILDING OWNER FOR BUILDING OWNER’S OBLIGATIONS UNDER THIS
AGREEMENT SHALL BE LIMITED TO BUILDING OWNER’S INTEREST FROM TIME TO TIME IN THE
BUILDING AND SCREEN OWNER AND ANY PERSON OR ENTITY CLAIMING BY OR THROUGH SCREEN
OWNER SHALL NOT LOOK TO ANY OTHER PROPERTY OR ASSETS OF BUILDING OWNER OR THE
PROPERTY OR ASSETS OF ANY PERSON OR ENTITY OTHER THAN BUILDING OWNER IN SEEKING
EITHER TO ENFORCE BUILDING OWNER’S OBLIGATIONS UNDER THIS AGREEMENT OR TO
SATISFY A JUDGMENT FOR BUILDING OWNER’S FAILURE TO PERFORM SUCH OBLIGATIONS; AND
NO OTHER PERSON OR ENTITY SHALL BE LIABLE FOR THE PERFORMANCE OF BUILDING
OWNER’S OBLIGATIONS UNDER THIS AGREEMENT.
ARTICLE
8
Display
Responsibilities
8.1 For
any Advertising which Building Owner desires to place upon the Screen, Building
Owner shall make all Advertising available to Screen Owner in such form and at
such time as shall allow Screen Owner adequate time to display the Advertising
in accordance with the terms of the agreement applicable
thereto. Building Owner shall also supply Screen Owner with any
agreement relating to the display of such Advertising promptly upon execution of
the same by Building Owner and Advertiser.
ARTICLE
9
Term and
Termination
9.1 This
Agreement shall commence on the date hereof.
9.2 The
term of this Agreement shall be to and through June 30, 2014, (the “Term”), subject to Section 9.4
below. Upon the expiration of the Agreement, the Screen shall be
removed from the Building by Screen Owner and any damage caused to the Building
by such removal shall be repaired by Screen Owner in accordance with the
provisions of Section 2.3 hereof. Any failure by Screen Owner to
fully comply with the foregoing removal obligation shall be deemed an
abandonment of the Screen, in which case Building Owner shall have the right to
remove the Screen at Screen Owner’s sole cost and expense. This Agreement
shall continue on a month to month basis after the Term unless either Party
gives ten (10) days advance notice to the other that it desires to terminate the
Agreement.
9.3 Upon
termination or expiration of this Agreement, all rights of Screen Owner to sell
or place Advertising on the Screen shall immediately cease and the Parties shall
do any other acts reasonably required by Screen Owner in connection with such
termination or expiration. Screen Owner shall remain liable for the
proportionate share of Eligible Revenue payments attributable to Building Owner
related to activities performed under this Agreement prior to
termination.
9.4 Screen
Owner or Building Owner may terminate this Agreement at any time upon the giving
of 30 days notice if at the end of any 12 month period ending on June 30 of any
year during the Term of this Agreement after the Initial Term the minimum annual
“Eligible Revenue” of $260,000 is not achieved. In addition, if
Building Owner sells the Building as provided in Section 14.1(e) then Building
Owner shall have the right, upon not less than ninety (90) days prior written
notice to Screen Owner, to terminate this Agreement.
ARTICLE
10
Screen Owner’s
Representations and Warranties
Screen
Owner represents and warrants that, as of the effective date of this
Agreement:
(a) Screen
Owner is a corporation duly organized, validly existing and in good standing
under the laws of the State of Colorado and is qualified to carry on its
business in such other jurisdictions as may be necessary.
(b) Screen
Owner has all requisite corporate power and authority to carry on its business
as presently conducted, to enter into this Agreement, and to perform its
obligations hereunder. The execution and delivery of this Agreement
does not, and the performance of Screen Owner’s obligations hereunder will not
violate, or be in conflict with, any material provision of Screen Owner’s
governing documents, or any material provision of any agreement or instrument to
which Screen Owner is a party or by which it is bound, or, to Screen Owner’s
Knowledge, any judgment, decree, order, statute, rule or regulation applicable
to Screen Owner. (The term “Knowledge”, as used in this Agreement,
shall mean the actual knowledge of the officers of each of the Parties after
reasonable inquiry.)
(c) This
Agreement constitutes Screen Owner’s legal, valid and binding obligation,
enforceable in accordance with its terms, subject, however, to the effects of
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
other laws for the protection of creditors, as well as to general principles of
equity, regardless whether such enforceability is considered in a proceeding in
equity or at law.
ARTICLE
11
Building Owner’s
Representations and Warranties
Building
Owner represents and warrants that, as of the effective date of this
Agreement:
(a) Building
Owner is a Delaware limited liability company, duly organized, validly existing
and in good standing under the laws of Delaware and is duly qualified to carry
on its business in such other jurisdictions as may be necessary.
(b) Building
Owner has all requisite power and authority to carry on its business as
presently conducted. The execution and delivery of this Agreement
does not, and the fulfillment of and compliance with the terms and conditions
hereof will not violate, or be in conflict with, any material provision of
Building Owner’s governing documents, or any material provision of any agreement
or instrument to which Building Owner is a party or by which it is bound or, to
any judgment, decree, order, statute, rule or regulation applicable to Building
Owner.
(c) This
Agreement constitutes Building Owner’s legal, valid and binding obligation,
enforceable in accordance with its terms, subject, however, to the effects of
bankruptcy, insolvency, reorganization, moratorium and other laws for the
protection of creditors, as well as to general principles of equity, regardless
whether such enforceability is considered in a proceeding in equity or at
law.
(d) There
is no action, suit, proceeding, claim or investigation by any person, entity,
administrative agency or governmental body pending or, threatened against it
before any governmental authority that impedes or is likely to impede its
ability to consummate the transactions contemplated by this Agreement and to
assume the liabilities to be assumed by it under this Agreement.
ARTICLE
12
Disputes; Governing
Law
12.1 Any
dispute which may arise in connection with this Agreement, and in particular,
any dispute concerning its validity, construction, performance, or termination,
regardless of whether it arises before or after the expiration of this
Agreement, shall be submitted to binding arbitration in New York, New York,
United States of America, under the Commercial Rules (Expedited Procedures) of
the American Arbitration Association, except that, in order to control costs, no
depositions will be permitted and written discovery will be limited to the
maximum extent practicable under the circumstances. This Agreement shall be
governed by the laws of the State of New York.
ARTICLE
13
Events of
Breach
13.1 Each
of the following shall be deemed to be an “Event of Breach” by Screen Owner
under this Agreement: (i) Screen Owner shall fail to pay, in whole or in part,
any amount due hereunder, and such failure shall continue for a period of five
(5) business days after written notice of such breach from Building Owner is
received by Screen Owner; (ii) if, at any time (x) the Screen is unreadable as a
result of an equipment malfunction or does not otherwise perform to industry
standards or (y) Screen Owner fails to permanently remove offensive content as
required pursuant to Section 5.2 hereof, and Screen Owner fails to cure within
48 hours after notice from Building Owner; or (iii) Screen Owner shall fail to
comply with any other provision of this Agreement (other than as described in
clause (i) or (ii) above), and such failure shall continue for a period of ten
(10) days after Screen Owner receives written notice of such breach describing
such breach in reasonable detail from Building Owner (provided, however, if such
failure cannot reasonably be cured within such ten (10) day period, an Event of
Breach shall be deemed to have occurred only if Screen Owner shall fail to
commence to cure such condition within such ten (10) day period and thereafter
fails to diligently pursue the same to completion).
13.2 Each
of the following shall be deemed to be an “Event of Breach” by Building Owner
under this Agreement: (i) Building Owner fails to comply with any provision of
this Agreement and said failure continues for a period of ten (10) days after
Building Owner receives written notice describing the breach in reasonable
detail (provided that if such failure cannot reasonably be cured within such ten
(10) days, an Event of Breach shall be deemed to have occurred only if Building
Owner fails to commence to cure such breach within ten (10) days after receiving
notice of such breach from Screen Owner, and thereafter fails to diligently
pursue the same to completion), or (ii) the Building, during the Term of this
Agreement, is no longer used as a commercial office building.
13.3 Upon
an Event of Breach the non-breaching party may (i) upon five (5) days written
notice to the breaching party terminate this Agreement, and/or (ii) subject to
any other provisions in this Agreement, avail itself of any other remedies
available to it at law or in equity.
ARTICLE
14
Miscellaneous
14.1 (a) This
Agreement is the entire agreement between the Parties with respect to its
subject matter, and supersedes all promises and representations made by any
Party concerning the obligations to be performed under this Agreement, and the
terms applicable thereto.
(b) This
Agreement may not be supplemented, amended or modified, except in writing by a
duly authorized representative all of the Parties.
(c) The
failure of any Party to insist, in any one or more instances upon the
performance of any term, condition, or covenant of this Agreement shall not be
construed as a waiver or relinquishment of such Party’s right to future
performance of such term, condition or covenant, and the other Party’s or
Parties’ obligations in respect of such future performance shall continue in
full force and effect.
(d) Screen
Owner shall have the unrestricted right to transfer, assign or pledge
(“Transfer”) all of its right, title and interest in and to the Screen and/or
the entity comprising the Screen Owner, together with all of its rights, duties
and obligations under this Agreement, to Xxxxxxxx X. XxXxxxxx, XxXxxxxx Holdings
Three, LLC, ADTI Media, LLC, or any of their respective affiliates or
subsidiaries (collectively, “Permitted Assignees”) without the consent of
Building Owner so long as such Permitted Assignee delivers to Building Owner a
written instrument unconditionally assuming and agreeing to be bound by all of
the terms and conditions of this Agreement applicable to Screen Owner at the
time of the Transfer. Notwithstanding any such transfer, assignment or
pledge to a Permitted Assignee, however, Screen Owner shall not be released from
any liabilities arising under this Agreement in existence at the time of the
Transfer. Screen Owner shall not Transfer, directly or indirectly, all or
any portion of its respective rights or delegate any portion of its respective
rights or delegate all or any portion of its duties hereunder to any person or
entity that is not a Permitted Assignee without the prior written consent of
Building Owner, which consent may be withheld in Building Owner’s sole
discretion. Any attempted assignment or transfer of custody contrary
to the terms of this limitation shall be void and of no force or effect ab initio.
(e) Building
Owner shall have the unrestricted right to transfer, assign or pledge, in whole
or in part and/or directly or indirectly, its right, title and interest in and
to the Building and/or the entity comprising the Building Owner without the
consent of Screen Owner; provided, however, that in the event of an assignment,
transfer or pledge in connection with a sale, lease or other disposition of the
Building (including by foreclosure or transfer in lieu thereof), the transferee
of the Building delivers to Screen Owner a written instrument unconditionally
assuming and agreeing to be bound by all of the terms and conditions of this
Agreement applicable to Building Owner at the time of the assignment or other
transfer, then Building Owner shall be released from any and all liability
thereafter accruing and provided, further that at any time after the first year
of the Term of this Agreement, Building Owner shall have the right to terminate
this Agreement in connection with such sale, lease or other disposition of the
Building.
(f) The
Parties agree to reasonably cooperate and assist in the exercise of each other’s
rights under this Agreement.
(g) Nothing
in this Agreement shall constitute or be deemed to constitute or to create an
agency or similar relationship between the Parties.
(h) The
headings of the Articles and sections of this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning of this
Agreement.
(i) This
Agreement may be executed by the Parties in any number of counterparts, each of
which shall together constitute a single instrument. Telecopied or
emailed scans of original signatures shall be considered binding.
14.2 NOTWITHSTANDING
ANYTHING TO THE CONTRARY IN THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, THE
REFERENCE TO THE SCREEN’S STANDARDS IN ARTICLE 13, SCREEN OWNER MAKES NO
WARRANTY OR REPRESENTATION, EXPRESS, IMPLIED, STATUTORY, COMMON LAW OR
OTHERWISE, INCLUDING ANY WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, WITH
RESPECT TO THE SCREEN AND BUILDING OWNER HEREBY EXPRESSLY DISCLAIMS, WAIVES AND
RELEASES SCREEN OWNER FOR ANY LIABILITY RELATED THERETO.
14.3 The
Parties acknowledge that both Screen Owner and Building Owner have an interest
in ensuring that, while the Screen is installed at the Building, it always
operates and performs in a manner that positively enhances the value and
reputation of Screen Owner’s business of manufacturing and selling similar
screens and the value of the Building. Accordingly, if at any time,
(i) in Screen Owner’s judgment and in its absolute discretion, the
operation, performance or use of the Screen on the Building is not
positively enhancing Screen Owner’s business, then Screen Owner may forthwith
terminate this Agreement and (ii) in Building Owner’s judgment and in its
absolute discretion, the operation, performance or use of the Screen is
adversely affecting the value or operations of the Building, then Building Owner
may forthwith terminate this Agreement.
14.4 All
information disclosed by one Party to the other shall be deemed confidential and
proprietary and shall be held in strict confidence by the other save and except
to the extent disclosure to other professionals is required for the purposes of
providing advice with respect to the transactions herein contemplated or as
required by law or reporting requirements. In the event that the
transactions herein contemplated do not proceed, each Party shall return to the
other all documents and data in whatever format received from the other or
subsequently converted.
14.5 No
Party shall be liable or responsible to the other Party, nor be deemed to have
defaulted under or breached any provision set forth in this Agreement, for any
failure or delay in fulfilling or performing any term of this Agreement, when
and to the extent such failure or delay is caused by or results from acts beyond
the affected Party’s reasonable control, including, without limitation: (a) acts
of God; (b) flood, fire, explosion, war, invasion, riot or other civil unrest;
(c) actions, embargoes or blockades in effect on or after the date of this
Agreement; (d) national or regional emergency; (e) compliance with any law or
governmental order, rule, regulation or direction, or any action taken by a
governmental or public authority; (f) shortage of adequate power or
telecommunications or transportation facilities; or (g) any other event which is
beyond the reasonable control of such Party. Each of the foregoing a
“Force Majeure Event.” The Party suffering a Force Majeure Event
shall give notice to the other Party, stating the period of time the occurrence
is expected to continue and shall use diligent efforts to end the failure or
delay and ensure the effects of such Force Majeure Event are minimized;
provided, however, that Screen Owner has the right to terminate this Agreement
if the Force Majeure Event continues for thirty (30) days or more by providing
written notice thereof to Building Owner, whereupon this Agreement shall
forthwith terminate. During the Force Majeure Event, the non-affected
Party may similarly suspend its performance obligations until such time as the
affected Party resumes performance.
14.6 Except
as otherwise expressly provided, all notices and communications required or
permitted under this Agreement shall be in writing and addressed as set forth
below. Any communication or delivery hereunder shall be deemed to
have been duly made and the receiving Party charged with notice (i) if
personally delivered, when received, (ii) if sent by telecopy or facsimile
transmission, when received, (iii) if mailed, five (5) business days after
mailing, certified mail, return receipt requested, or (iv) if sent by overnight
courier, one day after sending. All notices shall be addressed as
follows:
If to
Screen Owner:
Advance
Display Technologies, Inc.
00000
Xxxx Xxxxx
Xxxxxxxx,
XX 00000
Attn: Xxx
Xxxxxxxxxx
Telephone:
(000) 000-0000
Fax:
(000) 000-0000
With a
copy to:
Xxxxx
Xxxxxx & Xxxxxx LLP
0000
00xx
Xxxxxx, Xxxxx 000
Xxxxxx,
XX 00000
Attn: S.
Xxx Xxxxx, Jr.
Telephone:
(000) 000-0000
Fax: (000)
000-0000
If to
Building Owner:
Times
Square Tower Associates LLC
c/o
Boston Properties Limited Partnership.
000
Xxxxxxxxx Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attn.:
Xxxxxx X. Xxxxxx
Telephone:
(000) 000-0000
Fax:
(000) 000-0000
With a
copy to:
Times
Square Tower Associates LLC
c/o
Boston Properties Limited Partnership
000
Xxxxxxxxx Xxxxxx
Xxx Xxxx,
Xxx Xxxx 00000
Attn.: Xxxxxxx
X. Xxxxx, Esq.
Telephone:
(000) 000-0000
Fax:
(000) 000-0000
Any Party
may, by written notice so delivered to the other Party, change the address or
individual to which delivery shall thereafter be made.
14.7 This
Agreement shall be subordinate to any ground lease, mortgage or deed of trust
presently existing or hereafter arising upon the Building or to any renewals,
modifications, consolidations, refinancing, and extensions
thereof. At Building Owner’s request, from time to time, Screen Owner
will execute and deliver to Building Owner reasonable instruments confirming
such subordination.
14.8 As
an inducement to Building Owner to enter into this Agreement, Screen Owner
hereby represents and warrants that: (i) Screen Owner is not, nor is it owned or
controlled directly or indirectly by any person, group, entity or nation named
on any list issued by the Office of Foreign Assets Control of the United States
Department of Treasury (“OFAC”) pursuant to Executive Order 13224 or any similar
list or any law, order, rule or regulation or any Executive Order of the
President of the United States as a terrorist, “Specially Designated National
and Blocked Person” or other banned or blocked person (any such person, group,
entity or nation being hereinafter referred to as a “Prohibited Person”); (ii)
Screen Owner is not (nor is it owned or controlled directly or indirectly by any
person, group, entity or nation which is) acting directly or indirectly for or
on behalf of any Prohibited Person; and (iii) from and after the effective date
of the above-referenced Executive Order, Screen Owner (and any person, group or
entity which Screen Owner controls, directly or indirectly) has not knowingly
conducted nor will knowingly conduct business nor has knowingly engaged nor will
knowingly engage in any transaction or dealing with any Prohibited Person in
violation of the U.S. Patriot Act or any OFAC rule or regulation, including
without limitation, any assignment of this Agreement or the making or receiving
of any contribution of funds, goods or services to or for the benefit of any
Prohibited Person in violation of the U.S. Patriot Act or any OFAC rule or
regulation. In connection with the foregoing, it is expressly
understood and agreed that (x) any breach by Screen Owner hereunder shall be
covered by the indemnity provisions of this Agreement, and (y) the
representations and warranties contained in this subsection shall be continuing
in nature and shall survive the expiration or earlier termination of this
Agreement.
14.9 Nothing
herein contained shall create a landlord or tenant relationship between the
Parties.
14.10 Screen
Owner warrants and represents that Screen Owner has not dealt with any broker in
connection with the consummation of this Agreement; and in the event any claim
is made against Building Owner relative to dealings by Screen Owner with
brokers, Screen Owner shall defend the claim against Building Owner with counsel
of Screen Owner's selection first approved by Building Owner (which approval
will not be unreasonably withheld) and save harmless and indemnify Building
Owner on account of loss, cost or damage which may arise by reason of such
claim.
14.11 Screen Owner will provide a
security deposit in the amount of $50,000 (“Security Deposit”) to Building
Owner. The Security Deposit shall be in such form as Screen Owner
shall determine in the exercise of its reasonable judgment, including by way of
example and not limitation, in cash, by letter of credit or such other form as
will provide Building Owner with readily available funds in the event that
Building Owner shall have the right to access and use the Security Deposit as
hereinbelow described. The sole and exclusive purposes and uses of
the Security Deposit by Building Owner shall be (i) to apply such sums to any
payments due to Building Owner pursuant to Article 6 hereunder and (ii) to
defray the direct costs incurred by Building Owner in (x) removing the Screen
from the Building if, and only if, Screen Owner fails to remove the Screen from
the Building within ninety (90) days from the date of termination of this
Agreement and/or (y) repairing any damage caused by Screen Owner in removing the
Screen.
IN WITNESS WHEREOF the Parties
have executed this Agreement effective as of the date first above
written.
Advance Display Technologies,
Inc.
|
By:
|
/s/ Xxx Xxxxxxxxxx
|
|
|
Xxx
Xxxxxxxxxx, Executive Vice President of Manufacturing & Chief
Operations
Officer
|
||
Times
Square Tower Associates LLC
|
By:
|
/s/
|
|
|
Its:
Vice President
|
||
