EXHIBIT 10.39
MAGIC MOVIE STUDIOS OF VALENCIA, LTD.
PRODUCTION FACILITY AGREEMENT
THIS AGREEMENT is made and entered into the 7th day of June, 1994 by and
between MAGIC MOVIE STUDIOS OF VALENCIA, LTD., a California limited partnership
(hereinafter referred to as "MMSV"), and SABAN ENTERTAINMENT, INC. (hereinafter
referred to as "SABAN").
WITNESSETH:
WHEREAS, MMSV is the Owner/Operator of a multipurpose production facility,
located at 00000 Xxxxxx Xxxxxxx, Xxxxxxxx, Xxxxxxxxxx 00000, and WHEREAS SABAN
desires to use the following production facility package (hereinafter referred
to as "Package") for the purposes of motion picture production facility for such
purpose all on the terms and condition hereinafter set forth. The package shall
include:
FACILITIES
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Stage One (1) and Two (2) at the above references address including
approximately 11,700 square feet of office space.
PARKING
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SABAN ENTERTAINMENT may use all the parking spaces available on the lot at
MMSV with the exception of those designated for use by Dresser Rand, Inc. SABAN
may have all the spaces adjacent to Stages 1 and 2.
MMSV has acquired an additional parking lot directly across the street from
the studio which provides approximately 110 additional parking spaces. These
are for the exclusive use of SABAN Entertainment Productions.
EXCLUSIONS
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At this time, the above package does not include the following:
Stage Manager
Grip and Light
Pre-Light
Power for Air Conditioning/Heat
Catering
Clerical Staff
Dumpster
Cleaning Supplies
Security exclusive to SABAN Entertainment, Inc.
NOW, THEREFORE, in consideration of the mutual promise and agreements
contained herein, the parties agree as follows:
1. Use of Facility. MMSV grants to Saban the exclusive right to use the
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production facilities for the exclusive purpose of motion picture and television
production and related uses. During its use of MMSV property, Saban shall not
make or permit use of MMSV facilities for any unlawful purpose.
2. Lease Terms. SABAN shall lease the production facilities as
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previously listed under "FACILITIES" above for a period of six (6) months with
one (1) six (6) month optional extension, plus additional one(1) year optional
extension.
2.1 Payments. SABAN shall pay MMSV the amount of Twenty-five
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thousand dollars ($25,000.00) per month for the initial term beginning June 13,
1994. The payment schedule is as follows: $25,000.00 deposit payable upon
signing of this contract. (Receipt of $25,000.00 is hereby acknowledged on May,
1994). First month's rent of $25,000.00 payable on June 13, 1994, or will be
prorated should premises not be ready for occupancy by June 13th; and $25,000.00
per month on or before the 1st day of each month for the initial lease term.
Initial rent will be due and payable upon occupance of production office space
(or per item #18 of the Addendum as pertains to Stages.)
2.2 Extension Option. If the six (6) month option is exercised,
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commencing on December 1, 1994, the rental rate shall remain at $25,000.00 per
month for the full six (6) month term. In the event that Saban exercises the
one (1) year option commencing on June 1, 1995 the rental rate shall increase to
$26,250.000 for the full the full term of one (1) year lease Rent shall be due
and payable on the 1st day of each month prior to the rental period.
3. Maintenance and Repairs. MMSV shall deliver the facilities and
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equipment to SABAN in a good and usable condition, and MMSV shall be responsible
for all necessary and routine repairs, maintenance and upkeep of the MMSV
facilities and equipment in the event that the facilities are damaged by SABAN's
willful misconduct or gross negligent use of the facilities, SABAN shall assume
full financial responsibility except for MMSV's negligent or intentional acts
provided that such damage is caused by SABAN.
MMSV is responsible for all structural repairs, including without
limitation, roof repairs, electrical and plumbing during the term of this lease.
If SABAN informs MMSV of a maintenance problem, MMSV must make every
effort to repair this problem within 48 hours or SABAN will have the right to
make repairs, and deduct the actual costs of said repairs from the next month's
rent if SABAN elects do so. Should SABAN elect not to repair said problem and
should MMSV elect not to repair said problem, then SABAN shall not be held
liable nor responsible for any damages or deterioration which may result from
non-repair.
SABAN shall be entitled to terminate this lease and have the security
deposit refunded, less any damage that SABAN may be directly responsible for due
to gross negligence,
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or for any outstanding invoices due to MMSV from SABAN for items in Addendum
paragraphs 3,5,7,8 and/or 9 should the premises become uninhabitable for the
intended for period exceeding five (5) working days.
4. Insurance. SABAN and MMSV each agree to provide public comprehensive
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liability insurance, including bodily injury, personal injury and property
damages, in an initial amount of not less than one million dollars
($1,000,000.00) for any one occurrence. Said insurance policy must name the
other party as additional insured, and must provide at least ten (10) days
written notice of cancellation or material change. Each party shall provide the
a certificate of insurance evidencing this coverage.
5. Indemnification. MMSV shall indemnify, defend and hold SABAN harmless
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from and against any and all claims, demands, losses, costs, expenses,
obligation, liabilities, damages, recoveries, actions, judgements, suits and
reasonable attorneys fees and disbursements that SABAN shall incur or suffer,
including property damages, injury or death to persons which arise from or in
connection with MMSV's operation provided the foregoing arises out of MMSV's
negligent or intentional acts or omissions, including the negative acts or
omissions of any of MMSV's officers, directors, employees, agents or
representatives, or the breach or failure by MMSV to perform any covenant or
agreement contained herein, except for SABAN's gross negligence or intentional
acts. SABAN shall indemnify, defend and hold MMSV harmless from and against any
and all claims, demands, loss, costs, expenses, obligations, liabilities,
damages, recoveries, action, judgements, suits and reasonable attorneys fees and
disbursements that MMSV shall include or suffer, including property damage,
injury or death to person, which arise from or in connection with SABAN's
operation, use, control or leasing of MMSV, and SABAN's negligent or intentional
acts or omissions (including the acts or omission of any of SABAN's officers
directors, employees, agents or representatives), or the breach or failure by
SABAN to perform any covenant or agreement contained herein except for MMSV's
negligent or intentional acts. SABAN and MMSV shall notify each other in
writing of any claims-or contingent claims which may arise from SABAN's use of
MMSV's production facilities.
6. General. This Agreement shall not be modified or amended except by an
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instrument in writing signed by or on behalf of the parties hereto. This
Agreement shall be binding upon and inure to the benefit of the parties their
successors and assigns.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first written above.
MAGIC MOVIES STUDIOS OF VALENCIA, LTD.
a California limited partnership
By: /s/ Xxxx Xxxxxx 6/9/94
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XXXX XXXXXX, CHIEF OPERATING OFFICER
SABAN ENTERTAINMENT, INC.
By: /s/ Xxx Xxxxx
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ADDENDUM TO PRODUCTION FACILITY AGREEMENT
DATED JUNE 7, 1994 BY AND BETWEEN
MAGIC MOVIE STUDIOS OF VALENCIA, LTD.
("MMSV") AND SABAN ENTERTAINMENT, INC. ("SABAN")
1. MMSV shall fully build out the stages and production offices per
attached plans which have been signed by MMSV.
2. MMSV shall completely clean the carpet, replace where worn, soiled
(beyond ability to clean to an acceptable state), or missing. Also, MMSV must
carpet the back stairwell.
3. SABAN agrees to pay $400.00 per month for the rental of the telephone
system, plus 10% surcharge on all telephone toll charges. MMSV shall install
and maintain system at no charge to Saban throughout the term of the lease.
SABAN may install XXXXX line if they desire. MMSV agrees to install a telephone
system with the capabilities to provide up to forty-eight (48) lines and sixty
(60) telephones.
4. MMSV will not supply security to SABAN at no charge; however, SABAN
can provide their own security and are not obligated to take security services
from MMSV.
5. Power xxxx for Stages 1 (one) and 2 (two) will be presented directly
to SABAN for payment, plus a 10% surcharge. Payment must be made to MMSV within
ten (10) business days from submission to SABAN. MMSV agrees to put a maximum
charge of $270.00 per month as a surcharge.
6. MMSV shall be responsible for building insurance and real estate
taxes.
7. MMSV shall be responsible for a janitorial staff and SABAN will be
responsible for cleaning supplies. These supplies will be billed to SABAN at
cost. MMSV provides cleaning service daily Sunday through Friday evenings.
8. Saban shall pay the water xxxx and gas xxxx for Stages 1 (one) and 2
(two). These will be billed at cost and shall be paid within ten (10) business
days from of submission for payment.
9. Saban agrees to pay the sum of $120.00 per month for monitoring of
security and the telephone lines to Fire Department and Police Department.
10. Telephone jacks shall be installed in each office at the expense of
MMSV.
11. Cables for computer service will be installed at expense of MMSV.
12. New shower stalls stall be installed in the Mens and Womens restrooms
downstairs on Stage 1 (one).
13. MMSV shall install two (2) paint sinks in Stage I (one).
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14. All 11,7000 square feet of non-sage space shall have air conditioning
sufficient to cool all such space ducted into each room upstairs and, as the
eggcrate style ceiling is used downstairs, air conditioning must be properly
distributed as to sufficiently cool all offices. (35 BTUS/s.f. /1200 BTUS/ton).
15. All materials for new grid xxxx be provided and installed by MMSVC in
both Stages 1 (one) and 2 (two). The grid will conform to proper weight
distribution. MMSV will provide an engineering plan of the grid's maximum
weight and weigh distribution.
16. Both Stages 1 (one) and 2 (two), as well as all production areas will
fully with all fire and safety codes.
17. MMSV shall deliver Stages 1 (one) and 2 (two) to SABAN no later than
June 13, 1994 in a habitable condition, inclusive of all structural and roof
repairs. Should MMSV fail to deliver Stages 1 (one) and 2 (two) in such a
condition as aforementioned, the deposit will be refunded in full and the lease
terminated.
18. MMSV will require fourteen (14) days from the date we sign the lease
document to do the renovations per the attached plans. Saban may move into the
offices at any time during the construction. The rent will begin on the office
space commencing the date of completion. Rental of Stages 1 (one) and 2 (two)
will be prorated from the date of move in with a five (5) day grace period and
based on a rental of $12,500.00 per month until all office construction is
completed.
19. MMSV agrees to construct nine (9) dressing rooms and install mirrors
and mirror lights in all make-up areas.
20. MMSV agrees to provide proper lighting in fire lanes, as on Stage 3
(three).
21. MMSV agrees to provide washer and dryer connections in wardroom area.
22. MMSV agrees to replace all locks on all doors throughout the
facilities and will provide new individual and master keys.
AGREED TO AND ACCEPTED :
MAGIC MOVIE STUDIOS OF
VALENCIA, LTD.
by: /s/ Xxxx Xxxxxx
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XXXX XXXXXX
CHIEF OPERATING OFFICER
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SABAN ENTERTAINMENT, INC.
by: /s/ Xxx Xxxxx
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MAGIC MOVIE STUDIOS OF VALENCIA, LTD.
PRODUCTION FACILITY AGREEMENT
THIS AGREEMENT is made and entered into this 5th day of January, 1994, by
and Between MAGIC MOVIE STUDIOS OF VALENCIA, LTD., a California limited
partnership (hereinafter referred to as "MMSV"), and SABAN ENTERTAINMENT, INC.,
(hereinafter referred to as "SABAN").
WITNESSETH:
WHEREAS, MMSV is the Owner/Operator of a multi purpose production facility,
located at 00000 Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxx 00000, and WHEREAS, SABAN
desires to use the following production facility package (hereinafter referred
to as "Package") for the purpose of motion picture production and MMSV desires
to allow SABAN to use its motion picture production facility for such purpose
all on the terms and conditions hereinafter set forth. The package shall
include:
FACILITIES
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Stages Three (3), Four (4), and Five (5) at the above referenced address.
ON LOT PARKING
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MMSV hereby grants SARAN the right to TWO Hundred Eighty Eight (288)
parking spaces for the term of this Agreement at no additional charge.
EXCLUSIONS
----------
At this time, the above Package does not include the following:
Stage Manager
Grip and light
Pre-light
Power for Air Conditioning/Heat
Catering
Clerical Staff
Dumpster
Cleaning supplies
Security exclusive to Saban Entertainment Inc.
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein, the parties agree as follows:
1
1. Use of Facility. MMSV hereby grants to SABAN the exclusive right to
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use the production facility for the exclusive purpose of motion picture and
television production. During its use of MMSV property, SABAN shall not make or
permit use of MMSV facilities for any unlawful purpose.
2. Lease Terms. SABAN shall lease production facilities as previously
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listed under "Facilities" above for a period of twenty four (24) months, with
three (3) one (1) year extension options. The rental rate shall escalate five
percent (5%) for each year commencing January 20, 1995.
2.1 Payments. SABAN shall pay MMSV the amount of Thirty Five
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Thousand Dollars ($35,000) per month for the initial year of the term beginning
January 20, 1994. The Payment schedule is as follows: $35,000 Deposit, payable
upon signing of this contract, First months rent of $35,000, prorated, payable
upon signing of this contract, and $35,000 per month on or before the 1st day of
each month for the first 12 months. Commencing on January 20, 1995, the rental
rate shall increase to $36,750 per month, prorated, for the month of January and
shall continue at the rate of $36,750 per month for the second 12 months.
2.2 Extension Options. If first year option to extend is exercised,
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commencing on January 20, 1996, the rental rate shall increase to $38,587.50 for
the following 12 months. If second year option to extend is exercised,
commencing on January 20, 1997, the rental rate shall increase to $40,516.87 for
the following 12 months. If third year option to extend is exercised,
commencing on January 20, 1998, the rental rate shall increase to $42,542.72 for
the following 12 months. Rent shall be due and payable on the 1st day of each
month prior to the rental period beginning on the 10th day.
3. Maintenance and Repair. NMSV shall deliver the facilities and
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equipment to SABAN in a good and usable condition, and MMSV shall be responsible
for all necessary and routine repairs, maintenance and upkeep of the MMSV
facilities and equipment. In the event that the facilities are damaged by
SABAN'S willful misconduct or negligent use of the facilities, SABAN shall
assume full financial responsibility except for MMSV's negligent or intentional
acts provided that such damage is caused by SABAN.
4. Insurance. SABAN and MMSV each agree to provide public comprehensive
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liability insurance, including bodily injury, personal injury and property
damage in an initial amount of not less than One Million Dollars ($1,000,000.00)
for any one occurrence. Said insurance policy must name the other party as
additional insured, and must provide at least ten (10) days' written notice of
cancellation or material change. Each party shall provide the other with a
certificate of insurance evidencing this coverage.
5. Indemnification. MMSV shall indemnify, defend and hold SABAN harmless
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from and against any and all claims, demands, losses, costs, expenses,
obligations, liabilities, damages, recoveries, actions, judgments, suits and
reasonable attorneys fees and disbursements that SABAN shall incur or suffer,
including property damages, injury or death to persons which arise from or in
connection with MMSV'S operation provided that the foregoing arises out of
MMSV'S negligent or intentional acts or omissions, including the acts or
omissions of any
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MMSV's officers, directors, employees, agents or representatives, or the breach
or failure by MMSV to perform any covenant or agreement contained herein, except
for SABAN's negligent or intentional acts. SABAN shall indemnify, defend and
hold MMSV harmless from and against any and all claims, demands, losses, costs,
expenses, obligations, liabilities, damages, recoveries, actions, judgments,
suits, and reasonable attorneys fees and disbursements that MMSV shall incur or
suffer, including property damage, injury or death to persons, which arise from
or in connection with SABAN'S operation, use, control, or leasings of MMSV, and
SABAN's negligent or intentional acts or omissions (including the acts or
omissions of any of SABAN'S officers, directors, employees, agents, or
representatives), or the breach of or failure by SABAN to perform any covenant
or agreement contained herein except for MMSV'S negligent or intentional acts.
SARAN and MMSV shall notify each other of any claims or contingent claims which
my arise from SABAN'S use of MMSV'S production facilities.
6. General. This Agreement shall not be modified or amended except by an
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instrument in writing signed by or on behalf of the parties hereto. This
Agreement shall be binding upon and inure to the benefit of the parties, their
successors and assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first written above.
MAGIC MOVIE STUDIOS OF VALENCIA, LTD.
a California limited partnership
By: Xxxx Xxxxxxx Drive, Inc.
General Partner
By: /s/ Xxxxxx X. Xxxxxxxxx
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XXXXXX X. XXXXXXXX, PRESIDENT
SABAN ENTERTAINMENT INC.
By: /s/ Xxxxxxx Xxxxx
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Name: SR. VICE PRESIDENT
AUTHORIZED SIGNATORY
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ADDENDUM TO PRODUCTION FACILITY AGREEMENT
DATED JANUARY 5, 1994, BY AND BETWEEN
MAGIC MOVIE STUDIOS OF VALENCIA, LTD.
AND SABAN ENTERTAINMENT, INC.
1. MMSV agrees that, by January 20, 1994, it will complete, at MMSV's
sole expense, the following construction, renovations, and repairs in Stages 3,
4, and 5:
a. Construction of a wall dividing dressing area from stage area in
Stage 3.
b. Construction of two (2) showers in Stage 3 (one in the women's
restroom facilities, one in the men's restroom facilities).
c. Construction of two (2) showers in Stage 4 (one in the women's
restroom facilities, one in the men's restroom facilities).
d. Relocation of the sprinkler system in the office area in Stage 3,
construction of office ceilings for sound proofing and privacy (using so-
called "egg crate" style ceiling), and installation of air conditioning
ducts and vents into each office.
e. Construction of a dining area and fully-equipped kitchen facility
(including sink, stove, dishwasher, and refrigerator) to accommodate cast
and crew of approximately 100 persons per meal on the first floor of each
of Stages 3 and 4.
f. Construction of three (3) additional dressing rooms in Stage 4.
g. Installation of mirrors and mirror lights in all make-up areas.
h. Installation of washer and dryer connections in Stage 3 and Stage
4.
i. Repair and repainting of the cyclorama in Stage 5.
j. Install carpet on stairs in Stages 3, 4, and 5 in each instance in
which carpet is worn or missing.
k. Lower the grid on Stage 3 and provide an engineering plan of the
grid's maximum weight and weight distribution.
l. Replacement of all locks, including new individual keys and master
keys for all doors throughout the Facilities.
m. Installation of phone jacks in all offices and throughout all
stages.
n. Remove all temporary walls and construction in Stage 5.
o. Repair and paint office walls that are presently temporarily
patched;
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relocate any external wiring on walls to the inside of walls.
p. Install a paint sink on each sound stage for the Art Department's
use.
2. Rent shall be abated on a pro-rata basis for each day after January
20, 1994, that the construction, renovations, and repairs are not completed such
that Saban cannot fully use any portion of the Facilities for production and/or
offices as contemplated in the Production Facility Agreement.
3. Notwithstanding anything to the contrary set forth in the Production
Facility Agreement, the lease payment set forth in paragraph 2.1 thereof, shall
be abated until March 1, 1994, on a prorata basis for Stage 5.
4. MMSV shall provide, during the term of the Production Facility
Agreement:
a. Limited daytime-only security patrol of the exterior of the
Facilities.
b. Security monitoring equipment, for which Saban shall reimburse
MMSV for the actual cost of the monitoring service, which is presently $120
per month.
c. Air conditioning maintenance, including the installation of
additional air conditioning if the current air conditioning volume is
inadequate.
d. Regular, periodic cleaning of the Facilities, except that Saban
will reimburse MMSV on a monthly basis for the actual costs of cleaning
supplies used in the Facilities; MMSV believes, but does not warrant, that
the cost of cleaning supplies for the Facilities will be between $300 and
$350 per month.
e. A Toshiba telephone system with 274 free ports for Saban's use at
the Facilities, for which Saban will pay MMSV cost plus 10% surcharge.
There will be no cost for installation and MMSV will maintain the system
throughout the term of the Production Facility Agreement.
5. Saban will pay the cost of electrical power for the Facilities
directly. Saban will make such payment within ten (10) days after its receipt
of the power provider's statement.
6. Saban will have the right, at its sole expense, to affix signage of
its logo on the building housing Stages 3, 4, and 5, provided, however, that
Saban must conform to Newhall Land and Farm specifications for such signage.
Saban will maintain the signage so affixed at its sole expense.
7. All Santa Clarita-area properties owned and/or managed by MMSV or Xxxx
Xxxxxxx Drive, Inc., or any of its or their parent, subsidiaries, or related
companies or entities (collectively, "MMSV Properties") will be available
throughout the term of the Production Facility Agreement for Saban to use as
exterior shooting locations at no additional charge by MMSV to Saban.
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8. If MMSV and/or Xxxx Xxxxxxx Drive, Inc., or any of its or their parent,
subsidiaries, or related companies or entities not purchase the Lockheed
facility in Santa Clarita, California, within twelve (12) months after the
execution of the Production Facility Agreement, Saban shall have the right to
terminate the Production Facility Agreement by giving MMSV notice thereof at
least 30 days in advance of the effective date of such termination.
9. MMSV represents that no permits are required for shooting on MMSV
stages or MMSV Properties nor is there any requirement that a fire marshal or
police be present during shooting, unless required by future changes to local
laws, ordinances, and/or covenants.
10. The Option to Lease attached hereto is part of the Production Facility
Agreement and is a material part of the consideration given therein.
AGREED TO AND ACCEPTED THIS 7TH DAY OF JANUARY 1994.
MAGIC MOVIE STUDIOS
OF VALENCIA, LTD.
By: XXXX XXXXXXX DRIVE, INC.
GENERAL PARTNER
By: /s/ Xxxxxx X. Xxxxxxxxx
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XXXXXX X. XXXXXXXXX
PRESIDENT
SABAN ENTERTAINMENT, INC.
By: /s/ Xxxxxxx Xxxxx
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Its SR. VICE PRESIDENT
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OPTION TO LEASE
Magic Movie Studios of Valencia, Ltd. ("MNSV") agrees to give to Saban
Entertainment, Inc. a ninety (90) day first right of refusal to lease Stages 1
and 2 (presently occupied by CBS), and Stage 6 (presently occupied by Dresser
Rand Inc.), as per the following items:
1. Stages 1 and 2 plus all production offices at the rate of $32,000 per
month through December 31, 1994, and further option to lease for the following
three (3) years at a five percent (5%) escalation per year. The ninety (90) day
first right of refusal on Stages 1 and 2 will be given to Saban Entertainment
Inc. no later than April 30, 1994.
2. Stage 6 option to lease from August 1, 1994 through December 31, 1994
at the rate of $32,000 per month, and a further option to lease for the
following three (3) years at a five percent (5%) escalation per year. This
monthly rental rate is based on 28,000 square feet of stage space, plus
approximately 4,000 square feet of office space.
3. All ancillary charges on Xxxxxx 0, 0 xxx 0 xxxxx xx added to the terms
and conditions of Paragraphs 1 and 2 above pursuant to the Production Facility
Agreement between MMSV and Saban Entertainment:Inc.
AGREED TO AND ACCEPTED THIS ______ DAY OF JANUARY, 1994.
MAGIC MOVIE STUDIOS
OF VALENCIA, LTD.
BY: XXXX XXXXXXX DRIVE, INC.
GENERAL PARTNER
By: /s/ Xxxxxx X. Xxxxxxxxx
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XXXXXX X. XXXXXXXX, PRESIDENT
SABAN ENTERTAINMENT, INC.
By: /s/ Xxxxxxx Xxxxx
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AUTHORIZED SIGNATORY
By:_______________________________
AUTHORIZED SIGNATORY
Option to Lease
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