MANHATTAN BEACH STUDIOS LEASE
Exhibit 10.1
MANHATTAN BEACH STUDIOS
This Lease (“Lease”), dated as of September 22, 2008, is made by Landlord and Tenant named
below, who agree as follows:
PART I
GENERALLY DEFINED TERMS
GENERALLY DEFINED TERMS
The following words when used in this Lease with initial capital letters have the respective
meanings set forth in this Part I. Additional words used in this Lease with initial capital
letters are defined in particular provisions of this Lease.
| 1. | “Affiliate”: A person controlled or wholly owned (directly or indirectly) by, or controlling
(directly or indirectly) or wholly owning (directly or indirectly), or under common control
or ownership with another person specified in this Lease; a person resulting from the merger,
consolidation or other reorganization of another person specified in this Lease, or any
person that acquires substantially all of the assets or ownership interests of another person
specified in this Lease as a going concern. As used in this Lease, the word “person” includes
any natural person or persons, a partnership, corporation, limited liability company, or any
other form of business or legal association or entity. |
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| 2. | “Base Rent”: Subject to subparagraph (d) below: |
| (a) | During the first twelve (12) months of the Initial Term, the monthly Base Rent
payable under this Lease shall equal the following: |
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Corporate Office Space: $44,750 per month. |
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Production Office Space: $118,610 per month. |
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Sound Stages: In accordance with Exhibit “B” attached hereto,
$52,800 per month for Stage 21; $52,800 per month for Stage 22; $65,000 per month
for Stage 25; $52,800 for a Stage to be determined by the parties, but in any
event, to be an 18,000 square foot, 35 feet to gridline stage; and $52,800 for a
Stage to be determined by the parties, but in any event, to be an 18,000 square
foot, 35 feet to gridline stage; provided, that in any event Landlord shall use its
good faith efforts to provide such additional two (2) Sound Stages as physically
close as reasonably possible to Stages 21, 22, and 25. |
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Mill Space: If Tenant elects to lease the Mill Space as provided in Part
II, Section 1 below, $15,000 per month in accordance with Exhibit “B”
attached hereto. |
| (b) | On each anniversary of the Commencement Date during the Lease Term (including
all Option Terms), the monthly Base Rent payable for each of the Corporate Office
Space, the Production Office Space, the Sound Stages and the Mill Space shall be
increased by 4% over the monthly Base Rent for the
preceding year. |
| (c) | Notwithstanding anything herein which may be construed to the contrary, with
respect to the Corporate Office Space, Tenant shall be entitled to one (1) month’s
abatement of Base Rent for the first full calendar month in each lease year during the
Initial Term and any Option Term. In addition, notwithstanding anything herein which
may be construed to the contrary, with respect to the Production Office Space, Tenant
shall be entitled to a rent abatement equal to 100% of the Base Rent payable by Tenant
for the Production Office Space for two months each year during the Lease Term
(including any Option Term), and with respect to the Sound Stages, Tenant shall be
entitled to a rent abatement equal to 100% of the Base Rent payable by Tenant for the
Sound Stages for 2.35 months each year during the Term (including any Option Term).
Such two months and 2.35 months, as applicable, for each year shall be specified by
Tenant by written notice to Landlord delivered no later than 30 days before the months
in which Tenant proposes the rent abatement to apply. |
| 3. | “Building”: The structure or structures containing all, or any portion of, the Leased
Premises. |
| 4. | “Commencement Date”: The Lease Term shall commence upon the date Landlord tenders delivery
of possession of the entire Leased Premises to Tenant with “Tenant Improvements,” as defined
in the Work Letter attached hereto as Exhibit “C,” “Substantially Completed,” as
defined in Part III, Section 1.5 below. |
| 5. | “Expiration Date”: The day before the third anniversary of the Commencement Date plus however
many days are left in the final calendar month of the Lease Term, subject to any Options to
extend and to any provisions of this Lease for termination of the Lease Term prior to its
expiration. |
| 6. | “Initial Term”: The three year period starting on the Commencement Date plus any additional
days required for the Expiration Date to occur on the last day of a calendar month. |
| 7. | “Landlord”: CRP MB Studios, L.L.C., a Delaware limited liability company or any successor in
interest, but only for the time that any such person owns the Project in accordance with and
subject to the provisions of Part III, Article 25. |
| 8. | “Laws”: Any constitution, statute, ordinance, regulation, building or fire code, rule,
judicial decision, administrative order, or other requirement of any federal, state, county,
city or governmental agency and of any other public or quasi-public authority having
jurisdiction over the Project, now in force or hereafter enacted, promulgated or issued, and
the direction of any public officer pursuant to any of the foregoing, whether now or
hereafter in force. |
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| 9. | “Leased Premises”: The portion or portions of the Project leased to Tenant pursuant to this
Lease designated for the exclusive use of Tenant. Unless and until Tenant exercises its
option for the Mill Space as provided in Part II, Section 1 of this Lease, the Leased
Premises shall consist of the (i) “Sound Stages,” (ii) the “Corporate Office
Space,” and (iii) the “Production Office Space.” The “Sound Stages” shall consist of Xxxxx
00, Xxxxx 00, Xxxxx 25, and two (2) additional Stages as provided in Part I, Section 2(a)
above, all as more particularly depicted on Exhibit “A” attached hereto. The
“Corporate Office Space” shall consist of approximately 13,811 rentable square feet of
space, commonly referred to as Suite 120, located on the first floor of that certain
building whose mailing address is 0000 Xxxxxxxxx Xxxxxx, Xxxxx Xxxxxx Xxxxxxxx, Xxxxxxxxx
Xxxxx, XX 00000 (the “Corporate Office Building”), and as more particularly depicted on
Exhibit “A” attached hereto. The Production Office Space shall consist of the
following: (a) approximately 15,792 rentable square feet commonly referred to as Suites
200 and 300 in Production Building 1A, as more particularly depicted on Exhibit “A”
attached hereto (“Floor 1A Space”), (b) approximately 15,792 rentable square feet commonly
referred to as Suites 200 and 300 of Production Building 4B, as more particularly depicted
on Exhibit “A” attached hereto (“Floor Space 4B”), and (c) approximately 15,792
rentable square feet commonly referred to as Suites 200 and 300 in Production Building 6A,
as more particularly depicted on Exhibit “A” attached hereto (the “Floor 6A
Space”). In addition to the foregoing Leased Premises, concurrently with Landlord’s
construction of the Corporate Office Space, Landlord shall also, at its sole cost and
expense, construct, and install all required equipment into, an approximately 1,739 square
foot screening room (the “Screening Room”) immediately adjacent, and connected by a private
entrance, to the Corporate Office Space in accordance with the plans and specifications
attached to and made a part of the Work Letter attached to this Lease as Exhibit
“C.” The Screening Room shall not be considered a portion of the Leased Premises;
provided, that Tenant shall have throughout the Lease Term a continuing first-priority
right to use the Screening Room. Tenant shall pay to Landlord on a per-use basis a
reasonable use fee to be mutually determined by Landlord and Tenant (but not to exceed in
any event the fair market rate charged by comparable studio operators for a comparable
screening room facility) for Tenant’s use of the Screening Room. |
| 10. | “Lease Term”: The Initial Term as extended by the Options, if any, properly exercised by
Tenant, subject to any provisions of this Lease for termination of the Lease Term prior to its
expiration by the passage of time. |
| 11. | “Project”: Approximately 22.5 acres of real property in Manhattan Beach, commonly referred to
as the “Raleigh Studios Manhattan Beach,” located in Manhattan Beach, California. |
| 12. | “Rent”: Base Rent, Additional Rent and all other amounts of any kind payable by Tenant to
Landlord pursuant to the provisions of this Lease. |
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| 13. | “Security Deposit” shall mean Two Hundred Fifty Thousand Dollars ($250,000.00). |
| 14. | “Sound Stage”: A room located at the Project which is built to certain sound proofing and
other standards that make it suitable, and which is intended to be used primarily, for the
filming, recording or other production of motion pictures, television programs and other audio
visual works. Certain office and production support space is designated for use with a
particular Sound Stage. The word “Sound Stage” does not include any Common Areas or any
related office and production support space, even though designated for use solely in
connection with a particular Sound Stage. |
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| 15. | “Tenant”: MVL Productions LLC, a Delaware limited liability company, or any Assignee
permitted by Part III, Section 17.2(b). |
| 16. | “Work Letter”: The agreement attached to this Lease as Exhibit “C” governing the
construction, completion and delivery of the Leased Premises. |
PART II
SPECIFIC LEASE PROVISIONS
SPECIFIC LEASE PROVISIONS
1. Option
to Rent Mill Space.
(a) Mill
Space Option and Exercise. Subject to the provisions of this Lease,
Landlord grants to Tenant the option (“Mill Space Option”) to lease that certain more particularly
depicted on Exhibit “A” attached hereto and designated as “Mill” (the “Mill Space”).
Tenant may exercise the Mill Space Option only by delivering written notice of such exercise
(“Exercise Notice”) to Landlord on or before February 1, 2009, which Exercise Notice shall specify
the time period for which Tenant desires to lease the Mill Space. If Tenant timely delivers the
Exercise Notice and the Mill Space will be available during the period of time Tenant has
requested, Tenant shall lease the Mill Space on a month-to-month basis, and shall have the right
to terminate its lease of the Mill Space at any time during the Term upon thirty (30) days’ prior
written notice to Landlord. During any period of time that Tenant is not leasing the Mill Space,
Tenant shall not have any right to use the Mill Space and Landlord may license or lease the use of
the Mill Space to a third party.
(b) Terms
and Conditions Applicable to the Mill Space. If Tenant timely and validly
exercises the Mill Space Option, then beginning on the actual date Landlord delivers possession of
the Mill Space to Tenant and continuing for the entire Lease Term (unless earlier terminated
pursuant to Part II, Subparagraph 1(a) above): (a) the Mill Space shall be part of the Leased
Premises under this Lease, so that the term “Leased Premises” in this Lease shall include the Mill
Space, and (b) the building containing the Mill Space shall constitute a “Building” under this
Lease. Except as specified in this Part II, Article 1 or in any other provision of this Lease,
Tenant’s lease of the Mill Space shall be subject to all of the terms and conditions of this Lease
and shall expire concurrently with the expiration or earlier termination of this Lease, unless
earlier terminated by Tenant pursuant to Part II, Subparagraph 1(a) above).
(c) Base
Rent for Mill Space. If Tenant elects to lease the Mill Space, the initial
monthly Base Rent for the Mill Space shall be as set forth in Part I, Section 2(a) and shall be
increased as provided in Part I, Section 2(b).
2. Tenant’s Right of First Lease of Production Trailer Space. If any space (other than
parking spaces) becomes available at the Project sufficient to legally and appropriately permit
Tenant to maintain a transportation, wardrobe, or other related production trailer upon such space,
then, subject to Tenant’s obtaining any required governmental approvals or permits, Tenant shall
have an on-going, first right to lease such space for the remainder of the Term (including any
Option Terms) at no additional cost to Tenant. If such space becomes available, prior to leasing
such space to any other party, Landlord shall notify Tenant of the availability of such space in
writing (“Landlord’s Trailer Space Notice”). Tenant shall have 5 days from the date Tenant receives
Landlord’s Trailer Space Notice to notify Landlord that Tenant elects to so lease the trailer
space, at no additional cost to Tenant.
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If Tenant does not timely deliver such election notice or declines to exercise its right to lease such space, Landlord
thereafter shall have the right to lease such space to a third party. If any such space again
becomes available for lease during the Term, Tenant shall again have the ongoing, first right to
lease this space pursuant to this Part II, Section 2 and Landlord shall not lease such space to a
third party without again complying with the requirements of this Section 2. Notwithstanding
anything herein to the contrary, the parties hereby acknowledge and agree that upon the termination
of that certain lease between Landlord and Xxxxx X. Xxxxxx Productions, Inc. (“Xxxxxx”) regarding
certain sound stages and other space within the Project, Tenant shall be entitled to use, at no
cost to Tenant, the space within the Project (which are not parking spaces) on which those certain
production trailers located within the Project are currently being used by Xxxxxx; provided,
however, that if Tenant is required by the City of Manhattan Beach or any other governmental
authority to relocate any of its trailers from such current location to space within the Project
otherwise allocated to parking spaces, then any parking spaces which may thereafter be utilized by
Tenant shall be counted in determining the number of parking spaces Tenant is then using pursuant
to Part III, Article 8.
3. Intentionally Omitted.
4. Addresses for Notices.
| (a) | Landlord’s address: |
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CRP MB Studios, L.L.C. c/o The Carlyle Group Attention: Xxxxxxx Xxxxxx 00000 Xxxxx Xxxxxx Xxxxxxxxx Xxxxx 000 Xxx Xxxxxxx XX, 00000 |
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With a copy to: |
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CRB MB Studios, L.L.C. c/o Property Manager 0000 Xxxxxxxxx Xxxxxx Xxxxxxxxx Xxxxx, XX 00000 |
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| (b) | Tenant’s address: |
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Prior to the Commencement Date: Marvel Studios, Inc. 0000 Xxxxxxx Xxxxxxxxx, Xxxxx 000 Xxxxxxx Xxxxx, XX 00000 Attention: Xxxxx X’Xxxxxxxx; and |
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Following the Commencement Date: Marvel Studios, Inc., at the Corporate Office Space, and at all times, |
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With a copy to: |
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Marvel Entertainment, Inc. 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000 |
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Attention: Xxxx Xxxxxxxx, Executive Vice President, Office of the Chief Executive and General Counsel |
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PART III
GENERAL LEASE PROVISIONS
ARTICLE 1
LEASE OF PREMISES
LEASE OF PREMISES
1.1
Lease of Premises. Landlord leases the Leased Premises to Tenant, and Tenant
leases the Leased Premises from Landlord, on all of the terms and conditions of this Lease. Tenant
will have 24 hour-a-day, seven day-a-week access to the Building, the Leased Premises, and the
parking areas and other Common Areas which service the same.
1.2 Intentionally Omitted.
1.3
Landlord’s Reservation of Rights. The following rights are reserved to Landlord:
(a) The right to all of the Project, except for the space within the
Leased Premises;
(b) The right to change any or all elements of the Project except for the space within the
Leased Premises and except as otherwise provided in this Lease, so long as such changes do not
change the nature of the Project from studio and related uses;
(c) The right to grant easements, licenses, rights, and dedications that Landlord deems
necessary or desirable, and to record parcel maps and restrictions, so long as these easements,
rights, dedications, maps, and restrictions do not unreasonably interfere with Tenant’s use of the
Leased Premises; and
(d) All other rights reserved to Landlord by provisions of this Lease, or by operation of law
unless expressly waived herein.
1.4 Common Areas. Tenant shall have non-exclusive rights to use the Common Areas in accordance with Article 7 of this Part III.
1.5 Delivery of Leased Premises.
(a) Delivery Requirements. Landlord, at its cost, shall have “Substantially
Completed” (as hereinafter defined) the Tenant Improvements, as defined and described in
Exhibit “C” to this Lease. Landlord shall deliver possession of the Leased Premises to
Tenant (subject to Landlord’s reserved rights hereunder and Landlord’s right to complete the punch
list items, if any) as follows:
A. Production Office Space.
(i) Production Office Space Building 6A-2nd and 3rd Floors—October 20,
2008 (with access to the 2nd Floor made available to Tenant, free of charge, one week
prior to such date for Tenant’s move-in).
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(ii) Production Office Space Building 1A-2nd and 3rd Floors—January 15,
2009 (with access to Premises made available to Tenant, free of charge, one week prior to such date
for Tenant’s move-in).
(iii) Production Office Space Building 4B-2nd and 3rd Floors—January 15,
2009 (with access to Premises made available to Tenant free of charge, one week prior to such date,
for Tenant’s move-in).
B. Sound Stages.
(i) Two 18,000-square foot Sound Stages as selected by Landlord — December 15, 2008 per
Schedules D and E of Exhibit “B.”
(ii) Stages 21, 22 and 25 — January 15, 2009 per Schedules A, B and C of Exhibit “B.”
C. Corporate Office Space. January 15, 2009, subject to Tenant Delays and Force
Majeure Delays (as defined in the Work Letter).
If possession of Sound Stages 21, 22, and 25 and the corresponding amount of Production Office
Space is not delivered by Landlord in the condition required hereunder by the corresponding dates
set forth above, then Tenant shall have the right, exercisable in Tenant’s sole discretion, to
terminate the Lease. If the Lease is not terminated as set forth in the immediately preceding
sentence, and if possession of the entire Leased Premises is not delivered to Tenant on or before
March 15, 2009 (other than due to Tenant Delays), then Tenant shall have an additional right to
terminate the entire Lease, in which event Landlord shall be responsible to Tenant for all of its
out of pocket expenses incurred in connection with Tenant’s negotiation of this Lease, together
with any occupancy costs actually incurred by Tenant in connection with Tenant’s leasing of such
replacement premises for a period of time equal to the Initial Term in order for Tenant to
undertake those production activities contemplated under this Lease in excess of the Rent payable
by Tenant hereunder for the Initial Term. In addition to the completion of Tenant Improvements,
on the date Landlord delivers possession of the Leased Premises to Tenant, to Landlord’s knowledge,
the Leased Premises and the Common Areas shall be in material compliance with all applicable Laws
and the Leased Premises and all building systems (including, without limitation, electrical,
plumbing and HVAC) servicing the Leased Premises shall be in good working order and condition.
(b) Definition of Substantial Completion. For purposes of this Lease, the term
“Substantially Complete” (and its grammatical variations, such as Substantial Completion), when
used with reference to Tenant Improvements, will mean that Tenant Improvements has been completed,
except for minor “punch list” items, the completion of which minor “punch list” items will not
interfere with Tenant’s occupancy and use of the Premises and can be completed within forty-five
(45) days; provided, however, Landlord shall complete all of such punch list items within such
45-day period.
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ARTICLE 2
USE OF LEASED PREMISES
USE OF LEASED PREMISES
2.1 Permitted Use. Tenant shall use the Leased Premises solely for motion
picture, television and other audio video production and associated offices, corporate and
administrative offices, and all uses related thereto. Tenant shall not use or permit the Leased
Premises to be used for any other purpose without Landlord’s prior written consent, which consent
shall not be unreasonably withheld.
2.2 Rules and Regulations. To the extent they do not conflict with any
express right of Tenant set forth in this Lease, Tenant shall comply with the reasonable rules
and regulations adopted by Landlord from time to time for the safety, care and cleanliness of the
Leased Premises and the Project or for the preservation of good order (“Rules and Regulations”).
Landlord shall act reasonably and in good faith in enforcing the Rules and Regulations.
2.3
Additional Restrictions On Use. In addition to complying with other
provisions of this Lease concerning the use of the Leased Premises:
(a) Tenant shall not do or permit any act to be done that could cause
damage to any part of the Leased Premises or the Project, except to the extent reasonably
necessary for the installation of Trade Fixtures (as defined below), equipment, machinery, or the
construction of Alterations as permitted under this Lease and provided that Tenant repairs any such
damage prior to the end of the Lease Term. Tenant shall not commit any waste in or around the
Project and shall keep the Leased Premises in a safe, neat, clean, attractive and orderly
condition, free of any nuisances or hazards or risks to person or property.
(b) Tenant shall not operate or permit the operation of any equipment
or machinery in the Leased Premises, or any other area of the Project, that could:
(i) materially damage the Leased Premises or any other area of the Project;
(ii) impair the efficient operation of the Leased Premises’ heating, ventilation, or
air conditioning, or other Building or Project systems;
(iii) block or otherwise impede the operation of the Leased Premises’ sprinkler
system;
(iv) overload floors, structural, mechanical or electrical systems or physical
components of the Leased Premises or otherwise place an undue strain on any of these items;
or
(v) damage, overload, or corrode the Leased Premises’ or the
Project’s sanitary sewer system.
(c) Tenant shall not install or attach anything in the Leased Premises
in excess of the load limits established for the Leased Premises. Tenant shall contain and
dispose of all dust, fumes, or waste products generated by Tenant’s use of the Leased Premises so
as to avoid (i) unreasonable fire or health hazards, (ii) damage to the Project, (iii) the violation of any Law, or (iv) the creation of any nuisance.
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(d) Tenant shall not change the exterior of any Building or install any equipment, machinery,
or antennas on or make any penetrations of the exterior or roof of the Building, without Landlord’s
prior written consent in each instance which shall not be unreasonably withheld.
(e) Tenant shall use the Leased Premises in compliance with all Laws, recorded covenants and
restrictions, and requirements of any fire insurance underwriters or rating bureaus, now or later
in effect. Without limiting the generality of the foregoing, this Lease is and shall be at all
times subject and subordinate to: (i) the Development Agreement entered into by and between the
City of Manhattan Beach and TRW Inc., dated March 6, 1984 and recorded on April 17, 1984, as
Document No. 84462424 (“Development Agreement”), which Development Agreement is to be assigned to
Landlord pursuant to the Assignment and Assumption Agreement between TRW Inc. and Landlord, upon
Landlord’s purchase of the land, and (ii) the Easement Agreement to be entered into by and between
TRW, Inc., Parstem Realty Company, Inc. and Landlord, upon Landlord’s purchase of the land
(“Easement Agreement”); copies of which have been delivered to and reviewed by Tenant prior to
signature and delivery of this Lease. Tenant shall cooperate reasonably with Landlord to comply
with Landlord’s obligations under the Development Agreement and the Easement Agreement, and Tenant
shall use reasonable efforts to assist Landlord in connection with its efforts to maintain cordial
and cooperative relationships with the City of Manhattan Beach, neighbors of the Project and
neighborhood organizations.
(f) “NR-Rated Activity” shall mean Tenant’s engaging in any activity permitted under Section
2.1 of this Lease with respect to a theatrical motion picture, television mini-series, television
series, so-called MOW or other motion picture project of any kind whatsoever that shall be accorded
an “NR” rating or that would most likely be accorded an “NR” rating if rated or that shall
purposely be left unrated because of its explicit depiction of sex or violence. “Permitted NR-Rated
Activity” shall mean Tenant’s engaging in any NR-Rated Activity in respect of any such project
either produced by, produced for distribution by or actually distributed by a so-called “Major” or
“Mini-Major” theatrical motion picture studio/distributor, a U.S. television network (i.e., ABC,
CBS, NBC, Fox, or the CW network), or a major cable network (other than the Playboy Channel or the
like) that is accorded such a rating or is left unrated for such reason (e.g., projects like-“Last
Tango In Paris,” “Xxxxxx and Xxxxx” or “Heavy Traffic” but not projects like “Deep Throat”). Tenant
hereby represents and warrants that, at all times prior to the execution of the Lease and at all
times from and after the execution of the Lease until its expiration or earlier termination,
NR-Rated Activity other than Permitted NR-Rated Activity has been and will remain an insignificant
part of Tenant’s business. Tenant may engage in Permitted NR-Rated Activity throughout the term of
the Lease, as the same may be extended from time to time. Tenant acknowledges that a breach of the
foregoing representation and warranty would be a material breach of the Lease. This Section 2.3(f)
shall be further subject to such changes as Landlord may reasonably consent to following any change
in the present system for rating motion pictures.
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ARTICLE 3
LEASE TERM
LEASE TERM
3.1 Initial Lease Term. The provisions of this Lease shall be effective as of the
date of this Lease. Subject to the provisions of the Work Letter, Tenant’s right to occupy the
Leased Premises, and Tenant’s obligation to pay Rent for the Leased Premises, commences on
the Commencement Date and shall expire on the Expiration Date, unless this Lease is sooner
terminated as provided in this Lease. After the Commencement Date, upon Landlord’s or Tenant’s
request, Landlord and Tenant shall promptly sign, acknowledge and deliver to each other a
memorandum confirming the Commencement Date substantially in the form of Exhibit “D”
attached hereto. Notwithstanding anything herein to the contrary, if at any time during the Lease
Term (including any Option Terms), Tenant’s production activities within the Leased Premises are
suspended as a result of any Force Majeure Delay, including without limitation, an industry-wide
strike or other similar labor-related work stoppage, then provided that Tenant notifies Landlord
promptly following Tenant’s discovery of such Force Majeure Delay, and subject to any
then-existing written rights of any third parties, Tenant shall have the right, exercisable within
thirty (30) days following the cessation of such work stoppage, to extend the Lease Term by a
period of time equal to the number of days that Tenant’s production activities were suspended as a
result of such work stoppage, in which event the end of the then-current Term (or Option Term if
applicable) shall be extended accordingly.
3.2 Options to Extend Term. Tenant shall have four consecutive options
(individually an “Option” and together the “Options”), each to extend the term of this
Lease for all or any portion of the Leased Premises for one year (individually an “Option Term”
and together the “Option Terms”). Notwithstanding anything herein to the contrary, however,
(i) if Tenant exercises an Option for any or all of the Sound Stages, then Tenant shall also
exercise an Option for a corresponding amount of Production Office Space associated with such
Sound Stage(s), and (ii) if Tenant elects not to exercise an Option for any or all of the Sound
Stages, then Tenant shall not be permitted to exercise an Option for any corresponding
Production Office Space associated with such Sound Stage(s); provided, however, that,
notwithstanding anything in Part III, Articles 26 and 27 to the contrary, in any event Tenant
shall be permitted to remain in such Production Office Space at the same rent payable as of the
last month of the Term for up to sixty (60) days following the expiration of the Term of such
corresponding Sound Stage(s) in order to enable Tenant to complete any post-production
activities associated with Tenant’s production activities conducted within such Sound Stage(s).
All of the terms and conditions in this Lease shall apply to the Option Terms, except this
Article 3.
3.3 Exercise of Options. To exercise each Option, Tenant must give Landlord
written notice of exercise of the Option by registered mail, overnight courier or personal
delivery with proof of receipt (“Option Notice”) no later than 6 months prior to the expiration
of the Initial Term or the immediately preceding Option Term in the case of the Corporate Office
Space, and 60 days prior to the expiration of the Initial Term or the immediately preceding
Option Term in the case of the Sound Stages or Production Office Space. If, however, as of
Landlord’s receipt of the Option Notice, Tenant is in default under this Lease beyond any
applicable cure period, the Option Notice shall be totally ineffective. If after giving the
Option Notice and prior to commencement of the applicable Option Term, there is occurring an
Event of Default (as defined in Part III, Article 19 below) under this Lease, this Lease shall,
in Landlord’s discretion, terminate as of the expiration of the Initial Term or the immediately
preceding Option Term. The rights contained in this Section 3 are personal to the Tenant named
in Part I above and any permitted assignee, and may only be exercised by such parties.
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ARTICLE 4
BASE RENT
BASE RENT
4.1 Base Rent. Except as provided in the Work Letter, commencing on the respective
date(s) that Landlord delivers possession of the applicable portions of the Leased Premises
pursuant to Part III, Section 1.5(a), and continuing thereafter on the first day of each month
until the end of the Lease Term, Tenant shall pay to Landlord: (a) with respect to the delivered
portions of the Corporate Office Space, the Production Office Space, the Sound Stages, and, if
leased, the Mill Space, Base Rent in the pro rata amounts set forth in Part I, Section 2 for such
delivered portions of the Leased Premises, in advance, and (b) with respect to charges for
additional services provided to Tenant by Landlord in amounts based on that detailed in
Exhibit “B,” within 30 days after Tenant’s receipt of a written invoice therefor (a “Sound
Stage Rent Invoice”), all without offset, deduction or abatement, except for abatement expressly
provided for elsewhere in this Lease. Rent shall be payable in lawful money of the United States to
Landlord at the address stated in this Lease or to any other address that Landlord may designate
from time to time. Tenant may, within thirty (30) business days after its receipt of any Sound
Stage Rent Invoice, deliver written notice to Landlord that Tenant disputes in good-faith all or
any portion of the invoiced amount set forth in such Sound Stage Rent Invoice. Provided that
Tenant’s notice includes full payment of the Sound Stage Rent Invoice, the parties shall reasonably
cooperate with each other in good faith to resolve such dispute; provided, that if the parties have
not reached a mutually satisfactory resolution within 60 days after delivery of Tenant’s notice,
then such dispute shall be determined by the audit and arbitration procedure set forth in Part II,
Section 5.9 below.
4.2 Proration. Tenant’s obligation to pay Base Rent for any period of less than a
full calendar month shall be prorated based upon the number of days of the Lease Term falling
within such calendar month divided by the actual number of days in the applicable month.
4.3 Application of Payments. All payments received by Landlord from Tenant
shall be applied first to the oldest payment obligation owed by Tenant to Landlord. No
designation by Tenant, either in a separate writing or on a check or money order shall modify this
clause or have any force or effect.
ARTICLE 5
ADDITIONAL RENT
ADDITIONAL RENT
5.1
Additional Rent: Rent. In addition to paying the Base Rent specified in
Part II, Article 4, Tenant shall pay as “Additional Rent”, (a) in connection with the
Corporate Office Space only, Tenant’s Share (as hereinafter defined) of the annual Operating
Expenses (as hereinafter defined) as to the Corporate Office Building that are in excess of the
amount of Operating Expenses incurred during the Base Year (as hereinafter defined) for the
Corporate Office Building; provided, however, that in no event shall Tenant’s Share of Operating
Expenses payable for any “Expense Year” (as defined below) increase by more than four percent
(4%) of the amount paid by Tenant in respect of the previous Expense Year, and (b) in connection
with the Production Office Space and Stages, the cost of the “Additional Services” (as
hereinafter defined) used or consumed by Tenant. Without limitation on other obligations of
Tenant that survive the expiration of the Lease Term, Tenant’s obligations to pay the Additional
Rent provided for in this Lease shall survive the expiration of the Lease Term.
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5.2
Corporate Office Space – Payment of Operating Expenses. As used in this Lease,
“Base Year” shall mean calendar year 2009 (except that if the Commencement Date occurs after
June 30, 2009, the Base Year shall mean calendar year 2010). “Operating Expenses” means all
reasonable expenses, costs, and amounts of every kind that Landlord pays or incurs (and
thereafter pays) during any “Expense Year” (as hereinafter defined) because of or in connection
with the operation, management, maintenance or repair, replacement or restoration or protection
of the Corporate Office Building (but not any other Building) and Common Areas, except as
excluded in Part III, Section 5.2(b).
(a) Examples
of Operating Expenses. The definition of “Operating
Expenses” includes, without limitation, any reasonable amounts paid or incurred (and
thereafter paid) by Landlord for the following:
(i) cleaning, maintenance, repair and restoration of all Common
Areas; maintenance of all landscaping in the Common Areas, including the installation and
maintenance of irrigation systems, the planting and maintenance of shrubs, trees, flowering
plants, and ground cover; cleaning, striping, resurfacing and signing of parking; maintenance,
repair, cleaning, resurfacing, or painting, as appropriate, of the Corporate Office Building’s
roof and exterior walls; installation, repair, and maintenance of all light fixtures and signs
located in the Common Areas; the cost of operating, managing, maintaining, and repairing operating
and building systems, including, but not limited to, the following systems: heating, air
conditioning and ventilation, mechanical, electrical, plumbing, sanitary sewer, storm drainage,
fire sprinkler, escalator and elevator; the cost of service contracts for any of the foregoing or
any other systems; maintenance and repair of structural components and finish work; the cost of
supplies and tools and of equipment, maintenance, and service contracts solely in connection with
the foregoing and rentals paid or incurred by Landlord with respect to machinery, equipment,
tools, materials, facilities or systems solely for the management, maintenance or operation of the
Project;
(ii) establishment and maintenance of directories of tenants and other signage in the
Project;
(ii) provision of utilities to the Common Areas, including but not limited to, gas,
electricity, garbage and trash removal, and water for irrigation;
(iii) premiums paid to maintain the casualty and liability insurance carried by Landlord
covering the Project or its income therefrom or any risk related thereto; the amount of any
commercially reasonable deductible paid by Landlord in connection with an insured loss resulting
from damage to the Project; and the amount of any uninsured loss resulting from damage to the
Project;
(iv) wages, salaries, and other compensation and benefits of all persons engaged in the
operation, maintenance, or security of the Project, plus the employer’s share of Social Security
taxes, unemployment taxes, Worker’s Compensation and other insurance, and any other taxes imposed
on Landlord that may be levied on those wages, salaries, and other compensation and benefits. If
any of Landlord’s employees provide services for more than one of Landlord’s properties, only the
compensation, benefits and taxes reflecting the percentage of their working time devoted to the
Project shall be included in Operating Expenses;
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(v) legal, accounting and other consultant’s fees and expenses;
(vi) compliance with all Laws, including, but not limited to, Laws pertaining to energy or
natural resource conservation or environmental protection, and all charges, taxes, surcharges,
assessments or penalties imposed by any government agency or public utility as a means of
conserving or controlling the consumption of water, gas, electricity, energy, natural resources, or
other products or services; the cost of licenses, certificates, permits, and inspections; and all
costs, including attorney’s fees and expenses, of contesting the validity or applicability of any
Laws if a successful contest would reduce Operating Expenses;
(viii) management fees or other amounts payable, whether for services rendered or goods
provided by Landlord, an Affiliate of Landlord, Landlord’s employees, or a property manager hired by
Landlord; or if Landlord acts as managing agent, a sum in lieu thereof, which fees or other amounts
do not exceed the then-prevailing rates for management fees or other applicable charges for motion
picture studio operations in the Los Angeles area;
(ix) amortization (including interest on the unamortized cost at a rate equal to the
commercial bank rate announced by Bank of America as its so-called reference or prime rate from
time to time) of the cost of acquiring personal property used in the maintenance, repair,
management and operation of the Project;
(x) costs of capital improvements and replacements made after completion of the initial
construction of any phase of the Project that (A) are intended as a labor-saving device or to
effect other economies in the maintenance or operation of all or part of the Project, or (B) are
required under any governmental law or regulation but that were not required in connection with
the Project when permits for the construction were obtained or as of the date of this Lease; all
permitted capital expenditures shall be amortized (including interest on the unamortized cost at a
rate equal to the commercial loan rate announced by Bank of America as it so-called reference or
prime rate from time to time) over the useful life of-such improvements as reasonably determined
by Landlord;
(xi) a reserve each Expense Year of $0.54 multiplied by the Rentable Square Feet of the
Corporate Office Space, such amount to be increased effective January 1 each year, commencing
January 1, 2010, in proportion to the increase, if any, in the Consumer Price index for All Items,
All Urban Consumers for the Los Angeles-Riverside-Orange County Area (1982-84=100) (“CP1”)
published by the United States Department of Labor, Bureau of Labor Statistics (the “Index”) for
January of the prior year (“Comparison Month”) over the Index for January of 2009 (the “Base
Month”). Even if the Index for the Comparison Month is less than the Index for the Base Month, such
amount shall not be reduced below $0.54 multiplied by the Rentable Square Feet of the Corporate
Office Space. Should the Bureau of Labor Statistics discontinue the publication of the Index, or
publish it less frequently, or alter it in some other material manner, Landlord shall adopt a
substitute index, subject to Tenant’s approval, such approval not to be unreasonably withheld.
Landlord may recover from such reserve the costs of capital improvements and replacements to the
Project not covered by Part III, Section 5.2(a)(x), including, but not limited to, HVAC, roofs,
elevators and paving, and the cost of insurance policies and maintenance contracts covering such
capital improvements and replacements. If and to the extent such reserve is insufficient for such
costs, Landlord may recover the unrecouped portion from such reserve thereafter established;
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(xii) Property Taxes; and
(xiii) all additional costs and expenses incurred by Landlord in connection with the
ownership, operation, management, maintenance or repair, replacement or restoration or
protection of the Project that would be considered a current expense according to generally
accepted accounting principles.
(b) Exclusions
From Operating Expenses. Notwithstanding anything to the contrary in
Part III, Section 5.2(a), Operating Expenses shall not include the following expenses:
(i) estate, inheritance, transfer, gift, or franchise taxes of Landlord or the Federal or
state net income tax imposed on Landlord’s income from all sources;
(ii) costs associated with the operation of the business of the entity which constitutes
Landlord, as the same are distinguished from the costs of operation of the Project, including,
without limitation, Landlord’s general corporate overhead, accounting and legal expenses, costs of
defending any proceedings, lawsuits or arbitration with any mortgagee (except as the actions of
Tenant may be at issue), and costs of selling, syndicating, financing, mortgaging or hypothecating
any of Landlord’s interest in the Project;
(iii) costs of the initial construction of the Leased Premises and other phases of the
Project and initial improvements or alterations to tenant spaces;
(iv) costs, including, without limitation, permit, license and inspection costs, incurred
with respect to the installation of tenant or other occupants’ improvements in the Project or
incurred in renovating or otherwise improving, decorating, painting or redecorating vacant
space intended for the exclusive use of specific tenants or other occupants of the Project;
(v) costs of any items for which Landlord receives reimbursement from insurance proceeds, any
tenant or any third person. Insurance proceeds shall offset items that would otherwise constitute
Operating Expenses in the year in which the proceeds are received. Any commercially reasonable
deductible amount under any insurance policy shall be included in Operating Expenses when paid;
(vi) costs arising from Landlord’s failure to make payments when due and tax penalties
incurred as a result of Landlord’s inability or unwillingness to make payments or to file any tax
or information returns when due;
(vii) any other duplicative charge, payment of which is provided elsewhere in this Lease;
(viii) the cost of repair to the Property, or any part thereof, to the extent the cost of the
repairs is reimbursed by insurance or condemnation proceeds, covered by warranty or otherwise
reimbursed by third parties other than as a part of Operating Expenses;
(ix) marketing costs, including leasing commissions, in
connection with the negotiation and preparation of letters, deal memos, letters of intent,
leases, subleases and/or assignments, space planning costs, and other costs and expenses incurred
in connection with the lease, sublease and/or assignment negotiations and
transactions with present or prospective tenants of the Project or their successors;
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(x) the cost of improving or renovating space for tenants (including Tenant) or space vacated
by any tenant (including Tenant), including without limitation, architects’, engineers’ and space
planners’ fees and expenses;
(xi) the costs of utilities charged to individual tenants (including Tenant) and payroll,
material and contract costs of other services paid by tenants (including Tenant);
(xii) the depreciation of the Property, or any part thereof;
(xiii) interest, points and fees on debt or amortization payments, and late payment penalties
and interest on any Property mortgages or deeds of trust and ground lease payments, and other costs
of financing or refinancing the Property, or any part thereof;
(xiv) legal, accounting, consulting and other related expenses associated with the
enforcement of leases or the defense of Landlord’s title to the Property of any portion thereof;
(xv) advertising costs incurred directly for leasing individual space in the Property;
(xvi) Landlord’s general overhead and general administrative expenses not related to the
operation of the Property including costs of preparing partnership or other tax returns, or
financial statements not related to the operation of the Property, and all compensation to
executives, officers or partners of Landlord or to any other person at or above the level of
building manager, other than the manager of the Project or any portion thereof and any other
persons providing on-site services to the Project (regardless of job title or level);
(xvii) any compensation paid to clerks, attendants or other persons in commercial concessions
operated by Landlord and other costs directly related to the installation, operation and
maintenance thereof, except for parking garages and parking areas, the compensation and costs of
which will be included in Operating Expenses;
(xviii) all items and services for which Tenant or any other tenant in the Building or
Property reimburses Landlord other than through Operating Expenses or similar pass-through
expenses (or is so obligated to reimburse Landlord) and all items and services supplied
selectively to any tenant without reimbursement, provided that, any item or service supplied
selectively to Tenant shall be paid for by Tenant;
(xix) governmental fines or penalties assessed as a result of Landlord’s failure to make
payments in a timely manner or to comply with applicable laws, unless such failure is
commercially reasonable under the circumstances;
(xx) costs which are to be capitalized and not expensed in accordance with generally accepted
accounting principles, except as otherwise permitted under Part III;
(xxi) liability which (A) is covered by insurance or (B) would have been covered by
insurance required to be carried by Landlord under this Lease but which was not obtained as a
result of Landlord’s intentional acts or omissions or negligence (but not as a result of
commercial impracticability of obtaining such insurance);
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(xxii) expenses resulting directly from the willful misconduct or gross negligence of
Landlord;
(xxiii) costs of repairs or modifications to the Building or Property due to Landlord’s (or
Landlord’s predecessor’s) failure, if any, to construct the Building in full compliance with all
governmental regulations, ordinances and laws effective at the time of construction;
(xxiv) costs of complying with laws, codes, regulations or ordinances relating to Hazardous
Materials which are incurred (1) as a result of Landlord’s negligence or intentional acts in the
course of construction of the Property, including the selection and use of building materials
which Landlord should have known were Hazardous Materials at the time of their installation, or
(2) as a result of the presence of Hazardous Materials in the soil or groundwater under the
Property on or before the date of execution of this Lease;
(xxv) any bad debt loss, rent loss or reserves for bad debts or rent loss;
(xxvi) except to the extent specifically provided otherwise in the Lease, and except as to
the management fees payable to Landlord or its subsidiary or Affiliate, the overhead and profit
increments paid to Landlord, or to any subsidiary or Affiliate of Landlord for goods and/or
services in the Property, to the extent such overhead and profit increments exceed the costs of
comparable, first-class, high quality goods and/or services, delivered or rendered by unaffiliated
third parties of comparable reputation, stature, experience and quality to Landlord, on a
competitive basis;
(xxvii) costs incurred due to Landlord’s breach of a law or ordinance;
(xxviii) charitable or political contributions and membership fees or other payments to trade
organizations;
(xxix) rent and similar charges for Landlord’s on-site management office and/or leasing
office or any other offices of Landlord or its affiliates; however only to the extent such rent is
attributable to a portion of such office(s) in excess of 2,500 Rentable Square Feet (in the
aggregate), it being acknowledged that Landlord may include such rent and similar charges to the
extent they relate to any such office (or portion thereof) which is less than 2,500 Rentable
Square Feet);
(xxx) costs of Tenant Improvements which are to be borne by Landlord pursuant to attached
Exhibit “C”; and
(xxxi) any costs expressly excluded from Operating Expenses elsewhere in this Lease.
5.3
Tenant’s Share. “Tenant’s Share” is equal to: (a) in connection with Operating
Expenses that are incurred by Landlord and solely relate to the Corporate Office Building, the
number of Rentable Square Feet of the Corporate Office Space divided by the total Rentable Square
Feet in the Corporate Office Building, and (b) in connection with Operating Expenses that are
incurred by Landlord and relate to the entire Project, the number of Rentable Square Feet of the
Corporate Office Space divided by the total Rentable Square Feet in all of the buildings located
at the Project. If either the Corporate Office Space or the Corporate Office Building or Project,
as applicable, is expanded or reduced, Tenant’s Share
shall be appropriately adjusted. Tenant’s Share for the Expense Year in which that change
occurs shall be determined on the basis of the number of days during the Expense Year in which
each such Tenant’s Share was in effect. For purposes of calculating Tenant’s Share, “Rentable
Square Feet” shall be calculated by Landlord under the applicable standard adopted by the Building
Owners and Managers Association (BOMA) for similar projects.
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5.4 Adjustment of Operating Expenses. Operating Expenses shall be adjusted as follows:
X. Xxxxx Up Adjustment When a Project Is Less Than Fully Occupied. If the occupancy of the
total Rentable Square Footage of the Corporate Office Building or Project, as applicable, during
any part of any Expense Year (including the Base Year) is less than 95%, Landlord shall make an
appropriate adjustment to the variable components of the Operating Expenses for that Expense Year,
as reasonably estimated by Landlord using sound accounting and management principles, to determine
the amount of Operating Expenses that would have been incurred had such buildings been 95%
occupied. This amount shall be considered to have been the amount of Operating Expenses for that
Expense Year. For purposes of this Paragraph 5.4A, “variable components” include only those
component expenses that are affected by variations in occupancy levels, such as water usage.
B. Additional Costs. If in any Lease Year after the Base Year, a new Operating
Expense category, sub-category or item is included in Operating Expenses which was not included in
the Operating Expenses for the Base Year, then the cost of such new category, sub-category or item
(in the amount incurred in the first full Expense Year in which the subject category, sub-category
or item is incurred by Landlord) shall be added to the Operating Expenses for the Base Year for
purposes of determining the amounts payable by Tenant under this Article 5 for each subsequent
Expense Year in which the subject category, sub-category or item is incurred, and during each such
subsequent Expense Year, such amount shall continue to be included in the computation of the
Operating Expenses for the Base Year, resulting in the Operating Expenses for each subsequent
Expense Year including (as to such category, sub-category or item of Operating Expense) only the
increase in the cost of such new Operating Expense category, sub-category or item over the Base
Year, as so adjusted. However, if in any Expense Year thereafter, such new category, sub-category
or item is not included in Operating Expenses, then no such addition shall be made to the Operating
Expenses for the Base Year.
In addition to the foregoing, if due to a change in the types of Operating Expenses being
incurred by Landlord (such as, for example, the commencement or cessation of security services—but
not a mere change in how a particular cost is handled—such as going from an in-house to an outside
landscaping service), the Operating Expenses for the Base Year need to be adjusted to eliminate the
effect of such change, Landlord may reasonably adjust the Operating Expenses for the Base Year and
notify Tenant of such change in writing.
5.5
Property Taxes. As used in this Lease, the term “Property Taxes” shall mean any
and all taxes, assessments, levies, and other charges, general and special (including all
installments of principal and interest required to pay any existing general or special assessments,
and any increases resulting from reassessments made in connection with a
change in ownership, new construction, or any other cause), imposed by any governmental or
quasi-governmental authority or special district having the power to tax or levy assessments, which
are levied or assessed against or with respect to the value of Landlord’s interest in the Corporate
Office Building, the fixtures, equipment, and other property of Landlord, real or personal, that
are an integral part of and located on the real property on which the Corporate Office Building is
located, subject to Section 5.2(b)(i).
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5.6
Taxes and Other Charges for Which Tenant Is Directly Responsible.
Notwithstanding Part III, Section 5.4, Tenant shall reimburse Landlord as Rent promptly on demand
for any all taxes, levies, fines and other charges required to be paid and paid by Landlord that
are:
(a) Measured by or reasonably attributable to:
(i) The cost or value of Tenant’s equipment, furniture, fixtures, and other personal property
located in the Corporate Office Space; or
(ii) The cost or value of any leasehold improvements made in or to the Corporate Office Space
by or for Tenant subsequent to Landlord’s initial build-out of the Leased Premises pursuant to the
Work Letter (to the extent that the cost or value of those leasehold improvements exceeds the cost
or value of the Improvements within the Corporate Office Space as of the date of this Lease, as
reasonably determined by Landlord, regardless of whether title to those improvements is vested in
Tenant or Landlord);
(b) Assessed on or related to the possession, leasing, operation,
management, maintenance, alteration, repair, use, or occupancy by Tenant of:
(i) The Corporate Office Space;
(ii) Any portion of the Project in connection with the Corporate Office
Space;
(iii) The parking areas used by Tenant in connection with the Corporate
Office Space; or
(iv) Assessed either on this transaction or on any document to which Tenant is a party
that creates or transfers an interest or an estate in the Corporate Office Space.
5.7 Calculation and Payment of Additional Rent. Tenant shall pay Tenant’s
Share of the actual Operating Expenses incurred or paid by Landlord (to the extent the same
exceeds the Operating Expenses incurred by Landlord in the Base Year) within 30 days after receipt
by Tenant of a reasonably detailed billing from Landlord, provided that Landlord shall not xxxx
Tenant more frequently than once a month. Landlord may, at Landlord’s option, reasonably estimate
the amount by which Tenant’s Share of Operating Expenses is estimated to exceed the Operating
Expense incurred by Landlord for the Base Year on a monthly, quarterly or annual basis, which
amount shall be payable monthly on the same day as the Base Rent is due. If Landlord chooses to
collect Tenant’s Share of the Operating Expenses (to the extent the same exceeds the Operating
Expenses incurred by Landlord in the Base Year) based upon Landlord’s estimate, Landlord shall use
commercially reasonable efforts to deliver to Tenant, within 120 days after the end of each
calendar year, a reasonably detailed statement showing Tenant’s Share of the actual Operating Expenses incurred or paid during the
preceding calendar year in excess of the Operating Expenses incurred by
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Landlord in the Base Year
(“Statement”). If that Statement reflects that Tenant’s payments during the preceding calendar
year exceed Tenant’s Share as indicated on the Statement, Landlord shall credit the amount of the
excess against the Base Rent next falling due. If the excess occurs in the last year of the Lease
Term, Landlord shall refund the excess after applying it to any other amounts then due by Tenant to
Landlord within 30 days after delivery by Landlord to Tenant of the Statement. If the Statement
reflects that Tenant’s payments during the preceding calendar year were less than Tenant’s Share as
indicated on the Statement, Tenant shall pay to Landlord the amount of the deficiency within 10
days after delivery by Landlord to Tenant of the Statement. Tenant shall have until 180 days after
presentation of any Statement of actual Operating Expenses from Landlord within which to object in
writing to the accuracy thereof; after expiration of said 180-day period, such Statement shall be
conclusive and binding upon Tenant. Tenant’s objection shall describe in detail how the Operating
Expenses have been overstated.
5.8
Audit Rights. Landlord shall keep at the Project or at Landlord’s principal
executive offices accurate and complete books and records that show all Operating Expenses and that
include, without limitation, invoices, receipts, canceled checks and like matters. Such books and
records shall be retained by Landlord for at least two years after the expiration of the Term. If
Tenant objects to any Statement of Operating Expenses as provided in Part III, Section 5.7, and
provided that Tenant timely pays the full amount of the Tenant’s Share of Operating Expenses set
forth on such Statement, including all disputed amounts, Tenant shall have the right, within 180
days following delivery to Tenant of the Statement of Operating Expenses to which Tenant has
objected, upon reasonable written notice to Landlord, to audit or to cause to be audited such books
and records with respect to the period covered by the Statement of Operating Expenses to which
objection has been made, which audit right shall include the right to inspect all receipts and
other documents relating to Operating Expenses for such period. In the event that Tenant does not
timely pay any amount of Tenant’s Share of Operating Expenses in excess of the Operating Expenses
incurred by Landlord for the Base Year, Tenant shall have no right to audit the Statement of
Operating Expenses. If Landlord estimates the amount of Tenant’s Share of Operating Expenses in
excess of the Operating Expenses incurred by Landlord for the Base Year on a monthly or quarterly
basis, in no event shall such increase from one month to the next, or one quarter to the next,
increase by more than an annualized amount equal to 4% per annum.
5.9
Audit Procedure. If Tenant’s audit rights are timely exercised in accordance with
Section 5.8, Tenant and its authorized agents may examine and inspect the books and records of
Landlord concerning the Operating Expenses in question, at Tenant’s sole cost and expense, during
normal business hours and with no less than five days’ prior written notice to Landlord. If Tenant
chooses to proceed to an audit after such examination and inspection, in accordance with Section
5.8 and this Section 5.9, Tenant shall submit to Landlord the names of two independent, reputable,
certified public accounting firms. Such firms shall be nationally or regionally recognized
certified public accounting firms. Neither of such firms shall be compensated on a contingent fee
or commission basis. Within 30 days after the date of said submission, Landlord shall select one of
the two firms (the “Auditor”) to perform the audit and shall identify the Auditor by written notice
to Tenant. Within 30 days after Landlord’s notice to Tenant of Landlord’s choice of firm, Landlord
and Tenant each may submit to the Auditor its position regarding the items set forth in Tenant’s
written objection. The Auditor shall deliver copies of the results of the audit simultaneously to
Landlord and Tenant. If the audit shows an overstatement or understatement of any Operating Expenses, the owing
party shall pay the
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applicable amount to the other party hereto within 10 days after receipt of the
audit report. Costs of the audit shall be paid by Tenant unless the final determination concludes
that Landlord overstated the Operating Expenses for any year by more than 5% of the Operating
Expenses, in which case Landlord shall pay such costs. Tenant and Tenant’s agents shall keep any
information gained from any examination or inspection of Landlord’s books and records and any audit
confidential, other than in litigation or arbitration between the parties. Except in connection
with an increase in Landlord’s estimate of the amount of Tenant’s Share of Operating Expenses in
excess of Operating Expenses incurred for the Base Year as set forth in Section 5.7 above, there
shall be no more than one such examination and inspection by Tenant and one such audit of Operating
Expenses during any 12-month period.
5.10 Production Office Space – Payment of Additional Services. Tenant shall pay to
Landlord, within thirty (30) days after Tenant’s receipt of an invoice therefor, such sums as may
be due to Landlord for the “Additional Services”, as generally described in this Section 5.10
below, requested and used by Tenant and provided by Landlord in the month previous to the one in
which the invoice is delivered to Tenant. Notwithstanding anything in this Lease to the contrary,
any delay or failure of Landlord to provide notice of the additional cost due, or in billing
therefor, shall not constitute a waiver of, or in any way impair, the obligation of Tenant to pay
such additional cost within thirty (30) days after Tenant’s receipt of an invoice therefor.
Tenant’s failure to pay such additional charges shall, without impairment to any other of
Landlord’s rights and remedies at law or otherwise, entitle Landlord to immediately suspend or
terminate the Additional Services for which payment has not been made in whole when due, and shall
be subject to the same penalties, charges, and remedies as a failure to pay other contractual
obligations.
(a) Data Services. Tenant reserves the right to use Tenant’s preferred internet
provider to supply data and internet services to Tenant at any of the space occupied by
Tenant. Subject to Section 9.4, internet and other data services for the Production Office
Space and Sound Stages may be provided through Landlord or any other entity selected by
Landlord to provide such services (the “DSP”) and not by a public utility. Landlord shall
xxxx Tenant at the standard charges and rates established by Landlord for all tenants having
similar usage and requirements. These data charges and rates shall be established at the
time such service is ordered and shall apply in all months in which Tenant utilizes such
service, subject to any price adjustments applicable to all users that Landlord in its sole
discretion may find it necessary to make. Notwithstanding anything herein to the contrary,
data charges and rates and other internet service terms and conditions as well as any Custom
Data Service and provisioning of network or other computer equipment is subject to
Exhibit “E” attached hereto and made a part hereof (the “Networking & Internet
Services Agreement”).
(b) Copiers.
Copy machines are provided solely by Landlord and shall be billed at
the standard charges and rates established by Landlord for all tenants having similar copier
usage and requirements. Copier charges and rates shall be established at the time such
service is ordered initially and shall apply in all months in which Tenant utilizes such
service, subject to any price adjustments applicable to all users that Landlord in
Landlord’s sole discretion may find it necessary to make.
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(c) Other
Services. Use of Landlord’s equipment, provisions of maintenance services
other than as expressly set forth in this Lease, provision of repair services, and use of
conference rooms, as well as any other items and/or services not expressly provided for in
this Lease, shall be upon such terms and conditions as may be agreed to in writing between
Landlord and Tenant.
(d) Interruption of Service. Except as otherwise provided herein, Landlord shall
not be liable and Rent shall not xxxxx for interruptions to, without limitation, the
telephone, plumbing, heating, ventilation, air conditioning, elevator, electrical or other
mechanical systems or cleaning services, by reason of accident, emergency, repairs,
alterations, improvements or shortages or lack of availability of materials or services. At
any time during the term of this Lease, any utilities or services may be conserved by
Landlord without abatement of rent or other expenses if undertaken by Landlord as required
by any governmental agency or in a reasonable effort to reduce energy or other resource
consumption, provided that no such efforts to reduce energy or other resource consumption
shall reduce Tenant’s rights under this Lease nor hinder or adversely affect Tenant’s
ability to use of the Leased Premises for its stated purposes. Notwithstanding anything to
the contrary set forth herein, in the event that Tenant is prevented from using, and does
not use, the Leased Premises or any portion thereof, as a result of (i) any repair,
maintenance or alteration performed by Landlord, or which Landlord failed to perform,
applicable to the Leased Premises and required by this Lease, which substantially interferes
with Tenant’s use of or ingress to or egress from the Leased Premises or the parking
facilities servicing the Leased Premises; or (ii) any wrongful failure to provide services,
utilities or ingress to and egress from the Leased Premises as required by this Lease (any
such set of circumstances as set forth in items (i) through (ii), above, to be known as an
“Abatement Event”), then Tenant shall give Landlord Notice of such Abatement Event, and if
such Abatement Event continues for five (5) consecutive business days after Landlord’s
receipt of any such notice, or occurs for ten (10) non-consecutive business days in a twelve
(12) month period (provided Landlord is sent a notice as required pursuant to this Lease of
each such Abatement Event) (in either of such events, the “Eligibility Period”), then the
Base Rent and all Additional Rent (other than (a) Additional Rent due in connection with
Sound Stage services provided pursuant to Section 9.3, below, or (b) charges for Additional
Services which Tenant elects to incur after the Eligibility Period) and Tenant’s obligation
to pay for parking (to the extent not actually utilized by Tenant) shall be abated or
reduced, as the case may be, after expiration of the Eligibility Period for such time that
Tenant continues to be so prevented from using, and does not use, the Leased Premises, or
any portion thereof.
(e) Network Infrastructure. Tenant may require the use of Landlord’s facilities in
locations within Landlord-occupied buildings as reasonably approved by Landlord to support
Tenant’s network infrastructure as described in this subsection. In order to support
Tenant’s requirements, Tenant may ask Landlord to provide dedicated rack, power, and cabling
from and to Tenant-occupied locations to the main switch room within Landlord occupied and
approved locations at Tenant’s cost. If required, Landlord will provide space up to 7 square
feet and two dedicated 110v 20 amp circuits at no additional charge to Tenant in a Landlord
approved location. Landlord will provide Tenant requested fiber connections between
Tenant-occupied locations to other Tenant-occupied locations or to Landlord’s occupied location, the cost of which will
be borne by Tenant.
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5.11 No Requirement. The inclusion of any services, facilities, or improvements in
Part III, Section 5.2(a) or elsewhere in this Lease shall not be deemed to impose an obligation on
Landlord to provide those services, facilities, or improvements unless otherwise required by this
Lease.
ARTICLE 6
SECURITY DEPOSIT
SECURITY DEPOSIT
On delivery to Landlord of a copy of this Lease executed by Tenant, Tenant shall deposit with
Landlord the amount set forth in Part I, Section 14 as security for the timely performance by
Tenant of its obligations under this Lease prior to the delivery of the Leased Premises to Tenant
in the condition required hereunder. The Security Deposit shall be deemed to be an advance payment
of Base Rent under this Lease, and shall be applied by Landlord toward the first installment of
Base Rent due under this Lease.
ARTICLE 7
COMMON AREAS
COMMON AREAS
7.1 Definition of Common Areas. As used in this Lease, the term “Common Areas” shall
mean all areas and facilities within the Project that are not designated by Landlord for the
exclusive use of Tenant, Landlord, or any other tenant of the Project, including but not limited to
hallways, elevators, building systems, lobbies, parking areas, maintenance facilities, millshops
(except the Mill Space), storage facilities, loading and unloading areas, trash areas, roadways,
sidewalks, walkways, parkways, patios, gates, guardhouses, driveways, landscaped areas, recreation
areas, green belts, and the exteriors of all buildings within the Project, including, but not
limited to, the Building.
7.2 Control of Common Areas. Landlord shall have exclusive control over the Common
Areas, provided that Tenant and Tenant’s employees, agents, suppliers, shippers, customers, and
invitees shall have the nonexclusive right to use the Common Areas during the Lease Term, subject
to the rights reserved by Landlord under this Lease and further subject to all Rules and
Regulations governing the use of the Common Areas from time to time issued by Landlord, to the
extent such Rules and Regulations do not conflict with any of the terms set forth in this Lease.
7.3 Landlord’s Rights. Subject to reasonable prior notice, Landlord shall have the
right without it constituting an actual or constructive eviction of Tenant, and without any
abatement of Rent under this Lease, to:
(a) close any part of the Common Areas to the extent necessary in Landlord’s reasonable
opinion to prevent the accrual of any prescriptive rights;
(b) close temporarily any part of the Common Areas or any other portion of the Project to
repair and maintain them or for any other reasonable purpose;
(c) close permanently any part of the Common Areas to construct
improvements thereon in connection with future development of the Project;
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(d) change the nature of the Common Areas, including without limitation changes in the
location, size, shape, and number of driveways, entrances, parking spaces, parking areas, loading
and unloading areas, ingress, egress, direction of traffic, landscaped areas, and walkways;
(e) eliminate from or add to the Project any land or improvement;
(f) designate additional property outside the boundaries of the Project to be a part of the
Common Areas;
(g) establish a charge or schedule of charges, or allow a concessionaire or other supplier of
materials or services to establish a charge or schedule of charges, for use of any Common Areas
other than the Tenant parking areas described in Part III, Article 8 and the roadways, sidewalks,
walkways, parkways, patios, gates, driveways and other areas providing ingress to and egress from
the Leased Premises and the Project; and
(h) perform any other acts and make other changes or alterations in the Common Areas and the
Project as Landlord reasonably may deem appropriate;
provided, however, that the exercise by Landlord of the rights set forth in this Section 7.3
(a)-(h) does not unreasonably interfere with Tenant’s quiet enjoyment and use of the Leased
Premises or Tenant’s ingress to and egress from the Leased Premises.
ARTICLE 8
TENANT PARKING
TENANT PARKING
Tenant shall be entitled to use: (a) for the Sound Stages and Production Office Space, 250
spaces per production being filmed within the Leased Premises from time to time, at no charge or
Rent therefor, and, (b) 50 spaces for the Corporate Office Space, at the monthly rate as set forth
in Exhibit “B” (collectively, “Tenant’s Parking Allotment”), all on those portions of the
Common Areas designated for parking. Subject to availability and the anticipated parking needs for
the balance of the Project, Tenant shall have the right to use such additional parking spaces at
the Project in addition to Tenant’s Parking Allotment as may be requested by Tenant from time to
time at Landlord’s then-current rate schedule. Loading and unloading of vehicles shall be
permitted on designated loading docks or loading areas only. Any vehicle violating any provision of
this Section 8.1 shall be subject to towing, and such towing shall be at Tenant’s expense with
respect to all vehicles owned or operated by Tenant, Tenant’s employees and agents, or over which
Tenant otherwise exercises control. Subject to the applicable requirements of any Laws (including
without limitation, Tenant’s obtaining, at its expense, any required governmental approvals and/or
permits) and to the other provisions of this Lease, Tenant may use any of the parking spaces,
loading docks or loading areas designated for Tenant’s use for the parking of trailers, mobile
dressing facilities, production trucks, equipment vehicles and other production support vehicles
without additional charge or Rent beyond that set forth in this Lease. Tenant may not in any event
park vehicles within any Sound Stages.
Landlord specifically reserves the right to change permanently the location, size,
configuration, design, layout, and all other aspects of the parking areas, provided that Landlord
provides the same number of alternative parking spaces in a location within the Project
reasonably convenient to the Leased Premises. Landlord may close off or restrict
access to the parking areas from time to time on a temporary basis to facilitate
construction, alteration, or improvements, without incurring any liability to Tenant and without
any abatement of Rent under this Lease, provided that Landlord provides the same number of
alternative parking spaces for Tenant’s use within the Project on a basis that is no less
favorable to Tenant than to other tenants.
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ARTICLE 9
UTILITIES AND OTHER SERVICES
UTILITIES AND OTHER SERVICES
9.1 Utilities. Landlord shall furnish, at Landlord’s sole cost and expense, to the
Corporate Office Space and the Production Office Space during “normal business hours” (as defined
below), such amounts of air conditioning, heating and ventilation as may be reasonably necessary
for the comfortable use and occupation of the Leased Premises. If Tenant requires air
conditioning, heating and ventilation after normal business hours, Landlord shall provide the same
and Tenant shall reimburse Landlord for the actual cost thereof charged to Landlord by the public
utility plus an agreed-upon service fee as set forth in Exhibit “B.” In addition, Landlord
shall replace, at Landlord’s sole cost and expense, fluorescent tubes and ballasts in the
Landlord’s building standard overhead fluorescent fixtures as required. Tenant shall pay for
replacement of all other tubes, ballasts and bulbs as required. Landlord shall provide utility
service, including water, gas, and electricity, required by Tenant for the Sound Stages, and the
Tenant shall be charged for the same in accordance with the applicable rates specified in
Exhibit “B” attached hereto. For purposes hereof, “normal business hours” shall mean
Monday through Friday, 7:00 am through 9:00 p.m., and Saturdays, 9:00 a.m. through 3:00 p.m.,
excluding local, state and federal holidays.
9.2 Other Services. Landlord shall at all times furnish, at Landlord’s sole cost and
expense, the Corporate Office Space and the Production Office Space with elevator service and
reasonable amounts of electricity for normal lighting and office machines and shall furnish water
for lavatory and drinking purposes. Landlord shall provide, at Landlord’s sole cost and expense,
ordinary and customary, basic janitorial service to the Corporate Office Space and the Production
Office Space, which shall consist essentially of a nightly clean-up five (5) days per week
(excluding holidays) and window washing as reasonably required but not less than two (2) times per
year. Landlord shall not be required to provide janitorial services to above-Project-standard
improvements installed in the Leased Premises including but not limited to metallic trim, wood
floor covering, glass panels, interior windows, kitchen/dining areas, executive washrooms, or
shower facilities. Any janitorial services required by Tenant and provided by Landlord in excess of
such ordinary and customary, basic janitorial services shall be separately paid for by Tenant, as
Additional Rent, within ten days of written demand, at the rates set forth in Exhibit “B.”
9.3 Sound Stage Services. Tenant shall have the right from time to time in connection
with Tenant’s production activities within the Leased Premises to request that Landlord provide
Tenant with the stages, lot services, equipment and facilities detailed on Exhibit “B.”
Landlord shall provide the stages, lot services, equipment and facilities detailed on Exhibit
“B” to Tenant at the rates set forth in Exhibit “B”, provided that Tenant shall be
entitled to a 25% discount from those rates set forth on Exhibit “B” on all rentals for
electrical and grip equipment, generators, and theatrical equipment, all in a manner consistent
with similar services and equipment provided at comparable full service, first class studio
facilities. If at any time during the Lease Term hereof Tenant shall require any additional
stages, lot services, equipment and facilities in addition to those detailed on
Exhibit “B”, Landlord agrees to furnish the same, subject to the availability thereof, but
Tenant shall have no right to use any additional equipment, lot services or facilities without the
payment of additional fees and/or charges therefor. All stages, lot services, equipment and
facilities not expressly referred to in Exhibit “B” will be charged in accordance with the
Landlord’s then current rate schedule. Except for charges at Landlord’s then-current rate schedule
and such other business terms agreed to by Landlord and Tenant, all other non-economic terms and
conditions of this Lease shall apply to any additional stages, equipment, lot services and
facilities furnished by Landlord at Tenant’s request; provided, that neither the Option Terms nor
any of Tenant’s Base Rent abatement rights pursuant to Part I, Section 2(c) shall apply to such
additional stages unless otherwise specifically agreed to in writing by Landlord.
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9.4 Telephone Services. All telephone lines shall be installed and routed through the
Landlord’s privately owned system at Landlord’s expense, and not by a public utility. Telephone
lines provided to Tenant are unrestricted, and Tenant shall pay for all calls placed on any such
lines until disconnected at Tenant’s request, provided Tenant shall be charged at the standard
charges and rates established by Landlord and as set forth on Exhibit “B” attached hereto
and made a part hereof. Tenant understands that Landlord’s telephones and telephone equipment are
privately owned and subject to disconnection, after the expiration of applicable notice and cure
periods, upon abuse or Tenant’s failure to pay incurred charges when due. Notwithstanding the
foregoing, at Tenant’s sole discretion, Tenant may elect to use a VoIP phone solution/configuration
within all or a portion of the Corporate Office Space in lieu of the Landlord’s telephone system.
In doing so, Tenant will utilize Tenant’s preferred internet service provider (ISP) to transport
call/voice communications to and from the Corporate Office Space only. Landlord will not apply a
fee to any of the Tenant’s Corporate Office Space telephone usage should Tenant decide to use a
VoIP phone solution.
9.5
Remedies for Failure to Provide Services. Landlord shall provide the production
related services and equipment contemplated in Section 9.3 above in a manner consistent with
similar services and equipment provided at comparable full service, first class studio facilities.
In the event that Landlord fails to timely provide such services or equipment to Tenant when and as
required by Tenant in order to support Tenant’s production activities being conducted within the
Leased Premises, Tenant shall have the right to obtain such services or equipment from parties
other than Landlord until such time as Landlord has provided such required service or equipment,
and Tenant shall have the right to offset any commercially reasonably amounts incurred by Tenant
given the circumstances at the time in procuring such replacement services or equipment which are
in excess of the amount Tenant would have paid under this Lease for such service or equipment
against Base Rent next due under this Lease (it being understood, for example, that if Tenant was
required to rent any particular replacement equipment for a minimum 1-week period, but Landlord was
able to deliver such required equipment within less than such 1-week minimum, Tenant shall
nevertheless be entitled to recover the excess amount incurred for the entire 1-week period). In
addition, from time to time during the Lease Term, if Tenant is forced to replace any particular
service or equipment listed on the Schedules attached to Exhibit “B” (it being agreed that
“lighting and grip services” shall be deemed a single service for the purposes of this Section 9.5)
six (6) times in any twelve (12) month period during the Lease Term, then Tenant shall not be
obligated to exclusively use Landlord for such particular service or equipment for the four (4)
month period immediately following the sixth (6th) such failure; provided, however, that
such 4-month period shall be extended in order to allow Tenant to complete any particular
production(s) using such replacement services or equipment and
which are on-going within the Leased Premises as of the expiration of such 4-month period.
Notwithstanding anything in this Section 9.5 to the contrary, the parties acknowledge that if
pursuant to Section 9.3 above, Tenant requests that Landlord provide any additional stages in
addition to the Sound Stages comprising the Leased Premises and Landlord is unable to provide such
additional stages, then Tenant shall not be entitled to offset against the Base Rent due under this
Lease any amounts which Tenant may elect to incur in connection with Tenant’s leasing of such
additional stages outside of the Project.
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ARTICLE 10
HAZARDOUS MATERIALS
HAZARDOUS MATERIALS
10.1 Definitions. The following definitions apply in this Article 10:
(a) “Environmental Laws” means all federal, state, local, or municipal laws, rules,
orders, regulations, statutes, ordinances, codes, decrees, or requirements of any government
authority regulating, relating to, or imposing liability or standards of conduct concerning any
Hazardous Material, or pertaining to the public health and safety and protection of the
environment, as now or may at any later time be in effect, including without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA), 42 USCS §§
9601 et seq.; the Resource Conservation and Recovery Act of 1976 (RCRA), 42 USCS §§ 6901 et seq.;
the Clean Water Act, also known as the Federal Water Pollution Control Act (FWPCA), 33 USCS §§ 1251
et seq.; the Toxic Substances Control Act (TSCA), 15 USCS §§ 2601 et seq.; and the Hazardous
Materials Transportation Act (HMTA), 49 USCS §§ 1801 of seq.
(b) “Hazardous Material” shall mean any hazardous or toxic substance, material or waste
that is or becomes regulated by the United States, the State of California, or any local
governmental authority having jurisdiction over the Project. Hazardous Material includes without
limitation:
(i) Those substances included within the definitions of hazardous substance, hazardous waste,
hazardous material, toxic substance, solid waste, or pollutant or contaminant in CERCLA, RCRA,
TSCA, HMTA, or under any other Environmental Law;
(ii) Those substances listed in the United States Department of Transportation (DOT) Table [49
CFR 172.101J, or by the Environmental Protection Agency (EPA), or any successor agency, as
hazardous substances [40 CFR Part 302J; and
(iii) Any material, waste, or substance that is a petroleum or refined petroleum product,
asbestos, polychlorinated biphenyl, a flammable explosive, a radioactive material, or designated as
a hazardous substance pursuant to 33 USCS § 1321 or listed pursuant to 33 USCS § 1317.
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10.2 Use of Hazardous Materials. Tenant shall not use, handle, store, transport,
generate, release, or dispose of any Hazardous Materials on, under, or about the Leased
Premises or any other area of the Project, except that, subject to Tenant’s indemnity obligation
set forth in Part III, Section 10.3, Tenant may use (1) small quantities of commonly-used chemicals
such as adhesives, lubricants, and cleaning fluids in order to conduct business at the Leased
Premises and (ii) other Hazardous Materials that are necessary for the operation of Tenant’s
business and are customarily used in connection with the operation of motion picture and television
studio facilities in the Los Angeles metropolitan area. Tenant shall within 10 days after
Landlord’s written request, disclose in writing all Hazardous Materials that are being used by
Tenant on the Project, the nature of the use, and the manner of storage and disposal. Tenant agrees
that any and all handling, transportation, storage, treatment, disposal, or use of Hazardous
Materials by Tenant in or about the Leased Premises or any other area of the Project shall strictly
comply with all Laws, including, but not limited to, all Environmental Laws.
10.3 Indemnification. Landlord agrees to indemnify, defend and hold harmless Tenant
and Tenant’s shareholders, directors, officers, employees, partners, Affiliates and agents from any
liability, penalties, losses, damages, costs, causes of action, claims, charges, liens,
assessments, fines, judgments, attorney fees, expert fees, court costs, remediation costs,
investigation costs, or other expenses resulting from or arising out of (i) Hazardous Materials
existing on or about the Project as of the date of this Lease; and (ii) the use, storage,
treatment, transportation, release, or disposal of Hazardous Materials on or about the Leased
Premises or the Project, or the violation of any Environmental Law, by Landlord or Landlord’s
employees, agents, contractors or invitees. Tenant agrees to indemnify, defend and hold harmless
Landlord and Landlord’s shareholders, directors, officers, employees, partners, Affiliates and
agents from any liability, penalties, losses, damages, costs, causes of action, claims, charges,
liens, assessments, fines, judgments, attorney fees, expert fees, court costs, remediation costs,
investigation costs, or other expenses resulting from or arising out of the use, storage,
treatment, transportation, release, or disposal of Hazardous Materials on or about the Leased
Premises or the Project, or the violation of any Environmental Law, by Tenant or Tenant’s
employees, agents, contractors, invitees and subtenants. Neither party, however, shall be required
to indemnify the other against any consequential damages or lost profits pursuant to this Section
10.3. This indemnification shall survive the expiration or earlier termination of this Lease.
10.4 Remediation Obligations. If the presence of Hazardous Material brought onto
the Leased Premises or the Project by Tenant or Tenant’s employees, agents, contractors,
invitees, or subtenants results in contamination of any area of the Project, at Landlord’s
option, either (i) Tenant shall promptly take all necessary actions, at Tenant’s sole expense and
after Landlord’s reasonable approval of the proposed remedial action, to return the contaminated
area to the condition that existed before the introduction of such Hazardous Material; or (ii)
Landlord shall take all actions as Landlord reasonably determines necessary or appropriate to
return the contaminated area to the condition that existed before introduction of such Hazardous
Material, and Tenant shall advance all reasonable substantiated costs of remediation to Landlord,
or reimburse Landlord as Rent promptly upon demand for all such costs. This provision does not
limit the indemnification obligation set forth in Part III, Section 10.3 and shall survive the
expiration or earlier termination of this Lease.
10.5 Notification. Landlord and Tenant each agree to notify the other promptly of
any communication received from any governmental entity concerning Hazardous Materials or the
violation of Environmental Laws that relate to the Leased Premises.
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10.6
Landlord’s Rights to Test. Landlord may require testing xxxxx to be drilled on
the Project and may require the ground water to be tested to detect the presence of Hazardous
Materials at any time upon reasonable notice to Tenant, as long as such testing does not
unreasonably interfere with Tenant’s use and enjoyment of the Leased Premises. The cost of these
tests and of the installation, maintenance, repair, and replacement of the xxxxx shall be paid by
Tenant if the tests disclose the existence of facts that give rise to liability of Tenant pursuant
to this Article 10.
10.7
Warranty. Landlord warrants and represents that, to the best of Landlord’s
knowledge, there are no hazardous or toxic materials in or about the Project in violation of
Environmental Laws, on the date of execution of this Lease, and that Landlord will not permit or
cause the storage, use, generation, release, handling or disposal of any hazardous or toxic
materials in, on or about the Leased Premises or the Project during the Term of this Lease, except
for (i) small quantities of commonly- used chemicals such as adhesives, lubricants and cleaning
fluids, and (ii) other Hazardous Materials that are necessary for construction of the Project or
the operation of Landlord’s business or the business of Tenant or any other tenant at the Project.
Landlord agrees that any and all handling, transportation, storage, treatment, disposal, or use of
Hazardous Materials by Landlord in or about the Leased Premises or any other area of the Project
shall strictly comply with all Laws, including, but not limited to, all Environmental Laws.
ARTICLE 11
REPAIRS AND MAINTENANCE
REPAIRS AND MAINTENANCE
11.1 Landlord’s Repair and Maintenance Obligations. Subject to the provisions of Part
III, Section 11.2 (Tenant’s Repair and Maintenance Obligations), Section 11.3 (Tenant’s Compliance
with Laws), Article 15 (Damage and Destruction) and Article 16 (Condemnation), and except for
damage caused by the negligent or intentional act or omission of Tenant, Tenant’s employees,
suppliers, shippers, customers, or invitees, in which event Landlord shall repair the damage at
Tenant’s sole expense (unless and to the extent paid for by insurance maintained by Landlord or
Tenant), Landlord, at Landlord’s sole expense (subject to reimbursement to the extent constituting
an “Operating Expense” in accordance with Part III, Article 5 or to the extent contemplated by
Exhibit “E” attached hereto), shall keep in good order, condition and repair: (i) the roof,
foundations, exterior walls, and structural condition of interior bearing walls, (ii) electrical,
HVAC, fire sprinkler and smoke detection systems, plumbing systems and other Building systems to
the extent located behind the interior finished surface of walls of the Leased Premises, and (iii)
the Common Areas of the Project (collectively the “Landlord’s Maintenance Obligations”). The
Landlord’s Maintenance Obligations shall not, however, include the painting of the interior
surfaces of exterior walls or the maintenance, repair or replacement of windows, window cases,
doors or plate glass of the Leased Premises. Landlord shall have no obligation to make repairs
under this Section 11.1 until a reasonable time after receipt of written notice from Tenant of the
need for such repairs. Tenant waives and releases its rights, including its right to make repairs
at Landlord’s expense, under California Civil Code §§ 1941-1942 or any similar law, statute, or
ordinance now or hereafter in effect. Notwithstanding the foregoing, however, except in connection
with the initial build-out of the Leased Premises, Landlord shall not be required to make, and
Tenant shall be responsible for, any repair (x) resulting from any alteration or modification to
the Building or systems of the Building performed by, for or on behalf of Tenant, (y) to special
equipment or systems installed by, for or on behalf of Tenant, and (z) to
any of Tenant’s Alterations, Trade Fixtures or other property or equipment.
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11.2 Tenant’s Repair and Maintenance Obligations. Subject to the provisions of Part
III, Section 11.1 (Landlord’s Repair and Maintenance Obligations), Article 15 (Damage and
Destruction) and Article 16 (Condemnation), Tenant, at Tenant’s sole expense and in accordance with
the terms of this Lease, shall keep in good order, condition, and repair the Leased Premises and
every part thereof, including, but not limited to, any communications conduit, equipment and wiring
installed by Tenant and exclusively serving the Leased Premises, plumbing fixtures and facilities,
electrical, lighting facilities, fire sprinkler and smoke detection systems and equipment,
fixtures, tenant improvements, interior walls and interior surfaces of exterior walls, floor and
wall coverings, ceilings, floors, windows, doors, plate glass and skylights located within the
Leased Premises, but excluding Building systems (including electrical) to the extent located behind
the interior finished surface of walls of the Leased Premises.
11.3 Tenant’s Compliance with Laws. Tenant, at Tenant’s sole expense, shall promptly
make all repairs, replacements, alterations or improvements needed to comply with all Laws to the
extent that the Laws relate to or are triggered by (i) Tenant’s particular use or change of use of
the Leased Premises, (ii) the tenant improvements, Trade Fixtures and furnishings located in the
Leased Premises, (iii) any Alterations located in the Leased Premises, and (iv) Tenant’s
application for any permit or governmental approval.
11.4 Quality and Scope of Work. All repairs and replacements required of Tenant
shall be promptly made with new materials of like kind and quality. Any work that would
constitute an Alteration shall be governed by all of the requirements of Part III, Article 12.
11.5 Landlord’s Right to Perform Tenant’s Obligations. If Tenant fails to perform
Tenant’s obligations under this Article 11, or under any other provision of this Lease, after
expiration of the cure period provided in Part III, Section 19(b), except in an emergency
endangering person or property when no notice shall be required, Landlord may enter the Leased
Premises, perform the obligations on Tenant’s behalf, and recover the cost of performance as Rent
payable by Tenant with the next installment of Base Rent.
11.6 Warranty. Landlord warrants and represents that Landlord has not received any
written notice of any violations of applicable Law as of the date of this Lease, and, to
Landlord’s knowledge, the Leased Premises shall be delivered to Tenant in material compliance with
all local, state and federal laws, regulations and ordinances applicable to the Leased Premises
and in good order, repair and condition, including without limitation, all structural and
non-structural components, all equipment or facilities servicing the Leased Premises, such as
plumbing, electrical, lighting facilities, fire sprinkler and smoke detection systems and
equipment, fixtures, walls (interior and exterior), foundations, ceilings, roofs, floors, windows
and doors. Landlord and Tenant shall conduct a walk-through of the Leased Premises upon Landlord’s
tender of delivery of possession thereof, and provided that Tenant provides notice to Landlord
either at such walk-through or within 30 days after delivery of the applicable Leased Premises,
Landlord shall be obligated to repair or bring into compliance any elements of the Leased Premises
delivered in breach of this representation and warranty.
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ARTICLE 12
ALTERATIONS
ALTERATIONS
12.1 Landlord’s Consent to Alterations. Except as expressly permitted under this
Section 12.1, Tenant shall not construct any alterations, improvements, or additions or
otherwise alter the Leased Premises (“Alterations”) without Landlord’s prior written consent,
which consent shall not be unreasonably withheld.
(a) Alterations to the Sound Stages. Tenant shall be entitled, without Landlord’s
prior consent, to make Alterations to the Sound Stages, provided such Alterations (i) do not
affect the structural integrity, the exterior sections, or water-tight nature of the Building in
which the applicable Sound Stage is located, (ii) do not affect the exterior appearance or
structure of the Building in which the applicable Sound Stage is located or any portions of the
building systems located outside the Leased Premises, (iii) do not require the removal or
relocation of any building systems or components thereof, and (iv) do not otherwise violate any
of the provisions of Part III, Section 2.3 or any other provisions of this Lease; provided,
however, that Tenant shall return any Sound Stages within which Tenant performs Alterations back
to its original condition, normal wear and tear and casualty excepted, prior to the earlier to
occur of: (a) the scheduled expiration of Tenant’s use of such Sound Stage, as set forth in
Exhibit “B” or otherwise agreed upon in writing between the parties, or (b) the expiration of the
Term.
(b) Alterations to Corporate Office Space and Production Office Space. Tenant shall be
entitled, without Landlord’s prior consent, to make Alterations to the Corporate Office Space and
the Production Office Space, provided such Alterations (i) do not affect the structural integrity,
the exterior sections, or water-tight nature of the Building in which such space is located, (ii)
do not affect the exterior appearance or structure of the Building in which such space is located
or any portions of the building systems located outside the Leased Premises, (iii) do not require
the removal or relocation of any building systems or components thereof, (iv) do not otherwise
violate any of the provisions of Part III, Section 2.3, (v) do not require the securing of any
building or other permit from applicable government authorities, and (vi) with respect to any
Alterations to the Production Office Space, Tenant shall restore the Production Office Space to its
condition as of the Lease Commencement Date, reasonable wear and tear and casualty excepted.
Notwithstanding the foregoing, Tenant shall be entitled to move interior non-bearing walls and
doors within the Corporate Office Space only without Landlord’s consent, even if such Alteration
requires a building or other permit, so long as Tenant complies with items (i) — (iv) of this
Section 12.1(b) and all other conditions set forth in this Part III, Article 12.
(c) Approval. If Landlord’s approval for any Alterations is required,
Tenant shall not undertake the Alterations until Landlord has given written consent to the
plans and specifications, which consent shall not be unreasonably withheld, and the Alterations
shall be constructed substantially in compliance with the plans and specifications approved by
Landlord. Notwithstanding the foregoing, if Landlord fails to reasonably approve or disapprove
Tenant’s plans and specifications within 30 days of their delivery to Landlord, such silence shall
be deemed an approval by Landlord of the plans and specifications.
(d) Expedited Approval. Landlord acknowledges that the Leased Premises may contain
certain of Tenant’s business critical computer servers and other network-related equipment.
Notwithstanding anything in this Article 12 to the contrary, should any Force Majeure or similar
event arise requiring Tenant to make certain Alterations on an emergency basis, Landlord shall
approve any such required Alterations as soon as commercially possible given the extent of such
emergency.
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12.2 Conditions. Whether or not Landlord’s consent is required, all Alterations
not constructed by Tenant’s own personnel shall be constructed by a licensed contractor approved by
Landlord, such approval not to be unreasonably withheld, and in accordance with all Laws using new
materials of good quality. Tenant shall not commence construction of any Alterations until:
(a) copies of Tenant’s plans and specifications have been delivered to Landlord at least 30
days before Tenant commences the Alterations;
(b) all required governmental approvals and permits have been obtained and copies have been
delivered to Landlord;
(c) all requirements regarding insurance imposed by Part III, Article 14 of this Lease and all
commercially reasonable requirements of Landlord’s hazard insurance carrier have been satisfied,
and a certificate of insurance showing Landlord as an additional insured on the contractor’s
ability insurance policy shall be delivered to Landlord; and
(d) Tenant has given Landlord at least 10 days’ prior written notice of
Tenant’s intention to commence construction so that Landlord may post and record notices of
non-responsibility.
12.3 Payment for Alterations. Tenant shall pay, when due, all claims for labor or
materials furnished or alleged to have been furnished in connection with the Alterations that are
or may become mechanics’ or materialmen’s liens against the Leased Premises or the Project or any
interest in them. Tenant shall have the right, in good faith, to contest the validity of any
lien, claim, or demand, provided that Tenant shall, at Tenant’s sole expense, defend Landlord
against the lien, claim, or demand. Upon the request of Landlord, Tenant shall indemnify Landlord
against liability and hold the Leased Premises and the Project free from the effect of any such
lien, claim, or demand. In addition, Tenant shall provide adequate assurances to Landlord’s
lender, title company or purchaser of the Project or any portion thereof (in form acceptable to
Landlord’s lender, title company or purchaser) that any such contested lien shall be released or
satisfied by Tenant and that the Leased Premises and the Project shall be free from the effect of
any such lien, claim or demand. Tenant shall pay and satisfy any adverse judgment that may be
rendered to enforce the lien, claim, or demand against the Landlord, the Leased Premises, or the
Project before the enforcement thereof.
12.4 Landlord’s Property. Except for Trade Fixtures, all Alterations shall be and
become the property of Landlord upon installation, and Landlord shall have no obligation to
reimburse Tenant for any portion of the value or cost; provided, however, that if Landlord’s
default is the sole cause of a termination of this Lease, Landlord shall reimburse Tenant for the
cost of such Alterations, not to exceed the lesser of (i) $100,000, or (ii) the unreimbursed
portion of the costs amortized over no longer than five years. By written notice to Tenant
delivered either before expiration of the Lease Term or within 30 days after the effective date of
any earlier termination of this Lease, Landlord may require Tenant, at Tenant’s sole expense, to
remove any Alterations and restore the Leased Premises to their configuration and condition before
the Alterations were made. Notwithstanding the foregoing, if Tenant delivers copies of the plans
and specifications for any Alteration to Landlord and a written request for Landlord’s advance
determination regarding the removal of such Alterations hereunder, at least 15 days prior to
Tenant’s commencement of construction of such Alteration, and Landlord fails to notify Tenant
within such 15 day period that Landlord requires that the Alteration be removed at the termination
of the Lease and the Leased Premises be restored to their condition prior to the Alteration, Landlord may not later
require Tenant to remove the Alteration and restore the Leased Premises to their condition prior to
the Alteration. If Tenant fails to complete any required restoration in a timely manner, Landlord
may do so and charge the cost of the restoration to Tenant as Rent.
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12.5 Construction Insurance. Before construction begins, Tenant shall deliver to
Landlord reasonable evidence that damage to, or destruction of, the Alterations during construction
will be covered either by the policies that Tenant is required to carry under Part III, Article 14
or by a policy of builder’s all-risk insurance in an amount approved by Landlord. If Landlord
requires Tenant to provide builder’s all-risk insurance for the proposed Alterations, Tenant shall
provide a copy of the policy, any endorsements, and an original certificate of insurance that
complies with Part III, Section 14.2. Tenant shall cause each contractor and subcontractor to
maintain all worker’s compensation insurance required by law and liability insurance (including
property damage) in amounts reasonably required by Landlord. Landlord shall be named as an
additional insured on Tenant’s and its contractor’s liability insurance policy.
12.6 Initial Improvements. The construction and payment of the initial improvements
to the Leased Premises to be performed prior to the Commencement Date shall be governed by the
terms of the Work Letter and not the terms of this Part III, Article 12.
ARTICLE 13
TRADE FIXTURES
TRADE FIXTURES
Tenant shall have the right, at any time and from time to time during the Lease Term, at
Tenant’s sole cost and expense, to install and affix in, to, or on the Leased Premises trade
fixtures, equipment or personal property necessary or appropriate for Tenant’s trade or business
(collectively, “Trade Fixtures”). Trade Fixtures or any other equipment installed in but not
affixed to the Leased Premises by Tenant shall remain the property of Tenant and may be removed at
the expiration of the Lease Term, provided that any damage to the Leased Premises caused by the
removal of Trade Fixtures or equipment shall be repaired by Tenant, and further provided that
Landlord shall have the right, but not the obligation, to keep any Trade Fixtures or equipment that
Tenant otherwise elects to abandon. Any Trade Fixtures that are not removed from the Leased
Premises by Tenant within ten (10) business days after the Expiration Date or earlier termination
date, shall be deemed abandoned by Tenant and shall automatically become the property of Landlord
as the owner of the real property to which they are affixed. At Landlord’s option, Landlord may
cause any such Trade Fixtures remaining in the Leased Premises for any period of time after the
Expiration Date or earlier termination date to be removed from the Leased Premises and stored in a
public warehouse or elsewhere at the expense and for the account of Tenant and, if not removed by
Tenant within 30 days thereafter, disposed of in accordance with the provisions of applicable law
at Tenant’s expense. Tenant shall reimburse Landlord as Rent promptly upon demand for all such
costs (plus a supervisory fee in the amount of ten percent of such costs).
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ARTICLE 14
INSURANCE
INSURANCE
14.1 Tenant’s Policies of Insurance. Tenant shall, at Tenant’s expense, obtain and
keep in force during the Lease Term:
(a) Commercial general liability insurance against liability for bodily injury, personal
injury, death, and damage to property occurring on the Leased Premises with a combined single limit
coverage of at least $1,000,000 per occurrence and a general aggregate combined single limit of
bodily injury and property damage liability of at least $2,000,000; that policy shall include
contractual liability insuring Tenant’s performance of indemnification obligations contained in
this Lease;
(b) Fire and all risk property damage insurance, insuring any Alterations and all Tenant
improvements, and Tenant’s equipment and Trade Fixtures located on the Leased Premises for full
replacement cost; and
(c) Worker’s Compensation insurance as required by law and employer’s liability insurance with
limits of no less than $1,000,000.
If Tenant has in full force a blanket policy of liability insurance with the same coverage for
the Leased Premises as described in this Section 14.1, that blanket Insurance shall satisfy the
requirements of this Section 14.1, provided that the blanket policy specifically states the address
of the Leased Premises as being covered. The limits of liability set forth in Part III, Section
14.1(a) and 14.1(c) may be increased at the beginning of each Option Term by Landlord upon written
notice to Tenant not later than 30 days prior to the commencement of such Option Term, provided
that such increases may not exceed such higher amounts as may be customary among other studio
facilities in the Los Angeles area at the time. Within 30 days after written request by Tenant,
which request Tenant may give at any time during the 12 months prior to any Option Term, Landlord
shall provide to Tenant written notice of the amount of such increase.
14.2 Additional Insurance Requirements. Where applicable, each policy of insurance
required to be carried by Tenant pursuant to Part III, Sections 14.1(a) and 14.1(b):
(a) shall name Landlord, Landlord’s lender and one additional affiliated or third party
manager or operator of the Project (which operator is currently Raleigh Studios) as additional
insureds (however this requirement shall not be applicable to the insurance required under Sections
14.1(b) and 14.1(c));
(b) shall be primary insurance that provides that the insurer shall be liable for the full
amount of the loss without the right of contribution from any other insurance coverage of Landlord;
(c) shall be in a form reasonably satisfactory to Landlord;
(d) shall be carried with companies rated A- or better by AM Best and a Best’s Financial Size
Category rating of at least “X,” as set forth in the most current edition of “Best’s Insurance
Reports” (unless otherwise approved by Landlord), or such higher rating as may be required by any
Lender;
(e) shall provide that the policy shall not be subject to cancellation, lapse, or change,
except after at least 30 days’ prior written notice to Landlord;
(f) shall not have a deductible in excess of a commercially reasonably
amount; and
(g) shall contain a severability clause.
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A copy of each policy evidencing the insurance required to be carried by Tenant pursuant to
Part III, Section 14.1 or a certificate of the insurer, certifying that the policy has been issued,
which provides the coverage required by Part III, Section 14.1 and which contains the specified
provisions, shall be delivered to Landlord prior to the time Tenant takes possession of the Leased
Premises and upon renewal of those policies, not less than 30 days prior to the expiration of the
term of the coverage. If Tenant fails during the Lease Term to maintain any insurance required to
be maintained by Tenant under this Lease, then Landlord may, at its election, upon providing Tenant
with three (3) business days prior notice, arrange for any such insurance, and Tenant shall
reimburse Landlord, as Rent, for any premiums for any such insurance within ten business days after
Tenant receives a copy of the premium notice.
14.3 Landlord’s Property Insurance. Landlord shall procure and maintain during the
Lease Term insurance coverages in such amounts, from such companies, and on such other terms and
conditions as Landlord may from time to time reasonably determine; provided that the coverage and
amounts of insurance carried by Landlord in connection with the Leased Premises shall at a minimum
cover the full replacement cost of the improvements within the Project (including coverages for
enforcement of all Laws requiring the upgrading, demolition, reconstruction and/or replacement of
any portion of such improvements as a result of a covered loss) without deduction for depreciation,
and shall otherwise be comparable to the coverage and amounts of insurance that are carried by
reasonably prudent landlords of similar or comparable facilities in the Los Angeles metropolitan
area. On inquiry by Tenant from time to time, Landlord shall inform Tenant of all such insurance
carried by Landlord.
14.4 Waiver of Subrogation. Landlord and Tenant agree to cause the insurance companies
issuing their respective property (first party) insurance to waive any subrogation rights that
those companies may have against Tenant or Landlord, respectively, as long as the insurance is not
invalidated by the waiver. If the waivers of subrogation are contained in their respective
insurance policies, Landlord and Tenant waive any right that either may have against the other on
account of any loss or damage to their respective property to the extent that the loss or damage is
insured and such proceeds are received under their respective insurance policies.
ARTICLE 15
DAMAGE AND DESTRUCTION
DAMAGE AND DESTRUCTION
15.1 Repair of Damage by Landlord. Tenant agrees to notify Landlord in writing
promptly of any damage to the Leased Premises or the Common Areas resulting from fire, earthquake,
or any other identifiable event of a sudden, unexpected, or unusual nature (“Casualty”). If the
Leased Premises or any Common Areas providing access to the Leased Premises are damaged by a
Casualty to the extent that Tenant does not have reasonable use of or access to the Leased
Premises, and if neither Landlord nor Tenant has elected to terminate this Lease under Part III,
Sections 15.3 or 15.4, Landlord shall promptly and diligently restore such Common Areas and the
Leased Premises as originally constructed by Landlord to substantially the same condition as
existed before the Casualty, except for modifications required by building codes and other Laws
and except for any other modifications to the Common Areas conducted during the Lease Term in
accordance with
Part III, Article 7, and Tenant shall accept such restored Common Areas and Leased Premises.
At Tenant’s option, and at Tenant’s expense, Tenant may restore the Tenant’s Alterations and other
improvements to substantially the same condition as they existed prior to the date of the Casualty
event, provided that Tenant promptly and diligently restores such Alterations and improvements,
such restoration does not unreasonably extend the time period for restoration of the Leased
Premises, and Tenant’s election to not conduct such restoration shall not affect the continued
validity of or Tenant’s obligations under this Lease. Landlord’s obligation to restore is subject
to reasonable delays for insurance adjustment and other matters beyond Landlord’s reasonable
control and subject to the other clauses of this Article 15.
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15.2 Repair Period Notice. Landlord shall, within 45 days after the date Landlord
becomes aware of the Casualty, provide written notice to Tenant indicating the anticipated period
for repairing the Casualty (“Repair Period Notice”). The Repair Period Notice shall also state, if
applicable, Landlord’s election either to repair or to terminate the Lease under Part III, Section
15.3. Landlord shall reasonably and in good-faith determine the Repair Period, using reputable
independent third-party construction expert reasonably satisfactory to Tenant, and shall provide,
with the Repair Period Notice, reasonable documentation supporting Landlord’s determination of the
Repair Period.
15.3 Landlord’s Option to Terminate or Repair. Landlord may elect, in Landlord’s sole
and absolute discretion without any obligation of reasonableness, either to terminate this Lease as
to the portion of the Leased Premises affected by such Casualty only, or to effectuate repairs of
such affected portion, if:
(a) The Estimated Repair Period exceeds 180 days from the date of the Repair Period Notice and
as a result of such Casualty, Tenant does not have reasonable use of or access to the Leased
Premises;
(b) The estimated repair cost exceeds the sum of (i) insurance proceeds actually received by
Landlord, or which would have been received by Landlord except for Landlord’s breach of Part III,
Section 14.3 of this Lease, for such repair (not including the deductible, if any, on Landlord’s
property insurance), plus (ii) any amount that Tenant is obligated or elects to pay for such
repair, by more than five percent of the total replacement cost of the Project;
(c) The estimated repair cost of the Leased Premises, even though
covered by insurance, exceeds 50% of the full replacement cost; or
(d) Then-existing Laws do not permit restoration to the original condition of the damaged
Leased Premises or Common Area.
15.4 Tenant’s Option To Terminate. If the Repair Period Notice provided by
Landlord indicates that the anticipated period for repairing the Casualty exceeds 180 days from the
date of the Repair Period Notice in the case of the Corporate Office Space or 60 days from the date
of the Repair Period Notice in the case of either the Sound Stages or Production Office Space,
Tenant may elect to terminate this Lease as to the portion of the Leased Premises affected by such
Casualty only or the entire Lease by providing written notice (“Tenant’s Termination Notice”) to
Landlord within 30 days after receiving the Repair Period Notice; provided, however, that Landlord
shall have the right to provide, at no additional cost or expense to Tenant, replacement space
within the Project reasonably
satisfactory in all respects to Tenant, in which event Tenant shall not have any right to
terminate this Lease. If Tenant does not elect to terminate within this 30-day period, Tenant shall
be considered to have waived the option to terminate. Landlord shall not be required to commence
repairs to the Leased Premises unless and until Tenant elects or is deemed to have elected not to
terminate this Lease. In the event that any modifications to the Leased Premises, required by
building codes or other Laws, prevent Tenant from conducting its business in substantially the same
manner as before the Casualty, Tenant may elect to terminate this Lease within 30 days after
receiving notice of such modification(s). Notwithstanding anything to the contrary in this Section
15.4 or this Lease, if the Casualty was the result of the negligence or willful misconduct of
Tenant or Tenant’s employees, contractors, licensees, subtenants or invitees, Tenant may not elect
to terminate this Lease.
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15.5 Rent Abatement Due to Casualty. Landlord and Tenant agree that, if the Casualty
was not the result of the negligence or willful misconduct of Tenant or Tenant’s employees,
contractors, licensees, subtenants or invitees, Tenant shall be provided with a proportionate
abatement of Rent based on the Rentable Square Feet of the Leased Premises rendered unusable (due
to physical damage to the Leased Premises or the unavailability of access to the Leased Premises)
and not used by Tenant. That proportional abatement, if any, shall be provided during the period
(a) beginning on the later of (i) the date of the Casualty or (ii) the date on which Tenant ceases
to occupy that portion of the Leased Premises affected by the Casualty, and (b) ending on (i) the
date that the unusable portions of the Leased Premises, including the Tenant’s Alterations and
improvements, are once again available for legal use by Tenant or (ii) the effective date of
termination under Part Ill, Section 15.7. Landlord shall not be liable to Tenant or any other
person or entity for any direct damages unless caused by the gross negligence or willful misconduct
of Landlord or Landlord’s employees, contractors, licensees, or invitees, due to, arising out of,
or as a result of the Casualty. In connection with the preceding sentence, Tenant’s “direct
damages” shall be deemed to include (a) all of Tenant’s relocation costs incurred in connection
with Tenant’s moving to replacement premises in lieu of those portions of the Leased Premises
affected by the Casualty in order to permit Tenant to complete any production activities pending as
of such Casualty, and (b) any occupancy costs incurred by Tenant in connection with Tenant’s
leasing of such replacement premises in order for Tenant to complete any production activities
pending as of such Casualty in excess of the Rent payable by Tenant hereunder; provided, further,
that in no event shall Landlord be liable for any other “consequential” damages (including but not
limited to lost profits of Tenant or loss of or interference with Tenant’s business) arising out
of, or as a result of the Casualty. Notwithstanding the foregoing, to the extent that any of the
Stages are damaged by a Casualty, in addition to the rent abatement Tenant is entitled to for the
unusable Stage or Stages which are damaged, Tenant shall also be entitled to rent abatement for
those portions of the production office space, for which Tenant has no use and does not use due to
Tenant’s inability to use such Stage(s). Although Tenant is not obligated to maintain business
interruption insurance, Tenant agrees that Landlord shall not be liable for any damages, losses,
costs or expenses that would be covered by a commercially reasonable business interruption
insurance policy, unless such damages, losses, costs or expenses are caused by Landlord’s
negligence or willful misconduct, and then only for an amount equal to a commercially reasonable
deductible under such business interruption insurance policy maintained by Tenant.
15.6 Damage Near End of Term. Despite any other provision of this Part III, Article
15, if during the last six (6) months of the Lease Term (as may be extended), the Leased
Premises or the Building are destroyed or damaged by a Casualty which would take longer than
forty five (45) days to repair, Landlord shall have the option, in Landlord’s sole and absolute
discretion without any obligation of reasonableness, to terminate the Lease by giving written
notice to Tenant of the exercise of that option within 60 days after the damage or destruction.
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15.7 Effective Date of Termination: Rent Apportionment. If Landlord or Tenant elects
to terminate this Lease under this Part III, Article 15 in connection with a Casualty, such
termination shall be effective 30 days after delivery of written notice of such election to allow
Tenant time to remove Tenant’s equipment and Trade Fixtures. Tenant shall pay Rent, properly
apportioned and abated, up to the effective date of the termination. After the effective date of
the termination, Landlord and Tenant shall be discharged of all future obligations under this
Lease, except for those provisions that, by their terms, survive the expiration or earlier
termination of this Lease.
15.8 Waiver of Statutory Provisions. The provisions of this Lease, including those in
this Part III, Article 15, constitute an express agreement between Landlord and Tenant that applies
in the event of any Casualty to the Leased Premises, Building, or Project. Tenant, therefore, fully
waives the provisions of any statute or regulation, including California Civil Code §§ 1932(2) and
1933(4), for any rights or obligations concerning a Casualty.
15.9 Sole Remedy. Except as expressly provided in this Article 15, damage to or
destruction of the Leased Premises, the Building, or the Project shall not terminate this Lease or
result in any abatement of Rent. Tenant waives any right of offset against Tenant’s obligations to
pay Rent that may be provided by any statute or rule of law in connection with Landlord’s duties of
repair and restoration under the provisions of this Lease. Landlord shall not be responsible for
any loss, damage, or destruction to Tenant’s leasehold improvements or to fixtures, inventory, or
other Tenant-owned improvements or property, unless such loss, damage or destruction is caused by
Landlord’s negligence or willful misconduct, and then only for an amount equal to a commercially
reasonable deductible under any insurance policy maintained by Tenant or required to be maintained
by Tenant under Article 14 or any other provision of this Lease.
ARTICLE 16
CONDEMNATION
CONDEMNATION
16.1 Termination Rights. If any part of the Leased Premises is condemned or otherwise
taken under the power of eminent domain or conveyed in lieu of condemnation, and the condemnation
or taking materially and adversely affects Tenant’s access to or occupancy of the Leased Premises
or a material portion thereof, either party shall, at such party’s option, have the right to
terminate this Lease within 60 days after receiving written notice of such condemnation or taking.
If any part of the Project is condemned or taken and such taking materially and adversely affects
the normal operation of the Project, Landlord, in Landlord’s reasonable discretion, may terminate
this Lease within 60 days after receiving written notice of such condemnation or taking. If a part
of the Leased Premises is condemned or taken, and neither party elects to terminate this Lease, but
the Leased Premises have been damaged as a consequence, Landlord shall not be required to repair or
restore any damage to the Leased Premises, provided that the Base Rent for the remainder of the
Lease Term shall be proportionately reduced, based on the degree of interference with Tenant’s use
of the Leased Premises. Landlord and Tenant waive the provisions of any statute (including without
limitation California Code of Civil Procedure Section 1265.130 or
any successor statute) that allows Landlord or Tenant to petition the superior court (or any
other court) to terminate this Lease in the event of a partial Condemnation of the Premises.
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16.2 Landlord’s Right to Award. Except as provided in Part Ill, Section 16.3, in
connection with any condemnation or taking:
(a) Landlord shall be entitled to receive all compensation and anything of value awarded,
paid, or received in settlement or otherwise (“Award”); and
(b) Tenant irrevocably assigns and transfers to Landlord all rights to and interests in the
Award and fully releases and relinquishes any claim to, right to make a claim on, or interest in
the Award.
16.3 Tenant’s Right to Award. Notwithstanding Part III, Section 16.2:
(a) Tenant shall be entitled to receive any amount attributable to any excess of (i) the
present value of the fair market base rent over (ii) the Base Rent, for that portion of the
Leased Premises subject to the condemnation or taking for the remainder of the Lease Term, as of
the date on which title to the Property or any portion thereof subject to the condemnation or
taking is vested in the condemning authority (the “bonus value”); and
(b) Tenant shall have the right to make a separate claim in the condemnation proceeding for:
(i) the taking of the unamortized or undepreciated value of any leasehold improvements owned by
Tenant that Tenant has the right to remove at the end of the Lease Term and that Tenant elects not
to remove; (ii) reasonable removal and relocation costs for any leasehold improvements that Tenant
has the right to remove and elects to remove; (iii) loss of goodwill; (iv) relocation costs under
Government Code section 7262, the claim for which Tenant may pursue by separate action independent
of this Lease; and (v) any other amount in addition to the foregoing that does not reduce the
amount of the Award payable to Landlord. Tenant shall have the right to negotiate directly with the
condemning authority for the recovery of the portion of the Award that Tenant is entitled to under
this subsection 16.3(b).
16.4 Temporary Taking. If the Leased Premises is condemned or taken for less than six
months, this Lease shall be unaffected, and Tenant shall continue to pay all Rent payable under
this Lease; provided, however, that in such case, Tenant shall be entitled to receive that portion
of any Award that represents Rent paid by Tenant under this Lease.
ARTICLE 17
ASSIGNMENT AND SUBLETTING
ASSIGNMENT AND SUBLETTING
17.1 Assignments. Subject to the provisions of Part III, Section 17.2 below, Tenant
may not, without Landlord’s prior written consent, not to be unreasonably withheld, conditioned or
delayed, voluntarily, involuntarily, or by operation of laws:
(i) assign Tenant’s interest in this Lease or sublet all or any part of the Leased
Premises;
(ii) mortgage or encumber the Lease, or otherwise use the Lease as a security device
in any manner; or
(iii) amend or modify any assignment, sublease, or other transfer permitted hereunder.
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17.2 Permitted Assignments. Tenant shall be permitted to make the following
Assignments without requiring Landlord’s consent and the terms and conditions stated herein:
(a) Subletting. Tenant may sublet all or any part of the Leased
Premises or allow it to be occupied or used by a person or entity other than Tenant, provided
that:
(i) Landlord receives written notice of the sublease and subtenant, including the
number of occupants and parking spaces, at least 10 days before the commencement of any
such subtenancy; or if a 10 day notice cannot reasonably be given, as soon as possible, but
in any event prior to such subtenant taking possession of any portion of the Leased
Premises;
(ii) The sublease is for a term less than or equal to the remaining Lease Term at the
time the sublease is entered into;
(iii) The subtenant is only permitted to use its applicable sublet premises for film,
television or other related production activities; and
(iv) The sublease provides by its terms that it is subordinate and
subject to the terms and conditions of this Lease, that subtenant will comply with all
obligations of Tenant under the Lease, that subtenant will obtain all Additional Services
from Landlord, and in the event of the termination of this Lease that the sublease shall
terminate, and in the event that such termination of this Lease is due to Tenant’s breach,
Landlord may elect to recognize and assume the sublease, in which event the subtenant shall
attorn to Landlord and recognize Landlord as the lessor under such sublease.
(b) Assignment. Tenant may assign Tenant’s interest under
this Lease to any Affiliate of Tenant without Landlord’s consent, as long as the following
conditions are met:
(i) Landlord receives written notice of the Assignment at least
10 days before the Assignment, specifying the name of the Assignee; and
(ii) The Assignee assumes in writing all of Tenant’s obligations under this Lease.
(c) Occupancy by Others. Notwithstanding anything in this Article 17 to the contrary,
Tenant shall have the right to permit the occupancy of the Leased Premises from time to time
during the Term by any of Tenant’s Affiliates or any other individual(s) or entities with a
business relationship with Tenant (which business relationship is not created solely in order to
allow occupancy of the Leased Premises under this subsection) and who are working with and
directly under the supervision of Tenant (collectively, “Tenant’s Occupants”) on and subject to
the following conditions: (i) such individuals or entities shall not be permitted to occupy a
separately demised portion of the
Leased Premises which contains an entrance to such portion of the Leased Premises other than
the primary entrance to the Leased Premises nor shall any such individuals or entities be
permitted
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identification signage; (ii) such occupancy shall not be a subterfuge by Tenant to avoid
its obligations under this Lease, (iii) Tenant shall receive no rent payment or other
consideration in connection with such occupancy in respect of such space other than nominal rent
payments or other consideration for actual services rendered or provided by Tenant for such
Tenant’s Occupant; and (iv) Tenant shall indemnify, defend and hold Landlord harmless from and
against any and all liability, penalties, losses, damages, costs, expenses, causes of action,
claims, charges, liens, assessments, fines or judgments of any kind resulting from any of Tenant’s
Occupants’ use of or presence upon the Leased Premises and/or the Project, except for claims
arising out of Landlord’s gross negligence or willful misconduct. Tenant shall be solely
responsible for ensuring compliance with this Lease by Tenant’s Occupants at all times. To the
extent not restricted by the terms of any confidentiality agreement, Tenant shall promptly supply
Landlord with such documents or information regarding any such individuals or entities as may be
reasonably necessary to confirm such individuals’ or entities’ occupancy conforms with the
requirements of this subsection. Any occupancy permitted under this subsection shall not be
deemed an Assignment under this Article 17 and shall not require Landlord’s consent.
Notwithstanding the foregoing, no such occupancy shall relieve Tenant from any obligations or
primary liability under this Lease.
17.3 Conditions. Any action taken or proposed to be taken pursuant to Part
III, Sections 17.1 or 17.2 shall be collectively referred to as an “Assignment”, and any third
person succeeding to all or a portion of Tenant’s interest under this Lease or proposed to succeed
to all or a portion of Tenant’s interest under this Lease shall be referred to as an “Assignee”.
(a) Any attempted Assignment other than as provided in Section 17.2 shall constitute an Event
of Default and shall be voidable at Landlord’s option.
(b) No Assignment or other permitted use of all or any portion of the Leased Premises by any
of Tenant’s Occupants, even with the consent of Landlord, shall relieve Tenant of its primary
obligation to pay the Rent and to perform all of the other obligations to be performed by Tenant,
and Tenant shall remain primarily liable under this Lease (and not as a mere surety). The
acceptance of Rent by Landlord from any person shall not be deemed to be a waiver by Landlord of
any provision of this Lease, nor to be a consent to any Assignment.
(c) In the event that Tenant requires any subtenant to carry insurance under its sublease,
Tenant shall use best efforts to have Landlord named as an additional insured under such insurance.
If Tenant receives proof of insurance from any subtenant, Tenant shall provide a copy of such proof
of insurance to Landlord.
17.4
Landlord’s Rights Upon Event of Default. If an Event of Default occurs and is
continuing, Landlord may:
(a) proceed directly against Tenant, any Assignee, any guarantors, or
any other person responsible for the performance of this Lease, without first exhausting
Landlord’s remedies against any other person responsible to Landlord, or resorting to any security
held by Landlord; and
(b) require any subtenant to attorn to Landlord, in which event
Landlord shall undertake the obligations of Tenant under any sublease, provided, however, that
Landlord shall not be liable for any amounts paid by the subtenant to Tenant or for any defaults by
Tenant under the sublease.
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ARTICLE 18
EXCULPATION, INDEMNIFICATION AND LIMITATION OF LIABILITY
EXCULPATION, INDEMNIFICATION AND LIMITATION OF LIABILITY
18.1 Definition of “Tenant Parties” and “Landlord Parties”. For purposes of this
Part III, Article 18, the term “Tenant Parties” refers singularly and collectively to Tenant and
Tenant’s officers, directors, managers, shareholders, members, partners, agents, employees and
subtenants, as well as to all persons and entities claiming through any of these persons or
entities. The term “Landlord Parties” refers singularly and collectively to Landlord and Landlord’s
officers, directors, managers, shareholders, members, partners, agents, employees and independent
contractors, as well as to all persons and entities claiming through any of these persons or
entities.
18.2 Exculpation. Except as specifically provided in this Lease, Landlord and
Landlord’s Parties shall not be liable to Tenant or Tenant’s Parties for any damage to Tenant,
Tenant’s Parties or their property from any cause. Tenant, on its own behalf and on the behalf of
all Tenant Parties, waives all claims against Landlord or Landlord’s Parties for damage to person
or property arising for any reason, except that this exculpation clause shall not apply to claims
for damage to Tenant or Tenant’s Parties or their property resulting from the negligence or willful
misconduct of Landlord or Landlord’s Parties. The provisions of this Section 18.2 shall survive the
expiration or earlier termination of this Lease.
18.3 Tenant’s Indemnification. Tenant agrees to indemnify, defend, and hold
Landlord and Landlord Parties harmless from all liability, penalties, losses, damages, costs,
expenses, causes of action, claims, charges, liens, assessments, fines or judgments of any kind
arising by reason of any death, bodily injury, personal injury, or property damage, and all
economic losses or resulting damage of any kind (except, in all events, for lost profits and
other consequential damages), resulting from:
(a) any cause occurring in or about or resulting from an occurrence in or about the Leased
Premises during the Lease Term, except for claims arising out of Force Majeure or Landlord’s gross
negligence or willful misconduct;
(b) any act, error, omission or negligence of Tenant or Tenant Parties wherever it occurs;
(c) Tenant’s conducting of its business; or
(d) an Event of Default by Tenant.
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The provisions of this Part III, Section 18.3 shall survive the expiration or earlier
termination of this Lease.
18.4 Landlord’s Indemnification. Landlord agrees to indemnify, defend, and hold Tenant
and Tenant’s Parties harmless from all liability, penalties, losses, damages, costs, expenses,
causes of action, claims, charges, liens, assessments, fines or judgments of any kind arising by
reason of any death, bodily injury, personal injury, or property damage, and all economic losses or
resulting damage of any kind (except, in all events, for lost profits and
other consequential damages), resulting from:
(a) any act, error, omission or negligence of Landlord or Landlord’s Parties in connection
with Landlord Parties’ activities in, on, or about the Project, except to the extent that such
liability, penalties, losses, damages, costs, expenses, causes of action, claims, charges, liens,
assessments, fines or judgments are for damage to any of Tenant’s Alterations or improvements and
Tenant’s personal property, fixtures, furniture and equipment in the Leased Premises and is covered
by insurance that Tenant is required to obtain under this Lease (or would have been covered had
Tenant carried the insurance required under this Lease); or
(b) a default by Landlord, under Part III, Section 21.1.
The provisions of this Section 18.4 shall survive the expiration or earlier termination of this
Lease.
18.5 Limitations of Liability. Except as otherwise provided in this Lease, Landlord
shall not be liable to Tenant, nor shall Tenant be entitled to terminate this Lease or to any
abatement of Rent for any damage to Tenant’s property or any injury to Tenant or any Tenant Parties
or loss to Tenant’s business arising out of any cause, including but not limited to:
(a) the failure, interruption, or installation of any heating, air conditioning, or
ventilation equipment;
(b) the loss, interruption, limitation, curtailment, rationing, or restriction on the use of
water or electricity, gas or any other form of utility;
(c) the failure to furnish or delay in furnishing any utilities or services when the failure
or delay is caused by fire or other casualty, the elements, labor disputes, acts of God, or any
other circumstance beyond the control of Landlord; or
(d) subject to Landlord’s compliance with reasonable security procedures, vandalism, malicious
mischief, or forcible entry by unauthorized persons or the criminal act of any person.
Notwithstanding the foregoing, if and to the extent any of the events listed in subsections
18.5(a)-(d) occur primarily due to the gross negligence or intentional misconduct of Landlord, then
the limitations of liability set forth in this Section 18.5 shall not apply to that event.
ARTICLE 19
DEFAULT BY TENANT
DEFAULT BY TENANT
Each of the following shall constitute an event of default under this Lease (each, “Event of
Default”):
(a) Tenant’s failure to make any payment required under this Lease when due, where this
failure continues for a period of five business days after written notice from Landlord to Tenant;
(b) The failure of Tenant to perform any of the covenants, conditions, or provisions of this
Lease to be performed by Tenant (other than those requiring any payment
to Landlord), where this failure continues for a period of 30 days (or such shorter period, if
any, set forth for cure in the applicable provision of this Lease) after written notice from
Landlord to Tenant or, if Tenant’s obligation requires more than 30 days for performance, Tenant
shall not be in default if Tenant commences to perform within the 30 day period and afterwards
completes it with due diligence and continuity;
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(c) Any of the following (to the extent permitted by law):
(i) The making by Tenant of any general arrangements or
assignments for the benefit of creditors;
(ii) The filing by or against Tenant of any proceeding under an insolvency or bankruptcy law,
unless (in the case of an involuntary proceeding) the proceeding is dismissed within 60 days;
(iii) The appointment of a trustee or receiver to take possession of substantially all of
Tenant’s assets at the Leased Premises or of Tenant’s interest in this Lease, where possession is
not restored to Tenant within 60 days of this appointment; or
(iv) The attachment, execution, or other judicial seizure of substantially all of Tenant’s
assets located at the Leased Premises or of Tenant’s interest in this Lease, where this seizure is
not discharged within 60 days after the seizure.
(d) Tenant’s Assignment in violation of Article 17; and
(e) Tenant’s failure to execute or deliver any estoppel certificate
required under Part III, Article 24 in a timely manner.
ARTICLE 20 REMEDIES
20.1 Landlord’s Remedies. Upon the occurrence of an Event of Default, and after the
expiration of any applicable cure period, Landlord, in addition to any other rights or remedies
available to Landlord at law or in equity, shall have the remedies set forth in this Article 20.
The remedies are not exclusive but cumulative.
(a) Landlord may terminate this Lease and all rights of Tenant by
giving Tenant written notice that this Lease is terminated, in which case Landlord may
recover from Tenant the sum of:
(i) the worth at the time of award of any unpaid Rent that had
been earned at the time of termination;
(ii) the worth at the time of award of the amount by which (A)
the unpaid Rent that would have been earned after termination until the time of award
exceeds (B) the amount of rental loss, that Tenant proves could have been reasonably
avoided;
(iii) the worth at the time of award of the amount by which (A)
the unpaid Rent for the balance of the term after the time of award exceeds (B) the
amount of rental loss, that Tenant proves could be reasonably avoided;
(iv) any other amount necessary to compensate Landlord for all
the detriment proximately caused by Tenant’s failure to perform Tenant’s obligations
or that, in the ordinary course of things, would be likely to result, including, but not
limited to, brokerage commissions, advertising expenses, costs of remodeling the Leased
Premises, or any portion of the Leased Premises, for a new tenant or tenants, and any
special concessions made to obtain a new tenant or tenants; and
(v) all other amounts in addition to or in lieu of those previously stated as may be
permitted from time to time by California law.
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As used in clauses (i) and (ii) of this Section 20.1(a), the worth at the time of award is
computed by allowing interest at the rate set forth in Part III, Section 22.2. As used in clause
(iii) of this Section 20.1(a), the worth at the time of award is computed by discounting that
amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus
1%.
(b) Landlord may continue this Lease, and from time to time, without terminating this Lease,
either (i) recover all Rent and other amounts payable as they become due or (ii) relet the Leased
Premises or any part of the Leased Premises on behalf of Tenant for any term, at any reasonable
Rent, and pursuant to any other provisions as Landlord deems advisable, all with the right, at
Tenant’s cost, to make reasonable alterations and necessary repairs to the Leased Premises.
Tenant acknowledges that in the event of any such reletting of the Leased Premises, Landlord
shall be entitled to recover its reasonable costs incurred in such reletting, including without
limitation, brokers’ commissions, attorneys’ fees, advertising costs, and expenses of remodeling
the Leased Premises for such reletting. The parties agree that Landlord is to have the remedy
described in California Civil Code Section 1951.4 (which effectively provides that a lessor may
continue a lease in effect after the lessee’s breach and recover rent as it becomes due), and the
Tenant hereby acknowledges that this Lease meets the requirements of such statutory provision and
that Tenant’s rights to sublet or assign hereunder are subject only to reasonable limitations.
(c) Upon the occurrence of an Event of Default, Landlord shall also
have the right, with or without terminating this Lease, to re-enter the Leased Premises and
remove all persons and property from the Leased Premises after giving Tenant “reasonable notice”
under the circumstances of its intent to do so. As used in this Section 20.1(c), “reasonable
notice” shall be no longer than 10 days. Landlord may cause property so removed from the Leased
Premises to be stored in a public warehouse or elsewhere at the expense and for the account of
Tenant and to be disposed of in accordance with the provisions of applicable law at Tenant’s
expense.
20.2 Remedial Actions by Landlord. None of the following remedial actions, singly or
in combination, shall be construed as an election by Landlord to terminate this Lease unless
Landlord has in fact given Tenant written notice that this Lease is terminated or unless a court
of competent jurisdiction decrees termination of this Lease: any act by Landlord to maintain or
preserve the Leased Premises; any efforts by Landlord to relet the Leased Premises; or any
re-entry, repossession, or reletting of the Leased Premises by Landlord pursuant to this Article
20. If Landlord takes any of the previous remedial actions without terminating this Lease,
Landlord may nevertheless at any time after taking any remedial action terminate this Lease by
written notice to Tenant.
20.3 Landlord’s Right to Cure Tenant’s Breach. After the occurrence of an Event of
Default, Landlord, in addition to or in lieu of exercising other remedies, may, but without
any obligation to do so, cure the breach underlying the Event of Default for the account and at the
expense of Tenant. If an event occurs which, with the giving of notice or the passage of time, or
both, would constitute an Event of Default, Landlord may, but shall have no obligation to, proceed
to cure such event in case of an emergency prior to the expiration of any applicable cure period
for the account and at the expense of Tenant. Tenant shall reimburse Landlord as Rent promptly on
demand for all costs, including costs of settlements, defense, court costs, and attorneys’ fees,
that Landlord may incur in the course of any cure.
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ARTICLE 21
DEFAULT BY LANDLORD
DEFAULT BY LANDLORD
21.1 Default.
(a) Except as provided in subsection 21.1 (b) below, Landlord shall not be in default unless
Landlord fails to perform obligations required of Landlord within 30 days after written notice by
Tenant to Landlord (or such shorter period, if any, set forth for cure in the applicable provision
of this Lease) and to the holder of any first mortgage or deed of trust covering the Leased
Premises, the name and address for that holder having been furnished to Tenant in writing,
specifying in what respect Landlord has failed to perform the obligation. However, if Landlord’s
obligation requires more than 30 days for performance, Landlord shall not be in default if Landlord
commences to perform within the 30 day period and afterwards completes it with due diligence and
continuity.
(b) In the event that Landlord breaches the covenant of quiet enjoyment and as a direct
result of Landlord’s failure to immediately cure such breach, Tenant is prevented from utilizing
the Sound Stage(s) for Tenant’s production activities for an aggregate of more than 10 business
days within any 12-month period, Tenant may terminate this Lease by written notice to Landlord at
any time during such 12-month period that Landlord remains in breach of the covenant of quiet
enjoyment; provided, however, that Landlord shall not be considered in breach of the covenant of
quiet enjoyment unless and until Tenant notifies Landlord in writing of the specific conditions
constituting a breach of the covenant and Landlord fails to cure the breach immediately after
receipt of such notice and only if and for so long thereafter as Tenant gives Landlord written
notice on each of the days that such breach of the covenant of quiet enjoyment occurs, continues or
recurs.
21.2 Liability of Landlord. For any breach of this Lease, the liability of Landlord
and all Landlord’s Parties (including all persons and entities that comprise Landlord, and any
successor landlord) and any recourse by Tenant against Landlord and Landlord’s Parties shall be
limited to the interest of Landlord in and to the Project. On behalf of itself and all persons
claiming by, through, or under Tenant, Tenant expressly waives and releases Landlord from any
personal liability for breach of this Lease.
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ARTICLE 22
LATE PAYMENTS
LATE PAYMENTS
22.1 Late Charge. Tenant acknowledges that late payment of sums due under this Lease
will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which will
be extremely difficult to ascertain. Therefore, if any sum due from Tenant is not received by
Landlord when due more than two times during the Lease Term, then without any requirement for
notice to Tenant, Tenant shall pay to Landlord a late charge equal to 3% of all subsequent overdue
sums during the Lease Term; provided, that if Tenant fails to make any payment required under this
Lease when due three (3) times within any 12 month period (whether or not cured), then upon the
fourth late payment, the penalty shall be 15% of the overdue sum, and upon the fifth late payment,
the penalty shall be 20% of the overdue sum, and upon all late payments thereafter, the penalty
shall be 25% of the overdue sum. The parties agree that the late charge represents a fair and
reasonable estimate of the costs Landlord will incur because of late payment by Tenant. Acceptance
of the late charge by Landlord shall not constitute a waiver of Tenant’s default for the overdue
sum, nor prevent Landlord from exercising any of the other rights and remedies in this Lease.
Tenant shall pay the late charges as Rent with the next installment of Rent.
22.2 Interest on Past Due Obligations. If any amount that is due to Landlord is not
paid when due, Tenant shall pay to Landlord interest on the past due amount, from the date due
until paid, at a rate equal to the commercial loan rate announced by Bank of America as its
so-called reference or prime rate from time to time plus 4% per year. Despite any other provision
of this Lease, the total liability for interest payments shall not exceed the limits, if any,
imposed by Laws. Any interest paid in excess of those limits shall be refunded to Tenant by
application of the amount of excess interest paid against any sums outstanding in any order that
Landlord requires. If the amount of excess interest paid exceeds the sums outstanding, the portion
exceeding those sums shall be refunded in cash to Tenant by Landlord. To ascertain whether any
interest payable exceeds the limits imposed, any non-principal payment (including late charges)
shall be considered to the extent permitted by law to be an expense or a fee, premium, or penalty
rather than interest.
ARTICLE 23
SUBORDINATION; NONDISTURBANCE; ATTORNMENT
SUBORDINATION; NONDISTURBANCE; ATTORNMENT
23.1 Automatic Subordination. Subject to the provisions of Part III, Section 23.2,
this Lease shall be subject and subordinate to the following:
(a) All present and future liens of any mortgages, deeds of trust and, other encumbrances
(“Encumbrances”) of the Leased Premises and the Project;
(b) All ground or underlying leases (“Underlying Leases”) now or hereafter in force against
the Project or any portion thereof;
(c) All renewals, extensions, modifications, consolidations, and replacements of the items
described in items (a) and (b) of this Section 23.1; and
(d) All advances made or hereafter to be made on the security of the Encumbrances.
Despite any other provision of this Article 23, any Encumbrance holder or lessor of an Underlying
Lease may elect that this Lease shall be senior to and have priority over that Encumbrance or
Underlying Lease whether this Lease is dated before or after the date of the Encumbrance or
Underlying Lease.
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23.2 Nondisturbance. No subordination under Part III, Section 23.1 shall be effective
unless and until Landlord obtains for the benefit of Tenant from the holder of the Encumbrance a
nondisturbance agreement in recordable form, providing, in substance, that in the event of any
foreclosure, sale under a power of sale, ground or master lease termination, or transfer in lieu of
any of the foregoing, or the exercise of any other right or remedy under any such Encumbrance:
(a) Tenant’s use, possession, and enjoyment of the Leased Premises shall not be disturbed and
this Lease shall continue unmodified in any way and in full force and effect subject to all of its
terms and conditions; and
(b) This Lease shall automatically become a lease directly between any successor to Landlord’s
interest, as landlord, and Tenant, as if that successor were the Landlord originally named in this
Lease; provided, however, that in no event shall such successor be:
(i) liable for any act, omission, default, misrepresentation or breach of warranty
of any previous landlord (including Landlord) or obligations accruing prior to such
successor’s actual ownership of the Project; provided, however, that if such act or
omission constitutes a continuing non-monetary default under this Lease, then such
successor shall be required to cure the same within the same period as provided to
Landlord under this Lease; and provided, further that in no event shall Landlord be
released from any continuing liability under this;
(ii) subject to any offset, defense, claim or counterclaim which Tenant might be
entitled to assert against any previous landlord (including Landlord) except as
otherwise provided in this Lease;
(iii) bound by any payment of rent, additional rent or other payments made by
Tenant to any previous landlord (including Landlord) for more than one (1) month in
advance;
(iv) bound by any material amendment or modification of the Lease hereafter made,
or consent or acquiescence by any previous landlord (including Landlord) under the
Lease to any assignment or sublease hereafter granted, without the written consent
of Landlord’s lender if such consent of Landlord was required under the Lease; or
(v) liable for any deposit that Tenant may have given to any previous landlord
(including Landlord) which has not, as such, been transferred to such successor.
23.3 Subordination Agreement. If Tenant has received the nondisturbance agreement
referred to in Part Ill, Section 23.2, Tenant shall, within 10 days after Landlord’s request,
execute any reasonable further instruments or assurances in recordable form that Landlord
reasonably considers necessary to evidence or confirm the subordination or superiority of this
Lease to any such Encumbrances or Underlying Leases.
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23.4 Attornment. Subject to Part III, Section 23.2, Tenant covenants and agrees to
attorn to any transferee of Landlord’s interest in the Project by foreclosure, deed in lieu of
foreclosure, exercise of any remedy provided in any Encumbrance or Underlying Lease, or operation
of law (without any deductions or setoffs) except as expressly provided in this Lease or in any
nondisturbance agreement, if requested to do so by the transferee, and to recognize the transferee
as the lessor under this Lease as long as the transferee agrees to take the place of Landlord in
this Lease and perform covenants, conditions or provisions of this Lease. The transferee shall not
be liable for:
(a) Any acts, omissions, or defaults of Landlord that occurred before the sale or conveyance;
or
(b) The return of any security deposit except for deposits actually paid to the transferee and
except as expressly provided in this Lease or in any nondisturbance agreement.
23.5 Notice of Default; Right to Cure. Tenant agrees to give written notice of any
default by Landlord to the holder of any Encumbrance or Underlying Lease that it has been made
aware of in writing. Tenant agrees that, before it exercises any rights or remedies under the
Lease, the lienholder or lessor shall have the right, but not the obligation, to cure the default
within the same time, if any, given to Landlord to cure the default, plus an additional 30 days
(except for those rights set forth in Part III, Sections 1.5, 9.5 or 21.1(b), which must be cured
within the time period set forth therein).
ARTICLE 24
ESTOPPEL CERTIFICATES
ESTOPPEL CERTIFICATES
24.1 Estoppel Certificate. At all times during the Lease Term, each party agrees to
execute and deliver to the requesting party, within 10 days following delivery of a request by the
other party, an estoppel certificate:
(a) certifying that this Lease is unmodified and in full force and effect, or if modified
stating the nature of the modification and certifying that this Lease, as so modified, is in full
force and effect;
(b) stating the date to which the Rent and other charges are paid in advance, if any;
(c) acknowledging that there are not, to the certifying party’s knowledge, any uncured
defaults on the part of any party, or if there are uncured defaults, specifying the nature of the
defaults;
(d) acknowledging that, to the certifying party’s knowledge, the certifying party does not
have any claims against the requesting party; and
(e) any other items reasonably requested by such party or its lender or prospective purchaser
or lender.
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24.2 Failure to Deliver Certificate. A failure to deliver an estoppel certificate
within 10 days after delivery of a request shall be a conclusive admission that, as of the date of
the request for such statement:
(a) this Lease is unmodified except as may be represented by the requesting party in the
request and is in full force and effect;
(b) to that party’s knowledge, there are no uncured defaults in the requesting party’s
performance; and
(c) no Rent has been paid more than 30 days in advance.
ARTICLE 25
TRANSFER BY LANDLORD
TRANSFER BY LANDLORD
Landlord has the right to transfer all or part of its interest in the Project or any portion
thereof and in this Lease. On such transfer Landlord shall automatically be released from all
future liability accruing under this Lease, and Tenant shall look solely to that transferee for
the performance of Landlord’s obligations under this Lease after the date of the transfer so long
as such transferee is bound by, or otherwise agrees in writing to be bound by, the terms and
conditions hereof. However, any prepaid Rent or security deposit held by Landlord at the time of
the transfer shall be delivered to the transferee. Notwithstanding anything in this Article 25 to
the contrary, Tenant shall have the right, exercisable in Tenant’s sole discretion within sixty
(60) days following Tenant’s receipt of notice of such transfer, to terminate this Lease if
Landlord transfers all or substantially all of the Project or Landlord’s interest in the Project
to any of the following direct competitors of Tenant or any of their affiliates who acquire the
Project for purposes of using the Project or any portion thereof for their own or their
affiliates’ theatrical motion pictures studio operations and production (as opposed to acquiring
the Project merely for purposes of real estate investment): (1) Warner Bros, (2) Sony, (3)
NBC/Universal, (4) Paramount Studios, (5) Xxxx Disney Company, (6) Twentieth Century Fox Film
Corporation, (7) MGM/UA, or (8) Lions Gate, or any affiliates of any such entities.
ARTICLE 26
HOLDING OVER
HOLDING OVER
Except only for Tenant’s right to remain in possession of the Production Office Space as
specifically set forth in Part III, Section 3.2, if Tenant remains in possession of all or any
portion of the Leased Premises after expiration or earlier termination of this Lease with
Landlord’s express written consent, Tenant’s occupancy shall be a month-to-month tenancy at a rent
agreed on by Landlord and Tenant, or, if none is so agreed, then at the rate of 175% of the Base
Rent and Additional Rent payable under this Lease for the last full month before the date of
expiration or earlier termination for that portion of the Leased Premises Tenant continues to
occupy. The month-to-month tenancy shall be on the terms and conditions of this Lease except as
provided in (i) the preceding sentence and (ii) Part III, Section 3. Landlord’s acceptance of Rent
after such holding over with Landlord’s written
consent shall not result in any other tenancy or in a renewal of the Initial Term or any
Option Term. If Tenant remains in possession of all or any portion of the Leased Premises after
expiration or earlier termination of this Lease without Landlord’s consent, Tenant’s continued
possession shall be on the basis of a tenancy at sufferance and Tenant shall pay as Rent during
the holdover period an amount equal to 175% of the Base Rent and Additional Rent payable under
this Lease for the last full month before the date of expiration or earlier termination for that
portion of the Leased Premises Tenant continues to occupy.
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ARTICLE 27
SURRENDER OF THE LEASED PREMISES
SURRENDER OF THE LEASED PREMISES
Upon the expiration or earlier termination of this Lease, Tenant shall vacate and surrender
the Leased Premises to Landlord, broom-clean and in the same condition as existed at the
Commencement Date, except for (i) reasonable wear and tear, and (ii) damage caused by any Casualty
or condemnation. If Landlord so requests, Tenant shall, prior to the expiration or earlier
termination of this Lease (i) remove any Alterations that Tenant is required to remove pursuant to
this Lease and repair all damage caused by such removal, and (ii) return the Leased Premises or any
part of the Leased Premises to its original configuration existing as of the time the Leased
Premises were delivered to Tenant. If the Leased Premises are not so surrendered at the termination
of this Lease, Tenant shall be liable to Landlord for all costs reasonably incurred by Landlord in
returning the Leased Premises to the required condition. Tenant shall indemnify Landlord against
all liability, penalties, losses, damages, costs, expenses, causes of action, claims, charges,
liens, assessments, fines or judgments of any kind arising from delay by Tenant in surrendering the
Leased Premises, including without limitation any claims made by any succeeding tenant or losses to
Landlord due to lost opportunities to lease to succeeding tenants as long as Tenant was provided
with at least 10 days prior written notice of any potential lost opportunities, including without
limitation a reasonably detailed outline of the potential damages that Landlord shall suffer as a
result of Tenant’s delay. This indemnification shall survive the expiration or earlier termination
of this Lease.
ARTICLE 28
LANDLORD’S ACCESS TO LEASED PREMISES
LANDLORD’S ACCESS TO LEASED PREMISES
28.1 Rights To Entry. Landlord and its agents may enter the Leased Premises at any
reasonable time after giving at least one business day’s notice to Tenant, and immediately in the
case of emergency, for the purpose of:
(a) inspecting the Leased Premises;
(b) posting notices of nonresponsibility;
(c) supplying or performing any service to be provided by Landlord to Tenant;
(d) showing the Leased Premises to prospective purchasers, mortgagees, or, during the last 12
months of the Lease Term, tenants;
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(e) making necessary alterations, additions, or repairs;
(f) performing work necessary or desirable to preserve and protect the Building from injury
or damage and to support the Building in connection with any excavation upon land adjacent to or
under the Building;
(g) performing Tenant’s obligations when Tenant has failed to do so after written notice from
Landlord and the expiration of any applicable cure period;
(h) responding to an emergency; or
(i) taking possession due to any Event of Default by Tenant.
28.2 Manner of Entry. For entry as permitted by this Article 28, Landlord shall at all
times have a key or, if applicable, a card key with which to unlock all the doors in the Leased
Premises, excluding Tenant’s vaults and safes. In an emergency.situation, Landlord shall
have the right to use any means Landlord deems necessary and proper to enter the Leased Premises.
Any such entry into the Leased Premises by Landlord shall not be considered a forcible or unlawful
entry into, or a detainer of, the Leased Premises, or an eviction, actual or constructive, of
Tenant from any portion of the Leased Premises. With respect to any entry by Landlord under
Section 28.1(a)-(f) only, Landlord shall pay for any damage or injury to the Leased Premises or
Tenant’s property caused by Landlord’s negligence or willful misconduct.
ARTICLE 29
GENERAL PROVISIONS
GENERAL PROVISIONS
29.1 Severability. If any provision of this Lease is held by a court of competent
jurisdiction to be either invalid or unenforceable, the remaining provisions of this Lease shall
remain in effect, unimpaired by the holding.
29.2 Time of Essence. Time is of the essence under this Lease.
29.3 Captions. The captions of Articles and Sections and the Table of Contents of this
Lease are for convenience only and have no effect on the interpretation of the provisions of this
Lease.
29.4 Entire Agreement. This Lease and all exhibits referred to in this Lease
constitute the final, complete and exclusive statement of the terms of the agreement between
Landlord and Tenant pertaining to Tenant’s lease of the Leased Premises and supersedes all prior
and contemporaneous understandings or agreements of the parties. Neither party has been induced to
enter into this Lease by, and neither party is relying on, any representation, warranty, statement,
promise or inducement outside those expressly set forth in this Lease. This Lease may be amended
only by an agreement in writing signed by Landlord and Tenant.
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29.5 Notices. When this Lease requires service of a notice, that notice shall replace
rather than supplement any equivalent or similar statutory notice, including any notices required
by Code of Civil Procedure § 1161 or any similar or successor statute. When a
statute requires service of a notice in a particular manner, service of that notice (or a
similar notice required by this Lease) in the manner required by this Section 29.5 shall replace
and satisfy the statutory service of notice procedures, including those required by Code of Civil
Procedure § 1162 or a similar or successor statute. All notices or other communications required or
permitted by this Lease or by law to be served on or given to either party to this Lease by the
other party shall be in writing and shall be deemed given for all purposes as follows, provided
that the time to provide any responsive notice shall not commence until receipt:
(a) When personally delivered to the recipient, notice is effective on delivery;
(b) When mailed first class to the last address of the recipient known to the party giving
notice, notice is effective upon receipt;
(c) When mailed by certified mail with return receipt requested, notice is effective upon
receipt;
(d) When delivered by overnight courier, notice is effective upon receipt; and
(e) When sent by fax to the last fax number of the recipient known to
the party giving notice, notice is effective on receipt, provided that one of the methods
referenced above is concurrently used as well. Any notice given by fax shall be considered to have
been received on the next business day if it is received after 6 p.m. (recipient’s time) or on a
nonbusiness day.
Addresses for purposes of giving notice are set forth in Part II, Section 4. Either party may
change its address by giving written notice of the change to the other party in the manner
provided in this Section 29.5.
29.6 Procedure for indemnification. With respect to any provision in this Lease
providing for either party to indemnify the other, the procedure for indemnification shall be as
follows:
(a) The party claiming indemnification (the “Claimant”) shall give written notice to the
party from which indemnification is sought (the “Indemnitor) promptly after the Claimant learns of
any loss, claim or proceeding covered by the indemnity; provided, however, that the
Claimant’s failure to give the Indemnitor prompt notice shall not bar the Claimant’s right to
indemnification unless such failure has materially prejudiced the Indemnitors ability to
investigate or defend against the loss, claim or proceeding.
(b) With respect to claims between the parties, following receipt of notice from the Claimant
of a claim, the indemnitor shall have 30 days to make any investigation of the claim that the
Indemnitor deems necessary or desirable. For the purpose of this investigation, the Claimant
agrees to make available to the Indemnitor and its authorized representatives the information
relied upon by the Claimant to substantiate the claim. If the Claimant and the Indemnitor cannot
agree as to the validity and amount of the claim within the 30-day period (or any mutually agreed
upon extension thereof), the Claimant may seek appropriate legal remedies.
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(c) With respect to any third-person claims as to which the Claimant is entitled to
indemnification, the indemnitor shall have the right to employ counsel reasonably acceptable to the
Claimant to defend against any such claim or proceeding, or to compromise, settle or otherwise
dispose of the same, if the Indemnitor deems it advisable to do so, all at the expense of the
indemnitor. The parties will fully cooperate in any such action, and shall make available to each
other any books or records useful for the defense of any such claim or proceeding. If the
Indemnitor fails to acknowledge in writing its obligation to defend against or settle such claim or
proceeding within 20 days after receiving notice thereof from the Claimant (or such shorter time
specified in the notice as the circumstances of the matter may dictate or such shorter time as may
be required for the Indemnitor to provide a timely response to all claims and proceedings) the
Claimant shall be free to engage counsel of its choice and defend against or settle the matter, all
at the expense of the lndemnitor.
(d) Unless expressly stated otherwise in this Lease, the rights to indemnification hereunder
shall not be the exclusive remedy of either party in connection with any breach by the other party
of its representations, warranties, or covenants, nor shall such indemnification be deemed to
prejudice or operate as a waiver of any remedy to which either party may otherwise be entitled as a
result of any such breach by the other party.
(e) The respective indemnification obligations of the parties under this
Lease shall survive the expiration or earlier termination of this Lease.
29.7
Waivers. No waiver by Landlord or Tenant of any provisions in this Lease shall be
deemed a waiver of any other provision of this Lease, of any subsequent breach of this Lease by
Tenant or Landlord, or of any other provision. Landlord’s consent to or approval of any act by
Tenant shall not waive the necessity for Landlord’s consent to or approval of any subsequent act by
Tenant.
29.8 No Recording. Neither party shall, without the express written consent of the
other, execute, acknowledge, or record a memorandum of this Lease.
29.9 Cumulative Remedies. No remedy or election under this Lease shall be deemed
exclusive but shall, wherever possible, be cumulative with all other remedies at law or in equity.
29.10 Binding Effect. This Lease shall be binding on and inure to the benefit of the
parties and their successors and assigns permitted by the provisions of this Lease.
29.11 Attorney Fees. if either party brings an action, arbitration or other proceeding
arising out of this Lease, the prevailing party shall be entitled to reasonable attorney fees as
determined by the court.
29.12 Force Majeure. The term “Force Majeure Delay” as used in this Lease shall mean
any delay incurred by Tenant or Landlord in the performance of their obligations attributable to
any: (1) strike, lockout or other labor or industrial disturbance (whether or not on the part of
the employee of either party hereto), civil disturbance, act of public enemy, war, riot, sabotage,
blockade, or embargo; (2) delay due to changes in any applicable Laws or the interpretation
thereof; or (3) delay attributable to lightning, earthquake, fire, storm, hurricane, tornado,
flood, washout, explosion or any other similar cause beyond the reasonable control of the party
from whom performance is required, or any of its employees, agents, contractors or other
representatives. Except for the obligations of either party to pay
money, including Rent and other charges, pursuant to this Lease, any prevention, delay or
stoppage due to any Force Majeure Delay shall excuse the performance of the party affected for a
period of time equal to any such prevention, delay or stoppage, provided the party claiming such
Force Majeure Delay notifies the other party hereto in writing of such Force Majeure Delay within
30 days after learning of such Force Majeure Delay.
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29.13
Signs. Tenant shall have signage in accordance with a signage plan for the
Project adopted by Landlord from time to time and applicable to all tenants of the Project. In
addition, Tenant shall have the right, at Tenant’s sole cost and expense, to install and maintain
(ii) exterior signs on each of the Sound Stages leased by Tenant hereunder, and (ii) rooftop or
other prominent tenant-identification and logo signage on the exterior of the Corporate Office
Building, in all events subject to all Laws and Landlord’s reasonable rules and regulations
regarding exterior signs applicable to all tenants of the Project.
29.14 Intentionally Deleted.
29.15 Broker’s Fee. The parties represent and warrant to each other that each has not
dealt with any real estate agents or brokers and that no brokerage fees, commissions or finder’s
fees shall be payable as a result of such warranting party’s actions or inactions. Each party
agrees to indemnify, defend, and hold the other harmless from all liability, penalties, losses,
damages, costs, expenses, causes of action, claims, charges, liens, assessments, fines or judgments
of any kind arising as a result of the breach of this warranty. This indemnification shall survive
the expiration or earlier termination of this Lease.
29.16 Authority. Each individual executing this Lease on behalf of Landlord or Tenant
represents and warrants that such individual is duly authorized to execute and deliver this Lease
on behalf of Landlord or Tenant and that this Lease is binding upon Landlord and Tenant in
accordance with its terms. Each of the persons executing this Lease on behalf of a corporation
covenants and warrants that the party for whom the person is executing this Lease is a duly
authorized and existing corporation, that it is qualified to do business in California, and that
the corporation has full right and authority to enter into this Lease.
29.17 Governing Law. This Lease shall be governed by California law, and any
litigation concerning this Lease between the parties shall be initiated in the Superior Court of
Los Angeles County.
29.18 Offer. Preparation of this Lease by Landlord or Landlord’s agent and submission
to Tenant shall not be deemed an offer to lease, nor shall signature and delivery of this Lease by
Tenant make this Lease binding upon Landlord. This Lease shall become binding on Landlord and
Tenant only when fully executed by Landlord and Tenant.
29.19 Presumptions. This Lease shall be construed without regard to any presumption or
other rule requiring construction against the party drafting a document. It shall be construed
neither for nor against Landlord or Tenant, but shall be given a reasonable interpretation in
accordance with the plain meaning of its terms and the intent of the parties.
29.20 Quiet Enjoyment. As long as Tenant is not in default of any provisions of this
Lease (beyond any applicable cure periods), during the Lease Term Tenant shall have quiet enjoyment
of the Leased Premises.
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29.21 Additional Studio Services Provided by Landlord. For so long as Landlord
continues to retain a first class, full-service studio operator comparable to the current
operator of the Project and which operator is otherwise qualified in all respects to provide the
services and equipment required under this Lease (or if Landlord, itself, is otherwise capable of
providing such services and equipment as required under this Lease), Tenant and its Affiliates
(collectively, “Marvel”) shall rent from Landlord all electrical and grip equipment, forklifts,
heavy equipment, trash disposal, generators, theatrical equipment and expendables needed or used on
all its live action theatrical distribution feature productions wherever located nationwide,
provided that (i) Landlord shall charge Marvel the lesser of (a) Landlord’s applicable standard
rate set forth on Exhibit “B”, or (b) the applicable rate at such off-site facility, and in
either of such events, less the 25% discount on electric and grip equipment, generators, and
theatrical equipment, (ii) Landlord, or its designated studio operator shall be able to timely
provide the particular equipment (of a type and quality reasonably satisfactory to Marvel) needed
by Marvel, (iii) Marvel’s obligation to use such services outside of the Project shall be subject
to the same rights set forth in Part III, Section 9.5 above, and (iv) Marvel’s obligation shall be
subject to any requirements which may be imposed by any other landlord or licensor of stages that
Marvel exclusively use such other landlord’s or licensor’s equipment. If any of the foregoing
conditions are not met, Landlord shall not be in default under this Lease but Marvel may obtain the
equipment or service, as the case may be, from any other party.
29.22 Catering Services. Tenant may elect to, but shall not be required to, use
catering services provided by Landlord.
29.23 Dressing Rooms. Tenant shall have the right to use, at no additional cost to
Tenant, not less than thirty-two (32) dressing rooms at the Project. In addition, Tenant shall
have the right to use additional dressing rooms at the Project subject to availability and payment
therefor at the rates set forth in Exhibit “B.”
29.24 Screen Credit. Tenant shall give Landlord screen credit on all prints of any
feature film, show or series filmed in whole or in part at the Leased Premises by Tenant reading
substantially as follows: “FILMED AT XXXXXXXXX XXXXX XXXXXXX, XXXXXXXXX XXXXX, XX.” Placement and
type shall be at Tenant’s sole discretion: however, said credits shall be of a size sufficiently
large and on-screen long enough to be easily read per industry norms. Tenant shall provide Landlord
at Tenant’s sole cost one show poster for any feature film, show or series filmed in whole or in
part at the Leased Premises by Tenant. Notwithstanding anything in this Lease which may be
construed to the contrary, Tenant’s failure to comply with this Section 29.24 shall not constitute
a default or breach of the Lease.
29.25 Security.
(a) Landlord will provide the guard and fire protection personnel set forth in Exhibit
“B” for the protection of the Sound Stages during “normal business hours” at no additional cost
to Tenant, and, if Tenant requests any after-hours and/or additional guard and fire personnel, such
services shall be charged at the rates set forth in Exhibit “B.” Notwithstanding the
foregoing, Tenant shall have the right to hire its own security and fire personnel, in which event
Tenant will have no obligation to pay any costs or expenses for any security allocated to or
related to the Sound Stages.
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(b) The security of Landlord’s property requires that Tenant inform that gate guard when
either a delivery or pick-up is to be made to the Leased Premises. This
notice will enable guards to screen out unauthorized deliveries or pick-ups. If a truck does come
to the gate with a delivery for Tenant and the gate guard has not been notified, Landlord will
attempt to contact a member of the Tenant’s staff. Landlord, at its option, may refuse to accept
any deliveries for which it has received no notification. In the event Landlord accepts a
delivery, whether or not for which it has received notification, said delivery shall be accepted by
Landlord solely at Tenant’s risk and Landlord will not be liable in the event of any such loss or
damage of any nature to said delivery, except to the extent of any intentional misconduct of
Landlord or its employees, representatives or agents. No pick-ups from the Project facilities will
be permitted without Tenant’s prior consent or on the spot authorization. In this regard, Tenant
shall furnish Landlord with a list of all personnel authorized to give such on the spot
authorization.
(c) The security of Landlord’s property requires that Landlord’s guards be permitted to search
vehicles for any of Landlord’s property before they leave the Project, and Tenant hereby consents,
on behalf of itself, its agents, representatives, guests, invitees, contractors, and employees, to
a reasonable search of their vehicles, and agrees to open any and all compartments to said vehicles
if requested to do so by Landlord’s guards. Tenant, on behalf of itself, its agents,
representatives and employees, waive any and all claims for any damages on account of such
reasonable searches. Tenant shall notify all its agents, representatives, employees, contractors,
guests and invitees of this requirement.
(e) Tenant reserves the right to install a card or biometric access perimeter security system
that secures the Leased Premises. The security system may protect all elevator, door, window or
any other access points within or providing access to the Leased Premises; provided, however, that
(i) subject to reasonable coordination with Tenant’s security personnel, Landlord’s designated
authorized representatives shall have the right to access such security system if necessary in
order to maintain the security of the Project.
(f) Tenant shall have the right to purchase at its own cost two hundred fifty (250) access
cards for its use per production. Landlord will program such cards at no cost to Tenant. Any
additional access cards that Tenant requires in excess of such amount, and the replacement of any
lost or damaged access cards, shall be charged at the rates set forth on Exhibit “B.”
(g) Landlord shall allow Tenant to connect its proprietary camera and access system to
Landlord’s cameras and access controls systems that secure the Leased Premises.
[Signature page follows]
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The parties have executed this Lease as of the date first set forth above.
| LANDLORD: | ||||
| CRP MB STUDIOS, L.L.C., a Delaware limited liability company |
||||
By: Printed Name: |
/s/ Xxxxxx Xxxxx
|
|||
Its:
|
Vice President | |||
| TENANT: | ||||
| MVL PRODUCTIONS LLC, a Delaware limited liability company |
||||
By: Printed Name: |
/s/ Xxxxxxx Xxxxxx
|
|||
Its:
|
CFO | |||
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EXHIBIT A
FLOOR PLAN/SITE PLAN DEPICTING THE PREMISES
[see attached]
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EXHIBIT B
| 1. | This Exhibit “B” is composed of the information set forth below and the following schedules
(“Schedules”) attached hereto: |
| a. | Schedule A — Stage 21 |
||
| b. | Schedule B — Stage 22 |
||
| c. | Schedule C — Stage 25 |
||
| d. | Schedule D — Stage TBD |
||
| e. | Schedule E — Stage TBD |
||
| f. | Schedule F — Mill Space |
||
| g. | 2008 Rate Card |
||
| h. | Service Charges List |
| 2. | All of the rates set forth in the Schedules shall increase annually on each anniversary of
the Commencement Date by 4% per annum over the rates for the preceding year, except for the
rates for lighting and grip services, which shall increase by 2% per annum. |
| 3. | In the event of any inconsistency between the provisions of the Lease and the Schedules, the
Schedules shall control. |
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EXHIBIT C
WORK LETTER AGREEMENT
(TURNKEY)
(TURNKEY)
1. TENANT IMPROVEMENTS. Landlord shall construct and, except as provided below to the
contrary, pay for the entire cost of constructing the tenant improvements (“Tenant Improvements”)
shown on the floor plan entitled “Building 7-Ground Level Plan” attached to Exhibit “A” to this
Lease (the “Plans”), and as otherwise discussed and agreed to by Landlord and Tenant (and as more
particularly described on the Coordination Task List dated September 11, 2008 and attached as
Schedule 1 to this Work Letter Agreement, and as may be updated and revised at the parties’
mutual agreement, and with respect to the Leased Premises server room, as more particularly
described on Schedule 2 to this Work Letter Agreement), including without limitation,
Landlord shall install, at Landlord’s expense not to exceed $50,000 a dedicated HVAC for use solely
by Tenant in connection with the Leased Premises server room; provided, however, that in no event
shall the quality and type of building finishes and materials of the Tenant Improvements be of a
lesser nature than those previously installed by Landlord in the Corporate Office Building. Tenant
may request changes to the Plans provided that (a) the changes shall not be of a lesser quality
than Landlord’s standard specifications for tenant improvements for the Building as the same may be
changed from time to time by Landlord (the “Standards”); (b) the changes conform to applicable
governmental regulations and necessary governmental permits and approvals can be secured; (c) the
changes do not require building service beyond the levels normally provided to other tenants in the
Building; (d) the changes do not have any adverse affect on the structural integrity or systems of
the Building; (e) the changes will not, in Landlord’s opinion, unreasonably delay construction of
the Tenant Improvements; and (f) Landlord has determined in its reasonable discretion that the
changes are of a nature and quality consistent with the overall objectives of Landlord for the
Building. If Landlord approves a change requested by Tenant, then, as a condition to the
effectiveness of Landlord’s approval, Tenant shall pay to Landlord upon demand by Landlord the
increased cost attributable to such change, as reasonably determined by Landlord. To the extent
any such change results in a delay of completion of construction of the Tenant Improvements, then
such delay shall constitute a delay caused by Tenant as described below.
2. CONSTRUCTION OF TENANT IMPROVEMENTS. Landlord’s contractor shall commence and
diligently proceed with the construction of the Tenant Improvements, subject to Tenant Delays (as
described in Section 4 below) and Force Majeure Delays (as described in Section 5 below). Promptly
upon the commencement of the Tenant Improvements, Landlord shall furnish Tenant with a construction
schedule letter setting forth the projected completion dates therefor and showing the deadlines, if
any, for any actions required to be taken by Tenant during such construction, and Landlord may from
time to time during construction of the Tenant Improvements modify such schedule.
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3. SUBSTANTIAL COMPLETION; DELIVERY OF POSSESSION.
(a) Substantial Completion; Punch-List. The Tenant Improvements shall be deemed to be
“substantially completed” when Landlord: (a) is able to provide Tenant reasonable access to the
Corporate Office Space; (b) has substantially completed the Tenant Improvements in accordance with
the Plans, other than decoration and minor “punch-list” type items and
adjustments which do not materially interfere with Tenant’s access to or use of the Corporate
Office Space; and (c) has obtained a temporary certificate of occupancy or other required
equivalent approval from the local governmental authority permitting occupancy of the Corporate
Office Space; provided, however, that if substantial completion of the Tenant Improvements is
delayed as a result of any Tenant Delays described in Section 4 below, then substantial completion
shall be the date that the Tenant Improvements would have been completed but for such Tenant
Delays. Within ten (10) days after such substantial completion, Tenant shall conduct a
walk-through inspection of the Corporate Office Space with Landlord and provide to Landlord a
written punch-list specifying those decoration and other punch-list items which require completion,
which items Landlord shall thereafter complete within 45 days; provided, however, that Tenant shall
be responsible, at Tenant’s sole cost and expense, for the remediation of any items on the
punch-list caused by Tenant’s acts or omissions.
(b) Delivery of Possession. Landlord agrees to deliver possession of the Corporate Office Space to
Tenant when the Tenant Improvements have been substantially completed in accordance with Section
(a) above. Landlord has agreed that Landlord will deliver possession of the Corporate Office Space
to Tenant by January 15, 2009, subject to Tenant Delays and Force Majeure Delays (as defined in
this Work Letter). Landlord’s failure to deliver possession of the Corporate Office Space by the
date set forth herein shall be governed by the provisions of Part III, Section 1.5 of the Lease.
4. TENANT DELAYS. For purposes of this Work Letter Agreement, “Tenant Delays” shall mean
any delay in the completion of the Tenant Improvements resulting from any or all of the following:
(a) Tenant’s failure to timely perform any of its obligations pursuant to this Work Letter
Agreement, including any failure to complete, on or before the due date therefor, any action item
which is Tenant’s responsibility pursuant to the Work Schedule or any schedule delivered by
Landlord to Tenant pursuant to this Work Letter Agreement; (b) Tenant’s changes to the Plans; (c)
Tenant’s request for materials, finishes, or installations which are not readily available or which
are incompatible with the Standards; (d) any delay of Tenant in making payment to Landlord for
Tenant’s share of any costs in excess of the cost of the Tenant Improvements as described in the
Plans; or (e) any other act or failure to act by Tenant, Tenant’s employees, agents, architects,
independent contractors, consultants and/or any other person performing or required to perform
services on behalf of Tenant.
5. FORCE MAJEURE DELAYS. For purposes of this Work Letter, “Force Majeure Delays” shall
mean any actual delay caused by strikes, riots, acts of God, shortages of labor or materials, war,
acts of terrorism, governmental laws, regulations or restrictions, or any other cause whatsoever
beyond the reasonable control of Landlord in the construction of the Tenant Improvements, which is
not a Tenant Delay.
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EXHIBIT D
MEMORANDUM OF LEASE COMMENCEMENT
This Memorandum of Lease Commencement is made as of
_____, 200_, by (“Landlord”) and (“Tenant”), pursuant Part III, Section 3.1
of the Lease between Landlord and Tenant dated
_____, 2008, with respect to the Manhattan
Beach Studios (the “Lease”):
Landlord and Tenant hereby confirm, one to the other, that the “Commencement Date”, as defined
in the Lease, is
_____, 200_, and that barring extension or early termination as
provided in the Lease, the Expiration Date is
_____, 200_.
In witness whereof, Landlord and Tenant have executed this Memorandum of Lease Commencement as
of the day and year set forth above.
| LANDLORD: | ||||
| CRP MB STUDIOS, L.L.C., a Delaware limited liability company |
||||
By: |
||||
Printed Name: |
||||
Its: |
||||
| TENANT: | ||||
| MVL PRODUCTIONS LLC, a Delaware limited liability company |
||||
By: |
||||
Printed Name: |
||||
Its: |
||||
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