Exhibit 10.5

AMENDED AND RESTATED LEASE AGREEMENT

BY AND BETWEEN

TMCT, LLC

AS LANDLORD

AND

TRIBUNE COMPANY

AS TENANT

--------------------------------------------------------------------------------

TABLE OF CONTENTS

 

 

 

Page

1.

 

Lease

 

1

 

 

 

 

 

2.

 

Use

 

1

 

 

 

 

 

3.

 

Term

 

2

 

 

 

 

 

4.

 

Rent

 

2

 

 

 

 

 

5.

 

Maintenance and Repair

 

5

 

 

 

 

 

6.

 

Alterations and Additions

 

5

 

 

 

 

 

7.

 

Liens

 

5

 

 

 

 

 

8.

 

Assignment and Subletting

 

6

 

 

 

 

 

9.

 

Exemption of Landlord from Liability

 

6

 

 

 

 

 

10

 

Triple Net Lease

 

7

 

 

 

 

 

11

 

Tenant’s Environmental Representations and Indemnification of Landlord

 

7

 

 

 

 

 

12.

 

Indemnification of Landlord

 

9

 

 

 

 

 

13.

 

Insurance

 

9

 

 

 

 

 

14.

 

Waiver of Subrogation

 

11

 

 

 

 

 

15.

 

Utilities and Services

 

11

 

 

 

 

 

16.

 

Real Property Taxes

 

11

 

 

 

 

 

17.

 

Damage or Destruction

 

12

 

 

 

 

 

18.

 

Condemnation

 

13

 

 

 

 

 

19.

 

Default

 

14

 

 

 

 

 

20.

 

Remedies

 

15

 

 

 

 

 

21.

 

Interest on Past-Due Obligations; Late Charge

 

16

 

 

 

 

 

22.

 

Holding Over

 

17

 

 

 

 

 

23.

 

Quiet Enjoyment

 

17

 

 

 

 

 

24.

 

Estoppel Certificate

 

17

 

i

--------------------------------------------------------------------------------

 

25.

 

Surrender of Premises

 

17

 

 

 

 

 

26.

 

Notices

 

18

 

 

 

 

 

27

 

Option to Purchase

 

18

 

 

 

 

 

28.

 

Defined Terms and Headings

 

21

 

 

 

 

 

29.

 

Enforceability

 

21

 

 

 

 

 

30.

 

Commissions

 

21

 

 

 

 

 

31.

 

Attorneys’ Fees

 

21

 

 

 

 

 

32.

 

Time and Applicable Law

 

21

 

 

 

 

 

33.

 

Successors and Assigns

 

21

 

 

 

 

 

34.

 

Entire Agreement

 

21

 

 

 

 

 

35.

 

Recordation

 

22

 

 

 

 

 

36.

 

Exhibits

 

22

 

 

 

 

 

37.

 

Covenants and Conditions

 

22

 

 

 

 

 

38.

 

Survival

 

22

 

 

 

 

 

39.

 

No Joint Venture

 

22

 

 

 

 

 

40.

 

Calendar Days and Business Days

 

22

 

 

 

 

 

41.

 

Subordination, Nondisturbance and Attornment

 

22

 

 

 

 

 

42.

 

Counterparts

 

22

 

 

 

 

 

43.

 

Waiver

 

22

 

 

 

 

 

44.

 

Landlord’s Access

 

23

 

 

 

 

 

45.

 

Business Improvement Districts

 

23

 

Exhibits

Exhibit A – Parcels and Legal Description

Exhibit B – Form of Agreement of Purchase and Sale

ii

--------------------------------------------------------------------------------

AMENDED AND RESTATED LEASE AGREEMENT

THIS AMENDED AND RESTATED LEASE AGREEMENT (“Lease”) is made and entered into as
of September 22, 2006, by and between TRIBUNE COMPANY, a Delaware corporation
(“Tenant”), and TMCT, LLC, a Delaware limited liability company (“Landlord”).

R E C I T A L S

WHEREAS,

A.            On August 8, 1997 Landlord and The Times Mirror Company, a
Delaware corporation (“Original Tenant”) entered into a certain Lease Agreement
(the “Original Lease”), which Original Lease was assigned to, and assumed by
operation of law by Tenant, as successor to Original Tenant in the merger of
Original Tenant and Tenant;

B.            Landlord and Tenant desire to amend the Original Lease in order to
reflect certain changes to the terms and provisions set forth in this Amendment;
and

C.            This Lease hereby amends and restates, in its entirety, the
Original Lease, which is hereby superseded and replaced with the terms and
provisions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants, agreements and
promises contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Landlord and Tenant
hereby agree as follows:

AGREEMENT

1.             Lease.  By the Original Lease and hereby, Landlord leases to
Tenant and Tenant leases from Landlord certain real estate owned by Landlord and
located in the states of California, Connecticut, Maryland, Missouri and New
York (each parcel of real property a “Parcel”, collectively “Parcels”), together
with all buildings, improvements, equipment and fixtures located on or attached
to said real estate now or during the Term of this Lease (each  Parcel, together
with the improvements, equipment and fixtures located on or attached to said
parcel, a “Property” and collectively the “Premises”), which Properties are
listed in Exhibit A and which Parcels are more particularly described in
Exhibits A-1 through Exhibits A-8 attached hereto and incorporated herein by
this reference.  Tenant acknowledges that its subsidiaries have occupied the
Premises for an extended period of time prior to the Commencement Date and
Tenant agrees to lease the Premises on an “as-is” and “with all faults” basis.

2.             Use.  The Premises may be used by Tenant in the manner used by
Tenant’s subsidiaries prior to the Commencement Date.  The Premises may also be
used by Tenant for any use permitted by applicable zoning and other applicable
law, so long as any such new use does not reduce the fair market value of the
Premises.  Tenant shall not allow the Premises to be used for any unlawful
purpose, nor shall Tenant cause or maintain or permit any nuisance in, on, or
about the Premises.  Tenant shall not commit or suffer the commission of any
waste in, on, or about the Premises.  Tenant shall comply with all governmental
laws, ordinances, regulations, directives, covenants and restrictions of record
(“Regulations”) applicable to the use and its occupancy of the Premises, and
shall promptly

--------------------------------------------------------------------------------

comply with the Regulations for the prevention and abatement of any violations
or nuisances in or upon, or connected with, the Premises, all at Tenant’s sole
expense.  If, as a result of any change in the Regulations, the Premises must be
altered to lawfully accommodate Tenant’s use and occupancy, such alterations
shall be made solely at Tenant’s expense.  Tenant shall not do or permit
anything to be done on or about the Premises or bring or keep anything therein
which will in any way jeopardize the coverage of insurance thereon.

3.             Term.  The term (the “Term”) of this Lease commenced on August 8,
1997, the date defined as the “Commencement Date” in the Original Lease (which
shall be referred to herein as the “Commencement Date”), and shall end at
midnight on August 7, 2009 (the “Initial Term”) or the last day of any
Additional Term (the “Termination Date”), unless sooner terminated as herein
provided.  Tenant shall be entitled to extend the Term for up to two (2)
additional terms (each an “Additional Term”, and, collectively, the “Additional
Terms”) if but only if (i) this Lease shall not have been terminated pursuant to
any of the provisions hereof, and (ii) Tenant is not in default hereunder unless
such default is commercially impractical to cure.  Each such Additional Term
shall be for twelve (12) years and commence (i) on the expiration of the Initial
Term, with respect to the first Additional Term, and (ii) on the expiration of
the first Additional Term with respect to the second Additional Term.

3.1           If Tenant shall fail or neglect to exercise the Option to purchase
the Premises in accordance with Section 27 hereof during the Early Exercise
Period or the Original Exercise Period, or if such exercise shall been made, but
the contemplated purchase and sale shall not have occurred for any reason
whatsoever, Tenant shall be automatically deemed, without any further notice or
action whatsoever, to have made an irrevocable election to extend the Term for
the first Additional Term.  In such event, the Initial Term shall be deemed to
be automatically extended through August 7, 2021 upon all the covenants,
agreements, terms, provisions and conditions set forth in this Lease.

3.2           Tenant may extend the Term for the second Additional Term by
giving Landlord written notice (the “Extension Notice”) at least one (1) year
prior to the expiration of the first Additional Term.  Upon the giving by Tenant
to Landlord of the Extension Notice, the current Term shall be deemed to be
automatically extended through August 7, 2033 upon all the covenants,
agreements, terms, provisions and conditions set forth in this Lease (excluding
any previously exercised or extinguished option to extend) except that Rent
during such extension shall be determined as provided in Section 4.4 below.

3.2           If Tenant fails or omits to give Landlord the Extension Notice, it
shall be deemed, without further notice and without further agreement between
the parties hereto, that Tenant elected not to exercise the option granted
Tenant pursuant to this Section 3 to extend the Term for the Second Additional
Term.

4.             Rent.

4.1           For the period beginning on the Commencement Date through and
including the Termination Date, Tenant shall pay as rent (the “Rent”) for the
Premises: (i) the amount (the “Base Rent”) each calendar month as provided in
this Section 4, (ii) the cost of all utilities and services as set forth herein,
(iii) the cost of insurance as set forth herein and (iv) the cost of the Real
Property Tax as set forth in

2

--------------------------------------------------------------------------------

Section 16.  Each payment of Base Rent made pursuant to this Section 4 shall be
made in advance on the first day of each calendar month.  If the Term commences
or ends on a date other than the first day of the month, the installment for any
partial month shall be prorated on the basis of thirty (30) calendar days per
month.

4.2.          The Base Rent shall be paid in monthly installments as set forth
herein, without deduction or offset, in such currency of the United States as at
the time shall be legal tender for the payment of public and private debts, at
such place as Landlord may designate from time to time.

4.3           The Base Rent payable by Tenant during (i) the Initial Term, and
(ii) the first Additional Term, shall be Two Million Thirteen Thousand Eight
Hundred Twenty-Nine Dollars and Seventeen Cents ($2,013,829.17) per month
($24,165,950 per year).

4.4           The Base Rent payable during the second Additional Term shall be
at Fair Market Rental Value, which shall be determined as follows:

4.4.1        Within thirty (30) days after Landlord receives Tenant’s Extension
Notice, Landlord and Tenant shall mutually agree upon and appoint one appraiser
to determine the fair market rental value of the Premises.  If Landlord and
Tenant are unable to agree upon a single appraiser to appraise the fair market
rental value of the Premises within such thirty day period, then Landlord and
Tenant shall each appoint an appraiser within sixty (60) days after Landlord
receives Tenant’s Extension Notice to determine the fair market rental value of
each Property (a single appraiser may appraise more than one Property and
Landlord and Tenant shall each use best efforts to minimize the total number of
appraisers appointed), and notice of each such appointment shall be given to the
other party.  For each Property, the appraisers thus appointed shall proceed to
determine such fair market rental value for such Property within thirty
(30) days after notice of their appointment.

4.4.2        If the parties were unable to agree on a single appraiser to
appraise the fair market rental value of the Premises, then within fifteen
(15) days after the parties have each appointed appraisers pursuant to
Subsection 4.4.1, the appraisers appointed for each Property shall join to
appoint a third appraiser to appraise such Property and if they fail so to
appoint such third appraiser within such period, the third appraiser shall be
appointed by the court exercising such functions in the jurisdiction in which
the Property is located except that if the court will not do so the third
appraiser shall be appointed by the American Arbitration Association or similar
organization performing such functions, and such third appraiser shall then
individually determine the fair market rental value for such Property within
thirty (30) days of notice of appointment.

4.4.3        If Landlord and Tenant fail to appoint a single appraiser to
appraise the fair market rental value of the Premises, then the average of the
fair market rental values contained in the two closest appraisals shall
constitute the fair market rental value of such Property, and such

3

--------------------------------------------------------------------------------

determination shall be binding upon each of the parties.  In the event that
there are not two closest appraisals (e.g., if the middle appraisal is exactly
halfway between the highest and lowest appraisals), then the middle appraisal
shall be binding upon each of the parties.  The fair market rental value of the
Premises shall be equal to the sum of the fair market rental values of each
Property.

4.4.4        All appraisers appointed hereunder shall be competent, qualified by
training and experience in the County in which the Property(ies) they are
appraising is located, disinterested and independent and shall be members in
good standing of the American Institute of Real Estate Appraisers or its
successor and all appraisal reports shall be rendered in writing and signed by
the appraiser or appraisers making the report.

4.4.5        For purposes of this Section 4, the term “fair market rental value”
means the rental rate, including all escalations, at which tenants lease
comparable space as of the commencement of the Option Term.  In determining the
fair market rental value, an appraiser shall take into account the terms of this
Lease, including but not limited to such terms as the option to purchase and the
triple net lease provisions.  For this purpose, “comparable space” shall be
space that is:

(a)                                  Not subject to another tenant’s expansion
rights;

(b)                                 Not leased to a tenant that holds an
ownership interest in the landlord;

(c)                                  Not leased to a tenant under a renewal or
an extension of a lease;

(d)                                 Comparable in size, location, and quality to
the Property; provided, however, that the size and quality of the Property shall
be determined as if any capital improvements (as that term is defined in
Subsection 27.3.3) made by Tenant or a subtenant had not been made and, instead,
any improvements replaced by a capital improvement had remained and had been
maintained, repaired and/or replaced as required under this Lease;

(e)                                  Leased for a term comparable to the second
Additional Term; and

(f)                                    Suitable for the tenant’s use in an
“as-is” condition without the need for any tenant improvement allowance.

4.4.6        Landlord and Tenant shall each be solely responsible for the costs,
fees and expenses of the appraisers that they appoint pursuant to Subsection
4.4.1.  All costs, fees and expenses of the appraisers appointed pursuant to
Paragraph 4.4.2 shall be divided equally between Landlord and Tenant.

4

--------------------------------------------------------------------------------

5.             Maintenance and Repair.  Tenant shall at all times keep in good
condition and repair the Premises and every part thereof, structural and
non-structural, including, without limiting the generality of the foregoing, all
plumbing, heating, air conditioning, ventilating, electrical, lighting
facilities and equipment within the Premises, fixtures, walls (interior and
exterior), foundations, ceilings, roofs (interior and exterior), floors,
windows, doors, plate glass and skylights located within the Premises, and all
gardening, landscaping, driveways, parking lots, fences and signs located on the
Premises and sidewalks and parkways adjacent to the Premises.  Notwithstanding
the foregoing, Tenant shall have the rights specified in Sections 6 and 17
below.  It is hereby understood and agreed that other than its obligations under
Section 17 below, Landlord has no other obligation to repair and maintain the
Premises or any part thereof, all of which obligations are intended to be that
of Tenant.  Tenant expressly waives to the extent permitted by law the benefit
of any statute or other law or regulation now or hereafter in effect which would
otherwise afford Tenant the right to make repairs at Landlord’s expense or to
terminate this Lease because of Landlord’s failure to keep the Premises in good
order, condition and repair.

6.             Alterations and Additions.  Tenant shall be permitted to make any
alterations, improvements, additions, or installations (“Improvements”) in, on
or about the Premises; provided, however, that Tenant shall not make any of the
following Improvements without the consent of Landlord, which consent shall not
be unreasonably withheld, conditioned or delayed:  (i) any Improvement which
will result in a modification to the footprint of any load bearing exterior wall
of any building or any material portion thereof located on any Parcel; (ii) any
single project of which one or more Improvements is a part costing (including
all costs that are capitalized according to GAAP standards) in excess of Fifteen
Million Dollars ($15,000,000); (iii) any Improvement which will render any
building on any Parcel unusable for the general purpose for which such building
was used prior to the construction of such Improvement.  Tenant shall be
responsible for payment of all governmental fees and costs imposed in connection
with the Improvements and/or the use of the Premises by Tenant, and Landlord
shall not have any obligation in that regard.  Tenant shall properly construct
any and all Improvements in compliance with all applicable laws and shall not
make Improvements which reduce the fair market value of the Premises.  Promptly
after the completion of any Improvements, Tenant shall provide Landlord with
as-built plans and specifications for such Improvements.  All Improvements which
may be made on the Premises by Tenant or any subtenant shall be made in
compliance with all applicable Regulations, and any such Improvements shall be
the sole and exclusive property of Tenant during the Term of this Lease;
provided that any such Improvements (other than Tenant’s trade fixtures and
personal property, which Tenant may elect to remove at the expiration or earlier
termination of this Lease pursuant to Section 25) shall become the property of
Landlord and remain upon and be surrendered with the Premises at the expiration
or prior termination of the Lease.

7.             Liens.  Tenant shall keep the Premises and Tenant’s interest in
the Premises free from any liens arising out of any work performed, materials
furnished, or obligations incurred by Tenant.  In the event that Tenant shall
not, within thirty (30) days following the imposition of any such lien, cause
the same to be released of record by payment or posting of a proper bond,
Landlord shall have, in addition to all other remedies provided herein and by
law, the right, but not the obligation, to cause the same to be released by such
means as it shall deem proper, including payment of the claim giving rise to
such lien.  All such sums paid by Landlord and all expenses, including
attorneys’ fees, incurred by it in connection therewith shall be payable to
Landlord by Tenant on demand.  If Tenant shall, in good faith,

5

--------------------------------------------------------------------------------

contest the validity of any such lien, then Tenant shall, after prior written
notice to Landlord, at its sole cost and expense, defend itself and Landlord
against the same and shall pay and satisfy any such adverse judgment that may be
rendered thereon before the enforcement thereof against Landlord or the
Premises, provided that (i) neither the Premises nor any part thereof would be
in any danger of being sold, forfeited, lost or interfered with, and (ii) Tenant
shall furnish to Landlord a surety bond in form and from a surety reasonably
satisfactory to Landlord in an amount equal to one hundred fifty percent (150%)
of such contested lien indemnifying Landlord against liability for the same and
holding the Premises free from the effect of such lien.

8.             Assignment and Subletting.

8.1           Tenant may not assign the Lease without the prior written consent
of Landlord, which consent may be withheld in Lessor’s sole discretion. 
Notwithstanding this limitation, Tenant may assign the Lease without the consent
of Lessor to an affiliate of Tenant (provided, however, that any event or
combination of events which results in such entity ceasing to be an affiliate of
Tenant shall be considered to be an assignment, requiring the consent of
Landlord hereunder) or to an entity acquiring the entire business of Tenant (and
its affiliates) as carried out in the Premises.  Any assignee of Tenant must
assume Tenant’s obligations under the Lease in a form acceptable to Landlord and
Tenant shall not be relieved from its liability under the Lease by reason of any
assignment.  Tenant shall provide Lessor with a copy of any assignment of the
Lease.

8.2           Tenant shall have the right to sublease any portion of the
Premises with the consent of Lessor, which consent shall not be unreasonably
withheld, conditioned or delayed.  Lessor’s consent to sublease a portion of the
Premises shall not be required (i) if the sublease is to an affiliate of Tenant
(provided, however, that any event or combination of events which results in
such entity ceasing to be an affiliate of Tenant shall be considered to be a
sublease to a non-affiliate of Tenant, requiring the consent of Landlord
hereunder) or an entity acquiring the entire business of Tenant or Tenant’s
affiliate being conducted at the portion of the Premises so sublet, or (ii) if
the space to be sublet, plus any other space previously sublet to non-affiliates
without Landlord’s consent, together total not more than ten percent (10%) of
the square footage of the structures located on the Parcels.

9.             Exemption of Landlord from Liability.  Except with respect to its
obligations under Section 17 below with respect to casualties, Landlord shall
not be liable to Tenant and Tenant hereby assumes all risks and waives all
claims against Landlord for any damage to any property or any injury to or death
of any person in or about the Premises by or from any cause whatsoever arising
at any time, and without limiting the generality of the foregoing, whether
caused by fire, steam, electricity, gas, water, or rain, or from the breakage,
leakage, obstruction or other defects of pipes, sprinklers, wires, appliances,
plumbing, air conditioning or lighting fixtures, or from any other cause
regardless of whether the cause of such damage or injury or the means of
repairing the same is inaccessible to Tenant.  Landlord shall not be liable or
responsible for any loss or damage to any property or person occasioned by
theft, fire, act of God, acts of third parties, public enemy, injunction, riot,
strike, insurrection, war, court order, requisition or order of governmental
body or authority, or other matter beyond the control of Landlord.  In further
explanation of and not in limitation of the foregoing provisions of this
Section 9, Landlord shall only remain liable for any damage to any property or
any injury to or death of any person in or about the

6

--------------------------------------------------------------------------------

Premises which may result from the active negligence or willful acts or
omissions of Landlord, or its agents, or employees or contractors.

10.           Triple Net Lease.  This Lease is intended to be a “triple net”
lease and it should be interpreted accordingly.

11.           Tenant’s Environmental Representations and Indemnification of
Landlord.  Tenant hereby agrees that:

11.1         Tenant acknowledges that its subsidiaries have owned the Premises
for an extended period of time prior to the Commencement Date.  Accordingly, it
is Tenant’s obligation at its sole cost and expense to comply with any and all
Environmental Laws with respect to Hazardous Substances, including those
existing on the Premises on or prior to the Commencement Date and whether or not
such is currently known.  Such obligation, and any liability that Tenant may
have for any breach thereof, shall survive the termination or expiration of this
Lease.

11.2         In the event Tenant discovers or determines the existence on the
Premises of any condition resulting from Hazardous Substances that were
disposed, discharged, leaked, handled or otherwise present on the Premises, the
presence of which may require investigation, removal or remedial action pursuant
to any law, Environmental Law or may be the basis for the assertion of any third
party claims, including claims of governmental entities, Tenant shall promptly
notify Landlord thereof and Tenant shall, at its sole cost and expense, proceed
with all due diligence as may be required by applicable Environmental Laws with
respect to Hazardous Substances (including those existing prior to the
Commencement Date).  In the event that Tenant fails to proceed with due
diligence, Landlord may, at its option, proceed to take the appropriate action
and shall be reimbursed by Tenant therefor.

11.3         Any Hazardous Substances used by Tenant or its agents, employees,
contractors, subtenants, assignees and invitees on, in, or about the Premises
will be contained, treated, stored, used and disposed of in a safe manner and in
accordance with all Environmental Laws.

11.4         Tenant will use, keep and maintain the Premises in compliance with,
and shall not cause or permit the Premises to be in violation of, any
Environmental Laws.

11.5         Neither Tenant nor its agents, employees, contractors, subtenants,
assignees and invitees will use the Premises in a manner which causes any
Hazardous Substance to be deposited, and will not deposit any Hazardous
Substance, except in compliance with Environmental Laws, into the atmosphere,
into the soil or into the ground water of the Premises.  If Tenant or its
agents, employees, contractors, subtenants, assignees or invitees shall cause or
permit a “release,” as such term is defined in the Environmental Laws, unless
the release occurs after termination of the Lease, or from off-site, Tenant,
upon actual knowledge thereof, will promptly notify Landlord in writing of such
release and begin investigation and remediation of such release and complete
such remediation at Tenant’s own cost and expense as required by the
Environmental Laws.

7

--------------------------------------------------------------------------------

11.6         Tenant shall indemnify, defend and hold harmless Landlord, its
officers, directors, employees, shareholders, affiliates, successors and assigns
(the “Indemnitees”) against any and all damages, claims (including without
limitation, third party claims of personal injury or real or personal property
damages), costs, losses (including losses of value and income), legal,
accounting, actions, causes of action, consulting, engineering, investigation,
remediation and removal costs, and other expenses whether at law, in equity, or
administrative (including without limitation attorneys’ fees and court costs)
(hereinafter collectively referred to as “Claims”), which may be imposed upon,
incurred by or asserted against any of the Indemnitees by any other party or
parties, including without limitation a governmental entity, arising out of or
in connection with the breach by Tenant of Tenant’s covenants in this
Section 11.  This obligation by Tenant to indemnify, defend, and hold harmless
the Landlord includes, without limitation, costs incurred by the Indemnitees for
or in connection with any investigation of site conditions or any cleanup,
remedial, monitoring, restoration or closure work required by any federal,
state, or local governmental agency or political subdivision, or any third party
action, because of any Hazardous Substances present in the soil, air, surface or
ground water, on, under, or about the Premises, including, without limitation,
any sums paid in settlement of claims, penalties, attorneys’ fees, court costs,
consultant and laboratory fees, as a result of Tenant’s and its agents’,
employees’, contractors’, subtenants’, assignees’ and invitees’ activities on or
in connection with the Premises, but excluding that portion of any damages to
the extent caused by Indemnitees or any of their respective agents.

11.7         Promptly upon becoming aware of any matter described above to which
the indemnity applies, Landlord shall provide Tenant with notice of the same
provided that any delay in providing such notice shall not impair the indemnity
hereunder unless the delay actually causes prejudice to the Tenant, and the
Indemnitees shall reasonably cooperate with Tenant in the defense of the
matter.  Tenant’s obligations pursuant to the indemnity in Subsection 11.4 above
shall survive the termination or expiration of this Lease.

11.8         As used herein, the term “Hazardous Substances” shall mean all
hazardous substances, hazardous wastes, hazardous materials, toxic materials, or
toxic substances and any other substances, including asbestos, petroleum and its
by-products, the remediation, disposal, storage, production, or use of which is
regulated by federal, state or local laws, ordinances, regulations, permit
conditions, administrative orders and similar requirements pertaining to health,
safety and the environment, including, but not limited to, substances listed
under the Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, 42 U.S.C. § 9601 et seq.; the Hazardous Materials Transportation Act,
42 U.S.C. § 1801 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C.
§ 6901 et seq.; the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq.; the
Clean Water Act, 33 U.S.C. § 1251 et seq.; the Safe Drinking Water Act, 42
U.S.C. § 300f et seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq.; the
California Hazardous Waste Control Law, Cal. Health and Safety Code § 25100 et
seq.; and the Porter-Cologne Water Quality Control Act, Cal. Water Code § 13000
et seq., as each may be amended from time to time (herein referred to as
“Environmental Laws”).

8

--------------------------------------------------------------------------------

12.           Indemnification of Landlord.  Tenant shall defend, indemnify and
hold Landlord harmless from any and all claims, demands, judgments, damages,
liabilities, costs, expenses and losses, including attorneys’ fees and court
costs, arising from Tenant’s use of the Premises or use of the Premises by any
party holding under Tenant, or from the conduct of Tenant’s business, or from
the conduct of the business of any party holding under Tenant, or from any
activity, work or things done in or about the Premises except to the extent
caused by the active negligence or willful misconduct of Landlord.  Tenant
further agrees to defend, indemnify and hold Landlord harmless from any and all
claims, demands, judgments, damages, liabilities, costs, expenses and losses
arising from any breach or default on the part of Tenant in the performance of
any covenant or agreement on the part of Tenant to be performed pursuant to the
terms of this Lease.  If any action or proceeding is brought against Landlord by
reason of any such matters, Tenant agrees to defend such action or proceeding at
Tenant’s sole expense by counsel reasonably satisfactory to Landlord.  If
Landlord receives insurance proceeds with respect to any claim or loss for which
it is insured pursuant to the terms of this Lease, Tenant shall reduce its
payment to Landlord pursuant to this Section 12 to the extent of such proceeds. 
The provisions of this Section 12 shall survive the expiration or prior
termination of this Lease with respect to any claims or liability relating to
matters occurring after the Commencement Date and prior to such expiration or
termination.

13.           Insurance.

13.1         Tenant shall, at Tenant’s expense, obtain and keep in force during
the entire term of this Lease a Comprehensive General Liability policy
(including Premises Liability and Contractual Liability, Occurrence form)
insuring Landlord and Tenant against covered liability arising out of the
Premises or its use, occupancy or maintenance, including all areas appurtenant
thereto.  Such insurance shall name Landlord as an additional insured and shall
provide coverage in limits of at least $5,000,000 combined single limit for
bodily injury or death to any one person, $20,000,000 for bodily injury or death
to any number of persons in respect of any one accident or occurrence and
$1,000,000 for property damage in respect of one accident or occurrence.  Tenant
may maintain up to a $2,000,000 deductible on the insurance required in this
Subsection 13.1.  The insurance coverage limits required under this Section 13.1
shall be increased every three years to reflect any increases in the Consumer
Price Index for All Urban Consumers U.S. City Average, All Items (base years
1982-84 = 100), published by the United States Department of Labor, Bureau of
Labor Statistics.

13.2         Tenant shall, at Tenant’s expense, obtain and keep in force during
the entire term of this Lease a policy of insurance covering loss or damage to
all improvements, fixtures and equipment located upon or affixed to the Parcels,
including, without limitation, walls (interior and exterior), foundations,
ceilings, roofs (interior and exterior), floors, windows, doors, plate glass and
skylights located within the Premises, all plumbing, electrical, elevator and
lighting facilities and equipment in, on or about the Parcels, all landscaping,
driveways, parking lots, fences and signs located on the Parcels and sidewalks
and parkways adjacent to the Parcels, and any personal property or fixtures of
Tenant located on or affixed to the Parcels, in the amount of the full
replacement value thereof, as the same may exist from time to time, against (i)
all perils included within the classification of fire, extended coverage,
vandalism, malicious mischief, and special extended perils (“all

9

--------------------------------------------------------------------------------

risk” as such term is used in the insurance industry), and (ii) flooding.  Said
insurance shall name Landlord as loss payee and shall provide for payment of
loss thereunder to Landlord and Tenant as their interests may appear.  Tenant
may maintain up to a $500,000 deductible on the insurance required in this
Subsection 13.2.

13.3         Tenant shall, at Tenant’s expense, obtain and keep in force during
the entire term of the Lease a policy or policies of boiler and machinery
insurance, if applicable, in an amount not less than one hundred percent (100%)
of the actual replacement value thereof (including the cost of debris removal
but excluding foundations and excavations and land).

13.4         Tenant may self-insure for the insurance required in Subsections
13.1, 13.2 and 13.3 in an aggregate amount not to exceed five percent (5%) of
Tenant’s tangible net worth (as determined by certified financial statements not
more than twelve (12) months old) upon providing notice to Landlord and Tenant
shall, to the extent self-insured, be responsible for all amounts which would
have been payable by an insurer if Tenant had not elected to self-insure.  All
deductibles shall be considered self-insurance and shall be subject to all
provisions in this Lease governing insurance coverage, including any provisions
concerning a waiver of subrogation.

13.5         Tenant shall, at Tenant’s expense, obtain and keep in force during
the entire term of the Lease a policy or policies of Workers’ Compensation
Insurance, including Employers’ Liability Insurance, or qualified
self-insurance, which is in full compliance with the applicable Workers’
Compensation or similar laws.

13.6         Tenant shall deliver to Landlord certificates evidencing the
existence and amounts of such insurance, with loss payable clauses as required
by this Section 13.  No such policy shall be cancelable or subject to reduction
of coverage or other modification except after thirty (30) days’ prior written
notice to Landlord.  Tenant shall, at least thirty (30) days prior to the
expiration of such policies, furnish Landlord with renewals or “binders”
thereof, or if Tenant fails to furnish such renewals, then Landlord may, upon
ten days written notice to Tenant, order such insurance and charge the cost
thereof to Tenant, which amount shall be payable by Tenant upon demand.

13.7         Tenant shall not carry concurrent insurance insuring against the
risks against which insurance is required hereunder unless such concurrent
insurance satisfies all of the requirements for Tenant’s insurance set forth in
this Lease (including but not limited to naming Landlord as an additional
insured).

13.8         So long as there exists a sublessee of any portion of the Premises
which is required, by the terms of its sublease, to carry insurance which is no
less comprehensive than that described above, and which names Landlord as an
additional insured thereon or loss payee thereof, as the case may be, then
Tenant shall have no obligation during the term of such sublease to carry the
insurance required hereunder with respect to such portion of the Premises as
long as such sublessee actually maintains such required insurance.

10

--------------------------------------------------------------------------------

14.           Waiver of Subrogation.  Except as otherwise provided in this
Lease, to the extent they receive payment for any loss or damage arising out of
or incident to perils occurring in, on or about the Premises, Tenant and
Landlord each hereby release and relieve the other, and waive their entire right
of recovery against the other for such loss or damage, whether due to the
negligence of Landlord or Tenant or their agents, employees, contractors and/or
invitees, but only to the extent permitted by the parties’ insurance carriers. 
Tenant and Landlord shall use their best efforts to obtain waiver of subrogation
endorsements from such carrier or carriers.

15.           Utilities and Services.  Tenant shall, during the entire term of
this Lease, procure and pay for all utilities and services supplied to the
Premises, including but not limited to water, gas, heat, light, power,
telephone, security, and janitorial services, together with any taxes thereon.

16.           Real Property Taxes.  Tenant shall pay directly to each County Tax
Collector, or other appropriate assessing authority, as it becomes due and not
less than ten (10) days before delinquency, the amount of the Real Property Tax,
as defined in Subsection 16.1, applicable to the Premises during the term of
this Lease.  Notwithstanding the foregoing, Tenant shall have no obligation to
pay for the Real Property Taxes due for the period prior to the Commencement
Date, even if those Real Property Taxes are not assessed until after the
Commencement Date.  Further, Tenant shall have no obligation to pay any
penalties or interest assessed with respect to the Premises for a period prior
to the Commencement Date, even if such penalties or interest are not assessed
until after the Commencement Date.  If payments made by Tenant are applied by
the assessing authority to unpaid Real Property Taxes (including without
limitation, any interest or penalties thereon) respecting a period prior to the
Commencement Date, then Landlord shall be responsible for the Real Property
Taxes (and all resulting interest and penalties thereon) which Tenant had
attempted to pay, but which were diverted to pay earlier Real Property Taxes
(including without limitation, all interest and penalties included therein).  If
any Real Property Taxes constituting assessments are, at the election of the
taxpayer, payable in installments, Landlord shall make an election to make such
payments in installments and Tenant shall be responsible for the payment of the
installments of such Real Property Taxes as shall be due and payable during the
term of this Lease.

16.1         As used herein, “Real Property Tax” shall mean any form of real
estate tax or assessment, general, special, ordinary or extraordinary, and any
license fee, commercial rental tax, improvement bond or bonds, levy or tax
(other than inheritance, personal income or estate taxes) imposed on the
Premises by any authority having the direct or indirect power to tax, including
any city, state or federal government or any school, agricultural, sanitary,
fire, street, drainage or other improvement district thereof, as against any
legal or equitable interest of Landlord in the Premises or in the real property
of which the Premises are a part, as against Landlord’s right to rent or other
income therefrom, and as against Landlord’s business of leasing the Premises,
including any tax, fee, levy, assessment or charge (i) in substitution of,
partially or totally, any tax, fee, levy, assessment or charge hereinabove
included, (ii) the nature of which was hereinbefore included within this
definition, or (iii) which is imposed by reason of this lease transaction, any
modifications or changes hereto, or any transfers hereof.

11

--------------------------------------------------------------------------------

16.2         During the term of this Lease, Tenant shall reimburse to Landlord,
upon presentation of a written invoice therefor, any and all taxes payable by
Landlord (other than net income taxes) whether or not now customary or within
the contemplation of the parties hereto: (i) upon, allocable to, or measured by
or on the gross or net rent payable hereunder, including without limitation any
gross income tax or excise tax levied by any State, any political subdivision
thereof, or the Federal Government with respect to the receipt of such rent; or
(ii) upon or with respect to the possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy by Tenant of the Premises or
any portion thereof; or (iii) upon or measured by the Tenant’s gross receipts or
payroll or the value of Tenant’s equipment, furniture, fixtures, and other
personal property of Tenant or leasehold improvements, alterations, additions,
located in the Premises.

16.3         Tenant shall pay prior to delinquency all taxes assessed against
and levied upon trade fixtures, furnishings, equipment and all other personal
property of Tenant contained in the Premises or elsewhere.  Tenant shall cause
such trade fixtures, furnishings, equipment and all other personal property to
be assessed and billed separately from the real property of Landlord.  If any of
Tenant’s said personal property shall be assessed with Landlord’s real property,
Tenant shall pay Landlord the taxes attributable to Tenant within ten (10) days
after receipt of a written statement setting forth the taxes applicable to
Tenant’s property.

16.4         Tenant may contest the imposition of any taxes, including without
limitation, the current assessment, and if required by law, Landlord shall join
in any such proceedings brought by Tenant.  However, Tenant shall pay the costs
and fees of the proceedings.  Upon the final determination of any proceeding or
contest, Tenant shall pay the taxes due, together with all costs, charges,
interest and penalties incidental to the proceedings if Tenant does not pay the
taxes when due and contests such taxes.  Tenant shall not be in default under
the Lease for nonpayment of such taxes so long as the taxes are paid under
protest if such payment under protest is necessary to prevent the property from
being sold under a “tax sale” or similar enforcement proceeding.

17.           Damage or Destruction.

17.1         In the event that any structure located on the Parcels is damaged
or destroyed, then Tenant shall repair or rebuild such structure to
substantially the condition in which it was immediately prior to the casualty,
but in no event shall Tenant be required to repair or rebuild non-functional or
decorative items (e.g., statues).

17.2         Tenant shall commence to rebuild or repair the Premises promptly
after such damage or destruction, provided that all permits required for such
work have been obtained at the time necessary with the Tenant using reasonable
diligence to obtain such permits, and shall proceed with diligence to complete
the restoration.  If Tenant is not able to obtain permits to restore the
Premises as required hereunder, then Tenant shall repair or rebuild the Premises
as required hereunder to the maximum extent to which it can obtain permits to do
so.  Tenant shall not have the right to terminate this Lease as the result of
any damage to or destruction of the Premises, and Tenant hereby waives the right
to do so under any applicable statute,

12

--------------------------------------------------------------------------------

code, case law or other legal doctrine.  This Lease shall remain in full force
and effect, and Tenant shall be entitled to an equitable abatement of the Rent
during the time and to the extent any portion of the Premises is unfit for
occupancy; provided, however, that the amount of such abatement shall not exceed
the amount of loss of rents or business interruption insurance proceeds, if any,
payable to Landlord by reason of such damage or destruction.  In the event
Tenant is obligated to rebuild the Premises pursuant to this Section 17, then
all insurance proceeds arising out of insurance coverage procured by Landlord
(other than loss of rents insurance or business interruption insurance), if any,
shall be made available to Tenant to pay for the cost of such repair, rebuilding
or restoration.

18.           Condemnation.

18.1         In the event that all or any portion of the Premises shall be
lawfully condemned or taken in any manner for any public or quasi-public use, or
conveyed by Landlord in lieu thereof (a “Taking”), Tenant may require that
Landlord rebuild or repair the portion of the Premises taken so that the same
will be in substantially the same condition it was prior to the Taking. 
Notwithstanding the foregoing, Landlord shall only be obligated to rebuild or
restore the portion of the Premises subject to the Taking to the extent of the
award Landlord receives for such Taking pursuant to Section 18.2.

18.2         Upon a permanent Taking, Landlord and Tenant shall be entitled to
the following portions of the award (less the costs and fees incurred in the
collection thereof) in no order of priority:

(a)           To Tenant, an amount equal to the fair market value of its
personal property and fixtures that it is entitled to remove at the expiration
or earlier termination of this Lease and that are condemned as part of the
Taking;

(b)           To Tenant, an amount equal to the damages Tenant suffers as a
result of the interruption of its business from the Taking; and

(c)           To Landlord, the balance of the award.

In no event shall Tenant be entitled to any award for the value of its leasehold
interest.  If Landlord and Tenant are not able to obtain separate awards from
the condemning authority for the above amounts, then such amounts shall be
determined by the mutual agreement of the parties, or if the parties are unable
to agree, then by binding arbitration in accordance with the rules of the
American Arbitration Association then in effect.

18.3         In the event of a permanent Taking, the Rent shall be equitably
abated in proportion to the Base Rent fairly allocable to the part of the
Premises so taken, and Landlord shall be obligated to restore the Premises only
to the extent of any severance damages received as part of the condemnation
award.  The amount of the abatement shall be determined by the mutual agreement
of the parties, or if the parties are unable to agree, then by binding
arbitration in accordance with the rules of the American Arbitration Association
then in effect.

13

--------------------------------------------------------------------------------

18.4         No temporary Taking of the Premises and/or of Tenant’s rights
therein or under this Lease shall terminate this Lease or give Tenant any right
to abatement of Rent hereunder.  Any award made to Tenant by reason of any such
temporary Taking shall belong entirely to Tenant and Landlord shall not be
entitled to share therein.

19.           Default.

19.1         The following events shall be deemed to be events of default by
Tenant under this Lease:

(a)           Tenant shall fail to make any payment of Rent or any other payment
required to be made by Tenant hereunder, as and when due, and such failure shall
continue for a period of five (5) business days after receiving written notice
of said failure; or

(b)           Tenant shall fail to comply with any term, provision or covenant
of this Lease other than a default pursuant to Subsection (a) of this Section,
and shall not cure such failure within thirty (30) days of receiving written
notice of such failure provided, however, that if the default cannot reasonably
be cured within such 30-day period, including by reason of having to regain
possession of the Premises from a sublessee, Tenant shall not be in default of
this Lease if Tenant shall commence to cure the default, including commencing an
action to regain possession of the Premises, within said 30-day period and
diligently continues to prosecute the cure; or

(c)           The leasehold interest of Tenant shall be levied upon under
execution or be attached by process of law or Tenant shall fail to contest
diligently the validity of any lien or claimed lien and give sufficient security
to Landlord to insure payment thereof or shall fail to satisfy any judgment
rendered thereon and have the same released, and such default shall continue for
thirty (30) days after written notice thereof to Tenant; or

(d)           Tenant shall become insolvent, admit in writing its inability to
pay its debts generally as they become due, file a petition in bankruptcy or a
petition to take advantage of any insolvency statute, make an assignment for the
benefit of creditors, make a transfer in fraud of creditors, apply for or
consent to the appointment of a receiver of itself or of the whole or any
substantial part of its property, or file a petition or answer seeking
reorganization or arrangement under the federal or any state bankruptcy laws, as
now in effect or hereafter amended, or any other applicable law or statute of
the United States or any state thereof, or have filed against it a case or
proceeding under any such law or statute which is consented to or acquiesced in
by Tenant, results in the entry of an order for relief, or remains undismissed
for ninety (90) days; or

(e)           A court of competent jurisdiction shall enter an order, judgment
or decree adjudicating Tenant a bankrupt, or appointing a receiver of Tenant, or
of the whole or any substantial part of its property, without the consent of
Tenant, or approving a petition filed against Tenant seeking reorganization or

14

--------------------------------------------------------------------------------

arrangement of Tenant under the bankruptcy laws of the United States, or any
state thereof, as now in effect or hereafter amended, and such order, judgment
or decree shall not be vacated or set aside or stayed within ninety (90) days
from the date of entry thereof.

19.2         Landlord’s failure to perform any of its obligations under this
Lease shall constitute a default by Landlord under the Lease if the failure
shall continue for thirty (30) days after written notice of the failure from
Tenant to Landlord.  If the required performance cannot be completed within
thirty (30) days, Landlord’s failure to perform shall constitute a default under
the Lease unless Landlord undertakes to cure the failure within thirty (30) days
and diligently prosecutes the cure to completion as soon as reasonably possible.

20.           Remedies.

20.1         In case of an event of default by Tenant hereunder (as defined in
Section 19), Landlord shall not terminate this Lease unless such default is not
cured as provided herein and is a “material default.”  For purposes of this
Lease, a “material default” shall mean (i) a default described in Subsection
19.1(a), (ii) the failure to carry insurance required hereunder to be carried by
Tenant, (iii) the failure to repair or maintain the Premises as required under
the Lease, (iv) a default described in Subsection 19.1(b-e) that is likely to
result in a cost, loss of value or liability to Landlord of five million dollars
($5,000,000) or more, or (v) a material incurable default.  In circumstances
where Landlord has no right to terminate this Lease or where Landlord chooses
not to terminate this Lease, Landlord shall have all other remedies available at
law or in equity, including the right to sue for rent as it comes due and the
right to obtain damages from Tenant for breach of contract.

20.2         Upon the occurrence of any material default (as defined in
Subsection 20.1), Landlord shall have, in addition to any other remedies
available to Landlord at law or in equity, the option to terminate this Lease by
written notice thereof to Tenant, in which event Tenant shall immediately
surrender the Premises to Landlord, and if Tenant fails to do so, Landlord may,
without prejudice to any other remedy which it may have for possession or
arrearages in rent, enter upon and take possession of the Premises and expel or
remove Tenant and any other person who may be occupying the Premises or any part
thereof in accordance with applicable state law, without being liable for
prosecution or any claim or damages therefor; and Landlord may recover from
Tenant the following:

(a)           The worth at the time of award of any unpaid Rent which has been
earned at the time of such termination (as used in this subparagraph (a) and (b)
of this Section 20, the “worth at the time of award” shall be computed by
allowing interest from the date the sums became due at the lesser of (i) the
30-day LIBOR rate (as published in the Wall Street Journal) plus 600 basis
points (the “Default Interest Rate”), or (ii) the maximum rate permitted by
law); plus

(b)           The worth at the time of award of the amount by which the unpaid
Rent which would have been earned after termination until the time of

15

--------------------------------------------------------------------------------

award exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided; plus

(c)           The worth at the time of award of the amount by which the unpaid
Rent for the balance of the Term after the time of award exceeds the amount of
such rental loss that Tenant proves could have been reasonably avoided (as used
in this subparagraph (c), the “worth at the time of award” shall be computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco at the time of award plus 1%); plus

(d)           Any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant’s failure to perform its obligations
under this Lease or which in the ordinary course of things would be likely to
result therefrom, specifically including, but not limited to, attorneys’ fees
and court costs, brokerage commissions and advertising expenses incurred; and

(e)           At Landlord’s election, such other amounts in addition to or in
lieu of the foregoing as may be permitted from time to time by applicable law.

20.3         In addition to the remedies provided above, Landlord has the remedy
described in California Civil Code Section 1951.4 (lessor may continue lease in
effect after lessee’s breach and abandonment and recover rent as it becomes due,
if lessee has right to sublet or assign, subject only to reasonable
limitations).

20.4         Upon a default of Tenant hereunder, Landlord, upon ten (10) days
written notice, may cure such default of Tenant and Tenant shall, immediately
upon demand, reimburse Landlord for any and all reasonable expenses incurred by
Landlord to cure such default.

20.5         No act by Landlord shall terminate this Lease other than the
written notice specified above.  No waiver by Landlord of any violation or
breach of any of the terms, provisions and covenants herein contained shall be
deemed or construed to constitute a waiver of any other or later violation or
breach of the same or any other of the terms, provisions, and covenants herein
contained.  Delay by Landlord in enforcement of one or more of the remedies
herein provided upon an event of default shall not be deemed or construed to
constitute a waiver of such default.  The acceptance of any Rent hereunder by
Landlord following the occurrence of any default, whether or not known to
Landlord, shall not be deemed a waiver of any such default, except only a
default in the payment of the Rent so accepted.

20.6         Tenant waives any right to terminate this Lease or to withhold Rent
on Landlord’s default under this Lease.

21.           Interest on Past-Due Obligations.  Except as expressly provided
herein, any amount due to Landlord which is not paid when due shall bear
interest at the Default Interest Rate (as defined in Section 20.2(a)), but in no
event greater than the maximum amount permitted to be contracted for under
applicable law.  Payment of such interest shall not excuse or cure any default
by Tenant under this Lease.

16

--------------------------------------------------------------------------------

22.           Holding Over.  Tenant shall pay Landlord for each day Tenant
retains possession of the Premises or part thereof after termination hereof by
lapse of time or otherwise the Rent prorated on a daily basis and all damages
and expenses sustained by Landlord by reason of such retention as provided in
this Lease.  Tenant hereby indemnifies and holds Landlord harmless from any loss
or liability resulting from such holding over and delay in surrender.  If
Landlord gives notice to Tenant of Landlord’s election thereof, such holding
over shall constitute renewal of this Lease for a period of time from
month-to-month at One Hundred Twenty Percent (120%) of the Base Rent, but if the
Landlord does not so elect, acceptance by Landlord of rent after such
termination shall not constitute a renewal.  This provision shall not be deemed
to waive Landlord’s right of reentry or any other right hereunder or at law.

23.           Quiet Enjoyment.  Landlord represents and warrants that it has
full right and authority to enter into this Lease and that Tenant, while paying
the rental and performing its other covenants and agreements herein set forth,
shall peaceably and quietly have, hold and enjoy the Premises for the Term
without interference from Landlord subject to the terms and provisions of this
Lease.  Landlord shall not be liable for any interference or disturbance by
third persons, nor shall Tenant be released from any of the obligations of this
Lease because of such interference or disturbance.

24.           Estoppel Certificate.  Within fifteen (15) days following any
written request which Landlord may make from time to time, Tenant shall execute
and deliver to Landlord or Landlord’s mortgagee or prospective mortgagee, a
sworn statement certifying: (a) the Commencement Date, (b) the fact that this
Lease is unmodified and in full force and effect (or, if there have been
modifications hereto, that this Lease is in full force and effect, as modified,
and stating the date and nature of such modifications), (c) the date to which
the Rent and other sums payable under this Lease have been paid, (d) the fact
that, to Tenant’s actual knowledge, there are no current defaults under this
Lease by either Landlord or Tenant except as specified in Tenant’s statement,
and (e) such other matters reasonably requested by Landlord.  Landlord and
Tenant intend that any statement delivered pursuant to this Section 24 may be
relied upon by any mortgagee, beneficiary, or purchaser of the Premises or any
interest therein.  Within fifteen (15) days following any written request which
any mortgagee or prospective mortgagee may make from time to time (but not more
often than twice in any twelve (12) month period), Landlord shall execute and
deliver to such mortgagee or prospective mortgagee, a sworn statement certifying
as to the same matters described above, except that clause (e) shall refer to
matters requested by the mortgagee or prospective mortgagee.  Failure to comply
with the provisions of this Section 24 shall constitute an event of default
under this Lease.

25.           Surrender of Premises.  Tenant shall, upon the expiration or prior
termination of the Term, surrender to Landlord the Premises and all repairs,
changes, alterations, fixtures, additions, and improvements thereto in good
order and condition, reasonable wear and tear excepted.  Notwithstanding the
foregoing, Tenant shall have the option, in its sole discretion, to remove any
or all personal property owned by Tenant and any or all fixtures installed on
the Premises by Tenant, provided that Tenant shall restore any damage to the
Premises resulting from such removal.  Tenant shall indemnify Landlord against
any loss or liability resulting from delay by Tenant in so surrendering the
Premises, including without limitation any claims made by any succeeding tenant
founded on such delay.

17

--------------------------------------------------------------------------------

26.           Notices.  All notices and demands which may or are required to be
given by either party to the other hereunder shall be in writing.  All notices
and demands by the Landlord to the Tenant shall be personally delivered or sent
by United States certified mail, postage prepaid, or by prepaid express mail or
overnight courier addressed to Tribune Company, 435 N. Michigan Avenue, Chicago,
IL 60611, Attention: General Counsel, or such other person(s) or to such other
place(s) as Tenant may from time to time designate in a notice to Landlord.  All
notices and demands to Landlord shall be personally delivered or sent by United
States certified mail, postage prepaid, or by prepaid express mail or overnight
courier addressed to TMCT, LLC, c/o Chandler Trust No. 1, 350 West Colorado
Blvd. Suite 230, Pasadena, California 91105, Attention: William Stinehart, Jr.,
or such other person(s) or to such other place(s) as Landlord may from time to
time designate in a notice to Landlord.  Notices and demands delivered
personally shall be deemed given on the date of delivery; notices and demands
delivered by mail shall be deemed given three (3) days after deposit in the
United States mail; and notices and demands delivered by express mail or
overnight courier shall be deemed given one (1) day after deposit.

27.           Option to Purchase.

27.1         Tenant shall have the option to purchase the entire Premises (but
not less than the entirety) during the Early Exercise Period and the Original
Exercise Period (each as hereinafter defined); provided, however, that Tenant
shall not have the Option to purchase the Premises if this Lease terminates due
to a default of Tenant unless such termination was the result of a default of
Tenant that was commercially impracticable to cure.

27.2         To exercise the option to purchase the Premises (the “Option”),
Tenant must provide written notice, together with executed copies of the
Purchase Agreement as contemplated in subsection 27.6 below (the “Exercise
Notice”), to Landlord during one of the following periods:

(i)                                     during the period between January 1,
2008 and January 31, 2008 (such period shall hereinafter be referred to as the
“Early Exercise Period”); or

(ii)                                  during the period commencing on February
8, 2008 and ending three (3) months prior to the expiration of the Lease (such
period shall hereinafter be referred to as the “Original Exercise Period”);

except that in the event of the early termination of the Lease due to an uncured
default of Tenant that was commercially impractical to cure, Tenant may exercise
the option within thirty (30) days following such termination (which shall, for
all purposes hereof, be deemed to have been an exercise during the Original
Exercise Period notwithstanding the date of such termination).  If the Option to
purchase hereunder is exercised, the closing of such purchase shall occur within
ninety (90) days from the date of the Exercise Notice.  If such closing shall
occur prior to August 9, 2009, and if there is any increase in the assessment of
real estate taxes as a result thereof, Tenant agrees, for the benefit of any
subtenants of the Property, that no portion of such increase in real estate
taxes accruing during any period prior to August 9, 2009 shall be passed on to
any such subtenant.

18

--------------------------------------------------------------------------------

27.3         Tenant’s purchase of the Premises pursuant to the Option shall be
in cash at “fair market value” subject to, and determined in accordance with,
the following:

27.3.1         If Tenant shall deliver the Exercise Notice during the Early
Exercise Period, the parties agree that the “fair market value” of the Premises
is, and the purchase price under the Purchase Agreement shall be, One Hundred
and Seventy Five Million Dollars ($175,000,000).

27.3.2      If Tenant shall have delivered the Exercise Notice during the
Original Exercise Period (or shall be deemed to have exercised the Option in
accordance Section 27.2 above), then within thirty (30) days after Landlord
receives the Exercise Notice, Landlord and Tenant shall mutually agree upon and
appoint one appraiser to determine the fair market value of the Premises.  If
Landlord and Tenant are unable to agree upon a single appraiser to appraise the
Premises within such thirty day period, then Landlord and Tenant shall each
appoint an appraiser within sixty (60) days after Landlord receives the Exercise
Notice to determine the fair market value of each Property (a single appraiser
may appraise more than one Property and Landlord and Tenant shall each use best
efforts to minimize the total number of appraisers appointed), and notice of
each such appointment shall be given to the other party.  For each Property, the
appraisers thus appointed shall proceed to determine such fair market value for
such Property within thirty (30) days after notice of their appointment.

27.3.3      If the parties were unable to agree on a single appraiser to
appraise the Premises, then within fifteen (15) days after the parties have each
appointed appraisers pursuant to Subsection 27.3.2, the appraisers appointed for
each Property shall join to appoint a third appraiser to appraise such Property
and if they fail so to appoint such third appraiser within such period, the
third appraiser shall be appointed by the court exercising such functions in the
jurisdiction in which the Property is located unless otherwise agreed in writing
by the parties, and such third appraiser shall then individually determine the
fair market value for such Property within thirty (30) days of notice of
appointment.

27.3.4      When calculating the fair market value for any Property, each
appraiser shall appraise the Property as if any capital improvements made to the
Property by Tenant had not been made.  For purposes of this Lease only, the term
“capital improvements” shall exclude repairs and replacements which are intended
to preserve the continued functionality of the improvements located on the
Property at issue without substantially upgrading the functionality of such
improvements or the Property, but shall include improvements which (i) are
identifiable new improvements, or (ii) are replacements of existing improvements
located on the Property that so substantially upgrade the functionality of the
replaced improvements as to be substantially equivalent to an identifiable new
improvement.  For example, the replacement of the roof on a building located on
a Property with a roof of similar quality, or the renovation of existing office
space, would not be considered a capital improvement for purposes of this
Section 27.  Conversely, the installation of a kitchen in a vacant basement (an
identifiable new improvement), or the complete renovation of an auditorium
including a substantial increase in seating capacity, stage size and quality
(substantially

19

--------------------------------------------------------------------------------

equivalent to an identifiable new improvement), would be considered capital
improvements for purposes of this Lease.

27.3.5      If Landlord and Tenant fail to appoint a single appraiser to
appraise the Premises, then the average of the fair market values contained in
the two closest appraisals shall constitute the fair market value of such
Property, and such determination shall be binding upon each of the parties.  In
the event that there are not two closest appraisals (e.g., if the middle
appraisal is exactly halfway between the highest and lowest appraisals), then
the middle appraisal shall be binding upon each of the parties.  The fair market
value of the Premises shall be equal to the sum of the fair market values of
each Property.

27.3.6      All appraisers appointed hereunder shall be competent, qualified by
training and experience in the County in which the Property(ies) they are
appraising is located, disinterested and independent and shall be members in
good standing of the American Institute of Real Estate Appraisers or its
successor and all appraisal reports shall be rendered in writing and signed by
the appraiser or appraisers making the report.

27.3.7         Notwithstanding anything to the contrary herein contained, the
parties agree that in no event shall the fair market value of the Premises (and
purchase price payable under the Purchase Agreement), as determined by the
parties or the two appraisers appointed by the parties under subsection 27.3.2,
or as determined by the two appraisers appointed by the parties or the third
appraiser under subsection 27.3.3, be less than One Hundred and Ninety Five
Million Dollars ($195,000,000).

27.4         The conveyance of the Premises shall be to Tenant or its designated
nominee(s), shall be on an “as-is” and “with all faults” basis without
warranties of any kind (except that Landlord shall represent and warrant that
there are no liens, mortgages or other encumbrances on the Premises that were
not present when Landlord obtained title to the Premises, other than those
created by, caused by or approved by Tenant or suffered by Landlord through no
fault of Landlord), and shall occur at the expiration of the Lease or, in the
case of the earlier termination thereof, as soon as reasonably possible after
such termination.

27.5         Landlord shall be solely responsible for all transfer and recording
fees and costs in conjunction with a conveyance of the Premises to Tenant. 
Tenant shall be solely responsible for the cost of any title insurance if the
same is desired by Tenant.

27.6         Purchase Agreement.  To be effective, the Exercise Notice must be
accompanied by two (2) original copies of the Agreement of Purchase and Sale
substantially in form attached hereto as Exhibit B (the “Purchase Agreement”)
duly executed by Tenant, with such changes thereto as may be agreed upon by both
parties.  If all of the conditions to the exercise of the Option as set forth in
this Section 27 shall then have been satisfied, the copies of the Purchase
Agreement shall be promptly executed, and dated the date of such execution, by
Landlord and Landlord shall deliver one (1) copy of the fully executed Purchase
Agreement to Tenant.

20

--------------------------------------------------------------------------------

27.7         Further Assurances.  Each of the parties hereto shall execute and
deliver any and all additional papers and documents, and shall do any and all
further acts and things, as may be reasonably necessary in connection with the
performance of their respective obligations hereunder and to carry out the
intent of this Article 27.

27.8         Time of Essence.  Time is of the essence with respect to the
performance of each of the covenants and obligations contained in this Option
Agreement.

28.           Defined Terms and Headings.  The Section and paragraph headings
herein are for convenience of reference and shall in no way define, increase,
limit, or describe the scope or intent of any provision of this Lease.  The term
“Landlord” in these presents shall include Landlord, its successors, and
assigns.  Any indemnification of, insurance of, or option granted to Landlord
shall also benefit, include or be exercisable by Landlord’s trustee,
beneficiary, agents and employees, as the case may be.  The term “Tenant” shall
include Tenant and its successors and assigns, subject to any limitation on
assignment provided in this Lease.  Tenant agrees to furnish promptly upon
demand a corporate resolution, proof of due authorization by partners, or other
appropriate documentation evidencing the due authorization of Tenant to enter
into this Lease.

29.           Enforceability.  If for any reason whatsoever any of the
provisions hereof shall be unenforceable or ineffective, all of the other
provisions shall be and remain in full force and effect.

30.           Commissions.  Each of the parties (i) represents and warrants to
the other that neither party has dealt with any broker or finder in connection
with this Lease; and (ii) indemnifies and holds the other harmless from any and
all losses, liability, costs or expenses (including attorneys’ fees), incurred
as a result of an alleged breach of the foregoing warranty.

31.           Attorneys’ Fees.  In the event that any action or proceeding is
brought to enforce any term, covenant or condition of this Lease on the part of
Landlord or Tenant, the prevailing party in such litigation shall be entitled to
reasonable attorneys’ fees to be fixed by the court in such action or
proceeding.

32.           Time and Applicable Law.  Time is of the essence of this Lease and
all of its provisions.  This Lease shall be governed, as to each Parcel, by the
laws of the respective jurisdictions where such Parcel is located.

33.           Successors and Assigns.  The terms, covenants and conditions
contained herein shall be binding upon and inure to the benefit of the permitted
heirs, successors, executors, administrators, and assigns of the parties
hereto.  In the event Landlord sells the Premises or any portion thereof,
Landlord shall automatically be relieved of liability for obligations under this
Lease arising on and after the date title is conveyed to the purchaser.

34.           Entire Agreement.  This Lease, together with its exhibits,
contains all agreements of the parties hereto and supersedes any previous
negotiations.  There have been no representations made by the Landlord or
understandings made between the parties regarding the leasing of the Premises by
Tenant other than those set forth in this Lease and

21

--------------------------------------------------------------------------------

its exhibits.  This Lease may not be modified except by a written instrument
duly executed by the parties hereto.

35.           Recordation.  Tenant may record this Lease or any memorandum
hereof without the prior written consent of Landlord.  If requested by Tenant,
Landlord shall execute a memorandum of this Lease in recordable form in the form
of Exhibit B hereto.

36.           Exhibits. Attached to this Lease and a part hereof are exhibits
identified as follows: Exhibit A (Legal Description), Exhibit B (Memorandum of
Lease).

37.           Covenants and Conditions.  Each provision of this Lease
performable by Tenant shall be deemed both a covenant and a condition.

38.           Survival.  Except as otherwise expressly provided herein, all
obligations, covenants, warranties and representations shall survive the
expiration or prior termination of this Lease.

39.           No Joint Venture.  The parties intend by this Lease to establish
the relationship of Landlord and Tenant only, and do not intend to create a
partnership, joint venture, joint enterprise or any business relationship other
than that of Landlord and Tenant.

40.           Calendar Days and Business Days.  All time periods described in
this Lease in terms of days shall mean calendar days unless otherwise provided
herein.  If any last day for performance of any act falls upon a day either of
the parties is not open for business, such last day will be the next following
business day.

41.           Subordination, Nondisturbance and Attornment.  Tenant shall upon
demand execute, acknowledge and deliver to Landlord, any and all instruments
that may be reasonably necessary to subordinate this Lease and all rights of
Tenant hereunder to the lien of any mortgage or deed of trust on the Premises
created pursuant to a new loan or refinancing of an existing loan entered into
by Landlord after the date hereof provided that the beneficiary thereunder
executes a nondisturbance agreement in recordable form and in form and substance
acceptable to Tenant and any Mortgagee whereby the beneficiary agrees (a) that
in the event it should become necessary to foreclose said deed of trust it will
cause the sale of the Premises to be made subject to this Lease, including
without limitation, the provisions for the Additional Term (provided that the
Tenant is not in default past any applicable notice and grace period under this
Lease at the time of such foreclosure), and (b) in the event of condemnation or
damage by fire, casualty or other causes as covered by fire and extended
coverage insurance, the condemnation award or proceeds of such insurance shall
be used for reconstruction or otherwise disbursed as provided in this Lease
notwithstanding any provision in the mortgage or deed of trust to the contrary.

42.           Counterparts.  This Lease may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
constitute one and the same instrument.

43.           Waiver.  Neither Landlord nor Tenant shall be deemed to have
waived the default or breach of any term, covenant or condition of this Lease by
the other party unless

22

--------------------------------------------------------------------------------

such waiver shall be in writing and signed by the party charged with such
waiver.  The acceptance of Rent or any other payment by Landlord shall not be
deemed a waiver of any default or breach by Tenant.  No waiver by Landlord or
Tenant of any default or breach of any term, covenant or condition of this Lease
by the other party shall be deemed to be a waiver of any other term, covenant or
condition of this Lease, or of any subsequent default or breach by the other
party of the same term, covenant or condition of this Lease.

44.           Landlord’s Access.  Landlord and Landlord’s agents shall have the
right to enter the Premises at any time, in the case of an emergency, and
otherwise at reasonable times and upon reasonable notice for the purpose of
showing the same to prospective purchasers, lenders, or lessees, and for other
reasonable and proper purposes.

45.           Business Improvement Districts.

45.1         One of the Properties located in California is currently subject to
an annual assessment by the City of Los Angeles because the Property is part of
a business improvement district which has as its primary purpose the improvement
of the neighborhood in which such Property is located (a “Business Improvement
District”).  The Property is subject to such Business Improvement District
pursuant to a vote in which landowners in the neighborhood voted to form the
Business Improvement District and subject their properties to the annual
assessment.

45.2         Tenant may, with Landlord’s consent (which shall not be
unreasonably withheld, delayed or conditioned), vote in favor of establishing,
continuing or terminating any Business Improvement District with respect to any
Property.  Landlord agrees to promptly execute any documentation or take any
other action reasonably necessary to vote to establish, continue or terminate
any Business Improvement District pursuant to the terms of this Section 45. 
Tenant acknowledges that it is required to pay all fees, costs and assessments
associated with any Business Improvement District which accrue during the Term
of this Lease.

The parties hereto have executed this Lease as of the date first above written.

 

LANDLORD

 

 

 

 

 

TMCT, LLC,

 

 

A DELAWARE LIMITED LIABILITY COMPANY

 

 

 

 

 

 

 

 

By:

/s/ Chandler Trust No. 1, Managing Member

 

 

 

Name:

William Stinehart, Jr.

 

 

 

Title:

Trustee

 

23

--------------------------------------------------------------------------------

 

 

TENANT

 

 

 

 

 

TRIBUNE COMPANY,

 

 

A DELAWARE CORPORATION

 

 

 

 

 

 

 

 

By:

/s/ Chandler Bigelow

 

 

 

Name:

Chandler Bigelow

 

 

 

Title:

Vice President

 

24

--------------------------------------------------------------------------------