Exhibit 10.52
 
 
Commercial Space Lease
Single Tenant Triple Net
between
NLC-Lindblade, LLC,
a Delaware limited liability company
(“Landlord”)
and
Westwood One, Inc.
a Delaware corporation
(“Tenant”)
 
 

 

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TABLE OF CONTENTS

                      Page ARTICLE 1  
REFERENCES
    1      
 
        ARTICLE 2  
LEASED PREMISES, TERM AND POSSESSION
    3      
 
        ARTICLE 3  
RENT, LATE CHARGES AND SECURITY DEPOSITS
    6      
 
        ARTICLE 4  
USE OF LEASED PREMISES AND OUTSIDE AREA
    10      
 
        ARTICLE 5  
REPAIRS, MAINTENANCE, SERVICES AND UTILITIES
    15      
 
        ARTICLE 6  
ALTERATIONS AND IMPROVEMENTS
    18      
 
        ARTICLE 7  
ASSIGNMENT AND SUBLETTING BY TENANT
    19      
 
        ARTICLE 8  
LIMITATION ON LANDLORD’S LIABILITY AND INDEMNITY
    22      
 
        ARTICLE 9  
INSURANCE
    23      
 
        ARTICLE 10  
DAMAGE TO LEASED PREMISES
    26      
 
        ARTICLE 11  
CONDEMNATION
    27      
 
        ARTICLE 12  
DEFAULT AND REMEDIES
    28      
 
        ARTICLE 13  
GENERAL PROVISIONS
    30      
 
        ARTICLE 14  
CORPORATE AUTHORITY, BROKERS AND ENTIRE AGREEMENT
    40      
 
           
 
        EXHIBIT “A”  
LEGAL DESCRIPTION OF THE PROPERTY
    A-1   EXHIBIT “B”  
SITE PLAN OF THE PROJECT
    B-1   EXHIBIT “C”  
SCHEDULE OF BASE MONTHLY RENT & PARKING FEES
    C-1   EXHIBIT “D”  
FORM OF IRREVOCABLE STANDBY LETTER OF CREDIT
    D-1   EXHIBIT “E”  
SCHEDULE OF TENANT’S REPAIRS
    E-1   EXHIBIT “F”  
ROFO PURCHASE AGREEMENT
    F-1   EXHIBIT “G”  
MEMORANDUM OF LEASE
    G-1  

 

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COMMERCIAL SPACE LEASE
(SINGLE TENANT TRIPLE NET)
THIS COMMERCIAL SPACE LEASE (Single Tenant Triple Net) (this “Lease”) dated as
of December 17, 2009 (the “Effective Date”), and is entered into between
NLC-Lindblade, LLC, a Delaware limited liability company (“Landlord”), and
Westwood One, Inc., a Delaware corporation (“Tenant”).
ARTICLE 1
REFERENCES
1.1 REFERENCES: All references in this Lease to the following terms shall have
the following meaning or refer to the respective address, person, date, time
period, amount, percentage, calendar year or fiscal year as below set forth:

     
A. Tenant’s Address for Notices:
  Westwood One, Inc.
 
  1114 Avenue of the Americas, 28th Floor
 
  New York, New York 10036
 
  Attention: General Counsel
 
  Telephone: 212.641.2075
 
  Facsimile: 212.641.2198
 
   
 
  with a copy to:
 
   
 
  Lowenstein Sandler PC
 
  1251 Avenue of the Americas
 
  New York, New York 10020
 
  Attention: Peter D. Greene, Esq.
 
  Telephone: 646.414.6908
 
  Facsimile: 973.422.6861
 
   
B. Landlord’s Address for Notices:
  NLC-Lindblade, LLC
 
  c/o Hackman Capital Partners, LLC
 
  11111 Santa Monica, Suite 750
 
  Los Angeles, California 90025-3343
 
  Attention: Chief Operating Officer — Theresa Jones
 
  Telephone: 310.473.8900
 
  Facsimile: 310.473.8827
 
   
 
  with a copy to:
 
   
 
  c/o Hackman Capital Partners, LLC
 
  11111 Santa Monica, Suite 750
 
  Los Angeles, California 90025-3343
 
  Attention: Chief Financial Officer — Scott Poland
 
  Telephone: 310.473.8900
 
  Facsimile: 310.473.8827
 
   
 
  and with a copy to:
 
   
 
  John A. Rosenfeld, Esq.
 
  Post Office Box 1308
 
  Topanga, California 90290
 
  Telephone: 310.455.9718
 
  Facsimile: 310.455.9768

 

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C. Commencement Date:
  December 17, 2009
 
   
D. Initial Lease Term:
  Ten (10) years
 
   
E. Initial Term Expiration Date:
  December 16, 2019
 
   
F. Second Month’s Prepaid Rent
   
 
   
and Parking Fees:
  $72,963.00
 
   
Tenant’s Security Deposit:
  $218,889.00

G. Broker: CB Richard Ellis, Inc., for Tenant
H. Property or Project: That certain real property, situated in Culver City,
County of Los Angeles, State of California, more particularly described on
Exhibit “A” attached hereto.
I. Buildings: Those certain structures and improvements situated on, or affixed
or appurtenant to the Property, including, without limitation, the parking
facilities including (when aggregated with the spaces available under the
Parking Agreement (defined below in Article 1.1L below)) approximately one
hundred one (101) parking spaces (the “Parking Areas”) and the buildings (each,
a “Building” and collectively, the “Buildings”), having a common address of 8944
Lindblade Street, 8966 Washington Boulevard (also commonly known as 8965
Lindblade Street) and 8960 Washington Boulevard (also commonly known as 8935
Lindblade Street), which Buildings and Parking Areas are depicted on Exhibit “B”
attached hereto.
J. Outside Areas: The term “Outside Areas” shall mean all areas of the Property
on the exterior of the Buildings, including, without limitation, the Parking
Areas and structures (including striping and sealing of the Parking Areas and
lighting systems in the Outside Areas), driveways, sidewalks, landscaped,
planted areas (including sprinkler systems and drains) and enclosed trash
disposal areas.
K. Private Restrictions: All tenements, hereditaments, easements, rights-of-way,
rights and privileges in and to the Property, including (i) easements over other
lands granted by any easement agreement, (ii) any streets, ways, alleys, vaults,
gores or strips of land adjoining the Property, and (iii) the rights under that
certain Covenant and Agreement Regarding Parking made as of August 17, 1990,
between GTO Entertainment and Westwood One, Inc., a Delaware corporation,
recorded on September 10, 1990, in the Official Records of Los Angeles County,
California, as Instrument No. 90-1556576 (the “Parking Agreement”).
L. Fixtures: All fixtures, machinery, equipment and other property located on or
affixed to the Property or the Buildings.
M. Leased Premises: All the space within the Property, consisting of
approximately 32,428 square feet of Buildings situated on approximately 53,522
gross square feet of land, for purposes of this Lease, agreed between Landlord
and Tenant to contain said number of square feet.
N. Base Monthly Rent: The term “Base Monthly Rent” shall mean the amounts, as
adjusted, set forth on Exhibit “C” attached hereto.
O. Permitted Use: The term “Permitted Use” shall mean the use of the Leased
Premises for production and broadcast of media content and general office use
and all uses ancillary to any such uses; provided, however, that if Tenant
desires to use the Leased Premises for any principal purpose other than studio,
production and general office use, then (i) such other purpose shall be subject
to applicable zoning restrictions, and (ii) Tenant shall obtain Landlord’s prior
written consent, which consent may be withheld in Landlord’s reasonable
discretion.
P. Exhibits: The term “Exhibits” shall mean the Exhibits to this Lease which are
described as follows:

 

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Exhibit “A”-
  Legal Description of the Property
Exhibit “B”-
  Site Plan depicting the Property, the Buildings and Parking Areas
Exhibit “C” -
  Schedule of Base Monthly Rent
Exhibit “D” -
  Irrevocable Standby Letter of Credit
Exhibit “E” -
  Schedule of Tenant’s Repairs
Exhibit “F” -
  ROFO Purchase Agreement
Exhibit “G” -
  Memorandum of Lease

ARTICLE 2
LEASED PREMISES, TERM AND POSSESSION
2.1 DEMISE OF LEASED PREMISES: Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord for Tenant’s own use in the conduct of Tenant’s
business, for the Lease Term and upon the terms and subject to the conditions of
this Lease, the Leased Premises, reserving and excepting to Landlord the right
to share in all profits to be derived from any permitted assignments or
sublettings by Tenant during the Lease Term to the extent provided by Article 7.
Tenant’s lease of the Leased Premises, together with the appurtenant right to
use the Outside Areas as described in Article 2.2 below, shall be conditioned
upon and be subject to the continuing compliance by Tenant with (i) all the
terms and conditions of this Lease, (ii) all Laws (as defined in
Article 13.11(D)) governing the use of the Leased Premises and the Property,
(iii) all Private Restrictions, including, without limitation, all of the terms
and conditions of the Parking Agreement, any others easements and other matters
now of public record respecting the Leased Premises and the Property, and
(iv) all reasonable rules and regulations from time to time established by
Landlord. Subject to Tenant’s compliance with the terms and conditions of this
Lease, Landlord covenants and agrees that Tenant shall have the right to quiet
possession of the Leased Premises during the Lease Term.
2.2 RIGHT TO USE OUTSIDE AREAS: As an appurtenant right to Tenant’s right to the
use and occupancy of the Leased Premises, Tenant shall have the right to
exclusively use the Outside Areas in conjunction with the Permitted Use of the
Leased Premises solely for the purposes for which they were designed and
intended and for no other purposes whatsoever. Tenant’s right to use the Outside
Areas shall be subject to the limitations on such use as set forth in Article 4
and shall terminate concurrently with any termination of this Lease. Unless
approved in writing by Landlord, Tenant shall not use the Outside Areas to store
any property, temporarily or permanently, except for the one (1) emergency
generator approved by Landlord (the “Generator”) serving the Buildings and
located in the area depicted on Exhibit “B”, benches and tables for employee use
and the refuse and recycling storage areas located in the areas depicted on
Exhibit “B”. Any other storage or other items within the Outside Areas shall be
permitted only by the prior written consent of Landlord. If any unauthorized
storage shall occur or if Tenant shall violate any covenants applicable to the
Leased Premises, Landlord shall have the right, without notice, in addition to
such other rights and remedies that it may have, to remove the property and
charge the cost to Tenant, which cost shall be immediately payable upon demand
by Landlord.
2.3 LEASE TERM: Landlord hereby leases the Leased Premises to Tenant, and Tenant
hereby rents and hires the Leased Premises from Landlord, for the Lease Term set
forth in Article 1 above, subject to the terms and conditions of this Lease.
2.4 DELIVERY OF POSSESSION: Landlord shall deliver to Tenant possession of the
Leased Premises on or before the Commencement Date in their presently existing
condition.
2.5 ACCEPTANCE OF POSSESSION: Tenant acknowledges that (i) it has inspected the
Leased Premises, (ii) is willing to accept the Leased Premises in their existing
condition, and (iii) neither Landlord nor any representative of Landlord has
made any representation or warranty with respect to the Leased Premises, the
Buildings or the Property or their respective suitability or fitness for any
purpose, including, without limitation, any representations or warranties
regarding zoning or other land use matters. Tenant acknowledges and agrees that,
as the fee owner of the Property prior to the execution of this Lease, and
except for Tenant’s Repairs (as defined in Article 5.1(E) below, all existing
plumbing, lighting, heating, ventilating and air conditioning systems within the
Leased Premises and all doors serving the Leased Premises are in good operating
condition as of the Commencement Date. As of the Commencement Date, Tenant
hereby agrees to accept the Leased Premises in its

 

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existing condition and acknowledges that Tenant does not rely on, and Landlord
does not make, any express or implied representations or warranties as to any
matters, including, without limitation, the suitability of the soil or subsoil,
any characteristics of the Leased Premises or improvements thereon, the
suitability of the Leased Premises for the intended use, the economic
feasibility of the business Tenant intends to conduct on the Leased Premises,
title to the Leased Premises, Hazardous Materials (as defined in Article 4.13(F)
below) on or in the vicinity of the Leased Premises, or any other matter. Tenant
further acknowledges that neither Landlord nor any representative of Landlord
has agreed to undertake any alterations or additions or construct any
improvements to the Leased Premises. Tenant hereby agrees that if any remedial
or restoration work is required by any governmental authority in order to
conform the Leased Premises to the requirements of any applicable Laws, Tenant
shall assume responsibility for any such work.
2.6 SURRENDER OF POSSESSION: Immediately prior to the expiration or upon the
sooner termination of this Lease, Tenant shall remove all of Tenant’s signs from
the exterior of the Buildings and shall remove all of Tenant’s personal property
from the Leased Premises, and shall vacate and surrender the Leased Premises to
Landlord in good condition and repair in accordance with this Article,
reasonable wear and tear excepted, and shall deliver to Landlord all keys to the
Leased Premises. Tenant shall, to Landlord’s reasonable satisfaction, (i) repair
all damage to the Leased Premises caused by Tenant’s removal of Tenant’s
personal property and all damage to the exterior of the Buildings caused by
Tenant’s removal of all signs, (ii) patch and refinish all penetrations made by
Tenant or its agents and employees to the floor, walls or ceiling of the Leased
Premises, whether such penetrations were made with Landlord’s approval or not;
(iii) clean, repair or replace all stained or damaged ceiling tiles, wall
coverings and clean or replace as may be required all stained or damaged floor
coverings; (iv) replace all burned out light bulbs and damaged light lenses;
(v) pay the cost to restore (or replace as required) all heating, ventilating,
and air-conditioning equipment to good working order to the extent the need for
the restoration or replacement results from Tenant’s failure to maintain the
equipment in the condition required by this Lease; (vi) pay the cost of
restoring or replacing all trees, shrubs, plants, lawn and ground cover and
repair (or replace as required) to the extent the need for the restoration or
replacement results from Tenant’s failure to maintain such landscaping in the
condition required by this Lease; (vii) pay the cost to restore (or replace as
required) all paved surfaces of the Leased Premises to the extent the need for
the restoration or replacement results from Tenant’s failure to maintain the
paving in the condition required by this Lease; and (viii) remove all
Alterations required to be removed under Article 6 below. Tenant shall otherwise
satisfy all requirements to repair any damage or excessive wear to the Leased
Premises, the Buildings, Outside Areas and/or Property. Tenant shall not be
required to comply with the preceding two (2) sentences of this Article for any
portion of the Leased Premises that Landlord notifies Tenant in writing that
such portion of the Leased Premises are to be demolished by on or behalf of the
next occupant of the Leased Premises. If the Leased Premises are not surrendered
to Landlord in the condition required by this Article at the expiration or
sooner termination of this Lease, Landlord may, after three (3) business days
notice and opportunity of Tenant to cure, to cure, at Tenant’s sole expense,
remove Tenant’s signs, Tenant’s personal property and/or improvements not so
removed and make such repairs and replacements not so made or hire, at Tenant’s
sole expense, independent contractors to perform such work. Tenant shall be
liable to Landlord for all costs incurred by Landlord in returning the Leased
Premises to the required condition, plus interest on all costs incurred from the
date paid by Landlord at the rate of ten percent (10%) per annum (the “Lease
Interest Rate”), payable by Tenant to Landlord within ten (10) days after
receipt of a statement therefore from Landlord, and Tenant shall be deemed to
have impermissibly held over until such time as such required work is completed,
and Tenant shall pay Base Monthly Rent and Additional Rent in accordance with
the terms of Article 13.2 until such work is completed.
2.7 OPTIONS TO EXTEND: Tenant shall have two (2) options (each an “Extension
Option” and collectively, the “Extension Options”) to extend the Lease Term for
the entire Leased Premises only for additional periods of five (5) years each
(each an “Extended Term”). To exercise an Extension Option with respect to each
Extended Term, Tenant shall deliver written notice to Landlord (each an
“Election Notice”) not more than fifteen (15) months and not less than twelve
(12) months prior to the expiration of the initial Lease Term or the first
Extended Term, as applicable. Notwithstanding the foregoing, Tenant shall have
no right to exercise an Extension Option (i) during the period commencing with
the giving of any valid notice of default and continuing until said default is
cured, (ii) during the period of time any Base Monthly Rent or Additional Rent
is unpaid (without regard to whether notice thereof is given to Tenant), or
(iii) in the event that Tenant has been given three (3) or more valid notices of
separate default, whether or not the defaults are cured, during any twelve
(12) month period during the Lease Term preceding the exercise of the Extension
Option. The period of time within which an Extension Option may be exercised
shall not be extended or enlarged by reason of Tenant’s inability to exercise an
Extension Option

 

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because of the provisions of this Article 2.7. In addition, an Extension Option
shall terminate and be of no further force or effect, notwithstanding Tenant’s
due and timely exercise of the Extension Option, if, after such exercise and
prior to the commencement of the Extended Term, (y) Tenant fails to pay Base
Monthly Rent or Additional Rent for a period of thirty (30) days after such Base
Monthly Rent or Additional Rent becomes due (without any necessity of Landlord
to give notice thereof), or (z) if Tenant commits a default of the Lease beyond
the applicable cure period, if any.
A. If Tenant properly and timely exercises an Extension Option pursuant to this
Article 2.7, then each Extended Term shall be upon all of the same terms,
covenants and conditions of this Lease; provided, however, that (i) the Base
Monthly Rent applicable to the Leased Premises for the Extended Term shall be
ninety-five percent (95%) of the Fair Market Rent (as defined below) for
creative office space comparable to the Leased Premises as of the commencement
of the applicable Extended Term; (ii) the Base Monthly Rent for each year during
the Extended Term shall be subject to annual increases, and (iii) in no event
shall the Base Monthly Rent for an Extended Term be less than the applicable
Base Monthly Rent for the month immediately preceding the first month of the
applicable Extended Term. The term “Fair Market Rent” shall mean the annual
rental being charged for creative office space of a class comparable to that of
the Leased Premises, as of the commencement of the applicable Extended Term,
within Culver City and Santa Monica, County of Los Angeles, California
(“Comparable Class”), taking into account location, condition, existing
improvements to the space and any improvements to be made to the Leased Premises
in connection with the Extended Term or otherwise. Tenant shall pay all leasing
commissions and consulting fees payable in connection with the Extension
Options, unless such leasing commissions or consulting fees arise solely out of
a contractual relationship between Landlord and a broker or consultant.
B. Within one hundred twenty (120) days prior to the commencement of the
applicable Extended Term, Landlord and Tenant shall negotiate in good faith in
an attempt to determine Fair Market Rent for the applicable Extended Term. If
within thirty (30) days after the commencement of such one hundred twenty
(120) day period Landlord and Tenant are unable to agree on the Fair Market Rent
for any Extended Term, then the Fair Market Rent shall be determined as provided
in Article 2.7(C) below.
C. If it becomes necessary to determine the Fair Market Rent for the Leased
Premises by appraisal, the real estate appraiser(s) indicated in this Article
shall be members of the American Institute of Real Estate Appraisers (or its
successor organization, or if such organization ceases to exist, by the American
Arbitration Association), shall have at least five (5) years experience
appraising office space located in Culver City and Santa Monica, California, and
shall be appointed and shall act in accordance with the following procedures:
(1) If the parties are unable to agree on the Fair Market Rent within the
above-referenced thirty (30) day period, then either party may demand an
appraisal by giving written notice to the other party, which demand to be
effective must state the name, address and qualifications of an appraiser
selected by the party demanding the appraisal (“Notifying Party”). Within
fifteen (15) days following the Notifying Party’s appraisal demand, the other
party (“Non-Notifying Party”) shall either approve the appraiser selected by the
Notifying Party or select a second properly qualified appraiser by giving
written notice of the name, address and qualification of said appraiser to the
Notifying Party. If the Non-Notifying Party fails to select an appraiser within
the fifteen (15) day period, the appraiser selected by the Notifying Party shall
be deemed selected by both parties and no other appraiser shall be selected. If
two (2) appraisers are selected, they shall select a third appropriately
qualified appraiser within ten (10) days of selection of the second appraiser.
If the two (2) appraisers fail to select a third qualified appraiser, the third
appraiser shall be appointed by the American Institute of Real Estate Appraisers
(or its successor organization, or if such organization ceases to exist, by the
American Arbitration Association) upon application by either party.
(2) If only one (1) appraiser is selected, such appraiser shall notify the
parties in simple letter form of its determination of the Fair Market Rent for
the Leased Premises within fifteen (15) days following his or her selection,
which appraisal shall be conclusively determinative and binding on the parties
as the appraised Fair Market Rent.
(3) If multiple appraisers are selected, the appraisers shall meet not later
than ten (10) days following the selection of the last appraiser. At such
meeting, the appraisers shall attempt to determine the Fair

 

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Market Rent for the Premises as of the commencement date of the Extended Term by
the agreement of at least two (2) of the appraisers.
(4) If two (2) or more of the appraisers agree on the Fair Market Rent for the
Leased Premises at the initial meeting, such agreement shall be determinative
and binding upon the parties hereto and the agreeing appraisers shall forthwith
notify both Landlord and Tenant of the amount set by such agreement. If multiple
appraisers are selected and two (2) appraisers are unable to agree on the Fair
Market Rent for the Leased Premises, each appraiser shall submit to Landlord and
Tenant his or her respective independent appraisal of the Fair Market Rent for
the Leased Premises, in simple letter form, within fifteen (15) days following
appointment of the final appraiser. The parties shall then determine the Fair
Market Rent for the Leased Premises by averaging the appraisals; provided that
any high or low appraisal, differing from the middle appraisal by more than ten
percent (10%) of the middle appraisal, shall be disregarded in calculating the
average.
(5) If only one (1) appraiser is selected, then each party shall pay one-half
(1/2) of the fees and expenses of that appraiser. If three (3) appraisers are
selected, each party shall bear the fees and expenses of the appraiser it
selects and one-half (1/2) of the fees and expenses of the third appraiser.
D. The Extension Option is personal to Westwood One, Inc., a Delaware
corporation (and to any Affiliate or Successor who has assumed the Lease or
succeeded to Tenant’s rights under Article 7.10), and cannot be assigned or
exercised by any person or entity other than Westwood One, Inc., a Delaware
corporation (or such Affiliate or Successor), and may be exercised only while
Westwood One, Inc., a Delaware corporation (or such Affiliate or Successor), is
in full possession of the Leased Premises and without the intention of
thereafter assigning or subleasing the Leased Premises.
E. Immediately after the Fair Market Rent has been determined, the parties shall
enter into an amendment to this Lease setting forth the Base Monthly Rent for
the applicable Extended Term and the new expiration date of the Lease Term. All
other terms and conditions of the Lease shall remain in full force and effect
and shall apply during the Extended Term, except that: (i) there shall be no
further option to extend the Lease Term beyond the expiration of the second
Extended Term (if and as applicable), (ii) there shall be no rent concessions,
and (iii) there shall be no construction allowance, tenant improvement allowance
or similar provisions or any obligation on the part of Landlord to construct any
improvements within the Leased Premises.
ARTICLE 3
RENT, LATE CHARGES AND SECURITY DEPOSITS
3.1 BASE MONTHLY RENT: Commencing on the Commencement Date and continuing
throughout the Lease Term, Tenant shall pay to Landlord, without prior demand
therefore or offset, in advance on the first day of each calendar month, as base
monthly rent, the applicable Base Monthly Rent set forth on Exhibit “C” attached
hereto.
3.2 ADDITIONAL RENT: Commencing on the Commencement Date and continuing
throughout the Lease Term, in addition to the Base Monthly Rent, Tenant shall
pay to Landlord without offset as additional rent (the “Additional Rent”) the
following amounts:
A. An amount equal to all Property Operating Expenses (as defined in Article 13)
incurred by Landlord. Payment shall be made by whichever of the following
methods (or combination of methods) is (are) from time to time designated by
Landlord:
(1) Landlord may bill to Tenant, on a periodic basis not more frequently than
monthly, the amount of such expenses (or group of expenses) as paid or incurred
by Landlord, and Tenant shall pay to Landlord the amount of such expenses within
thirty (30) days after receipt of a written bill therefore from Landlord; and/or
(2) Landlord may deliver to Tenant Landlord’s reasonable estimate of any given
expense (such as Landlord’s Insurance Costs or Real Property Taxes), or group of
expenses, which it anticipates will be paid or incurred for the ensuing calendar
or fiscal year, as Landlord may determine, and Tenant shall pay to Landlord an

 

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amount equal to the estimated amount of such expenses for such year in equal
monthly, installments during such year with the installments of Base Monthly
Rent.
(3) Landlord reserves the right to change from time to time the methods of
billing Tenant for any given expense or group of expenses or the periodic basis
on which such expenses are billed; provided, however, in no event shall Landlord
bill any such expenses more frequently than monthly.
B. The fees imposed from time to time for the right to use the Parking Areas in
accordance with the Parking Agreement (“Parking Fees”), without prior demand
therefore or offset, in advance on the first day of each calendar month,
together with the Base Monthly Rent in accordance with the schedule set forth on
Exhibit “C” attached hereto. In the event Parking Fees are imposed for any
period of time prior to the Commencement Date, Tenant shall pay all such Parking
Fees upon demand.
C. Landlord’s share of the consideration received by Tenant upon certain
assignments and sublettings as required by Article 7;
D. Any legal fees and costs that Tenant is obligated to pay or reimburse to
Landlord pursuant to Article 13; and
E. Any other charges or reimbursements due Landlord from Tenant pursuant to the
terms of this Lease other than late charges and interest on defaulted rent.
This Lease is a “net lease,” and Tenant’s obligations arising or accruing during
the Lease Term to pay Base Monthly Rent, Additional Rent and all other payments
under this Lease required to be made by Tenant shall be absolute and
unconditional. Tenant shall pay all Base Rent, Additional Rent and all other
payments required to be made by Tenant under this Lease without notice, demand,
counterclaim, set-off, deduction, or defense and free from any charges,
assessments, impositions, expenses or deductions of any and every kind of and
nature whatsoever. Subject to exceptions and limitations expressly set forth in
this Lease, (i) all costs, expenses and obligations of every kind and nature
whatsoever relating to the Leased Premises that may arise or become due during
the Lease Term (whether or not the same shall become payable during the Lease
Term or thereafter) shall be paid by Tenant, and (ii) Landlord shall have no
obligation or responsibility to perform any improvements or to provide any
services or to perform any repairs, maintenance or replacements in, to, at, on
or under the Leased Premises or the Property.
3.3 YEAR-END ADJUSTMENTS: If Landlord shall have elected to bill Tenant for the
Property Operating Expenses (or any group of such expenses) on an estimated
basis in accordance with the provisions of Article 3.2A(2) above, Landlord shall
furnish to Tenant within three (3) months following the end of the applicable
calendar or fiscal year, as the case may be, a statement setting forth (i) the
amount of such expenses paid or incurred during the just ended calendar or
fiscal year, as appropriate, and (ii) the amount that Tenant has paid to
Landlord for credit against such expenses for such period. If Tenant shall have
paid more than its obligation for such expenses for the stated period, Landlord
shall, at its election, either (a) credit the amount of such overpayment toward
the next ensuing payment or payments of Additional Rent that would otherwise be
due, or (b) refund in cash to Tenant the amount of such overpayment. If such
year-end statement shall show that Tenant did not pay its obligation for such
expenses in full, then Tenant shall pay to Landlord the amount of such
underpayment within thirty (30) days from Landlord’s billing of same to Tenant.
The provisions of this Article shall survive the expiration or sooner
termination of this Lease.
Landlord agrees to maintain accurate books and records of the Property Operating
Expenses for each calendar or fiscal year or partial year throughout the Term
and for a period of two (2) years thereafter. Tenant shall have ninety (90) days
after receipt of any statement for Property Operating Expenses within which to
raise any questions or objections to the items or calculations contained in such
statement, which questions or objections must be delivered to Landlord in
writing and, as to any objections, must set out with particularity the nature of
such objections. If Tenant requests, within such ninety (90) days following
receipt of a statement, to review Landlord’s records (limited to such records
relevant to the information in the statement), Landlord shall permit Tenant
(through a reputable and duly licensed certified public accounting firm
reasonably approved by Landlord) to review such records in the offices of
Landlord or Landlord’s property manager, during normal business hours, within
thirty (30) days after such request. Tenant shall provide Landlord with a
written report of the findings of Tenant’s review

 

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within thirty (30) days after such review. If, following Tenant’s review, Tenant
continues to dispute any items or any calculations contained in any statement,
Tenant shall continue to pay all amounts due hereunder, without any deduction or
offset whatsoever, but nothing in this Lease shall prohibit or impair Tenant’s
right to bring suit against Landlord to resolve any of Tenant’s claims against
Landlord arising out of such a dispute.
3.4 LATE CHARGE AND INTEREST ON RENT IN DEFAULT: Tenant acknowledges that the
late payment by Tenant of any monthly installment of Base Monthly Rent or any
Additional Rent will cause Landlord to incur certain costs and expense not
contemplated under this Lease, the exact amounts of which are extremely
difficult or impractical to fix. Such costs and expenses will include, without
limitation, administration and collection costs and processing and accounting
expenses. Therefore, if any installment of Base Monthly Rent or Additional Rent
is not received by Landlord from Tenant within six (6) calendar days after the
same becomes due, Tenant shall immediately pay to Landlord a late charge in an
amount equal to the greater of five percent (5%) of the amount overdue or
$500.00 for each delinquent payment (the “Late Charge Amount”); provided,
however, (i) Tenant shall not be obligated to pay the Late Charge Amount solely
with respect to the first late payment of Base Monthly Rent and/or Additional
Rent during the Lease Term as long as such Base Monthly Rent and/or Additional
Rent is paid within ten (10) calendar days of when first due, and (ii) the Late
Charge Amount shall be $500.00 solely with respect to the second late payment of
Base Monthly Rent and/or Additional Rent during the Lease Term so long as such
Base Monthly Rent and/or Additional Rent is paid within ten (10) calendar days
of when first due, and (iii) except as otherwise provided in the foregoing
clauses (i) and (ii), so long as Tenant has not made late payment of Base
Monthly Rent and/or Additional Rent more than two times during the preceding
twelve (12) months, the Late Charge Amount shall be reduced to the greater of
three percent (3%) of the amount overdue or $500. Landlord and Tenant agree that
the Late Charge Amount represents a reasonable estimate of such costs and
expenses and is fair compensation to Landlord for the anticipated loss Landlord
would suffer by reason of Tenant’s failure to make timely payment. In no event
shall this provision for a late charge be deemed to grant to Tenant a grace
period or extension of time within to pay any rental installment or prevent
Landlord from exercising any right or remedy available to Landlord upon Tenant’s
failure to pay each rental installment due under this Lease when due, including
the right to terminate this Lease. If any rent remains delinquent for a period
in excess of six (6) calendar days, then, in addition to the Late Charge Amount,
Tenant shall pay to Landlord interest on any rent that is not so paid from said
sixth (6th) day at the Lease Interest Rate until paid in full.
3.5 PAYMENT OF RENT: All rent shall be paid in lawful money of the United
States, without any abatement, reduction or offset for any reason whatsoever, to
Landlord at such address as Landlord may designate from time to time. Tenant’s
obligation to pay Base Monthly Rent and all Additional Rent shall be
appropriately prorated at the commencement and expiration of the Lease Term. The
failure by Tenant to pay any Additional Rent as required pursuant to this Lease
when due shall be treated the same as a failure by Tenant to pay Base Monthly
Rent when due, and Landlord shall have the same rights and remedies against
Tenant as Landlord would have if Tenant failed to pay the Base Monthly Rent when
due.
3.6 PREPAID RENT: Concurrent with the execution of this Lease, Tenant shall pay
to Landlord the amount set forth in Article 1 as the first month’s Base Monthly
Rent and Parking Fees.
3.7 SECURITY DEPOSIT: Tenant shall deposit with Landlord upon the execution of
this Lease by Landlord and Tenant, an irrevocable standby letter of credit (the
“Letter of Credit”) in the amount set forth in the Basic Lease Information as
the “Security Deposit” under this Lease and in the form of Exhibit “D” attached
hereto. The Security Deposit shall be held by Landlord as security for the
performance by Tenant of all its obligations under this Lease. If Tenant fails
to pay any Rent due hereunder, or otherwise commits a default with respect to
any provision of this Lease, Landlord may use, apply or retain all or any
portion of the Security Deposit for the payment of any such Rent or for the
payment of any other amounts expended or incurred by Landlord by reason of
Tenant’s default, or to compensate Landlord for any loss or damage which
Landlord may incur thereby (and in this regard Tenant hereby waives the
provisions of California Civil Code Section 1950.7 and any similar or successor
statute providing that Landlord may claim from a security deposit only those
sums reasonably necessary to remedy defaults in the payment of Rent, to repair
damage caused by Tenant, or to clean the Leased Premises, it being agreed that
Landlord may, in addition, claim those sums reasonably necessary to compensate
Landlord for any other loss or damage, foreseeable or unforeseeable, caused by
the act or omission of Tenant or any officer, employee, agent or invitee of
Tenant). Exercise by Landlord of its rights hereunder shall not constitute a
waiver of, or relieve Tenant from any liability for, any default. If any portion
of the Letter of Credit posted as the Security Deposit is drawn

 

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upon by Landlord for such purposes, Tenant shall within ten (10) days after
written demand therefore, deposit a replacement Letter of Credit with Landlord
in the amount of the original Letter of Credit. If Tenant performs all of
Tenant’s obligations hereunder, the Letter of Credit shall be returned to Tenant
(or, at Landlord’s option, to the last assignee, if any, of Tenant’s interest
under this Lease) within thirty (30) days after the later of (i) the date of
expiration or earlier termination of this Lease, or (ii) vacation of the Leased
Premises by Tenant if the Leased Premises has been left in the condition
specified by this Lease. Upon termination of the original Landlord’s (or any
successor owner’s) interest in the Leased Premises, the original Landlord (or
such successor) shall be released from further liability with respect to the
Security Deposit upon the original Landlord’s (or such successor’s) delivery of
the Letter of Credit to the successor landlord and compliance with California
Civil Code Section 1950.7(d), or successor statute.
A. The Letter of Credit deposited as a Security Deposit shall be issued by a
U.S. based money-center bank (a bank which accepts deposits, which maintains
accounts, which has a local office in the City of Los Angeles that will
negotiate a letter of credit and whose deposits are insured by the FDIC) whose
financial strength shall be sufficient to meet liquidity demands with respect to
issued letters of credit and which is otherwise acceptable to Landlord. The
Letter of Credit shall be issued for a term of at least twelve (12) months and
shall be in a form and with such content reasonably acceptable to Landlord. The
Letter of Credit shall specify that the issuer thereof shall notify the
beneficiary of the Letter of Credit in writing at least sixty (60) days in
advance of the expiry date of such Letter of Credit if the Letter of Credit
shall not be renewed as of such expiry date. Tenant shall either replace the
expiring Letter of Credit with another Letter of Credit in an amount equal to
the original Letter of Credit or renew the expiring Letter of Credit, in any
event no later than thirty (30) days prior to the expiration of the term of the
Letter of Credit then in effect. If Tenant fails to deposit a replacement Letter
of Credit or renew the expiring Letter of Credit, Landlord shall have the right
immediately to draw upon the expiring Letter of Credit for the full amount
thereof and hold the funds drawn as the Security Deposit. Any Letter of Credit
deposited with Landlord during the final lease year of the Term must have an
expiry date no earlier than the date which is thirty (30) days after the
expiration of the Lease Term, as extended (if and as applicable). If Landlord
notifies Tenant in writing that the bank which issued the Letter of Credit has
become financially unacceptable (e.g., the bank is under investigation by
governmental authorities, the bank no longer has the financial strength
equivalent to the current financial strength of Wells Fargo Bank, N.A., the FDIC
or other applicable governmental agency has threatened to place the bank in
conservatorship or receivership, or the bank has filed bankruptcy or
reorganization proceedings), then Tenant shall have thirty (30) days after
notice from Landlord to provide Landlord with a substitute Letter of Credit
complying with all of the requirements hereof. If Tenant does not so provide
Landlord with a substitute Letter of Credit within such time period, then
Landlord shall have the right to draw upon the current Letter of Credit and hold
the funds drawn as the Security Deposit. The premium or purchase price of, or
any other bank fees (including transfer or assignment fees) associated with,
such Letter of Credit shall be paid by Tenant. The Letter of Credit shall be
transferable (and must permit multiple transfers), irrevocable and
unconditional, so that Landlord, or its successors-in-interest, may at any time
draw on the Letter of Credit against sight drafts presented by Landlord,
accompanied by Landlord’s statement, made under penalty of perjury, that said
drawing is in accordance with the terms and conditions of this Lease; no other
document or certification from Landlord shall be required to negotiate the
Letter of Credit and the Landlord may draw on any portion of the then uncalled
upon amount thereof without regard to and without the issuing bank inquiring as
to the right or lack of right of the holder of said Letter of Credit to effect
such draws or the existence or lack of existence of any defenses by Tenant with
respect thereto. The Letter of Credit shall not be mortgaged, assigned or
encumbered in any manner whatsoever by Tenant without the prior written consent
of Landlord (which consent may be withheld by Landlord in its sole discretion).
The use, application or retention of the Letter of Credit, or any portion
thereof, by Landlord shall not prevent Landlord from exercising any other right
or remedy provided by this Lease or by Law, it being intended that Landlord
shall not first be required to proceed against the Letter of Credit, and such
use, application or retention shall not operate as a limitation on any recovery
to which Landlord may otherwise be entitled.
B. Tenant acknowledges and agrees that the Letter of Credit constitutes a
separate and independent contract between Landlord and the issuing bank, that
Tenant is not a third-party beneficiary of such contract, and that Landlord’s
claim under the Letter of Credit for the full amount due and owing thereunder
shall not be, in any way, restricted, limited, altered or impaired by virtue of
any provision of the Bankruptcy Code, including, but not limited to,
Section 502(b)(6) of the Bankruptcy Code.

 

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C. The Letter of Credit shall be transferable to any of the following parties:
(i) any secured or unsecured lender of Landlord, or (ii) any assignee,
successor, transferee or other purchaser of all or any portion of the Buildings,
or any interest in any Building. Further, in the event of any sale, assignment
or transfer by the Landlord of its interest in the Leased Premises or the Lease,
Landlord shall have the right to assign or transfer the Letter of Credit to its
grantee, assignee or transferee; and in the event of any sale, assignment or
transfer, the landlord so assigning or transferring the Letter of Credit shall
have no liability to Tenant for the return of the Letter of Credit, and Tenant
shall look solely to such grantee, assignee or transferee for such return, so
long as such grantee, assignee or transferee assumes in writing all of
Landlord’s obligations with respect to the Letter of Credit. The terms of the
Letter of Credit shall permit multiple transfers of the Letter of Credit. Tenant
shall use its best efforts to cooperate with Landlord and the bank to effect the
transfer(s) of the Letter of Credit and Tenant shall be responsible for all
costs of the bank associated therewith.
ARTICLE 4
USE OF LEASED PREMISES AND OUTSIDE AREA
4.1 PERMITTED USE: Tenant shall be entitled to use the Leased Premises solely
for the Permitted Use as set forth in Article 1 and for no other purpose. Tenant
shall have the exclusive right to use the Outside Areas in conjunction with its
Permitted Use of the Leased Premises solely for the purposes for which they were
designed and intended and for no other purpose.
4.2 GENERAL LIMITATIONS ON USE: Tenant shall not do or permit anything to be
done in or about the Leased Premises, the Buildings, the Outside Areas or the
Property which does or could (i) jeopardize the structural integrity of the
Building, or (ii) cause damage to any part of the Leased Premises, the
Buildings, the Outside Areas or the Property. Tenant shall not operate any
equipment within the Leased Premises which does or could (a) injure, vibrate or
shake the Leased Premises or any Building, (b) damage, overload, corrode or
impair the efficient operation of any electrical, plumbing, sewer, heating,
ventilating or air conditioning systems within or servicing the Leased Premises
or any Building, or (c) damage or impair the efficient operation of the
sprinkler system (if any) within or servicing the Leased Premises or any
Building. Except as permitted in Article 5, Tenant shall not affix any equipment
to or make any penetrations or cuts in the floor, ceiling or walls of the Leased
Premises without Landlord’s prior written consent. Tenant shall not place any
loads upon the floors, walls, ceiling or roof systems which could endanger the
structural integrity of any Building or damage its floors, foundations or
supporting structural components. Tenant shall not place any explosive,
flammable or harmful fluids or other waste materials including Hazardous
Materials in the drainage systems of the Leased Premises, the Buildings, the
Outside Areas or the Property. Tenant shall not commit nor permit to be
committed any waste in or about the Leased Premises, any Building, the Outside
Areas or the Property.
4.3 NOISE AND EMISSIONS: All noise generated by Tenant in its use of the Leased
Premises shall be confined or muffled so that it does not interfere with the
businesses of or annoy the occupants and/or users of adjacent properties. All
dust, fumes, odors and other emissions generated by Tenant’s use of the Leased
Premises shall be sufficiently dissipated in accordance with sound environmental
practices and exhausted from the Leased Premises in such a manner so as not to
interfere with the businesses of or annoy the occupants and/or users of adjacent
properties, or cause any damage to the Leased Premises, any Building, the
Outside Areas or the Property or any component part thereof or the property of
adjacent property owners.
4.4 TRASH DISPOSAL: Tenant shall provide trash bins (or other adequate garbage
disposal facilities) within the trash enclosure areas currently in use or
otherwise as provided or permitted by Landlord in the Outside Areas sufficient
for the interim disposal of all of its trash, garbage and waste. All such trash,
garbage and waste temporarily stored in such areas shall be stored in such a
manner so that it is not visible from outside of such areas, and Tenant shall
cause such trash, garbage and waste to be removed once each week from the
Property at Tenant’s sole cost. Tenant shall at all times keep the Leased
Premises, the Buildings, the Outside Areas and the Property in a clean, safe and
neat condition free and clear of all trash, garbage, waste and/or boxes, pallets
and containers containing same at all times.
4.5 PARKING: In consideration for the Parking Fees, Tenant shall be entitled to
use of the vehicle parking spaces in the Parking Areas depicted on Exhibit “B”,
which use, as between Landlord and Tenant, is

 

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exclusive. Tenant shall not permit or allow any vehicles that belong to or are
controlled by Tenant or Tenant’s employees, suppliers, shippers, customers or
invitees to be loaded, unloaded or parked in areas other than those used for
such purposes on the Commencement Date or as otherwise designated by Landlord
for such activities. Nothing contained in this Lease shall be deemed to create
liability upon Landlord for any damage to motor vehicles of visitors or
employees, for any loss of property from within those motor vehicles, or for any
injury to Tenant, its visitors or employees, unless the same is caused by
Landlord’s gross negligence or intentional misconduct. Tenant shall be liable
for any damage to the Parking Areas caused by Tenant or Tenant’s employees,
suppliers, shippers, customers or invitees, including, without limitation,
damage from excess oil leakage. Tenant shall have no right to install any
fixtures or equipment or store any personal property in the Parking Areas,
except that Tenant may park its mobile broadcasting equipment within the Parking
Areas in the areas designated by Landlord for same. Tenant shall not, at any
time, park or permit to be parked any recreational vehicles or inoperative
vehicles in the Parking Areas or on any portion of the Property. Tenant agrees
to assume responsibility for compliance by its employees and invitees with the
Parking Agreement and the parking provisions contained in this Lease. If Tenant
or its employees park any vehicle within the Property in violation of these
provisions, then Landlord may, in addition to any other remedies Landlord may
have under this Lease, charge Tenant, as Additional Rent, and Tenant agrees to
pay, as Additional Rent, $75.00 per day for each day or partial day that each
such vehicle is so parked within the Property. Landlord reserves the right,
after the Initial Lease Term, to construct a parking garage to serve the parking
needs of the Property and neighboring properties. If Landlord desires to
construct a parking garage during an Extension Term, Landlord shall so notify
Tenant in writing not less than thirty (30) days prior to the earliest date
Tenant is permitted to deliver an Election Notice to exercise the Extension
Option with respect to such Extension Term pursuant to Article 2.7 above. If
Landlord fails to provide timely written notice of the exercise of its right to
construct the parking garage and thereafter Tenant exercises the Extension
Option, Landlord shall have no right to construct a parking garage during such
Extension Term. If Landlord provides timely notice of the exercise of its right
to construct the parking garage and Tenant nonetheless exercises an Extension
Option pursuant to Article 2.7, Landlord may provide the Parking Areas within a
parking garage constructed thereon, and may temporarily relocate the Parking
Areas during construction thereof (the “Temporary Relocated Parking Areas”). The
Temporary Relocated Parking Areas Parking Areas shall be located with one
(1) mile of the Leased Premises, provided that if the Temporary Relocated
Parking Areas Parking Areas are not within 750 feet of the Leased Premises,
Landlord shall provide shuttle service from and to such Temporary Relocated
Parking Areas and the Leased Premises during any such construction; provided,
however, Landlord shall at all times provide Tenant with the number of parking
spaces set forth in Article 1.1(J) above. The hours of operation and frequency
of trips of the shuttle service shall not unreasonably inconvenience Tenant’s
employees or hinder operation of Tenant’s business. The Temporary Relocated
Parking Areas shall have security substantially equivalent to the level of
security Tenant is then providing to Parking Area at the Leased Premises.
Landlord covenants to use reasonable commercial efforts to ensure that noise and
vibration resulting from the construction does not adversely affect the utility
of the Tenant’s recording studios.
4.6 SIGNS: Other than the business identification signs which are located on the
Property as of the Commencement Date, Tenant shall not place or install on or
within any portion of the Leased Premises, the exterior of the Building, the
Outside Areas or the Property any other sign, advertisement, banner, placard or
picture which is visible from the exterior of the Leased Premises, until
Landlord shall have first approved in writing the location, size, content,
design, method of attachment and material to be used in the making of such sign.
Any sign, once approved by Landlord, shall be installed only in strict
compliance with Landlord’s approval, at Tenant’s expense, using a contractor
first approved by Landlord to install same. Landlord may remove any permitted
signs, advertisements, banners, placards or pictures so placed by Tenant on or
within the Leased Premises, the exterior of any Building, the Outside Areas or
the Property and charge to Tenant the cost of such removal, together with any
costs incurred by Landlord to repair any damage caused thereby, including any
cost incurred to restore the surface upon which such sign was so affixed to its
original condition. Tenant shall remove all of Tenant’s signs, repair any damage
caused thereby, and restore the surface upon which the sign was affixed to its
original condition, all to Landlord’s reasonable satisfaction, upon the earlier
of the expiration of the Lease Term or the termination of this Lease.
4.7 COMPLIANCE WITH LAWS AND PRIVATE RESTRICTIONS: Tenant shall abide by and
shall promptly observe and comply with, at its sole cost and expense, all Laws
and Private Restrictions respecting the use and occupancy of the Leased
Premises, the Buildings, the Outside Areas or the Property including, without
limitation, the terms of the Parking Agreement and all Laws governing the use
and/or, subject to Article 4.13,

 

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disposal of Hazardous Materials, and shall defend with competent counsel,
indemnify and hold Landlord harmless from any claims, damages or liability
resulting from Tenant’s failure to do so. Notwithstanding anything in the first
sentence of this Article 4.7 to the contrary, if Laws (including compliance with
the ADA, Title 24 of the California Administrative Code, and other similar
federal, state and local Laws and regulations) or Private Restrictions
respecting the use and occupancy of the Leased Premises, the Buildings, the
Outside Areas or the Property are changed after the Commencement Date so as to
require during the Lease Term the construction of an addition to or an
alteration of any portion of the Property, or the reinforcement or other
physical modification of any portion of the Property (“Capital Expenditure”),
Landlord and Tenant shall allocate the cost of such work as follows:
A. Subject to Article 4.7(C) below, if such Capital Expenditures are required as
a result of the specific and unique use of the Leased Premises by Tenant as
compared with uses by tenants in general, Tenant shall be fully responsible for
the cost thereof.
B. If such Capital Expenditure is not the result of the specific and unique use
of the Leased Premises by Tenant (such as, governmentally mandated seismic
modifications), then Landlord shall pay for such Capital Expenditure and Tenant
shall only be obligated to pay, each month during the remainder of the Lease
Term, on the date on which Base Monthly Rent is due, an amount equal to 1/144th
of the portion of such costs. Tenant shall pay interest monthly at the Lease
Interest Rate on a sum equal to the number of months then remaining in the Lease
Term times 1/144th of the portion of such costs (the “Unamortized Balance”) but
may prepay its obligation at any time.
C. Notwithstanding the above, the provisions concerning Capital Expenditures are
intended to apply only to non-voluntary and new Applicable Requirements. If the
Capital Expenditures are instead triggered by Tenant as a result of an actual or
proposed change in the use, change in intensity of use, or Tenant’s voluntary
modification to the Property or any portion thereof then, and in that event,
Tenant shall either (i) immediately cease such changed use or intensity of use
and/or take such other steps as may be necessary to eliminate the requirement
for such Capital Expenditure, or (ii) complete such Capital Expenditure at its
own expense. Tenant shall not, however, have any right to terminate this Lease.
4.8 COMPLIANCE WITH INSURANCE REQUIREMENTS: With respect to any insurance
policies required or permitted to be carried by Landlord in accordance with the
provisions of this Lease, Tenant shall not conduct (or permit any other person
to conduct) any activities nor keep, store or use (or allow any other person to
keep, store or use) any item or thing within the Leased Premises, the Buildings,
the Outside Areas or the Property which (i) is prohibited under the terms of any
of such policies, (ii) could result in the termination of the coverage afforded
under any of such policies, (iii) could give to the insurance carrier the right
to cancel any of such policies, or (iv) could cause an increase in the rates
(over standard rates) charged for the coverage afforded under any of such
policies. Tenant shall comply with all requirements of any insurance company,
insurance underwriter, or Board of Fire Underwriters which are necessary to
maintain, at standard rates, the insurance coverages carried by either Landlord
or Tenant pursuant to this Lease.
4.9 LANDLORD’S RIGHT TO ENTER: Landlord and its agents shall have the right to
enter the Leased Premises during normal business hours after giving Tenant
reasonable prior notice and subject to Tenant’s reasonable security measures for
the purpose of (i) inspecting the same, (ii) showing the Leased Premises to
prospective purchasers, mortgagees or tenants, (iii) making necessary
alterations, additions or repairs, and/or (iv) performing any of Tenant’s
obligations when Tenant has failed to do so. Landlord shall have the right to
enter the Leased Premises during normal business hours (or as otherwise agreed),
subject to Tenant’s reasonable security measures, for purposes of exercising its
rights under this Lease. Landlord shall have the right to enter the Outside
Areas during normal business hours for purposes of (a) inspecting the exterior
of the Buildings and the Outside Areas, and (b) posting notices of
non-responsibility, or, during the final year of the Lease Term, “For Lease” of
“For Sale” signs. Any entry into the Leased Premises or the Outside Areas by
Landlord in accordance with this Article shall not under any circumstances be
construed or deemed to be a forcible or unlawful entry into, or a detainer of,
the Leased Premises, or an eviction, actual or constructive of Tenant from the
Leased Premises or any portion thereof.
4.10 USE OF OUTSIDE AREAS: Tenant, in its use of the Outside Areas, shall at all
times keep the Outside Areas in a safe, Comparable Class condition, free and
clear of all materials, equipment, debris, trash (except

 

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within existing enclosed trash areas), inoperable vehicles, and other items
which are not specifically permitted by Landlord to be stored or located thereon
by Tenant. If, in the opinion of Landlord, unauthorized persons are using any of
the Outside Areas by reason of, or under claim of, the express or implied
authority or consent of Tenant, then Tenant, upon demand of Landlord, shall
restrain, to the fullest extent then allowed by Law, such unauthorized use, and
shall initiate such appropriate proceedings as may be required to so restrain
such use.
4.11 RULES AND REGULATIONS: Landlord shall have the right from time to time to
establish reasonable rules and regulations and/or amendments or additions
thereto relating to the use of the Leased Premises and the Outside Areas and for
the care and orderly management of the Property. Upon delivery to Tenant of a
copy of such rules and regulations or any amendments or additions thereto,
Tenant shall comply with such rules and regulations. A violation by Tenant of
any of such rules and regulations shall constitute a default by Tenant under
this Lease. If there is a conflict between the rules and regulations and any of
the provisions of this Lease, the provisions of this Lease shall prevail.
Landlord shall not be responsible or liable to Tenant for the violation of such
rules and regulations by any other tenant of the Property.
4.12 ENVIRONMENTAL PROTECTION: Landlord may voluntarily cooperate in a
reasonable manner with the efforts of all governmental agencies in reducing
actual or potential environmental damage. Tenant shall not be entitled to
terminate this Lease or to any reduction in or abatement of rent by reason of
such compliance or cooperation. Tenant agrees at all times to cooperate fully
with Landlord and to abide by all rules and regulations and requirements which
Landlord may reasonably prescribe in order to comply with the requirements and
recommendations of governmental agencies regulating, or otherwise involved in,
the protection of the environment.
4.13 HAZARDOUS SUBSTANCES:
A. Reportable Uses Require Consent. The term “Hazardous Substance” as used in
this Lease shall mean any product, substance, or waste whose presence, use,
manufacture, disposal, transportation, or release, either by itself or in
combination with other materials expected to be on the Leased Premises, is
either: (i) potentially injurious to the public health, safety or welfare, the
environment or the Premises, (ii) regulated or monitored by any governmental
authority, or (iii) a basis for potential liability of Landlord to any
governmental agency or third party under any applicable statute or common law
theory. Hazardous Substances shall include, but not be limited to, hydrocarbons,
petroleum, gasoline, and/or crude oil or any products, by-products or fractions
thereof. Tenant shall not engage in any activity in or on the Leased Premises
which constitutes a Reportable Use of Hazardous Substances without the express
prior written consent of Landlord and timely compliance (at Tenant’s expense)
with all Applicable Requirements. “Reportable Use” shall mean (i) the
installation or use of any above or below ground storage tank, (ii) the
generation, possession, storage, use, transportation, or disposal of a Hazardous
Substance that requires a permit from, or with respect to which a report,
notice, registration or business plan is required to be filed with, any
governmental authority, and/or (iii) the presence at the Leased Premises of a
Hazardous Substance with respect to which any Law requires that a notice be
given to persons entering or occupying the Leased Premises or neighboring
properties. Notwithstanding the foregoing, without Landlord’s consent Tenant may
use any ordinary and customary materials reasonably required to be used in the
normal course of the Permitted Use such as ordinary office supplies (copier
toner, liquid paper, glue, etc.) and common household cleaning materials, so
long as such use is in compliance with all Laws and does not expose Landlord to
any liability therefor. In addition, Landlord may condition its consent to any
Reportable Use upon receiving such additional assurances as Landlord reasonably
deems necessary to protect itself, the public, the Leased Premises and/or the
environment against damage, contamination, injury and/or liability, including,
but not limited to, the installation (and removal on or before Lease expiration
or termination) of protective modifications (such as concrete encasements)
and/or increasing the Security Deposit. Landlord hereby consents to the
operation and maintenance by Tenant, in accordance with the terms of this Lease,
of the existing underground storage tank which contains fuel for Tenant’s
emergency generator located on the Leased Premises.
B. Duty to Inform Landlord. If Tenant knows, or has reasonable cause to believe,
that a Hazardous Substance has come to be located in, on, under or about the
Leased Premises, other than as previously consented to by Landlord (and
Hazardous Substances to which Landlord has consented for purposes of this
Article 4.13(B) shall be deemed to include any state of fact discovered by
Landlord in connection with its Feasibility Studies under the Purchase and Sale
Agreement between Landlord (as purchaser) and Tenant (as seller) dated December
 _____  , 2009 (the “PSA”) or which is described in the exhibits or schedules to
the PSA), as soon as is possible Tenant shall give

 

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written notice of such fact to Landlord, and provide Landlord with a copy of any
report, notice, claim or other documentation which it has concerning the
presence of such Hazardous Substance.
C. Tenant Remediation. Tenant shall not cause or permit any Hazardous Substance
to be spilled or released in, on, under, or about the Leased Premises (including
through the plumbing or sanitary sewer system) in violation of Laws and shall
promptly, at Tenant’s expense, comply with all Laws and Private Restrictions and
take all investigatory and/or remedial action ordered or required under any
applicable Laws for the cleanup of any contamination of, and for the
maintenance, security and/or monitoring of the Leased Premises or neighboring
properties, that was caused or materially contributed to by Tenant, or
pertaining to or involving any Hazardous Substance brought onto the Leased
Premises during the term of this Lease, by or for Tenant or any third party.
D. Tenant Indemnification. Tenant shall indemnify, defend and hold Landlord, its
agents, employees, lenders and ground lessor, if any, harmless from and against
any and all loss of rents and/or damages, liabilities, judgments, claims;
expenses, penalties, and attorneys’ and consultants’ fees resulting from any
Hazardous Substance brought onto the Leased Premises by or for Tenant, or any
third party (provided, however, that Tenant shall have no liability under this
Lease with respect to (i) Hazardous Substances brought onto the Leased Premises
by Landlord, or Landlord’s employees, agents, contractors or subcontractors, and
(ii) underground migration of any Hazardous Substance under the Leased Premises
from areas outside of the Leased Premises not caused or contributed to by
Tenant). Tenant’s obligations shall include, but not be limited to, the effects
of any contamination or injury to person, property or the environment created or
suffered by Tenant, and the cost of investigation, removal, remediation,
restoration and/or abatement, and shall survive the expiration or termination of
this Lease. No termination, cancellation or release agreement entered into by
Landlord and Tenant shall release Tenant from its obligations under this Lease
with respect to Hazardous Substances, unless specifically so agreed by Landlord
in writing at the time of such agreement.
E. Landlord Indemnification. Landlord and its successors and assigns shall
indemnify, defend, reimburse and hold Tenant, its employees and lenders,
harmless from and against any and all environmental damages, including the cost
of remediation, which result from Hazardous Substances which are caused by the
negligent acts or omissions of Landlord, its agents or employees, contractors or
subcontractors. Landlord’s obligations, as and when required by Laws, shall
include, but not be limited to, the cost of investigation, removal, remediation,
restoration and/or abatement, and shall survive the expiration or termination of
this Lease.
F. Investigations and Remediation. Landlord shall retain the responsibility and
pay for any investigations or remediation measures required by governmental
entities having jurisdiction with respect to the existence of Hazardous
Substances on the Leased Premises which are caused by the negligent acts or
omissions of Landlord, its agents or employees, contractors or subcontractors.
Tenant shall cooperate fully in any such activities at the request of Landlord,
including allowing Landlord and Landlord’s agents to have reasonable access to
the Leased Premises at reasonable times in order to carry out Landlord’s
investigative and remedial responsibilities.
G. Landlord Termination Option. If a condition involving the presence of, or a
contamination by Hazardous Substances, which requires repair, remediation or
restoration (a “Hazardous Substance Condition”), occurs during the term of this
Lease, unless Tenant is legally responsible therefor (in which case Tenant shall
make the investigation and remediation thereof required by all Laws and this
Lease shall continue in full force and effect, but subject to Landlord’s rights
under Article 4.13(D) and Article 12), Landlord may, at Landlord’s option,
either (i) investigate and remediate such Hazardous Substance Condition, if
required, as soon as reasonably possible at Landlord’s expense, in which event
this Lease shall continue in full force and effect, or (ii) if the Hazardous
Substance Condition cannot be remediated at a commercially reasonable cost
without dispossessing Tenant from a material portion of the Premises for more
than an immaterial amount of time, give written notice to Tenant within 60 days
after receipt by Landlord of knowledge of the occurrence of such Hazardous
Substance Condition, of Landlord’s desire to terminate this Lease as of a date
not less than nine (9) months following the date of such notice. In the event
Landlord elects to give a termination notice, this Lease shall terminate as of
the date specified in Landlord’s notice of termination.
H. Inspection; Compliance. Landlord and Landlord’s lenders and consultants shall
have the right to enter into the Leased Premises at any time, in the case of an
emergency, and otherwise at reasonable times, for the purpose of inspecting the
condition of the Leased Premises and for verifying compliance by Tenant with
this Lease.

 

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The cost of any such inspections shall be paid by Landlord, unless, under
circumstances where Tenant would be responsible under this Lease for compliance,
a violation of Laws or Private Restrictions or a Hazardous Substance Condition
is found to exist or be imminent, or the inspection is requested or ordered by a
governmental authority. In such case, Tenant shall upon request reimburse
Landlord for the cost of such inspection, so long as such inspection is
reasonably related to the violation or contamination.
I. Environmental Insurance. Prior to the Commencement Date and as a condition to
the closing under the PSA, Landlord shall have obtained, at Tenant’s expense, a
policy of environmental liability insurance covering pre-existing conditions
from Great American Insurance Group (or one of its subsidiaries) (the “EP
Insurer”), for a term of ten (10) years and with limits of liability in the
amount of $5,000,000, and with a deductible or self-insured retention amount not
to exceed $100,000 per claim (the “Lease Environmental Policy”, which shall
include replacements or extensions of same at Tenant’s expense if Tenant
continues to occupy the Leased Premises after the Initial Lease Term). Landlord
shall be designated as the first named insured on the Lease Environmental
Policy, and Tenant shall be an additional named insured on the Lease
Environmental Policy and on any replacements or extensions of same if Tenant
continues to occupy the Leased Premises after the Initial Lease Term. The Lease
Environmental Policy shall list this Lease and the PSA as “insured contracts”
thereunder, and otherwise shall be in form approved by Landlord. During the
Lease Term, Tenant shall be responsible to pay the deductible amount for any
claim under the Lease Environmental Policy, whether the claim is made by
Landlord or Tenant, unless the claim arises from a matter where Landlord is
responsible to indemnify Tenant under Article 4.13(E) above. Tenant acknowledges
that Landlord may maintain one or more additional environmental liability
insurance policies with respect to the Leased Premises at Landlord’s sole cost,
and shall have no obligation to designate Tenant as an additional insured or
additional named insured thereon. Landlord shall copy Tenant on all of its
written communications concerning the Lease Environmental Policy to the EP
Insurer or to the insurance broker which placed the Lease Environmental Policy,
and during the Lease Term shall not cancel the Lease Environmental Policy or
remove Tenant as an additional named insured without the written authorization
of Tenant. In the event the Lease Environmental Policy is replaced with an
environmental liability policy from an insurer other than Great American
Insurance Group (or one of its subsidiaries), such subsequent insurer shall be
deemed the EP Insurer for purposes of this Article 4.13(I).
ARTICLE 5
REPAIRS, MAINTENANCE, SERVICES AND UTILITIES
5.1 REPAIR AND MAINTENANCE: Tenant shall, during the Lease Term, at its sole
cost and expense and without any cost or expense to Landlord (except as
otherwise expressly set forth below), provide for the repair and maintenance of
the Leased Premises in accordance with the following terms and conditions.
A. Tenant shall continuously keep and maintain all Buildings and other
improvements now or hereafter located on the Leased Premises, the Outside Areas
and the Property and all appurtenances thereto, and replace as and when required
to the Buildings and all such improvements, in a Comparable Class condition,
including, without limiting, the generality of the foregoing, (i) all interior
walls, floors and ceilings, (ii) all windows, doors and skylights, (iii) all
electrical wiring, conduits, connectors and fixtures, (iv) all plumbing, pipes,
sinks, toilets, faucets, drains and wet and dry utility systems, including,
without limitation, sprinkler systems, (v) all lighting fixtures, bulbs and
lamps, (vi) all heating, ventilating and air conditioning equipment, (vii) all
entranceways to the Leased Premises, (viii) the exterior and structural parts of
each Building (including the foundation, subflooring, load-bearing and exterior
walls and roof), and (ix) all Outside Areas, including, without limitation, the
Generator and paying and performing all obligations of Landlord under and in
accordance with the Parking Areas. Except where expressly required by this
Lease, Landlord shall not be obligated to make any repairs, replacements or
renewals of any kind, nature or description whatsoever to the Leased Premises or
any Buildings or other improvements now or hereafter located thereon, and Tenant
hereby expressly waives all right to make repairs at Landlord’s expense under
Sections 1941 and 1942 of the California Civil Code, as amended from time to
time. Tenant shall, at Tenant’s sole cost and expense, procure and maintain
contracts, with copies to Landlord, in customary form and substance for, and
with contractors specializing and experienced in the maintenance of the
following equipment and improvements, if any, if and when installed on the
Leased Premises (collectively, the “Systems”): (i) heating, ventilating and air
conditioning equipment and systems (“HVAC”), (ii) fire extinguishing systems,
including fire alarm and/or smoke detection, (iii) landscaping and irrigation
systems, (iv) roof covering and drains, (v) clarifiers, and (vi) the

 

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underground storage tank on the Leased Premises which contains fuel for Tenant’s
backup generator, including leak detection, monitoring and maintenance.
B. Tenant shall comply with and abide by all Laws and Private Restrictions,
including, without limitation, the Parking Agreement, affecting the Leased
Premises, the Outside Areas and all Buildings and other improvements now or
hereafter located on the Property.
C. If Tenant shall fail to perform the required maintenance or fail to make
repairs required of it pursuant to this Article within a reasonable period of
time following notice from Landlord to do so, then Landlord may, at its election
and without waiving any other remedy it may otherwise have under this Lease or
at Law, perform such maintenance or make such repairs and charge to Tenant, as
Additional Rent, the costs so incurred by, Landlord for same.
D. Tenant, at its sole cost and expense, shall cause all alterations, additions,
improvements and repairs made by Tenant to the Leased Premises to comply with
the provisions of the ADA, Title 24 of the California Administrative Code, and
other similar federal, state and local laws and regulations required by Tenant’s
use or occupation of the Leased Premises.
E. Tenant, at Tenant’s sole cost and expense (but subject to the reimbursement
by Landlord set forth herein), shall cause the repairs, replacements and
improvements identified on Exhibit “E” attached hereto (as same may be amended
from time to time upon the request of either party with the consent of the other
party, such consent not to be unreasonably withheld, collectively, the “Tenant’s
Repairs”) to be made and/or installed, as applicable, on or before the
applicable date set forth on Exhibit “E,” but in no event later than twelve
(12) months after the Effective Date. The Tenant’s Repairs shall be made and
performed in a safe and workmanlike manner, using only first-class materials, in
accordance with Article 6. Subject to the requirements of Article 6, Landlord
agrees to allow Tenant to make such repairs and replacements, all at the sole
cost of Tenant (except as otherwise provided herein). No delay in the completion
of construction of the Tenant’s Repairs shall be considered in the determination
of the Commencement Date of the Lease. Landlord shall be entitled to supervise
Tenant’s completion of the Tenant’s Repairs; provided, however, Tenant
acknowledges and agrees that Landlord’s sole interest in any review and
supervision of the installation of the Tenant’s Repairs is to protect the
Building and Landlord’s interest in the Building. Accordingly, Tenant shall not
rely upon Landlord’s supervision of the design and/or installation of the
Tenant’s Repairs for any purpose, and Landlord shall incur no liability of any
kind by reason of such supervision. The failure of Tenant, absent force majeure,
to substantially complete or cause the completion of the Tenant’s Repairs in
accordance with the terms of this Section and the schedule set forth on Exhibit
“E”, shall be a default under this Lease and Landlord shall have the right, but
not the obligation, in addition to such other rights and remedies that Landlord
may have, to complete the Tenant’s Repairs and charge the cost of the same to
Tenant, which cost shall be immediately payable upon demand by Landlord. In
connection with its acquisition of the Property, Landlord has held back from the
purchase price the sum of $673,000 (the “Deferred Maintenance Funds Deposit”),
which shall be disbursed to Tenant upon satisfaction of the following
conditions:
(1) Tenant shall submit to Landlord, from time to time but not more than once
per calendar month, for reasonable approval by Landlord, a description of the
portion of Tenant’s Repairs which have been completed along with a written
request for payment executed by Tenant;
(2) Tenant shall provide Landlord with copies of invoices, lien waivers,
applications for payments, and, unless payment is made directly by Landlord
pursuant to clause (7) of this Article 5.1(E), cancelled checks or other
evidence of payment of amounts paid by Tenant in connection with Tenant’s
Repairs; and
(3) Tenant shall have delivered evidence satisfactory to Landlord, in its
reasonable discretion, that the undisbursed Deferred Maintenance Funds Deposit
is sufficient to complete the uncompleted Tenant’s Repairs or, if insufficient
(the amount of such shortfall, the “Deferred Maintenance Shortfall”), Tenant
shall provide evidence of payment of Tenant’s Repairs in an amount equal to such
Deferred Maintenance Shortfall, which payment shall not be eligible for
reimbursement hereunder;

 

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(4) Tenant shall submit disbursement requests to Landlord promptly upon receipt
of any invoice for payment from any architect, contractor, supplier or other
third party for work or services completed for Tenant’s Repairs;
(5) Intentionally omitted;
(6) Such disbursements shall be utilized to pay the actual costs of Tenant’s
Repairs; and
(7) Upon receipt of a disbursement request from Tenant in compliance with the
foregoing, at Landlord’s option, Landlord shall either (a) pay the disbursement
requested from the Deferred Maintenance Funds Deposit directly to an architect,
contractor, supplier or other third party for work or services completed, or
(b) deliver the Deferred Maintenance Funds Deposit to Tenant for payment to such
third party.
If Tenant’s Repairs are substantially completed pursuant to the terms of this
Lease, Landlord shall disburse to Tenant the undisbursed portion, if any, of the
Deferred Maintenance Funds Deposit, within ten (10) days after request therefor.
If Tenant’s Repairs are not completed pursuant to the terms of this Lease,
Landlord shall retain any undisbursed portion of the Deferred Maintenance Funds
Deposit not required to be paid to Tenant under this Lease. In light of the
possibility that the final scope of work for Tenant’s Repairs, based on final
plans and specifications and permits for same to be prepared and obtained after
execution of this Lease, may vary in immaterial ways from the scope of work set
forth in Exhibit “E”, Landlord agrees that its approval of the scope of work set
forth in the plans and specifications for Tenant’s Repairs will not be withheld,
so long as such scope of work is consistent in all material respects with that
set forth on Exhibit “E”.
F. Without relieving Tenant of liability resulting from damage caused by Tenant
or by Tenant’s failure to exercise and perform good maintenance practices, if
the roof, structural elements or foundation of any of the Buildings on the
Leased Premises cannot be repaired other than at a cost which is in excess of
50% of the cost of replacing such item, then such items shall be replaced by
Landlord, and the cost thereof shall be prorated between Landlord and Tenant and
Tenant shall only be obligated to pay, each month during the remainder of the
Lease Term, on the date on which Base Monthly Rent is due, an amount equal to
the product of multiplying the cost of such replacement by a fraction, the
numerator of which is one, and the denominator of which is 144 (i.e., 1/144th of
the cost per month). Tenant shall pay interest at the Lease Interest Rate on the
Unamortized Balance but may prepay its obligation at any time.
5.2 UTILITIES: Tenant shall arrange, at its sole cost and expense and in its own
name, for the supply of water, gas, electricity, telephone, cable and all other
utilities provided to or serving the Leased Premises. In the event that such
services are not separately metered, Tenant shall, at its sole expense, cause
such meters to be installed. Landlord shall maintain the water meter(s) in its
own name; provided, however, that if at any time during the Lease Term Landlord
shall require Tenant to put the water service in Tenant’s name, Tenant shall do
so at Tenant’s sole cost. Tenant shall be responsible for determining if the
local supplier of water, gas, electricity, telephone, cable and other utilities
can supply the needs of Tenant and whether or not the existing water, gas,
telephone, cable and electrical distribution systems within the Buildings and
the Leased Premises are adequate for Tenant’s needs. Tenant shall be responsible
for determining if the existing sanitary and storm sewer systems now servicing
the Leased Premises and the Property are adequate for Tenant’s needs. Tenant
shall pay all charges for water, gas, electricity, telephone, cable, storm and
sanitary sewer and other utility and other services as so supplied to the Leased
Premises, irrespective of whether or not the services are maintained in
Landlord’s or Tenant’s name.
5.3 SECURITY: Tenant acknowledges that Landlord has not undertaken any duty
whatsoever to provide security for the Leased Premises, the Buildings, the
Outside Areas or the Property and, accordingly, Landlord is not responsible for
the security of same or the protection of Tenant’s property or Tenant’s
employees, invitees or contractors. To the extent Tenant determines that such
security or protection services are advisable or necessary, Tenant shall arrange
for and pay the costs of providing same.
5.4 ENERGY AND RESOURCE CONSUMPTION: Landlord may voluntarily cooperate in a
reasonable manner with the efforts of governmental agencies and/or utility
suppliers in reducing energy or other resource consumption within the Property.
Tenant shall not be entitled to terminate this Lease or to any reduction in or
abatement of rent by reason of such compliance or cooperation as long as Tenant
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beneficially enjoy the Leased Premises for the uses permitted hereunder,
including, without limitation, provision of comfortable cooling and heating to
the Leased Premises. In no event shall Tenant have any obligation to pay
Landlord the cost of implementing such compliance or cooperation, including
through incorporation of the cost in the Property Operating Expenses, except to
the extent of any savings to Tenant resulting from the implementation, as and
when the savings are realized. Tenant agrees at all times to reasonably
cooperate with Landlord and to abide by all reasonable rules established by
Landlord (i) to maximize the efficient operation of the electrical, heating,
ventilating and air conditioning systems and all other energy or other resource
consumption systems within the Property, and/or (ii) in order to comply with the
requirements and recommendations of utility suppliers and governmental agencies
regulating the consumption of energy and/or other resources.
5.5 LIMITATION OF LANDLORD’S LIABILITY: Landlord shall not be liable to Tenant
for injury to Tenant, its employees, agents, invitees or contractors, damage to
Tenant’s property or loss of Tenant’s business or profits, nor shall Tenant be
entitled to terminate this Lease or to any reduction in or abatement of rent by
reason of any matter relating to this Lease or the Leased Premises unless the
same is caused by Landlord’s gross negligence or intentional misconduct. Without
limiting the foregoing, Landlord shall not be liable to Tenant as a result of
(i) Landlord’s failure to provide security services or systems within the
Property for the protection of the Leased Premises, the Buildings or the Outside
Areas, or the protection of Tenant’s property or Tenant’s employees, invitees,
agents or contractors, or (ii) any failure, interruption, rationing or other
curtailment in the supply of water, electric current, gas or other utility
service to the Leased Premises, the Buildings, the Outside Areas or the Property
from whatever cause (other than Landlord’s gross negligence or willful
misconduct), or (iii) the unauthorized intrusion or entry into the Leased
Premises by third-parties (other than Landlord or third parties acting on behalf
of Landlord).
ARTICLE 6
ALTERATIONS AND IMPROVEMENTS
6.1 PERMITTED ALTERATIONS: Tenant may, from time to time at its sole expense
make alterations, modifications and improvements (collectively, “Alterations”),
to the interior of any of the Buildings on the Leased Premises without
Landlord’s prior consent but upon notice to Landlord (“Permitted Alterations”)
provided that: (i) such Permitted Alterations are non-structural, (ii) do not
involve puncturing, removing or relocating the roof, ceilings, floors or any
existing walls, (iii) will not affect the electrical, plumbing, HVAC and/or life
safety systems, (iv) are designed to enhance either or both of the economic
value and the utility of the Property, (v) the cost of such Permitted
Alterations do not exceed $20,000 for any single alteration or $50,000
cumulatively during any lease year of the Lease Term (excluding the Tenant
Repairs), and (vi) Tenant, in every instance, complies with the terms and
conditions of this Article (other than the first sentence of Article 6.2).
Landlord also consents hereby to the Tenant Repairs referenced in Article 5.1(E)
provided that Tenant complies with the terms and conditions of this Article
other than (x) the first sentence of Article 6.2 and (y) the provisions of
Article 6.3 which grant Landlord the right to require Tenant to remove such
repairs upon the expiration or earlier termination of the Term of this Lease.
6.2 OTHER ALTERATIONS: Except as provided in Article 6.1, all Alterations that
are not Permitted Alterations (“Major Alterations”) shall require Landlord’s
prior written consent. Regardless of whether or not Landlord’s consent to
Alterations is required, all of the following shall apply with respect to all
Alterations: (i) the structural integrity of the Buildings shall not be
adversely affected; (ii) the proper functioning of the mechanical, electrical,
heating, ventilating, air-conditioning (“HVAC”), sanitary and other service
systems of the Leased Premises shall not be adversely affected and the usage of
such systems by Tenant shall not be increased beyond the level of usage for
which each such system was designed, and (iii) Tenant shall have appropriate
insurance coverage, reasonably satisfactory to Landlord, regarding the
performance and installation of the Alterations. Additionally, but subject to
clauses (i) through (iii) above, Landlord shall not unreasonably withhold its
consent to Major Alterations that are: (a) reasonably required in order to
accommodate a sublease or an assignment of this Lease (provided such assignment
or sublease is permitted hereunder), or (b) reasonably required to accommodate
Tenant’s business operations at the Leased Premises. Tenant shall submit
complete copies of plans and specifications to Landlord (y) for Major
Alterations, concurrent with its request for consent, and (z) for Permitted
Alterations, prior to obtaining permits for same.

 

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6.3 OTHER REQUIREMENTS: All Alterations, regardless of whether or not Landlord’s
consent to Alterations is required, shall be made, constructed or installed by
Tenant at Tenant’s expense, shall be done in accordance with all Laws and in a
good and workmanlike manner using new materials of good quality that match or
complement the original improvements existing as of the Commencement Date.
Tenant shall not commence the making of any Alterations until (i) all required
governmental approvals and permits shall have been obtained, (ii) all
requirements regarding insurance imposed by this Lease have been satisfied, and
(iii) Tenant shall have obtained contingent liability and broad form builder’s
risk insurance in an amount reasonably satisfactory to Landlord to cover any
perils relating to the proposed work not covered by insurance carried by Tenant
pursuant to Article 9. As a part of granting Landlord’s approval for Tenant to
make Major Alterations, Landlord may require Tenant to increase the amount of
its Security Deposit to cover the cost of removing the Major Alterations and to
restore the condition of the Leased Premises. Tenant shall pay Landlord’s
reasonable costs to inspect the construction of Major Alterations and to have
Landlord’s architect revise Landlord’s drawings to show the work performed by
Tenant. At the time Landlord approves of any Major Alterations, Landlord shall
notify Tenant whether Landlord shall require Tenant to remove the Major
Alterations at Tenant’s sole expense before the expiration or earlier
termination of this Lease or whether the Major Alterations shall remain upon the
Leased Premises and be surrendered therewith at the expiration or earlier
termination of this Lease as the property of Landlord. Landlord shall retain the
right to notify Tenant whether Landlord shall require Tenant to remove any of
the Permitted Alterations at Tenant’s sole expense prior to the expiration or
earlier termination of the Lease Term or whether the Permitted Alterations (or
any of them) shall remain on the Leased Premises and be surrendered therewith at
the expiration or earlier termination of this Lease as the property of Landlord.
If Landlord notifies Tenant that Landlord requires the removal of all or part of
any Alterations in accordance with this Article, then Tenant, at its expense,
shall remove such Alterations before the expiration or earlier termination of
this Lease and repair any damage to the Leased Premises caused by such removal.
If Tenant fails to remove the Alterations required to be removed pursuant to
this Article, then Landlord may (but shall not be obligated to) remove such
Alterations and the cost of removal and repair of any damage to the Leased
Premises, together with all other damages which Landlord may suffer by reason of
the failure of Tenant to remove same, shall be paid by Tenant to Landlord upon
demand. Tenant shall not be entitled to any compensation from Landlord for any
Alterations removed by Landlord or at Landlord’s direction pursuant to the
immediately preceding sentence.
6.4 OWNERSHIP OF IMPROVEMENTS: All Alterations made or added to the Leased
Premises by Tenant (other than Tenant’s inventory, equipment, movable furniture,
wall decorations and trade fixtures) shall be deemed real property and a part of
the Leased Premises, but shall remain the property of Tenant during the Lease
Term. At the expiration or sooner termination of this Lease, all Alterations
(excluding Tenant’s inventory, equipment, movable furniture, wall decorations
and trade fixtures) shall automatically become the property of Landlord and
shall be surrendered to Landlord as a part of the Leased Premises as required
pursuant to Article 2, unless Landlord shall require Tenant to remove any of
such Alterations in accordance with the provisions of Article 6.3, in which case
Tenant shall so remove same. Landlord shall have no obligation to reimburse to
Tenant all or any portion of the cost or value of any such Alterations so
surrendered to Landlord. All lighting, plumbing, electrical, heating,
ventilating and air conditioning fixtures, partitioning, window coverings, wall
coverings and floor coverings installed by Tenant shall be deemed improvements
to the Leased Premises and not trade fixtures of Tenant.
6.5 LIENS: Tenant shall keep the Property and every part thereof free from any
liens and shall pay when due all bills arising out of any work performed,
materials furnished, or obligations incurred by Tenant, its agents, employees or
contractors relating to the Property. If any such claim of lien is recorded
against Tenant’s interest in this Lease, the Property or any part thereof,
Tenant shall bond against, discharge or otherwise cause such lien to be entirely
released within fifteen (15) days after the same has been so recorded. Tenant’s
failure to do so shall be a default under this Lease.
ARTICLE 7
ASSIGNMENT AND SUBLETTING BY TENANT
7.1 BY TENANT: Except as set forth in Article 7.10, Tenant shall not sublet the
Leased Premises (or any portion thereof) or assign or encumber its interest in
this Lease, whether voluntarily or by operation of Law, without Landlord’s prior
written consent first obtained in accordance with the provisions of this
Article 7. Any

 

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attempted subletting, assignment or encumbrance without Landlord’s prior written
consent, at Landlord’s election, shall constitute a default by Tenant under the
terms of this Lease. The acceptance of rent by Landlord from any person or
entity other than Tenant, or the acceptance of rent by Landlord from Tenant with
knowledge of a violation of the provisions of this Article, shall not be deemed
to be a waiver by Landlord of any provision of this Article or this Lease or to
be a consent to any subletting by Tenant or any assignment or encumbrance of
Tenant’s interest in this Lease.
7.2 Intentionally omitted.
7.3 LANDLORD’S ELECTION: If Tenant or Tenant’s successors shall desire to assign
its interest under this Lease or to sublet the Leased Premises, Tenant and
Tenant’s successors must first notify Landlord, in writing, of its intent to so
assign or sublet, at least thirty (30) days in advance of the date it intends to
so assign its interest in this Lease or sublet the Leased Premises but not
sooner than sixty (60) days in advance of such date, specifying in detail the
terms of such proposed assignment or subletting, including the name of the
proposed assignee or sublessee, the proposed assignee’s or sublessee’s intended
use of the Leased Premises, a current financial statement of such proposed
assignee or sublessee and the form of documents to be used in effectuating such
assignment or subletting. Landlord shall have a period of fifteen (15) days
following receipt of such notice and receipt of all information requested by
Landlord regarding the proposed assignee or sublessee within which to do one of
the following: (i) terminate this Lease or, in the case of a sublease of less
than all of the Leased Premises, terminate this Lease as to that part of the
Leased Premises proposed to be so sublet, either on the condition that the
proposed Transferee immediately enter into a direct lease of the Leased Premises
with Landlord (or, in the case of a partial sublease, a lease for the portion
proposed to be so sublet) on the same terms and conditions contained in Tenant’s
(or Tenant’s successors’) notice, or so that Landlord is thereafter free to
lease the Leased Premises (or, in the case of a partial sublease, the portion
proposed to be so sublet) to whomever it pleases on whatever terms are
acceptable to Landlord, (ii) consent to the proposed assignment or sublease
subject to the terms of this Article, or (iii) refuse to consent to the proposed
assignment or sublease. In the event Landlord elects to so terminate this Lease,
then (a) if such termination is conditioned upon the execution of a lease
between Landlord and the proposed Transferee, Tenant’s and Tenant’s successors’
obligations under this Lease shall not be terminated until such Transferee
executes a new lease with Landlord, enters into possession, and commences the
payment of rent, and (b) if Landlord elects simply to terminate this Lease (or,
in the case of a partial sublease, terminate this Lease as to the portion to be
so sublet), the Lease shall so terminate in its entirety (or as to the space to
be so sublet) fifteen (15) days after Landlord has notified Tenant and Tenant’s
successors in writing of such election. In the case of a partial termination of
the Lease, the Base Monthly Rent and Tenant’s or Tenant’s successors’
proportionate share shall be reduced to an amount which bears the same
relationship to the original amount thereof as the area of that part of the
Leased Premises which remains subject to the Lease bears to the original area of
the Leased Premises. Landlord and Tenant or Tenant’s successors shall execute a
cancellation agreement with respect to the Lease to effect such termination or
partial termination, or if Landlord shall not have elected to cancel and
terminate this Lease, to either (x) consent to such requested assignment or
subletting subject to Tenant’s and Tenant’s successors’ compliance with the
conditions set forth in Article 7.4 below, or (y) refuse to so consent to such
requested assignment or subletting, provided that such consent shall not be
unreasonably refused. It shall not be unreasonable for Landlord to withhold its
consent to any proposed assignment or subletting if (A) the proposed assignee’s
or subtenant’s anticipated use of the Leased Premises involves the storage, use
or disposal of a Hazardous Material; (B) if the proposed assignee or subtenant
has been required by any prior landlord, lender or governmental authority to
clean up Hazardous Materials unlawfully discharged by the proposed assignee or
subtenant; (C) if the proposed assignee or subtenant is subject to investigation
or enforcement order or proceeding by any governmental authority in connection
with the use, disposal or storage of a Hazardous Material, (D) the proposed
assignee or subtenant is a subsidiary of another entity and the parent entity
does not guarantee the obligations under this Lease, (E) all of the assets of
Tenant shall not be held by the proposed assignee or subtenant following the
transfer, or (F) Landlord disapproves of the proposed assignee’s or subtenant’s
net worth and/or ability to satisfy the financial obligations of Tenant under
this Lease. Tenant and Tenant’s successors covenant and agree to supply to
Landlord, upon request, with all necessary or relevant information which
Landlord may reasonably request respecting such proposed assignment or
subletting and/or the proposed assignee or sublessee. Landlord’s review period
shall not commence until Landlord has received all information requested by
Landlord.
7.4 CONDITIONS TO LANDLORD’S CONSENT: If Landlord elects to consent, or shall
have been ordered to so consent by a court of competent jurisdiction, to such
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encumbrance, such consent shall be expressly conditioned upon the occurrence of
each of the conditions below set forth, and any purported assignment, subletting
or encumbrance made or ordered prior to the full and complete satisfaction of
each of the following conditions shall be void and, at the election of Landlord,
which election may be exercised at any time following such a purported
assignment, subletting or encumbrance shall constitute a default by Tenant under
this Lease giving Landlord the absolute right to terminate this Lease. The
conditions are as follows:
A. Landlord having approved in form and substance the assignment or sublease
agreement (or the encumbrance agreement), which approval shall not be
unreasonably withheld by Landlord if the requirements of this Article 7 are
otherwise complied with. Without limiting the foregoing, such agreement shall
contain a provision that it may not be amended or modified without the
Landlord’s prior written consent, the absence of which will cause any such
amendment or modification to be null and void.
B. Each such sublessee or assignee having agreed, in writing satisfactory to
Landlord and its counsel and for the benefit of Landlord, to assume, to be bound
by, and to perform the obligations of this Lease to be performed by Tenant (or,
in the case of an encumbrance, each such encumbrancer having similarly agreed to
assume, be bound by and to perform Tenant’s obligations upon a foreclosure or
transfer in lieu thereof).
C. Tenant having fully and completely performed all of its obligations under the
terms of this Lease through and including the date of the requested consent, as
well as through and including the date such assignment or subletting is to
become effective.
D. Tenant having reimbursed to Landlord all reasonable costs and attorneys’ fees
incurred by Landlord in conjunction with the processing and documentation of any
such requested subletting, assignment or encumbrance.
E. Tenant having delivered to Landlord a complete and fully-executed duplicate
original of such sublease agreement, assignment agreement or encumbrance (as
applicable) and all related agreements.
F. Tenant having paid, or having agreed in writing to pay as to future payments,
to Landlord fifty percent (50%) of all Assignment Consideration (as defined
below) or Excess Rentals (as defined below) to be paid to Tenant or to any other
on Tenant’s behalf or for Tenant’s benefit for such assignment or subletting as
follows:
(1) If Tenant assigns its interest under the Lease and if all or a portion of
the consideration for such assignment is to be paid by the assignee at the time
of the assignment, that Tenant shall have paid to Landlord and Landlord shall
have received an amount equal to fifty percent (50%) of the Assignment
Consideration so paid or to be paid whichever is the greater) at the time of the
assignment by the assignee; or
(2) If Tenant assigns its interest under this Lease and if Tenant is to receive
all or a portion of the consideration for such assignment in future
installments, that Tenant and Tenant’s assignee shall have entered into a
written agreement with and for the benefit of Landlord satisfactory to Landlord
and its counsel whereby Tenant and Tenant’s assignee jointly agree to pay to
Landlord an amount equal to fifty percent (50%) of all such future Assignment
Consideration installments to be paid by such assignee as and when such
Assignment Consideration is so paid.
(3) If Tenant subleases the Leased Premises, that Tenant and Tenant’s sublessee
shall have entered into a written agreement with and for the benefit of Landlord
satisfactory to Landlord and its counsel whereby Tenant and Tenant’s sublessee
jointly agree to pay to Landlord fifty percent (50%) of all Excess Rentals to be
paid by such sublessee as and when such Excess Rentals are so paid and fifty
percent (50%) of any payment upon termination or modification of a sublease.
7.5 ASSIGNMENT CONSIDERATION AND EXCESS RENTALS DEFINED: For purposes of this
Article, the term “Assignment Consideration” shall mean all consideration to be
paid by the assignee as consideration for such assignment, and the term “Excess
Rentals” shall mean all consideration to be paid by the sublessee in excess of
the rent to be paid by said sublessee/sublessor for the premises subleased for
the same period. Assignment Consideration and/or Excess Rentals shall include
all payments made or to be made by any assignee or sublessee relating in any way
to any transfer of an interest in the Lease or the Leased Premises including,
but not

 

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limited to, any payment made with respect to property which would or shall
become Landlord’s property upon the expiration or earlier termination of the
Lease, whether such property was installed or paid for by Landlord or by Tenant
or Tenant’s successors. In the event Tenant or Tenant’s successors sublease a
portion of the Leased Premises, Excess Rentals shall be calculated by
subtracting the rent payable by the sublessor for the portion of the Leased
Premises so sublet from all consideration to be paid by such sublessee. Rent
payable by the sublessor for the portion of the Leased Premises so sublet shall
be calculated by multiplying the Base Monthly Rent payable by the sublessor for
the Leased Premises leased by such sublessor by a fraction, the numerator of
which is the area in square feet subleased and the denominator of which is the
total floor area of the Leased Premises leased by such sublessor also in square
feet. Tenant and Tenant’s successors agree that any Assignment Consideration
and/or Excess Rentals hereunder shall be the property of Landlord and not the
property of Tenant.
7.6 PAYMENTS: All payments required by this Article to be made to Landlord shall
be made in cash in full as and when they become due. At the time Tenant,
Tenant’s assignee or sublessee makes each such payment to Landlord, Tenant or
Tenant’s assignee or sublessee, as the case may be, shall deliver to Landlord an
itemized statement in reasonable detail showing the method by which the amount
due Landlord was calculated and certified by the party making such payment as
true and correct. Landlord may require that all payments of Excess Rentals
and/or Assignment Consideration to be made hereunder be made directly to
Landlord by the applicable transferee.
7.7 GOOD FAITH: The rights granted to Tenant by this Article are granted in
consideration of Tenant’s express covenant that all pertinent allocations which
are made by Tenant between the rental value of the Leased Premises and the value
of any of Tenant’s personal property which may be conveyed or leased
concurrently with and which may reasonably be considered a part of the same
transaction as the permitted assignment or subletting shall be made fairly,
honestly and in good faith. If Tenant shall breach this covenant of good faith,
Landlord may immediately declare Tenant to be in default under this Lease and
terminate this Lease and/or exercise any other rights and remedies Landlord
would have under the terms of this Lease in the case of a default by Tenant.
7.8 EFFECT OF LANDLORD’S CONSENT: No subletting, assignment or encumbrance, even
with the consent of Landlord, shall relieve Tenant of its personal and primary
obligation to pay rent and to perform all of the obligations to be performed by
Tenant hereunder. Consent by Landlord to one (1) or more assignments or
encumbrances of Tenant’s interest in this Lease or to one (1) or more
sublettings of the Leased Premises shall not be deemed to be a consent to any
subsequent assignment, encumbrance or subletting. If Landlord shall have been
ordered by a court of competent jurisdiction to consent to a requested
assignment, subletting or encumbrance, or such an assignment, subletting or
encumbrance shall have been ordered over the objection of Landlord, such
assignment, subletting or encumbrance shall not be binding between the assignee
(or sublessee) and Landlord until such time as all conditions set forth in
Article 7.4 above have been fully satisfied (to the extent not then satisfied)
by the assignee or sublessee, including, without limitation, the payment to
Landlord of all Assignment Consideration and/or Excess Rentals then due
Landlord.
7.9 Intentionally omitted.
7.10 ASSIGNMENT OR SUBLEASE TO AFFILIATE OR SUCCESSOR. Notwithstanding anything
to the contrary in Article 7.1, Tenant may, without Landlord’s consent
(1) assign this Lease or sublease the Leased Premises or any portion thereof to
any entity that controls, is controlled by or under common control with Tenant
(each, an “Affiliate”), or (2) merge, consolidate, or transfer stock of Tenant
or sell all or substantially all assets of Tenant (Tenant’s successor or
purchaser in such a transaction, a “Successor”) provided that in each case the
Affiliate or Successor, as applicable, delivers to Landlord a written assumption
of the Lease. In addition, Tenant may, without Landlord’s consent (3) engage in
a public offering of Tenant and (4) transfer shares of Tenant effected through
any recognized exchange or through the “over the counter” market. In connection
with any transaction described in this Article 7.10, Tenant shall be obligated
to deliver to Landlord promptly any written information relating to same as is
reasonably requested by Landlord. Subject to securities laws and regulations,
Tenant shall provide not less than ten (10) business days prior written notice
to Landlord of a transaction that is described in this Article 7.10. Articles
7.3 through 7.6 shall not apply to any transaction governed by this
Article 7.10.

 

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ARTICLE 8
LIMITATION ON LANDLORD’S LIABILITY AND INDEMNITY
8.1 LIMITATION ON LANDLORD’S LIABILITY AND RELEASE: Landlord shall not be liable
to Tenant for, and Tenant hereby releases Landlord and its partners, principals,
officers, agents and employees from, any and all liability, whether in contract,
tort or on any other basis, for any injury to or any damage sustained by Tenant,
Tenant’s agents, employees, contractors or invitees; any damage to Tenant’s
property; or any loss to Tenant’s business, loss of Tenant’s profits or other
financial loss of Tenant resulting from or attributable to the condition of, the
management of, the repair or maintenance of, the protection of, the supply of
services or utilities to, the damage to or destruction of the Leased Premises,
the Buildings, the Project or the Outside Areas, including without limitation,
(i) the failure, interruption, rationing or other curtailment or cessation in
the supply of electricity, water, gas or other utility service to the Project,
the Buildings or the Leased Premises; (ii) the vandalism or forcible entry into
the Buildings or the Leased Premises; (iii) the penetration of water into or
onto any portion of the Leased Premises through roof leaks or otherwise;
(iv) the failure to provide security and/or adequate lighting in or about the
Project, the Buildings or the Leased Premises; (v) the existence of any design
or construction defects within the Project, the Buildings or the Leased
Premises; (vi) the failure of any mechanical systems to function properly (such
as the HVAC systems); (vii) the existence of any Hazardous Materials, or
(viii) the blockage of access to any portion of the Project, the Buildings, the
Parking Areas or the Leased Premises, except that Tenant does not so release
Landlord from such liability to the extent such damage was proximately caused by
Landlord’s gross negligence or willful misconduct. In this regard, Tenant
acknowledges that it is fully apprised of the provisions of Law relating to
releases, and particularly to those provisions contained in Section 1542 of the
California Civil Code which reads as follows:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.”
Notwithstanding such statutory provision, and for the purpose of implementing a
full and complete release and discharge, Tenant hereby (a) waives the benefit of
such statutory provision, and (b) acknowledges that, subject to the exceptions
specifically set forth herein, the release and discharge set forth in this
Article is a full and complete settlement and release and discharge of all
claims and is intended to include in its effect, without limitation, all claims
which Tenant, as of the date hereof, does not know of or suspect to exist in its
favor.
8.2 TENANT’S INDEMNIFICATION OF LANDLORD: Tenant shall defend with competent
counsel satisfactory to Landlord any claims made or legal actions filed or
threatened against Landlord with respect to the violation of any Law, or the
death, bodily injury, personal injury, property damage, or interference with
contractual or property rights suffered by any third-party occurring within the
Leased Premises or Property or resulting from Tenant’s use or occupancy of the
Leased Premises or the Buildings or the use of the Outside Areas, or resulting
from Tenant’s activities in or about the Leased Premises, the Buildings, the
Outside Areas or the Property, and Tenant shall indemnify and hold Landlord,
Landlord’s principals, employees and agents (the “Landlord Indemnified Parties”)
harmless from any loss, liability, penalties, or expense whatsoever (including
any loss or liability resulting from delay by Tenant in surrendering the Leased
Premises in accordance with the terms of this Lease) resulting therefrom, except
to the extent caused by the gross negligence or willful misconduct of Landlord.
This indemnity agreement shall survive the expiration or sooner termination of
this Lease. In no event shall Tenant be liable to Landlord and the Landlord
Indemnified Parties for any punitive, special or consequential damages the
Landlord Indemnified Parties incur.
ARTICLE 9
INSURANCE
9.1 TENANT’S INSURANCE: Tenant shall maintain insurance complying with all of
the following:

 

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A. Tenant shall procure, pay for and keep in full force and effect, at all times
during the Lease Term, the following:
(1) Comprehensive general liability insurance covering the Leased Premises and
the Property in the amount of not less than $3,000,000 per occurrence, and
$5,000,000 annual general aggregate for bodily injury and property damage
liability (umbrella/ excess liability coverage may be used to achieve required
dollar limits);
(2) Commercial “all-risk” property insurance covering Tenant’s personal property
(at its full replacement cost) and damage to other property resulting from any
acts or operations of Tenant or any third parties and business income;
(3) Loss of income and extra expense insurance in amounts as will reimburse
Tenant for direct or indirect loss of earnings attributable to all perils
commonly insured against by prudent lessees in the business of Tenant, or
attributable to prevention of access to the Leased Premises on account of such
perils;
(4) Workers’ compensation insurance and any other employee benefit insurance
sufficient to comply with all Laws which policy shall be endorsed to provide
thirty (30) days written notice of cancellation to Landlord;
(5) With respect to making of Alterations by Tenant, contingent liability and
builder’s risk insurance, in an amount and with coverage satisfactory to
Landlord;
(6) Comprehensive Auto Liability insurance with a combined single limit coverage
of not less than the amount of $2,000,000 (umbrella or excess liability coverage
may be used to achieve the required dollar limits) for bodily injury and/or
property damage liability for: (i) owned autos (ii) hired or borrowed autos,
(iii) non-owned autos, and (iv) auto blanket contractual form CA0001; if
reasonably available from the insurer, the policy shall be endorsed to provide
thirty (30) days written notice of cancellation to Landlord;
(7) During any period of construction on the Property by or on behalf of Tenant,
builder’s risk coverage in an amount sufficient for such Alterations performed
on the Leased Premises; provided, however, that in the event that such builder’s
risk coverage is required, such coverage may be provided through so-called
“course of construction” coverage endorsement, and Tenant shall cause such
“course of construction” coverage to provide coverage in an amount equal to 100%
of the completed value of the work; and
(8) The Lease Environmental Policy; and
(9) If not covered under the Lease Environmental Policy, coverage for
environmental damages (including remediation and restoration of the Leased
Premises) arising from a leak in the existing underground storage tank at the
Leased Premises.
B. Each policy of liability insurance required to be carried by Tenant pursuant
to this Article or actually carried by Tenant with respect to the Leased
Premises or the Property shall (i) be in a form satisfactory to Landlord,
(ii) be provided by carriers admitted to do business in the state of California,
with a Best rating of “A/VI” or better and/or acceptable to Landlord, (iii)
except for the Lease Environmental Policy, not contain deductibles in excess of
$25,000, and (iv) name as insured parties Tenant, Landlord and, upon request,
any mortgagee of Landlord. Property insurance shall contain a waiver and/or a
permission to waive by the insurer any right of subrogation against Landlord,
its principal, employees, agents and contractors which might arise by reason of
any payment under such policy or by reason of any act or omission of Landlord,
its principals, employees, agents or contractors.
C. Prior to the time Tenant or any of its contractors enters the Leased
Premises, Tenant shall deliver to the Landlord with respect to each policy of
insurance required to be carried by Tenant pursuant to this Article, a
certificate of the insurer certifying, in a form satisfactory to the Landlord,
that the policy has been issued and premium paid providing the coverage required
by this Article and containing the provisions herein. Attached to such a
certificate shall be endorsements naming Landlord as additional insured, and
including the wording under primary insurance above. With respect to each
renewal or replacement of any such insurance, the requirements of

 

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this Article must be complied with not less than thirty (30) days prior to the
expiration or cancellation of the policy being renewed or replaced. Landlord may
at any time and from time-to-time inspect and/or copy any and all insurance
policies required to be carried by Tenant pursuant to this Article. If
Landlord’s lender, insurance broker or advisor or counsel reasonably determines
at any time that the form or amount of coverage set forth in Article 9.1(A) for
any policy of insurance Tenant is required to carry pursuant to this Article is
not adequate, then Tenant shall increase the amount of coverage for such
insurance to such greater amount or change the form as Landlord’s lender,
insurance broker or advisor or counsel reasonably deems adequate (provided
however such increase level of coverage may not exceed the level of coverage for
such insurance commonly carried by owners of comparable buildings in Culver City
and Santa Monica, California).
D. Nothing contained in this Article 9 shall be construed to limit the liability
of Tenant under the indemnification provisions set forth in this Lease.
9.2 LANDLORD’S INSURANCE: With respect to insurance maintained by Landlord:
A. Landlord may maintain, as the minimum coverage required of it by this Lease,
property insurance in so-called “Special” form insuring Landlord (and such
others as Landlord may designate) against loss from physical damage to the
Buildings with coverage of not less than one hundred percent (100%) of the full
actual replacement cost thereof and against loss of rents for a period of not
less than twelve (12) months. Such property damage insurance, at Landlord’s
election but without any requirement on Landlord’s behalf to do so, (i) may be
written in so-called Special Form, excluding only those perils commonly excluded
from such coverage by Landlord’s then property damage insurer; (ii) may provide
coverage for physical damage to the improvements so insured for up to the entire
full actual replacement cost thereof; (iii) may be endorsed to include (or
separate policies may be carried to cover) loss or damage caused by any
additional perils against which Landlord may elect to insure, including
earthquake and/or flood if required by a Lender; (iv) may provide coverage for
loss of rents for a period of up to twelve (12) months; and/or (v) may contain
“deductibles” per occurrence in an amount reasonably acceptable to Landlord.
Landlord shall not be required to cause such insurance to cover any of Tenant’s
personal property, inventory and trade fixtures, or any modifications,
alterations or improvements made or constructed by Tenant to or within the
Leased Premises.
B. Landlord may maintain Commercial General Liability insurance insuring
Landlord (and such others as are designated by Landlord) against liability for
personal injury, bodily injury, death, and damage to property occurring in, on
or about, or resulting from the use or occupancy of the Property, or any portion
thereof, with combined single limit coverage of at least $2,000,000. Landlord
may carry such greater coverage as Landlord or Landlord’s lender, insurance
broker or advisor or counsel may from time to time determine is reasonably
necessary for the adequate protection of Landlord and the Property.
C. Notwithstanding anything to the contrary in Article 9.2(A)(iii) above,
provided that Tenant commences that portion of Tenant’s Repairs consisting of
seismic retrofitting (the “Seismic Retrofit Work”) on or before April 15, 2009
(as such date may be postponed on account of inclement weather which make the
performance such work impractical) and completes the Seismic Retrofit Work
within twelve (12) weeks thereafter (as such time period may be extended on
account of inclement weather which makes the performance of such work
impractical), any insurance which provides coverage for damage caused by an
earthquake and which is required by a Lender to be maintained prior to the
completion of the portion of the Seismic Retrofit Work, shall be paid for by
Landlord. Thereafter, if insurance which provides coverage for damage caused by
an earthquake is required by a Lender to be maintained, Landlord shall provide
Tenant with written notice of such requirement and a period of five (5) business
days within which to provide to Landlord a policy quote for such coverage from
an insurer meeting the requirements of the Lender. Provided the coverage and the
insurer proposed by Tenant meet the requirements of the Lender and the insurer
agrees to provide such coverage on such terms, and the cost of such policy is
less than the cost of a policy for such coverage that Landlord otherwise would
obtain, Landlord agrees to procure any such insurance from the carrier proposed
by Tenant.
D. Landlord may maintain any other insurance which in the reasonable opinion of
Landlord, its lender or legal counsel, is prudent to carry under the given
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9.3 MUTUAL WAIVER OF SUBROGATION: Landlord hereby releases Tenant and its
respective principals, officers, agents, employees and servants, and Tenant
hereby releases Landlord and its respective principals, officers, agents,
employees and servants, from any and all liability for loss, damage or injury to
the property of the other in or about the Leased Premises or the Property which
is caused by or results from a peril or event or happening which would be
covered by insurance required to be carried by the party sustaining such loss
under the terms of this Lease, or is covered by insurance actually carried and
in force at the time of the loss, by the party sustaining such loss; provided,
however, that such waiver shall be effective only to the extent permitted by the
insurance covering such loss and to the extent such insurance is not prejudiced
thereby.
9.4 PAYMENT OF INSURANCE COSTS BY TENANT: Tenant shall pay for all insurance
required under this Article 9, and all deductibles in connection with any claim.
Premiums for policy periods commencing prior to or extending beyond the Lease
Term shall be prorated to correspond to the Lease Term. Payment shall be made to
Landlord within ten (10) days following receipt of an invoice.
ARTICLE 10
DAMAGE TO LEASED PREMISES
10.1 TENANT’S DUTY TO RESTORE: No loss or damage by fire or other cause required
to be insured against under this Lease, resulting in either partial or total
destruction of any Building or improvement on the Property, shall, except as
otherwise provided herein, operate to terminate this Lease, or to relieve or
discharge Tenant from the payment of rents or amounts payable as rent as they
become due and payable, or from the performance and observance of any of the
agreements, covenants and conditions herein contained on the part of Tenant to
be performed and observed. Tenant hereby waives the provisions of Subsection 2
of Section 1932 and Subsection 4 of Section 1933 of the California Civil Code,
as amended from time to time. If any Buildings or improvements located on the
Leased Premises or the Property, or any fixtures, equipment or machinery used or
intended to be used in connection with the Leased Premises, at any time during
the Lease Term shall be damaged or destroyed by fire or other cause and Tenant
does not terminate this Lease pursuant to Article 10.2 below, then Tenant, with
all reasonable diligence, shall repair, reconstruct or replace such Buildings or
improvements and such fixtures, equipment and machinery to a condition
substantially similar to their condition immediately prior to such destruction.
All such repair, reconstruction or replacements shall be at the sole cost and
expense of Tenant and, upon completion thereof, shall be free and clear of all
liens and encumbrances of any nature whatsoever, including mechanics’ liens.
Subject to the requirements of its lenders, Landlord shall make the proceeds of
the insurance required under Article 9.2(A) available to Tenant for the purposes
described in the preceding sentence.
10.2 TENANT’S RIGHT TO TERMINATE: If (i) the Buildings now or hereafter located
on the Leased Premises or the Property are totally or substantially destroyed by
a cause not required to be insured against under this Lease, or (ii) the then
existing Laws do not permit the repair, reconstruction or replacement of such
Buildings, or (iii) the Buildings are totally or substantially destroyed during
the last two (2) years of the Lease Term (irrespective of whether the cause of
such destruction was required to be insured against hereunder), and provided
that any such destruction referred to in the foregoing clauses (i) through
(iii) has not been caused by Tenant’s gross negligence or willful misconduct,
then, in any of such events, Tenant, may, at its option, either (a) repair,
reconstruct or replace the Buildings, or (b) elect to terminate this Lease, by
delivering to Landlord notice thereof within ninety (90) days after such total
or substantial destruction. If Tenant elects to terminate this Lease, then this
Lease shall terminate effective as of the date of such total or substantial
destruction; provided, however, that upon Landlord’s written request made upon
Tenant within ninety (90) days after Landlord’s receipt of Tenant’s notice of
election to terminate, Tenant shall promptly remove such destroyed or damaged
Buildings from the Property and immediately thereafter redeliver the Leased
Premises to Landlord in a neat and clean condition. Subject to the requirements
of its lenders, Landlord shall make the proceeds of the insurance required under
Article 9.2(A) available to Tenant for the purposes described in the preceding
sentence.
10.3 TENANT’S WAIVER: Landlord and Tenant agree that the provisions of
Article 10.2 above, captioned “Tenant’s Right to Terminate”, are intended to
supersede and replace the provisions contained in California Civil Code,
Section 1932, Subdivision 2, and California Civil Code, Section 1934, and
accordingly, Tenant hereby waives the provisions of said Civil Code Sections and
the provisions of any successor Code Sections or similar laws hereinafter
enacted.

 

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ARTICLE 11
CONDEMNATION
11.1 TENANT’S RIGHT TO TERMINATE: Except as otherwise provided in Article 11.4
below regarding temporary takings, Tenant shall have the option to terminate
this Lease if, as a result of any taking, (i) the entire Leased Premises is
taken, or (ii) if less than the entire Leased Premises shall be taken, but
Landlord reasonably determines that the Buildings cannot at a reasonable expense
be repaired, restored, or replaced to an economically profitable unit, this
Lease may at the option of Tenant be terminated on the date of such taking.
Tenant must exercise such option within a reasonable period of time, to be
effective on the later to occur of (a) ten (10) days after the date that
possession of that portion of the Leased Premises is condemned is taken by the
condemnor, or (b) the date Tenant vacated the Leased Premises.
11.2 RESTORATION: If any part of the Leased Premises, the Buildings or the
Outside Areas is taken and this Lease is not terminated, then Tenant shall
repair any damage occasioned thereby to the remainder thereof to a condition
reasonably suitable for Tenant’s continued operations.
11.3 TEMPORARY TAKING: No temporary taking of the Property or Leased Premises
shall terminate this Lease or give Tenant any right to abatement of rent, and
any award specifically attributable to a temporary taking of the Leased Premises
shall belong entirely to Tenant. A temporary taking shall be deemed to be a
taking of the use or occupancy of a material portion of the Leased Premises for
a period of not to exceed one hundred twenty (120) days.
11.4 DIVISION OF CONDEMNATION AWARD: Any award made for any taking of the
Property, the Buildings, the Outside Areas or the Leased Premises, or any
portion thereof, shall belong to and be paid to Landlord, and Tenant hereby
assigns to Landlord all of its right, title and interest in any such award;
provided, however, that Tenant shall be entitled to receive any portion of the
award that is made specifically (i) for the taking of personal property,
inventory or trade fixtures belong to Tenant, (ii) for the interruption of
Tenant’s business or its moving costs, (iii) for loss of Tenant’s goodwill, or
(iv) for any temporary taking where this Lease is not terminated as a result of
such taking. The rights of Landlord and Tenant regarding any condemnation shall
be determined as provided in this Article, and each party hereby waives the
provisions of Section 1265.130 of the California Code of Civil Procedure, and
the provisions of any similar law hereinafter enacted, allowing either party to
petition the Superior Court to terminate this Lease and/or otherwise allocate
condemnation awards between Landlord and Tenant in the event of a taking of the
Leased Premises.
11.5 TAKING DEFINED: The term “taking” or “taken” as used in this Article 11
shall mean any transfer or conveyance of all or any portion of the Property to a
public or quasi-public agency or other entity having the power of eminent domain
pursuant to or as a result of the exercise of such power by such an agency,
including any inverse condemnation and/or any sale or transfer by Landlord of
all or any portion of the Property to such an agency under threat of
condemnation or the exercise of such power.
ARTICLE 12
DEFAULT AND REMEDIES
12.1 EVENTS OF TENANT’S DEFAULT: Tenant shall be in default of its obligations
under this Lease if any of the following events occur:
A. Tenant shall have failed to pay Base Monthly Rent or any Additional Rent when
due; or
B. Tenant shall have failed to renew any letter of credit Security Deposit
within thirty (30) days before the expiration thereof; or
C. Tenant shall have failed to perform any term, covenant or condition of this
Lease, except those requiring the payment of Base Monthly Rent or Additional
Rent, within thirty (30) days after written notice from Landlord to Tenant
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D. Tenant shall have sublet the Leased Premises or assigned or encumbered its
interest in this Lease in violation of the provisions contained in Article 7,
whether voluntarily or by operation of Law; or
E. Tenant shall have permitted or suffered the sequestration or attachment of,
or execution on, or the appointment of a custodian or receiver with respect to,
all or any substantial part of the property or assets of Tenant or any property
or asset essential to the conduct of Tenant’s business, and Tenant shall have
failed to obtain a return or release of the same within thirty (30) days
thereafter, or prior to sale pursuant to such sequestration, attachment or levy,
whichever is earlier; or
F. Tenant shall have made a general assignment of all or a substantial part of
its assets for the benefit of its creditors; or
G. Tenant shall have allowed (or sought) to have entered against it a decree or
order which: (i) grants or constitutes an order for relief, appointment of a
trustee, or confirmation or a reorganization plan under the bankruptcy laws of
the United States; (ii) approves as properly filed a petition seeking
liquidation or reorganization under said bankruptcy laws or any other debtor’s
relief Law or similar statute of the United States or any state thereof; or
(iii) otherwise directs the winding up or liquidation of Tenant; provided,
however, if any decree or order was entered without Tenant’s consent or over
Tenant’s objection, Landlord may not terminate this Lease pursuant to this
Article if such decree or order is rescinded or reversed within thirty (30) days
after its original entry; or
H. Tenant shall have abandoned the Leased Premises without the payment of rent
and without providing reasonable security for the Buildings; or
I. Tenant shall have availed itself of the protection of any debtor’s relief
Law, moratorium law or other similar Law which does not require the prior entry
of a decree or order.
Tenant agrees that any notice given by Landlord pursuant to Article 12.1 of the
Lease shall satisfy the requirements for notice under California Code of Civil
Procedure Section 1161, and Landlord shall not be required to give any
additional notice in order to be entitled to commence an unlawful detainer
proceeding.
12.2 LANDLORD’S REMEDIES: In the event of any default by Tenant, and without
limiting Landlord’s right to indemnification as provided in Article 8.2 or
otherwise, Landlord shall have the following remedies, in addition to all other
rights and remedies provided by Law or otherwise provided in this Lease, to
which Landlord may resort cumulatively, or in the alternative:
A. Landlord may, at Landlord’s election, keep this Lease in effect and enforce,
by an action at law or in equity, all of its rights and remedies under this
Lease including, without limitation, (i) the right to recover the rent and other
sums as they become due by appropriate legal action, (ii) the right to make
payments required by Tenant, or perform Tenant’s obligations and be reimbursed
by Tenant for the cost thereof with interest at the then maximum rate of
interest not prohibited by Law from the date the sum is paid by Landlord until
Landlord is reimbursed by Tenant, and (iii) the remedies of injunctive relief
and specific performance to prevent Tenant from violating the terms of this
Lease and/or to compel Tenant to perform its obligations under this Lease, as
the case may be.
B. Landlord may, at Landlord’s election, terminate this Lease by giving Tenant
written notice of termination, in which event this Lease shall terminate on the
date set forth for termination in such notice. Any termination under this
Article shall not relieve Tenant from its obligation to pay to Landlord all Base
Monthly Rent and Additional Rent then or thereafter due, or any other sums due
or thereafter accruing to Landlord, or from any claim against Tenant for damages
previously accrued or then or thereafter accruing. In no event shall any one or
more of the following actions by Landlord, in the absence of a written election
by Landlord to terminate the Lease, constitute a termination of the Lease:
(1) Appointment of a receiver or keeper in order to protect Landlord’s interest
hereunder;
(2) Consent to any subletting of the Leased Premises or assignment of this Lease
by Tenant, whether pursuant to the provisions hereof or otherwise; or

 

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(3) Any other action by Landlord or Landlord’s agents intended to mitigate the
adverse effects of any breach of this Lease by Tenant, including, without
limitation, any action taken to maintain and preserve the Leased Premises or any
action taken to relet the Leased Premises, or any portion thereof, for the
account of Tenant and in the name of Tenant.
C. In the event Tenant breaches this Lease and abandons the Leased Premises,
Landlord may terminate this Lease, but this Lease shall not terminate unless
Landlord gives Tenant written notice of termination. If Landlord does not
terminate this Lease by giving written notice of termination, Landlord may
enforce all its rights and remedies under this Lease, including the right to
recover rent as it becomes due under this Lease as provided in California Civil
Code Section 1951.4, as in effect on the Effective Date of this Lease.
D. In the event Landlord terminates this Lease, Landlord shall be entitled, at
Landlord’s election, to damages in an amount as set forth in California Civil
Code Section 1951.2, as in effect on the Effective Date of this Lease. For
purposes of computing damages pursuant to Section 1951.2, an interest rate equal
to the Lease Interest Rate shall be used where permitted. Such damages shall
include, without limitation:
(1) 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 be reasonably avoided, computed by
discounting such amount at the discount rate of the Federal Reserve Bank of San
Francisco, at the time of award plus one percent (1%); and
(2) Any other amount necessary to compensate Landlord for all detriment
proximately caused by Tenant’s failure to perform Tenant’s obligations under
this Lease, or which in the ordinary course of things would be likely to result
therefrom, including without limitation, the following: (i) expenses for
cleaning, repairing or restoring the Leased Premises; (ii) expenses for
altering, remodeling or otherwise improving the Leased Premises for the purpose
of reletting, including removal of existing leasehold improvements and/or
installation of additional leasehold improvements (regardless of how the same is
funded, including reduction of rent, a direct payment or allowance to a new
tenant, or otherwise); (iii) broker’s fees, advertising costs and other expenses
of reletting the Leased Premises; (iv) costs of carrying and maintaining the
Leased Premises which costs would have been billed to Tenant as Additional Rent
had Tenant not defaulted and which include but are not limited to taxes,
insurance premiums, utility charges, landscape maintenance costs, costs of
maintaining electrical, plumbing and HVAC equipment and costs for providing
security; (v) expenses incurred in removing, disposing of and/or storing any of
Tenant’s personal property, inventory or trade fixtures remaining therein;
(vi) attorneys’ fees, expert witness fees, court costs and other reasonable
expenses incurred by Landlord but not limited to taxable costs) in retaking
possession of the Leased Premises, establishing damages hereunder, and
re-leasing the Leased Premises; and (vii) any other expenses, costs or damages
otherwise incurred or suffered as a result of Tenant’s default.
12.3 LANDLORD’S DEFAULT AND TENANT’S REMEDIES: Landlord shall not be deemed to
be in default in the performance of any obligation under this Lease, and Tenant
shall have no rights to take any action against Landlord, unless and until
Landlord has failed to perform the obligation within thirty (30) days after
written notice by Tenant to Landlord specifying in reasonable detail the nature
and extent of the failure; provided, however, that if the nature of Landlord’s
obligation is such that more than thirty (30) days are required for its
performance, then Landlord shall not be deemed to be in default if it commences
performance within the thirty (30) day period and thereafter diligently pursues
the cure to completion. In the event of Landlord’s default as set forth above,
then, and only then, Tenant shall have the following remedies only:
A. Tenant may then proceed in equity or at law to compel Landlord to perform its
obligations and/or to recover damages proximately caused by such failure to
perform (except as and to the extent Tenant has waived its right to damages as
provided in this Lease).
B. Tenant, at its option, may then cure any default of Landlord at Landlord’s
cost. If, pursuant to this Article, Tenant reasonably pays any sum to any
third-party or does any act that requires the payment of any sum to any
third-party at any time by reason of Landlord’s default, the sum paid by, Tenant
shall be immediately due from Landlord to Tenant at the time Tenant supplies
Landlord with an invoice therefor (provided such invoice sets forth and is
accompanied by a written statement of Tenant setting forth in reasonable detail
the amount paid, the party to whom it was paid, the date it was paid, and the
reasons giving rise to such payment), together with interest at the

 

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Lease Interest Rate from the date of such invoice until Tenant is reimbursed by
Landlord. Tenant may not offset such sums against any installment of rent due
Landlord under the terms of this Lease.
12.4 LIMITATION ON TENANT’S RECOURSE: If Landlord is a corporation, trust,
partnership, joint venture, unincorporated association, or other form of
business entity, Tenant agrees that (i) the obligations of Landlord under this
Lease shall not constitute personal obligations of the officers, directors,
trustees, partners, joint venturers, members, owners, stockholders, or other
principals of such business entity, and (ii) Tenant shall have recourse only to
Landlord’s then equity interest, if any, in the Property for the satisfaction of
such obligations and not against the assets of such officers, directors,
trustees, partners, joint venturers, members, owners, stockholders or principals
(other than to the extent of their interest in the Property). Tenant shall look
exclusively to such equity interest of Landlord, if any, in the Property for
payment and discharge of any obligations imposed upon Landlord hereunder, and
Landlord is hereby released and relieved of any other obligations hereunder.
Additionally, if Landlord is a partnership, then Tenant covenants and agrees:
A. No partner of Landlord shall be sued or named as a party in any suit or
action brought by Tenant with respect to any alleged breach of this Lease
(except to the extent necessary to secure jurisdiction over the partnership and
then only for that sole purpose);
B. No service of process shall be made against any partner of Landlord except
for the sole purpose of securing jurisdiction over the partnership; and
C. No writ of execution shall be levied against the assets of any partner of
Landlord other than to the extent of his interest in Property.
Tenant further agrees that each of the foregoing covenants and agreements shall
be enforceable by Landlord and by any partner of Landlord and shall be
applicable to any actual or alleged misrepresentation or non-disclosure made
respecting this Lease or the Leased Premises or any actual or alleged failure,
default or breach of any covenant or agreement either expressly or implicitly
contained in this Lease or imposed by statute or at common law.
12.5 TENANT’S WAIVER: Landlord and Tenant agree that the provisions of
Article 12.3 above are intended to supersede and replace the provisions of
California Civil Code Sections 1932(l), 1941 and 1942, and accordingly, Tenant
hereby waives the provisions of California Civil Code Sections 1932(l), 1941 and
1942 and/or any similar or successor Law regarding Tenant’s right to terminate
this Lease or to make repairs and deduct the expenses of such repairs from the
rent due under this Lease. Tenant hereby waives any right of redemption or
relief from forfeiture under the Laws of the State of California, or under any
other present or future Law, in the event Tenant is evicted or Landlord takes
possession of the Leased Premises by reason of any default by Tenant.
ARTICLE 13
GENERAL PROVISIONS
13.1 TAXES ON TENANT’S PROPERTY: Tenant shall pay before delinquency any and all
taxes, assessments, license fees, use fees, permit fees and public charges of
whatever nature or description levied, assessed or imposed against Tenant or
Landlord by a governmental agency arising out of, caused by reason of or based
upon Tenant’s estate in this Lease, Tenant’s ownership of property, improvements
made by Tenant to the Leased Premises or the Outside Areas, improvements made by
Landlord for Tenant’s use within the Leased Premises or the Outside Areas,
Tenant’s use (or estimated use) of public facilities or services or Tenant’s
consumption (or estimated consumption) of public utilities, energy, water or
other resources. Upon demand by Landlord, Tenant shall furnish Landlord with
satisfactory evidence of these payments. If any such taxes, assessments, fees or
public charges are levied against Landlord, Landlord’s property, the Buildings
or the Property, or if the assessed value of the Buildings or the Property is
increased by the inclusion therein of a value placed upon same, then Landlord,
after giving written notice to Tenant, shall have the right, regardless of the
validity thereof, to pay such taxes, assessment, fee or public charge and bill
Tenant, as Additional Rent, the amount of such taxes, assessment, fee or public
charge so paid on Tenant’s behalf. Tenant shall, within ten (10) days from the
date it receives an invoice from Landlord setting forth the amount of such
taxes, assessment, fee or public charge so levied, pay to Landlord, as
Additional Rent, the amount set forth in said invoice. Failure by Tenant to pay
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conclusively deemed a default by Tenant under this Lease. Tenant shall have the
right, and the Landlord’s full cooperation if Tenant is not then in default
under the terms of this Lease, to bring suit in any court of competent
jurisdiction to recover from the taxing authority the amount of any such taxes,
assessment, fee or public charge so paid.
13.2 HOLDING OVER: This Lease shall terminate without further notice on the
expiration of the Lease Term or earlier termination of this Lease. Any holding
over by Tenant after expiration of the Lease Term or earlier termination of this
Lease shall neither constitute a renewal nor extension of this Lease nor give
Tenant any rights in or to the Leased Premises except as expressly provided in
this Article. Any such holding over shall be deemed an unlawful detainer of the
Leased Premises unless Landlord has consented in writing to same. Any such
holding over to which Landlord has consented to in writing shall be construed to
be a tenancy from month-to-month, on the same terms and conditions herein
specified insofar as applicable, except that the Base Monthly Rent shall be
increased to an amount equal to one hundred fifty percent (150%) of the Base
Monthly Rent payable during the last full month immediately preceding such
holding over. The provisions of this Article shall not be deemed to limit or
constitute a waiver of any other rights or remedies of Landlord provided in this
Lease or at Law.
13.3 SUBORDINATION TO MORTGAGES: This Lease is subject to and subordinate to all
underlying ground leases, mortgages and deeds of trust which affect the
Buildings or the Property and which are of public record as of the Effective
Date of this Lease, and to all renewals, modifications, consolidations,
replacements and extensions thereof. However, if the lessor under any such
ground lease or any lender holding any such mortgage or deed of trust shall
advise Landlord that it desires or requires this Lease to be made prior and
superior thereto, then, upon written request of Landlord to Tenant, Tenant shall
promptly execute, acknowledge and deliver any and all documents or instruments
which Landlord and such lessor or lender deem necessary or desirable to make
this Lease prior thereto. Tenant hereby consents to Landlord’s ground leasing
the land underlying the Buildings or the Property and/or encumbering the
Buildings or the Property as security for future loans on such terms as Landlord
shall desire, all of which future ground leases, mortgages or deeds of trust
shall be subject to and subordinate to this Lease. However, if any lessor under
any such future ground lease or any lender holding such future mortgage or deed
of trust shall desire or require that this Lease be made subject to and
subordinate to such future ground lease, mortgage or deed of trust, then Tenant
agrees, within ten (10) days after Landlord’s written request therefor, to
execute, acknowledge and deliver to Landlord any and all documents or
instruments requested by Landlord or by such lessor or lender as may be
necessary or proper to assure the subordination of this Lease to such future
ground lease, mortgage or deed of trust, but only if such lessor or lender
agrees to recognize Tenant’s rights under this Lease and agrees not to disturb
Tenant’s quiet possession of the Leased Premises so long as Tenant is not in
default under this Lease.
13.4 TENANT’S ATTORNMENT UPON FORECLOSURE: Tenant shall, upon request, attorn
(i) to any purchaser of the Buildings or the Property at any foreclosure sale or
private sale conducted pursuant to any security instrument encumbering the
Buildings or the Property, (ii) to any grantee or transferee designated in any
deed given in lieu of foreclosure of any security interest encumbering the
Buildings or the Property, or (iii) to the lessor under any underlying ground
lease of the land underlying the Buildings or the Property, should such ground
lease be terminated; provided that such purchaser, grantee or lessor recognizes
Tenant’s rights under this Lease.
13.5 MORTGAGEE PROTECTION: In the event of any default on the part of Landlord,
Tenant will give notice by registered mail to any lender or lessor under any
underlying ground lease who shall have requested, in writing, to Tenant that it
be provided with such notice, and Tenant shall offer such lender or lessor a
reasonable opportunity to cure the default, including time to obtain possession
of the Leased Premises by power of sale or judicial foreclosure or other
appropriate legal proceedings if reasonably necessary to effect a cure.
13.6 ESTOPPEL CERTIFICATES: Tenant and Landlord shall, within twenty (20) days
after the request of the other party, promptly execute and deliver to the
requesting party an estoppel certificate (i) certifying that this Lease is
unmodified and in full force and effect, or, if modified, stating the nature of
such modification and certifying that this Lease, as so modified, is in full
force and effect, (ii) stating the date to which the rent and other charges are
paid in advance, if any, (iii) acknowledging that there are not, to such party’s
knowledge, any uncured defaults under this Lease, or specifying such defaults if
any are claimed, and (iv) certifying such other information about this Lease as
may be reasonably requested by the requesting party. Tenant’s failure to execute
and deliver such estoppel certificate within such twenty (20) day period shall
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Landlord shall have all of the rights and remedies available to Landlord as
Landlord would otherwise have in the case of any other default by Tenant.
Landlord and Tenant intend that any statement delivered pursuant to this Article
may be relied upon by any lender or purchaser or prospective lender or purchaser
of the Buildings, the Property, or any interest herein.
13.7 TENANT’S FINANCIAL INFORMATION: If at any time after Tenant’s financial
statements shall no longer be publicly available, Tenant shall, within ten
(10) business days after Landlord’s request therefor deliver to Landlord a copy
of a financial statement for the most recently concluded fiscal year (or if the
request is made sooner than one hundred twenty (120) days from a fiscal year
end, then the financial statement for the preceding fiscal year) including an
income statement and a balance sheet and any such other information reasonably
requested by Landlord regarding Tenant’s financial condition. Tenant
acknowledges that Landlord is relying upon the financial information provided to
Landlord by Tenant prior to entering into this Lease and the information to be
provided to Landlord by Tenant during the Lease Term. Landlord shall be entitled
to disclose such financial statements or other information to its lender, to any
present or prospective principal of or investor in Landlord, or to any
prospective lender or purchaser of the Buildings, the Property or any portion
thereof or interest therein. Any such financial statement or other information
which is not publicly available shall be confidential and shall not be disclosed
by Landlord to any third party except as specifically provided in this Article,
unless the same becomes a part of the public domain without the fault of
Landlord.
13.8 TRANSFER BY LANDLORD: Landlord and its successors in interest shall have
the right to transfer their interest in the Buildings, the Property, or any
portion thereof at any time and to any person or entity. In the event of any
such transfer, the Landlord originally named herein (and in the case of any
subsequent transfer, the transferor), from the date of such transfer, (i) shall
be automatically relieved, without any further act by any person or entity, of
all liability for the performance of the obligations of the Landlord hereunder
which may accrue after the date of such transfer, and (ii) shall be relieved of
all liability for the performance of the obligations of the Landlord hereunder
which have accrued before the date of transfer if its transferee agrees to
assume and perform all such prior obligations of the Landlord hereunder. Tenant
shall attorn to any such transferee. After the date of any such transfer, the
term “Landlord” as used herein shall mean the transferee of such interest in the
Buildings or the Property.
13.9 NOTICES: Any notice required or desired to be given by a party regarding
this Lease shall be in writing and shall be personally served, or in lieu of
personal service may be given by (i) delivery by Federal Express, United Parcel
Service or similar commercial carrier, (ii) electronic fax transmission, or
(iii) depositing such notice in the United States mail, postage prepaid,
addressed to the other party as follows:
A. If addressed to Landlord, to Landlord at its Address for Notices (as set
forth in Article 1).
B. If addressed to Tenant, to Tenant at its Address for Notices (as set forth in
Article 1). Any notice given by registered mail shall be deemed to have been
given on the third business day after its deposit in the United States mail.
Any notice given by registered mail shall be deemed given on the date receipt
was acknowledged to the postal authorities. Any notice given by mail other than
registered or certified mail shall be deemed given only if received by the other
party, and then on the date of receipt. Any notice delivered by commercial
carrier or by fax shall be deemed given on the date of confirmation of delivery
by the carrier or by electronic confirmation. Each party may, by written notice
to the other in the manner aforesaid, change the address to which notices
addressed to it shall thereafter be mailed.
13.10 ATTORNEYS’ FEES: In the event any party shall bring any action,
arbitration proceeding or legal proceeding alleging a breach of any provision of
this Lease, to recover rent, to terminate this Lease, or to enforce, protect,
determine or establish any term or covenant of this Lease or rights or duties
hereunder of either party, the prevailing party shall be entitled to recover
from the non-prevailing party as a part of such action or proceeding, or in a
separate action for that purpose brought within one year from the determination
of such proceeding, reasonable attorneys’ fees of up to two laws firms, expert
witness fees, court costs and other reasonable expenses incurred by the
prevailing party (collectively, “Costs”). In the event that Landlord shall be
required to retain counsel to enforce any provision of this Lease, and if Tenant
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default, Landlord shall be conclusively deemed the prevailing party and Tenant
shall pay to Landlord all Costs incurred by Landlord promptly upon demand.
Landlord may enforce this provision by either (i) requiring Tenant to pay such
fees and costs as a condition to curing its default, or (ii) bringing a separate
action to enforce such payment, it being agreed by and between Landlord and
Tenant that Tenant’s failure to pay such fees and costs upon demand shall
constitute a breach of this Lease in the same manner as a failure by Tenant to
pay the Base Monthly Rent, giving Landlord the same rights and remedies as if
Tenant failed to pay the Base Monthly Rent.
13.11 DEFINITIONS: Any term that is given a special meaning by any provision in
this Lease shall, unless otherwise specifically stated, have such meaning
whenever used in this Lease or in any Addenda or amendment hereto. In addition
to the terms defined in Article 1, the following terms shall have the following
meanings:
A. REAL PROPERTY TAXES: The term “Real Property Tax” or “Real Property Taxes”
shall each mean (i) all taxes, assessments, levies and other charges of any kind
or nature whatsoever, general and special, foreseen and unforeseen (including
all installments of principal and interest required to pay any general or
special assessments for public improvements and any increases resulting from
reassessments caused by any change in ownership or new construction), now or
hereafter imposed by any governmental or quasi-governmental authority or special
district having the direct or indirect power or tax or levy assessments, which
are levied or assessed for whatever reason against the Project or any portion
thereof, or Landlord’s interest herein, or the fixtures, equipment and other
property of Landlord that is an integral part of the Project and located
thereon, or Landlord’s business of owning, leasing or managing the Project or
the gross receipts, income or rentals from the Project; (ii) all charges, levies
or fees imposed by any governmental authority against Landlord by reason of or
based upon the use of or number of parking spaces within the Project, the amount
of public services or public utilities used or consumed (e.g. water, gas,
electricity, sewage or surface water disposal) at the Project, the number of
persons employed by tenants of the Project, the size (whether measured in area,
volume, number of tenants or whatever) or the value of the Project, or the type
of use or uses conducted within the Project; and (iii) all costs and fees
(including attorneys’ fees) incurred by Landlord in contesting any Real Property
Tax and in negotiating with public authorities as to any Real Property Tax, but
only to the extent of a Real Property Tax reduction. If, at any time during the
Lease Term, the taxation or assessment of the Project prevailing as of the
Effective Date of this Lease shall be altered so that in lieu of or in addition
to any Real Property Tax described above there shall be levied, or imposed
(whether by reason of a change in the method of taxation or assessment, creation
of a new tax or charge, or any other cause) an alternate, substitute, or
additional tax or charge (a) on the value, size, use or occupancy of the Project
or Landlord’s interest therein, or (b) on or measured by the gross receipts,
income or rentals from the Project, or on Landlord’s business of owning, leasing
or managing the Project or (c) computed in any manner with respect to the
operation of the Project, then any such tax or charge, however designated, shall
be included within the meaning of the terms “Real Property Tax” or “Real
Property Taxes” for purposes of this Lease. If any Real Property Tax is partly
based upon property or rents unrelated to the Project, then only that part of
such Real Property Tax that is fairly allocable to the Project shall be included
within the meaning of the terms “Real Property Tax” or “Real Property Taxes.”
Notwithstanding the foregoing, the terms “Real Property Tax” or “Real Property
Taxes” shall not include estate, inheritance, transfer, gift or franchise taxes
of Landlord or the federal or state income tax imposed on Landlord’s income from
all sources. Notwithstanding the foregoing or anything to the contrary in this
Lease, Tenant shall be entitled to the benefit of all existing and future
reductions and/or abatements of Real Property Taxes, to the extent such
reductions and/or abatements are granted by the applicable taxing authorities
and are applicable to periods during the Lease Term.
B. LANDLORD’S INSURANCE COSTS: The term “Landlord’s Insurance Costs” shall mean
the costs to Landlord to carry and maintain the policies of insurance required,
or permitted, to be carried by Landlord pursuant to Article 9, together with any
deductible amounts paid by Landlord upon the occurrence of any insured casualty
or loss.
C. PROPERTY OPERATING EXPENSES: The term “Property Operating Expenses” shall
mean and include all Real Property Taxes, plus all Landlord’s Insurance Costs,
plus all Property Costs. The term “Property Costs” shall mean and include all
expenses of operation, repair and maintenance of the Buildings and the Property
in accordance with the terms of this Lease, including, without limitation,
(i) the costs associated with the maintenance of an HVAC service agreement (if
Tenant fails to procure and maintain the same), (ii) the cost of any
environmental, insurance, tax or other consultant utilized by Landlord in
connection with the Buildings and/or Property,

 

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(iii) reasonably allocated wages and salaries, fringe benefits and payroll taxes
for Landlord’s administrative and other personnel directly applicable to the
Buildings or the Property, including both Landlord’s personnel and outside
personnel, and (iv) an overhead/management fee for the professional operation of
the Buildings or the Property in an amount equal to two percent (2%) of the sum
of the annual Base Monthly Rent plus the Property Operating Expenses (payable
monthly). Under no circumstances, however, shall Property Operating Expenses
include any of the following: (a) depreciation on the Building or any
improvements on the Property, (b) federal, state, or local income, franchise,
gift, transfer, excise, capital stock, estate, succession or inheritance taxes
(except to the extent any Real Property Tax is recharacterized as one of the
foregoing, up to the amount of the resulting reductions in the real property tax
from the prior year), (c) interest on debt or amortization payments on mortgages
or deeds of trust secured by the Property, (d) costs incurred because Landlord
violated any Law; provided such violation is not caused by Tenant’s failure to
comply with the terms of this Lease; (e) costs or expenses of a partnership, or
other entity, which constitutes Landlord, which costs or expenses are not
directly related to the Leased Premises (such as entity-level accounting fees,
tax returns, and income taxes of such entity), (f) expenses incurred by Landlord
that are not directly related to and expended for the Leased Premises or its
operations; (g) costs of any political, charitable, civic or other contribution
or donation; (h) any interest or penalty incurred due to the late payment of any
cost assessed as a result of Landlord’s failure to make payments when due in
those instances where Landlord is specifically responsible for the payment in
question; provided such late payment is not caused by Tenant’s failure to make
when due any payment required pursuant to this Lease; (i) any fee or expenditure
paid to a related party by Landlord in excess of the amount which would be paid
in an arm’s length transaction for materials or services of comparable quality
(but only to the extent of such excess); (j) any personal property taxes of the
Landlord for equipment or items not used directly in the operation or
maintenance of the Leased Premises; (k) any costs or expenses for sculpture,
paintings or other works of art purchased for the Leased Premises by Landlord,
including costs incurred with respect to the purchase, ownership, leasing,
repair and/or maintenance of such works of art; (l) costs for which Landlord is
actually compensated by insurance proceeds related to Property Operating Expense
items, exclusive of deductibles and costs of collection; and (m) costs incurred
by Landlord in connection with obtaining financing.
D. LAW: The term “Law” or “Laws” shall mean any judicial decision and any
statute, constitution, ordinance, resolution, regulation, rule, administrative
order, or other requirement of any municipal, county, state, federal, or other
governmental agency or authority having jurisdiction over the parties to this
Lease, the Leased Premises, the Buildings or the Property, or any of them in
effect either at the Effective Date of this Lease or at any time during the
Lease Term, including, without limitation, any regulation, order, or policy of
any quasi-official entity or body (e.g. a board of fire examiners or a public
utility or special district).
E. LENDER: The term “lender” shall mean the holder of any note or other evidence
of indebtedness secured by the Property or any portion thereof.
F. PRIVATE RESTRICTIONS: The term “Private Restrictions” shall mean the Parking
Agreement, all recorded covenants, conditions and restrictions, private
agreements, easements, and any other recorded instruments affecting the use of
the Property, as they may exist from time to time.
G. RENT: The term “rent” shall mean collectively Base Monthly Rent and all
Additional Rent.
13.12 GENERAL WAIVERS: One party’s consent to or approval of any act by the
other party requiring the first party’s consent or approval shall not be deemed
to waive or render unnecessary the first party’s consent to or approval of any
subsequent similar act by the other party. No waiver of any provision hereof or
any breach of any provision hereof shall be effective unless in writing and
signed by the waiving party. The receipt by Landlord of any rent or payment with
or without knowledge of the breach of any other provision hereof shall not be
deemed a waiver of any such breach. No waiver of any provision of this Lease
shall be deemed a continuing waiver unless such waiver specifically states so in
writing and is signed by both Landlord and Tenant. No delay or omission in the
exercise of any right or remedy accruing to either party upon any breach by the
other party under this Lease shall impair such right or remedy or be construed
as a waiver of any such breach theretofore or thereafter occurring. The waiver
by either party of any breach of any provision of this Lease shall not be deemed
to be a waiver of any subsequent breach of the same or any other provisions
herein contained.

 

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13.13 MISCELLANEOUS: Should any provision of this Lease prove to be invalid or
illegal, such invalidity or illegality shall in no way affect, impair or
invalidate any other provision hereof, and such remaining provisions shall
remain in full force and effect. Time is of the essence with respect to the
performance of every provision of this Lease in which time of performance is a
factor. Any copy of this Lease which is executed by the parties shall be deemed
an original for all purposes. This Lease shall, subject to the provisions
regarding assignment, apply to and bind the respective heirs, successors,
executors, administrators and assigns of Landlord and Tenant. The term “party”
shall mean Landlord or Tenant as the context implies. If Tenant consists of more
than one person or entity, then all members of Tenant shall be jointly and
severally liable hereunder. This Lease shall be construed and enforced in
accordance with the Laws of the California. The language in all parts of this
Lease shall in all cases be construed as a whole according to its fair meaning,
and not strictly for or against either Landlord or Tenant. The captions used in
this Lease are for convenience only and shall not be considered in the
construction or interpretation of any provision hereof. When the context of this
Lease requires, the neuter gender includes the masculine, the feminine, a
partnership or corporation or joint venture, and the singular includes the
plural. The terms “must”, “shall”, “will”, and “agree” are mandatory. The term
“may” is permissive. When a party is required to do something by this Lease, it
shall do so at its sole cost and expense without right of reimbursement from the
other party unless specific provision is made therefor. Where Tenant is
obligated not to perform any act or is not permitted to perform any act, Tenant
is also obligated to restrain any others reasonably within its control,
including agents, invitees, contractors, subcontractors and employees, from
performing said act. Landlord shall not become or be deemed a partner or a joint
venture with Tenant by reason of any of the provisions of this Lease.
13.14 RIGHT OF FIRST OFFER.
A. Prior to offering to sell the Property during the Term to a third party,
Landlord shall first deliver to Tenant a written notice of the purchase price
and, if the purchase price is other than all cash, the terms of any seller
financing, pursuant to which Landlord intends to negotiate the sale of the
Property to a third party (the “ROFO Notice”). In addition, if Landlord receives
an unsolicited offer to purchase the Property and Landlord wishes to negotiate
or accept such unsolicited offer, Landlord shall first deliver to Tenant a
written notice of the purchase price and, if the purchase price offered is other
than all cash, the terms of any seller financing set forth in such unsolicited
offer (the “Unsolicited Offer ROFO Notice”). For a period of twenty (20) days
from receipt of the ROFO Notice, or ten (10) days from receipt of the
Unsolicited Offer ROFO Notice, Tenant shall have the right to negotiate the
purchase of the Property for the price and, if applicable, the terms of any
seller financing specified in the ROFO Notice, or in the Unsolicited Offer ROFO
Notice, as appropriate (the “ROFO”).
B. With respect to a ROFO Notice, in the event Landlord and Tenant are unable to
reach agreement on the purchase price and, if applicable, the terms of any
seller financing for the Property within the foregoing twenty (20) day period,
then Tenant shall be deemed to have rejected the ROFO and Landlord shall be free
to sell the Property to any third party at any time, subject to the following:
1. If Landlord fails, for any reason, to fully execute a purchase and sale
agreement for the sale of the Property within one hundred eighty (180) days
after Tenant rejects (or is deemed to have rejected) the ROFO, then Landlord
shall be obligated, prior to selling the Property, to again offer the Property
to Tenant for sale pursuant to a ROFO Notice or an Unsolicited Offer ROFO
Notice, as applicable, in which event the preceding terms of this Article 13.14
shall again apply.
2. If by the end of the twenty (20) day period after receipt of the ROFO Notice,
Tenant has specified in writing a price and, if applicable, the terms of any
seller financing upon which it agrees, but for Landlord’s lack of concurrence,
to purchase the Property (the “Tenant Offered Price and Terms”) and before the
end of one hundred eighty (180) days after Tenant rejects or is deemed to have
rejected the ROFO, Landlord proposes to sell the Property at a price which is
less (and, if applicable, with seller financing more favorable to the buyer)
than the Tenant Offered Price and Terms, then Landlord shall be obligated to
deliver a written notice to Tenant specifying such price and, if applicable, the
terms of the seller financing (the “Second Bite ROFO Notice”) and Tenant shall
have the right, until the date which is three (3) business days after receipt of
the Second Bite ROFO Notice, to deliver written notice to Landlord exercising
the ROFO (and in the event Tenant fails to provide an unqualified written notice
of acceptance and exercise of the ROFO to Landlord within the foregoing three
(3) business day period following receipt of the Second Bite ROFO Notice, then
Tenant shall be deemed to have rejected the ROFO).

 

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C. With respect to an Unsolicited Offer ROFO Notice, in the event Landlord and
Tenant are unable to reach agreement on the purchase price (and, if applicable,
the terms of any seller financing) for the Property within the foregoing ten
(10) day period, then Tenant shall be deemed to have rejected the ROFO and
Landlord shall be free to sell the Property to any third party at any time;
provided, however, that if Landlord fails, for any reason, to fully execute a
purchase and sale agreement for the sale of the Property within one hundred
eighty (180) days after Tenant rejects (or is deemed to have rejected) the ROFO,
then Landlord shall be obligated, prior to selling the Property, to again offer
the Property to Tenant for sale pursuant to a ROFO Notice or an Unsolicited
Offer ROFO Notice, as applicable, in which event the preceding terms of this
Article 13.14 shall again apply.
D. Upon exercise of the ROFO, Tenant’s obligations to purchase the Property in
accordance with the terms and conditions set forth in this Article 13.14 shall
be irrevocable, and any breach by Tenant of its obligation to purchase the
Property thereunder shall cause its rights under this Article 13.14 shall
immediately terminate and be of no further force or effect. Any purchase of the
Property by Tenant under the ROFO shall be upon the terms and conditions set
forth in the American Industrial Real Estate Association Standard Offer,
Agreement and Escrow Instructions for the Purchase of Real Property attached
hereto as Exhibit “F”, except that in light of Tenant’s possession and occupancy
of the Property, and notwithstanding any contrary terms in the ROFO Notice,
there shall be no due diligence period provided to Tenant under the terms of its
purchase of the Property, any representations and warranties thereunder by
Landlord (as seller), other than as to the valid organization of Landlord and
the due authorization by Landlord of the sale transaction thereunder, shall be
deemed null and void, and the closing thereunder shall occur, on an all-cash
basis (unless seller financing exists), not more than sixty (60) days following
Tenant’s exercise of the ROFO. The period during which the ROFO shall apply (the
“ROFO Period”) shall commence on the date of this Lease, and shall expire upon
the earlier of (i) the closing of the sale of the Property following Tenant’s
rejection of the ROFO as provided in Articles 13.14(B) and 13.14(C), or (ii) the
expiration or earlier termination of this Lease.
E. In the event that Landlord desires to transfer and convey all or any portion
of its interest in the Property (i) to an affiliate of Landlord, (ii) to any
entity controlled by, controlling or under common control with Landlord,
(iii) to any joint venture or co-investment program (whether in the form of a
limited liability company, a limited partnership or otherwise), in which any of
Landlord or its affiliates has an interest, or (iv) as part of a Portfolio
Transaction (as hereinafter defined), such a transfer shall not trigger Tenant’s
ROFO. A “Portfolio Transaction” shall mean a contemplated sale to a third party
of the Property, together with one or more additional properties that are owned
by Landlord or one of its affiliates or by a joint venture or co-investment
program in which Landlord or one of its affiliates has an interest. Landlord may
not rely on a transaction under this Article 13.14 to avoid, as a substantial
purpose, the Tenant’s ROFO.
F. If Landlord finances and encumbers its interest in the Property (as evidenced
by a mortgage or comparable encumbrance), and such secured party exercises any
or all of its rights and remedies against either or both of Landlord and the
Property, and as a result thereof, the Property is transferred to that lender,
an affiliate of that lender, or a third party, whether at a foreclosure sale, or
through a deed in lieu of foreclosure, or some comparable procedure or
proceeding (a “Default Transfer”), then such Default Transfer shall not trigger
Tenant’s ROFO (and, therefore, neither Landlord nor its lender shall be
obligated to deliver a ROFO Notice); provided that any resulting successor shall
continue to be bound by the terms of Tenant’s ROFO, it being intended to be a
continuing right.
13.15 LEASEHOLD MORTGAGE
A. Landlord shall not be required to subject its fee estate and interest in the
Premises to the lien of any leasehold financing or mortgage sought or obtained
by Tenant.
B. Tenant, and to the extent this Lease is assigned to same, an Affiliate or
Successor (each as defined in Article 7.10 above) are hereby given the right
(exercisable at any time and from time to time) by Landlord, in addition to any
other rights herein granted, without Landlord’s prior written consent, approval
or authorization, to hypothecate, pledge, encumber or mortgage its interest in
this Lease and the leasehold estate in the Leased Premises created hereby under
one or more leasehold mortgage(s) from a third-party lender or lenders unrelated
to Borrower or its owners, and experienced in financial transactions comparable
to that represented by the agreements and instruments of which the Leasehold
Mortgage in place as of the Commencement Date is a part (“Leasehold

 

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Mortgage”) and to assign such interest in this Lease and the leasehold estate in
the Premises created hereby as collateral security for such Leasehold
Mortgage(s), upon the condition that all rights acquired under such Leasehold
Mortgage(s) shall, except as expressly provided in this Article 13.15, be
subject to each and all of the covenants, conditions and restrictions set forth
in this Lease, and to all rights and interests of Landlord herein. None of such
covenants, conditions or restrictions is or shall be waived by Landlord by
reason of the right given to mortgage such interest in this Lease, except as
expressly provided in this Article 13.15. The holder of any Leasehold Mortgage,
and its successors and/or assigns in such capacity, encumbering the leasehold
estate created by this Lease, shall be referred to herein as the “Leasehold
Mortgagee” and shall be entitled to the rights and benefits as provided herein.
A subtenant may not hypothecate, pledge, encumber or mortgage its interest in
this Lease without the prior written consent of Landlord, which may be withheld
in Landlord’s sole and absolute discretion. Notwithstanding anything to the
contrary herein, no Leasehold Mortgage or subleasehold mortgage shall affect
Landlord’s fee title to the Leased Premises in any way.
C. Provided that Leasehold Mortgagee shall have notified Landlord in writing of
its status as a Leasehold Mortgagee and its name and address for notices, and
provided to Landlord a copy and the pertinent recording information of such
Leasehold Mortgagee, Landlord thereafter shall give to such Leasehold Mortgagee
a copy of each notice of default and each notice of termination of the Lease at
the same time as the same shall be delivered by Landlord to Tenant, such copy to
be addressed to Leasehold Mortgagee at the address last furnished to Landlord as
hereinabove provided. No such communication shall be binding upon or affect said
Leasehold Mortgagee unless a copy of said communication shall be given to said
Leasehold Mortgagee pursuant to this Section 13.15(C). In furtherance of the
foregoing, Landlord shall not serve a notice of cancellation or termination upon
Tenant unless a copy of any prior notice of default shall have been delivered to
Leasehold Mortgagee as hereinabove provided and the time as hereinafter
specified for the curing of such default shall have expired without the same
having been cured. Landlord shall notify Leasehold Mortgagee in writing of the
failure of Tenant to cure a default within any applicable grace period and of
the curing of any default by Tenant. Leasehold Mortgagee shall have the right,
but not the obligation, to perform any term, covenant, condition or agreement of
Tenant, and to remedy any default hereunder and, upon acquiring Tenant’s
interest in this Lease, to exercise any rights of Tenant under the Lease
(specifically including, without limitation, the Extension Options as described
in Section 2.7). Landlord shall accept such performance by said Leasehold
Mortgagee with the same force and effect as if performed, exercised and/or
remedied by Tenant.
D. In furtherance of the provisions of Section 13.15(C) hereof, in the case of a
default by Tenant in the performance of any term, covenant, condition or
agreement on Tenant’s part to be performed under this Lease, Landlord will
accept performance by Leasehold Mortgagee within the following periods of any
obligation to be performed by Tenant hereunder, with the same force and effect
as though timely performed by Tenant:
(i) as to any default in the payment of Rent and other sums payable hereunder,
within ten (10) days after notice from Landlord thereof;
(ii) as to all other defaults, within thirty (30) days more time than is given
Tenant to remedy or cause to be remedied the defaults complained of, or, if
within such period such default cannot be cured, to commence to so cure within
such period and diligently and continuously proceed therewith to completion; and
(iii) as to any default with respect to which Leasehold Mortgagee is without the
legal power to cure by payment or performance, at any time so long as Leasehold
Mortgagee shall diligently proceed to obtain possession of the Leased Premises
as mortgagee (including possession by receiver), and upon obtaining such
possession, Leasehold Mortgagee shall diligently proceed to cure such default;
and
(iv) as to any default which is not susceptible to cure by Leasehold Mortgagee,
at any time so long as Leasehold Mortgagee shall diligently institute
foreclosure proceedings and diligently prosecute the same to completion (unless
in the meantime Leasehold Mortgagee shall acquire Tenant’s estate hereunder,
either in its own name or through a nominee, by assignment in lieu of
foreclosure).
E. Landlord shall not exercise its right to terminate this Lease during the time
that Leasehold Mortgagee shall require to complete its remedies under its
Leasehold Mortgage; provided, however:

 

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(i) that Leasehold Mortgagee proceeds, promptly and with due diligence, to
exercise the remedies under its Leasehold Mortgage and thereafter prosecutes and
completes the same with all due diligence; and
(ii) that Leasehold Mortgagee shall pay to Landlord the Rent and all other
charges required to be paid by Tenant hereunder which have accrued and those
which shall become due and payable during said period.
(iii) Upon the completion of any foreclosure proceedings or acquisition of
Tenant’s interest in this Lease by Leasehold Mortgagee, any default not
susceptible of being cured by Leasehold Mortgagee shall be deemed waived by
Landlord as to Leasehold Mortgagee, any purchaser at a foreclosure sale, and
their respective successors and assigns.
F. No notice of termination to Tenant shall be effective with respect to
termination of this Lease unless Leasehold Mortgagee shall also have been so
notified. Leasehold Mortgagee shall then have the right to notify Landlord in
writing, within ten (10) days after receipt by Leasehold Mortgagee of such
notice of cancellation and termination, that (a) Leasehold Mortgagee, or a
reasonably qualified operator of a radio programming and distribution business
comparable to that operated by Tenant designated by Leasehold Mortgagee, or
otherwise a nominee approved by Landlord for a use approved Landlord, such
approval not to be unreasonably withheld (each hereinafter called an “approved
nominee”), elects to lease the Premises from the date of termination of this
Lease for the remainder of the term of this Lease, at the Rent and other charges
herein reserved and upon the same terms, covenants and conditions as are herein
set forth, with the same relative priority in time and in right as this Lease
(to the extent possible) and having the benefit of and vesting in Leasehold
Mortgagee, or the approved nominee, of all the rights, title, interest, powers
and privileges of the Tenant hereunder (the “New Lease”), and (b) Leasehold
Mortgagee or the approved nominee further obligates itself to (and in fact does)
cure all defaults pursuant to, and within the time frames described in,
Section 13.15(D). Each subtenant of all or any portion of the Leased Premises,
if any, whose sublease was in force and effect immediately prior to the delivery
of said New Lease shall attorn to the lessee under the New Lease, unless said
lessee shall, at its option, elect to dispossess said subtenant or otherwise
terminate the sublease held by said subtenant. Each subtenant who hereafter
subleases all or any portion of the Leased Premises shall be deemed to have
agreed to the provisions of this Section 13.15(G). The foregoing shall not be
deemed to obligate Landlord to keep any sublease in force and effect after the
termination of this Lease, nor shall Landlord have any obligation to terminate
any sublease simultaneously with the termination of this Lease. Upon
consummation of the New Lease, Landlord shall pay or credit to Leasehold
Mortgagee or the approved nominee, as applicable, any rentals, less costs and
expenses of collection, received by Landlord between the date of termination of
this Lease and the date of execution of said New Lease, from subtenants or other
occupants of the Leased Premises, if any, which shall not theretofore have been
applied by Landlord towards the payment of rent or any other sum of money
payable by Tenant hereunder or towards the cost of operating the Leased Premises
and all buildings and improvements thereon or performing the obligations of
Tenant hereunder.
G. After such termination of this Lease and upon compliance with the provisions
of Article 13.15(G) by Leasehold Mortgagee, or the approved nominee, within such
time, Landlord shall thereupon execute and deliver such New Lease to Leasehold
Mortgagee or the approved nominee, having the same relative priority in time and
right as this Lease (to the extent possible) and having the benefit of all of
the right, title, interest, powers and privileges of Tenant hereunder in and to
the Premises.
H. Anything herein contained to the contrary notwithstanding, Landlord and
Tenant mutually agree that so long as there exists an unpaid Leasehold Mortgage
on the leasehold estate of Tenant, this Lease or any renewal thereof shall not
be modified, amended or altered and Landlord shall not accept a surrender of the
Premises or a cancellation of this Lease (provided Leasehold Mortgagee remedies
any default and keeps this Lease current, all as provided above) prior to the
expiration or sooner termination thereof, without the prior written consent of
Leasehold Mortgagee.
I. So long as any debt secured by a Leasehold Mortgage upon the leasehold
created by this Lease shall remain unpaid, unless Leasehold Mortgagee shall
otherwise consent in writing, the fee title to the Premises and the leasehold
estate in the Premises shall not merge but shall always be kept separate
estates, notwithstanding what otherwise would be the merger of such estates
either in Landlord or in Tenant or in a third party by purchase or otherwise.

 

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J. In connection with any Leasehold Mortgage, if requested by the Leasehold
Mortgagee, Landlord and Tenant agree to execute and deliver a memorandum of
lease in the form attached hereto as Exhibit G (the “Memorandum of Lease”) for
recordation in the Official Records of Los Angeles County. Upon the expiration
or earlier termination of the Lease Term, and promptly following Landlord’s
request, Tenant agrees to execute and deliver, in recordable form reasonably
acceptable to Landlord, a termination of the Memorandum of Lease (the
“Memorandum Termination”). Tenant hereby appoints Landlord as its
attorney-in-fact for the purpose of executing and recording the Memorandum
Termination following the expiration or earlier termination of the Lease Term,
should Tenant not execute and deliver the Memorandum Termination to Landlord.
K. Notwithstanding the provisions of Section 13.3 to the contrary, Landlord
shall not grant any ground leases, mortgages and/or deeds of trust after the
date hereof unless and until such ground lessee, mortgagee or beneficiary, as
applicable, shall recognize the rights and protections afforded Leasehold
Mortgagee pursuant to this Article 13.15, including, without limitation,
Leasehold Mortgagee’s right to receive notice and opportunity to cure any
default under this Lease as required by this Article 13.15 prior to the
commencement of any action to terminate this Lease. Leasehold Mortgagee agrees
to evidence its consent to any subordination, non-disturbance and attornment (or
similar) agreement required by a ground lessee, mortgagee or beneficiary, as
applicable, provided such agreement shall not modify Leasehold Mortgagee’s
rights and protections afforded by this Lease.
L. All notices, copies of notices and other communications between Landlord and
Leasehold Mortgagee shall be given in the same manner and subject to the same
terms and conditions as set forth in Section 13.9 hereof.
M. If Tenant shall reject or disaffirm this Lease pursuant to any bankruptcy
law, Landlord shall give to Leasehold Mortgagee notice of such rejection or
disaffirmance, together with a statement of all Rent then due and payable by
Tenant under this Lease (without giving effect to any acceleration of the due
date of any such payment of Rent), and of all other defaults under this Lease.
Leasehold Mortgagee shall have the right (but not the obligation), to give to
Landlord within thirty (30) days after receipt by Leasehold Mortgagee of such
notice from Landlord, a notice that Leasehold Mortgagee elects to assume this
Lease and cures all then-existing outstanding balance of Rent concurrently with
such assumption of all non-monetary defaults (except for defaults of the type
specified in Section 365(b)(2) of the Bankruptcy Code or which are impossible
for Leasehold Mortgagee to cure) with reasonable diligence (the “Assumption
Election”); provided however, that Leasehold Mortgagee’s failure to make the
Assumption Election within said thirty (30) day period shall constitute
Leasehold Mortgagee’s election not to assume this Lease. In the event of an
Assumption Election, (i) Tenant’s rejection or disaffirmance of this Lease shall
not constitute a termination of this Lease, (ii) Tenant and Leasehold
Mortgagee’s interest in the Lease shall remain in effect (except to the extent
Tenant’s interest therein shall have terminated or been transferred in
connection with any enforcement of any Leasehold Mortgage) and shall not be
terminated or subjected to any divestiture or defeasance as a result of such
rejection or disaffirmance, (iii) Leasehold Mortgagee may assume the obligations
of Tenant without any instrument of assignment or transfer from Tenant,
(iv) Leasehold Mortgagee’s rights under this Lease shall be free and clear of
all rights, claims and encumbrances of or in respect of Tenant, (v) Leasehold
Mortgagee shall consummate the assumption of this Lease and the payment of the
amounts payable by it to Landlord as provided above at a closing to be held at
the office of Landlord on the tenth (10th) business day after Leasehold
Mortgagee shall have given to Landlord the notice hereinabove provided for (or
such other location as may be mutually acceptable to Leasehold Mortgagee and
Landlord), and (vi) upon an assignment of this Lease (following an Assumption
Election) by Leasehold Mortgagee to an approved nominee, Leasehold Mortgagee
shall be relieved of all obligations and liabilities arising from and after the
date of such assignment.
N. If Landlord (whether as debtor in possession or otherwise) or any trustee of
Landlord shall reject or disaffirm this Lease pursuant to any bankruptcy law,
(i) Landlord, without further act or deed, shall be deemed to have elected to
remain in possession of the Leased Premises for the balance of the term hereof
(including any extension or renewal terms) (unless Leasehold Mortgagee shall
otherwise consent in writing), and (ii) this Lease shall not be terminated, or
be deemed to have terminated, unless Tenant (with the written consent of
Leasehold Mortgagee) shall elect to treat this Lease as terminated under
Section 365 of the Bankruptcy Code. Any exercise or attempted exercise by Tenant
of any right to treat this Lease as terminated after any rejection or
disaffirmance of this Lease by Landlord (whether as debtor in possession or
otherwise) or any trustee of Landlord shall be void unless consented to in
writing by Leasehold Mortgagee. In the absence of such election with such
consent, this Lease shall not be treated as terminated under any provision of
any bankruptcy law, and this Lease shall continue in full force and effect in
accordance with its terms (except that Tenant shall have the rights conferred
under Section 365 of the

 

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Bankruptcy Code), and the rights of Leasehold Mortgagee shall not be affected or
impaired by such rejection or disaffirmance.
O. Landlord agrees to subordinate to the lien of the Leasehold Mortgage any
landlord’s lien, all rights of levy, distress or distraint and all claims and
demands of every kind against any of Tenant’s personal property now or hereafter
located within the Leases Premises, including, without limitation, Tenant’s
present and future inventory, equipment and all tangible property now owned or
hereafter acquired by Tenant (collectively, the “Goods”, which term, as used
herein, shall not include any property owned by Landlord or required to support
the structure of, or to heat or cool as a whole, any of the buildings located on
the Property, or which would cause material damage or constitute a material
adverse Alteration to the structure of the Property if removed, but which term
shall expressly include, without limitation, all “Excluded Property” set forth
on Exhibit B to the Bill of Sale delivered by Tenant to Landlord in connection
with Landlord’s acquisition of the Leased Premises pursuant to the PSA). Without
limiting the foregoing provisions of this Article 13.15(O), Leasehold Mortgagee
or its receiver or any officer or other representative of Leasehold Mortgagee,
may, at its option, from time to time enter the Leased Premises for the purpose
of inspecting, possessing, removing, selling (by way of public or private
auction, but subject to Landlord’s reasonable terms and conditions concerning
same), advertising for sale or otherwise dealing with the Goods, and such
license shall be irrevocable and shall continue from the date Leasehold
Mortgagee enters the Leased Premises for as long as it deems necessary (but not
to exceed a period of sixty (60) days after termination of the Lease); provided,
however, that Leasehold Mortgagee shall pay the Rent and provide general
liability insurance with limits of at least $2,000,000, naming Landlord as an
additional insured thereon, for the period beginning with termination of the
Lease until the conclusion of the removal of the Goods and return of the Leased
Premises to Landlord as required in this Article 13.15(O). At the conclusion of
such period, Leasehold Mortgagee shall remove all of the Goods not sold or
otherwise removed, and leave the Leased Premises in broom clean condition and
otherwise in the condition required by this Article 13.15(O). With respect to
any Goods not removed from the Leased Premises within said period, all interest,
if any, of Leasehold Mortgagee in such Goods shall terminate and be of no force
or effect; provided, however, that nothing in the preceding sentence shall
entitle Leasehold Mortgagee to abandon any Goods within the Leased Premises.
P. Notwithstanding anything to the contrary in Article 7.8, Leasehold Mortgagee
shall be released from all obligations and liabilities under this Lease or any
New Lease upon its assignment of its full interest therein made in conformance
with the provisions of this Article 13.15.
ARTICLE 14
CORPORATE AUTHORITY,
BROKERS AND ENTIRE AGREEMENT
14.1 CORPORATE AUTHORITY: Tenant represents and warrants that Tenant is validly
formed and duly authorized and existing, that Tenant is qualified to do business
in the State in which the Leased Premises are located, that Tenant has the full
right and legal authority to enter into this Lease, that the officers signing
this Lease are duly authorized to execute and deliver this Lease on behalf of
Tenant in accordance with the bylaws and/or a board of directors’ resolution of
Tenant, and that this Lease is binding upon Tenant in accordance with its terms.
Tenant shall, concurrently with the execution of this Lease, deliver to Landlord
a certified copy of the resolution of its board of directors authorizing or
ratifying the execution of this Lease, and if Tenant fails to do so, Landlord at
its sole election may elect to (i) extend the Commencement Date by such number
of days that Tenant shall have delayed in so delivering such corporate
resolution to Landlord, or (ii) terminate this Lease.
14.2 BROKERAGE COMMISSIONS: Tenant covenants, warrants and represents that,
other than the Broker, no broker, agent, salesperson or advisor represented
Tenant in the negotiation of this Lease. Tenant, at Tenant’s sole cost, shall
pay any and all fees, commissions or amounts payable to Broker in connection
with this Lease and/or the occupancy of the Leased Premises by Tenant. Landlord
covenants, warrants and represents that no brokers or advisors represented
Landlord in the negotiation of this Lease. Each party agrees to and hereby does
defend, indemnify and hold the other harmless against and from any brokerage
commissions or finder’s fees or claims therefor by a party claiming to have
dealt with the indemnifying party and all costs, expenses and liabilities in
connection therewith, including, without limitation, reasonable attorneys’ fees
and expenses, for any breach of the foregoing. The foregoing indemnification
shall survive the termination or expiration of this Lease.

 

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14.3 ENTIRE AGREEMENT: This Lease and the Exhibits, which Exhibits are by this
reference incorporated herein, constitute the entire agreement between the
parties, and there are no other agreements, understandings or representations
between the parties relating to the lease by Landlord of the Leased Premises to
Tenant, except as expressed herein. No subsequent changes, modifications or
additions to this Lease shall be binding upon the parties unless in writing and
signed by both Landlord and Tenant.
14.4 WAIVER OF JURY TRIAL: LANDLORD AND TENANT EACH ACKNOWLEDGES THAT IT IS
AWARE OF AND HAS HAD THE ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT TO ITS
RIGHTS TO TRIAL BY JURY, AND EACH PARTY DOES HEREBY EXPRESSLY AND KNOWINGLY
WAIVE AND RELEASE ALL SUCH RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM BROUGHT BY EITHER PARTY HERETO AGAINST THE OTHER (AND/OR AGAINST
ITS MEMBERS, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, OR SUBSIDIARY OR AFFILIATED
ENTITIES) ON ANY MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH
THIS LEASE, TENANT’S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM OF
INJURY OR DAMAGE. FURTHERMORE, THIS WAIVER AND RELEASE OF ALL RIGHTS TO A JURY
TRIAL IS DEEMED TO BE INDEPENDENT OF EACH AND EVERY OTHER PROVISION, COVENANT,
AND/OR CONDITION SET FORTH IN THIS LEASE.
14.5 LANDLORD’S REPRESENTATIONS: Tenant acknowledges that neither Landlord nor
any of its agents made any representation or warranties respecting the Project,
the Buildings or the Leased Premises, upon which Tenant relied in entering into
this Lease, which are not expressly set forth in this Lease. Tenant further
acknowledges that neither Landlord nor any of its agents made any
representations as to (i) whether the Leased Premises may be used for the
Permitted Use under existing Law, or (ii) the suitability of the Leased Premises
for the conduct of Tenant’s business, or (iii) the exact square footage of the
Leased Premises, and that Tenant relied solely upon its own investigations
respecting said matters. Tenant expressly waives any and all claims for damage
by reason of any state-management, representation, warranty, promise or other
agreement of Landlord or Landlord’s agent(s), if any, not contained in this
Lease.
[Signature Page Follows Immediately]

 

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IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the
Effective Date.

                              “LANDLORD”:       “TENANT”:    
 
                            NLC-Lindblade, LLC,       Westwood One, Inc.,     a
Delaware limited liability company       a Delaware corporation    
 
                           
By:
  /s/ Jonathan Epstein       By:   /s/ Roderick M. Sherwood, III      
 
                           
 
  Name:   Jonathan Epstein           Name:   Roderick M. Sherwood, III    
 
  Its:   Authorized Representative           Its:   President & CFO    
 
                           
 
              By:   /s/ David Hillman      
 
                           
 
                  Name:   David Hillman    
 
                  Its:   GC, CAO & Secretary    

If Tenant is a CORPORATION, the authorized officers must sign on behalf of the
corporation and indicate the capacity in which they are signing. This Lease must
be executed by the chairman of the board, president or vice-president, and the
secretary, assistant secretary, the chief financial officer or assistant
treasurer, unless the bylaws or a resolution of the board of directors shall
otherwise provide, in which event a certified copy, of the bylaws or a certified
copy of the resolution, as the case may be, must be attached to this Lease.

 

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EXHIBIT “A”
(Legal Description of the Property)
All that certain tract. parcel and lot of land lying and being situate in the
City of Culver City, State of California, being more particularly described as
follows:
PARCEL 1:
LOTS 41, 42 AND 45 OF TRACT 4161, IN THE CITY OF CULVER CITY, AS PER MAP
RECORDED IN BOOK 46 PAGE 32, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF
SAID COUNTY.
PARCEL 2:
LOTS 43 AND 44, OF TRACT 4161, IN THE CITY OF CULVER CITY, AS PER MAP RECORDED
IN BOOK 46 PAGE 32 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
PARCEL 3:
LOTS 8, 9, 22 THE NORTHEASTERLY 4.61 FEET OF LOT 21 AND THE SOUTHWESTERLY 20.39
FEET OF LOT 23, OF TRACT NO. 4161, IN THE CITY OF CULVER CITY, AS PER MAP
RECORDED IN BOOK 46 PAGES 32 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF
SAID COUNTY.
PARCEL 4:
LOTS 10, 11, 12, 19,20 AND 21 ALL IN TRACT 4161, IN THE CITY OF CULVER CITY AS
PER MAP RECORDED IN BOOK 46, PAGE 32 OF MAPS, IN THE OFFICE OF THE COUNTY
RECORDER OF SAID COUNTY.
EXCEPT THE NORTHEASTERLY 4.61 FEET OF LOT 21.
APN NOS.: 4206-015-039, 4206-015-040, 4206-016-008, 4206-016-009, 4206-016-010
and 4206-016-011

 

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EXHIBIT “B”
(Site Plan of the Project)

 

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EXHIBIT “C”
(Schedule of Base Monthly Rent)

                      Monthly Installment of         Months   Base Monthly Rent
    Annual Amount  
1-12
  $ 72,963.00     $ 875,556.00  
13-24
  $ 75,516.71     $ 906,200.46  
25-36
  $ 78,159.79     $ 937,917.48  
37-48
  $ 80,895.38     $ 970,744.59  
49-60
  $ 86,726.72     $ 1,004,720.65  
61-72
  $ 86,657.16 **   $ 1,039,885.87 **
73-84
  $ 89,690.16 **   $ 1,076,281.88 **
85-96
  $ 92,829.31 **   $ 1,113,951.74 **
97-108
  $ 96,078.34 **   $ 1,152,940.05 **
109-120
  $ 99,441.08 **   $ 1,193,292.96 **

      **  
these amounts are based on a year-over-year increase of three and one-half
percent (3.5%); provided, however, the Base Monthly Rent and Parking Fees for
each year after the fifth anniversary of the Effective Date shall be subject to
additional increases as provided in this Exhibit “C”

Commencing on the fifth anniversary of the Effective Date and continuing on each
anniversary of the Effective Date thereafter during the Lease Term (each as
“Adjustment Date”), the amount of Base Monthly Rent and Parking Fees (and the
corresponding monthly installments of the Base Monthly Rent plus Parking Fees)
payable under this Lease shall be increased in accordance with this Exhibit. On
the first Adjustment Date, the Base Monthly Rent and the Parking Fees shall be
increased by the greater of (i) three and one-half percent (3.5%), or (ii) a
percentage equal to the cumulative percentage increase, if any, in the Index (as
defined below) published one (1) month before the Effective Date over the Base
Index (as defined below). On the second Adjustment Date and on each Adjustment
Date thereafter during the Lease Term, the Base Monthly Rent and the Parking
Fees shall be increased by the greater of (a) three and one-half percent (3.5%),
or (b) a percentage equal to the percentage increase, if any, in the Index
published one (1) month before the applicable Adjustment Date over the Base
Index.
After each Adjustment Date, Landlord shall deliver to Tenant a written statement
of the applicable Base Monthly Rent and Parking Fees and the manner in which
such items were computed. If Tenant shall have paid any installment of Base
Monthly Rent and Parking Fees prior to Landlord’s delivery of such written
statement identifying the increased Base Monthly Rent and Parking Fees, then
Tenant shall pay to Landlord the amount of the underpayment of Base Monthly Rent
and Parking Fees within ten (10) days from Landlord’s delivery of such statement
to Tenant. The term “Index” shall mean the United States Department of Labor,
Bureau of Labor Statistics Consumer Price Index for All Urban Consumers (Los
Angeles-Riverside-Orange County Area), Subgroup “All Items” (1982/1984 = 100).
In the event the foregoing Index is discontinued prior to the expiration of this
Lease, Landlord may substitute any substantially equivalent official index
published by the Bureau of Labor Statistics or its successor. Landlord shall use
any appropriate conversion factors to accomplish such substitution. The
substitute index shall then become the Index hereunder. The Index for the
calendar month which is thirteen (13) months before each Adjustment Date shall
be the “Base Index”.
Parking Fees shall be determined from time to time based upon the Parking
Agreement, and shall be added to the Base Rent set forth above.
Notwithstanding anything to the contrary in this Lease, Landlord agrees to abate
Tenant’s obligation to pay Base Rent for the first month of the Initial Lease
Term.

 

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EXHIBIT “D”

 

D-1