EXHIBIT 10.54

LEASE

BETWEEN

WESTWOOD GATEWAY II LLC

AND

MARATHON PATENT GROUP, INC.

 
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LEASE
(Short Form)

THIS LEASE is made as of the 14th day of October, 2013, by and between WESTWOOD
GATEWAY II LLC, a Delaware limited liability company, hereafter called
“Landlord,” and MARATHON PATENT GROUP, INC., a Nevada corporation, hereafter
called “Tenant.”

ARTICLE 1.  BASIC LEASE PROVISIONS

Each reference in this Lease to the “Basic Lease Provisions” shall mean and
refer to the following collective terms, the application of which shall be
governed by the provisions in the remaining Articles of this Lease.

1.
Tenant’s Trade Name:  N/A

2.            Premises:
Suite No. 380
   Address of Building:
11100 Santa Monica Blvd., Los Angeles, CA 90025
   Project Description:
Westwood Gateway II

   (The Premises are more particularly described in Section 2.1).

3.
Use of Premises:   General office and for no other use.

4.
Commencement Date: May 1, 2014

5.
Lease Term:  The Term of this Lease will expire at midnight on April 30, 2021.

6.
Basic Rent:

Months of Term
or Period
Monthly Rate Per
Rentable Square Foot
Monthly Basic Rent
(rounded to the nearest dollar)
5/1/14 to 4/30/15
$3.05
$5,283.00
5/1/15 to 4/30/16
$3.19
$5,525.00
5/1/16 to 4/30/17
$3.33
$5,768.00
5/1/17 to 4/30/18
$3.48
$6,027.00
5/1/18 to 4/30/19
$3.64
$6,304.00
5/1/19 to 4/30/20
$3.80
$6,582.00
5/1/20 to 4/30/21
$3.97
$6,876.00

 
Notwithstanding the above schedule of Basic Rent to the contrary, as long as
Tenant is not in Default (as defined in Section 14.1) under this Lease, Tenant
shall be entitled to an abatement of 5 full calendar months of Basic Rent in the
aggregate amount of $26,415.00 (i.e. $5,283.00 per month) (the “Abated Basic
Rent”) for the first 5 full calendar months of the Term (the “Abatement
Period”).  In the event Tenant Defaults at any time during the Term, all Abated
Basic Rent shall immediately become due and payable.  The payment by Tenant of
the Abated Basic Rent in the event of a Default shall not limit or affect any of
Landlord's other rights, pursuant to this Lease or at law or in equity.  Only
Basic Rent shall be abated during the Abatement Period and all other additional
rent and other costs and charges specified in this Lease shall remain as due and
payable pursuant to the provisions of this Lease.

7.
Property Tax Base:  The Property Taxes per rentable square foot incurred by
Landlord and attributable to the

 
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twelve month period ending June 30, 2014 (the "Base Year").

Project Cost Base:  The Project Costs per rentable square foot incurred by
Landlord and attributable to the Base Year.

Expense Recovery Period:  Every twelve month period during the Term (or portion
thereof during the first and last Lease years) ending June 30.

8.
Floor Area of Premises:  approximately 1,732 rentable square feet (Landlord and
Tenant stipulate and agree that the Floor Area of Premises is correct).

Floor Area of Building:  approximately 292,056 rentable square feet

9.
Security Deposit:  $7,564.00

10.
Broker(s):  Irvine Realty Company ("Landlord's Broker") and Guardian Commercial
Realty ("Tenant's Broker")

11.
Parking:  6 parking passes in accordance with the provisions set forth in
Exhibit F to this Lease.

12.
Address for Payments and Notices:

LANDLORD
TENANT
 
Payment Address:
 
WESTWOOD GATEWAY II LLC
PO Box #842470
Los Angeles, CA  90084-2470
 
Notice Address:
 
THE IRVINE COMPANY LLC
11100 Santa Monica Boulevard, Suite 100
Los Angeles, CA,  90025
Attn: Property Manager
 
with a copy of notices to:
 
THE IRVINE COMPANY LLC
550 Newport Center Drive
Newport Beach, CA 92660
Attn: Senior Vice President, Property Operations
Irvine Office Properties
Marathon Patent Group, Inc.
11100 Santa Monica Blvd., Suite 380
Los Angeles, CA 90025
 

13.
List of Lease Exhibits (all exhibits, riders and addenda attached to this Lease
are hereby incorporated into and made a part of this Lease):

 
Exhibit A                          Description of Premises
Exhibit B                          Operating Expenses
Exhibit C                          Utilities and Services
Exhibit D                          Tenant’s Insurance
Exhibit E                          Rules and Regulations
Exhibit F                          Parking
Exhibit G                         Additional Provisions
Exhibit X                         Work Letter

 
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ARTICLE 2.  PREMISES

2.1.   LEASED PREMISES.  Landlord leases to Tenant and Tenant leases from
Landlord the Premises shown in Exhibit A (the “Premises”), containing
approximately the floor area set forth in Item 8 of the Basic Lease Provisions
(the “Floor Area”).  The Premises are located in the building identified in
Item 2 of the Basic Lease Provisions (the “Building”), which is a portion of the
project described in Item 2 (the “Project”).

2.2.   ACCEPTANCE OF PREMISES.  Tenant is currently occupying the Premises under
the terms of an existing sub-sublease agreement, which is currently scheduled to
expire at midnight on April 30, 2014.  Tenant acknowledges that, except for the
items required to be accomplished by Landlord under the Work Letter attached as
Exhibit X, it is satisfied with the condition of the Premises.  In no event
shall this clause nullify any Landlord obligations under the Lease.

ARTICLE 3.  TERM

3.1.   GENERAL.  The term of this Lease (“Term”) shall be for the period shown
in Item 5 of the Basic Lease Provisions.  The Term shall commence (“Commencement
Date") on the Commencement Date as set forth in Item 4 of the Basic Lease
Provisions and shall end upon the expiration of the period set forth in Item 5
of the Basic Lease Provisions (“Expiration Date").

ARTICLE 4.  RENT AND OPERATING EXPENSES

4.1.   BASIC RENT.  From and after the Commencement Date, Tenant shall pay to
Landlord without deduction or offset a Basic Rent for the Premises in the total
amount shown (including subsequent adjustments, if any) in Item 6 of the Basic
Lease Provisions (the “Basic Rent”).  If the Commencement Date is other than the
first day of a calendar month, any rental adjustment shown in Item 6 shall be
deemed to occur on the first day of the next calendar month following the
specified monthly anniversary of the Commencement Date.  The Basic Rent shall be
due and payable in advance commencing on the Commencement Date and continuing
thereafter on the first day of each successive calendar month of the Term, as
prorated for any partial month.  No demand, notice or invoice shall be
required.  An installment in the amount of 1 full month’s Basic Rent at the
initial rate specified in Item 6 of the Basic Lease Provisions shall be
delivered to Landlord concurrently with Tenant’s execution of this Lease.

4.2.   OPERATING EXPENSES. Tenant shall pay Tenant’s Share of Operating Expenses
in accordance with Exhibit B of this Lease.
 
4.3.   SECURITY DEPOSIT.  Concurrently with Tenant’s delivery of this Lease,
Tenant shall deposit with Landlord the sum, if any, stated in Item 9 of the
Basic Lease Provisions (the “Security Deposit”), to be held by Landlord as
security for the full and faithful performance of Tenant’s obligations under
this Lease, to pay any rental sums, including without limitation such additional
rent as may be owing under any provision hereof, and to maintain the Premises as
required by this Lease.  Upon any breach of the foregoing obligations by Tenant,
Landlord may apply all or part of the Security Deposit as full or partial
compensation.  If any portion of the Security Deposit is so applied, Tenant
shall within 15 days after written demand by Landlord deposit cash with Landlord
in an amount sufficient to restore the Security Deposit to its original
amount.  Landlord shall not be required to keep this Security Deposit separate
from its general funds, and Tenant shall not be entitled to interest on the
Security Deposit.  In no event may Tenant utilize all or any portion of the
Security Deposit as a payment toward any rental sum due under this Lease.  Any
unapplied balance of the Security Deposit shall be returned to Tenant or, at
Landlord’s option, to the last assignee of Tenant’s interest in this Lease
within 30 days following the termination of this Lease and Tenant's vacation of
the Premises.  Tenant hereby waives the provisions of Section 1950.7 of the
California Civil Code, or any similar or successor laws now or hereafter in
effect.

 
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ARTICLE 5.  USES

5.1.   USE.  Tenant shall use the Premises only for the purposes stated in
Item 3 of the Basic Lease Provisions and for no other use whatsoever.  Tenant
shall not do or permit anything to be done in or about the Premises which will
in any way interfere with the rights or quiet enjoyment of other occupants of
the Building or the Project, or use or allow the Premises to be used for any
unlawful purpose, nor shall Tenant permit any nuisance in the Premises or the
Project. Tenant shall comply at its expense with all present and future laws,
ordinances and requirements of all governmental authorities in all material
respects that pertain to Tenant or its use of the Premises, and with all energy
usage reporting requirements of Landlord.  As of the date of this Lease, there
has been no inspection of the Building and Project by a Certified Access
Specialist as referenced in Section 1938 of the California Civil Code.

5.2.   SIGNS.  Landlord shall affix and maintain a sign (restricted solely to
Tenant’s name as set forth herein or such other name as Landlord may consent to
in writing) adjacent to the entry door of the Premises, together with a
directory strip listing Tenant's name as set forth herein in the lobby directory
of the Building.  Tenant shall not place or allow to be placed any other sign,
decoration or advertising matter of any kind that is visible from the exterior
of the Premises.

5.3   HAZARDOUS MATERIALS.  Tenant shall not generate, handle, store or dispose
of hazardous or toxic materials (as such materials may be identified in any
federal, state or local law or regulation) in the Premises or Project without
the prior written consent of Landlord.  Tenant acknowledges that it has read,
understands and, if applicable, shall comply with the provisions of Exhibit H to
this Lease, if that Exhibit is attached.

ARTICLE 6.  LANDLORD SERVICES
 
6.1.   UTILITIES AND SERVICES.  Landlord and Tenant shall be responsible to
furnish those utilities and services to the Premises to the extent provided in
Exhibit C, subject to the conditions and payment obligations and standards set
forth in this Lease. Landlord’s failure to furnish, or any interruption,
diminishment or termination of, services due to the application of laws, the
failure of any equipment, the performance of repairs, improvements or
alterations, utility interruptions or the occurrence of an event of force
majeure (defined in Section 20.8) shall not render Landlord liable to Tenant,
constitute a constructive eviction of Tenant, give rise to an abatement of Rent,
nor relieve Tenant from the obligation to fulfill any covenant or agreement.

6.2.   OPERATION AND MAINTENANCE OF COMMON AREAS.  During the Term, Landlord
shall operate all Common Areas within the Building and the Project.  The term
“Common Areas” shall mean all areas within the Building, Project and other
buildings in the Project which are not held for exclusive use by persons
entitled to occupy space.

6.3.   USE OF COMMON AREAS.  The occupancy by Tenant of the Premises shall
include the use of the Common Areas in common with Landlord and with all others
for whose convenience and use the Common Areas may be provided by Landlord,
subject, however, to compliance with Rules and Regulations described in
Article 17 below.  Landlord shall at all times during the Term have exclusive
control of the Common Areas, and may reasonably restrain or permit any use or
occupancy.  Landlord may temporarily close any portion of the Common Areas for
repairs, remodeling and/or alterations, to prevent a public dedication or the
accrual of prescriptive rights, or for any other reasonable purpose.

ARTICLE 7.  REPAIRS AND MAINTENANCE

7.1.   TENANT’S MAINTENANCE AND REPAIR.  Subject to Articles 11 and 12, Tenant
at its sole expense shall make all repairs necessary to keep the Premises and
all improvements and fixtures therein in good condition and repair, excepting
ordinary wear and tear.  Tenant’s maintenance obligation shall include without
limitation all appliances, interior glass, doors, door closures, hardware,
fixtures, electrical within the Premises, plumbing within the Premises, fire
extinguisher equipment and other equipment installed in the Premises, together
with any supplemental HVAC equipment servicing only the Premises.  Should
Landlord or its management agent agree to make a repair on behalf of Tenant and
at Tenant’s request, Tenant shall promptly reimburse Landlord as additional rent
for all reasonable and documented costs incurred (including the standard 5%
supervision fee) upon submission of an invoice.

 
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   7.2.   LANDLORD’S MAINTENANCE AND REPAIR.  Subject to Articles 11 and 12,
Landlord shall provide service, maintenance and repair with respect to the
heating, ventilating and air conditioning (“HVAC”) equipment of the Building
(exclusive of any supplemental HVAC equipment servicing only the Premises) and
shall maintain in good repair the Common Areas, roof, foundations, footings, the
exterior surfaces of the exterior walls of the Building (including exterior
glass), and the structural, electrical, mechanical and plumbing systems of the
Building (including elevators, if any, serving the Building), except to the
extent provided in Section 7.1 above.  Notwithstanding any provision of the
California Civil Code or any similar or successor laws to the contrary, Tenant
understands that it shall not make repairs at Landlord’s expense or by rental
offset. Except as provided in Section 11.1 and Article 12 below, there shall be
no abatement of rent and no liability of Landlord by reason of any injury to or
interference with Tenant’s business arising from the making of any repairs,
alterations or improvements to any portion of the Building, including repairs to
the Premises, nor shall any related activity by Landlord constitute an actual or
constructive eviction. Tenant hereby waives any and all rights under and
benefits of subsection 1 of Section 1932, and Sections 1941 and 1942 of the
California Civil Code, or any similar or successor laws now or hereafter in
effect.

   7.3.   ALTERATIONS.  Tenant shall make no alterations, additions,
decorations, or improvements, except as set forth in Exhibit X, (collectively
referred to as “Alterations”) to the Premises without the prior written consent
of Landlord, such consent not to be unreasonably withheld or delayed.  Landlord
may impose, as a condition to its consent, any requirements that Landlord in its
discretion may deem reasonable.  Tenant shall use Landlord’s designated
mechanical and electrical contractors, obtain all required permits for the
Alterations and shall perform the work in compliance with all applicable laws,
regulations and ordinances with contractors reasonably acceptable to Landlord.
Except for cosmetic alterations not requiring a permit, Landlord shall be
entitled to a supervision fee in the amount of 5% of the cost of the
Alterations.  Landlord may elect to cause its architect to review Tenant’s
architectural plans, and the reasonable cost of that review shall be reimbursed
by Tenant.  Should the Alterations proposed by Tenant and consented to by
Landlord change the floor plan of the Premises, then Tenant shall, at its
expense, furnish Landlord with as-built drawings and CAD disks compatible with
Landlord’s systems.  Unless Landlord otherwise agrees in writing, all
Alterations affixed to the Premises, including without limitation all Tenant
Improvements constructed pursuant to the Work Letter (except as otherwise
provided in the Work Letter), but excluding moveable trade fixtures and
furniture, shall become the property of Landlord and shall be surrendered with
the Premises at the end of the Term, except that Landlord may, by notice to
Tenant given at least 30 days prior to the Expiration Date, require Tenant to
remove by the Expiration Date, or sooner termination date of this Lease, all or
any Alterations (including without limitation all telephone and data cabling)
installed either by Tenant or by Landlord at Tenant’s request (collectively, the
“Required Removables”).  In connection with its removal of Required Removables,
Tenant shall repair any damage to the Premises arising from that removal and
shall restore the affected area to its pre-existing condition, reasonable wear
and tear excepted.

7.4.   MECHANIC’S LIENS.  Tenant shall keep the Premises free from any liens
arising out of any work performed, materials furnished, or obligations incurred
by or for Tenant.   In the event that Tenant shall not, within 15 days following
the imposition of any lien, cause the lien to be released of record by payment
or posting of a proper bond in accordance with California Civil Code Section
8424 or any successor statute, Landlord shall have, in addition to all other
available remedies, the right to cause the lien to be released by any means it
deems proper, including payment of or defense against the claim giving rise to
the lien.  All expenses so incurred by Landlord shall be reimbursed by Tenant
promptly following Landlord’s demand.  Tenant shall give Landlord no less than
20 days’ prior notice in writing before commencing construction of any kind on
the Premises.

7.5.   ENTRY AND INSPECTION.  Landlord shall at all reasonable times and with
reasonable prior verbal notice, except in emergencies or to provide Building
services, have the right to enter the Premises to inspect them, to supply
services in accordance with this Lease, to make repairs and renovations as
reasonably deemed necessary by Landlord, and to submit the Premises to
prospective or actual purchasers or encumbrance holders (or, during the final
twelve months of the Term or when an uncured Default exists, to prospective
tenants), all without being deemed to have caused an eviction of Tenant and
without abatement of rent except as provided elsewhere in this
Lease.  Notwithstanding the foregoing, Landlord will use reasonable efforts not
to disrupt the Tenant’s day to day business activities.

 
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ARTICLE 8.  SPACE PLANNING AND SUBSTITUTION

Landlord shall have the right, upon providing not less than 60 days written
notice, to move Tenant to other space of comparable size and corner location
higher than the third floor in the Building.  The new space shall be provided
with new improvements of comparable quality to those within the
Premises.  Landlord shall pay the reasonable out-of-pocket costs to relocate and
reconnect Tenant’s personal property and equipment within the new
space.  Landlord shall also reimburse Tenant for such other reasonable
out-of-pocket costs that Tenant may incur in connection with the relocation,
including, but not limited to, Tenant’s notice of address change and new
stationary. Within 10 days following request by Landlord, Tenant shall execute
an amendment to this Lease prepared by Landlord to memorialize the relocation.

ARTICLE 9.  ASSIGNMENT AND SUBLETTING
 
9.1.   RIGHTS OF PARTIES.  Tenant shall not, directly or indirectly, assign,
sublease, transfer or encumber any interest in this Lease or allow any third
party to use any portion of the Premises (collectively or individually, a
“Transfer”) without the prior written consent of Landlord, which consent shall
not be unreasonably withheld if Landlord does not exercise its recapture
rights.  Tenant agrees that it is not unreasonable for Landlord to withhold
consent to a Transfer to a proposed assignee or subtenant who is an existing
tenant or occupant of the Building or Project or to a prospective tenant with
whom Landlord or Landlord's affiliate has been actively negotiating.  Within 30
days after receipt of executed copies of the transfer documentation and such
other information as Landlord may request, Landlord shall either: (a) consent to
the Transfer by execution of a consent agreement in a form reasonably designated
by Landlord; (b) refuse to consent to the Transfer; or (c) recapture the portion
of the Premises that Tenant is proposing to Transfer.  Tenant hereby waives the
provisions of Section 1995.310 of the California Civil Code, or any similar or
successor Laws, now or hereinafter in effect, and all other remedies, including,
without limitation, any right at law or equity to terminate this Lease, on its
own behalf and, to the extent permitted under all applicable laws, on behalf of
the proposed transferee.  In no event shall any Transfer release or relieve
Tenant from any obligation under this Lease, as same may be amended.  Tenant
shall pay Landlord a review fee of $750.00 for Landlord’s review of any
requested Transfer.  Tenant shall pay Landlord, as additional Rent, 50% of all
rent and other consideration which Tenant receives as a result of a Transfer
that is in excess of the Rent payable to Landlord for the portion of the
Premises and Term covered by the Transfer. If Tenant is in Default, Landlord may
require that all sublease payments be made directly to Landlord, in which case
Tenant shall receive a credit against Rent in the amount of Tenant’s share of
payments received by Landlord.

9.2.   PERMITTED TRANSFER.  Notwithstanding the foregoing, Tenant may assign
this Lease to a successor to Tenant by merger, consolidation or the purchase of
substantially all of Tenant’s assets, or assign this Lease or sublet all or a
portion of the Premises to an Affiliate (defined below), without the consent of
Landlord, provided that all of the following conditions are satisfied (a
“Permitted Transfer”):  (i) Tenant is not then in Default hereunder; (ii) Tenant
gives Landlord written notice prior to such Permitted Transfer; and (iii) the
successor entity resulting from any merger or consolidation of Tenant or the
sale of all or substantially all of the assets of Tenant in one or more related
transactions, has a net worth at the time of the Permitted Transfer that is at
least equal to the net worth of Tenant immediately before the Permitted
Transfer.  “Affiliate” shall mean an entity controlled by, controlling or under
common control with Tenant.

ARTICLE 10.  INSURANCE AND INDEMNITY

10.1.   TENANT’S INSURANCE.  Tenant, at its sole cost and expense, shall provide
and maintain in effect the insurance described in Exhibit D.  Evidence of that
insurance must be delivered to Landlord prior to the Commencement Date.

 
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10.2.   TENANT’S INDEMNITY.  To the fullest extent permitted by law, but subject
to Section 10.4 below, Tenant shall defend, indemnify and hold harmless Landlord
and Landlord’s agents, employees, lenders, and affiliates, from and against any
and all negligence, claims, liabilities, damages, costs or expenses arising
either before or after the Commencement Date which arise from or are caused by
Tenant’s use or occupancy of the Premises, the Building or the Common Areas of
the Project, or from the conduct of Tenant’s business, or from any activity,
work, or thing done, permitted or suffered by Tenant or Tenant’s agents,
employees, subtenants, vendors, contractors, invitees or licensees in or about
the Premises, the Building or the Common Areas of the Project, or from any
Default in the performance of any obligation on Tenant’s part to be performed
under this Lease, or from any act, omission or negligence on the part of Tenant
or Tenant’s agents, employees, subtenants, vendors, contractors, invitees or
licensees.  Landlord may, at its option, require Tenant to assume Landlord’s
defense in any action covered by this Section 10.2 through counsel reasonably
satisfactory to Landlord.  Notwithstanding the foregoing, Tenant shall not be
obligated to indemnify Landlord against any liability or expense to the extent
that the same was caused by the negligence or willful misconduct of Landlord,
its agents, contractors or employees.

10.3.   LANDLORD’S NONLIABILITY.  Landlord shall not be liable to Tenant, its
employees, agents and invitees, and Tenant hereby waives all claims against
Landlord, its employees and agents for loss of or damage to any property, or any
injury to any person, resulting from any condition including, but not limited
to, acts or omissions (criminal or otherwise) of third parties and/or other
tenants of the Project, or their agents, employees or invitees, fire, explosion,
falling plaster, steam, gas, electricity, water or rain which may leak or flow
from or into any part of the Premises or from the breakage, leakage, obstruction
or other defects of the pipes, sprinklers, wires, appliances, plumbing, air
conditioning, electrical works or other fixtures in the Building, whether the
damage or injury results from conditions arising in the Premises or in other
portions of the Building, regardless of the negligence of Landlord, its agents
or any and all affiliates of Landlord in connection with the
foregoing.  Notwithstanding anything to the contrary contained in this Lease, in
no event shall Landlord be liable for Tenant’s loss or interruption of business
or income (including without limitation, Tenant’s consequential damages, lost
profits or opportunity costs), or for interference with light or other similar
intangible interests.

10.4.   WAIVER OF SUBROGATION.  Landlord and Tenant each hereby waives all
rights of recovery against the other on account of loss and damage occasioned to
the property of such waiving party to the extent that the waiving party is
entitled to proceeds for such loss and damage under any property insurance
policies carried or otherwise required to be carried by this Lease; provided
however, that the foregoing waiver shall not apply to the extent of Tenant’s
obligation to pay deductibles under any such policies and this Lease.

ARTICLE 11.  DAMAGE OR DESTRUCTION

11.1.   RESTORATION.

(a)           If the Building of which the Premises are a part is damaged as the
result of an event of casualty, then subject to the provisions below, Landlord
shall repair that damage as soon as reasonably possible unless Landlord
reasonably determines that:  (i) the Premises have been materially damaged and
there is less than 1 year of the Term remaining on the date of the casualty;
(ii) any Mortgagee (defined in Section 13.1) requires that the insurance
proceeds be applied to the payment of the mortgage debt; or (iii) proceeds
necessary to pay the full cost of the repair are not available from Landlord’s
insurance, including without limitation earthquake insurance.  Should Landlord
elect not to repair the damage for one of the preceding reasons, Landlord shall
so notify Tenant in the “Casualty Notice” (as defined below), and this Lease
shall terminate as of the date of delivery of that notice, and Tenant shall have
no further obligations to Landlord, financial or otherwise.  In such
circumstance, Landlord shall promptly return the remaining balance of the
Security Deposit and any prepayment of rent to the Tenant.

(b)           As soon as reasonably practicable following the casualty event but
not later than 60 days thereafter, Landlord shall notify Tenant in writing
(“Casualty Notice”) of Landlord’s election, if applicable, to terminate this
Lease.  If this Lease is not so terminated, the Casualty Notice shall set forth
the anticipated period for repairing the casualty damage.  If the anticipated
repair period exceeds 270 days and if the damage is so extensive as to
reasonably prevent Tenant’s substantial use and enjoyment of the Premises, then
either party may elect to terminate this Lease by written notice to the other
within 10 days following delivery of the Casualty Notice, and Tenant shall have
no further obligations to Landlord, financial or otherwise.  In such
circumstance, Landlord shall promptly return the remaining balance of the
Security Deposit and any prepayment of rent to the Tenant.

 
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(c)           In the event that neither Landlord nor Tenant terminates this
Lease pursuant to Section 11.1(b), Landlord shall repair all material damage to
the Premises or the Building as soon as reasonably possible and this Lease shall
continue in effect for the remainder of the Term.  Upon notice from Landlord,
Tenant shall assign or endorse over to Landlord (or to any party designated by
Landlord) all property insurance proceeds payable to Tenant under Tenant's
insurance with respect to any Alterations.  Within 15 days of demand, Tenant
shall also pay Landlord for any additional excess costs that are reasonably
determined during the performance of the repairs to such Alterations.

(d)           From and after the casualty event, the rental to be paid under
this Lease shall be abated in the same proportion that the Floor Area of the
Premises that is rendered unusable by the damage from time to time bears to the
total Floor Area of the Premises.

(e)           Notwithstanding the provisions of subsections (a), (b) and (c) of
this Section 11.1, but subject to Section 10.4, the cost of any repairs shall be
borne by Tenant, and Tenant shall not be entitled to rental abatement or
termination rights, if the damage is due to the fault or neglect of Tenant or
its employees, subtenants, contractors, invitees or representatives.

11.2.   LEASE GOVERNS.  Tenant agrees that the provisions of this Lease,
including without limitation Section 11.1, shall govern any damage or
destruction and shall accordingly supersede any contrary statute or rule of law.

ARTICLE 12. EMINENT DOMAIN

Either party may terminate this Lease if any material part of the Premises is
taken or condemned for any public or quasi-public use under Law, by eminent
domain or private purchase in lieu thereof (a “Taking”).  Landlord shall also
have the right to terminate this Lease if there is a Taking of any portion of
the Building or Project which would have a material adverse effect on Landlord’s
ability to profitably operate the remainder of the Building.  The termination
shall be effective as of the effective date of any order granting possession to,
or vesting legal title in, the condemning authority, and Tenant shall have no
further obligations to Landlord, financial or otherwise.  In such circumstance,
Landlord shall promptly return the remaining balance of the Security Deposit and
any prepayment of rent to the Tenant.  All compensation awarded for a Taking
shall be the property of Landlord.  Tenant agrees that the provisions of this
Lease shall govern any Taking and shall accordingly supersede any contrary
statute or rule of law.

ARTICLE 13.  SUBORDINATION; ESTOPPEL CERTIFICATE

13.1.   SUBORDINATION.  Tenant accepts this Lease subject and subordinate to any
mortgage(s), deed(s) of trust, ground lease(s) or other lien(s) now or
subsequently arising upon the Premises, the Building or the Project, and to
renewals, modifications, refinancings and extensions thereof (collectively
referred to as a “Mortgage”).  The party having the benefit of a Mortgage shall
be referred to as a “Mortgagee.”  This clause shall be self-operative, but upon
request from a Mortgagee, Tenant shall execute a commercially reasonable
subordination and attornment agreement in favor of the Mortgagee, provided such
agreement provides a non-disturbance covenant benefitting
Tenant.  Alternatively, a Mortgagee shall have the right at any time to
subordinate its Mortgage to this Lease.  Upon request, Tenant, without charge,
shall attorn to any successor to Landlord’s interest in this Lease in the event
of a foreclosure of any mortgage.   Tenant agrees that any purchaser at a
foreclosure sale or lender taking title under a deed in lieu of foreclosure
shall not be responsible for any act or omission of a prior landlord, shall not
be subject to any offsets or defenses Tenant may have against a prior landlord,
and shall not be liable for the return of the Security Deposit not actually
recovered by such purchaser nor bound by any rent paid in advance of the
calendar month in which the transfer of title occurred; provided that the
foregoing shall not release the applicable prior landlord from any liability for
those obligations.  Tenant acknowledges that Landlord’s Mortgagees and their
successors-in-interest are intended third party beneficiaries of this Section
13.1.

13.2.   ESTOPPEL CERTIFICATE.  Tenant shall, within 10 days after receipt of a
written request from Landlord, execute and deliver a commercially reasonable
estoppel certificate in favor of those parties as are reasonably requested by
Landlord (including a Mortgagee or a prospective purchaser of the Building or
the Project).

 
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ARTICLE 14.  DEFAULTS AND REMEDIES

14.1.   TENANT’S DEFAULTS.  In addition to any other event of default set forth
in this Lease, the occurrence of any one or more of the following events shall
constitute a “Default” by Tenant:

(a)           The failure by Tenant to make any payment of Rent required to be
made by Tenant, as and when due, where the failure continues for a period of 5
business days after written notice from Landlord to Tenant.  The term “Rent” as
used in this Lease shall be deemed to mean the Basic Rent and all other sums
required to be paid by Tenant to Landlord pursuant to the terms of this Lease.

(b)           Except where a specific time period is otherwise set forth for
Tenant’s performance in this Lease (in which event the failure to perform by
Tenant within such time period shall be a Default), the failure or inability by
Tenant to observe or perform any of the covenants or provisions of this Lease to
be observed or performed by Tenant, other than as specified in any other
subsection of this Section 14.1, where the failure continues for a period of 30
days after written notice from Landlord to Tenant.

The notice periods provided herein are in lieu of, and not in addition to, any
notice periods provided by law, and Landlord shall not be required to give any
additional notice under California Code of Civil Procedure Section 1161, or any
successor statute, in order to be entitled to commence an unlawful detainer
proceeding.
 
14.2.   LANDLORD’S REMEDIES.

(a)           Upon the occurrence of any Default by Tenant, then in addition to
any other remedies available to Landlord, Landlord may exercise the following
remedies:

(i)              Landlord may terminate Tenant’s right to possession of the
Premises by any lawful means, in which case this Lease shall terminate and
Tenant shall immediately surrender possession of the Premises to Landlord.  Such
termination shall not affect any accrued obligations of Tenant under this
Lease.  Upon termination, Landlord shall have the right to reenter the Premises
and remove all persons and property.  Landlord shall also be entitled to recover
from Tenant:

(1)       The worth at the time of award of the unpaid Rent which had been
earned at the time of termination;

(2)       The worth at the time of award of the amount by which the unpaid Rent
which would have been earned after termination until the time of award exceeds
the amount of such loss that Tenant proves could have been reasonably avoided;

(3)       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
loss that Tenant proves could be reasonably avoided;

(4)       Any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant’s failure to perform its obligations
under this Lease or which in the ordinary course of things would be likely to
result from Tenant’s default, including, but not limited to, the cost of
recovering possession of the Premises, commissions and other expenses of
reletting, including necessary repair, renovation, improvement and alteration of
the Premises for a new tenant, reasonable attorneys’ fees, and any other
reasonable costs; and

(5)       At Landlord’s election, all other amounts in addition to or in lieu of
the foregoing as may be permitted by law.  Any sum, other than Basic Rent, shall
be computed on the basis of the average monthly amount accruing during the 24
month period immediately prior to Default, except that if it becomes necessary
to compute such rental before the 24 month period has occurred, then the
computation shall be on the basis of the average monthly amount during the
shorter period.  As used in subparagraphs (1) and (2) above, the “worth at the
time of award” shall be computed by allowing interest at the rate of 10% per
annum.  As used in subparagraph (3) above, the “worth at the time of award”
shall be computed by discounting the amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of award plus 1%.

 
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(ii)              Employ the remedy described in California Civil Code § 1951.4
(Landlord may continue this Lease in effect after Tenant's breach and
abandonment and recover Rent as it becomes due, if Tenant has the right to
sublet or assign, subject only to reasonable limitations).

(b)           The various rights and remedies reserved to Landlord in this Lease
or otherwise shall be cumulative and, except as otherwise provided by California
law, Landlord may pursue any or all of its rights and remedies at the same
time.  No delay or omission of Landlord to exercise any right or remedy shall be
construed as a waiver of the right or remedy or of any breach or Default by
Tenant.  The acceptance by Landlord of rent shall not be a (i) waiver of any
preceding breach or Default by Tenant of any provision of this Lease, other than
the failure of Tenant to pay the particular rent accepted, regardless of
Landlord’s knowledge of the preceding breach or Default at the time of
acceptance of rent, or (ii) a waiver of Landlord’s right to exercise any remedy
available to Landlord by virtue of the breach or Default.  No payment by Tenant
or receipt by Landlord of a lesser amount than the rent required by this Lease
shall be deemed to be other than a partial payment on account of the earliest
due stipulated rent, nor shall any endorsement or statement on any check or
letter be deemed an accord and satisfaction and Landlord shall accept the check
or payment without prejudice to Landlord’s right to recover the balance of the
rent or pursue any other remedy available to it.  Tenant hereby waives any right
of redemption or relief from forfeiture under California Code of Civil Procedure
Section 1174 or 1179, or under any successor statute, in the event this Lease is
terminated by reason of any Default by Tenant.  No act or thing done by Landlord
or Landlord’s agents during the Term shall be deemed an acceptance of a
surrender of the Premises, and no agreement to accept a surrender shall be valid
unless in writing and signed by Landlord.

14.3.   LATE PAYMENTS.  Any Rent due under this Lease that is not paid to
Landlord within 5 days of the date when due shall bear interest at the maximum
rate permitted by law from the date due until fully paid and if any Rent due
from Tenant shall not be received by Landlord or Landlord’s designee within 5
days after the date due, then Tenant shall pay to Landlord, in addition to the
interest, a late charge for each delinquent payment equal to the greater of
(i) 5% of that delinquent payment or (ii) $100.00.

14.4.   DEFAULT BY LANDLORD.  Landlord shall not be deemed to be in default in
the performance of any obligation under this Lease unless and until it has
failed to perform the obligation within 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 30 days are required for its performance, then Landlord shall not
be deemed to be in default if it commences performance within the 30 day period
and thereafter diligently pursues the cure to completion.

14.5.   EXPENSES AND LEGAL FEES.  Should either Landlord or Tenant bring any
action in connection with this Lease, the prevailing party shall be entitled to
recover as a part of the action its reasonable attorneys’ fees, and all other
reasonable costs.  The prevailing party for the purpose of this paragraph shall
be determined by the trier of the facts.
 
14.6.   WAIVER OF JURY TRIAL/JUDICIAL REFERENCE.

(a)           LANDLORD AND TENANT EACH ACKNOWLEDGES THAT IT IS AWARE OF AND HAS
HAD THE ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT TO ITS RIGHT 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 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.
 
 
 
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(b)           In the event that the jury waiver provisions of Section 14.6 (a)
are not enforceable under California law, then, unless otherwise agreed to by
the parties, the provisions of this Section 14.6 (b) shall apply.  Landlord and
Tenant agree that any disputes arising in connection with this Lease (including
but not limited to a determination of any and all of the issues in such dispute,
whether of fact or of law) shall be resolved (and a decision shall be rendered)
by way of a general reference as provided for in Part 2, Title 8, Chapter 6 (§§
638 et. seq.) of the California Code of Civil Procedure, or any successor
California statute governing resolution of disputes by a court appointed
referee.  Nothing within this Section 14.6 shall apply to an unlawful detainer
action.

14.7.   SATISFACTION OF JUDGMENT.  The obligations of Landlord do not constitute
the personal obligations of the individual partners, trustees, directors,
officers, members or shareholders of Landlord or its constituent partners or
members. Should Tenant recover a money judgment against Landlord, such judgment
shall be satisfied only from the interest of Landlord in the Project and out of
the rent or other income from such property receivable by Landlord, and no
action for any deficiency may be sought or obtained by Tenant.

ARTICLE 15.  END OF TERM

15.1.   HOLDING OVER.  If Tenant holds over for any period after the Expiration
Date (or earlier termination of the Term), such tenancy shall constitute a
tenancy at sufferance only and possession shall be subject to all of the terms
of this Lease, except that the monthly rental shall be 150% of the total monthly
rental for the month immediately preceding the date of termination.  The
acceptance by Landlord of monthly hold-over rental in a lesser amount shall not
constitute a waiver of Landlord's right to recover the full amount due unless
otherwise agreed in writing by Landlord.  If Tenant fails to surrender the
Premises upon the expiration of this Lease despite demand to do so by Landlord,
Tenant shall indemnify and hold Landlord harmless from all loss or liability,
including without limitation, any claims made by any succeeding tenant relating
to such failure to surrender. The foregoing provisions of this Section 15.1 are
in addition to and do not affect Landlord’s right of re-entry or any other
rights of Landlord under this Lease or at law.

15.2.   SURRENDER OF PREMISES; REMOVAL OF PROPERTY.  Upon the Expiration Date or
upon any earlier termination of this Lease, Tenant shall quit and surrender
possession of the Premises to Landlord in as good order, condition and repair as
when received or as hereafter may be improved by Landlord or Tenant, reasonable
wear and tear and repairs which are Landlord’s obligation excepted, and shall
remove or fund to Landlord the cost of removing all wallpapering, voice and/or
data transmission cabling installed by or for Tenant and Required Removables,
together with all personal property and debris, and shall perform all work
required under Section 7.3 of this Lease.   If Tenant shall fail to comply with
the provisions of this Section 15.2, Landlord may effect the removal and/or make
any repairs, and the cost to Landlord shall be additional rent payable by Tenant
upon demand.

ARTICLE 16.  PAYMENTS AND NOTICES

All sums payable by Tenant to Landlord shall be paid, without deduction or
offset, in lawful money of the United States to Landlord at its address set
forth in Item 12 of the Basic Lease Provisions, or at any other place as
Landlord may designate in writing.  Unless this Lease expressly provides
otherwise, all payments shall be due and payable within 5 days after
demand.  All payments requiring proration shall be prorated on the basis of the
number of days in the pertinent calendar month or year, as applicable.  Any
notice, election, demand, consent or approval to be given or other document to
be delivered by either party to the other may be delivered to the other party,
at the address set forth in Item 12 of the Basic Lease Provisions, by personal
service or by any courier or “overnight” express mailing service.  Either party
may, by written notice to the other, served in the manner provided in this
Article, designate a different address.  The refusal to accept delivery of a
notice, or the inability to deliver the notice (whether due to a change of
address for which notice was not duly given or other good reason), shall be
deemed delivery and receipt of the notice as of the date of attempted delivery.

ARTICLE 17.  RULES AND REGULATIONS

Tenant agrees to comply with the Rules and Regulations attached as Exhibit E,
and any reasonable and nondiscriminatory amendments, modifications and/or
additions as may be adopted by Landlord from time to time.

 
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ARTICLE 18.  BROKER’S COMMISSION

The parties recognize as the broker(s) who negotiated this Lease the firm(s)
whose name(s) is (are) stated in Item 10 of the Basic Lease Provisions, and
agree that Landlord shall be responsible for the payment of brokerage
commissions to those broker(s) unless otherwise provided in this Lease.  Tenant
agrees to indemnify and hold Landlord harmless from any cost, expense or
liability (including reasonable attorneys’ fees) for any compensation,
commissions or charges claimed by any other real estate broker or agent employed
or claiming to represent or to have been employed by Tenant in connection with
the negotiation of this Lease.

ARTICLE 19.  TRANSFER OF LANDLORD’S INTEREST

Landlord shall have the right to transfer and assign, in whole or in part, all
of its ownership interest, rights and obligations in the Building, Project or
Lease, including the Security Deposit, and upon transfer Landlord shall be
released from any further obligations hereunder, and Tenant agrees to look
solely to the successor in interest of Landlord for the performance of such
obligations and the return of any Security Deposit.

ARTICLE 20.  INTERPRETATION

20.1.   NUMBER.  Whenever the context of this Lease requires, the words
“Landlord” and “Tenant” shall include the plural as well as the singular.

20.2.   JOINT AND SEVERAL LIABILITY.  If more than one person or entity is named
as Tenant, the obligations imposed upon each shall be joint and several and the
act of or notice from, or notice or refund to, or the signature of, any one or
more of them shall be binding on all of them with respect to the tenancy of this
Lease, including, but not limited to, any renewal, extension, termination or
modification of this Lease.

20.3.   SUCCESSORS.  The expiration of the Term, whether by lapse of time,
termination or otherwise, shall not relieve either party of any obligations
which accrued prior to or which may continue to accrue after the expiration or
termination of this Lease.

20.4.   TIME OF ESSENCE.  Time is of the essence with respect to the performance
of every provision of this Lease in which time of performance is a factor.

20.5.   CONTROLLING LAW/VENUE.  This Lease shall be governed by and interpreted
in accordance with the laws of the State of California.

20.6.   SEVERABILITY.  If any term or provision of this Lease, the deletion of
which would not adversely affect the receipt of any material benefit by either
party or the deletion of which is consented to by the party adversely affected,
shall be held invalid or unenforceable to any extent, the remainder of this
Lease shall not be affected and each term and provision of this Lease shall be
valid and enforceable to the fullest extent permitted by law.

20.7.   WAIVER.  One or more waivers by Landlord or Tenant of any breach of any
term, covenant or condition contained in this Lease shall not be a waiver of any
subsequent breach of the same or any other term, covenant or condition.  Consent
to any act by one of the parties shall not be deemed to render unnecessary the
obtaining of that party’s consent to any subsequent act.  No breach of this
Lease shall be deemed to have been waived unless the waiver is in a writing
signed by the waiving party.

20.8.   INABILITY TO PERFORM.  In the event that either party shall be delayed
or hindered in or prevented from the performance of any work or in performing
any act required under this Lease by reason of any cause beyond the reasonable
control of that party, then the performance of the work or the doing of the act
shall be excused for the period of the delay and the time for performance shall
be extended for a period equivalent to the period of the delay.  The provisions
of this Section 20.8 shall not operate to excuse Tenant from the prompt payment
of Rent.

 
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20.9.   ENTIRE AGREEMENT.  This Lease constitutes the entire agreement between
the parties and supersedes all prior agreements and understandings related to
the Premises. This Lease may be modified only by a written agreement signed by
Landlord and Tenant.

20.10.   QUIET ENJOYMENT.  Upon the observance and performance of all the
covenants, terms and conditions on Tenant’s part to be observed and performed,
and subject to the other provisions of this Lease, Tenant shall have the right
of quiet enjoyment and use of the Premises for the Term without hindrance or
interruption by Landlord or any other person claiming by or through Landlord.

20.11.   SURVIVAL.  All covenants of Landlord or Tenant which reasonably would
be intended to survive the expiration or sooner termination of this Lease,
including without limitation any warranty or indemnity hereunder, shall so
survive and continue to be binding upon and inure to the benefit of the
respective parties and their successors and assigns.

ARTICLE 21.  EXECUTION

21.1.   COUNTERPARTS.  This Lease may be executed in one or more counterparts,
each of which shall constitute an original and all of which shall be one and the
same agreement.

21.2.   CORPORATE AND PARTNERSHIP AUTHORITY.  Tenant represents and warrants to
Landlord, and agrees, that each individual executing this Lease on behalf of
Tenant is authorized to do so on behalf of Tenant.

21.3.   EXECUTION OF LEASE; NO OPTION OR OFFER.  The submission of this Lease to
Tenant shall be for examination purposes only, and shall not constitute an offer
to or option for Tenant to lease the Premises unless and until Landlord has
executed and delivered this Lease to Tenant.

ARTICLE 22.  MISCELLANEOUS

22.1.  MORTGAGEE PROTECTION.  No act or failure to act on the part of Landlord
which would otherwise entitle Tenant to be relieved of its obligations hereunder
or to terminate this Lease shall result in such a release or termination unless
(a) Tenant has given notice by registered or certified mail to any Mortgagee of
a Mortgage covering the Building whose address has been furnished to Tenant and
(b) such Mortgagee is afforded a reasonable opportunity to cure the default by
Landlord.  Tenant shall comply with any written directions by any Mortgagee to
pay Rent due hereunder directly to such Mortgagee without determining whether a
default exists under such Mortgagee’s Mortgage.

 
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22.2.   SDN LIST.  Tenant hereby represents and warrants that neither Tenant nor
any officer, director, employee, partner, member or other principal of Tenant
(collectively, "Tenant Parties") is listed as a Specially Designated National
and Blocked Person ("SDN") on the list of such persons and entities issued by
the U.S. Treasury Office of Foreign Assets Control (OFAC).  In the event Tenant
or any Tenant Party is or becomes listed as an SDN, Tenant shall be deemed in
breach of this Lease and Landlord shall have the right to terminate this Lease
immediately upon written notice to Tenant.

LANDLORD:
 
WESTWOOD GATEWAY II LLC,
a Delaware limited liability company
 
By/s/ Steven M. Case                                                           
Steven M. Case
Executive Vice President
Office Properties
 
By/s/ Betty R.
Casties                                                           
Betty R. Casties
Vice President, Operations
Office Properties
TENANT:
 
MARATHON PATENT GROUP, INC.,
a Nevada corporation
 
By /s/ Douglas B.
Croxall                                                         
Printed Name Douglas B.
Croxall                                                            
Title CEO                                                            
 
By                                                            
Printed Name                                                            
Title                                                            

 
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DESCRIPTION OF PREMISES

11100 Santa Monica Boulevard
Suite 380

[maralease1.jpg]

 
 
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EXHIBIT A

 
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EXHIBIT B

Operating Expenses and Taxes
(Base Year)

(a)           Commencing 12 months following the Commencement Date, Tenant shall
pay Landlord, as additional rent, for Tenant’s Share of the amount, if any, by
which “Project Costs” (defined below) for each Expense Recovery Period during
the Term exceed Project Costs for the Project Cost Base and the amount, if any,
by which “Property Taxes” (defined below) for each Expense Recovery Period
during the Term exceed Property Taxes for the Property Tax Base.  Property Taxes
and Project Costs are mutually exclusive and may be billed separately or in
combination as determined by Landlord.  “Tenant’s Share” shall mean that portion
of any Operating Expenses determined by multiplying the cost of such item by a
fraction, the numerator of which is the Floor Area and the denominator of which
is the total rentable square footage, as determined from time to time by
Landlord, of (i) the Floor Area of the Building as defined in Item 8 of the
Basic Lease Provisions, for expenses determined by Landlord to benefit or relate
substantially to the Building rather than the entire Project, or (ii) all or
some of the buildings in the Project, for expenses determined by Landlord to
benefit or relate substantially to all or some of the buildings in the Project
rather than any specific building. Tenant acknowledges Landlord’s rights to make
changes or additions to the Building and/or Project from time to time pursuant
to Section 6.4 of the Lease, in which event the total rentable square footage
within the Building and/or Project may be adjusted.  For convenience of
reference, Property Taxes and Project Costs may sometimes be collectively
referred to as “Operating Expenses.”

(b)           Commencing prior to the start of the first full “Expense Recovery
Period” of the Lease (as defined in Item 7 of the Basic Lease Provisions)
following the Base Year, and prior to the start of each full or partial Expense
Recovery Period thereafter, Landlord shall give Tenant a written estimate of the
amount of Tenant’s Share of Project Costs and Property Taxes for the Expense
Recovery Period or portion thereof.  Commencing 12 months following the
Commencement Date, Tenant shall pay the estimated amounts to Landlord in equal
monthly installments, in advance, with Basic Rent.  Landlord may from time to
time change the Expense Recovery Period to reflect a calendar year or a new
fiscal year of Landlord, as applicable, in which event Tenant’s share of
Operating Expenses shall be equitably prorated for any partial year. From time
to time during an Expense Recovery Period, Landlord may revise the estimate
based on increases in any of the Operating Expenses.

(c)           Within 180 days after the end of each Expense Recovery Period,
Landlord shall furnish to Tenant a statement setting forth the actual or
prorated Property Taxes and Project Costs attributable to that period, and the
parties shall within 30 days thereafter make any payment or allowance necessary
to adjust Tenant’s estimated payments, if any, to Tenant’s actual Tenant’s Share
as shown by the annual statement.  If actual Property Taxes or Project Costs
allocable to Tenant during any Expense Recovery Period are less than the
Property Tax Base or the Project Cost Base, respectively, Landlord shall not be
required to pay that differential to Tenant, although Landlord shall refund any
applicable estimated payments collected from Tenant.  Should Tenant fail to
object in writing to Landlord’s determination of actual Operating Expenses
within 60 days following delivery of Landlord’s expense statement, Landlord’s
determination of actual Operating Expenses for the applicable Expense Recovery
Period shall be conclusive and binding on Tenant.

(d)           Even though the Lease has terminated and the Tenant has vacated
the Premises, when the final determination is made of Tenant’s share of Property
Taxes and Project Costs for the Expense Recovery Period in which the Lease
terminates, Tenant shall upon notice pay the entire increase due over the
estimated expenses paid; conversely, any overpayment made in the event expenses
decrease shall be promptly (and in any event within 30 days) rebated by Landlord
to Tenant.

 
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(e)           The term “Project Costs” shall include all charges and expenses
pertaining to the operation, management, maintenance and repair of the Building
and the Project, together with all appurtenant Common Areas (as defined in
Section 6.2), and shall include the following charges by way of illustration but
not limitation:  water and sewer charges; insurance premiums and deductibles
and/or reasonable premium equivalents and deductible equivalents should Landlord
elect to self-insure any risk that Landlord is authorized to insure hereunder;
license, permit, and inspection fees; heat; light; power; janitorial services;
the cost of equipping, staffing and operating an on-site and/or off-site
management office for the Building and Project; all labor and labor-related
costs for personnel applicable to the Building and Project, including both
Landlord's personnel and outside personnel; a commercially reasonable Landlord
overhead/management fee; reasonable fees for consulting services; access
control/security costs, inclusive of the reasonable cost of improvements made to
enhance access control systems and procedures; repairs; air conditioning;
supplies; materials; equipment; tools; tenant services; programs instituted to
comply with transportation management requirements; any expense incurred
pursuant to Sections 6.1, 6.2, 7.2, and 10.2 and Exhibits C and F below; costs
incurred (capital or otherwise) on a regular recurring basis every 3 or more
years for normal maintenance projects (e.g., parking lot slurry coat or
replacement of lobby, corridor and elevator cab carpets and coverings); and the
amortized cost of capital improvements (as distinguished from replacement parts
or components installed in the ordinary course of business) which are intended
to reduce other operating costs or increases thereof, or upgrade Building and/or
Project security, or which are required to bring the Building and/or Project
into compliance with applicable laws and building codes.  Landlord shall
amortize the cost of capital improvements on a straight-line basis over the
lesser of the Payback Period (as defined below) or the useful life of the
capital improvement as reasonably determined by Landlord.  Any amortized Project
Costs item may include, at Landlord's option, an actual or imputed interest rate
that Landlord would reasonably be required to pay to finance the cost of the
item, applied on the unamortized balance.  "Payback Period" shall mean the
reasonably estimated period of time that it takes for the cost savings, if any,
resulting from a capital improvement item to equal the total cost of the capital
improvement.  It is understood that Project Costs shall include competitive
charges for direct services provided by any subsidiary or division of
Landlord.  If any Project Costs are applicable to one or more buildings or
properties in addition to the Building, then that cost shall be equitably
prorated and apportioned among the Building and such other buildings or
properties.  The term “Property Taxes” as used herein shall include the
following:  (i) all real estate taxes or personal property taxes, as such
property taxes may be increased from time to time due to a reassessment or
otherwise; and (ii) other taxes, charges and assessments which are levied with
respect to this Lease or to the Building and/or the Project, and any
improvements, fixtures and equipment and other property of Landlord located in
the Building and/or the Project, except that general net income and franchise
taxes imposed against Landlord shall be excluded; and (iii) any tax, surcharge
or assessment which shall be levied in addition to or in lieu of real estate or
personal property taxes; and (iv) costs and expenses incurred in contesting the
amount or validity of any Property Tax by appropriate proceedings.  A copy of
Landlord’s unaudited statement of expenses shall be made available to Tenant
upon request.  The Project Costs, inclusive of those for the Base Year, shall be
extrapolated by Landlord to reflect at least 95% occupancy of the rentable area
of the Building.

 
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EXHIBIT C

UTILITIES AND SERVICES

The following standards for utilities and services shall be in effect at the
Building.  Landlord reserves the right to adopt nondiscriminatory modifications
and additions to these standards.  In the case of any conflict between these
standards and the Lease, the Lease shall be controlling.  Subject to all of the
provisions of the Lease, the following shall apply:

1.   Landlord shall make available to the Premises during the hours of 8:00 a.m.
to 6:00 p.m., Monday through Friday, and if requested by Tenant on a
week-by-week basis, from 8:00 a.m. to 1:00 p.m. on Saturday ("Building Hours"),
generally recognized national holidays excepted, reasonable HVAC
services.  Subject to the provisions set forth below, Landlord shall also
furnish the Building with elevator service (if applicable), reasonable amounts
of electric current for normal lighting by Landlord’s standard overhead
fluorescent and incandescent fixtures and for the operation of office equipment
consistent in type and quantity with that utilized by typical office tenants of
the Building and Project, and water for lavatory purposes.  Tenant will not,
without the prior written consent of Landlord, not to be unreasonably withheld
or delayed, connect any apparatus, machine or device with water pipes or
electric current (except through existing electrical outlets in the Premises)
for the purpose of using electric current or water.

2.   Upon written request from Tenant delivered to Landlord at least 24 hours
prior to the period for which service is requested, but during normal business
hours, Landlord will provide any of the foregoing building services to Tenant at
such times when such services are not otherwise available.  Tenant agrees to pay
Landlord for those after-hour services at rates that Landlord may establish from
time to time.  If Tenant requires electric current in excess of that which
Landlord is obligated to furnish under this Exhibit C, Tenant shall first obtain
the consent of Landlord, and Landlord may cause an electric current meter to be
installed in the Premises to measure the amount of electric current
consumed.  The cost of installation, maintenance and repair of the meter shall
be paid for by Tenant, and Tenant shall reimburse Landlord promptly upon demand
for all electric current consumed for any special power use as shown by the
meter.

3.   Landlord shall furnish water for drinking, personal hygiene and lavatory
purposes only.

4.   In the event that any utility service to the Premises is separately metered
or billed to Tenant, Tenant shall pay all charges for that utility service to
the Premises and the cost of furnishing the utility to tenant suites shall be
excluded from the Operating Expenses as to which reimbursement from Tenant is
required in the Lease.

5.   Landlord shall provide janitorial services 5 days per week, equivalent to
that furnished in comparable buildings, and window washing as reasonably
required; provided, however, that Tenant shall pay for any additional or unusual
janitorial services requested by Tenant in writing to the Landlord.

6.   Tenant shall have access to the Building 24 hours per day, 7 days per week,
52 weeks per year; provided that Landlord may install access control systems as
it deems advisable for the Building.  Landlord may impose a reasonable charge
for access control cards and/or keys issued to Tenant.

7.   The costs of operating, maintaining and repairing any supplemental air
conditioning unit serving only the Premises shall be borne solely by
Tenant.  Such installation shall be subject to Landlord’s prior written
approval, such approval not to be unreasonably withheld or delayed, at Tenant's
sole expense and shall include installation of a separate meter for the
operation of the unit.  Landlord may require Tenant to remove at Lease
expiration any such unit installed by or for Tenant and to repair any resulting
damage to the Premises or Building.

 
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EXHIBIT D

TENANT’S INSURANCE

The following requirements for Tenant’s insurance shall be in effect during the
Term, and Tenant shall also cause any subtenant to comply with the
requirements.  Landlord reserves the right to adopt reasonable nondiscriminatory
modifications and additions to these requirements.

1.    Tenant shall maintain, at its sole cost and expense, during the entire
Term:  (i) commercial general liability insurance with respect to the Premises
and the operations of Tenant in, on or about the Premises, on a policy form that
is at least as broad as Insurance Service Office (ISO) CGL 00 01 (if alcoholic
beverages are sold on the Premises, liquor liability shall be explicitly
covered), which policy(ies) shall be written on an “occurrence” basis and for
not less than $2,000,000 combined single limit per occurrence for bodily injury,
death, and property damage liability; (ii) workers’ compensation insurance
coverage as required by law, together with employers’ liability insurance
coverage of at least $1,000,000 each accident and each disease; (iii) with
respect to Alterations constructed by Tenant under this Lease, builder’s risk
insurance, in an amount equal to the replacement cost of the work; and
(iv) insurance against fire, vandalism, malicious mischief and such other
additional perils as may be included in a standard “special form” policy,
insuring all Alterations, trade fixtures, furnishings, equipment and items of
personal property in the Premises, in an amount equal to not less than 90% of
their replacement cost (with replacement cost endorsement), which policy shall
also include business interruption coverage in an amount sufficient to cover 1
year of loss.  In no event shall the limits of any policy be considered as
limiting the liability of Tenant under this Lease.

2.    All policies of insurance required to be carried by Tenant pursuant to
this Exhibit D shall be written by insurance companies authorized to do business
in the State of California and with a general policyholder rating of not less
than “A-” and financial rating of not less than “VIII” in the most current
Best’s Insurance Report.  The deductible or other retained limit under any
policy carried by Tenant shall be commercially reasonable, and Tenant shall be
responsible for payment of such deductible or retained limit with waiver of
subrogation in favor of Landlord.  Any insurance required of Tenant may be
furnished by Tenant under any blanket policy carried by it or under a separate
policy.  A certificate of insurance, certifying that the policy has been issued,
provides the coverage required by this Exhibit and contains the required
provisions, together with endorsements acceptable to Landlord evidencing the
waiver of subrogation and additional insured provisions required below, shall be
delivered to Landlord prior to the date Tenant is given the right of possession
of the Premises.  Proper evidence of the renewal of any insurance coverage shall
also be delivered to Landlord not less than thirty (30) days prior to the
expiration of the coverage.  In the event of a loss covered by any policy under
which Landlord is an additional insured, Landlord shall be entitled to review a
copy of such policy.

3.    Tenant’s commercial general liability insurance shall contain a provision
that the policy shall be primary to and noncontributory with any policies
carried by Landlord, together with a provision including Landlord, The Irvine
Company LLC, and any other parties in interest designated by Landlord as
additional insureds.  Tenant’s policies described in Subsections 1 (ii), (iii)
and (iv) above shall each contain a waiver by the insurer of any right to
subrogation against Landlord, its agents, employees, contractors and
representatives.  Tenant also waives its right of recovery for any deductible or
retained limit under same policies enumerated above.  All of Tenant’s policies
shall contain a provision that the insurer will not cancel or change the
coverage provided by the policy without first giving Landlord 30 days prior
written notice.  Tenant shall also name Landlord as an additional insured on any
excess or umbrella liability insurance policy carried by Tenant.

NOTICE TO TENANT:  IN ACCORDANCE WITH THE TERMS OF THIS LEASE, TENANT MUST
PROVIDE EVIDENCE OF THE REQUIRED INSURANCE TO LANDLORD’S MANAGEMENT AGENT PRIOR
TO BEING AFFORDED ACCESS TO THE PREMISES.

 
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EXHIBIT E

RULES AND REGULATIONS

The following Rules and Regulations shall be in effect at the
Building.  Landlord reserves the right to adopt reasonable nondiscriminatory
modifications and additions at any time and Landlord shall use reasonable
efforts to promptly notify Tenant of such modifications.  In the case of any
conflict between these regulations and the Lease, the Lease shall be
controlling.
 
1.         The sidewalks, halls, passages, elevators, stairways, and other
common areas shall not be obstructed by Tenant or used by it for storage, for
depositing items, or for any purpose other than for ingress to and egress from
the Premises.  Should Tenant have access to any balcony or patio area, Tenant
shall not place any furniture other personal property in such area without the
prior written approval of Landlord, such approval not to be unreasonably delayed
or withheld.
 
2.         Neither Tenant nor any employee or contractor of Tenant shall go upon
the roof of the Building without the prior written consent of Landlord, other
than in case of an emergency.
 
3.         Tenant shall, at its expense, be required to utilize the third party
contractor designated by Landlord for the Building to provide any telephone
wiring services from the minimum point of entry of the telephone cable in the
Building to the Premises.
 
4.         No antenna or satellite dish shall be installed by Tenant without the
prior written agreement of Landlord, such consent not to be unreasonably
withheld or delayed.
 
5.         The sashes, sash doors, windows, glass lights, solar film and/or
screen, and any lights or skylights that reflect or admit light into the halls
or other places of the Building shall not be covered or obstructed.  If
Landlord, by a notice in writing to Tenant, shall object to any curtain, blind,
tinting, shade or screen attached to, or hung in, or used in connection with,
any window or door of the Premises, the use of that curtain, blind, tinting,
shade or screen shall be immediately discontinued and removed by Tenant.  No
awnings shall be permitted on any part of the Premises.
 
6.         The installation and location of any unusually heavy equipment in the
Premises, including without limitation file storage units, safes and electronic
data processing equipment, shall require the prior written approval of
Landlord.  The moving of large or heavy objects shall occur only between those
hours as may be designated by, and only upon previous notice to, Landlord.  No
freight, furniture or bulky matter of any description shall be received into or
moved out of the lobby of the Building or carried in any elevator other than the
freight elevator (if available) designated by Landlord unless approved in
writing by Landlord.
 
7.         Any pipes or tubing used by Tenant to transmit water to an appliance
or device in the Premises must be made of copper or stainless steel, and in no
event shall plastic tubing be used for that purpose.
 
8.         Tenant shall not place any lock(s) on any door in the Premises or
Building without Landlord’s prior written consent, which consent shall not be
unreasonably withheld.  Upon the termination of its tenancy, Tenant shall
deliver to Landlord all the keys to offices, rooms and toilet rooms and all
access cards which shall have been furnished to Tenant or which Tenant shall
have had made.
 
9.         Tenant shall not install equipment requiring electrical or air
conditioning service in excess of that to be provided by Landlord under the
Lease without prior written approval from Landlord, such approval not to be
unreasonably withheld or delayed.
 
10.         Tenant shall not use space heaters within the Premises.
 
11.         Tenant shall not do or permit anything to be done in the Premises,
or bring or keep anything in the Premises, which shall in any way increase the
insurance on the Building, or on the property kept in the Building, or interfere
with the rights of other tenants, or conflict with any government rule or
regulation.
 
12.         Tenant shall not use or keep any foul or noxious gas or substance in
the Premises.

 
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13.         Tenant shall not permit the Premises to be occupied or used in a
manner offensive or objectionable to Landlord or other occupants of the Building
by reason of noise, odors and/or vibrations, or interfere in any way with other
tenants or those having business with other tenants.
 
14.         Tenant shall not permit any animals or birds be kept by Tenant in or
about the Building.
 
15.         Neither Tenant nor its employees, agents, contractors, invitees or
licensees shall bring any firearm, whether loaded or unloaded, into the Project
at any time.
 
16.         Smoking anywhere within the Premises or Building is strictly
prohibited, and Landlord may enforce such prohibition pursuant to Landlord’s
leasehold remedies.  Smoking is permitted outside the Building and within the
project only in areas designated by Landlord.
 
17.         Tenant shall not install an aquarium of any size in the Premises
unless otherwise approved by Landlord.
 
18.         Unless as required by law, judicial process or governmental or
regulatory body, Tenant shall not utilize any name selected by Landlord from
time to time for the Building and/or the Project as any part of Tenant’s
corporate or trade name.  Landlord shall have the right to change the name,
number or designation of the Building or Project without liability to Tenant.
Tenant shall not use any picture of the Building in its advertising, stationery
or in any other manner.
 
19.         Tenant shall, upon request by Landlord, supply Landlord with the
names and telephone numbers of personnel designated by Tenant to be contacted on
an after-hours basis should circumstances warrant.
 
20.         Landlord may from time to time grant tenants individual and
temporary variances from these Rules, provided that any variance does not have a
material adverse effect on the use and enjoyment of the Premises by Tenant.

 
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EXHIBIT F

PARKING

The following parking regulations shall be in effect at the Building In the case
of any conflict between these regulations and the Lease, the Lease shall be
controlling.

1.      Landlord agrees to maintain, or cause to be maintained, an automobile
parking area (“Parking Area”) in reasonable proximity to the Building for the
benefit and use of the visitors and patrons and, except as otherwise provided,
employees of Tenant, and other tenants and occupants of the Building.  Landlord
shall have the right to determine the nature and extent of the automobile
Parking Area, and of making such changes to the Parking Area from time to time
which in its opinion are desirable.  Landlord shall not be liable 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 ultimately determined to be caused by the sole active negligence or
willful misconduct of Landlord.  Landlord shall also have the right to
establish, and from time to time amend, and to enforce against all users of the
Parking Area all reasonable rules and regulations (including the designation of
areas for employee parking) as Landlord may deem necessary and advisable for the
proper and efficient operation and maintenance of the Parking Area.

2.      Landlord may, if it deems advisable in its sole discretion, charge for
parking and may establish for the Parking Area a system or systems of permit
parking for Tenant, its employees and its visitors.  In no event shall Tenant or
its employees park in reserved stalls leased to other tenants or in stalls
within designated visitor parking zones, nor shall Tenant or its employees
utilize more than the number of Parking Passes (defined below) allotted in this
Lease to Tenant.   Tenant shall, upon request of Landlord from time to time,
furnish Landlord with a list of its employees’ names and of Tenant’s and its
employees’ vehicle license numbers.  Parking access devices, if applicable,
shall not be transferable.  Landlord may impose a reasonable fee for access
devices and a replacement charge for devices which are lost or stolen.  Each
access device shall be returned to Landlord promptly following the Expiration
Date or sooner termination of this Lease.

3.      Washing, waxing, cleaning or servicing of vehicles, or the parking of
any vehicle on an overnight basis, in the Parking Area (other than emergency
services) by any parker or his or her agents or employees is prohibited unless
otherwise authorized by Landlord.

4.      It is understood that the employees of Tenant and the other tenants of
Landlord within the Building and Project shall not be permitted to park their
automobiles in the portions of the Parking Area which may from time to time be
designated for patrons of the Building and/or Project.  Tenant may purchase all
or a portion of the parking passes for unreserved parking set forth in Item 11
of the Basic Lease Provisions (the "Parking Passes"), in monthly amounts as
Landlord shall from time to time determine.  Landlord agrees that Tenant may
convert up to 1 of its Parking Passes to a reserved stall by providing written
notice of such election to Landlord prior to the Commencement Date (the
“Converted Stall”), at Landlord’s asking rate for reserved parking from time to
time.  Tenant acknowledges that if such written notice of election is not
delivered to Landlord prior to the Commencement Date, then the conversion of the
Parking Pass to a reserved stall shall be subject to the month to month
availability of such reserved stall as determined by Landlord.  Should any
monthly parking charge not be paid within 5 days following the date due, then a
late charge shall be payable by Tenant equal to the greater of (i) 5% of the
delinquent installment or (ii) $100.00, which late charge shall be separate and
in addition to any late charge that may be assessed pursuant to Section 14.3 of
the Lease for other than delinquent monthly parking charges.

5.      Landlord shall be entitled to pass on to Tenant its proportionate share
of any charges or parking surcharge or transportation management costs levied by
any governmental agency and Tenant shall cooperate in any voluntary or mandated
transportation management programs.

6.      Tenant shall not assign or sublet any of the Parking Passes, either
voluntarily or by operation of law, without the prior written consent of
Landlord, except in connection with an authorized assignment of this Lease or
subletting of the Premises.

 
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EXHIBIT G

ADDITIONAL PROVISIONS

1.   RIGHT OF FIRST OFFER.  Provided Tenant is not then in Default hereunder,
and provided further that Tenant has not exercised its termination right
pursuant to Paragraph 2 of this Exhibit G below, Landlord hereby grants Tenant a
one-time right (“First Right”) to lease any office space contiguous to the
Premises on the third floor of the Building (“First Right Space”) in accordance
with and subject to the provisions of this Section.  Except as otherwise
provided below, prior to leasing the First Right Space to any other party during
the period that this First Right is in effect, Landlord shall give Tenant
written notice of the basic economic terms including but not limited to the
Basic Rent, term, operating expense base, security deposit, and tenant
improvement allowance (collectively, the “Economic Terms”), upon which Landlord
is willing to lease such particular First Right Space to Tenant or to a third
party; provided that the Economic Terms shall exclude brokerage commissions and
other Landlord payments that do not directly inure to the tenant’s benefit.  It
is understood that should Landlord intend to lease other office space in
addition to the First Right Space as part of a single transaction, then
Landlord’s notice shall so provide and all such space shall collectively be
subject to the following provisions.  Within 3 business days after receipt of
Landlord’s notice, Tenant must give Landlord written notice pursuant to which
Tenant shall elect to (i) lease all, but not less than all, of the space
specified in Landlord’s notice (the “Designated Space”) upon such Economic Terms
and the same non-Economic Terms as set forth in this Lease; (ii) refuse to lease
the Designated Space, specifying that such refusal is not based upon the
Economic Terms, but upon Tenant’s lack of need for the Designated Space, in
which event Landlord may lease the Designated Space upon any terms it deems
appropriate; or (iii) refuse to lease the Designated Space, specifying that such
refusal is based upon said Economic Terms, in which event Tenant shall also
specify revised Economic Terms upon which Tenant shall be willing to lease the
Designated Space.  In the event that Tenant does not so respond in writing to
Landlord’s notice within said period, Tenant shall be deemed to have elected
clause (ii) above.  In the event Tenant gives Landlord notice pursuant to clause
(iii) above, Landlord may elect to either (x) lease the Designated Space to
Tenant upon such revised Economic Terms and the same other non-Economic Terms as
set forth in this Lease, or (y) lease the Designated Space to any third party
upon Economic Terms which are not materially more favorable to such party than
those Economic Terms proposed by Tenant.  Should Landlord so elect to lease the
Designated Space to Tenant, then Landlord shall promptly prepare and deliver to
Tenant an amendment to this Lease consistent with the foregoing, and Tenant
shall execute and return same to Landlord within 10 days.  Tenant’s failure to
timely return the amendment shall entitle Landlord to specifically enforce
Tenant’s commitment to lease the Designated Space, to lease such space to a
third party, and/or to pursue any other available legal remedy.  Notwithstanding
the foregoing, it is understood that Tenant’s First Right shall be subject to
any extension or expansion rights previously granted by Landlord to any third
party tenant in the Building, as well as to any such rights which may hereafter
be granted by Landlord to any third party tenant occupying the First Right Space
or any portion thereof, and Landlord shall in no event be obligated to initiate
this First Right prior to leasing any portion of the First Right Space to the
then-current occupant thereof.  Tenant’s rights under this Section shall be
personal to the original Tenant named in this Lease and may not be assigned or
transferred (except in connection with a Permitted Transfer of this Lease to an
Affiliate as described in Section 9.2 hereof).  Any other attempted assignment
or transfer shall be void and of no force or effect.

2.   RIGHT TO TERMINATE.  Provided Tenant is not in Default under any provision
of this Lease, Tenant shall have a one-time right to terminate this Lease
effective as of the expiration of the 42nd month of the initial Term.  Tenant
shall exercise such termination right by giving written notice thereof to
Landlord (the "Termination Notice") at least 9 months prior to the effective
date of termination.  All Rent and other costs due under this Lease for the
Premises shall be due and payable by Tenant to Landlord through the effective
date of termination.  In addition, should Tenant exercise the foregoing right to
terminate, Tenant shall pay to Landlord, concurrently with its delivery of the
Termination Notice, a separate termination fee, as reasonably computed by
Landlord, comprised of the unamortized portion (based upon a constant
amortization over a 7 year period with 7% interest) as of the effective date of
termination of (A) brokerage commissions paid by Landlord in connection with the
Lease, and (B) tenant improvement costs funded by Landlord.  Any such
termination shall not abrogate any obligation existing under the Lease as of the
termination date or otherwise attributable to Tenant’s occupancy thereof.

 
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EXHIBIT X

WORK LETTER

DOLLAR ALLOWANCE
[SECOND GENERATION SPACE]

The Tenant Improvement work (herein “Tenant Improvements”) shall consist of any
work required to complete the Premises pursuant to plans and specifications
approved by both Landlord and Tenant.  All of the Tenant Improvement work shall
be performed by a contractor selected by Landlord and in accordance with the
procedures and requirements set forth below.

I.           ARCHITECTURAL AND CONSTRUCTION PROCEDURES

 
A.
Tenant and Landlord shall approve both (i) a detailed space plan for the
Premises, prepared by the architect engaged by Landlord for the work described
herein (“Landlord’s Architect”), which includes interior partitions, ceilings,
interior finishes, interior office doors, suite entrance, floor coverings,
window coverings, lighting, electrical and telephone outlets, plumbing
connections, heavy floor loads and other special requirements (“Preliminary
Plan”), and (ii) an estimate, prepared by the contractor engaged by Landlord for
the work herein (“Landlord’s Contractor”), of the cost for which Landlord will
complete or cause to be completed the Tenant Improvements (“Preliminary Cost
Estimate”). Tenant shall approve or disapprove each of the Preliminary Plan and
the Preliminary Cost Estimate by signing copies of the appropriate instrument
and delivering same to Landlord within 5 business days of its receipt by
Tenant.  If Tenant disapproves any matter, Tenant shall specify in detail the
reasons for disapproval and Landlord shall attempt to modify the Preliminary
Plan and the Preliminary Cost Estimate to incorporate Tenant’s suggested
revisions in a mutually satisfactory manner; provided that in no event shall
Tenant have the right to request changes or additions to the Preliminary Plan
for the purpose of utilizing any unused portion of the Landlord Contribution (as
defined below).

 
B.
On or before its approval of the Preliminary Plan, Tenant shall provide in
writing to Landlord or Landlord’s Architect all specifications and information
reasonably requested by Landlord for the preparation of final construction
documents and costing, including without limitation Tenant’s final selection of
wall and floor finishes, complete specifications and locations (including load
and HVAC requirements) of Tenant’s equipment, and details of all other
non-building standard improvements to be installed in the Premises
(collectively, “Programming Information”).  Tenant understands that final
construction documents for the Tenant Improvements shall be predicated on the
Programming Information, and accordingly that such information must be accurate
and complete.

 
C.
Upon Tenant’s approval of the Preliminary Plan and Preliminary Cost Estimate and
delivery of the complete Programming Information, Landlord’s Architect and
engineers shall prepare and deliver to the parties working drawings and
specifications (“Working Drawings and Specifications”), and Landlord’s
Contractor shall prepare a final construction cost estimate (“Final Cost
Estimate”) for the Tenant Improvements in conformity with the Working Drawings
and Specifications.  Tenant shall have 5 business days from the receipt thereof
to approve or disapprove the Working Drawings and Specifications and the Final
Cost Estimate, and any disapproval or requested modification shall be limited to
items not contained in the approved Preliminary Plan or Preliminary Cost
Estimate; provided that in no event shall Tenant have the right to request
changes or additions to the Working Drawings and Specifications for the purpose
of utilizing any unused portion of the Landlord Contribution. In no event shall
Tenant disapprove the Final Cost Estimate if it does not exceed the approved
Preliminary Cost Estimate. Should Tenant disapprove the Working Drawings and
Specifications and the Final Cost Estimate, such disapproval shall be
accompanied by a detailed list of revisions.  Any revision requested by Tenant
and accepted by Landlord shall be incorporated by Landlord’s Architect into a
revised set of Working Drawings and Specifications and Final Cost Estimate, and
Tenant shall approve same in writing within 5 business days of receipt without
further revision.

 
 
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D.
In the event that Tenant requests in writing a revision in the approved Working
Drawings and Specifications (“Change”), then provided such Change is acceptable
to Landlord, Landlord shall advise Tenant by written change order as soon as is
practical of any increase in the Completion Cost such Change would
cause.  Tenant shall approve or disapprove such change order in writing within 2
business days following its receipt from Landlord.  Tenant’s approval of a
Change shall be accompanied by Tenant’s payment of any resulting increase in the
Completion Cost, regardless of any unutilized portion of the “Landlord
Contribution” as defined below.  It is understood that Landlord shall have no
obligation to interrupt or modify the Tenant Improvement work pending Tenant’s
approval of a change order.

 
E.
It is understood that the Preliminary Plan and the Working Drawings and
Specifications, together with any Changes thereto, shall be subject to the prior
approval of Landlord.  Landlord shall identify any disapproved items within 3
business days (or 2 business days in the case of Changes) after receipt of the
applicable document.  Should Landlord approve work requested in writing by the
Tenant that would necessitate any ancillary Building modification or other
expenditure by Landlord, then except to the extent of any remaining balance of
the Landlord Contribution, Tenant shall, in addition to its other obligations
herein, promptly fund the cost thereof approved by the Tenant to Landlord.

 
F.
It is understood that all of the Tenant Improvements shall be done during
Tenant’s occupancy of the Premises.  In this regard, Tenant agrees to assume any
risk of injury, loss or damage which may result.  Tenant further agrees that it
shall be solely responsible for relocating its office equipment and furniture in
the Premises in order for Landlord to complete the work in the Premises and that
no rental abatement shall result while the Tenant Improvements are completed in
the Premises.

 
G.
Tenant hereby designates Doug Croxall, Telephone No. (____) __________, as its
representative, agent and attorney-in-fact for the purpose of receiving notices,
approving submittals and issuing requests for Changes, and Landlord shall be
entitled to rely upon authorizations and directives of such person(s) as if
given directly by Tenant.  Tenant may amend the designation of its construction
representative(s) at any time upon delivery of written notice to Landlord.

II.           COST OF TENANT IMPROVEMENTS

 
A.
Landlord shall complete, or cause to be completed, the Tenant Improvements, at
the construction cost shown in the approved Final Cost Estimate (subject to the
provisions of this Work Letter), in accordance with final Working Drawings and
Specifications approved by both Landlord and Tenant.  Landlord shall pay towards
the final construction costs (“Completion Cost”) as incurred a maximum of
$51,380.00 (“Landlord Contribution”), based on $35.00 per usable square foot of
the Premises, and Tenant shall be fully responsible for the remainder (“Tenant
Contribution”). Tenant understands and agrees that any portion of the Landlord
Contribution not requested by Tenant in accordance with this Exhibit X by
December 31, 2014, shall inure to the benefit of Landlord and Tenant shall not
be entitled to any credit or payment; provided, however, that Tenant may, upon
written request delivered to Landlord not later than December 31, 2014, apply a
portion of the unused Landlord Contribution not to exceed $25,690.00 to the next
then due Basic Rent.  Landlord shall promptly memorialize any such reduction in
the Basic Rent on a form provided by Landlord.  In addition, Tenant may utilize
a portion of the unused Landlord Contribution not to exceed $14,680.00 toward
the out-of-pocket expenses incurred by Tenant for (1) relocating to the
Premises, including moving costs (not to exceed $7,340.00 in the aggregate)
(“Moving Costs”) and (2) for the purchase, refurbishment or relocation of
furniture, fixtures and equipment for the Premises (not to exceed $7,340.00 in
the aggregate) (“FF&E Costs”).  Tenant shall be reimbursed for Moving Costs
and/or FF&E Costs by submitting copies of all supporting third-party invoices to
Landlord by August 1, 2014.  Landlord shall reimburse Tenant in one installment
for Moving Costs and one installment for FF&E Costs within 30 days following
receipt of all such respective invoices.

 
 
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B.
The Completion Cost shall include all direct costs of Landlord in completing the
Tenant Improvements, including but not limited to the following:  (i) payments
made to architects, engineers, contractors, subcontractors and other third party
consultants in the performance of the work, (ii) permit fees and other sums paid
to governmental agencies, (iii) costs of all materials incorporated into the
work or used in connection with the work (excluding any furniture, fixtures and
equipment relating to the Premises), and (iv) keying and signage costs.  The
Completion Cost shall also include an administrative/supervision fee to be paid
to Landlord in the amount of 3% of all such direct costs, cosmetic alterations
not requiring a permit excluded.

 
C.
Prior to start of construction of the Tenant Improvements, Tenant shall pay to
Landlord the amount of the Tenant Contribution set forth in the approved Final
Cost Estimate.  In addition, if the actual Completion Cost of the Tenant
Improvements is greater than the Final Cost Estimate because of modifications or
extras requested by Tenant and not reflected on the approved working drawings,
or because of delays caused by Tenant, then notwithstanding any unused portion
of the Landlord Contribution, Tenant shall pay to Landlord, within 10 days
following submission of an invoice therefor, all such additional costs,
including any additional architectural fee.  If Tenant defaults in the payment
of any sums due under this Work Letter, Landlord shall (in addition to all other
remedies) have the same rights as in the case of Tenant’s failure to pay rent
under the Lease.