exv10w8



 






Exhibit 10.8



OFFICE LEASE




     THIS LEASE made as of the January 20, 2004, between 9944 SANTA MONICA, LLC, a Delaware
limited liability company (“Landlord”), and SBA1, LLC, a Delaware limited liability company
(“Tenant”).



WITNESSETH:




ARTICLE 1




Premises and Term




     Landlord hereby leases to Tenant and Tenant hereby leases from Landlord that certain space
comprised of the entire building (“Building”) located at 9944 Santa Monica Boulevard, Beverly
Hills, California (“Property”, as further described in Article 25) and the Property, including,
without limitation, the basement, first and second floors thereof (collectively, the “Premises”),
as described or shown on Exhibit A attached hereto, subject to the provisions herein contained.
The term (“Term”) of this Lease shall commence on February 1, 2004 (the “Commencement Date”) and
shall end on January 31, 2009 (“Expiration Date”), unless sooner terminated as provided herein.
The Commencement Date shall be subject to adjustment as provided in Article 4. Landlord and Tenant
agree that for purposes of this Lease the rentable area of the Premises is 20,000 square feet.



     Notwithstanding anything else to the contrary in this Lease, Landlord (referenced, in such
capacity, in this paragraph as “LL Occupant”) may continue during the Occupancy Period (as defined
below) to occupy the two (2) offices in the southeastern portion of the basement of the Building
(“LL Occupancy Space”), described or shown on Exhibit A-l attached hereto, which LL Occupant is
currently occupying. During the Occupancy Period, LL Occupant shall occupy the LL Occupancy Space,
shall continue to use the parking spaces that it currently uses, and the shall continue to use and
receive the utilities and services at the Building that it currently uses and receives, all
without any obligation to pay Tenant any base rent, additional rent or other charges, fees, costs
or other amounts of any kind in connection therewith. The “Occupancy Period” shall begin on the
date that this Lease is executed and delivered by both Landlord and Tenant and shall end on the
date that is thirty (30) days after Tenant gives LL Occupant written notice of the termination of
the Occupancy Period, provided, however, that (a) Tenant shall not terminate the Occupancy Period
before the date that is three (3) months after the Commencement Date, and (b) LL Occupant may
terminate the Occupancy Period at any time by giving written notice to Tenant of the date of the
termination of the Occupancy Period.



ARTICLE 2




Rent and Other Charges




     (A) Base Rent. Tenant shall pay Landlord monthly Base Rent in accordance with the following
schedule in advance on or before the first (1st) day of each calendar month during the



 









 




Term, except that Base Rent for the first and last full months for which Base Rent shall be due
(i.e., a total payment of $63,765.00) shall be paid when Tenant executes this Lease.




	 	 	 	 	 
	Time Period	 	Monthly Base Rent
	February 1, 2004  — January 31,2005
	 	$	30,000.00	 
	February 1, 2005  — January 31,2006
	 	$	30,900.00	 
	February 1, 2006  — January 31,2007
	 	$	31,827.00	 
	February 1,
2007 — January 31, 2008
	 	$	32,782.00	 
	February 1, 2008  — January 31, 2009
	 	$	33,765.00	 





If the Term begins on a day other than the first day of a calendar month or ends on a day other
than the last day of a calendar month, then the Rent payable for such month shall be prorated on
the basis of 1/30th of the monthly Rent for each day of such month.




     All amounts (other than Base Rent) which Tenant is or becomes obligated to pay Landlord under
this Lease or other agreement entered in connection herewith (including, without limitation,
Furniture Payments (as defined in Article 3) and parking charges) (collectively, “Additional
Rent”), together with the Base Rent, are sometimes herein referred to collectively as “Rent,” and
all remedies applicable to the non-payment of Rent shall be applicable thereto. Rent shall be paid
to Landlord c/o Crescent Heights, 2930 Biscayne Boulevard, Miami, Florida 33137, attention: Joseph
Zdon, or at such other place as Landlord may designate from time to time.



     (B) Additional Rent.



          (1) Operating Expenses.




               (a) Tenant shall pay as Additional Rent for each “Lease Year” (as
defined below) during the Term (and the Renewal Term, if any) an amount equal to Operating
Expenses for such Lease Year to the extent that such amount is in excess of the amount of
Operating Expenses for the Base Year (as defined below).



               (b) Any costs or expenses for services or utilities other than or in excess
of those specifically required by this Lease to be supplied by Landlord (if any), not
otherwise
included in Operating Expenses, and which are attributable directly to Tenant’s use or
occupancy of
the Premises shall be paid in full by Tenant as Additional Rent when such costs are incurred
or, if
Landlord makes such payments, within five (5) days after being billed therefor by Landlord.
This
paragraph does not limit or modify the provisions of Article 7.



               (c) “Operating Expenses” shall mean the total of all costs incurred by
Landlord in connection with the management, operation, maintenance, cleaning, protecting,
servicing and repair of the Property. Operating Expenses shall include, without limitation,
(i) the
cost associated with providing, operating, and repairing air conditioning, sprinkler, fire and
life
safety, electricity, steam, heating, mechanical, ventilation, escalator and elevator systems
and all
other utilities and the cost of supplies and equipment and maintenance and service contracts
in
connection therewith, except to the extent that the same are paid directly by Tenant; (ii) the
cost of
repairs, general maintenance, trash removal, telephone service, light bulb and tube
replacement, and



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supplies, and security; (iii) the cost of insurance maintained by Landlord in accordance with
Article 11; (iv) wages, salaries and other labor costs including taxes, insurance, retirement,
medical and other employee benefits; (v) fees, charges and other costs, including management fees,
consulting fees, legal fees and accounting fees, of all independent contractors (if any) engaged by
Landlord or reasonably charged by Landlord if Landlord performs management services in connection
with the Property, which may include an annual fee equal to at least three percent of gross revenue
of the Property; (vi) the fair market rental value of the Property manager’s offices (if any) and
storage areas (if any) in the Building (excluding the LL Occupancy Space); (vii) the cost of
business licenses; (viii) fees imposed by any governmental entity for services which do not
constitute Real Property Taxes hereunder; (ix) capital costs incurred in connection with any
equipment, device or other improvement reasonably anticipated to achieve economies in the
operation, maintenance or repair of the Property or portion thereof, or to comply with Laws;
provided, however, the same shall be amortized (including interest on the unamortized cost) over
the shorter of (A) the useful life, or (B) the cost recovery period (i.e., the anticipated period
to recover the full cost of such capital item from cost savings achieved by such capital item), of
the relevant capital item as reasonably determined by Landlord; and (x) depreciation of the cost of
acquiring or the rental expense of personal property used in the maintenance, operation and repair
of the Building or Property.




     Operating Expenses shall not include the following: (1) the cost of repair to the Building
including the Premises, to the extent the cost of the repairs is reimbursed by insurance; (2)
leasing commissions; (3) the cost of utilities charged to individual tenants (including Tenant)
and payroll, material and contract costs of other services charged to tenants (including Tenant);
(4) the depreciation of the Building and other real property structures in the Property; (5)
interest, points and fees on debt or amortization payments on any real property mortgages or deeds
of trust and ground lease payments; (6) advertising costs incurred directly for leasing individual
space in the Building or other portions of the Property; (7) Landlord’s general corporate overhead
and general administrative expenses not related to the operation of the Property; (8) all items
and services for which Tenant or any other tenant in the Building directly reimburses Landlord,
provided that, any item or service supplied selectively by Landlord to Tenant shall be paid for by
Tenant; (9) to the extent reimbursed by parking fees, the cost of payroll for clerks and
attendants, bookkeeping, garage keepers liability insurance, parking management fees, tickets and
uniforms (if any) directly incurred in operating the parking facilities; and (10) costs of capital
improvements to the Building and other portions of the Property except as otherwise included in
Operating Expenses pursuant to Section 2(B)(l)(c)(ix).



          (2) Real Property Taxes.




               (a) Tenant shall pay as Additional Rent for each Lease Year during the
Term (and the Renewal Term, if any) an amount equal to the Real Property Taxes for such Lease
Year to the extent that such amount is in excess of the amount of Real Property Taxes for the
Base Year.



               (b) “Real Property Taxes” shall mean all taxes, assessments (special or
otherwise) and charges levied upon or with respect to the Property and ad valorem taxes on
personal
property used in connection therewith. Real Property Taxes shall include, without limitation,
any
tax, fee or excise on the act of entering into this Lease, on the occupancy of Tenant, the
rent



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hereunder or in connection with the business of owning and/or renting space in the Property which
are now or hereafter levied or assessed against Landlord by any governmental entity or district or
other political or public entity, and shall also include any other tax, assessment, fee or excise,
however described (whether general or special, ordinary or extraordinary, foreseen or unforeseen),
which may be levied or assessed in lieu of, as a substitute for, or as an addition to, any other
Real Property Taxes. Real Property Taxes shall also include any private assessments or the
Building’s contribution towards a private cost-sharing agreement for the purpose of augmenting or
improving the quality of service and amenities normally provided by governmental agencies. Real
Property Taxes shall also include legal fees, costs and disbursements incurred in connection with
proceedings to contest, determine or reduce Real Property Taxes. Real Property Taxes shall not
include income, franchise, transfer, inheritance or capital stock taxes, unless, due to a change
in the method of taxation, any of such taxes are levied or assessed against Landlord, in whole or
in part, in lieu of, as a substitute for or as an addition to, any other tax which would otherwise
constitute a Real Property Tax.




          (3) Payment. Before the commencement of each Lease Year, or as soon
thereafter as possible, Landlord shall furnish to Tenant a statement containing Landlord’s
reasonable estimate of the Operating Expenses and Real Property Taxes (collectively, “Project
Expenses”) for such Lease Year and a calculation of the Additional Rent, if any, payable by
Tenant
for such Lease Year pursuant to this Section 2(B) on the basis of such estimate. If the Lease
Year is
a full year; Tenant shall pay to Landlord one-twelfth (1/12th) of the amount of said
Additional Rent
on each monthly rent payment date during such year (commencing on January 1) until further
adjustment pursuant to this Section 2(B). If the Lease Year is a partial year, Tenant shall
pay to
Landlord on each monthly rent payment date in such partial year an amount equal to said
Additional
Rent divided by the number of months in said partial Lease Year. If Landlord’s statement is
furnished after the start of the Lease Year, then on the next monthly rent payment date Tenant
shall
pay the entire portion of the Additional Rent attributable to portions of the Lease Year prior
to such
date. Landlord may reasonably adjust Tenant’s monthly rent payments of Project Expenses from
time to time to reflect the then current or estimated Project Expenses and actual expenditures
made during the elapsed portion of the Lease Year. Following each Lease Year, Landlord shall
furnish to Tenant a statement showing the actual Project Expenses during the previous Lease Year,
and Landlord shall compute any charge or credit to Tenant necessary to adjust rent previously paid
by Tenant to reflect the actual Project Expenses. If such statement and computation reveal an
underpayment, Tenant shall promptly pay to Landlord an amount equal to such underpayment (whether
or not this Lease has expired or been terminated), and if such statement and computation show an
overpayment, Landlord shall credit the next monthly rental payment of Tenant with an amount equal
to such overpayment, or, if the Term has expired, refund the overpayment to Tenant.




          (4) Lease Year; Base Year; Proration. “Lease Year” shall mean the whole or
partial calendar year commencing on the Commencement Date and ending on December 31 of the
calendar year in which the Commencement Date occurs, and all subsequent calendar years within
the Term and (if any) Renewal Term. The Base Year shall mean the calendar year of 2004;
provided that, to the extent that Tenant does not occupy the Premises during the entirety of
2004,
Landlord shall reasonably estimate what the Operating Expenses and Real Property Taxes would
have been for such period of Tenant’s non-occupancy during 2004, based on the actual usage
during
Tenant’s occupancy during the remainder of 2004, and the calculation of the Base Year shall be




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adjusted so as to include such estimate. The amount of Additional Rent payable hereunder shall be
proportionately abated in the case of a partial month or if the Lease Year is less than 365 days.




ARTICLE 3




Furniture




     Tenant
hereby leases from Landlord the Furniture (as defined below) during the Term.
Landlord and Tenant acknowledge that, for purposes of this Lease, the Furniture shall be
deemed to
have a value during the Term of this Lease (as the same may be extended) of $30,000.00.
Tenant
shall have no right to remove the Furniture from the Premises prior to or upon the expiration
of the
Lease. The “Furniture” shall be such items of furniture that are currently located in the
Premises
and which are detailed on a written schedule prepared by Landlord and acknowledged by Tenant
on
or before the Commencement Date. Without limiting the terms of Article 35, upon the
expiration
of the Lease, Landlord may, but shall not be required to, draw upon all or any part of the LC
and/or
LC Account (as defined in Article 35) or use, retain or apply all or any part of the proceeds
thereof
for the payment of any cost or loss incurred by Landlord with respect to needed repair or
replacement of any Furniture.



ARTICLE 4




Commencement of Term; Renewal Term




     (A) Commencement Date. The Commencement Date set forth in Article 1 shall be delayed and Base
Rent shall be abated to the extent that Landlord fails to deliver possession of the Premises for
any reason on the intended Commencement Date, including but not limited to holding over by prior
occupants, except to the extent that Tenant, its contractors, agents or employees in any way
contribute to such failure. If Landlord so fails for a sixty (60) day initial grace period, or
such additional time as may be necessary due to fire or other casualty, strikes, lock-outs or
other labor troubles, shortages of equipment or materials, governmental requirements, power
shortages or outages, acts or omissions of Tenant or other Persons, or other causes beyond
Landlord’s reasonable control, Tenant shall have the right to terminate this Lease by written
notice to Landlord any time thereafter up until Landlord delivers the Premises to Tenant. Any such
delay in the Commencement Date shall not subject Landlord to liability for loss or damage
resulting therefrom, and Tenant’s sole recourse with respect thereto shall be the abatement of
Base Rent and right to terminate this Lease described above. Upon any such termination, Landlord
and Tenant shall be entirely relieved of their obligations hereunder, and any Security Deposit and
Rent payments shall be returned to Tenant. If the Commencement Date is delayed, the Expiration
Date shall be similarly extended (in which case, the parties shall confirm the same in writing).
Tenant may enter the Premises during the seven (7) day period prior to the intended Commencement
Date (“Early Entry Period”) only for purposes of installing its furniture, fixtures and equipment
(including telecommunications and computer equipment) and for purposes of moving into the
Premises, (but not for occupancy or the operation of Tenant’s business). During the Early Entry
Period, Tenant shall comply with all terms and provisions of this Lease, except those provisions
requiring the payment of Rent. If Tenant shall be permitted by Landlord in writing to enter the
Premises prior to the intended Commencement Date for the purpose of occupying the same, then the
Commencement Date shall be deemed to be such



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date of occupancy. Landlord shall permit early entry other than the Early Occupancy Period in its
sole and absolute discretion and only by giving Tenant prior written notice thereof. At any time
during the Term, Landlord may deliver to Tenant a written notice setting forth the Commencement
Date and other reasonable dates and information relating to this Lease (“Notice of Lease Dates”),
which notice Tenant shall execute and return to Landlord within five (5) days of receipt thereof,
and thereafter the dates set forth on such notice shall be conclusive and binding; Tenant’s
failure to timely execute and deliver the Notice of Lease Dates shall constitute an acknowledgment
by Tenant that the statements included in such notice are true and correct, without exception.




     (B) Renewal Term.



          (i) Provided Tenant is not in default under this Lease as of the date of exercise or the
commencement of the Renewal Term (“Renewal Term Commencement Date”), Tenant shall have the option
to renew this Lease (“Renewal Option”) for the entire Premises for one (1) period of five (5)
years (“Renewal Term”), exercisable by giving written notice thereof (“Renewal Notice”) to
Landlord of its exercise of the Renewal Option at least six (6) and no more than nine (9) months
prior to the expiration of the initial Term of this Lease.




          (ii) The Base Rent payable hereunder for the Premises during the Renewal Term shall be
adjusted to the Fair Market Rental Rate (as defined in Article 25) as of the Renewal Term
Commencement Date; provided, however, in no event shall the Base Rent during the Renewal Term be
less than the Base Rent payable hereunder in the month immediately preceding the Renewal Term
Commencement Date. Tenant shall continue during the Renewal Term to pay all Additional Rent in
accordance with the terms of this Lease. In order to determine the Fair Market Rental Rate for the
Renewal Term, Landlord and Tenant, thirty (30) days after the date on which the Renewal Notice is
given by Tenant, shall each simultaneously submit to the other in writing its good faith estimate
of the Fair Market Rental Rate, which estimates shall in no event be less than the Base Rent
payable hereunder in the month immediately preceding the Renewal Term Commencement Date. If the
higher of said estimates is not more than one hundred and five percent (105%) of the lower of such
estimates, the Fair Market Rental Rate in question shall be deemed to be the average of the
submitted rates. If otherwise, and if Landlord and Tenant cannot agree on the Fair Market Rental
Rate for the Renewal Term within two (2) months after Landlord’s receipt of the Renewal Notice,
then the Fair Market Rental Rate shall be set by a single arbitrator jointly selected by Landlord
and Tenant, which arbitrator shall be a real estate broker active for over five (5) years and with
generally recognized experience and competence in the leasing of commercial office properties in
the vicinity of the Building; neither Landlord nor Tenant shall consult with such broker as to his
or her opinion as to Fair Market Rental Rate prior to the appointment (if Landlord and Tenant fail
to agree upon and appoint an arbitrator within three (3) months after Landlord’s receipt of the
Renewal Notice, then the appointment of the arbitrator shall be made by the Presiding Judge of the
Los Angeles Superior Court, or, if he or she refuses to act, by any judge having jurisdiction over
the parties). The arbitration shall be conducted by a single arbitrator and shall be on the basis
that the arbitrator shall pick one of the two proposed Fair Market Rental Rates submitted by
Landlord and Tenant, which is closer to the proposed Fair Market Rental Rate as determined by the
arbitrator using the definition set forth in Article 25. Such arbitrator may hold such meetings
or hearings and require such briefs or other materials as the arbitrator




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determines is necessary. The parties agree to be bound by the decision of the arbitrator, which
shall be final and non-appealable, and shall share equally the costs of arbitration, and judgment
upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.
If the Fair Market Rental Rate is determined after the Renewal Term Commencement Date, then
Tenant.shall continue to pay the Base Rent applicable immediately before the Renewal Term
Commencement Date until such determination is made, the parties shall promptly reconcile any
additional amounts of Base Rent that may be owed by Tenant for such interim period, and Tenant
shall pay any such additional amounts of Base Rent to Landlord along with the monthly payment of
Base Rent next coming due.




          (iii) The Renewal Option set forth in this Section 4(B) is personal to Tenant and may not be
assigned, transferred or conveyed to any party, except in connection with an assignment of the
Lease in its entirety to a permitted Transferee in accordance with Article 21.




          (iv) Notwithstanding anything herein to the contrary, if the original Landlord identified in
this Lease transfers its interest in the Property at any time during the initial Term, the
transferee landlord shall have the right, prior to the Renewal Term Commencement Date, to
terminate the Renewal Option in its entirety by giving written notice thereof to Tenant.




ARTICLE 5




Condition of Premises




     Tenant has inspected the Premises, Property, Systems and Equipment (as defined in Article
25), or has had an opportunity to do so, and agrees to accept the same “as is” without any
agreements, representations, understandings or obligations on the part of Landlord to perform any
alterations, repairs or improvements.



ARTICLE 6




Use and Rules




     Tenant shall use the Premises for customary general office, post-production and incidental
and limited videography purposes, all in keeping with the character of a first-class office
building and for no other purpose whatsoever, in compliance with all applicable Laws, and without
disturbing or interfering with any other tenant or occupant of the Property. Without limiting the
foregoing, office uses permitted under this Lease do not include uses for a medical practice,
retail sales operation, showroom, classroom, testing center or non-incidental storage). Tenant
shall not use the Premises in any manner so as to cause a cancellation of Landlord’s insurance
policies, or an increase in the premiums thereunder. Tenant shall comply with all rules set forth
in Rider One attached hereto (the “Rules”). Landlord shall have the right to reasonably amend such
Rules and supplement the same with other reasonable Rules (not expressly inconsistent with this
Lease) relating to the Property, or the promotion of safety, care, cleanliness or good order
therein, and all such amendments or new Rules shall be binding upon Tenant after five (5) days’
notice thereof to Tenant. All Rules shall be applied on a non-discriminatory basis, but nothing
herein shall be construed to give Tenant or any other Person (as defined in Article 25) any claim,
demand or



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cause of action against Landlord arising out of the violation of such Rules by any other tenant,
occupant, or visitor of the Property, or out of the enforcement or waiver of the Rules by Landlord
in any particular instance.




ARTICLE 7




Services and Utilities




     Tenant shall provide and pay for the following services and utilities:



     (A) Electricity for standard office lighting fixtures, and equipment and accessories, of
such type and in such quantities as are customary in Landlord’s reasonable opinion for normal
general office use, where the connected electrical load of all of the same does not exceed
such
amount as maybe made available by Landlord, based on the judgment of Landlord’s engineers as
to
the safe and lawful capacity of the existing electrical circuit(s) and facilities serving the
Premises.



     (B) Heat and air-conditioning for occupancy of the Premises under normal business
operations by a normal general office tenant, during Normal Business Hours (as defined in
Article
25). Landlord shall not be responsible for inadequate air-conditioning or ventilation to the
extent
the same occurs because Tenant uses any item of equipment consuming more than 500 watts at
rated capacity without providing adequate air-conditioning and ventilation therefor.



     (C) Water for drinking, lavatory and toilet purposes.



     (D) Operatorless passenger elevator service (if the Property has such equipment serving
the Premises), and subject to scheduling by Landlord) in common with Landlord and other
tenants
and their contractors, agents and visitors.



     (E) Janitorial services in and about the Premises. Such janitorial services shall be at a
standard at least equal to that of the janitorial services provided by reasonable landlords of
office
buildings comparable to the Building and shall include, without limitation, customary office
cleaning and trash removal service Monday through Friday or Sunday through Thursday. Tenant
shall select and contract with a third party supplier of such janitorial services, which
selection shall
be subject to Landlord’s written approval, which approval Landlord shall not unreasonably
withhold. Tenant shall indemnify Landlord for all damages, costs, losses, liability, legal
fees and
costs (including, without limitation, attorneys’ fees) and any other amounts resulting from
any property damage, personal injury or death directly or indirectly arising from or related to
(i) any act
or omission by of such janitorial services or its employees, agents or contractors or (ii) the
selection
and engagement of such janitorial services by or on behalf of Tenant. If Tenant fails to
cause the
performance of the janitorial services required by this paragraph, Landlord, without limiting
its
rights or remedies under this Lease or under applicable law, shall have the right, but not the
obligation, to undertake such janitorial services as it deems appropriate, and Tenant shall
pay as
Additional Rent hereunder the cost of such services undertaken by Landlord, along with
Landlord’s
related reasonable administrative and other charges, at the same time as the installment of
Base Rent
next coming due or, if earlier, within twenty (20) days after demand.



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     (F) Trash removal services.



     If for any reason any of the above utilities and services cannot be, or are not, provided
directly to Tenant, then Landlord shall provide such services to Tenant, and Tenant shall pay as
Additional Rent hereunder the cost of such services undertaken by Landlord, along with Landlord’s
related reasonable administrative and other charges, at the same time as the installment of Base
Rent next coming due or, if earlier, within twenty (20) days after demand. Landlord may install and
operate meters and/or any other reasonable systems for monitoring or estimating or for supplying
any services or utilities used by Tenant in excess of those deemed customary by Landlord (including
a system for Landlord’s engineer to reasonably estimate any such excess usage). If any of such
systems indicate in Landlord’s reasonable opinion that Tenant has used such excess services or
utilities, then Landlord may require Tenant to pay Landlord’s reasonable charges for installing and
operating any of such systems and any supplementary air-conditioning, ventilation, heat, electrical
or other systems or equipment (or adjustments or modifications or increased wear and tear to the
existing Systems and Equipment) and Landlord’s reasonable charges for such amount of excess
services or utilities used by Tenant.



     Landlord does not warrant that any services or utilities will be free from shortages,
failures, variations, or interruptions caused by repairs, maintenance, replacements, improvements,
alterations, changes of service, strikes, lockouts, labor controversies, accidents, inability to
obtain services, fuel, steam, water or supplies, governmental requirements or requests, or other
causes beyond Landlord’s reasonable control. None of the same shall be deemed an eviction or
disturbance of Tenant’s use and possession of the Premises or any part thereof, or (subject to the
provisions of paragraph 9 (B)) render Landlord liable to Tenant for abatement of Rent, or relieve
Tenant from performance of Tenant’s obligations under this Lease. Landlord in no event shall be
liable for damages by reason of loss of profits, business interruption or other consequential
damages.



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ARTICLE 8




Alterations and Liens




     Tenant shall make no additions, changes, alterations or improvements (the “Work”) to the
Premises or the Systems and Equipment (as defined in Article 25) pertaining to the Premises without
the prior written consent of Landlord, which Landlord shall not unreasonably withhold. Landlord may
impose reasonable requirements as a condition of such consent including without limitation the
submission of plans and specifications for Landlord’s prior written approval, obtaining necessary
permits, posting bonds, obtaining insurance, prior approval of contractors, subcontractors and
suppliers, prior receipt of copies of all contracts and subcontracts, contractor and subcontractor
lien waivers, affidavits listing all contractors, subcontractors and suppliers, use of union labor
(if Landlord’s lenders require that union labor be used in connection with the Property),
affidavits from engineers acceptable to Landlord stating that the Work will not adversely affect
the Systems and Equipment or the structure of the Property, and requirements as to the manner and
times in which such Work shall be done. All Work shall be performed in a good and workmanlike
manner and all materials used shall be of a quality comparable to or better than those in the
Premises and Property and shall be in accordance with plans and specifications approved by
Landlord, and Landlord may require that all such Work be performed under Landlord’s supervision. In
all cases, Tenant shall reimburse Landlord for reasonable amounts Landlord actually pays to third
parties involved in reviewing Tenant’s plans and specifications and performing any supervision of
the Work. If Landlord consents or supervises, the same shall not be deemed a warranty as to the
adequacy of the design, workmanship or quality of materials, and Landlord hereby expressly
disclaims any responsibility or liability for the same. Landlord shall under no circumstances have
any obligation to repair, maintain or replace any portion of the Work.



     Tenant shall keep the Property and Premises free from any mechanic’s, materialman’s or
similar liens or other such encumbrances in connection with any Work on or respecting the Premises
performed by, or at the request of, Tenant and shall indemnify and hold Landlord harmless from and
against any claims, liabilities, judgments, or costs (including attorneys’ fees) arising out of
the same or in connection therewith. Tenant shall give Landlord notice at least twenty (20) days
prior to the commencement of any Work on the Premises (or such additional time as may be necessary
under applicable Laws), to afford Landlord the opportunity of posting and recording appropriate
notices of non-responsibility. Tenant shall remove any such lien or encumbrance by bond or
otherwise within thirty (30) days after written notice by Landlord, and if Tenant shall fail to do
so, Landlord may pay the amount necessary to remove such lien or encumbrance, without being
responsible for investigating the validity thereof. The amount so paid shall be deemed Additional
Rent under this Lease payable upon demand, without limitation as to other remedies available to
Landlord under this Lease. Nothing contained in this Lease shall authorize Tenant to do any act
which shall subject Landlord’s title to the Property or Premises to any liens or encumbrances
whether claimed by operation of law or express or implied contract. Any claim to a lien or
encumbrance upon the Property or Premises arising in connection with any Work on or respecting the
Premises not performed by or at the request of Landlord shall be null and void, or at Landlord’s
option shall attach only against Tenant’s interest in the Premises and shall in all respects be
subordinate to Landlord’s title to the Property and Premises.



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ARTICLE 9




Repairs; Abatement




     (A) Except for damage covered under Article 10, Tenant shall keep the Premises in good and
sanitary condition, working order and repair (including without
limitation, carpet, wall-covering,
doors, plumbing and other fixtures, equipment, alterations and improvements whether installed by
Landlord or Tenant). In the event that any repairs, maintenance or replacements are required,
Tenant shall promptly arrange for the same either through Landlord for such reasonable charges as
Landlord may from time to time establish, or such contractors as Landlord generally uses at the
Property or such other contractors as Landlord shall first approve in writing, and in a first
class, workmanlike manner approved by Landlord in advance in writing. If Tenant does not promptly
make such arrangements, Landlord may, but need not, make such repairs, maintenance and
replacements, and the costs paid or incurred by Landlord therefor shall be reimbursed by Tenant
promptly after request by Landlord. Tenant shall indemnify Landlord and pay for any repairs,
maintenance and replacements to areas of the Property outside the Premises, caused, in whole or in
part, as a result of moving any furniture, fixtures, or other property to or from the Premises, or
by Tenant or its employees, agents, contractors, or visitors (notwithstanding anything to the
contrary contained in this Lease). Except as provided in the preceding sentence, or for damage
covered under Article 10, Landlord shall keep the common areas of the Property, Systems and
Equipment and structure (including the roof) in good and sanitary condition, working order and
repair. Tenant waives and releases its right to make repairs at Landlord’s expense under Sections
1941 and 1942 of the California Civil Code or under any other law, statute or ordinance now or
hereafter in effect (subject to paragraph 9 (B)), and Tenant waives and releases the right to
terminate this Lease under Section 1932(1) of the California Civil Code or any similar or successor
statute.



     (B) Notwithstanding anything to the contrary in this Lease, Tenant shall have the right to
“self-help” and/or rental abatement with respect to Landlord’s maintenance and services
obligations hereunder, but only on the terms expressly set forth in this paragraph 9(B). If
Landlord fails to perform its obligations under this Lease and such failure causes all or a
portion of the Premises to be untenantable and unusable by Tenant to an extent that materially
interferes with Tenant’s operation of its business, then such failure shall be (i) a “Maintenance
Default” if it relates directly to Landlord’s maintenance and repair obligations specifically set
forth in paragraph 9(A), and (ii) a “Services Default” if it relates directly to material
shortages, failures, variations, or interruptions in services or utilities to be provided pursuant
to Article 7 (a “Landlord Default” is a Maintenance Default and/or a Services Default). If a
Landlord Default occurs, Tenant shall give Landlord notice (the “Default Notice”), specifying such
Landlord Default. If Landlord has not, within five (5) business days after the receipt of a
Default Notice thereof, used reasonable diligence to commence to cure a Maintenance Default, then
Tenant may take reasonable measures to perform Landlord’s maintenance obligations described in the
Default Notice, after giving written notice to Landlord (but without adversely affecting the
Systems and Equipments or the Building structure; in accordance with applicable law and Building
rules and regulations; in a good and workmanlike manner; with materials at least equal in quality
to those in the Premises and Property; and without permitting any liens or encumbrances in
connection with the work) (“Self-Help”). If Landlord has not, within fifteen (15) business days
after the receipt of a Default Notice thereof, used reasonable diligence to commence to cure a
Landlord Default (and Tenant has not, with respect to a Maintenance Default, taken Self-Help),
Tenant may immediately abate Base Rent payable under this Lease for that portion of the Premises
rendered untenantable and not used by Tenant, for the period beginning on the date fifteen (15)
business days after the Default Notice and ending on the earlier of the date Landlord commences
the cure



11









 





of such Landlord Default or the date Tenant recommences (or could reasonably recommence) the use
of such portion of the Premises, provided that Tenant shall continue to pay all Additional Rent
due hereunder during such period. Each of such right to take Self-Help and to abate Base Rent
shall be Tenant’s sole and exclusive remedy at law or in equity for a Landlord Default. Except
as specifically provided in this paragraph 9(B) or elsewhere in this Lease, nothing contained in
this Lease shall be interpreted to mean that Tenant is excused from paying any Rent due
hereunder.



ARTICLE 10




Casualty Damage




     If the Premises or any common areas of the Property providing access thereto shall be damaged
by fire or other casualty, Landlord shall use available insurance proceeds to restore the same.
Such restoration shall be to substantially the condition prior to the casualty, except for
modifications required by zoning and building codes and other Laws or by any Holder (as defined in
Article 25), any other modifications to the common areas deemed desirable by Landlord (provided
access to the Premises is not materially impaired), and except that Landlord shall not be required
to repair or replace any of Tenant’s furniture, furnishings, fixtures or equipment, or any
alterations or improvements in excess of any work performed or paid for by Landlord under any
separate agreement signed by the parties in connection herewith. Landlord shall not be liable for
any inconvenience or annoyance to Tenant or its visitors, or injury to Tenant’s business resulting
in any way from such damage or the repair thereof. However, Landlord shall allow Tenant a
proportionate abatement of Base Rent during the time and to the extent the Premises are unfit for
occupancy for the purposes permitted under this Lease and not occupied by Tenant as a result
thereof (unless Tenant or its employees or agents caused the damage). Notwithstanding the
foregoing to the contrary, Landlord may elect to terminate this Lease by notifying Tenant in
writing of such termination within sixty (60) days after the date of damage (such termination
notice to include a termination date providing at least ninety (90) days for Tenant to vacate the
Premises), if the Property shall be materially damaged by Tenant or its employees or agents, or if
the Property shall be damaged by fire or other casualty or cause such that: (a) repairs to the
Premises and access thereto cannot reasonably be completed within 120 days after the casualty
without the payment of overtime or other premiums, (b) more than 25% of the Premises is affected
by the damage, and fewer than 24 months remain in the Term, or any material damage occurs to the
Premises during the last 12 months of the Term, (c) any Holder (as defined in Article 25) shall
require that the insurance proceeds or any portion thereof be used to retire the Mortgage debt (or
shall terminate the ground lease, as the case may be), or the damage is not fully covered by
Landlord’s insurance policies, or (d) the cost of the repairs, alterations, restoration or
improvement work would exceed 25% of the replacement value of the Building, or the nature of such
work would make termination of this Lease necessary or convenient. Tenant agrees that Landlord’s
obligation to restore, and the abatement of Base Rent provided herein, shall be Tenant’s sole
recourse in the event of such damage, and waives any other rights Tenant may have under any
applicable Law to terminate the Lease by reason of damage to the Premises or Property, including
all rights under California Civil Code, Sections 1932(2), 1933(4), and 1942, as the same may be
modified or replaced hereafter. Tenant acknowledges that this Article represents the entire
agreement between the parties respecting damage to the Premises or Property.



12









 





ARTICLE 11




Insurance, Subrogation, and Waiver of Claims




     Tenant shall maintain during the Term commercial general liability insurance, with limits of
not less than $2,000,000 combined single limit for personal injury, bodily injury or death, or
property damage or destruction (including loss of use thereof) for any one occurrence. Tenant shall
also maintain during the Term workers compensation insurance as required by statute, and primary,
noncontributory, “all-risk” property damage insurance covering Tenant’s personal property, business
records, fixtures and equipment, for damage or other loss caused by fire or other casualty or cause
including, but not limited to, vandalism and malicious mischief, theft, water damage of any type,
including sprinkler leakage, bursting or stoppage of pipes, explosion, business interruption, and
other insurable risks in amounts not less than the full insurable replacement value of such
property and full insurable value of such other interests of Tenant (subject to reasonable
deductible amounts). Landlord shall maintain during the Term commercial general liability
insurance, with limits of not less than $2,000,000 combined single limit for personal injury,
bodily injury or death, or property damage or destruction (including loss of use thereof) for any
one occurrence. Landlord shall also maintain during the Term workers compensation insurance as
required by statute, and primary, non-contributory, extended coverage or “all-risk” property damage
insurance, in an amount equal to at least ninety percent (90%) of the full insurable replacement
value of the Property (exclusive of the costs of excavation, foundations and footings, and such
risks required to be covered by Tenant’s insurance, and subject to reasonable deductible amounts),
or such other amount necessary to prevent Landlord from being a co-insured, and such other coverage
as Landlord shall deem appropriate or that may the required by any Holder (as defined in Article
25).



     Tenant shall provide Landlord with certificates evidencing such coverage (and, with respect
to liability coverage, showing Landlord and Builders Bank, an Illinois banking corporation, as
additional insureds) prior to the Commencement Date, which shall state that such insurance
coverage may not be changed or cancelled without at least twenty (20) days’ prior written notice
to Landlord, and shall provide renewal certificates to Landlord at least twenty (20) days prior to
expiration of such policies. Landlord may periodically, but not more often than every five years,
require that Tenant reasonably increase the aforementioned coverage. Except as provided to the
contrary herein, any insurance carried by Landlord or Tenant shall be for the sole benefit of the
party carrying such insurance. Any insurance policies hereunder may be “blanket policies.” All
insurance required hereunder shall be provided by responsible insurers and Tenant’s insurer shall
be reasonably acceptable to Landlord. By this Article, Landlord and Tenant intend that their
respective property loss risks shall be borne by responsible insurance carriers to the extent
above provided, and Landlord and Tenant hereby agree to look solely to, and seek recovery only
from, their respective insurance carriers in the event of a property loss to the extent that such
coverage is agreed to be provided hereunder. The parties each hereby waive all rights and claims
against each other for such losses, and waive all rights of subrogation of their respective
insurers, provided such waiver of subrogation shall not affect the right of the insured to recover
thereunder. The parties agree that their respective insurance policies are now, or shall be,
endorsed such that said waiver of subrogation shall not affect the right of the insured to recover
thereunder, so long as no material additional premium is charged therefor.



13









 





ARTICLE 12




Condemnation




     If the whole or any material part of the Premises or Property shall be taken by power of
eminent domain or condemned by any competent authority for any public or quasi-public use or
purpose, or if any adjacent property or street shall be so taken or condemned, or reconfigured
or vacated by such authority in such manner as to require the use, reconstruction or remodeling
of any part of the Premises or Property, or if Landlord shall grant a deed or other instrument
in lieu of such taking by eminent domain or condemnation, Landlord shall have the option to
terminate this Lease upon ninety (90) days’ notice, provided such notice is given no later than
180 days after the date of such taking, condemnation, reconfiguration, vacation, deed or other
instrument. Tenant shall have reciprocal termination rights if the whole or any material part of
the Premises is permanently taken, or if access to the Premises is permanently materially
impaired. Landlord shall be entitled to receive the entire award or payment in connection
therewith, except that Tenant shall have the right to file any separate claim available to
Tenant for any taking of Tenant’s personal property and fixtures belonging to Tenant and
removable by Tenant upon expiration of the Term, and for good will and moving expenses (so long
as such claim does not diminish the award available to Landlord or any Holder, and such claim is
payable separately to Tenant). All Rent shall be apportioned as of the date of such termination,
or the date of such taking, whichever shall first occur. If any part of the Premises shall be
taken, and this Lease shall not be so terminated, the Rent shall be proportionately abated.
Tenant hereby waives any and all rights it might otherwise have pursuant to Section 1265.130 of
the California Code of Civil Procedure.



ARTICLE 13




Return of Possession




     At
the expiration or earlier termination of this Lease or Tenant’s right of possession,
Tenant shall surrender possession of the Premises in the condition required under Article 9,
ordinary wear and tear and (subject to compliance with Article 10) damage by casualty excepted,
and shall surrender all keys, any key cards, and any parking stickers or cards, to Landlord, and
advise Landlord as to the combination of any locks or vaults then remaining in the Premises, and
shall remove all trade fixtures and personal property. All improvements, fixtures and other items
in or upon the Premises (except trade fixtures and personal property belonging to Tenant), whether
installed by Tenant or Landlord, shall be Landlord’s property and shall remain upon the Premises,
all without compensation, allowance or credit to Tenant. However, if prior to such termination or
within ten (10) days thereafter Landlord so directs by notice, Tenant shall promptly remove such
of the foregoing items as are designated in such notice and restore the Premises to the condition
prior to the installation of such items; provided, Landlord shall not require removal of customary
office improvements installed by Tenant with Landlord’s written approval (except as expressly
required by Landlord in connection with granting such approval). If Tenant shall fail to perform
any repairs or restoration, or fail to remove any items from the Premises required hereunder,
Landlord may do so, and Tenant shall pay Landlord the cost thereof upon demand. All property
removed from the Premises by Landlord pursuant to any provisions of this Lease or any Law may be
handled or stored



14









 




by Landlord at Tenant’s expense, and Landlord shall in no event be responsible for the value,
preservation or safekeeping thereof. All property not removed from the Premises or retaken from
storage by Tenant within thirty (30) days after expiration or earlier termination of this Lease or
Tenant’s right to possession, shall at Landlord’s option be conclusively deemed to have been
conveyed by Tenant to Landlord as if by bill of sale without payment by Landlord. Unless
prohibited by applicable Law, Landlord shall have a lien against such property for the costs
incurred in removing and storing the same.




ARTICLE 14




Holding Over




     Unless Landlord expressly agrees otherwise in writing, Tenant shall pay Landlord 200% of the
amount of Rent then applicable prorated on per diem basis for each day Tenant shall retain
possession of the Premises or any part thereof after expiration or earlier termination of this
Lease, together with all damages sustained by Landlord on account thereof. The foregoing
provisions shall not serve as permission for Tenant to hold-over, nor serve to extend the Term
(although Tenant shall remain bound to comply with all provisions of this Lease until Tenant
vacates the Premises, and shall be subject to the provisions of Article 13). Notwithstanding the
foregoing to the contrary, at any time before or after expiration or earlier termination of the
Lease, Landlord may serve notice advising Tenant of the amount of Rent and other terms required,
should Tenant desire to enter a month-to-month tenancy (and if Tenant shall hold over more than
one full calendar month after such notice, Tenant shall thereafter be deemed a month-to-month
tenant, on the terms and provisions of this Lease then in effect, as modified by Landlord’s
notice, and except that Tenant shall not be entitled to any renewal or expansion rights contained
in this Lease or any amendments hereto).



ARTICLE 15




No Waiver




     No provision of this Lease will be deemed waived by either party unless expressly waived in
writing signed by the waiving party. No waiver shall be implied by delay or any other act or
omission of either party. No waiver by either party of any provision of this Lease shall be deemed
a waiver of such provision with respect to any subsequent matter relating to such provision, and
Landlord’s consent or approval respecting any action by Tenant shall not constitute a waiver of
the requirement for obtaining Landlord’s consent or approval respecting any subsequent action.
Acceptance of Rent by Landlord shall not constitute a waiver of any breach by Tenant of any term
or provision of this Lease. No acceptance of a lesser amount than the Rent herein stipulated shall
be deemed a waiver of Landlord’s right to receive the full amount due, nor shall any endorsement
or statement on any check or payment or any letter accompanying such check or payment be deemed an
accord and satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord’s right to recover the full amount due. The acceptance of Rent or of the performance of
any other term or provision from any Person other than Tenant, including any Transferee, shall not
constitute a waiver of Landlord’s right to approve any Transfer.



15









 





ARTICLE 16




Attorneys’ Fees and Jury Trial




     In the event of any litigation between the parties, the prevailing party shall be entitled to
obtain, as part of the judgment, all reasonable attorneys’ fees, costs and expenses incurred in
connection with such litigation, except as may be limited by applicable Law. In the interest of
obtaining a speedier and less costly-hearing of any dispute, the parties hereby each irrevocably
waive the right to trial by jury.



ARTICLE 17




Personal Property Taxes, Rent Taxes and Other Taxes




     Tenant shall pay prior to delinquency all taxes, charges or other governmental impositions
assessed against or levied upon Tenant’s fixtures, furnishings, equipment and personal property
located in the Premises, and any Work to the Premises under Article 8. Whenever possible, Tenant
shall cause all such items to be assessed and billed separately from the property of Landlord. In
the event any such items shall be assessed and billed with the property of Landlord, Tenant shall
pay Landlord its share of such taxes, charges or other governmental impositions within thirty (30)
days after Landlord delivers a statement and a copy of the assessment or other documentation
showing the amount of such impositions applicable to Tenant’s property. Tenant shall pay any rent
tax or sales tax, service tax, transfer tax or value added tax, or any other applicable tax on the
Rent or services herein or otherwise respecting this Lease.



ARTICLE 18




Reasonable Approvals




     Whenever Landlord’s approval or consent is expressly required under this Lease (including
Article 21) or any other agreement between the parties, Landlord shall not unreasonably withhold
or delay such approval or consent (reasonableness shall be a condition to Landlord’s enforcement
of such consent or approval requirement, and not a covenant), except as otherwise provided herein
and except for matters affecting the structure, safety or security of the Property, or the
appearance of the Property from any common or public areas.



ARTICLE 19




Subordination, Attornment and Mortgagee Protection




     This Lease is subject and subordinate to all Mortgages (as defined in Article 25) now or
hereafter placed upon the Property, and all other encumbrances and matters of public record
applicable to the Property. If any foreclosure proceedings are initiated by any Holder or a deed
in lieu is granted (or if any ground lease is terminated), Tenant agrees, upon written request of
any such Holder or any purchaser at foreclosure sale, to attorn and pay Rent to such party and to
execute and deliver any instruments necessary or appropriate to evidence or effectuate such
attornment



16









 




(provided such Holder or purchaser shall agree to accept this Lease and not disturb Tenant’s
occupancy, so long as Tenant does not default and fail to cure within the time permitted
hereunder). However, in the event of attornment, no Holder shall be: (i) liable for any act or
omission of Landlord, or subject to any offsets or defenses which Tenant might have against
Landlord (prior to such Holder becoming Landlord under such attornment), (ii) liable for any
security deposit or bound by any prepaid Rent not actually received by such Holder, or (iii) bound
by any future modification of this Lease not consented to by such Holder. Any Holder (as defined in
Article 25) may elect to make this Lease prior to the lien of its Mortgage, by written notice to
Tenant, and if the Holder of any prior Mortgage shall require, this Lease shall be prior to any
subordinate Mortgage. Tenant agrees to give any Holder by certified mail, return receipt requested,
a copy of any notice of default served by Tenant upon Landlord, provided that prior to such notice
Tenant has been notified in writing (by way of service on Tenant of a copy of an assignment of
leases, or otherwise) of the address of such Holder. Tenant further agrees that if Landlord shall
have failed to cure such default within the times permitted Landlord for cure under this Lease, any
such Holder whose address has been provided to Tenant shall have an additional period of thirty
(30) days in which to cure (or such additional time as may be required due to causes beyond such
Holder’s control, including time to obtain possession of the Property by power of sale or judicial
action). Tenant shall execute such documentation as Landlord may reasonably request from time to
time, in order to confirm the matters set forth in this Article in recordable form.




ARTICLE 20




Estoppel Certificate




     Tenant shall from time to time, within ten (10) days after written request from Landlord,
execute, acknowledge and deliver a statement (i) certifying that this Lease is unmodified and in
full force and effect or, if modified, stating the nature of such modification and certifying that
this Lease as so modified, is in full force and effect (or if this Lease is claimed not to be in
force and effect, specifying the ground therefor) and any dates to which the Rent has been paid in
advance, and the amount of any Security Deposit, (ii) acknowledging that there are not, to
Tenant’s knowledge, any uncured defaults on the part of Landlord hereunder, or specifying such
defaults if any are claimed, and (iii) certifying such other matters as Landlord may reasonably
request, or as may be reasonably requested by Landlord’s current or prospective Holders, insurance
carriers, auditors, and prospective purchasers. Any such statement may be relied upon by any such
parties. If Tenant shall fail to execute and return such statement within the time required
herein, Tenant shall be deemed to have agreed with the matters set forth therein.



ARTICLE 21




Assignment and Subletting




     (A) Transfers. Tenant shall not, without the prior written consent of Landlord, which consent
shall not be unreasonably withheld, as further described below: (i) assign, mortgage, pledge,
hypothecate, encumber, or permit any lien to attach to, or otherwise transfer, this Lease or any
interest hereunder, by operation of law or otherwise, (ii) sublet the Premises or any part
thereof, or (iii) permit the use of the Premises by any Persons (as defined in Article 25) other
than Tenant and



17









 




its employees (all of the foregoing are hereinafter sometimes referred to collectively as
“Transfers” and any Person to whom any Transfer is made or sought to be made is hereinafter
sometimes referred to as a “Transferee”). If Tenant shall desire Landlord’s consent to any
Transfer, Tenant shall notify Landlord in writing, which notice (“Transfer Notice”) shall include:
(a) the proposed effective date (which shall not be less than 30 nor more than 180 days after
Tenant’s Transfer Notice), (b) the portion of the Premises to be Transferred (herein called the
“Subject Space”), (c) the terms of the proposed Transfer and the consideration therefor, the name
and address of the proposed Transferee, and a copy of all documentation pertaining to the proposed
Transfer, and (d) current financial statements of the proposed Transferee certified by an officer,
partner or owner thereof, and any other information to enable Landlord to determine the financial
responsibility, character, and reputation of the proposed Transferee, nature of such Transferee’s
business and proposed use of the Subject Space, and such other information as Landlord may
reasonably require. Any Transfer made without complying with this Article shall, at Landlord’s
option, be null, void and of no effect. Whether or not Landlord shall grant consent, Tenant shall
pay $300.00 towards Landlord’s review and processing expenses, as well as any reasonable legal fees
incurred by Landlord (not to exceed $1,000 per request), within thirty (30) days after written
request by Landlord (provided that Landlord’s selection of legal counsel for such purpose is
subject to Tenant’s approval, which approval Tenant shall not unreasonably withhold, condition or
delay).




     (B) Approval. Landlord will not unreasonably withhold its consent (as provided in
Article 18) to any proposed Transfer of the Subject Space to the Transferee on the terms
specified in
Tenant’s Transfer Notice. The parties hereby agree that it shall be reasonable under this
Lease and
under any applicable Law for Landlord to withhold consent to any proposed Transfer where one
or
more of the following applies (without limitation as to other reasonable grounds for
withholding
consent): (i) the Transferee is of a character or reputation or engaged in a business which is
not
consistent with the quality of the Property, or would be a significantly less prestigious
occupant of
the Property than Tenant, (ii) the Transferee intends to use the Subject Space for purposes
which are
not permitted under this Lease, (iii) the Subject Space is not regular in shape with
appropriate means
of ingress and egress suitable for normal renting purposes, (iv) the Transferee is either a
government
(or agency or instrumentality thereof) or (if there is vacant space in the Building at such
time) an
occupant of the Property, (v) the proposed Transferee does not have a reasonable financial
condition
in relation to the obligations to be assumed in connection with the Transfer, or (vi) Tenant
has committed and failed to cure a Default at the time Tenant requests consent to the proposed
Transfer.



     (C) Transfer Premium. If Landlord consents to a Transfer, and as a condition thereto
which the parties hereby agree is reasonable, Tenant shall pay Landlord fifty percent (50%) of
any
Transfer Premium derived by Tenant from such Transfer. “Transfer Premium” shall mean all rent,
additional rent or other consideration paid by such Transferee in excess of the Rent payable
by
Tenant under this Lease (on a monthly basis during the Term, and on a per rentable square foot
basis, if less than all of the Premises is transferred), after deducting the reasonable
expenses
(including related fees paid to Landlord) incurred by Tenant for any changes, alterations and
improvements to the Premises, any other economic concessions or services provided to the
Transferee, and any customary brokerage commissions paid in connection with the Transfer. If
part
of the consideration for such Transfer shall be payable other than in cash, Landlord’s share
of such
non-cash consideration shall be in such form as is reasonably satisfactory to Landlord. The



18









 




percentage of the Transfer Premium due Landlord hereunder shall be paid within ten (10) days after
Tenant receives any Transfer Premium from the Transferee.




     (D) Recapture. Notwithstanding anything to the contrary contained in this Article,
Landlord shall have the option, by giving written notice to Tenant within thirty (30) days
after
receipt of Tenant’s Transfer Notice, to recapture the Subject Space. Such recapture notice
shall
cancel and terminate this Lease with respect to the Subject Space as of the date stated in the
Transfer Notice as the effective date of the proposed Transfer (or at Landlord’s option, shall
cause
the Transfer to be made to Landlord or its agent, in which case the parties shall execute the
Transfer
documentation promptly thereafter). If this Lease shall be cancelled with respect to less
than the
entire Premises, the Rent reserved herein shall be prorated on the basis of the number of
rentable
square feet retained by Tenant in proportion to the number of rentable square feet contained
in the
Premises, this Lease as so amended shall continue thereafter in full force and effect, and
upon
request of either party, the parties shall execute written confirmation of the same.



     (E) Terms of Consent. If Landlord consents to a Transfer: (a) the terms and conditions
of this Lease, including among other things, Tenant’s liability for the Subject Space, shall
in no way
be deemed to have been waived or modified, (b) such consent shall not be deemed consent to any
further Transfer by either Tenant or a Transferee, (c) no Transferee shall succeed to any
rights
provided in this Lease or any amendment hereto to extend the Term of this Lease, expand the
Premises, or lease additional space, any such rights being deemed personal to Tenant, (d)
Tenant
shall deliver to Landlord promptly after execution, an original executed copy of all
documentation
pertaining to the Transfer in form reasonably acceptable to Landlord, and (e) Tenant shall
furnish
upon Landlord’s request a complete statement, certified by Tenant’s chief financial officer,
setting
forth in detail the computation of any Transfer Premium Tenant has derived and shall derive
from
such Transfer. Landlord or its authorized representatives shall have the right at all
reasonable times
to audit the books, records and papers of Tenant relating to any Transfer, and shall have the
right to
make copies thereof. If the Transfer Premium respecting any Transfer shall be found
understated,
Tenant shall within thirty (30) days after demand pay the deficiency, and if understated by
more
than 2%, Tenant shall pay Landlord’s costs of such audit. Any sublease hereunder shall be
subordinate and subject to the provisions of this Lease, and if this Lease shall be terminated
during
the term of any sublease, Landlord shall have the right to: (i) treat such sublease as
cancelled and
repossess the Subject Space by any lawful means, or (ii) require that such subtenant attorn to
and recognize Landlord as its landlord under any such sublease. If Tenant shall Default and fail
to cure
within the time permitted for cure under Article 23(A), Landlord is hereby irrevocably
authorized,
as Tenant’s agent and attorney-in-fact, to direct any Transferee to make all payments under or
in connection with the Transfer directly to Landlord (which Landlord shall apply towards Tenant’s
obligations under this Lease) until such Default is cured.



     (F) Certain Transfers. For purposes of this Lease, the term “Transfer” shall also include (a)
if Tenant is a partnership or limited liability company, the withdrawal or change, voluntary,
involuntary or by operation of law, of a majority of the partners or members (as applicable), or a
transfer of a majority of partnership or membership (as applicable) interests, within a twelve
month period, or the dissolution of the partnership or limited liability company, and (b) if
Tenant is a closely held corporation (i.e., whose stock is not publicly held and not traded
through an exchange or over the counter), the dissolution, merger, consolidation or other
reorganization of




19









 





Tenant, or within a twelve month period: (i) the sale or other transfer of more than an
aggregate of 50% of the voting shares of Tenant (other than to immediate family members by
reason of gift or death) or (ii) the sale, mortgage, hypothecation or pledge of more than an
aggregate of 50% of Tenant’s net assets.




     Tenant may effect a Transfer to an “Affiliate” (as defined below) without being required to
obtaining Landlord’s consent, provided that it first gives Landlord a Transfer Notice with
respect to such Transfer. An “Affiliate” for such purposes is Standard Securities, SMS
Marketing, NGV, or any other business entity in which an ownership interest of at least
one-third (1/3) is held by at least two of Gene Simmons, Richard Abramson and/or Alan Brown
(excluding, in each case, any such entity formed to avoid the restrictions on Transfer by Tenant
hereunder).



ARTICLE 22




Rights Reserved By Landlord




     Except to the extent expressly limited herein, Landlord reserves full rights to control the
Property (which rights may be exercised without subjecting Landlord to claims for constructive
eviction, abatement of Rent, damages or other claims of any kind), including more particularly, but
without limitation, the following rights:



     (A) To change the name or street address of the Property; install and maintain signs on the
exterior and interior of the Property (subject to Tenant’s rights set forth in Article 37); retain
at all times, and use in appropriate instances, keys to all doors within and into the Premises;
grant to any Person the right to conduct any business or render any service at the Property,
whether or not it is the same or similar to the use permitted Tenant by this Lease; and have access
for Landlord and other tenants of the Property to any mail chutes located on the Premises according
to the rules of the United States Postal Service.



     (B) To enter the Premises at reasonable hours for reasonable purposes, including inspection
and supplying cleaning service or other services to be provided Tenant hereunder, to show the
Premises to current and prospective mortgage lenders, ground lessors, insurers, and prospective
purchasers, tenants and brokers, at reasonable hours, and if Tenant shall abandon the Premises at
any time, or shall vacate the same during the last 3 months of the Term, to decorate, remodel,
repair, or alter the Premises.



     (C) To limit or prevent access to the Property, shut down elevator service, activate elevator
emergency controls, or otherwise take such action or preventative measures deemed necessary by
Landlord for the safety of tenants or other occupants of the Property or the protection of the
Property and other property located thereon or therein, in case of fire, invasion, insurrection,
riot, civil disorder, public excitement or other dangerous condition, or threat thereof.



     (D) To decorate and to make alterations, additions and improvements, structural or otherwise,
in or to the Property or any part thereof, and any adjacent building, structure, parking facility,
land, street or alley (including without limitation changes and reductions in corridors, lobbies,
parking facilities and other public areas and the installation of kiosks, planters, sculptures,



20









 




displays, escalators, mezzanines, and other structures, facilities, amenities and features
therein, and changes for the purpose of connection with or entrance into or use of the Property in
conjunction with any adjoining or adjacent building or buildings, now existing or hereafter
constructed). In connection with such matters, or with any other repairs, maintenance,
improvements or alterations, in or about the Property, Landlord may erect scaffolding and other
structures reasonably required, and during such operations may enter upon the Premises and take
into and upon or through the Premises, all materials required to make such repairs, maintenance,
alterations or improvements, and may close public entry ways, other public areas, restrooms,
stairways or corridors, provided that Landlord shall use reasonable efforts to minimize
interference with Tenant’s business to the extent practical.




     In connection with entering the Premises to exercise any of the foregoing rights, Landlord
shall: (a) provide reasonable advance written or oral notice to Tenant’s on-site manager or other
appropriate person (except in emergencies, or for routine cleaning or other routine matters), and
(b) take reasonable steps to minimize any interference with Tenant’s business.



ARTICLE 23




Landlord’s Remedies




     (A) Default. The occurrence of any one or more of the following events shall constitute a
“Default” by Tenant, which, if not cured within any applicable time permitted for cure below,
shall give rise to Landlord’s remedies set forth in Paragraph (B), below: (i) failure by Tenant to
make when due any payment of Rent, unless such failure is cured within ten (10) days after notice;
(ii) failure by Tenant to observe or perform any of the terms or conditions of this Lease to be
observed or performed by Tenant other than the payment of Rent, or as provided below, unless such
failure is cured within thirty (30) days after notice, or such shorter period expressly provided
elsewhere in this Lease (provided, if the nature of Tenant’s failure is such that more time is
reasonably required in order to cure, Tenant shall not be in Default if Tenant commences to cure
within such period and thereafter reasonably seeks to cure such failure to completion); (iii)
failure by Tenant to comply with the Rules, unless such failure is cured within five (5) days
after notice (provided, if the nature of Tenant’s failure is such that more than five (5) days are
reasonably required in order to cure, Tenant shall not be in Default if Tenant commences to cure
within such period and thereafter reasonably seeks to cure such failure to completion); (iv)
vacation of all or a substantial portion of the Premises for more than thirty (30) consecutive
days, or the failure to take possession of the Premises within sixty (60) days after the
Commencement Date; (v) (a) making by Tenant or any guarantor hereof of any general assignment for
the benefit of creditors, (b) filing by or against Tenant or any guarantor of a petition to have
Tenant or such guarantor adjudged a bankrupt or a petition for reorganization or arrangement under
any Law relating to bankruptcy (unless, in the case of a petition filed against Tenant or such
guarantor, the same is dismissed within sixty (60) days), (c) appointment of a trustee or receiver
to take possession of substantially all of Tenant’s assets located on the Premises or of Tenant’s
interest in this Lease, where possession is not restored to Tenant within thirty (30) days, (d)
attachment, execution or other judicial seizure of substantially all of Tenant’s assets located on
the Premises or of Tenant’s interest in this Lease, (e) Tenant’s or any guarantor’s convening of a
meeting of its creditors or any class thereof for the




21









 







purpose of effecting a moratorium upon or composition of its debts, or (f) Tenant’s or any
guarantor’s insolvency or admission of an inability to pay its debts as they mature; (vi) any
material misrepresentation herein, or material misrepresentation or omission in any financial
statements or other materials provided by Tenant or any guarantor in connection with negotiating or
entering this Lease or in connection with any Transfer under Article 21; (vii) cancellation of any
guaranty of this Lease by any guarantor; (viii) failure by Tenant to cure within any applicable
times permitted thereunder any default under any other lease for space at the Property now or
hereafter entered by Tenant (and any Default hereunder not cured within the times permitted for
cure herein shall, at Landlord’s election, constitute a default under any such other lease or
leases); (ix) failure by Tenant to provide Landlord with a renewed LC or a substitute LC in form
reasonably acceptable to Landlord at least thirty (30) days prior to the expiration of the then
existing LC. Failure by Tenant to comply with the same term or condition of this Lease on three
occasions during any twelve month period shall cause any failure to comply with such term or
condition during the succeeding twelve month period, at Landlord’s option, to constitute an
incurable Default, if Landlord has given Tenant notice of each such failure within ten (10) days
after each such failure occurs. The notice and cure periods provided herein are in lieu of, and not
in addition to, any notice and cure periods provided by Law.




     (B) Remedies. If Tenant commits a Default and fails to cure within the time permitted for cure
under Article 23(A), in addition to any other right or remedy allowed under any Law or other
provision of this Lease (all of which remedies shall be distinct, separate and cumulative),
Landlord may terminate this Lease, repossess the Premises by detainer suit, summary proceedings, or
other lawful means, and recover as damages a sum of money equal to: (a) the worth at the time of
award of the unpaid Rent which had been earned at the time of termination; (b) the worth at the
time of award of the amount by which the unpaid Rent which would have been earned after termination
until the time of the award exceeds the amount of such Rent loss that Tenant proves could have been
reasonably avoided; (c) the worth at the time of award of the amount by which the unpaid Rent for
the balance of the Term after the time of award exceeds the amount of such Rent loss that Tenant
proves can reasonably be avoided; and (d) any other amounts necessary to compensate Landlord for
all detriment or damages proximately caused by Tenant’s failure to perform its obligations under
this Lease or that in the ordinary course would be likely to result therefrom, including without
limitation all Costs of Reletting (as defined in Paragraph F). The “worth at the time of award” of
the amounts referred to in clauses (a) and (b) shall be computed by allowing interest at the
Default Rate (as defined in Article 25). The “worth at the time of award” of the amount referred
to in clause (c) shall be computed by discounting such amount at the discount rate of the Federal
Reserve Bank of San Francisco at the time of award plus one percent (1%).



     (C) Mitigation of Damages. If Landlord terminates this Lease or Tenant’s right to
possession, Landlord shall use reasonable efforts to mitigate Landlord’s damages, and Tenant shall
be entitled to submit proof of such failure to mitigate as a defense to Landlord’s claims
hereunder, if mitigation of damages by Landlord is required by applicable Law. If Landlord has not
terminated this Lease or Tenant’s right to possession, Landlord shall have no obligation to
mitigate, may permit the Premises to remain vacant or abandoned, and shall have the remedies under
California Civil Code, Section 1951.4, as the same may be modified or replaced hereafter; in such
case, Tenant may seek to mitigate damages by attempting to sublease the Premises or assign this
Lease (subject to Article 21).



22









 





     (D) Specific Performance and Collection of Rent. Landlord shall at all times have the rights
and remedies (which shall be cumulative with each other and cumulative and in addition to those
rights and remedies available under Paragraph (B), above or any Law or other provision of this
Lease), without prior demand or notice except as required by applicable Law: (i) to seek any
declaratory, injunctive or other equitable relief, and specifically enforce this Lease, or
restrain or enjoin a violation or breach of any provision hereof, and (ii) to sue for and collect
any unpaid Rent which has accrued.



     (E) Late Charges and Interest. Tenant shall pay, as Additional Rent, a service charge of Two
Hundred Dollars ($200.00) for bookkeeping and administrative expenses, if Rent is not received
within five (5) days after its due date; Tenant agrees that the amount of such service charge
represents a reasonable estimate of the cost and expense that would be incurred by Landlord in
processing each delinquent payment of Rent by Tenant and that such service charge shall be paid to
Landlord as liquidated damages for each delinquent payment pursuant to California Civil Code
Section 1671. In addition, any Rent paid more than five (5) days after due shall accrue interest
from the due date at the Default Rate (as defined in Article 25), until payment is received by
Landlord. Such service charge and interest payments shall not be deemed consent by Landlord to late
payments, nor a waiver of Landlord’s right to insist upon timely payments at any time, nor a waiver
of any remedies to which Landlord is entitled as a result of the late payment of Rent.



     (F) Certain Definitions. “Net Re-Letting Proceeds” shall mean the total amount of rent and
other consideration paid by any Replacement Tenants, less all Costs of Re-Letting, during a given
period of time. “Costs of Re-Letting” shall include without limitation, all reasonable costs and
expenses incurred by Landlord for any repairs, maintenance, changes, alterations and
improvements to the Premises, brokerage commissions, advertising costs, attorneys’ fees, any
customary free rent periods or credits, tenant improvement allowances, take-over lease obligations
and other customary, necessary or appropriate economic incentives required to enter leases with
Replacement Tenants, and costs of collecting rent from Replacement Tenants. “Replacement Tenants”
shall mean any Persons (as defined in Article 25) to whom Landlord relets the Premises or any
portion thereof pursuant to this Article.



     (G) Other Matters. No re-entry or repossession, repairs, changes, alterations and
additions, reletting, acceptance of keys from Tenant, or any other action or omission by Landlord
shall be construed as an election by Landlord to terminate this Lease or Tenant’s right to
possession, or accept a surrender of the Premises, nor shall the same operate to release the Tenant
in whole or in part from any of Tenant’s obligations hereunder, unless express written notice of
such intention is sent by Landlord or its agent to Tenant. To the fullest extent permitted by Law,
all rent and other consideration paid by any Replacement Tenants shall be applied: first, to the
Costs of Re-Letting, second, to the payment of any Rent theretofore accrued, and the residue, if
any, shall be held by Landlord and applied to the payment of other obligations of Tenant to
Landlord as the same become due (with any remaining residue to be retained by Landlord). Rent shall
be paid without any prior demand or notice therefor (except as expressly provided herein) and
without any deduction, set-off or counterclaim, or relief from any valuation or appraisement laws.
Landlord may apply payments received from Tenant to any obligations of Tenant then accrued, without
regard to such obligations as may be designated by Tenant. Landlord shall be under no obligation to
observe or perform any




23









 







provision of this Lease on its part to be observed or performed which accrues after the date of
any Default by Tenant hereunder not cured within the times permitted hereunder. The times set
forth herein for the curing of Defaults by Tenant are of the essence of this Lease. Tenant hereby
irrevocably waives any right otherwise available under any Law to redeem or reinstate this Lease.




ARTICLE 24




Landlord’s Right to Cure




     If Landlord shall fail to perform any term or provision under this Lease required to be
performed by Landlord, Landlord shall not be deemed to be in default hereunder nor subject to any
claims for damages of any kind, unless such failure shall have continued for a period of
twenty-five (25) days after written notice thereof by Tenant; provided, if the nature of
Landlord’s failure is such that more than twenty-five (25) days are reasonably required in order
to cure, Landlord shall not be in default if Landlord commences to cure such failure within such
twenty-five (25) day period, and thereafter reasonably seeks to cure such failure to completion.
The aforementioned periods of time permitted for Landlord to cure shall be extended for any period
of time during which Landlord is delayed in, or prevented from, curing due to fire or other
casualty, strikes, lock-outs or other labor troubles, shortages of equipment or materials,
governmental requirements, power shortages or outages, acts or omissions by Tenant or other
Persons, and other causes beyond Landlord’s reasonable control. If Landlord shall fail to cure
within the times permitted for cure herein, Landlord shall be subject to such remedies as may be
available to Tenant (subject to the other provisions of this Lease); provided, in recognition that
Landlord must receive timely payments of Rent and operate the Property, Tenant shall have no right
of self-help to perform repairs or any other obligation of Landlord, and shall have no right to
withhold, set-off, or abate Rent, except as specifically provided in paragraph 9(B).



ARTICLE 25




Captions, Definitions and Severability




     The captions of the Articles and Paragraphs of this Lease are for convenience of reference
only and shall not be considered or referred to in resolving questions of interpretation. If any
term or provision of this Lease shall be found invalid, void, illegal, or unenforceable with
respect to any particular Person by a court of competent jurisdiction, it shall not affect, impair
or invalidate any other terms or provisions hereof, or its enforceability with respect to any
other Person, the parties hereto agreeing that they would have entered into the remaining portion
of this Lease notwithstanding the omission of the portion or portions adjudged invalid, void,
illegal, or unenforceable with respect to such Person.



     (A) “Building” shall mean the structure identified in Article I of this Lease.



     (B) “Default Rate” shall mean eighteen percent (18%) per annum, or the highest rate permitted
by applicable Law, whichever shall be less.



24









 





     (C) “Fair Market Rental Rate” shall mean the fair market rental rate that landlords leasing
similar space in buildings similar to the Building and located in the business district of Beverly
Hills, California at the time of the determination of the fair market rental rate, would obtain
from any unrelated prospective tenant for any general office use of such space, as such space is
then improved, and taking into account the value of any rent or equivalent concessions then usually
and customarily given in connection with the leasing of comparable space for a comparable lease
term, such as free rent periods and tenant improvement allowances (taking into account any tenant
improvement allowance to which Tenant is entitled for such space pursuant to the terms of this
lease), the presence or absence of any brokerage commission obligations and the level of any
escalation base or “stop” for such comparable space.



     (D) “Holder” shall mean the holder of any Mortgage at the time in question, and where such
Mortgage is a ground lease, such term shall refer to the ground lessor.



     (E) “Holidays” shall mean all (i) federally observed holidays, including New Year’s Day,
President’s Day, Memorial Day, Independence Day, Labor Day, Veterans’ Day, Thanksgiving Day,
Christmas Day; (ii) recognized Jewish holidays, including, without limitation, Purim, Passover
(first two days and last two days), Shavuot, Rosh Hashanah, Yom Kippur and Sukkot (first two days
and last two days); and (iii) to the extent of utilities or services provided by union members
engaged at the Property, such additional holidays observed by such unions. The term “business
days” whenever used in this Lease, shall exclude, without limitation, Saturdays and Sundays and all
Holidays.



     (F) “Landlord” and “Tenant” shall be applicable to one or more Persons as the case may be, and
the singular shall include the plural, and the neuter shall include the masculine and feminine; and
if there be more than one, the obligations thereof shall be joint and several. For purposes of any
provisions indemnifying or limiting the liability of Landlord, the term “Landlord” shall include
Landlord’s present and future partners, members, managers, beneficiaries, trustees, officers,
directors, employees, shareholders, principals, agents, affiliates, successors and assigns.



     (G) “Law” shall mean all federal, state, county and local governmental and municipal laws,
statutes, ordinances, rules, regulations, codes, decrees, orders and other such requirements,
applicable equitable remedies and decisions by courts in cases where such decisions are considered
binding precedents in the state in which the Property is located, and decisions of federal courts
applying the Laws of such State.



     (H) “Mortgage” shall mean all mortgages, deeds of trust, ground leases and other such
encumbrances now or hereafter placed upon the Property or Building, or any part thereof, and all
renewals, modifications, consolidations, replacements or extensions thereof, and all indebtedness
now or hereafter secured thereby and all interest thereon.



     (I) “Normal Business Hours” shall mean from 8:00 a.m. until 6:00 p.m. Monday through Friday,
and from 9:00 a.m. until 1:00 p.m. on Saturday, except on Holidays.



     (J) “Person” shall mean an individual, trust, partnership, limited liability company, joint
venture, association, corporation, and any other entity.



25









 





     (K) “Property” shall mean the Building, and any common or public areas or facilities,
easements, corridors, lobbies, sidewalks, loading areas, driveways, landscaped areas, skywalks,
parking garages and lots, and any and all other structures or facilities operated or maintained in
connection with or for the benefit of the Building, and all parcels or tracts of land on which all
or any portion of the Building or any of the other foregoing items are located, and any fixtures,
machinery, equipment, apparatus, Systems and Equipment, furniture and other personal property
located thereon or therein and used in connection therewith, whether title is held by Landlord or
its affiliates. Possession of areas necessary for utilities, services, safety and operation of the
Property, including the Systems and Equipment (as defined in Article 25), fire stairways, perimeter
walls, space between the finished ceiling of the Premises and the slab of the floor or roof of the
Property thereabove, and the use thereof together with the right to install, maintain, operate,
repair and replace the Systems and Equipment, including any of the same in, through, under or above
the Premises in locations that will not materially interfere with Tenant’s use of the Premises, are
hereby excepted and reserved by Landlord, and not demised to Tenant. If the Building shall be part
of a complex, development or group of buildings or structures collectively owned or managed by
Landlord or its affiliates or collectively managed by Landlord’s managing agent, the Property
shall, at Landlord’s option also be deemed to include such other of those buildings or structures
as Landlord shall from time to time designate, and shall initially include such buildings and
structures (and related facilities and parcels on which the same are located) as Landlord shall
have incorporated by reference to the total square footage of the Property in Article 1.



     (L) “Rent” shall have the meaning specified therefor in Article 3.



     (M) “Systems and Equipment” shall mean any plant, machinery, transformers, duct work, cable,
wires, and other equipment, facilities, and systems designed to supply heat, ventilation, air
conditioning and humidity or any other services or utilities, or comprising or serving as any
component or portion of the electrical, gas, steam, plumbing, sprinkler, communications, alarm,
security, or fire/life/safety systems or equipment, or any other mechanical, electrical,
electronic, computer or other systems or equipment for the Property.



ARTICLE 26




Conveyance by Landlord and Liability




     In case Landlord or any successor owner of the Property or the Building shall convey or
otherwise dispose of any portion thereof in which the Premises are located, to another Person (and
nothing herein shall be construed to restrict or prevent such conveyance or disposition), such
other Person shall thereupon be and become landlord hereunder and shall be deemed to have fully
assumed and be liable for all obligations of this Lease to be performed by Landlord which first
arise after the date of conveyance, including the return of any Security Deposit, and Tenant shall
attorn to such other Person, and Landlord or such successor owner shall, from and after the date
of conveyance, be free of all liabilities and obligations hereunder not then incurred. The
liability of Landlord to Tenant for any default by Landlord under this Lease or arising in
connection herewith or with Landlord’s operation, management, leasing, repair, renovation,
alteration, or any other matter relating to the Property or the Premises, shall be limited to the
interest of Landlord in the




26









 







Property (and the rental proceeds thereof). Tenant agrees to look solely to Landlord’s interest in
the Property (and the rental proceeds thereof) for the recovery of any judgment against Landlord,
and Landlord shall not be personally liable for any such judgment or deficiency after execution
thereon. The limitations of liability contained in this Article shall apply equally and inure to
the benefit of Landlord’s present and future partners, beneficiaries, officers, directors,
trustees, shareholders, agents and employees, and their respective partners, heirs, successors and
assigns. Under no circumstances shall any present or future general or limited partner of
Landlord (if Landlord is a partnership), or trustee or beneficiary (if Landlord or any partner of
Landlord is a trust) have any liability for the performance of Landlord’s obligations under this
Lease. Notwithstanding the foregoing to the contrary, Landlord shall have personal liability for
insured claims, beyond Landlord’s interest in the Property (and rental proceeds thereof), to the
extent of Landlord’s liability insurance coverage available for such claims.




ARTICLE 27




Indemnification




     (A) Except to the extent arising from the intentional or grossly negligent acts of Landlord or
Landlord’s agents or employees, Tenant shall defend, indemnify and hold harmless Landlord from and
against any and all claims, demands, liabilities, damages, judgments, orders, decrees, actions,
proceedings, fines, penalties, costs and expenses, including without limitation, court costs and
attorneys’ fees arising from or relating to any loss of life, damage or injury to person, property
or business occurring in or from the Premises to the extent caused by the negligence or willful
misconduct of Tenant, its employees, agents, contractors, guests or invitees, or caused by or in
connection with any violation of this Lease or use of the Premises or Property by, or any other act
or omission of, Tenant, any other occupant of the Premises, or any of their respective agents,
employees, contractors or guests. Without limiting the generality of the foregoing, Tenant
specifically acknowledges that the indemnity undertaking herein shall apply to claims in connection
with or arising out of any “Work” as described in Article 8, the installation, maintenance, use or
removal of any “Lines” located in or serving the Premises as described in Article 29, and the
transportation, use, storage, maintenance, generation, manufacturing, handling, disposal, release
or discharge of any “Hazardous Material” as described in Article 30 (whether or not any of such
matters shall have been theretofore approved by Landlord), except to the extent that any of the
same arises from the intentional or grossly negligent acts of Landlord or Landlord’s agents or
employees.



     (B) Landlord shall defend, indemnify and hold harmless Tenant from and against any and all
claims, demands, liabilities, damages, judgments, orders, decrees, actions, proceedings, fines,
penalties, costs and expenses, including without limitation, court costs and attorneys’ fees
arising from or relating to any loss of life, damage or injury to person, property or business (but
not for injury to, or interference with, Tenant’s business or for lost profits or any other
consequential damages) occurring in or from the Property, to the extent arising from the
intentional or grossly negligent acts of Landlord or Landlord’s agents or employees, or caused by
or in connection with any violation of this Lease by Landlord, but subject to limitations on
Landlord’s liability set forth herein (including, without limitation, Article 26) and except where
the same is the obligation of Tenant pursuant to Section 27(A) and except that Landlord’s indemnity
shall not apply or extend to any such damage or injury covered by any insurance



27









 




maintained by Tenant (or which would have been covered had Tenant obtained the insurance required
under the provisions of this Lease).




ARTICLE 28




Safety and Security Devices, Services and Programs




     The parties acknowledge that safety and security devices, services and programs provided by
Landlord, if any, while intended to deter crime and ensure safety, may not in given instances
prevent theft or other criminal acts, or ensure safety of persons or property. The risk that any
safety or security device, service or program may not be effective, or may malfunction, or be
circumvented by a criminal, is assumed by Tenant with respect to Tenant’s property and interests,
and Tenant shall obtain insurance coverage to the extent Tenant desires protection against such
criminal acts and other losses, as further described in Article 11. Tenant agrees to cooperate in
any reasonable safety or security program developed by Landlord or required by Law. Tenant may, at
its sole expense, provide additional security equipment or personnel in the Premises, provided
that Landlord is given reasonable access (and a reasonable number of copies of any electronic
keycards or similar access devices) to the Premises and that any such security system installed by
Tenant complies with all applicable Laws and shall not create any material security risk to the
Building or materially adversely affect the rights of other tenants in the Building.



ARTICLE 29




Communications and Computer Lines; Antenna




     (A) Tenant may install, maintain, replace, remove or use any communications, data or computer
wires, cables and related devices (collectively the “Lines”) at the Property in or serving the
Premises, provided: (a) Tenant shall obtain Landlord’s prior written approval (Landlord shall
approve or disapprove such matters under this Article 29 within one (1) business day [for notices
received by Landlord before February 1, 2004] or five (5) business days [for notices received by
Landlord after February 1, 2004] after its receipt of Tenant’s written notice specifically
requesting Landlord’s approval of a matter, provided that Landlord’s failure to respond within
such time shall be deemed to be a disapproval by Landlord), use an experienced and qualified
contractor approved in writing by Landlord, and comply with all of the other provisions of Article
8, (b) any such installation, maintenance, replacement, removal or use shall comply with all laws
applicable thereto and good work practices, and shall not interfere with the use of any then
existing Lines at the Property, (c) an acceptable number of spare Lines and space for additional
Lines shall be maintained for existing and future occupants of the Property, as determined in
Landlord’s reasonable opinion, (d) if Tenant at any time uses any equipment that may create an
electromagnetic field exceeding the normal insulation ratings of ordinary twisted pair riser cable
or cause a radiation higher than normal background radiation, the Lines therefor (including riser
cables) shall be appropriately insulated to prevent such excessive electromagnetic fields or
radiation, (e) as a condition to permitting the installation of new Lines, Landlord may require
that Tenant remove existing Lines located in or serving the Premises, (f) Tenant’s rights shall be
subject to the rights of any regulated telephone company, and (g) Tenant shall pay all costs in
connection therewith. Landlord reserves the right to require that Tenant remove any Lines located
in or serving the




28









 







Premises which are installed in violation of these provisions, or which are at any time in
violation of any Laws or represent a dangerous or potentially dangerous condition (whether such
Lines were installed by Tenant or any other party), within three (3) days after written notice.




     Landlord may (but shall not have the obligation to): (i) install new Lines at the Property
(ii) create additional space for Lines at the Property, and (iii) reasonably direct, monitor
and/or supervise the installation, maintenance, replacement and removal of, the allocation and
periodic re- allocation of available space (if any) for, and the allocation of excess capacity (if
any) on, any Lines now or hereafter installed at the Property by Landlord, Tenant or any other
party (but Landlord shall have no right to monitor or control the information transmitted through
such Lines). Such rights shall not be in limitation of other rights that may the available to
Landlord by Law or otherwise. If Landlord exercises any such rights, Landlord may charge Tenant
for the costs attributable to Tenant, (including without limitation, costs for acquiring and
installing Lines and risers to accommodate new Lines and spare Lines, any associated computerized
system and software for maintaining records of Line connections, and the fees of any consulting
engineers and other experts).



     Notwithstanding anything to the contrary contained in Article 13, Landlord reserves the right
to require that Tenant remove any or all Lines installed by or for Tenant within or serving the
Premises upon termination of this Lease, provided Landlord notifies Tenant prior to or within
thirty (30) days following such termination. Any Lines not required to be removed pursuant to this
Article shall, at Landlord’s option, become the property of Landlord (without payment by
Landlord). If Tenant fails to remove such Lines as required by Landlord, or violates any other
provision of this Article, Landlord may, after twenty (20) days’ written notice to Tenant, remove
such Lines or remedy such other violation, at Tenant’s expense (without limiting Landlord’s other
remedies available under this Lease or applicable Law). Tenant shall not, without the prior
written consent of Landlord in each instance, grant to any third party a security interest or lien
in or on the Lines, and any such security interest or lien granted without Landlord’s written
consent shall be null and void. Except to the extent arising from the intentional or negligent
acts of Landlord or Landlord’s agents or employees, Landlord shall have no liability for damages
arising from, and Landlord does not warrant that the Tenant’s use of any Lines will be free from
the following (collectively called “Line Problems”): (x) any eavesdropping or wire-tapping by
unauthorized parties, (y) any failure of any Lines to satisfy Tenant’s requirements, or (z) any
shortages, failures, variations, interruptions, disconnections, loss or damage caused by the
installation, maintenance, replacement, use or removal of Lines by or for other tenants or
occupants at the Property, by any failure of the environmental conditions or the power supply for
the Property to conform to any requirements for the Lines or any associated equipment, or any
other problems associated with any Lines by any other cause. Under no circumstances shall any Line
Problems be deemed an actual or constructive eviction of Tenant, render Landlord liable to Tenant
for abatement of Rent, or relieve Tenant from performance of Tenant’s obligations under this
Lease. Landlord in no event shall be liable for damages by reason of loss of profits, business
interruption or other consequential damage arising from any Line Problems.



     (B) Landlord grants Tenant a license to maintain one (1) GPS antennae or satellite dish
connected to the Premises for television or radio reception, of less than twenty-four inches (24”)
in diameter, upon such portion of the rooftop of the Building as is designated by Landlord,
subject to the availability of such space, and subject to Tenant’s compliance with the rules and
regulations




29









 







promulgated by Landlord, from time to time, with respect to use of, and access to, the rooftop of
the Building. Tenant must pay for the maintenance and repair of all antennas, satellite dishes
and/or other equipment or Lines placed upon such licensed portion of the Building’s rooftop
(collectively, “Antenna Facilities”), as well as all utilities used to operate such Antenna
Facilities. Except in the event of an emergency, Tenant covenants to repair, maintain and remove
its Antenna Facilities during normal business hours. The installation of Tenant’s Antenna
Facilities shall be at Tenant’s sole cost and expense. Such installation of Tenant’s Antenna
Facilities, including the aesthetic compatibility of such Antenna Facilities with the design and
appearance of the Building and the height and weight of the Antenna Facilities, shall be subject to
Landlord’s approval. Landlord may, but is not obligated to, involve its engineers in the
installation, repair, maintenance and/or removal of the Antenna Facilities at Tenant’s expense.




     The operation of Tenant’s Antenna Facilities shall not interfere with the maintenance,
operation or efficiency of the Building, including but not limited to the roof, MATV, CATV or
other video systems, HVAC systems, electronically controlled elevator systems, computers,
telephone systems, or any other system serving the Building and/or its occupants, or the
operation of any radio or telecommunication equipment (if any) installed at the Building prior
to the Commencement Date (including any replacements for such systems or equipment). Tenant
shall indemnify, defend, protect and hold Landlord harmless from all expenses, costs, damages,
loss, claims or other expenses and liabilities arising from Tenant’s installation, maintenance
and use of such Antenna Facilities, including any interference caused by such Antenna
Facilities. If Landlord reasonably suspects Tenant’s Antenna Facilities are causing such
interference, Tenant agrees to cease all operations (except for testing as approved by Landlord)
until the interference has been corrected to the sole satisfaction of Landlord. If such
interference has not been corrected within thirty (30) days, Landlord may require Tenant to
remove the specific items from Tenant’s Antenna Facilities causing such interference.



     Tenant shall be responsible for causing all of Tenant’s equipment installations on the
rooftop of the Building to comply with Landlord’s site standards, and specifically those dealing
with transmitter noise-intermodulation protection and grounding. Tenant agrees to maintain its
Antenna Facilities in proper operating condition and within industry accepted safety standards
and in compliance with all Laws, including but not limited to local zoning requirements, and will
adhere to reasonable technical standards developed for the Building by Landlord as amended from
time to time. Landlord assumes no responsibility for the licensing, operation and/or maintenance
of Tenant’s Antenna Facilities. Tenant shall comply with all of the terms of its FCC license. All
installations and other work to be performed by Tenant on the rooftop of the Building will be
done in such a manner so as not to interfere materially with, delay, or impose any additional
expense upon Landlord in maintaining the rooftop or any other portion of the Building. Tenant
shall use the roofing company specified by Landlord to perform any work affecting the roof,
provided the costs charged by such roofer are competitive with charges for similar services
provided by comparably skilled and experienced contractors working in first-class office
buildings within the Beverly Hills and immediately surrounding areas. All Lines, cable runs,
conduit and sleeving shall be installed in a good and workmanlike manner and in accordance with
this Lease (including Section 29(A)). Lines shall be routed and attached in accordance with
current, state of the art, industry practices and in accordance with Section 29(A) above.
Tenant’s Antenna Facilities shall be identified with permanently marked, weather proof tags at
the following locations: (i) each antenna bracket; (ii) at




30










 






the transmission line building entry point; (iii) at the interior wall feed through or any
other transmission line exit point; and (iv) at any transmitter combiner, duplexer, or multifed
receive port. In addition, all of Tenant’s telephone blocks, demarcs, and cables shall be clearly
identified with the Tenant’s name, type of line, and circuit number. Landlord shall have the right
to require Tenant, at Tenant’s sole cost and expense to remove the Antenna Facilities, including
any conduit, cabling and/or Lines connecting the Antenna Facilities to the Premises upon the
termination of this Lease and to require Tenant to repair all damage caused thereby and to restore
that portion of the Building affected by such damage to the condition it was in prior to the
installation of such Antenna Facilities, ordinary wear and tear excepted. That portion of the
rooftop of the Building on which Tenant’s Antenna Facilities are located shall be treated for all
purposes of this Lease as part of the Premises (except that the area of same shall not be
considered Rentable Area for purposes of calculating Base Rent or Operating Expenses or Real
Property Taxes), and Additional Rent shall be due and payable for any expenses incurred by Landlord
in connection with Tenant’s installation and use of such equipment in accordance with this Article
29(B).




ARTICLE 30




Hazardous Materials




     Tenant shall not transport, use, store, maintain, generate, manufacture, handle, dispose, release
or discharge any “Hazardous Material” (as defined below) upon or about the Property, nor permit
Tenant’s employees, agents, contractors, and other occupants of the Premises to engage in such
activities upon or about the Property. However, the foregoing provisions shall not prohibit the
transportation to and from, and use, storage, maintenance and handling within, the Premises of
substances customarily used in offices (or such other business or activity expressly permitted to
be undertaken in the Premises under Article 6), provided: (a) such substances shall be used and
maintained only in such quantities as are reasonably necessary for such permitted use of the
Premises, strictly in accordance with applicable Law and the manufacturers’ instructions therefor,
(b) such substances shall not be disposed of, released or discharged on the Property, and shall be
transported to and from the Premises in compliance with all applicable Laws, and as Landlord shall
reasonably require, (c) if any applicable Law or Landlord’s trash removal contractor requires that
any such substances be disposed of separately from ordinary trash, Tenant shall make arrangements
at Tenant’s expense for such disposal directly with a qualified and licensed disposal company at a
lawful disposal site (subject to scheduling and approval by Landlord), and shall ensure that
disposal occurs frequently enough to prevent unnecessary storage of such substances in the
Premises, and (d) any remaining such substances shall be completely, properly and lawfully removed
from the Property upon expiration or earlier termination of this Lease.



     Tenant shall promptly notify Landlord of: (i) any enforcement, cleanup or other regulatory action
taken or threatened by any governmental or regulatory authority with respect to the presence of any
Hazardous Material on the Premises or the migration thereof from or to other property, (ii) any
demands or claims made or threatened by any party against Tenant or the Premises relating to any
loss or injury resulting from any Hazardous Material, (iii) any release, discharge or non-routine,
improper or unlawful disposal or transportation of any Hazardous Material on or from the Premises,
and (iv) any matters where Tenant is required by Law to give a notice to any governmental or
regulatory authority respecting any Hazardous Material on the Premises. Landlord shall have the



31









 




right (but not the obligation) to join and participate, as a party, in any legal proceedings or
actions affecting the Premises initiated in connection with any environmental, health or safety
Law. At such times as Landlord may reasonably request, Tenant shall provide Landlord with a written
list identifying any Hazardous Material then used, stored, or maintained upon the Premises, the use
and approximate quantity of each such material, a copy of any material safety data sheet (“MSDS”)
issued by the manufacturer thereof, written information concerning the removal, transportation and
disposal of the same, and such other information as Landlord may reasonably require or as may be
required by Law. The term “Hazardous Material” for purposes hereof shall mean any chemical,
substance, material or waste or component thereof which is now or hereafter listed, defined or
regulated as a hazardous or toxic chemical, substance, material
or waste or component thereof by any federal, state or local governing or regulatory body having
jurisdiction, or which would trigger any employee or community “right-to-know” requirements adopted
by any such body, or for which any such body has adopted any requirements for the preparation or
distribution of an MSDS.




     If any Hazardous Material is released, discharged or disposed of by Tenant or any other occupant of
the Premises, or their employees, agents or contractors, on or about the Property in violation of
the foregoing provisions, Tenant shall immediately, properly and in compliance with applicable Laws
clean up and remove the Hazardous Material from the Property and any other affected property and
clean or replace any affected personal property (whether or not owned by Landlord), at Tenant’s
expense. Such clean up and removal work shall be subject to Landlord’s prior written approval
(except in emergencies), and shall include, without limitation, any testing, investigation, and the
preparation and implementation of any remedial action plan required by any governmental body having
jurisdiction or reasonably required by Landlord. If Tenant shall fail to comply with the provisions
of this Article within five (5) days after written notice by Landlord, or such shorter time as may
be required by Law or in order to minimize any hazard to Persons or property, Landlord may (but
shall not be obligated to) arrange for such compliance directly or as Tenant’s agent through
contractors or other parties selected by Landlord, at Tenant’s expense (without limiting Landlord’s
other remedies under this Lease or applicable Law). If any Hazardous Material is released,
discharged or disposed of on or about the Property and such release, discharge or disposal is not
caused by Tenant or other occupants of the Premises, or their employees, agents or contractors,
such release, discharge or disposal shall be deemed casualty damage under Article 10 to the extent
that the Premises or common areas serving the Premises are affected thereby; in such case, Landlord
and Tenant shall have the obligations and rights respecting such casualty damage provided under
Article 10.



ARTICLE 31




Miscellaneous




     (A) Each of the terms and provisions of this Lease shall be binding upon and inure to the
benefit of the parties hereto, their respective heirs, executors, administrators, guardians,
custodians, successors and assigns, subject to the provisions of Article 21 respecting Transfers.



     (B) Neither this Lease nor any memorandum of lease or short form lease shall be recorded by
Tenant.



32









 





     (C) This Lease shall be construed in accordance with the Laws of the state in which
the Property is located.



     (D) All obligations or rights of either party arising during or attributable to the period
ending upon expiration or earlier termination of this Lease shall survive such expiration or
earlier termination.



     (E) Landlord agrees that, if Tenant timely pays the Rent and performs the terms and provisions
hereunder, and subject to all other terms and provisions of this Lease, Tenant shall hold and enjoy
the Premises during the Term, free of lawful claims by any Person acting by or through Landlord.



     (F) This Lease does not grant any legal rights to “light and air” outside the Premises nor
any particular view or cityscape visible from the Premises; however, Landlord shall not
permanently place any sign or other element that directly blocks Tenant’s view from any window in
the Premises.



     (G) If the Commencement Date is delayed in accordance with Article 4 for more than one year,
Landlord may declare this Lease null and void, and if the Commencement Date is so delayed for more
than seven years, this Lease shall thereupon become null and void without further action by either
party.



     (H) Tenant shall not do anything or suffer anything to be done in or about the Premises that will
in any way conflict with any Laws now or hereafter in effect, including, without limitation, the
Americans with Disability Act of 1990 and local enactments thereof (“ADA”). At its sole cost and
expense, Tenant shall promptly comply with all requirements of Laws, including, without limitation,
making required changes to the Premises, the access thereto and common area restrooms therefor, the
base Building structure and Systems, and other areas of the Building (other than making structural
changes) relating to or arising out of the use, occupancy, repair, improvement or alteration of the
Premises, including any Work described in Article 8. Landlord shall be responsible for compliance
with Laws (including, without limitation, the ADA as in effect on the date hereof) with respect to
areas of the Building not within the Premises subject to the other provisions of this Lease where
such compliance measures are required due to another tenant’s use, occupancy, repair, improvement
or alteration of its premises, or where such compliance is not made the responsibility of Tenant as
set forth above.



     (I)  Each individual executing this Lease on behalf of Tenant hereby represents and warrants that
Tenant is a duly formed and existing entity qualified to do business in California and that Tenant
has full right and authority to execute and deliver this Lease and that each person signing on
behalf of Tenant is authorized to do so. Before the Commencement Date and before Tenant may occupy
or access the Premises pursuant to this Lease (including, without limitation, the Early Entry
Period), Tenant shall deliver to Landlord written materials satisfactory to Landlord evidencing the
existence of Tenant and Tenant’s qualification to do business in California (“Tenant Entity
Materials”) and obtain Landlord’s written approval thereof. If Tenant does not deliver and obtain
Landlord’s written approval of the Tenant Entity Materials before the intended Commencement Date,
then Landlord may terminate this Lease in its entirety (including, without



33









 




limitation, the Option set forth in Rider Two) effective, upon three (3) days prior written
notice, at any time before it receives the Tenant Entity Materials from Tenant, in which case
Landlord may retain all amounts deposited with or paid to Landlord by Tenant.




ARTICLE 32




Offer




     The submission and negotiation of this Lease shall not be deemed an offer to enter the same by
Landlord, but the solicitation of such an offer by Tenant. Tenant agrees that its execution of this
Lease constitutes a firm offer to enter the same which may not be withdrawn for a period of five
(5) days after delivery to Landlord (or such other period as may be expressly provided in any other
agreement signed by the parties). During such period and in reliance on the foregoing, Landlord
may, at Landlord’s option (and shall, if required by applicable Law), proceed with any plans,
specifications, alterations or improvements, and permit Tenant to enter the Premises, but such acts
shall not be deemed an acceptance of Tenant’s offer to enter this Lease, and such acceptance shall
be evidenced only by Landlord signing and delivering this Lease to Tenant, and upon such signing
and delivery of this Lease by Landlord to Tenant, Tenant may not withdraw its firm offer.



ARTICLE 33




Notices




     Except as expressly provided to the contrary in this Lease, every notice or other communication to
be given by either party to the other with respect hereto or to the Premises or Property, shall be in
writing and shall not be effective for any purpose unless the same shall be served personally or by
national air courier service, or United States certified mail, return receipt requested, postage
prepaid, addressed as follows:



     To Tenant:                                                             , California 90210, attention
                    , until the Commencement Date, and thereafter to the Tenant at the Premises, or such
other address or addresses as Tenant may from time to time designate by notice given as above
provided; and



     To Landlord: c/o Crescent Heights, 2930 Biscayne Boulevard, Miami, Florida 33137, attention: Joseph
Zdon, with a copy to: Crescent Heights, 2930 Biscayne Boulevard, Miami, Florida 33137, attention:
Sharon Christenbury, Esq., General Counsel; and with a copy to Landlord at 9944 Santa Monica
Boulevard, Beverly Hills, 90210, attention: Berel Schusterman, or such other address or addresses
Landlord may from time to time designate by notice given as above provided.


Every notice or other communication hereunder shall be deemed to have been given as of the third
business day following the date of such mailing (or as of any earlier date evidenced by a receipt
from such national air courier service or United States Postal Service) or immediately if
personally delivered. Notices not sent in accordance with the foregoing shall be of no force or
effect until received by the foregoing parties at such addresses required herein.




34









 








ARTICLE 34




Real Estate Brokers




     Tenant represents that Tenant has dealt with CB Richard Ellis, Inc. (“Broker”) (whose
commission(s), if any, shall be paid by Landlord pursuant to separate agreement) and no other
broker as broker, agent or finder in connection with this Lease. Tenant acknowledges that Landlord
has no obligation whatsoever to any other broker, agent or finder a commission or fee and agrees to
indemnify and hold Landlord harmless from all damages, judgments, liabilities and expenses
(including reasonable attorneys’ fees) arising from any claims or demands of any broker, agent or
finder other than Broker with whom Tenant has dealt for any commission or fee alleged to be due in
connection with its participation in the procurement of Tenant or the negotiation with Tenant of
this Lease.



ARTICLE 35




Security




     (A) Letter of Credit. Before the Commencement Date, Tenant shall deliver to Landlord an
unconditional, irrevocable letter of credit (“LC”) in the original amount of Two Hundred Eighty
Thousand Dollars ($280,000) (the “LC Stated Amount”); if Tenant does not deliver the LC to Landlord
before the Commencement Date, then Landlord may terminate this Lease in its entirety (including,
without limitation, the Option set forth in Rider Two) effective, upon three (3) days prior written
notice, at any time before it receives the LC from Tenant, in which case Landlord may retain all
amounts deposited with or paid to Landlord by Tenant. The LC shall be issued by a national money
center bank (“Bank”) reasonably acceptable to Landlord that has its headquarters in the United
States and has a local Los Angeles branch office, and shall be in the form attached hereto as
Exhibit B. Tenant shall pay all expenses, points and/or fees incurred in obtaining and renewing the
LC. The LC shall be effective from the date of delivery thereof through the date which is one
hundred (100) days after the expiration of the Term, as it may be extended pursuant to the terms of
this Lease (the “LC Expiration Date”). The LC may be re-issued, renewed or replaced for annual
periods, provided that the LC Stated Amount is not reduced except as expressly provided below. Each
reissue, renewal or replacement LC shall be in the form attached hereto as Exhibit B, and shall be
subject to Landlord’s prior written approval. The LC Stated Amount shall be reduced, effective on
the fourth (4th) anniversary of the Commencement Date (“Reduction Date”), to the amount
of Ninety Thousand Dollars ($90,000), subject to the provisions of Subparagraphs (1) and (2)
immediately below.



          (1) Notwithstanding any contrary provision hereof, if a Default by Tenant under this Lease has
occurred and is continuing on the Reduction Date, or if Tenant is in default under this Lease and
Tenant has received notice thereof as required by this Lease, but failed to cure such default
within the time period permitted
under this Lease or such lesser time as may remain before the Reduction Date, then the LC Stated
Amount shall not be reduced on such Reduction Date (but shall be reduced upon the curing of such
default, subject, however, to Landlord’s draw on the LC as permitted hereunder in connection with a
Default).





35









 








          (2) Tenant hereby covenants to provide to Landlord not less than thirty (30) days prior to the
Reduction Date, a certificate signed by an authorized officer or manager of Tenant stating to the
best knowledge of the certifying officer or manager, Tenant’s net worth as of a date not earlier
than four (4) months prior to the applicable Reduction Date. If Tenant’s net worth as of such date
is a negative number, or if Tenant fails to provide the certification as required hereunder, then
the LC Amount shall not be reduced on the Reduction Date.




     (B) Failure to Reissue, Renew or Replace. If the Bank fails to extend the expiration date thereof
through the LC Expiration Date, and/or if Landlord receives a notice of non-renewal from Bank (as
described in the LC), then Tenant shall provide Landlord with a substitute LC. If Tenant fails to
provide Landlord with a substitute LC in a form reasonably acceptable to Landlord at least thirty
(30) days prior to the expiration of the then existing LC, then (i) such failure shall be deemed a
Default hereunder, and (ii) Landlord shall be entitled to draw down the full amount of the LC then
available and apply, use and retain the proceeds thereof in accordance with this Article 35.



     (C) Application of LC and LC Account. Any amount of the LC which is drawn upon by Landlord, but not
used or applied by Landlord shall be held by Landlord in an account (the “LC Account”; also
sometimes referenced in this Lease as the “Security Deposit”) as security for the full and faithful
performance of each of the terms hereof by Tenant, subject to use and application as set forth
below. If a Default shall occur and be continuing with respect to any provision of this Lease,
including, but not limited to, the provisions relating to the payment of Rent, or in the event the
LC is not renewed or reissued at least thirty (30) days prior to the expiration of the then
existing LC, Landlord may, but shall not be required to, draw upon all or any part of the LC and/or
LC Account or use, retain or apply all or any part of the proceeds thereof for the payment of any
Rent or any other sum in default, or for the payment of any other amount which Landlord may spend
or become obligated to spend by reason of Tenant’s default or to compensate Landlord for loss or
damage which Landlord may suffer by reason of Tenant’s default, including without limitation the
amounts to which Landlord may become entitled pursuant to this Article 35 (whether or not such
amounts have been awarded) and any other loss, liability, expense and damages that may accrue upon
Tenant’s default or the act or omission of Tenant or any officer, employee, agent or invitee of
Tenant, and costs and attorneys’ fees incurred by Landlord to recover possession of the Premises
upon a default by Tenant hereunder. The use, application, retention or draw of the LC and/or LC
Account, or any portion thereof, by Landlord shall not (i) constitute the cure of any default by
Tenant or the waiver of such default, (ii) prevent Landlord from exercising any other remedies
provided for under this Lease or by law, it being intended that Landlord shall not first be
required to proceed against the LC and/or LC Account, or (iii) operate as a Limitation on the
amount of any recovery to which Landlord may otherwise be entitled. If any portion of the LC and/or
LC Account is so drawn upon, or any part of the proceeds thereof is used or applied, Tenant shall,
within five (5) days after written demand therefor, deposit cash with Landlord in an amount equal
to the draw upon the LC and/or the amount of the LC Account that was used or applied (so that the
combined amount of the remaining sums available to be drawn upon the LC and the LC Account balance
equals the LC Stated Amount), and Tenant’s failure to do so shall be a Default under this Lease.
The LC Account may be commingled with other funds of Landlord, shall be held in Landlord’s name,
and Tenant shall not be entitled to any interest or earnings thereon. Notwithstanding any contrary
provision herein, in the event that the total amount of the LC outstanding plus any amount



36









 




remaining in the LC Account exceeds the LC Stated Amount (“Excess Security”), then Landlord
shall return the amount of the Excess Security to Tenant upon Tenant’s request to the extent that
such amount is available in the LC Account.




     (D) Waiver. Tenant hereby waives the provisions of Section 1950.7 of the California
Civil Code, and all similar or successor provisions of law, now or hereafter in force, and Landlord
and Tenant hereby acknowledge that their entire agreement with respect to the LC and the LC Account
is set forth herein.



     (E) Expiration of LC. Unless a Default has occurred and is continuing under this Lease or a
Default would exist under the Lease but Landlord is barred by Law from sending a notice of default
to Tenant with respect thereto, within sixty (60) days following the LC Expiration Date, Landlord
shall return any LC previously delivered by Tenant and any balance remaining in the LC Account
after use and application in accordance with this Article 35, to Tenant (or, at Landlord’s option,
to the last assignee, if any, of Tenant’s interest hereunder), and Tenant shall have no further
obligation to provide the LC.



     (F) Landlord’s Transfer. Tenant acknowledges that Landlord has the right to transfer or
mortgage its interest in the Building or Property and in this Lease, and Tenant agrees that in the
event of any such transfer or mortgage, Landlord shall have the right to transfer or assign the LC
and/or the LC Account to the transferee or mortgagee. Upon such transfer or assignment of the LC
and/or LC Account, Landlord shall be deemed released by Tenant from all liability or obligation for
the return of the LC and LC Account, as applicable, and Tenant shall look solely to such transferee
or mortgagee for the return thereof. If Landlord transfers or assigns the LC and Tenant fails to
cause the Bank to accept such transfer or assignment, such failure shall be a Default hereunder.



     (G) Bank Obligation. Tenant acknowledges and agrees that the LC is a separate and
independent obligation of the Bank to Landlord and that Tenant is not a third party beneficiary of
such obligation, and that Landlord’s right to draw upon the LC for the full amount due and owing
thereunder shall not be, in any way, restricted, impaired, altered or limited by virtue of any
provision of the United States Bankruptcy Code, including without limitation, Section 502(b)(6)
thereof.



ARTICLE 36




Entire Agreement




     This Lease, together with Rider One and Exhibits A and B, contains all the terms and provisions
between Landlord and Tenant relating to the matters set forth herein and no prior or
contemporaneous agreement or understanding pertaining to the same shall be of any force or effect,
except any such contemporaneous agreement specifically referring to and modifying this Lease,
signed by both parties. Without limitation as to the generality of the foregoing, Tenant hereby
acknowledges and agrees that Landlord’s leasing agents and field personnel are only authorized to
show the Premises and negotiate terms and conditions for leases subject to Landlord’s final
approval, and are not authorized to make any agreements, representations, understandings or



37









 




obligations, binding upon Landlord, respecting the condition of the Premises or Property,
suitability of the same for Tenant’s business, or any other matter, and no such agreements,
representations, understandings or obligations not expressly contained herein or in such
contemporaneous agreement shall be of any force or effect. Neither this Lease, nor any Riders or
Exhibits referred to above may be modified, except in writing signed by both parties.




ARTICLE 37




Signage; Building Directory




     Tenant shall be permitted to install, at its sole expense and subject to the provisions of this
Article 37, appropriate signage containing Tenant’s name (i) on the entrance door to the Premises
located at the front and side of the Building, (ii) on the entrance door to the Premises itself
located within the lobby at the side of the Building, and (iii) exclusive exterior signage
displaying Tenant’s name on the Building facade (the “Exterior Signage”) in the front of the
Building.



     All signage permitted by this Article 37 shall be (a) designed and constructed (with respect to
location, size, materials, coloring, lighting and similar features) in a manner compatible with
Building standard design, signage and graphics criteria designated by Landlord; (b) subject to
Landlord’s prior written approval, which approval shall not be unreasonably withheld or delayed;
(c) subject to Tenant’s obtaining approvals from the City of Beverly Hills and any other required
governmental agency or entity; (d) subject to the Rules and applicable Laws; and (e) removed in
accordance with the removal and restoration specifications provided in Article 13 (to the extent
not inconsistent with this Article 37) upon the termination of this Lease.



     The identification and signage rights of this paragraph of this Article 37 are personal and
specific to Tenant and are not transferable by sublease, assignment, operation of law or otherwise,
except to a Transferee permitted pursuant to Article 21 (provided that, at no time during the Term
shall the rights to the Exterior Signage be exercised concurrently by more than one (1) party among
Tenant and any such permitted Transferees). The design, installation, maintenance, repair,
restoration and removal (including restoration of the facade upon which the same was located) and
all other aspects of Tenant’s signage shall be at Tenant’s sole expense. All of the foregoing
identity and signage rights in this paragraph of this Article 37 shall apply only while Tenant pays
Rent (in accordance with this Lease) for and personally occupies all of the Premises; such rights
shall be null and void at such time as Tenant fails to pay Rent (in accordance with this Lease) for
and personally occupy all the Premises and upon such failure, Landlord shall be entitled to
immediately remove Tenant’s signage.



     Tenant shall have the right to the directory board in the lobby of the Building for the designation
of the name of Tenant or its employees.



38









 





ARTICLE 38




Parking




     Tenant hereby rents from Landlord and Landlord hereby leases to Tenant all parking spaces, on
a monthly basis throughout the Term, which parking spaces shall pertain to the Property parking
facilities or areas available for tenant parking. Tenant shall rent such parking spaces from
Landlord during the initial Term without charge. During the Renewal Term, if any, Tenant shall pay
Landlord as Additional Rent on a monthly basis for such spaces at the then-prevailing rate charged
from time to time for comparable parking spaces at comparable buildings in the Beverly Hills area.
Tenant’s rental and use of such spaces is subject to the Rules (including, without limitation,
paragraph 19 thereof) and this Lease. The parking spaces rented by Tenant pursuant to this Article
38 are provided to Tenant solely for use by Tenant’s own personnel, business invitees and licensees
and such spaces may not be transferred, assigned, subleased or otherwise alienated by Tenant
without Landlord’s prior approval.



39









 




IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be executed as of the day and
date written below.




	 	 	 	 	 	 	 
	 	 	LANDLORD:
	 
	 	 	 	 	 	 
	 	 	9944 SANTA MONICA, LLC,
	 	 	a Delaware limited liability company
	 
	 	 	 	 	 	 
	 

	 	BY:
	 	/s/ [ILLEGIBLE]	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	NAME: [ILLEGIBLE]
	 
	 	 	 	 	 	 
	 	 	TITLE: President
	 
	 	 	 	 	 	 
	 	 	TENANT:
	 
	 	 	 	 	 	 
	 	 	SBA1, LLC,
	 	 	a Delaware limited liability company
	 
	 	 	 	 	 	 
	 

	 	BY:
	 	/s/ Richard Abramson	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	NAME: Richard Abramson
	 
	 	 	 	 	 	 
	 	 	TITLE: Member
	 
	 	 	 	 	 	 
	 	 	DATE SIGNED: 1-17-04







40










 








NOTICE OF LEASE DETAILS




Thursday April 22, 2004

TO: 9944 Santa Monica, LLC

          9944 Santa Monica Boulevard

          Beverly Hills, CA 90212 Att:

          Berel Schustennan



RE Office
Lease (“Original Lease”) dated as of January 20, 2004, as amended by that certain
First Amendment to Office Lease (“First Amendment”) dated
as of January 29, 2004 and that certain
Second Amendment to Office Lease (“Second Amendment”) dated as of February 6, 2004,
(collectively the “Lease”) by and between 9944 Santa Monica, LLC, a Delaware limited liability
company (“Landlord”) and SBA1, LLC, a Delaware limited liability company (“Tenant”) concerning
that certain real property (the “Property”) located in the City of Beverly Hills, County of Los
Angeles, known as 9944 Santa Monica Boulevard.




Gentlemen:



Terms used, but not defined herein have the same meanings given to them in the Lease.



By signing in the space provided below, you acknowledge that as of the date of this letter,
Tenant is not in violation of any of the terms and conditions of the Lease, including, without
limitation, Article 31 Section (1). Further, Landlord acknowledges that he has received and
approved the Tenant Entity Materials.



Also, Landlord acknowledges that it has been given proper notice under Article I of the Lease
relating to the Occupancy Period, and that Landlord will vacate the LL Occupancy Space on or
before May 1,2004.



Additionally,
Landlord approves and accepts all improvements and changes made to the
Property prior to this date, and Tenant agrees to get Landlord’s prior approval for all changes
or improvements in the Property commenced after the date of this letter.



Finally, both Landlord and Tenant agree that the Tenant’s name on the Lease and on all
subsequent documents shall be SAB 1, LLC, instead of SBA 1, LLC, which was a typographical
error.




	 	 	 
	Very truly yours,

	 	Accepted and Agreed:
	 
	 	 
	SAB1, LLC

BY Richard Abramson

	 	9944 Santa Monica LLC

BY: /s/ [ILLEGIBLE]
	/s/ Richard Abramson

	 	  
	President

	 	Title Acquisitions
	 

	 	 
	 

	 	Date signed 4/22/04