** **

**Exhibit10.13**

** **

** **

##### **OFFICE LEASE**

 

**Between**

 

**BRIGHTON ENTERPRISES, LLC,a California limited liability company**

 

 

**asLandlord**

**and**

 

**MERCANTILE NATIONAL BANK, N.A., a California “C” corporation**

 

 

 

**as Tenant**

### **Dated**

**March 30, 2005**

 

|    |   |    |   |    |   |    |   |
|---------|--------|---------|--------|---------|--------|---------|--------|
| Initial |   | Initial |   | Initial |   | Initial |   |

 

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**OFFICE LEASEBASIC LEASE INFORMATION**

                                                
|        |       | Date:                                 |       | March 29,  2005                                                                                                                                                                                                                    |
|-------------|------------|---------------------------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|        |       | Landlord:                             |       | BRIGHTON ENTERPRISES,  LLC, a California limited liability company                                                                                                                                                                 |
|        |       | Tenant:                               |       | MERCANTILE NATIONAL  BANK, N.A., a California “C” corporation

                                                                                                                                                     |
| **SECTION** |       |                                  |       |                                                                                                                                                                                                                               |
| 1.1         |       | Premises:                             |       | 9601 Wilshire  Boulevard, Suite 250 Beverly Hills, California 90210                                                                                                                                                                |
| 1.4         |       | Rentable Area of  Premises:           |       | approximately 2,559  square feet                                                                                                                                                                                                   |
| 1.4         |       | Usable Area of  Premises:             |       | approximately 2,084  square feet                                                                                                                                                                                                   |
| 2.1         |       | Term:                                 |       | Five (5) Years and  Three (3) Months                                                                                                                                                                                               |
|        |       | Anticipated  Commencement Date:       |       | April 1, 2004 (as  modified by Section 2.1)                                                                                                                                                                                        |
|        |       | Anticipated Expiration  Date:         |       | June 30, 2009 (as  modified by Section 2.1)                                                                                                                                                                                        |
| 3.1         |       | Fixed Monthly Rent:                   |       | $7,369.92                                                                                                                                                                                                                          |
| 3.3         |       | Fixed Monthly Rent  Increase          |       | Three percent (3%)                                                                                                                                                                                                                 |
| ** **  | ** ** | **Date of First Increase:**           | ** ** | ** **                                                                                                                                                                                                                         |
| ** **  | ** ** | ** **                            | ** ** | **SEE SECTION 3.3**                                                                                                                                                                                                                |
| ** **  | ** ** | **Frequency of Increase:**            | ** ** | **SEE SECTION 3.3**                                                                                                                                                                                                                |
| 3.7         |       | Security Deposit:                     |       | $0.00                                                                                                                                                                                                                              |
| 4.1         |       | Tenant’s Share                   |       | .79%                                                                                                                                                                                                                               |
| 4.2         |       | Base Year for Operating  Expenses:    |       | 2004                                                                                                                                                                                                                               |
| 6.1         |       | Use of Premises:                      |       | General office use  consistent with the operation of a first-class office building in the Beverly  Hills area                                                                                                                      |
| 16.1        |       | Tenant’s Address for  Notices:   |       |                                                                                                                                                                                                                               |
|        |       | Before the Commencement  Date:        |       | 9601 Wilshire  Boulevard, Suite 600  Beverly Hills, California 90210  With a copy to:  Mr. David Brown  Chief Financial Officer  Mercantile National Bank, N.A.  1880 Century Park East, Suite 1200  Los Angeles, California 90067 |
|        |       | After the Commencement  Date:         |       | 9601 Wilshire  Boulevard, Suite 250  Beverly Hills, California 90210  With a copy to:  Mr. David Brown  Chief Financial Officer  Mercantile National Bank, N.A.  1880 Century Park East, Suite 1200  Los Angeles, California 90067 |
|        |       | Contact:                              |       | Mr. Chuck Avis                                                                                                                                                                                                                     |
|        |       | Landlord’s Address for  Notices: |       | BRIGHTON ENTERPRISES,  LLC  c/o Douglas, Emmett and Company  Director of Property Management  808 Wilshire Boulevard, Suite 200  Santa Monica, California 90401                                                                    |

 

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| 20.5 |   | Brokers:         |   | Douglas, Emmett and  Company  808 Wilshire Boulevard, Suite 200  Santa Monica, California 90401 and  First Property Realty Corporation  350 South Beverly Drive, Suite 340  Beverly Hills, California 90212-4820 |
|------|--------|------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 21.1 |   | Parking Permits: |   | Five (5) permits for  unreserved spaces                                                                                                                                                                          |

*Except as noted hereinbelow, the foregoing BasicLease Information is hereby incorporated into and made a part of theLease.  The Section reference in the leftmargin of the Basic Lease Information exists solely to indicate where suchreference initially appears in the Lease document.  Except as specified hereinbelow, each suchreference in the Lease document shall incorporate the applicable Basic LeaseInformation.  However, in the event ofany conflict between any reference contained in the Basic Lease Information andthe specific wording of the Lease, the wording of the Lease shall control.*

 

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**OFFICE LEASETABLE OF CONTENTS**
| **ARTICLE** |   |                                                                       |
|-------------|--------|----------------------------------------------------------------------------|
| ARTICLE 1   |   | DEMISE OF PREMISES                                                         |
| ARTICLE 2   |   | COMMENCEMENT DATE AND  TERM                                                |
| ARTICLE 3   |   | PAYMENT OF RENT, LATE  CHARGE                                              |
| ARTICLE 4   |   | ADDITIONAL RENT                                                            |
| ARTICLE 5   |   | ETHICS                                                                     |
| ARTICLE 6   |   | USE OF PREMISES                                                            |
| ARTICLE 7   |   | CONDITION UPON  VACATING & REMOVAL OF PROPERTY                         |
| ARTICLE 8   |   | UTILITIES AND  SERVICES                                                    |
| ARTICLE 9   |   | TENANT’S  INDEMNIFICATION AND LIMITATION ON LANDLORD’S LIABILITY |
| ARTICLE 10  |   | COMPLIANCE WITH  LAWS                                                      |
| ARTICLE 11  |   | ASSIGNMENT AND  SUBLETTING                                                 |
| ARTICLE 12  |   | MAINTENANCE,  REPAIRS, DAMAGE, DESTRUCTION, RENOVATION AND/OR ALTERATION   |
| ARTICLE 13  |   | CONDEMNATION                                                               |
| ARTICLE 14  |   | MORTGAGE  SUBORDINATION; ATTORNMENT AND MODIFICATION OF LEASE              |
| ARTICLE 15  |   | ESTOPPEL  CERTIFICATES                                                     |
| ARTICLE 16  |   | NOTICES                                                                    |
| ARTICLE 17  |   | DEFAULT AND  LANDLORD’S OPTION TO CURE                                |
| ARTICLE 18  |   | DAMAGES; REMEDIES;  RE-ENTRY BY LANDLORD; ETC.                             |
| ARTICLE 19  |   | INSURANCE                                                                  |
| ARTICLE 20  |   | MISCELLANEOUS                                                              |
| ARTICLE 21  |   | PARKING                                                                    |
| ARTICLE 22  |   | CONCIERGE SERVICES                                                         |
| ARTICLE 23  |   | OPTION TO EXTEND  TERM                                                     |
| ARTICLE 24  |   | RIGHT OF FIRST  OFFER                                                      |

 
| Exhibits |       |
|----------|------------|
|     | A —   | Premises Plan |
|     | B —   | Improvement  Construction Agreement |
|     | B-1 — | Construction by  Tenant During Term |
|     | C —   | Rules and Regulations |
|     | D —   | First Amendment —  Commencement Date and Term |
|     | E —   | ~~Guaranty of Lease~~ — INTENTIONALLY DELETED |
|     | F —   | Asbestos Rider |
|     | G —   | ~~Form of Letter of  Credit~~ —  INTENTIONALLY DELETED |
|     | H —   | Form of  Subordination, Non-Disturbance and Attornment Agreement |

** **

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**OFFICE LEASE**

        **This Office Lease**,dated March 30, 2005, is by and betweenBRIGHTON ENTERPRISES, LLC, a California limited liability company (“Landlord”),with an office at 808 Wilshire Boulevard, Suite 200, Santa Monica,California  90401, and MERCANTILENATIONAL BANK, N.A., a California “C” corporation (“Tenant”), with an office at1880 Century Park East, Suite 1200, Los Angeles, California 90067.

**ARTICLE 1**DEMISE OF PREMISES

**Section1.1.  Demise.** Subject to the covenants and agreements contained in this Lease,Landlord leases to Tenant and Tenant hires from Landlord, Suite Number 250 (the“Premises”) on the second (2nd) floor, in the building located at9601 Wilshire Boulevard, Los Angeles, California  90210 (the “Building”). The configuration ofthe Premises is shown on Exhibit A, attached hereto and made a part hereof byreference, and Landlord and Tenant acknowledge and agree that the intent ofboth parties hereto is that said configuration shall not be materially alteredby construction of the demising walls separating the same from the balance ofthe space from which it is being demised.

        Tenant acknowledges that it has made itsown inspection of and inquiries regarding the Premises, which are alreadyimproved.  Therefore, except for theimprovements to be completed pursuant to Exhibit B, attached hereto and made apart hereof by reference, Tenant accepts the Premises in their “as-is”condition, subject to the representations and warranties contained in this Leaseand its Exhibits, and to any latent defects. Tenant further acknowledges that Landlord has made no representation orwarranty, express or implied, except as are contained in this Lease and itsExhibits, regarding the condition, suitability or usability of the Premises orthe Building for the purposes intended by Tenant.  **  **Landlord hereby represents andwarrants to Tenant that to the best of Landlord’s knowledge as of the datehereof: (i) the existing structure of the Building (including, without limitation,the roof, foundations and the exterior walls) and all building systems servingthe Premises (including, without limitation, the plumbing, electrical, andheating, ventilating and air conditioning systems) are in good operatingcondition and repair, (ii) the second (2nd) floor of the Building(including, without limitation, the Premises and the common areas thereof) are(x) in compliance with all applicable Codes (as such term is defined in Section10.1 of this Lease), including, without limitation, all applicable covenants orrestrictions of record and all applicable building codes, regulations andordinances in effect as of the Commencement Date, and (y) free of all hazardoussubstances, including, but not limited to, any asbestos-containing materials(whether or not friable) and lead-based paint.

        The Building, the Building’s parkingfacilities, any outside plaza areas, land and other improvements surroundingthe Building which are designated from time to time by Landlord as common areasappurtenant to or servicing the Building, and the land upon which any of theforegoing are situated, are herein sometimes collectively referred to as the “RealProperty.”

**Section1.2.  Tenant’s Non-Exclusive Use. **Subject to the contingencies contained herein, Tenantis granted the nonexclusive use of the common corridors and hallways,stairwells, elevators, restrooms, parking facilities, lobbies and other publicor common areas located on the Real Property. However, the manner in which such public and common areas are maintainedand operated shall be at the reasonable discretion of Landlord, and Tenant’suse thereof shall be subject to such reasonable and non-discriminatory rules,regulations and restrictions as Landlord may make from time to time.

**Section1.3.  Landlord’s Reservation ofRights. **Landlord specifically reserves to itself use, controland repair of the structural portions of all perimeter walls of the Premises,any balconies, terraces or roofs adjacent to the Premises (including anyflagpoles or other installations on said walls, balconies, terraces or roofs)and any space in and/or adjacent to the Premises used for shafts, stairways,pipes, conduits, ducts, mail chutes, conveyors, pneumatic tubes, electric orother utilities, sinks, fan rooms or other Building facilities, and the usethereof, as well as access thereto through the Premises.  Landlord also specifically reserves to itselfthe following rights:

**a)****             **To designate all sources furnishing signpainting or lettering;

**b)****             **To constantly have pass keys to thePremises;

**c)****             **To grant to anyone the exclusive right toconduct any particular business or undertaking in the Building, so long asLandlord’s granting of the same does not prohibit Tenant’s use of the Premisesfor Tenant’s Specified Use or Particular Usage, each as defined in Article 6;

**d)****             **To enter the Premises at any reasonabletime with reasonable notice (except for emergencies) to inspect, repair, alter,improve, update or make additions to the Premises or the Building, so long asTenant’s access to and use of the Premises is not materially impaired thereby;

**e)****             **During the last six (6) months of theTerm, to exhibit the Premises to prospective future tenants upon not less than24 hours prior notice and accompanied by a representative of Tenant;

 

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**f)****               **Subject to the provisions of Article 12,to, at any time, and from time to time, whether at Tenant’s request or pursuantto governmental requirement, repair, alter, make additions to, improve, ordecorate all or any portion of the Real Property, Building or Premises at anyreasonable time with reasonable notice (except for emergencies), so long asTenant’s access to and use of the Premises and the parking facilities is notmaterially impaired thereby.  Inconnection therewith, and without limiting the generality of the foregoingrights, Landlord shall specifically have the right to remove, alter, improve orrebuild all or any part of the lobby of the Building as the same is presentlyor shall hereafter be constituted, so long as following any such alteration orrebuilding, the Building has a first-class lobby;

**g)****            **Subject to the provisions ofArticle 12, Landlord reserves the right to make alterations or additionsto or change the location of elements of the Real Property and any common areasappurtenant thereto at any reasonable time with reasonable notice (except foremergencies), so long as Tenant’s access to and use of the Premises and theparking facilities is not materially impaired thereby; and/or

**h)****            **To take such other actions as mayreasonably be necessary when the same are required to preserve, protect orimprove the Premises, the Building, or Landlord’s interest therein at anyreasonable time with reasonable notice (except for emergencies), so long asTenant’s access to and use of Premises and the parking facilities is notmaterially impaired thereby.

**Section 1.4.  Area.**  Since thePremises are not yet fully demised, once the exact location of the demisingwalls is established, Landlord and Tenant agree that a one-time recalculationof the Rentable Area of the Premises shall be made by Stevenson Systems, Inc.,an independent planning firm, in accordance with the June, 1996 standards setforth by the Building Owners and Managers Association (the “PremisesRemeasurement”).  Such determinationshall be determinative unless patently unreasonable.  Tenant and Landlord agree to execute anamendment to this Lease, documenting the revised Usable Area and Rentable Areaas documented by Stevenson Systems, it being expressly understood and agreedthat there shall be no further re-measurement of the Premises following thePremises Remeasurement.  The partiesfurther expressly acknowledge and agree that there shall be no increase ordecrease in the Fixed Monthly Rent or Tenant’s Share as a result of thePremises Re-measurement.

        Landlord and Tenant further agree thatthe Rentable Area of the Premises shall be calculated on the basis of 1.2277times the estimated Usable Area, regardless of what actual common areas of theBuilding may be, or whether they may be more or less than 22.77% of the totalestimated Usable Area of the Building, and is provided solely to give a generalbasis for comparison and pricing of this space in relation to other spaces inthe market area.

        Landlord and Tenant further agree thatonce the Rentable Area and Usable Area of the Premises have been determined bythe Premises Remeasurement as specified hereinabove, even if later either partyalleges that the actual Rentable Area or Usable Area of the Premises is more orless than the figures stated herein; and whether or not such figures areinaccurate, the Rentable and Usable figures agreed upon shall be conclusivelydeemed to be the Rentable Area or Usable Area of the Premises, as the case maybe; provided, however, that if the Usable Area and the Rentable Area areincreased pursuant to this Section 1.4, it is expressly understood and agreedthat there shall be no change in the initial Fixed Monthly Rent payable for thePremises and  there shall be no change inTenant’s Share (as described in Section 4.2 d) below).

**Section1.5.  Quiet Enjoyment.** So long as Tenant is not in default beyond any applicable notice and/orcure period set forth in this Lease, and subject to the limitations imposedunder Article 14 of this Lease, Tenant shall lawfully and quietly hold,occupy and enjoy the Premises during the Term.

**Section1.6.  No Light, Air or View Easement.** Any diminution or shutting off of light, air or view by any structurewhich is now or may hereafter be erected on lands adjacent to the Building shallin no way affect this Lease or impose any liability on Landlord.  Noise, dust or vibration or other ordinaryincidents to new construction of improvements on lands adjacent to theBuilding, whether or not by Landlord, shall in no way affect this Lease orimpose any liability on Landlord.

**Section1.7.  Relocation.** Landlord shall have the one-time right at any time, except during thelast six (6) months of the Term, and after giving Tenant a minimum of ninety(90) days prior written notice, to:

**a)****             **provide and furnish Tenant with spaceelsewhere in the Building (but not on a lower floor) of approximately the samesize, views, configuration and quality of tenant improvements as the Premises(the “Substitute Premises”) and

**b)****             **relocate Tenant to such SubstitutePremises.

        Landlord shall pay all costs andexpenses incurred as a result of such relocation (including (i) Tenant’sreasonable reprinting costs for announcements, stationery and business cards,and (ii) costs incurred in connection with the relocation of Tenant’s telephoneand data cabling equipment.  If Landlordmoves Tenant to the Substitute Premises, each and every term, covenant andcondition of this Lease shall remain in full force and effect and be deemedapplicable to the Substitute Premises, as though Landlord and Tenant hadentered into an express written amendment of this Lease with respect thereto,except that if the approximate Rentable square footage of the SubstitutePremises is less than that of the Premises, the Fixed Monthly Rent and Tenant’sShare  shall be appropriately reduced,and if the approximate Rentable square footage of the Substitute Premises ismore than that of the Premises, the Fixed Monthly Rent and Tenant’s Share shallbe based on the square footage of the Premises prior to the relocation, andshall not increase.

 

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        If Tenant refuses to permit Landlord torelocate Tenant as specified above, Landlord shall have the right to terminatethis Lease effective ninety (90) days from the date Landlord provided Tenantwith the original notification of intent to relocate.

**ARTICLE2**           COMMENCEMENT DATE AND TERM

**Section 2.1. Commencement Date and Term.**  This Leaseshall commence five (5) business days following the date Landlord substantiallycompletes the Improvements contemplated under Exhibit B (the “Commencement Date”),and shall end, unless sooner terminated as otherwise provided herein, atmidnight on the last calendar day of the calendar month which occurs five (5)years and three (3) months after the Commencement Date (the “Termination Date”).The anticipated Commencement Date is April 1, 2004.  Landlord and Tenant shall promptly execute anamendment to this Lease (the “First Amendment”) substantially in the formattached hereto as Exhibit D, confirming the finalized Commencement Date andTerm as soon as they are determined.

        Forpurposes of establishing the Commencement Date, substantial completion shall bedefined as that point in the construction process when all of the structural,mechanical, plumbing and electrical work specified herein has been performed;the paint, carpet, hard flooring materials, base moldings, and millwork, ifany, have been installed, and a majority of the other finish work specified inTenant’s plans has been completed in such a manner that Tenant could, if ittook possession of the Premises, enjoy beneficial occupancy thereof.

        Tenant’s taking possession of thePremises for the purpose of conducting Tenant’s normal business operations inthe Premises shall be deemed conclusive evidence that, as of the CommencementDate:

**a)****             **Landlord has substantially completed theTenant Improvements contemplated hereunder, except for any minor punchlistitems to be completed; and

**b)****             **the Premises are in good order and repair,subject to latent defects and the representations and warranties set forth inthis Lease.

        Provided that Tenant does not delayLandlord’s completion of the Improvements that Landlord is required tocomplete, Tenant may take possession of the Premises up to two (2) weeks (butnot less than one (1) week) prior to the anticipated Commencement Date, solelyfor the purpose of installing Tenant’s furniture, fixtures and equipment,computer and telephone cabling.  Saidearly possession shall be subject to Tenant complying with all of theprovisions and covenants contained herein, except that Tenant shall not beobligated to pay Fixed Monthly Rent or Additional Rent until the CommencementDate.  If Tenant’s early possession doesso delay completion of the Improvements, the Commencement Date shall be thedate the Improvements would have been completed had no such delay occurred.

        If for any reason (including Landlord’sinability to complete the Improvements called for hereunder) Landlord is unableto deliver possession of the Premises to Tenant on the anticipated CommencementDate, this Lease shall not be void or voidable, nor shall Landlord be liable toTenant for any damage resulting from Landlord’s inability to deliver suchpossession.  However, Tenant shall not beobligated to pay the Fixed Monthly Rent or Additional Rent that Tenant isrequired to pay pursuant to Section 3.1 until such possession of thePremises has been delivered to Tenant by Landlord.  Except for such delay in the commencement ofRent, Landlord’s failure to give possession on the anticipated CommencementDate shall in no way affect Tenant’s obligations hereunder.

        If possession of the Premises is nottendered by Landlord within ninety (90) days after the anticipated CommencementDate, then Tenant shall have the right to terminate this Lease by givingwritten notice to Landlord within ten (10) days after such failure.  If such notice of termination is not so givenby Tenant within said ten (10) day time period, then this Lease shall continuein full force and effect.

        **Section 2.2.  Holding Over.**  If Tenant fails to deliver possession of thePremises on the Termination Date, but holds over after the expiration orearlier termination of this Lease without the express prior written consent ofLandlord, such tenancy shall be construed as a tenancy from month-to-month onthe same terms and conditions as are contained herein, except that the FixedMonthly Rent payable by Tenant during the first thirty (30) days of holdingover (the “Initial Holdover Period”) shall automatically increase as of theTermination Date to an amount equal to one hundred twenty-five  percent (125%) of the Fixed Monthly Rentpayable by Tenant for the calendar month immediately prior to the date whenTenant commences such holding over (the “Holdover Rent”).  After the expiration of the Initial HoldoverPeriod, the Holdover Rent shall be increased to one hundred fifty percent(150%) of the Fixed Monthly Rent payable by Tenant for the calendar monthimmediately prior to the date when Tenant commenced such holding over.  Such Holdover Rent shall be paid during suchperiod as Tenant retains possession of the Premises.  However, Tenant’s payment of such HoldoverRent, and Landlord’s acceptance thereof, shall not constitute a waiver by Landlordof any of Landlord’s rights or remedies with respect to such holding over, norshall it be deemed to be a consent by Landlord to Tenant’s continued occupancyor possession of the Premises past the time period covered Tenant’s payment ofthe Holdover Rent.

        Furthermore, if Tenant fails to deliverpossession of the Premises to Landlord upon the expiration or earliertermination of this Lease, and Landlord has theretofore notified Tenant inwriting that Landlord requires possession of the Premises for a succeedingtenant, then, in addition to any other liabilities to Landlord accruingtherefrom, Tenant shall protect, defend, indemnify and hold Landlord harmlessfrom all loss, costs (including reasonable attorneys’ fees and expenses) andliability resulting from such failure, including without limiting theforegoing, any claims made by any succeeding tenant arising out of Tenant’sfailure to so surrender, and any lost profits to Landlord resulting therefrom.

 

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        Notwithstanding the provisions containedhereinabove regarding Tenant’s liability for a continuing holdover, Landlordagrees to use commercially reasonable efforts to insert into any future leaseof another tenant proposing to occupy the Premises provisions  permitting mitigation of Tenant’s damagesarising out of Tenant’s temporary holdover.

**ARTICLE 3**           PAYMENT OF RENT, LATE CHARGE

**Section3.1.  Payment of Fixed Monthly Rent andAdditional Rent.**  “Rent” shall mean: all payments of monies inany form whatsoever required under the terms and provisions of this Lease, andshall consist of:

**a)****             **“Fixed Monthly Rent,” which shall bepayable in equal monthly installments of $7,369.92; plus

**b)****             **Additional Rent as provided inArticle 4 and elsewhere in this Lease.

**Section3.2.  Manner of Payment.** Tenant shall pay Fixed Monthly Rent and Additional Rent immediately uponthe same becoming due and payable, without demand therefor, and without anyabatement, set off or deduction whatsoever, except as may be expressly providedin this Lease.  Landlord’s failure tosubmit statements to Tenant stating the amount of Fixed Monthly Rent orAdditional Rent then due, including Landlord’s failure to provide to Tenant acalculation of the adjustment as required in Section 3.3 or the EscalationStatement referred to in Article 4, shall not constitute Landlord’s waiverof Tenant’s requirement to pay the Rent called for herein, unless Landlordfails to provide the Escalation Statement described in Article 4 within one (1)year after the expiration of the calendar year to which such EscalationStatement is applicable, in which event Landlord shall be deemed to have waivedits right to collect any Additional Rent for such calendar year for whichTenant had not theretofore been billed. Tenant’s failure to pay Additional Rent as provided herein shallconstitute a material default equal to Tenant’s failure to pay Fixed MonthlyRent when due.

        Rent shall be payable in advance on thefirst day of each and every calendar month throughout the Term, in lawful moneyof the United States of America, to Landlord at 9601 Wilshire Boulevard, SuiteGL-25, Beverly Hills, California  90210,or at such other place(s) as Landlord designates in writing to Tenant.  Tenant’s obligation to pay Rent shall begin onthe Commencement Date and continue throughout the Term, without abatement,setoff or deduction, except as otherwise specified hereinbelow.

        On or before April 1, 2004, Tenant shallpay to Landlord the Fixed Monthly Rent due for the first month of the Term.

**Section3.3.  Fixed Monthly Rent Increase. **Commencing on the date that is ninety (90) daysfollowing the Commencement Date, and continuing through the last calendar dayof the twelfth (12th) calendar month of the Term, the Fixed MonthlyRent payable by Tenant shall increase from $7,369.92 per month to $7,753.77 permonth.

        Commencing the first calendar day of thethirteenth (13th) calendar month of the Term, and continuing throughthe last calendar day of the twenty-fourth (24th) calendar month ofthe Term, the Fixed Monthly Rent payable by Tenant shall increase from$7,753.77 per month to $7,986.38 per month.

        Commencing the first calendar day of thetwenty-fifth (25th) calendar month of the Term, and continuingthrough the last calendar day of the thirty-sixth (36th) calendarmonth of the Term, the Fixed Monthly Rent payable by Tenant shall increase from$7,986.38 per month to $8,225.97 per month.

        Commencing the first calendar day of thethirty-seventh (37th) calendar month of the Term, and continuing thelast calendar day of the forty-eighth (48th) calendar month of theTerm, the Fixed Monthly Rent payable by Tenant shall increase from $8,225.97per month to $8,472.75 per month.

        Commencing the first calendar day of theforty-ninth (49th) calendar month of the Term, and continuing thelast calendar day of the sixtieth (60th) calendar month of the Term,the Fixed Monthly Rent payable by Tenant shall increase from $8,472.75 permonth to $8,726.94 per month.

        Commencing the first calendar day of thesixty-first (61st) calendar month of the Term, and continuingthroughout the remainder of the initial Term, the Fixed Monthly Rent payable byTenant shall increase from $8,726.94 per month to $8,988.74 per month.

        Landlord and Tenant shall, in the FirstAmendment, confirm the actual dates upon which the changes in Fixed MonthlyRent specified above shall occur.

        Notwithstanding the foregoing, Tenantshall be permitted to defer one hundred percent (100%) of the Fixed MonthlyRent due for the second (2nd), third (3rd), thirteenth(13th), twenty-fifth (25th) and thirty-seventh (37th)months of the Term (collectively, the “Rent Deferral Amount”).  So long as Tenant does not commit a material,uncured default during the Term that has resulted in Landlord filing an unlawfuldetainer action against Tenant, the entire Rent Deferral Amount shall be abatedand forgiven as of the Termination Date.

**Section3.4.  Tenant’s Payment of Certain Taxes.** Tenant shall, within thirty (30) days following Tenant’s receipt ofsubstantiating documentation from Landlord, reimburse Landlord, as AdditionalRent, for any and all taxes, surcharges, levies, assessments, fees and chargespayable by Landlord when:

**a)****             **assessed on, measured by, or reasonablyattributable to

the cost or value of Tenant’s equipment, furniture,fixtures and other personal property located in the Premises;

 

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**b)****             **on or measured by any rent payablehereunder, including, without limitation, any gross income tax, gross receiptstax, or excise tax levied by the City of Beverly Hills or the County of LosAngeles or any other governmental body with respect to the receipt of such rent(computed as if such rent were the only income of Landlord), but solely whenlevied by the appropriate City or County agency in lieu of, or as an adjunctto, such business license(s), fees or taxes as would otherwise have beenpayable by Tenant directly to such taxing authority. Notwithstanding theforegoing, the Beverly Hills City Rental Tax shall be paid by Landlord andincluded in Operating Expenses.  Tenantshall not be billed directly for such tax; or

**c)****             **upon or with respect to the possession,leasing, operating, management, maintenance, alteration, repair, use oroccupancy by Tenant of the Premises or any portion thereof. If it becomesunlawful for Tenant so to reimburse Landlord, the rent payable to Landlordunder this Lease shall be revised to net Landlord the same rent afterimposition of any such tax as would have been payable to Landlord prior to theimposition of any such tax.

        Said taxes shall be due and payablewhether or not now customary or within the contemplation of Landlord andTenant.  Notwithstanding the above, in noevent shall the provisions of this Section 3.4 serve to entitle Landlordto reimbursement from Tenant for any federal, state, county or city income taxpayable by Landlord or the managing agent of Landlord.

**Section 3.5. Certain Adjustments.**  If:

**a)****             **the Commencement Date occurs on other than January 1stof a calendar year, or the Lease expires or terminates on other than December31st of a calendar year;

**b)****             **the size of the Premises or the Building changesduring a calendar year;

**c)****             **or any abatement of Fixed Monthly Rent orAdditional Rent occurs during a calendar year,

then the amountpayable by Tenant or reimbursable by Landlord during such year shall beadjusted proportionately on a daily basis, and the obligation to pay suchamount shall survive the expiration or earlier termination of this Lease.

        If the Commencement Date occurs on otherthan the first day of a calendar month, or the Lease expires on a day otherthan the last day of a calendar month, then the Fixed Monthly Rent andAdditional Rent payable by Tenant shall be appropriately apportioned on aprorata basis for the number of days remaining in the month of the Term forwhich such proration is calculated.

        If the amount of Fixed Monthly Rent orAdditional Rent due is modified pursuant to the terms of this Lease, suchmodification shall take effect the first day of the calendar month immediatelyfollowing the date such modification would have been scheduled.

**Section3.6.  Late Charge and Interest.** Tenant acknowledges that late payment by Tenant to Landlord of FixedMonthly Rent or Additional Rent will cause Landlord to incur costs notcontemplated by this Lease, the exact amount of which are extremely difficultand impracticable to fix.  Such costsinclude, without limitation, processing and accounting charges and late chargesthat may be imposed on Landlord by the terms of any encumbrance and notesecured by any encumbrance covering the Premises.  Therefore, if any installment of FixedMonthly Rent or Additional Rent and other payment due from Tenant hereunder isnot received by Landlord within five (5) days of the date it becomes due,Tenant shall pay to Landlord on demand an additional sum equal to five percent(5%) of the overdue amount as a late charge. The parties agree that this late charge represents a fair and reasonablesettlement against the costs that Landlord will incur by reason of Tenant’slate payment.  Acceptance of any latecharge shall not constitute a waiver of Tenant’s default with respect to theoverdue amount, or prevent Landlord from exercising any of the other rights andremedies available to Landlord.

        Every installment of Fixed Monthly Rentand Additional Rent and any other payment due hereunder from Tenant to Landlordwhich is not paid within twelve (12) days after the same becomes due andpayable shall, in addition to any Late Charge already paid by Tenant, bearinterest at the rate of ten percent (10%) per annum from the date that the sameoriginally became due and payable until the date it is paid.  Landlord shall bill Tenant for said interest,and Tenant shall pay the same within five (5) days of receipt of Landlord’sbilling.

        Notwithstanding the foregoing, Tenantshall not be assessed any late charge or interest for the first two (2) latepayments in each twelve (12) month period of the Term so long as Tenant payssuch amount within five (5) days of Tenant’s receipt of written notice thatsuch amount has not been paid.

**Section 3.7.  Security Deposit.**  **INTENTIONALLYDELETED**

**ARTICLE 4**ADDITIONAL RENT

**Section4.1.  Certain Definitions. **As used in this Lease:

**a)****             **“Escalation Statement” means a statementby Landlord, setting forth the amount payable by Tenant or by Landlord, as thecase may be, for a specified calendar year pursuant to this Article 4.

**b)****             **“Operating Expenses” means the followingin a referenced calendar year, including the Base Year as hereinafter defined,calculated, as to expenses that vary with occupancy, assuming the Building isat least ninety-five percent (95%) occupied: all costs of management, operation, maintenance, and repair of theBuilding.

 

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                                Byway of illustration only, Operating Expenses shall include, but not be limitedto: management fees paid by Landlord to any third-party, which shall not exceedthose reasonable and customary in the geographic area in which the Building islocated; water and sewer charges; any and all insurance premiums not otherwisedirectly payable by Tenant; license, permit and inspection fees; airconditioning (including repair of same); heat; light; power and otherutilities; steam; labor; cleaning and janitorial services; guard services;supplies; materials; equipment and tools.

                        Operating Expenses shall also include thecost or portion thereof of those capital improvements made to the Building byLandlord during the Term:

**i)****               **to the extent that such capital improvements reduceother direct expenses, when the same were made to the Building by Landlordafter the Commencement Date, or

**ii)****           **that are required under any governmental law orregulation that was not applicable to the Building as of the Commencement Date.

                                Saidcapital improvement costs, or the allocable portion thereof (as referred to inclauses (i) and (ii) above), shall be amortized on a straight-line basis overthe useful life of any such capital improvement pursuant to generally-acceptedaccounting principles, together with interest on the unamortized balance at therate of ten percent (10%) per annum.

                                OperatingExpenses shall also include all general and special real estate taxes,increases in assessments or special assessments and any other ad valorem taxes,rates, levies and assessments paid during a calendar year (or portion thereof)upon or with respect to the Building and the personal property used by Landlordto operate the Building, whether paid to any governmental or quasi-governmentalauthority, and all taxes specifically imposed in lieu of any such taxes (butexcluding taxes referred to in Section 3.4 for which Tenant or othertenants in the Building are liable) including fees of counsel and experts,reasonably incurred by, or reimbursable by Landlord in connection with anyapplication for a reduction in the assessed valuation of the Building and/orthe land thereunder or for a judicial review thereof, (collectively “AppealFees”), but solely to the extent that the Appeal Fees result directly in areduction of taxes otherwise payable by Tenant. However, in no event shall the portion of Operating Expenses used tocalculate any billing to Tenant attributable to real estate taxes and assessmentsfor any expense year be less than the billing for real estate taxes andassessments during the Base Year.

                                OperatingExpenses shall also include, but not be limited to, the premiums for thefollowing insurance coverage: all-risk, structural, fire, boiler and machinery,liability, earthquake and for replacement of tenant improvements to a maximumof $35.00 per usable square foot, and for such other coverage(s), and at suchpolicy limit(s) as Landlord deems reasonably prudent and/or are required by anylender or ground lessor, which coverage and limits Landlord may, in Landlord’sreasonable discretion, change from time to time.

                                If, inany calendar year following the Base Year, as defined hereinbelow (a “SubsequentYear”), a new expense item (e.g. earthquake insurance, concierge services;entry card systems), is included in Operating Expenses which was not includedin the Base Year Operating Expenses, then the cost of such new item shall beadded to the Base Year Operating Expenses for purposes of determining theAdditional Rent payable under this Article 4 for such Subsequent Year.  During each Subsequent Year, the same amountshall continue to be included in the computation of Operating Expenses for theBase Year, resulting in each such Subsequent Year Operating Expenses onlyincluding the increase in the cost of such new item over the Base Year, as soadjusted.  However, if in any SubsequentYear thereafter, such new item is not included in Operating Expenses, no suchaddition shall be made to Base Year Operating Expenses.

                                Conversely,as reasonably determined by Landlord, when an expense item that was originallyincluded in the Base Year Operating Expenses is, in any Subsequent Year, nolonger included in Operating Expenses, then the cost of such item shall bedeleted from the Base Year Operating Expenses for purposes of determining theAdditional Rent payable under this Article 4 for such Subsequent Year.  The same amount shall continue to be deletedfrom the Base Year Operating Expenses for each Subsequent Year thereafter thatthe item is not included.  However, ifsuch expense item is again included in the Operating Expenses for anySubsequent Year, then the amount of said expense item originally included inthe Base Year Operating Expenses shall again be added back to the Base Year OperatingExpenses.

**c)****             ****Exclusions from OperatingExpenses**.  Notwithstanding anything contained in thedefinition of Operating Expenses as set forth in Subsection 4.1 b) of thisLease, Operating Expenses shall not include the following:

**                       ****i)            **Any ground lease rental;

**                       ****ii)           **The costs of repairs to the Building, if the costs of such repairs isreimbursed by the insurance carried by Landlord or subject to award under anyeminent domain proceeding;

**                       ****iii)          **Costs, including permit, license and inspection costs, incurred withrespect to the installation of Tenant’s or other occupant’s improvements orincurred in renovating or otherwise improving, decorating, painting orredecorating vacant space for Tenant or other occupants of the Building;

 

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**                       ****iv)           **Depreciation, amortization and interest payments, except asspecifically permitted herein or except on materials, tools supplies andvendor-type equipment purchased by Landlord to enable Landlord to supplyservices Landlord might otherwise contract for with a third party where suchdepreciation, amortization and interest payments would otherwise have beenincluded in the charge for such third party’s services.  In such a circumstance, the inclusion of alldepreciation, amortization and interest payments shall be determined pursuantto generally accepted accounting principles, consistently applied, amortizedover the reasonably anticipated useful life of the capital item for which suchamortization, depreciation or interest allocation was calculated;

**                       ****v)**             Marketingcosts, including leasing commissions, attorneys’ fees incurred in connectionwith the negotiation and preparation of letters, deal memos, letters of intent,leases subleases and/or assignments, space planning costs, and other costs andexpenses incurred in connection with lease, sublease and/or assignmentnegotiations and transactions with present or prospective tenants or otheroccupants of the Building;

                        **vi)**            Expensesfor services not offered to Tenant or for which Tenant is charged directly,whether or not such services or other benefits are provided to another tenantor occupant of the Building;

                        **vii)         **Costsincurred due to Landlord’s or any tenant of the Building’s violation, otherthan Tenant, of the terms and conditions of any lease or rental agreement inthe Building;

                        **viii)**        That portion of any billing by Landlord,its subsidiaries or affiliates for goods and/or services in the Building, tothe extent that such billing exceeds the costs of such goods and/or services ifrendered by an unaffiliated third parties on a competitive basis;

                        **ix)**           Costsincurred by Landlord for structural earthquake repairs necessitated by theJanuary 17, 1994 earthquake that occurred in the vicinity of the Building;

                        **x)**             Interest,principal, points and fees on debts or amortization on any mortgage ormortgages or any other debt instrument encumbering the Building or the landthereunder;

**                       ****xi)**           Costsassociated with operating the entity which constitutes Landlord, as the sameare distinguished from the costs of operation of the Building, includingpartnership accounting and legal matters, costs of defending any lawsuits withany mortgagee (except as the actions of Tenant may be in issue), costs ofselling, syndicating, financing, mortgaging or hypothecating any of Landlord’sinterest in the Building, costs (including attorneys’ fees and costs ofsettlement judgments and payments in lieu thereof) arising from claims,disputes or potential disputes in connection with potential or actual claims,litigation or arbitration pertaining to Landlord’s ownership of the Building;

                        **xii)**          Advertisingand promotional expenditures, and costs of signs in or on the Buildingidentifying the owner of the Building, or other tenants signs;

                        **xiii)        **Electric, gas or other power costs forwith Landlord has been directly reimbursed by another tenant or occupant of theBuilding, or for which any tenant directly contracts with the local publicservice company;

**                       ****xiv)         **Tax penalties and interest incurred as aresult of Landlord’s negligent or willful failure to make payments and/or tofile any income tax or informational return(s) when due, unless suchnon-payment is due to Tenant’s nonpayment of rent;

**                       ****xv)          **Costs incurred by Landlord to comply with notices of violation of theAmericans With Disabilities Act, as amended, when such notices are forconditions existing prior to the Commencement Date;

**                       ****xvi)         **Any charitable or politicalcontributions;

**                       ****xvii)       **Thepurchase or rental price of any sculpture, paintings or other object of art,whether or not installed in, on or upon the Building;

**                       ****xviii)      **Anycompensation paid or expenses reimbursed to clerks, attendants or other personsworking in any commercial concession(s) operated by Landlord, and any servicesprovided, taxes attributable to and costs incurred in connection with theoperation of any retail or restaurant operations in the Building;

**                       ****xix)        **Any accelerated payment(s) made atLandlord’s election on obligations, including, without limitation, taxes andassessments, undertaken by of which would not otherwise become due, to theextent that such accelerated payment(s) exceed the amount otherwise payable hadLandlord not elected to accelerate payment thereof.  Notwithstanding such exclusion, the balanceof such accelerated payment shall be included by Landlord in operating expensecalculations for succeeding years, as if the payment had been made whenoriginally due prior to such acceleration.

                        **xx)  **        Costs, including attorneys’ fees andsettlement judgments and/or payments in lieu thereof, arising from actual orpotential claims, disputes, litigation or arbitration pertaining to Landlordand/or the Building;

                        **xxi)**        Insurance deductibles in excess ofreasonable and customary deductible amounts, and/or whether or not reasonableand/or customary, in excess of $250,000 in any calendar year;

 

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| **xxii)**  |   | Costs of repairs which would have been covered by casualty insurance  but for Landlord’s failure to maintain casualty insurance to cover the  replacement value of the Building as required by this Lease; |
|------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **xxiii)** |   | Capital  expenditures not otherwise permitted hereunder;                                                                                                                                                        |
| **xxiv)**  |   | The assessment or billing of operating expenses that results in  Landlord being reimbursed more than one hundred percent (100%) of the total  expenses for the calendar year in question;                       |
| **xxv)**   |   | Costs to remove or abate or remediate hazardous materials or comply  with laws regulating hazardous materials;                                                                                                  |
| **xxvi)**  |   | Any bad debt loss, rent loss or reserves for bad debts or rent loss;  and                                                                                                                                       |
| **xxvii)** |   | Costs incurred by Landlord to comply with applicable Codes (as such  term is defined in Section 10.1 of this Lease), when compliance is in  connection with conditions existing prior to the Commencement Date. |
| ** ** |   |                                                                                                                                                                                                            |

**d)**“Tenant’s Share” means .79%, which is derived bydividing the usable square footage of the Premises (2,084) by the usable squarefootage of the Building (265,105).

**Section 4.2. Calculation of Tenant’s Share of Increases in Operating Expenses. **If, commencing with the calendar year 2005, theOperating Expenses for any calendar year during the Term, or portion thereof,(including the last calendar year of the Term), have increased over theOperating Expenses for the calendar year 2004 (the “Base Year”), then withinthirty (30) days after Tenant’s receipt of Landlord’s computation of suchincrease (an “Escalation Statement”), Tenant shall pay to Landlord, asAdditional Rent, an amount equal to the product obtained by multiplying suchincrease by Tenant’s Share.

        Landlordmay, at or after the start of any calendar year subsequent to the Base Year,notify Tenant of the amount which Landlord estimates will be Tenant’s monthlyshare of any such increase in Operating Expenses for such calendar year overthe Base Year and the amount thereof shall be added to the Fixed Monthly Rentpayments required to be made by Tenant in such year.  If Tenant’s Share of any such increase inrent payable hereunder as shown on the Escalation Statement is greater or lessthan the total amounts actually billed to and paid by Tenant during the yearcovered by such statement, then within thirty (30) days thereafter, Tenantshall pay in cash any sums owed Landlord or, if applicable, Tenant shall eitherreceive a credit against any Fixed Monthly Rent and/or Additional Rent nextaccruing for any sum owed Tenant, or if Landlord’s Escalation Statement isrendered after the expiration or earlier termination of this Lease andindicates that Tenant’s estimated payments have exceeded the total amount towhich Tenant was obligated, then provided that Landlord is not owed any othersum by Tenant, Landlord shall issue a cash refund to Tenant within thirty (30)days after Landlord’s completion of such Escalation Statement.

        Withinone hundred fifty (150) days after receipt of a statement by Tenant, if Tenantdisputes the amount of Additional Rent set forth in the statement, Tenant mayreview Landlord’s records with respect to such statement at Landlord’soffices.  Tenant may, after such review,but within one hundred fifty (150) days after receipt of a statement, retain anindependent certified public accountant (“Tenant’s Accountant”) to, afterreasonable notice to Landlord and at reasonable times, inspect Landlord’srecords with respect to such statement at Landlord’s offices, provided thatTenant is not then in default under this Lease beyond any applicable noticeand/or cure period and Tenant has paid all amounts required to be paid underthe applicable statement.  In connectionwith such inspection, Tenant and Tenant’s agents must agree in advance tofollow Landlord’s reasonable rules and procedures regarding inspections ofLandlord’s records, and shall execute a commercially reasonable confidentialityagreement regarding such inspection. Tenant’s failure to dispute the amount of Additional Rent set forth inany Statement within one hundred fifty (150) days of Tenant’s receipt of suchstatement shall be deemed to be Tenant’s approval of such statement and Tenant,thereafter, waives the right or ability to dispute the amounts set forth insuch statement.  If after suchinspection, Tenant still disputes such Additional Rent, a determination as tothe proper amount shall be made, at Tenant’s expense, by an independentcertified public accountant (“Landlord’s Accountant”) selected by Landlord andsubject to Tenant’s reasonable approval; provided that if such determination byLandlord’s Accountant proves that Operating Expenses were overstated by morethan five percent (5%), then the cost of Landlord’s Accountant and Tenant’s Accountant and the costs of suchdetermination shall be paid for by Landlord. Tenant hereby acknowledges that Tenant’s sole right to inspect Landlord’sbooks and records and to contest the amount of Operating Expenses payable byTenant shall be as set forth in this Section 4.2 and Tenant hereby waives anyand all other rights pursuant to applicable law to inspect such books andrecords and/or to contest the amount of Operating Expenses payable by Tenant.

**Section4.3.  Tenant’s Payment of Direct Chargesas Additional Rent. **Tenant shall promptly and duly pay allcosts and expenses incurred for or in connection with any Tenant Change orTenant Service, and discharge any mechanic’s or other lien created against thePremises, Building or the Real Property arising as a result of or in connectionwith any Tenant Change or Tenant Service as Additional Rent by paying the same,bonding or manner otherwise provided by law.

        Any other cost, expense, charge, amountor sum (other than Fixed Monthly Rent) payable by Tenant as provided in thisLease shall also be considered Additional Rent.

 

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        Certain individual items of cost orexpense may, in the reasonable determination of Landlord, be separately chargedand billed to Tenant by Landlord, either alone or in conjunction with anotherparty or parties, if they are deemed in good faith by Landlord to apply solelyto Tenant and/or such other party or parties and are not otherwise normallyrecaptured by Landlord as part of normal operating expenses.  Landlord shall give Tenant prior notice andthe opportunity to cure any circumstance that would give rise to such separateand direct billing.

        Said separate billing shall be paid asAdditional Rent, regardless of Tenant’s Share. Such allocations by Landlord shall be binding on Tenant unless patentlyunreasonable, and shall be payable within thirty (30) days after receipt ofLandlord’s billing therefor.

**ARTICLE 5**ETHICS

**INTENTIONALLY DELETED**

**ARTICLE 6**USE OF PREMISES

**Section 6.1.  Use. **The Premises shall only be for generaloffice use consistent with the operation of a first-class office building inthe Beverly Hills area (the “Specified Use”) and for no other purposes, withoutLandlord’s prior written consent, which consent shall be in Landlord’s solediscretion.  Any proposed revision of theSpecified Use by Tenant shall be for a use consistent with those customarilyfound in first-class office buildings. Reasonable grounds for Landlord withholding its consent shall include,but not be limited to:

**a)****             **the proposed use will place adisproportionate burden on the Building systems;

**b)****             **the proposed use is for governmental ormedical purposes or for a company whose primary business is that of conductingboiler-room type transactions or sales;

**c)****             **the proposed use would generate excessivefoot traffic to the Premises and/or Building.

        So longas Tenant is in control of the Premises, Tenant covenants and agrees that itshall not use, suffer or permit any person(s) to use all or any portion of thePremises for any purpose in violation of the laws of the United States ofAmerica, the State of California, or the ordinances, regulations orrequirements of the City or County of Los Angeles, or other lawful authoritieshaving jurisdiction over the Building.

        Tenantshall not do or permit anything to be done in or about the Premises which willin any way obstruct or unreasonably interfere with the rights of other tenantsor occupants of the Building, or injure or annoy them.  Tenant shall not use or allow the Premises tobe used for any pornographic or violent purposes, nor shall Tenant cause,commit, maintain or permit the continuance of any nuisance or waste in, on orabout the Premises.  Tenant shall not usethe Premises in any manner that in Landlord’s reasonable judgment wouldadversely affect or interfere with any services Landlord is required to furnishto Tenant or to any other tenant or occupant of the Building, or that wouldinterfere with or obstruct the proper and economical rendition of any such service.

**Section 6.2. Exclusive Use. **Landlord represents that Tenant’sSpecified Use of the Premises and its usage for private banking and investmentbanking and related activities (“Particular Usage”) does not conflict withexclusive use provisions granted by Landlord in other leases for theBuilding.  Landlord further agrees thatit shall, in the future, not grant an exclusive use privilege to any othertenant in the Building that will prevent Tenant from continuing to use thePremises for its Specified Use or the Particular Usage.

        Tenantacknowledges and agrees that it shall not engage in any of the uses specifiedhereinbelow, for which Landlord has already granted exclusive rights:

a)     Gymnasiumor private fitness training; and

b)    Designershoes

        Providedthat Tenant has received written notice of the same from Landlord, and furtherprovided that Landlord does not grant a future exclusive use right thatprohibits Tenant from engaging in the Specified Use or the Particular Usage,then Tenant agrees that it shall not violate any exclusive use provision(s)granted by Landlord to other tenants in the Building.

**Section 6.3.  Rules and Regulations. **Tenant shall observe and comply with the rules andregulations set forth in Exhibit C, and such other and further reasonable andnon-discriminatory rules and regulations as Landlord may make or adopt andcommunicate to Tenant in writing at any time or from time to time, when saidrules, in the reasonable judgment of Landlord, may be necessary or desirable toensure the first-class operation, maintenance, reputation or appearance of theBuilding. However, if any conflict arises between the provisions of this Leaseand any such rule or regulation, the provisions of this Lease shall control.

        Provided Landlord makes commercially reasonable efforts toseek compliance by all occupants of the Building with the rules and regulationsadopted by Landlord, Landlord shall not be responsible to Tenant for thefailure of any other tenants or occupants of the Building to comply with saidrules and regulations.

 

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**ARTICLE 7**CONDITION UPON VACATING & REMOVAL OF PROPERTY

**Section 7.1.  Condition upon Vacating. **At the expiration or earlier termination of thisLease, Tenant shall:

**a)****             **terminate its occupancy of, quit andsurrender to Landlord, all or such portion of the Premises upon which thisLease has so terminated, broom-clean and in the same condition as receivedexcept for:

**i)****               **ordinary wear and tear, or

**ii)****           **loss or damage by fire or other casualty; and

**b)****             **surrender the Premises free of any andall debris and trash and any of Tenant’s personal property, furniture, fixturesand equipment that do not otherwise become a part of the Real Property,pursuant to the provisions contained in Section 7.2 hereinbelow; and

**c)****             **at Tenant’s sole expense, forthwith andwith all due diligence remove any Tenant Change made by Tenant and restore thePremises to their original condition, reasonable wear and tear excepted.  However, Tenant shall only be obligated toremove said Tenant Change if it was made without Landlord’s approval and/or ifLandlord notified Tenant of its obligation to do so at the time Landlordapproved Tenant’s request for a Tenant Change. If Tenant fails to complete such removal and/or to repair any damagecaused by the removal of any Tenant Change, Landlord may do so and may chargethe cost thereof to Tenant.  For purposesof this Section 7.1, a Tenant Change shall not include any of the TenantImprovements to be made in accordance with Exhibit B of this Lease or anywiring or cabling.

**Section 7.2.  Tenant’s Property.** All fixtures, equipment, improvements and installations attached orbuilt into the Premises at any time during the Term shall, at the expiration orearlier termination of this Lease, be deemed the property of Landlord; become apermanent part of the Premises and remain therein.  However, if said equipment, improvementsand/or installations can be removed without causing any structural damage tothe Premises, then, provided after such removal Tenant restores the Premises tothe condition existing prior to installation of Tenant’s trade fixtures orequipment, Tenant shall be permitted, at Tenant’s sole expense, to remove saidtrade fixtures and equipment.

**ARTICLE 8**UTILITIES AND SERVICES

**Section 8.1. Normal Building Hours / Holidays. **The “NormalBusiness Hours” of the Building, during which Landlord shall furnish theservices specified in this Article 8 are defined as 6:00 A.M. to 7:00P.M., Monday through Friday, and 7:00 A.M. to 2:00 P.M. on Saturday, any one ormore Holiday(s) excepted.

        The “Holidays”which shall be observed by Landlord in the Building are defined as anyfederally-recognized holiday and any other holiday specified herein, which are:New Years Day, Presidents’ Day, Memorial Day, the 4th of July, Labor Day,Thanksgiving Day, the day after Thanksgiving, and Christmas Day (eachindividually a “Holiday”).  Tenantacknowledges that the Building shall be closed on each and every such Holiday,and Tenant shall not be guaranteed access to Landlord or Landlord’s managingagent(s) on each such Holiday.

**Section 8.2.  Access to the Building and General Services.**      ** **Subject to ForceMajeure and any power outage(s) which may occur in the Building when the sameare out of Landlord’s reasonable control, Landlord shall furnish the followingservices to the Premises twenty-four (24) hours per day, seven days per week:

**a)****             **during Normal Business Hours, bulbreplacement for building standard lights;

**b)****             **access to and use of the parking facilitiesfor persons holding valid parking permits or customers or guests of Tenant;

**c)****             **access to and use of the elevators andthe Premises, it being expressly understood and agreed that there shall be nocharge for use of the freight elevators;

**d)****             **use of electrical lighting on anas-needed basis within the Premises; and

**e)****             **use of a reasonable level of water forkitchen and toilet facilities in the Premises and common area bathrooms.

**Section 8.3.  Janitorial Services. **Landlord shall furnish the Premises with a level ofjanitorial services consistent with the level of janitorial services providedby landlords of comparable first-class office buildings in the Beverly Hillsarea (“Comparable Buildings”) five (5) business days per week, except when theBuilding is closed on any Holiday. Landlord shall retain the sole discretion to choose and/or revise thejanitorial company providing said services to the Premises and/or Building,subject to Landlord’s compliance with the first sentence of this Section 8.3,and maintaining the Building in a first-class manner.

**Section 8.4.  Security Services. **Tenant acknowledges that Landlord currently providesuniformed guard service to the Building twenty-four (24) hours per day, seven(7) days per week, solely for the purposes of providing surveillance of,information and directional assistance to persons entering the Building.

 

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        Tenant acknowledges that such guard service shall not provideany measure of security or safety to the Building or the Premises, and thatTenant shall take such actions as it may deem necessary and reasonable toensure the safety and security of Tenant’s property or person or the propertyor persons of Tenant’s agents, clients, contractors, directors, employees,invitees, licensees, officers, partners or shareholders.  Tenant agrees and acknowledges that, exceptin the case of the gross negligence or willful misconduct of Landlord or itsdirectors, employees, officers, partners or shareholders, Landlord shall not beliable to Tenant in any manner whatsoever arising out of the failure ofLandlord’s guard service to secure  anyperson or property from harm.

        Tenant agrees and acknowledges that Landlord, in Landlord’ssole discretion, shall have the option, but not the obligation to add,decrease, revise the hours of and/or change the level of services beingprovided by any guard company serving the Building, so long as the level ofsecurity services provided to the Building remains consistent with the level ofsecurity services provided by landlords of Comparable Buildings.  Tenant further agrees that Tenant shall notengage or hire any outside guard or security company without Landlord’s priorwritten consent, which shall be in Landlord’s sole discretion.

**Section 8.5.  Utilities. **DuringNormal Business Hours Landlord shall furnish a reasonable and comfortable levelof water, heat, ventilation and air conditioning (“HVAC”), and a sufficientamount of electric current to provide customary business lighting and tooperate ordinary office business machines, such as a single personal computerand ancillary printer per one hundred and twenty (120) Rentable square feetcontained in the Premises, facsimile machines, small copiers customarily usedfor general office purposes, and such other equipment and office machines as donot result in above-standard use of the existing electrical system.  So long as the same remain reasonably costcompetitive and are of first-class quality, Landlord shall retain the solediscretion to choose the utility vendor(s) to supply such services to thePremises and the Building.

        Except with the prior written consent of Landlord, whichshall not be unreasonably withheld, conditioned and/or delayed, Tenant shallnot install or use any equipment, apparatus or device in the Premises thatrequires the installation of a 220 voltage circuit; consumes more than five (5)kilowatts per hour per item; or the aggregate use of which will in any wayincrease the connected load to more than 5 Watts per square foot, or cause theamount of electricity to be furnished or supplied for use in the Premises tomore than 1.2 kWh per usable square foot, per month.

        Except with the prior written consent of Landlord, Tenantshall not connect any electrical equipment to the electrical system of theBuilding, except through electrical outlets already existing in the Premises,nor shall Tenant pierce, revise, delete or add to the electrical, plumbing,mechanical or HVAC systems in the Premises.

**Section 8.6.  After Hours HVAC and/or Excess UtilityUsage. **If Tenant requires HVAC service during other thanNormal Business Hours (“Excess HVAC”), Tenant shall use reasonable efforts tomake its request at least six (6) hours before the close of the normal businessday. If less notice is given, Landlord shall use reasonable efforts to provideExcess HVAC.  Tenant’s request shall bedeemed conclusive evidence of its willingness to pay the costs specifiedherein.  The current cost of Excess HVACis $100.00 per hour, which shall increase only to the extent that Landlord’sactual, out-of-pocket costs of providing Excess HVAC increase.

**       **If Tenant requires electric current inexcess of the amounts specified hereinabove, water or gas in excess of that customarily furnished to the Premises asoffice space (“Excess Utility Use”), Tenant shall first procure Landlord’sprior written consent to such Excess Utility Use, which Landlord may reasonablyrefuse.

        In lieu of Landlord’s refusal, Landlord may cause a meter orsub-meter to be installed to measure the amount of water, gas and/or electriccurrent consumed by Tenant in the Premises. The cost of any such meter(s), and the installation, maintenance, andrepair thereof, shall be paid by Tenant as Additional Rent.

        After completing installation of said meter(s), and/or ifTenant requests Excess HVAC, then Tenant shall pay, as Additional Rent, withinthirty (30) calendar days after Tenant’s receipt of Landlord’s billing, for theactual amounts of all water, steam, compressed air, electric current and/orExcess HVAC consumed beyond the normal levels Landlord is required herein toprovide.  Said billing shall becalculated on the usage indicated by such meter(s), sub-meter(s), or Tenant’swritten request therefor, and shall be issued by Landlord at the rates chargedfor such services by the local public utility furnishing the same, plus anyadditional expense reasonably incurred by Landlord in providing said ExcessUtility Use and/or in keeping account of the water, steam, compressed air andelectric current so consumed, plus an administrative and billing fee equal toten percent (10%) of the costs so billed.

**Section8.7.  Changes affecting HVAC. **Tenant shall also pay as Additional Rent for anyadditional costs Landlord incurs to repair any failure of the HVAC equipmentand systems to perform their function when said failure arises out of or inconnection with any change in, or alterations to, the arrangement ofpartitioning in the Premises after the Commencement Date, or from occupancy by,on average, more than one person for every one hundred and twenty-five (125)usable square feet of the Premises, or from Tenant’s failure to keep all HVACvents within the Premises free of obstruction.

**Section8.8.  Damaged or Defective Systems. **Tenant shall give prompt notice to Landlord afterTenant acquires actual knowledge of any alleged damage to, or defectivecondition in any part or appurtenance of the Building’s sanitary, electrical,HVAC or other systems serving, located in, or passing through, the Premises.  Provided that the repair or remedy of saiddamage or defective condition is within the reasonable control of Landlord, itshall be remedied by Landlord with reasonable diligence.  Otherwise, Landlord shall make suchcommercially reasonable efforts as may be available to Landlord to effect such

 

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remedy or repair,but except in the case of Landlord’s gross negligence and/or willful misconductor the gross negligence and/or willful misconduct of Landlord’s agents,contractors, directors, employees, officers, partners, and/or shareholders,Landlord shall not be liable to Tenant for any failure thereof.

        Tenant shall not be entitled to claim any damages arisingfrom any such damage or defective condition nor shall Tenant be entitled toclaim any eviction by reason of any such damage or defective condition unless:

**a)****             **the same was caused by Landlord’s grossnegligence or willful misconduct while operating or maintaining the Premises orthe Building;

**b)****             **the damage or defective condition hassubstantially prevented Tenant from conducting its normal business operationsor obtaining access to at least seventy-five percent (75%) of the Premises; and

**c)****             **Landlord shall have failed to commencethe remedy thereof and proceeded with reasonable diligence to complete the sameafter Landlord’s receipt of notice thereof from Tenant.

        Furthermore, if such damage or defectivecondition was caused by, or is attributed to, a Tenant Change or theunreasonable or improper use of such system(s) by Tenant or its employees,licensees or invitees:

**d)****             **the cost of the remedy thereof shall bepaid by Tenant as Additional Rent pursuant to the provisions of Section 4.3;

**e)****             **in no event shall Tenant be entitled toany abatement of rent as specified above; and

**f)****               **Tenant shall be estopped from making anyclaim for damages arising out of Landlord’s repair thereof.

**Section 8.9.  Limitation on Landlord’s Liability forFailure to Provide Utilities and/or Services.**  Except in thecase of Landlord’s gross negligence or willful misconduct or the grossnegligence or willful misconduct of Landlord’s agents, contractors, directors,employees, licensees, officers, partners or shareholders, Tenant herebyreleases Landlord from any liability for damages, by abatement of rent orotherwise, for any failure or delay in furnishing any of the services orutilities specified in this Article 8 (including, but not limited totelephone and telecommunication services), or for any diminution in the qualityor quantity thereof.

        Tenant’s release of Landlord’s liabilityshall be applicable when such failure, delay or diminution is occasioned, inwhole or in part, by repairs, replacements, or improvements, by any strike,lockout or other labor trouble, by Landlord’s inability to secure electricity,gas, water or other fuel at the Building after Landlord’s reasonable effort todo so, by accident or casualty whatsoever, by act or default of Tenant orparties other than Landlord, or by any other cause beyond Landlord’s reasonablecontrol.  Such failures, delays ordiminution shall never be deemed to constitute a constructive eviction ordisturbance of Tenant’s use and possession of the Premises, or serve to relieveTenant from paying Rent or performing any of its obligations under the Lease.

        Furthermore,Landlord shall not be liable under any circumstances for a loss of, injury to,or interference with, Tenant’s business, including, without limitation, anyloss of profits occurring or arising through or in connection with or incidentalto Landlord’s failure to furnish any of the services or utilities required bythis Article 8.

        Notwithstanding the above, Landlordshall use commercially reasonable efforts to remedy any delay, defect orinsufficiency in providing the services and or utilities required hereunder.

        Notwithstanding the foregoing, if Tenantis prevented from using and does not use, the Premises or any portion thereof,as a result of (i) Landlord’s failure to provide services or utilities asrequired by this Lease, or (ii) Landlord’s exercise of its rights under Section12.11 below (an “Abatement Event”), then Tenant shall give Landlord Notice ofsuch Abatement Event and if such Abatement Event continues for five (5)consecutive business days after Landlord’s receipt of any such Notice (the “EligibilityPeriod”), and such failure is in no way attributable to, or caused by, the actsof Tenant,  then the Fixed Monthly Rentshall be abated or reduced, as the case may be, after expiration of theEligibility Period for such time that Tenant continues to be so prevented fromusing, and does not use, the Premises, or a portion thereof, in the proportionthat the rentable area of the portion of the Premises that Tenant is preventedfrom using, and does not use (“Unusable Area”), bears to the total rentablearea of the Premises; provided, however, in the event that Tenant is preventedfrom using, and does not use, the Unusable Area for a period of time in excessof the Eligibility Period and the remaining portion of the Premises is notsufficient to allow Tenant to effectively conduct its business therein and ifTenant does not conduct its business from such remaining portion, then for suchtime after expiration of the Eligibility Period during which Tenant is soprevented from effectively conducting its business therein, the Fixed MonthlyRent and Additional Rent for the entire Premises shall be abated for such timeas Tenant continues to be so prevented from using, and does not use, thePremises.  If, however, Tenant reoccupiesany portion of the Premises during such period, the Rent allocable to suchreoccupied portion, based on the proportion that the rentable area of suchreoccupied portion of the Premises bears to the total rentable area of thePremises, shall be payable by Tenant from the date Tenant reoccupies suchportion of the Premises.  Such right toabate Fixed Monthly Rent and Additional Rent shall be Tenant’s sole andexclusive remedy at law or in equity for an Abatement Event.

**Section8.10.  Tenant Provided Services. **Tenant shall make no contract or employ any labor inconnection with the maintenance, cleaning or other servicing of the physicalstructures of the Premises or for installation of any computer, telephone orother cabling, equipment or materials provided in or to the Premises(collectively and individually a “Tenant Service”) without the prior consent ofLandlord, which consent shall not be unreasonably withheld.  Tenant shall not permit the use of any labor,material

 

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or equipment inthe performance of any Tenant Service if the use thereof, in Landlord’sreasonable judgment, would violate the provisions of any agreement betweenLandlord and any union providing work, labor or services in or about thePremises, Building and/or create labor disharmony in the Building.

**ARTICLE 9**           TENANT’S INDEMNIFICATION AND LIMITATION ON LANDLORD’S LIABILITY

**Section9.1.  Tenant’s Indemnification and HoldHarmless. **For the purposes of thisSection 9.1, “Indemnitee(s)” shall jointly and severally refer to Landlordand Landlord’s agents, clients, contractors, directors, employees, officers,partners, and/or shareholders.

        Tenantshall indemnify and hold Indemnitees harmless from and against all claims,suits, demands, damages, judgments, costs, interest and expenses (includingattorneys fees and costs incurred in the defense thereof) to which anyIndemnitee may be subject or suffer to the extent the same arise out of thenegligence or willful misconduct of Tenant or the negligence or willfulmisconduct of Tenant’s agents, contractors, directors, employees, licensees,officers, partners or shareholders in connection with the use of, work in,construction to, or actions in, on, upon or about the Premises, including anyactions relating to the installation, placement, removal or financing of anyTenant Change, improvements, fixtures and/or equipment in, on, upon or aboutthe Premises.

        Tenant’s indemnification (if requiredpursuant to the above paragraph) shall extend to any and all claims andoccurrences, whether for injury to or death of any person or persons, or fordamage to property (including any loss of use thereof), or otherwise, occurringduring the Term or prior to the Commencement Date (if Tenant has been givenearly access to the Premises for whatever purpose), and to all claims arisingfrom any condition of the Premises due to or resulting from any default byTenant in the keeping, observance or performance of any covenant or provisionof this Lease, or from the negligence or willful misconduct of Tenant or thenegligence or willful misconduct of Tenant’s agents, contractors, directors,employees, licensees, officers, partners or shareholders.

**Section 9.2.  Nullity of Tenant’s Indemnification in Eventof Negligence. **Notwithstanding anything to the contrarycontained in this Lease, Tenant’s indemnification shall not extend to thenegligence or willful misconduct of Landlord or the negligence or willfulmisconduct of Landlord’s agents, contractors, directors, employees, officers,partners or shareholders, nor to such events and occurrences for which Landlordotherwise carries insurance coverage.

**Section9.3.  Tenant’s Waiver of Liability. **Provided and to the extent that any injury or damagesuffered by Tenant or Tenant’s agents, clients, contractors, directors,employees, invitees, officers, partners, and/or shareholders did not arise outof the  negligence or willful misconductof Landlord or the negligence or willful misconduct of Landlord’s agents,contractors, employees, officers, partners or shareholders, Tenant shall makeno claim against Landlord and Landlord shall not be liable or responsible inany way for, and Tenant hereby waives all claims against Landlord with respectto or arising out of injury or damage to any person or property in or about thePremises by or from any cause whatsoever under the reasonable control ormanagement of Tenant.

**Section9.4.  Limitation of Landlord’sLiability. **Tenant expressly agrees that,notwithstanding anything in this Lease and/or any applicable law to thecontrary, the liability of Landlord and Landlord’s agents, contractors,directors, employees, licensees, officers, partners or shareholders, includingany successor in interest thereto (collectively and individually the “LandlordParties”), and any recourse by Tenant against Landlord or the Landlord Partiesshall be limited solely and exclusively to an amount which is equal to theinterest of Landlord in the Building, including rental income and proceeds frominsurance.

        Tenant specifically agrees that neither Landlord nor any ofthe Landlord Parties shall have any personal liability therefor.  Further, Tenant hereby expressly waives andreleases such personal liability on behalf of itself and all persons claimingby, through or under Tenant.

**Section 9.5.  Transfer of Landlord’s Liability. **Tenant expressly agrees that, to the extent that anytransferee assumes the obligations of Landlord hereunder in writing, andprovided Landlord has either transferred the complete Security Deposit heldpursuant to this Lease or refunded the same to Tenant as of the date of suchtransfer, then the covenants and agreements on the part of Landlord to beperformed under this Lease which arise and/or accrue after the date of suchtransfer shall not be binding upon Landlord herein named from and after thedate of transfer of its interest in the Building.

**Section9.6.  Landlord’s Indemnification.** Notwithstanding any contrary provision of this Lease, Landlord shallindemnify, and hold Tenant and Tenant’s agents, clients, directors, officers,partners, employees, shareholders and contractors harmless from and against,any and all claims, causes of action, liabilities, losses, reasonable costs andexpenses, including reasonable attorney’s fees and court costs, arising from orin connection with:

**a)****             **any activity occurring, or condition existing, at orin the Building and/or the Real Property (other than in the Premises) when suchactivity or condition is under the reasonable control of Landlord, except andto the extent the same is caused by the negligence or willful misconduct ofTenant or Tenant’s employees, agents, licensee, invitees, or contractors, or byTenant’s breach or default in the performance of any obligation under thisLease;

**b)****             **any activity occurring, or condition existing in thePremises when and to the extent caused by the negligence or willful misconductof Landlord or Landlord’s employees, agents or contractors; or

**c)    **any breach by Landlord of any of Landlord’sobligations under this Lease.

 

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**ARTICLE 10**COMPLIANCE WITH LAWS

**Section 10.1.  Tenant’s Compliance with Laws. **Tenant shall not use, permit to be used, or permitanything to be done in or about all or any portion of the Premises which willin any way violate any laws, statutes, ordinances, rules, orders or regulationsduly issued by any governmental authority having jurisdiction over thePremises, or by the Board of Fire Underwriters (or any successor thereto)(collectively “Codes”).

**Section 10.2.  Tenant to Comply at Sole Expense. **Tenant shall, at its sole expense, promptly remedy anyviolation of such Codes relating to the condition of the Premises, provided,however, that nothing contained in this Section 10.2 shall require Tenantto make any structural changes, or other alterations, additions or improvementsof a capital nature to the Premises, unless such changes are required due toeither Tenant or Tenant’s agents, clients, contractors, directors, employees,invitees, licensees, officers, partners or shareholders use of the Premises forpurposes other than general office purposes consistent with a Class A officebuilding.

**Section 10.3.  Conclusive Evidence of Violation. **The judgment of any court of competent jurisdiction;Tenant’s admission; or the admission of any one or more of Tenant’s agents,contractors, directors, employees, officers, partners or shareholders in anyaction against Tenant, whether or not Landlord is a party thereto, that Tenanthas so violated any one or more Codes shall be conclusive evidence of suchviolation as between Landlord and Tenant.

**Section10.  Landlord’s Compliance with Law.** Landlord represents that to the best of Landlord’s knowledge, and exceptas expressly provided in this Lease (including any of the exhibits attachedhereto) Landlord has not received any notice of any non-compliance with anylaw, regulation or code affecting the Premises or the Building from anyapplicable governmental authority having jurisdiction.  If Landlord is cited for any such non-compliance,and:

a)     Landlord chooses to not dispute such citation (or Landlorddisputes such citation and is unsuccessful); and

b)    The existence of such condition materially affects Tenant’sreasonable occupancy and beneficial use of the Premises, then Landlord shallcommence to cure said non-compliance at Landlord’s expense if suchnon-compliance is due to a condition that existed prior to the CommencementDate, and as part of Operating Expenses of the Building if such non-complianceis due to a condition that arises after the Commencement Date.

**ARTICLE 11**ASSIGNMENT AND SUBLETTING

**Section 11.1.  Permission Required for Assignment orSublet. **Unless Landlord’s prior written consent has beengiven, which consent shall not be unreasonably withheld, conditioned and/ordelayed (subject to the express provisions of this Article 11), this Leaseshall not, nor shall any interest herein, be assignable as to the interest ofTenant by operation of law; nor shall Tenant:

**a)****             **assign Tenant’s interest in this Lease; or

**b)****             **sublet the Premises or any part thereof or permit thePremises or any part thereof to be utilized by anyone other than Tenant,whether as by a concessionaire, franchisee, licensee, permittee or otherwise(collectively, a “sublease”)

        In addition, except for Transfers underclauses (a) or (b), Tenant shall not mortgage, pledge, encumber or otherwisetransfer this Lease, the Term and/or estate hereby granted or any interestherein without Landlord’s prior written consent, which consent may be grantedor withheld in Landlord’s sole and absolute discretion.

        Any assignment, mortgage, pledge,encumbrance, transfer or sublease (collectively, any “Transfer”) withoutLandlord’s prior written consent shall be voidable, and, in Landlord’s soleelection, shall constitute a material default under this Lease.

**Section 11.2.  Voluntary Assignment due to Changes inStructure of Tenant. **A change of stock ownership or control ofTenant shall not require the consent of Landlord; provided, however, thatTenant shall give Landlord not less than ten (10) days’ prior notice of anysuch transfer of ownership or control.

        Any withdrawal or change (whether voluntary, involuntary, orby operation of law) in the partnership by one or more partners who own, in theaggregate fifty percent (50%) or more of the partnership, or the dissolution ofthe partnership, shall be deemed a voluntary assignment.

        If Tenant is comprised of more than one individual, apurported assignment (whether voluntary, involuntary, or by operation of law),by any one of the persons executing this Lease shall be deemed a voluntaryassignment.

**Section 11.2.1.  Affiliated Companies/Restructuring ofBusiness Organization**.  Any contrary provision of thisArticle 11 notwithstanding, the assignment or subletting by Tenant of all orany portion of this Lease or the Premises to (i) a parent or subsidiary ofTenant, or (ii) any person or entity which controls, is controlled by or undercommon control with Tenant, or (iii) any entity which purchases all orsubstantially all of the stock or assets of Tenant, or (iv) any entity intowhich Tenant is merged or consolidated (all such persons or entities describedin (i), (ii), (iii) and (iv) being sometimes hereinafter referred to as “Affiliates”)shall not be deemed a Transfer under this Article 11 and thus shall not besubject  to Landlord’s prior consent, andLandlord shall not be entitled to any Net Rental Profit resulting therefrom,provided that:

 

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**a)** Any such Affiliate was not formed as a subterfuge to avoid theobligations of this Article 11;

**b)** Tenant gives Landlord at least ten (10) days’ prior notice of any suchassignment or sublease to an Affiliate;

**c)** The successor of Tenant and Tenant have as of the effective date of anysuch assignment or sublease a tangible net worth, in the aggregate, computed inaccordance with generally accepted accounting principles (but excluding goodwill as an asset), which is sufficient to meet the then-remaining obligationsof Tenant under this Lease;

**d)** Any such assignment or sublease shall be subject and subordinate to allof the terms and provisions of this Lease, and such assignee or sublessee shallassume, in a written document reasonably satisfactory to Landlord and deliveredto Landlord upon or prior to the effective date of such assignment or sublease,all the obligations of Tenant under this Lease with respect to that portion ofthe Premises which is the subject of such Transfer (other than the amount ofFixed Monthly Rent payable by Tenant with respect to a sublease); and

**e)** Tenant and any guarantor shall remain fully liable for all obligationsto be performed by Tenant under this Lease.

**Section11.3.  Request to Assign orSublease. **If at any time during the Term, Tenantwishes to assign this Lease or any interest therein, or to sublet all or anyportion of the Premises, then at least twenty (20) days prior to the date whenTenant desires the assignment or sublease to be effective, Tenant shall givewritten notice to Landlord setting forth the name, address, and business of theproposed assignee or sublessee, business and personal credit applicationscompleted on Landlord’s standard application forms, and information (includingreferences and such financial documentation as Landlord shall reasonablyprescribe) concerning the character and financial condition of the proposedassignee or sublessee, the effective date of the assignment or sublease, andall the material terms and conditions of the proposed assignment, and withreference solely to a sublease: a detailed description of the space proposed tobe sublet, together with any rights of the proposed sublessee to use Tenant’simprovements and/or ancillary services with the Premises.  Tenant expressly acknowledges and agrees thatif Tenant proposes to assign this Lease or sublet all of the Premises to anentity other than an Affiliate (as such term is defined in Section 11.2.1 ofthis Lease), and the financial status and creditworthiness of the entity issuch that Landlord would ordinarily require the payment of a security deposit,Tenant shall provide Landlord with a security deposit equal to the FixedMonthly Rent payable by Tenant under this Lease as of the effective date of theproposed Transfer.

**Section11.4.  Landlord’s Consent. **Landlord shall have twenty (20) days after Tenant’snotice of assignment and/or sublease is received with the financial informationreasonably requested by Landlord to advise Tenant of Landlord’s (i) consent tosuch proposed assignment or sublease, (ii) withholding of consent to suchproposed assignment or sublease, or (iii) election to terminate this Lease,such termination to be effective as of the date of the commencement of theproposed assignment or subletting.  IfLandlord shall exercise its termination right hereunder, Landlord shall havethe right to enter into a lease or other occupancy agreement directly with theproposed assignee or subtenant, and Tenant shall have no right to any of therents or other consideration payable by such proposed assignee or subtenantunder such other lease or occupancy agreement, even if such rents and otherconsideration exceed the rent payable under this Lease by Tenant.  Landlord shall have the right to lease thePremises to any other tenant, or not lease the Premises, in its sole andabsolute discretion.  Landlord and Tenantspecifically agree that Landlord’s right to terminate this Lease under clause(iii) above is a material consideration for Landlord’s agreement to enter intothis Lease and such right may be exercised in Landlord’s sole and absolutediscretion and no test of reasonableness shall be applicable thereto; provided,however, that Landlord may exercise the termination right described in saidclause (iii) only if Tenant proposes to assign this Lease or sublet the entirePremises.

        Tenant acknowledges that Landlord’s consent shall be basedupon the criteria listed in Sections 11.4 (a) through (e) below, andsubject to Landlord’s right to unilaterally disapprove of any proposedassignment and/or sublease, based on the existence of any condition containedwithin Section 11.5 hereinbelow.  IfLandlord either provides its consent or fails to respond within the time periodspecified, Tenant shall be free to complete the assignment and/or sublet suchspace to the party contained in Tenant’s notice, subject to the followingconditions:

**a)****             **The assignment and/or sublease shall beon the same terms as were set forth in the notice given to Landlord;

**b)****             **The assignment and/or sublease shall bedocumented in a written format that is reasonably acceptable to Landlord, whichform shall specifically include the assignee’s and/or sublessee’sacknowledgement and acceptance of the obligation contained in this Lease, in sofar as applicable;

**c)****             **The assignment and/or sublease shall notbe valid, nor shall the assignee or sublessee take possession of the Premises,or subleased portion thereof, until an executed duplicate original of suchsublease and/or assignment has been delivered to Landlord;

 

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**d)****             **In the event of any Transfer, Landlordshall receive as Additional Rent hereunder (and without affecting or reducingany other obligation of Tenant under this Lease) fifty percent (50%) of Tenant’s“Net Rental Profit” derived from such Transfer. If Tenant shall elect to Transfer, Tenant shall use reasonable and goodfaith efforts to secure consideration from any such Transferee which would begenerally equivalent to then-current market rent for a sublease of the squarefootage and for the term then being offered by Tenant, but in no event shallTenant’s monetary obligations to Landlord, as set forth in this Lease, bereduced.   Net Rental Profit shall meanall rent, additional rent or other consideration payable (in lieu of or inaddition to rent) by such Transferee in connection with the Transfer inexcess of the Rent and Additional Rent payable by Tenant under this Leaseduring the term of the Transfer on a per rentable square foot basis if lessthan all of the Premises is transferred, after deducting the reasonableexpenses incurred by Tenant in connection with such Transfer for (i) anyimprovement allowance or other economic concessions (space planning allowance,moving expenses, etc.) paid by Tenant or Transferee in connection with suchTransfer, (ii) any brokerage commissions incurred by Tenant in connection withthe Transfer, and (iii) reasonable attorneys’ fees incurred by Tenant inconnection with the Transfer.

**                       ****       **Tenant shall deliver to Landlord astatement within thirty (30) days after the end of each calendar year and/orwithin thirty (30) days after the expiration or earlier termination of the Termof this Lease in which any Transfer has occurred, specifying for each suchTransfer:

**i)****               **the date of its execution and delivery, the number ofsquare feet of the Rentable Area demised thereby, and the Term thereof, and

**ii)****           **a computation in reasonable detail showing the amounts(if any) paid and payable by Tenant to Landlord pursuant to this Section 11.4with respect to such Transfer for the period covered by such statement, and theamounts (if any) paid and payable by Tenant to Landlord pursuant to thisSection 11.4 with respect to any payments received from a Transferee duringsuch period but which relate to an earlier period.

**Section 11.5.  Reasonable Grounds for Denial of Assignmentand/or Sublease. **Landlord and Tenant agree that, inaddition to such other reasonable grounds as Landlord may assert forwithholding its consent, it shall be reasonable under this Lease and anyapplicable law for Landlord to withhold its consent to any proposed Transfer,where any one or more of the following conditions exists:

**a)****             **The proposed sublessee or assignee (a “Transferee”)is, in Landlord’s reasonable judgment, of a character or reputation which is notconsistent with those businesses customarily found in a Class A officebuilding;

**b)****             **The Transferee is engaged in a business or intends touse all or any portion of the Premises for purposes which are not consistentwith those generally found in the Building or other Class A office buildings inthe vicinity of the Building, provided, however, that in no event shallLandlord be permitted to decline Tenant’s request for a Transfer solely on thebasis of said Transferee’s intent to change the Specified Use from that ofTenant, unless such proposed change shall violate any Exclusive Use provisionalready granted by Landlord;

**c)****             **The Transferee is either a governmental agency orinstrumentality thereof;

**d)****             **The Transfer will result in more than a reasonable andsafe number of occupants within the Premises;

**e)****             **The Transferee is not a party of reasonable financialworth and/or financial stability in light of the responsibilities involvedunder the sublease, if a sublessee, or the Lease, if an assignee, on the date consentis requested, or has demonstrated a prior history of credit instability orunworthiness;

**f)****               **The Transfer will cause Landlord to be in violation ofanother lease or agreement to which Landlord is a party, or would give anotheroccupant of the Building a right to cancel its lease;

**g)****            **The Transferee will retain any right originallygranted to Tenant to exercise a right of renewal, right of expansion, right offirst offer or other similar right held by Tenant;

**h)****            **Either the proposed Transferee, or any person orentity which directly or indirectly, controls, is controlled by, or is undercommon control with, the proposed Transferee is a tenant in the Building at thetime Tenant requests approval of the proposed Transfer, or is engaged inon-going negotiations with Landlord to lease space in the Building at the timeTenant requests approval of the proposed Transfer, and Landlord can make spaceavailable in the Building comparable to the space that is the subject of theproposed Transfer; or

**i)****               **The Transferee intends to use all or a portion of thePremises for medical procedures or for a primary business which is as aboiler-room type sales or marketing organization.

**Section11.6.  Tenant’s ContinuedObligation. **Any consent by Landlord to an assignmentof this Lease and/or sublease of the Premises shall not release Tenant from anyof Tenant’s obligations hereunder or be deemed to be a consent by Landlord toany subsequent hypothecation, assignment, subletting, occupation or use byanother person, and Tenant shall remain liable to pay the Rent and/or performall other obligations to be performed by Tenant hereunder.  Landlord’s acceptance of Rent or AdditionalRent from any other person shall not be deemed to be a waiver by Landlord ofany provision of this Lease.  Landlord’sconsent to one assignment or subletting shall not be deemed consent to anysubsequent assignment or subletting.

        If any assignee or sublessee of Tenantor any successor of Tenant defaults in the performance of any of the provisionsof this Lease, whether or not Landlord has collected Rent directly from saidassignee or

 

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sublessee,Landlord may proceed directly against Tenant without the necessity ofexhausting remedies against such assignee, sublessee or othersuccessor-in-interest.

        Provided that in no event shall any further assignment,sublease, amendment or modification to this Lease serve to either increaseTenant’s liability or expand Tenant’s duties or obligations hereunder, orrelieve Tenant of its liability under this Lease, then Landlord may consent tosubsequent assignments or subletting of this Lease or amendments ormodifications to this Lease with any assignee, without notifying Tenant or anysuccessor of Tenant, and without obtaining their consent thereto.

**Section 11.7.  Tenant To Pay Landlord’s Costs. **If Tenant assigns or sublets the Premises or requeststhe consent of Landlord to any assignment, subletting or other modification ofthis Lease, or if Tenant requests the consent of Landlord for any act thatTenant proposes to do, whether or not Landlord shall grant consent thereto,then Tenant shall, concurrent with Tenant’s submission of any written requesttherefor, pay to Landlord the non-refundable sum of $1,000 as reasonableconsideration for Landlord’s considering and processing the applicable request.

**Section 11.8.  Successors and Assigns.** Subject to the provisions contained herein, the covenants and agreementscontained in this Lease shall bind and inure to the benefit of Landlord andTenant, their respective successors and assigns and all persons claiming by,through or under them.

**ARTICLE 12**MAINTENANCE, REPAIRS, DAMAGE, DESTRUCTION, RENOVATION AND/OR ALTERATION

**Section12.1.  Tenant’s Obligation toMaintain. **Tenant shall, at Tenant’s sole expense,maintain the non-structural portions of the Premises in good order and repair,and shall also keep clean any portion of the Premises which Landlord is notobligated to clean.  Such obligationshall include the clean-out; repair and/or replacement of Tenant’s garbagedisposal(s), Instant-Heat or other hot water producing equipment, if any, andthe cleaning and removal of any dishes and/or food prior to the same becomingunsanitary.  If Tenant becomes obligatedto repair anything within the Premises and desires that Landlord make therepair, Tenant shall advise Landlord’s managing agent of such need, whichrequest shall be presumed conclusive evidence of Tenant’s obligation andwillingness to reimburse Landlord a fair and reasonable charge for suchrepair(s), unless such repair is Landlord’s obligation as described in thisSection 12.1 or in the event of a casualty.

        Further, Tenant shall pay the cost ofany injury, damage or breakage in, upon or to the Premises created by Tenant’sgross negligence or willful misconduct or the gross negligence or willfulmisconduct of Tenant’s agents, clients, contractors, directors, employees,invitees, licensees, officers, partners or shareholders.

        Subject to Tenant’s obligation forreimbursement to Landlord, if applicable, as specified herein, Landlord shallmake all repairs to the Premises. Landlord shall maintain in first-classoperating condition and repair, the Common Areas, the exterior walls,foundation and roof of the Building, the structural portions of the floors ofthe Building, structural elements of the Premises, all of the systems andequipment of the Building and the Tenant Improvements installed in thePremises.  The allocation of the foregoingcosts of such maintenance and repair shall be governed by Article 4.  However, if such repairs, maintenance orcleaning are required due to Tenant’s gross negligence or willful misconduct orthe gross negligence or willful misconduct of Tenant’s agents, clients,contractors, directors, employees, invitees, licensees, officers, partners orshareholders, then, Tenant shall, within thirty (30) days after receipt ofLandlord’s billing therefor, reimburse Landlord, as Additional Rent, for anyexpense of such repairs, cleaning and/or maintenance in excess of any insuranceproceeds available for reimbursement thereof, including for any deductibleanticipated in connection therewith.

        Tenant hereby waives all right to makerepairs at Landlord’s expense under the provisions of Section 1932(1),1941 and 1942 of the Civil Code of California.

**Section 12.2.  Repair Period Notice. **Tenant shall give prompt notice to Landlord of Tenant’sactual knowledge of any damage or destruction to all or any part of thePremises or Building resulting from or arising out of any fire, earthquake, orother identifiable event of a sudden, unexpected or unusual nature(individually or collectively a “Casualty”).** **The time periods specified in thisSection 12.2. shall commence on the earlier of the date of Landlord’s actualknowledge of the Casualty or after Landlord receives said written notice fromTenant of the occurrence of a Casualty. After the earlier of Landlord ‘s actual knowledge or receipt of Tenant’swritten notice that a Casualty has occurred, Landlord shall, within the laterof:

**a)****             **sixty (60) days after the date on whichLandlord determines the full extent of the damage caused by the Casualty; or

**b)****             **thirty (30) days after Landlord hasdetermined the extent of the insurance proceeds available to effectuaterepairs, but

**c)****             **in no event more than ninety (90) daysafter the Casualty,

        provide written notice to Tenant indicating the anticipatedtime period for repairing the Casualty (the ”Repair Period Notice”).  The Repair Period Notice shall also state, ifapplicable, Landlord’s election either to repair the Premises, or to terminatethis Lease, pursuant to the provisions of Section 12.3, and if Landlord electsto terminate this Lease, Landlord shall use commercially reasonable efforts toprovide Tenant with a minimum period of ninety (90) days within which to fullyvacate the Premises.

 

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**Section 12.3.  Landlord’s Option to Terminate orRepair. **Notwithstanding anything to the contrary containedherein, Landlord shall have the option, but not the obligation to elect not torebuild or restore the Premises and/or the Building if one or more of thefollowing conditions is present:

**a)****             **repairs to the Premises cannot reasonablybe completed within one hundred and eighty (180) days after the date of theCasualty (when such repairs are made without the payment of overtime or otherpremiums);

**b)****             **repairs required cannot be made pursuantto the then-existing laws or regulations affecting the Premises or Building, orthe Building cannot be restored except in a substantially different structuralor architectural form than existed before the Casualty;

**c)****             **the holder of any mortgage on theBuilding or ground or underlying lessor with respect to the Real Propertyand/or the Building shall require that all or such large a portion of theinsurance proceeds be used to retire the mortgage debt, so that the balance ofinsurance proceeds remaining available to Landlord for completion of repairsshall be insufficient to repair said damage or destruction;

**d)****             **the holder of any mortgage on theBuilding or ground or underlying lessor with respect to the Real Propertyand/or the Building shall terminate the mortgage, ground or underlying lease,as the case may be;

**e)****             **provided Landlord has carried the coverageLandlord is required to obtain under Section 19.1 of this Lease, thedamage is not fully covered, except for deductible amounts, by Landlord’sinsurance policies;

**f)****               **more than thirty-three and one-thirdpercent (33 1/3%) of the Building is damaged or destroyed, whether or not thePremises is affected, provided that Landlord elects to terminate all otherleases for offices of a similar size in the Building.

        If Landlord elects not to completerepairs to the Building or Premises, pursuant to this Section 12.3,Landlord’s election to terminate this Lease shall be stated in the RepairPeriod Notice, in which event this Lease shall cease and terminate as of thedate contained in Landlord’s Repair Period Notice.

        If one hundred percent of the Buildingis damaged or destroyed, as certified by an independent building inspector,this Lease shall automatically terminate after Tenant’s receipt of writtennotice of such termination from Landlord, and without action beyond the givingof such notice being required by either Landlord or Tenant.

        Upon any termination of this Leasepursuant to this Section 12.3, Tenant shall pay its prorata share of FixedMonthly Rent and Additional Rent, properly apportioned up to the date of suchtermination, reduced by any abatement of Rent to which Tenant is entitled underSection 12.5; after which both Landlord and Tenant shall thereafter befreed and discharged of all further obligations under the Lease, except forthose obligations which by their provisions specifically survive the expirationor earlier termination of the Term.

**Section12.4.  Tenant’s Option to Terminate. **If

**a)****             **the Repair Period Notice provided by Landlordindicates that the anticipated period for repairing the Casualty (the “RepairPeriod”) exceeds one hundred and eighty (180) days after the Casualty, or

**b)****             **the Casualty to the Premises occursduring the last twelve (12) months of the Term;

then Tenant shall havethe option, but not the obligation, to terminate this Lease by providingwritten notice (“Tenant’s Termination Notice”) to Landlord within thirty (30)days after receiving the Repair Period Notice in the case of 12.4 (a); orwithin thirty (30) days after the Casualty, in the case ofSection 12.4 (b).  Furthermore,if

Landlord has not completed the repairs thereafter on or before thirty(30) days after the expiration of the Repair Period,

then Tenant shallalso have the option, but not the obligation, to terminate this Lease by givingLandlord written notice of its intention to so terminate, which notice shall begiven not more than forty-five (45) days after expiration of the Repair Period.

        Tenant’s failure to provide Landlord with Tenant’sTermination Notice within the time periods specified hereinabove shall bedeemed conclusive evidence that Tenant has waived its option to terminate thisLease.

**Section 12.5.  Temporary Space and/or Rent Abatement DuringRepairs or Renovation. **During the Repair Period or during anysuch period that Landlord completes Work (as defined hereinbelow) orRenovations (as defined in Section 12.11 hereinbelow), if available, and ifrequested by Tenant, Landlord shall make available to Tenant other space in theBuilding which, in Tenant’s reasonable opinion, is suitable for the temporaryconduct of Tenant’s business.  However,if such temporary space is smaller than the Premises, Tenant shall pay FixedMonthly Rent and Additional Rent for the temporary space based upon thecalculated rate per Rentable square foot payable hereunder for the Premises,times the number of Rentable square feet available for Tenant’s use in thetemporary space.  If such temporary spaceis larger than the Premises, Tenant shall pay Fixed Monthly Rent and AdditionalRent for the temporary space based upon the square footage of the Premisesinitially leased to Tenant, and Landlord shall pay the costs of the move in tothe temporary space and the move back to the Premises initially leased toTenant, including the cost of the relocation of all telephone and computercabling.

        If no temporary space is available thatis reasonably satisfactory to Tenant, and any part of the Premises is rendereduntenantable by reason of such Casualty, Work or Renovation, then to the extentthat all or said portion of the usable area of the Premises is so rendereduntenantable by reason of such Casualty, Work or Renovation, Tenant shall beprovided with a proportionate abatement of Fixed

 

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Monthly Rent andAdditional Rent.  Said proportionalabatement shall be based on the Usable Square Footage of the Premises thatcannot and is not actually used by Tenant, divided by the total Usable squarefeet contained in the Premises; provided, however, if the remaining portion ofthe Premises is not usable for Tenant’s business purposes, then Tenant shall beentitled to a full abatement of Fixed Monthly Rent and Additional Rent.  That proportional abatement (or fullabatement, as the case may be), if any, shall be provided during the periodbeginning on the later of:

**a)****             **the date of the Casualty; or

**b)****             **the actual date on which Tenant ceases toconduct Tenant’s normal business operations in all or any portion of thePremises,

and shall end on the dateLandlord achieves substantial completion of restoration of the Premises.  Tenant’s acceptance of said abatement of Rentshall be deemed conclusive evidence of Tenant’s waiver of any further claim orright of future claim for any loss or damage asserted by Tenant arising out ofthe Casualty Repair, Work or Renovation, as the case may be.

**Section 12.6. Tenant’s Waiver of Consequential Damages. **Subject to Section 12.4, the provisions containedin Section 12.5 are Tenant’s sole remedy arising out of any Casualty.  Landlord shall not be liable to Tenant or anyother person or entity for any direct, indirect, or consequential damage(including but not limited to lost profits of Tenant or loss of or interferencewith Tenant’s business), unless caused by the gross negligence or willfulmisconduct of Landlord or the gross negligence or willful misconduct ofLandlord’s agents, contractors, directors, employees, licensees, officers,partners or shareholders, due to, arising out of, or as a result of theCasualty (including but not limited to the termination of the Lease inconnection with the Casualty).

**Section 12.7. Restoration of thePremises. **If the cost of repair of any Casualty iscovered under one or more of the insurance policies Landlord is required hereinto provide, then Landlord shall restore the base core and shell of the Premisesto its condition prior to the Casualty and repair and/or replace theImprovements previously installed in the Premises.

        If Landlord has elected to complete repairs to the Premises,and has not elected to terminate this Lease, as specified in Section 12.3, thenLandlord shall complete such repairs within the Repair Period, in a manner, andat times, which do not unreasonably interfere with Tenant’s use of that portionof the Premises remaining unaffected by the Casualty.  Provided Landlord has elected to make therepairs required hereunder, this Lease shall not be void or voidable during theRepair Period, nor shall Landlord be deemed to have constructively evictedTenant thereby.

**Section 12.8.  Waiver. **Tenanthereby waives the provisions of California Civil Code Sections 1932(2) and1933(4) and the provisions of any successor or other law of like import.

**Section 12.9.  Repair of the Building. **Except as specified hereinabove, unless Landlordterminates this Lease as permitted hereinabove, Landlord shall repair theBuilding, parking structure or other supporting structures and facilitieswithin two hundred ten (210) days after Landlord becomes aware of such damageand/or destruction.

**Section 12.10.  Government-Required Repairs. **If, during the Term, additional inspections other thanthose standard annual or biannual inspections to which the Building maygenerally be subject; testing, repairs and/or reconstruction (collectively the “Work”)are required by any governmental authority, or if, upon the recommendation ofits engineers, Landlord independently elects to undertake all or any portion ofthe Work prior to being required to do so by such governmental authority,Landlord shall give notice thereof to Tenant and shall use its best efforts notto unreasonably interfere with Tenant’s use of the Premises while completingthe Work.  Tenant shall cooperate fullywith Landlord in connection with the Work and, upon the prior written requestof Landlord, shall make the Premises available for completion of the Work.  Tenant agrees that Landlord shall allocateall costs associated with completion of the Work to the Building’s OperatingExpenses, when permitted to under the provisions of Section 4.1 of thisLease.

        If Landlord elects to undertake the Workduring the Term, then Tenant shall be entitled to an abatement of rent,pursuant to the provisions of Section 12.5 hereinabove, and Landlord shall becompletely responsible for repair of any damage to the Premises and all costsassociated with the removal, moving and/or storage of Tenant’s furniture,artwork, office equipment and files.  IfTenant is moved to alternate space, then Landlord shall pay the costs of themove in to the alternate space and the move back to the Premises, including thecost of the relocation of all telephone and computer cabling.  Landlord will restore any and all areasdamaged by completion of the Work to their previous quality and pay allclean-up costs.  Landlord further agreesthat it shall use commercially reasonable efforts to see that all construction,such as coring or power nailing that could be disruptive to Tenant’s normalbusiness operations shall, in so far as is reasonably possible, be performedbetween the hours of 7:00 p.m. to 7:00 a.m. Monday through Friday; after 1:00p.m. on Saturdays and/or at any time on Sundays.

        Except inthe case of Landlord’s gross negligence and/or willful misconduct or the grossnegligence and/or willful misconduct of Landlord’s agents, contractors,directors, employees, officers, partners, and/or shareholders, Tenant shall nothave the right to terminate this Lease as a result of Landlord undertaking theWork, nor shall Tenant or any third party claiming under Tenant be entitled tomake any claim against Landlord for any interruption, interference ordisruption of Tenant’s business or loss of profits therefrom as a result of theWork, and Tenant hereby releases Landlord from any claim which Tenant may haveagainst Landlord arising from or relating to, directly or indirectly, theperformance of the Work by Landlord.

 

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**Section 12.11.  Optional Landlord Renovation. **It is specifically understood and agreed that Landlordhas no obligation and has made no promises to alter, remodel, improve, renovateor decorate the Premises, Building, or any part thereof and that, except as setforth herein, no representations respecting the condition of the Premises orthe Building have been made by Landlord to Tenant.

        However, at any time and from time to time during the Term,Landlord may elect, in Landlord’s sole discretion, to otherwise renovate,improve, alter or modify elements of the Real Property, the Building and/or thePremises (collectively, “Renovations”) including without limitation, theparking facilities, common areas, systems, equipment, roof, and structuralportions of the same, which Renovations may include, without limitation:

**a)****             **modifying the common areas and tenantspaces to comply with applicable laws and regulations, including regulationsrelating to the physically disabled, seismic conditions and building safety andsecurity, and

**b)****             **installing new carpeting, lighting andwall covering in the Building common areas.

        Inconnection with such Renovations, Landlord may, among other things, erectscaffolding or other necessary structures in or about the Building, limit oreliminate access to portions of the Building, common areas or parkingfacilities serving the Building, or perform other work in or about theBuilding, which work may create noise, dust or debris that remains in theBuilding.

        Landlordshall have the right to access through the Premises as well as the right totake into and upon and through all or any part of the Premises, or any otherpart of the Building, all materials that may reasonably be required to makesuch repairs, alterations, decorating, additions or improvements pursuant tothe provisions of this Section 12.11. So long as Tenant shall maintain reasonable access to the Premises, theBuilding and the parking facilities, Landlord shall also have the right, in thecourse of the Renovations, to close entrances, doors, corridors, elevators, orother building facilities, or temporarily to abate the operation of suchfacilities.

        So long as Tenant is not required tovacate the Premises for any reason arising out of the Renovations, andmaintains reasonable access to the Premises and the parking facilities, Tenantshall permit all of the Renovations to be done, and except in the case ofLandlord’s gross negligence or willful misconduct or the gross negligence orwillful misconduct of Landlord’s contractors, directors, employees, officers,partners or shareholders, without claiming Landlord is guilty of theconstructive eviction or disturbance of Tenant’s use and possession.

        Landlord shall not be liable to Tenantin any manner (except as expressly provided otherwise in this Lease), whetherfor abatement of any Rent or other charge, reimbursement of any expense,injury, loss or damage to Tenant’s property, business, or any person claimingby or under Tenant, by reason of interference with the business of Tenant orinconvenience or annoyance to Tenant or the customers of Tenant resulting fromany Renovations done in or about the Premises or the Building or to anyadjacent or nearby building, land, street or alley.  However, Landlord agrees that the Renovationsshall be scheduled insofar as is commercially reasonable to permit Tenant tocontinue its normal business operations, with advance notice thereof, and insuch commercially reasonable manner so as to minimize Tenant’s inconvenience.

**Section 12.12.  Optional Tenant Changes During the Term. **After completion of the initial Improvementscontemplated hereunder, if any, Tenant shall make no alteration, change,addition, removal, demolition, improvement, repair or replacement in, on, upon,to or about the Premises, or at any time to any portion of the Building(collectively or individually a “Tenant Change”), without the prior writtenconsent of Landlord, which consent shall be in Landlord’s reasonablediscretion.  Notwithstanding theforegoing, Tenant shall have the right, without Landlord’s consent but upon ten(10) days prior notice to Landlord, to make non-structural additions andalterations (“Cosmetic Alterations”) to the Premises that do not (i) involvethe expenditure of more than $50,000.00 in the aggregate in any twelve (12)month period during the Term, (ii) affect the exterior appearance of theBuilding, or (iii) affect the Building systems or the Building structure.  Except as otherwise specified in Article 7,any Tenant Change shall, at the termination of this Lease, become a part of theBuilding and belong to Landlord, pursuant to the provisions of Article 7.  Any application for Landlord’s consent to aTenant Change, and the completion thereof, shall be in conformance with theprovisions of Exhibit B-1, attached hereto and made a part hereof by reference.

        Tenantshall not knowingly permit Tenant’s agents, clients, contractors, directors,employees, invitees, licensees, officers, partners or shareholders to defacethe walls, floors and/or ceilings of the Premises, nor mark, drive nails,screws or drill holes into, paint, or in any way mar any surface in theBuilding.  Notwithstanding the above,Tenant is hereby permitted to install such pictures, certificates, licenses,artwork, bulletin boards and similar items as are normally used in Tenant’sbusiness, so long as such installation is carefully attached to the walls byTenant in a manner reasonably prescribed by Landlord.

        If Tenant desires, as a part of any Tenant Change, to makeany revisions whatsoever to the electrical, HVAC, mechanical, plumbing, orstructural systems of the Building or Premises, such revisions must becompleted by subcontractors specified by Landlord and in the manner andlocation(s) reasonably prescribed by Landlord. If Tenant desires to install any telephone outlets, the same shall beinstalled in the manner and location(s) reasonably prescribed by Landlord.

 

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        If Landlord consents to any requested Tenant Change, Tenantshall give Landlord a minimum of fifteen (15) days written notice prior tocommencement thereof.  Landlord reservesthe option, but not the obligation, to enter upon the Premises for the purpose ofposting and maintaining such notices on the Premises as may be reasonablynecessary to protect Landlord against mechanic’s liens, material man’s liens orother liens, and/or for posting any other notices that may be proper andnecessary in connection with Tenant’s completion of the Tenant Change.

        If any alterations, additions orimprovements made by Tenant result in Landlord being required to make anyalterations to other portions of the Building in order to comply with anyapplicable statutes, ordinances or regulations (e.g., “handicap ordinances”)then Tenant shall reimburse Landlord upon demand for all costs and expensesincurred by Landlord in making such alterations.

**Section 12.13.  Express Agreement. **The provisions of this Lease, including thosecontained in this Article 12, constitute an express agreement betweenLandlord and Tenant that applies in the event of any Casualty to the Premises,Building or Real Property.  Tenant,therefore, fully waives the provisions of any statute or regulations, includingCalifornia Civil Code Sections 1932(2) and 1933(4), and any other law orstatute which purports to govern the rights or obligations of Landlord andTenant concerning a Casualty in the absence of express agreement.  Tenant and Landlord expressly agree andaccept that any successor or other law of like import shall have no applicationhereunder.

**ARTICLE 13**CONDEMNATION

**Section 13.1.  Condemnation of the Premises. **If more than twenty five percent (25%) of the Premisesis lawfully condemned or taken in any manner for any public or quasi-publicuse, or if any portion of the Building is condemned or taken in such a mannerthat Tenant is reasonably prevented from obtaining access to the Building orthe Premises, this Lease may, within ten (10) business days of such taking, beterminated at the option of either Landlord or Tenant by one party giving theother thirty (30) days written notice of its intent to do so.  If either Landlord or Tenant provide theother party written notice of termination, the Term and estate hereby grantedshall forthwith cease and terminate as of the earlier of the date of vesting oftitle in such condemnation or taking or the date of taking of possession by thecondemning authority.

        If less than twenty-five percent (25%) of the Premises is socondemned or taken, then the term and estate hereby granted with respect tosuch part shall forthwith cease and terminate as of the earlier of the date ofvesting of title in such condemnation or taking or the date of taking ofpossession by the condemning authority, and the Fixed Monthly Rent payablehereunder (and Additional Rent payable pursuant toArticles 3 or 4) shall be abated on a prorated basis, bydividing the total number of Usable square feet so taken by the total number ofUsable square feet contained in the Premises, then multiplying said percentageon a monthly basis, continuing from the date of such vesting of title to thedate specified in this Lease for the expiration of the Term hereof.

**Section13.2.  Condemnation of the Building. **If less than twenty-five percent (25%) of the Buildingis so condemned or taken, then Landlord shall, to the extent of the proceeds ofthe condemnation payable to Landlord and with reasonable diligence, restore theremaining portion of the Building as nearly as practicable to its conditionprior to such condemnation or taking; except that, if such proceeds constituteless than ninety percent (90%) of Landlord’s estimate of the cost of rebuildingor restoration, then Landlord may terminate this Lease on thirty (30) daysprior written notice to Tenant.

        If morethan twenty-five percent (25%) of the Building is so condemned or taken, butthe Premises are unaffected thereby, then Landlord shall have the option butnot the obligation, which election shall be in Landlord’s sole discretion, toterminate this Lease, effective the earlier of the date of vesting of title insuch condemnation or the date Landlord delivers actual possession of theBuilding and Premises to the condemning authority, which election by Landlordshall be provided to Tenant in writing.

**Section 13.3.  Award. **If anycondemnation or taking of all or a part of the Building takes place, Tenantshall be entitled to join in any action claiming compensation therefore, andLandlord shall be entitled to receive that portion of the award made for thevalue of the Building, Premises, leasehold improvements made or reimbursed byLandlord, or bonus value of the Lease, and Tenant shall only be entitled toreceive any award made for the value of the estate vested by this Lease inTenant, including Tenant’s proximate damages to Tenant’s business andreasonable relocation expenses.  Nothingshall preclude Tenant from intervening in any such condemnation proceeding toclaim or receive from the condemning authority any compensation to which Tenantmay otherwise lawfully be entitled in such case in respect of Tenant’s propertyor for moving to a new location.

**Section 13.4.  Condemnation for a Limited Period. **Notwithstanding the provisions of Section 13.1,13.2 or 13.3, except during the final twelve (12) months of the Term, if all orany portion of the Premises are condemned or taken for governmental occupancyfor a limited period (i.e. -  anticipatedto be no longer than sixty (60) days), then this Lease shall not terminate;there shall be no abatement of Fixed Monthly Rent or Additional Rent payablehereunder; and Tenant shall be entitled to receive the entire award therefor(whether paid as damages, rent or otherwise).

        If, during the final twelve (12) months of the Term, all orany portion of the Premises are condemned or taken for governmental occupancyfor a limited period anticipated to be in excess of sixty (60) days, or for aperiod extended after the expiration of the initial Term, Tenant shall have theoption, but not the obligation, to terminate this Lease, in which case,Landlord shall be entitled to such part of such award as shall be properlyallocable to the cost of restoration of the Premises, and the balance of suchaward shall be apportioned between Landlord and Tenant as of the date of suchtermination.

 

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        If the termination of such governmental occupancy is prior toexpiration of this Lease, and Tenant has not elected to terminate this Lease,Tenant shall, upon receipt thereof and to the extent an award has been made,restore the Premises as nearly as possible to the condition in which they wereprior to the condemnation or taking.

**ARTICLE 14**MORTGAGE SUBORDINATION; ATTORNMENT AND MODIFICATION OF LEASE

**Section 14.1.  Subordination. **This Lease, the Term and estate hereby granted, areand shall be subject and subordinate to the lien of each mortgage which may nowor at any time hereafter affect Landlord’s interest in the real property,Building, parking facilities, common areas or portions thereof and/or the landthereunder (an “underlying mortgage”), regardless of the interest rate, theterms of repayment, the use of the proceeds or any other provision of any suchmortgage.  Tenant shall from time to timeexecute and deliver such instruments as Landlord or the holder of any suchmortgage may reasonably request to confirm the subordination provided in thisSection 14.1.  Tenant shall executeand deliver to Landlord three (3) copies of the Subordination, Non-Disturbanceand Attornment Agreement attached as Exhibit H hereto and made a part hereof(the “SNDA”) concurrently with Tenant’s execution and delivery of thisLease.  Within thirty (30) days followingthe full execution of this Lease, Landlord shall deliver to Tenant a copy ofthe SNDA executed by Landlord and Landlord’s lender.

**Section14.2.  Attornment. **Tenant confirms that if by reason of a default underan underlying mortgage the interest of Landlord in the Premises is terminated,provided Tenant is granted in writing continued quiet enjoyment of the Premisespursuant to the terms and provisions of this Lease, Tenant shall attorn to theholder of the reversionary interest in the Premises and shall recognize suchholder as Tenant’s landlord under this Lease, but in no event shall such holderbe bound by any payment of Rent paid more than one month in advance of the datedue under this Lease.  Tenant shall,within fifteen (15) calendar days after request therefor, execute and deliver,at any time and from time to time, upon the request of Landlord or of theholder of an underlying mortgage any instrument which may be necessary orappropriate to evidence such attornment.

**Section14.3.  Modification of Lease; Notice ofDefault. **If any current or prospective mortgagee or groundlessor for the Building requires a modification or modifications of this Lease,which modification or modifications will not cause an increased cost or expenseto Tenant or in any other way changes the rights and obligations of Tenant orthe obligations of Landlord hereunder, then in such event, Tenant agrees thatthis Lease may be so modified.  Tenantagrees to execute and deliver to Landlord within fifteen (15) calendar daysfollowing the request therefor whatever documents are required to effectuatesaid modification.  Should Landlord orany such current or prospective mortgagee or ground lessor require execution ofa short form of Lease for recording, containing, among other customaryprovisions, the names of the parties, a description of the Premises and theTerm, Tenant agrees to execute and deliver to Landlord such short form of Leasewithin fifteen (15) calendar days following the request therefor.  Further, Tenant shall give written notice ofany default by Landlord under this Lease to any mortgagee and ground lessor ofthe Building and shall afford such mortgagee and ground lessor a reasonableopportunity to cure such default prior to exercising any remedy under thisLease.

**ARTICLE 15**ESTOPPEL CERTIFICATES

**Section 15.1.  Estoppel Certificates. **Tenant shall, within fifteen (15) business days afterreceipt of Landlord’s written request therefor, execute, acknowledge anddeliver to Landlord an Estoppel Certificate, which may be conclusively reliedupon by any prospective purchaser, mortgagee or beneficiary under any deed oftrust covering the Building or any part thereof.  Said Estoppel Certificate shall certify thefollowing:

**a)****             **that this Lease is unmodified and in fullforce and effect (or, if there have been modifications, that this Lease is infull force and effect, as modified, and stating the date and nature of eachmodification);

**b)****             **the date, if any, to which rental andother sums payable hereunder have been paid;

**c)****             **that no notice has been received byTenant of any default which has not been cured, except as to defaults specifiedin the certificate;

**d)****             **that, to Tenant’s actual knowledge,Landlord is not in default under this Lease or, if so, specifying such default;and

**e)****             **such other factual matters as may bereasonably requested by Landlord.

        Tenant’s failure to deliver the Estoppel Certificate withinfive (5) days following Tenant’s receipt of Landlord’s second (2nd)written request therefor shall constitute a material default under the Lease,and Landlord shall have the option, but not the obligation, to enforce theremedies contained in Article 18.

**ARTICLE 16**NOTICES

**Section 16.1.  Notices. **Anynotice, consent, approval, agreement, certification, request, bill, demand,statement, acceptance or other communication hereunder (a “notice”) shall be inwriting and shall be considered duly given or furnished when:

**a)****             **delivered personally or by messenger orovernight delivery service, with signature evidencing such delivery;

 

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**b)****             **upon the date of delivery, after beingmailed in a postpaid envelope, sent certified mail, return receipt requested,when addressed to Landlord as set forth in the Basic Lease Information and toTenant at the Premises and any other address for Tenant specified in the BasicLease Information; or to such other address or addressee as either party maydesignate by a written notice given pursuant hereto; or

**c)****             **upon confirmation of good transmission ifsent via facsimile machine to such phone number as shall have been provided inwriting by Landlord or Tenant, one to the other.

        If Tenantfails to provide another valid address, other than the Premises, upon whichservice to Tenant can be perfected, then Tenant hereby appoints as its agent toreceive the service of all dispossessory or distraint proceedings and noticesthereunder the person in charge of or occupying the Premises at the time, andif no person shall be in charge of or occupy the same, then such service may bemade by attaching the same to the main entrance of the Premises.

**ARTICLE 17**DEFAULT AND LANDLORD’S OPTION TO CURE

**Section17.1.  Tenant’s Default. **For the purposes of this Section 17.1, if the term “Tenant”,as used in this Lease, refers to more than one person, then, such term shall bedeemed to include all of such persons or any one of them; if any of theobligations of Tenant under this Lease are guaranteed, the term “Tenant,” asused in Section 17.1(e) and Section 17.1(f), shall be deemed to alsoinclude the guarantor or, if there is more than one guarantor, all or any one ofthem; and if this Lease has been assigned, the term “Tenant,” as used inSections 17.1 (a) through (h), inclusive, shall be deemed to include theassignee and assignor, jointly and severally, unless Landlord shall have, inconnection with such assignment, previously released the assignor from anyfurther liability under this Lease, in which event the term “Tenant,” as usedin said subparagraphs, shall not include the assignor that was previouslyreleased.

        Tenant’s continued occupancy and quietenjoyment of the Premises and this Lease and the covenants and estate herebygranted are subject to the limitation that:

**a)****             **if Tenant fails to make any payment ofFixed Monthly Rent or Additional Rent within five (5) business days followingTenant’s receipt of written notice from Landlord that any such amount is dueand unpaid, or

**b)****             **if Tenant abandons or vacates thePremises and concurrently discontinues the payment of Rent, or

**c)****             **if Tenant defaults in the keeping,observance or performance of any covenant or agreement set forth inSections 6.1, 6.2 or 19.3, and if such default continuesand is not cured by Tenant before the expiration of Landlord’s written 3-DayNotice to Cure or Quit; or

**d)****             **if Tenant defaults in the keeping,observance or performance of any covenant or agreement including any provisionsof the rules and regulations established by Landlord (other than a default ofthe character referred to in Sections17.1 (a), (b) or (c)), and if such default continues and isnot cured by Tenant within thirty (30) days after Landlord has given to Tenanta notice specifying the same, or, in the case of such a default which forcauses beyond Tenant’s reasonable control (including occupancy of a sublessee)cannot with due diligence be cured within such period of thirty (30) days, ifTenant:

**i)****               **does not, promptly upon Tenant’s receipt of suchnotice, advise Landlord of Tenant’s intention duly to institute all stepsnecessary to cure such default or

**ii)****           **does not duly institute and thereafter diligentlyprosecute to completion all steps (including, if appropriate, legal proceedingsagainst a defaulting sublessee) necessary to cure the same, or

**e)****             **if Tenant fails to deliver the EstoppelCertificate required under Article 15 hereof within the time periodspecified, or

**f)****               **if Tenant:

**i)****               **applies for or consents to the appointment of, or thetaking of possession by a receiver, custodian, trustee or liquidator of itselfor of all or a substantial part of its property;

**ii)****           **admits in writing its inability, or is generallyunable, to pay its debts as such debts become due;

**iii)****       **makes a general assignment for the benefit of itscreditors;

**iv)****          **commences a voluntary case under federal bankruptcylaws (as now or hereafter in effect);

**v)****              **files a petition seeking to take advantage of any otherlaw relating to bankruptcy, insolvency, reorganization, winding up, orcomposition or adjustment of debts;

**vi)****          **fails to controvert in a timely or appropriate manner,or acquiesces in writing to, any petition filed against it in an involuntarycase under such bankruptcy laws;

**vii)****      **take any action for the purpose of effecting any ofthe foregoing, or

**g)****            **if a proceeding or case is commenced,without the application or consent of Tenant, in any court of competentjurisdiction, seeking:

**i)****               **the liquidation, reorganization, dissolution, windingup, or composition or readjustment of debts, of Tenant; or

**ii)****           **the appointment of a trustee, receiver, custodian,liquidator or the like of Tenant or of all or a substantial part of its assets;or

 

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**iii)****       **similar relief with respect of Tenant under any lawrelating to bankruptcy, insolvency, reorganization, winding up, or compositionor adjustment of debts, and such proceeding or case shall continue undismissed,or an order, judgment or decree approving or ordering any of the foregoingshall be entered and continue unstayed and in effect, for a period of sixty(60) days, or an order for relief against Tenant shall be entered in aninvoluntary case under such bankruptcy laws, or

**h)****            **if Tenant fails to take possession of andmove into the Premises within fifteen (15) calendar days after Landlord tendersthe same in writing to Tenant, unless Tenant acknowledges and accepts theCommencement Date as occurring within such fifteen-day time period, and paysRent thereon from such Commencement Date;

then, in any or each suchevent, Tenant shall be deemed to have committed a material default under thisLease.

**Section 17.2.  Landlord’s Option to Cure Tenant’sDefault. **If Tenant enters into a default under this Lease, inlieu of Landlord’s issuance of a written notice, as specified hereinbelow,Landlord may cure the same at the sole expense of Tenant:

**a)****             **immediately and without notice in thecase of emergency; if said default is specified in Sections17.1 (a), (b) or (c), or if such default unreasonably interfereswith the use by any other tenant of the Building; with the efficient operationof the Building; or will result in a violation of law or in a cancellation ofany insurance policy maintained by Landlord, and

**b)****             **after the expiration of Landlord’s 3-DayNotice of Intent to Cure, in the case of any default other than those specifiedin Section 17.2 (a) hereinabove.

**Section 17.3.  Landlord’s Option to Terminate thisLease. **In addition to any other remedies Landlord may have atlaw or in equity, Landlord shall be entitled to give to Tenant a written noticeof intention to terminate this Lease at the expiration of three (3) days fromthe date of the giving of such notice (which notice shall be in addition to thenotices described in Section 17.1, and shall not be given unless and until thecure period described in Section 17.1 has expired and the default has not beencured, except that this notice shall constitute the notice described in Section17.1 (a)), and if such notice is given by Landlord, and Tenant fails to curethe defaults specified therein, then this Lease and the Term and estate herebygranted (whether or not the Commencement Date has already occurred) shallterminate upon the expiration of such three (3) day period (a “DefaultTermination”), with the same effect as if the last of such three (3) days werethe Termination Date, except that Tenant shall remain liable for damages asprovided hereinbelow or pursuant to law.

**Section 17.4.  Certain Payments. **Bills for all reasonable costs and expenses incurredby Landlord in connection with any performance by it under Section 17.2shall be payable, as Additional Rent, pursuant to the provisions of Section4.3.

**Section 17.5.  Certain Waivers. **Unless Tenant has submitted documentation that itvalidly disputes Landlord’s billing for Fixed Monthly Rent hereunder, or iscompleting an audit of Landlord’s Operating Expense Statement, if Tenant is indefault in payment of Fixed Monthly Rent or Additional Rent hereunder, Tenantwaives the right to designate the items against which any payments made byTenant are to be credited.  In lieuthereof, Landlord may apply any payments received from Tenant to the then-oldestbilling remaining unpaid on Tenant’s rental account or to any other payment duefrom Tenant, as Landlord sees fit.

**Section 17.6.  Landlord Default. **Notwithstanding anything to the contrary set forth inthis Lease, Landlord shall not be in default in the performance of anyobligation required to be performed by Landlord pursuant to this Lease unless:

**a)****             **in the event such default is with respectto the payment of money, Landlord fails to pay such unpaid amounts within five(5) business days of written notice from Tenant that the same was not paid whendue, or

**b)****             **in the event such default is other thanthe obligation to pay money, Landlord fails to perform such obligation withinthirty (30) days after the receipt of notice from Tenant specifying in detailLandlord’s failure to perform; provided, however, if the nature of Landlord’sobligation is such that more than thirty (30) days are required for itsperformance, then Landlord shall not be in default under this Lease if it shallcommence such performance within such thirty (30) days period and thereafterdiligently pursue the same to completion within a reasonable time period.

        Upon any such default by Landlord underthis Lease, Tenant may, except as otherwise specifically provided in this Leaseto the contrary, exercise any of its rights provided at law or in equity.

**ARTICLE 18**DAMAGES; REMEDIES; RE-ENTRY BY LANDLORD; ETC.

**Section18.1.  Damages. **If Landlord terminates this Lease, pursuant to theprovisions of Section 17.3 (a “Default Termination”), then Landlord may recoverfrom Tenant the total of:

**a)****             **the worth at the time of award of theunpaid Fixed Monthly Rent and Additional Rent earned to the date of suchDefault Termination; and

**b)****             **the worth at the time of award of theamount by which the unpaid Fixed Monthly Rent and Additional Rent which wouldhave been earned after the date of such Default Termination until the time ofaward exceeds the amount of such rental loss that Tenant proves could have beenreasonably avoided; and

 

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**c)****             **the worth at the time of award of theamount by which the unpaid Fixed Monthly Rent and Additional Rent which wouldhave been earned for the balance of the Term after the time of award exceedsthe amount of such rental loss that Tenant proves could have been reasonablyavoided; and

**d)****             **any other amount reasonably necessary tocompensate Landlord for all of the detriment proximately caused by Tenant’sfailure to observe or perform any of its covenants and agreements under thisLease or which in the ordinary course of events would be likely to resulttherefrom, including, without limitation, the payment of the reasonableexpenses incurred or paid by Landlord in re-entering and securing possession ofthe Premises and in the reletting thereof (including, without limitation,altering and preparing the Premises for new tenants and brokers’ commission);and

**e)****             **at Landlord’s sole election, such otheramounts in addition to or in lieu of the foregoing as may be permitted fromtime to time under applicable California laws.

**Section18.2.  Computations: **The “worth at the time of award” is computed:

**a)****             **in paragraphs (a) and (b) above, byallowing interest at the rate of ten percent (10%) per annum (but in no eventin excess of the maximum rate permitted by law); and

**b)****             **in paragraph (c) above, by discountingsuch amount at the discount rate of the Federal Reserve Bank of San Franciscoat the time of award plus one percent (1%).

**c)****             **For purposes of computing unpaid rentalwhich would have accrued and become payable under this Lease, unpaid rentalshall consist of the sum of:

**i)****               **the total Fixed Monthly Rent for the balance of theTerm, plus

**ii)****           **a computation of Tenant’s Share of Additional Rent dueunder the Lease including, without limitation, Tenant’s Proportionate Share ofany increase in Operating Expenses (including real estate taxes) for thebalance of the Term.  For purposes ofcomputing any increases due Landlord hereunder, Additional Rent for thecalendar year of the default and for each future calendar year in the Term shallbe assumed to be equal to the Additional Rent for the calendar year prior tothe year in which default occurs, compounded at a rate equal to the meanaverage rate of inflation for the preceding five calendar years as determinedby the United States Department of Labor, Bureau of Labor Statistics ConsumerPrice Index (All Urban Consumers, all items, 1982-84 equals 100) for themetropolitan area or region of which Los Angeles, California is a part.  If such index is discontinued or revised, theaverage rate of inflation shall be determined by reference to the indexdesignated as the successor or substitute index by the government of the UnitedStates.

**Section18.3.  Re-Entry by Landlord.**

**a)****             **If a Default Termination occurs or anydefault specified in Sections 17.1 (a) through (g) occurs andcontinues beyond the period of grace (if any) therefor, Landlord or Landlord’sauthorized representatives may re-enter the Premises and remove all persons andall property therefrom, either by summary dispossession proceedings or by anysuitable action or proceeding at law, without being liable to indictment,prosecution or damages therefor, and may repossess and enjoy the Premises.  No re-entry or repossession of the Premisesby Landlord or its representatives under this Section 18.3 shall beconstrued as an election to terminate this Lease unless a notice of suchelection is given to Tenant or unless the termination thereof is decreed by acourt of competent jurisdiction.  The words“re-enter”, “re-entry” and “re-entering” as used herein are not restricted totheir technical legal meanings.

**b)****             **If any default specified in Sections17.1 (a) through (g) occurs and continues beyond the period ofgrace (if any) therefor, then if Landlord does not elect to terminate thisLease Landlord may, from time to time and without terminating this Lease,enforce all its rights and remedies under this Lease, including the right torecover the Fixed Monthly Rent and Additional Rent as the same becomes payableby Tenant hereunder.

**i)****               **If Landlord consents thereto, Tenant may sublet thePremises or any part thereof (which consent Landlord agrees will not beunreasonably withheld), subject to Tenant’s compliance with the requirements ofArticle 11 of this Lease.  So longas Landlord is exercising this remedy it will not terminate Tenant’s right topossession of the Premises, but it may engage in the acts permitted bySection 1951.4(c) of the California Civil Code.

**c)****             **If Tenant abandons the Premises in breachof this Lease, Landlord shall have the right to relet the Premises or any partthereof on such terms and conditions and at such rentals as Landlord in itssole discretion may deem advisable, with the right to make alterations andrepairs in and to the Premises necessary to reletting.  If Landlord so elects to relet, then grossrentals received by Landlord from the reletting shall be applied:

**i)****               ****first,** to the payment of the reasonableexpenses incurred or paid by Landlord in re-entering and securing possession ofthe Premises and in the reletting thereof (including, without limitation,altering and preparing the Premises for new tenants and brokers’ commissions);

**ii)****           ****second,** to the payment of the Fixed Monthly Rentand Additional Rent payable by Tenant hereunder; and

**iii)****       ****third,**the remainder, if any, to be retained by Landlord and applied to the payment offuture Fixed Monthly Rent and Additional Rent as the same become due.

        Should the gross rentals received byLandlord from the reletting be insufficient to pay in full the sums stated inSection 18.3 (a) and (b) hereinabove, Tenant shall, upon demand, paythe deficiency to Landlord.

 

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**Section18.4.  Certain Waivers. **After Landlord has actually obtained possession of thePremises pursuant to any lawful order of possession granted in a valid court oflaw, Tenant thereafter waives and surrenders for Tenant, and for all claimingunder Tenant, all rights and privileges now or hereafter existing to redeem thePremises (whether by order or judgment of any court or by any legal process orwrit); to assert Tenant’s continued right to occupancy of the Premises; or tohave a continuance of this Lease for the Term hereof.  Tenant also waives the provisions of any lawrelating to notice and/or delay in levy of execution in case of an eviction ordispossession for nonpayment of rent, and of any successor or other law of likeimport.

**Section 18.5.  Cumulative Remedies. **The remedies of Landlord provided for in this Leaseare cumulative and are not intended to be exclusive of any other remedies towhich Landlord may be lawfully entitled. The exercise by Landlord of any remedy to which it is entitled shall notpreclude or hinder the exercise of any other such remedy.

**ARTICLE 19**INSURANCE

**Section 19.1.  Landlord Obligations:**

**a)****             **Landlord shall secure and maintain duringthe Term of this Lease the following insurance:

**i)****               **Commercial General Liability and Umbrella Liabilityinsurance relating to Landlord’s operation of the Building, for personal andbodily injury and death, and damage to other’s property.

**ii)****           **All risk of standard fire insurance and extendedcoverage including vandalism and malicious mischief and sprinkler leakageendorsements relating to the Building, the parking facilities, the common areaimprovements and any and all improvements installed in, on or upon the Premisesand affixed thereto (but excluding Tenant’s fixtures, furnishings, equipment,personal property or other elements of Tenant’s Property), and provided thatthe premium cost for coverage of the Improvements to the Premises in excess ofa total value equal to Thirty-Five Dollars ($35.00) per square foot of UsableArea in the Premises shall be directly reimbursed from Tenant to Landlord,pursuant to the provisions of Section 4.3 of this Lease;

**iii)****       **Such other insurance (including, without limitation,boiler and machinery, rental loss, earthquake and/or flood insurance) asLandlord reasonably elects to obtain or any Lender requires.

**b)****             **Insurance effected by Landlord under thisSection 19.1 will be:

**i)****               **In amounts which Landlord from time to time determinessufficient or which any Lender requires; and

**ii)****           **Subject to such deductibles and exclusions as Landlorddeems appropriate.

**c)****             **Notwithstandingany contribution by Tenant to the cost of insurance premiums as providedherein, Tenant acknowledges that Tenant has no right to receive any proceedsfrom any insurance policies carried by Landlord.

**Section 19.2.  Tenant Obligations.**

**a)****             **At least ten (10) days prior to the earlier of theCommencement Date or Tenant’s anticipated early possession date of the Premisesand thereafter during the Term of this Lease, Tenant shall secure and maintain,at its own expense throughout the Term of this Lease the following minimumtypes and amounts of insurance, in form and in companies acceptable toLandlord, insuring Tenant, its employees, agents and designees:

**i)****               **Workers’ Compensation Insurance, the amount and scopeof which shall be the greater of (1) the insurance currently maintained byTenant, or (2) the amount and scope required by statute or other governing law.

**ii)****           **Employer’s Liability Insurance in amounts equal to thegreater of (1) the insurance currently maintained by Tenant, or (2) thefollowing:  Bodily Injury by accident -$1,000,000 each accident; Bodily Injury by disease - $1,000,000 policy limit;and Bodily Injury by disease - $1,000,000 each employee.

**iii)****       **Commercial General Liability and Umbrella LiabilityInsurance on an occurrence basis, without claims-made features, with bodilyinjury and property damage coverage in an amount equal to the greater of (1)the insurance currently maintained by Tenant or (2) a combined single limit of$1,000,000; and such insurance shall include the following coverages:  (A) Premises and Operations coverage with X,C, and U exclusions for explosion, collapse, and underground property damagedeleted under both premises/operations and contractual liability coverageparts, if applicable; (B) Owner and Contractor Protective coverage; (C)Products and Completed Operations coverage; (D) Blanket Contractual coverage,including both oral and written contracts; (E) Personal Injury coverage; (F)Broad Form Comprehensive General Liability coverage (or its equivalent); and(G) Broad Form Property Damage coverage, including completed operations.

**iv)****          **All risk of standard fire insurance and extendedcoverage with vandalism and malicious mischief and sprinkler leakageendorsements, insuring fixtures, glass, equipment, merchandise, inventory andother elements of Tenant’s Property in and all other contents of thePremises.  Such insurance shall be in anamount equal to 100% of the replacement value thereof (and Tenant shallre-determine the same as frequently as necessary in order to comply herewith).  The proceeds of such insurance, so long asthis Lease remains in effect, shall be used to repair and/or replace the itemsso insured.

 

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**v)****              **A commercially reasonable and customary policy ofbusiness interruption insurance with respect to the operation of Tenant’sbusiness.

**vi)****          **Any other forms of insurance Landlord’s lender mayrequire from time to time, in form and amounts and for insurance risks againstwhich a prudent tenant of comparable size in a comparable business wouldprotect itself, and as requested by other landlords of similar buildings in theBeverly Hills area for similarly sized premises and uses.

**b)****             **All insurance policies maintained toprovide the coverages required herein shall:

**i)****               **Be issued by insurance companies authorized to dobusiness in the state in which the leased premises are located, and withcompanies rated, at a minimum “A- VII” by A.M. Best, so long as such rating isavailable on a commercially reasonable basis;

**ii)****           **Be subject to the prior approval of Landlord (whichapproval shall not be unreasonably withheld) as to form, substance and insurer;

**iii)****       **Provide for a deductible only so long as Tenant shallremain liable for payment of any such deductible in the event of any loss;

**iv)****          **Contain appropriate cross-liability endorsementsdenying Tenant’s insurers the right of subrogation against Landlord as to riskscovered by such insurance, without prejudice to any waiver of indemnityprovisions applicable to Tenant and any limitation of liability provisionsapplicable to Landlord hereunder, of which provisions Tenant shall notify allinsurance carriers;

**v)****              **Contain provisions for at least ten (10) days advancewritten notice to Landlord of cancellation due to non-payment and of materialmodification resulting in a violation of the requirements of this Section 19.2or cancellation for any reason other than non-payment; and

**vi)****          **Stipulate that coverages afforded under such policiesare primary insurance as respects Landlord and that any other insurancemaintained by Landlord are excess and non-contributing with the insurancerequired hereunder.

**c)****             **No endorsement limiting or excluding arequired coverage is permitted.

**d)****             **Tenant shall deliver to Landlord uponexecution of this Lease, written evidence of insurance coverages requiredherein.  Tenant shall deliver to Landlordno less than fifteen (15) days prior to the expiration of any requiredcoverage, written evidence of the renewal or replacement of such coverage.  Landlord’s failure at any time to object toTenant’s failure to provide the specified insurance or written evidence thereof(either as to the type or amount of such insurance) shall not be deemed as awaiver of Tenant’s obligations under this Section.

**e)****             **Landlord shall be named as an additionalinsured on the Tenant’s policies of General Liability and Umbrella Liabilityinsurance and as a loss payee on the Tenant’s policies of All Risk insurance astheir interest may appear.  Tenant shalldeliver to Landlord the appropriate endorsements evidencing additional insuredand loss payee status.  Any claim forloss under said insurance policies shall be payable notwithstanding any act,omission, negligence, representation, misrepresentation or other conduct ormisconduct of Tenant which might otherwise cause cancellation, forfeiture orreduction of such insurance.

**f)****               **The insurance requirements in thisSection shall not in any way limit, in either scope or amount, the indemnityobligations separately owed by Tenant to Landlord under the Lease.

**g)****            **Nothingherein shall in any manner limit the liability of Tenant for non-performance ofits obligations or for loss or damage for which Tenant is responsible.  The aforementioned minimum limits of policiesshall in no event limit the liability of Tenant hereunder.

**h)****            **Tenant may, at its option, satisfy itsinsurance obligations hereunder by policies of so-called blanket insurancecarried by Tenant provided that the same shall, in all respects, comply withthe provisions hereof.  In such event,Tenant shall not be deemed to have complied with its obligations hereunderuntil Tenant shall have obtained and delivered to Landlord a copy of each suchpolicy together with an appropriate endorsement or certificate applicable toand evidencing full compliance with the specific requirements of the Lease(irrespective of any claim which may be made with respect to any other propertyor liability covered under such policy), and until the same shall have beenapproved by Landlord in writing.

**Section 19.3.  Compliance with Building InsuranceRequirements. **After Tenant takes occupancy of thePremises, Tenant shall not violate or permit in, on or upon the Premises theviolation of any condition imposed by such standard fire insurance policies asare normally issued for office buildings in the City or County in which the Buildingis located.  Tenant shall not do, sufferor permit anything to be done, or keep, suffer or permit anything to be kept,in the Premises which would increase the risk ratings or premium calculationfactors on the Building or property therein (collectively an “Increased Risk”),or which would result in insurance companies of good standing refusing toinsure the Building or any property appurtenant thereto in such amounts andagainst such risks as Landlord may reasonably determine from time to time are appropriate.

        Notwithstanding the above, if additional insurance isavailable to cover such Increased Risk, Tenant shall not be in defaulthereunder if:

**a)****             **Tenant authorizes Landlord in writing toobtain such additional insurance; and

**b)****             **prepays the annual cost thereof toLandlord for such additional coverage, as well as the additional costs, if any,of any increase in Landlord’s other insurance premiums resulting from theexistence or continuance of such Increased Risk.

 

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**Section 19.4.  Mutual Waiver of Subrogation. ** Tenant andLandlord agree that if a loss occurs due to any of the perils for which theyare required hereunder to provide insurance, each party shall look solely tothe insurance policies covering such loss or risk for recovery and each partywaives all claims of recovery against the other for damage or loss to itsproperty due to hazards covered by the insurance maintained by that party orwhich would have been covered by the policies of insurance which should havebeen obtained pursuant to this Lease or which should have been coveredthereby.  Landlord and Tenant herebygrant to each other, on behalf of any insurer providing insurance to either ofthem with respect to the demised premises, a waiver of any right of subrogationthat any such insurer of one party may acquire against the other by virtue ofpayment of any loss under such insurance.

**Section 19.5.  Failure to Secure. **If at any time during the Term, and after expirationof ten (10) business days prior written demand therefore from Landlord, Tenantfails to:

**a)****             **provide Landlord with access to aregistered insurance broker of record that can verify Tenant’s compliancewith  the requirement contained in thisArticle 19; or

**b)****             **provide documentation reasonablyacceptable to Landlord that Tenant has secured and maintained the insurancecoverage required hereunder,

then such failure shallbe considered a material default under the Lease, and Landlord shall have theoption, but not the obligation, without further notice or demand to obtain suchinsurance on behalf of or as the agent of Tenant and in Tenant’s name.

        Tenant shall pay Landlord’s billing for the premiumsassociated with such insurance policy or policies within fifteen (15) daysafter receipt of Landlord’s billing, as well as such other reasonable costs andfees arising out of such default, together with interest on the entire amountso advanced by Landlord, at the rate of ten percent (10%) per annum, computedfrom the date of such advance.  Suchadvances, if made by Landlord, shall be construed as and considered AdditionalRent under this Lease.

**ARTICLE 20**MISCELLANEOUS

**Section 20.1.  Entire Agreement. **This Lease, including the exhibits and guaranty oflease, if any, annexed hereto, contains all of the agreements andunderstandings relating to the leasing of the Premises and the obligations ofLandlord and Tenant in connection therewith and neither party and no agent orrepresentative thereof has made or is making, and neither party in executingand delivering this Lease is relying upon, any warranties or representations,except to the extent set forth in this Lease. All understandings and agreements heretofore had between Landlord andTenant relating to the leasing of the Premises are merged in this Lease, whichalone fully and completely expresses their agreement.  The Riders (if any) and Exhibits annexed tothis Lease and the Construction Agreement are hereby incorporated herein andmade a part hereof.   This Leaseincludes, and incorporates herein, Exhibits A , B, C, D, F and H.

**Section 20.2.  No Waiver or Modification. **The failure of Landlord or Tenant to insist in anyinstance upon the strict keeping, observance or performance of any covenant oragreement contained in this Lease or to exercise any election herein containedshall not be construed as a waiver or relinquishment for the future of suchcovenant or agreement, but the same shall continue and remain in full force andeffect.  No waiver or modification byeither Landlord or Tenant of any covenant or agreement contained in this Leaseshall be deemed to have been made unless the same is in writing executed by theparty whose rights are being waived or modified.  No surrender of possession of any part of thePremises shall release Tenant from any of its obligations hereunder unlessaccepted in writing by Landlord.  Thereceipt and retention by Landlord, and the payment by Tenant, of Fixed MonthlyRent or Additional Rent with knowledge of the breach of any covenant oragreement contained in this Lease shall not be deemed a waiver of such breachby either Landlord or Tenant.

**Section 20.3.  Time of the Essence. **Time is of the essence of this Lease and of allprovisions hereof, except in respect to the delivery of possession of the Premisesat the Commencement Date.  Nothing setforth herein negates any notice and cure periods set forth in this Lease.

**Section 20.4.  Force Majeure. **For the purposes of this Lease, “Force Majeure” shallbe defined as any or all prevention, delays or stoppages and/or the inabilityto obtain services, labor, materials or reasonable substitutes therefor, whensuch prevention, delay, stoppage or failure is due to strikes, lockouts, labordisputes, acts of God, governmental actions, civil commotion, fire or othercasualty, and/or other causes beyond the reasonable control of the partyobligated to perform, except that Force Majeure may not be raised as a defensefor Tenant’s non-performance of any obligations imposed by the Lease withregard to the payment of Fixed Monthly Rent and/or Additional Rent.

        Notwithstanding anything to the contrary contained in thisLease, Force Majeure shall excuse the performance of such party for a periodequal to any such prevention, delay, stoppage or inability.  Therefore, if this Lease specifies a timeperiod for performance of an obligation by either party, that time period shallbe extended by the period of any delay in such party’s performance caused by aForce Majeure.

**Section 20.5.  Broker. **Landlordand Tenant represent to one another that each has dealt with no broker inconnection with this Lease other than **Douglas, Emmett andCompany**and **First Property Realty Corporation**.  Landlord and Tenant shall hold one anotherharmless from and against any and all liability, loss, damage, expense, claim,action, demand, suit or obligation arising out of or relating to a breach bythe indemnifying party of such representation. Landlord agrees to pay all commissions due to the brokers listed abovecreated by Tenant’s execution of this Lease.

 

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**Section 20.6.  Governing Law. **This Lease shall be governed by and construed inaccordance with the laws of the State of California.

**Section 20.7.  Submission of Lease. **Whether or not rental deposits have been received byLandlord from Tenant, and whether or not Landlord has delivered to Tenant anunexecuted draft version of this Lease for Tenant’s review and/or signature, nocontractual or other rights shall exist between Landlord and Tenant withrespect to the Premises, nor shall this Lease be valid and/or in effect untilthis Lease has been fully executed and a duplicate original of saidfully-executed Lease has been delivered to both Landlord and Tenant.

        The submission of this Lease to Tenantshall be for examination purposes only, and does not and shall not constitute areservation of or an option for Tenant to lease, or otherwise create anyinterest by Tenant in the Premises or any other offices or space situated inthe Building.  Execution of this Lease byTenant and its return to Landlord shall not be binding upon Landlord,notwithstanding any time interval, until Landlord has in fact executed anddelivered a fully-executed duplicate original of this Lease to Tenant.  Landlord and Tenant agree hereby to authorizetransmission of all or portions of documents, including signature linesthereon, by facsimile machines, and further authorize the other party to relyconclusively upon such facsimile transmissions as if the original had been received.

**Sections20.8.  Captions. **The captions in this Lease are for convenience onlyand shall not in any way limit or be deemed to construe or interpret the termsand provisions hereof.

**Section 20.9.  Singular and Plural, Etc. **The words “Landlord” and “Tenant”, as used herein,shall include the plural as well as the singular.  Words used in the masculine gender includethe feminine and neuter.  If there bemore than one Landlord or Tenant the obligations hereunder imposed uponLandlord and Tenant shall be joint and several.

**Section 20.10.  Independent Covenants. **Except where the covenants contained in one Article ofthis Lease are clearly affected by or contingent upon fulfillment by eitherparty of another Article or paragraph of this Lease, this Lease shall beconstrued as though the covenants herein between Landlord and Tenant areindependent and not dependent and Tenant hereby expressly waives the benefit ofany statute to the contrary and agrees that if Landlord fails to perform itsobligations set forth herein, Tenant shall not be entitled to make any repairsor perform any actions hereunder at Landlord’s expense or to any set-off of theRent or other amounts owing hereunder against Landlord; provided, however, thatthe foregoing shall in no way impair the right of Tenant to commence a separateaction against Landlord for the violation by Landlord of the provisions hereofso long as notice is first given to Landlord and any holder of a mortgage ordeed of trust covering the Building, Real Property or any portion thereof, ofwhose address Tenant has theretofore been notified, and an opportunity isgranted to Landlord and such holder to correct such violations as providedabove.

**Section 20.11.  Severability. **If anycovenant or agreement of this Lease or the application thereof to any person orcircumstance shall be held to be invalid or unenforceable, then and in eachsuch event the remainder of this Lease or the application of such covenant oragreement to any other person or any other circumstance shall not be therebyaffected, and each covenant and agreement hereof shall remain valid andenforceable to the fullest extent permitted by law.

**Section 20.12.  Warranty of Authority. **If Landlord or Tenant signs as a corporation, limitedliability company or a partnership, each of the persons executing this Lease onbehalf of Landlord or Tenant hereby covenant and warrant that each is a dulyauthorized and existing entity, that each has and is qualified to do businessin California, that the persons signing on behalf of Landlord or Tenant havefull right and authority to enter into this Lease, and that each and everyperson signing on behalf of either Landlord or Tenant are authorized to do so.

**Section 20.13.  No Representations or Warranties.** Neither Landlord nor Landlord’s agents or attorneys have made anyrepresentations or warranties with respect to the Premises, the Building orthis Lease, except as expressly set forth herein, and no rights, easements orlicenses are or shall be acquired by Tenant by implication or otherwise.

**Section 20.14.  No Joint Venture or Partnership. **This Lease shall not be deemed or construed to createor establish any relationship of partnership or joint venture or similarrelationship or arrangement between Landlord and Tenant hereunder.

**Section20.15.  Tenant’s Obligations At Its SoleExpense. **Notwithstanding the fact that certain references inthis Lease to acts required to be performed by Tenant hereunder, or to breachesor defaults of this Lease by Tenant, omit to state that such acts shall beperformed at Tenant’s sole expense, or omit to state that such breaches ordefaults by Tenant are material, unless the context clearly implies to thecontrary each and every act to be performed or obligation to be fulfilled byTenant pursuant to this Lease shall be performed or fulfilled at Tenant’s soleexpense, and all breaches or defaults by Tenant hereunder shall be deemedmaterial if not cured with any applicable notice and/or cure period.

**Section 20.16.  Attorneys’ Fees. **If litigation is instituted between Landlord andTenant, the cause for which arises out of or in relation to this Lease, theprevailing party in such litigation shall be entitled to receive its costs (notlimited to court costs), expenses and reasonable attorneys’ fees from thenon-prevailing party as the same may be awarded by the court.

**Section 20.17.  Waiver of Trial by Jury.  In the interest of saving time and expense,Landlord and Tenant hereby consent to trial without a jury in any action,proceeding or counterclaim brought by either of the parties hereto against theother or their successor-in-interest in respect to any matters arising out ofor relating to this Lease.**

 

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**Section 20.18.  No Merger. **Thevoluntary or other surrender of this Lease by Tenant, or a mutual cancellationthereof, shall not work a merger, and shall, at the option of Landlordterminate all or any existing subleases or subtenancies, or may, at the optionof Landlord, operate as an assignment to it of any or all such subleases orsubtenancies.

**Section 20.19.  Prohibition Against Recording. **Except as provided in Section 14.3 of this Lease,neither this Lease, nor any memorandum, affidavit or other writing with respectthereto, shall be recorded by Tenant or by anyone acting through, under or onbehalf of Tenant, and the recording thereof in violation of this provisionshall make this Lease null and void at Landlord’s election.

**Section 20.20.  Hazardous Waste. **Tenant specifically agrees that, except for suchlimited quantities of office materials and supplies as are customarily used inTenant’s normal business operations, Tenant shall not engage or permit at anytime, any operations or activities upon, or any use or occupancy of thePremises, or any portion thereof, for the purpose of or in any way involvingthe handling, manufacturing, treatment, storage, use, transportation, spillage,leakage, dumping, discharge or disposal (whether legal or illegal, accidentalor intentional) of any hazardous substances, materials or wastes, or any wastesregulated under any local, state or federal law.

        Tenant shall, during the Term, remain infull compliance with all applicable laws governing the handling, manufacturing,treatment, storage, disposal, discharge, use, and transportation of hazardoussubstances, materials or wastes, and any wastes regulated under any local,state or federal law.  Tenant will remainin full compliance with the terms and conditions of all permits and licensesissued to it by any governmental authority on account of any or all of itsactivities on the Premises.

        Landlord shall not cause or permit anyhazardous material to be brought, kept, or used in or about the Real Propertyin violation of any Code, and shall indemnify, defend, and hold Tenant harmlessfrom and against any and all claims, demands, obligations, penalties, fines,liabilities, losses and expenses (including, without limitation, reasonableattorneys’ fees and costs) arising out of or resulting from the presence of anyhazardous material in, on or under the Building, except to the extent arisingfrom any hazardous material introduced into the Building by Tenant or Tenant’sagents, employees, representatives or contractors.

**Section 20.21.  Transportation Management. **Tenant shall, at Tenant’s sole expense, fully complywith all present or future programs intended to manage parking, transportationor traffic in and around the Building, when the same have been mandated by anoutside governmental authority having jurisdiction therefor and not whenrequired for the convenience of Landlord.

        In connection therewith, Tenant shall be responsible for thetransportation planning and management for all of Tenant’s employees whilelocated at the Premises, by working directly with Landlord, any governmentaltransportation management organization or any other transportation-relatedcommittees or entities reasonably designated by Landlord.  Such programs may include, withoutlimitation:

**a)****             **restrictions on the number of peak-hourvehicle trips generated by Tenant;

**b)****             **requirements for increased vehicleoccupancy;

**c)****             **implementing an in-house ride-sharingprogram and/or appointing an employee transportation coordinator;

**d)****             **working with employees of any Building(or area-wide) ridesharing program manager;

**e)****             **instituting employer-sponsored incentives(financial or in-kind) to encourage employees to ridesharing; and

**f)****               **utilizing flexible work shifts foremployees.

**Section20.22.  Signage. **Tenant may not install, inscribe, paint or affix anyawning, shade, sign, advertisement or notice on or to any part of the outsideor inside of the Building, or in any portion of the Premises visible to theoutside of the Building or common areas without Landlord’s prior writtenconsent, which shall not be unreasonably withheld, conditioned or delayed.

        All signage and/or directory listingsinstalled on behalf of Tenant, whether installed in, on or upon the publiccorridors, doorways, Building directory and/or parking directory (if any), orin any other location whatsoever visible outside of the Premises, shall beinstalled by Landlord, at Tenant’s sole expense.

        Tenant’s identification on or in anycommon area of the Building shall be limited to Tenant’s name and suitedesignation, and in no event shall Tenant be entitled to the installation ofTenant’s logo in any portion of the Building or common areas.  Furthermore, the size, style, and placementof letters to be used in any of Tenant’s signage shall be determined byLandlord, in Landlord’s sole discretion, in full conformance withpreviously-established signage program for the Building.

        Except as specified hereinbelow, Tenantshall only be entitled to one (1) listing on the Building directory, or anyparking directory ancillary thereto, which shall only show Tenant’s businessname and suite designation.  Tenant shallalso be entitled to a maximum of two (2) additional listings on said Buildingand/or parking directory, which listings shall be limited solely to Tenant’sofficers, employees, subsidiaries, affiliates and/or sublessees, ifany.Landlord shall permit Tenant to designate the names connected with Tenanton the directory board in the lobby of the Building.  Tenant may elect to have its names grouped inone location on the directory board in any area designated by Landlord inaddition to having such names listed alphabetically, one (1) line per 1,000rentable square feet lease, not to exceed 20 lines, subject toavailability.  Tenant shall also beentitled to building standard suite identity signage at the entrance of thePremises.

 

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**Section 20.23.  Disclosure. **Landlordand Tenant acknowledge that principals of Landlord have a financial interest inDouglas Emmett Realty Advisors and P.L.E. Builders.

**Section20.24.  Confidentiality. **Landlord and Tenant agree that the covenants andprovisions of this Lease shall not be divulged to anyone not directly involvedin the management, administration, ownership, lending against, or subleasing ofthe Premises, which permitted disclosure shall include, but not be limited to,the board members, legal counsel and/or accountants of either Landlord orTenant.

**Section20.25.  Guaranty. **INTENTIONALLY DELETED

**Section 20.26.  Asbestos Notification. **Tenant acknowledges that ithas received and reviewed Exhibit F attached hereto and incorporated herein.

**ARTICLE 21**PARKING

**Section 21.1.  Parking. **Throughoutthe Term, Tenant shall have the right, but not the obligation, to purchase andassign to its employees up to the number of parking permits set forth inSection 21.1 of the Basic Lease Information (“BLI”).  Notwithstanding the foregoing, Tenant shallbe obligated, during each month of the Term, to purchase no fewer than 1.5parking permits per each 1,000 usable square feet then leased by Tenant underthis Lease.  In addition, if, during any calendar month of the Term, Tenantelects to purchase less than the total number of parking permits to whichTenant is entitled hereunder, Tenant shall thereafter lose the right topurchase the number of parking permits which Tenant so elected not topurchase.  Except as otherwise permittedby Landlord’s management agent in its reasonable discretion, and based on theavailability thereof, in no event shall Tenant be entitled to purchase more thanthe number of parking permits listed in the BLI.  If additional parking permits are availableon a month-to-month basis, which determination shall be in the sole discretionof Landlord’s parking agent, Tenant shall be permitted to purchase one or more ofsaid permits on a first-come, first-served basis.

        The current rates for such permits are:  $165.00 per single unreserved permit; $220.00per single reserved permit; $175.00 per single VIP permit, for Level P-1;$140.00 per single unreserved permit for Level P-2; and $120.00 per singleunreserved permit in Levels 3 and 4, per month.

        Said parking permits shall allow Tenantto park in the Building parking facility at the prevailing monthly parking ratethen in effect, which rate may be thereafter changed from time to time, inLandlord’s sole discretion. Notwithstanding the foregoing, the rate payable by Tenant for each suchcategory of parking shall not increase by more than six percent (6%) per annum,on a cumulative basis. Landlord shall retain sole discretion to designate thelocation of each parking space, and whether it shall be assigned, orunassigned, unless specifically agreed to otherwise in writing between Landlordand Tenant.

        Guests and invitees of Tenant shall havethe right to use, in common with guests and invitees of other tenants of theBuilding, the transient parking facilities of the Building at the then-postedparking rates and charges, or at such other rate or rates and charges as may beagreed upon from time to time between Landlord and Tenant in writing.  Such rate(s) or charges may be changed byLandlord from time to time in Landlord’s sole discretion, and shall include,without limitation, any and all fees or taxes relating to parking assessed toLandlord for such parking facilities. Landlord shall make parking validations available to Tenant upon Tenant’spayment of then-prevailing rate therefor.

        Tenant or Tenant’s agents, clients, contractors, directors,employees, invitees, licensees, officers, partners or shareholders continued useof said transient, as well as monthly parking, shall be contingent upon Tenantand Tenant’s agents, clients, contractors, directors, employees, invitees,licensees, officers, partners or shareholders continued compliance with thereasonable and non-discriminatory rules and regulations adopted by Landlord,which rules and regulations may change at any time or from time to time duringthe Term hereof in Landlord’s sole discretion.

 

**ARTICLE 22**CONCIERGE SERVICES

**Section22.1.  Provision of Services. **Landlord and Tenant acknowledge and understand thatLandlord may, from time to time, make it possible for Tenant to use or purchasea variety of personal services which may include, but not be limited to,personal shopping, assistance with choosing or obtaining travel reservations,accommodations and/or tickets; tickets to performances, recommendations toeating establishments; and the like (collectively “Concierge Services”).

        Tenant acknowledges that said ConciergeServices are provided by Landlord solely as an accommodation to and for theconvenience of Tenant and Tenant’s agents, contractors, directors, employees,licensees, officers, partners or shareholders, and Landlord does not make anyrepresentation, warranty or guarantee, express or implied, as to the quality,value, accuracy, or completeness of said Concierge Services, or whether or notTenant shall be satisfied with the services and/or goods so provided and/orrecommended. Landlord hereby disclaims any control over the variety orsufficiency of such services to be provided.

        Tenant acknowledges that Tenant is notrequired to use such Concierge Services as a condition precedent to compliancewith the Lease; that Tenant’s use of such Concierge Services is strictlyvoluntary, and at the sole discretion and control of Tenant.  Tenant shall independently make suchfinancial arrangements for payment of the services provided as Tenant deemsreasonable and of value.

**Section 22.2. Indemnification and Release by Tenant. **Notwithstandinganything to the contrary contained in the Lease, any city, county, state orfederal ordinance, statute, regulation or law, Tenant’s

 

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signature hereon indicates Tenant’s agreement thatsolely as it relates to the purchase or use of Concierge Services by Tenant orthe agents, contractors, employees, officers, partners, and/or shareholders ofTenant, Tenant, on behalf of itself and its agents, contractors, directors,employees, licensees, officers, partners or shareholders, does and shall herebyforever hold Landlord and Landlord’s affiliates, agents, assigns, contractors,directors, employees, officers, parent organization, partners, representatives,shareholders, and subsidiaries (collectively the “Indemnitees”) harmless fromand forever release, remise, discharge, acquit and relieve the Indemnitees fromand against any and all claims, demands, causes of action, obligations,liabilities, agreements, damages, cost (including, without limitation,reasonable attorneys’ fees), loss, or liability of any kind or nature, whetherasserted, known or unknown, suspected or unsuspected, in any way connectedwith, which any one or more of the Indemnitees may sustain or incur by reasonof, related to, associated with, or arising out of the provision, use or therendering of any such Concierge Services or the delivery of such ConciergeServices to Tenant or Tenant’s agents, clients, contractors, directors,employees, invitees, licensees, officers, partners or shareholders.

        Solely as it relates to the purchase oruse of Concierge Services by Tenant or the agents, contractors, employees,officers, partners, and/or shareholders of Tenant, Tenant hereby expresslywaives all rights and benefits conferred by the provisions of Section 1542of the Civil Code of the State of California, which reads as follows:

**                       ****“A general release does not extend to claims which the creditor doesnot know or suspect to exist in his favor at the time of executing the releaseand which, if known by him, must have materially affected his settlement withthe debtor.”**

In so doing, Tenant acknowledges that it will be unable to make anyclaim against Landlord or any other Indemnitees for damages that may exist asof the date or after the date of this release, but which Tenant does not knowto exist, and which, if known, would materially have affected Tenant’s decisionto execute this document, regardless of whether Tenant’s lack of knowledge, ifany, is the result of ignorance, oversight, error, negligence or other cause.

**ARTICLE 23**OPTION TO EXTEND TERM

**Section23.1.  Option to Extend Term. **Provided Tenant is not in material default after theexpiration of notice and the opportunity to cure on the date Tenant givesnotice to Landlord of Tenant’s intent to exercise its rights pursuant to thisArticle 23, Tenant is given the option to extend the term for an additionalfive (5) year period (the “Extended Term”), commencing the next calendar dayafter the expiration of the Term (the “Option”).  The Option shall apply only to the entiretyof the Premises, and Tenant shall have no right to exercise the Option as toonly a portion of the Premises.

        Tenant’s exercise of this Option is contingent upon Tenantgiving written notice to Landlord (the “Option Notice”) of Tenant’s election toexercise its rights pursuant to this Option by Certified Mail, Return ReceiptRequested, or by reputable overnight courier, or by personal delivery, withsigned receipt, no more than twelve (12) and no less than eight (8) monthsprior to the Termination Date.

**Section23.2.  Fixed Monthly Rent Payable. **The Rent payable by Tenantduring the Extended Term (“Option Rent”) shall be equal to the Fair MarketValue of the Premises as of the commencement date of the Extended Term. The term “Fair Market Value” shall be defined as the annual rent perrentable square foot that Landlord has accepted in other current similartransactions in the Building, or if there are not a sufficient number ofcomparable current similar transactions in the Building, then what a willing,comparable new, non-equity tenant would pay, and what a willing comparablelandlord in the Beverly Hills area would accept at arms length, in either casegiving appropriate consideration to brokerage commissions, if any, which wouldbe payable by Landlord in similar transactions, all economic benefitsachievable by Landlord, such as Fixed Monthly Rent (including periodicadjustments), Additional Rent in the form of Operating Expense reimbursements,and any and all  monetary or non-monetaryconcessions (including [x] a then-current base year or expense stop number, asthe case may be, [y] any tenant improvement allowance, and [z] any rentabatement, if any) that may be given in the market place to a comparable newtenant, as is chargeable for a similar use of comparable space for a comparableterm in a Comparable Building.

        .

        Landlord and Tenant shall have thirty (30) days (the “NegotiationPeriod”) after Landlord receives the Option Notice in which to agree on theFair Market Value.  If Landlord andTenant agree on the Fair Market Value during the Negotiation Period, they shallimmediately execute an amendment to the Lease extending the Term and statingthe Fair Market Value.

**Section23.3.  Appraisers to Set Fixed Rent. **If Landlord and Tenant are unable to agree on the FairMarket Value during the Negotiation Period, then:

**a)**           Landlordand Tenant, each at its own cost, shall select an independent real estateappraiser with at least ten (10) years full-time commercial appraisalexperience in the area in which the Premises are located, and shall providewritten notice to the other party of the identity and address of the appraiserso appointed.  Landlord and Tenant shallmake such selection within ten (10) days after the expiration of theNegotiation Period.

**b)****             **Within thirty (30) days of having been appointed to doso (the “Appraisal Period”), the two (2) appraisers so appointed shall meet andset the Fair Market Value for the Extended Term.  In setting the Fair Market Value, theappraisers shall solely consider the use of the Premises for general officepurposes.

 

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**Section23.4.  Failure by Appraisers to Set FairMarket Value. **If the two (2) appointed appraisers areunable to agree on the Fair Market Value within ten (10) days after expirationof the Appraisal Period, they shall elect a third appraiser of like or betterqualifications, and who has not previously acted in any capacity for eitherLandlord or Tenant.  Landlord and Tenantshall each bear one half of the costs of the third appraiser’s fee.

        Within thirty (30) days after the selection of the thirdappraiser (the “Second Appraisal Period”) the Fair Market Value for theExtended Term shall be set by a majority of the appraisers now appointed.

        If a majority of the appraisers are unable to set the FairMarket Value within the Second Appraisal Period, the three (3) appraisers shallindividually render separate appraisals of the Fair Market Value, and theirthree (3) appraisals shall be added together, then divided by three (3);resulting in an average of the appraisals, which shall be the Fair Market Valueduring the Extended Term.

        However, if the low appraisal or high appraisal varies bymore than ten percent (10%) from the middle appraisal, then one (1) or bothshall be disregarded.  If only one (1)appraisal is disregarded, the remaining two (2) appraisals shall be addedtogether and their total divided by two (2), and the resulting average shall bethe Fair Market Value.  If both the lowand high appraisal are disregarded, the middle appraisal shall be the FairMarket Value for the Premises during the Extended Term.  The appraisers shall immediately notifyLandlord and Tenant of the Fair Market Value so established, and Landlord andTenant shall immediately execute an amendment to the Lease, extending the Termand revising the Fixed Rent payable pursuant to the Fair Market Value soestablished.

        Landlord and Tenant shall execute such amendment establishingthe Fair Market Value within thirty (30) days following the determination ofthe Fair Market Value and if Tenant is the party failing to so execute, thisOption shall become null and void and of no further force or effect.

**Section 23.5. No Right of Reinstatement or Further Extension. **Once Tenant has either failed to exercise its rightsto extend the term pursuant to this Article 23 or failed to execute theamendment called for hereunder, it shall have no right of reinstatement of itsOption to Extend the Term, nor shall Tenant have any right to a further or secondextension of the Term beyond the period stated in Section 23.1hereinabove.

**Section23.6.  No Assignment of Option. **This Option may be exercised only by the originalTenant signing this Lease or an Affiliate (as such term is defined in Section11.2.1 above), and shall be null, void and of no further force or effect as ofthe date that Tenant assigns this Lease to an unaffiliated entity and/orsubleases more than forty-nine percent (49%) of the total Rentable Area of thePremises.

**ARTICLE 24**RIGHT OF FIRST OFFER

**Section24.1.  Right of First Offer.** Landlord hereby grants to the originally named Tenant herein (and anyAffiliate, as such term is defined in Section 11.2.1 above) a one-time right offirst offer with respect to the first tenant space contiguous to the Premisesbecoming available on the second (2nd) floor of the Building (the “FirstOffer Space”).  Notwithstanding theforegoing, such first offer right of Tenant shall commence only following theexpiration or earlier termination of the existing lease (including renewals) ofthe First Offer Space and only after the First Offer Space is actually vacatedand becomes available for lease, and such right of first offer shall besubordinate to the holders of all existing rights of expansion, rights of firstrefusal or rights of first offer (collectively, the “Superior Right Holders”)with respect to the First Offer Space. Tenant’s right of first offer shall be on the terms and conditions setforth in this Article 24.

**Section24.2.  Procedure for Offer.** So long as Tenant theretofore notified Landlord in writing that Tenantdesires to lease the First Offer Space, Landlord shall notify Tenant (the “FirstOffer Notice”) when the First Offer Space becomes available for lease to thirdparties, provided that no Superior Right Holder wishes to lease the First OfferSpace.  The First Offer Notice shallspecify the terms and conditions upon which Landlord is willing to lease theFirst Offer Space to Tenant.

**Section24.3.  Procedure for Acceptance.** If Tenant wishes to exercise Tenant’s right of first offer with respectto the First Offer Space, then within ten (10) business days of delivery of theFirst Offer Notice to Tenant, Tenant shall deliver notice to Landlord of Tenant’sintention to exercise its right of first offer with respect to the First OfferSpace.  If Tenant does not so notifyLandlord within such ten (10) business day period, then Landlord shall be freeto lease the First Offer Space to anyone to whom Landlord desires on terms notmaterially different than the terms contained in the Offer Notice.  Notwithstanding anything to the contrarycontained herein, Tenant must elect to exercise its right of first offer, if atall, with respect to all of the First Offer Space, and Tenant may not elect tolease only a portion thereof.

**Section 24.4.  Amendment to Lease.** If Tenant timely exercises Tenant’s right to lease the First Offer Spaceas set forth herein, Landlord and Tenant shall within fifteen (15) daysthereafter execute an amendment to this Lease for such First Offer Space uponthe terms and conditions as set forth in the First Offer Notice and thisArticle 24.

 

**[INTENTIONALLY LEFT BLANK]**

 

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**Section 24.5.  Termination of Right of First Offer.** The rights contained in this Article 24 may only be exercised by Tenantor an Affiliate and only if Tenant or an Affiliate occupies the entirePremises.  The right of first offergranted herein shall terminate as to the First Offer Space upon the failure byTenant to exercise its right of first offer with respect to the First OfferSpace.  Tenant shall not have the rightto lease the First Offer Space, as provided in this Article 24, if, as of thedate of the attempted exercise of any right of first offer by Tenant, or as ofthe scheduled date of delivery of the First Offer Space to Tenant, Tenant is inmaterial default under this Lease beyond any applicable notice and/or cureperiod.

**IN WITNESS WHEREOF**, Landlord and Tenant have duly executed this Lease,effective the day and year first above written.

 
| **LANDLORD:**                                                      | ** **                        | **TENANT:**                                                                      |
|--------------------------------------------------------------------|-----------------------------------|----------------------------------------------------------------------------------|
| ** **                                                         | ** **                        | ** **                                                                       |
| BRIGHTON ENTERPRISES, LLC,

a California limited liability company |                              | MERCANTILE NATIONAL BANK, N.A.,

a California “C” corporation_________ |
|                                                               |                              |                                                                             |
| By:                                                                | DOUGLAS, EMMETT  AND COMPANY,     |                                                                             |   |   |
|                                                               | a California corporation,         |                                                                             |   |   |
|                                                               | its agent                         |                                                                             |   |   |
|                                                               |                              |                                                                             |   |   |
| By:                                                                |                              |                                                                             | By: |   |
|                                                               | Michael J.  Means, Vice President |                                                                             | Its: |   |
|                                                               |                              |                                                                             |   |
| Dated:                                                             |                              |                                                                             | By: |   |
|                                                               |                              | Its:                                                                             |   |
|                                                               |                              |                                                                             |   |
|                                                               |                              | Dated:                                                                           |   |
|                                                                    |                                   |                                                                                  |  |  |  |

 

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**EXHIBIT A — PREMISES PLAN**

 

**Suite 250at 9601 Wilshire Boulevard, Beverly Hills, California  90210**

**RentableArea:  approximately 2,559 square feet**

**UsableArea:  approximately 2,084 square feet**

**(Measuredpursuant to the provisions of Section 1.4 of the Lease)**

 

 

 

 

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**EXHIBITB**

TENANT WORK LETTER

 

ThisTenant Work Letter shall set forth the terms and conditions relating to theconstruction of the tenant improvements in the Premises.  This Tenant Work Letter is essentiallyorganized chronologically and addresses the issues of the construction of thePremises, in sequence, as such issues will arise during the actual constructionof the Premises.  All references in thisTenant Work Letter to Articles or Sections of “this Lease” shall mean therelevant portion of Articles 1 through 24 of the Office Lease towhich this Tenant Work Letter is attached as Exhibit B and of which thisTenant Work Letter forms a part, and all references in this Tenant Work Letterto Sections of “this Tenant Work Letter” shall mean the relevant portion of Sections1 through 6 of this Tenant Work Letter.

SECTION 1

CONSTRUCTIONDRAWINGS FOR THE PREMISES

Landlordshall cause the improvements in the Premises (the “Improvements”) to beconstructed by PLE Builders, Inc. (“PLE”) pursuant to those certain drawingsT-1, A-1, A-2, D-1, each dated December 30, 2003, and that certain Bulletin #1,dated February 17, 2004, prepared by WWCOT (collectively, the “Approved WorkingDrawings”) in strict compliance with the Approved Working Drawings, all Codes,and with first-class workmanship and the materials described in the ApprovedWorking Drawings.  Tenant shall make nochanges or modifications to the Approved Working Drawings without the priorwritten consent of Landlord, which consent may be withheld in Landlord’s solediscretion if such change or modification would directly or indirectly delaythe substantial completion of, or increase the cost of designing orconstructing, the Improvements.

SECTION 2

 TENANT’S CONTRIBUTION; CHANGE ORDERS

Concurrentlywith Tenant’s execution and delivery of this Lease, Tenant shall pay to Landlordthe sum of $2,865.00 as Tenant’s contribution toward the cost of theImprovements (“Tenant’s Contribution”). In the event that after Tenant’s execution of this Lease, any revisions,changes, or substitutions shall be made to the Approved Working Drawings or theImprovements, any additional costs which arise in connection with suchrevisions, changes or substitutions shall be paid by Tenant to Landlordimmediately upon Landlord’s request.

SECTION 3

CONTRACTOR’S WARRANTIES AND GUARANTIES

Landlordhereby assigns to Tenant all warranties and guaranties by the contractor whoconstructs the Tenant Improvements (the “Contractor”) relating to theImprovements, and Tenant hereby waives all claims against Landlord relating to,or arising out of the construction of, the Improvements; provided, however,that Landlord shall assist Tenant in the enforcement of all warranties andguaranties, based upon Landlord’s relationship with the Contractor.

SECTION 4

TENANT’S COVENANTS

INTENTIONALLY OMITTED.

SECTION5

COMPLETION OF THEIMPROVEMENTS;

COMMENCEMENT DATE

Exceptas provided in this Section 5, the Commencement Date shall occur as setforth in Section 2.1 of the Lease.  Ifthere shall be a delay or there are delays in the substantial completion of theImprovements or in the occurrence of any of the other conditions precedent tothe Commencement Date, as set forth in of the Lease, then, to the extent thedelay is the result of:

5.2.1  Tenant’s failure to timely approve any matterrequiring Tenant’s approval;

5.2.2  A breach by Tenant of the terms of thisTenant Work Letter or the Lease;

5.2.3  Tenant’s request for changes in the ApprovedWorking Drawings;

 

5.2.4  Tenant’s requirement for materials,components, finishes or improvements which are not available in a commerciallyreasonable time given the anticipated date of substantial completion of theImprovements, as set forth in the Lease, or which are different from, or notincluded in, Landlord’s standard improvement package items for the Building;

5.2.5  Changes to the base, shell and core work ofthe Building required by the Approved Working Drawings; or

5.2.6  Any other acts or omissions of Tenant, or itsagents, or employees;

then,notwithstanding anything to the contrary set forth in the Lease or this TenantWork Letter and regardless of the actual date of the substantial completion ofthe Improvements, the date of substantial completion of the Improvements shallbe deemed to be the date the substantial completion of the Improvements wouldhave occurred if the act or omission of Tenant causing the delay or delays, asset forth above, had not occurred.

 

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SECTION 6

MISCELLANEOUS

6.1           Tenant’sEntry Into the Premises Prior to Substantial Completion.  Provided that Tenant and its agents do notinterfere with Contractor’s work in the Building and the Premises, Contractorshall allow Tenant access to the Premises prior to the substantial completionof the Improvements for the purpose of Tenant installing furniture, equipmentor fixtures (including Tenant’s data and telephone equipment) in thePremises.  Tenant shall hold Landlordharmless from and indemnify, protect and defend Landlord against any loss ordamage to the Building or Premises and against injury to any persons caused by Tenant’sactions pursuant to this Section 6.1, except and to the extent caused by thenegligence or willful misconduct of Landlord, its agents, employees orcontractors (including Contractor).

6.2           Freight Elevators.  Landlord shall, consistent with itsobligations to other tenants of the Building, make the freight elevatorreasonably available to Tenant in connection with initial decorating,furnishing and moving into the Premises.

6.3           Tenant’s Representative.  Tenant has designated _Chuck Avis****as its sole representative with respect tothe matters set forth in this Tenant Work Letter, who, until further notice toLandlord, shall have full authority and responsibility to act on behalf of theTenant as required in this Tenant Work Letter.

6.4           Landlord’s Representative.  Landlord has designated **Mary Lowe**as its sole representative withrespect to the matters set forth in this Tenant Work Letter, who, until furthernotice to Tenant, shall have full authority and responsibility to act on behalfof the Landlord as required in this Tenant Work Letter.

6.5           Tenant’s Agents.  All subcontractors, laborers, materialmen,and suppliers retained directly by Tenant shall all be union labor incompliance with the then existing master labor agreements.

6.6           Time of the Essence in This TenantWork Letter.  Unless otherwiseindicated, all references herein to a “number of days” shall mean and refer tocalendar days.  In all instances whereTenant is required to approve or deliver an item, if no written notice ofapproval is given or the item is not delivered within the stated time period,at Landlord’s sole option, at the end of such period the item shallautomatically be deemed approved or delivered by Tenant and the next succeedingtime period shall commence.

6.7           Tenant’s LeaseDefault.  Notwithstanding anyprovision to the contrary contained in this Lease, if an event of default thatis not cured within the applicable notice and/or cure period as described inthe Lease, or a default by Tenant under this Tenant Work Letter that is notcured with the applicable notice and/or cure period (and a default under thisTenant Work Letter shall be entitled to the notice and cure period described inSection 17.1 (d) of the Lease), has occurred at any time on or before thesubstantial completion of the Improvements, then (i) in addition to allother rights and remedies granted to Landlord pursuant to the Lease, Landlordshall have the right to cause Contractor to cease the construction of thePremises (in which case, Tenant shall be responsible for any delay in thesubstantial completion of the Improvements caused by such work stoppage as setforth in Section 5 of this Tenant Work Letter), and (ii) all otherobligations of Landlord under the terms of this Tenant Work Letter shall beforgiven until such time as such default is cured pursuant to the terms of theLease.

6.8           Move-In.  Landlord shall thoroughly clean the Premisesprior to and subsequent to Tenant’s move-in to the Premises.

 
| **LANDLORD:**                                                      | ** **                        | **TENANT:**                                                                      |
|--------------------------------------------------------------------|-----------------------------------|----------------------------------------------------------------------------------|
| ** **                                                         | ** **                        | ** **                                                                       |
| BRIGHTON ENTERPRISES, LLC,

a California limited liability company |                              | MERCANTILE NATIONAL BANK, N.A.,

a California “C” corporation_________ |
|                                                               |                              |                                                                             |
| By:                                                                | DOUGLAS, EMMETT  AND COMPANY,     |                                                                             |   |   |
|                                                               | a California  corporation,        |                                                                             |   |   |
|                                                               | its agent                         |                                                                             |   |   |
|                                                               |                              |                                                                             |   |   |
| By:                                                                |                              |                                                                             | By: |   |
|                                                               | Michael J.  Means, Vice President |                                                                             | Its: |   |
|                                                               |                              |                                                                             |   |
| Dated:                                                             |                              |                                                                             | By: |   |
|                                                               |                              | Its:                                                                             |   |
|                                                               |                              |                                                                             |   |
|                                                               |                              | Dated:                                                                           |   |
|                                                                    |                                   |                                                                                  |  |  |  |

** **

**B-2**

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** **

**EXHIBIT B-1**CONSTRUCTION BY TENANT DURING TERM

**1.****             **IfTenant wishes to make a Tenant Change, as specified in Section 12.12 ofthe Lease (other than a Cosmetic Alteration, as defined in Section 12.12 of theLease), such Tenant Change shall be completed pursuant to the provisions ofSection 12.12. of the Lease and this Exhibit B-1.  Tenant shall bear all costs of said TenantChange, which shall be paid directly to Tenant’s general contractor (“Contractor”).

**2.    **Contractor shall complete construction tothe Premises pursuant to the final Plans and Specifications approved in writingby Landlord and Tenant (the “Tenant Change”), in compliance with all applicablecodes and regulations. Tenant’s selections of finishes and materials shall beindicated on the Plans and Specifications, and shall be equal to or better thanthe minimum Building standards and specifications.  All work not shown on the final Plans andSpecifications, but which is to be included in the Tenant Change, including butnot limited to, telephone service installation, furnishings or cabinetry, shallbe installed pursuant to Landlord’s reasonable directives.

**3.    **Prior to commencing any work:

**a)****             **Tenant’s proposed Contractor and the Contractor’s proposedsubcontractors and suppliers shall be approved in writing by Landlord, whichapproval shall not be unreasonably withheld, conditioned or delayed.   As a condition of such approval, so long asthe same are reasonably cost competitive, then Contractor shall use Landlord’sHeating, Venting, and Air-conditioning, plumbing, and electrical subcontractorsfor such work.

**b)****             **During completion of any Tenant Change, neither Tenantor Contractor shall permit any sub-contractors, workmen, laborers, material orequipment to come into or upon the Building if the use thereof, in Landlord’sreasonable judgment, would violate Landlord’s agreement with any unionproviding work, labor or services in or about the Building.

**c)****             **Contractor shall submit to Landlord and Tenant awritten bid for completion of the Tenant Change.  Said bid shall include Contractor’s overhead,profit, and fees, and, if the proposed Tenant Change is for cosmetic work inexcess of $50,000 in aggregate value per occurrence or for structural work ofany kind, Contractor shall:

**i****                   **pre-pay to Landlord’s managing agent$250.00 as partial payment of said managing agent’s construction administrationfee, as specified hereinbelow, and

**ii****               **upon completion of said Tenant Change, pay anadministration fee for supervision of said Tenant Change equal to fifty dollars($50.00) per hour, to a maximum of three percent (3%) of the total cost of theTenant Change, to defray said agent’s costs for supervision of theconstruction;

**4.    **Tenant or Contractor shall submit allPlans and Specifications to Landlord, and no work on the Premises shall becommenced before Tenant has received Landlord’s final written approval thereof,which shall not be unreasonably withheld, delayed or conditioned;

**5.    **Contractor shall complete all architecturaland planning review and obtain all permits, including signage, required by thecity, state or county in which the Premises are located; and

**6.    **Contractor shall submit to Landlordverification of public liability and worker’s compensation insurance adequateto fully protect Landlord and Tenant from and against any and all liability fordeath or injury to persons or damage to property caused in or about or byreason of the construction of any work done by Contractor or Contractor’ssubcontractors or suppliers.

**7.    **INTENTIONALLY DELETED

**8.    **Contractor and Contractor’s subcontractors andsuppliers shall be subject to Landlord’s reasonable administrative control andsupervision.  Landlord shall provideContractor and Contractor’s subcontractors and suppliers with reasonable accessto the Premises.

**9.    **During construction of the Tenant Change, Contractorshall adhere to the procedures contained hereinbelow, which represent Landlord’sminimum requirements for completion of the Tenant Change.

**10. **Upon completion of the Tenant Change, Tenant shallprovide Landlord with such evidence as Landlord may reasonably request that theContractor has been paid in full, and Contractor shall provide Landlord withlien releases as requested by Landlord, confirmation that no liens have beenfiled against the Premises or the Building. If any liens arise against the Premises or the Building as a result ofthe Tenant Change, Tenant shall immediately, at Tenant’s sole expense, removesuch liens and provide Landlord evidence that the title to the Building andPremises have been cleared of such liens.

**11. **Whether or not Tenant or Contractor timely completethe Tenant Change, unless the Lease is otherwise terminated pursuant to theprovisions contained therein, Tenant acknowledges and agrees that Tenant’sobligations under the Lease to pay Fixed Monthly Rent and/or Additional Rentshall continue unabated.

**CONSTRUCTION POLICY**

        The following policies outlined are theconstruction procedures for the Building. As a material consideration to Landlord for granting Landlord’spermission to Tenant to complete the construction contemplated hereunder,Tenant agrees to be bound by and follow the provisions contained hereinbelow:

**1.     Administration**

**a)****             **Contractors to notify the management office for theBuilding prior to starting any work.  Alljobs must be scheduled by the general contractor or sub-contractor when nogeneral contractor is being used.

 

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**b)****             **The general contractor is to provide the BuildingManager with a copy of the projected work schedule for the suite, prior to thestart of construction.

**c)****             **Contractor will make sure that at least one set ofdrawings will have the Building Manager’s initials approving the plans and acopy delivered to the Building Office.

**d)****             **As-built construction, including mechanical drawingsand air balancing reports will be submitted at the end of each project.

**e)****             **The HVAC contractor is to provide the following itemsto the Building Manager upon being awarded the contract from the generalcontractor:

**i)****               **A plan showing the new ducting layout,all supply and return air grille locations and all thermostat locations.  The plan sheet should also include thelocation of any fire dampers.

**ii)****           **An Air Balance Report reflecting thesupply air capacity throughout the suite, which is to be given to the ChiefBuilding Engineer at the finish of the HVAC installation.

**f)**                All paint bids should reflect a one-time touch-uppaint on all suites.  This is to becompleted approximately five (5) days after move-in date.

**g)**             The general contractor must provide for the removal ofall trash and debris arising during the course of construction.  At no time are the building’s trashcompactors and/or dumpsters to be used by the general contractor’s clean-upcrews for the disposal of any trash or debris accumulated duringconstruction.  The Building Officeassumes no responsibility for bins. Contractor is to monitor and resolve any problems with bin usage withoutinvolving the Building Office.  Bins areto be emptied on a regular basis and never allowed to overflow.  Trash is to be placed in the bin.

 

**h)**             Any problems with construction per the plan, will bebrought to the attention of and documented to the Building Manager.  Any changes that need additional work notdescribed in the bid will be approved in writing by the Building Manager.  All contractors doing work on this projectshould first verify the scope of work (as stated on the plans) beforesubmitting bids; not after the job has started.

**2.****             ****Building Facilities Coordination**

**a)**              All deliveries of material will be made through theparking lot entrance.

**b)**              Construction materials and equipment will not bestored in any area without prior approval of the Building Manager.

**c)**              Only the freight elevator is to be used byconstruction personnel and equipment. Under no circumstances are construction personnel with materials and/ortools to use the “passenger” elevators.

**3.****             ****Housekeeping**

**a)**              Suite entrance doors are to remain closed at alltimes, except when hauling or delivering construction materials.

**b)**              All construction done on the property that requiresthe use of lobbies or common area corridors will have carpet or other floorprotection.  The following are the onlyprescribed methods allowed:

**i)****               **Mylar:  Extraheavy-duty to be taped from the freight elevator to the suite underconstruction.

**ii)****           **Masonite:  1/4inch Panel, Taped to floor and adjoining areas. All corners, edges and joints to have adequate anchoring to provide safeand “trip-free” transitions.  Materialsto be extra heavy-duty and installed from freight elevator to the suite underconstruction.

**c)**              Restroom wash basins will not be used to fill buckets,make pastes, wash brushes, etc.  Iffacilities are required, arrangements for utility closets will be made with theBuilding Office.

**d)**              Food and related lunch debris are not to be left inthe suite under construction.

**e)**              All areas the general contractor or theirsub-contractors work in must be kept clean. All suites the general contractor works in will have construction debrisremoved prior to completion inspection. This includes dusting of all window sills, light diffusers, cleaning ofcabinets and sinks.  All common areas areto be kept clean of building materials at all times so as to allow tenantsaccess to their suites or the building.

**4.****             ****Construction Requirements**

**a)**              All Life and Safety and applicable Building Codes willbe strictly enforced (i.e. tempered glass, fire dampers, exit signs, smokedetectors, alarms, etc.).  Priorcoordination with the Building Manager is required.

**b)**              Electric panel schedules must be brought up to dateidentifying all new circuits added.

**c)**              All electrical outlets and lighting circuits are to beproperly identified.  Outlets will belabeled on back side of each cover plate.

**d)**              All electrical and phone closets being used must havepanels replaced and doors shut at the end of each day’s work.  Any electrical closet that is opened with thepanel exposed must have a work person present.

 

B1-2

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**e)**              All electricians, telephone personnel, etc. will, uponcompletion of their respective projects, pick up and discard their trashleaving the telephone and electrical rooms clean.  If this is not complied with, a clean-up willbe conducted by the building janitors and the general contractor will beback-charged for this service.

**f)**                Welding or burning with an open flame will not be donewithout prior approval of the Building Manager. Fire extinguishers must be on hand at all times.

**g)**             All “anchoring” of walls or supports to the concreteare not to be done during normal working hours (7:30 AM - 6:00 PM, Mondaythrough Friday).  This work must bescheduled before or after these hours during the week or on the weekend.

**h)**             All core drilling is not to be done during normalworking hours (7:30 AM - 6:00 PM, Monday through Friday).  This work must be scheduled before or afterthese hours during the week or on the weekend.

**i)**                All HVAC work must be inspected by the BuildingEngineer.  The following procedures willbe followed by the general contractor:

**i)****               **A preliminary inspection of the HVAC work in progresswill be scheduled through the Building Office prior to the reinstallation ofthe ceiling grid.

**ii)****           **A second inspection of the HVAC operation will also bescheduled through the Building Office and will take place with the attendanceof the HVAC contractor’s Air Balance Engineer. This inspection will take place when the suite in question is ready tobe air-balanced.

**iii)****       **The Building Engineer will inspect the construction ona periodic basis as well.

**j)**                All existing thermostats, ceiling tiles, lightingfixtures and air conditioning grilles shall be saved and turned over to theBuilding Engineer.

**        Goodhousekeeping rules and regulations will be strictly enforced.  The building office and engineeringdepartment will do everything possible to make your job easier.  However, contractors who do not observe theconstruction policy will not be allowed to perform within this building.  The cost of repairing any damages that arecaused by Tenant or Tenant’s contractor during the course of construction shallbe deducted from Tenant’s Allowance or Tenant’s Security Deposit, asappropriate.**

** **
| **LANDLORD:**                                                      | ** **                        | **TENANT:**                                                                      |
|--------------------------------------------------------------------|-----------------------------------|----------------------------------------------------------------------------------|
| ** **                                                         | ** **                        | ** **                                                                       |
| BRIGHTON ENTERPRISES, LLC,

a California limited liability company |                              | MERCANTILE NATIONAL BANK, N.A.,

a California “C” corporation_________ |
|                                                               |                              |                                                                             |
| By:                                                                | DOUGLAS, EMMETT  AND COMPANY,     |                                                                             |   |   |
|                                                               | a California  corporation,        |                                                                             |   |   |
|                                                               | its agent                         |                                                                             |   |   |
|                                                               |                              |                                                                             |   |   |
| By:                                                                |                              |                                                                             | By: |   |
|                                                               | Michael J.  Means, Vice President |                                                                             | Its: |   |
|                                                               |                              |                                                                             |   |
| Dated:                                                             |                              |                                                                             | By: |   |
|                                                               |                              | Its:                                                                             |   |
|                                                               |                              |                                                                             |   |
|                                                               |                              | Dated:                                                                           |   |
|                                                                    |                                   |                                                                                  |  |  |  |

** **

**B1-3**

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** **

**EXHIBIT C**RULES AND REGULATIONS

**BUILDING RULES ANDREGULATIONS**

**1.     Access. **Tenant and/or Tenant’s agents, clients, contractors,directors, employees, invitees, licensees, officers, partners or shareholdersshall only use the sidewalks, entrances, lobby(ies), garage(s), elevators,stairways, and public corridors as a means of ingress and egress, and shalltake such actions as may reasonably be necessary to ensure that the same remainunobstructed at all times.

        The entranceand exit doors to the Premises are to be kept closed at all times except asrequired for orderly passage to and from the Premises.  Except on balconies available for the jointor exclusive use of Tenant as otherwise specified hereinabove, Tenant shall notpermit its agents, clients, contractors, directors, employees, invitees,licensees, officers, partners or shareholders to loiter in any part of theBuilding or obstruct any means of ingress or egress.  Tenant shall not cover any doors, and shallnot cover any window, other than with vertical or mini-blinds pre-approved inwriting by Landlord.  Landlordspecifically disapproves the installation of any film or foil coveringwhatsoever on the windows of the Premises.

        Neither Tenant, nor its agents, clients,contractors, directors, employees, invitees, licensees, officers, partners orshareholders shall go up on the roof or onto any balcony serving the Building,except upon such roof, portion thereof, or balcony as may be contiguous to thePremises and is designated in writing by Landlord as a roof-deck, roof-gardenarea, or exclusive use balcony area.

**2.     Restroom Facilities. **The toilet rooms, toilets, urinals, wash bowls andother apparatus (the “Restroom Facilities”), whether contained in the commonareas of the Building and/or the interior of the Premises, shall not be usedfor any purpose other than that for which they were designed.  Tenant shall not permit its agents, clients,contractors, directors, employees, invitees, licensees, officers, partners orshareholders to throw foreign substances of any kind whatsoever or papers notspecifically designated for use in the Restroom facilities down any toilet, orto dispose of the same in any way not in keeping with the instructions providedto Tenant by the management of the Building regarding same, and Tenant herebyspecifically agrees to reimburse Landlord directly for the expense of anybreakage, stoppage or damage resulting from Tenant’s violation of this rule.

**3.     Heavy Equipment. **Landlord reserves the right, in Landlord’s solediscretion, to decline, limit or designate the location for installation of anysafes, other unusually heavy, or unusually large objects to be used or broughtinto the Premises the Building.  In eachcase where Tenant requests installation of one or more such unusually heavyitem(s), which request shall be conclusively evidenced by Tenant’s effort tobring such item(s) into the Building or Premises, Tenant shall reimburseLandlord for the costs of any engineering or structural analysis required byLandlord in connection therewith.  In allcases, each such heavy object shall be placed on a metal stand or metal platesor such other mounting detail of such size as shall be prescribed by Landlord.

        Tenanthereby indemnifies Landlord against any damage or injury done to persons,places, things or the Building or its common areas when such damage or injuryprimarily arises out of Tenant’s installation or use of one or more unusuallyheavy objects.  Tenant further agrees toreimburse Landlord for the costs of repair of any damage done to the Buildingor property therein by putting in, taking out, or maintaining such safes orother unusually heavy objects.

INTENTIONALLY DELETED

**4.     Flammable Materials. **Except for such limited quantities of office materialsand supplies as are customarily utilized in Tenant’s normal businessoperations, Tenant shall not use or keep in the Premises or the Building anykerosene, gasoline, flammable or combustible fluid or material, other thanthose limited quantities of normal business operating materials as mayreasonably be necessary for the operation or maintenance of officeequipment.  Nor shall Tenant keep orbring into the Premises or the Building any other toxic or hazardous materialspecifically disallowed pursuant to California state law.

**5.     Cooking / Odors / Nuisances. **Tenant shall not permit its agents, clients,contractors, directors, employees, invitees, licensees, officers, partners orshareholders to engage in the preparation and/or serving of foods unless thePremises includes a self-contained kitchen area.  Notwithstanding the foregoing, Tenant may usea coffeemaker, toaster oven, microwave oven and refrigerator in the Premises,regardless of whether or not the Premises contain a self-contained kitchen.  Tenant shall not permit the odors arisingfrom such cooking, or any other improper noises, vibrations, or odors toemanate from the Premises.  Tenant shallnot obtain for use in the Premises, ice, drinking water, food, beverage, towelor other similar services except at such reasonable hours and under suchreasonable regulations as may be specified by Landlord.

        Tenanthereby agrees to instruct all persons entering the Premises to comply with therequirements of the Building, by advising all persons entering the Premisesthat smoking of any tobacco or other substance is prohibited at all times,except in such common areas located outside the Building as may be designatedby the Building management.

        Tenantshall not permit Tenant’s agents, clients, contractors, directors, employees,invitees, licensees, officers, partners or shareholders to interfere in any waywith other tenants of the Building or with those having business with them.

 

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        Tenantshall not permit its agents, clients, contractors, directors, employees,invitees, licensees, officers, partners or shareholders to bring or keep withinthe Building any animal, bird or bicycle, except such seeing-eye dog or otherdisability assistance type animal as may comply with the requirements of any handicappedordinances having jurisdiction therefor.

        Tenantshall store its trash and garbage within the Premises.  No material shall be placed in the trashboxes or receptacles if such material is a hazardous waste or toxic substanceor is of such a nature that its disposal in Landlord’s ordinary and customarymanner of removing and disposing of trash and garbage would be a violation ofany law, ordinance or company regulation governing such disposal.  All garbage and refuse disposal shall be madeonly through entry ways and elevators provided for such purposes and at suchtimes as Landlord shall designate.  Asand when directed by Landlord and/or if required by any governmental agencyhaving jurisdiction therefor, Tenant shall comply with all directives for recyclingand separation of trash.

        Tenantshall not employ any person to do janitorial work in any part of the Premiseswithout the prior written consent of Landlord, which consent may be withheld inLandlord’s sole discretion.

        Landlordreserves the right to exclude or expel from the Building any person who inLandlord’s sole discretion is intoxicated or under the influence of liquor ordrugs or who, in any manner, engages in any act in violation of the Rules andRegulations of the Building.

        Tenantshall not conduct any public or private auction, fire sale or other sale ofTenant’s personal property, furniture, fixtures or equipment or any otherproperty located in or upon the Premises, without Landlord’s prior writtenconsent, which consent shall be in Landlord’s sole discretion.

**6.     Storage. **Tenant mayonly store goods, wares, or merchandise on or in the Premises in areasspecifically designated by Landlord for such storage.

**7.     Directives to Management. **Tenant’s requirements, other than those Landlord specificallyagrees to perform elsewhere in this Lease, shall only be attended to upon theBuilding management’s receipt of Tenant’s written request therefor.  Landlord’s employees shall not perform anywork or do anything outside of their regular duties unless under specialinstruction from the Building management. No security guard, janitor or engineer or other employee of the Buildingmanagement shall admit any person (Tenant or otherwise) to the Premises withoutspecific instructions from the Office of the Building and written authorizationfor such admittance from Tenant.

**8.     Keys and Locks. **Landlord shall furnish Tenant with two keys to eachdoor lock existing in the Premises. Tenant shall reimburse Landlord a reasonable charge for these and anyadditional keys. Tenant shall not be permitted to have keys made, nor shallTenant alter any lock or install a new or additional lock or bolts on any doorof the Premises without Landlord’s prior written consent.  Tenant shall, in each case, furnish Landlordwith a key for any additional lock installed or changed by Tenant or Tenant’sagent(s).  Tenant, upon the expiration orearlier termination of this Lease, shall deliver to Landlord all keys in thepossession of Tenant or Tenant’s agents, clients, contractors, directors,employees, invitees, licensees, officers, partners or shareholders for doors inthe Building, whether or not furnished to Tenant by Landlord.  If Tenant, or Tenant’s agents, clients,contractors, directors, employees, invitees, licensees, officers, partners orshareholders, lose or misplace any key(s) to the Building, Landlord shall, inLandlord’s sole discretion, either replace said key(s) or re-key such locks asmay be affected thereby, and Tenant shall reimburse Landlord for all such costsof such re-keying and/or replacement.

**9.     Solicitation. **Tenant and/or its agents, clients, contractors,directors, employees, invitees, licensees, officers, partners or shareholdersshall not permit any canvassing, peddling, soliciting and/or distribution ofhandbills or any other written materials to occur in the Premises and/or theBuilding, nor shall Tenant or Tenant’s agents, clients, contractors, directors,employees, invitees, licensees, officers, partners or shareholders engage insuch solicitation or distribution activities.

**10.  Retail Sales, Services and ManufacturingProhibited. **Except with the prior written consent ofLandlord, Tenant shall not sell, or permit the retail sale of, newspapers,magazines, periodicals, theater tickets or any other goods or merchandise tothe general public in or on the Premises, nor shall Tenant carry on or permitor allow any employee or other person to carry on the independent business ofstenography, typewriting or any similar business in or from the Premises for theservice or accommodation of other occupants of any other portion of theBuilding.  Tenant shall not permit thePremises to be used for manufacturing or for any illegal activity of any kind,or for any business or activity other than for Tenant’s specific use.

**11.  Change in Name or Address. **Landlord shall have the right, exercisable withoutnotice and without liability to Tenant, to change the name and street addressof the Building.

**12.  Projections from Premises. **Tenant shall not install any radio or televisionantenna, loudspeaker or other device on the roof or the exterior walls of theBuilding or in any area projecting outside the interior walls of thePremises.  Tenant shall not install orpermit to be installed any awnings, air conditioning units or otherprojections, without the prior written consent of Landlord.

**13.  Superiority of Lease. **These Rules and Regulations are in addition to, andshall not be construed to in any way modify or amend, in whole or in part, thecovenants, agreements or provisions of this Lease.  If a conflict or disagreement between theLease and these Rules becomes apparent, this Lease shall prevail.

 

C-2

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**14.  Changesto Rules and Regulations. **Provided such changes do not harm Tenant’sability to conduct its normal business operations, Landlord shall retain theright to change, add or rescind any rule or regulation contained herein, or tomake such other and further reasonable and non-discriminatory Rules andRegulations as in Landlord’s sole judgment may, from time to time, becomenecessary for the management, safety, care and cleanliness of the Premises, theBuilding or the Parking Facilities, or for the preservation of good ordertherein, or for the convenience of other occupants and tenants therein, so longas such recision, addition, deletion or change is thereafter reasonably appliedto all occupants of the Building affected thereby.

**PARKING RULES ANDREGULATIONS**

**A.****           **Tenant shall strictly comply with all posted speedlimits, directional signs, yield signs, stops signs and all other signs withinor about the parking facilities.

**B.****           **Tenant shall register all vehicle license platenumbers with the Building management.

**C.****           **Tenant shall be responsible for the cost of repairingany damage to the parking facilities or cleaning any debris created or left byTenant, including, without limitation, oil leakage from motor vehicles parkedin the parking facilities under its auspices.

**D.****           **Landlord, in addition to reserving the right to designateone or more areas solely for visitor parking, which areas may be changed byLandlord from time to time with or without prior notice to Tenant, reserves theright to allocate additional visitor spaces on any floor of the parkingfacilities.  Tenant shall not park anyvehicles in any spaces designated as visitor only spaces or customer spaceswithin the parking facilities.

**E.****             **Tenant shall strictly comply with all rules,regulations, ordinances, speed limits, and statutes affecting handicappedparking and/or access, and shall not park any vehicles within the fire lanes,along parking curbs or in striped areas.

**F.****             **Tenant shall only use the number of parking permitsallocated to it and shall not permit more than one of its employees to utilizethe same parking permit.  Landlordreserves the right to assign or re-assign parking spaces within the Parkingfacilities to Tenant from time to time, and provided Landlord is required to doso by reason of any action arising out of a governmental mandate imposed onLandlord, Landlord further reserves the right at any time to substitute anequivalent number of parking spaces in a parking facilities or subterranean orsurface parking facility within a reasonable distance of the Premises.

**G.****           **Except with Landlord’s managing agent(s)’ priorwritten consent, Tenant shall not leave vehicles in the parking facilitiesovernight, nor park any vehicles in the parking facilities other thanautomobiles, motorcycles, motor-driven or non-motor-driven bicycles orfour-wheeled trucks or vans.  Landlordmay, in its sole discretion, designate separate areas for bicycles andmotorcycles.  Tenant shall ensure thatvehicles parking in the parking facilities by using the parking permitsassigned to Tenant shall be parked entirely within the striped linesdesignating a single space and are not so situated or of such a width or lengthas to impede access to or egress from vehicles parked in adjacent areas ordoors or loading docks.  Further, allvehicles utilizing Tenant’s parking permits shall not be higher than any heightlimitation that may be posted, or of such a size, weight or dimension so thatentry of such vehicle into the parking facilities would cause any damage orinjury thereto.

**H.****           **Tenant shall not allow any of the vehicles parkedusing Tenant’s permits, or the vehicles of any of Tenant’s suppliers, shippers,customers or invitees to be loaded or unloaded in any area other than thosespecifically designated by Landlord for loading.

**I.****                **Tenant shall not use or occupy the parking facilities inany manner which will unreasonably interfere with the use of the parkingfacilities by other tenants or occupants of the Building.  Without limitation, Tenant agrees to promptlyturn off any vehicle alarm system activated and sounding an alarm in the parkingfacilities.  In the event said alarmsystem fails to turn off and no longer sound an intruder alert fifteen (15)minutes after commencing such an alarm, Landlord shall reserve the right toremove the vehicle from the parking facilities at Tenant’s sole expense.

**J.****             **Tenant acknowledges that the Rules and Regulations asposted herein shall be in effect twenty-four hours per day, seven days perweek, without exception.

 

**[INTENTIONALLYLEFT BLANK]**

 

C-3

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**K.****           **Tenant acknowledges that the uniformed guard officersand parking attendants serving the parking facilities are authorized to issueverbal and written warnings of Tenant’s violations of any of the rules andregulations contained herein.  Except inthe case of a car alarm continuing to sound in excess of a maximum of fifteenminutes, in which case no further notice by Landlord shall be required.  If Tenant or Tenant’s agents, contractors,directors, employees, officers, partners or shareholders continue to materiallybreach these rules and regulations after expiration of written notice and theopportunity to cure has been given to Tenant, then in addition to such otherremedies and request for injunctive relief it may have, Landlord shall have theright, without additional notice, to remove or tow away the vehicle involvedand store the same, all costs of which shall be borne exclusively by Tenant.

 
| **LANDLORD:**                                                      | ** **                        | **TENANT:**                                                                      |
|--------------------------------------------------------------------|-----------------------------------|----------------------------------------------------------------------------------|
| ** **                                                         | ** **                        | ** **                                                                       |
| BRIGHTON ENTERPRISES, LLC,

a California limited liability company |                              | MERCANTILE NATIONAL BANK, N.A.,

a California “C” corporation_________ |
|                                                               |                              |                                                                             |
| By:                                                                | DOUGLAS, EMMETT  AND COMPANY,     |                                                                             |   |   |
|                                                               | a California  corporation,        |                                                                             |   |   |
|                                                               | its agent                         |                                                                             |   |   |
|                                                               |                              |                                                                             |   |   |
| By:                                                                |                              |                                                                             | By: |   |
|                                                               | Michael J.  Means, Vice President |                                                                             | Its: |   |
|                                                               |                              |                                                                             |   |
| Dated:                                                             |                              |                                                                             | By: |   |
|                                                               |                              | Its:                                                                             |   |
|                                                               |                              |                                                                             |   |
|                                                               |                              | Dated:                                                                           |   |
|                                                                    |                                   |                                                                                  |  |  |  |

** **

**C-4**

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** **

**EXHIBIT D**FIRST AMENDMENT - COMMENCEMENT DATE AND TERM

** **

**        This First Amendment**, dated March30, 2005, is by and between BRIGHTON ENTERPRISES, LLC, a Californialimited liability company (“Landlord”), with an office at 808 WilshireBoulevard, Suite 200, Santa Monica, California 90401, and MERCANTILE NATIONAL BANK, N.A., a California “C” corporation(“Tenant”), with an office at 1880 Century Park East, Suite 1200, Los Angeles,California 90067.

**WHEREAS,**

**A.   **Landlord,pursuant to the provisions of that certain written, dated March 30, 2005 (the “Lease”), leased to Tenantand Tenant leased from Landlord space in the property located at 9601 WilshireBoulevard, Beverly Hills, California 90210 (the “Building”), commonly known as Suite 250 (the “Premises”);

**B.   **Theprovisions of said Lease specify that the Commencement Date shall be the datethat is five (5) days following the date Landlord substantially completes theImprovements for which Landlord is obligated under the Lease;

**C.   **Tenanttook possession of the Premises for the purpose of conducting its business on ;

**NOW,THEREFORE, in consideration** of the covenants and provisions contained herein, andother good and valuable consideration, the sufficiency of which Landlord and Tenanthereby acknowledge, Landlord and Tenant agree:

**1.****             ****Confirmation of DefinedTerms. **Unless modified herein, all terms previously definedand capitalized in the Lease shall hold the same meaning for the purposes ofthis  Amendment.

**2.****             ****Confirmation of Commencement Dateand Term. **The Commencement Date is hereby confirmedto be           , and theTerm is hereby confirmed from and including           to and including                              .

**3.****             ****Revision in Fixed MonthlyRent. **Tenant acknowledges and agrees commencing                    ,and continuing through                    ,Tenant shall pay the initial Fixed Monthly Rent of $                    per month.  Furthermore, as of theCommencement Date, the provisions of Section 3.3 are hereby deleted in theirentirety, and replaced in lieu thereof, with the following:

                        “      Commencingon the date that is ninety (90) days following the Commencement Date, andcontinuing through the last calendar day of the twelfth (12th)calendar month of the Term, the Fixed Monthly Rent payable by Tenant shallincrease from $         per month to $         per month.

        Commencing the firstcalendar day of the thirteenth (13th) calendar month of the Term,and continuing through the last calendar day of the twenty-fourth (24th)calendar month of the Term, the Fixed Monthly Rent payable by Tenant shallincrease from $         per month to $          per month.

        Commencing the firstcalendar day of the twenty-fifth (25th) calendar month of the Term,and continuing through the last calendar day of the thirty-sixth (36th)calendar month of the Term, the Fixed Monthly Rent payable by Tenant shallincrease from $           permonth to $           permonth.

        Commencing the firstcalendar day of the thirty-seventh (37th) calendar month of theTerm, and continuing the last calendar day of the forty-eighth (48th)calendar month of the Term, the Fixed Monthly Rent payable by Tenant shallincrease from $           permonth to $           permonth.

        Commencing the firstcalendar day of the forty-ninth (49th) calendar month of the Term,and continuing the last calendar day of the sixtieth (60th) calendarmonth of the Term, the Fixed Monthly Rent payable by Tenant shall increase from$           per month to $          per month.

                                Commencingthe first calendar day of the sixty-first (61st) calendar month ofthe Term, and continuing throughout the remainder of the initial Term, theFixed Monthly Rent payable by Tenant shall increase from $          per month to $           permonth.

        Notwithstanding the foregoing, Tenantshall be permitted to defer one hundred percent of the Fixed Monthly Rent duefor the second (2nd), third (3rd), thirteenth (13th),twenty-fifth (25th) and thirty-seventh (37th) months ofthe Term (collectively, the “Rent Deferral Amount”).  So long as Tenant does not commit a material,uncured default during the Term that has resulted in Landlord filing anunlawful detainer action against Tenant, the entire Rent Deferral Amount shallbe abated and forgiven as of the Termination Date.

**4.****             ****Acceptance of Premises. **Tenant acknowledges and agrees that Landlord hascompleted the Improvements for which Landlord was obligated under the Lease.

**5.****             ****Warranty of Authority.** If Landlord or Tenant signs as acorporation, or a limited liability company, or a partnership, each of thepersons executing this  Amendment onbehalf of Landlord or Tenant hereby covenants and warrants that the applicableentity is a duly authorized and existing entity that is qualified to dobusiness in California; that the person(s) signing on behalf of either Landlordor Tenant have full right and authority to enter into this  Amendment; and that each and every personsigning on behalf of either Landlord or Tenant are authorized in writing to doso.

 

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**6.****             ****Broker Representation. **Landlord and Tenant represent to one another that ithas dealt with no broker in connection with this  Amendment other than **Douglas,Emmett and Company**and **First Property Realty Corporation**.  Landlord and Tenant shall hold one anotherharmless from and against any and all liability, loss, damage, expense, claim,action, demand, suit or obligation arising out of or relating to a breach bythe indemnifying party of such representation. Landlord agrees to pay all commissions due to the brokers listed abovecreated by Tenant’s execution of this Amendment.

**7.****             ****Successors and Heirs. **The provisions of this Amendment shall inure to the benefit of Landlord’s and Tenant’srespective successors, assigns, heirs and all persons claiming by, through orunder them.

**8.****             ****Confidentiality. **Landlord and Tenant agree that the covenants andprovisions of this  Amendment shall notbe divulged to anyone not directly involved in the management, administration,ownership, lending against, or subleasing of the Premises, other than Tenant’sor Landlord’s counsel-of-record or leasing or sub-leasing broker of record.

**9.****             ****Disclosure.** Landlord and Tenant acknowledge that principals of Landlord have afinancial interest in Douglas Emmett Realty Advisors, Douglas Emmett andCompany, and P.L.E. Builders.

**10.****      ****Governing Law. **The provisions of this Amendment shall be governed bythe laws of the State of California.

**11.****      ****Reaffirmation. **Landlord and Tenant acknowledge and agree that theLease, as amended herein, constitutes the entire agreement by and betweenLandlord and Tenant, and supersedes any and all other agreements written ororal between the parties hereto. Furthermore, except as modified herein, all other covenants and provisionsof the Lease shall remain unmodified and in full force and effect.

**INWITNESS WHEREOF,**Landlord and Tenant have duly executed this document as of the day and yearwritten below.

 
| **LANDLORD:**                                                      | ** **                        | **TENANT:**                                                                      |
|--------------------------------------------------------------------|-----------------------------------|----------------------------------------------------------------------------------|
| ** **                                                         | ** **                        | ** **                                                                       |
| BRIGHTON ENTERPRISES, LLC,

a California limited liability company |                              | MERCANTILE NATIONAL BANK, N.A.,

a California “C” corporation_________ |
|                                                               |                              |                                                                             |
| By:                                                                | DOUGLAS, EMMETT  AND COMPANY,     |                                                                             |   |   |
|                                                               | a California  corporation,        |                                                                             |   |   |
|                                                               | its agent                         |                                                                             |   |   |
|                                                               |                              |                                                                             |   |   |
| By:                                                                |                              |                                                                             | By: |   |
|                                                               | Michael J.  Means, Vice President |                                                                             | Its: |   |
|                                                               |                              |                                                                             |   |
| Dated:                                                             |                              |                                                                             | By: |   |
|                                                               |                              | Its:                                                                             |   |
|                                                               |                              |                                                                             |   |
|                                                               |                              | Dated:                                                                           |   |
|                                                                    |                                   |                                                                                  |  |  |  |

 

D-2

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**EXHIBIT F**

**ASBESTOS RIDER**

        As youare probably aware, many buildings constructed during the 20th Century throughthe mid to late 1970s, such as this property, utilized some degree of asbestosin the construction process; such practice was formerly a standard in thebuilding trade. Asbestos is the commercial name for a naturally-occurringfamily of fibrous minerals which was used in building materials mainly as afireproofing, reinforcing and insulating agent, and is typically encountered inwrapped heating system insulation, structural fire-proofing, acousticalceilings, vinyl flooring and roofing felts. Asbestos was regularly used in manyother building and non-building products as well. In fact, asbestos fibers aregenerally present in urban air and water.

        Extensivegovernmental regulation of asbestos now exists, and proposals have been madefor additional regulations. No federal laws, regulations or standards, however,require wholesale removal of asbestos from an occupied building. Indeed, theEPA has concluded that “The presence of asbestos in a building does not meanthat the health of building occupants is endangered. If asbestos-containingmaterial remains in good condition and is unlikely to be disturbed, exposurewill be negligible.” *Guidance for ControllingAsbestos-Containing Materials in Buildings* (EPA 560/5-85-024 June1985), page 1-1. According to the experts, the health risks associated withasbestos arise only when and if fibers become airborne and are inhaled, forexample, as a result of maintenance or repairs conducted without propercontrols. When inhaled, asbestos fibers can cause certain diseases, includingasbestosis, mesothelioma and lung cancer (and risks for smokers aredramatically compounded). The thrust of both current EPA and OSHA requirementsand non-binding guidance is to identify the materials that are releasing orcould release asbestos fibers into the air, implement proper response actionswhen such materials are located, maintain asbestos in good condition, andfollow appropriate work practices when disturbance of asbestos is unavoidable.

        It is thepolicy of the property owner to provide a healthy environment by repairing,removing or otherwise abating any damaged asbestos materials that pose a healthrisk, and by complying with all regulations concerning asbestos at the propertyand following procedures that will minimize or avoid disturbance ofasbestos-containing materials (ACM). We have engaged a qualified asbestosconsultant to survey the property for asbestos and assist in implementing anasbestos management plan which includes, among other things, periodicreinspection and surveillance, air monitoring, information and trainingprograms for building engineering and maintenance staff, cleaning procedures,emergency fiber release and training programs for building engineering andmaintenance staff, cleaning procedures, emergency fiber release procedures,work procedures and other measures to minimize potential fiber releases, as wellas recordkeeping requirements.

        Becauseany tenant alterations or other work at the property could disturb ACM andpossibly release asbestos fibers into the air, we must require the propertymanager’s written approval prior to beginning such projects. This includesmajor alterations, but might also include such activities as drilling or boringholes, installing electrical, telecommunications or computer lines, sandingfloors, removing ceiling tiles, or other work which might disturb ACM. In manycases, such activities will not affect ACM, but you must check with theproperty manager in advance, just in case, and the property manager may makeavailable such instructions as may be required. Any such work should not beattempted by an individual or contractor who is not qualified to handle ACM.

        Inconnection with the foregoing, we are adopting the following new rules undertenant leases: (1) the owner, and representatives of the owner, including,without limitation, the owner’s ACM consultant, are entitled to enter into thepremises of any tenant to inspect for ACM, perform air tests and abatementwhich may be legally required or prudent, and otherwise to comply with legalrequirements or recommended practices relating to ACM; (2) any tenant,contractor, or other party must obtain the property manager’s prior writtenapproval before performing any alterations on any tenant space, or performingany other work at the property that might disturb ACM or involve exposure toasbestos fibers as described above.

 

**[INTENTIONALLYLEFT BLANK]**

** **

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        We trustthat the implementation of the aforesaid requirements will not undulyinconvenience you. If you have any questions or concerns about asbestos, pleasecontact the property manager. Thank you for your cooperation in this mutualendeavor.

 
| **LANDLORD:**                                                      | ** **                        | **TENANT:**                                                                      |
|--------------------------------------------------------------------|-----------------------------------|----------------------------------------------------------------------------------|
| ** **                                                         | ** **                        | ** **                                                                       |
| BRIGHTON ENTERPRISES, LLC,

a California limited liability company |                              | MERCANTILE NATIONAL BANK, N.A.,

a California “C” corporation_________ |
|                                                               |                              |                                                                             |
| By:                                                                | DOUGLAS, EMMETT  AND COMPANY,     |                                                                             |   |   |
|                                                               | a California  corporation,        |                                                                             |   |   |
|                                                               | its agent                         |                                                                             |   |   |
|                                                               |                              |                                                                             |   |   |
| By:                                                                |                              |                                                                             | By: |   |
|                                                               | Michael J.  Means, Vice President |                                                                             | Its: |   |
|                                                               |                              |                                                                             |   |
| Dated:                                                             |                              |                                                                             | By: |   |
|                                                               |                              | Its:                                                                             |   |
|                                                               |                              |                                                                             |   |
|                                                               |                              | Dated:                                                                           |   |
|                                                                    |                                   |                                                                                  |  |  |  |

 

 

D-2

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**EXHIBIT H**SUBORDINATION, NON-DISTURBANCEAND ATTORNMENT AGREEMENT

(Lease)

THIS AGREEMENT made as ofMarch 30, 2005 between TRIANGLE LENDERS,LLC, a California limited liability company, having an address at 808 WilshireBoulevard, Suite 200, Santa Monica, California 90401 (the “Leasehold Mortgagee”),BRIGHTON ENTERPRISES, LLC, a California limited liability company, having anaddress at 808 Wilshire Boulevard, Suite 200, Santa Monica, California 90401(the “Ground Lessor”), and MERCANTILE NATIONAL BANK, a California “C”corporation, having an office at 1880 Century Park East, Suite 1200, LosAngeles, California 90067 (the “Tenant”);

**W I T N E S S E T H:**

WHEREAS the Ground Lessorand Brighton Enterprises, LLC, a California limited liability company,successor-in-interest to Wilshire-Camden Associates, a California limitedpartnership (the “Ground Lessee”), are the current parties to that certainAmended and Restated Ground Lease (the “Ground Lease”), pursuant to which theGround Lessee is leasing certain land located in the County of Los Angeles,City of Beverly Hills and State of California, known as 9601 WilshireBoulevard, as more particularly described in Exhibit “A” attached hereto andincorporated herein by this reference (the “Land”) from the Ground Lessor;

WHEREAS the LeaseholdMortgagee is the present owner and holder of a certain deed of trust or deedsof trust (the “Leasehold Deed of Trust”) encumbering the Ground Lessee’sinterest in the Ground Lease, as well as that certain office building togetherwith the four-level subterranean parking garage located on the Land (the “Improvements”);

WHEREAS the Tenant is theholder of a leasehold estate in a portion of the Improvements under andpursuant to the provisions of a certain lease dated September     ,2002 with Ground Lessee, as landlord (the “Lease”); and

WHEREAS the Tenant hasagreed to subordinate the Lease to the Leasehold Deed of Trust and the GroundLease, and to the lien of each of the same, and the Leasehold Mortgagee and theGround Lessor have each agreed to grant non-disturbance to the Tenant under theLease on the terms and conditions hereinafter set forth.

NOW THEREFORE, inconsideration of Ten Dollars ($10) and other good and valuable consideration,the receipt of which is hereby acknowledged, the Leasehold Mortgagee, theGround Lessor and the Tenant hereby covenant and agree as follows:

1.             The Tenant agrees that the Lease and all of the terms,covenants and provisions thereof and all rights, remedies and options of theTenant thereunder are and shall at all times continue to be subject andsubordinate in all respects to (i) the Leasehold Deed of Trust and all of theterms, covenants and provisions thereof and to the lien thereof and to any andall increases, renewals, modifications, spreaders, consolidations, replacementsand extensions thereof, and to any and all sums secured thereby, with the sameforce and effect as if the Leasehold Deed of Trust had been executed, deliveredand recorded prior to the execution and delivery of the Lease, and (ii) theGround Lease and all of the terms, covenants and provisions thereof and to anyand all amendments, modifications, replacements and extensions thereof, and toany and all amounts required to be paid thereunder, with the same force andeffect as if the Ground Lease had been executed, delivered and recorded priorto the execution and delivery of the Lease.

2.             The Leasehold Mortgagee and the Ground Lessor,respectively, agree that provided  (i)the Lease shall be in full force and effect, and (ii) the Tenant shall not bein default under any of the terms, covenants or conditions of the Lease or ofthis Agreement on the part of the Tenant to be observed or performed thereunderor hereunder, the right of possession of Tenant to the leased premises shallnot be affected or disturbed by (a) the Leasehold Mortgagee in the exercise ofany of its rights under the Leasehold Deed of Trust and any sale of theImprovements pursuant to the exercise of any rights and remedies under theLeasehold Deed of Trust or otherwise shall be made subject to Tenant’s right ofpossession under the Lease, and (b) the Ground Lessor in the exercise of any ofits rights under the Ground Lease and any termination of the Ground Leasepursuant to the exercise of any rights and remedies under the Ground Lease orotherwise shall be made subject to Tenant’s right of possession under theLease.

3.             The Tenant agrees that (i) if the Leasehold Mortgagee orany successors in interest to the Leasehold Mortgagee shall become the owner ofthe Improvements and the leasehold interest in the Ground Lease by reason ofthe foreclosure of the Leasehold Deed of Trust or the acceptance of a deed orassignment in lieu of foreclosure or otherwise, or (ii) if the Ground Lease isterminated and Ground Lessor or any successors in interest to the Ground Lessorshall become the owner of the Improvements, the Lease shall not be terminatedor affected thereby but shall continue in full force and effect as a directlease between the Leasehold Mortgagee and the Ground Lessor, as applicable, andthe Tenant upon all of the terms, covenants and conditions set forth in theLease and in that

 

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event the Tenantagrees to attorn to the Leasehold Mortgagee and the Ground Lessor, asapplicable, and the Leasehold Mortgagee and the Ground Lessor, as applicable,agrees to accept such attornment, provided, however, that the provisions of theLeasehold Deed of Trust shall govern with respect to the disposition of anycasualty insurance proceeds or condemnation awards and neither the LeaseholdMortgagee or the Ground Lessor, as applicable, shall be (i) obligated to completeany construction work required to be done by the Landlord (as hereinafterdefined) pursuant to the provisions of the Lease or to reimburse the Tenant forany construction work done by the Tenant, (ii) liable for any accruedobligation of the Landlord, or for any act or omission of the Landlord, whetherprior to or after such foreclosure, sale or termination, as applicable, (iii)liable under any indemnity provision of whatever nature contained in the Lease,including, but not limited to, any environmental indemnification, (iv) requiredto make any repairs to the Premises (as hereinafter defined) and/or to thepremises demised under the Lease as a result of fire or other casualty or byreason of condemnation, (v) required to make any capital improvements to thePremises and/or to the premises demised under the Lease which the Landlord mayhave agreed to make, but had not completed, or to perform or provide anyservices not related to possession or quiet enjoyment of the premises demisedunder the Lease, (vi) subject to any offsets, claims or counterclaims whichshall have accrued to the Tenant against the Landlord prior to the date onwhich the Leasehold Mortgagee or the Ground Lessor, as applicable, or itsrespective successor in interest shall become the owner of the Premises, (vii)liable for any security deposit or other monies not actually received by theLeasehold Mortgagee or the Ground Lessor, as applicable.

4.             The Tenant shall not, without the prior written consentof the Leasehold Mortgagee and the Ground Lessor (which consent shall not beunreasonably withheld) (i) enter into any agreement decreasing the amount ofrent payable under the Lease, (ii) prepay any of the rents, additional rents orother sums due under the Lease for more than one (1) month in advance of thedue date thereof, (iii) voluntarily surrender the premises demised under theLease or terminate the Lease without cause or shorten the term thereof, or (iv)assign the Lease or sublet the premises demised under the Lease or any partthereof except as expressly permitted by the terms of the Lease; and any suchamendment, modification, termination, prepayment, voluntary surrender,assignment or subletting, without the prior written consent of the LeaseholdMortgagee and the Ground Lessor shall not be binding on the Leasehold Mortgageeor the Ground Lessor, respectively.

5.             The Tenant hereby represents and warrants to theLeasehold Mortgagee and the Ground Lessor that as of the date hereof (i) theTenant is the owner and holder of the tenant’s interest under the Lease, (ii)the Lease has not been modified or amended, (iii) the Lease is in full forceand effect and the term thereof will commence as provided in accordance with****the provisions thereof , (iv) neither theTenant nor the Landlord is in default under any of the terms, covenants orprovisions of the Lease and the Tenant to the best of its knowledge knows of noevent which but for the passage of time or the giving of notice or both wouldconstitute an event of default by the Tenant or the Landlord under the Lease,(v) neither the Tenant nor the Landlord has commenced any action or given orreceived any notice for the purpose of terminating the Lease, (vi) all rents,additional rents and other sums due and payable under the Lease have been paidin full and no rents, additional rents or other sums payable under the Leasehave been paid for more than one (1) month in advance of the due dates thereof,and (vii) there are no offsets or defenses to the payment of the rents,additional rents, or other sums payable under the Lease.

6.             The Tenant shall notify the Leasehold Mortgagee and theGround Lessor of any default by the Landlord under the Lease or any othercircumstance which would entitle the Tenant to cancel or terminate the Lease orabate the rents, additional rents or other sums payable thereunder, and agreesthat, notwithstanding any provisions of the Lease to the contrary, no notice ofcancellation, termination or abatement thereof shall be effective unless theLeasehold Mortgagee and the Ground Lessor shall have received notice of thedefault or other circumstance giving rise to such cancellation, termination orabatement and shall have failed within sixty (60) days after receipt of suchnotice to cure such default or remedy such circumstance, or if such defaultcannot be cured within sixty (60) days, shall have failed within sixty (60)days after receipt of such notice to commence and to thereafter diligentlypursue any action necessary to cure such default or remedy such circumstance,as the case may be.

7.             Anything herein or in the Lease tothe contrary notwithstanding, in the event that the Leasehold Mortgagee or theGround Lessor shall acquire title to the Premises, or shall otherwise becomeliable for any obligations of the Landlord under the Lease, neither theLeasehold Mortgagee nor the Ground Lessor, as applicable, shall have anyobligation, nor incur any liability, beyond the then interest, if any, of theLeasehold Mortgagee or the Ground Lessor, as applicable, in the Premises andthe Tenant shall look exclusively to such interest of the Leasehold Mortgageeor the Ground Lessor, as applicable, if any, in the Premises for the paymentand discharge of any obligations imposed upon the Leasehold Mortgagee or theGround Lessor, as applicable, hereunder or under the Lease and the LeaseholdMortgagee and the Ground Lessor, as applicable, are hereby released or relievedof any other liability hereunder and under the Lease.  The Tenant agrees that with respect to anymoney judgment which may be obtained or secured by the Tenant against theLeasehold Mortgagee or the Ground Lessor, as applicable, the Tenant shall looksolely to the estate or interest

 

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owned by the Leasehold Mortgagee or the Ground Lessor, as applicable,in the Premises and the Tenant will not collect or attempt to collect any suchjudgment out of any other assets of the Leasehold Mortgagee or the GroundLessor, as applicable.

8.             Any notice, request, demand, statement, authorization,approval or consent made hereunder shall be in writing and shall be sent byFederal Express, or other reputable courier service, or by postage pre-paidregistered or certified mail, return receipt requested, and shall be deemedgiven when received or refused (as indicated on the receipt) and addressed asfollows:
| If to the Leasehold Mortgagee:                      |
|-----------------------------------------------------|
|                                                |
| Triangle  Lenders, LLC                              |
| c/o  Douglas Emmett Realty Advisors                 |
| 808  Wilshire Boulevard, Suite 200                  |
| Santa  Monica, California 90401                     |
| Attention:  Mr. Jordan Kaplan and Mr. William Kamer |
|                                                |
| If to the Ground Lessor:                            |
|                                                |
| Douglas  Emmett Realty Fund 2000                    |
| c/o  Douglas Emmett Realty Advisors                 |
| 808  Wilshire Boulevard, Suite 200                  |
| Santa  Monica, California 90401                     |
| Attention:  Mr. Jordan Kaplan and Mr. William Kamer |
|                                                |
| If to the Tenant:                                   |
|                                                |
| Mr. David Brown                                     |
| Chief Financial Officer                             |
| Mercantile National  Bank, N.A.                     |
| 1880 Century Park East,  Suite 1200                 |
| Los Angeles, California 90067                       |

 

it being understood and agreed that each party will use reasonableefforts to send copies of any notices to the addresses marked “With a copy to”hereinabove set forth; provided, however, that failure to deliver such copy orcopies shall have no consequence whatsoever to the effectiveness of any noticemade to the Tenant, the Leasehold Mortgagee and/or the Ground Lessor.  Each party may designate a change of addressby notice given, as hereinabove provided, to the other party, at least fifteen(15) days prior to the date such change of address is to become effective.

9.             This Agreement shall be binding upon and inure to thebenefit of the parties hereto and their respective successors and assigns.

10.           The term “Leasehold Mortgagee” asused herein shall include the successors and assigns of the Leasehold Mortgageeand any person, party or entity which shall become the owner of the Premises byreason of a foreclosure of the Leasehold Deed of Trust or the acceptance of adeed or assignment in lieu of foreclosure or otherwise.  The term “Ground Lessor” as used herein shallinclude the successors and assigns of the Ground Lessor and any person, partyor entity which shall become the owner of the Improvements by reason of atermination of the Ground Lease.  Theterm “Landlord” as used herein shall mean and include the present landlordunder the Lease and such landlord’s predecessors and successors in interestunder the Lease.  The term “Premises” asused herein shall mean the Land, the Improvements, any other improvements nowor hereafter located on the Land and/or the estates therein encumbered by theLeasehold Deed of Trust and/or the Ground Lease.

11.           This Agreement may not be modified inany manner or terminated except by an instrument in writing executed by theparties hereto.

 

**[INTENTIONALLYOMITTED]**

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12.           This Agreement shall be governed byand construed under the laws of the State in which the Premises are located.

IN WITNESS WHEREOF, the parties hereto have dulyexecuted this Agreement as of the date first above written.

 
| TRIANGLE LENDERS, LLC,                 |
|----------------------------------------|
| a California limited liability company |
|                                   |
| By:                                    | Douglas Emmett Realty Advisors, |
|                                   | a California corporation, |
|                                   | Manager |
|                                   |
| By:                                    |   |
| Name:                                  |   |
| Title:                                 |   |
| Dated:                                 |   |
|                                        |  |  |

 
| BRIGHTON ENTERPRISES, LLC,             |
|----------------------------------------|
| a California limited liability company |
|                                   |
| By:                                    | Douglas, Emmett and Company, |
|                                   | a California corporation, |
|                                   | Its agent |
|                                   |
| By:                                    |   |
| Name:                                  |   |
| Title:                                 |   |
| Dated:                                 |   |
|                                        |  |  |

 
| MERCANTILE NATIONAL BANK, N.A.,    |
|------------------------------------|
| a California “C”________ |
|                               |
| By:                                |   |
| Name:                              |   |
| Title:                             |   |
| Dated:                             |   |
|                               |   |
| By:                                |   |
| Name:                              |   |
| Title:                             |   |
| Dated:                             |   |
|                                    |  |  |

 

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| STATE OF  |   |     )      |
|-----------|--------|--------------------------------|
|      |   |     )  ss: |
| COUNTY OF |   |     )      |
|           |        |                                |  |  |

 

On                              ,before me,                              ,a Notary Public, personally appeared                              ,personally known to me (or proved to me on the basis of satisfactory evidence)to be the person(s) whose name(s) is/are subscribed to the within instrumentand acknowledged to me that he/she/they executed the same in his/her/theirauthorized capacity(ies), and that by his/her/their signature(s) on theinstrument the person(s), or the entity upon behalf of which the person(s)acted, executed the instrument.

WITNESS my hand andofficial seal.

 
|          |
|---------------|
| Notary Public |

 
| STATE OF  |   |     )      |
|-----------|--------|--------------------------------|
|      |   |     )  ss: |
| COUNTY OF |   |     )      |
|           |        |                                |  |  |

On                               ,before me,                              ,a Notary Public, personally appeared                              ,personally known to me (or proved to me on the basis of satisfactory evidence)to be the person(s) whose name(s) is/are subscribed to the within instrumentand acknowledged to me that he/she/they executed the same in his/her/theirauthorized capacity(ies), and that by his/her/their signature(s) on theinstrument the person(s), or the entity upon behalf of which the person(s)acted, executed the instrument.

WITNESS my hand andofficial seal.

 
|          |
|---------------|
| Notary Public |

 
| STATE OF  |   |     )      |
|-----------|--------|--------------------------------|
|      |   |     )  ss: |
| COUNTY OF |   |     )      |
|           |        |                                |  |  |

On                              ,before me,                              ,a Notary Public, personally appeared                              ,personally known to me (or proved to me on the basis of satisfactory evidence)to be the person(s) whose name(s) is/are subscribed to the within instrumentand acknowledged to me that he/she/they executed the same in his/her/theirauthorized capacity(ies), and that by his/her/their signature(s) on theinstrument the person(s), or the entity upon behalf of which the person(s)acted, executed the instrument.

WITNESS my hand andofficial seal.

 
|          |
|---------------|
| Notary Public |

 

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**EXHIBIT “A”**

**LEGAL DESCRIPTION**

** **

Lots 8, 9, 10, 11,12, 13 and 14, in Block 18, of Beverly, in the City of Beverly Hills, County ofLos Angeles, State of California, as per map recorded in Book 11, Pages 94 and95 of Maps, in the Office of the County Recorder of said County.

 

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**FIRST AMENDMENT TO OFFICELEASE**

                **This FirstAmendment to Office Lease**(the “First Amendment”), dated March 30, 2005, is made by and between BRIGHTONENTERPRISES, LLC, a California limited liability company (“Landlord”), with anoffice at 808 Wilshire Boulevard, Suite 200, Santa Monica, California 90401,and MERCANTILE NATIONAL BANK, N.A., a California “C” corporation (“Tenant”),with offices at 9601 Wilshire Boulevard, Suite 250, Beverly Hills, California90210.

**WHEREAS,**

**               **A.    Landlord,pursuant to the provisions of that certain written Office Lease, dated  March 11, 2004 (the “Lease”) leased to Tenantand Tenant leased from Landlord space in the property located at 9601 WilshireBoulevard, Beverly Hills, California 90210 (the “Building”), commonly known as Suite250 (the “Premises”);

                B.    The provisions of the Lease specify that the Commencement Dateshall commence five (5) business days following the date Landlord substantiallycompletes the Improvements for which Landlord is obligated under the Lease;

                C.    The Improvements werecompleted on May 25, 2004;

                D.    The provisions of the Lease further specify that the RentableArea and all other economic provisions of the Lease shall be appropriatelyadjusted based upon the final certification of the Usable Area;

                E.     Certification of the Usable Area has now been received.

**NOW,THEREFORE, in consideration** of the covenants and provisions contained herein, andother good and valuable consideration, the sufficiency of which Landlord andTenant hereby acknowledge, Landlord and Tenant agree:

**1.****             ****Confirmation of DefinedTerms. **Unless modified herein, all terms previously definedand capitalized in the Lease shall hold the same meaning for the purposes ofthis First Amendment.

**2.****             ****Confirmation of Commencement Dateand Term. **The Commencement Date is hereby confirmedto be June 1, 2004 and the Term is hereby confirmed from and including June 1,2004 to and including August 31, 2009.

**3.****             ****Confirmation of Usable andRentable Area. **The Usable Area of the Premises is herebyconfirmed to be 2,084 square feet and the Rentable Area of the Premises ishereby confirmed to be 2,559 square feet.

                                Landlordand Tenant agree that even if the Rentable or Usable Area of the Premisesand/or the total Building Area are later determined to be more or less than thefigures stated herein, for all purposes of the Lease, the figures stated hereinshall be conclusively deemed to be the actual Rentable or Usable Area of thePremises, as the case may be.

**4.****             ****Revision in Fixed MonthlyRent. **Tenant acknowledges andagrees commencingJune 1, 2004 and continuing throughAugust 31, 2004, the initial Fixed Monthly Rent payable by Tenant shall be$7,369.92 per month.  Furthermore, as ofthe Commencement Date, the provisions of Section 3.3 are hereby deleted intheir entirety, and replaced in lieu thereof, with the following:

                                “CommencingSeptember 1, 2004 and continuing through May 31, 2005, the Fixed Monthly Rentpayable by Tenant shall increase from $7,369.92 per month to $7,753.77 permonth;

                                CommencingJune 1, 2005 and continuing through May 31, 2006 the Fixed Monthly Rent payableby Tenant shall increase from $7,753.77 per month to $7,986.38 per month;

                                CommencingJune 1, 2006 and continuing through May 31, 2007, the Fixed Monthly Rentpayable by Tenant shall increase from $7,986.38 per month to $8,225.97 permonth; and

                                CommencingJune 1, 2007 and continuing through May 31, 2008 the Fixed Monthly Rent payableby Tenant shall increase from $8,225.97 per month to $8,472.75 per month;

                                CommencingJune 1, 2008 and continuing through May 31, 2009, the Fixed Monthly Rentpayable by Tenant shall increase from $8,472.75 per month to $8,726.94 permonth; and

                                CommencingJune 1, 2009 and continuing throughout the remainder of the initial Term, theFixed Monthly Rent payable by Tenant shall increase from $8,726.94 per month to$8,988.74 per month.”

                                Notwithstandingthe foregoing, Tenant shall be permitted to defer one hundred percent (100%) ofthe Fixed Monthly Rent due for the months of July 2004, August 2004, June 2005,June 2006, and June 2007 (collectively, the “Rent Deferral Amount”).  So long as Tenant does not commit a material,uncured default during the Term that has resulted in Landlord filing anunlawful detainer action against Tenant, the entire Rent Deferral Amount shallbe abated and forgiven as of the Termination Date.

**5.****             ****Acceptance of Premises.**  Tenant acknowledges and agrees that Landlordhas completed the Improvements for which Landlord was obligated under theLease.

**6.****             ****Warranty of Authority.** If Landlord or Tenant signs as acorporation or a partnership, each of the persons executing this FirstAmendment on behalf of Landlord or Tenant hereby covenants and warrants thatthe corporation executing hereinbelow is a duly authorized and existing entitythat is qualified to do business in California; that the person(s) signing onbehalf of either Landlord or Tenant have full right and authority to enter intothis First Amendment; and that each and every person signing on behalf ofeither Landlord or Tenant are authorized in writing to do so.

 

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**7.****             ****Broker Representation. **Landlord and Tenant represent to one another that ithas dealt with no broker in connection with this First Amendment other than **Douglas, Emmett and Company and First Property Realty Corporation**.  Landlord and Tenant shall hold one anotherharmless from and against any and all liability, loss, damage, expense, claim,action, demand, suit or obligation arising out of or relating to a breach bythe indemnifying party of such representation. Landlord agrees to pay all commissions due to the brokers listed abovecreated by Tenant’s execution of this First Amendment.

**8.****             ****Successors and Heirs. **The provisions of this First Amendment shall inure tothe benefit of Landlord’s and Tenant’s respective successors, assigns, heirsand all persons claiming by, through or under them.

**9.****             ****Confidentiality. **Landlord and Tenant agree that the covenants andprovisions of this First Amendment shall not be divulged to anyone not directlyinvolved in the management, administration, ownership, lending against, orsubleasing of the Premises, other than Tenant’s or Landlord’s counsel-of-recordor leasing or sub-leasing broker of record.

**10.****      ****Disclosure.** Landlord and Tenant acknowledge that principals of Landlord have afinancial interest in Douglas Emmett Realty Advisors, Douglas Emmett andCompany, and P.L.E. Builders.

**11.****      ****Governing Law. **The provisions of this First Amendmentshall be governed by the laws of the State of California.

**12.****      ****Reaffirmation. **Landlord and Tenant acknowledge and agreethat the Lease, as amended herein, constitutes the entire agreement by andbetween Landlord and Tenant relating to the Premises, and supersedes any andall other agreements written or oral between the parties hereto.  Furthermore, except as modified herein, allother covenants and provisions of the Lease shall remain unmodified and in fullforce and effect.

**INWITNESS WHEREOF,**Landlord and Tenant have duly executed this document as of the day and yearwritten below.

 
| **LANDLORD:**                                                       | ** **                        | **TENANT:**                                                                                                             |
|---------------------------------------------------------------------|-----------------------------------|-------------------------------------------------------------------------------------------------------------------------|
| ** **                                                          | ** **                        | ** **                                                                                                              |
| BRIGHTON ENTERPRISES, LLC,

a California limited  liability company |                              | MERCANTILE NATIONAL BANK, N.A.,

a California “C” corporation                                                 |
|                                                                |                              |                                                                                                                    |
| By:                                                                 | DOUGLAS, EMMETT  AND COMPANY,     |                                                                                                                    |   |   |
|                                                                | a California  corporation,        |                                                                                                                    |   |   |
|                                                                | its agent                         |                                                                                                                    |   |   |
|                                                                |                              |                                                                                                                    |   |   |
| By:                                                                 |                              |                                                                                                                    | By: |   |
|                                                                | Michael J. Means,  Vice President |                                                                                                                    |  

   Signer's  Name |   |
|                                                                |                              |  

o President o Vice President or o Chief Executive Officer

*(Check  Title Above)* |
| Dated:                                                              |                              |                                                                                                                    |   |
|                                                                |                              |                                                                                                                    | **and** |
|                                                                |                              |                                                                                                                    |
|                                                                |                              |                                                                                                                    | By: |   |
|                                                                |                              |  

   Signer's  Name                                                                                |   |
|                                                                |                              |  

o President o Vice President or o Chief Executive Officer

*(Check  Title Above)* |
|                                                                |                              |                                                                                                                    |
|                                                                |                              | Dated:                                                                                                                  |   |
|                                                                     |                                   |                                                                                                                         |  |  |  |  |

 

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