Exhibit 10.10


 


OFFICE LEASE


 


THIS LEASE, dated August 30,
2004, for purposes of reference only, is made and entered into by and between
SFI Real Estate Holdings, LLC, a Delaware limited liability company (“Landlord”) INdTV Holdings, LLC, a Delaware limited liability
company, and INdTV, LLC, a Delaware limited liability company (collectively “Tenant”).


 


1.             The Premises.


 


1.1           Landlord hereby leases to Tenant, and Tenant hereby
leases from Landlord, the Premises designated in the Summary of Basic Lease
Information (“Summary”) attached hereto, and
which is more particularly described and outlined on the floor plan attached
hereto and marked Exhibit A, all of which is incorporated herein by
this reference.  The Premises is located
in the building at the address designated in the Summary (the “Building”), and located on the parcel of real property (the “Site”) under the Building. 
Notwithstanding the foregoing, Landlord reserves those rights described
in Subparagraph 1.3 below, and this Lease is subject to those rules and
regulations attached hereto as Exhibit C, and such additional
reasonable rules and regulations as Landlord may deliver to Tenant from
time to time.  Tenant acknowledges that
Landlord has made no representation or warranty regarding the condition of the
Premises, Building, or Site except as specifically stated in this Lease.  The parties hereto agree that said letting
and hiring is upon and subject to the terms, covenants and conditions herein
set forth and Tenant covenants as a material part of the consideration for this
Lease to keep and perform each and all of said terms, covenants and conditions
by it to be kept and performed, and this Lease is made upon the condition of
such performance.


 


1.2           Tenant also shall have the nonexclusive right to use in
common with other tenants in the Building, subject to the Rules and
Regulations referred to in Paragraph 29 below and subject to the reasonable
discretion of Landlord to determine the manner in which the public and common
areas are maintained and operated, the following areas (“Common Areas”)
appurtenant to the Premises:


 


(a)           The common entrances, lobbies, restrooms, elevators,
stairways and access ways, loading docks, ramps, drives and platforms and any
passageways and service ways thereto, and the common pipes, conduits, wires and
appurtenant equipment serving the Premises; and


 


(b)           The loading and unloading areas, roadways, sidewalks,
walkways, parkways, and driveways appurtenant to the Building, including the
roof deck.


 


Landlord shall operate
the Common Areas in a manner consistent with the common areas of similar class
buildings (e.g., 160 King Street, 475 Brannan Street) located in the general
area of the Building.


 


1.3           Landlord reserves the right from time to time to do
any of the following, provided that Landlord shall exercise such rights in a
manner that does not materially interfere with Tenant’s use of or access to the
Premises, and with respect to any work required to be performed in the
Premises, Landlord shall use commercially reasonable efforts to perform such
work after normal business hours:


 


(a)           To remove, install, reinstall, use, maintain, repair
and replace pipes, ducts, conduits, wires and appurtenant meters and equipment
for service to other parts of the Building above the ceiling 


 


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surfaces, below the floor
surfaces, within the walls and in the central core areas, and to relocate any
pipes, ducts, conduits, wires and appurtenant meters and equipment included in
the Premises which are located in the Premises or located elsewhere outside the
Premises, and to expand the Building;


 


(b)           To make changes to the Common Areas, including,
without limitation, changes in the location, size, shape and number of
driveways, entrances, loading and unloading areas, ingress, egress, direction
of traffic and walkways; provided, however, that changes to the Common Areas at
the King Street entrance to the Building shall not be changed without Tenant’s
prior written approval, which shall not be unreasonably withheld, conditioned
or delayed;


 


(c)           To close temporarily any of the Common Areas for
maintenance purposes so long as reasonable access to the Premises remains
available;


 


(d)           To use the Common Areas at any time, including, but
not limited to, while engaged in making additional improvements, repairs or
alterations to the Building, or any portion thereof; and/or


 


(e)           To do and perform such other acts and make such other
changes in, to or with respect to the Site, Common Areas and Building as
Landlord may, in the exercise of Landlord’s business judgment, reasonably deem
to be appropriate.


 


1.4           The rights and obligations of the parties regarding
any initial improvements, alterations, or construction of the Premises to be
performed at the commencement of the Term are described in the Tenant Work
Letter (“Work Letter”) attached to this Lease as
Exhibit B.  Any inconsistency
between the provisions of the Work Letter and the provisions of the balance of
this Lease shall be governed by the provisions of the Work Letter.  In addition to the Tenant Improvements to be
paid for using the Tenant Improvement Allowance (as defined in and contemplated
by the Work Letter), Landlord shall, at Landlord’s expense, (i) construct
a glass partition (the “Glass Partition”)
to separate the King Street lobby of the Building from the Premises, (ii) construct
a demising wall to separate the premises of the other tenant(s) on the
ground floor of the Building from the portion of the Premises located on the
ground floor of the Building, (iii) reprogram the existing key card
security system in the Building elevators and entry doors to limit access to
the Premises to Tenant’s card keys, and (iv) construct an exit corridor
from the rear portion of the Premises located on the ground floor of the
Building (collectively, “Landlord’s Work”).  With the exception of the Glass Partition
(which Landlord shall complete with reasonable diligence), all of Landlord’s
Work shall be completed by the Delivery Date, and pending completion of the
Glass Partition, Landlord shall secure the ground floor portion of the Premises
by limiting access to the King Street lobby of the Building (both through the
exterior doors and the elevator) to Tenant only.  Landlord will construct Landlord’s Work using
new and good quality materials consistent with the existing finishes of the
Building.  Tenant shall have the right,
subject to the immediately preceding sentence, to reasonably approve the
design, finishes, location and layout of Landlord’s Work.


 


1.5           In addition to the Premises as defined herein, Tenant
shall also have the right to use during the Term all of the personal property
located within the Premises and described on Exhibit D attached
hereto (the “Personal Property”).  The Personal Property shall remain the property
of Landlord and upon expiration of the Term or earlier termination of this
Lease, Tenant shall return the Personal Property to Landlord in good condition
and repair, in the same condition as when received, normal wear and tear
excepted.


 


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1.6           References in this Lease to “rentable square feet”, “rentable
square footage” and “rentable area” shall have the same meanings, and Tenant
hereby acknowledges and agrees that the rentable square footage of the Premises
shall be deemed, and is, 27,506 rentable square feet, and the rentable square
footage of the Building shall be deemed, and is, 126,467 rentable square feet.  Landlord represents that the foregoing square
footage determinations were the results of a measurement made of the Building
and the Premises in accordance with BOMA standards, and that, within thirty
(30) days following the Lease Commencement Date, Landlord shall cause Landlord’s
architect, Huntsman Associates, to remeasure the rentable square footage of the
Premises and the Building in accordance with the Standard Method for Measuring
Floor Area in Office Buildings, ANSI/BOMA Z65.1-1996 (“1996 BOMA
Standards”), adopted by the Building Owners and Managers Association
International (BOMA).  If the
remeasurement indicates that the rentable square footage of the Premises or
Building set forth above is inaccurate per the 1996 BOMA Standards, Landlord
and Tenant shall enter into an amendment to this Lease setting forth the
correct rentable square footage of the Premises and/or the Building and
adjusting the Monthly Basic Rent, Tenant’s Percentage Share and other amounts
hereunder calculated based on the rentable square footage thereof.  In addition, at such time as Tenant extends
the ground floor of the Premises to the King Street window line over the
easternmost lightwell and the middle lightwell (immediately adjacent to [and
southwesterly of] the King Street lobby of the Building), which, in the case of
the middle lightwell only, shall be done in accordance with Exhibit H
or such other plans as shall allow an equivalent or greater amount of light to
the lower level of the Building (any deviation of such plans from Exhibit H
shall be subject to Landlord’s approval, which shall not be unreasonably withheld,
conditioned or delayed) (“Permitted Ground Floor
Changes”), then Landlord and Tenant shall enter into an amendment to
this Lease setting forth the adjusted rentable square footage of the Premises
and the Building and adjusting the Monthly Basic Rent, Tenant’s Percentage
Share and other amounts hereunder, including the Tenant Improvement Allowance,
that are calculated based on the rentable square footage thereof; provided,
however, that (a) if such Permitted Ground Floor Changes are completed on
or before the first adjustment of Monthly Basic Rent as set forth in Item (j) of
the Summary above (the “First Adjustment Date”),
then the adjustments in Monthly Basic Rent, Tenant’s Percentage Share and the
rentable square footage of the Premises and Building shall not occur until the
First Adjustment Date (the adjustment in the Tenant Improvement Allowance shall
occur as of the date such Permitted Ground Floor Changes are completed); (b) if
such Permitted Ground Floor Changes are completed following the First Adjustment
Date, but on or before the second adjustment of Monthly Basic Rent, as set
forth in Item (j) of the Summary above (the “Second
Adjustment Date”), then the adjustments in Monthly Basic Rent,
Tenant’s Percentage Share and the rentable square footage of the Premises and
Building shall occur on the date such Permitted Ground Floor Changes are
completed; and (c) if Tenant has not completed such Permitted Ground Floor
Changes on or before the Second Adjustment Date, or has completed only a
portion of the Permitted Ground Floor Changes, then, as of the Second
Adjustment Date, the rentable square footage of the Premises and Building shall
be deemed to be 27,919 and 126,880 rentable square feet, respectively (to
reflect the additional rentable square footage that the parties estimate would
have been added to the Premises had the Permitted Ground Floor Changes been
completed on or before the Second Adjustment Date), and the adjustments in
Monthly Basic Rent, Tenant’s Percentage Share and other amounts hereunder that
are calculated based on the rentable square footage of the Premises shall occur
as of the Second Adjustment Date.  Any
dispute with respect to remeasurement of the Premises or Building shall be
resolved by arbitration pursuant to Paragraph 55 below.


 


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1.7           Tenant additionally shall have the exclusive right to
use the parking bay of the Building located on the Site on the eastern side of
the Building for the sum of $500.00 per month (the “Parking Rent”).  The Parking Rent shall be subject to
adjustment to fair market value, as reasonably determined by Landlord in good
faith, no more frequently than once every two years.  Tenant’s rights pursuant to this Paragraph
are subject to any obligation imposed on Landlord by any governmental entity
for the provision of handicapped parking; provided, however, in all events,
Landlord shall use its commercially reasonable efforts to ensure that Tenant
has the ability to park at least one vehicle at the Site and in no event shall
Tenant’s rights regarding the generator in Paragraph 56 be affected.


 


1.8           In addition to the Premises as contemplated by this
Paragraph 1 and Exhibit A, Tenant shall, at Tenant’s sole election,
additionally lease from Landlord during the Term 50% of the rentable square
footage of the computer server room located on Lower Level 1 of the Building
(the “Server Room”).  At such time as another user of the Building
leases space in the Server Room, Tenant shall install a chain-link fence or
other secure demising barrier to separate the server room into two separate and
functional server rooms.  All of the
costs of demising the server room into two rooms, and to plumb all the
necessary cable and wiring to connect the Premises to the server room, shall be
at Tenant’s sole cost and expense; provided, however, that Landlord shall
require the other user(s) of the Server Room to reimburse Tenant for
50% of the cost of the demising barrier. 
Landlord shall have the right to approve the final design and layout of
the demised server rooms.  In addition to
the Monthly Basic Rent contemplated by the Summary and Paragraph 4 below,
Tenant shall pay to Landlord, in accordance with the payment procedures set
forth in Paragraph 4.1 below, $1.00 per square foot of Tenant’s share of the
Server Room per month, plus 100% of all electrical and HVAC costs
associated with the use of the Server Room until such time as another
tenant of the Building accepts possession of the remaining 50% of the Server
Room, at which time Tenant’s obligation for HVAC and electrical costs for the
Server Room shall reduce to 50%.  All
monthly rental amounts for the Server Room contemplated by this Paragraph
shall be included within the meaning of Monthly Basic Rent whenever such term
is used in this Lease or the Work Letter unless the context clearly
contemplates otherwise.  Promptly after
Tenant completes the work to demise the Server Room, in accordance with plans
approved by Landlord, Landlord and Tenant shall measure the Server Room to
determine the actual monthly rental therefore, and the parties shall execute an
amendment to this Lease setting forth the monthly rental payable by Tenant’s
for the Server Room based on its square footage; provided, however, the
failure to do so shall not affect Landlord’s right to receive and collect such
monthly rental.


 


1.9           Tenant shall also have the right, at no charge to
Tenant, to use the roof deck in common with other tenants of the Building;
provided, however, that Landlord will reasonably assist Tenant in the
occasional exclusive use of the roof deck for conducting and recording
interviews for broadcast and for other Landlord-approved purposes related to
Tenant’s use of the Premises.


 


1.10         In the event any additional space becomes available
for lease from time to time on the ground floor, the third floor or either of
the lower levels of the Building, and Landlord receives an offer to lease such
space that Landlord is prepared to accept, Landlord shall then offer the
subject space (the “First Offer Space”)
to Tenant on the same terms and conditions. 
In addition, if Tenant at any time expands to the third or other floors
in the Building, then, for purposes hereof, the First Offer Space shall include
space on the expansion and adjacent floors; provided, however, in no event
shall any portion of the fifth or sixth floors be included within the First
Offer Space; and provided further that the fourth floor shall be included
within the First Offer Space only if (i)Tenant 


 


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occupies at least one
quadrant of the third floor, and (ii) no other space is available on the
third floor.  Tenant shall thereafter
have five (5) business days within which to commit to leasing the subject
First Offer Space on the same terms and conditions, in which event the parties
shall execute a lease for the subject First Offer Space on the terms and
conditions of the third party offer.  If
Tenant fails to accept the terms and conditions within the time allowed,
Landlord shall be free to lease the subject First Offer Space to the third
party on the terms and conditions of the original offer, without further
obligation to Tenant.  The foregoing
right to additional space in the Building does not include space that is vacant
on the execution date of this Lease (which space Landlord may market for lease
without obligation to Tenant).  Further,
the foregoing right to additional space in the Building is (i) subject to
the options to extend contained, or which may be contained, in any existing or
future lease, (ii) subject to any first offer expansion rights to the
fourth floor Landlord may grant to a tenant leasing a portion of the fourth
floor as part of Landlord’s initial lease up of the Building; provided,
however, that Tenant’s rights hereunder with respect to the fourth floor of the
Building shall be subordinate to the rights of any such fourth floor tenant
only for a period of twenty-four months following the commencement date of such
tenant’s lease (after that date, any 4th floor expansion rights of such tenant shall be
subordinate to Tenant’s rights hereunder), and (iii) subject to the rights
granted to other tenants in leases existing as of the execution date of this
Lease as set forth on Exhibit E attached hereto.


 


2.             Term.


 


2.1           Subject to Paragraphs 2.2, 2.3 and 3 below, the term
of this Lease (“Term”) shall be for the period
designated in the Summary.  The Term
shall commence on the Lease Commencement Date and end on the Lease Expiration
Date, unless the Term shall be sooner terminated or extended as hereinafter
provided.


 


2.2           Tenant shall have one option (the “Extension Option”) to extend the Term, for an additional
five (5) year period (the “Extended Term”)
on all the terms and conditions contained in this Lease with the exception of
the Monthly Basic Rent which shall be adjusted pursuant to the provisions of
Paragraphs 4.3.  In order to exercise the
Extension Option, Tenant shall deliver written notice of its exercise of the
option (“Option Notice”) to Landlord at least
270 days before the expiration of the initial Term.  The Extension Option shall be subject to the
following terms and conditions:


 


(a)           The Extension Option may be exercised only by delivery
of the Option Notice as provided in this Paragraph and only if, as of the date
of delivery of the Option Notice and the commencement date of the Extended
Term, Tenant is not in default under this Lease (after notice and applicable
cure periods), and has not incurred late charges in connection with its
obligation to pay Monthly Basic Rent more than twice during any consecutive
twelve (12) month period of the initial Term.


 


(b)           The rights contained in this Paragraph shall be
personal to the originally named Tenant and any Permitted Transferee (as
defined in Paragraph 25.2 below) and may be exercised only by the originally
named Tenant and any Permitted Transferee, and only if the originally named
Tenant and its Permitted Transferee(s) collectively occupy not less than
50% of the Premises as of the date it exercises the Extension Option in accordance
with the terms of this Paragraph.


 


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(c)           If Tenant properly exercises the Extension Option and
is not in default, beyond applicable cure periods, under this Lease at the end
of the initial Term, the Term shall be extended for the applicable Extended
Term.


 


References in this Lease
to the “Term” shall include the initial Term of ten (10) years, and shall,
in addition, include the Extended Term, if applicable.


 


2.3           As soon as reasonably practical after execution of
this Lease, Tenant shall be entitled to access to the Premises for purposes of
installing Tenant’s trade fixtures, furniture, and equipment, provided that (a) Tenant’s
early entry does not interfere with or delay Landlord’s performance of the
Tenant Improvements, and Landlord shall have the right to restrict the areas of
the Premises to which Tenant will have access in order to avoid interference
with Landlord’s construction work, and (b) prior to Tenant’s entry in the
Premises, Tenant shall furnish to Landlord certificates of insurance
satisfactory to Landlord evidencing Tenant’s compliance with the requirements
of Paragraph 20.1 below.  In connection
with such possession, the provisions of this Lease shall be applicable,
provided only that the obligation of Tenant to pay Monthly Basic Rent and
Operating Rent shall not commence until the Lease Commencement Date.


 


3.             Possession.  If the Lease
Commencement Date fails to occur on or before December 1, 2004, then
Tenant shall have the right to terminate this Lease by giving written notice to
Landlord at any time prior to the date Landlord tenders possession of the
Premises to Tenant.  Termination of the
Lease hereunder shall be Tenant’s sole remedy in the event of a failure of
delivery of possession of the Premises to Tenant by the above date, and Tenant
may not and shall not seek recovery for damages against Landlord.  In the event the Delivery Date does not occur
by October 1, 2004, then unless such failure is the result of a Tenant
Delay (as defined in the Work Letter), the Monthly Basic Rent escalations
scheduled for September 1, 2005 and September 1, 2006 shall be
delayed by one day for each day that the Delivery Date occurs after October 1,
2004.


 


4.             Monthly Basic Rent/Rent Increases.


 


4.1           Tenant agrees to pay to Landlord, on a monthly basis,
the Monthly Basic Rent designated in the Summary.  Tenant shall pay the Monthly Basic Rent in
advance on the first day of each and every calendar month during said Term,
except that the first month’s Monthly Basic Rent which shall be paid upon the
execution hereof.  In the event that the
Lease Commencement Date occurs other than on the first day of a calendar month,
and the full first month’s Monthly Basic Rent has been previously paid as
provided in this Lease, then the rent for the initial partial calendar month of
the Lease Term shall be prorated in the proportion that the number of days this
Lease is in effect during such calendar month bears to thirty (30), and the
prepaid first month’s Monthly Basic Rent shall be applied to such prorated
amount with the balance of the prepaid first month’s Monthly Basic Rent being
applied to reduce the payment of Monthly Basic Rent to be paid on the first day
of the first full calendar month of the Term of this Lease.  Said Monthly Basic Rent and all additional
rent including, without limitation, Operating Rent shall be paid to Landlord,
without any prior demand therefor and, except as otherwise expressly set forth
in this Lease, without any deduction or offset whatsoever in lawful money of
the United States of America, which shall be legal tender at the time of
payment, at the address of Landlord designated in Subparagraph (c) of the
Summary or to such other person or at such other place as Landlord may from
time to time designate in writing.  Further,
all charges to be paid by Tenant hereunder, including, without limitation,
payments for repairs and other costs and expenses, shall be considered
additional rent for the purposes of this 


 


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Lease, and the word “rent”
in this Lease shall include such additional rent as well as Monthly Basic Rent
and Operating Rent unless the context specifically or clearly implies that only
the Monthly Basic Rent or Operating Rent is referenced.


 


4.2           In the event Tenant exercises its option to extend the
Term pursuant to the provisions of Paragraph 2.2, the Monthly Basic Rent shall
be adjusted at the commencement of the Extended Term to reflect ninety-five
percent (95%) of the then-fair market rental value of the Premises pursuant to
the terms of this Paragraph, and the Base Year, for purposes of calculating
Operating Rent during the Extended Term shall be calendar year 2015.  The fair market rental value of the Premises
shall be determined in good faith by Landlord, who shall notify Tenant of such
determination at least one hundred fifty (150) days before commencement of the
Extended Term.  If Tenant does not agree
with Landlord’s determination, Tenant shall deliver written notice of Tenant’s objection
to Landlord within twenty (20) days of receipt of notice from Landlord, or
Landlord’s determination of the fair market rental value shall be final.  If Tenant timely objects to Landlord’s
determination, Landlord and Tenant shall diligently attempt in good faith to
agree on the fair market rental value of the Premises on or before the tenth
(10th)
day following delivery of Tenant’s written objection to Landlord’s
determination (the “Outside Agreement Date”).  If Landlord and Tenant are unable to agree on
the new Monthly Basic Rent by the Outside Agreement Date, the fair market
rental value of the Premises shall be determined by real estate brokers
pursuant to this Paragraph.  Landlord and
Tenant shall first attempt to select a mutually agreeable broker to determine
the fair market rental value of the Premises, which broker’s conclusion shall
be binding on the parties.  In the event
they are unable to agree on one broker within five (5) business days of
the Outside Agreement Date, the parties shall each select a broker within ten (10) business
days of the Outside Agreement Date, who together shall attempt to determine the
fair market rental value of the Premises. 
If either party fails to appoint a broker within such time period, the
broker timely appointed by the other party shall be the sole broker, whose
determination shall be binding on both parties. 
If two brokers are timely appointed, but they are unable to agree on the
fair market rental value of the Premises within fifteen (15) business days of
the Outside Agreement Date, they shall mutually select a third broker and the
three brokers shall each submit their determination of the fair market rental
value of the Premises within ten (10) business days of selection of the
third broker.  The fair market rental
value of the Premises shall be the average of the three brokers’ determination;
provided, however, that if either the high or low broker’s determination
differs from the middle determination by ten percent (10%) or more, it shall be
disregarded and the two remaining determinations shall be averaged to determine
the fair market rental value.  If both
the high and low determinations differ from the middle determination by ten
percent (10%) or more, then both shall be disregarded, and the fair market
rental value of the Premises shall be the middle broker’s determination.  Each party shall bear the cost of their
respective brokers; if a third broker is necessary, the parties shall share
equally the cost of the third broker.  All
brokers shall be licensed as such by the State of California, and shall have a
minimum of ten (10) years’ experience in the leasing of commercial
properties in the San Francisco downtown area.


 


The fair market rental
value shall be based on comparable space in San Francisco, which shall (i) not
be subleased, (ii) shall be comparable in size, location and quality with
the Premises, and (iii) shall be leased for a term comparable to the
subject option term, and shall take into consideration differences in the age
and quality of such buildings, the differences in the historical rental rates ascribed
to such buildings, the floor height of, and the views from, the comparable
space vis-à-vis the subject space, and making adjustments for the following
concessions:  (a) rental abatement
concessions, if any, being granted such tenants in connection with such
comparable space; (b) tenant 


 


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improvements or
allowances provided or to be provided for such comparable space, and (c) other
reasonable monetary concessions being granted such tenants in connection with
such comparable space.


 


4.3           All payments received by Landlord from Tenant shall be
applied to the oldest payment obligation owed by Tenant to Landlord.  No designation by Tenant, either in a
separate writing or in a check or money order, shall modify this clause or have
any force or effect.


 


5.             Operating Expenses.


 


5.1           For the purposes of this Subparagraph 5.1, the
following terms are defined as follows:


 


Base Year.  2005 calendar year


 


Tenant’s
Percentage Share.  Tenant’s
Percentage Share shall mean the percentage set forth in the Summary.


 


Operating Expenses.  Operating Expenses shall consist of all
reasonable costs of operation and maintenance of the Building, the Common Areas
and the Site as determined in accordance with generally accepted accounting
principles, subject to any deviations therefrom to reflect industry-standard
accounting practices.  Operating Expenses
shall be based on the then current level of services and the then current cost
therefor at one hundred percent (100%) occupancy of the Building; provided,
however, that if the Operating Expenses in any year increase due to a change of
policy or practice in operating the Building (such as a determination to carry
earthquake, terrorism or other insurance, or a change in the calculation of the
management fee), or due to an additional type of taxes or assessments levied
against the Building (such as a gross receipts tax), such increase shall be
included only to the extent of the increase in cost over the projected costs
that would have been included in Operating Expenses for the Base Year if such
policy, practice or tax had been in effect during the entire Base Year.  If, during the Term (including the Base
Year), the actual occupancy of the Building is or becomes less than one hundred
percent (100%), Operating Expenses shall be deemed to be increased to an amount
equal to the like Operating Expenses which would normally be incurred had the
occupancy of the Building been one hundred percent (100%), and had such full
utilization of services occurred throughout the entire Term; and Operating
Expenses shall be determined as if the Building had been one hundred percent
(100%) occupied with all tenants paying full rent, as contrasted with free rent
or other rent concessions.  Landlord
shall have the right to reasonably estimate the Operating Expenses which would
be incurred at 100% of occupancy in Landlord’s reasonable discretion.  Operating Expenses shall include the
following costs by way of illustration, but not limitation:  real property taxes and assessments and any
taxes or assessments hereafter imposed in lieu thereof; gross receipt taxes
(whether assessed against Landlord or assessed against Tenant and collected by
Landlord, or both); the cost of insurance for which Landlord is responsible
hereunder or which Landlord or any first mortgagee with a lien affecting the
Premises reasonably deems necessary in connection with the operation of the
Building (including the commercially reasonable deductible portion of any
insured loss, but excluding earthquake or terrorism insurance deductibles, if
maintained by Landlord); janitorial services and supplies; security; labor;
parking expenses (including any tax or other charge determined or measured by
the collection of parking fees levied against Landlord by any governmental
authority); utility surcharges, and any other costs levied, assessed or imposed
by, or at the direction of, or resulting from statutes or regulations or
interpretations thereof, promulgated by any federal, 


 


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state, regional,
municipal or local government authority in connection with the use or occupancy
of the Building or the Premises; the cost of any capital improvements made to
the Building by Landlord (a) which are reasonably anticipated to reduce
Operating Expenses, or any portion thereof, (b) which are replacements or
modifications to the Building’s fire/life safety system, or (c) that are
required under any governmental law or regulation, except for capital
improvements to remedy a condition existing prior to the Lease Commencement
Date; provided, however, that any capital expenditure shall be amortized at an
interest rate equal to the prime rate at the time, plus 2% over its reasonable
useful life as reasonably determined by Landlord; costs incurred in the
management of the Building, if any (including supplies, wages and salaries of
employees used in the management, operation and maintenance of the Building,
and payroll taxes and similar governmental charges with respect thereto); on
site Building management office rental; a commercially reasonable management
fee, not to exceed three percent (3%) of Landlord’s gross rental revenues,
adjusted and grossed up to reflect a one hundred percent (100%) occupancy of
the Building with all tenants paying full rent, as contrasted with free rent,
half-rent and the like; air conditioning; waste disposal and trash removal;
heating; electrical; water; sewer and other utility costs for the Building and
the Common Areas; ventilating; elevator maintenance; supplies; materials;
equipment; tools; repair and maintenance of the plumbing, heating, ventilating,
air conditioning and electrical systems installed or furnished by Landlord; and
maintenance, costs and upkeep of all parking and Common Areas, rental of
personal property used in maintenance; costs and expenses of gardening and
landscaping, maintenance of signs (other than Tenant’s signs); personal
property taxes levied on or attributable to personal property used in
connection with the entire Building, including the Common Areas; reasonable
audit or verification fees; and costs and expenses of repairs, resurfacing,
repairing, maintenance, painting, lighting, cleaning, refuse removal and
similar items.


 


If, during any portion of
a calendar year Landlord is furnishing a particular service or work (the cost
of which, if furnished by Landlord, would be included in Operating Expenses) to
Tenant, but another tenant of the Building has undertaken to perform such
service or work in lieu of receiving it from Landlord, Operating Expenses for
such calendar year shall be considered to be increased by an amount equal to
the additional Operating Expenses that Landlord would reasonably have incurred during
this period if Landlord had furnished a service or work to such tenant.


 


Notwithstanding anything
contained in this Paragraph 5.1 to the contrary, Operating Expenses shall not
include any of the following:


 


(a)           amortization or depreciation on the Building or
equipment therein, except as permitted with respect to capital improvements as
set forth in the definition of Operating Expenses above;


 


(b)           real estate brokers’ commissions;


 


(c)           interest expense, principal, points and fees on
Building financing, and other Building financing expenses;


 


(d)           cost of tenant improvements in the Building (including
permit, license and inspection fees);


 


(e)           ground rent;


 


(f)            income and franchise taxes;


 


9

















 


(g)                                 Landlord’s cost of electricity or other
service sold to tenants to the extent Landlord is reimbursed therefore as a
charge over the Monthly Basic Rent and any additional rent payable under the
lease with that tenant;


 


(h)                                 third party accountants’ fees, attorneys’
fees and other professional fees and costs incurred in connection with disputes
or lease negotiations with tenants or other occupants or prospective tenants or
occupants of the Building, the enforcement of any leases (including unlawful
detainer proceedings and the collection of rents), other than de minimis
amounts, and requests to assign or sublet (except such fees which are incurred
in connection with resolving a dispute which benefits all tenants of the
Building generally, such as the enforcement of Rules and Regulations);


 


(i)                                     overhead and profit paid to subsidiaries
or affiliates of the Landlord for management or other services on or to the
Building for supplies or other materials, to the extent that the overall cost
of the services, supplies or materials provided by Landlord materially exceeds
the competitive cost of the services, supplies, or materials if obtained from
an unrelated third party on an arm’s length basis;


 


(j)                                     compensation paid to clerks, attendants,
or other persons in commercial concessions operated by the Landlord;


 


(k)                                  rentals and other related expenses
incurred in leasing air conditioning systems, elevators, or other equipment
ordinarily considered to be of a capital nature;


 


(l)                                     items and services for which Tenant
reimburses the Landlord or pays third parties or that the Landlord provides
selectively to one or more tenants of the Building other than Tenant without
reimbursement;


 


(m)                               maintenance costs incurred in connection
with repairs or other work needed because of fire, windstorm, or other casualty
to the extent Landlord is entitled to be compensated through proceeds or
insurance awards, or would have been so reimbursed if Landlord had in force all
of the insurance required to be carried by Landlord under this Lease;


 


(n)                                 all voluntary contributions to any
political or charitable-organizations;


 


(o)                                 advertising, marketing and promotion
costs;


 


(p)                                 costs associated with the operation of
the corporation or other entity which constitutes the Landlord, as
distinguished from costs of operation of the Building, including accounting and
legal costs, costs of defending lawsuits with any mortgagee, and the costs of
selling, syndicating, financing, mortgaging or hypothecating any ownership
interest in Landlord, or any of the Landlord’s interests in the Building;


 


(q)                                 costs for which Landlord is entitled to
be reimbursed by insurance companies or other third parties;


 


(r)                                    reserves for capital items, bad debts, or
rental losses;


 


(s)                                  the cost of Landlord’s removal from the
Building or the Site of Hazardous Materials (defined below);


 


10

















 


(t)                                    fines and penalties incurred due to
Landlord’s operation of the Building in violation of Applicable Laws (as
defined in Paragraph 13.1 below) or due to Landlord’s failure to timely pay
real property taxes;


 


(u)                                 costs in connection with the correction
of defects in the design or original construction of the Building and related
facilities;


 


(v)                                 costs of a capital nature, including, but
not limited to, capital improvements, capital repairs, capital equipment, and
capital tool, and rental payments and other related expenses incurred in
leasing air conditioning systems, elevators or other equipment ordinarily
considered to be of a capital nature, except as otherwise expressly permitted
in the definition of Operating Expenses above;


 


(w)          costs incurred due to violation by
Landlord or its managing agent or any tenant of the terms and conditions of any
lease;


 


(x)            costs of repair or replacement for any
item covered by a warranty to the extent covered by the warranty;


 


(y)                                 reserves for future improvements, repairs
or additions to the Building;


 


(z)                                   The cost of repair or replacement of the
structural elements of the Building, including the structural elements of the
roof;


 


(aa)                            costs incurred in connection with
upgrading the Building to comply with Applicable Laws in effect prior to the
Lease Commencement Date, including penalties or damages incurred due to such
non-compliance; and


 


(bb)                          any other expenses which, in accordance
with general industry practice with respect to the operation of similar class
office buildings, would not normally be treated as operating expenses by
comparable landlords.


 


As used herein, the term “real
property taxes” shall include any form of assessment, license fee, license tax,
business license fee, tax, levy, charge, or similar imposition, imposed by any
authority having the direct power to tax, including any city, county, state or
federal government, or any school, agricultural, lighting, drainage or other
improvement or special assessment district thereof, as against any legal or
equitable interest of Landlord in the Premises, including, but not limited to,
the following:


 


(a)           any tax on Landlord’s “right” to rent or “right” to
other income from the Premises or as against Landlord’s business of leasing the
Premises;


 


(b)           any assessment, tax, fee, levy or charge in
substitution, partially or totally, of any assessment, tax, fee, levy or charge
previously included within the definition of real estate tax, it being
acknowledged by Tenant and Landlord that Proposition 13 was adopted by the
voters of the State of California in the June, 1978 Election and that
assessments, taxes, fees, levies and charges may be imposed by governmental
agencies for such services as fire protection, street, sidewalk and road
maintenance, refuse removal and for other governmental services formerly
provided without charge to property owners or occupants.  It is the intention of Tenant and Landlord
that all such 


 


11

















 


new
and increased assessments, taxes, fees, levies and charges be included within
the definition of “real property taxes” for the purposes of this Lease;


 


(c)           any assessment, tax, fee, levy or charge allocable to
or measured by the area of the Premises or the rent payable hereunder,
including, without limitation, any excise tax levied by the State, City or
Federal government, or any political subdivision thereof, with respect to the
receipt of such rent, or upon or with respect to the possession, leasing,
operating, management, maintenance, alteration, repair, use or occupancy by
Tenant of the Premises, or any portion thereof;


 


(d)           any assessment, tax, fee, levy or charge upon this
transaction or any document to which Tenant is a party, creating or
transferring an interest or an estate in the Premises;


 


(e)           any assessment, tax, fee, levy or charge by any
governmental agency related to any transportation plan, fund or system
instituted within the geographic area of which the Building is a part; or


 


(f)            reasonable legal and other professional fees, costs
and disbursements incurred in connection with proceedings to contest, determine
or reduce real property taxes.


 


Notwithstanding any
provision of this Paragraph 5.1 expressed or implied to the contrary, “real
property taxes” shall not include Landlord’s federal or state income,
franchise, inheritance or estate taxes.  In
addition, if the property tax assessment for the Building (or real property
taxes) for the Base Year or any subsequent year does not reflect an assessment
(or real property taxes) for a one hundred percent (100%) leased, completed and
occupied project (such that existing or future leasing, tenant improvements
and/or occupancy may result in an increased assessment and/or increased real
property taxes), real property taxes for the Base Year shall be adjusted, on a
basis consistent with sound real estate accounting principles, to reflect an
assessment for (and real property taxes for) a one hundred percent (100%)
leased, completed and occupied project.  Notwithstanding
anything to the contrary set forth in this Lease, the amount of real property
taxes for the Base Year shall be calculated without taking into account any
decreases in real property taxes obtained in connection with Proposition 8 for
the Base Year.


 


5.2                                 During the Term, Tenant shall be
responsible for payment of Tenant’s Percentage Share of the Operating Expenses
in excess of the Operating Expenses incurred at the Building during the Base
Year (the “Excess Operating Expenses”).  Landlord shall estimate the monthly Operating
Expenses and Tenant’s Percentage Share of the Excess Operating Expenses, and
shall deliver notice thereof to Tenant (“Estimate Statement”).  Tenant shall pay on the first day of each and
every calendar month during the Term as additional rent such estimated monthly
amount.  If Landlord determines that
Tenant’s Percentage Share of the Excess Operating Expenses for such current
calendar year is greater than that set forth in the Estimate Statement, then
Landlord may, at any time, but not more frequently than once during each Lease
Year, deliver a revised Estimate Statement, and Tenant shall thereafter pay
during the balance of such current calendar year Tenant’s Percentage Share of
the new estimate of Excess Operating Expenses.


 


By the first day of April of
each succeeding calendar year during the Term, or as soon thereafter as
possible, Landlord shall deliver to Tenant a statement (“Actual
Statement”) wherein Landlord shall state the actual Operating
Expenses for the preceding calendar year. 
If the Actual Statement reveals an amount of Tenant’s Percentage Share
of Excess Operating Expenses in excess 


 


12

















 


of that which was estimated
by Landlord in the Estimate Statement delivered as provided herein, then within
thirty (30) days following receipt of the Actual Statement by Tenant, Tenant
shall pay a lump sum equal to said Excess Operating Expenses.  If the Actual Statement reveals that Tenant
overpaid Excess Operating Expenses for any calendar year, any overpayment made
by Tenant on the monthly installment basis provided above shall be credited
toward the next monthly rent falling due and the monthly installment of Tenant’s
Percentage Share of Excess Operating Expenses to be paid pursuant to the then
current Estimate Statement shall be adjusted to reflect such lower expenses for
the most recent calendar year, or if this Lease has been terminated, such
excess shall be credited against any amount which Tenant owes Landlord pursuant
to this Lease and, to the extent all amounts which Tenant owes Landlord
pursuant to this Lease have been paid, Landlord shall promptly pay such excess
to Tenant.  Any delay or failure by
Landlord in delivering any estimate or statement pursuant to this Paragraph
shall not constitute a waiver of its right to require an increase in Tenant’s
Percentage Share of the Excess Operating Expenses nor shall it relieve Tenant
of its obligations pursuant to this Paragraph, except that Tenant shall not be
obligated to make any payments based on such estimate or statement until thirty
(30) days after receipt of such estimate or statement.


 


5.3           Even though the Term has expired and Tenant has
vacated the Premises, when the final determination is made of Tenant’s
Percentage Share of the Excess Operating Expenses for the year in which this
Lease terminates, Tenant, within thirty (30) days after receipt of Landlord’s
determination, shall pay any increase due over the estimated expenses paid and
conversely any overpayment made in the event said expenses decrease shall be
rebated by Landlord to Tenant, within thirty (30) days after Landlord’s
determination.


 


5.4           Notwithstanding anything contained in this Paragraph
5, the rent payable by Tenant each month shall in no event be less than the
Monthly Basic Rent specified in Paragraph 4 hereof.  The Operating Expenses to be paid by Tenant
to Landlord pursuant to the provisions of this Paragraph 5 shall sometimes be
referred to in the aggregate as the “Operating Rent.”


 


5.5           Within one hundred eighty (180) days after receipt by
Tenant of an Actual Statement for any prior calendar year during the Term,
Tenant or its authorized representative (working on a non-contingency fee
basis) shall have the right to inspect the books of Landlord upon reasonable
notice and during the business hours of Landlord at Landlord’s office in the
Building, or, at Landlord’s option, at such other location in San Francisco as
Landlord reasonably may specify, for the purpose of verifying the information
contained in the statement.  Unless
Tenant asserts specific errors within one hundred eighty (180) days after
receipt of the statement, the statement shall be deemed correct as between
Landlord and Tenant.  If Tenant makes a
timely exception, Landlord shall cause an independent certified public
accountant reasonably acceptable to Tenant to issue a final and conclusive
resolution of Tenant’s exception.  If,
according to such accountant, Landlord’s original determination of annual
Operating Expenses overstated the amounts thereof, in the aggregate, by five
percent (5%) or less or understated the amounts thereof, then Tenant shall pay
the cost of the certification, and, in the case of an understatement, shall pay
to Landlord the deficiency in Tenant’s payment of Operating Expenses within
thirty (30) days following Tenant’s receipt of such certification.  If, according to such certification, Landlord’s
original determination of annual Operating Expenses overstated the amounts thereof,
in the aggregate, by more than five percent (5%), then Landlord shall pay the
cost of the certification and shall, at its election, either promptly refund
the amount of Tenant’s overpayment of Operating Expenses or, if this Lease is
still in effect, credit such overpayment against Tenant’s subsequent
obligations to pay Operating Expenses.


 


13

















 


6.             Security Deposit.  Upon
execution of this Lease, Tenant shall pay to Landlord a cash security deposit in
the amount specified in the Summary to be held by Landlord as security for the
faithful performance by Tenant of all of the terms, covenants and conditions of
this Lease to be kept and performed by Tenant during the Term hereof.  If at any time during the Term of this Lease
any item constituting rent as provided herein, or any other sum payable by
Tenant to Landlord hereunder shall be overdue and unpaid (after notice and
applicable cure periods), then Landlord may, at the sole option of Landlord,
but without any requirement to do so, appropriate and apply any portion of the
deposit provided pursuant to this Paragraph 6 to payment of such overdue rent
or other sum.  In the event of the
failure of Tenant to keep and perform any term, covenant or condition of this
Lease to be kept or performed by Tenant (after notice and applicable cure
periods), then, at the sole option of Landlord, and after termination of this
Lease, Landlord may appropriate and apply the entire deposit, or so much
thereof as may be necessary to compensate Landlord for any loss or damage
sustained or suffered by Landlord due to such breach on the part of Tenant.  In the event that all or any portion of the
deposit is appropriated and applied by Landlord to overdue rent or other sums
due and payable to Landlord by Tenant hereunder, then Tenant shall, within ten (10) days
following written demand of Landlord, promptly remit to Landlord a sufficient
amount in cash to restore such deposit to the original sum provided in this
Paragraph.  Any failure on the part of
Tenant to restore the amount of the deposit provided herein within ten (10) days
following the date on which demand for restoration is deemed given hereunder
shall constitute a breach of this Lease pursuant to Paragraph 24.1 hereof.  Within ten (10) days following the
expiration of the Term, or earlier termination of this Lease, Landlord shall
pay to Tenant any portion of the deposit provided for herein which has not been
appropriated or applied by Landlord in accordance with the provisions of this
Paragraph.  Tenant acknowledges that the
deposit provided for herein is not prepaid rent and shall not be applied by
Tenant to the payment of any rent due the Landlord herein.  No interest shall be paid on the deposit
provided for in this Paragraph by Landlord to Tenant, and Landlord shall not be
obligated to maintain the deposit provided herein separate or apart from any
other funds of Landlord.  In the event
Landlord transfers the amount of the deposit provided herein to any successor
in interest of Landlord to title of the Site and Building, then, in such event,
Landlord shall be discharged from any further obligation or liability with
respect to the deposit provided herein.  Tenant
waives the provisions of California Civil Code Section 1950.7 and all
other provisions of law now in force or that become in force after the date of
execution of this Lease, that provide that Landlord may claim from a security
deposit only those sums reasonably necessary to remedy defaults in the payment
of rent, to repair damages caused by Tenant, or to clean the Premises.  Landlord and Tenant agree that Landlord may,
in addition, claim those sums reasonably necessary to compensate Landlord for
damages described in California Civil Code Section 1951.2.  Tenant may not assign or encumber the deposit
without the consent by Landlord.  Any
attempt to do so shall be void and shall not be binding on Landlord.  Provided that Tenant has not previously been
in default of this Lease as defined in Paragraph 24, the security deposit shall
be reduced to $200,000.00 following the fourth anniversary of the Lease
Commencement Date, and further reduced to $120,000.00 following the fifth
anniversary of the Lease Commencement Date. 
In the event Landlord fails to return timely that portion of the
security deposit necessary to reduce the deposit as provided in the preceding
sentence, Tenant may give Landlord a written demand for the return of the
required funds.  If Landlord thereafter
does not return the funds to Tenant within thirty (30) days, Tenant may offset
against the next due payment(s) of Monthly Basic Rent the amount necessary
to reduce the security deposit as provided herein.  Notwithstanding the foregoing, Tenant shall
not have any offset rights if Landlord disputes Tenant’s entitlement to the
return of any portion of the security deposit. 
In the event of such a dispute, the provisions of Paragraph 55 shall
apply.


 


14

















 


7.             Use.


 


7.1           Tenant shall use the Premises for general office
purposes and for use as a production/post-production and television broadcast
facility, and all purposes incident thereto and shall not use or permit the
Premises to be used for any other purpose without the prior written consent of
Landlord, which consent may be granted or withheld in Landlord’s sole
discretion.  Tenant shall not use or
occupy the Premises in violation of any law, code, regulation, rule, order, or
injunction or of the Certificate of Occupancy issued for the Building.  Upon five (5) days’ written notice from
Landlord, Tenant shall discontinue any use of the Premises which is declared by
any governmental authority having jurisdiction to be a violation of any such
recorded covenants, conditions and restrictions affecting the Site or of any law,
code, regulation, rule, order, or injunction or of said Certificate of
Occupancy.  Except as otherwise provided
in Paragraph 57 hereof, Tenant shall not install any radio or television
antenna, loudspeaker or other device on the roof or exterior walls of the
Building.  Tenant shall not interfere
with radio or television broadcasting or reception from or in the Building to
the extent such facilities exist on the date of this Lease, provided that in
all events Tenant shall operate its telecommunication equipment and facilities
in and on the Building in compliance with all Applicable Laws.  Landlord agrees to use its commercially
reasonable efforts to cause other tenants of the Building not to interfere with
Tenant’s telecommunication equipment and facilities located on or in the
Building.  Tenant shall comply with any
direction of any governmental authority having jurisdiction which shall, by
reason of the nature of Tenant’s specific use or alteration of the Premises,
impose any duty upon Tenant or Landlord with respect to the Premises or with
respect to the use or occupation thereof. 
Tenant shall not do or permit to be done anything which will invalidate
or increase the cost of any fire, extended coverage or any other insurance
policy covering the Site, the Building, the Premises, and/or property located
therein and shall comply with all rules, orders, regulations and requirements
of the Pacific Fire Rating Bureau or any other organization performing a
similar function.  Upon demand, Tenant
shall promptly reimburse Landlord as additional rent for any additional premium
charged for such policy by reason of Tenant’s failure to comply with the
provisions of this Paragraph 7.  Tenant
shall not do or permit anything to be done in or about the Site, the Building,
and/or the Premises which will in any way obstruct or interfere with the rights
of other tenants or occupants of the Building, or injure them, or use or allow
the Premises to be used for any unlawful purpose.  Tenant shall not cause, maintain or permit any
nuisance in, on or about the Site, the Building and/or the Premises, or allow
any noxious odors to exist at or emanate from the Site, the Building and/or the
Premises.  Tenant shall not commit or
suffer to be committed any waste in or upon the Site, the Building and/or the
Premises and shall keep the Premises in good repair and appearance.  Tenant shall not place a load upon the
Premises which exceeds the average pounds of live load per square foot of floor
area specified for the Building by Landlord’s architect, with the partitions to
be considered a part of the live load.  Landlord
reserves the right to prescribe the weight and position of all safes, files and
heavy equipment which Tenant desires to place in the Premises so as to
distribute properly the weight thereof.  Tenant’s
business machines and mechanical equipment which cause vibration or noise that
may be transmitted to the Building structure or to any other space in the
Building shall be so installed, maintained and used by Tenant as to eliminate
such vibration or noise.  Tenant shall be
responsible for all structural engineering required to determine structural
load.  Tenant shall fasten all files,
bookcases and like furnishings to walls in a manner to prevent tipping over in
the event of earth movements.  Landlord
shall not be responsible for any damage or liability for such events.


 


7.2           Except for the normal and proper use and storage of
typical cleaning fluids and solutions, and office equipment supplies (such as
copier toner), in amounts commensurate with Tenant’s 


 


15

















 


permitted use and
occupancy of the Premises, and except in connection with the use of the
Generator pursuant to Paragraph 56 below, Tenant shall not use, introduce to
the Site, the Building and/or the Premises, generate, manufacture, produce,
store, release, discharge or dispose of, on, under or about the Site, the
Building and/or the Premises or transport to or from the Site, the Building
and/or the Premises any Hazardous Material (as defined below) or allow its
employees, agents, contractors, invitees or any other person or entity to do so.  Tenant warrants that it shall not make any
use of the Site, the Building and/or the Premises which may cause contamination
of the soil, the subsoil or ground water. 
Tenant shall keep and maintain the Premises in compliance with, and
shall not cause the Premises to be in violation of, any and all federal, state
or local laws, ordinances, rules or regulations pertaining to health,
industrial hygiene or the environmental conditions on, under or about the
Premises (“Environmental Laws”); provided,
however, that (a) Landlord represents and warrants to Tenant that, upon
the Delivery Date, there shall be no Hazardous Materials actually existing and
present at the Building or the Site or within the Premises as of the Lease
Commencement Date in concentrations which present a known health hazard or
require remediation or other action pursuant to any Environmental Law, and (b) in
no event shall Tenant be responsible for the investigation, cleanup,
detoxification or other ameliorative work of any Hazardous Materials in, on or
about the Site, the Building and/or the Premises, except to the extent arising
from Tenant’s use thereof in violation of Environmental Laws.  Tenant shall give immediate written notice to
Landlord of (i) any action, proceeding or inquiry by any governmental
authority or any third party with respect to the presence of any Hazardous
Material on the Site, the Building and/or the Premises or the migration thereof
from or to other property or (ii) any spill, release or discharge of
Hazardous Materials that occurs with respect to the Site, the Building and/or
the Premises or Tenant’s operations.


 


(a)           Tenant shall indemnify and hold harmless Landlord, its
directors, officers, members, employees, agents, successors and assigns
(collectively “Landlord Parties”, individually a “Landlord Party”) from and against any and all claims arising
from Tenant’s use of the Site, the Building and/or the Premises in violation of
the terms, covenants and conditions of Paragraph 7.2 above.  The indemnity shall include all costs, fines,
penalties, judgments, losses, attorney’s fees, expenses and liabilities
incurred by any of the Landlord Parties for any such claim or any action or
proceeding brought thereon including, without limitation, (i) all
foreseeable consequential damages including without limitation loss of rental
income and diminution in property value; and (ii) the costs of any
cleanup, detoxification or other ameliorative work of any kind or nature
required by any governmental agency having jurisdiction thereof, including
without limitation all costs of monitoring and all fees and expenses of
consultants and experts retained by and of the Landlord Parties.  This indemnity shall survive the expiration or
termination of this Lease.  In any action
or proceeding brought against any of the Landlord Parties by reason of any such
claim, upon notice from such Landlord Party if such Landlord Party does not
elect to retain separate counsel, Tenant shall defend the same at Tenant’s
expense by counsel reasonably satisfactory to such Landlord Party.


 


(b)           Landlord shall indemnify and hold harmless Tenant, its
directors, officers, employees, agents, successors and assigns (collectively, “Tenant Parties”, individually a “Tenant Party”)
from and against any and all claims arising from or relating to Hazardous
Materials actually existing and present at the Building or the Site or within
the Premises (i) as of the Lease Commencement Date, or (ii) not
caused by Tenant, its employees, agents or contractors.  The indemnity shall include all costs, fines,
penalties, judgments, losses, attorney’s fees, expenses and liabilities
incurred by any of the Tenant Parties for any such claim or any action or
proceeding brought thereon including the cost of any clean up, detoxification
or other ameliorative work of any kind or nature required by any 


 


16

















 


governmental agency
having jurisdiction thereof and including, without limitation, all fees and
expenses of consultants and experts retained by any of the Tenant Parties.  This indemnity shall survive the expiration
or termination of this Lease.  Any action
or proceeding brought against Tenant Parties by reason of any such claim, upon
notice from such Tenant Party, if such Tenant Party does not elect to retain
separate counsel, Landlord shall defend the same at Landlord’s expense by
counsel reasonably satisfactory to such Tenant Party.


 


(c)           As used herein, the term “Hazardous
Material” shall mean any substance or material which has been
determined by any state, federal or local governmental authority to be capable
of posing a risk of injury to health, safety or property, including all of
those materials and substances designated as hazardous or toxic by the city or
state in which the Premises are located, the U.S. Environmental Protection
Agency, the Consumer Product Safety Commission, the Food and Drug
Administration, the California Water Resources Control Board, the Regional
Water Quality Control Board, San Francisco Bay Region, the California Air
Resources Board, CAL/OSHA Standards Board, Division of Occupational Safety and
Health, the California Department of Food and Agriculture, the California Department
of Health Services, and any federal agencies that have overlapping jurisdiction
with such California agencies, or any other governmental agency now or
hereafter authorized to regulate materials and substances in the environment.  Without limiting the generality of the
foregoing, the term “Hazardous Material” shall include all of those materials
and substances defined as “hazardous materials” or “hazardous waste” in
Sections 66680 through 66685 of Title 22 of the California Administrative Code,
Division 4, Chapter 30, as the same shall be amended from time to time,
petroleum, petroleum-related substances and the by-products, fractions,
constituents and sub-constituents of petroleum or petroleum-related substances,
asbestos, and any other materials requiring remediation now or in the future
under federal, state or local statutes, ordinances, regulations or policies.


 


8.             Payments and Notices.  All rents and
other sums payable by Tenant to Landlord hereunder shall be paid to Landlord by
check, cashier’s check, or cash, at Landlord’s option, at the address
designated by Landlord in the Summary or at such other places as Landlord may
hereafter designate in writing.  Any
notice required or permitted to be given hereunder must be in writing and may
be given by personal delivery, mail, or by recognized overnight courier.  If notice is given by personal delivery, such
notice shall be deemed to be given upon delivery.  If notice is given by Landlord by registered
or certified mail addressed to Tenant at the Building, or by Tenant to Landlord
at both of the addresses designated in the Summary, then such notice shall be
deemed given on receipt or upon attempted delivery if delivery is refused.  If notice is given by overnight courier to
the addresses stated above, notice shall be deemed given on receipt or upon
attempted delivery, if delivery is refused. 
Either party may by written notice to the other specify a different
address for notice purposes except that Landlord may in any event use the
Premises as Tenant’s address for notice purposes.  If more than one person or entity constitutes
the “Tenant” under this Lease, service of any notice upon any one of said
persons or entities shall be deemed as service upon all of said persons or
entities.


 


9.             Brokers.  The parties
recognize that the brokers who negotiated this Lease are the brokers whose
names are stated in Paragraph (o) of the Summary, and agree that Landlord
shall be solely responsible for the payment of brokerage commissions to said
brokers.  Tenant shall have no
responsibility therefor.  As part of the
consideration for the granting of this Lease, Tenant represents and warrants to
Landlord that no other broker, agent or finder was hired, negotiated or was
instrumental in negotiating or consummating this Lease and there is no other
real estate broker, 


 


17

















 


agent or finder who is,
or might be, entitled to a commission or compensation in connection with this
Lease.  Any broker, agent or finder of
Tenant whom Tenant has failed to disclose herein shall be paid by Tenant.  Tenant shall hold Landlord (and/or each of
the Landlord Parties) harmless from all damages and indemnify Landlord (and/or
each of the Landlord Parties) for all said damages paid or incurred by Landlord
(and/or each of the Landlord Parties) resulting from any claims that may be
asserted against Landlord (and/or each of the Landlord Parties) by any broker,
agent or finder who has, or has claimed to have, rendered services to Tenant
undisclosed by Tenant herein.  Landlord
shall hold Tenant (and/or each of the Tenant Parties) harmless from all damages
and indemnify Tenant (and/or each of the Tenant Parties) for all said damages
paid or incurred by Tenant (and/or any of the Tenant Parties) resulting from any
claims that may be asserted against Tenant (and/or any of the Tenant Parties)
by any broker, agent or finder who has, or has claimed to have, rendered
services to Landlord undisclosed by Landlord herein.


 


10.           Holding Over.  If Tenant
remains in possession of the Premises after expiration or earlier termination
of this Lease with Landlord’s express consent, Tenant’s occupancy shall be a
month to month tenancy at a rent agreed upon by Landlord and Tenant, but in no
event less than the Monthly Basic Rent and Operating Rent payable under this
Lease during the last full month before the date of expiration or earlier
termination.  The month to month tenancy
shall be on the terms and conditions of this Lease except as provided in the
preceding sentence and the Lease clauses concerning extension rights.  If Tenant holds over after the expiration or
earlier termination of the Term hereof without the express written consent of
Landlord, Tenant shall become a tenant at sufferance only, at a rental rate
equal to the greater of one hundred fifty percent (150%) of the Monthly Basic
Rent which would be applicable to the Premises upon the date of expiration of
the Term (prorated on a daily basis) or fair market value as reasonably
determined by Landlord, and otherwise subject to the terms, covenants and
conditions herein specified, so far as applicable including, without
limitation, the obligation to pay increased Operating Expenses as provided in Paragraph
5.  Acceptance by Landlord of rent after
such expiration or earlier termination shall not constitute a consent to a
holdover hereunder or result in a renewal. 
The foregoing provisions of this Paragraph 10 are in addition to and do
not affect Landlord’s right of re-entry or any rights of Landlord hereunder or
as otherwise provided by law.  If Tenant
fails to surrender the Premises upon the expiration of this Lease despite
written demand to do so by Landlord, Tenant shall indemnify and hold Landlord
harmless from all loss or liability arising out of such failure, including without
limitation, any claim made by any succeeding tenant founded on or resulting
from such failure to surrender.  No
provision of this Paragraph 10 shall be construed as implied consent by
Landlord to any holding over by Tenant.  Landlord
expressly reserves the right to require Tenant to surrender possession of the
Premises to Landlord as provided in this Lease upon expiration or other
termination of this Lease.  The
provisions of this Paragraph 10 shall not be considered to limit or constitute
a waiver of any other rights or remedies of Landlord provided in this Lease or
at law.


 


11.           Taxes on Tenant’s Property.  Tenant
shall be liable for and shall pay before delinquency, taxes levied against any
personal property or trade fixtures placed by Tenant in or about the Premises.  If any such taxes on Tenant’s personal
property or trade fixtures are levied against Landlord or Landlord’s property,
or if the assessed value of the Site, the Building, and/or the Premises is
increased by the inclusion therein of a value placed upon such personal
property or trade fixtures of Tenant, and if Landlord, after written notice to
Tenant, pays the taxes based upon such increased assessments, which Landlord
shall have the right to do regardless of the validity thereof, but only under
proper protest if requested by Tenant, then, upon demand Tenant shall repay to
Landlord the taxes levied against Landlord, or the proportion of such taxes
resulting from such 


 


18

















 


increase in the assessment.  Notwithstanding the foregoing, at Tenant’s
sole cost and expense and at no expense or cost to Landlord, Tenant shall have
the right, in the name of Landlord and with Landlord’s full cooperation, to
bring a good faith suit in any court of competent jurisdiction to recover the
amount of any such taxes so paid under protest, any amount so recovered to
belong to Tenant.


 


12.           Condition of Premises.  Other than
with respect to the completion of Landlord’s construction obligations set forth
in Paragraph 1.4 and the Work Letter, which shall be done in a good and
workmanlike manner, and other than as expressly stated herein, Tenant
acknowledges that neither Landlord nor any of the Landlord Parties have made
any representation or warranty of any kind whatsoever with respect to the Site,
the Premises and/or the Building or with respect to the suitability of either
for the conduct of Tenant’s business; provided, however, that Landlord
represents and warrants to Tenant that, upon the Delivery Date, the Building,
the Site and the Premises shall be in compliance with all Applicable Laws,
including the Americans with Disabilities Act of 1990, as amended from time to
time.  Tenant acknowledges and agrees
that Tenant is relying solely upon Tenant’s own inspection of the Site, the
Building and the Premises, and Tenant is not relying on any representation or
warranty from the Landlord regarding the Site, the Premises or the Building,
except as specifically set forth in this Lease, including, without limitation,
any representation or warranty as to the physical condition, design or layout
of the Site, the Building and the Premises. 
Landlord represents that the Service Facilities (as defined below) are,
or will be as of the Commencement Date, in good working condition and comply
with all Applicable Laws.


 


13.           Alterations.


 


13.1         Other than changes to the roof, the structural
portions of the Building and/or the Premises, and to the foundation, Tenant
may, at any time and from time to time during the Term of this Lease, at its
sole cost and expense, make alterations, additions, installations,
substitutions, improvements and decorations (hereinafter collectively called “Changes” and individually, a “Change”)
in and to the Premises, on the following conditions, provided that such Changes
will not result in a violation of all applicable laws, rules, orders,
ordinances, directions, regulations and requirements of all governmental
authorities, agencies, offices, departments, bureaus and boards having
jurisdiction thereof laws, codes, regulations, orders or injunctions
(collectively, “Applicable Laws”) or require a
change in the Certificate of Occupancy applicable to the Premises:


 


(a)           The outside appearance, character or use of the
Building shall not be affected, and no Changes shall weaken or impair the
structural strength or, in the reasonable opinion of Landlord, lessen the value
of the Building, the Site, and/or the Premises or cause material and unusual expenses
to be incurred upon the removal of Changes and the restoration of the Premises
upon the termination of this Lease that Tenant does not agree to bear;
provided, however, that Landlord acknowledges and agrees that Changes relating
to Tenant’s use of the Premises as permitted hereunder, including, without
limitation, the construction of a production/post-production and broadcast
facility and the Permitted Ground Floor Changes are hereby approved.  Notwithstanding such approval, Landlord shall
have the right to disapprove the Changes described in the immediately preceding
sentence if the Changes (a) adversely affect the structure of the
Building, (b) adversely affect the Service Facilities, (c) do not
comply with Applicable Laws or (d) unreasonably interfere with normal and
customary business operations of Landlord or other tenants of the Building (the
“Disapproval Conditions”).


 


19

















 


(b)           No part of the Building outside of the Premises shall
be physically affected.


 


(c)           The proper functioning of any of the mechanical,
electrical, sanitary and other service systems or instillations of the Building
(“Service Facilities”) shall not be
adversely affected, and there shall be no construction which might interfere
with Landlord’s free access to the Service Facilities or interfere with the moving
of Landlord’s equipment to or from the enclosures containing the Service
Facilities.


 


(d)           In performing the work involved in making such
Changes, Tenant shall be bound by and observe all of the conditions and
covenants contained in this Paragraph 13, and Tenant shall not unreasonably
interfere with or disturb any other tenants (of such tenants, invitees,
employees, or agents) use and enjoyment of the Site and the Building.


 


(e)           All work shall be done at such times and in such
manner as is set forth in this Paragraph 13.


 


(f)            Tenant shall not be permitted to install and make part
of the Premises any materials, fixtures or articles (excluding Tenant’s trade
fixtures, personal property and other items specified in Paragraph 13.7 below)
which are subject to liens, conditional sales contracts or chattel mortgages.


 


(g)           At the date upon which the Term of this Lease shall
end, or the date of any earlier termination of this Lease, Tenant shall, unless
otherwise requested by Landlord in writing, restore the Premises to their
condition prior to the making of any Changes permitted by this Paragraph,
reasonable wear and tear excepted.  If
Tenant fails to complete the restoration before expiration of the Term,
Landlord may complete the restoration and charge the reasonable cost of the
restoration to Tenant.  Tenant shall have
no obligation to restore the Premises to its condition prior to (i) the
construction of the tenant improvements contemplated by Paragraph 1.4, or (ii) any
Changes made by Tenant during the first twenty-four (24) months of the Term
that relate to Tenant’s use of the Premises as permitted hereunder, provided
such Changes are made in compliance with the provisions of this Paragraph 13.


 


13.2         Before proceeding with any Change (exclusive only of
changes to items constituting Tenant’s personal property), Tenant shall submit
to Landlord plans and specifications for the work to be done, which shall in
all cases require Landlord’s prior written approval, which approval shall not
be withheld unless the Disapproval Conditions apply.  Landlord shall review and approve or
disapprove all such plans and specifications within ten (10) days
following the date upon which Tenant submits the same to Landlord.  Landlord may confer with consultants in
connection with the review of such plans and specifications.  If Landlord or such consultant(s) shall
disapprove of any of the Tenant’s plans, Tenant shall be advised of the reasons
of such disapproval with reasonable specificity.  In any event, Tenant agrees to pay to Landlord,
as additional rent, the reasonable cost of such consultation and review within
thirty (30) days following receipt of invoices either from Landlord or such
consultant(s).  Any Change for which
approval has been received shall be performed strictly in accordance with the
approved plans and specifications, and no material amendments or additions to such
plans and specifications shall be made without the prior written consent of
Landlord, which approval shall not be withheld unless the Disapproval
Conditions apply.


 


13.3         [Intentionally Deleted]


 


20

















 


13.4         Tenant shall submit to Landlord for Landlord’s
approval (which approval shall not be unreasonably withheld, conditioned or
delayed) the name and address of each contractor intended to be used by Tenant
in connection with construction of Changes. 
Landlord shall review and approve or disapprove all such contractors
within ten (10) days following the date upon which Tenant submits the same
to Landlord.  If Landlord approves the
construction of specific interior improvements in the Premises by contractors
or mechanics selected by Tenant and approved by Landlord, then Tenant’s
contractors shall obtain on behalf of Tenant and at Tenant’s sole cost and
expense, all necessary governmental permits and certificates for the
commencement and prosecution of Tenant’s Changes and for final approval thereof
upon completion.  In the event Tenant
shall request any Changes in the work to be performed after the submission of
the plans referred to in this Paragraph 13, such additional Changes shall be
subject to the same approvals and notices as the Changes initially submitted by
Tenant.


 


13.5         All Changes and the performance thereof shall at all
times comply with (i) all Applicable Laws, (ii) all rules, orders,
directions, regulations and requirements of the Pacific Fire Rating Bureau, or
of any similar insurance body or bodies, and (iii) all reasonable and
non-discriminatory rules and regulations of Landlord, and Tenant shall
cause Changes to be performed in compliance therewith and in good and
workmanlike manner, using materials and equipment at least equal in quality and
class to the installations of the Building. 
Changes shall be performed in such manner as not to unreasonably interfere
with the occupancy of any other tenant in the Building nor delay or impose any
additional material expense upon Landlord in construction, maintenance or
operation of the Building, and shall be performed by Contractors or mechanics
approved by Landlord and submitted to Tenant pursuant to this Paragraph, who
shall coordinate their work in cooperation with any other work being performed
with respect to the Site and/or the Building. 
Throughout the performance of Changes, Tenant, at its expense, shall
carry, or cause to be carried, workmen’s compensation insurance in statutory
limits, and general liability insurance for any occurrence in or about the
Building, of which Landlord and its managing agent shall be named as parties
insured, in limits of $1,000,000 per occurrence and in the aggregate, with
insurers reasonably satisfactory to Landlord all in compliance with
Subparagraph 20.2.  Notwithstanding any
provision of this Lease to the contrary, except as provided below, in no event
shall Landlord be required to undertake any alteration or any improvements of
any kind whatsoever in connection with the Premises or the Building as a result
of or in connection with any Changes being made by Tenant.  Without limiting the foregoing, Landlord
shall not be required to make any improvements or alteration of any kind
whatsoever in order to comply with any Applicable Laws which may be required in
connection with Changes being made by Tenant, except that if the Site and/or
the Building are not in compliance with all Applicable Laws as of the date of
this Lease, then any improvements required to be made to bring the Site and/or
the Building into compliance shall be performed by Landlord at no cost to
Tenant.


 


13.6         Tenant further covenants and agrees that any mechanic’s
lien filed against the Premises or against the Building for work claimed to
have been done for, or materials claimed to have been furnished to Tenant, will
be discharged by Tenant, by bond (pursuant to California Civil Code Section 3143)
or otherwise, within ten (10) days after the filing thereof, at the cost
and expense of Tenant.  All alterations,
decorations, additions or improvements upon the Premises, made by either party,
including (without limiting the generality of the foregoing) all wall covering,
built-in cabinet work, paneling and the like, shall, unless Landlord elects
otherwise and except as provided in Paragraph 13.7 below, become the property
of Landlord, and shall remain upon, and be surrendered with the Premises, as a
part thereof, at the end of the Term hereof. 
Notwithstanding the foregoing, Landlord may by written notice, given to
Tenant at least thirty (30) days prior to the end of the 


 


21

















 


Term, require Tenant to
remove all partitions, counters, railings, changes and the like installed by
Tenant, and Tenant shall repair any damage to the Premises arising from such
removal or, at Landlord’s option, shall pay to the Landlord all of Landlord’s
costs of such removal and repair.  Notwithstanding
the sentence immediately above, Tenant shall not be required to remove or
restore any Changes (a) which Landlord agreed in accordance with the
provisions of Subparagraph 13.1(g) need not be removed or restored or (b) which,
at the time Landlord grants its approval of the Changes hereunder, Landlord
does not specify in writing shall be required to be removed.


 


13.7         With the exception of the Personal Property listed in Exhibit D,
all articles of personal property and all business and trade fixtures,
machinery and equipment, furniture and movable partitions owned by Tenant or
installed by Tenant at its expense in the Premises shall be and remain the
property of Tenant.  Tenant may remove
such items at Tenant’s sole cost and expense at any time during the Term, and
Tenant shall restore and repair all damage to the Premises caused by such
removal, and shall otherwise perform such removal in accordance with Landlord’s
reasonably imposed scheduling and other requirements.  If Tenant shall fail to remove all of its effects
from said Premises upon termination of this Lease for any cause whatsoever,
Landlord may, at its option, remove the same in any manner that Landlord shall
choose, and store said effects without liability to Tenant for loss thereof.  Tenant agrees to pay Landlord upon demand any
and all reasonable expenses incurred in such removal, including court costs and
attorneys’ fees and storage charges on such effects for any length of time that
the same shall be in Landlord’s possession, or Landlord may, at its option,
without notice, sell said effects, or any of the same, at private sale and
without legal process, for such price as Landlord may obtain Landlord shall
apply such proceeds of such sale upon any amounts due under this Lease from
Tenant to Landlord and upon the expense incident to the removal and sale of
said effects.


 


13.8         Landlord reserves the right at any time and from time
to time without the same constituting an actual or constructive eviction and
without incurring any liability to Tenant therefor or otherwise affecting
Tenant’s obligations under this Lease, to make such changes, alterations,
additions, improvements, repairs or replacements in or to the Site or the
Building (including the Premises if required so to do by any law or regulation)
and to the fixtures and equipment thereof, as well as in or to the street
entrances, halls, passages and stairways thereof; provided, however, that
Landlord shall use commercially reasonable efforts to minimize interference
with Tenant’s conduct of business in the Premises in the performance of such
work and, with respect to any such work which is required to be performed in
the Premises, Landlord shall not perform such work during normal business hours
unless it is unavoidable.  Without
limitation to the foregoing, Landlord may change the name by which the Building
is commonly known, as Landlord may deem necessary or desirable; provided,
however, that in no event shall the name of the Building identify a media
company, and Landlord shall be responsible for all reasonable costs and
expenses incurred by Tenant as a result of such name change.  Nothing contained in this Paragraph 13 shall
be deemed to relieve Tenant of any duty, obligation or liability of Tenant with
respect to the terms, covenants and conditions of the Lease, to making any
repair, replacement or improvement required hereby, or to complying with any
law, order or requirement of any government or other authority.  Nothing contained in this Paragraph 13, shall
be deemed or construed to impose upon Landlord any obligation, responsibility or
liability whatsoever, for the care, supervision of repair of the Site, the
Building and/or the Premises or any part thereof other than as otherwise
provided in this Lease.


 


13.9         Within thirty (30) days of completion of any Changes
that require a building permit, Tenant shall provide Landlord with a set of
final “as-built” plans.


 


22

















 


13.10       If, following completion of the Tenant Improvements,
the Tenant Improvement Allowance (as defined in the Work Letter) has not been
fully disbursed, then Landlord agrees to contribute the remaining portion of
the Tenant Improvement Allowance to any Changes performed by Tenant during the
first twenty-four (24) months of the Term. 
Landlord shall disburse the remaining portion of the Tenant Improvement
Allowance to Tenant within thirty (30) days after Tenant’s written demand,
which written demand may be made not more often than monthly and shall be
accompanied by (i) copies of applicable invoices, (ii) a written
statement from Tenant’s architect or contractor that the work described on any
such invoices has been completed in accordance with the approved plans and
specifications, and (iii) properly executed lien waivers from Tenant’s
general contractor to the extent of the work described in such invoices.  In the event Landlord fails to disburse the
remainder of the Tenant Improvement Allowance as provided in this Paragraph
within thirty (30) days of receipt of Tenant’s written demand, and provided
that Tenant has complied with all of the requirements for such disbursement,
Tenant may offset against the next due payments of Monthly Basic Rent the
amount of the Tenant Improvement Allowance to which Tenant is entitled.  Notwithstanding the foregoing, Tenant shall
not have any offset rights if Landlord disputes Tenant’s entitlement to the
amounts demanded by Tenant.  In the event
of such a dispute, the provisions of Paragraph 55 shall apply.


 


14.           Repairs.


 


14.1         Subject to the provisions of Paragraph 20.6 below,
Tenant shall, when and if needed, at Tenant’s sole cost and expense, maintain
and make all repairs to the Premises and each and every part thereof, to keep,
maintain and preserve the Premises, and each and every system exclusively
serving the Premises (other than any such systems located in the Server Room,
which shall, subject to inclusion as an Operating Expense, be Landlord’s
responsibility), in good condition, excepting ordinary wear and tear and damage
by fire or other casualty.  Any such
maintenance and repair shall be performed by Landlord’s contractor, or a
contractor or contractors approved in advance in writing by Landlord (which
approval shall not be unreasonably withheld, conditioned or delayed); provided,
however, that if such maintenance and repair is performed by Landlord’s
contractor, then Landlord agrees that (a) the cost to Tenant of such
maintenance and repair shall be reasonably priced vis-à-vis the cost to Tenant
if Tenant had contracted directly for such maintenance and repair with another
qualified contractor approved by Landlord to perform work in the Building, and (b) the
time period required to perform such maintenance and repair shall not be
materially longer than the time period requited to complete such work had Tenant
contracted directly therefor.  All costs
and expenses incurred in such maintenance and repair shall be paid by Tenant
within thirty (30) days after billing by Landlord or such contractor or
contractors.  If Tenant hires a
contractor other than Landlord’s contractor, then the contract between Tenant
and such contractor shall provide that Landlord be copied on all notices and
invoices delivered to Tenant.  Tenant
shall upon the expiration or sooner termination of the Term hereof surrender
the Premises to Landlord in good condition and repair, reasonable wear and tear
and damage by fire or other casualty excepted. 
Landlord shall have no obligation to alter, remodel, improve, repair,
decorate or paint the Premises or any part thereof except as provided in Paragraphs
1.4, 14.2, 21 and 22, and the parties hereto affirm that Landlord (and each of
the Landlord Parties) has made no representations to Tenant respecting the
condition of the Site, the Premises or the Building, except as specifically
herein set forth.  Notwithstanding
anything set forth above in this Paragraph to the contrary, Tenant shall have
no obligation to install, maintain or repair any of the structural elements or
systems of the Building, unless such work is required due to Tenant’s specific
use or misuse of the Premises.


 


23














 


14.2         Notwithstanding anything contained in Subparagraph
14.1 above to the contrary, Landlord shall repair and maintain the structural
portions of the Building, the exterior of the Building, the Common Areas of the
Site and the Service Facilities in good condition, unless and to the extent
such maintenance and repairs are, subject to the provisions of Paragraph 20.6
below, necessary as a result of the act, neglect, fault of or omission of any
duty of Tenant, its agents, servants, employees, representatives or invitees,
in which case Tenant shall pay to Landlord as additional rent, the reasonable
cost of such maintenance and repairs.  Landlord
shall not be liable for any failure to make any such repairs, or to perform any
maintenance, unless such failure shall persist for an unreasonable time after
written notice of the need of such repairs or maintenance is given to Landlord
by Tenant; provided, however, that (a) Landlord shall proceed forthwith to
effect any necessary repairs with reasonable diligence, but in all events
Landlord shall commence making such repairs within thirty (30) days after
having received Tenant’s notice (or, in the case of an emergency situation or
imminent threat to life or safety, as soon as reasonably practicable under the
circumstances) and diligently pursue such repairs to completion; and (b) if
an emergency situation or imminent threat to life or safety arises in the
Premises, Tenant may, following any type of notice to Landlord which is
reasonable under the circumstances, immediately make such repairs as are
necessary to avoid or mitigate such emergency situation or threat, in which
event, provided the same are Landlord’s responsibility hereunder, Landlord
shall reimburse Tenant for the reasonable cost thereof within thirty (30) days
following receipt of a reasonably detailed invoice therefor.  Except as provided in Paragraph 17.2 and
Paragraph 21 hereof, there shall be no abatement of rent and no liability of
Landlord by reason of any injury to or interference with Tenant’s business arising
from the making of any repairs, alterations or improvements in or to any
portion of the Building or the Premises or in or to fixtures, appurtenances and
equipment therein.  Tenant hereby waives
the provisions of California Civil Code Sections 1932(1), 1941 and 1942 and of
any similar law, statute or ordinance now or hereafter in effect.


 


15.           Liens.  As provided
in Paragraph 13.6 above, Tenant covenants and agrees that any mechanic’s lien
filed against the Premises or against the Building for work claimed to have
been done for, or materials claimed to have been furnished to Tenant, will be
discharged by Tenant, by bond (pursuant to California Civil Code Section 3143)
or otherwise, within twenty (20) days after the filing thereof, at the cost and
expense of Tenant.  Landlord shall have
the right at all reasonable times to post and keep posted on the Premises any
notices which it deems necessary for protection from such liens.  Notwithstanding any other provision in this
Lease to the contrary, if Tenant does not comply with the foregoing
requirements, Landlord may, without waiving its rights and remedies based on
such breach of Tenant and without releasing Tenant from any of its obligations,
cause such liens to be released by any means it shall deem proper, including
payment in satisfaction of the claim giving rise to such lien.  Thereafter, Tenant shall promptly pay to
Landlord, upon notice by Landlord, any sum paid by Landlord to remove such
liens, together with interest at the maximum rate per annum permitted by law
from the date of such payment by Landlord.


 


16.           Entry by Landlord.  Landlord
reserves and shall at any and all reasonable times (except in the case of
emergency) have the right to enter the Premises to inspect the same, to supply
any service to be provided by Landlord to Tenant hereunder, to submit said
Premises to prospective purchasers or mortgagors/lenders or, to post notices of
nonresponsibility, to alter, improve or repair the Premises or any other
portion of the Building, during the last six (6) months of the Term of
this Lease, to prospective tenants, all without being deemed guilty of any
eviction of Tenant (so long as Landlord complies with the last sentence of this
Paragraph) and without abatement of rent, except as provided in Paragraph 17.2
below.  In order to carry out such
purposes, Landlord may erect scaffolding and 


 


24

















 


other necessary
structures where reasonably required by the character of the work to be
performed, provided that the business of Tenant shall be interfered with as
little as is reasonably practicable.  Tenant
hereby waives any claim for damages for any injury or inconvenience to or
interference with Tenant’s business, any loss of occupancy or quiet enjoyment
of the Premises, and any other loss occasioned thereby.  For each of the aforesaid purposes, Landlord
shall at all times have and retain a key with which to unlock all of the doors
in, upon and about the Premises (excluding Tenant’s vaults and safes), and Landlord
shall have the means which Landlord may deem proper to open said doors in an
emergency in order to obtain entry to the Premises.  Any entry to the Premises obtained by
Landlord by any of said means, or otherwise, shall not, under any
circumstances, be construed or deemed to be a forcible or unlawful entry into,
or a detainer of, the Premises, or an eviction of Tenant from the Premises or
any portion thereof.  Any damages caused
on account thereof shall be paid by Landlord. 
It is understood and agreed that no provision of this Lease shall be
construed as obligating Landlord to perform any repairs, alterations or
decorations except as otherwise expressly agreed herein to be performed by
Landlord.  In the exercise of its rights
under this Paragraph 16 Landlord shall attempt to minimize any disturbance of
Tenant’s use and possession of the Premises and to provide as much notice to
Tenant as may be reasonably possible prior to any such exercise of Landlord’s
rights under this Paragraph 16.


 


17.           Utilities
and Services.


 


17.1         Landlord agrees during the Lease Term to furnish to
the Premises Monday through Friday, 8:00 a.m. through 7:00 p.m.,
holidays excepted, reasonable quantities of electric current for normal
lighting and fractional horsepower office machines, water for lavatory and
drinking purposes, heat and air conditioning required in Landlord’s reasonable
judgment for the comfortable use and occupancy of the Premises (which amounts
shall be materially consistent with the amounts being provided by landlords of
comparable buildings in the San Francisco South of Market area), janitorial
service (including washing the exterior of the windows of the Premises on a
frequency reasonably determined by Landlord consistent with similar buildings)
and elevator service by non attended automatic elevators.  Except as provided in Paragraph 17.2 below,
Landlord shall not be liable for, and Tenant shall not be entitled to any
abatement or reduction of rent by reason of Landlord’s failure to furnish any
of the foregoing when such failure is caused by accident, breakage, repairs,
strikes, lockouts or other labor disturbances or labor disputes of any
character, or for other causes beyond Landlord’s reasonable control.  Landlord’s cost of providing such services
shall be part of Operating Expenses.  Tenant
hereby waives the provisions of California Civil Code Section 1932(1) or
any other applicable existing or future law, ordinance or governmental
regulation permitting the termination of this Lease due to the interruption or
failure of or inability to provide any services required to be provided by
Landlord hereunder.  If Tenant requires
or utilizes materially more water, electric power or other utility service than
is considered typical for general office purposes, which the parties agree
shall be 6.0 watts per square foot (3.5 watts for wall receptacles, 2.5 watts
for desk top computers and peripherals), Landlord may at its option, require
Tenant to pay as additional rent the cost as reasonably estimated by Landlord
incurred by such additional or extraordinary usage.  In the event Tenant requires HVAC service to
the Premises outside of the business hours specified above, Tenant shall pay to
Landlord as additional rent the sum of $85.00 per hour for each hour of
occupancy outside of the business hours specified above to reimburse Landlord
for the electricity costs to operate the HVAC; provided , however, that in the
case where Tenant and one or more other tenants shall order after-hours HVAC,
the cost payable by Tenant shall be prorated to reflect the area of that
portion of the Premises so served and the area of the other tenants’ premises
served.  Electrical power required in
connection with any special air conditioning installed for a “computer 


 


25

















 


room” in the Premises or
electric power otherwise required in connection with any such “computer room”
shall be considered extraordinary and Tenant shall be charged therefor as and
to the extent provided in Paragraph 1.8 above. 
Tenant shall additionally be responsible for the payment of all
electrical costs associated with the studio portion of the Premises, but only
to the extent such usage exceeds the electrical consumption which would occur
were the studio portion of the Premises devoted to general office use, as
defined above.  In addition, Landlord
may, but shall not be required to, install separate meter(s) for the
Premises, or advisory meters, at Tenant’s sole expense, and Tenant thereafter
shall pay all charges in excess of the cost of normal office use of such
services and Tenant shall not be charged for any share of Operating Expenses
with respect to, and to the extent that Tenant pays for, the services that are
separately metered.  All charges levied
against Tenant for extraordinary utility usage, or usage outside the business
hours specified above, shall be due and payable thirty (30) days after receipt
by Tenant of Landlord’s written invoice detailing such charges.  Any incandescent light bulbs used in the
Premises shall be paid for by the Tenant. 
Upon Tenant’s request, Landlord’s personnel shall install incandescent
light bulbs or other Building Nonstandard bulbs in the Premises.  Tenant agrees to pay Landlord, within thirty
(30) days after receipt by Tenant of Landlord’s written invoice detailing such
charges, Landlord’s cost for the maintenance and/or replacement, as applicable,
of all such incandescent light bulbs installed or other Building Nonstandard
lighting fixtures.  Landlord shall
provide Tenant access to the Premises on a twenty-four (24) hour per day, seven
(7) days per week basis, subject to events beyond Landlord’s reasonable
control.


 


17.2         Notwithstanding anything to the contrary set forth in
this Lease, in the event that Tenant is prevented from using, and does not use,
the Premises or any portion thereof, as a result of (a) any repair,
maintenance or alteration performed by Landlord, or which Landlord failed to
perform as required by this Lease, which substantially interferes with Tenant’s
use of the Premises, (b) any failure to provide services, utilities or
access to the Premises as required by this Lease, (c) any other event
which is not the result of Tenant’s default hereunder or the negligence or
willful misconduct of Tenant or any Tenant Party (any such set of circumstances
as set forth in items (a), (b) or (c), above, to be known as an “Abatement Event”), then Tenant shall give Landlord notice of
such Abatement Event, and if such Abatement Event continues for five (5) consecutive
business days after Landlord’s receipt of any such notice (the “Eligibility Period”), the Base Rent and Operating Rent, and
Tenant’s obligation to pay for parking (to the extent not utilized by Tenant)
shall be abated or reduced, as the case may be, after expiration of the
Eligibility Period for such time that Tenant continues to be so prevented from
using, and does not use for the normal conduct of Tenant’s business, the
Premises or a portion thereof, in the proportion that the rentable area of the
portion of the Premises that Tenant is prevented from using, and does not use,
bears to the total rentable area of the Premises; provided, however, in the
event that Tenant is prevented from using, and does not use, a portion of the
Premises for a period of time in excess of the Eligibility Period and the
remaining portion of the Premises is not sufficient to allow Tenant to
effectively conduct its business therein, and if Tenant does not conduct its
business from such remaining portion, then for such time after expiration of
the Eligibility Period during which Tenant is so prevented from effectively
conducting its business therein, the Base Rent and Operating Rent for the
entire Premises and Tenant’s obligation to pay for parking shall be abated for
such time as Tenant continues to be so prevented from using, and does not use,
the Premises.  If, however, Tenant
reoccupies any portion of the Premises during such period, the Rent allocable
to such reoccupied portion, based on the proportion that the rentable area of
such reoccupied portion of the Premises bears to the total rentable area of the
Premises, shall be payable by Tenant from the date Tenant reoccupies such
portion of the Premises.  Such right to
abate Base Rent and Operating Rent, and Tenant’s obligation 


 


26

















 


to pay for parking shall
be Tenant’s sole and exclusive remedy for rent abatement at law or in equity
for an Abatement Event.  Except as
provided in this Section 19.5.2, nothing contained herein shall be
interpreted to mean that Tenant is excused from paying Rent due hereunder.


 


17.3         If, as a result of an Abatement Event, Tenant is
prevented from using, and does not use, the Premises, for a continuous period
of six (6) months after Landlord’s receipt of an applicable Abatement
Event notice, then Tenant shall have the right to terminate this Lease by
notice to Landlord (the “Abatement Event
Termination Notice”), effective as of a date set forth in the
Abatement Event Termination Notice (the “Abatement Event
Termination Date”), which Abatement Event Termination Date shall not
be less than ten (10) business days following the date such Abatement
Event Termination Notice was delivered to Landlord.  Notwithstanding anything set forth to the
contrary in this Section 17.3, Tenant shall have the right to terminate
this Lease under this Section 17.3 only if Tenant is not then in economic
or material non-economic default under this Lease beyond any applicable notice
and cure period expressly set forth in this Lease.


 


18.           Indemnification.


 


18.1         To the fullest extent permitted by law, Tenant hereby
agrees, subject to the provisions of Paragraph 20.6 below, to defend,
indemnify, protect and hold Landlord and Landlord Parties harmless against and
from any and all loss, cost, damage or liability (“Claims”)
arising from: (a) any cause in, on or about the Premises; or (b) the
negligence or willful misconduct of Tenant or any Tenant Party; provided,
however, that Tenant’s obligations under this Paragraph shall be inapplicable
to the extent such Claims arise from the negligence or willful misconduct of
Landlord or any Landlord Parties.


 


18.2         To the fullest extent permitted by law, Landlord
hereby agrees, subject to the provisions of Paragraph 20.6 below, to defend,
indemnify, protect and hold Tenant and Tenant Parties harmless against and from
any and all Claims arising from (a) the gross negligence or willful
misconduct of Landlord or any Landlord Parties; or (b) any cause in, on or
about the Common Areas to the extent covered by Landlord’s insurance; provided,
however, that Landlord’s obligations under this Paragraph shall be inapplicable
to the extent such Claims (i) arise from the negligence or willful
misconduct of Tenant or any Tenant Parties, or (ii) are covered by Tenant’s
indemnity and related obligations contained in Paragraphs 56 or 57 below.


 


18.3         Landlord’s and Tenant’s obligations under this
Paragraph 18 shall survive the expiration or earlier termination of this Lease
until all Claims within the scope of this Paragraph 18 are fully, finally, and
absolutely barred by the applicable statutes of limitations.


 


19.           Damage to Tenant’s Property.  Notwithstanding
the provisions of Paragraph 18 to the contrary, Landlord and each of the
Landlord Parties shall not be liable for any damage to property entrusted to
employees of the Building, nor for loss of or damage to any property by theft
or otherwise, nor for any injury or damage to persons or property resulting
from fire, explosion, falling plaster, steam, gas, electricity, water or rain
which may leak from any part of the Building (including, but not limited to,
the Premises) or from the pipes, appliances or plumbing works therein or from
the roof, street or sub-surface or from any other place or resulting from
dampness or any other patent or latent cause whatsoever, except to the extent
arising from the negligence or willful misconduct of Landlord or the Landlord
Parties.  Landlord and each of the
Landlord Parties shall not be liable for interference with the light, air or
view of the Premises.  Tenant shall give
prompt 


 


27

















 


notice to Landlord in
case of fire or accidents in the Premises or in the Building or of defects
known to Tenant therein or in the fixtures or equipment located therein.  Notwithstanding any provision of Paragraph 18
to the contrary, neither Landlord nor any partner, director, officer, member,
agent, servant or employee of Landlord shall be liable:  (i) for any such damage caused by other
tenants or persons in, upon or about the Building, or caused by operations in
the construction of any private, public or quasi-public work (the limitations
of liability set forth in this clause (i) shall not apply to any damage or
liability caused by the negligence or intentional misconduct of Landlord or any
Landlord Parties); or (ii) for consequential damages, including lost
profits, of Tenant or any person claiming through or under Tenant.


 


20.           Insurance.


 


20.1         During the Term hereof, Tenant, at its sole expense,
shall obtain and keep in force the following insurance:


 


(a)           Commercial general liability insurance naming the
Landlord as an additional insured against any and all claims for bodily injury
and property damage occurring in, or about the Premises arising out of Tenant’s
use and occupancy of the Premises.  Such
insurance shall have a combined single limit of not less than Two Million
Dollars ($2,000,000.00) per occurrence with a Four Million Dollars
($4,000,000.00) aggregate limit.  Such
liability insurance shall be primary and not contributing to any insurance
available to Landlord and Landlord’s insurance shall be in excess thereto.  In no event shall the limits of such
insurance be considered as limiting the liability of Tenant under this Lease.


 


(b)           Personal property insurance insuring all equipment,
trade fixtures, inventory and personal property located on or in the Premises
for perils covered by the causes of loss - special form (all risk) and in
addition, coverage for boiler and machinery (if applicable).  Such insurance shall be written on a replacement
cost basis in an amount equal to the full replacement value of the aggregate of
the foregoing less any applicable deductible. 
Tenant shall also be responsible for insuring any Changes constructed by
Tenant pursuant to Paragraph 13 above and any portion of the Tenant
Improvements constructed by Landlord or Tenant pursuant to the Work Letter in
excess of the Tenant Improvement Allowance.


 


(c)           Workers’ compensation insurance in accordance with
statutory law.


 


20.2         The policies required to be maintained by Tenant shall
be with companies rated AVIII or better in the most current issue of Best’s
Insurance Reports.  Insurers shall be
licensed to do business in the state in which the Premises are located and
domiciled in the USA.  Any deductible
amounts under any insurance policies required to be carried by Tenant hereunder
shall be commercially reasonable.  Tenant
shall be responsible for the payment of all deductible amounts in the event of
a covered occurrence under the policies described in Paragraph 20.1 above.  Certificates of insurance (certified copies
of the policies may be required) shall be delivered to Landlord prior to the
Lease Commencement Date and annually thereafter at least twenty (20) days prior
to the expiration date of the old policy.  Tenant shall have the right to provide
insurance coverage which it is obligated to carry pursuant to the terms hereof
in a blanket policy, provided such blanket policy expressly affords coverage to
the Premises and to Landlord as required by this Lease.  Each policy of insurance shall provide that
Landlord, Landlord’s managing agent and any mortgagee are 


 


28

















 


additional insureds, and
shall provide notification to Landlord at least thirty (30) days prior to any
cancellation or modification to reduce the insurance coverage.


 


20.3         During the Term hereof, Landlord shall insure the
Building and the Tenant Improvements constructed using any portion of the
Tenant Improvement Allowance pursuant to the Work Letter (excluding any
property which Tenant is obligated to insure under Subparagraph 20.1(b) hereof)
against damage with All Risk insurance in the amount of the full replacement
cost of the Building and public commercial liability insurance, all in such
amounts and with such deductibles as Landlord reasonably considers appropriate
and consistent with the provisions of Paragraph 20.8.  Landlord may, but shall not be obligated to,
obtain and carry any other form or forms of insurance as it or Landlord’s
mortgagees may determine advisable.  Landlord
may, but shall not be required to, maintain earthquake coverage.  Notwithstanding any contribution by Tenant to
the cost of insurance premiums, as provided herein, Tenant acknowledges that it
has no right to receive any proceeds from any insurance policies carried by
Landlord.


 


20.4         Tenant will not knowingly keep, use, sell, or offer
for sale in, or upon, the Premises any article which may be prohibited by any
insurance policy periodically in force covering the Building.  If Tenant’s occupancy or business in, or on,
the Premises, whether or not Landlord has consented to the same, results in any
increase in premiums for the insurance periodically carried by Landlord with
respect to the Building, Tenant shall pay any such increase in premiums as
additional rent within thirty (30) days after being billed therefor by Landlord.  In determining whether increased premiums are
a result of Tenant’s use of the Premises, a schedule issued by the organization
computing the insurance rate on the Building or the Premises showing the
various components of such rate, shall be conclusive evidence of the several
items and charges which make up such rate. 
Tenant shall promptly comply with all reasonable requirements of the
insurance authority or any present or future insurer relating to the Premises.


 


20.5         If any of Landlord’s insurance policies shall be
canceled or cancellation shall be threatened or the coverage thereunder reduced
or threatened to be reduced in any way because of the specific use of the
Premises or any part thereof by Tenant (other than general office purposes and
the operation of broadcast facilities as permitted herein) or any assignee or
sub-tenant of Tenant or by anyone Tenant permits on the Premises and, if Tenant
fails to remedy the condition giving rise to such cancellation, threatened
cancellation, reduction of coverage, threatened reduction of coverage, increase
in premiums, or threatened increase in premiums, within 72 hours after receipt
of notice thereof, Landlord may, at its option, either terminate this Lease or
enter upon the Premises and attempt to remedy such condition, and Tenant shall
promptly pay the cost thereof to Landlord as additional rent.  Landlord shall not be liable for any damage
or injury caused to any property of Tenant or of others located on the Premises
resulting from such entry, except to the extent arising from the negligence or
willful misconduct of Landlord or the Landlord Parties.  If Landlord is unable, or elects not, to
remedy such condition, then Landlord shall have all of the remedies provided
for in this Lease in the event of a default by Tenant.  Notwithstanding the foregoing provisions of
this Subparagraph 20.5, if Tenant fails to remedy as aforesaid, Tenant shall be
in default of its obligation hereunder and Landlord shall have no obligation to
remedy such default.


 


20.6         Landlord and Tenant hereby mutually waive their
respective rights of recovery against each other for any loss of, or damage to,
either parties’ property, to the extent that such loss or damage is insured by
an insurance policy required to be in effect at the time of such loss or damage.  Each 


 


29

















 


party shall obtain any
special endorsements, if required by its insurer whereby the insurer waives its
rights of subrogation against the other party.


 


20.7         In the event Tenant does not purchase the insurance
required by this Lease or keep the same in full force and effect (after notice
and the opportunity to cure), Landlord may, but, shall not be obligated to
purchase the necessary insurance and pay the premium.  Tenant shall repay to Landlord, as additional
rents the amount so paid within thirty (30) days following demand.  In addition, Landlord may recover from Tenant
and Tenant agrees to pay, as additional rent, any and all reasonable expense
(including attorneys’ fees) and damages which Landlord may sustain by reason of
the failure to Tenant to obtain and maintain such insurance.


 


20.8         Landlord shall maintain insurance coverage comparable
to insurance coverage maintained by prudent landlords of similar class
buildings in the San Francisco South of Market area, and which in any event
includes fire and extended coverage insurance for the Building and commercial
liability coverage as provided in Paragraph 20.3 above.


 


21.           Damage
or Destruction.


 


21.1         In the event that the Premises or any Common Areas
necessary to Tenant’s use of or access to the Premises is damaged by fire or
other casualty which is covered under insurance pursuant to the provisions of
the foregoing section, Landlord shall restore such damage provided that: (i) the
insurance proceeds, plus the amount of any deductible (the payment of which
shall be Landlord’s responsibility but included in Operating Expenses to the
extent provided in Paragraph 5), are sufficient to pay one hundred percent
(100%) of the cost of restoration; and (ii) in the reasonable judgment of
Landlord’s architect, the restoration can be completed within one hundred and
eighty (180) days after the date of the damage or casualty under the laws and
regulations of the state, federal, county and municipal authorities having
jurisdiction.  Landlord shall notify
Tenant whether or not the Premises will be restored under this section within
forty-five (45) days of the occurrence of the casualty, which notice shall
include the estimate of Landlord’s architect and contractor with respect to the
cost of, and required time for, the repair and restoration.  If such conditions apply so as to require
Landlord to restore such damage pursuant to this section, this Lease shall
continue in full force and effect, unless otherwise agreed to in writing by
Landlord and Tenant.  Tenant shall be
entitled to a proportionate reduction of Monthly Basic Rent at all times during
which Tenant’s use of the Premises is interrupted, such proportionate reduction
to be based on the extent to which Tenant cannot make use of the Premises in a
commercially reasonable manner.  Tenant’s
right to a reduction of Rent hereunder shall be Tenant’s sole and exclusive
remedy in connection with any such damage.


 


21.2         If Landlord is not required to restore such damage in
accordance with the provisions of the immediately preceding section and if
either (a) the damage was caused by casualty against which Landlord is not
required to maintain insurance pursuant to Paragraph 20 or (b) the
insurance proceeds plus the amount of any deductible are not sufficient to pay
one hundred percent (100%) of the repair/restoration costs, Landlord shall have
the option to either (i) repair or restore such damage, with the Lease
continuing in full force and effect, with Monthly Basic Rent proportionately abated
as provided above; or (ii) give a termination notice to Tenant at any time
within forty-five (45) days after the occurrence of such damage, provided that
Landlord may exercise such termination right only if Landlord terminates the
leases of all tenants of the Building whose premises or access are similarly
damaged by the casualty.  This Lease
shall terminate as of a date to be 


 


30

















 


specified in such
termination notice which date shall not be less than thirty (30) nor more than
sixty (60) days after the date on which such notice of termination is given.  This Lease shall expire and all interest of
Tenant in the Premises shall terminate on the date so specified in such
termination notice and the Rent, reduced by any proportionate reduction in
Monthly Basic Rent as provided for above, shall be paid to the date of such
termination.  Notwithstanding the
foregoing, if Landlord elects to terminate this Lease pursuant to this
Subparagraph 21.2, and if within thirty (30) days after receipt of Landlord’s
notice, Tenant elects to provide the funds necessary to make up the shortage
(or absence) of insurance proceeds necessary to restore the Premises and
provides Landlord with reasonable assurance thereof, Landlord shall restore the
Premises as provided in this Subparagraph provided that the Premises are
reasonably subject to restoration within one hundred eighty (180) days
following the date on which the casualty occurs.


 


21.3         [Intentionally Deleted]


 


21.4         Notwithstanding the foregoing, (a) Tenant may
terminate this Lease if the Premises or any Common Areas necessary to Tenant’s
use of or access to the Premises is damaged by fire or other casualty and (i) in
the notice delivered to Tenant pursuant to Paragraph 21.1 above, Landlord’s
architect estimates that the restoration cannot be completed within one hundred
and eighty (180) days after the date of the damage or casualty; or (ii) the
restoration is not completed within one hundred and eighty (180) days after the
date of the damage or casualty; and (b) either Landlord or Tenant may
terminate this Lease if the Premises is damaged by fire or other casualty (and
Landlord’s reasonably estimated cost of restoration of the Premises exceeds ten
percent (10%) of the then replacement value of the Premises) and such damage or
casualty occurs during the last twelve (12) months of the Term of this Lease (or
the Term of any renewal option, if applicable), by giving the other notice
thereof at any time within thirty (30) days following Landlord’s delivery to
Tenant of the notice set forth in Paragraph 21.1 above (or, in the case of a
termination pursuant to clause (a)(ii) above, at any time before the
restoration is substantially completed); provided, however, that if Landlord
elects to terminate this Lease pursuant to clause (b) above, Tenant may
negate Landlord’s election by exercising, within twenty (20) days after receipt
of Landlord’s termination notice, any unexercised Extension Option hereunder.  All termination rights granted herein shall
be exercisable only by written notice, and any such termination notice shall
specify the date of such termination, which date shall not be less than thirty
(30) nor more than sixty (60) days following the date on which such notice of
termination is given.  This Lease shall
expire and all interest of Tenant in the Premises shall terminate on the date
so specified in such termination notice and the Rent shall be paid to the date
of such termination.  Tenant’s right to
terminate this Lease on the grounds that Landlord has not substantially
completed the restoration work within one hundred and eighty (180) days shall
only be effective in the event that Landlord does not complete the required
work within thirty (30) days of receipt of Tenant’s termination notice, which
notice Tenant may give so that the thirty (30) day period expires on the date
which is one hundred eighty (180) days after the date of the damage or
casualty.


 


21.5         Tenant shall not be released from any of its
obligations under this Lease except to the extent and upon the conditions
expressly stated in this Paragraph 21 or otherwise in this Lease.  Notwithstanding anything to the contrary
contained in this Paragraph 21, should Landlord be delayed or prevented from
repairing or restoring the damaged Premises after the occurrence of such damage
or destruction by reason of acts of God, war, governmental restrictions,
inability to procure the necessary labor or materials, or other cause or force
majeure beyond the control of Landlord, the 


 


31

















 


time period permitted to
Landlord for repair or restoration shall be extended by one day for each day
completion of the work to restore the Premises is delayed thereby.


 


21.6         Landlord and Tenant hereby agree that if Landlord is
obligated to or elects to repair or restore as herein provided, Landlord shall
be obligated to make repairs or restoration only to the portions of the Site
for which Landlord is obligated pursuant to Paragraph 14.2 and to the Tenant
Improvements made to the Premises by either Tenant or Landlord which were paid
for by any portion of the Tenant Improvement Allowance, as defined in the Work
Letter.  Such restoration shall be
substantially to the same condition as existed prior to the casualty, except
for modifications required by zoning and building codes and other laws or by
the holder of a mortgage on the Building or any other modifications to the
Common Areas deemed reasonably desirable by Landlord, provided that access to
the Premises shall not be materially modified or impaired.  The repair and restoration of items for which
Tenant is required to carry insurance pursuant to Paragraph 20.1(b) shall
be the obligation of Tenant.


 


21.7         Tenant hereby waives California Civil Code Sections
1932(2) and 1933(4), providing for termination of hiring upon destruction
of the thing hired and California Civil Code Sections 1941 and 1942, providing
for repairs to and of Premises.


 


22.           Eminent
Domain.


 


22.1         In case the whole of the Premises shall be taken for
any public or quasi-public purpose by any lawful power or authority by exercise
of the right of appropriation, condemnation or eminent domain, or sold to
prevent such taking (a “Taking”), this
Lease shall terminate effective as of the date possession is required to be
surrendered to said authority.  In case
only part of the Premises is subject to a Taking, but such part [or the Taking
of any other portion of the Site] shall materially interfere with Tenant’s use
and occupancy of the Premises, Tenant shall have the right to terminate this
Lease effective as of the date possession is required to be surrendered to said
authority.  Tenant shall not assert any
claim against Landlord or the taking authority for any compensation because of
such taking, and Landlord shall be entitled to receive the entire amount of any
award without deduction for any estate or interest of Tenant; provided,
however, that the foregoing shall not be deemed to prohibit Tenant from filing
a separate claim at its sole cost and expense for an award or portion thereof
separately designated for (a) relocation costs, (b) moving expenses, (c) the
unamortized portion of the value of all Tenant Improvements or Changes
performed in the Premises (or, if this Lease is not terminated, in the portion
thereof subject to the Taking) and paid for by Tenant (such amortization to be
calculated on a straight-line basis, without interest, over the Term of this
Lease remaining as of the completion of such work).  In the case of a Taking in which this Lease
is not terminated, Landlord shall be entitled to the entire amount of the award
without deduction for any estate or interest of Tenant, and Landlord shall
promptly proceed to restore the Premises to substantially their same condition
prior to such partial Taking, and a proportionate allowance shall be made to
Tenant for the rent corresponding to the time during which, and to the part of
the Premises of which, Tenant shall be so deprived on account of such Taking
and restoration.  Nothing contained in
this Paragraph shall be deemed to give Landlord any interest in any award
separately made to Tenant for the taking of personal property and trade
fixtures belonging to Tenant or for moving costs incurred by Tenant in
relocating Tenant’s business.


 


22.2         In the event of a Taking of the Premises or any part
thereof for temporary use, (i) this Lease shall be and remain unaffected
thereby and rent shall not abate, and (ii) Tenant shall be entitled to 


 


32

















 


receive for itself such
portion or portions of any award made for such use with respect to the period
of the Taking which is within the Term, provided that if such Taking shall
remain in force at the expiration or earlier termination of this Lease, Tenant
shall then pay to Landlord a sum equal to the reasonable cost of performing
Tenant’s obligations under Paragraph 14 with respect to surrender of the
Premises and upon such payment shall be excused from such obligations.  For purpose of this Subparagraph 22.2, a
temporary taking shall be defined as a taking for a period of 180 days or less.


 


22.3         Landlord and Tenant each hereby waive the provisions
of California Code of Civil Procedure Section 1265.130 and any other
applicable existing or future law, ordinance or governmental regulation
providing for, or allowing either party to petition the courts of the state of
California for, a termination of this lease upon a partial taking of the
Premises and/or the Building.


 


23.           Bankruptcy.  If Tenant
shall file a petition in bankruptcy under any Chapter of federal bankruptcy law
as then in effect, or if Tenant be adjudicated a bankrupt in involuntary bankruptcy
proceedings and such adjudication shall not have been vacated within thirty
(30) days from the date thereof, or if a receiver or trustee be appointed of
Tenant’s property and the order appointing such receiver or trustee not be set
aside or vacated within thirty (30) days after the entry thereof, or if Tenant
shall assign Tenant’s estate or effects for the benefit of creditors, or if
this Lease shall otherwise by operation of law pass to any person or persons
other than Tenant, then in any such event Landlord may, if Landlord so elects,
with or without notice of such election and with or without entry or action by
Landlord, forthwith terminate this Lease. 
Notwithstanding any other provisions of this Lease, Landlord, in
addition to any and all rights and remedies allowed by law or equity, shall
upon such termination be entitled to recover damages in the amount provided in
Subparagraph 24.2 below.  Neither Tenant
nor any person claiming through or under Tenant or by virtue of any statute or
order of any court shall be entitled to possession of the Premises, and Tenant
shall forthwith quit and surrender the Premises to Landlord.  Nothing herein contained shall limit or
prejudice the right of Landlord to prove and obtain as damages by reason of any
such termination an amount equal to the maximum allowed by any statute or rule of
law in effect at the time when, and governing the proceedings in which, such
damages are to be proved, whether or not such amount be greater, equal to, or
less than the amount of damages recoverable under the provisions of this
Paragraph 23.


 


24.           Defaults
and Remedies.


 


24.1         The occurrence of any one or more of the following
events shall constitute a default hereunder by Tenant:


 


(a)           The abandonment of the Premises by Tenant.  Abandonment is herein defined to include, but
is not limited, to, any absence by Tenant from the Premises for fourteen (14)
consecutive days or more without the payment of Rent.


 


(b)           The failure by Tenant to make any payment of Monthly
Basic Rent, Operating Rent, additional rent or any other payment required to be
made by Tenant hereunder as and when due, where such failure continues for a
period of five (5) days after written notice thereof from Landlord to
Tenant; provided, however, that any such notice shall be in lieu of, and not in
addition to, any notice required under California Code of Civil Procedure 1161.


 


33

















 


(c)           The failure by Tenant to observe or perform any of the
express or implied covenants or provisions of this Lease to be observed or
performed by Tenant, other than as specified in Subparagraph 24.1(a) or
24.1(b) above, where such failure shall continue for a period of thirty
(30) days after written notice thereof from Landlord to Tenant; provided,
however, that any such notice shall be in lieu of, and not in addition to, any
notice required under California Code of Civil Procedure 1161; provided,
further, that if the nature of Tenant’s default is such that more than thirty
(30) days are reasonably required for its cure, then Tenant shall not be deemed
to be in default if Tenant shall commence such cure within said 30-day period
and thereafter diligently and without interruption prosecute such cure to
completion.


 


(d)           (1) The making by Tenant of any general
assignment for the benefit of creditors; (2) the filing by or against
Tenant of a petition to have Tenant adjudged a bankrupt or a petition for
reorganization or arrangement under any law relating to bankruptcy (unless, in
the case of a petition filed against Tenant, the same is dismissed within
thirty (30) days); (3) the appointment of a trustee or receiver to take
possession of substantially all of Tenant’s assets located at the Premises or
of Tenant’s interest in this Lease, where possession is not restored to Tenant
within thirty (30) days; or (4) the attachment, execution or other
judicial seizure of substantially all of Tenant’s assets located at the
Premises or of Tenant’s interest in this Lease where such seizure is not
discharged within thirty (30) days.


 


24.2         In the event of any such default by Tenant, in
addition to any other remedies available to Landlord at law or in equity,
Landlord shall have the immediate option to terminate this Lease and all rights
of Tenant hereunder.  Upon such termination
of Tenant’s right to possession of the Premises, this Lease shall terminate and
Landlord shall be entitled to recover damages from Tenant as provided in
California Civil Code Section 1951.2 or any other applicable existing or
future law, ordinance or regulation providing for recovery of damages for such
breach, including but not limited to the following:


 


(a)           the worth at the time of award of any unpaid rent
which had been earned at the time of such termination; plus


 


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


 


(c)           the worth at the time of award of the amount by which
the unpaid rent for the balance of the Term after the time of award exceeds the
amount of such rental loss that Tenant proves could be reasonably avoided; plus


 


(d)           any other amount necessary to compensate Landlord for
all the detriment proximately caused by Tenant’s failure to perform his
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom.


 


As used in Subparagraphs
24.2(a) and 24.2(b) above, the “worth at the time of award” is
computed by allowing interest at the maximum rate permitted by law per annum.  As used in Subparagraph 24.2(c) above,
the Worth at the time of awards is computed by discounting to present value at
the time of the award such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus one percent (1%).


 


34

















 


24.3         If a default exists under this Lease, Landlord may
exercise its rights under California Civil Code Section 1951.4 and may
continue this Lease in effect after Tenant has breached this Lease and
abandoned the Premises and Landlord may recover rent as it becomes due;
provided, however that Tenant has the right to sublet or assign this Lease,
subject to reasonable limitations.  Acts
of maintenance or preservation or efforts to relet the Premises or the
appointment of a receiver upon initiative of Landlord to protect Landlord’s
interest under this Lease shall not constitute a termination of Tenant’s right
to possession.


 


24.4         All rights, options’ and remedies of Landlord
contained in this Lease shall be construed and held to be cumulative, and no
one of them shall be exclusive of the other, and Landlord shall have the right
to pursue any one or all of such remedies or any other remedy or relief which
may be provided by law, whether or not stated in this Lease.  No waiver of any default of Tenant hereunder
shall be implied from any acceptance by Landlord of any rent or other payments
due hereunder or any omission by Landlord to take any action on account of such
default if such default persists or is repeated, and no express waiver shall
affect defaults other than as specified in said waiver.  The consent or approval or Landlord to or of
any act by Tenant requiring Landlord’s consent or approval shall not be deemed
to waive or render unnecessary Landlord’s consent or approval to or of any
subsequent similar acts by Tenant.


 


25.           Assignment
and Subletting.


 


25.1         Subject to Paragraph 25.2 below, Tenant shall not
voluntarily assign, hypothecate or encumber its interest in this Lease or in
the Premises, or sublease all or any part of the Premises, or allow any other
person or entity to occupy or use all or any part of the Premises, without
first obtaining Landlord’s prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed (all of the foregoing are
hereinafter sometimes referred to individually as a “Transfer”,
and collectively as “Transfers”, and
any person to whom any Transfer is made or sought to be made is hereinafter
sometimes referred to as a “Transferee”).  Any assignment, encumbrance, hypothecation or
sublease without Landlord’s prior written consent shall be voidable, at
Landlord’s election, and shall constitute a default.  Except as otherwise provided in Paragraph
25.2 below, in the event Tenant is a partnership, a withdrawal or change of
partners, or change of ownership of partners, owning more than a fifty percent
(50%) interest in the partnership, or if Tenant is a corporation, any transfer of
fifty percent (50%) of its stock, or of voting control of such corporation,
shall constitute a voluntary assignment and shall be subject to these
provisions; provided, however, that a Transfer shall not be deemed to include
the infusion of additional equity capital in Tenant or an initial public
offering of equity securities of Tenant and the foregoing shall not apply if
Tenant’s stock is publicly held and traded through a national stock exchange.  No consent to any assignment, encumbrance, or
sublease shall constitute a further waiver of the provisions of this Paragraph.  No later than thirty (30) days prior to the
effective date of the proposed assignment or sublease, Tenant shall notify
Landlord in writing of Tenant’s intent to assign, encumber, hypothecate or
sublease, the name of the proposed assignee or sublessee, information
concerning the financial responsibility of the proposed assignee or sublessee
and the terms of the proposed assignment or subletting, and Landlord shall,
within fifteen (15) days of receipt of such written notice as well as any
additional information requested by Landlord concerning the proposed assignee’s
or sublessee’s financial responsibility, elect one of the following:


 


(a)           Consent to such proposed assignment, encumbrance or sublease;


 


35

















 


(b)           Refuse such consent, which refusal shall be on
reasonable grounds, including but not limited to those matters set forth
hereinbelow;


 


Without limiting the
other instances in which it may be reasonable for Landlord to withhold its
consent to an assignment or sublease, Landlord and Tenant acknowledge that it
shall be reasonable for Landlord to withhold its consent in the following
instances:  (i) if at the time
consent is requested or at any time prior to the granting of consent, Tenant is
in default under this Lease after any grace or cure period under Paragraph 24
above; (ii) if the proposed assignee or subtenant’s credit, character and
business or professional standing does not meet the reasonable standards of
landlords of similar buildings in the area of the Building; or (iii) if
the proposed assignee is an existing tenant of the Building and Landlord is
currently negotiating with such tenant for available space in the Building.


 


In the event that
Landlord shall consent to any assignment or sublease under the provisions of
this Paragraph 25, Tenant shall pay all of Landlord’s processing costs and
attorneys’ fees incurred in giving such consent in an amount not to exceed Two
Thousand Dollars ($2,000.00).  If, for
any proposed assignment or sublease, Tenant receives rent or other
consideration, either initially or over the term of the assignment or sublease,
in excess of the rent called for hereunder, plus related Transfer Costs
(defined below), or, in case of the sublease of a portion of the Premises, in
excess of all Transfer Costs related to such sublease, plus such rent fairly
allocable to such portion of the Premises (in either case, such excess is
herein referred to as the “Transfer Premium”),
then, at such time as Tenant has recouped all of the Transfer Costs relating to
the assignment or sublease, Tenant shall pay to Landlord as additional rent
hereunder fifty percent (50%) of the Transfer Premium received by Tenant
promptly after its receipt.  If Tenant
enters into more than one sublease with respect to the Premises, then the
calculation of the Transfer Premium hereunder shall take into account any
subleases for which the rent or other consideration received by Tenant over the
term of the sublease is less than the rent called for hereunder, plus related
Transfer Costs, or, in case of the sublease of a portion of the Premises, is
less than the Transfer Costs related to such sublease, plus such rent fairly
allocable to such portion of the Premises. 
As used herein, “Transfer Costs”
shall mean the reasonable expenses incurred by Tenant for (i) any Changes,
or improvement allowances given, in connection with a Transfer, (ii) any
free base rent provided to the Transferee in connection with the Transfer
(provided that such free rent shall be deducted only to the extent the same is
included in the calculation of total consideration payable by such Transferee),
(iii) any brokerage commissions in connection with the Transfer, and (iv) legal
fees reasonably incurred in connection with the Transfer.  Landlord’s waiver or consent to any
assignment or subletting shall not relieve Tenant from any obligation under
this Lease.  Landlord shall have the
right to reasonably approve any rent credits, Changes or improvement
allowances; provided, however, that Landlord may not withhold consent to the
foregoing to the extent they reflect the current rental marketplace, and
related leasing concessions, applicable at the time of the subject assignment
or subletting.


 


25.2         Tenant may assign this Lease or sublet any portion of
the Premises (hereinafter collectively referred to as a “Permitted
Transfer”), which Landlord agrees shall not constitute a Transfer
for purposes of this Lease, to (a) a corporation or other entity with
which Tenant may merge or consolidate, or to whom Tenant sells all or
substantially all of Tenant’s assets or voting stock; or (b) any parent,
affiliate or subsidiary of Tenant; or (c) an affiliate or subsidiary of
Tenant’s parent (individually, a “Permitted Transferee”);
provided that (1) at least ten (10) days prior to the Transfer (or as
soon thereafter as is reasonably practicable), Tenant notifies Landlord of such
Transfer, and supplies Landlord with copies of the documents establishing to
the reasonable 


 


36

















 


satisfaction of Landlord
that the transaction in question is one permitted under this Paragraph 25.2, (2) at
least ten (10) days prior to the Transfer (or as soon thereafter as is
reasonably practicable), Tenant furnishes Landlord with a written document
executed by the proposed Permitted Transferee in which such entity assumes all
of Tenant’s obligations under this Lease with respect to the Transfer Premises
(unless such assumption is made by operation of law), and (3) any such
proposed Transfer is made for a good faith operating business purpose and not,
whether in a single transaction or in a series of transactions, be entered into
as a subterfuge to evade the obligations and restrictions relating to Transfers
set forth in this Paragraph 25.  No
Permitted Transfer shall release Tenant from any of its obligations hereunder,
nor result in any change in the Permitted Use of the Premises.


 


25.3         Notwithstanding anything to the contrary contained in
this Paragraph 25, if Tenant contemplates a Transfer (“Contemplated
Transfer”), Tenant shall give Landlord notice (the “Intention to Transfer Notice”) of such contemplated Transfer
(whether or not the contemplated Transferee or the terms of such contemplated
Transfer have been determined) provided, however, that Landlord hereby
acknowledges and agrees that Tenant shall have no obligation to deliver an
Intention to Transfer Notice hereunder, and Landlord shall have no right to
recapture space with respect to, a sublease of less than the entire Premises
for less than the remainder of the Lease Term. 
The Intention to Transfer Notice shall specify the portion of and amount
of rentable square feet of the Premises which Tenant intends to Transfer (the “Contemplated Transfer Space”), the contemplated date of
commencement of the Contemplated Transfer (the “Contemplated
Effective Date”), and the contemplated length of the term of such
contemplated Transfer, and shall specify that such Intention to Transfer Notice
is delivered to Landlord pursuant to this Paragraph 25.3 in order to allow
Landlord to elect to recapture the Contemplated Transfer Space for the
remainder of the Lease Term.  Thereafter,
Landlord shall have the option, by giving written notice to Tenant within
fifteen (15) days after receipt of any Intention to Transfer Notice, to
recapture the Contemplated Transfer Space. 
Any recapture under this Paragraph 25.3 shall cancel and terminate (or
suspend if not for the remainder of the Lease Term) this Lease with respect to
the Contemplated Transfer Space as of the Contemplated Effective Date.  In the event of a recapture by Landlord, (i) Landlord
shall install, on a commercially reasonable basis, any corridor and/or demising
wall which is required as a result of a recapture by Landlord pursuant to the
terms hereof, (ii) the Rent reserved herein shall be prorated on the basis
of the number of rentable square feet retained by Tenant in proportion to the
number of rentable square feet contained in the Premises; and (iii) this
Lease as so amended shall continue thereafter in full force and effect, and
upon request of either party, the parties shall execute written confirmation of
the same.  If Landlord declines, or fails
to elect in a timely manner, to recapture the Contemplated Transfer Space under
this Paragraph 25.3, then Landlord shall not have any right to recapture the
Contemplated Transfer Space with respect to any Transfer made during the twelve
(12) month period following the date of the Intention to Transfer Notice;
provided however, that any such Transfer shall be subject to the remaining
terms of this Paragraph 25.  If such a
Transfer is not so consummated within such 12-month period, Tenant shall again
be required to submit a new Intention to Transfer Notice to Landlord with
respect any contemplated Transfer, as provided above in this Paragraph 25.3.


 


26.           Quiet Enjoyment.  Landlord
covenants and agrees with Tenant that upon Tenant paying the rent required
under this Lease and paying all other charges and performing all of the
covenants and provisions aforesaid on Tenant’s part to be observed and
performed under this Lease and subject to the terms and conditions of this
Lease, Tenant shall and may peaceably and quietly have, hold and enjoy the
Premises in accordance with this Lease.


 


37

















 


27.           Subordination.  Without the
necessity of any additional document being executed by Tenant for the purpose
of effecting a subordination, and at the election of Landlord or any first
mortgagee.  with a lien on the Site, the
Premises, the Building (or any portion thereof) or any ground lessor with
respect to the Site and/or the Building (or any portion thereof), this Lease
shall be subject and subordinate at all times to: (a) all ground leases or
underlying leases which may now exist or hereafter be executed affecting the
Site, the Premises, the Building (or any portion thereof) or the land upon
which the Building is situated or both, and (b) the lien of any mortgage
or deed of trust which may now exist or hereafter be executed in any amount for
which the Site, the Premises, the Building, land, ground leases or underlying
leases, or Landlord’s interest or estate in any of said items is specified as
security; provided, however, that any such self-operating subordination shall
be expressly conditioned on Tenant’s rights under this Lease not being
disturbed so long as Tenant is not in default under this Lease (after notice
and applicable cure periods).  Notwithstanding
the foregoing, Landlord shall have the right to subordinate or cause to be
subordinated any such ground leases or underlying leases or any such liens to
this lease.  In the event that any ground
lease or underlying lease terminates for any reason or any mortgage or deed of
trust is foreclosed or a conveyance in lieu of foreclosure is made for any
reason, Tenant shall, if requested by the ground lessor, mortgagee or
beneficiary, as applicable, attorn to and become the Tenant of the successor in
interest to Landlord and in such event Tenant’s right to possession of the
Premises shall not be disturbed if Tenant is not in default under this Lease
(after notice and applicable cure periods), unless the Lease is otherwise
terminated pursuant to its terms.  Tenant
covenants and agrees to execute and deliver, upon demand by Landlord and in the
form reasonably requested by Landlord, any additional documents evidencing the
priority or subordination of this Lease with respect to any such ground leases
or underlying leases or the lien of any such mortgage or deed of trust.  Should Tenant fail to sign and return any
such documents within ten (10) business days of receipt of a second demand
for the execution of such documentation, Tenant shall be in default of this
Lease.  Landlord shall use its
commercially reasonable efforts to obtain a subordination, nondisturbance and
attornment agreement, on Landlord’s lender’s standard form, within a reasonable
time following execution of this Lease.


 


28.           Estoppel
Certificate.


 


28.1         Within ten (10) business days following any
written request which Landlord may make from time to time, Tenant shall execute
and deliver to Landlord a statement, in a commercially reasonable form
acceptable to Landlord, certifying at minimum; (i) the Commencement Date of
this Lease; (ii) the fact that this Lease, is unmodified and in full force
and effect (or, if there have been modifications hereto, that this Lease is in
full force and effect, as modified, and stating the date and nature of such
modifications); (iii) the date to which the rental and other sums payable
under this Lease have been paid; (iv) the fact that, to Tenant’s current
actual knowledge, there are no current defaults under this Lease by either
Landlord or Tenant except as specified in such statement; and (v) such
other matters reasonably requested by the requesting party.  Landlord and Tenant intend that any statement
delivered pursuant to this Paragraph 28 may be relied upon by any mortgagee,
beneficiary, purchaser or prospective purchaser of the Site and/or Building or
any interest therein.


 


28.2         Tenant’s failure to deliver such statement within such
time shall be conclusive upon Tenant (i) that this Lease is in full force
and effect, without modification except as may be represented by Landlord, (ii) that
there are no uncured defaults in the requesting party’s performance, and (iii) that
not more than one (1) month’s rent has been paid in advance.  If Tenant fails to deliver said statement to
Landlord within ten (10) business days of receipt of a second written
request therefor, 


 


38

















 


such failure shall,
without the requirement of any future notice or any further grace period,
constitute a default under this Lease pursuant to Paragraph 24.1.


 


29.           Rules and Regulations.  Tenant
shall faithfully observe and comply with the “Rules and Regulations,” a
copy of which is attached hereto and marked Exhibit C, and all
reasonable and nondiscriminatory modifications thereof and additions thereto
from time to time put into effect by Landlord that do not materially increase
any obligations or materially diminish any rights of Tenant.  In the event of any conflict between the
terms of this Lease and the Rules and Regulations, the terms of this Lease
shall prevail.  Landlord shall not be
responsible to Tenant for the violation or nonperformance by any other tenant
or occupant of the Building of any of said Rules and Regulations;
provided, however, that Landlord agrees to enforce the Rules and
Regulations uniformly and in a non-discriminatory manner.


 


30.           Conflict of Laws.  This Lease
shall be governed by and construed pursuant to the laws of the State of
California.


 


31.           Successors and Assigns.  Except as
otherwise provided in this Lease, all of the covenants, conditions and provisions
of this Lease shall be binding upon and shall inure to the benefit of the
parties hereto and their respective heirs, personal representative, successors
and assigns.


 


32.           Surrender of Premises.  The voluntary
or other surrender of this Lease by Tenant, or a mutual cancellation thereof,
shall not work a merger, and shall, at the option of Landlord, operate as an
assignment to it of any or all subleases or subtenancies.  Upon the expiration or termination of this
Lease, Tenant shall peaceably surrender the Premises and all alterations and
additions thereto broom-clean, in good order, repair and condition, reasonable
wear and tear and damage by fire or other casualty excepted.  The delivery of keys to any employee of
Landlord or to Landlord’s agent or any employee thereof shall not be sufficient
to constitute a termination of this Lease or a surrender of the Premises.


 


33.           Professional Fees.  In the event
that Landlord or Tenant should bring suit for the possession of the Premises,
for the recovery of any sum due under this Lease, or because of the breach of
any provisions of this Lease, or for any other relief against Tenant or
Landlord hereunder, or should either party bring suit against the other with
respect to matters arising from or growing out of this Lease, then all costs
and expenses, including without limitation, its reasonable professional fees
such as appraisers’, accountants’ and attorneys’ fees, incurred by the
prevailing party therein shall be paid by the other party, which obligation on
the part of the other party shall be deemed to have accrued on the date of the
commencement of such action and shall be enforceable whether or not the action
is prosecuted to judgment


 


34.           Performance by Tenant.  Except as
otherwise expressly provided in this Lease, all covenants and agreements to be
performed by Tenant under any of the terms of this Lease shall be performed by
Tenant at Tenant’s sole cost and expense and without any abatement of rent.  Tenant acknowledges that the late payment by
Tenant to Landlord of any sums due under this Lease will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of such cost being
extremely difficult and impractical to fix. 
Such costs include, without limitation, processing and accounting charges,
and late charges that may be imposed on Landlord by the terms of any
encumbrance and note secured by any encumbrance covering the Premises or the
Building of which the Premises are a part. 
Therefore if any amount due Landlord from Tenant hereunder has not 


 


39

















 


been received within five
(5) days of its due date, Tenant shall pay to Landlord, without notice or
demand, as additional rent, five percent (5%) of the overdue amount as a late
charge; provided, however, that no such late charge shall be assessed on the
first (1st) occasion that any rent or other sum is not received by Landlord or
Landlord’s designee within ten (10) days of the due date.  Such overdue amount shall also bear interest,
as additional rent, at the rate permissible by law calculated, as appropriate,
from the date of receipt of said notice until the date of payment to Landlord.  Landlord’s acceptance of any late charge or
interest shall not constitute a waiver of Tenant’s default with respect to the
overdue amount or prevent Landlord from exercising any of the other rights and
remedies available to Landlord under this Lease or any law now or hereafter in
effect.  Further, in the event such late
charge is imposed by Landlord for two (2) consecutive months for whatever
reason, Landlord shall have the option to require that, beginning with the
first payment of rent due following the imposition of the second consecutive
late charge, rent shall no longer be paid in monthly installments but shall be
payable three (3) months in advance.


 


35.           Mortgagee and Senior Lessor Protection.  No
act or failure to act on the part of Landlord which would entitle Tenant under
the terms of this Lease, or by law, to be relieved of Tenant’s obligations
hereunder or to terminate this Lease (if any), shall result in a release of
such obligations or a termination of this Lease unless (a) Tenant has
given notice by registered or certified mail to Landlord and to any beneficiary
of a deed of trust or mortgage covering the Site and/or the Building (or any
portion thereof) and to the lessor under any master or ground lease covering
the Building, the Site or any interest therein whose identity and address shall
have been furnished to Tenant, and (b) Tenant offers such beneficiary,
mortgagee or lessor a reasonable opportunity (but in no event less than thirty
(30) days) to cure the default, including time to obtain possession of the
Premises by power of sale or of judicial foreclosure, if such should prove
necessary to effect a cure.  Landlord
shall, from time to time, give Tenant written notice of the identity and
address of the beneficiary of any deed of trust or mortgage covering the Site
and/or the Building (or any portion thereof) and/or the lessor under any master
or ground lease.  Notwithstanding the
foregoing provisions of this Paragraph 35, if Landlord or any beneficiary,
mortgagee or lessor shall fail to commence curing any default on the part of
Landlord hereunder within thirty (30) days following notice thereof from Tenant
(or, in the case of an emergency situation or imminent threat to life or
safety, as soon as reasonably practicable under the circumstances) and
diligently pursue such cure to completion, Tenant shall have the right, without
any obligation to do so, to cure any such default at Landlord’s expense.  Any work performed by Tenant pursuant to the
foregoing shall be conducted in accordance with the terms of Paragraph 13 above
(excluding the requirement to obtain Landlord’s consent).  Bills for the expense incurred by Tenant in
connection with performing such obligations, and for the payment for which
Landlord is liable shall be due and payable thirty (30) days after written
notice is given of the amount due.


 


36.           Definition of Landlord.  The term “Landlord”
as used in this Lease, so far as covenants or obligations on the part of
Landlord are concerned, shall be limited to mean, and include only, the owner
or owners, at the time in question, of the fee title to, or a lessee’s interest
in a ground lease of the Site or master lease of the Building.  In the event of any transfer, assignment or
other conveyance or transfer of any such title or interest, Landlord herein
named (and in case of any subsequent transfers or conveyances, the then
grantor) shall be automatically freed and relieved from and after the date of
such transfer, assignment or conveyance of all liability with respect to the
performance of any covenants or obligations on the part of Landlord contained
in this Lease thereafter to be performed and, without further agreement, the
transferee of such title or interest shall be deemed to have agreed to observe
and perform any and all obligations of Landlord 


 


40

















 


hereunder, during its
ownership of the Premises.  Landlord may
transfer its interest in the Premises without the consent of Tenant and such
transfer or subsequent transfer shall not be deemed a violation on Landlord’s
part of any of the terms and conditions of this Lease.


 


37.           Waiver.  The failure of
either party to seek redress for violation of, or to insist upon strict
performance of, any term, covenant or condition of this Lease or the Rules and
Regulations attached hereto as Exhibit C, shall not be deemed a
waiver of such violation or prevent a subsequent act which would have
originally constituted a violation from having all the force and effect of an
original violation, nor shall any custom or practice which may become
established between the parties in the administration of the terms hereof be
deemed a waiver of, or in any way affect, the right of Landlord or Tenant to
insist upon the performance by the other party in strict accordance with said
terms.  The subsequent acceptance or
payment of rent hereunder by Landlord or Tenant shall not be deemed to be a
waiver of any preceding breach by Tenant or Landlord of any term, covenant or
condition of this Lease, other than the failure of Tenant to pay the particular
rent so accepted, regardless of Landlord’s knowledge of such preceding breach
at the time of acceptance of such rent.


 


38.           Identification of Tenant.  If
Tenant consists of more than one person or entity, (a) each of them is
jointly and severally liable for the keeping, observing and performing of all
of the terms, covenants, conditions, provisions and agreements of this Lease to
be kept, observed and performed by Tenant, and (b) the term “Tenant” as
used in this Lease shall mean and include each of them jointly and severally
and the act of or notice from, or notice or refund to, or the signature of, any
one or more of them, with respect to the tenancy or this Lease, including, but
not limited to, any renewal, extension, expiration, termination or modification
of this Lease, shall be binding upon each and all of such entities or persons
with the same force and effect as if each and all of them had so acted or so
given or received such notice or refund or so signed.


 


39.           Terms and Headings.  The words “Landlord”
and “Tenant” as used herein shall include the plural as well as the singular.  Words used in any gender include other
genders.  If there be more than one
Tenant, i.e., if two or more persons or entities are jointly referred to in
this Lease as “Tenant,” the obligations hereunder imposed upon Tenant shall be
joint and several.  The Paragraph
headings of this Lease are not a part of this Lease and shall have no effect
upon the construction or interpretation of any part hereof.  Terms capitalized but not otherwise defined
herein shall have the respective meanings given to such terms in the Summary.


 


40.           Examination of Lease.  Submission of
this instrument for examination or signature by Tenant does not constitute a
reservation of or option for Lease, and it is not effective as a Lease or
otherwise until execution by and delivery to both Landlord and Tenant.


 


41.           Time.  Time is of
the essence with respect to the performance of every provision of this Lease in
which time or performance is a factor.


 


42.           Prior Agreement; Amendments.  This
Lease contains all of the agreements of the parties hereto with respect to any
matter covered or mentioned in this Lease, and no prior agreement or
understanding, oral or written, express or implied, pertaining to any such
matter shall be effective for any purpose. 
No provision of this Lease may be amended or added to except by an
agreement in writing signed by the parties hereto or their respective
successors in interest.  The parties 


 


41

















 


acknowledge that all
prior agreements, representations and negotiations are deemed superseded by the
execution of this Lease to the extent they are not incorporated herein.


 


43.           Severability.  Any provision
of this Lease which shall prove to be invalid, void or illegal in no way
affects, impairs or invalidates any other provision hereof, and such other
provisions shall remain in full force and effect.


 


44.           Recording.  Tenant shall
not record this Lease nor a short memorandum thereof without the consent of
Landlord and if such recording occurs, it shall be at the sole cost and expense
of Tenant, including any documentary transfer taxes or other expenses related
to such recordation.


 


45.           Limitation
on Liability.


 


45.1         The obligations of Landlord under this Lease do not
constitute personal obligations of the individual partners, members, directors,
officers or shareholders of Landlord, and Tenant shall not seek recourse
against the individual partners, members, directors, officers or shareholders
of Landlord or any of their personal assets for satisfaction of any liability
in respect to this Lease.  In
consideration of the benefits accruing hereunder, Tenant and all successors and
assigns covenant and agree that in the event of any actual or alleged failure,
breach or default hereunder by Landlord, the sole and exclusive remedy shall be
against Landlord’s interest in the Building, including, without limitation,
rents due from tenants, insurance proceeds, and proceeds from condemnation or
eminent domain proceedings.


 


45.2         Notwithstanding any contrary provision herein, neither
Tenant nor the Tenant Parties shall be liable under any circumstances for any
indirect or consequential damages including damages to Landlord’s business,
loss of profits, loss of business opportunity and loss of goodwill, in each
case, however occurring, provided that the foregoing shall not limit Tenant’s
liability, if any, pursuant to Paragraphs 7.2 or 24.2 of the Lease.


 


46.           Signs.  Tenant shall
not place any sign outside the Premises without Landlord’s prior written
consent, which consent may be withheld in Landlord’s sole discretion.  Notwithstanding the foregoing, Tenant shall
be entitled to have Building standard signage in the main lobby of the
Building, on the lobby directory, and in the elevator lobby of each floor
occupied by Tenant with other tenants, and on the exterior door to the Premises.  The signage in the lobby of the Building
shall be supplied at Landlord’s cost and any signage on the exterior door to
the Premises shall be at Tenant’s cost.  In
addition, Tenant shall have the right to install signage on the exterior of the
Building, specifically, (a) on the green steel beam located on the King
Street side of the Building along with one other tenant of the Building, with
Tenant’s signage to be located where the existing Building signage is currently
located; and (b) subject to compliance with all applicable ordinances, statutes
and regulations imposed by all applicable governmental authorities, banner
signage on the east side of the Building in conformity with the size and
location of such signage depicted on Exhibit F hereto.  All non-Building standard signage shall be
subject to Landlord’s reasonable approval as to size, style and location.  Tenant shall also have creative control over
the King Street window line on the ground floor of the Building.  All signs shall be in full compliance with
all applicable ordinances, statutes and regulations imposed by all applicable
governmental authorities.


 


47.           Modification for Lender.  If in
connection with obtaining construction, interim or permanent financing for the
Site and/or the Building (or any interest therein), the lender shall 


 


42

















 


request reasonable
modifications in this Lease as a condition to such financing, Tenant will not
unreasonably withhold, delay or defer its consent thereto, provided that such
modifications do not materially increase the obligations of Tenant hereunder or
materially adversely affect the leasehold interest hereby created or materially
diminish Tenant’s rights hereunder.


 


48.           Accord and Satisfaction.  No payment by
Tenant or receipt by Landlord of a lesser amount than the rent payment herein
stipulated shall be deemed to be other than on account of the rent, nor shall
any endorsement or statement on any check or any letter accompanying any check
or payment as rent be deemed an accord and satisfaction and Landlord may accept
such check or payment without prejudice to Landlord’s right to recover the
balance of such rent or pursue any other remedy provided in this Lease.  Tenant agrees that each of the foregoing
covenants and agreements shall be applicable to any covenant or agreement
either expressly contained in this lease or imposed by any statute or at common
law.


 


49.           Financial Statements.  If requested
by Landlord in connection with a potential sale or financing of the Site and/or
the Building (or any interest therein), Tenant shall, upon ten (10) days
prior written notice from Landlord, provide Landlord, to the extent available,
with a current financial statement and financial statements of the two (2) years
prior to the current financial statement year for Tenant, and any guarantors or
subtenants.  Such statement shall be
prepared in accordance with Tenant’s standard practices and shall be consistent
with financial statements given by Tenant to its investors.  Landlord shall protect the confidentiality of
any such statement and require that any proposed buyer or lender similarly
treat the information contained in such statement as being confidential in
nature, such that such information shall only be disclosed to the consultants,
analysts or counsel as may be reasonably necessary in order to evaluate a
potential purchase of, or loan upon, the Site and/or the Building (or any
interest thereof).  Upon written request
by Tenant, Landlord shall require any such persons to enter into a commercially
reasonable confidentiality agreement covering any confidential information that
is disclosed by Tenant.


 


50.           Tenant as Corporation.  If Tenant
executes this Lease as a legal entity, then Tenant and the persons executing
this Lease on behalf of Tenant represent and warrant that (a) the
individuals executing this Lease on Tenant’s behalf are duly authorized to
execute and deliver this Lease on the entity’s behalf and (b) that this
Lease is binding upon Tenant in accordance with its terms.


 


51.           No Partnership or Joint Venture.  Nothing
in this Lease shall be deemed to constitute Landlord and Tenant as partners or
joint venturers.  It is the express
intent of the parties hereto that their relationship with regard to this Lease
be and remain that of landlord and tenant.


 


52.           Counterparts.  This Lease
may be executed in counterparts with the same effect as if both parties hereto
had executed the same document.  Both
counterparts shall be construed together and shall constitute a single lease.


 


53.           Security System.  Subject to
Landlord’s reasonable approval, Tenant shall have the right to install a
security system to safeguard the Premises at any time.


 


54.           Consents.  Whenever
Landlord’s consent or approval is required under this Lease or the Work Letter,
unless Landlord expressly reserves the right to grant or withhold such consent
or approval in Landlord’s sole discretion, such consent or approval shall not
be unreasonably withheld, conditioned or delayed.


 


43

















 


55.           Alternative
Dispute Resolution Process.


 


55.1         Means of Resolution.  In the event
that any controversy or dispute shall arise under this Lease (excluding “Non-ADR Matters” (defined below), a “Dispute”),
including, without limitation, Disputes over which Tenant may be permitted to
terminate this Lease pursuant to the provisions hereof, and in the event that
the parties have been unable to resolve such Dispute within ten (10) days,
the Dispute shall be resolved as provided in this Paragraph 55.1.  All Disputes, the monetary value of which
exceeds Fifty Thousand Dollars ($50,000), or which involve an equitable remedy,
shall first require the utilization of Mediation as provided in Paragraph 55.2
below.  All Disputes, the monetary value
of which is Fifty Thousand Dollars ($50,000) or less shall be settled by
Arbitration as discussed in Paragraph 55.3 below.


 


55.2         Mediation.  The parties
shall first try in good faith to settle the Dispute by mediation pursuant to
the provisions as set forth below.  Either
party may initiate Mediation.  The party
commencing the Mediation shall first give a written notice (a “Mediation Notice”) to the other party setting forth the
nature of the Dispute.  The Mediation
shall be administered by JAMS/Endispute under its Commercial Mediation Rules,
except to the extent that this Paragraph 55.2 is inconsistent therewith, in
which event this Paragraph 55.2 shall govern and prevail.  If the parties cannot agree on the selection
of a Mediator within twenty (20) days after receipt of the Mediation Notice,
the Mediator shall be selected in accordance with JAMS/Endispute procedure.  If the Dispute or any part thereof has not
been resolved by mediation as provided above within sixty (60) clays after
receipt of the Mediation Notice, or if a party fails to participate in
Mediation, then at the option of either party by written notice, the Dispute
shall be determined by suit or action in court, unless it is a matter for
Arbitration as described in Paragraph 55.1 above.


 


55.3         Arbitration.  Either or
both parties may initiate the Arbitration process.  The party initiating the Arbitration process
shall first give a written notice to the other party setting forth the nature
of the Dispute.  The Arbitration shall be
administered by JAMS/Endispute in accordance with its Commercial Arbitration
Rules, except to the extent that this Paragraph 55.3 is inconsistent therewith,
in which event this Paragraph 55.3 shall govern and prevail.  Judgment upon the award rendered by the
Arbitrator may be entered in any court of competent jurisdiction.  Unless otherwise agreed to by the parties,
the matter shall be submitted to one (1) Arbitrator and shall be heard in
the City and County of San Francisco.  If
the parties cannot agree on the selection of an Arbitrator within ten (10) days
after the initiation of the Arbitration process, the Arbitrator shall be
selected in accordance with the JAMS/Endispute procedure, which selection shall
be binding on the parties.  The Arbitrator
shall resolve the controversy in accordance with applicable law and the terms
and conditions of this Lease.  The
Arbitrator shall allow the parties reasonable opportunities for pre-hearing
document exchange and other pre-hearing discovery of evidence as determined by
the arbitrator in his or her discretion. 
The determination of the Arbitrator shall be final, binding and
conclusive upon the parties.


 


55.4         Costs of Mediation and/or Arbitration.  The
costs of the Mediation and/or Arbitration shall be shared equally between the
parties, provided, however, that such costs along with all other costs and
expenses, including attorneys’ fees, shall be subject to award in full or in
part by the Mediator and/or Arbitrator in the Mediator and/or Arbitrator’s discretion
to the prevailing party.


 


55.5         Confidentiality.  Except as
otherwise required by law, the parties, Mediator and/or Arbitrator agree to
keep confidential and not disclose to third parties any information or
documents 


 


44

















 


obtained in connection
with the Mediation and/or Arbitration process, including the resolution of the
Dispute.


 


55.6         Specific Performance.  Notwithstanding
the foregoing provisions of this Paragraph 55, Landlord and Tenant agree that irreparable
damage may occur in the event that the provisions of this Lease are not
performed in all material respects in accordance with their specific terms or
are otherwise breached in any material respect. 
It is accordingly agreed that Landlord or Tenant shall be entitled to
seek a temporary restraining order or preliminary injunction from any court of
competent jurisdiction to maintain the status quo or otherwise to prevent a
material breach of this Lease and to enforce specifically the terms and provisions
hereof until an arbitration proceeding can be commenced or an injunction
hearing held.


 


55.7         Non-ADR Matters.  For purposes
of this Paragraph 55, “Non-ADR Matters”
means:


 


(a)           an action by Landlord for unlawful detainer of the
Premises pursuant to California Code of Civil Procedure Section 1161 et
seq. or any successor statute; and


 


(b)           the determination of fair market rental value
hereunder.


 


56.           Emergency
Generator.


 


56.1         Landlord hereby grants to Tenant an exclusive license
(the “Generator License”), at Tenant’s sole
cost and expense, but otherwise without charge, to install, operate, maintain
and use on the Land, in the location shown on Exhibit G, an
electrical generator and related equipment (collectively, the “Generator”), including, but not limited to, fuel storage and
lines, electrical lines and electrical power connections and meters to service
the Premises, subject to, and in accordance with, the terms and conditions
contained in Paragraph 13 above and this Paragraph 56.


 


56.2         The Generator License is subject to the following
requirements:


 


(a)           The manufacturer of the Generator, the type, size, and
quality of the Generator, the substance to be stored in the Generator, the
precise location of the Generator, all safety, monitoring, and related Generator
equipment, the method and manner of installation, and all other matters
material to the installation of the Generator, including, without limitation,
all Building penetrations, are subject to Landlord’s prior written approval,
which approval shall not be withheld unless the Disapproval Conditions apply.


 


(b)           Tenant’s contractor for installation of the Generator
shall be subject to Landlord’s prior approval (which approval will not be
unreasonably withheld, delayed or conditioned) and such contractor must provide
evidence of insurance reasonably satisfactory to Landlord prior to commencing
work in or about the Building.


 


(c)           The Generator must be installed in a good and
workmanlike manner and in accordance with all Applicable Laws, and in
accordance with plans and specifications approved in advance by Landlord, which
approval shall not be withheld unless the Disapproval Conditions apply.


 


(d)           Tenant, at its expense, shall at all times keep the
Generator in good order, condition and repair, and the Generator location and
the areas immediately surrounding same neat and clean.  With respect to all operations relating to
the Generator, Tenant shall conduct its business in such manner 


 


45

















 


as not to create any
nuisance, or interfere with, annoy or disturb any other tenant of the Building
or Landlord in its operation of the Building; provided, however, that to
routinely run the Generator, in non-emergency circumstances, for purposes
including, without limitation, testing, training, maintenance and repair, and
picking up utility company shed load shall not be considered an annoyance.


 


(e)           Tenant, at its sole cost and expense,
shall comply with all Applicable Laws and restrictive covenants applicable to
the installation, maintenance, operation and use of the Generator.  Without limiting the generality of the
foregoing, Tenant shall be responsible for obtaining any building permits, and
any licenses, consents, approvals or permits which may be required by any federal,
state and local agencies or governmental authorities required for the
installation, maintenance, operation and removal of the Generator, shall
provide copies of the same to Landlord, and shall, at all times during the term
of the License, comply with all requirements of any such agency or authority.


 


(f)            Tenant shall respond to any release of
Hazardous Materials from the Generator promptly after Tenant becomes aware of
such release, regardless of the amount of the release, and shall make all
required governmental notifications in the event of a release.  In addition, Tenant shall promptly notify
Landlord of such release after Tenant becomes aware thereof.  The provisions of Paragraph 7.2(a) shall
be fully applicable to the Generator and Tenant’s activities with respect to
the Generator License.


 


56.3         Damage Related to Generator.  Any
damage to the Building, or to any personal property of Landlord or other
parties, resulting from the installation, operation, maintenance or removal of
the Generator, including, without limitation, leakage or water damage, shall be
repaired by Tenant, at Tenant’s sole cost and expense; provided, however, that
to the extent Tenant fails to make such repairs after applicable notice and
cure periods (except in an emergency, in which event Landlord shall furnish
Tenant with reasonable notice in light of the circumstances), Landlord may make
such repairs, in which event Tenant shall reimburse Landlord for the reasonable
cost thereof within thirty (30) days following receipt of a reasonably detailed
invoice therefor.


 


56.4         Ownership of Generator; Removal and
Restoration.  The Generator shall be Tenant’s property and,
at Tenant’s option, Tenant may, at its own expense, remove the Generator not
later than ten (10) days after the expiration or earlier termination of
this Lease, and repair all damage to the Building caused by such removal,
normal wear and tear excepted.  If Tenant
does not remove the Generator within ten (10) days following the
expiration or earlier termination of this Lease, then Landlord shall provide
Tenant with notice that the Generator shall be deemed either: (a) conveyed
to Landlord without compensation or (b) abandoned, in which event Landlord
may dispose of any part thereof in any manner, unless Tenant provides written
notice to the contrary to Landlord within five (5) after receipt of such
notice and immediately thereafter takes all necessary steps to remove the
Generator in a prompt manner.


 


56.5         Generator Inspection.  Landlord
and its representatives shall have the right, at any reasonable time and from
time to time, with reasonable prior notice to Tenant, to inspect the Generator,
and to conduct testing, monitoring and analyses and to review any permits,
documents, materials, inventories, financial data, or notices or correspondence
to or from private parties or governmental authorities in connection therewith.  Tenant shall maintain copies of all permits
and other documentation relating to the Generator at the Premises.


 


46

















 


56.6         Insurance;
Indemnity.


 


(a)           Tenant shall cause the insurance policies
required to be maintained pursuant to Paragraph 20 of this Lease to cover the
Generator and any claims, demands, suits, liability, damage or loss arising in
connection with the presence, use, operation, installation, repair,
maintenance, or removal of the Generator.


 


(b)           Without limiting the provisions of
Paragraph 18.2 above, Tenant hereby agrees, to the maximum extent permitted by
law, to protect, defend, indemnify and hold Landlord and the other Landlord
Parties harmless from and against any and all Claims arising from or relating
to the Generator or the operations of Tenant in connection therewith (except to
the extent caused by the negligence or willful misconduct of Landlord or any
Landlord Parties).  The foregoing
indemnity shall survive the expiration or earlier termination of the Generator
License and this Lease.


 


57.           Satellite
Dish Antenna.


 


57.1         Grant of License.  During
the Term, Tenant shall have a non-exclusive license (the “Antenna
License”), without any charge, to install, operate, maintain and use
the Antenna Equipment (defined below), subject to, and in accordance with, the
terms and conditions contained in Paragraph 13 above and this Paragraph 57.


 


57.2         Permitted Use; Equipment; Location.  The
use permitted by the Antenna.  License is
solely to install, operate, maintain and use, for the purpose of reception and
transmission of communication and data signals, the following


 


(a)           one or more satellite antennae and
related equipment, and other equipment related to and necessary for the conduct
of Tenant’s business in the Premises as may be approved by Landlord, which
approval shall not be withheld unless the Disapproval Conditions apply (the “Antennae”), to be located on the open space of the roof of
the Building in a location designated by Landlord subject to Tenant’s
reasonable approval; and


 


(b)           connections for the Antennae for (i) electrical
wiring to the Building’s existing electrical supply and (ii) cable or similar
connection necessary to connect the Antennae with Tenant’s related equipment
located in the Premises.  The routes or
paths for such wiring and connections shall be through the Building’s existing
risers, conduits and shafts, subject to reasonable space limitations and
Landlord’s reasonable requirements for use of such areas, and in all events
subject to Landlord’s reasonable approval of plans and installation pursuant to
other provisions of this Antenna License, which approval shall not be withheld
unless the Disapproval Conditions apply (all such electrical and other
connections are referred to collectively as “Antennae
Connections”).  The Antennae
and Antennae Connections are collectively referred to as the “Antennae Equipment”.


 


57.3         Rooftop Installation Work.  The
Antennae Equipment and work related to its installation (“Rooftop
Installation Work”) must be performed in a good and workmanlike
manner and in accordance with all Applicable Laws and restrictive covenants,
shall not affect the integrity of the roof or any roof warranty, and shall be
subject to (a) obtaining Landlord’s prior written approval of plans and
specifications, which approval shall not be withheld unless the Disapproval
Conditions apply; and (b) obtaining Landlord’s prior written approval of
Tenant’s contractor for installation of the Antennae Equipment (which approval
will not be unreasonably withheld), and such contractor 


 


47

















 


must provide evidence of
insurance reasonably satisfactory to Landlord prior to commencing work in or
about the Building.  The plans and
specifications for the Antennae Equipment shall, include, without limitation,
the design, size and features thereof and mounting structure, floor and power
load requirements, cabling installations, the means of affixing or mounting the
Antennae Equipment, and the means of connecting the Antennae Equipment to the
Building’s electrical system and to the Premises.


 


57.4         General Requirements.  Tenant’s
use of the roof of the Building is subject to the following general
requirements:


 


(a)           Tenant shall provide Landlord with
reasonable advance notice prior to commencing installation of the Antennae
Equipment or other work on or to the Antennae Equipment from time to time, and
agrees to afford Landlord the opportunity to be present for all such work,
provided that only subsequent notice within a reasonable time, shall be
required in the case of an emergency situation that presents an immediate
danger.


 


(b)           Tenant shall have reasonable access to
the roof for the purposes of installation, maintenance and repair of the
Antennae Equipment upon Tenant’s reasonable advance notice to Landlord (except
in an emergency).


 


(c)           Tenant, at its expense, shall at all
times keep the Antennae Equipment in good order, condition and repair, and the
Antennae Equipment location neat and clean. 
With respect to all operations relating to the Antennae Equipment,
Tenant shall conduct its business and control its agents, employees and
invitees in such manner as not to create any nuisance, or materially interfere
with, annoy or disturb any other licensee or tenant of the Building or Landlord
in its operation of the Building.


 


57.5         Interference.  Without
limiting the generality of any other provision hereof, Tenant shall install,
maintain and operate the Antennae Equipment in a manner so as to not cause any
electrical, electromagnetic, radio frequency or other material interference
with the use and operation of any present or future electronic control system
for any of the Building’s operating services or the operation of the elevators
in the Building.  Landlord shall not
install equipment or procure services or permit any other licensee or tenant of
Landlord to install equipment or procure services that will cause any
electrical, electromagnetic, radio frequency or other material interference
with Tenant’s use and operation of the Antennae Equipment.


 


57.6         Insurance;
Indemnity.


 


(a)           Tenant shall cause the insurance policies
required to be maintained pursuant to Paragraph 20 of the Lease to cover the
Antennae Equipment and any Claims arising in connection with the presence, use,
operation, installation, repair, maintenance, or removal of the Antennae
Equipment.


 


(b)           Without limiting the provisions of
Paragraph 18.2 above, Tenant hereby agrees, to the maximum extent permitted by
law, to protect, defend, indemnify and hold Landlord and the other Landlord
Parties, and each of them, harmless from and against any and all Claims arising
from or connected in any way with the Antennae Equipment or the operations of
Tenant or any Tenant Parties in connection therewith (except to the extent
caused by the negligence or willful misconduct 


 


48

















 


of Landlord or a Landlord
Party).  The foregoing indemnity shall
survive the expiration or earlier termination of this Lease.


 


IN
WITNESS WHEREOF, the parties have executed and delivered this Lease as of the
day and year first above written.


 


	
  LANDLORD:

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
   

  
	
  SFI
  REAL ESTATE HOLDINGS LLC,

  	
  INdTV,
  LLC, a Delaware limited liability

  
	
  a
  Delaware limited liability company

  	
  company

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Edward W. Cronin, Jr.

  	
   

  	
  By:

  	
  /s/
  Joel Hyatt

  
	
   

  	
   

  	
   

  	
   

  	
  Joel
  Hyatt

  
	
  Name:

  	
   

  	
   

  	
   

  	
  Chief
  Executive Officer and Secretary

  
	
   

  	
   

  
	
  Its:

  	
  Vice
  President

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INdTV Holdings,
  LLC, a Delaware limited

  
	
   

  	
  liability
  company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joel Hyatt

  
	
   

  	
   

  	
  Joel Hyatt

  
	
   

  	
   

  	
  Chief Executive
  Officer and Secretary

  
						



 


49

















 


EXHIBIT C


 


RULES AND REGULATIONS


 


1.             Except as otherwise provided in the Lease, no sign,
placard, picture, advertisement, name or notice shall be installed or displayed
on any part of the Site and/or on the outside or inside of the Building without
the prior written consent of Landlord.  Landlord
shall have the right to remove, at Tenant’s expense and without notice, any
sign installed or displayed in violation of this rule.  Except as otherwise provided in the Lease,
all approved signs or lettering on doors, windows and walls shall be printed,
painted, affixed or inscribed at the expense of Tenant in a style and format
approved by Landlord, which shall not be unreasonably withheld.


 


2.             Intentionally Deleted


 


3.             Tenant shall not obstruct any sidewalks, halls
passages, exits, entrances, elevators, escalators or stairways of the Building.  The halls, passages, exits, entrances,
shopping malls, elevators, escalators and stairways are not for the general
public, and Landlord shall in all cases retain the right to control and prevent
access thereto of all persons whose presence in the judgment of Landlord would
be prejudicial to the safety, character, reputation and interests of the Site
and/or the Building and its tenants; provided that nothing herein contained
shall be construed to prevent such access to persons with whom any tenant normally
deals in the ordinary course of its business, unless such persons are engaged
in illegal activities.  Except as
otherwise provided in the Lease, no tenant and no employee or invitee of any
tenant shall go upon the roof of the Building without Landlord’s consent.


 


4.             The directory of the Building will be provided
exclusively for the display of the name and location of tenants only, and
Landlord reserves the right to exclude any other names therefrom.


 


5.             All cleaning and janitorial services for the Building
and the Premises shall be provided exclusively through Landlord except as
otherwise provided in the Lease.  Tenant
shall not cause any unnecessary labor by carelessness or indifference to the
good order and cleanliness of the Premises. 
Landlord shall not in any way be responsible to any tenant for any loss
of property on the Premises, however occurring, or for any damage to any tenant’s
property by the janitor or any other employee or any other person.


 


6.             Landlord will furnish Tenant, free of charge, with 140
electronic keys to Tenant’s Premises and to the Building.  Landlord may make a reasonable charge for any
additional keys or card keys.  Tenant
shall not make or have made additional keys, and Tenant shall not alter any
lock or install a new additional lock or bolt on any door of its Premises.  Tenant, upon the termination of its tenancy,
shall deliver to Landlord the keys or card keys of all doors which have been
furnished to Tenant, and in the event of loss of any keys or card keys so
furnished, shall pay Landlord therefor.  In
the event Tenant requires additional or replacement keys, or requires any
special access requirements over and above the existing access system at the
Building and the Premises, Tenant shall be responsible for the cost of such
keys or special access requirements.


 


7.             If Tenant requires telegraphic, telephonic, burglar
alarm or similar services, it shall first obtain, and comply with, Landlord’s
reasonable instructions in their installation.


 


1

















 


8.             Any freight elevator shall be available for use by all
tenants in the Building, subject to such reasonable scheduling as Landlord in
its discretion shall deem appropriate.  No
equipment, materials, furniture, packages, supplies, merchandise or other
property will be received in the Building or carried in the elevators except
between such hours and in such elevators as may be reasonably designated by
Landlord.


 


9.             Tenant shall not place a load upon any floor of the
Premises which exceeds the load per square foot which such floor was designed
to carry and which is allowed by law.  Landlord
shall have the right to prescribe the weight, size and position of all
equipment, materials, furniture or other property brought into the Building.  Heavy objects, if such objects are considered
necessary by Tenant, as determined by Landlord, shall stand on such platforms
as determined by Landlord to be necessary to properly distribute the weight.  Business machines and mechanical equipment
belonging to Tenant, which cause noise or vibration that may be transmitted to
the structure of the Building or to any space therein to such a degree as to be
objectionable to Landlord or to any tenants in the Building, shall be placed
and maintained by Tenant, at Tenant’s expense, on vibration eliminators or
other devices sufficient to eliminate noise or vibration.  The persons employed to move such equipment
in or out of the Building must be acceptable to Landlord.  Landlord will not be responsible for loss of,
or damage to, any such equipment or other property from any cause, and all
damage done to the Building by maintaining or moving such equipment or other
property shall be repaired at the expense of Tenant.


 


10.           Except as otherwise provided in the Lease, Tenant
shall not use or keep in the Building, on the Site and/or in the Premises any
kerosene, gasoline or flammable or combustible fluid or material other than
those limited quantities necessary for the operation or maintenance of office
equipment.  Tenant shall not use or
permit to be used in the Building, on the Site and/or in the Premises any foul
or noxious gas or substance, or permit or allow the Site, the Building, and/or
the Premises to be occupied or used in a manner offensive or objectionable to
Landlord or other occupants of the Building by reason of noise, odors or
vibrations, nor shall Tenant bring into or keep in or about the Premises any
birds or animals, except seeing-eye dogs when accompanied by their masters.


 


11.           Except as otherwise provided in the Lease and except
for any supplemental HVAC system as may be required for the conduct of Tenant’s
business in the Premises, Tenant shall not use any method of heating or air
conditioning other than that supplied or approved by Landlord.  No space heaters of any type are to be used
within the Premises without Landlord’s prior written consent, which consent
shall not be unreasonably withheld.


 


12.           Tenant shall not waste electricity, water or air
conditioning and agrees to cooperate fully with Landlord to assure the most
effective operation of the Building’s heating and air conditioning and to
comply with any governmental energy-saving rules, laws or regulations of which
Tenant has actual notice, and shall refrain from attempting to adjust controls
other than room thermostats installed for Tenant’s use.  Tenant shall keep corridor doors closed, and
shall close window coverings at the end of each business day.


 


13.           Subject to the terms and conditions of the Lease,
Landlord reserves the right, exercisable without notice and without liability
to Tenant, to change the name and street address of the Site, the Building
and/or the Premises.


 


2

















 


14.           Landlord reserves the right to exclude from the
Building between the hours of 6:00 p.m. and 7:00 a m. the following day,
or such other hours as may be established from time to time by Landlord, and on
Saturdays, Sundays and legal holidays, any person unless that person is known
to the person or employee in charge of the Building and has a pass or is
properly identified.  Tenant shall be
responsible for all persons for whom it requests passes and shall be liable to
Landlord for all acts of such persons.  Landlord
shall not be liable for damages for any error with regard to the admission to
or exclusion from the Building of any person. 
Landlord reserves the right to prevent access to the Site and/or the
Building in case of invasion, mob, riot, public excitement or other commotion
by closing the doors or by other appropriate action.


 


15.           Tenant shall close and lock the doors of its Premises
and entirely shut off all water faucets or other water apparatus, and, except
with regard to Tenant’s computers and other equipment which requires utilities
on a twenty-four hour basis, all electricity, gas or air outlets before Tenant
and its employees leave the Premises.


 


16.           The toilet rooms, toilets, urinals, wash bowls and
other apparatus shall not be used for any purpose other than that for which
they were constructed, and no foreign substance of any kind whatsoever shall be
thrown therein.  The expense of any
breakage, stoppage or damage resulting from the violation of this rule shall
be borne by the Tenant who, or whose employees or invitees, shall have caused
it.


 


17.           Tenant shall not sell, or permit the sale at retail,
of newspapers, magazines, periodicals, theater tickets or any other goods or
merchandise to the general public in or on the Site, the Building and/or the
Premises.  Tenant shall not make any
room-to-room solicitation of business from other tenants in the Building.  Tenant shall not use the Premises for any
business or activity other than that specifically provided for in Tenant’s
Lease.


 


18.           Except as otherwise provided in the Lease, Tenant
shall not mark, drive nails, screw or drill into the partitions, woodwork or
plaster or in any way deface the Premises or any part thereof, except to
install normal wall hangings, and to secure files and bookcases and other
furniture that could fall over.  Landlord
reserves the right to direct electricians as to where and how telephone and
telegraph wires are to be introduced to the Premises.  Tenant shall repair any damage resulting from
noncompliance with this rule.


 


19.           Tenant shall not install, maintain or operate upon the
Premises any vending machine without the written consent of Landlord.


 


20.           Canvassing, soliciting and distribution of handbills
or any other written material, and peddling in the Building or the Site are
prohibited, and each tenant shall cooperate to prevent same.


 


21.           Landlord reserves the right to exclude or expel from
the Site and/or the Building any person who, in Landlord’s judgment, is
intoxicated or under the influence of liquor or drugs or who is in violation of
any of the Rules and Regulations of the Building.


 


22.           Tenant shall store all its trash and garbage within
its Premises.  Tenant shall not place in
any trash box or receptacle any material which cannot be disposed of in the
ordinary and customary manner of trash and garbage disposal.  All garbage and refuse disposal shall be made
in accordance with directions issued from time to time by Landlord.


 


3

















 


23.           The Premises shall not be used for the storage of
merchandise held for sale to the general public, or for lodging or for
manufacturing of any kind.  No cooking
shall be done or permitted by any tenant on the Premises, except that use by
tenant of Underwriters’ Laboratory-approved equipment for brewing coffee, tea,
hot chocolate and similar beverages shall be permitted, and the use of a
microwave oven shall be permitted, provided that such equipment and use is in
accordance with all applicable federal, state, county and city laws, codes,
ordinances, rules and regulations.  If
odor is objectionable by Landlord or other tenants of Building, microwave use
may be prohibited by Landlord.


 


24.           Tenant shall not use in any space or in the public
halls of the Building any mailcarts or hand trucks except those equipped with
rubber tires and side guards or such other material handling equipment as
Landlord may approve.  Tenant shall not
bring any other vehicles of any kind into the Building except as provided in
the Parking Rules and Regulations.


 


25.           Without the written consent of Landlord, Tenant shall
not use the name of the Site or the Building in connection with or in promoting
or advertising the business of Tenant except as Tenant’s address.


 


26.           Tenant shall comply with all safety, fire protection
and evacuation procedures and regulations established by Landlord or any
governmental agency.


 


27.           Tenant assumes any and all responsibility for
protecting its Premises from theft, robbery and pilferage, which includes
keeping doors locked and other means of entry to the Premises closed.


 


28.           The requirements of Tenant will be attended to only
upon appropriate application to the office of the Building by an authorized
individual.  Employees of Landlord shall
not perform any work or do anything outside of their regular duties unless
under special instructions from Landlord, and no employee of Landlord will
admit any person (tenant or otherwise) to any office without specific
instructions from Landlord.


 


29.           Landlord may, as may be reasonable under the
circumstances, waive any one or more of these Rules and Regulations for the
benefit of Tenant or any other tenant, but no such waiver by Landlord shall be
construed as a waiver of such Rules and Regulations in favor of Tenant or
any other tenant, nor prevent Landlord from thereafter enforcing any such Rules and
Regulations against any or all of the tenants of the Building.


 


30.           These Rules and Regulations are in addition to
the terms, covenants, agreements and conditions of any lease of Premises in the
Building.  In the event these Rules and
Regulations conflict with any provision of the Lease, the Lease shall control.


 


31.           Landlord reserves the right to make such other and
reasonable Rules and Regulations as, in its judgment, may from time to
time be needed for safety and security, for care and cleanliness of the
Building and for the preservation of good order therein, provided such rules and
regulations do not materially increase Tenant’s obligation hereunder or
diminish Tenant’s rights hereunder.  Tenant
agrees to abide by all such Rules and Regulations hereinabove stated and
any such additional rules and regulations which are adopted.


 


32.           Tenant shall be responsible for the observance of all
of the foregoing rules by Tenant’s employees, agents, clients, customers,
invitees and guests.


 


4

















 


33.           Smoking is prohibited in all enclosed Common Areas of
the Building, including, but not limited to, the main lobbies, hallways,
stairwells, elevators, elevator lobbies, locker/shower rooms, restrooms and
conference room.  The foregoing shall not
be deemed to prohibit smoking within demised Premises.  When smoking outside the Building, ash
receptacles must be used and provided by the smoker if not provided by Landlord.  Smokers must not leave any ashtrays, smoking
material or debris in the area where they have been smoking, except in ash
receptacles provided by Landlord.


 


5














 


SUMMARY OF BASIC LEASE INFORMATION


 


The undersigned hereby
agree to the following terms of this Summary of Basic Lease Information (the “Summary”). This Summary is hereby incorporated into and made
a part of the attached Office Lease (this Summary and the Office Lease to be
known collectively as the “Lease”) which
pertains to the office building (the “Building”)
which is located at 123 Townsend Street, San Francisco, California. Each
reference in the Office Lease to any term of this Summary shall have the meaning
as set forth in this Summary for such term. In the event of a conflict between
the terms of this Summary and the Office Lease, the terms of the Office Lease
shall prevail. Any capitalized terms used herein and not otherwise defined
herein shall have the meaning as set forth in the Office Lease.


 


	
   

  	
   

  	
  TERMS OF LEASE

  	
   

  	
  DESCRIPTION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (a.)

  	
   

  	
  Date:

  	
   

  	
  August 30, 2004

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b.)

  	
   

  	
  Landlord:

  	
   

  	
  SFI Real Estate
  Holdings, LLC, a Delaware limited liability company

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (c.)

  	
   

  	
  Address of Landlord:

  	
   

  	
  SFI Real Estate
  Holdings

  c/o Manchester Capital Management

  3657 Main Street

  Manchester Village, Vermont 05254

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (d.)

  	
   

  	
  Tenant:

  	
   

  	
  INdTV, LLC, a
  Delaware limited liability company

  INdTV Holdings, LLC, a Delaware limited liability

  company

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (e.)

  	
   

  	
  Address of Tenant (Paragraph
  8):

  	
   

  	
  118 King Street

  San Francisco, California 94107

  Attention: Chief Operating Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (f.)

  	
   

  	
  Premises (Paragraph
  1):

  	
   

  	
  Approximately 27,506
  rentable square feet of space identified as Suites 100 and 200 and located on
  the first and second floors of the Building, as set forth in Exhibit A
  attached hereto.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (g.)

  	
   

  	
  Building (Paragraph
  1):

  	
   

  	
  123 Townsend Street,
  San Francisco, California. Total square footage of rentable office space of
  the Building: 126,467 rentable square feet.

  
	
  (h.)

  	
   

  	
  Term (Paragraph 2):

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  Delivery Date:

  	
   

  	
  Upon Substantial
  Completion (as defined in the Work Letter attached as Exhibit B)
  of (i) the Tenant Improvements to be completed by Landlord pursuant to
  the Work Letter, and, (ii) subject to Paragraph 1.4, Landlord’s Work,
  estimated to be October 1, 2004; provided, however, that Tenant shall be
  entitled to early access to the Premises as provided in Paragraph 3 below.

  
						



 


i

















 


	
   

  	
   

  	
  (ii)

  	
  Lease Commencement Date:

  	
   

  	
  Earliest of:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (a) the
  Delivery Date, or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (b) the date
  Tenant commences business operations in the Premises (excluding early access
  pursuant to Paragraph 3 below).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)

  	
  Lease Expiration Date:

  	
   

  	
  The day immediately
  preceding the tenth (10th) anniversary of the Lease Commencement
  Date.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (i.)

  	
   

  	
  Renewal Option (Paragraph
  2.2):

  	
   

  	
  One additional five
  (5) year term at 95% of fair market value.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (j.)

  	
   

  	
  Monthly Basic Rent
  (Paragraph 4):

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Lease Commencement
  Date — August 31, 2005:     $ 33,158.71 

  September 1,
  2005 — August 31, 2006:                    $ 46,493.04 

  September 1,
  2006 — Lease Expiration Date:           $ 62,461.54 

   

  (Subject to the
  delay provisions of Paragraph 3.)

  
	
   

  	
   

  	
   

  
	
  (k.)

  	
   

  	
  Security Deposit
  (Paragraph 6):

  	
   

  	
  $400,000.00 (subject
  to reduction pursuant to Paragraph 6.)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (l.)

  	
   

  	
  Prepaid Rent (Paragraph
  4.1):

  	
   

  	
  $33,158.71

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (m.)

  	
   

  	
  Operating Expenses
  (Paragraph 5):

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  Base Year:

  	
   

  	
  2005 calendar year

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  Tenant’s Percentage
  Share:

  	
   

  	
  21.75% (Based on
  square footage of the Premises compared to total square footage of the
  Building)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (n.)

  	
   

  	
  [Intentionally Deleted]

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (o.)

  	
   

  	
  Broker (Paragraph 9):

  	
   

  	
  Tenant’s Broker: 

  Landlord’s Broker:

  	
  CB Richard Ellis

  Newmark &
  Company 

  Commercial Real Estate 

  (Mike Brown and Bill
  Benton)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (p.)

  	
   

  	
  Parking (Paragraph 1.7)

  	
   

  	
  Entire east bay of
  the Building, exclusive.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (q.)

  	
   

  	
  Work Letter

  	
   

  	
  Attached as Exhibit B.

  
											



 


ii

















 


The foregoing terms of this Summary are agreed to by
Landlord and Tenant.


 


	
  LANDLORD:

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
   

  
	
  SFI REAL ESTATE HOLDINGS LLC,

  	
  INdTV, LLC, a Delaware limited liability

  
	
  a Delaware limited liability company

  	
  company

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Edward W. Cronin, Jr.

  	
   

  	
  By:

  	
  /s/ Joel Hyatt

  
	
  Name:

  	
   

  	
   

  	
   

  	
  Joel Hyatt

  
	
  Its:

  	
  Vice President

  	
   

  	
   

  	
  Chief Executive Officer and
  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INdTV Holdings, LLC, a Delaware limited

  
	
   

  	
  liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joel Hyatt

  
	
   

  	
   

  	
  Joel Hyatt

  
	
   

  	
   

  	
  Chief Executive Officer and Secretary

  
								



 


iii














 


FIRST AMENDMENT TO LEASE


 


This First Amendment to
Office Lease (“First Amendment”) is entered into effective July 1, 2005 by
and between SFI Real Estate Holdings, LLC, a Delaware limited liability company
(“Landlord”), Current Media, LLC, a Delaware limited liability company
(successor by name change to INdTV Holdings, LLC, a Delaware limited liability
company) and Current TV, LLC, a Delaware limited liability company (successor
by name change to INdTV, LLC, a Delaware limited liability company) (collectively
“Tenant”), and is made with respect to the following facts and circumstances.


 


A.                                   Landlord and.  Tenant are parties to a written Office Lease
(the “Lease”) dated August 30, 2004 pursuant to which Tenant leases from
Landlord 27,506 rentable square feet of space known as Suites 100 and 200 at
123 Townsend Street, San Francisco, California (“the Premises”).


 


B.                                     Landlord and Tenant now desire to amend
the Lease on the terms and conditions set forth herein.  Unless otherwise defined in this First
Amendment, all capitalized terms utilized herein shall have the meanings
ascribed to them in the Lease.


 


Now, therefore, in
recognition of the foregoing premises, in exchange of the covenants, agreements
and conditions set forth below, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, Landlord and Tenant
agree as follows.


 


1.                                       Effective June 1, 2005, Paragraph
1.8 of the Lease is hereby deleted and the following language is inserted in
its place and stead:


 


“1.8 In addition
to the Premises as contemplated by this Paragraph 1 and Exhibit A
of the Lease, Tenant shall additionally lease from Landlord during the Term all
of the rentable square footage of the computer server room located on Lower
Level 1 of the Building (the “Server Room”) in its AS IS condition.  The parties agree that the Server Room consists
of 1,659 rentable square feet.  All of
the costs to plumb all the necessary cable and wiring to connect the Premises
to the Server Room, and the cost to install an electrical advisory meter to
measure the power usage for the Server Room (including power usage to
operate all dedicated HVAC units serving the Server Room) shall be at Tenant’s
sole cost and expense.  In addition to
the Monthly Basic Rent contemplated by the Summary and Paragraph 4 of the
Lease, Tenant shall pay to Landlord, in accordance with the payment procedures
set forth in Paragraph 4.1 of the Lease, $13.00 per rentable square foot/per
year, or $1,797.25 per month, as rent for the Server Room, plus 100% of all
electrical and HVAC costs associated with the use of the Server Room.  All monthly rental amounts for the Server Room contemplated
by this Paragraph shall be included within the meaning of Monthly Basic Rent
whenever such term is used in this Lease unless the context clearly
contemplates otherwise.”


 


2.                                       Except as otherwise expressly provided in
this First Amendment, all other terms and conditions of the Lease shall remain
in full force and effect, fully binding on and enforceable against the parties.


 


1

















 


Wherefore, Landlord and
Tenant have executed and delivered this First Amendment as of the day and year
first above written.


 


	
  LANDLORD:

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
   

  
	
  SFI
  REAL ESTATE HOLDINGS LLC,

  	
  CURRENT
  TV, LLC, a Delaware limited

  
	
  a
  Delaware limited liability company

  	
  liability
  company

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Edward W. Cronin, Jr.

  	
   

  	
  By:

  	
  /s/
  Joel Hyatt

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Its:

  	
  Vice
  President

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CURRENT MEDIA,
  LLC, a Delaware limited 

  liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joel Hyatt

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Its:

  	
   

  
											



 


2














 


SECOND AMENDMENT TO LEASE


 


This Second Amendment to
Office Lease (“First Amendment”) is entered into effective June 30, 2006
by and between SFI Real Estate Holdings, LLC, a Delaware limited liability
company (“Landlord”), on the one hand, and Current Media, LLC, a Delaware
limited liability company (formerly known as INdTV Holdings, LLC) and Current
TV, LLC, ,a Delaware limited liability company (formerly known as INdTV, LLC)
(collectively “Tenant”), on the other hand, and is made with respect to the
following facts and circumstances.


 


A.                                   Landlord and Tenant are parties to a
written Office Lease dated August 30, 2004 and a First Amendment to Lease
(the “First Amendment”) dated September 28, 2005 (collectively, the “Lease”)
pursuant to which Tenant leases from Landlord 27,506 rentable square feet of
space known as Suites 100 and 200, a server room and storage space located on
lower level 1, at 123 Townsend Street, San Francisco, California (collectively,
the “Premises”).


 


B.                                     Landlord and Tenant now desire to amend
the Lease on the terms and conditions set forth herein.  Unless otherwise defined in this Second
Amendment, all capitalized terms utilized herein shall have the meanings
ascribed to them in the Lease.


 


Now, therefore, in
recognition of the foregoing premises, in exchange of the covenants, agreements
and conditions set forth below, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, Landlord and Tenant
agree as follows.


 


1.                                       Commencing on July 1, 2006 and
continuing thereafter for the full length of the term of the Lease, which
expires on September 30, 2014, Tenant shall additionally lease AS IS from
Landlord 3,893 rentable square feet located on Lower Level 1 of the Building as
more particularly shown in the attached Exhibit 1 (the “Additional
Premises”).  In addition to the Monthly
Basic Rent contemplated by the Summary and Paragraph 4 of the Lease, and the
rent due for the Server Room pursuant to the First Amendment, Tenant shall
pay to Landlord, in accordance with the payment procedures set forth in
Paragraph 4.1 of the Lease, $13.50 per rentable square foot/per year, or
$4,379.63 per month, as rent for the Additional Premises.


 


2.                                       Tenant shall be financially responsible
for all improvements to the Additional Premises necessary for Tenant’s proposed
use, and all work shall be done by approved contractors in compliance with all
laws and regulations including permitting. 
All work shall be conducted so as to minimize disruption to other
tenants of the Building.


 


3.                                       In the event any governmental authority
declares that Tenant’s use of the Additional Premises is not a permitted use,
Tenant’s occupancy rights of the Additional Premises shall terminate, and
Tenant shall cease to occupy and use the Additional Premises.  In the event Tenant’s occupancy of the
Additional Premises is terminated for any reason, at Landlord’s election Tenant
shall either leave the improvements performed by Tenant intact, or remove them
in a commercially reasonable manner.  Notwithstanding
Paragraph 1 hereof, Landlord retains the right to terminate Tenant’s
occupancy rights of the Additional Premises upon thirty (30) days written
notice; Tenant retains the same 


 


1

















 


right should Tenant determine in good faith that the
Additional Premises no longer satisfies Tenant’s space requirements.  In the event of such termination, Tenant
shall have no further obligation to pay rent in connection with the Additional
Premises.


 


4.                                       Except as otherwise expressly provided in
this Second Amendment, all other terms and conditions of the Lease shall remain
in full force and effect, fully binding on and enforceable against the parties.  In the event of a conflict between this
Second Amendment and the Lease, this Second Amendment shall control.


 


Wherefore, Landlord and
Tenant have executed and delivered this First Amendment as of the day and year
first above written.


 


	
  LANDLORD:

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
   

  
	
  SFI
  REAL ESTATE HOLDINGS LLC,

  	
  INdTV,
  LLC, a Delaware limited liability

  
	
  a
  Delaware limited liability company

  	
  company

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Edward W. Cronin, Jr.

  	
   

  	
  By:

  	
  /s/
  Joel Hyatt

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Its:

  	
  Vice
  President

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INdTV Holdings,
  LLC, a Delaware limited 

  liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joel Hyatt

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Its:

  	
   

  
											



 


2














 


THIRD AMENDMENT TO LEASE


 


This third amendment to Office Lease (“Third Amendment”) is entered
into effective April 30, 2005 by and between SFI Real Estate Holds, LLC, a
Delaware limited liability company (“Landlord”) and Current Media, LLC a
Delaware limited liability company (successor by name change to INdTV Holdings,
LLC a Delaware limited liability company) and Current TV, LLC a Delaware
limited liability company) (collectively “Tenant”), and is made with respect to
the following facts and circumstances.


 


A.                                   Landlord and Tenant are parties to a
written Office  Lease (the “Lease”) dated
August 30, 2004 pursuant to which Tenant leases from Landlord 27,506
rentable square feet of space known as Suite 100 and 200 at 123 Townsend
Street (aka 118 King Street), San Francisco, California (the “Premises”).


 


B.                                     Landlord and Tenant now desire to amend
the Lease on the terms and conditions set forth herein.  Unless otherwise defined in this Third
Amendment, all capitalized terms utilized herein shall have the meanings
ascribed to them in the Lease.


 


Now, therefore, in recognition of the foregoing premises, in exchange
of the covenants, agreements and conditions set forth below, and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Landlord and Tenant agree as follows.


 


1.                                       Commencing on July 1, 2006 Tenant
shall additionally lease AS IS from Landlord during the Term storage cage 6
consisting of 1,393 rentable square feet (the “Storage Cage”) and located on
Lower Level 1 of the Building as more particularly shown in the attached Exhibit 1.  In addition to the Monthly Basic Rent
contemplated by the Summary and Paragraph 4 of the Lease, Tenant shall pay to
Landlord, in accordance with the payment procedures set forth in Paragraph 4.1
of the Lease, $1.00 per rentable square foot/per year, or $1,393.00 per month,
as rent for the Storage Cages.


 


2.                                       Commencing on May 1, 2005 Tenant
shall additionally lease AS IS from Landlord during the Term storage cage 8
consisting of 766 rentable square feet (the “Storage Cage”) and located on
Lower Level 1 of the Building as more particularly shown in the attached Exhibit 1.  In addition to the Monthly Basic Rent
contemplated by the Summary and Paragraph 4 of the Lease, Tenant shall pay to Landlord,
in accordance with the payment procedures set forth in Paragraph 4.1 of the
Lease; $1.00 per rentable square foot/per year, or $766.00 per month, as rent
for the Storage Cages.


 


3.                                       Tenant may terminate the lease as it
applies to storage cage 6 and/or storage cage 8 at any time hereunder by notice
to Landlord 60 days prior to the date of termination.


 


4.                                       Except as otherwise expressly provided in
this third Amendment, all other terms and conditions of the Lease shall remain
in full force and effect, fully binding on and enforceable against the parties.  In the event of a conflict this Third
Amendment shall control.


 


1

















 


Wherefore, Landlord and Tenant have executed and delivered this Third
Amendment as of the day and year first above written.


 


	
  LANDLORD:

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
   

  
	
  SFI
  REAL ESTATE HOLDINGS LLC,

  	
  CurrentTV,
  LLC,

  
	
  a
  Delaware limited liability company

  	
  a
  Delaware limited liability company

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Edward W. Cronin, Jr.

  	
   

  	
  By:

  	
  /s/
  Joel Hyatt

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Its:

  	
  Vice
  President

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Current Media,
  LLC,

  
	
   

  	
  a Delaware
  limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joel Hyatt

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Its:

  	
   

  
									



 


2














 


FOURTH AMENDMENT TO LEASE


 


This Fourth Amendment to Office Lease (“Fourth Amendment”) is entered
into effective January 1, 2007 by and between SF1 Real Estate Holdings,
LLC, a Delaware limited liability company (“Landlord”) Current Media, LLC
(formerly known as “INdTV Holdings, LLC”), a Delaware limited liability company
and Current TV, LLC (formerly known as “INdTV, LLC”), a Delaware limited
liability company (collectively “Tenant”), and is made with respect to the
following facts and circumstances.


 


A.                                   Landlord and Tenant are parties to a
written Office Lease dated August 30, 2004, as amended by that certain
First Amendment to Lease dated September 28, 2005 and that certain Second
Amendment to Lease dated June 30, 2006, and that certain Third Amendment
to Lease dated as of April 30, 2005 (collectively, the “Lease”) pursuant
to which Tenant leases from Landlord Suites 100 and 200, a portion of lower
level 1 (including storage space), and a server room, at 123 Townsend Street,
San Francisco, California (collectively, the “Premises”).


 


B.                                     Landlord and Tenant now desire to amend
the Lease on the terms and conditions set forth herein.  Unless otherwise defined in this Fourth
Amendment, all capitalized terms utilized herein shall have the meanings
ascribed to them in the Lease.


 


Now, therefore, in recognition of the foregoing premises, in exchange
of the covenants, agreements and conditions set forth below, and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Landlord and Tenant agree as follows.


 


1.                                       The parties agree to amend Paragraph 17.1
of the Lease to provide that the per hour charge to Tenant for electricity
consummation for HVAC usage during after hour occupancy (outside the period
commencing at 8:00 am and ending at 7:00 pm, Monday through Friday, excepting
legal holidays) shall be lowered from $85.00 per hour to $25.00 per hour.  The parties further agree that Tenant’s after
hours usage commencing January 1, 2007 shall be calculated as follows:


 


Estimated after-hours HVAC billing for Tenant @ $25.00 per hour: 24 x 7
= 168 hours per week, minus 55 hours per week for normal building operations
(11 hours per day M-F) = 113 hours per week x 52 weeks = 5,876 hours, plus
88 holiday hours when building is closed (New Year’s, President’s Day, Memorial
Day, July 4, Labor Day, Thanksgiving, Friday after Thanksgiving,
Christmas: 11 x 8 = 88) = 5,964 hours per year x $25 per hour = $149,100
per year/12 = $12,425 per month.


 


Landlord shall invoice Tenant for the above monthly amount at the
beginning of the month following the month in which the usage occurred, and
Tenant shall pay such invoice within thirty (30)days of receipt.  Notwithstanding the foregoing, at any time
during the Term, Tenant may decline after-hours HVAC service by notice
hereunder to Landlord, whereupon Landlord shall cease billing Tenant for such
service effective thirty (30) days following such notice, and thereafter Tenant
shall have no obligation to pay amounts therefor.


 

















 


2.                                       Landlord and Tenant further agree to
resolve Tenant’s responsibility under Paragraph 17.1 of the Lease for
after hours HVAC usage for the period September 1, 2005 through December 31,
2006 by Tenant delivering to Landlord the sum of $210,450.00 on or before February 1,
2007.


 


3.                                       In the event Tenant elects to install an
HVAC system that will serve only the Premises (subject to Landlord’s approval
pursuant to the Lease) thus eliminating the need for Tenant to operate the
Building HVAC system during after hours, Landlord agrees to negotiate in good
faith with Tenant to further reduce the after hours charge set forth in
Paragraph 17.1 of the Lease, as amended by Paragraph 1 above, in a fair and
equitable manner.


 


4.                                       Except as otherwise expressly provided in
this Fourth Amendment, all other terms and conditions of the Lease shall remain
in full force and effect, fully binding on and enforceable against the parties.  In the event of a conflict between this
Fourth Amendment and the Lease, this Fourth Amendment shall control.


 


Wherefore, Landlord and Tenant have executed and delivered this Fourth
Amendment as of the day and year first above written.


 


 


	
  LANDLORD:

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
   

  
	
  SFI
  REAL ESTATE HOLDINGS LLC,

  	
  CurrentTV,
  LLC, (Formerly known as

  
	
  a
  Delaware limited liability company

  	
  “INdTV,
  LLC”) a Delaware limited liability

  company

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Edward W. Cronin, Jr.

  	
   

  	
  By:

  	
  /s/
  Joel Hyatt

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Its:

  	
  Vice
  President

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Current Media,
  LLC, (Formerly know as

  
	
   

  	
  “INdTV, LLC”) a
  Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joel Hyatt

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Its: