Exhibit 10.16





Exhibit 10.16




SUBLEASE AGREEMENT




This Sublease (“Sublease”) dated for reference purposes only on January 1, 2010, by and
between SONICPOOL, INC. a California corporation (“Landlord”), and SYCAMORE ENTERTAINMENT GROUP,
INC a Nevada Corporation (“Tenant”), who agree as follows:




1. FUNDAMENTAL SUBLEASE PROVISIONS.



(a) Premises: 6860 Lexington Avenue, Suite 120, 125, 165 and 166, Los Angeles,
California 90038, consisting of a Rentable Area consisting of approximately 1229 rentable square
feet.



(b) Sublease Term: Twelve (12) months, beginning on January 1, 2010 (the
“Commencement Date”), and ending on December 31, 2010. Tenant at its option may extend the
term for two (2) year ending on December 31, 2012, with 60 days notice before the end of the first
term.




(c) Base Rent: $2458.00/month from 1.1.10 thru 12.31.10




 $2832.00/month from 1.1.11 thru 12.31.11

 $2974.00/month from 1.1.12 thru 12.31.12




(d) A 10% late fee as provided in Section 20(c) below.




(e) Tenant’s Proportionate Share of total Rentable Area in the Building: 3.2%.



(f) Additional Rent: Subject to the terms and conditions herein contained, this
Sublease is net, net, net. Tenant is responsible for electrical as determined by its use and other
charges as hereafter set forth.




(g) Security Deposit: $2458.00.



(h) Tenant may only use premises for the purposes of:  Television and Film
Production, general administration. Tenant may not provide rental services of Finishing services
or any services that compete with Sonic Pool Inc. the Landlord (“Permitted Use”).




(i) Address for Notices and Payments of Rent:



Any Notices to Landlord shall be sent to: Sonicpool, Inc., 6860 Lexington Avenue, Suite A, Los
Angeles, California 90038, Attn: John Frost. Any payments due to Landlord under the Sublease shall
be sent to: Sonicpool, Inc., 6860 Lexington Avenue, Suite 250 Los Angeles, California 90038.



Any Notices to Tenant shall be sent to:                                                            ,
ATT:                                                            , with a copy to Senior Vice President,
Business Affairs.



 


 









 




(j) Intentionally deleted.



(k) Number of Parking Spaces Allocated: 8. There is a $840 monthly charge
for the Parking Spaces rented on a month to month basis by Tenant, which shall be located as shown
on Exhibit A attached hereto.



(l) Master Lease: This Sublease is subject to a certain Master Lease, dated January
19, 2001, in which the interest of “tenant” therein was assigned to Landlord, as of January 1,
2006.




2. PREMISES.



(a) Sublease of Premises. In consideration of Tenant’s agreement to pay the rent, and
the covenants and conditions herein contained, Landlord hereby Subleases to Tenant and Tenant
hereby Subleases from Landlord, upon the terms and conditions set forth herein, that certain space
identified in Section 1(a), (herein referred to as the “Premises”) in the building (herein referred
to as the “Building”) the address of which is 6860 Lexington Avenue, Los Angeles, California 90038.
The Building, the common areas (including parking areas) appurtenant to the Building and the land
upon which the Building and such common areas are located are hereinafter, collectively, referred
to as the “Project.”




3. TERM.



(a) In General, Commencement and Expiration. The term of this Sublease shall be that
period set forth in Section 1(b) hereof. The date upon which the Sublease commences shall be
referred to as “the Commencement Date”. Promptly following the tendering of possession of the
Premises to Tenant by Landlord, Tenant shall sign and return to Landlord a Sublease Confirmation
which will be countersigned and sent by Landlord to Tenant and incorporated herein by this
reference. The Sublease term shall expire as set forth in Section 1(b) hereof (the “Expiration
Date”). Notwithstanding the foregoing, Tenant shall have one (1) successive options to extend the
Sublease Term (the “Extension Options”) for an additional period of Twenty Four (24) months (the
“First Extension Term”), provided that Tenant is not then in default of the terms of this Sublease
after notice and any applicable cure periods. If Tenant exercises the Extension Options hereunder,
all of the terms, covenants and conditions of this Sublease shall continue in full force and effect
during the applicable Extension Term, except that the Base Rent payable by Tenant shall be as set
forth in Section 1(c) above. To exercise each Extension Option, Tenant must deliver notice to
Landlord not later than sixty (60) days prior to the commencement of the applicable Extension Term.



4. BASE RENT. Tenant covenants to pay to Landlord during the term hereof, at Landlord’s
office at the address set forth in Section 1(h) hereof or to such other persons or at such other
places as directed from time to time by written notice to Tenant from Landlord, a monthly rental
(hereinafter referred to as the “Base Rent”) in the amount set forth in Section 1(c) of the
Sublease (subject to applicable adjustments as set forth in this Sublease). Except as provided
otherwise in this Lease, all Base Rent shall be due and payable without demand or offset or
deduction, in advance on the first day of each calendar month. If the Commencement Date occurs on
a day other than the first day of a calendar month, then the Base Rent for the fraction of the
month starting with the Commencement Date shall be paid on such Commencement Date, prorated on the
basis of a thirty (30) day month. The Base Rent for the
first full month of the Sublease term shall be payable in advance upon Tenant’s execution of
the Sublease.


 


 









 





5. ADDITIONAL RENT. In addition to the Base Rent payable by Tenant pursuant to Section 4,
above, Tenant shall pay as additional rent (“Additional Rent”) “Tenant’s Proportionate Share”
(defined in Section 5(a)(6) below) of annual “Operating Costs” and “Taxes” (as defined in Sections
5(a)(2) and (3), respectively) which are in excess of the amount of Operating Costs and Taxes
applicable to the “Base Year” (defined in Section 5(a)(i) below). In no event shall any decrease
in annual Operating Costs or Taxes for any year, below the Operating Costs and Taxes for the Base
Year, entitle Tenant to any decrease in Base Rent or any credit against sums due under this
Sublease.




(a) Definitions.




(1) The term “Base Year” shall mean the calendar year 2009.



(2) The term “Operating Costs” shall mean the sum of all reasonable and verifiable expenses
paid or incurred by Landlord during any calendar year of the term hereof attributable to the
operation, maintenance, insurance, management and repair of the Project, or any portion thereof,
including both interior, exterior and landscape areas, walks, and parking facilities.



By way of example, Operating Costs shall include, without limitation: all reasonable costs and
expenses paid or incurred by Landlord during any calendar year of the term hereof for electricity
serving the Project, water, gas, trash, alarm, sewer, and similar utility services in connection
with the operation of the Project, and for utility taxes, charges or other similar impositions paid
or incurred by Landlord in connection therewith; costs of operation, maintenance and repair of the
heating, ventilation and air conditioning systems (“HVAC”), electrical and plumbing services and
facilities; the cost of periodic maintenance, repair and restoration of Building surfaces,
including paint, floor and wall coverings, and other surface materials on the exterior of the
Building and in both interior and exterior common areas (including the sidewalks and atriums, if
any); the cost of repaving and restriping of the parking facilities, if necessary.



Notwithstanding the foregoing, Landlord shall not be entitled to pass through to Tenant as
Operating Costs or otherwise any of the following: (i) the cost of any improvements, alterations,
repairs or any other work of a capital nature; (ii) costs incurred in connection with upgrading the
Premises, Building and/or Project to comply with Legal Requirements (as defined below), including,
but not limited to, handicap, life, fire, seismic and safety codes, in effect prior to the
Commencement Date; (iii) any cost incurred in connection with the investigation, reporting,
remediation or abatement of any Hazardous Material (as defined below) located (or alleged to be
located) in, on, under or about the Project and any cost incurred in connection with any
governmental investigation, order, proceeding or report with respect thereto; and (iv) any expenses
which, in accordance with generally accepted accounting principles and practices, would not
normally be treated as operating expenses by landlords of comparable projects.


 


 









 





(3) The term “Taxes” shall mean all real property taxes and personal property taxes, charges
and assessments which are levied, assessed upon or imposed by any governmental authority or
political subdivision thereof during any calendar year of the term hereof with respect to the
Project and any improvements, fixtures, and equipment and all other personal property of Landlord
used solely in connection with the operation of the Project (computed as if paid in permitted
installments regardless of whether actually so paid) and any tax which shall be levied or assessed
in addition to or in lieu of such real or personal property taxes, and any license fees, tax
measured by or imposed upon rents, or other tax or charge upon Landlord’s business of leasing the
Premises, or other parts of the Building, but shall not include any federal or state income tax, or
any franchise, capital stock, estate or inheritance taxes or any other taxes imposed on Landlord
and attributable to Landlord’s revenue derived from the Project.



(4) The term “Estimated Operating Costs” shall mean the annual estimates of Tenant’s
Proportionate Share of Operating Costs for each calendar year, to be given by Landlord to Tenant
pursuant to a reasonably detailed statement pursuant to the terms hereof.



(5) The term “Estimated Taxes” shall mean the annual estimates of Tenant’s Proportionate Share
of Landlord’s Taxes for each calendar year, to be given by Landlord to Tenant pursuant to a
reasonably detailed statement pursuant to the term hereof.



(6) The term “Tenant’s Proportionate Share” shall mean the proportion of the Rentable Area of
the Premises to the rentable area of the Building, which for this Sublease is agreed by Landlord
and Tenant to be the percentage set forth in Section 1(d) hereof. In the event the demised area of
the Premises by reason of amendments or modification shall change from the square footage of
Rentable Area expressed herein, or the rentable area of the Building shall change for any reason,
Tenant’s Proportionate Share shall be adjusted accordingly.



(b) Payment of Operating Costs and Taxes. Tenant shall pay to Landlord, as additional
rent, Tenant’s Proportionate Share of Operating Costs and Taxes as required pursuant to this
Article 5, in accordance with the following:



(1) The determination of Estimated Operating Costs and Estimated Taxes hereunder shall be made
by Landlord. Landlord’s estimates shall be based upon Landlord’s experience with the actual costs
and reasonable projections. For each calendar year (or portion thereof) during the term hereof
starting with the year prior to this Lease, Landlord shall furnish to Tenant, as soon as
practicable following the commencement of such year, a written statement showing in reasonable
detail Tenant’s Proportionate Share of the Estimated Operating Costs and the Estimated Taxes for
that calendar year (or portion thereof), which amount shall be calculated by comparing the
Estimated Operating Costs and Estimated Taxes to the amount of Operating Costs and Taxes for the
Base Year and determining the excess of the current Estimated Operating Costs and Estimated Taxes,
if any, over the Operating Costs and Taxes for the Base Year. For the avoidance of doubt, the
Tenant’s Proportionate Share of the Estimated Operating Costs and the Estimated Taxes shall be
prorated for any partial calendar year during the Term. The failure of Landlord to timely furnish
any such estimate statement for any calendar year (or portion thereof) shall not preclude Landlord
from enforcing its rights to collect any Estimated Operating Costs or Estimated Taxes under this
Article 5, nor shall
Landlord be prohibited from revising any estimate or Tenant’s Proportionate Share based
thereon, to the extent necessary.


 


 









 





(2) Notwithstanding any provision of this Sublease to the contrary, (a) Landlord shall
deliver to Tenant a statement of amounts payable by Tenant for the calendar year, and Tenant shall
pay any excess amounts due within thirty (30) days following receipt of the statement; and (b) if
the statement shows an amount owing by Tenant that is less than the payments for such year
previously made by Tenant, Landlord shall pay such amounts to Tenant within thirty (30) days.



(3) If Tenant continues to occupy the Premises beyond the Initial Term, Tenant shall have the
right to audit Landlord’s books and records relating to Operating Costs and Taxes for the Base Year
and succeeding calendar years and Landlord shall fully cooperate in such regard.



(c) Energy Usage. The cost of electricity furnished to the Premises during regular
“Building Hours” (i.e., from 9:00 a.m. through 6:00 p.m., Monday through Friday and 9:00 a.m.
through 1:00 p.m., Saturday) shall be included as an element of Operating Costs.




(d) After Hours/Special Services.



(1) Tenant shall, within 30 days after demand by Landlord, reimburse Landlord directly at
Landlord’s actual cost for usage of HVAC and electricity in the Premises during the “after hours”
period (i.e., after 6:00 p.m. and before 9:00 a.m., Monday through Friday, after 1:00 p.m. and
before 9:00 a.m. on Saturday, and all day on Sunday). Such amount is presently $50.00 per hour.
Payment of after hours HVAC and electricity usage shall be separate from and in addition to the
amounts paid as Operating Costs under this Section 5. For any after hours services requested on a
weekday, Tenant shall give Landlord at least twenty-four hours’ notice. For any after hours
services requested on a weekend, Tenant shall notify Landlord by 3:00 p.m. on the Friday preceding
the weekend.



(2) In addition to the services and payments described in Section 14(a) below, Tenant shall
upon demand pay for all other “additional building services” furnished to Tenant; i.e., services
which are not uniformly furnished to all tenants of the Building. These additional building
services provided shall be billed either at the actual cost to Landlord for such services (if
ascertainable), or at a rate based upon Landlord’s reasonable estimate of the cost for such
services.


 


 









 





6. SECURITY DEPOSIT. Tenant shall, upon execution of this Sublease, deposit with Landlord a
security deposit as set forth in Section 1(g) hereof as security for the full and faithful
performance of every provision of this Sublease to be performed by Tenant. If Tenant defaults with
respect to any provision of this Sublease after notice and any applicable cure period, including
but not limited to the provisions relating to the payment of rent, Landlord may use, apply, or
retain all or any part of this security deposit to compensate Landlord for any other loss, cost or
damage which Landlord may suffer by reason of Tenant’s default. If any portion of said deposit is
so used or applied, Tenant shall, within ten (10) business days after written demand therefor
deposit cash with Landlord in an amount sufficient to restore the security
deposit to its original amount, and Tenant’s failure to do so shall be a material breach of
this Sublease. Tenant hereby waives the provisions of Section 1950.7 of the California Civil Code,
and all provisions of law, now or hereafter enforced, which provide that Landlord may claim from a
security deposit only those sums reasonably necessary to remedy defaults in the payment of rent, to
repair damage caused by Tenant or to clean the Premises, it being agreed that Landlord may, in
addition, claim those sums reasonably necessary to compensate Landlord for any other loss or damage
foreseeable or unforeseeable, caused by the act or omission of Tenant. Landlord shall not be
required to keep this security deposit separate from its general funds and Tenant shall not be
entitled to interest on such deposit. If Tenant shall fully and faithfully perform every provision
of this Sublease to be performed by it, the security deposit or any balance thereof shall be
returned to Tenant (or, at Landlord’s option, to the last transferee of Tenant’s interest
hereunder) within thirty (30) days after both the expiration of the Sublease term and Tenant’s
delivery of the Premises to Landlord, provided, however, that Landlord may use all or any portion
of the deposit to repair any damages to the Premises for which Tenant is responsible hereunder or
to clean the Premises after Landlord has received possession of the Premises (normal wear and tear
excepted), and further provided that Landlord may retain the security deposit until such time as
any amount due from Tenant in accordance with Section 5 hereof has been determined and paid in
full. Tenant shall not assign or encumber its contingent rights in the security deposit, and
neither shall Landlord nor its successors or assigns be bound by any purported assignment or
encumbrance. In the event of the termination of any ground or underlying Sublease or foreclosure
of any mortgage or trust deed now or hereafter affecting the Premises, Building or land upon which
the same are located, Tenant shall only look to the new landlord for return of the security deposit
if such deposit is actually transferred to said new landlord.



7. CONSTRUCTION AND ACCEPTANCE OF PREMISES. Tenant hereby agrees that the Premises shall be
taken “as is”, “with all faults”, “without any representations and warranties”, except as otherwise
set forth in this Sublease, and Tenant hereby agrees and warrants that it has investigated and
inspected the condition of the Premises and the suitability of same for Tenant’s purposes, and
Tenant does hereby waive and disclaim any objection to, cause of action based upon, or claim that
its obligations hereunder should be reduced or limited because of the suitability of same for
Tenant’s purposes. Landlord hereby warrants and represents to Tenant that upon the Commencement
Date, the Building and the Premises shall be (i) in good condition and repair, the roof and
foundation will be water-tight and free of leaks, and all mechanical, electrical, plumbing,
life-safety and other systems serving the Premises and Building shall be in good operating
condition; (ii) in compliance with all applicable Legal Requirements; (iii) free of all Hazardous
Material (as defined below) in violation of applicable Legal Requirements; provided, however, that
if any of the foregoing is untrue, then as Tenant’s exclusive remedy therefor, Landlord shall
promptly correct such deficiency at no cost to Tenant, and Landlord shall use commercially
reasonable efforts to minimize interference with Tenant’s business as a result of such work.


 


 









 





8. HOLDING OVER. Should Tenant hold over after the expiration or sooner termination of this
Sublease with Landlord’s prior written consent, such possession by Tenant shall be deemed to be a
month-to-month tenancy subject to each and all terms and conditions of this Sublease as applicable
to a month-to-month tenancy, and such tenancy shall be terminable upon not less than thirty (30)
days’ written notice given by either Landlord or Tenant at any time.
During such holding over, Tenant shall pay in advance monthly Base Rent equal to the greater
amount of: a) the product of the Rentable Area times the base rent per square foot of Rentable Area
then being quoted generally by Landlord to prospective tenants, or b) 150% of the Base Rent
established under the Sublease for the last month of the Term of the Sublease. In addition, Tenant
shall pay any Additional Rent as set forth in Section 5 and any other charges payable under the
Sublease during the period in which Tenant holds over. The foregoing provisions of this Section
are in addition to and do not affect any rights of Landlord under the Sublease or as otherwise
provided by law. Nothing contained herein shall constitute Landlord’s consent to any holding over
by Tenant. The terms and conditions of Tenant’s holding over may be changed by Landlord upon not
less than thirty (30) days’ written notice. If Tenant fails to surrender the Premises upon the
expiration or sooner termination of this Sublease despite written demand to do so by Landlord,
Tenant shall indemnify and hold Landlord harmless from all losses or liability, including without
limitation, any claim made by any succeeding tenant founded on or resulting from such failure to
surrender, any loss of rent from prospective tenants, and any reasonable attorneys’ fees and legal
costs incurred and paid by Landlord to enforce Landlord’s rights hereunder, whether or not a legal
action is filed.




9. USE OF PREMISES.



(a) The Premises shall be used and occupied by Tenant for the purposes described in Section
1(g) hereof, and for no other purpose whatsoever.



(b) Tenant acknowledges that, except as herein expressly provided, neither Landlord nor any
agent of Landlord has made any representation or warranty with respect to the Premises or the
Building or with respect to the suitability of either for the conduct of Tenant’s profession or
business, nor has Landlord agreed to undertake any modification, alteration or improvement to the
Premises except as provided in this Sublease.



(c) Any use of the Premises in violation of Section 1(g) is expressly prohibited, and shall be
deemed a breach of the Sublease.



(d) Tenant shall not cause or permit, any Hazardous Material to be brought upon, kept or used
in or about the Premises by Tenant, its agents, employees, contractors or invitees (other than as
may be customarily used for general office and household cleaning purposes or as customarily
related to the uses permitted in Section 1(g) of this Sublease, in every instance in accordance
with all Legal Requirements) without the prior written consent of Landlord. If Tenant breaches the
obligations stated in the preceding sentence, or, if the presence of Hazardous Material on the
Premises caused or permitted by Tenant results in contamination of the Premises by Hazardous
Material, then Tenant shall indemnify, defend and hold Landlord harmless from any and all claims,
judgments, damages, penalties, fines, costs, liabilities or losses (including, without limitation,
diminution in value of the Premises, damages for the loss or restriction on use of rentable or
useable space or of any amenity of the Premises, damages arising from any adverse impact on
marketing of space, and sums paid in settlement of claims, attorneys’ fees, consultant fees and
expert fees) which arise during or after the Sublease term as a result of such contamination. The
term “Hazardous Material” includes, without limitation, any material or substance which is (i)
defined as a “hazardous waste”, “extremely hazardous waste” or “restricted hazardous waste” under
Sections 25115, 25116 or 25122.7, or listed pursuant to



 


 









 






Section 25140, of the California Control Law; (ii) defined as a “hazardous substance” under
Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8
(Carpenter-Presley-Tanner Hazardous Substance Account Act); (iii) defined as hazardous material”,
“hazardous substance”, or “hazardous waste” under Section 25501 of the California Health and
Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory);
(iv) defined as “hazardous substance” under Section 25291 of the California Health and Safety Code,
Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances); (v) petroleum; (vi)
asbestos; (vii) listed under Article 9 or defined as hazardous or extremely hazardous pursuant to
Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20; (viii)
designated as a “hazardous substance” pursuant to Section 311 of the Federal Water Pollution
Control Act (33 U.S.C. Section 1317); (ix) defined as a “hazardous waste” pursuant to Section 1004
of the Federal Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901, et seq., pursuant
to Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. Sections 9601, et seq.; and (x) any biohazardous wastes, substances or materials as defined
by the above regulations or any other applicable Legal Requirements.



Landlord shall defend, indemnify and hold Tenant and any members, partners or shareholders of
Tenant, and any of its or their employees, agents, licensees, invitees, representatives and
contractors (collectively, “Tenant Parties”) harmless from any and all demands, claims, actions,
causes of action, proceedings, penalties, fines, damages, awards, judgments, assessments, losses,
liabilities, obligations, costs, and expenses, including, without limitation, attorneys’ fees and
costs, arising out of, resulting from, relating to, or in connection with claim, loss or damage
incurred by Tenant or any Tenant Parties due to the presence of Hazardous Material on the Premises
on or prior to the date possession of the Premises is delivered to Tenant or the presence of
Hazardous Material after the date possession of the Premises is delivered to Tenant and not caused
by Tenant or any Tenant Parties.



Each party’s indemnification obligation hereunder shall expressly survive the expiration or
earlier termination of this Sublease.



(e) At Tenant’s sole cost, Tenant will promptly comply with: 1) all laws, statutes,
ordinances, rules, regulations, orders, recorded covenants and restrictions, and requirements of
all municipal, state and federal authorities now or later in force, including, but not limited to,
all provisions of the Americans with Disabilities Act (42 U.S.C. Sections 12101, et seq.); 2) the
requirements of any board of fire underwriters or other similar body now or in the future
constituted; and 3) any direction or occupancy certificate issued by public officers (collectively
“Legal Requirements”), insofar as the Legal Requirements relate to the use or occupancy of the
Premises and are not the responsibility of Landlord hereunder. However, Tenant’s compliance will
not be required for the following, which Landlord shall perform promptly at no cost to Tenant:



(1) structural changes (or other changes of a capital nature) to the Premises or Building or
changes to the electrical, mechanical, plumbing, life safety or other systems of the Building
(“Building Systems”), except to the extent necessitated by the affirmative acts, negligence or
willful misconduct of any Tenant Party, or by improvements made by or for Tenant or Tenant’s use of
the Premises for other than the Permitted Use;


 


 









 





(2) work necessitated by defects in the original construction of the Building or Landlord’s
improvements thereto(but excluding work necessitated by defects in any Alterations performed by
Tenant pursuant to Section 11 below); and



(3) work required to cause the Premises, Building or Project to comply with Legal Requirements
in effect on the Commencement Date.



The judgment of any court of competent jurisdiction or Tenant’s admission in any action or
proceeding against Tenant that Tenant has violated any Legal Requirement in the use or occupancy of
the Premises will be conclusive of the facts as between Landlord and Tenant. In addition to the
foregoing, Landlord will comply in a timely manner with all Legal Requirements that are not
Tenant’s responsibility under this Section, to the extent that noncompliance would adversely affect
Tenant’s use or occupancy of the Premises or impose liability on Tenant.



10. TAXES ON TENANT’S PROPERTY. Tenant shall be liable for and shall pay before delinquency
any and all taxes, assessments, license fees and other similar charges levied against any personal
property or trade fixtures placed by Tenant or at Tenant’s direction in or about the Premises. On
demand by Landlord, Tenant shall furnish Landlord with satisfactory evidence of these payments. 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 Building 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 such taxes based upon such increased assessment, which Landlord
shall have the right to do regardless of the validity thereof, but only under proper protest if
requested by Tenant, Tenant shall, within ten (10) days of written demand, reimburse Landlord for
the taxes resulting from such increase in the assessment; provided that, in any such event, Tenant
shall have the right, in the name of Landlord and with Landlord’s full cooperation, to bring suit
against the County Tax Collector in any court of competent jurisdiction to recover the amount of
any such taxes so paid under protest, and any amount so recovered shall belong to Tenant.




11. ALTERATIONS.



(a) Tenant shall not make or allow any alterations, additions or improvements in or to the
Premises (“Alterations”) without Landlord’s prior written consent, and then only by contractors or
mechanics reasonably approved in advance in writing by Landlord, provided Landlord may, in
Landlord’s sole discretion, withhold its consent to any Alteration which in Landlord’s reasonable
judgment would materially and adversely affect the structure or systems or equipment of the
Building or is visible from the exterior of the Building. Notwithstanding the foregoing, Landlord
hereby approves Tenant’s installation in the Premises of an “insert stage”, including a green
screen and soundproofing (the “Permitted Alterations”), subject to a plan to be reasonably approved
by Landlord. All such work shall be done by Tenant at such times and in such manner as Landlord
may from time to time reasonably designate and, except for the Permitted Alterations, under
Landlord’s reasonable supervision. In each instance where Tenant requires Landlord’s consent to an
Alteration, Tenant shall furnish Landlord with plans showing the proposed Alteration to the
Premises. Tenant covenants and agrees that all work done by or pursuant to the direction and
instruction of Tenant shall be performed in full compliance with all Legal Requirements.


 


 









 





(b) All Alterations, fixed partitions and/or appurtenances which are fixtures or otherwise
built into the Premises prior to or during the term hereof shall be and remain part of the Premises
and shall not be removed by Tenant at the end of the term hereof, unless such removal is required
by Landlord pursuant to written notice to Tenant given at least thirty (30) days before the
expiration or sooner termination of the term of this Sublease, in which event Tenant shall remove
the same and repair all damage caused by such removal at Tenant’s sole cost and expense. Such
Alterations, fixed partitions and/or appurtenances shall include but not be limited to: All floor
coverings, drapes, paneling, molding, doors, vaults (exclusive of vault doors), plumbing systems,
electrical systems, lighting systems, silencing equipment, all fixtures and outlets for the systems
mentioned above and for all radio, telecommunication, telegraph and television purposes, and any
special flooring or ceiling installations. Notwithstanding the foregoing, in no event shall Tenant
be required to remove the Permitted Alterations from the Premises at the expiration or earlier
termination of this Sublease.




12. MAINTENANCE AND REPAIRS.



(a) Subject to Landlord’s obligations set forth in Section 12(b) and 14(a)(4) below, Tenant
shall at Tenant’s sole cost and expense keep and maintain the Premises clean and in good condition
and repair, damage thereto by ordinary and reasonable wear and tear, fire or other casualty,
condemnation and repairs or other work for which Landlord is obligated hereunder excepted; and
provided, however, that, Tenant shall have no obligation to make repairs or replacements to the
Premises or Building, unless such repairs or replacements are necessitated by Tenant’s negligence
or willful misconduct. All damage or injury to the Premises or the Building caused by the
negligence or willful misconduct of Tenant, its employees, agents or visitors, shall be promptly
repaired by Tenant at its sole cost and expense, to the reasonable satisfaction of Landlord.
Landlord may make any repairs which are not promptly made by Tenant and charge Tenant for the
reasonable cost thereof.



(b) Except to the extent Tenant’s obligation under Section 12(a) above, Landlord shall
maintain in good condition and repair and in compliance with all applicable Legal Requirements, the
common areas of the Project, the Building shell and core areas, and all systems and equipment
serving the Building (including elements of such systems located in the Premises).



13. LIENS. Tenant shall keep the Premises, the Building, and the property upon which the
Building is situated, free from any liens arising out of the work performed, materials furnished,
or obligations incurred by Tenant. Tenant further covenants and agrees that should any mechanic’s
lien be 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, said lien will be discharged by Tenant, by
bond or otherwise, within ten (10) business days after the filing thereof, at the cost and expense
of Tenant. Any failure by Tenant to timely perform any of its obligations under this Section 13
shall be considered a “default” as defined in Section 21, below, and Tenant shall indemnify
Landlord for all damages, losses, attorneys’ fees and legal costs arising from or related to any
lien in the manner set forth in Section 16, below.


 


 









 






14. BUILDING SERVICES.



(a) Services. Subject to Section 5 of this Sublease, Landlord agrees to furnish to
the Premises during Building the following services:



(1) Utilities. Subject to the hours, charges and other provisions set forth in
Sections 5(c) and 5(d) above, air conditioning, trash removal, electricity, facility cleaning
services, natural gas, alarm services, water, internet connection services, phone services
(excluding long distance charges) all in such reasonable quantities, in the judgment of Landlord,
as are necessary for the comfortable occupancy of the Premises.



(2) Signs. Tenant shall not be entitled to install a sign on the building or in
common area hallways or doors without Landlord’s prior written approval.



(b) If Tenant is prevented from using, and does not use, the Premises or any portion thereof,
for the Permitted Use for five (5) consecutive business days (“Eligibility Period”) as a result of
any repair, maintenance or Alterations performed by Landlord, any failure to provide services or
access to the Premises, or because of the presence of Hazardous Material in, on or around the
Building or the Premises (collectively, “Abatement Conditions”), Base Rent and all other charges
payable by Tenant hereunder shall be abated or reduced, after expiration of the Eligibility Period,
for such time that Tenant continues to be so prevented from using, and does not use, 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 bears to the total rentable area of the Premises. Further, if
Tenant is prevented from using, and does not use, the Premises or any portion thereof, for the
Permitted Use for fifteen (15) consecutive days as a result of any of the Abatement Conditions,
then without limiting any of Tenant’s other rights or remedies, Tenant shall have the right to
terminate this Sublease.




15. RIGHTS OF LANDLORD.



(a) Landlord and its agents shall have the right to enter the Premises at all reasonable times
for the purpose of cleaning the Premises, and, upon prior reasonable notice to Tenant, for the
purpose of examining or inspecting the same, posting notices of non-responsibility, showing the
same to prospective tenants (during the last 2 months of the Term, unless Tenant is in default
under this Sublease, in which event the 2-month limitation shall not apply), lenders or purchasers
of the Building, or in the case of an emergency, and to make such alterations, repairs,
improvements or additions to the Premises or to the Building as Landlord may deem necessary or
desirable. If Tenant shall not personally be present to open and permit an entry into the Premises
at any time when such an entry by Landlord is necessary by reason of emergency, Landlord may enter
by means of a master key or passkey or may enter forcibly, without liability to Tenant except for
any failure to exercise due care for Tenant’s property, and any such entry by Landlord shall not
under such 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.


 


 









 





(b) In addition to any other rights provided herein, Landlord shall have the following rights,
exercisable in a reasonable manner without notice to Tenant and without any
obligation to exercise such rights: to change the name or address of the Building or the suite
number of the Premises; to designate all persons or organizations furnishing sign painting and
lettering used or consumed in the Building; to grant to anyone the exclusive right to conduct any
business in the Building, provided such exclusive right shall not infringe upon or otherwise impair
the uses by Tenant expressly permitted under this Sublease; to have access to all mail chutes, if
any, according to the rules of the United States Postal Service; to close the Building daily at
such reasonable time as Landlord may determine, subject, however, to Tenant’s right to admittance
at any time under such reasonable regulations as shall be prescribed from time to time by Landlord
and to decorate, alter, repair or improve Building and parking facilities, or maintain any service
therein, at any time; to do or permit to be done any necessary work in or about the Premises or the
Building or the parking facilities. Except as elsewhere in this Sublease provided, any rights so
exercised by Landlord shall be without any rebate or abatement of rent to Tenant for any loss or
occupancy or quiet enjoyment of the Premises or damage, injury or inconvenience thereof occasioned,
provided that Landlord uses commercially efforts to avoid any interference with the business of
Tenant in the exercise of such rights.




16. INDEMNIFICATION AND WAIVER.



(a) Tenant hereby agrees to indemnify, defend and hold Landlord and its partners, members, and
shareholders, as applicable, and their respective officers, agents, servants, employees, and
independent contractors (collectively, “Landlord Parties”) harmless against and from any and all
claims of damages or injury arising from Tenant’s use of the Premises, the Building, common areas
or the parking facilities, or any other portion of the Project, or the conduct of its business or
from any activity, work, or thing done, knowingly permitted or suffered by Tenant in the Premises,
Building, the common areas or parking facilities, or any other portion of the Project, except to
the extent arising from the negligence or willful misconduct of Landlord or any Landlord Parties.
Further, Tenant shall indemnify, defend and hold harmless Landlord Parties against and from any and
all claims to the extent arising from any breach or default in the performance of any obligation on
Tenant’s part to be performed under the terms of this Sublease, or to the extent arising from any
negligence or willful misconduct of Tenant or Tenant Parties and not covered by the insurance
required to be carried by Landlord hereunder, and from and against all costs, attorneys’ fees,
expenses, and liabilities incurred in or about any such claim or any action or proceeding brought
thereon; and in case any action or proceeding be brought against any Landlord Party by reason of
such claim, at Tenant’s expense by counsel reasonably satisfactory to Landlord. Tenant’s indemnity
obligations under this Sublease are subject to the waiver of subrogation contained in Section 18
below.



Tenant, as a material part of the consideration to Landlord, hereby assumes all risk of damage
to Tenant’s property or injury to Tenant’s employees, agents, visitors, invitees and licensees in
or upon the Premises, the Building, the common areas, and parking facilities, or any other portion
of the Project, and Tenant hereby waives all claims in respect thereof from any cause whatsoever
against any Landlord Party, except claims to the extent caused as a direct result of the failure of
Landlord to observe any of the terms and conditions of this Sublease and those claims which arise
from any negligence or willful misconduct of Landlord or any Landlord Party.


 


 









 





Neither party shall be liable to the other for any unauthorized or criminal entry of third
parties into the Premises, Building, common areas or parking facilities, or any other portion of
the Project, or for any damage to person or property, or loss of property in and about the
Premises, Building, common areas or parking facilities and the approaches, entrances, streets,
sidewalks or corridors thereto, by or from any unauthorized or criminal acts of third parties,
unless such criminal acts were facilitated by negligence or willful misconduct by Landlord or
Tenant.



Notwithstanding anything to the contrary contained in this Sublease, each party hereby agrees
that in no event shall the other party be liable for any consequential damages, including injury to
such party’s business or any loss of income therefrom, nor shall Landlord be liable to Tenant for
any damages caused by the act or neglect of any other tenant in the Building except to the extent
that such damages arise out of Landlord’s negligence or willful misconduct.



(b) Landlord hereby agrees to indemnify, defend and hold Tenant and the Tenant Parties
harmless against and from any and all claims of damages or injury to the extent arising from any
breach or default in the performance of any obligation on Landlord’s part to be performed under the
terms of this Sublease, or to the extent arising from any negligence or willful misconduct of
Landlord or Landlord Parties and not covered by the insurance required to be carried by Tenant
hereunder, and from and against all costs, attorneys’ fees, expenses, and liabilities incurred in
or about any such claim or any action or proceeding brought thereon; and in case any action or
proceeding be brought against any Tenant Party by reason of such claim, at Landlord’s expense by
counsel reasonably satisfactory to Tenant. Landlord’s indemnity obligations under this Sublease
are subject to the waiver of subrogation contained in Section 18 below.




17. INSURANCE.



(a) At all times during the term hereof, Tenant shall maintain in effect policies of property
damage insurance reasonably required by Landlord covering: (i) all leasehold improvements
(including any alterations, additions or improvements as may be made by Tenant pursuant to
provisions of Section 11 hereof) in which Tenant has an insurable interest, and (ii) all trade
fixtures, merchandise and other personal property from time to time in, on or upon the Premises.



(b) Tenant shall, at all times during the term hereof and at its own cost and expense, procure
and continue in force comprehensive general liability insurance for bodily injury and property
damage, with limits of not less than Two Million and 00/100 Dollars ($2,000,000.00) combined single
limit per occurrence and in the aggregate, insuring against liability for injury to or death of any
person, arising in connection with the construction of improvements on the Premises or Tenant’s
use, operation or condition of the Premises.



(c) All insurance required to be carried by Tenant hereunder shall be issued by responsible
insurance companies, qualified to do business in the State of California, reasonably acceptable to
Landlord and Landlord’s lender. Each policy shall name Landlord, and at Landlord’s request any
mortgagee of Landlord, as an additional insured, as their respective
interests may appear, and copies of all policies or certificates evidencing the existence and
amounts of such insurance shall be delivered to Landlord by Tenant at least ten (10) days prior to
Tenant’s occupancy of the Premises. No such policy shall be cancelable except after ten (10) days’
prior written notice to Landlord and Landlord’s lender.


 


 









 





(d) At all times during the term hereof, Landlord shall maintain in effect a policy or
policies of commercial general liability and property damage insurance covering the Building,
including the parking facilities and interior and adjacent landscaped areas, with such policy
limits as Landlord shall reasonably determine consistent with the requirements of comparable
commercial buildings.



18. WAIVERS OF SUBROGATION. Each of the parties hereby waives any and all rights to recovery
against the other or against the officers, employees, agents, representatives, customers, and
business visitors of such other party or of such other tenant or occupant of the Building, for loss
or damage to such waiving party or its property or the property of others under its control,
arising from any cause insured against as provided in Section 17, above. Tenant shall notify its
insurance carrier(s) that this mutual waiver of subrogation is contained in this Sublease.




19. EMINENT DOMAIN; CASUALTY.



(a) If the whole of the Premises shall be taken, or such part thereof shall be taken as shall
materially interfere with Tenant’s use and occupancy of the balance thereof, under power of eminent
domain, or sold, transferred, or conveyed in lieu thereof, either Tenant or Landlord may terminate
this Sublease as of the date of such condemnation or as of the date possession is taken by the
condemning authority, whichever date occurs later. If any part of the Project other than the
Premises, including parking facilities and adjacent landscaped areas, shall be so taken, sold,
transferred or conveyed in lieu thereof, Landlord and Tenant shall each have the right, at their
respective options, to terminate this Sublease as of the date of such condemnation or as of the
date possession is taken by the condemning authority. No award for any partial or entire taking
shall be apportioned, and Tenant hereby assigns to Landlord any award which may be made in such
taking or condemnation, together with any and all rights of Tenant now or hereafter arising in or
to the same or any part thereof; provided, however, that nothing contained herein shall be deemed
to give Landlord any interest in or require Tenant to assign to Landlord any award made to Tenant
for the loss of goodwill, taking of personal property and fixtures belonging to Tenant and
removable by Tenant at the expiration of the term hereof, as provided hereunder, or for the
interruption of, or damage to Tenant’s business or for relocation expenses recoverable against the
condemning authority. In the event of a partial taking, or a sale, transfer, or conveyance in lieu
thereof, which does not result in a termination of this Sublease, Landlord shall, to the extent of
any funds received from the condemning authority for repair or restoration, restore the Premises
substantially to their condition prior to such partial taking and, thereafter, rent shall be abated
in the proportion which the square footage of the part of the Premises so made unusable bears to
the total amount of Rentable Area immediately prior to the taking. Tenant hereby waives any and
all rights it might otherwise have pursuant to Section 1265.130 of the California Code of Civil
Procedure.


 


 









 





(b) In the event of material damage or destruction to the Premises or Building occurring
during the Sublease Term, either party shall have the right to terminate this Sublease
by written notice to the other party, provided that Landlord may not elect to terminate this
Sublease under this Section unless Landlord elects also to terminate the leases of all similarly
situated subtenants. Effective as of the date of any fire or other casualty to the Premises or any
portion of the Building, Base Rent and all other rent and charges payable by Tenant under this
Sublease shall abate in proportion to the degree of interference of Tenant’s use and enjoyment of
the Premises, calculated from the date of the fire or other casualty until the date the restoration
is complete (and in the case of damage to the Premises, until Tenant has been given a reasonable
period of time to reinstall its personal property, furniture and equipment).




20. DEFAULT.




(a) Any of the following events shall constitute a default under this Sublease by Tenant:



(1) Failure by Tenant to make any payment of Base Rent, Additional Rent, or other payment
required by this Sublease within five (5) business days after notice from Landlord that such
amounts are delinquent;



(2) Any failure by Tenant to observe or perform any other provision, covenant, or condition of
this Sublease to be observed or performed by Tenant where such failure continues for fifteen (15)
days after written notice thereof from Landlord to Tenant; provided that if the nature of such
default is such that the same cannot reasonably be cured within a fifteen (15) day period, Tenant
shall not be deemed to be in default if it diligently commences such cure within such period and
thereafter diligently proceeds to rectify and cure said default;



(3) The abandoning (which is deemed to include absence from the Premises for more than ten
(10) continuous days while in default of any material provisions of this Sublease) of the Premises
by Tenant;



(4) Except as expressly permitted under this Sublease, any attempted conveyance, assignment,
mortgage or subletting of this Sublease;



(5) The making by Tenant of a general assignment or general arrangement for the benefit of
creditors; the filing by or against Tenant of a petition to have Tenant adjudged bankrupt or a
petition for reorganization or arrangement under any law relating to bankruptcy and the failure of
Tenant, or Tenant’s trustee-in-bankruptcy (as the case may be) to assume this Sublease within sixty
(60) days after the date of the filing of the petition, (or within such additional time as the
court may fix for cause within such sixty (60) day period), or the rejection of this Sublease by
Tenant or the trustee of Tenant during such sixty (60) day period; or if this Sublease is assumed,
then the failure of Tenant or the trustee to comply with the provisions of Section 22(f) hereof;
the taking of any action at the corporate level by Tenant to authorize the filing of a
petition-in-bankruptcy on behalf of Tenant; the appointment by a court other than a bankruptcy
court 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 Sublease unless possession is restored to Tenant
within thirty (30) days; in the event this Sublease is assumed by a trustee appointed for Tenant or
by Tenant as debtor-in-possession under the provisions of Section
22(f)(2) hereof and, thereafter, Tenant is either adjudicated a bankrupt or files a subsequent
Petition for Arrangement under Chapter 11 of the United States Bankruptcy Code, 11 U.S.C. Sections
101, et seq. (“the Bankruptcy Code”);


 


 









 





(6) 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 Sublease, where such seizure is not
discharged within thirty (30) days;



(7) If Tenant or any guarantor of Tenant’s obligations hereunder (“Guarantor”) shall be
adjudicated insolvent pursuant to the provisions of any present or future insolvency law under the
laws of the State of California, or if any proceedings are filed by or against such Guarantor under
the Bankruptcy Code or any similar provisions of any future federal bankruptcy law, or if a
receiver or a trustee of the property of Guarantor shall be appointed under California law by
reason of Tenant’s or the Guarantor’s insolvency or inability to pay its debts as they become due
or otherwise; or if any assignment shall be made of Guarantor’s property for the benefit of
creditors under California law.



(b) In the event of any default by Tenant, as described above, Landlord may promptly or at any
time thereafter, upon written notice and demand and without limiting Landlord in the exercise of
any other right or remedy which Landlord may have by reason of such default or breach, pursue any
of the following remedies, each and all of which shall be cumulative and non-exclusive, without any
notice or demand whatsoever:



(1) Terminate Tenant’s right to possession of the Premises by any lawful means, in which case
this Sublease shall terminate and Tenant shall immediately surrender possession of the Premises to
Landlord. In such event, Landlord shall be entitled to recover from Tenant:



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



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



(C) The worth at the time of award of the amount by which the unpaid rent for the balance of
the term after the time of award exceeds the amount of such rental loss Tenant proves can
reasonably by avoided; and



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


 


 









 





(2) Even though Tenant has breached this Sublease and abandoned the Premises, at Landlord’s
option this Sublease shall continue in effect for so long as Landlord does not terminate Tenant’s
right to possession, and Landlord may enforce all of its rights and remedies hereunder and under
California Civil Code Section 1951.4, including the right to recover rent as it comes due under
this Sublease, and in such event Landlord will permit Tenant
to sublet the Premises or to assign his interest in the Sublease, or both, with the consent of
Landlord, which consent will not unreasonably be withheld provided the proposed assignee or
sublessee is reasonably satisfactory to Landlord as to credit and will occupy the Premises for the
same purposes specified herein, and such tenancy is not inconsistent with Landlord’s commitments to
other tenants in the Building. For purposes of this Subsection (c), the following shall not
constitute a termination of Tenant’s right to possession: (i) acts of maintenance or preservation
or efforts to relet the Premises; or (ii) the appointment of a receiver under the initiative of
Landlord to protect Landlord’s interest under this Sublease.



(3) Pursue any other remedy now or hereafter available to Landlord under the laws or judicial
decisions of the State of California.



(c) Tenant hereby acknowledges that late payment by Tenant to Landlord of rent and other
charges due under this Sublease will cause Landlord to incur costs not contemplated by this
Sublease, the exact amount of which will be extremely difficult to ascertain. Such costs include,
but are not limited to processing and accounting charges, and late charges which may be imposed on
Landlord by the terms of any mortgage or trust deed covering the Premises. Accordingly, if any
installment of rent or any other charge due from Tenant is not received by Landlord or Landlord’s
designee within five (5) days after such amount shall be due, then, at Landlord’s election and upon
Landlord’s demand, Tenant shall pay to Landlord a late charge equal to five percent (5%) of such
overdue amount, and in such event the parties hereby agree that such late charge represents a fair
and reasonable estimate of the costs Landlord will incur by reason of the late payment by Tenant.
No late charge may be imposed more than once for the same late rental payment. Acceptance of such
late charge by Landlord shall in no event constitute a waiver of Tenant’s default with respect to
such overdue amount, nor prevent Landlord from exercising any other rights and remedies granted to
it hereunder. Any late charges assessed hereunder shall be deemed “rent” and may be included in
any Notice to Pay Rent or Quit served by Landlord. Landlord’s decision to not include late charges
in a Notice to Pay Rent or Quit shall not be deemed to be a waiver of Landlord’s right to such late
charges.



(d) In the event of the occurrence of any of the events specified in Section 20(a)(4), if
Landlord shall not choose to exercise, or by law shall not be able to exercise, its rights
hereunder to terminate this Sublease upon the occurrence of such events, then, in addition to any
other rights of Landlord hereunder or by law, Landlord shall not be obligated to provide Tenant
with any of the services specified in Section 14, unless Landlord has received compensation in
advance for such services, and the parties agree that Landlord’s reasonable estimate of the
compensation required with respect to such services shall control. In the event of commencement of
a case of Tenant’s bankruptcy, any monies paid during the ninety (90) days prior to the
commencement of the case are hereby deemed to have been first applied to the most recently incurred
liabilities.




21. ASSIGNMENT AND SUBLETTING.



(a) Tenant shall not assign or transfer this Sublease, or any interest therein, and shall not
sublet the Premises or any part thereof, or any right or privilege appurtenant thereto, or suffer
any other person (the invitees, agents and servants of Tenant excepted) to occupy or use the
Premises, or any portion thereof, or agree to any of the foregoing, without in
each case first obtaining the written consent of Landlord, which consent shall not be
unreasonably withheld, conditioned or delayed. Neither this Sublease nor any interest therein
shall be assignable as to the interest of Tenant by operation of law, without the written consent
of Landlord.


 


 









 







22. ESTOPPEL CERTIFICATE AND FINANCIAL STATEMENTS.
Tenant shall at any time and from time to time, upon not less than ten (10) days’ prior
written notice from Landlord, execute, acknowledge, and deliver to Landlord a statement in writing
certifying, affirming or confirming certain information including, without limitation, that this
Sublease is unmodified and in full force and effect (or, if modified, stating the nature of such
modification and certifying that this Sublease, as so modified, is in full force and effect) and
the dates to which the rental, the security deposit, if any, and other charges, if any, are paid in
advance, and acknowledging that there are not, to Tenant’s knowledge, any uncured defaults on the
part of Landlord hereunder, and no events or conditions then in existence which, with the passage
of time or notice or both, would constitute a default on the part of Landlord hereunder, or
specifying such defaults, events, or conditions, if any are claimed. It is expressly understood
and agreed that any prospective purchaser or encumbrancer of all or any portion of the Building or
of the real property of which it is a part shall be entitled to rely upon any such statement.
Tenant’s failure to deliver such statement within such time shall, at the option of Landlord,
constitute a material breach or default under this Sublease. If such option is not so exercised by
Landlord (and despite any later delivery by Tenant of such statement), Tenant’s failure to deliver
same in a timely manner shall be conclusive upon Tenant that (i) this Sublease is in full force and
effect without modification except as may be represented by Landlord, (ii) there are no uncured
defaults in Landlord’s performance, and (iii) not more than one (1) month’s rental has been paid in
advance.



23. INTEREST ON PAST DUE OBLIGATIONS. Except as otherwise expressly provided in this
Sublease, any amount due from Tenant to Landlord hereunder which is not paid when due shall bear
interest at the lesser of (a) ten percent (10%) per annum or (b) the highest rate then allowed
under the laws of the State of California starting from the date due.




24. WAIVER.



(a) No delay or omission in the exercise of any right or remedy by either party to this
Sublease on the occurrence of any default by the other party to this Sublease shall impair such a
right or remedy or be construed as a waiver. The receipt and acceptance by Landlord of delinquent
rent shall not constitute a waiver of any other default; it shall constitute only a waiver of
timely payment for the particular rent payment involved. No act or conduct of Landlord, including
without limitation, the acceptance of the keys to the Premises, shall constitute an acceptance of
the surrender of the Premises by Tenant before the expiration of the term. Only written notice
from Landlord to Tenant shall constitute acceptance of the surrender of the Premises and accomplish
a termination of the Sublease. Landlord’s consent to or approval of any act by Tenant requiring
Landlord’s consent or approval shall not be deemed to waive or render unnecessary Landlord’s
consent to or approval of any subsequent act by Tenant. Any waiver by either party of any default
must be in writing and shall not be a waiver of any other default concerning the same or any other
provision of the Sublease.


 


 









 





(b) No acceptance by Landlord of a lesser sum than the Base Rent then due shall be deemed to
be other than on account of the earliest installment of such rent due, nor shall any endorsement or
statement of 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 installment or pursue any other remedy in this Sublease
provided. The delivery of keys to any employee of Landlord or to an agent of Landlord or any
employee thereof shall not operate as a termination of this Sublease or a surrender of the
Premises, unless expressly accepted therefor by Landlord.



25. FORCE MAJEURE. Whenever a day is appointed herein on which, or a period of time is
appointed within which, either party hereto is required to do or complete any act, matter or thing,
the time for the doing or completion thereof shall be extended by a period of time equal to the
number of days on or during which such party is prevented from, or is unreasonably interfered with,
the doing or completion of such act, matter or thing because of strikes, lock-outs, embargoes,
unavailability of labor or materials, wars, insurrections, rebellions, civil disorder, declarations
of national emergency, acts of God, or other causes beyond such party’s reasonable control
(financial inability excepted); provided, however, that nothing contained in this Section 25 shall
excuse Tenant from the prompt payment of any rental or other charge required of Tenant hereunder.




26. SURRENDER OF PREMISES.



(a) The voluntary or other surrender of this Sublease by Tenant to Landlord, or a mutual
termination 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 affecting the Premises.



(b) Upon the expiration of the term of this Sublease, or upon any earlier termination of this
Sublease, Tenant shall quit and surrender possession of the Premises to Landlord in good order and
condition, reasonable wear and tear, damage by fire or other casualty, condemnation and repairs or
other work for which Landlord is obligated hereunder excepted, and shall, without expense to
Landlord, remove or cause to be removed from the Premises all debris and rubbish, all furniture,
equipment, business and trade fixtures, free-standing cabinet work, moveable partitioning and other
articles of personal property owned by Tenant or installed or placed by Tenant at its expense in
the Premises, and all similar articles of any other persons claiming under Tenant unless Landlord
exercises its option to have any subleases or subtenancies assigned to it, and Tenant shall repair
all damage to the Premises resulting from such removal.



(c) Any property of Tenant not removed by Tenant upon the expiration of the term of this
Sublease (or within seventy-two (72) hours after a termination or re-entry by Landlord pursuant to
Section 21 hereof) shall be considered abandoned. Landlord shall give Tenant notice of its right
to reclaim abandoned property pursuant to California Civil Code Sections 1980, et seq., and may,
thereafter, remove any or all of such items and dispose of the same in any manner or store the same
in a public warehouse or elsewhere for the account and at the expense and risk of Tenant. Tenant
hereby grants to Landlord a security interest in said abandoned property, in the event it is not
reclaimed within the statutory period. If Tenant shall fail to pay the cost of storing any such
property after it has been stored for a period of thirty (30)
days or more, Landlord may sell any or all of such property at public or private sale, in such
manner and at such time and places as Landlord, in its sole discretion, may deem proper without
notice to or demand upon Tenant, and shall apply the proceeds of such sale: first, to the costs and
expenses of such sale, including reasonable attorneys’ fees actually incurred; second, to the
payment of the costs for the removal and storing of any such property; third, to the payment of any
other sums of money which may then or thereafter be due to Landlord from Tenant under any of the
terms hereof; and fourth, the balance, if any, to Tenant.


 


 









 






27. MASTER LEASE PROVISIONS.



(a) Landlord agrees that it will not cause or permit the Master Lease to be terminated or
forfeited without the written consent of Tenant.




28. MISCELLANEOUS.



(a) Any provision of this Sublease which shall prove to be invalid, void, or illegal shall in
no way affect, impair, or invalidate any other provision hereof and such other provisions shall
remain in full force and effect.



(b) In the event of any litigation between Tenant and Landlord, to enforce any provision of
this Sublease or any right of either party hereto, or to secure a judicial determination of any
right or obligation of either party hereto, the unsuccessful party in such litigation shall pay to
the successful party all costs and expenses, including reasonable attorney’s fees, incurred
therein. Moreover, if either party hereto without fault is made a party to any litigation
instituted by or against any other party to this Sublease, such other party shall indemnify
Landlord or Tenant, as the case may be, against and save it harmless from all costs and expenses,
including reasonable attorney’s fees, incurred by it in connection therewith. If Landlord is
required to incur any attorneys’ fees as a result of any failure by Tenant to timely or properly
perform any one or more of its obligations under the Sublease, Tenant shall reimburse Landlord for
such reasonable fees within ten (10) days of demand therefor from Landlord. Such attorneys’ fees
are not to be considered as a part of the late charge provided in Section 21(b) of the Sublease nor
as part of any interest payable under Section 24 of the Sublease, and payment by Tenant of any late
charge or interest shall not relieve Tenant of its obligation to pay any attorneys’ fees due under
this Section 29(b). Tenant further agrees to pay all rent and other sums due under this Sublease,
to perform all its non-monetary obligations under this Sublease, all in a timely manner,
notwithstanding any dispute which may arise between Landlord and Tenant, and to not withhold or
refuse to pay any such sum or to perform any such obligation while such dispute is pending.



(c) Each of Tenant’s covenants herein is a condition and time is of the essence with respect
to the performance of every provision of this Sublease, and the strict performance of each shall be
a condition precedent to Tenant’s right to remain in possession of the Premises or to have this
Sublease continue in effect.



(d) The section captions contained in this Sublease are for convenience and do not in any way
limit or amplify any term or provision of this Sublease and shall have no effect on its
interpretation.


 


 









 





(e) The terms “Landlord” and “Tenant” as used herein shall include the plural as well as the
singular, and the neuter shall include the masculine and feminine genders. The obligations herein
imposed upon Tenant shall be joint and several as to each of the persons, firms, or corporations of
which Tenant may be composed.



(f) This Sublease constitutes the entire agreement between the parties hereto with respect to
the subject matter hereof, and no prior agreement or understanding pertaining to any such matter
shall be effective for any purpose. No provision of this Sublease may be amended or supplemented
except by an agreement in writing signed by the parties hereto or their successors in interest.



(g) This Sublease shall be interpreted and enforced in accordance with the laws of the State
of California, which shall apply in all respects, including statutes of limitation, to any disputes
or controversies arising out of or pertaining to this Sublease.



(h) Upon Tenant’s paying the Base Rent and other sums provided hereunder, and observing and
performing all of the covenants, conditions, and provisions on Tenant’s part to be observed and
performed hereunder, Tenant shall have quiet possession of the Premises for the entire term hereof,
subject to all of the provisions of this Sublease.



(i) Except as otherwise provided in this Sublease, all of the covenants, conditions, and
provisions of this Sublease shall be binding upon and shall inure to the benefit of the parties
hereto and their respective heirs, personal representatives, successors, and assigns, and all
covenants of Tenant shall survive the expiration or earlier termination of this Sublease.



(j) Any notice required or permitted to be given hereunder shall be in writing and may be
given by personal delivery or by certified mail, return receipt requested, addressed to Tenant or
to Landlord at the addresses provided in Section 1(h) hereof. Either party may by notice to the
other specify a different address for notice purposes. A copy of all notices to be given to
Landlord hereunder shall be concurrently transmitted by Tenant to any other party hereafter
designated by written notice from Landlord to Tenant.



(k) Base Rent and all other sums payable under this Sublease, must be paid in lawful money of
the United States of America.



(l) The text of this Sublease shall be construed, in all respects, according to its fair
meaning, and not strictly for or against either Landlord or Tenant.



(m) If Tenant is a corporation, Tenant shall, if so requested by Landlord, deliver to Landlord
upon execution of this Sublease a certified copy of a resolution of its board of directors
authorizing the execution of this Sublease and naming the officers that are authorized to execute
this Sublease on behalf of the corporation.



(n) This Sublease shall not be recorded, except that if Landlord requests Tenant to do so, the
parties shall execute a memorandum of this Sublease in recordable form and Tenant shall execute and
deliver to Landlord on the expiration or termination of this Sublease, immediately on Landlord’s
request, a quitclaim deed to the Premises, in recordable form, designating Landlord as transferee.
All expenses incurred shall be borne by Landlord.


 


 









 





(o) If the amount of Base Rent or Additional Rent, or any other payment due under this
Sublease violates the terms of any governmental restrictions on such rent or payment, then the rent
or payment due during the period of such restrictions shall be the maximum amount allowable under
those restrictions. Upon termination of the restrictions, Landlord shall, to the extent it is
legally permitted, recover from Tenant the difference between the amounts received during the
period of the restrictions and the amounts Landlord would have received had there been no
restrictions.



(p) Landlord and Tenant hereby waive their respective right to trial by jury of any cause of
action, claim, counterclaim or cross-complaint in any action, proceeding and/or hearing brought by
either Landlord against Tenant or Tenant against Landlord on any matter whatsoever arising out of,
or in any way connected with, this Sublease, the relationship of Landlord and Tenant, Tenant’s use
or occupancy of the Premises, or any claim of injury or damage, or the enforcement of any remedy
under any law, statute, or regulation, emergency or otherwise, now or hereafter in effect.



(q) Notwithstanding anything in this Sublease to the contrary, wherever it is provided in the
Sublease that the consent of Landlord or Tenant is to be given, such consent shall not be
unreasonably withheld, conditioned or delayed; and wherever it is provided in this Sublease that a
determination shall be made by Landlord or Tenant, such determination shall be made on the basis of
reasonable standards of general applicability.



(r) Tenant has the right to install, operate, maintain, repair and replace a wireless network
and related equipment in the Premises, including an antennae on the roof of the Building, in a
location reasonably acceptable to Landlord. Tenant will have access to such rooftop antennae
subject to reasonable prior notice to, and approval of Landlord, which approval will not be
unreasonably withheld.



IN WITNESS WHEREOF, Landlord and Tenant have executed this Sublease as of the day and year
indicated below.



	 	 	 	 	 	 	 	 	 	 
	TENANT	 	 	 	LANDLORD	 
	 
	 	 	 	 	 	 	 	 	 
	SYCAMORE ENTERTAINMENT, INC. a
                                         company	 	 	 	SONICPOOL, INC. a California corporation	 
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Edward Sylvan
 

Print: Edward Sylvan
	 	 
	 	By:
	 	/s/ John W. Frost
 
 Print:
John W. Frost	 
	 
	 	 	 	 	 	 	 	 
	Dated: January 19, 2010	 	 	 	Dated: January 19, 2010