Exhibit 10.52





Exhibit
10.52



 

 






Commercial Space Lease




Single Tenant Triple Net




between




NLC-Lindblade, LLC,

a Delaware limited liability company

(“Landlord”)




and




Westwood One, Inc.

a Delaware corporation

(“Tenant”)




 

 








 












 









TABLE
OF CONTENTS




	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE 1	 	REFERENCES
	 	 	1	 
	 	 	 
	 	 	 	 
	ARTICLE 2	 	LEASED PREMISES, TERM AND POSSESSION
	 	 	3	 
	 	 	 
	 	 	 	 
	ARTICLE 3	 	RENT, LATE CHARGES AND SECURITY DEPOSITS
	 	 	6	 
	 	 	 
	 	 	 	 
	ARTICLE 4	 	USE OF LEASED PREMISES AND OUTSIDE AREA
	 	 	10	 
	 	 	 
	 	 	 	 
	ARTICLE 5	 	REPAIRS, MAINTENANCE, SERVICES AND UTILITIES
	 	 	15	 
	 	 	 
	 	 	 	 
	ARTICLE 6	 	ALTERATIONS AND IMPROVEMENTS
	 	 	18	 
	 	 	 
	 	 	 	 
	ARTICLE 7	 	ASSIGNMENT AND SUBLETTING BY TENANT
	 	 	19	 
	 	 	 
	 	 	 	 
	ARTICLE 8	 	LIMITATION ON LANDLORD’S LIABILITY AND INDEMNITY
	 	 	22	 
	 	 	 
	 	 	 	 
	ARTICLE 9	 	INSURANCE
	 	 	23	 
	 	 	 
	 	 	 	 
	ARTICLE 10	 	DAMAGE TO LEASED PREMISES
	 	 	26	 
	 	 	 
	 	 	 	 
	ARTICLE 11	 	CONDEMNATION
	 	 	27	 
	 	 	 
	 	 	 	 
	ARTICLE 12	 	DEFAULT AND REMEDIES
	 	 	28	 
	 	 	 
	 	 	 	 
	ARTICLE 13	 	GENERAL PROVISIONS
	 	 	30	 
	 	 	 
	 	 	 	 
	ARTICLE 14	 	CORPORATE AUTHORITY, BROKERS AND ENTIRE AGREEMENT
	 	 	40	 
	 	 	 
	 	 	 	 
	 	 	 
	 	 	 	 
	EXHIBIT “A”	 	LEGAL DESCRIPTION OF THE PROPERTY
	 	 	A-1	 
	EXHIBIT “B”	 	SITE PLAN OF THE PROJECT
	 	 	B-1	 
	EXHIBIT “C”	 	SCHEDULE OF BASE MONTHLY RENT & PARKING FEES
	 	 	C-1	 
	EXHIBIT “D”	 	FORM OF IRREVOCABLE STANDBY LETTER OF CREDIT
	 	 	D-1	 
	EXHIBIT “E”	 	SCHEDULE OF TENANT’S REPAIRS
	 	 	E-1	 
	EXHIBIT “F”	 	ROFO PURCHASE AGREEMENT
	 	 	F-1	 
	EXHIBIT “G”	 	MEMORANDUM OF LEASE
	 	 	G-1	 







 


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COMMERCIAL SPACE LEASE

(SINGLE TENANT TRIPLE NET)




THIS COMMERCIAL SPACE LEASE (Single Tenant Triple Net) (this “Lease”) dated as of December 17, 2009
(the “Effective Date”), and is entered into between NLC-Lindblade, LLC, a Delaware limited
liability company (“Landlord”), and Westwood One, Inc., a Delaware corporation (“Tenant”).



ARTICLE 1

REFERENCES




1.1 REFERENCES: All references in this Lease to the following terms shall have the following
meaning or refer to the respective address, person, date, time period, amount, percentage, calendar
year or fiscal year as below set forth:



	 	 	 
	A. Tenant’s Address for Notices:
	 	Westwood One, Inc.
	 
	 	1114 Avenue of the Americas, 28th Floor
	 
	 	New York, New York  10036
	 
	 	Attention:  General Counsel
	 
	 	Telephone:  212.641.2075
	 
	 	Facsimile:  212.641.2198
	 
	 	 
	 
	 	with a copy to:
	 
	 	 
	 
	 	Lowenstein Sandler PC
	 
	 	1251 Avenue of the Americas
	 
	 	New York, New York  10020
	 
	 	Attention:  Peter D. Greene, Esq.
	 
	 	Telephone:  646.414.6908
	 
	 	Facsimile:  973.422.6861
	 
	 	 
	B. Landlord’s Address for Notices:
	 	NLC-Lindblade, LLC
	 
	 	c/o Hackman Capital Partners, LLC
	 
	 	11111 Santa Monica, Suite 750
	 
	 	Los Angeles, California  90025-3343
	 
	 	Attention:  Chief Operating Officer
— Theresa Jones
	 
	 	Telephone: 310.473.8900
	 
	 	Facsimile:  310.473.8827
	 
	 	 
	 
	 	with a copy to:
	 
	 	 
	 
	 	c/o Hackman Capital Partners, LLC
	 
	 	11111 Santa Monica, Suite 750
	 
	 	Los Angeles, California  90025-3343
	 
	 	Attention:  Chief Financial Officer
— Scott Poland
	 
	 	Telephone: 310.473.8900
	 
	 	Facsimile:  310.473.8827
	 
	 	 
	 
	 	and with a copy to:
	 
	 	 
	 
	 	John A. Rosenfeld, Esq.
	 
	 	Post Office Box 1308
	 
	 	Topanga, California  90290
	 
	 	Telephone:  310.455.9718
	 
	 	Facsimile:  310.455.9768






 


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	C. Commencement Date:
	 	December 17, 2009
	 
	 	 
	D. Initial Lease Term:
	 	Ten (10) years
	 
	 	 
	E. Initial Term Expiration Date:
	 	December 16, 2019
	 
	 	 
	F. Second Month’s Prepaid Rent
	 	 
	 
	 	 
	and Parking Fees:
	 	$72,963.00
	 
	 	 
	Tenant’s Security Deposit:
	 	$218,889.00






G. Broker: CB Richard Ellis, Inc., for Tenant



H. Property or Project: That certain real property, situated in Culver City, County of Los
Angeles, State of California, more particularly described on Exhibit “A” attached hereto.



I. Buildings: Those certain structures and improvements situated on, or affixed or
appurtenant to the Property, including, without limitation, the parking facilities including (when
aggregated with the spaces available under the Parking Agreement (defined below in Article 1.1L
below)) approximately one hundred one (101) parking spaces (the “Parking Areas”) and the buildings
(each, a “Building” and collectively, the “Buildings”), having a common address of 8944 Lindblade
Street, 8966 Washington Boulevard (also commonly known as 8965 Lindblade Street) and 8960
Washington Boulevard (also commonly known as 8935 Lindblade Street), which Buildings and Parking
Areas are depicted on Exhibit “B” attached hereto.



J. Outside Areas: The term “Outside Areas” shall mean all areas of the Property on the
exterior of the Buildings, including, without limitation, the Parking Areas and structures
(including striping and sealing of the Parking Areas and lighting systems in the Outside Areas),
driveways, sidewalks, landscaped, planted areas (including sprinkler systems and drains) and
enclosed trash disposal areas.



K. Private Restrictions: All tenements, hereditaments, easements, rights-of-way, rights and
privileges in and to the Property, including (i) easements over other lands granted by any easement
agreement, (ii) any streets, ways, alleys, vaults, gores or strips of land adjoining the Property,
and (iii) the rights under that certain Covenant and Agreement Regarding Parking made as of August
17, 1990, between GTO Entertainment and Westwood One, Inc., a Delaware corporation, recorded on
September 10, 1990, in the Official Records of Los Angeles County, California, as Instrument No.
90-1556576 (the “Parking Agreement”).



L. Fixtures: All fixtures, machinery, equipment and other property located on or affixed to
the Property or the Buildings.



M. Leased Premises: All the space within the Property, consisting of approximately 32,428
square feet of Buildings situated on approximately 53,522 gross square feet of land, for purposes
of this Lease, agreed between Landlord and Tenant to contain said number of square feet.



N. Base Monthly Rent: The term “Base Monthly Rent” shall mean the amounts, as adjusted, set
forth on Exhibit “C” attached hereto.



O. Permitted Use: The term “Permitted Use” shall mean the use of the Leased Premises for
production and broadcast of media content and general office use and all uses ancillary to any such
uses; provided, however, that if Tenant desires to use the Leased Premises for any principal
purpose other than studio, production and general office use, then (i) such other purpose shall be
subject to applicable zoning restrictions, and (ii) Tenant shall obtain Landlord’s prior written
consent, which consent may be withheld in Landlord’s reasonable discretion.



P. Exhibits: The term “Exhibits” shall mean the Exhibits to this Lease which are described as
follows:


 


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	Exhibit “A”-

	 	Legal Description of the Property
	Exhibit “B”-

	 	Site Plan depicting the Property, the Buildings and Parking Areas
	Exhibit “C” -

	 	Schedule of Base Monthly Rent
	Exhibit “D” -

	 	Irrevocable Standby Letter of Credit
	Exhibit “E” -

	 	Schedule of Tenant’s Repairs
	Exhibit “F” -

	 	ROFO Purchase Agreement
	Exhibit “G” -

	 	Memorandum of Lease






ARTICLE 2

LEASED PREMISES, TERM AND POSSESSION




2.1 DEMISE OF LEASED PREMISES: Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord for Tenant’s own use in the conduct of Tenant’s business, for the Lease Term and upon the
terms and subject to the conditions of this Lease, the Leased Premises, reserving and excepting to
Landlord the right to share in all profits to be derived from any permitted assignments or
sublettings by Tenant during the Lease Term to the extent provided by Article 7. Tenant’s lease of
the Leased Premises, together with the appurtenant right to use the Outside Areas as described in
Article 2.2 below, shall be conditioned upon and be subject to the continuing compliance by Tenant
with (i) all the terms and conditions of this Lease, (ii) all Laws (as defined in Article 13.11(D))
governing the use of the Leased Premises and the Property, (iii) all Private Restrictions,
including, without limitation, all of the terms and conditions of the Parking Agreement, any others
easements and other matters now of public record respecting the Leased Premises and the Property,
and (iv) all reasonable rules and regulations from time to time established by Landlord. Subject
to Tenant’s compliance with the terms and conditions of this Lease, Landlord covenants and agrees
that Tenant shall have the right to quiet possession of the Leased Premises during the Lease Term.



2.2 RIGHT TO USE OUTSIDE AREAS: As an appurtenant right to Tenant’s right to the use and
occupancy of the Leased Premises, Tenant shall have the right to exclusively use the Outside Areas
in conjunction with the Permitted Use of the Leased Premises solely for the purposes for which they
were designed and intended and for no other purposes whatsoever. Tenant’s right to use the Outside
Areas shall be subject to the limitations on such use as set forth in Article 4 and shall terminate
concurrently with any termination of this Lease. Unless approved in writing by Landlord, Tenant
shall not use the Outside Areas to store any property, temporarily or permanently, except for the
one (1) emergency generator approved by Landlord (the “Generator”) serving the Buildings and
located in the area depicted on Exhibit “B”, benches and tables for employee use and the refuse and
recycling storage areas located in the areas depicted on Exhibit “B”. Any other storage or other
items within the Outside Areas shall be permitted only by the prior written consent of Landlord.
If any unauthorized storage shall occur or if Tenant shall violate any covenants applicable to the
Leased Premises, Landlord shall have the right, without notice, in addition to such other rights
and remedies that it may have, to remove the property and charge the cost to Tenant, which cost
shall be immediately payable upon demand by Landlord.



2.3 LEASE TERM: Landlord hereby leases the Leased Premises to Tenant, and Tenant hereby rents
and hires the Leased Premises from Landlord, for the Lease Term set forth in Article 1 above,
subject to the terms and conditions of this Lease.



2.4 DELIVERY OF POSSESSION: Landlord shall deliver to Tenant possession of the Leased
Premises on or before the Commencement Date in their presently existing condition.



2.5 ACCEPTANCE OF POSSESSION: Tenant acknowledges that (i) it has inspected the Leased
Premises, (ii) is willing to accept the Leased Premises in their existing condition, and (iii)
neither Landlord nor any representative of Landlord has made any representation or warranty with
respect to the Leased Premises, the Buildings or the Property or their respective suitability or
fitness for any purpose, including, without limitation, any representations or warranties regarding
zoning or other land use matters. Tenant acknowledges and agrees that, as the fee owner of the
Property prior to the execution of this Lease, and except for Tenant’s Repairs (as defined in
Article 5.1(E) below, all existing plumbing, lighting, heating, ventilating and air conditioning
systems within the Leased Premises and all doors serving the Leased Premises are in good operating
condition as of the Commencement Date. As of the Commencement Date, Tenant hereby agrees to accept
the Leased Premises in its



 


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existing condition and acknowledges that Tenant does not rely on, and Landlord does not make,
any express or implied representations or warranties as to any matters, including, without
limitation, the suitability of the soil or subsoil, any characteristics of the Leased Premises or
improvements thereon, the suitability of the Leased Premises for the intended use, the economic
feasibility of the business Tenant intends to conduct on the Leased Premises, title to the Leased
Premises, Hazardous Materials (as defined in Article 4.13(F) below) on or in the vicinity of the
Leased Premises, or any other matter. Tenant further acknowledges that neither Landlord nor any
representative of Landlord has agreed to undertake any alterations or additions or construct any
improvements to the Leased Premises. Tenant hereby agrees that if any remedial or restoration work
is required by any governmental authority in order to conform the Leased Premises to the
requirements of any applicable Laws, Tenant shall assume responsibility for any such work.



2.6 SURRENDER OF POSSESSION: Immediately prior to the expiration or upon the sooner
termination of this Lease, Tenant shall remove all of Tenant’s signs from the exterior of the
Buildings and shall remove all of Tenant’s personal property from the Leased Premises, and shall
vacate and surrender the Leased Premises to Landlord in good condition and repair in accordance
with this Article, reasonable wear and tear excepted, and shall deliver to Landlord all keys to the
Leased Premises. Tenant shall, to Landlord’s reasonable satisfaction, (i) repair all damage to the
Leased Premises caused by Tenant’s removal of Tenant’s personal property and all damage to the
exterior of the Buildings caused by Tenant’s removal of all signs, (ii) patch and refinish all
penetrations made by Tenant or its agents and employees to the floor, walls or ceiling of the
Leased Premises, whether such penetrations were made with Landlord’s approval or not; (iii) clean,
repair or replace all stained or damaged ceiling tiles, wall coverings and clean or replace as may
be required all stained or damaged floor coverings; (iv) replace all burned out light bulbs and
damaged light lenses; (v) pay the cost to restore (or replace as required) all heating,
ventilating, and air-conditioning equipment to good working order to the extent the need for the
restoration or replacement results from Tenant’s failure to maintain the equipment in the condition
required by this Lease; (vi) pay the cost of restoring or replacing all trees, shrubs, plants, lawn
and ground cover and repair (or replace as required) to the extent the need for the restoration or
replacement results from Tenant’s failure to maintain such landscaping in the condition required by
this Lease; (vii) pay the cost to restore (or replace as required) all paved surfaces of the Leased
Premises to the extent the need for the restoration or replacement results from Tenant’s failure to
maintain the paving in the condition required by this Lease; and (viii) remove all Alterations
required to be removed under Article 6 below. Tenant shall otherwise satisfy all requirements to
repair any damage or excessive wear to the Leased Premises, the Buildings, Outside Areas and/or
Property. Tenant shall not be required to comply with the preceding two (2) sentences of this
Article for any portion of the Leased Premises that Landlord notifies Tenant in writing that such
portion of the Leased Premises are to be demolished by on or behalf of the next occupant of the
Leased Premises. If the Leased Premises are not surrendered to Landlord in the condition required
by this Article at the expiration or sooner termination of this Lease, Landlord may, after three
(3) business days notice and opportunity of Tenant to cure, to cure, at Tenant’s sole expense,
remove Tenant’s signs, Tenant’s personal property and/or improvements not so removed and make such
repairs and replacements not so made or hire, at Tenant’s sole expense, independent contractors to
perform such work. Tenant shall be liable to Landlord for all costs incurred by Landlord in
returning the Leased Premises to the required condition, plus interest on all costs incurred from
the date paid by Landlord at the rate of ten percent (10%) per annum (the “Lease Interest Rate”),
payable by Tenant to Landlord within ten (10) days after receipt of a statement therefore from
Landlord, and Tenant shall be deemed to have impermissibly held over until such time as such
required work is completed, and Tenant shall pay Base Monthly Rent and Additional Rent in
accordance with the terms of Article 13.2 until such work is completed.



2.7 OPTIONS TO EXTEND: Tenant shall have two (2) options (each an “Extension Option” and
collectively, the “Extension Options”) to extend the Lease Term for the entire Leased Premises only
for additional periods of five (5) years each (each an “Extended Term”). To exercise an Extension
Option with respect to each Extended Term, Tenant shall deliver written notice to Landlord (each an
“Election Notice”) not more than fifteen (15) months and not less than twelve (12) months prior to
the expiration of the initial Lease Term or the first Extended Term, as applicable.
Notwithstanding the foregoing, Tenant shall have no right to exercise an Extension Option (i)
during the period commencing with the giving of any valid notice of default and continuing until
said default is cured, (ii) during the period of time any Base Monthly Rent or Additional Rent is
unpaid (without regard to whether notice thereof is given to Tenant), or (iii) in the event that
Tenant has been given three (3) or more valid notices of separate default, whether or not the
defaults are cured, during any twelve (12) month period during the Lease Term preceding the
exercise of the Extension Option. The period of time within which an Extension Option may be
exercised shall not be extended or enlarged by reason of Tenant’s inability to exercise an
Extension Option



 


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because of the provisions of this Article 2.7. In addition, an Extension Option shall
terminate and be of no further force or effect, notwithstanding Tenant’s due and timely exercise of
the Extension Option, if, after such exercise and prior to the commencement of the Extended Term,
(y) Tenant fails to pay Base Monthly Rent or Additional Rent for a period of thirty (30) days after
such Base Monthly Rent or Additional Rent becomes due (without any necessity of Landlord to give
notice thereof), or (z) if Tenant commits a default of the Lease beyond the applicable cure period,
if any.



A. If Tenant properly and timely exercises an Extension Option pursuant to this Article 2.7,
then each Extended Term shall be upon all of the same terms, covenants and conditions of this
Lease; provided, however, that (i) the Base Monthly Rent applicable to the Leased Premises for the
Extended Term shall be ninety-five percent (95%) of the Fair Market Rent (as defined below) for
creative office space comparable to the Leased Premises as of the commencement of the applicable
Extended Term; (ii) the Base Monthly Rent for each year during the Extended Term shall be subject
to annual increases, and (iii) in no event shall the Base Monthly Rent for an Extended Term be less
than the applicable Base Monthly Rent for the month immediately preceding the first month of the
applicable Extended Term. The term “Fair Market Rent” shall mean the annual rental being charged
for creative office space of a class comparable to that of the Leased Premises, as of the
commencement of the applicable Extended Term, within Culver City and Santa Monica, County of Los
Angeles, California (“Comparable Class”), taking into account location, condition, existing
improvements to the space and any improvements to be made to the Leased Premises in connection with
the Extended Term or otherwise. Tenant shall pay all leasing commissions and consulting fees
payable in connection with the Extension Options, unless such leasing commissions or consulting
fees arise solely out of a contractual relationship between Landlord and a broker or consultant.



B. Within one hundred twenty (120) days prior to the commencement of the applicable Extended
Term, Landlord and Tenant shall negotiate in good faith in an attempt to determine Fair Market Rent
for the applicable Extended Term. If within thirty (30) days after the commencement of such one
hundred twenty (120) day period Landlord and Tenant are unable to agree on the Fair Market Rent for
any Extended Term, then the Fair Market Rent shall be determined as provided in Article 2.7(C)
below.



C. If it becomes necessary to determine the Fair Market Rent for the Leased Premises by
appraisal, the real estate appraiser(s) indicated in this Article shall be members of the American
Institute of Real Estate Appraisers (or its successor organization, or if such organization ceases
to exist, by the American Arbitration Association), shall have at least five (5) years experience
appraising office space located in Culver City and Santa Monica, California, and shall be appointed
and shall act in accordance with the following procedures:



(1) If the parties are unable to agree on the Fair Market Rent within the above-referenced
thirty (30) day period, then either party may demand an appraisal by giving written notice to the
other party, which demand to be effective must state the name, address and qualifications of an
appraiser selected by the party demanding the appraisal (“Notifying Party”). Within fifteen (15)
days following the Notifying Party’s appraisal demand, the other party (“Non-Notifying Party”)
shall either approve the appraiser selected by the Notifying Party or select a second properly
qualified appraiser by giving written notice of the name, address and qualification of said
appraiser to the Notifying Party. If the Non-Notifying Party fails to select an appraiser within
the fifteen (15) day period, the appraiser selected by the Notifying Party shall be deemed selected
by both parties and no other appraiser shall be selected. If two (2) appraisers are selected, they
shall select a third appropriately qualified appraiser within ten (10) days of selection of the
second appraiser. If the two (2) appraisers fail to select a third qualified appraiser, the third
appraiser shall be appointed by the American Institute of Real Estate Appraisers (or its successor
organization, or if such organization ceases to exist, by the American Arbitration Association)
upon application by either party.



(2) If only one (1) appraiser is selected, such appraiser shall notify the parties in simple
letter form of its determination of the Fair Market Rent for the Leased Premises within fifteen
(15) days following his or her selection, which appraisal shall be conclusively determinative and
binding on the parties as the appraised Fair Market Rent.



(3) If multiple appraisers are selected, the appraisers shall meet not later than ten (10)
days following the selection of the last appraiser. At such meeting, the appraisers shall attempt
to determine the Fair


 


5









 







Market Rent for the Premises as of the commencement date of the Extended Term by the agreement
of at least two (2) of the appraisers.


(4) If two (2) or more of the appraisers agree on the Fair Market Rent for the Leased Premises
at the initial meeting, such agreement shall be determinative and binding upon the parties hereto
and the agreeing appraisers shall forthwith notify both Landlord and Tenant of the amount set by
such agreement. If multiple appraisers are selected and two (2) appraisers are unable to agree on
the Fair Market Rent for the Leased Premises, each appraiser shall submit to Landlord and Tenant
his or her respective independent appraisal of the Fair Market Rent for the Leased Premises, in
simple letter form, within fifteen (15) days following appointment of the final appraiser. The
parties shall then determine the Fair Market Rent for the Leased Premises by averaging the
appraisals; provided that any high or low appraisal, differing from the middle appraisal by more
than ten percent (10%) of the middle appraisal, shall be disregarded in calculating the average.



(5) If only one (1) appraiser is selected, then each party shall pay one-half (1/2) of the fees
and expenses of that appraiser. If three (3) appraisers are selected, each party shall bear the
fees and expenses of the appraiser it selects and one-half (1/2) of the fees and expenses of the
third appraiser.



D. The Extension Option is personal to Westwood One, Inc., a Delaware corporation (and to any
Affiliate or Successor who has assumed the Lease or succeeded to Tenant’s rights under Article
7.10), and cannot be assigned or exercised by any person or entity other than Westwood One, Inc., a
Delaware corporation (or such Affiliate or Successor), and may be exercised only while Westwood
One, Inc., a Delaware corporation (or such Affiliate or Successor), is in full possession of the
Leased Premises and without the intention of thereafter assigning or subleasing the Leased
Premises.



E. Immediately after the Fair Market Rent has been determined, the parties shall enter into an
amendment to this Lease setting forth the Base Monthly Rent for the applicable Extended Term and
the new expiration date of the Lease Term. All other terms and conditions of the Lease shall
remain in full force and effect and shall apply during the Extended Term, except that: (i) there
shall be no further option to extend the Lease Term beyond the expiration of the second Extended
Term (if and as applicable), (ii) there shall be no rent concessions, and (iii) there shall be no
construction allowance, tenant improvement allowance or similar provisions or any obligation on the
part of Landlord to construct any improvements within the Leased Premises.



ARTICLE 3

RENT, LATE CHARGES AND SECURITY DEPOSITS




3.1 BASE MONTHLY RENT: Commencing on the Commencement Date and continuing throughout the
Lease Term, Tenant shall pay to Landlord, without prior demand therefore or offset, in advance on
the first day of each calendar month, as base monthly rent, the applicable Base Monthly Rent set
forth on Exhibit “C” attached hereto.



3.2 ADDITIONAL RENT: Commencing on the Commencement Date and continuing throughout the Lease
Term, in addition to the Base Monthly Rent, Tenant shall pay to Landlord without offset as
additional rent (the “Additional Rent”) the following amounts:



A. An amount equal to all Property Operating Expenses (as defined in Article 13) incurred by
Landlord. Payment shall be made by whichever of the following methods (or combination of methods)
is (are) from time to time designated by Landlord:



(1) Landlord may bill to Tenant, on a periodic basis not more frequently than monthly, the
amount of such expenses (or group of expenses) as paid or incurred by Landlord, and Tenant shall
pay to Landlord the amount of such expenses within thirty (30) days after receipt of a written bill
therefore from Landlord; and/or



(2) Landlord may deliver to Tenant Landlord’s reasonable estimate of any given expense (such
as Landlord’s Insurance Costs or Real Property Taxes), or group of expenses, which it anticipates
will be paid or incurred for the ensuing calendar or fiscal year, as Landlord may determine, and
Tenant shall pay to Landlord an


 


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amount equal to the estimated amount of such expenses for such year in equal monthly,
installments during such year with the installments of Base Monthly Rent.



(3) Landlord reserves the right to change from time to time the methods of billing Tenant for
any given expense or group of expenses or the periodic basis on which such expenses are billed;
provided, however, in no event shall Landlord bill any such expenses more frequently than monthly.



B. The fees imposed from time to time for the right to use the Parking Areas in accordance
with the Parking Agreement (“Parking Fees”), without prior demand therefore or offset, in advance
on the first day of each calendar month, together with the Base Monthly Rent in accordance with the
schedule set forth on Exhibit “C” attached hereto. In the event Parking Fees are imposed for any
period of time prior to the Commencement Date, Tenant shall pay all such Parking Fees upon demand.



C. Landlord’s share of the consideration received by Tenant upon certain assignments and
sublettings as required by Article 7;



D. Any legal fees and costs that Tenant is obligated to pay or reimburse to Landlord pursuant
to Article 13; and



E. Any other charges or reimbursements due Landlord from Tenant pursuant to the terms of this
Lease other than late charges and interest on defaulted rent.



This Lease is a “net lease,” and Tenant’s obligations arising or accruing during the Lease Term to
pay Base Monthly Rent, Additional Rent and all other payments under this Lease required to be made
by Tenant shall be absolute and unconditional. Tenant shall pay all Base Rent, Additional Rent and
all other payments required to be made by Tenant under this Lease without notice, demand,
counterclaim, set-off, deduction, or defense and free from any charges, assessments, impositions,
expenses or deductions of any and every kind of and nature whatsoever. Subject to exceptions and
limitations expressly set forth in this Lease, (i) all costs, expenses and obligations of every
kind and nature whatsoever relating to the Leased Premises that may arise or become due during the
Lease Term (whether or not the same shall become payable during the Lease Term or thereafter) shall
be paid by Tenant, and (ii) Landlord shall have no obligation or responsibility to perform any
improvements or to provide any services or to perform any repairs, maintenance or replacements in,
to, at, on or under the Leased Premises or the Property.



3.3 YEAR-END ADJUSTMENTS: If Landlord shall have elected to bill Tenant for the Property
Operating Expenses (or any group of such expenses) on an estimated basis in accordance with the
provisions of Article 3.2A(2) above, Landlord shall furnish to Tenant within three (3) months
following the end of the applicable calendar or fiscal year, as the case may be, a statement
setting forth (i) the amount of such expenses paid or incurred during the just ended calendar or
fiscal year, as appropriate, and (ii) the amount that Tenant has paid to Landlord for credit
against such expenses for such period. If Tenant shall have paid more than its obligation for such
expenses for the stated period, Landlord shall, at its election, either (a) credit the amount of
such overpayment toward the next ensuing payment or payments of Additional Rent that would
otherwise be due, or (b) refund in cash to Tenant the amount of such overpayment. If such year-end
statement shall show that Tenant did not pay its obligation for such expenses in full, then Tenant
shall pay to Landlord the amount of such underpayment within thirty (30) days from Landlord’s
billing of same to Tenant. The provisions of this Article shall survive the expiration or sooner
termination of this Lease.



Landlord agrees to maintain accurate books and records of the Property Operating Expenses for each
calendar or fiscal year or partial year throughout the Term and for a period of two (2) years
thereafter. Tenant shall have ninety (90) days after receipt of any statement for Property
Operating Expenses within which to raise any questions or objections to the items or calculations
contained in such statement, which questions or objections must be delivered to Landlord in writing
and, as to any objections, must set out with particularity the nature of such objections. If
Tenant requests, within such ninety (90) days following receipt of a statement, to review
Landlord’s records (limited to such records relevant to the information in the statement), Landlord
shall permit Tenant (through a reputable and duly licensed certified public accounting firm
reasonably approved by Landlord) to review such records in the offices of Landlord or Landlord’s
property manager, during normal business hours, within thirty (30) days after such request. Tenant
shall provide Landlord with a written report of the findings of Tenant’s review



 


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within thirty (30) days after such review. If, following Tenant’s review, Tenant continues to dispute any items or
any calculations contained in any statement, Tenant shall continue to pay all amounts due
hereunder, without any deduction or offset whatsoever, but nothing in this Lease shall prohibit or
impair Tenant’s right to bring suit against Landlord to resolve any of Tenant’s claims against
Landlord arising out of such a dispute.



3.4 LATE CHARGE AND INTEREST ON RENT IN DEFAULT: Tenant acknowledges that the late payment by
Tenant of any monthly installment of Base Monthly Rent or any Additional Rent will cause Landlord
to incur certain costs and expense not contemplated under this Lease, the exact amounts of which
are extremely difficult or impractical to fix. Such costs and expenses will include, without
limitation, administration and collection costs and processing and accounting expenses. Therefore,
if any installment of Base Monthly Rent or Additional Rent is not received by Landlord from Tenant
within six (6) calendar days after the same becomes due, Tenant shall immediately pay to Landlord a
late charge in an amount equal to the greater of five percent (5%) of the amount overdue or $500.00
for each delinquent payment (the “Late Charge Amount”); provided, however, (i) Tenant shall not be
obligated to pay the Late Charge Amount solely with respect to the first late payment of Base
Monthly Rent and/or Additional Rent during the Lease Term as long as such Base Monthly Rent and/or
Additional Rent is paid within ten (10) calendar days of when first due, and (ii) the Late Charge
Amount shall be $500.00 solely with respect to the second late payment of Base Monthly Rent and/or
Additional Rent during the Lease Term so long as such Base Monthly Rent and/or Additional Rent is
paid within ten (10) calendar days of when first due, and (iii) except as otherwise provided in the
foregoing clauses (i) and (ii), so long as Tenant has not made late payment of Base Monthly Rent
and/or Additional Rent more than two times during the preceding twelve (12) months, the Late Charge
Amount shall be reduced to the greater of three percent (3%) of the amount overdue or $500.
Landlord and Tenant agree that the Late Charge Amount represents a reasonable estimate of such
costs and expenses and is fair compensation to Landlord for the anticipated loss Landlord would
suffer by reason of Tenant’s failure to make timely payment. In no event shall this provision for
a late charge be deemed to grant to Tenant a grace period or extension of time within to pay any
rental installment or prevent Landlord from exercising any right or remedy available to Landlord
upon Tenant’s failure to pay each rental installment due under this Lease when due, including the
right to terminate this Lease. If any rent remains delinquent for a period in excess of six (6)
calendar days, then, in addition to the Late Charge Amount, Tenant shall pay to Landlord interest
on any rent that is not so paid from said sixth (6th) day at the Lease Interest Rate until paid in
full.



3.5 PAYMENT OF RENT: All rent shall be paid in lawful money of the United States, without any
abatement, reduction or offset for any reason whatsoever, to Landlord at such address as Landlord
may designate from time to time. Tenant’s obligation to pay Base Monthly Rent and all Additional
Rent shall be appropriately prorated at the commencement and expiration of the Lease Term. The
failure by Tenant to pay any Additional Rent as required pursuant to this Lease when due shall be
treated the same as a failure by Tenant to pay Base Monthly Rent when due, and Landlord shall have
the same rights and remedies against Tenant as Landlord would have if Tenant failed to pay the Base
Monthly Rent when due.



3.6 PREPAID RENT: Concurrent with the execution of this Lease, Tenant shall pay to Landlord
the amount set forth in Article 1 as the first month’s Base Monthly Rent and Parking Fees.



3.7 SECURITY DEPOSIT: Tenant shall deposit with Landlord upon the execution of this Lease by
Landlord and Tenant, an irrevocable standby letter of credit (the “Letter of Credit”) in the amount
set forth in the Basic Lease Information as the “Security Deposit” under this Lease and in the form
of Exhibit “D” attached hereto. The Security Deposit shall be held by Landlord as security for the
performance by Tenant of all its obligations under this Lease. If Tenant fails to pay any Rent due
hereunder, or otherwise commits a default with respect to any provision of this Lease, Landlord may
use, apply or retain all or any portion of the Security Deposit for the payment of any such Rent or
for the payment of any other amounts expended or incurred by Landlord by reason of Tenant’s
default, or to compensate Landlord for any loss or damage which Landlord may incur thereby (and in
this regard Tenant hereby waives the provisions of California Civil Code Section 1950.7 and any
similar or successor statute providing 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 Leased 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 or any officer, employee, agent or invitee
of Tenant). Exercise by Landlord of its rights hereunder shall not constitute a waiver of, or
relieve Tenant from any liability for, any default. If any portion of the Letter of Credit posted
as the Security Deposit is drawn



 


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upon by Landlord for such purposes, Tenant shall within ten (10) days after written demand
therefore, deposit a replacement Letter of Credit with Landlord in the amount of the original
Letter of Credit. If Tenant performs all of Tenant’s obligations hereunder, the Letter of Credit
shall be returned to Tenant (or, at Landlord’s option, to the last assignee, if any, of Tenant’s
interest under this Lease) within thirty (30) days after the later of (i) the date of expiration or
earlier termination of this Lease, or (ii) vacation of the Leased Premises by Tenant if the Leased
Premises has been left in the condition specified by this Lease. Upon termination of the original
Landlord’s (or any successor owner’s) interest in the Leased Premises, the original Landlord (or
such successor) shall be released from further liability with respect to the Security Deposit upon
the original Landlord’s (or such successor’s) delivery of the Letter of Credit to the successor
landlord and compliance with California Civil Code Section 1950.7(d), or successor statute.



A. The Letter of Credit deposited as a Security Deposit shall be issued by a U.S. based
money-center bank (a bank which accepts deposits, which maintains accounts, which has a local
office in the City of Los Angeles that will negotiate a letter of credit and whose deposits are
insured by the FDIC) whose financial strength shall be sufficient to meet liquidity demands with
respect to issued letters of credit and which is otherwise acceptable to Landlord. The Letter of
Credit shall be issued for a term of at least twelve (12) months and shall be in a form and with
such content reasonably acceptable to Landlord. The Letter of Credit shall specify that the issuer
thereof shall notify the beneficiary of the Letter of Credit in writing at least sixty (60) days in
advance of the expiry date of such Letter of Credit if the Letter of Credit shall not be renewed as
of such expiry date. Tenant shall either replace the expiring Letter of Credit with another Letter
of Credit in an amount equal to the original Letter of Credit or renew the expiring Letter of
Credit, in any event no later than thirty (30) days prior to the expiration of the term of the
Letter of Credit then in effect. If Tenant fails to deposit a replacement Letter of Credit or
renew the expiring Letter of Credit, Landlord shall have the right immediately to draw upon the
expiring Letter of Credit for the full amount thereof and hold the funds drawn as the Security
Deposit. Any Letter of Credit deposited with Landlord during the final lease year of the Term must
have an expiry date no earlier than the date which is thirty (30) days after the expiration of the
Lease Term, as extended (if and as applicable). If Landlord notifies Tenant in writing that the
bank which issued the Letter of Credit has become financially unacceptable (e.g., the bank is under
investigation by governmental authorities, the bank no longer has the financial strength equivalent
to the current financial strength of Wells Fargo Bank, N.A., the FDIC or other applicable
governmental agency has threatened to place the bank in conservatorship or receivership, or the
bank has filed bankruptcy or reorganization proceedings), then Tenant shall have thirty (30) days
after notice from Landlord to provide Landlord with a substitute Letter of Credit complying with
all of the requirements hereof. If Tenant does not so provide Landlord with a substitute Letter of
Credit within such time period, then Landlord shall have the right to draw upon the current Letter
of Credit and hold the funds drawn as the Security Deposit. The premium or purchase price of, or
any other bank fees (including transfer or assignment fees) associated with, such Letter of Credit
shall be paid by Tenant. The Letter of Credit shall be transferable (and must permit multiple
transfers), irrevocable and unconditional, so that Landlord, or its successors-in-interest, may at
any time draw on the Letter of Credit against sight drafts presented by Landlord, accompanied by
Landlord’s statement, made under penalty of perjury, that said drawing is in accordance with the
terms and conditions of this Lease; no other document or certification from Landlord shall be
required to negotiate the Letter of Credit and the Landlord may draw on any portion of the then
uncalled upon amount thereof without regard to and without the issuing bank inquiring as to the
right or lack of right of the holder of said Letter of Credit to effect such draws or the existence
or lack of existence of any defenses by Tenant with respect thereto. The Letter of Credit shall
not be mortgaged, assigned or encumbered in any manner whatsoever by Tenant without the prior
written consent of Landlord (which consent may be withheld by Landlord in its sole discretion).
The use, application or retention of the Letter of Credit, or any portion thereof, by Landlord
shall not prevent Landlord from exercising any other right or remedy provided by this Lease or by
Law, it being intended that Landlord shall not first be required to proceed against the Letter of
Credit, and such use, application or retention shall not operate as a limitation on any recovery to
which Landlord may otherwise be entitled.



B. Tenant acknowledges and agrees that the Letter of Credit constitutes a separate and
independent contract between Landlord and the issuing bank, that Tenant is not a third-party
beneficiary of such contract, and that Landlord’s claim under the Letter of Credit for the full
amount due and owing thereunder shall not be, in any way, restricted, limited, altered or impaired
by virtue of any provision of the Bankruptcy Code, including, but not limited to, Section 502(b)(6)
of the Bankruptcy Code.


 


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C. The Letter of Credit shall be transferable to any of the following parties: (i) any
secured or unsecured lender of Landlord, or (ii) any assignee, successor, transferee or other
purchaser of all or any portion of the Buildings, or any interest in any Building. Further, in the
event of any sale, assignment or transfer by the Landlord of its interest in the Leased Premises or
the Lease, Landlord shall have the right to assign or transfer the Letter of Credit to its grantee,
assignee or transferee; and in the event of any sale, assignment or transfer, the landlord so
assigning or transferring the Letter of Credit shall have no liability to Tenant for the return of
the Letter of Credit, and Tenant shall look solely to such grantee, assignee or transferee for such
return, so long as such grantee, assignee or transferee assumes in writing all of Landlord’s
obligations with respect to the Letter of Credit. The terms of the Letter of Credit shall permit
multiple transfers of the Letter of Credit. Tenant shall use its best efforts to cooperate with
Landlord and the bank to effect the transfer(s) of the Letter of Credit and Tenant shall be
responsible for all costs of the bank associated therewith.



ARTICLE 4

USE OF LEASED PREMISES AND OUTSIDE AREA




4.1 PERMITTED USE: Tenant shall be entitled to use the Leased Premises solely for the
Permitted Use as set forth in Article 1 and for no other purpose. Tenant shall have the exclusive
right to use the Outside Areas in conjunction with its Permitted Use of the Leased Premises solely
for the purposes for which they were designed and intended and for no other purpose.



4.2 GENERAL LIMITATIONS ON USE: Tenant shall not do or permit anything to be done in or about
the Leased Premises, the Buildings, the Outside Areas or the Property which does or could (i)
jeopardize the structural integrity of the Building, or (ii) cause damage to any part of the Leased
Premises, the Buildings, the Outside Areas or the Property. Tenant shall not operate any equipment
within the Leased Premises which does or could (a) injure, vibrate or shake the Leased Premises or
any Building, (b) damage, overload, corrode or impair the efficient operation of any electrical,
plumbing, sewer, heating, ventilating or air conditioning systems within or servicing the Leased
Premises or any Building, or (c) damage or impair the efficient operation of the sprinkler system
(if any) within or servicing the Leased Premises or any Building. Except as permitted in Article
5, Tenant shall not affix any equipment to or make any penetrations or cuts in the floor, ceiling
or walls of the Leased Premises without Landlord’s prior written consent. Tenant shall not place
any loads upon the floors, walls, ceiling or roof systems which could endanger the structural
integrity of any Building or damage its floors, foundations or supporting structural components.
Tenant shall not place any explosive, flammable or harmful fluids or other waste materials
including Hazardous Materials in the drainage systems of the Leased Premises, the Buildings, the
Outside Areas or the Property. Tenant shall not commit nor permit to be committed any waste in or
about the Leased Premises, any Building, the Outside Areas or the Property.



4.3 NOISE AND EMISSIONS: All noise generated by Tenant in its use of the Leased Premises
shall be confined or muffled so that it does not interfere with the businesses of or annoy the
occupants and/or users of adjacent properties. All dust, fumes, odors and other emissions
generated by Tenant’s use of the Leased Premises shall be sufficiently dissipated in accordance
with sound environmental practices and exhausted from the Leased Premises in such a manner so as
not to interfere with the businesses of or annoy the occupants and/or users of adjacent properties,
or cause any damage to the Leased Premises, any Building, the Outside Areas or the Property or any
component part thereof or the property of adjacent property owners.



4.4 TRASH DISPOSAL: Tenant shall provide trash bins (or other adequate garbage disposal
facilities) within the trash enclosure areas currently in use or otherwise as provided or permitted
by Landlord in the Outside Areas sufficient for the interim disposal of all of its trash, garbage
and waste. All such trash, garbage and waste temporarily stored in such areas shall be stored in
such a manner so that it is not visible from outside of such areas, and Tenant shall cause such
trash, garbage and waste to be removed once each week from the Property at Tenant’s sole cost.
Tenant shall at all times keep the Leased Premises, the Buildings, the Outside Areas and the
Property in a clean, safe and neat condition free and clear of all trash, garbage, waste and/or
boxes, pallets and containers containing same at all times.




4.5 PARKING: In consideration for the Parking Fees, Tenant shall be entitled to use of the
vehicle parking spaces in the Parking Areas depicted on Exhibit “B”, which use, as between Landlord
and Tenant, is




 


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exclusive. Tenant shall not permit or allow any vehicles that belong to or are controlled by
Tenant or Tenant’s employees, suppliers, shippers, customers or invitees to be loaded, unloaded or
parked in areas other than those used for such purposes on the Commencement Date or as otherwise
designated by Landlord for such activities. Nothing contained in this Lease shall be deemed to
create liability upon Landlord for any damage to motor vehicles of visitors or employees, for any
loss of property from within those motor vehicles, or for any injury to Tenant, its visitors or
employees, unless the same is caused by Landlord’s gross negligence or intentional misconduct.
Tenant shall be liable for any damage to the Parking Areas caused by Tenant or Tenant’s employees,
suppliers, shippers, customers or invitees, including, without limitation, damage from excess oil
leakage. Tenant shall have no right to install any fixtures or equipment or store any personal
property in the Parking Areas, except that Tenant may park its mobile broadcasting equipment within
the Parking Areas in the areas designated by Landlord for same. Tenant shall not, at any time,
park or permit to be parked any recreational vehicles or inoperative vehicles in the Parking Areas
or on any portion of the Property. Tenant agrees to assume responsibility for compliance by its
employees and invitees with the Parking Agreement and the parking provisions contained in this
Lease. If Tenant or its employees park any vehicle within the Property in violation of these
provisions, then Landlord may, in addition to any other remedies Landlord may have under this
Lease, charge Tenant, as Additional Rent, and Tenant agrees to pay, as Additional Rent, $75.00 per
day for each day or partial day that each such vehicle is so parked within the Property. Landlord
reserves the right, after the Initial Lease Term, to construct a parking garage to serve the
parking needs of the Property and neighboring properties. If Landlord desires to construct a
parking garage during an Extension Term, Landlord shall so notify Tenant in writing not less than
thirty (30) days prior to the earliest date Tenant is permitted to deliver an Election Notice to
exercise the Extension Option with respect to such Extension Term pursuant to Article 2.7 above.
If Landlord fails to provide timely written notice of the exercise of its right to construct the
parking garage and thereafter Tenant exercises the Extension Option, Landlord shall have no right
to construct a parking garage during such Extension Term. If Landlord provides timely notice of
the exercise of its right to construct the parking garage and Tenant nonetheless exercises an
Extension Option pursuant to Article 2.7, Landlord may provide the Parking Areas within a parking
garage constructed thereon, and may temporarily relocate the Parking Areas during construction
thereof (the “Temporary Relocated Parking Areas”). The Temporary Relocated Parking Areas Parking
Areas shall be located with one (1) mile of the Leased Premises, provided that if the Temporary
Relocated Parking Areas Parking Areas are not within 750 feet of the Leased Premises, Landlord
shall provide shuttle service from and to such Temporary Relocated Parking Areas and the Leased
Premises during any such construction; provided, however, Landlord shall at all times provide
Tenant with the number of parking spaces set forth in Article 1.1(J) above. The hours of operation
and frequency of trips of the shuttle service shall not unreasonably inconvenience Tenant’s
employees or hinder operation of Tenant’s business. The Temporary Relocated Parking Areas shall
have security substantially equivalent to the level of security Tenant is then providing to Parking
Area at the Leased Premises. Landlord covenants to use reasonable commercial efforts to ensure
that noise and vibration resulting from the construction does not adversely affect the utility of
the Tenant’s recording studios.



4.6 SIGNS: Other than the business identification signs which are located on the Property as
of the Commencement Date, Tenant shall not place or install on or within any portion of the Leased
Premises, the exterior of the Building, the Outside Areas or the Property any other sign,
advertisement, banner, placard or picture which is visible from the exterior of the Leased
Premises, until Landlord shall have first approved in writing the location, size, content, design,
method of attachment and material to be used in the making of such sign. Any sign, once approved
by Landlord, shall be installed only in strict compliance with Landlord’s approval, at Tenant’s
expense, using a contractor first approved by Landlord to install same. Landlord may remove any
permitted signs, advertisements, banners, placards or pictures so placed by Tenant on or within the
Leased Premises, the exterior of any Building, the Outside Areas or the Property and charge to
Tenant the cost of such removal, together with any costs incurred by Landlord to repair any damage
caused thereby, including any cost incurred to restore the surface upon which such sign was so
affixed to its original condition. Tenant shall remove all of Tenant’s signs, repair any damage
caused thereby, and restore the surface upon which the sign was affixed to its original condition,
all to Landlord’s reasonable satisfaction, upon the earlier of the expiration of the Lease Term or
the termination of this Lease.



4.7 COMPLIANCE WITH LAWS AND PRIVATE RESTRICTIONS: Tenant shall abide by and shall promptly
observe and comply with, at its sole cost and expense, all Laws and Private Restrictions respecting
the use and occupancy of the Leased Premises, the Buildings, the Outside Areas or the Property
including, without limitation, the terms of the Parking Agreement and all Laws governing the use
and/or, subject to Article 4.13,



 


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disposal of Hazardous Materials, and shall defend with competent counsel, indemnify and hold
Landlord harmless from any claims, damages or liability resulting from Tenant’s failure to do so.
Notwithstanding anything in the first sentence of this Article 4.7 to the contrary, if Laws
(including compliance with the ADA, Title 24 of the California Administrative Code, and other
similar federal, state and local Laws and regulations) or Private Restrictions respecting the use
and occupancy of the Leased Premises, the Buildings, the Outside Areas or the Property are changed
after the Commencement Date so as to require during the Lease Term the construction of an addition
to or an alteration of any portion of the Property, or the reinforcement or other physical
modification of any portion of the Property (“Capital Expenditure”), Landlord and Tenant shall
allocate the cost of such work as follows:



A. Subject to Article 4.7(C) below, if such Capital Expenditures are required as a result of
the specific and unique use of the Leased Premises by Tenant as compared with uses by tenants in
general, Tenant shall be fully responsible for the cost thereof.



B. If such Capital Expenditure is not the result of the specific and unique use of the Leased
Premises by Tenant (such as, governmentally mandated seismic modifications), then Landlord shall
pay for such Capital Expenditure and Tenant shall only be obligated to pay, each month during the
remainder of the Lease Term, on the date on which Base Monthly Rent is due, an amount equal to
1/144th of the portion of such costs. Tenant shall pay interest monthly at the Lease
Interest Rate on a sum equal to the number of months then remaining in the Lease Term times
1/144th of the portion of such costs (the “Unamortized Balance”) but may prepay its
obligation at any time.



C. Notwithstanding the above, the provisions concerning Capital Expenditures are intended to
apply only to non-voluntary and new Applicable Requirements. If the Capital Expenditures are
instead triggered by Tenant as a result of an actual or proposed change in the use, change in
intensity of use, or Tenant’s voluntary modification to the Property or any portion thereof then,
and in that event, Tenant shall either (i) immediately cease such changed use or intensity of use
and/or take such other steps as may be necessary to eliminate the requirement for such Capital
Expenditure, or (ii) complete such Capital Expenditure at its own expense. Tenant shall not,
however, have any right to terminate this Lease.



4.8 COMPLIANCE WITH INSURANCE REQUIREMENTS: With respect to any insurance policies required
or permitted to be carried by Landlord in accordance with the provisions of this Lease, Tenant
shall not conduct (or permit any other person to conduct) any activities nor keep, store or use (or
allow any other person to keep, store or use) any item or thing within the Leased Premises, the
Buildings, the Outside Areas or the Property which (i) is prohibited under the terms of any of such
policies, (ii) could result in the termination of the coverage afforded under any of such policies,
(iii) could give to the insurance carrier the right to cancel any of such policies, or (iv) could
cause an increase in the rates (over standard rates) charged for the coverage afforded under any of
such policies. Tenant shall comply with all requirements of any insurance company, insurance
underwriter, or Board of Fire Underwriters which are necessary to maintain, at standard rates, the
insurance coverages carried by either Landlord or Tenant pursuant to this Lease.



4.9 LANDLORD’S RIGHT TO ENTER: Landlord and its agents shall have the right to enter the
Leased Premises during normal business hours after giving Tenant reasonable prior notice and
subject to Tenant’s reasonable security measures for the purpose of (i) inspecting the same, (ii)
showing the Leased Premises to prospective purchasers, mortgagees or tenants, (iii) making
necessary alterations, additions or repairs, and/or (iv) performing any of Tenant’s obligations
when Tenant has failed to do so. Landlord shall have the right to enter the Leased Premises during
normal business hours (or as otherwise agreed), subject to Tenant’s reasonable security measures,
for purposes of exercising its rights under this Lease. Landlord shall have the right to enter the
Outside Areas during normal business hours for purposes of (a) inspecting the exterior of the
Buildings and the Outside Areas, and (b) posting notices of non-responsibility, or, during the
final year of the Lease Term, “For Lease” of “For Sale” signs. Any entry into the Leased Premises
or the Outside Areas by Landlord in accordance with this Article shall not under any circumstances
be construed or deemed to be a forcible or unlawful entry into, or a detainer of, the Leased
Premises, or an eviction, actual or constructive of Tenant from the Leased Premises or any portion
thereof.





4.10 USE OF OUTSIDE AREAS: Tenant, in its use of the Outside Areas, shall at all times keep
the Outside Areas in a safe, Comparable Class condition, free and clear of all materials,
equipment, debris, trash (except




 


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within existing enclosed trash areas), inoperable vehicles, and other items which are not
specifically permitted by Landlord to be stored or located thereon by Tenant. If, in the opinion
of Landlord, unauthorized persons are using any of the Outside Areas by reason of, or under claim
of, the express or implied authority or consent of Tenant, then Tenant, upon demand of Landlord,
shall restrain, to the fullest extent then allowed by Law, such unauthorized use, and shall
initiate such appropriate proceedings as may be required to so restrain such use.



4.11 RULES AND REGULATIONS: Landlord shall have the right from time to time to establish
reasonable rules and regulations and/or amendments or additions thereto relating to the use of the
Leased Premises and the Outside Areas and for the care and orderly management of the Property.
Upon delivery to Tenant of a copy of such rules and regulations or any amendments or additions
thereto, Tenant shall comply with such rules and regulations. A violation by Tenant of any of such
rules and regulations shall constitute a default by Tenant under this Lease. If there is a
conflict between the rules and regulations and any of the provisions of this Lease, the provisions
of this Lease shall prevail. Landlord shall not be responsible or liable to Tenant for the
violation of such rules and regulations by any other tenant of the Property.



4.12 ENVIRONMENTAL PROTECTION: Landlord may voluntarily cooperate in a reasonable manner with
the efforts of all governmental agencies in reducing actual or potential environmental damage.
Tenant shall not be entitled to terminate this Lease or to any reduction in or abatement of rent by
reason of such compliance or cooperation. Tenant agrees at all times to cooperate fully with
Landlord and to abide by all rules and regulations and requirements which Landlord may reasonably
prescribe in order to comply with the requirements and recommendations of governmental agencies
regulating, or otherwise involved in, the protection of the environment.




4.13 HAZARDOUS SUBSTANCES:



A. Reportable Uses Require Consent. The term “Hazardous Substance” as used in this Lease
shall mean any product, substance, or waste whose presence, use, manufacture, disposal,
transportation, or release, either by itself or in combination with other materials expected to be
on the Leased Premises, is either: (i) potentially injurious to the public health, safety or
welfare, the environment or the Premises, (ii) regulated or monitored by any governmental
authority, or (iii) a basis for potential liability of Landlord to any governmental agency or third
party under any applicable statute or common law theory. Hazardous Substances shall include, but
not be limited to, hydrocarbons, petroleum, gasoline, and/or crude oil or any products, by-products
or fractions thereof. Tenant shall not engage in any activity in or on the Leased Premises which
constitutes a Reportable Use of Hazardous Substances without the express prior written consent of
Landlord and timely compliance (at Tenant’s expense) with all Applicable Requirements. “Reportable
Use” shall mean (i) the installation or use of any above or below ground storage tank, (ii) the
generation, possession, storage, use, transportation, or disposal of a Hazardous Substance that
requires a permit from, or with respect to which a report, notice, registration or business plan is
required to be filed with, any governmental authority, and/or (iii) the presence at the Leased
Premises of a Hazardous Substance with respect to which any Law requires that a notice be given to
persons entering or occupying the Leased Premises or neighboring properties. Notwithstanding the
foregoing, without Landlord’s consent Tenant may use any ordinary and customary materials
reasonably required to be used in the normal course of the Permitted Use such as ordinary office
supplies (copier toner, liquid paper, glue, etc.) and common household cleaning materials, so long
as such use is in compliance with all Laws and does not expose Landlord to any liability therefor.
In addition, Landlord may condition its consent to any Reportable Use upon receiving such
additional assurances as Landlord reasonably deems necessary to protect itself, the public, the
Leased Premises and/or the environment against damage, contamination, injury and/or liability,
including, but not limited to, the installation (and removal on or before Lease expiration or
termination) of protective modifications (such as concrete encasements) and/or increasing the
Security Deposit. Landlord hereby consents to the operation and maintenance by Tenant, in
accordance with the terms of this Lease, of the existing underground storage tank which contains
fuel for Tenant’s emergency generator located on the Leased Premises.



B. Duty to Inform Landlord. If Tenant knows, or has reasonable cause to believe, that a
Hazardous Substance has come to be located in, on, under or about the Leased Premises, other than
as previously consented to by Landlord (and Hazardous Substances to which Landlord has consented
for purposes of this Article 4.13(B) shall be deemed to include any state of fact discovered by
Landlord in connection with its Feasibility Studies under the Purchase and Sale Agreement between
Landlord (as purchaser) and Tenant (as seller) dated December
 _____ 
, 2009 (the “PSA”) or which is
described in the exhibits or schedules to the PSA), as soon as is possible Tenant shall give



 


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written notice of such fact to Landlord, and provide Landlord with a copy of any report,
notice, claim or other documentation which it has concerning the presence of such Hazardous
Substance.



C. Tenant Remediation. Tenant shall not cause or permit any Hazardous Substance to be spilled
or released in, on, under, or about the Leased Premises (including through the plumbing or sanitary
sewer system) in violation of Laws and shall promptly, at Tenant’s expense, comply with all Laws
and Private Restrictions and take all investigatory and/or remedial action ordered or required
under any applicable Laws for the cleanup of any contamination of, and for the maintenance,
security and/or monitoring of the Leased Premises or neighboring properties, that was caused or
materially contributed to by Tenant, or pertaining to or involving any Hazardous Substance brought
onto the Leased Premises during the term of this Lease, by or for Tenant or any third party.



D. Tenant Indemnification. Tenant shall indemnify, defend and hold Landlord, its agents,
employees, lenders and ground lessor, if any, harmless from and against any and all loss of rents
and/or damages, liabilities, judgments, claims; expenses, penalties, and attorneys’ and
consultants’ fees resulting from any Hazardous Substance brought onto the Leased Premises by or for
Tenant, or any third party (provided, however, that Tenant shall have no liability under this Lease
with respect to (i) Hazardous Substances brought onto the Leased Premises by Landlord, or
Landlord’s employees, agents, contractors or subcontractors, and (ii) underground migration of any
Hazardous Substance under the Leased Premises from areas outside of the Leased Premises not caused
or contributed to by Tenant). Tenant’s obligations shall include, but not be limited to, the
effects of any contamination or injury to person, property or the environment created or suffered
by Tenant, and the cost of investigation, removal, remediation, restoration and/or abatement, and
shall survive the expiration or termination of this Lease. No termination, cancellation or release
agreement entered into by Landlord and Tenant shall release Tenant from its obligations under this
Lease with respect to Hazardous Substances, unless specifically so agreed by Landlord in writing at
the time of such agreement.



E. Landlord Indemnification. Landlord and its successors and assigns shall indemnify, defend,
reimburse and hold Tenant, its employees and lenders, harmless from and against any and all
environmental damages, including the cost of remediation, which result from Hazardous Substances
which are caused by the negligent acts or omissions of Landlord, its agents or employees,
contractors or subcontractors. Landlord’s obligations, as and when required by Laws, shall
include, but not be limited to, the cost of investigation, removal, remediation, restoration and/or
abatement, and shall survive the expiration or termination of this Lease.



F. Investigations and Remediation. Landlord shall retain the responsibility and pay for any
investigations or remediation measures required by governmental entities having jurisdiction with
respect to the existence of Hazardous Substances on the Leased Premises which are caused by the
negligent acts or omissions of Landlord, its agents or employees, contractors or subcontractors.
Tenant shall cooperate fully in any such activities at the request of Landlord, including allowing
Landlord and Landlord’s agents to have reasonable access to the Leased Premises at reasonable times
in order to carry out Landlord’s investigative and remedial responsibilities.



G. Landlord Termination Option. If a condition involving the presence of, or a contamination
by Hazardous Substances, which requires repair, remediation or restoration (a “Hazardous Substance
Condition”), occurs during the term of this Lease, unless Tenant is legally responsible therefor
(in which case Tenant shall make the investigation and remediation thereof required by all Laws and
this Lease shall continue in full force and effect, but subject to Landlord’s rights under Article
4.13(D) and Article 12), Landlord may, at Landlord’s option, either (i) investigate and remediate
such Hazardous Substance Condition, if required, as soon as reasonably possible at Landlord’s
expense, in which event this Lease shall continue in full force and effect, or (ii) if the
Hazardous Substance Condition cannot be remediated at a commercially reasonable cost without
dispossessing Tenant from a material portion of the Premises for more than an immaterial amount of
time, give written notice to Tenant within 60 days after receipt by Landlord of knowledge of the
occurrence of such Hazardous Substance Condition, of Landlord’s desire to terminate this Lease as
of a date not less than nine (9) months following the date of such notice. In the event Landlord
elects to give a termination notice, this Lease shall terminate as of the date specified in
Landlord’s notice of termination.



H. Inspection; Compliance. Landlord and Landlord’s lenders and consultants shall have the
right to enter into the Leased Premises at any time, in the case of an emergency, and otherwise at
reasonable times, for the purpose of inspecting the condition of the Leased Premises and for
verifying compliance by Tenant with this Lease.


 


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The cost of any such inspections shall be paid by Landlord, unless, under circumstances where
Tenant would be responsible under this Lease for compliance, a violation of Laws or Private
Restrictions or a Hazardous Substance Condition is found to exist or be imminent, or the inspection
is requested or ordered by a governmental authority. In such case, Tenant shall upon request
reimburse Landlord for the cost of such inspection, so long as such inspection is reasonably
related to the violation or contamination.



I. Environmental Insurance. Prior to the Commencement Date and as a condition to the closing
under the PSA, Landlord shall have obtained, at Tenant’s expense, a policy of environmental
liability insurance covering pre-existing conditions from Great American Insurance Group (or one of
its subsidiaries) (the “EP Insurer”), for a term of ten (10) years and with limits of liability in
the amount of $5,000,000, and with a deductible or self-insured retention amount not to exceed
$100,000 per claim (the “Lease Environmental Policy”, which shall include replacements or
extensions of same at Tenant’s expense if Tenant continues to occupy the Leased Premises after the
Initial Lease Term). Landlord shall be designated as the first named insured on the Lease
Environmental Policy, and Tenant shall be an additional named insured on the Lease Environmental
Policy and on any replacements or extensions of same if Tenant continues to occupy the Leased
Premises after the Initial Lease Term. The Lease Environmental Policy shall list this Lease and
the PSA as “insured contracts” thereunder, and otherwise shall be in form approved by Landlord.
During the Lease Term, Tenant shall be responsible to pay the deductible amount for any claim under
the Lease Environmental Policy, whether the claim is made by Landlord or Tenant, unless the claim
arises from a matter where Landlord is responsible to indemnify Tenant under Article 4.13(E) above.
Tenant acknowledges that Landlord may maintain one or more additional environmental liability
insurance policies with respect to the Leased Premises at Landlord’s sole cost, and shall have no
obligation to designate Tenant as an additional insured or additional named insured thereon.
Landlord shall copy Tenant on all of its written communications concerning the Lease Environmental
Policy to the EP Insurer or to the insurance broker which placed the Lease Environmental Policy,
and during the Lease Term shall not cancel the Lease Environmental Policy or remove Tenant as an
additional named insured without the written authorization of Tenant. In the event the Lease
Environmental Policy is replaced with an environmental liability policy from an insurer other than
Great American Insurance Group (or one of its subsidiaries), such subsequent insurer shall be
deemed the EP Insurer for purposes of this Article 4.13(I).



ARTICLE 5

REPAIRS, MAINTENANCE, SERVICES AND UTILITIES




5.1 REPAIR AND MAINTENANCE: Tenant shall, during the Lease Term, at its sole cost and expense
and without any cost or expense to Landlord (except as otherwise expressly set forth below),
provide for the repair and maintenance of the Leased Premises in accordance with the following
terms and conditions.



A. Tenant shall continuously keep and maintain all Buildings and other improvements now or
hereafter located on the Leased Premises, the Outside Areas and the Property and all appurtenances
thereto, and replace as and when required to the Buildings and all such improvements, in a
Comparable Class condition, including, without limiting, the generality of the foregoing, (i) all
interior walls, floors and ceilings, (ii) all windows, doors and skylights, (iii) all electrical
wiring, conduits, connectors and fixtures, (iv) all plumbing, pipes, sinks, toilets, faucets,
drains and wet and dry utility systems, including, without limitation, sprinkler systems, (v) all
lighting fixtures, bulbs and lamps, (vi) all heating, ventilating and air conditioning equipment,
(vii) all entranceways to the Leased Premises, (viii) the exterior and structural parts of each
Building (including the foundation, subflooring, load-bearing and exterior walls and roof), and
(ix) all Outside Areas, including, without limitation, the Generator and paying and performing all
obligations of Landlord under and in accordance with the Parking Areas. Except where expressly
required by this Lease, Landlord shall not be obligated to make any repairs, replacements or
renewals of any kind, nature or description whatsoever to the Leased Premises or any Buildings or
other improvements now or hereafter located thereon, and Tenant hereby expressly waives all right
to make repairs at Landlord’s expense under Sections 1941 and 1942 of the California Civil Code, as
amended from time to time. Tenant shall, at Tenant’s sole cost and expense, procure and maintain
contracts, with copies to Landlord, in customary form and substance for, and with contractors
specializing and experienced in the maintenance of the following equipment and improvements, if
any, if and when installed on the Leased Premises (collectively, the “Systems”): (i) heating,
ventilating and air conditioning equipment and systems (“HVAC”), (ii) fire extinguishing systems,
including fire alarm and/or smoke detection, (iii) landscaping and irrigation systems, (iv) roof
covering and drains, (v) clarifiers, and (vi) the


 


15









 







underground storage tank on the Leased Premises which contains fuel for Tenant’s backup
generator, including leak detection, monitoring and maintenance.




B. Tenant shall comply with and abide by all Laws and Private Restrictions, including, without
limitation, the Parking Agreement, affecting the Leased Premises, the Outside Areas and all
Buildings and other improvements now or hereafter located on the Property.



C. If Tenant shall fail to perform the required maintenance or fail to make repairs required
of it pursuant to this Article within a reasonable period of time following notice from Landlord to
do so, then Landlord may, at its election and without waiving any other remedy it may otherwise
have under this Lease or at Law, perform such maintenance or make such repairs and charge to
Tenant, as Additional Rent, the costs so incurred by, Landlord for same.



D. Tenant, at its sole cost and expense, shall cause all alterations, additions, improvements
and repairs made by Tenant to the Leased Premises to comply with the provisions of the ADA, Title
24 of the California Administrative Code, and other similar federal, state and local laws and
regulations required by Tenant’s use or occupation of the Leased Premises.



E. Tenant, at Tenant’s sole cost and expense (but subject to the reimbursement by Landlord set
forth herein), shall cause the repairs, replacements and improvements identified on Exhibit “E”
attached hereto (as same may be amended from time to time upon the request of either party with the
consent of the other party, such consent not to be unreasonably withheld, collectively, the
“Tenant’s Repairs”) to be made and/or installed, as applicable, on or before the applicable date
set forth on Exhibit “E,” but in no event later than twelve (12) months after the Effective Date.
The Tenant’s Repairs shall be made and performed in a safe and workmanlike manner, using only
first-class materials, in accordance with Article 6. Subject to the requirements of Article 6,
Landlord agrees to allow Tenant to make such repairs and replacements, all at the sole cost of
Tenant (except as otherwise provided herein). No delay in the completion of construction of the
Tenant’s Repairs shall be considered in the determination of the Commencement Date of the Lease.
Landlord shall be entitled to supervise Tenant’s completion of the Tenant’s Repairs; provided,
however, Tenant acknowledges and agrees that Landlord’s sole interest in any review and supervision
of the installation of the Tenant’s Repairs is to protect the Building and Landlord’s interest in
the Building. Accordingly, Tenant shall not rely upon Landlord’s supervision of the design and/or
installation of the Tenant’s Repairs for any purpose, and Landlord shall incur no liability of any
kind by reason of such supervision. The failure of Tenant, absent force majeure, to substantially
complete or cause the completion of the Tenant’s Repairs in accordance with the terms of this
Section and the schedule set forth on Exhibit “E”, shall be a default under this Lease and Landlord
shall have the right, but not the obligation, in addition to such other rights and remedies that
Landlord may have, to complete the Tenant’s Repairs and charge the cost of the same to Tenant,
which cost shall be immediately payable upon demand by Landlord. In connection with its
acquisition of the Property, Landlord has held back from the purchase price the sum of $673,000
(the “Deferred Maintenance Funds Deposit”), which shall be disbursed to Tenant upon satisfaction of
the following conditions:



(1) Tenant shall submit to Landlord, from time to time but not more than once per calendar
month, for reasonable approval by Landlord, a description of the portion of Tenant’s Repairs which
have been completed along with a written request for payment executed by Tenant;



(2) Tenant shall provide Landlord with copies of invoices, lien waivers, applications for
payments, and, unless payment is made directly by Landlord pursuant to clause (7) of this Article
5.1(E), cancelled checks or other evidence of payment of amounts paid by Tenant in connection with
Tenant’s Repairs; and



(3) Tenant shall have delivered evidence satisfactory to Landlord, in its reasonable
discretion, that the undisbursed Deferred Maintenance Funds Deposit is sufficient to complete the
uncompleted Tenant’s Repairs or, if insufficient (the amount of such shortfall, the “Deferred
Maintenance Shortfall”), Tenant shall provide evidence of payment of Tenant’s Repairs in an amount
equal to such Deferred Maintenance Shortfall, which payment shall not be eligible for reimbursement
hereunder;


 


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(4) Tenant shall submit disbursement requests to Landlord promptly upon receipt of any invoice
for payment from any architect, contractor, supplier or other third party for work or services
completed for Tenant’s Repairs;




(5) Intentionally omitted;




(6) Such disbursements shall be utilized to pay the actual costs of Tenant’s Repairs; and



(7) Upon receipt of a disbursement request from Tenant in compliance with the foregoing, at
Landlord’s option, Landlord shall either (a) pay the disbursement requested from the Deferred
Maintenance Funds Deposit directly to an architect, contractor, supplier or other third party for
work or services completed, or (b) deliver the Deferred Maintenance Funds Deposit to Tenant for
payment to such third party.



If Tenant’s Repairs are substantially completed pursuant to the terms of this Lease, Landlord shall
disburse to Tenant the undisbursed portion, if any, of the Deferred Maintenance Funds Deposit,
within ten (10) days after request therefor. If Tenant’s Repairs are not completed pursuant to the
terms of this Lease, Landlord shall retain any undisbursed portion of the Deferred Maintenance
Funds Deposit not required to be paid to Tenant under this Lease. In light of the possibility that
the final scope of work for Tenant’s Repairs, based on final plans and specifications and permits
for same to be prepared and obtained after execution of this Lease, may vary in immaterial ways
from the scope of work set forth in Exhibit “E”, Landlord agrees that its approval of the scope of
work set forth in the plans and specifications for Tenant’s Repairs will not be withheld, so long
as such scope of work is consistent in all material respects with that set forth on Exhibit “E”.



F. Without relieving Tenant of liability resulting from damage caused by Tenant or by Tenant’s
failure to exercise and perform good maintenance practices, if the roof, structural elements or
foundation of any of the Buildings on the Leased Premises cannot be repaired other than at a cost
which is in excess of 50% of the cost of replacing such item, then such items shall be replaced by
Landlord, and the cost thereof shall be prorated between Landlord and Tenant and Tenant shall only
be obligated to pay, each month during the remainder of the Lease Term, on the date on which Base
Monthly Rent is due, an amount equal to the product of multiplying the cost of such replacement by
a fraction, the numerator of which is one, and the denominator of which is 144 (i.e.,
1/144th of the cost per month). Tenant shall pay interest at the Lease Interest Rate on
the Unamortized Balance but may prepay its obligation at any time.



5.2 UTILITIES: Tenant shall arrange, at its sole cost and expense and in its own name, for
the supply of water, gas, electricity, telephone, cable and all other utilities provided to or
serving the Leased Premises. In the event that such services are not separately metered, Tenant
shall, at its sole expense, cause such meters to be installed. Landlord shall maintain the water
meter(s) in its own name; provided, however, that if at any time during the Lease Term Landlord
shall require Tenant to put the water service in Tenant’s name, Tenant shall do so at Tenant’s sole
cost. Tenant shall be responsible for determining if the local supplier of water, gas,
electricity, telephone, cable and other utilities can supply the needs of Tenant and whether or not
the existing water, gas, telephone, cable and electrical distribution systems within the Buildings
and the Leased Premises are adequate for Tenant’s needs. Tenant shall be responsible for
determining if the existing sanitary and storm sewer systems now servicing the Leased Premises and
the Property are adequate for Tenant’s needs. Tenant shall pay all charges for water, gas,
electricity, telephone, cable, storm and sanitary sewer and other utility and other services as so
supplied to the Leased Premises, irrespective of whether or not the services are maintained in
Landlord’s or Tenant’s name.



5.3 SECURITY: Tenant acknowledges that Landlord has not undertaken any duty whatsoever to
provide security for the Leased Premises, the Buildings, the Outside Areas or the Property and,
accordingly, Landlord is not responsible for the security of same or the protection of Tenant’s
property or Tenant’s employees, invitees or contractors. To the extent Tenant determines that such
security or protection services are advisable or necessary, Tenant shall arrange for and pay the
costs of providing same.





5.4 ENERGY AND RESOURCE CONSUMPTION: Landlord may voluntarily cooperate in a reasonable
manner with the efforts of governmental agencies and/or utility suppliers in reducing energy or
other resource consumption within the Property. Tenant shall not be entitled to terminate this
Lease or to any reduction in or abatement of rent by reason of such compliance or cooperation as
long as Tenant continues to be able to




 


17









 






beneficially enjoy the Leased Premises for the uses permitted hereunder, including, without
limitation, provision of comfortable cooling and heating to the Leased Premises. In no event shall
Tenant have any obligation to pay Landlord the cost of implementing such compliance or cooperation,
including through incorporation of the cost in the Property Operating Expenses, except to the
extent of any savings to Tenant resulting from the implementation, as and when the savings are
realized. Tenant agrees at all times to reasonably cooperate with Landlord and to abide by all
reasonable rules established by Landlord (i) to maximize the efficient operation of the electrical,
heating, ventilating and air conditioning systems and all other energy or other resource
consumption systems within the Property, and/or (ii) in order to comply with the requirements and
recommendations of utility suppliers and governmental agencies regulating the consumption of energy
and/or other resources.



5.5 LIMITATION OF LANDLORD’S LIABILITY: Landlord shall not be liable to Tenant for injury to
Tenant, its employees, agents, invitees or contractors, damage to Tenant’s property or loss of
Tenant’s business or profits, nor shall Tenant be entitled to terminate this Lease or to any
reduction in or abatement of rent by reason of any matter relating to this Lease or the Leased
Premises unless the same is caused by Landlord’s gross negligence or intentional misconduct.
Without limiting the foregoing, Landlord shall not be liable to Tenant as a result of (i)
Landlord’s failure to provide security services or systems within the Property for the protection
of the Leased Premises, the Buildings or the Outside Areas, or the protection of Tenant’s property
or Tenant’s employees, invitees, agents or contractors, or (ii) any failure, interruption,
rationing or other curtailment in the supply of water, electric current, gas or other utility
service to the Leased Premises, the Buildings, the Outside Areas or the Property from whatever
cause (other than Landlord’s gross negligence or willful misconduct), or (iii) the unauthorized
intrusion or entry into the Leased Premises by third-parties (other than Landlord or third parties
acting on behalf of Landlord).



ARTICLE 6

ALTERATIONS AND IMPROVEMENTS




6.1 PERMITTED ALTERATIONS: Tenant may, from time to time at its sole expense make
alterations, modifications and improvements (collectively, “Alterations”), to the interior of any
of the Buildings on the Leased Premises without Landlord’s prior consent but upon notice to
Landlord (“Permitted Alterations”) provided that: (i) such Permitted Alterations are
non-structural, (ii) do not involve puncturing, removing or relocating the roof, ceilings, floors
or any existing walls, (iii) will not affect the electrical, plumbing, HVAC and/or life safety
systems, (iv) are designed to enhance either or both of the economic value and the utility of the
Property, (v) the cost of such Permitted Alterations do not exceed $20,000 for any single
alteration or $50,000 cumulatively during any lease year of the Lease Term (excluding the Tenant
Repairs), and (vi) Tenant, in every instance, complies with the terms and conditions of this
Article (other than the first sentence of Article 6.2). Landlord also consents hereby to the
Tenant Repairs referenced in Article 5.1(E) provided that Tenant complies with the terms and
conditions of this Article other than (x) the first sentence of Article 6.2 and (y) the provisions
of Article 6.3 which grant Landlord the right to require Tenant to remove such repairs upon the
expiration or earlier termination of the Term of this Lease.



6.2 OTHER ALTERATIONS: Except as provided in Article 6.1, all Alterations that are not
Permitted Alterations (“Major Alterations”) shall require Landlord’s prior written consent.
Regardless of whether or not Landlord’s consent to Alterations is required, all of the following
shall apply with respect to all Alterations: (i) the structural integrity of the Buildings shall
not be adversely affected; (ii) the proper functioning of the mechanical, electrical, heating,
ventilating, air-conditioning (“HVAC”), sanitary and other service systems of the Leased Premises
shall not be adversely affected and the usage of such systems by Tenant shall not be increased
beyond the level of usage for which each such system was designed, and (iii) Tenant shall have
appropriate insurance coverage, reasonably satisfactory to Landlord, regarding the performance and
installation of the Alterations. Additionally, but subject to clauses (i) through (iii) above,
Landlord shall not unreasonably withhold its consent to Major Alterations that are: (a) reasonably
required in order to accommodate a sublease or an assignment of this Lease (provided such
assignment or sublease is permitted hereunder), or (b) reasonably required to accommodate Tenant’s
business operations at the Leased Premises. Tenant shall submit complete copies of plans and
specifications to Landlord (y) for Major Alterations, concurrent with its request for consent, and
(z) for Permitted Alterations, prior to obtaining permits for same.


 


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6.3 OTHER REQUIREMENTS: All Alterations, regardless of whether or not Landlord’s consent to
Alterations is required, shall be made, constructed or installed by Tenant at Tenant’s expense,
shall be done in accordance with all Laws and in a good and workmanlike manner using new materials
of good quality that match or complement the original improvements existing as of the Commencement
Date. Tenant shall not commence the making of any Alterations until (i) all required governmental
approvals and permits shall have been obtained, (ii) all requirements regarding insurance imposed
by this Lease have been satisfied, and (iii) Tenant shall have obtained contingent liability and
broad form builder’s risk insurance in an amount reasonably satisfactory to Landlord to cover any
perils relating to the proposed work not covered by insurance carried by Tenant pursuant to Article
9. As a part of granting Landlord’s approval for Tenant to make Major Alterations, Landlord may
require Tenant to increase the amount of its Security Deposit to cover the cost of removing the
Major Alterations and to restore the condition of the Leased Premises. Tenant shall pay Landlord’s
reasonable costs to inspect the construction of Major Alterations and to have Landlord’s architect
revise Landlord’s drawings to show the work performed by Tenant. At the time Landlord approves of
any Major Alterations, Landlord shall notify Tenant whether Landlord shall require Tenant to remove
the Major Alterations at Tenant’s sole expense before the expiration or earlier termination of this
Lease or whether the Major Alterations shall remain upon the Leased Premises and be surrendered
therewith at the expiration or earlier termination of this Lease as the property of Landlord.
Landlord shall retain the right to notify Tenant whether Landlord shall require Tenant to remove
any of the Permitted Alterations at Tenant’s sole expense prior to the expiration or earlier
termination of the Lease Term or whether the Permitted Alterations (or any of them) shall remain on
the Leased Premises and be surrendered therewith at the expiration or earlier termination of this
Lease as the property of Landlord. If Landlord notifies Tenant that Landlord requires the removal
of all or part of any Alterations in accordance with this Article, then Tenant, at its expense,
shall remove such Alterations before the expiration or earlier termination of this Lease and repair
any damage to the Leased Premises caused by such removal. If Tenant fails to remove the
Alterations required to be removed pursuant to this Article, then Landlord may (but shall not be
obligated to) remove such Alterations and the cost of removal and repair of any damage to the
Leased Premises, together with all other damages which Landlord may suffer by reason of the failure
of Tenant to remove same, shall be paid by Tenant to Landlord upon demand. Tenant shall not be
entitled to any compensation from Landlord for any Alterations removed by Landlord or at Landlord’s
direction pursuant to the immediately preceding sentence.



6.4 OWNERSHIP OF IMPROVEMENTS: All Alterations made or added to the Leased Premises by Tenant
(other than Tenant’s inventory, equipment, movable furniture, wall decorations and trade fixtures)
shall be deemed real property and a part of the Leased Premises, but shall remain the property of
Tenant during the Lease Term. At the expiration or sooner termination of this Lease, all
Alterations (excluding Tenant’s inventory, equipment, movable furniture, wall decorations and trade
fixtures) shall automatically become the property of Landlord and shall be surrendered to Landlord
as a part of the Leased Premises as required pursuant to Article 2, unless Landlord shall require
Tenant to remove any of such Alterations in accordance with the provisions of Article 6.3, in which
case Tenant shall so remove same. Landlord shall have no obligation to reimburse to Tenant all or
any portion of the cost or value of any such Alterations so surrendered to Landlord. All lighting,
plumbing, electrical, heating, ventilating and air conditioning fixtures, partitioning, window
coverings, wall coverings and floor coverings installed by Tenant shall be deemed improvements to
the Leased Premises and not trade fixtures of Tenant.



6.5 LIENS: Tenant shall keep the Property and every part thereof free from any liens and
shall pay when due all bills arising out of any work performed, materials furnished, or obligations
incurred by Tenant, its agents, employees or contractors relating to the Property. If any such
claim of lien is recorded against Tenant’s interest in this Lease, the Property or any part
thereof, Tenant shall bond against, discharge or otherwise cause such lien to be entirely released
within fifteen (15) days after the same has been so recorded. Tenant’s failure to do so shall be a
default under this Lease.



ARTICLE 7

ASSIGNMENT AND SUBLETTING BY TENANT




7.1 BY TENANT: Except as set forth in Article 7.10, Tenant shall not sublet the Leased
Premises (or any portion thereof) or assign or encumber its interest in this Lease, whether
voluntarily or by operation of Law, without Landlord’s prior written consent first obtained in
accordance with the provisions of this Article 7. Any



 


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attempted subletting, assignment or
encumbrance without Landlord’s prior written consent, at
Landlord’s election, shall constitute a default by Tenant under the terms of this Lease. The acceptance of rent by
Landlord from any person or entity other than Tenant, or the acceptance of rent by Landlord from
Tenant with knowledge of a violation of the provisions of this Article, shall not be deemed to be a
waiver by Landlord of any provision of this Article or this Lease or to be a consent to any
subletting by Tenant or any assignment or encumbrance of Tenant’s interest in this Lease.




7.2 Intentionally omitted.



7.3 LANDLORD’S ELECTION: If Tenant or Tenant’s successors shall desire to assign its interest
under this Lease or to sublet the Leased Premises, Tenant and Tenant’s successors must first notify
Landlord, in writing, of its intent to so assign or sublet, at least thirty (30) days in advance of
the date it intends to so assign its interest in this Lease or sublet the Leased Premises but not
sooner than sixty (60) days in advance of such date, specifying in detail the terms of such
proposed assignment or subletting, including the name of the proposed assignee or sublessee, the
proposed assignee’s or sublessee’s intended use of the Leased Premises, a current financial
statement of such proposed assignee or sublessee and the form of documents to be used in
effectuating such assignment or subletting. Landlord shall have a period of fifteen (15) days
following receipt of such notice and receipt of all information requested by Landlord regarding the
proposed assignee or sublessee within which to do one of the following: (i) terminate this Lease
or, in the case of a sublease of less than all of the Leased Premises, terminate this Lease as to
that part of the Leased Premises proposed to be so sublet, either on the condition that the
proposed Transferee immediately enter into a direct lease of the Leased Premises with Landlord (or,
in the case of a partial sublease, a lease for the portion proposed to be so sublet) on the same
terms and conditions contained in Tenant’s (or Tenant’s successors’) notice, or so that Landlord is
thereafter free to lease the Leased Premises (or, in the case of a partial sublease, the portion
proposed to be so sublet) to whomever it pleases on whatever terms are acceptable to Landlord, (ii)
consent to the proposed assignment or sublease subject to the terms of this Article, or (iii)
refuse to consent to the proposed assignment or sublease. In the event Landlord elects to so
terminate this Lease, then (a) if such termination is conditioned upon the execution of a lease
between Landlord and the proposed Transferee, Tenant’s and Tenant’s successors’ obligations under
this Lease shall not be terminated until such Transferee executes a new lease with Landlord, enters
into possession, and commences the payment of rent, and (b) if Landlord elects simply to terminate
this Lease (or, in the case of a partial sublease, terminate this Lease as to the portion to be so
sublet), the Lease shall so terminate in its entirety (or as to the space to be so sublet) fifteen
(15) days after Landlord has notified Tenant and Tenant’s successors in writing of such election.
In the case of a partial termination of the Lease, the Base Monthly Rent and Tenant’s or Tenant’s
successors’ proportionate share shall be reduced to an amount which bears the same relationship to
the original amount thereof as the area of that part of the Leased Premises which remains subject
to the Lease bears to the original area of the Leased Premises. Landlord and Tenant or Tenant’s
successors shall execute a cancellation agreement with respect to the Lease to effect such
termination or partial termination, or if Landlord shall not have elected to cancel and terminate
this Lease, to either (x) consent to such requested assignment or subletting subject to Tenant’s
and Tenant’s successors’ compliance with the conditions set forth in Article 7.4 below, or (y)
refuse to so consent to such requested assignment or subletting, provided that such consent shall
not be unreasonably refused. It shall not be unreasonable for Landlord to withhold its consent to
any proposed assignment or subletting if (A) the proposed assignee’s or subtenant’s anticipated use
of the Leased Premises involves the storage, use or disposal of a Hazardous Material; (B) if the
proposed assignee or subtenant has been required by any prior landlord, lender or governmental
authority to clean up Hazardous Materials unlawfully discharged by the proposed assignee or
subtenant; (C) if the proposed assignee or subtenant is subject to investigation or enforcement
order or proceeding by any governmental authority in connection with the use, disposal or storage
of a Hazardous Material, (D) the proposed assignee or subtenant is a subsidiary of another entity
and the parent entity does not guarantee the obligations under this Lease, (E) all of the assets of
Tenant shall not be held by the proposed assignee or subtenant following the transfer, or (F)
Landlord disapproves of the proposed assignee’s or subtenant’s net worth and/or ability to satisfy
the financial obligations of Tenant under this Lease. Tenant and Tenant’s successors covenant and
agree to supply to Landlord, upon request, with all necessary or relevant information which
Landlord may reasonably request respecting such proposed assignment or subletting and/or the
proposed assignee or sublessee. Landlord’s review period shall not commence until Landlord has
received all information requested by Landlord.




7.4 CONDITIONS TO LANDLORD’S CONSENT: If Landlord elects to consent, or shall have been
ordered to so consent by a court of competent jurisdiction, to such requested assignment,
subletting or




 


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encumbrance, such consent shall be expressly conditioned upon the occurrence of each
of the conditions below set
forth, and any purported assignment, subletting or encumbrance made or ordered prior to the
full and complete satisfaction of each of the following conditions shall be void and, at the
election of Landlord, which election may be exercised at any time following such a purported
assignment, subletting or encumbrance shall constitute a default by Tenant under this Lease giving
Landlord the absolute right to terminate this Lease. The conditions are as follows:



A. Landlord having approved in form and substance the assignment or sublease agreement (or the
encumbrance agreement), which approval shall not be unreasonably withheld by Landlord if the
requirements of this Article 7 are otherwise complied with. Without limiting the foregoing, such
agreement shall contain a provision that it may not be amended or modified without the Landlord’s
prior written consent, the absence of which will cause any such amendment or modification to be
null and void.



B. Each such sublessee or assignee having agreed, in writing satisfactory to Landlord and its
counsel and for the benefit of Landlord, to assume, to be bound by, and to perform the obligations
of this Lease to be performed by Tenant (or, in the case of an encumbrance, each such encumbrancer
having similarly agreed to assume, be bound by and to perform Tenant’s obligations upon a
foreclosure or transfer in lieu thereof).



C. Tenant having fully and completely performed all of its obligations under the terms of this
Lease through and including the date of the requested consent, as well as through and including the
date such assignment or subletting is to become effective.



D. Tenant having reimbursed to Landlord all reasonable costs and attorneys’ fees incurred by
Landlord in conjunction with the processing and documentation of any such requested subletting,
assignment or encumbrance.



E. Tenant having delivered to Landlord a complete and fully-executed duplicate original of
such sublease agreement, assignment agreement or encumbrance (as applicable) and all related
agreements.



F. Tenant having paid, or having agreed in writing to pay as to future payments, to Landlord
fifty percent (50%) of all Assignment Consideration (as defined below) or Excess Rentals (as
defined below) to be paid to Tenant or to any other on Tenant’s behalf or for Tenant’s benefit for
such assignment or subletting as follows:



(1) If Tenant assigns its interest under the Lease and if all or a portion of the
consideration for such assignment is to be paid by the assignee at the time of the assignment, that
Tenant shall have paid to Landlord and Landlord shall have received an amount equal to fifty
percent (50%) of the Assignment Consideration so paid or to be paid whichever is the greater) at
the time of the assignment by the assignee; or



(2) If Tenant assigns its interest under this Lease and if Tenant is to receive all or a
portion of the consideration for such assignment in future installments, that Tenant and Tenant’s
assignee shall have entered into a written agreement with and for the benefit of Landlord
satisfactory to Landlord and its counsel whereby Tenant and Tenant’s assignee jointly agree to pay
to Landlord an amount equal to fifty percent (50%) of all such future Assignment Consideration
installments to be paid by such assignee as and when such Assignment Consideration is so paid.



(3) If Tenant subleases the Leased Premises, that Tenant and Tenant’s sublessee shall have
entered into a written agreement with and for the benefit of Landlord satisfactory to Landlord and
its counsel whereby Tenant and Tenant’s sublessee jointly agree to pay to Landlord fifty percent
(50%) of all Excess Rentals to be paid by such sublessee as and when such Excess Rentals are so
paid and fifty percent (50%) of any payment upon termination or modification of a sublease.



7.5 ASSIGNMENT CONSIDERATION AND EXCESS RENTALS DEFINED: For purposes of this Article, the
term “Assignment Consideration” shall mean all consideration to be paid by the assignee as
consideration for such assignment, and the term “Excess Rentals” shall mean all consideration to be
paid by the sublessee in excess of the rent to be paid by said sublessee/sublessor for the premises
subleased for the same period. Assignment Consideration and/or Excess Rentals shall include all
payments made or to be made by any assignee or sublessee relating in any way to any transfer of an
interest in the Lease or the Leased Premises including, but not



 


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limited to, any payment made with
respect to property which would or shall become Landlord’s
property upon the expiration or earlier termination of the Lease, whether such property was installed or paid
for by Landlord or by Tenant or Tenant’s successors. In the event Tenant or Tenant’s successors
sublease a portion of the Leased Premises, Excess Rentals shall be calculated by subtracting the
rent payable by the sublessor for the portion of the Leased Premises so sublet from all
consideration to be paid by such sublessee. Rent payable by the sublessor for the portion of the
Leased Premises so sublet shall be calculated by multiplying the Base Monthly Rent payable by the
sublessor for the Leased Premises leased by such sublessor by a fraction, the numerator of which is
the area in square feet subleased and the denominator of which is the total floor area of the
Leased Premises leased by such sublessor also in square feet. Tenant and Tenant’s successors agree
that any Assignment Consideration and/or Excess Rentals hereunder shall be the property of Landlord
and not the property of Tenant.



7.6 PAYMENTS: All payments required by this Article to be made to Landlord shall be made in
cash in full as and when they become due. At the time Tenant, Tenant’s assignee or sublessee makes
each such payment to Landlord, Tenant or Tenant’s assignee or sublessee, as the case may be, shall
deliver to Landlord an itemized statement in reasonable detail showing the method by which the
amount due Landlord was calculated and certified by the party making such payment as true and
correct. Landlord may require that all payments of Excess Rentals and/or Assignment Consideration
to be made hereunder be made directly to Landlord by the applicable transferee.



7.7 GOOD FAITH: The rights granted to Tenant by this Article are granted in consideration of
Tenant’s express covenant that all pertinent allocations which are made by Tenant between the
rental value of the Leased Premises and the value of any of Tenant’s personal property which may be
conveyed or leased concurrently with and which may reasonably be considered a part of the same
transaction as the permitted assignment or subletting shall be made fairly, honestly and in good
faith. If Tenant shall breach this covenant of good faith, Landlord may immediately declare Tenant
to be in default under this Lease and terminate this Lease and/or exercise any other rights and
remedies Landlord would have under the terms of this Lease in the case of a default by Tenant.



7.8 EFFECT OF LANDLORD’S CONSENT: No subletting, assignment or encumbrance, even with the
consent of Landlord, shall relieve Tenant of its personal and primary obligation to pay rent and to
perform all of the obligations to be performed by Tenant hereunder. Consent by Landlord to one (1)
or more assignments or encumbrances of Tenant’s interest in this Lease or to one (1) or more
sublettings of the Leased Premises shall not be deemed to be a consent to any subsequent
assignment, encumbrance or subletting. If Landlord shall have been ordered by a court of competent
jurisdiction to consent to a requested assignment, subletting or encumbrance, or such an
assignment, subletting or encumbrance shall have been ordered over the objection of Landlord, such
assignment, subletting or encumbrance shall not be binding between the assignee (or sublessee) and
Landlord until such time as all conditions set forth in Article 7.4 above have been fully satisfied
(to the extent not then satisfied) by the assignee or sublessee, including, without limitation, the
payment to Landlord of all Assignment Consideration and/or Excess Rentals then due Landlord.




7.9 Intentionally omitted.



7.10 ASSIGNMENT OR SUBLEASE TO AFFILIATE OR SUCCESSOR. Notwithstanding anything to the
contrary in Article 7.1, Tenant may, without Landlord’s consent (1) assign this Lease or sublease
the Leased Premises or any portion thereof to any entity that controls, is controlled by or under
common control with Tenant (each, an “Affiliate”), or (2) merge, consolidate, or transfer stock of
Tenant or sell all or substantially all assets of Tenant (Tenant’s successor or purchaser in such a
transaction, a “Successor”) provided that in each case the Affiliate or Successor, as applicable,
delivers to Landlord a written assumption of the Lease. In addition, Tenant may, without
Landlord’s consent (3) engage in a public offering of Tenant and (4) transfer shares of Tenant
effected through any recognized exchange or through the “over the counter” market. In connection
with any transaction described in this Article 7.10, Tenant shall be obligated to deliver to
Landlord promptly any written information relating to same as is reasonably requested by Landlord.
Subject to securities laws and regulations, Tenant shall provide not less than ten (10) business
days prior written notice to Landlord of a transaction that is described in this Article 7.10.
Articles 7.3 through 7.6 shall not apply to any transaction governed by this Article 7.10.


 


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ARTICLE 8

LIMITATION ON LANDLORD’S LIABILITY AND INDEMNITY




8.1 LIMITATION ON LANDLORD’S LIABILITY AND RELEASE: Landlord shall not be liable to Tenant
for, and Tenant hereby releases Landlord and its partners, principals, officers, agents and
employees from, any and all liability, whether in contract, tort or on any other basis, for any
injury to or any damage sustained by Tenant, Tenant’s agents, employees, contractors or invitees;
any damage to Tenant’s property; or any loss to Tenant’s business, loss of Tenant’s profits or
other financial loss of Tenant resulting from or attributable to the condition of, the management
of, the repair or maintenance of, the protection of, the supply of services or utilities to, the
damage to or destruction of the Leased Premises, the Buildings, the Project or the Outside Areas,
including without limitation, (i) the failure, interruption, rationing or other curtailment or
cessation in the supply of electricity, water, gas or other utility service to the Project, the
Buildings or the Leased Premises; (ii) the vandalism or forcible entry into the Buildings or the
Leased Premises; (iii) the penetration of water into or onto any portion of the Leased Premises
through roof leaks or otherwise; (iv) the failure to provide security and/or adequate lighting in
or about the Project, the Buildings or the Leased Premises; (v) the existence of any design or
construction defects within the Project, the Buildings or the Leased Premises; (vi) the failure of
any mechanical systems to function properly (such as the HVAC systems); (vii) the existence of any
Hazardous Materials, or (viii) the blockage of access to any portion of the Project, the Buildings,
the Parking Areas or the Leased Premises, except that Tenant does not so release Landlord from
such liability to the extent such damage was proximately caused by Landlord’s gross negligence or
willful misconduct. In this regard, Tenant acknowledges that it is fully apprised of the
provisions of Law relating to releases, and particularly to those provisions contained in Section
1542 of the California Civil Code which reads as follows:



“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE
MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”



Notwithstanding such statutory provision, and for the purpose of implementing a full and complete
release and discharge, Tenant hereby (a) waives the benefit of such statutory provision, and (b)
acknowledges that, subject to the exceptions specifically set forth herein, the release and
discharge set forth in this Article is a full and complete settlement and release and discharge of
all claims and is intended to include in its effect, without limitation, all claims which Tenant,
as of the date hereof, does not know of or suspect to exist in its favor.



8.2 TENANT’S INDEMNIFICATION OF LANDLORD: Tenant shall defend with competent counsel
satisfactory to Landlord any claims made or legal actions filed or threatened against Landlord with
respect to the violation of any Law, or the death, bodily injury, personal injury, property damage,
or interference with contractual or property rights suffered by any third-party occurring within
the Leased Premises or Property or resulting from Tenant’s use or occupancy of the Leased Premises
or the Buildings or the use of the Outside Areas, or resulting from Tenant’s activities in or about
the Leased Premises, the Buildings, the Outside Areas or the Property, and Tenant shall indemnify
and hold Landlord, Landlord’s principals, employees and agents (the “Landlord Indemnified Parties”)
harmless from any loss, liability, penalties, or expense whatsoever (including any loss or
liability resulting from delay by Tenant in surrendering the Leased Premises in accordance with the
terms of this Lease) resulting therefrom, except to the extent caused by the gross negligence or
willful misconduct of Landlord. This indemnity agreement shall survive the expiration or sooner
termination of this Lease. In no event shall Tenant be liable to Landlord and the Landlord
Indemnified Parties for any punitive, special or consequential damages the Landlord Indemnified
Parties incur.




ARTICLE 9

INSURANCE





9.1 TENANT’S INSURANCE: Tenant shall maintain insurance complying with all of the following:




 


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A. Tenant shall procure, pay for and keep in full force and effect, at all times during the
Lease Term, the following:



(1) Comprehensive general liability insurance covering the Leased Premises and the Property in
the amount of not less than $3,000,000 per occurrence, and $5,000,000 annual general aggregate for
bodily injury and property damage liability (umbrella/ excess liability coverage may be used to
achieve required dollar limits);



(2) Commercial “all-risk” property insurance covering Tenant’s personal property (at its full
replacement cost) and damage to other property resulting from any acts or operations of Tenant or
any third parties and business income;



(3) Loss of income and extra expense insurance in amounts as will reimburse Tenant for direct
or indirect loss of earnings attributable to all perils commonly insured against by prudent lessees
in the business of Tenant, or attributable to prevention of access to the Leased Premises on
account of such perils;



(4) Workers’ compensation insurance and any other employee benefit insurance sufficient to
comply with all Laws which policy shall be endorsed to provide thirty (30) days written notice of
cancellation to Landlord;



(5) With respect to making of Alterations by Tenant, contingent liability and builder’s risk
insurance, in an amount and with coverage satisfactory to Landlord;



(6) Comprehensive Auto Liability insurance with a combined single limit coverage of not less
than the amount of $2,000,000 (umbrella or excess liability coverage may be used to achieve the
required dollar limits) for bodily injury and/or property damage liability for: (i) owned autos
(ii) hired or borrowed autos, (iii) non-owned autos, and (iv) auto blanket contractual form CA0001;
if reasonably available from the insurer, the policy shall be endorsed to provide thirty (30) days
written notice of cancellation to Landlord;



(7) During any period of construction on the Property by or on behalf of Tenant, builder’s
risk coverage in an amount sufficient for such Alterations performed on the Leased Premises;
provided, however, that in the event that such builder’s risk coverage is required, such coverage
may be provided through so-called “course of construction” coverage endorsement, and Tenant shall
cause such “course of construction” coverage to provide coverage in an amount equal to 100% of the
completed value of the work; and




(8) The Lease Environmental Policy; and



(9) If not covered under the Lease Environmental Policy, coverage for environmental damages
(including remediation and restoration of the Leased Premises) arising from a leak in the existing
underground storage tank at the Leased Premises.



B. Each policy of liability insurance required to be carried by Tenant pursuant to this
Article or actually carried by Tenant with respect to the Leased Premises or the Property shall (i)
be in a form satisfactory to Landlord, (ii) be provided by carriers admitted to do business in the
state of California, with a Best rating of “A/VI” or better and/or acceptable to Landlord, (iii)
except for the Lease Environmental Policy, not contain deductibles in excess of $25,000, and (iv)
name as insured parties Tenant, Landlord and, upon request, any mortgagee of Landlord. Property
insurance shall contain a waiver and/or a permission to waive by the insurer any right of
subrogation against Landlord, its principal, employees, agents and contractors which might arise by
reason of any payment under such policy or by reason of any act or omission of Landlord, its
principals, employees, agents or contractors.



C. Prior to the time Tenant or any of its contractors enters the Leased Premises, Tenant shall
deliver to the Landlord with respect to each policy of insurance required to be carried by Tenant
pursuant to this Article, a certificate of the insurer certifying, in a form satisfactory to the
Landlord, that the policy has been issued and premium paid providing the coverage required by this
Article and containing the provisions herein. Attached to such a certificate shall be endorsements
naming Landlord as additional insured, and including the wording under primary insurance above.
With respect to each renewal or replacement of any such insurance, the requirements of



 


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this Article
must be complied with not less than thirty (30) days prior to the expiration or cancellation of the
policy being renewed or replaced. Landlord may at any time and from time-to-time inspect and/or
copy any and all insurance policies required to be carried by Tenant pursuant to this Article. If
Landlord’s lender, insurance broker
or advisor or counsel reasonably determines at any time that the form or amount of coverage
set forth in Article 9.1(A) for any policy of insurance Tenant is required to carry pursuant to
this Article is not adequate, then Tenant shall increase the amount of coverage for such insurance
to such greater amount or change the form as Landlord’s lender, insurance broker or advisor or
counsel reasonably deems adequate (provided however such increase level of coverage may not exceed
the level of coverage for such insurance commonly carried by owners of comparable buildings in
Culver City and Santa Monica, California).



D. Nothing contained in this Article 9 shall be construed to limit the liability of Tenant
under the indemnification provisions set forth in this Lease.




9.2 LANDLORD’S INSURANCE: With respect to insurance maintained by Landlord:



A. Landlord may maintain, as the minimum coverage required of it by this Lease, property
insurance in so-called “Special” form insuring Landlord (and such others as Landlord may designate)
against loss from physical damage to the Buildings with coverage of not less than one hundred
percent (100%) of the full actual replacement cost thereof and against loss of rents for a period
of not less than twelve (12) months. Such property damage insurance, at Landlord’s election but
without any requirement on Landlord’s behalf to do so, (i) may be written in so-called Special
Form, excluding only those perils commonly excluded from such coverage by Landlord’s then property
damage insurer; (ii) may provide coverage for physical damage to the improvements so insured for up
to the entire full actual replacement cost thereof; (iii) may be endorsed to include (or separate
policies may be carried to cover) loss or damage caused by any additional perils against which
Landlord may elect to insure, including earthquake and/or flood if required by a Lender; (iv) may
provide coverage for loss of rents for a period of up to twelve (12) months; and/or (v) may contain
“deductibles” per occurrence in an amount reasonably acceptable to Landlord. Landlord shall not be
required to cause such insurance to cover any of Tenant’s personal property, inventory and trade
fixtures, or any modifications, alterations or improvements made or constructed by Tenant to or
within the Leased Premises.



B. Landlord may maintain Commercial General Liability insurance insuring Landlord (and such
others as are designated by Landlord) against liability for personal injury, bodily injury, death,
and damage to property occurring in, on or about, or resulting from the use or occupancy of the
Property, or any portion thereof, with combined single limit coverage of at least $2,000,000.
Landlord may carry such greater coverage as Landlord or Landlord’s lender, insurance broker or
advisor or counsel may from time to time determine is reasonably necessary for the adequate
protection of Landlord and the Property.



C. Notwithstanding anything to the contrary in Article 9.2(A)(iii) above, provided that Tenant
commences that portion of Tenant’s Repairs consisting of seismic retrofitting (the “Seismic
Retrofit Work”) on or before April 15, 2009 (as such date may be postponed on account of inclement
weather which make the performance such work impractical) and completes the Seismic Retrofit Work
within twelve (12) weeks thereafter (as such time period may be extended on account of inclement
weather which makes the performance of such work impractical), any insurance which provides
coverage for damage caused by an earthquake and which is required by a Lender to be maintained
prior to the completion of the portion of the Seismic Retrofit Work, shall be paid for by Landlord.
Thereafter, if insurance which provides coverage for damage caused by an earthquake is required by
a Lender to be maintained, Landlord shall provide Tenant with written notice of such requirement
and a period of five (5) business days within which to provide to Landlord a policy quote for such
coverage from an insurer meeting the requirements of the Lender. Provided the coverage and the
insurer proposed by Tenant meet the requirements of the Lender and the insurer agrees to provide
such coverage on such terms, and the cost of such policy is less than the cost of a policy for such
coverage that Landlord otherwise would obtain, Landlord agrees to procure any such insurance from
the carrier proposed by Tenant.



D. Landlord may maintain any other insurance which in the reasonable opinion of Landlord, its
lender or legal counsel, is prudent to carry under the given circumstances.


 


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9.3 MUTUAL WAIVER OF SUBROGATION: Landlord hereby releases Tenant and its respective
principals, officers, agents, employees and servants, and Tenant hereby releases Landlord and its
respective principals, officers, agents, employees and servants, from any and all liability for
loss, damage or injury to the property of the other in or about the Leased Premises or the Property
which is caused by or results from a peril or
event or happening which would be covered by insurance required to be carried by the party
sustaining such loss under the terms of this Lease, or is covered by insurance actually carried and
in force at the time of the loss, by the party sustaining such loss; provided, however, that such
waiver shall be effective only to the extent permitted by the insurance covering such loss and to
the extent such insurance is not prejudiced thereby.



9.4 PAYMENT OF INSURANCE COSTS BY TENANT: Tenant shall pay for all insurance required under
this Article 9, and all deductibles in connection with any claim. Premiums for policy periods
commencing prior to or extending beyond the Lease Term shall be prorated to correspond to the Lease
Term. Payment shall be made to Landlord within ten (10) days following receipt of an invoice.



ARTICLE 10

DAMAGE TO LEASED PREMISES




10.1 TENANT’S DUTY TO RESTORE: No loss or damage by fire or other cause required to be
insured against under this Lease, resulting in either partial or total destruction of any Building
or improvement on the Property, shall, except as otherwise provided herein, operate to terminate
this Lease, or to relieve or discharge Tenant from the payment of rents or amounts payable as rent
as they become due and payable, or from the performance and observance of any of the agreements,
covenants and conditions herein contained on the part of Tenant to be performed and observed.
Tenant hereby waives the provisions of Subsection 2 of Section 1932 and Subsection 4 of Section
1933 of the California Civil Code, as amended from time to time. If any Buildings or improvements
located on the Leased Premises or the Property, or any fixtures, equipment or machinery used or
intended to be used in connection with the Leased Premises, at any time during the Lease Term shall
be damaged or destroyed by fire or other cause and Tenant does not terminate this Lease pursuant to
Article 10.2 below, then Tenant, with all reasonable diligence, shall repair, reconstruct or
replace such Buildings or improvements and such fixtures, equipment and machinery to a condition
substantially similar to their condition immediately prior to such destruction. All such repair,
reconstruction or replacements shall be at the sole cost and expense of Tenant and, upon completion
thereof, shall be free and clear of all liens and encumbrances of any nature whatsoever, including
mechanics’ liens. Subject to the requirements of its lenders, Landlord shall make the proceeds of
the insurance required under Article 9.2(A) available to Tenant for the purposes described in the
preceding sentence.



10.2 TENANT’S RIGHT TO TERMINATE: If (i) the Buildings now or hereafter located on the Leased
Premises or the Property are totally or substantially destroyed by a cause not required to be
insured against under this Lease, or (ii) the then existing Laws do not permit the repair,
reconstruction or replacement of such Buildings, or (iii) the Buildings are totally or
substantially destroyed during the last two (2) years of the Lease Term (irrespective of whether
the cause of such destruction was required to be insured against hereunder), and provided that any
such destruction referred to in the foregoing clauses (i) through (iii) has not been caused by
Tenant’s gross negligence or willful misconduct, then, in any of such events, Tenant, may, at its
option, either (a) repair, reconstruct or replace the Buildings, or (b) elect to terminate this
Lease, by delivering to Landlord notice thereof within ninety (90) days after such total or
substantial destruction. If Tenant elects to terminate this Lease, then this Lease shall terminate
effective as of the date of such total or substantial destruction; provided, however, that upon
Landlord’s written request made upon Tenant within ninety (90) days after Landlord’s receipt of
Tenant’s notice of election to terminate, Tenant shall promptly remove such destroyed or damaged
Buildings from the Property and immediately thereafter redeliver the Leased Premises to Landlord in
a neat and clean condition. Subject to the requirements of its lenders, Landlord shall make the
proceeds of the insurance required under Article 9.2(A) available to Tenant for the purposes
described in the preceding sentence.



10.3 TENANT’S WAIVER: Landlord and Tenant agree that the provisions of Article 10.2 above,
captioned “Tenant’s Right to Terminate”, are intended to supersede and replace the provisions
contained in California Civil Code, Section 1932, Subdivision 2, and California Civil Code, Section
1934, and accordingly, Tenant hereby waives the provisions of said Civil Code Sections and the
provisions of any successor Code Sections or similar laws hereinafter enacted.


 


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ARTICLE 11

CONDEMNATION




11.1 TENANT’S RIGHT TO TERMINATE: Except as otherwise provided in Article 11.4 below
regarding temporary takings, Tenant shall have the option to terminate this Lease if, as a result
of any taking, (i) the entire Leased Premises is taken, or (ii) if less than the entire Leased
Premises shall be taken, but Landlord reasonably determines that the Buildings cannot at a
reasonable expense be repaired, restored, or replaced to an economically profitable unit, this
Lease may at the option of Tenant be terminated on the date of such taking. Tenant must exercise
such option within a reasonable period of time, to be effective on the later to occur of (a) ten
(10) days after the date that possession of that portion of the Leased Premises is condemned is
taken by the condemnor, or (b) the date Tenant vacated the Leased Premises.



11.2 RESTORATION: If any part of the Leased Premises, the Buildings or the Outside Areas is
taken and this Lease is not terminated, then Tenant shall repair any damage occasioned thereby to
the remainder thereof to a condition reasonably suitable for Tenant’s continued operations.



11.3 TEMPORARY TAKING: No temporary taking of the Property or Leased Premises shall terminate
this Lease or give Tenant any right to abatement of rent, and any award specifically attributable
to a temporary taking of the Leased Premises shall belong entirely to Tenant. A temporary taking
shall be deemed to be a taking of the use or occupancy of a material portion of the Leased Premises
for a period of not to exceed one hundred twenty (120) days.



11.4 DIVISION OF CONDEMNATION AWARD: Any award made for any taking of the Property, the
Buildings, the Outside Areas or the Leased Premises, or any portion thereof, shall belong to and be
paid to Landlord, and Tenant hereby assigns to Landlord all of its right, title and interest in any
such award; provided, however, that Tenant shall be entitled to receive any portion of the award
that is made specifically (i) for the taking of personal property, inventory or trade fixtures
belong to Tenant, (ii) for the interruption of Tenant’s business or its moving costs, (iii) for
loss of Tenant’s goodwill, or (iv) for any temporary taking where this Lease is not terminated as a
result of such taking. The rights of Landlord and Tenant regarding any condemnation shall be
determined as provided in this Article, and each party hereby waives the provisions of Section
1265.130 of the California Code of Civil Procedure, and the provisions of any similar law
hereinafter enacted, allowing either party to petition the Superior Court to terminate this Lease
and/or otherwise allocate condemnation awards between Landlord and Tenant in the event of a taking
of the Leased Premises.



11.5 TAKING DEFINED: The term “taking” or “taken” as used in this Article 11 shall mean any
transfer or conveyance of all or any portion of the Property to a public or quasi-public agency or
other entity having the power of eminent domain pursuant to or as a result of the exercise of such
power by such an agency, including any inverse condemnation and/or any sale or transfer by Landlord
of all or any portion of the Property to such an agency under threat of condemnation or the
exercise of such power.



ARTICLE 12

DEFAULT AND REMEDIES




12.1 EVENTS OF TENANT’S DEFAULT: Tenant shall be in default of its obligations under this
Lease if any of the following events occur:




A. Tenant shall have failed to pay Base Monthly Rent or any Additional Rent when due; or



B. Tenant shall have failed to renew any letter of credit Security Deposit within thirty (30)
days before the expiration thereof; or



C. Tenant shall have failed to perform any term, covenant or condition of this Lease, except
those requiring the payment of Base Monthly Rent or Additional Rent, within thirty (30) days after
written notice from Landlord to Tenant specifying the nature of such failure and requesting Tenant
to perform same;


 


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D. Tenant shall have sublet the Leased Premises or assigned or encumbered its interest in this
Lease in violation of the provisions contained in Article 7, whether voluntarily or by operation of
Law; or



E. Tenant shall have permitted or suffered the sequestration or attachment of, or execution
on, or the appointment of a custodian or receiver with respect to, all or any substantial part of
the property or assets of Tenant or any property or asset essential to the conduct of Tenant’s
business, and Tenant shall have failed to obtain a return or release of the same within thirty (30)
days thereafter, or prior to sale pursuant to such sequestration, attachment or levy, whichever is
earlier; or



F. Tenant shall have made a general assignment of all or a substantial part of its assets for
the benefit of its creditors; or



G. Tenant shall have allowed (or sought) to have entered against it a decree or order which:
(i) grants or constitutes an order for relief, appointment of a trustee, or confirmation or a
reorganization plan under the bankruptcy laws of the United States; (ii) approves as properly filed
a petition seeking liquidation or reorganization under said bankruptcy laws or any other debtor’s
relief Law or similar statute of the United States or any state thereof; or (iii) otherwise directs
the winding up or liquidation of Tenant; provided, however, if any decree or order was entered
without Tenant’s consent or over Tenant’s objection, Landlord may not terminate this Lease pursuant
to this Article if such decree or order is rescinded or reversed within thirty (30) days after its
original entry; or



H. Tenant shall have abandoned the Leased Premises without the payment of rent and without
providing reasonable security for the Buildings; or



I. Tenant shall have availed itself of the protection of any debtor’s relief Law, moratorium
law or other similar Law which does not require the prior entry of a decree or order.



Tenant agrees that any notice given by Landlord pursuant to Article 12.1 of the Lease shall satisfy
the requirements for notice under California Code of Civil Procedure Section 1161, and Landlord
shall not be required to give any additional notice in order to be entitled to commence an unlawful
detainer proceeding.



12.2 LANDLORD’S REMEDIES: In the event of any default by Tenant, and without limiting
Landlord’s right to indemnification as provided in Article 8.2 or otherwise, Landlord shall have
the following remedies, in addition to all other rights and remedies provided by Law or otherwise
provided in this Lease, to which Landlord may resort cumulatively, or in the alternative:



A. Landlord may, at Landlord’s election, keep this Lease in effect and enforce, by an action
at law or in equity, all of its rights and remedies under this Lease including, without limitation,
(i) the right to recover the rent and other sums as they become due by appropriate legal action,
(ii) the right to make payments required by Tenant, or perform Tenant’s obligations and be
reimbursed by Tenant for the cost thereof with interest at the then maximum rate of interest not
prohibited by Law from the date the sum is paid by Landlord until Landlord is reimbursed by Tenant,
and (iii) the remedies of injunctive relief and specific performance to prevent Tenant from
violating the terms of this Lease and/or to compel Tenant to perform its obligations under this
Lease, as the case may be.



B. Landlord may, at Landlord’s election, terminate this Lease by giving Tenant written notice
of termination, in which event this Lease shall terminate on the date set forth for termination in
such notice. Any termination under this Article shall not relieve Tenant from its obligation to
pay to Landlord all Base Monthly Rent and Additional Rent then or thereafter due, or any other sums
due or thereafter accruing to Landlord, or from any claim against Tenant for damages previously
accrued or then or thereafter accruing. In no event shall any one or more of the following actions
by Landlord, in the absence of a written election by Landlord to terminate the Lease, constitute a
termination of the Lease:




(1) Appointment of a receiver or keeper in order to protect Landlord’s interest hereunder;



(2) Consent to any subletting of the Leased Premises or assignment of this Lease by Tenant,
whether pursuant to the provisions hereof or otherwise; or


 


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(3) Any other action by Landlord or Landlord’s agents intended to mitigate the adverse effects
of any breach of this Lease by Tenant, including, without limitation, any action taken to maintain
and
preserve the Leased Premises or any action taken to relet the Leased Premises, or any portion
thereof, for the account of Tenant and in the name of Tenant.



C. In the event Tenant breaches this Lease and abandons the Leased Premises, Landlord may
terminate this Lease, but this Lease shall not terminate unless Landlord gives Tenant written
notice of termination. If Landlord does not terminate this Lease by giving written notice of
termination, Landlord may enforce all its rights and remedies under this Lease, including the right
to recover rent as it becomes due under this Lease as provided in California Civil Code Section
1951.4, as in effect on the Effective Date of this Lease.



D. In the event Landlord terminates this Lease, Landlord shall be entitled, at Landlord’s
election, to damages in an amount as set forth in California Civil Code Section 1951.2, as in
effect on the Effective Date of this Lease. For purposes of computing damages pursuant to Section
1951.2, an interest rate equal to the Lease Interest Rate shall be used where permitted. Such
damages shall include, without limitation:



(1) 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, computed by discounting such amount at the discount rate of the Federal Reserve
Bank of San Francisco, at the time of award plus one percent (1%); and



(2) Any other amount necessary to compensate Landlord for all detriment proximately caused by
Tenant’s failure to perform Tenant’s obligations under this Lease, or which in the ordinary course
of things would be likely to result therefrom, including without limitation, the following: (i)
expenses for cleaning, repairing or restoring the Leased Premises; (ii) expenses for altering,
remodeling or otherwise improving the Leased Premises for the purpose of reletting, including
removal of existing leasehold improvements and/or installation of additional leasehold improvements
(regardless of how the same is funded, including reduction of rent, a direct payment or allowance
to a new tenant, or otherwise); (iii) broker’s fees, advertising costs and other expenses of
reletting the Leased Premises; (iv) costs of carrying and maintaining the Leased Premises which
costs would have been billed to Tenant as Additional Rent had Tenant not defaulted and which
include but are not limited to taxes, insurance premiums, utility charges, landscape maintenance
costs, costs of maintaining electrical, plumbing and HVAC equipment and costs for providing
security; (v) expenses incurred in removing, disposing of and/or storing any of Tenant’s personal
property, inventory or trade fixtures remaining therein; (vi) attorneys’ fees, expert witness fees,
court costs and other reasonable expenses incurred by Landlord but not limited to taxable costs)
in retaking possession of the Leased Premises, establishing damages hereunder, and re-leasing the
Leased Premises; and (vii) any other expenses, costs or damages otherwise incurred or suffered as a
result of Tenant’s default.



12.3 LANDLORD’S DEFAULT AND TENANT’S REMEDIES: Landlord shall not be deemed to be in default
in the performance of any obligation under this Lease, and Tenant shall have no rights to take any
action against Landlord, unless and until Landlord has failed to perform the obligation within
thirty (30) days after written notice by Tenant to Landlord specifying in reasonable detail the
nature and extent of the failure; provided, however, that if the nature of Landlord’s obligation is
such that more than thirty (30) days are required for its performance, then Landlord shall not be
deemed to be in default if it commences performance within the thirty (30) day period and
thereafter diligently pursues the cure to completion. In the event of Landlord’s default as set
forth above, then, and only then, Tenant shall have the following remedies only:



A. Tenant may then proceed in equity or at law to compel Landlord to perform its obligations
and/or to recover damages proximately caused by such failure to perform (except as and to the
extent Tenant has waived its right to damages as provided in this Lease).



B. Tenant, at its option, may then cure any default of Landlord at Landlord’s cost. If,
pursuant to this Article, Tenant reasonably pays any sum to any third-party or does any act that
requires the payment of any sum to any third-party at any time by reason of Landlord’s default, the
sum paid by, Tenant shall be immediately due from Landlord to Tenant at the time Tenant supplies
Landlord with an invoice therefor (provided such invoice sets forth and is accompanied by a written
statement of Tenant setting forth in reasonable detail the amount paid, the party to whom it was
paid, the date it was paid, and the reasons giving rise to such payment), together with interest at

the


 


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 Lease Interest Rate from the date of such invoice until Tenant is reimbursed by Landlord.
Tenant may not offset such sums against any installment of rent due Landlord under the terms of
this Lease.



12.4 LIMITATION ON TENANT’S RECOURSE: If Landlord is a corporation, trust, partnership, joint
venture, unincorporated association, or other form of business entity, Tenant agrees that (i) the
obligations of Landlord under this Lease shall not constitute personal obligations of the officers,
directors, trustees, partners, joint venturers, members, owners, stockholders, or other principals
of such business entity, and (ii) Tenant shall have recourse only to Landlord’s then equity
interest, if any, in the Property for the satisfaction of such obligations and not against the
assets of such officers, directors, trustees, partners, joint venturers, members, owners,
stockholders or principals (other than to the extent of their interest in the Property). Tenant
shall look exclusively to such equity interest of Landlord, if any, in the Property for payment and
discharge of any obligations imposed upon Landlord hereunder, and Landlord is hereby released and
relieved of any other obligations hereunder. Additionally, if Landlord is a partnership, then
Tenant covenants and agrees:



A. No partner of Landlord shall be sued or named as a party in any suit or action brought by
Tenant with respect to any alleged breach of this Lease (except to the extent necessary to secure
jurisdiction over the partnership and then only for that sole purpose);



B. No service of process shall be made against any partner of Landlord except for the sole
purpose of securing jurisdiction over the partnership; and



C. No writ of execution shall be levied against the assets of any partner of Landlord other
than to the extent of his interest in Property.



Tenant further agrees that each of the foregoing covenants and agreements shall be enforceable by
Landlord and by any partner of Landlord and shall be applicable to any actual or alleged
misrepresentation or non-disclosure made respecting this Lease or the Leased Premises or any actual
or alleged failure, default or breach of any covenant or agreement either expressly or implicitly
contained in this Lease or imposed by statute or at common law.



12.5 TENANT’S WAIVER: Landlord and Tenant agree that the provisions of Article 12.3 above are
intended to supersede and replace the provisions of California Civil Code Sections 1932(l), 1941
and 1942, and accordingly, Tenant hereby waives the provisions of California Civil Code Sections
1932(l), 1941 and 1942 and/or any similar or successor Law regarding Tenant’s right to terminate
this Lease or to make repairs and deduct the expenses of such repairs from the rent due under this
Lease. Tenant hereby waives any right of redemption or relief from forfeiture under the Laws of
the State of California, or under any other present or future Law, in the event Tenant is evicted
or Landlord takes possession of the Leased Premises by reason of any default by Tenant.



ARTICLE 13

GENERAL PROVISIONS




13.1 TAXES ON TENANT’S PROPERTY: Tenant shall pay before delinquency any and all taxes,
assessments, license fees, use fees, permit fees and public charges of whatever nature or
description levied, assessed or imposed against Tenant or Landlord by a governmental agency arising
out of, caused by reason of or based upon Tenant’s estate in this Lease, Tenant’s ownership of
property, improvements made by Tenant to the Leased Premises or the Outside Areas, improvements
made by Landlord for Tenant’s use within the Leased Premises or the Outside Areas, Tenant’s use (or
estimated use) of public facilities or services or Tenant’s consumption (or estimated consumption)
of public utilities, energy, water or other resources. Upon demand by Landlord, Tenant shall
furnish Landlord with satisfactory evidence of these payments. If any such taxes, assessments,
fees or public charges are levied against Landlord, Landlord’s property, the Buildings or the
Property, or if the assessed value of the Buildings or the Property is increased by the inclusion
therein of a value placed upon same, then Landlord, after giving written notice to Tenant, shall
have the right, regardless of the validity thereof, to pay such taxes, assessment, fee or public
charge and bill Tenant, as Additional Rent, the amount of such taxes, assessment, fee or public
charge so paid on Tenant’s behalf. Tenant shall, within ten (10) days from the date it receives an
invoice from Landlord setting forth the amount of such taxes, assessment, fee or public charge so
levied, pay to Landlord, as Additional Rent, the amount set forth in said invoice. Failure by
Tenant to pay the amount so invoiced within said ten day period shall be


 


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conclusively deemed a
default by Tenant under this Lease. Tenant shall have the right, and the Landlord’s full
cooperation if Tenant is not then in default under the terms of this Lease, to bring suit in any
court of competent
jurisdiction to recover from the taxing authority the amount of any such taxes, assessment,
fee or public charge so paid.




13.2 HOLDING OVER: This Lease shall terminate without further notice on the expiration of the
Lease Term or earlier termination of this Lease. Any holding over by Tenant after expiration of
the Lease Term or earlier termination of this Lease shall neither constitute a renewal nor
extension of this Lease nor give Tenant any rights in or to the Leased Premises except as expressly
provided in this Article. Any such holding over shall be deemed an unlawful detainer of the Leased
Premises unless Landlord has consented in writing to same. Any such holding over to which Landlord
has consented to in writing shall be construed to be a tenancy from month-to-month, on the same
terms and conditions herein specified insofar as applicable, except that the Base Monthly Rent
shall be increased to an amount equal to one hundred fifty percent (150%) of the Base Monthly Rent
payable during the last full month immediately preceding such holding over. The provisions of this
Article shall not be deemed to limit or constitute a waiver of any other rights or remedies of
Landlord provided in this Lease or at Law.



13.3 SUBORDINATION TO MORTGAGES: This Lease is subject to and subordinate to all underlying
ground leases, mortgages and deeds of trust which affect the Buildings or the Property and which
are of public record as of the Effective Date of this Lease, and to all renewals, modifications,
consolidations, replacements and extensions thereof. However, if the lessor under any such ground
lease or any lender holding any such mortgage or deed of trust shall advise Landlord that it
desires or requires this Lease to be made prior and superior thereto, then, upon written request of
Landlord to Tenant, Tenant shall promptly execute, acknowledge and deliver any and all documents or
instruments which Landlord and such lessor or lender deem necessary or desirable to make this Lease
prior thereto. Tenant hereby consents to Landlord’s ground leasing the land underlying the
Buildings or the Property and/or encumbering the Buildings or the Property as security for future
loans on such terms as Landlord shall desire, all of which future ground leases, mortgages or deeds
of trust shall be subject to and subordinate to this Lease. However, if any lessor under any such
future ground lease or any lender holding such future mortgage or deed of trust shall desire or
require that this Lease be made subject to and subordinate to such future ground lease, mortgage or
deed of trust, then Tenant agrees, within ten (10) days after Landlord’s written request therefor,
to execute, acknowledge and deliver to Landlord any and all documents or instruments requested by
Landlord or by such lessor or lender as may be necessary or proper to assure the subordination of
this Lease to such future ground lease, mortgage or deed of trust, but only if such lessor or
lender agrees to recognize Tenant’s rights under this Lease and agrees not to disturb Tenant’s
quiet possession of the Leased Premises so long as Tenant is not in default under this Lease.



13.4 TENANT’S ATTORNMENT UPON FORECLOSURE: Tenant shall, upon request, attorn (i) to any
purchaser of the Buildings or the Property at any foreclosure sale or private sale conducted
pursuant to any security instrument encumbering the Buildings or the Property, (ii) to any grantee
or transferee designated in any deed given in lieu of foreclosure of any security interest
encumbering the Buildings or the Property, or (iii) to the lessor under any underlying ground lease
of the land underlying the Buildings or the Property, should such ground lease be terminated;
provided that such purchaser, grantee or lessor recognizes Tenant’s rights under this Lease.



13.5 MORTGAGEE PROTECTION: In the event of any default on the part of Landlord, Tenant will
give notice by registered mail to any lender or lessor under any underlying ground lease who shall
have requested, in writing, to Tenant that it be provided with such notice, and Tenant shall offer
such lender or lessor a reasonable opportunity to cure the default, including time to obtain
possession of the Leased Premises by power of sale or judicial foreclosure or other appropriate
legal proceedings if reasonably necessary to effect a cure.



13.6 ESTOPPEL CERTIFICATES: Tenant and Landlord shall, within twenty (20) days after the
request of the other party, promptly execute and deliver to the requesting party an estoppel
certificate (i) certifying that this Lease is unmodified and in full force and effect, or, if
modified, stating the nature of such modification and certifying that this Lease, as so modified,
is in full force and effect, (ii) stating the date to which the rent and other charges are paid in
advance, if any, (iii) acknowledging that there are not, to such party’s knowledge, any uncured
defaults under this Lease, or specifying such defaults if any are claimed, and (iv) certifying such
other information about this Lease as may be reasonably requested by the requesting party.
Tenant’s failure to execute and deliver such estoppel certificate within such twenty (20) day
period shall be a default by Tenant under this Lease, and


 


31









 







 Landlord shall have all of the rights and
remedies available to Landlord as Landlord would otherwise have in the case of any other default by
Tenant. Landlord and Tenant intend that any statement delivered pursuant to this
Article may be relied upon by any lender or purchaser or prospective lender or purchaser of
the Buildings, the Property, or any interest herein.



13.7 TENANT’S FINANCIAL INFORMATION: If at any time after Tenant’s financial statements shall
no longer be publicly available, Tenant shall, within ten (10) business days after Landlord’s
request therefor deliver to Landlord a copy of a financial statement for the most recently
concluded fiscal year (or if the request is made sooner than one hundred twenty (120) days from a
fiscal year end, then the financial statement for the preceding fiscal year) including an income
statement and a balance sheet and any such other information reasonably requested by Landlord
regarding Tenant’s financial condition. Tenant acknowledges that Landlord is relying upon the
financial information provided to Landlord by Tenant prior to entering into this Lease and the
information to be provided to Landlord by Tenant during the Lease Term. Landlord shall be entitled
to disclose such financial statements or other information to its lender, to any present or
prospective principal of or investor in Landlord, or to any prospective lender or purchaser of the
Buildings, the Property or any portion thereof or interest therein. Any such financial statement
or other information which is not publicly available shall be confidential and shall not be
disclosed by Landlord to any third party except as specifically provided in this Article, unless
the same becomes a part of the public domain without the fault of Landlord.



13.8 TRANSFER BY LANDLORD: Landlord and its successors in interest shall have the right to
transfer their interest in the Buildings, the Property, or any portion thereof at any time and to
any person or entity. In the event of any such transfer, the Landlord originally named herein (and
in the case of any subsequent transfer, the transferor), from the date of such transfer, (i) shall
be automatically relieved, without any further act by any person or entity, of all liability for
the performance of the obligations of the Landlord hereunder which may accrue after the date of
such transfer, and (ii) shall be relieved of all liability for the performance of the obligations
of the Landlord hereunder which have accrued before the date of transfer if its transferee agrees
to assume and perform all such prior obligations of the Landlord hereunder. Tenant shall attorn to
any such transferee. After the date of any such transfer, the term “Landlord” as used herein shall
mean the transferee of such interest in the Buildings or the Property.



13.9 NOTICES: Any notice required or desired to be given by a party regarding this Lease
shall be in writing and shall be personally served, or in lieu of personal service may be given by
(i) delivery by Federal Express, United Parcel Service or similar commercial carrier, (ii)
electronic fax transmission, or (iii) depositing such notice in the United States mail, postage
prepaid, addressed to the other party as follows:



A. If addressed to Landlord, to Landlord at its Address for Notices (as set forth in Article
1).



B. If addressed to Tenant, to Tenant at its Address for Notices (as set forth in Article 1).
Any notice given by registered mail shall be deemed to have been given on the third business day
after its deposit in the United States mail.



Any notice given by registered mail shall be deemed given on the date receipt was acknowledged to
the postal authorities. Any notice given by mail other than registered or certified mail shall be
deemed given only if received by the other party, and then on the date of receipt. Any notice
delivered by commercial carrier or by fax shall be deemed given on the date of confirmation of
delivery by the carrier or by electronic confirmation. Each party may, by written notice to the
other in the manner aforesaid, change the address to which notices addressed to it shall thereafter
be mailed.



13.10 ATTORNEYS’ FEES: In the event any party shall bring any action, arbitration proceeding
or legal proceeding alleging a breach of any provision of this Lease, to recover rent, to terminate
this Lease, or to enforce, protect, determine or establish any term or covenant of this Lease or
rights or duties hereunder of either party, the prevailing party shall be entitled to recover from
the non-prevailing party as a part of such action or proceeding, or in a separate action for that
purpose brought within one year from the determination of such proceeding, reasonable attorneys’
fees of up to two laws firms, expert witness fees, court costs and other reasonable expenses
incurred by the prevailing party (collectively, “Costs”). In the event that Landlord shall be
required to retain counsel to enforce any provision of this Lease, and if Tenant shall thereafter
cure (or desire to cure) such



 


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default, Landlord shall be conclusively deemed the prevailing party
and Tenant shall pay to Landlord all Costs incurred by Landlord promptly upon demand. Landlord may
enforce this provision by either (i) requiring Tenant to
pay such fees and costs as a condition to curing its default, or (ii) bringing a separate
action to enforce such payment, it being agreed by and between Landlord and Tenant that Tenant’s
failure to pay such fees and costs upon demand shall constitute a breach of this Lease in the same
manner as a failure by Tenant to pay the Base Monthly Rent, giving Landlord the same rights and
remedies as if Tenant failed to pay the Base Monthly Rent.



13.11 DEFINITIONS: Any term that is given a special meaning by any provision in this Lease
shall, unless otherwise specifically stated, have such meaning whenever used in this Lease or in
any Addenda or amendment hereto. In addition to the terms defined in Article 1, the following
terms shall have the following meanings:



A. REAL PROPERTY TAXES: The term “Real Property Tax” or “Real Property Taxes” shall each mean
(i) all taxes, assessments, levies and other charges of any kind or nature whatsoever, general and
special, foreseen and unforeseen (including all installments of principal and interest required to
pay any general or special assessments for public improvements and any increases resulting from
reassessments caused by any change in ownership or new construction), now or hereafter imposed by
any governmental or quasi-governmental authority or special district having the direct or indirect
power or tax or levy assessments, which are levied or assessed for whatever reason against the
Project or any portion thereof, or Landlord’s interest herein, or the fixtures, equipment and other
property of Landlord that is an integral part of the Project and located thereon, or Landlord’s
business of owning, leasing or managing the Project or the gross receipts, income or rentals from
the Project; (ii) all charges, levies or fees imposed by any governmental authority against
Landlord by reason of or based upon the use of or number of parking spaces within the Project, the
amount of public services or public utilities used or consumed (e.g. water, gas, electricity,
sewage or surface water disposal) at the Project, the number of persons employed by tenants of the
Project, the size (whether measured in area, volume, number of tenants or whatever) or the value of
the Project, or the type of use or uses conducted within the Project; and (iii) all costs and fees
(including attorneys’ fees) incurred by Landlord in contesting any Real Property Tax and in
negotiating with public authorities as to any Real Property Tax, but only to the extent of a Real
Property Tax reduction. If, at any time during the Lease Term, the taxation or assessment of the
Project prevailing as of the Effective Date of this Lease shall be altered so that in lieu of or in
addition to any Real Property Tax described above there shall be levied, or imposed (whether by
reason of a change in the method of taxation or assessment, creation of a new tax or charge, or any
other cause) an alternate, substitute, or additional tax or charge (a) on the value, size, use or
occupancy of the Project or Landlord’s interest therein, or (b) on or measured by the gross
receipts, income or rentals from the Project, or on Landlord’s business of owning, leasing or
managing the Project or (c) computed in any manner with respect to the operation of the Project,
then any such tax or charge, however designated, shall be included within the meaning of the terms
“Real Property Tax” or “Real Property Taxes” for purposes of this Lease. If any Real Property Tax
is partly based upon property or rents unrelated to the Project, then only that part of such Real
Property Tax that is fairly allocable to the Project shall be included within the meaning of the
terms “Real Property Tax” or “Real Property Taxes.” Notwithstanding the foregoing, the terms “Real
Property Tax” or “Real Property Taxes” shall not include estate, inheritance, transfer, gift or
franchise taxes of Landlord or the federal or state income tax imposed on Landlord’s income from
all sources. Notwithstanding the foregoing or anything to the contrary in this Lease, Tenant shall
be entitled to the benefit of all existing and future reductions and/or abatements of Real Property
Taxes, to the extent such reductions and/or abatements are granted by the applicable taxing
authorities and are applicable to periods during the Lease Term.



B. LANDLORD’S INSURANCE COSTS: The term “Landlord’s Insurance Costs” shall mean the costs to
Landlord to carry and maintain the policies of insurance required, or permitted, to be carried by
Landlord pursuant to Article 9, together with any deductible amounts paid by Landlord upon the
occurrence of any insured casualty or loss.



C. PROPERTY OPERATING EXPENSES: The term “Property Operating Expenses” shall mean and include
all Real Property Taxes, plus all Landlord’s Insurance Costs, plus all Property Costs. The term
“Property Costs” shall mean and include all expenses of operation, repair and maintenance of the
Buildings and the Property in accordance with the terms of this Lease, including, without
limitation, (i) the costs associated with the maintenance of an HVAC service agreement (if Tenant
fails to procure and maintain the same), (ii) the cost of any environmental, insurance, tax or
other consultant utilized by Landlord in connection with the Buildings and/or Property,



 


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(iii)
reasonably allocated wages and salaries, fringe benefits and payroll taxes for Landlord’s
administrative and other personnel directly applicable to the Buildings or the Property, including
both Landlord’s personnel and outside personnel, and (iv) an overhead/management fee for the
professional operation of the Buildings or the Property in an
amount equal to two percent (2%) of the sum of the annual Base Monthly Rent plus the Property
Operating Expenses (payable monthly). Under no circumstances, however, shall Property Operating
Expenses include any of the following: (a) depreciation on the Building or any improvements on the
Property, (b) federal, state, or local income, franchise, gift, transfer, excise, capital stock,
estate, succession or inheritance taxes (except to the extent any Real Property Tax is
recharacterized as one of the foregoing, up to the amount of the resulting reductions in the real
property tax from the prior year), (c) interest on debt or amortization payments on mortgages or
deeds of trust secured by the Property, (d) costs incurred because Landlord violated any Law;
provided such violation is not caused by Tenant’s failure to comply with the terms of this Lease;
(e) costs or expenses of a partnership, or other entity, which constitutes Landlord, which costs or
expenses are not directly related to the Leased Premises (such as entity-level accounting fees, tax
returns, and income taxes of such entity), (f) expenses incurred by Landlord that are not directly
related to and expended for the Leased Premises or its operations; (g) costs of any political,
charitable, civic or other contribution or donation; (h) any interest or penalty incurred due to
the late payment of any cost assessed as a result of Landlord’s failure to make payments when due
in those instances where Landlord is specifically responsible for the payment in question; provided
such late payment is not caused by Tenant’s failure to make when due any payment required pursuant
to this Lease; (i) any fee or expenditure paid to a related party by Landlord in excess of the
amount which would be paid in an arm’s length transaction for materials or services of comparable
quality (but only to the extent of such excess); (j) any personal property taxes of the Landlord
for equipment or items not used directly in the operation or maintenance of the Leased Premises;
(k) any costs or expenses for sculpture, paintings or other works of art purchased for the Leased
Premises by Landlord, including costs incurred with respect to the purchase, ownership, leasing,
repair and/or maintenance of such works of art; (l) costs for which Landlord is actually
compensated by insurance proceeds related to Property Operating Expense items, exclusive of
deductibles and costs of collection; and (m) costs incurred by Landlord in connection with
obtaining financing.



D. LAW: The term “Law” or “Laws” shall mean any judicial decision and any statute,
constitution, ordinance, resolution, regulation, rule, administrative order, or other requirement
of any municipal, county, state, federal, or other governmental agency or authority having
jurisdiction over the parties to this Lease, the Leased Premises, the Buildings or the Property, or
any of them in effect either at the Effective Date of this Lease or at any time during the Lease
Term, including, without limitation, any regulation, order, or policy of any quasi-official entity
or body (e.g. a board of fire examiners or a public utility or special district).



E. LENDER: The term “lender” shall mean the holder of any note or other evidence of
indebtedness secured by the Property or any portion thereof.



F. PRIVATE RESTRICTIONS: The term “Private Restrictions” shall mean the Parking Agreement,
all recorded covenants, conditions and restrictions, private agreements, easements, and any other
recorded instruments affecting the use of the Property, as they may exist from time to time.




G. RENT: The term “rent” shall mean collectively Base Monthly Rent and all Additional Rent.



13.12 GENERAL WAIVERS: One party’s consent to or approval of any act by the other party
requiring the first party’s consent or approval shall not be deemed to waive or render unnecessary
the first party’s consent to or approval of any subsequent similar act by the other party. No
waiver of any provision hereof or any breach of any provision hereof shall be effective unless in
writing and signed by the waiving party. The receipt by Landlord of any rent or payment with or
without knowledge of the breach of any other provision hereof shall not be deemed a waiver of any
such breach. No waiver of any provision of this Lease shall be deemed a continuing waiver unless
such waiver specifically states so in writing and is signed by both Landlord and Tenant. No delay
or omission in the exercise of any right or remedy accruing to either party upon any breach by the
other party under this Lease shall impair such right or remedy or be construed as a waiver of any
such breach theretofore or thereafter occurring. The waiver by either party of any breach of any
provision of this Lease shall not be deemed to be a waiver of any subsequent breach of the same or
any other provisions herein contained.


 


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13.13 MISCELLANEOUS: Should any provision of this Lease prove to be invalid or illegal, such
invalidity or illegality shall in no way affect, impair or invalidate any other provision hereof,
and such remaining provisions shall remain in full force and effect. Time is of the essence with
respect to the performance of every provision of this Lease in which time of performance is a
factor. Any copy of this Lease which is executed by the
parties shall be deemed an original for all purposes. This Lease shall, subject to the
provisions regarding assignment, apply to and bind the respective heirs, successors, executors,
administrators and assigns of Landlord and Tenant. The term “party” shall mean Landlord or Tenant
as the context implies. If Tenant consists of more than one person or entity, then all members of
Tenant shall be jointly and severally liable hereunder. This Lease shall be construed and enforced
in accordance with the Laws of the California. The language in all parts of this Lease shall in
all cases be construed as a whole according to its fair meaning, and not strictly for or against
either Landlord or Tenant. The captions used in this Lease are for convenience only and shall not
be considered in the construction or interpretation of any provision hereof. When the context of
this Lease requires, the neuter gender includes the masculine, the feminine, a partnership or
corporation or joint venture, and the singular includes the plural. The terms “must”, “shall”,
“will”, and “agree” are mandatory. The term “may” is permissive. When a party is required to do
something by this Lease, it shall do so at its sole cost and expense without right of reimbursement
from the other party unless specific provision is made therefor. Where Tenant is obligated not to
perform any act or is not permitted to perform any act, Tenant is also obligated to restrain any
others reasonably within its control, including agents, invitees, contractors, subcontractors and
employees, from performing said act. Landlord shall not become or be deemed a partner or a joint
venture with Tenant by reason of any of the provisions of this Lease.




13.14 RIGHT OF FIRST OFFER.



A. Prior to offering to sell the Property during the Term to a third party, Landlord shall
first deliver to Tenant a written notice of the purchase price and, if the purchase price is other
than all cash, the terms of any seller financing, pursuant to which Landlord intends to negotiate
the sale of the Property to a third party (the “ROFO Notice”). In addition, if Landlord receives
an unsolicited offer to purchase the Property and Landlord wishes to negotiate or accept such
unsolicited offer, Landlord shall first deliver to Tenant a written notice of the purchase price
and, if the purchase price offered is other than all cash, the terms of any seller financing set
forth in such unsolicited offer (the “Unsolicited Offer ROFO Notice”). For a period of twenty (20)
days from receipt of the ROFO Notice, or ten (10) days from receipt of the Unsolicited Offer ROFO
Notice, Tenant shall have the right to negotiate the purchase of the Property for the price and, if
applicable, the terms of any seller financing specified in the ROFO Notice, or in the Unsolicited
Offer ROFO Notice, as appropriate (the “ROFO”).



B. With respect to a ROFO Notice, in the event Landlord and Tenant are unable to reach
agreement on the purchase price and, if applicable, the terms of any seller financing for the
Property within the foregoing twenty (20) day period, then Tenant shall be deemed to have rejected
the ROFO and Landlord shall be free to sell the Property to any third party at any time, subject to
the following:



1. If Landlord fails, for any reason, to fully execute a purchase and sale agreement for the
sale of the Property within one hundred eighty (180) days after Tenant rejects (or is deemed to
have rejected) the ROFO, then Landlord shall be obligated, prior to selling the Property, to again
offer the Property to Tenant for sale pursuant to a ROFO Notice or an Unsolicited Offer ROFO
Notice, as applicable, in which event the preceding terms of this Article 13.14 shall again apply.



2. If by the end of the twenty (20) day period after receipt of the ROFO Notice, Tenant has
specified in writing a price and, if applicable, the terms of any seller financing upon which it
agrees, but for Landlord’s lack of concurrence, to purchase the Property (the “Tenant Offered Price
and Terms”) and before the end of one hundred eighty (180) days after Tenant rejects or is deemed
to have rejected the ROFO, Landlord proposes to sell the Property at a price which is less (and, if
applicable, with seller financing more favorable to the buyer) than the Tenant Offered Price and
Terms, then Landlord shall be obligated to deliver a written notice to Tenant specifying such price
and, if applicable, the terms of the seller financing (the “Second Bite ROFO Notice”) and Tenant
shall have the right, until the date which is three (3) business days after receipt of the Second
Bite ROFO Notice, to deliver written notice to Landlord exercising the ROFO (and in the event
Tenant fails to provide an unqualified written notice of acceptance and exercise of the ROFO to
Landlord within the foregoing three (3) business day period following receipt of the Second Bite
ROFO Notice, then Tenant shall be deemed to have rejected the ROFO).


 


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C. With respect to an Unsolicited Offer ROFO Notice, in the event Landlord and Tenant are
unable to reach agreement on the purchase price (and, if applicable, the terms of any seller
financing) for the Property within the foregoing ten (10) day period, then Tenant shall be deemed
to have rejected the ROFO and Landlord shall be
free to sell the Property to any third party at any time; provided, however, that if Landlord
fails, for any reason, to fully execute a purchase and sale agreement for the sale of the Property
within one hundred eighty (180) days after Tenant rejects (or is deemed to have rejected) the ROFO,
then Landlord shall be obligated, prior to selling the Property, to again offer the Property to
Tenant for sale pursuant to a ROFO Notice or an Unsolicited Offer ROFO Notice, as applicable, in
which event the preceding terms of this Article 13.14 shall again apply.



D. Upon exercise of the ROFO, Tenant’s obligations to purchase the Property in accordance with
the terms and conditions set forth in this Article 13.14 shall be irrevocable, and any breach by
Tenant of its obligation to purchase the Property thereunder shall cause its rights under this
Article 13.14 shall immediately terminate and be of no further force or effect. Any purchase of
the Property by Tenant under the ROFO shall be upon the terms and conditions set forth in the
American Industrial Real Estate Association Standard Offer, Agreement and Escrow Instructions for
the Purchase of Real Property attached hereto as Exhibit “F”, except that in light of Tenant’s
possession and occupancy of the Property, and notwithstanding any contrary terms in the ROFO
Notice, there shall be no due diligence period provided to Tenant under the terms of its purchase
of the Property, any representations and warranties thereunder by Landlord (as seller), other than
as to the valid organization of Landlord and the due authorization by Landlord of the sale
transaction thereunder, shall be deemed null and void, and the closing thereunder shall occur, on
an all-cash basis (unless seller financing exists), not more than sixty (60) days following
Tenant’s exercise of the ROFO. The period during which the ROFO shall apply (the “ROFO Period”)
shall commence on the date of this Lease, and shall expire upon the earlier of (i) the closing of
the sale of the Property following Tenant’s rejection of the ROFO as provided in Articles 13.14(B)
and 13.14(C), or (ii) the expiration or earlier termination of this Lease.



E. In the event that Landlord desires to transfer and convey all or any portion of its
interest in the Property (i) to an affiliate of Landlord, (ii) to any entity controlled by,
controlling or under common control with Landlord, (iii) to any joint venture or co-investment
program (whether in the form of a limited liability company, a limited partnership or otherwise),
in which any of Landlord or its affiliates has an interest, or (iv) as part of a Portfolio
Transaction (as hereinafter defined), such a transfer shall not trigger Tenant’s ROFO. A
“Portfolio Transaction” shall mean a contemplated sale to a third party of the Property, together
with one or more additional properties that are owned by Landlord or one of its affiliates or by a
joint venture or co-investment program in which Landlord or one of its affiliates has an interest.
Landlord may not rely on a transaction under this Article 13.14 to avoid, as a substantial purpose,
the Tenant’s ROFO.



F. If Landlord finances and encumbers its interest in the Property (as evidenced by a mortgage
or comparable encumbrance), and such secured party exercises any or all of its rights and remedies
against either or both of Landlord and the Property, and as a result thereof, the Property is
transferred to that lender, an affiliate of that lender, or a third party, whether at a foreclosure
sale, or through a deed in lieu of foreclosure, or some comparable procedure or proceeding (a
“Default Transfer”), then such Default Transfer shall not trigger Tenant’s ROFO (and, therefore,
neither Landlord nor its lender shall be obligated to deliver a ROFO Notice); provided that any
resulting successor shall continue to be bound by the terms of Tenant’s ROFO, it being intended to
be a continuing right.




13.15 LEASEHOLD MORTGAGE



A. Landlord shall not be required to subject its fee estate and interest in the Premises to
the lien of any leasehold financing or mortgage sought or obtained by Tenant.



B. Tenant, and to the extent this Lease is assigned to same, an Affiliate or Successor (each
as defined in Article 7.10 above) are hereby given the right (exercisable at any time and from time
to time) by Landlord, in addition to any other rights herein granted, without Landlord’s prior
written consent, approval or authorization, to hypothecate, pledge, encumber or mortgage its
interest in this Lease and the leasehold estate in the Leased Premises created hereby under one or
more leasehold mortgage(s) from a third-party lender or lenders unrelated to Borrower or its
owners, and experienced in financial transactions comparable to that represented by the agreements
and instruments of which the Leasehold Mortgage in place as of the Commencement Date is a part
(“Leasehold



 


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Mortgage”) and to assign such interest in this Lease and the leasehold estate in the
Premises created hereby as collateral security for such Leasehold Mortgage(s), upon the condition
that all rights acquired under such Leasehold Mortgage(s) shall, except as expressly provided in
this Article 13.15, be
subject to each and all of the covenants, conditions and restrictions set forth in this Lease, and
to all rights and interests of Landlord herein. None of such covenants, conditions or restrictions
is or shall be waived by Landlord by reason of the right given to mortgage such interest in this
Lease, except as expressly provided in this Article 13.15. The holder of any Leasehold Mortgage,
and its successors and/or assigns in such capacity, encumbering the leasehold estate created by
this Lease, shall be referred to herein as the “Leasehold Mortgagee” and shall be entitled to the
rights and benefits as provided herein. A subtenant may not hypothecate, pledge, encumber or
mortgage its interest in this Lease without the prior written consent of Landlord, which may be
withheld in Landlord’s sole and absolute discretion. Notwithstanding anything to the contrary
herein, no Leasehold Mortgage or subleasehold mortgage shall affect Landlord’s fee title to the
Leased Premises in any way.



C. Provided that Leasehold Mortgagee shall have notified Landlord in writing of its status as
a Leasehold Mortgagee and its name and address for notices, and provided to Landlord a copy and the
pertinent recording information of such Leasehold Mortgagee, Landlord thereafter shall give to such
Leasehold Mortgagee a copy of each notice of default and each notice of termination of the Lease at
the same time as the same shall be delivered by Landlord to Tenant, such copy to be addressed to
Leasehold Mortgagee at the address last furnished to Landlord as hereinabove provided. No such
communication shall be binding upon or affect said Leasehold Mortgagee unless a copy of said
communication shall be given to said Leasehold Mortgagee pursuant to this Section 13.15(C). In
furtherance of the foregoing, Landlord shall not serve a notice of cancellation or termination upon
Tenant unless a copy of any prior notice of default shall have been delivered to Leasehold
Mortgagee as hereinabove provided and the time as hereinafter specified for the curing of such
default shall have expired without the same having been cured. Landlord shall notify Leasehold
Mortgagee in writing of the failure of Tenant to cure a default within any applicable grace period
and of the curing of any default by Tenant. Leasehold Mortgagee shall have the right, but not the
obligation, to perform any term, covenant, condition or agreement of Tenant, and to remedy any
default hereunder and, upon acquiring Tenant’s interest in this Lease, to exercise any rights of
Tenant under the Lease (specifically including, without limitation, the Extension Options as
described in Section 2.7). Landlord shall accept such performance by said Leasehold Mortgagee with
the same force and effect as if performed, exercised and/or remedied by Tenant.



D. In furtherance of the provisions of Section 13.15(C) hereof, in the case of a default by
Tenant in the performance of any term, covenant, condition or agreement on Tenant’s part to be
performed under this Lease, Landlord will accept performance by Leasehold Mortgagee within the
following periods of any obligation to be performed by Tenant hereunder, with the same force and
effect as though timely performed by Tenant:



(i) as to any default in the payment of Rent and other sums payable hereunder, within ten (10)
days after notice from Landlord thereof;



(ii) as to all other defaults, within thirty (30) days more time than is given Tenant to
remedy or cause to be remedied the defaults complained of, or, if within such period such default
cannot be cured, to commence to so cure within such period and diligently and continuously proceed
therewith to completion; and



(iii) as to any default with respect to which Leasehold Mortgagee is without the legal power
to cure by payment or performance, at any time so long as Leasehold Mortgagee shall diligently
proceed to obtain possession of the Leased Premises as mortgagee (including possession by
receiver), and upon obtaining such possession, Leasehold Mortgagee shall diligently proceed to cure
such default; and



(iv) as to any default which is not susceptible to cure by Leasehold Mortgagee, at any time so
long as Leasehold Mortgagee shall diligently institute foreclosure proceedings and diligently
prosecute the same to completion (unless in the meantime Leasehold Mortgagee shall acquire Tenant’s
estate hereunder, either in its own name or through a nominee, by assignment in lieu of
foreclosure).



E. Landlord shall not exercise its right to terminate this Lease during the time that
Leasehold Mortgagee shall require to complete its remedies under its Leasehold Mortgage; provided,
however:


 


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(i) that Leasehold Mortgagee proceeds, promptly and with due diligence, to exercise the
remedies under its Leasehold Mortgage and thereafter prosecutes and completes the same with all due
diligence; and



(ii) that Leasehold Mortgagee shall pay to Landlord the Rent and all other charges required to
be paid by Tenant hereunder which have accrued and those which shall become due and payable during
said period.



(iii) Upon the completion of any foreclosure proceedings or acquisition of Tenant’s interest
in this Lease by Leasehold Mortgagee, any default not susceptible of being cured by Leasehold
Mortgagee shall be deemed waived by Landlord as to Leasehold Mortgagee, any purchaser at a
foreclosure sale, and their respective successors and assigns.



F. No notice of termination to Tenant shall be effective with respect to termination of this
Lease unless Leasehold Mortgagee shall also have been so notified. Leasehold Mortgagee shall then
have the right to notify Landlord in writing, within ten (10) days after receipt by Leasehold
Mortgagee of such notice of cancellation and termination, that (a) Leasehold Mortgagee, or a
reasonably qualified operator of a radio programming and distribution business comparable to that
operated by Tenant designated by Leasehold Mortgagee, or otherwise a nominee approved by Landlord
for a use approved Landlord, such approval not to be unreasonably withheld (each hereinafter called
an “approved nominee”), elects to lease the Premises from the date of termination of this Lease for
the remainder of the term of this Lease, at the Rent and other charges herein reserved and upon the
same terms, covenants and conditions as are herein set forth, with the same relative priority in
time and in right as this Lease (to the extent possible) and having the benefit of and vesting in
Leasehold Mortgagee, or the approved nominee, of all the rights, title, interest, powers and
privileges of the Tenant hereunder (the “New Lease”), and (b) Leasehold Mortgagee or the approved
nominee further obligates itself to (and in fact does) cure all defaults pursuant to, and within
the time frames described in, Section 13.15(D). Each subtenant of all or any portion of the Leased
Premises, if any, whose sublease was in force and effect immediately prior to the delivery of said
New Lease shall attorn to the lessee under the New Lease, unless said lessee shall, at its option,
elect to dispossess said subtenant or otherwise terminate the sublease held by said subtenant.
Each subtenant who hereafter subleases all or any portion of the Leased Premises shall be deemed to
have agreed to the provisions of this Section 13.15(G). The foregoing shall not be deemed to
obligate Landlord to keep any sublease in force and effect after the termination of this Lease, nor
shall Landlord have any obligation to terminate any sublease simultaneously with the termination of
this Lease. Upon consummation of the New Lease, Landlord shall pay or credit to Leasehold
Mortgagee or the approved nominee, as applicable, any rentals, less costs and expenses of
collection, received by Landlord between the date of termination of this Lease and the date of
execution of said New Lease, from subtenants or other occupants of the Leased Premises, if any,
which shall not theretofore have been applied by Landlord towards the payment of rent or any other
sum of money payable by Tenant hereunder or towards the cost of operating the Leased Premises and
all buildings and improvements thereon or performing the obligations of Tenant hereunder.



G. After such termination of this Lease and upon compliance with the provisions of Article
13.15(G) by Leasehold Mortgagee, or the approved nominee, within such time, Landlord shall
thereupon execute and deliver such New Lease to Leasehold Mortgagee or the approved nominee, having
the same relative priority in time and right as this Lease (to the extent possible) and having the
benefit of all of the right, title, interest, powers and privileges of Tenant hereunder in and to
the Premises.



H. Anything herein contained to the contrary notwithstanding, Landlord and Tenant mutually
agree that so long as there exists an unpaid Leasehold Mortgage on the leasehold estate of Tenant,
this Lease or any renewal thereof shall not be modified, amended or altered and Landlord shall not
accept a surrender of the Premises or a cancellation of this Lease (provided Leasehold Mortgagee
remedies any default and keeps this Lease current, all as provided above) prior to the expiration
or sooner termination thereof, without the prior written consent of Leasehold Mortgagee.



I. So long as any debt secured by a Leasehold Mortgage upon the leasehold created by this
Lease shall remain unpaid, unless Leasehold Mortgagee shall otherwise consent in writing, the fee
title to the Premises and the leasehold estate in the Premises shall not merge but shall always be
kept separate estates, notwithstanding what otherwise would be the merger of such estates either in
Landlord or in Tenant or in a third party by purchase or otherwise.


 


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J. In connection with any Leasehold Mortgage, if requested by the Leasehold Mortgagee,
Landlord and Tenant agree to execute and deliver a memorandum of lease in the form attached hereto
as Exhibit G (the “Memorandum of Lease”) for recordation in the Official Records of Los Angeles
County. Upon the expiration or earlier termination of the Lease Term, and promptly following
Landlord’s request, Tenant agrees to execute and deliver, in recordable form reasonably acceptable
to Landlord, a termination of the Memorandum of Lease (the “Memorandum Termination”). Tenant
hereby appoints Landlord as its attorney-in-fact for the purpose of executing and recording the
Memorandum Termination following the expiration or earlier termination of the Lease Term, should
Tenant not execute and deliver the Memorandum Termination to Landlord.



K. Notwithstanding the provisions of Section 13.3 to the contrary, Landlord shall not grant
any ground leases, mortgages and/or deeds of trust after the date hereof unless and until such
ground lessee, mortgagee or beneficiary, as applicable, shall recognize the rights and protections
afforded Leasehold Mortgagee pursuant to this Article 13.15, including, without limitation,
Leasehold Mortgagee’s right to receive notice and opportunity to cure any default under this Lease
as required by this Article 13.15 prior to the commencement of any action to terminate this Lease.
Leasehold Mortgagee agrees to evidence its consent to any subordination, non-disturbance and
attornment (or similar) agreement required by a ground lessee, mortgagee or beneficiary, as
applicable, provided such agreement shall not modify Leasehold Mortgagee’s rights and protections
afforded by this Lease.



L. All notices, copies of notices and other communications between Landlord and Leasehold
Mortgagee shall be given in the same manner and subject to the same terms and conditions as set
forth in Section 13.9 hereof.



M. If Tenant shall reject or disaffirm this Lease pursuant to any bankruptcy law, Landlord
shall give to Leasehold Mortgagee notice of such rejection or disaffirmance, together with a
statement of all Rent then due and payable by Tenant under this Lease (without giving effect to any
acceleration of the due date of any such payment of Rent), and of all other defaults under this
Lease. Leasehold Mortgagee shall have the right (but not the obligation), to give to Landlord
within thirty (30) days after receipt by Leasehold Mortgagee of such notice from Landlord, a notice
that Leasehold Mortgagee elects to assume this Lease and cures all then-existing outstanding
balance of Rent concurrently with such assumption of all non-monetary defaults (except for defaults
of the type specified in Section 365(b)(2) of the Bankruptcy Code or which are impossible for
Leasehold Mortgagee to cure) with reasonable diligence (the “Assumption Election”); provided
however, that Leasehold Mortgagee’s failure to make the Assumption Election within said thirty (30)
day period shall constitute Leasehold Mortgagee’s election not to assume this Lease. In the event
of an Assumption Election, (i) Tenant’s rejection or disaffirmance of this Lease shall not
constitute a termination of this Lease, (ii) Tenant and Leasehold Mortgagee’s interest in the Lease
shall remain in effect (except to the extent Tenant’s interest therein shall have terminated or
been transferred in connection with any enforcement of any Leasehold Mortgage) and shall not be
terminated or subjected to any divestiture or defeasance as a result of such rejection or
disaffirmance, (iii) Leasehold Mortgagee may assume the obligations of Tenant without any
instrument of assignment or transfer from Tenant, (iv) Leasehold Mortgagee’s rights under this
Lease shall be free and clear of all rights, claims and encumbrances of or in respect of Tenant,
(v) Leasehold Mortgagee shall consummate the assumption of this Lease and the payment of the
amounts payable by it to Landlord as provided above at a closing to be held at the office of
Landlord on the tenth (10th) business day after Leasehold Mortgagee shall have given to Landlord
the notice hereinabove provided for (or such other location as may be mutually acceptable to
Leasehold Mortgagee and Landlord), and (vi) upon an assignment of this Lease (following an
Assumption Election) by Leasehold Mortgagee to an approved nominee, Leasehold Mortgagee shall be
relieved of all obligations and liabilities arising from and after the date of such assignment.



N. If Landlord (whether as debtor in possession or otherwise) or any trustee of Landlord shall
reject or disaffirm this Lease pursuant to any bankruptcy law, (i) Landlord, without further act or
deed, shall be deemed to have elected to remain in possession of the Leased Premises for the
balance of the term hereof (including any extension or renewal terms) (unless Leasehold Mortgagee
shall otherwise consent in writing), and (ii) this Lease shall not be terminated, or be deemed to
have terminated, unless Tenant (with the written consent of Leasehold Mortgagee) shall elect to
treat this Lease as terminated under Section 365 of the Bankruptcy Code. Any exercise or attempted
exercise by Tenant of any right to treat this Lease as terminated after any rejection or
disaffirmance of this Lease by Landlord (whether as debtor in possession or otherwise) or any
trustee of Landlord shall be void unless consented to in writing by Leasehold Mortgagee. In the
absence of such election with such consent, this Lease shall not be treated as terminated under any
provision of any bankruptcy law, and this Lease shall continue in full force and effect in
accordance with its terms (except that Tenant shall have the rights conferred under Section 365 of
the


 


39









 







Bankruptcy Code), and the rights of Leasehold Mortgagee shall not be affected or impaired by
such rejection or disaffirmance.



O. Landlord agrees to subordinate to the lien of the Leasehold Mortgage any landlord’s lien,
all rights of levy, distress or distraint and all claims and demands of every kind against any of
Tenant’s personal property now or hereafter located within the Leases Premises, including, without
limitation, Tenant’s present and future inventory, equipment and all tangible property now owned or
hereafter acquired by Tenant (collectively, the “Goods”, which term, as used herein, shall not
include any property owned by Landlord or required to support the structure of, or to heat or cool
as a whole, any of the buildings located on the Property, or which would cause material damage or
constitute a material adverse Alteration to the structure of the Property if removed, but which
term shall expressly include, without limitation, all “Excluded Property” set forth on Exhibit B to
the Bill of Sale delivered by Tenant to Landlord in connection with Landlord’s acquisition of the
Leased Premises pursuant to the PSA). Without limiting the foregoing provisions of this Article
13.15(O), Leasehold Mortgagee or its receiver or any officer or other representative of Leasehold
Mortgagee, may, at its option, from time to time enter the Leased Premises for the purpose of
inspecting, possessing, removing, selling (by way of public or private auction, but subject to
Landlord’s reasonable terms and conditions concerning same), advertising for sale or otherwise
dealing with the Goods, and such license shall be irrevocable and shall continue from the date
Leasehold Mortgagee enters the Leased Premises for as long as it deems necessary (but not to exceed
a period of sixty (60) days after termination of the Lease); provided, however, that Leasehold
Mortgagee shall pay the Rent and provide general liability insurance with limits of at least
$2,000,000, naming Landlord as an additional insured thereon, for the period beginning with
termination of the Lease until the conclusion of the removal of the Goods and return of the Leased
Premises to Landlord as required in this Article 13.15(O). At the conclusion of such period,
Leasehold Mortgagee shall remove all of the Goods not sold or otherwise removed, and leave the
Leased Premises in broom clean condition and otherwise in the condition required by this Article
13.15(O). With respect to any Goods not removed from the Leased Premises within said period, all
interest, if any, of Leasehold Mortgagee in such Goods shall terminate and be of no force or
effect; provided, however, that nothing in the preceding sentence shall entitle Leasehold Mortgagee
to abandon any Goods within the Leased Premises.



P. Notwithstanding anything to the contrary in Article 7.8, Leasehold Mortgagee shall be
released from all obligations and liabilities under this Lease or any New Lease upon its assignment
of its full interest therein made in conformance with the provisions of this Article 13.15.



ARTICLE 14

CORPORATE AUTHORITY,

BROKERS AND ENTIRE AGREEMENT




14.1 CORPORATE AUTHORITY: Tenant represents and warrants that Tenant is validly formed and
duly authorized and existing, that Tenant is qualified to do business in the State in which the
Leased Premises are located, that Tenant has the full right and legal authority to enter into this
Lease, that the officers signing this Lease are duly authorized to execute and deliver this Lease
on behalf of Tenant in accordance with the bylaws and/or a board of directors’ resolution of
Tenant, and that this Lease is binding upon Tenant in accordance with its terms. Tenant shall,
concurrently with the execution of this Lease, deliver to Landlord a certified copy of the
resolution of its board of directors authorizing or ratifying the execution of this Lease, and if
Tenant fails to do so, Landlord at its sole election may elect to (i) extend the Commencement Date
by such number of days that Tenant shall have delayed in so delivering such corporate resolution to
Landlord, or (ii) terminate this Lease.



14.2 BROKERAGE COMMISSIONS: Tenant covenants, warrants and represents that, other than the
Broker, no broker, agent, salesperson or advisor represented Tenant in the negotiation of this
Lease. Tenant, at Tenant’s sole cost, shall pay any and all fees, commissions or amounts payable
to Broker in connection with this Lease and/or the occupancy of the Leased Premises by Tenant.
Landlord covenants, warrants and represents that no brokers or advisors represented Landlord in the
negotiation of this Lease. Each party agrees to and hereby does defend, indemnify and hold the
other harmless against and from any brokerage commissions or finder’s fees or claims therefor by a
party claiming to have dealt with the indemnifying party and all costs, expenses and liabilities in
connection therewith, including, without limitation, reasonable attorneys’ fees and expenses, for
any breach of the foregoing. The foregoing indemnification shall survive the termination or
expiration of this Lease.


 


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14.3 ENTIRE AGREEMENT: This Lease and the Exhibits, which Exhibits are by this reference
incorporated herein, constitute the entire agreement between the parties, and there are no other
agreements, understandings or representations between the parties relating to the lease by Landlord
of the Leased Premises to Tenant, except as expressed herein. No subsequent changes, modifications
or additions to this Lease shall be binding upon the parties unless in writing and signed by both
Landlord and Tenant.



14.4 WAIVER OF JURY TRIAL: LANDLORD AND TENANT EACH ACKNOWLEDGES THAT IT IS AWARE OF AND HAS
HAD THE ADVICE OF COUNSEL OF ITS CHOICE WITH RESPECT TO ITS RIGHTS TO TRIAL BY JURY, AND EACH PARTY
DOES HEREBY EXPRESSLY AND KNOWINGLY WAIVE AND RELEASE ALL SUCH RIGHTS TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER PARTY HERETO AGAINST THE OTHER (AND/OR AGAINST
ITS MEMBERS, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, OR SUBSIDIARY OR AFFILIATED ENTITIES) ON ANY
MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE, TENANT’S USE OR
OCCUPANCY OF THE PREMISES, AND/OR ANY CLAIM OF INJURY OR DAMAGE. FURTHERMORE, THIS WAIVER AND
RELEASE OF ALL RIGHTS TO A JURY TRIAL IS DEEMED TO BE INDEPENDENT OF EACH AND EVERY OTHER
PROVISION, COVENANT, AND/OR CONDITION SET FORTH IN THIS LEASE.



14.5 LANDLORD’S REPRESENTATIONS: Tenant acknowledges that neither Landlord nor any of its
agents made any representation or warranties respecting the Project, the Buildings or the Leased
Premises, upon which Tenant relied in entering into this Lease, which are not expressly set forth
in this Lease. Tenant further acknowledges that neither Landlord nor any of its agents made any
representations as to (i) whether the Leased Premises may be used for the Permitted Use under
existing Law, or (ii) the suitability of the Leased Premises for the conduct of Tenant’s business,
or (iii) the exact square footage of the Leased Premises, and that Tenant relied solely upon its
own investigations respecting said matters. Tenant expressly waives any and all claims for damage
by reason of any state-management, representation, warranty, promise or other agreement of Landlord
or Landlord’s agent(s), if any, not contained in this Lease.



[Signature Page Follows Immediately]



 


41









 






IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the Effective Date.



	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	“LANDLORD”:	 	 	 	“TENANT”:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	NLC-Lindblade, LLC,	 	 	 	Westwood One, Inc.,	 	 
	a Delaware limited liability company	 	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Jonathan Epstein	 	 	 	By:	 	/s/ Roderick M. Sherwood, III	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
      	 	 	 	 
	 

	 	Name:
	 	Jonathan Epstein
	 	 	 	 	 	Name:
	 	Roderick M. Sherwood, III	 	 
	 

	 	Its:
	 	Authorized Representative
	 	 	 	 	 	Its:
	 	President & CFO	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	By:	 	/s/ David Hillman	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 
	 

	 	 	 	 	 	 	 	 	 	Name:
	 	 David Hillman	 	 
	 

	 	 	 	 	 	 	 	 	 	Its:
	 	GC, CAO & Secretary	 	 






If Tenant is a CORPORATION, the authorized officers must sign on behalf of the corporation and
indicate the capacity in which they are signing. This Lease must be executed by the chairman of
the board, president or vice-president, and the secretary, assistant secretary, the chief financial
officer or assistant treasurer, unless the bylaws or a resolution of the board of directors shall
otherwise provide, in which event a certified copy, of the bylaws or a certified copy of the
resolution, as the case may be, must be attached to this Lease.



 


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EXHIBIT “A”




(Legal Description of the Property)




All that certain tract. parcel and lot of land lying and being situate in the City of Culver
City, State of California, being more particularly described as follows:



PARCEL 1:



LOTS 41, 42 AND 45 OF TRACT 4161, IN THE CITY OF CULVER CITY, AS PER MAP RECORDED IN BOOK 46
PAGE 32, OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.



PARCEL 2:



LOTS 43 AND 44, OF TRACT 4161, IN THE CITY OF CULVER CITY, AS PER MAP RECORDED IN BOOK 46
PAGE 32 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.



PARCEL 3:



LOTS 8, 9, 22 THE NORTHEASTERLY 4.61 FEET OF LOT 21 AND THE SOUTHWESTERLY 20.39 FEET OF LOT
23, OF TRACT NO. 4161, IN THE CITY OF CULVER CITY, AS PER MAP RECORDED IN BOOK 46 PAGES 32
OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.



PARCEL 4:



LOTS 10, 11, 12, 19,20 AND 21 ALL IN TRACT 4161, IN THE CITY OF CULVER CITY AS PER MAP
RECORDED IN BOOK 46, PAGE 32 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.



EXCEPT THE NORTHEASTERLY 4.61 FEET OF LOT 21.



APN NOS.: 4206-015-039, 4206-015-040, 4206-016-008, 4206-016-009, 4206-016-010 and
4206-016-011


 


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EXHIBIT “B”




(Site Plan of the Project)




 


B-1









 




EXHIBIT “C”




(Schedule of Base Monthly Rent)




	 	 	 	 	 	 	 	 	 
	 	 	Monthly Installment of	 	 	 	 
	Months	 	Base Monthly Rent	 	 	Annual Amount	 
	1-12
	 	$	72,963.00	 	 	$	875,556.00	 
	13-24
	 	$	75,516.71	 	 	$	906,200.46	 
	25-36
	 	$	78,159.79	 	 	$	937,917.48	 
	37-48
	 	$	80,895.38	 	 	$	970,744.59	 
	49-60
	 	$	86,726.72	 	 	$	1,004,720.65	 
	61-72
	 	$	86,657.16	**	 	$	1,039,885.87	**
	73-84
	 	$	89,690.16	**	 	$	1,076,281.88	**
	85-96
	 	$	92,829.31	**	 	$	1,113,951.74	**
	97-108
	 	$	96,078.34	**	 	$	1,152,940.05	**
	109-120
	 	$	99,441.08	**	 	$	1,193,292.96	**








	 	 	 
	**	 	these amounts are based on a year-over-year increase of three and one-half percent (3.5%);
provided, however, the Base Monthly Rent and Parking Fees for each year after the fifth anniversary
of the Effective Date shall be subject to additional increases as provided in this Exhibit “C”





Commencing on the fifth anniversary of the Effective Date and continuing on each anniversary of the
Effective Date thereafter during the Lease Term (each as “Adjustment Date”), the amount of Base
Monthly Rent and Parking Fees (and the corresponding monthly installments of the Base Monthly Rent
plus Parking Fees) payable under this Lease shall be increased in accordance with this Exhibit. On
the first Adjustment Date, the Base Monthly Rent and the Parking Fees shall be increased by the
greater of (i) three and one-half percent (3.5%), or (ii) a percentage equal to the cumulative
percentage increase, if any, in the Index (as defined below) published one (1) month before the
Effective Date over the Base Index (as defined below). On the second Adjustment Date and on each
Adjustment Date thereafter during the Lease Term, the Base Monthly Rent and the Parking Fees shall
be increased by the greater of (a) three and one-half percent (3.5%), or (b) a percentage equal to
the percentage increase, if any, in the Index published one (1) month before the applicable
Adjustment Date over the Base Index.



After each Adjustment Date, Landlord shall deliver to Tenant a written statement of the applicable
Base Monthly Rent and Parking Fees and the manner in which such items were computed. If Tenant
shall have paid any installment of Base Monthly Rent and Parking Fees prior to Landlord’s delivery
of such written statement identifying the increased Base Monthly Rent and Parking Fees, then Tenant
shall pay to Landlord the amount of the underpayment of Base Monthly Rent and Parking Fees within
ten (10) days from Landlord’s delivery of such statement to Tenant. The term “Index” shall mean
the United States Department of Labor, Bureau of Labor Statistics Consumer Price Index for All
Urban Consumers (Los Angeles-Riverside-Orange County Area), Subgroup “All Items” (1982/1984 = 100).
In the event the foregoing Index is discontinued prior to the expiration of this Lease, Landlord
may substitute any substantially equivalent official index published by the Bureau of Labor
Statistics or its successor. Landlord shall use any appropriate conversion factors to accomplish
such substitution. The substitute index shall then become the Index hereunder. The Index for the
calendar month which is thirteen (13) months before each Adjustment Date shall be the “Base Index”.



Parking Fees shall be determined from time to time based upon the Parking Agreement, and shall be
added to the Base Rent set forth above.



Notwithstanding anything to the contrary in this Lease, Landlord agrees to abate Tenant’s
obligation to pay Base Rent for the first month of the Initial Lease Term.




 


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EXHIBIT “D”



 


D-1