Exhibit 10.28


 


 


 


 


 


 


 


 


 


 


OFFICE
LEASE


 


WILSHIRE COURTYARD


 


 


 


 


 


 


 


WILSHIRE COURTYARD L.L.C.,


 


a Delaware limited liability
company,


 


as Landlord,


 


and


 


WPT ENTERPRISES, INC.,


 


a Delaware corporation


 


as Tenant.


 


 


 


 


 


 


 


 


 


 


 


 



    	 	 	 



     


    




 





TABLE OF CONTENTS


 


 


 





	 	 	Page
	 	 	 
	1.	Premises, Building, Project, And Common Areas; Rentable
Square Footage.	4
	 	 	 
	2.	Lease Term.	6
	 	 	 
	3.	Rent. 	9
	 	 	 
	4.	Additional Rent. 	9
	 	 	 
	5.	Use of Premises.	16
	 	 	 
	6.	Services and Utilities. 	17
	 	 	 
	7.	Repairs. 	19
	 	 	 
	8.	Additions and Alterations. 	20
	 	 	 
	9.	Covenant Against Liens.	21
	 	 	 
	10.	Insurance. 	22
	 	 	 
	11.	Damage and Destruction. 	24
	 	 	 
	12.	Nonwaiver. 	25
	 	 	 
	13.	Condemnation.	26
	 	 	 
	14.	Assignment And Subleting.	26
	 	 	 
	15.	Surrender Of Premises; Ownership And Removal Of Trade Fixtures.	30
	 	 	 
	16.	Holding Over.	31
	 	 	 
	17.	Estoppel Certificates.	31
	 	 	 
	18.	Subordination.	31
	 	 	 
	19.	Defaults; Remedies.	32
	 	 	 
	20.	Covenant Of Quiet Enjoyment.	34
	 	 	 
	21.	Security Deposit.	34



 


 


 






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TABLE OF CONTENTS


 


 



	 	 	Page
	22.	Credit.	35
	 	 	 
	23.	Signs.	37
	 	 	 
	24.	Compliance With Law.	37
	 	 	 
	25.	Late Charges.	37
	 	 	 
	26.	Landlord's Right To Cure Default; Payments By Tenant.	38
	 	 	 
	27.	Entry By Landlord.	38
	 	 	 
	28.	Tenant Parking.	38
	 	 	 
	29.	Miscellaneous Provisions.	39



 


	 	EXHIBITS	 
	 	 	 
	A	OUTLINE OF PREMISES	 
	B	TENANT WORK LETTER	 
	C	FORM OF NOTICE OF LEASE TERM DATES	 
	D	RULES AND REGULATIONS	 
	E	FORM OF TENANT'S ESTOPPEL CERTIFICATE	 
	F	FORM OF SUBORDINATION, NONDISTURBANCE AND ATTORNMENT AGREEMENT	 
	G	FORM OF CONSENT TO TRANSFER	 
	I-f	FORM OF LETTER OF CREDIT	 









 








 








 


 


 


 


 


 


 






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1


 


 


 


 


 


 





WILSHIRE COURTYARD OFFICE LEASE This Office  Lease  (the  ''Lease''),  dated  as  of  the  date  set  forth  in  Section  1  of  the  Summary  of  Basic  Lease   Information  (the  ''Summary''),  below,  is  made  by  and  between WILSHIRE  COURTYARD  L.L.C., a  Delaware   limited  liability  company  (''Landlord''),  and WPT  ENTERPRISES,  INC.,  a  Delaware  corporation (''Tenant''). • TERMS  OF LEASE SUMMARY OF  BASIC  LEASE INFORMATION . DESCRIPTION 1. Date: September  24, 2004 2. Premises   (Article 1). 2.1 Building: 5700  Wilshire  Boulevard,  Los Angeles,  California   90036,  containing  536,027  rentable  square feet. 2.2 Premises: 15,901  rentable square feet  of  space  located  on  the  third   (3 rd )  floor  of  the  Building,  as  further  set  forth  in Exhibit - A  to  the Office Lease. 3. Lease Te1111 (Article 2). 3.1 3.2 Length ofTe1m: Lease  Commencement Date: 3.3 Lease  Expiration Date: Seventy - five  (75) months. The  earlier  of(a)  the  date  which  is ten  (10)  days  after   Substantial  Completion  of  the  Premises  (defined  in   Lease  Section  2.1),  and  (b)  the  date  on  which  Tenant   first  occupies  the Premises  for  the  conduct  of  business   therefrom. Seventy - five  (75)  months  following  the  Lease   Commencement Date. 4. Base  Rent  (Article 3): Period  Following  Lease   Commencement Date Month s 1 - 3 [JSG:se/102994_5.DOC/092404/4040.039] Monthly   Installment   of  Base Rent Monthly  Rental  Rate  per  Rentable  Square Foot $ 0.00 Months 4 - 15 $37,844.38 Months  16 - 27 $39,116.46 Months  28 - 39 $40,388.54 Months  40 - 51 $41,660.62 Months  52 - 63 $43,091.71 Months 64 - 75 $44,522.80 $ 0.00 $ 2.38 $ 2.46 $ 2.54 $ 2.62 $ 2.71 $ 2.80 - 1 -



    	 



    	 



    



5. Base  Year   (Article 4): Calendar  year 2004. 6. Tenant's Share   (Article 4): . Approximately 2.966o/o. 7. Permitted Use   (Article 5): 8. 9. Security Deposit Parking  Pass  Ratio   (Article 28): General  office  use consistent  with  a  first - class  office   building,  including,  without limitation, entertainment   and  television  production  and post - production  facilities   and  related  activities  consistent  with a  first - class office   building $44,522.80 Up  to  three  and  one  half  (3.5),  but  no  less  than  two  and   one - half  (2.5)  umeserved  parking  passes  for  every  1,000   rentable square  feet  of the Premises. Subject to  the   terms  of  Article  28  of  the Lease, Tenant may  elect  to   convert  up  to  two  (2)  umeserved  parking passes  to   reserved  parking passes. 10. Address  of Tenant   (Section 29.18): 11. Address  of  Landlord   (Section 29.18): 1041  N. Formosa Formosa  Building, Suite 99 Hollywood, CA 90045 Attention: Adam  Pliska,  Director  of  Business  a11d   Legal Affairs (Prior  to  Lease  Commencement Date) and 5700  Wilshire Boulevard Suite 350 Los Angeles, CA 90036 Attention:  Adam  Pliska,  Director  of Business  and   Legal Affairs (After  Lease  Commencement Date) with  a  copy to: Sonnenschein  Nath  &  Rosenthal  LLP   601  South  Figueroa  Street,  Suite  1500   Los Angeles, CA 90017 Attention:  Robert  M.  Johnson, Esq. See  Section  29.18  of the Lease. (JSG:se/102994_5.DOC/092404/4040.039] - 2 -



    	 



    	 



    



- 3 - [JSG:se/102994_5.DOC/092404/4040.039] 12. Broker(s)   (Section 29.24): McCarthy  Coolc  &  Co.  LLC   Wilshire Courtyard 5750  Wilshire Boulevard Los  Angeles,  California 90036 and Julien  J.  Studley, Inc. 10960  Wilshire  Boulevard,  17 th  Floor   Los  Angeles,  California 90024 Attu: Janice  Cimbalo   Robert Cavaiola •



    	 



    	 



    



- 4 - [JSG:se/102994_5.DOC/092404/4040.039] 1. Premises, Building. Project,  And  Common Areas;  Rentable  Square Footage. 1. Premises, Building.  Project  and  Common Areas. (a) The Premises. Landlord  hereby  leases  to  Tenant  and  Tenant  hereby  leases from Landlord  the  premises set  forth  in  Section  2.2  of  the  Summary  (the  ''Premises'').  The  outline  oftl1e  Prenlises is  set   forth  in  Exhibit  A attached  hereto  and  each  floor or floors  of  the  Premises  has the  number  ofrentable  square  feet  as   set  forth  in  Section  2.2 of the Summary. The  parties  hereto  agree  that  the  lease  of  the  Premises  is  upon  and  subject   to  the  terms,  covenants  and  conditions herein  set  forth,  and  Tenant  covenants  as  a  material  part  of  the  consideration   for  this  Lease  to  keep  and  perform each  and  all  of  such  terms, covenants  and  conditions  by  it  to be  kept  and   performed and  that this  Lease  is  made  upon  the condition  of such performance. The  parties  hereto  her·eby   acknowledge  that  the  purpose  of  Exhibit  A is to show  the  approximate  location  of  the  Premises  in  the ''Building,"  as   that  ter1n  is defined  in  Section  1.1(b), below,  only,  and  such  Exhibit  is  not  meant  to  constitute  an  agreement,   representation  or  warranty  as  to  the  construction  of  the Premises, the  precise area  thereof,  or  the  specific  location  of   the  ''Common  Areas,"  as that  te1m  is  defined in  Section 1 . l(c), below,  or  the  elements thereof  or of  the  accessways   to  the  Premises or  the  ''Project,"  as  that  term  is  defined in  Section  l.l(b}, below. Except  as  specifically  set  forth  in   this  Lease  and  in the  Tenant  Work  Letter  attached  hereto  as  Exhibit  B (the  ''Tenant  Work  Letter''),  Landlord  shall   not  be  obligated  to  provide  or  pay  for any  improvement  work  or  services  related  to the  improvement  of  the   Prenlises. Tenant  also  acknowledges  that  neither  Landlord  nor  any  agent  of Landlord  has  made  any  representation   or  warranty  regarding the  condition  of  the  Prenlises,  the  Building  or  the  Project  or  witl1  respect  to  the  suitability  of   any  of  the foregoing for  the  conduct of  Tenant's  business,  except as  specifically  set  forth  in  this  Lease and  the  Tenant Work Letter. The  talcing  of  possession  of  the  Premises  by  Tenant shall  conclusively  establish  that  the   Premises  and  the  Building  were  at  such  time  in  good  and  sanitary  order,  condition and repair. (b) The  Building  and The Project. The  Prenlises  are  a  part  of  the  building set forth  in   Section  2.1  of  the  Summary  (the  ''Building'').  The  Building  is  part  of an  office project  known  as  ''Wilshire   Courtyard."  The  term  ''Project,"  as  used  in  this  Lease,  shall  mean  (i)  the  Building  and  the  Conlillon  Areas,  (ii)  the   land  (which  is  improved with  landscaping,  subterranean  parking  facilities  and  other  improvements) upon  whicl1  tl1e   Building  and  the  Common  Areas  are  located,  and  (iii)  the  other  office  building  located  adjacent  to  the  Building  and   the  land  upon  which  such  adjacent  office  building  is  located,  and  (iv) at  Landlord's  discretion,  any  additio11al  real   property,  areas,  land,  buildings  or  other  improvements  added  thereto  outside  of  the Project. (c) Common Areas. Tenant  shall  have  the non - exclusive right  to  use  in  comn1on  with  other   tenants  in  the  Project, and  subject  to  the  rules  and  regulations  referred  to  in  Article  5 of  this  Lease,  those  portions  of   the  Project  which  are provided,  from  time  to  time,  for  use  in  common  by  Landlord,  Tenant  and  any  other  tenants  of   the  Project  (such areas, together with such  other  portions  of  the  Project  designated  by  Landlord,  in  its discretion,   including  certain areas  designated  for the exclusive  use  of certain  tenants,  or  to  be  shared  by  Landlord  and  certain  tenants,  are  collectively  referred  to  herein  as  the ''Common Areas''). The Co1nmon  Areas  shall  consist  of  the   ''Project  Common  Areas''  and  the  ''Building Common Areas." The  terrn ''Project  Common  Areas,"  as used  in  this   Lease,  shall  mean  the  portion  of  the  Project designated  as  such by Landlord. The  term ''Building  Common  An·eas,"   as used  in  this Lease,  shall  mean  the  portions  of  the  Common  Areas  located within the  Building  designated  as  such   by Landlord. The  manner  in  which  the  Common  Areas  are  maintained  and  operated shall  be  at  the  sole  discretio11  of   Landlord,  provided  that  Landlord  shall maintain  and operate  same  in  a manner  consistent  with  that  of  other  first class,  high - rise office buildings  in  the  vicinity  of  the  Building  (the  ''Comparable  Buildings'')  and the  use  thereof   shall  be  subject to such reasonable rules,  regulations  and  restrictions  as  Landlord  may  malce  from  time to  ti1ne.   Landlord  reserves  the  right  to  close temporarily,  make  alterations  or  additions  to,  or  change  the location  of  elements   of  the  Project  and  the  Common  Areas,  provided  such  alterations, additions  or changes  do  not  adversely  affect  access   to  or  Tenants  normal  business  operations  in  the Premises. 2. Square Footages. The  parties  stipulate  to  the  rentable  area  of  the  Prenlises  and  the  Building  set   forth  in  Section  2  of  the Summary,  and  such  areas  shall  not  be  subject to  remeasurement  by  either party. 3. Right_  of  First  Offer  for  Additional Space. (a) Proposal to Lease. Subject  to the  other  provisions of this  Section 1.3 ,  and  pr·ovided   Tenant  is  not  in  default  hereunder  (after  any  applicable  notice  and  lapse of  applicable  cure  periods),  if  any  por·tion of



    	 



    	 



    



- 5 - [JSG:se/102994_5.DOC/092404/4040.039] the  third  (3 rd )  floor  of  the  Building containing  5,000  to  10,000  rentable  square  feet  and  which  is  immediately   adjacent  to  the  Premises,  becomes  available  for  lease  to  others  (the  ''Available  Space'')  during  the  Lease  Te•nrx"'n,  Tenant  shall  have  an  ongoing  right  of  first  offer  to  lease  such  Available  Space  that  becomes  available  as set  forth   herein.  For purposes  of  this  Section  1.3 ,  Available  Space shall  not include  (i)  space  for  which  existing  leases are   being  renewed,  or  (ii)  space  which  is  the  subject  of  options  to  expand  or  rights  of  first  offer  granted  to  any  othe1·   person  or  tenant,  which rights  are existing  on  the  date  hereof  or  are  granted  hereafter without violation  of  Tenant's   rights  hereunder  in  connection  with  a  lease  of  Available  Space to  any  other  Person  for  which  Tenant has  been  given   an  opportunity  to  lease  such  Available  Space hereunder. (b) Offer Notice. Until the termination  of  Tenant's  rights  under  this  Section  1.3 , provided Tenant has  given Landlord  notice  of  Tenant's  interest  in  leasing  Available  Space  (an  ''Interest  Notice'')  (except  as   set  forth  below), Landlord  shall  not,  within one  hundred  twenty (120)  days  after receipt  of  such  notice,  enter  into  or   commit  to  enter  into  any  lease  of  Available  Space  without  first giving  Tenant a  notice  (''Offer  Notice'')  offering  to   lease  such  Available  Space to Tenant on  the  following  tern1s and conditions:  (A)  the  term of  this  Lease  as  to  such   Available   Space  shall  commence  on  the  date  on  which  Landlord delivers  possession thereof to  Tenant  and  shall   continue  (i)  with  respect  to  any  lease  of  Available  Space  entered  into  on  or  before the  third  (3'  d ) anniversary  of the Commencement  Date, until  the  end of  the  Lease  Term  as  to  the balance  of  the  Premises,  and  (ii)  with  respect  to  any   lease  of  Available  Space entered  into  after  the  third (3 rd )  anniversary  of  the  Commencement Date,  until  the  end  of   the  Renewal  Term  as  if the  frrst  Renewal  Option  were  exercised  (whether  or  not  the  first  Renewal  Option  is,  in  fact,   exercised  by  Tena11t);  (B)  the  Base  Rent  payable  by  Tenant  for  the  Available  Space  shall  be the  Market Rent  (as   defined  in  Section  2.2 below)  and  the  Base  Year  with  respect  to  the  Available  Space  leased  by  Tenant  shall  be   adjusted  in  accordance  with  such Market  Rent,  (C)  Tenant shall pay  Additional  Rent  for  the  Available  Space  in   accordance  with  the  provisions  of  Article  4 of  this  Lease;  (D)  Tenant shall  receive  the applicable  improvement   allowance  and  other  applicable  concessions  as  determined  in  connection  with  the  determination of  the  Market  Rent   for the Available  Space  to the  extent  any  such  allowance  is  then  being  given  in  the  Comparable  Transactions  used  in   the  determination  of  such  Market Rent;  and  (E)  the Available  Space  shall  be  added  to  the Premises  for  all  other   purposes  of  this  Lease  and  all  of  the  other  terms  and  conditions  of this  Lease shall  apply  to  such  Available  Space  that  is  leased  by  Tenant  during  the  term  of  this  Lease  witl1 respect thereto. Tenant  shall  not  be  obligated  to  give   Landlord  an  Interest  Notice unless  Landlord has  previously  given  Tenant written  notice  specifying  the  current   availability  of  the  Available  Space for  lease  to  others  and the  dates  the  Available  Space,  if  not  currently  available,   will  become  available for  lease  to  others  (the  ''Available  Space  Notice'')  and  the  information  contained  in  any   Available  Space  Notice  most  recently  given  to  Tenant remains accurate. If  Landlord  has  not  given Tenant  an   Available  Space  Notice  which  remains  accurate,  Landlord shall  give  Tenant an  Offer Notice  as  set  forth  above,  even   without  receipt  of  an  Interest  Notice  from  Tenant,  prior to  Landlord's  entering  into  or  committing  to  enter  i11to  any   lease  of  Available  Space,  after  which  the  other  provisions  of  this  Section  1.3 shall apply. (c) No Acceptance. If  Tenant  does  not  accept  the  Available  Space  offered  by  Landlord  by   giving  Landlord  written  notice  of  such  acceptance  (the  ''Acceptance  Notice'')  within  ten  (10)  business  days  after   receipt  of  such  Offer  Notice,  then  Landlord_  shall  be  free  to  lease  such  space  to  any  other Person and  Tenant shall  not   have  any  rights under  this  Section  1.3 with  respect  to such  Available  Space  for  a  period  of  one  hundred  fifty  (150)   days  after  expiration  of said  ten  (10)  business  day  period,  and  only  upon  Tenant's  delivery  of  another  Interest   Notice. Tenant  also  shall  have  its  rights under  this  Section  1.3 with  respect  to  such  space  not  accepted  by  Tenant,   when such  space again  becomes  Available  Space  after the expiration  of  a  lease  thereof to a  third party. (d) Market Rent. If  Tenant  timely accepts  the  Available  Space  offered  by  Landlo1·d,  Tenant   shall  lease  the  same  from  Landlord  on  the  terms  and  co11ditions  described  in  Paragraph  l  .3(b) and  at  the  Market   Rent  determined as follows. Landlord  and  Tenant  shall  attempt  to  agree  on  the  Market  Rent  for  a  period  often  (10)   business  days after  the  after  the date  on  which  Tenant  accepts  the  Available  Space  offered  by  Landlord  in  the  Offer   Notice. In  the  event  that  Landlord  and  Tenant  do  not  agree  upon  such  rent  within  said  ten  (10)  business  day  period,   on  the  fifth  (5th)  business  day  after  the  expiration  of  said  ten  (10)  business  day  period,  Landlord  and  Tenant shall   each  simultaneously submit  to  the  other  in  writing  its  good  faith  estimate  of  the Market Rent. If  the  higher  of  said   estimates  is  not  more  than  one  hundred  and  five  percent  (105%)  of  the  lower  of  such  estimates,  the  Market  Rent  in   question  shall  be  deemed  to  be  the  average  of  the submitted rates. If  otherwise,  then  the  rate  shall  be  set  by   arbitration  to  be  held  in  Los  Angeles  County,  California in  accordance  with  the  Real  Estate  Valuation  Arbitration   Rules  of  the  American  Arbitration  Association, as follows. Landlord  and  Tenant  shall  within five  (5)  business  days   after  submittal  of  their  estimates,  each  appoint  a  reco3nized real  estate  expert  who  is  a  member  ofM.A.I.,  who has



    	 



    	 



    



- 6 - [JSG:se/102994_5.DOC/092404/4040.039] 10  years of  professional  real  estate  experience  in  the  market  where  the  Premises  are  located  and  who  shall  have   generally  recognized  current  competence  in  the  valuation  of  rental  properties  similar  to  the  Building  and  Project   which  are  located  in  the  vicinity  of  the  Project.  The  two experts  so  appointed  shall  appoint  a  third  recognized  real   estate  expert  possessing  the  aforesaid  qualifications.  If  the  three  experts  to  be  so  appointed  are  not  appointed  within   ten  (10)  business  days  of  the  date the  appraisal  procedure  is  invoked,  then the  expert  or experts,  if  any,  who  have   been  selected  shall  proceed  to  carry  out  the  appraisal  using  the  definition  of  Market  Rent  set  forth  in  Paragraph   2.2(c) below. The  expert  or  experts  shall  determine the  Market  Rent  in  accordance  with  the terms  of  this  Lease  and   pick  one  of  the  two rates  submitted,  being  the  rate  that is  closer  to  the  Market Rent  as  deter1nined by  the  a1·bitrator   using  the  definition  set  forth  in  Section  2.2. Any  such  selection  shall  be  signed  by  a  majority  of the  experts  if  more   than  two  have been selected. If  only  two  experts  have  been  selected  and  they  are  unable  to  agree,  then  eithe1·   Landlord or  Tenant  shall  be  entitled  to  apply  to  the  presiding judge  of  the Superior  Court  of  The  County  of  Los   Angeles,  California  for  the  selection  of  a  third  expert  who  shall  then  participate  in  such  appraisal  proceedings,  and   who  shall  be  selected  from  a  list  of  names  of  experts  possessing  the  aforesaid  qualifications  submitted  by  Landlord   and/or  from  a list  of  names  of  experts  possessing  the aforesaid  qualifications  submitted  by Tenant. Each  party  shall   pay  the  cost  of the  appraiser   selected  by  such  party, and  shall  equally  share  the  cost  of the third appraiser. The   parties  agree  to  be  bound  by  the  decision  of the  arbitrators,  which  shall  be  final  and  non - appealable,  and judgment   upon  the  award rendered  by  the  arbitrators   may  be  entered in  any  court  having jurisdiction thereof. Within fifteen (15)  business  days  after  the  determination  of  the  Rent  under  this  Section,  Tenant  and  Landlord  shall  execute  an   appropriate  lease  amendment  reflecting  Tenant's  acceptance  of  the  Offer  Notice  as  to specific  Available  Space  and setting  forth  the  Rent therefor. (e) Termination of Right. Tenant's  rights  under this  Section  1.3 shall  expire  (i)  if Tenant exercises  the  Renewal  Option,  on  the  eighth (8 th does  not  timely  exercise  the  Renewal  Option  set  forth  in  Section 2.2 below, upon  the lapse  of  Renewal Option  on   the  date  which  is  twelve  (12)  months prior  to  the  expiration  of  the  initial  Lease  Term,  or (ii)  if  Tenant timely )  anniversary  of the  Lease  Commencement Date. (f) Same Terms and Conditions. During  the  term  of  this  Lease with respect  to  any   Available  Space  leased  by  Tenant,  such  Available  Space  shall  become part  of  the  Premises  and,  except  as  otherwise   provided  in  this  Section  1.3 ,  shall  be  leased  upon the  same terms  and  conditions  as  the  original Premises. (g) Personal Right. Tenant's  right  to  lease Available  Space  as  set  forth  in  this  Sectio11  1.3 is   personal  to  Tenant and  may  not  be  assigned,  transferred  or  conveyed  to  any  party,  except  to  an  entity  to  which  this   Lease  has  been  assigned  (as  permitted  pursuant  to  Article  14 below)  in  its  entirety which (i)  has  succeeded  to  the   entire  business and  assets  (by  merger,  reorganization  or  otherwise)  of  the  original  Tenant  hereunder,  or  (ii)  which  is   owned  or  controlled  by  Tenant  or  is  under  common  ownership   or  control with Tenant. For  purposes  hereof,  the   words  ''control,"  and  ''Person''  shall  have the  meanings  ascribed  to  them  in  Paragraph  2.2(d) below.  The  foregoi11g   shall  not  be  construed  to  limit  Tenant's  ability  to  exercise  its  rights  under  this  Section  1.3 for  the  benefit  of  any  other   assignee  of  the  Lease  permitted  pursuant  to  Article  14 below. • 2. Lease Term. 2.1 Initial Term. The  terms and  provisions of this  Lease  shall  be  effective  as  of  tl1e  date  of this Lease. The  term  of  this  Lease  (the  ''Lease  Term'')  shall  be  as  set  forth  in Section  3.1  of  the Summary,  shall   commence  on  the date  set  forth  in  Section  3.2  of  the  Summary  (the  ''Lease  Commencement  Date''),  and  sl1all   terminate  on  the  date  set  forth  in  Section  3.3  of  the  Summary  (the  ''Lease  Expiration  Date'')  unless this  Lease  is   sooner  terminated   as hereinafter provided. For  purposes  of  this Lease,  the  term  ''Lease  Year''  shall  mean  each   consecutive twelve  (12)  month  period  during the  Lease  Term; provided,  however,  that the  first  Lease  Year  sl1all   commence  on  the  Lease  Commencement  Date  and end  on  the  last  day  of  the eleventh month  thereafter  and  the   second  and  each  succeeding  Lease Year shall  commence  on  the first  day  of  the  next  calendar  month;  and  further   provided   that  the  last Lease  Year  shall  end  on  the  Lease Expiration Date. For  purposes  of  this  Lease,  ''Substantial   Completion''  of the  Premises  shall  occur upon  (i)  the  completion  of  construction  <>fthe  ''Tenant  Improven1ents,"  as   that  term  is  defined  in  Section 2.1 of  the  Tenant  Work  Letter,  in  the  Premises  pursLiant  to  the  plans  and  drawings   which  were  prepared pursuant to  the  terms  of  the  Tenant  Work  Letter,  with  the  ex1;eption  of  any  minor  punch  list   items  which  do  not  adversely  affect the ability  of  Tenant  to  utilize  the  Premises  (s11ch  as  minor  items  of  decoration)   and  (ii)  Tenant  has  had  unrestricted  access  to  the  Premises  and  the  Building  (including  common  areas)  in  accordance   with  the  terms  of this Lease. Subject  to  Section  2.4 below,  this  Lease  shall  not  be  void,  voidable  or  subject to



    	 



    	 



    



- 7 - [JSG:se/102994_5.DOC/092404/4040.039] termination, nor  shall Landlord  be  liable  to  Tenant  for  any  loss  or damage  resulting  from  Landlord's  i11ability  to   deliver  the Premises to  Tenant, but  no Rent  hereunder  shall  be  payable  hereunder with  respect to  any  delay  in   delivery  of  the  Premises  to the  extent  caused by Landlord. At  any  time  during  the  Lease  Tt:1111  and upon  the   Substantial  Completion  of  the  Premises,  Landlord  shall  deliver  to  Tenant  a  notice  of  Lease  Tt11n dates  in  the  forxn as   set forth  in  Exhibit  ''C," attached hereto,  which  notice Tenant  shall  execute  and  return  to  Landlord  within  five  (5)   business  days  of  receipt thereof. 2. Renewal Term. (a) Option. Provided  Tenant  is  not  in  default under  this  Lease  (after  any  applicable notice   and  lapse  of  applicable  cure periods)  as  of  the  date  of  exercise,  Tenant  shall  have  one  option  to  renew  this  Lease   (''Renewal  Option'')  for  the  entire  Premises  for  a  period  of  five  (5)  years  (''Renewal  Term''),  exercisable  by  giving   written  notice  thereof  (''Renewal  Notice'')  to  Landlord  of  its  exercise  of  the  Renewal  Option  not  later  than twelve (12) months  prior to  the  Lease  Expiration Date. (b) Renewal  Term  Rent. The  rent  payable  hereunder for the  Premises  during  the Renewal  Terrr1 shall  be adjusted  to  the  Market  Rent  (as  defined  in  Paragraph  2.2(c) below)  as of  the  commencement of  the   Renewal  Ter1n (the  ''Renewal  Term Commencement Date''). In order  to  determine  the  Market Rent for  the   Renewal  Tenn,  Landlord and  Tenant,  ten  (10)  business  days  after  the  date  on  which  the Renewal  Notice  is  given  by   Tenant  (but  not  earlier  than  fifteen  (15)  months  prior  to  the  expiration  of  the  initial  Tenn), shall commence   discussions   to endeavor  to  agree  upon  the  applicable Market Rent. In  the event  that  Landlord  and  Tenant  do  not   agree  upon  such  rent  within  twenty (20)  business  days  after  the  expiration  of  said  ten  (10)  business  day  period,  on   the  twenty - fifth  (25th)  business  day  after  the  expiration  of  said  ten  (10)  business  day  period,  Landlord  and  Tenant   shall  each  simultaneously  submit to  the  other  in  writing  its  good  faith  estimate  of  the Market Rent. If  the  highe1·  of   said  estimates  is  not  more  than  one  hundred and  five  percent (105%)  of  the  lower  of  such  estimates,  tl1e  Market  Rent   in  question  shall  be  deemed  to  be  the  average  of  the submitted rates. If  otherwise,  then  the  rate  shall  be  set  by   arbitration  to  be  held  in  Los  Angeles,  California in  accordance  with  the  Real Estate  Valuation  Arbitration  Rules  of   the  American  Arbitration  Association, as follows. Landlord  and  Tenant  shall  within  five (5)  business  days after   submittal  of  their  estimates,  each  appoint  a recognized real  estate  expert  who  is  a member  ofM.A.I.  and  who  shall  have  generally  recognized  current  competence  in  the  valuation  of  rental  properties  similar to the  Building  and   Project  which  are  located  in  the  vicinity  of the Project. The  two  experts  so  appointed  shall  appoint  a  third   recognized  real  estate  expert  possessing the  aforesaid  qualifications.  If  the three  experts  to  be  so  appointed  a1·e  not   appointed  within  ten  (10)  business  days  of  the  date  the appraisal  procedure  is  invoked, then  the  expert  or  experts,  if   any,  who  have  been  selected shall  proceed  to  carry  out  the appraisal using the  definition  of  Market Rent  set  fo1ih  in  Paragraph 2.2(c) below. The  expert  or  experts  shall  determine  the  Market Rent  in  accordance with  the tenns  of  this   Lease  and  pick  one  of  the  two  rates  submitted, being  the  rate  that  is closer  to  the  Market  Rent  as  dete111lined by  the   arbitrator   using  the  definition  set  forth  in Paragraph 2.2(c). Any  such  selection shall  be  signed  by  a  majority  of  the   experts  if  more  than two have been selected. If  only  two  experts  have  been  selected  and they  are  unable to  agree,   then either Landlord  or  Tenant  shall  be  entitled  to  apply  to  the  presiding  judge  of  the  Superior Court of  The  County   of  Los  Angeles,  California  for  the  selection  of  a  third  expert  who  shall  then  participate  in  such  appraisal  proceedings,  and  who  shall  be  selected  from  a  list  of  names  of  experts  possessing the aforesaid qualifications   submitted  by  Landlord  and/or  from  a  list  of  names  of  experts  possessing  the  aforesaid  qualifications  submitted  by   Tenant. Each  party  shall  pay  the  cost  of  the  appraiser selected  by  such  party,  and  shall  equally  share the cost  of  the   third appraiser. The  parties  agree  to  be  bound  by  the  decision  of  the  arbitrators,  which  shall  be  final  and  non appealable, and  judgment  upon  the  award rendered  by  the  arbitrators  may  be entered  in  any  court  having  jurisdiction   thereof. (c) Market Rent. The  ''Market  Rent,"  shall  be  equal  to  the  rent (including  additional  re11t   and considering  any  ''base  year''  or  ''expense  stop''  applicable  thereto),  including all escalations,  of  leases which .  have  been  entered  into  during  the  nine (9)  month  period  prior  to  the  commencement  of  the applicable option  tenn,  at   which  tenants  are  leasing  non - renewal,  non - encumbered,  non - expansion,  non - equity  space  (''Comparable   Transactions'')  comparable  in  size,  floor  height  and  quality  to  the  Premises  for  a  similar  lease  tenn,  which   comparable  space  is  located  in  the  Project  as  well  as what  a comparable  landlord  of other  first - class  office  buildings   of  comparable  quality,  age,  size  (with  at  least  five  (5)  floors),  quality  of  location,  services  and  amenities   (''Comparable  Buildings'')   would  accept  in  Comparable Transactions. For  such  purposes, Landlord and  Tenant   stipulate  the  Comparable  Buildings  include  only the following: Colorado  Center in  Santa  Monica  and 6300



    	 



    	 



    



0 Wilshire  Boulevard,  6500  Wilshire  Boulevard  and  5670  Wilshire  Boulevard   in Los Angeles. The  detennination  of   the  Market  Rent  shall take  into  consideration  only  the following concessions  (the  ''Concessions''):  (i)  rental   abatement concessions,  if  any,  being  granted such  tenants in  connection  with  such  comparable  space  including,  if   applicable, periods  of  free rent  for  construction  of improvements,  (ii)  tenant  improvements  or  allowances provided   or  to  be  provided  for  such  comparable  space,  taking  into  account  the  value  of  the existing  improvements  in  such   comparable  space  and in  the  Premises  which  can  be  re - used  by  Tenant,  such  value  to  be  based upon  the  age,  quality   and  layout  of  the  improvements  and the  extent  to  which  the  same could  be  utilized  by  Tenant,  and  with  respect  to   the  Market Rent  determination  for the  Renewal  Tenn,  based  upon  the  fact  that  the  precise  Tenant  Improvements   existing  in  the  Premises  are  specifically suitable  to  Tenant,  but  Tenant shall  be  entitled  to  repai1·  a11d  refurbishment   of  such  existing  Tenant  Improvements  (and  any  applicable  allowances  with  respect  thereto)  to  the  extent  such  repair   or  refurbishment  is  available  in  Comparable Transactions  and  the  Premises  require  the  same,  and  (iii)  all  other   reasonable  monetary  and  other  economic concessions,  if  any,  being granted  such  tenants in  connection  with  such   comparable space;  and  provided  further  that in  calculating  the  rent for the  Renewal  Tenn,  no  consideration  shall  be   given  to  the  fact  that  Landlord  is  or  is  not  required  to  pay  a real  estate  brokerage commission  in  connection with   Tenant's  lease  of  the  Premises  during the  Renewal  Term or  the  fact  that  Landlord  or  such  other  landlo1·ds  are  or  are   not  required  to  pay  real  estate  brokerage   commissions  in  connection  with  such comparable space. The  Market  Rent   shall  additionally  include  a  determination  based  on  the concession  package  being  offered  by  Landlord  as  to  whetl1er,   and  if  so  to  what extent,  Tenant  must  provide  Landlord with  additional  financial  secm·ity,  such  as  a  letter  of  credit or   guaranty,  for  Tenant's Rent obligations. Such  dete1mination (if  applicable)  shall  be  made  by  reviewing the  extent  of   financial  security  then generally  being  imposed  in  Comparable  Transactions  from  tenants  of  compa1·able  financial   condition  and credit  history  to  the  then  existing  financial  condition and  credit  history  of  Tenant  (with  appropriate   adjustments  to  account  for  differences in  the then - existing  financial condition  of  Tenant  and  such  other tenants). (d) Transfer. The  Renewal  Option  is  personal  to  Tenant  and  may  not  be  assigned,   transferred  or  conveyed to  any  party, except  to  an  entity  to  which  this  Lease  has  been  assigned  (as  pennitted   pursuant to  Article  14 below)  in  its  entirety  which  (i) has  succeeded  to  the  entire  business  and  assets  (by  merger,   reorganization  or otherwise)  of  the  original  Tenant hereunder,  or  (ii)  which  is  owned  or  controlled  by  Tenant  or is   under  common  ownership  or  control with Tenant. For  purposes hereof,  the  word  ''control,"  as  used  above,  mea11s   with  respect  to a  Person  that  is  corporation, the  right to  exercise,  directly  or  indirectly,  more  tha11  fifty percent (50%)   of  the  voting rights  attributable  to  the shares  of  the  controlled  corporation  and,  with  respect  to  a Person  that  is  not a   corporation,  the  possession,  directly  or  indirectly,  of  the  power  to  direct  or cause  the  direction  of  the management  or   policies  of  the controlled Person. The  word  ''Person''  means  an  individual,  partnership,  trust,  corporation,  firrn or   other entity. The  foregoing  shall  not  be  construed  to  limit  Tenant's  ability  to  exercise  its  rights  under·  this Section 2.2 for  the benefit  of  any  other  Transferee  permitted pursuant  to  Article  14 below. 3. Option  to Cancel. (a) Option. Subject  to  Tenant's  payment  of  the  Termination  Fee  (as  defined  in Paragraph 2.3(b) below)  and the  other  conditions  set forth  herein,  Tenant  shall  have  the  option  (the  ''Termination  Option'')  to   terminate  this  Lease  (and  all  rights  and  obligations of  the  parties  hereunder,  except  for  accrued  and  unpaid  or   unperformed  obligations  and  liabilities) effective  on  the  fourth (4 th )  anniversary  of  the  Rent  Commencement  Date   (the ''Termination Date''). The  Termination  Option  may  be  exercised  by  written  notice  (the ''Termination Notice'')  given to Landlord  at  least  nine  (9) months  prior to the  Termination Date. Any  such  notice of termination   shall  be  irrevocable  when  received  by Landlord. (b) Fee. Within  thirty  (30)  days  after  Tenant's  notice  of  exercise  of  the  Temlination  Option   under  this  Section  2.3 and  in  order  for  such  tennination  to  be  effective,  Tenant  shall  pay  to  Landlord  the   ''Termination  Fee,"  which  shall equal  the  sum  of(a)  three  (3)  monthly  installments  of  Base Rent  (calculated  using   the  monthly installment  amount  due  during  months  49  through  51  following  the  Lease  Commencen1ent  Date), plus (b)  the  unamortized  amount  of  Landlord's  Lease  Costs  (defined  below)  as  of  the  Termination Date,  with Landlord's Lease Costs amortized  from  the Rent  Commencement  Date  over  the  Tern1 at  an  annual interest  rate  equal  to  the   interest  rate  on  five - year  United  States Treasury  Bills  issued  on  the  date  the  Ter11iination Notice  is  given,  plus two   hundred  (200) basis points. ''Landlord's  Lease  Costs''  are  defined  as  the  sum  of(i)  the  amount of  the  Tenant   Improvement  Allowance  expended by  Landlord  pursuant  to  Exhibit  B attached  hereto, plus  (ii)  the  amount  of   brokerage commissions  paid  by  Landlord  in  connection  with  this  Lease,  plus  (iii)  the  Base Rent  that  would  have   been  payable  by  Tenant  during  the  first three  (3)  months  after  the  Lease  Commencement  Date  if  the  monthly  rent for [JSG:se/102994_5.DOC/092404/4040.039) - 8 -



    	 



    	 



    



- 9 - [JSG:se/102994_5.DOC/092404/4040.039] the  fourth  (4 th )  month  of  the  Lease  Term had  been  payable  for  each  of  said  three  (3)  months,  plus  (iv)  attorneys'  fees   and  costs  incurred  by  Landlord  in  the  preparation  and  negotiation of this Lease. (c) Good Faith Exercise. Tenant  may  not  exercise,  nor  announce  any  intention  to  exercise   the  Termination Option,  in  order  to  re - negotiate  or  improve for  Tenant's  benefit  any  of  the  terms  of  this  Lease,   including,   without  limitation,  the  Rent payable hereunder. This  provision  shall  not  be  construed  to  limit  Tenant's   ability  to initiate  discussions  of  the  same  type  and similar  timing  that  other  tenants  in  the  market  would  be likely  to initiate. 2.4 Tenant Cancellation for  Failure to Complete. Tenant  shall have  the  right  to  cancel  and   terminate  this  Lease  (and  the  rights  and  obligations  of  the  parties hereunder) if,  on  or before  September  1,  2005,  (the   ''Outside  Completion  Date''),  Substantial  Completion  (defined  in  Section  2.1 above) has failed to  occur. The   Outside  Completion  Date  shall  be  postponed,  on  a  day - for - day  basis  by  any  Tenant  Delays  (defined, determined  and   adjusted  as  set  forth  in  Section  5 of  Exhibit  B hereto)  but  not  due  to  any  delays  due  to  Force Majeure  events   described  in  Section 29.16 below. Said  right to  cancel and  ter11u11ate this  Lease  must  be  exercised  by  a  written  notice  to  Landlord  given  within  thirty  (30)  days  after  the  Outside Completion Date. 3. Rent. 1. Base  Rent. Commencing  on  the  date (the  ''Rent  Commencement  Date'')  which  is three (3)  months  following  the  Lease Commencement  Date,  Tenant  shall  pay,  without  prior  notice  or  demand,  to  Landlord  or   Landlord's  agent at  the  management  office  of  the  Project,  or,  at  Landlord's  option,  at such  other  place  as  Landlord   may  from  time  to  time  designate  in  writing,  by  a  check  (drawn  on  a bank  having  a  branch  office  in  Los  Angeles,   California)  for  currency  which,  at  the  time  of  payment,  is  legal  tender  for  private  or public debts  in  the  United  States   of  America, base rent  (''Base  Rent'')  as set  forth  in  Section  4  of  the  Summary,  payable  in  equal  monthly  installments   as  set  forth  in  Section  4  of the Summary in  advance,  on  or before  the  first  day  of  each  and every  calendar  month   during  the  Lease  Term,  commencing  on  the  Rent Commencement  Date,  without  any  setoff  or  deduction  whatsoever.   The  Base  Rent for  the  first  full  month  of  the  Lease  Term  which  occurs  after  the  expiration  of  any  free  rent period   shall  be paid  at  the  time  of  Tenant's  execution  of this Lease. If  any  Rent payment  date  (including  the  Rent   Commencement  Date)  falls  on  a  day  of  the  month  other  than  the  first  day  of  such  month  or  if  any payment  of  Rent  is   for  a  period  which  is  shorter  than  one  month,  the Rent  for  any  fractional  month  shall accrue  on  a  daily  basis for  the   period  from  the  date  such  payment  is  due  to  the  end  of  such  calendar  month  or  to the  end  of  the Lease  Terrn at  a  rate   per  day  which  is  equal  to  1/365  of  the  applicable annual Rent. All  other  payments or  adjustments  required  to  be   made  under  the  terms  of  this  Lease  that  require  proration  on  a  time  basis  shall  be  prorated  on  the  same basis. 2. Initial  Three Month Period. Tenant  may  occupy  the  Premises  for  the conduct  of  business  after   the  Lease  Commencement  Date  and  prior  to  the Rent Commencement  Date,  and  all  of  the  provisions  oftl1is  Lease   shall  be  in  full  force  and  effect  upon  such  occupancy,  except  that  no  Base  Rent  or  additional  rent for  Direct   Expenses  pursuant to  Article  4 shall  be  payable  for the  Premises  for  the  period  prior  to  the  Rent Commencement Date; provided,  however,  that  Tenant  shall  pay  any  parking charges  due  hereunder  for  parking  for  such  Premises  and   other  sundry  expenses  due  and  payable hereunder  as  of  the  date  that  Tenant  occupies  the  Premises,  or  any portion thereof,  for  the  conduct  of business. 4. Additional Rent. 1. General Terms. In  addition  to  paying  the  Base  Rent  specified  in  Article  3 of  this  Lease,  commencing on  the  Rent  Commencement  Date,  Tenant  shall  pay  ''Tenant's  Share''  oftl1e  annual  ''Direct  Expenses,"   as  those  terms are defined  in  Sections  4.2(f} and  4.2(b) of  this  Lease,  respectively,  which  are  in  excess  of  the  amount   of  Direct  Expenses  applicable  to the  ''Base Year,"  as  that  term is  defmed  in  Section  4.2(a), below;  provided,   however,  that  in  no  event shall  any decrease  in  Direct  Expenses  for  any ''Expense  Year,"  as  that  it:1111 is defined  in  Section  4.2(c) below,  below Direct Expenses  for the  Base  Year  entitle  Tenant  to  any decrease  in  Base  Rent  01·  any   credit  against sums  due  under this Lease. Such  payments  by  Tenant,  together  with  any  and  all  other  amounts   payable  by  Tenant to Landlord  pursuant  to the terms  of  this  Lease,  are  hereinafter collectively  referred  to  as  the   ''Additional  Rent'',  and  the  Base  Rent  and  the  Additional  Rent  are  herein  collectively   referred  to as ''Rellllt." All   amounts  due  under  this  Article  4 as  Additional  Rent  shall  be  payable  for  the  same  periods  and  in  the  same  manner  as   the  Base  Rent.  Without limitation  on  other  obligations  of  Tenant  which  survive  the expiration  of  the  Lease Term,



    	 



    	 



    



- 10 - [JSG:se/102994_5.DOC/092404/4040.039] the  obligations  of Tenant  to  pay  the  Additional  Rent  provided  for in  this  Article  4 that  accrue  prior  to  the  expiration   of the  Lease  Terrn shall  survive  the  expiration  of  the Lease Te1rn. 2. Definitions of  Key  Terms  Relating   to Additional Rent. As  used  in  this  Article  4, the  following   terms  shall  have  the  meanings  hereinafter  set forth: (a) ''Base  Year''  shall  mean  the  period  set  forth in  Section  5  of  the Summary. (b) ''Direct  Expenses''  shall  mean  ''Operating  Expenses''  and  ''Tax Expenses." (c) ''Expense  Year''  shall  mean  each  calendar  year  in  which  any  portion of  the Lease  Term  falls,  through  and  including  the  calendar  year  in  which  the  Lease  Term expires,  provided  that  Landlord,  upon  notice   to  Tenant,  may  change  the Expense  Year  from  time  to  time  to  any  other  twelve  (12)  consecutive  month  period,  and,   in  the  event of  any  such  change,  Tenant's  Share of  Direct  Expenses  shall  be  equitably  adjusted  for  any  Expense   Year  involved  in  any  such change. (d) ''Operating  Expenses''  shall  mean  all  expenses,  costs  and amounts of  every  kind  and   nature  which  Landlord  pays  or  accrues  during  any  Expense Year  because  of  or  in  connection  with  the ownership,   management,  maintenance,  security,  repair,  replacement,  restoration  or  operation  of  the  Project,  or  any  portion   thereof. Without  limiting the  generality  of the  foregoing,  Operating Expenses  shall  specifically  include  any  and  all   of the following: (i)  the  cost  of  supplying  all  utilities,  the  cost  of  operating,  repairing,  maintaining,  and  renovating   the utility,  telephone,  mechanical,  sanitary,  storm  drainage,  and  elevator  systems,  and  the  cost  of  maintenance  and   service  contracts in connection  therewith;  (ii)  the  cost  of  licenses,  certificates,  permits  and  inspections  and  the  cost   of  contesting  any  governmental  enactments  which  may  affect  Operating Expenses,  and  the  costs incurred  in   connection  with  a  governmentally  mandated  transportation  system  management  program  or  similar  program;  (iii)  the  cost  of  all  insurance  carried  by  Landlord  in  connection  with  the  Project;  (iv) the  cost  of  landscaping,  relamping,   and  all  supplies, tools,  equipment  and  materials  used  in the  operation, repair  and  maintena11ce  oftl1e  Project,  or·  any   portion  thereof;  (v)  costs  incurred  in  connection  with  the  parking  areas  servicing  the  Building  (subject  to  tl1e   exclusion of  expenses  set  forth  in  Subparagraph  4.2(d)(l0) below);  (vi)  fees and  other  costs,  including  management   fees,  consulting  fees,  legal fees  and accounting fees,  of  all  contractors  and  consultants in  connection  with  the   management,  operation,  maintenance  and  repair  of  the  Project; (vii)  payments  under any  equiprnent  rental   agreements  and  the  fair  rental  value  of  any  management  office  space;  (viii)  subject  to  item  (6), below,  wages,   salaries  and other  compensation  and  benefits,  including  taxes levied thereon,  of  all  persons  engaged  in  the  operation,   management,  maintenance  and  security  of  the  Project;  (ix)  costs  under  any  instrument pertaining  to  the sharing  of   costs  by  the  Project;  (x)  operation,  repair,  maintenance  and  replacement of  all  systems  and  equipment  and   components  thereof  of  the  Building;  (xi)  the  cost  of  janitorial,  alartn, security  and  other services,  replacement  of   wall  and  floor  coverings,  ceiling  tiles  and  fixtures in  common  areas,  maintenance  and  replacen1ent  of  curbs  and  walkways,  repair to  roofs  and  re - roofing;  (xii)  amortization (including  interest  on  the  unamortized  cost)  over  the   useful  life  as  Landlord  shall  reasonably  determine, of  the  cost  of  acquiring  or  the rental  expense  of  personal property   used  in the  maintenance,  operation  and  repair  of  the  Project,  or  any portion  thereof;  (xiii)  the  cost  of  capital   improvements  or other  costs  incurred  in  connection  with  the  Project  (A)  which  are  intended  to  effect  economies  in   the  operation  or  maintenance  of  the  Project,  or  any  portion  thereof,  (B)  that  are  required  under  applicable  laws  to   comply  with  conservation  programs,  (C)  which  are  replacements or  modifications  of  nonstructural  items located  in   the  Common  Areas  required  to  keep  the  Common  Areas  in  good  order  or  condition  (provided  that  the costs for the   same  are  properly expensed,  and  not  a  capital  item,  as determined  in accordance  with  generally  accepted  accounting   and  management practices  consistently  applied), or  (D)  that  are  required  under  any  gove1nmental  law  01·  regulation   by  a  federal, state  or  local  governmental  agency, except  for  capital repairs,  replacements  or  other  improvements  to   remedy a  condition  existing  prior  to  the  Lease  Commencement  Date  which an  applicable governmental  authority,  if   it  had knowledge  of  such  condition  prior  to  the  Lease  Commencement  Date,  would  have  then  required  to be   remedied  pursuant to  then - current  governmental laws  or  regulations  in  their  fo1rn existing  as of  the Lease   Commencement  Date and  pursuant  to the  then - current  interpretation of  such  governmental  laws  or  regulations  by   the  applicable  governmental  authority  as  of  the  Lease  Commencement  Date; provided,  however,  tl1at  any  capital   expenditure  shall be  amortized  (including  interest  on  the amortized  cost)  over  its  useful  life  as  Landlord  shall   reasonably  deter1nine; (xiv)  costs,  fees, charges  or  assessments  imposed  by,  or  resulting  from  any  mandate  imposed   on  Landlord  by,  any  federal,  state  or  local  government  for  fire  and  police  protection,  trash  removal, community



    	 



    	 



    



- 11 - [JSG:se/102994_5.DOC/092404/4040.039] services,  or  other services which  do  not  constitute  ''Tax  Expenses''  as  that  terrn is  defined  in  Section  4.2(e)., below.   Notwithstanding the  foregoing,  for  purposes  of  this  Lease,  Operating  Expenses shall  not,  however, include: (1) costs, including  marketing  costs,  legal  fees,  space  planners'  fees,  advertising  and   promotional  expenses,  and  brokerage  fees  incurred  in  connection with  the  original  construction  or  development,  or   original  or  future leasing  of  the  Project, and  costs,  including  per1nit, license and  inspection  costs,  incurred  with   respect to  the  installation  of  tenant  improvements  made  for  new  tenants  in  the  Project  or  incurred  in  renovating  or   otherwise  improving,  decorating, painting  or  redecorating  vacant  space  for  tenants  or  other  occupants  of  the  Project   (excluding,  however,  such  costs  relating  to  any  common  areas  of  the  Project  or  parking facilities); (2) except  as  set  forth  in  items  (xii),  (xiii),  and  (xiv)  above,  depreciation,  interest   and  principal  payments  on  mortgages  and  other debt  costs,  if  any,  penalties  and interest,  costs  of  capital  repai1·s  and   alterations, and  costs  of  capital  improvements  and equipment; (3) costs  for  which the  Landlord  is reimbursed  by  any  tenant  or  occupant  of  the   Project  or  by  insurance  by  its  carrier  or  any  tenant's  carrier  or  by  anyone  else,  and  electric  power  costs  for  which   any  tenant  directly  contracts with  the  local  public  service company; (4) any  bad  debt  loss,  rent  loss,  or  reserves  for  bad  debts or rent loss; (5) costs  associated  with  the operation  of  the  business  of  the  partnersl1ip  or  entity   which  constitutes  the  Landlord, as  the  same  are  distinguished  from  the costs  of  operation  of  the  Project  (which shall   specifically  include,  but  not  be  limited  to,  accounting  costs  associated   with  the  operation  of the Project). Costs   associated  with  the  operation  of  the  business  of  the  partnership  or  entity  which constitutes  the  Landlord  include  costs   of  partnership   accounting  and  legal  matters, costs  of  defending  any  lawsuits  with  any  mortgagee  (except as the ·   actions of the  Tenant  may  be  in  issue),  costs  of  selling,  syndicating,  financing, mortgaging  or  hypothecating  any  of   the  Landlord's  interest  in  the  Project,  and  costs  incurred  in  connection  with  any  disputes  between  Landlord  and  its   employees,  between  Landlord and Project  management,  or between  Landlord  and  other  tenants  or  occupants,  and   Landlord's  general  corporate  overhead  and  general  and  administrative expenses; (6) the  wages  and  benefits  of  any  employee  who  does  not  devote  substantially  all  of   his  or  her employed  time  to  the  Project  unless  such  wages  and  benefits  are  prorated  to  reflect  time  spent  on   operating and  managing  the  Project  vis - a - vis time  spent on  matters  umelated  to operating and  managing  the Project;  provided,  that  in  no  event  shall  Operating  Expenses  for  purposes of  this  Lease  include  wages  and/or  benefits   attributable  to  personnel  above  the  level  of  Project  manager  or  Project engineer; (7) amount  paid  as  ground  rental  for the  Project  by  the Landlord; (8) except  for  a  Project  management  fee  consistent  with  the  management  fee  being   charged  in connection  with  the  operation  of  Comparable  Buildings  (a  fee  not  exceeding three percent  (3%)  of  gross   revenues of the  Project  shall  be  deemed  acceptable), overhead  and  profit  increment  paid  to  the  Landlord  or  to   subsidiaries  or  affiliates  of  the  Landlord  for  services  in  the  Project  to  the  extent  the same exceeds  the  costs  of  such   services rendered  by  qualified,  frrst - class  unaffiliated  third  parties  on  a  competitive basis; (9) any  compensation paid to  clerks,  attendants  or  other  persons  in  commercial   concessions  operated  by  the  Landlord,  provided  that  any  compensation paid  to  any  concierge  at  the  Project  shall  be   includable  as  an  Operating Expense; (10) the  cost  of  payroll  for  clerks  and attendants,  garage keepers  liability insurance,   parking  management  fees,  tickets and  uniforms  directly  incurred  in  operating parking facilities; (11) rentals  and  other related expenses  incurred in  leasing  air  conditioning  systems,  elevators  or  other equipment  which  if  purchased  the  cost  of  which  would  be  excluded  from  Operating Expenses  as  a   capital  cost,  except equipment  not  affixed  to  the  Project  which  is  used  in  providing  janitorial  or  similar services and,



    	 



    	 



    



- 12 - [JSG:se/102994_5.DOC/092404/4040.039] further  excepting  from  this  exclusion  such  equipment rented  or  leased  to  remedy  or  ameliorate  an  emergency   condition  in  the  Project ; (12) all  items  and  services  for  which  Tenant  or  any  other tenant  in  the  Project   reimburses  Landlord or  which  Landlord provides  selectively  to  one  or  more  tenants  (other than  Tenant) without ' reimbursement; (13) costs,  other  than  those  incurred  in  ordinary maintenance  and  1·epair,  for   sculpture,  paintings,  fountains  or  other  objects  of art; (14) any  costs  expressly  excluded  from  Operating  Expenses  elsewhere  in  this Lease; (15) rent  for  any office  space  occupied  by  Project  management  personnel to  the   extent  the  size  or  rental  rate of  such  office space  exceeds  the  size  or  fair  market  rental value  of  office  space  occupied   by  management  personnel  of  the Comparable  Buildings  in  the  vicinity  of  the  Building,  with  adjustment  where   appropriate  for  the  size  of  the applicable project; (16) costs arising  from  the  gross  negligence  or  willful  misconduct  of  Landlord  or  its   agents,  employees, vendors,  contractors,  or  providers  of  materials  or services; (17) costs  incurred  to  comply with  laws  relating  to  the  removal of  hazardous  material   (as  defined  under  applicable  law)  which  was  in existence in  the  Building  or  on  the  Project  prior to  tl1e  Lease   Commencement Date,  and  was  of  such  a  nature  that  a  federal,  State  or  municipal  governn1ental  authority, if  it  had   then  had  knowledge  of  the  presence  of such  hazardous  material, in  the  state, and  under  the  conditions  that  it  then   existed  in  the  Building  or on  the  Project,  would  have  then  required  the  removal of  such  hazardous  material  or  other   remedial  or containment action with  respect  thereto;  and  costs  incurred  to  remove,  remedy,  contain,  or  treat   hazardous  material,  which  hazardous  material  is  brought  into  the  Building  or  onto  the  Project  after  the  date  l1ereof   by  Landlord  or  any  other tenant of  the  Project  and  is  of  such  a  nature,  at  that  time,  that  a  federal,  State  or  mu11icipal   governn1ental  authority,  if  it  had  then  had  knowledge  of  the presence  of  such hazardous  material, in  the  state,  a11d   under  the  conditions,  that  it  then  exists in  the  Building  or  on  the  Project,  would  have  then required  the  removal  of   such  hazardous  material  or  other  remedial  or  containment  action  with  respect  thereto; and (18) costs  arising  from  Landlord's  charitable  or  political contributions. If Landlord  is  not  furnishing any particular work  or  service  (the  cost  of  which,  ifperfo1111ed by  Landlord,   would  be  included  in  Operating  Expenses)  to a  tenant who  has  undertaken  to  perfor1n such  work  or  service in lieu  of   the  performance  thereof  by  Landlord,  Operating  Expenses  shall  be  deemed to  be  increased  by  an  amount  equal to   the  additional  Operating  Expenses  which  would  reasonably  have  been  incurred  during  such  period  by  Landlord  if  it   had  at  its  own  expense  furnished  such  work  or  service  to such tenant. If  the Project  is  not  at  least ninety - five  percent   (95%)  occupied  during  all  or  a  portion  of  the  Base  Year  or  any  Expense  Year,  Landlord  may  elect  to make  a11   appropriate  adjustment to  the  components  of  Operating  Expenses  that vary  based  on  the  occupancy  of  the  Project  for   such  year  to  deter1nine the  amount of  Operating  Expenses  that would  have  been  incurred  had  the  Project been ninety - five  percent  (95%)  occupied;  and  the  amount  so  deter1nined shall  be  deemed  to  have been  the  amount  of   Operating  Expenses  for  such  year,  provided  that  a comparable  adjustment  shall have  been  made,  or  if  not made, shall  also  be  made  to  the  Base  Year Operating Expenses. Operating  Expenses  for  the  Base  Year  shall  not  include (to the  extent  not  continuing  and  applicable only  to  the  Base  Year)  market - wide labor - rate increases  due  to   extraordinary  circumstances,  including,  but  not limited  to,  boycotts  and  stril<es,  and  utility  rate  increases  due to   extraordinary  circumstances  including, but  not limited  to,  conservation  surcharges,  boycotts,  embargoes  or  other   shortages,  or  amortized  costs  relating  to  capital improvements. (e) Taxes. (1) ''Tax  Expenses''  shall  mean  all  federal,  state,  county,  or  local  governn1ental  or   municipal  taxes,  fees,  charges  or  other  impositions  of  every  kind  and  nature,  whether  general,  special,  ordinary  or   extraordinary,  (including,  without  limitation,  real  estate  taxes,  general and  special  assessments,  transit taxes,



    	 



    	 



    



- 13 - [JSG:se/102994_5.DOC/092404/4040.039] leasehold taxes  or  taxes  based  upon  the  receipt  of  rent, including  gross  receipts  or  sales  taxes applicable  to  the   receipt  of  rent,  unless required  to be  paid  by  Tenant,  personal  property  taxes  imposed  upon  the  fixtures,  machinery,   equipment,  apparatus,  systems  and  equipment,  appurtenances,  furniture  and  other  personal  property  used  in   connection with  the  Project,  or  any  portion  thereof), which  shall  be  paid  or  accrued  during  any  Expense  Year   (without  regard to  any different  fiscal  year  used  by  such  governmental  or  municipal  authority)  because  of  or  in   connection with  the  ownership,  leasing  and operation  of  the Project,  or  any  portion thereof. (2) Tax  Expenses  shall  include, without limitation: (i)  Any  tax on  the  rent,  right  to   re11t  or  other income  from  the Project,  or  any  portion  thereof,  or  as  against  the  business  of  leasing  the Project,  or any   portion  thereof;  (ii)  Any  assessment,  tax,  fee,  levy  or  charge  in  addition  to,  or  in  substitution,  partially  or  totally,  of   any  assessment,  tax,  fee,  levy  or  charge previously  included  within  the  definition  of  real  property  tax,  it  being   acknowledged  by  Tenant and  Landlord  that  Proposition  13  was  adopted  by  the  voters  of  the  State  of  California  in   the  June  1978  election  (''Proposition  13'')  and  that  assessments,  taxes,  fees,  levies  and  charges  may  be  imposed  by   governmental  agencies  for  such  services as  fire  protection,  street, sidewalk  and  road  maintenance,  1·efuse  removal   and  for  other  governmental  services  for1nerly provided  without charge  to  property  owners  or  occupants,  and,  in   further recognition  of  the  decrease  in  the  level  and quality  of  governmental  services  and  amenities  as  a  result  of   Proposition  13,  Tax  Expenses  shall  also  include  any  governmental  or  private  assessments  or  the  Project's   contribution  towards a  governmental  or  private  cost - sharing  agreement  for  the  purpose  of  augmenting  or  improving   the  quality  of  services  and  amenities normally  provided  by  governmental  agencies;  (iii)  Any  assessment,  tax,  fee,   levy,  or  charge  allocable  to  or  measured  by  the  area  of  the  Premises  or the  Rent  payable hereunder,  including,   without  limitation,  any  business or  gross income  tax  or  excise tax  with respect  to  the  receipt  of  such  rent,  or  upon  or   with  respect  to  the  possession, leasing,  operating,  management,  maintenance,  alteration,  repair, use  or  occupancy  by   Tenant  of  the  Premises,  or any  portion  thereof;  and  (iv)  Any  assessment,  tax,  fee,  levy  or  charge,  upon  this   transaction  or any  document  to  which Tenant  is  a  party,  creating  or  transferring  an  interest  or  an  estate  in  the   Premises. (3) Notwithstanding  the  foregoing,  the  following  shall  be  excluded  from  Tax   Expenses: (i)  net  income,  inheritance,  estate,  succession,  transfer,  gift,  franchise,  or  capital stock  tax,  or  any  income   taxes  arising  out  of  or  related  to  ownership  and operation  of  income - producing  real  estate  (as  opposed  to  rents,   receipts  or  income  attributable  to  operations at  the  Project,  and  except  as expressly  provided  in  Subparagraph   4.2(e)(l) above);  (ii)  any  Tax  Expenses  attributable  to  any  period  prior  to  the  Commencement  Date  hereof  of  after   the  expiration  or  earlier  termination  hereof;  (iii)  any  assessments,  charges,  taxes,  rents,  fees,  rates,  levies, excises,  license  fees,  per1nit fees,  inspection  fees,  impact  fees,  concurrency  fees,  or  other  authorization  fees  or  charges  to  the  extent  payable  for  the  original  development  or  installation  of on - or  off - site  improvements  or  utilities  (including   without  limitation street  and intersection  improvements,  roads, rights  of  way,  lighting, and  signalization)  necessary  for  the  i11itial  development  or  construction  of  the  Project  or  any past, present  or  future  phases  thereof,  or  any  past,  present  or  future  system  development  reimbursement  schedule  or  sinking  fund related  to  any  of  the  foregoing,   whether  the  improvements  to  which  they  may  relate  are  installed  prior  to  or  after  the  Commencement  Date  of  this   Lease;  and  (iv)  any  items  paid  by  Tenant  under  Section  4.5 of this Lease. All  assessments  which  are  not  specifically   charged  to Tenant  because  of  what  Tenant has done,  which can  be  paid  by  Landlord  in installments,  shall  be  paid  by   Landlord  in  the  maximum  number  of  installments  permitted  by  law  and  not  included  as  Tax  Expenses  except in  the   year  in  which  the  assessment  installment  is  actually paid. (4) Any  costs  and  expenses (including,  without  limitation,  reasonable  attorneys'   fees)  incurred  in  attempting  to  protest, reduce or  minimize  Tax  Expenses  shall  be  included in  Tax  Expenses  in  the   Expense   Year  such  expenses are paid. Tax  refunds  shall  be  credited  against  Tax  Expenses  and  refunded to  Tenant   regardless  of  when  received,  based  on  the  Expense Year to  which  the refund  is applicable. If  Tax  Expenses for any   Expense  Year  during  the  Lease  Term  or any  extension  thereof are  increased  after  payment  thereof,  or  if  Tax   Expenses  for  the  Base  Year  are  decreased  after  payment  thereof,  in  either  event  for  any  reason,  including,  without   limitation,  error  or  reassessment by applicable governmental  or  municipal  authorities,  Tenant shall  pay  Landlord   within  thirty  (30)  days  after  demand  any  resulting  increase in  the amount  of  Tenant's  Share  of  Direct  Expenses  for   any Expense Year  affected   by such change. Any  decrease  in  Tax  Expenses,  shall  be  paid  by  Landlord to Tenant   within  thirty  (30)  days  after  such  determination  or  credited  against  Tax  Expenses as  set  forth above. (5) The  amount  of  Tax  Expenses for  the  Base  Year  shall  be  known  as  ''Base  Taxes''.   If  in  any  comparison  year  subsequent  to  the  Base  Year,  the  amount  of  Tax  Expenses decreases  below  the  amount of



    	 



    	 



    



- 14 - [JSG:se/102994_5.DOC/092404/4040.039] Base  Taxes,  then  for  purposes  of  all subsequent comparison years, including  the  comparison  year  in  which  such   decrease  in  Tax  Expenses  occurred,  the  Base  Taxes  shall  be  decreased  by  an  amount  equal  to  the  decrease  in Tax Expenses. (f) ''Tenant's  Share''  shall  mean  the  percentage  set  forth  in  Section  6  of  the Summary. 3. Allocation  of  Direct Expenses. (a) Method of Allocation. The  parties  acknowledge  that  the  Building  is  a  part  of  a  multi - building  project  and that the  costs  and expenses incurred  in  connection  with  the  Project  (i.e. the  Direct  Expenses)   should  be  shared  between  the tenants  of  the Building  and  the tenants  of  the  other  buildings  in  the Project.   Accordingly, as  set  forth  in  Section  4.2 above, Direct Expenses  (which  consists  of  Operating  Expenses and  Tax   Expenses)  are  determined  annually  for  the  Project  as  a  whole,  and  a portion  of  the  Direct  Expenses,  which  portion   shall  be  determined  by  Landlord  on  an  equitable  basis,  shall  be  allocated  to  the  tenants  of  the  Building  (as  opposed   to  the  tenants  of  any  other  buildings  in  the  Project)  and  such  portion  shall  be  the  Direct  Expenses  for·  purposes  of  this   Lease. Such  portion  of  Direct  Expenses  allocated  to  the tenants  of  the  Building  shall  include all  Direct  Expenses   attributable  solely  to  the  Building  and  an  equitable  portion  of  the  Direct  Expenses  attributable  to  the Project  as a whole. (b) Cost Pools. Landlord shall  have  the  right,  from  time  to  time,  to  equitably  allocate  some  or  all  of  the  Direct  Expenses  for  the  Project among  different  portions  or  occupants  of  the  Project (the  ''Cost  Pools''),  in  Landlord's reasonable discretion. Such Cost  Pools  may  include,  but  shall  not  be  limited  to,  the  office  space   tenants  of  a  building  of  the  Project  or of  the  Project,  and  the  retail  space  tenants  of  a  building  of  the  Project  or of  the   Project.  The  Direct  Expenses  within  each  such  Cost  Pool  shall  be  allocated  and  charged  to  the tenants within  such Cost  Pool  in  an  equitable manner. 4. Calculation and  Payment  of Additional Rent. If  for  any  Expense  Year  ending  or  comme11cing   within  the  Lease  Term,  Tenant's  Share of  Direct  Expenses  for  such  Expense  Year  exceeds  Tenant's  Shar·e  of  Direct   Expenses  applicable  to  the  Base  Year,  then  Tenant  shall  pay  to  Landlord,  in  the  manner  set  forth  in  Section  4.4(a),  below,  and  as  Additional  Rent,  an  amount  equal  to  the  excess (the ''Excess''). If  in  any  Expense Year,  the  amo11nt  of   Tax  Expenses  is  less  than  the  amount  of  Base  Taxes,  the  Excess  shall  be  computed  as  if  there  were  no Tax  Expenses due  for  such  year. (a) Statement of  Actual  Direct  Expenses  and  Payment  by  Tenant. Landlord shall  give  to   Tenant  within  one  hundred twenty  (120)  days  following  the  end  of  each Expense  Year,  a  staten1ent  (the   ''Statement'')  which  shall  state  the  Direct  Expenses  incurred  or  accrued  for such  preceding  Expe11se  Year,  and   which  shall indicate  the  amount  of the Excess. Within  fifteen  (15)  business days  after receipt  of  the  Statement  for   each Expense  Year  commencing or  ending during  the  Lease  Te11n, if  an  Excess  is  present,  Tenant  shall  pay, with its   next  installment  of  Base Rent  due,  the  full  amount  of  the  Excess for such  Expense  Year,  less  the  amounts,  if  any,  paid  during  such  Expense  Year  as  ''Estimated  Excess,"  as  that  term  is  defined  in  Section  4.4(b), below,  and  if  Tenant   paid  more as  Estimated  Excess than  the  actual  Excess,  Tenant  shall  receive a credit  in  the  amount  of  Tenant's   overpayment   against  Rent  next  due  under this Lease. Even though  the  Lease  Terrn has  expired  and Tenant  has   vacated  the  Premises, when  the  final  determination  is  made  of  Tenant's  Share  of  Direct Expenses  for  the  Expense   Year  in  which  this  Lease  terminates,  if  an  Excess if  present,  Tenant  shall  pay  to  Landlord  such amount within  tl1irty (30)  days  after  such  determination,  and  if Tenant paid  more as Estimated  Excess  than  the  actual Excess, Landlo1·d shall,  within  thirty  (30)  days,  deliver  a  check  payable to Tenant  in  the  amount  of  the overpayment. The  provisions   of  this  Section  4.4(a) shall  survive  the expiration   or  earlier  termination of  the Lease Term. The  failure  of  Landlord   to  timely  furnish  the  Statement for  any  Expense  Year  shall  not  prejudice  Landlord  or  Tenant  from  enfor·cing  its   rights  under  this  Article  4, unless  Landlord  fails  to  provide a  Statement within  eighteen  (18)  n1onths  after  tl1e  end  of   the  applicable  Expense  Year, in  which  case  Tenant's  obligation  to  pay  for  the  Excess  relating  to  such  Expense Year shall terminate. (b) Statement of  Estimated Direct Expenses. In  addition,  Landlord  shall  endeavor  to  give   Tenant  a yearly  expense  estimate  statement  (the  ''Estimate  Statement'')  which shall  set  forth  Landlord's  reasonable   estimate (the  ''Estimate'')  of  what  the  total  amount  of  Direct  Expenses  for  the then - current  Expense Year  shall  be   and  the  estimated  excess  (the  ''Estimated  Excess'')  as  calculated  by  comparing the  Direct  Expenses for such



    	 



    	 



    



- 15 - [JSG:se/102994_5.DOC/092404/4040.039] Expense  Year,  which  shall  be  based  upon  the  Estimate,  to the  amount  of  Direct  Expenses  for  the  Base Year.  The   failure  of  Landlord to  timely furnish  the  Estimate  Statement  for  any  Expense  Year  shall  not  preclude Landlord  from   enforcing  its  rights  to  collect  any  Estimated  Excess  under  this  Article  4, nor  shall  Landlord  be  prol1ibited  from   revising  any  Estimate  Statement  or  Estimated  Excess  theretofore  delivered  to  the  extent  reasonably necessary. Thereafter,  Tenant  shall  pay,  with  its  next installment  of  Base Rent  due,  a  fraction  of  the  Estimated  Excess  for  the   then - current  Expense  Year  (reduced  by  any  amounts paid  pursuant  to  the  next  to  last  sentence  of  this  Section  4.4.(b)). Such  fraction  shall have as  its  numerator  the  number  of  months  which have  elapsed  in  such  current   Expense  Year,  including  the  month of  such  payment,  and  twelve  (12)   as  its denominator. Until  a  new  Estimate   Statement  is  furnished  (which  Landlord  shall  have  the  right  to  deliver  to Tenant  at  any  time),  Tenant  shall  pay   monthly,  with  the  monthly  Base  Rent  installments,  an  amount  equal  to  one - twelfth  (1/12)  of  the  total  Estimated   Excess  set  forth  in  the previous  Estimate  Statement  delivered by  Landlord  to Tenant. 4.5 Taxes  and  Other  Charges  for Which  Tenant Is Directly Responsible. (a) Tenant  shall  be  liable  for  and  shall  pay  ten  (10)  business  days  before  delinquency, taxes levied against  Tenant's  equipment,  furniture,  fixtures  and  any  other personal  property located in  or about  the   Premises. If  any  such  taxes  on  Tenant's  equipment,  furniture,  fixtures  and  any  other  personal  property  are  levied   against  Landlord  or  Landlord's  property  or  if  the  assessed  value  of  Landlord's  property  is  increased  by  the  inclusion   therein  of  a  value  placed  upon  such  equipment,  furniture,  fixtures  or  any  other  personal  property  and  if  Landlord   pays the  taxes  based  upon  such  increased  assessment,  which  Landlord shall  have  the  right to  do  regardless  of  the   validity  thereof  but  only  under  proper  protest  if requested  by  Tenant,  Tenant  shall  upon  demand  repay  to  Landlord   the  taxes  so  levied  against  Landlord  or  the  proportion of  such  taxes  resulting  from  such  increase  in  the assessment,   as  the  case  may be. (b) If  the tenant  improvements  in  the  Premises,  whether  installed  and/or  paid  for  by  Landlord  or  Tenant  and  whether  or  not  affixed  to  the  real  property  so as  to  become  a  part  thereof,  are  assessed  for  real  property  tax purposes at  a  valuation  higher  than  the  valuation  at  which  tenant  improvements  confomung  to   Landlord's  ''building  standard''  (i.e.,  in  excess of  $40.50  per  rentable  square  foot)  in  other  space  in  the  Building  are  assessed,  then  the  Tax  Expenses  levied  against  Landlord  or  the  property  by  reason  of  such  excess  assessed  valuation   shall  be  deemed to  be  taxes levied against  personal  property  of  Tenant  and  shall  be  governed  by  the  provisions  of  Section 4.5(a), above. Improvements installed  in  the  Premises  for  Tenant's  initial  occupancy  thereof,  the cost  for   which  is  not  in  excess  of  the  sum  of  the  Tenant  Improvement  Allowance and  Supplemental  Allowance  set  forth  in   Article  2  of  Exhibit  B hereto,  are  hereby stipulated  to  be  ''building  standard''  for  purposes  of  this Section. (c) Notwithstanding  any  contrary  provision  herein,  Tenant  shall  pay  prior  to  delinquency any (i)  rent  tax  or  sales  tax,  service  tax,  transfer  tax  or  value  added  tax,  or  any  other applicable  tax  on  the  rent  or  services   herein  or  otherwise  respecting  this  Lease,  (ii)  taxes  assessed  upon  or  with  respect  to  the  possession,  leasing,   operation,  management,  maintenance,  alteration,  repair,  use  or  occupancy  by  Tenant  of  the  Premises  or  any  portion   of  the  Project,  including  the  Project parking facility;  or  (iii)  taxes  assessed  upon  this  transaction  01·  any document  to   which  Tenant  is  a  party  creating  or  transferring  an  interest  or  an  estate in  the Premises. 4.6 Records; Audit. Landlord  shall  maintain  in  a  safe and  orderly manner all  of  its  records  pertaining   to  the Direct  Expenses  payable  pursuant  to  this  Article  4 for  a  period  of  two  (2)  years  after the  completion  of  each   calendar year. Landlord shall  maintain  such  records  on  a  current  basis  and  in sufficient  detail to  perrnit adequate   review  thereof  and, at  all  reasonable  times,  copies  of  such  records  shall  be  available  to  Tenant's  accounting   personnel  (but  not  other  representatives  except  as set  forth  in  this  Section  4.6) for such purposes  at  the  management   office  of the Project. If  Tenant  disputes  a  Statement  provided  under  Section  4.4 above,  provided  Tenant  is  not  in   default  under  this  Lease  after  notice  and expiration of  any  applicable  cure  period,  Tenant  may,  by  written  notice to   Landlord  within  two  (2)  years  after  receipt  of  a  Statement  for  a  particular  Expense  Year, cause  an  audit  to  be   commenced  of  the  Direct  Expenses  for  such  Expense  Year  by  a  nationally  or  regionally  recognized  firxn of  certified   public  accountants  or  by  Tenant's  own  internal  certified  public  accountants  on  a  non - contingency  fee  basis,  at   Tenant's  sole  expense,  to  verify  if  the  Statement was accurate. Tenant shall give  Landlord  not  less  than  ten  (10)   business  days  prior  written  notice of  its  intention  to  conduct   any such audit. Landlord  shall  cooperate  with  Tenant   during  the  course  of  such audit,  which  shall  be  conducted  during  normal  business  hours  in Landlord's Building



    	 



    	 



    



- 16 - [JSG:se/102994_5.DOC/092404/4040.039] management office. Landlord  agrees  to  make  such  personnel  available  to Tenant  as  is  reasonably  necessary  to   conduct  such  audit,  but  in  no  event  shall  such  audit  last  more  than  five  (5)  business  days  in  duration  for each  Lease   Year audited. Tenant  shall  be  entitled  to  make  photostatic copies  of  the  relevant  accounting  records  at  Tenant's  sole   expense,  provided  that  Tenant  keeps  such copies  confidential  (subject  to  any  legal  disclosure  required  by law,   judicial  process, or  regulation)  and  does  not  show  or  distribute such copies  to  any  third  party;  provided  that  Tenant's   accounting  personnel, attorneys and  any  auditor  engaged  by  Tenant  may  review such records  and Tenant  may  share   any  audit  results  with  its professional advisors. If such  audit reveals  an  overpayment  of  Direct  Expenses  for  the  year   covered  by  such  Statement,  then,  provided  Landlord  does  not  reasonably  dispute  the  result  of  such  audit,  Landlord   shall  credit  the  next  monthly  rent  payment  of  Tenant,  or  if  the  Ter111 has  expired,  refund  the overpayment. If  such   audit reveals  an  underpayment  of  Direct Expenses  for  the  year  covered  by  the  Statement,  then,  p1·ovided  Tenant  does   not  reasonably  dispute  the  result  of such audit, Tenant  shall  pay  the  same  with  its  next  monthly  rent  payment, or  if   the  Te11n has expired,  within  fifteen  (15)  days  after  receipt  of  the audit results. If  Landlord disputes  the  results  of  an   audit  caused  by  Tenant,  Landlord  shall  send  Tenant  a  notice  within  thirty  (30)  days  of receipt of the  results  of  such   audit  and  either  party  may  submit  the dispute  to  arbitration  in  accordance  with  Section  4.7 below  provided  that   Tenant  shall  continue  to  pay  to  Landlord  all rent,  including  any  adjustments  pursuant to this  Article  4, until  a  final   decision  is  rendered  by such arbitration. Tenant's  failure  to  dispute  a  year - end  Statement  and  conduct  an  audit  of   Direct  Expenses  within  two (2)  years  after  receipt  of  the  Statement  for  a  particular  Expense  Year  shall  constitute   Tenant's  acknowledgement  of the  accuracy  of such Statement. No  audit  hereunder shall  be  permitted  after   termination  of  the  Lease  due  to  default  by  Tenant,  and  Tenant  agrees  to  keep  the  results  of  any  audit hereunder   confidential. Tenant  agrees  to  pay  the  cost  of  any  audit  hereunder  by  Tenant;  provided  that  if  the  audit  reveals,  with   respect  to  any  Expense  Year,  that  Landlord  has  billed  Tenant for  Tenant's  share of  Direct  Expenses  more  than  five   percent  (5o/o)  in  excess of  the  Direct  Expenses  that  Tenant  should  pay  for  such  Expense  Year  pursuant  to  the  terms   of  the  Lease,  then  Landlord  shall  pay  the  reasonable  cost  of  such  audit,  provided  that  the  cost  shall  not  exceed  the   reasonable  customary  cost  of  such  audit  on  an  hourly fee basis. 4.7 Arbitration of Audit Dispute. When  invoked  pursuant  to  Section  4.6 above,  a  dispute  regarding   an  audit  conducted  pursuant  to  Section  4.6 shall  be  resolved  by  arbitration  conducted  in Los  Angeles,  California,  as   provided  in  this  Section  4.7. The  party  desiring  such  arbitration  shall  give  written  notice  thereof  to  the other   specifying   the dispute  to be arbitrated. Within  twenty  (20)  days  after  the  date  on  which  the  arbitration  procedure  is   invoked,  each  party  shall  appoint  an  experienced  arbitrator and  notify  the  other  party  of  the  arbitrator's  name and   address. The  two  arbitrators  so  appointed  shall appoint  a  third  experienced arbitrator. If  the three arbitrators  to  be   so  appointed  are  not  appointed  within  thirty  (30)  days  after  the  date  the  arbitration  procedure  is  invoked  as  provided   in  this  Lease,  then  the  arbitrator  or  arbitrators, if  any,  who  have  been  selected  shall  proceed  to  carry  out  the   arbitration. The  arbitrator  or  arbitrators  so  selected  shall  furnish  Landlord  and  Tenant with  a  written  decision  within   thirty  (30)  days  after  the  date  of  selection  of  the  last  of  the arbitrators   to be so selected. Any  decision  so  submitted   shall  be  signed  by  a  majority of  the arbitrators,  if  more  than two  have been selected. If  only  two  arbitrators have   been  selected and  they are  unable  to  agree,  then  either  Landlord  or  Tenant  shall  be  entitled  to  apply  to  the  presiding   judge  of the  Superior  Court  of the  County  of  Los  Angeles,  California  for the  selection  of  a  third arbitrator who  shall   be  selected  from  a  list  of  names  of  experienced  arbitrators  submitted  by  Landlord  or  from  a list  of  names  submitted   by  Tenant, as  the  case  may  be,  unless both  Landlord  and  Tenant submit lists  of  names,  in  which  case  the  Court,  in  its   sole  discretion,  shall select  the  third  arbitrator   from the lists. In  designating arbitrators  and  irI  deciding  the  dispute,   the arbitrators  shall  act  in  accordance  with  the  Commercial  Rules  of  Arbitration  then  in  force  of  the  American   Arbitration Association,  subject,  however,  to  such  limitations  as  may  be  placed  upon them by  the provisions of  this   Lease. The  decision  of  the  arbitrators  shall  be  final  and  biriding  upon  the  parties,  and  judgment  on  the  award   rendered  by  the  arbitrators   may  be  entered  in  any  court having jurisdiction thereof. The  obligation  of  Landlord  and   Tenant  to  submit  a dispute  to  arbitration  is  limited  to  disputes  arising  under  Section  4.6 above. • 5. Use  Of Premises. 5.1 Permitted Use. Tenant  shall  use  the  Premises  solely  for  the  Permitted Use  set  forth  in  Section 7 of  the  Summary  and  Tenant  shall not  use  or  permit  the  Premises  or the  Project  to  be  used for  any  other  purpose or   purposes  whatsoever  without  the  prior  written  consent  of  Landlord,  which  may  be  withheld  in  Landlord's sole discretion. 5.2 Prohibited Uses. The  uses prohibited  under  this  Lease  shall  iriclude,  without  limitation,  use  of   the  Premises  or  a  portion  thereof  for (i)  offices  of  any agency  or  bureau  of  the  United  States  or  any state  or  political



    	 



    	 



    



- 17 - [JSG:se/102994_5.DOC/092404/4040.039] subdivision  thereof;  (ii)  offices  or  agencies of  any  foreign  governmental  or  political  subdivision  thereof;  (iii)  offices   of  any  health  care  professionals or  service  organization;  (iv) schools or other training  facilities  which  are not ancillary  to  corporate,  executive or  professional office  use; (v)  retail  or restaurant  uses;  or  (vi)  live broadcasting activities  such  as radio  and/or television stations. Tenant  shall  not  allow  occupancy  density of  the  Premises  greater   than  the  highest  density of  any  other  office tenant  of the Building. Tenant  further  covenants  and  agrees  that  Tenant   shall  not  use, or suffer  or  permit  any  person  or  persons  to  use,  the  Premises  or  any  part  thereof for  any use  or   purpose  contrary  to the provisions of  the  Rules  and  Regulations  set  forth  in  Exhibit  D, attached hereto,  or  in   violation  of  the  laws  of  the  United  States  of  America,  the  State  of California,  or the  ordinances,  regulations or   requirements  of  the  local  municipal  or  county  governing  body  or other  lawful  authorities  having  jurisdiction over  the   Project)  including,  without  limitation,  any  such  laws,  ordinances,  regulations or  requirements  relating to  haza1·dous   materials  or  substances,  as  those  terms  are  defined  by  applicable laws  now  or  hereafter  in effect. Tenant  shall not  do   or  pe1·nrit anything  to  be  done  in  or  about  the  Premises  which  will  in  any  way  damage  the  reputation of  the  Project  or   obstruct  or  interfere  with  the rights  of other  tenants  or occupants  of  the  Building, or injure  or annoy  them  or  use  01·   allow  the Premises  to  be used  for  any improper,  unlawful  or objectionable  purpose,  nor  shall  Tenant cause,  maintain   or  permit  any  nuisance  in,  on  or  about  the Premises. 6. Services and Utilities. 1. Standard Tenant Services. Landlord  shall  provide  the  following  services  on  all  days  (unless   otherwise  stated  below)  during  the  Lease Terrn. (a) Subject  to  limitations  imposed by  all  governmental  rules,  regulations  and guidelines   applicable  thereto,  Landlord  shall  provide  heating  and  air  conditioning  (''HV AC'') when  necessary  for  normal   comfort  for  nor111al office  use  in the  Prenrises  during  ''Building  Hours,"  as  that  te1m is  defined, below. For  purposes   of  this Lease,  ''Building  Hours''  shall  be  from  8:00  A.M.  to  6:00  P.M.  Monday  through  Friday,  and  on  Saturdays   from  9:00 A.M.  to  1:00  P.M., except  for  the  date of  observation  of  New  Year's  Day,  Memorial  Day,  Independence   Day,  Labor  Day,  Thanksgiving  Day,  Christmas  Day  and,  at  Landlord's  discretion,  other  nationally recognized   holidays which  are  observed  by  other Comparable Buildings  (collectively,  the  ''Holidays'').  Notwithstanding  the   foregoing,  Building  Hours  shall  be  from 8:00  A.M.  to  7:00  P.M.  Monday  through  Friday,  and  on  Saturdays  from   9:00  A.M.  to  1:00  P.M.,  except  for  the  date of  observation  of  the  Holidays,  for  so  long  as  Landlord  remains   obligated  to  provide such extended  hour  of  operation  under  the  now  existing  lease for a  third  party tenant in  the   Building,  which  obligation  Landlord  expects to  continue through  April  2006. (b) Landlord  shall  provide adequate  electrical  wiring  and  facilities  (including  use  of  Tenant's   pro  rata  share  of existing  risers  and  conduit required  for  access  to  electricity  and  for  data  and  communications   wiring)  for  connection  to  Tenant's  lighting fixtures  and  normal  office  use equipment,  typical  densities,  including   copy  machines and microwaves. Landlord  shall,  as  a standard  service,  furnish  to the  Prenrises  during  Building   Hours,  electric  current  of  not  less  than  five (5)  watts  per  square  foot  on  an  annualized  connected  load  basis,  and   otherwise  subject  to Title 24 regulations. Tenant  will  design  Tenant's  electrical  system  serving  any  equipment   producing  nonlinear  electrical  loads  to  accommodate  such  nonlinear  electrical  loads,  including,  but  not  limited  to,   oversizing   neutral conductors, derating transformers  and/or  providing power - line filters. Engineering  plans  shall   include  a  calculation  of  Tenant's  fully connected  electrical  design  load with  and  without  demand  factors  and  sl1all   indicate  the  number  of  watts  ofunmetered  and submetered loads. Tenant  shall  bear  the  cost  of  replacement  of   lamps,  starters  and  ballasts for  non - Building standard  lighting  fixtures  within  the Premises. (c) Landlord  shall  provide  city  water  from  the regular  Building  outlets for  drinking,  lavatory   and  toilet purposes  in the  Building  Common Areas. (d) Landlord  shall  provide  janitorial  services  to the  Premises  five (5)  days  per  week,  except   the  date  of observation of the  Holidays,  in  and  about  the  Prenrises  and  window  washing services in  a  manner   consistent  with  other  comparable  buildings  in the  vicinity  of  the Building. (e) Landlord  shall  provide  nonexclusive,  non - attended  automatic  passenger elevator  service   during  the  Building  Hours,  shall  have  one  elevator  available  at  all other times. Tenant  shall  have  access  to  the   Building,  Premises  and  Project parking facility  24  hours a  day,  seven  days  a  week, subject to  reasonable  rules  and   regulations  and  security  procedures  from  time - to - time  established  by Landlord.



    	 



    	 



    



- 18 - [JSG:se/102994_5.DOC/092404/4040.039] ( f ) , Landlord  shall  provide nonexclusive freight elevator  service subject to  scheduling by Landlord. , (g) Landlord  shall  provide  reasonable access  control  services  for  the  Building  seven (7)  days   per  week,  twenty - four  (24)  hours  per  day,  in  a  manner consistent  with  other comparable  first class  office buildings   in  the  vicinity  of the Building. Notwithstanding  the  foregoing, Landlord  shall  in  no  case  be  liable  for  personal injury or  property  damage  for  any  error with  regard  to  the  admission  to  or  exclusion  from  the  Building or  Project  of  any   person;  subject to  Landlord's  indemnification  obligations  set forth  in  Article 10 below. (h) Landlord  shall  provide  building  security  equipment,  procedures  and  personnel for  the   Project  which  are  consistent  with  those  used  in other comparable  first  class  office  buildings  in  the  vicinity  oftl1e   Building. Landlord  does  not  warrant  the  effectiveness  of  said  security equipment,  procedures  and  personnel and   Tenant shall  have  the  right, at  Tenant's  expense,  to  provide  additional security  equipn1ent  or  personnel  in  the   Premises,  provided  that  Landlord is  given  reasonable access  to  the  Premises  and  that  any  such  security  system   installed  by  Tenant  complies with all  applicable  codes  and  shall  not  create  any material  security  risk  to  the  Building   or  materially  adversely  affect  the  rights  of  other  tenants  in  the Project. (i) Tenant  may  install  a  supplemental  or  independent  cooling  system  in  the  Premises   (''Additional  HVAC  Equipment'')  and  may use,  at  Tenant's  sole  expense,  the  Building's  chilled  or  condense1·   water  and  electricity  for the  Additional HVAC Equipment. Tenant's  use  of  such  utilities  shall  be  separately  metered   using meters  installed at  Tenant's sole expense. The  Additional  HVAC  Equipment  and  the  utilization  of  chilled  or   condenser  water  and  electricity  shall  comply  with  applicable  insurance  regulations  and  applicable  laws,  shall  not   cause  per·manent damage  or  injury to  the  Building,  Building systems, Building  structure  or  the  Premises, shall  not   create  a  dangerous  or  hazardous  condition nor  interfere  with  or  disturb  other  tenants  in  the  Building,  a11d  shall  be   consistent   with  a first - class office building. The  installation  of  Additional  HVAC  Equipment  shall  be  subject  to   Landlord's  prior approval  pursuant   to  the  terms  of  Exhibit  B or  Article  8 below, as applicable. Tenant  sl1all  be   responsible  for  all  costs related  to the  Additional  HVAC  Equipment  and  installation  thereof,  including  without   limitation,  costs  of  any  modification  to  the  Base,  Shell  and  Core,  Building systems  and  Building  structure  and  costs   of  subsequent maintenance  in  connection therewith. Tenant  shall cooperate  fully  with  Landlord  at  all  times and abide  by  all  regulations  and requirements  that   Landlord  may  reasonably  prescribe  for  the  proper  functioning  and  protection  of  the  HVAC,  electrical,  mechanical   and plumbing systems. Landlord  agrees  that  it  will  cause  the  Project,  Building  and  Common  Areas  to  be  maintained   in a  manner  consistent  with  a  first  class office building  in  the vicinity  of  the Project. 6.2 Overstandard Tenant Use. Tenant  shall  not,  without  Landlord's  prior  written  conse11t,  use  l1eat - generating machines, machines  other  than  normal fractional  horsepower  office  machines, or  equipment  or  lighting   other  than  Building standard lights  in  the  Premises, which  may  affect the  temperature  otherwise  maintained  by  the  air  conditioning  system or  increase  the  water  nor111ally furnished  for  the  Premises  by  Landlord  pursuant  to  the  terxns  of   Section 6.1 of this Lease. If  such  consent  is  given,  Landlord  shall  have  the  right to  install  supplementary  ail·   conditioning units  or other  facilities  in  the Premises,  including  supplementary or additional metering  devices,  and  the  cost  thereof,  including  the  cost  of  installation,  operation  and  maintenance,  increased wear  and  tear  on  existing   equipment  and  other  similar  charges,  shall  be  paid  by  Tenant  to  Landlord  upon  billing by Landlord. If  Tenant  uses   water,  electricity,  heat or  air conditioning  in  excess  of  that  supplied  by  Landlord pursuant  to  Section  6.1 of  tl1is   Lease,  Tenant  shall  pay  to  Landlord,  upon  billing,  the  cost  of  such  excess consumption,  and,  if  such  excess  is  used   by  Tenant  on  a  regular  basis,  the  cost  of  the  installation,  operation,  and  maintenance of  equipment  which  is  installed   in  order  to  supply  such  excess  consumption,  and  the  cost  of  the  increased wear  and  tear  on  existing  equipn1ent   caused  by such excess consumption. Landlord  may  install  devices  to  separately  meter  any  increased  use  and  in such   event  Tenant  shall  pay  the  increased  cost  directly  to  Landlord,  on  demand,  at  the  rates  charged  by  the  public  utility   company  furnishing  the  same, including,  if  such  excess  is  used  bY.  Tenant  on  a  regular  basis,  the  cost  of  such   additional metering devices. Tenant's  use  of  electricity  shall  never exceed  the  capacity  of  the  feeders  to  the  Project   or  the  risers  or wiring installation. If  Tenant  desires  to  use  heat,  ventilation  or air  conditioning  during  hours  other   than those  for  which  Landlord  is  obligated  to  supply  such  utilities  pursuant  to the  terms of  Section  6.1 of  tllis  Lease,   Tenant  shall  give Landlord  such  prior  notice,  if any,  as  Landlord  shall  from  time  to  time  establish  as  appropriate,  of   Tenant's  desired use  in  order  to  supply  such  utilities,  and  Landlord  shall supply  such  utilities  to Tenant  at such



    	 



    	 



    



- 19 - [JSG:se/102994_5.DOC/092404/4040.039] hourly cos t t o Tenan t ( whic h shal l be treate d a s Additiona l Rent ) a s Landlor d shal l from tim e t o tim e  establish . The   charge  for  after  hours  HVAC  as  of the  date hereof  is  $65.00  per  hour  per  zone  on  the  floors  of  the Building. 3. Interruption of  Use. Tenant  agrees  that,  except  as  set  forth in  Section  6.4 below,  Landlord shall  not  be  liable  for damages,  by  abatement  of  Rent  or  otherwise,  for  failure  to  furnish  or  delay  in  furnishing  any  service   (including  telephone  and telecommunication  services),  or  for  any  diminution  in  the  quality or  quantity  thereof,  when   such  failure  or  delay  or  diminution  is  occasioned,  in whole  or  in  part,  by  breakage,  repairs,  replacements,  or   improvements,  by  any  strike,  lockout  or other  labor  trouble,  by  inability  to  secure  electricity,  gas,  water,  or  other   fuel  at  the  Building or  Project  after  reasonable  effort  to  do  so,  by  any  riot  or  other  dangerous  condition,  emergency,   accident  or  casualty  whatsoever,  by  act or  default  of  Tenant  or  other  parties,  or  by  any other  cause;  and  such  failures   or  delays  or  diminution  shall  never  be  deemed  to  constitute  an  eviction  or  disturbance of  Tenant's  use  and   possession  of  the Premises  or relieve  Tenant  from  paying  Rent  or  performing  any  of  its  obligations  under  this  Lease.   Furthermore,  Landlord  shall  not  be  liable  under  any  circumstances  for  a  loss  of,  or  injury  to,  property  or  for  injury   to,  or  interference  with,  Tenant's  business,  including,  without  limitation,  loss  of  profits,  however  occurring,  through   or  in  connection  with  or  incidental  to  a  failure  to  furnish  any  of  the  services  or  utilities  as  set  forth in  this  Article  6.  Landlord  may  comply  with  voluntary  controls  or  guidelines  promulgated  by  any  governmental  entity relating  to the   use  or  conservation  of  energy,  water,  gas,  light  or  electricity  or  the  reduction  of  automobile  or  other emissions   without  creating  any  liability  of  Landlord  to  Tenant  under  this  Lease,  provided  that  Tenant's  use  oftl1e  Premises  is   not materially adversely affected thereby. 4. Abatement for  Untenantability. If  the  Premises  or  any  portion  thereof  are  rendered untenantable   and  are  not  used  by  Tenant  for  a  period of  three  (3)  consecutive  business days  or  any  ten  (10)  days  in  any twelve (12)  month  period  (the  ''Eligibility  Period'')  as  a  result  of  failure  in  the  water,  sewage,  air  conditioning,  heating,   ventilating,  elevator  or  electrical  systems  of  the  Project,  or  as  a  result  of  any  damage  described  in  Article  11 ,  or as  a   result  of  any  taking  by  eminent domain  described  in  Article  13 , or because  of  the  presence of  Hazardous Materials (defined  in  Section 29.34 below)  in,  on  or  around the Building, the Premises  or  the  Project,  or as a  result  of any repair,  maintenance  or alteration  performed  by  Landlord  which interferes  with  Tenant's  use  of  the  Premises,   Tenant's  rent  shall  be  reduced  and  abated  after  the  expiration  of  the  Eligibility  Period  for  such  time  as  the  Premises   or such  portion  thereof  remain  untenantable  and  are  not  used  by  Tenant,  in  the  proportion  that  the  rentable  area  of   the  portion  of  the  Premises  rendered  untenantable  and  not  used  by  Tenant  bears  to  the  total  rentable  area  of  the   Premises. If  the  untenantability  of  the  Premises described  in  this  Section  6.4 is  due  to  an  event  of  damage  described   in  Article  11 ,  after  three  (3)  consecutive  days  of  such  untenantability  Tenant's  rights  to  rent abatement hereunder   shall  relate  back  to  the  first  day  of  such  untenantability.  Notwithstanding  the  foregoing,  during  any  rent abatement   under  this  Lease,  Tenant  shall  pay  Landlord  Additional  Rent  for  all  services  and  utilities  provided  to  and  used  by   Tenant  during  the  period  of  the rent abatement. However,  if  due  to  the  causes referred  to in the  first  sentence  of this   Section  6.4, any  portion  of  the  Premises  is  rendered untenantable  for  a  period  of  time  in  excess  of  the  Eligibility   Period,  and  the  remaining  portion  of  the  Premises  is  not  sufficient  to  allow  Tenant  to  effectively  conduct  its  business   therein,  and if  Tenant  does  not conduct  its  business  from  such  remaining portion,  then  for  such  time  after  expiration   of the Eligibility  Period  during  which  Tenant  is  so prevented  from  effectively  conducting  its  business  therein,  the   rent  for  the  entire Premises shall  be  abated;  provided,  however,  if  Tenant reoccupies  and  conducts  its  business  from   any  portio11  of  the  Premises  during  such  period,  the  rent  allocable  to  such  reoccupied portion,  based  on  the   proportion  that  the  rentable area  of  such  reoccupied  portion  of  the  Premises  bears  to  the total  rentable  area  of  the   Premises,   shall  be  payable  by  Tenant  from  the  date  such  business operations commence. If  Tenant's  right  to   abatement  occurs  during a  free  rent  period  which  arises  after the  Lease  Commencement  Date,  Tenant's  free  rent   period  shall  be  extended  for the  number of  days  that  the  abatement  period  overlapped  the  free  rent  period  (''Overlap   Period''). Landlord  shall  have  the  right  to  extend  the  expiration  date  for  a  period  of  time  equal to  the  Overlap   Period  if  Landlord  sends  a  notice  to  Tenant  of  such  election  within  thirty  (30)  days following the  end  of the  extended  free rent period. If  Tenant's  right  to abatement  occurs  because  of  damage  to  the  Premises described  in   Article  11 ,  Tenant's  abatement  period  shall continue until  Tenant has  been  given  reasonably  sufficient  time, and reasonably  sufficient  access  to  the  Premises,  for  the  restoration  of  the  Premises  and  installation  of  Tenant's  property,   furniture,  fixtures  and  equipment  and  to  move  in.  To  the  extent  rental  loss insurance  carried  by  Landlord,  the   premiums  for  which  are  included  in  Direct  Expenses,  covers  rent  loss  for  any  portion of  the  Eligibility  Period,  the   Eligibility  Period  shall  be  reduced  to the  extent  of  such coverage. 7. epairs.



    	 



    	 



    



[JSG:se/102994_5.DOC/092404/4040.039] - 20 - Tenant  shall,  at  Tenant's  own  expense,  pursuant  to  the  terms  of  this Lease,  including  without  limitation   Article  8 hereof,  keep  the  Premises,  including  all  improvements,  fixtures  and  furnishings  therein, in  good order, repair  and  condition  at  all times  during  the Lease Te11n. In  addition,  Tenant  shall,  at  Tenant's  own  expense,  but   under the  supervision  and  subject  to  the  prior  approval  of  Landlord,  and  within  any  reasonable period of  time   specified  by  Landlord,  pursuant  to  the  terms  of  this  Lease,  including  without  limitation  Article  8 hereof,  but  subject   to  the  terms of  Section  10.5 hereof,  promptly  and  adequately repair  all  damage  to  the  Premises  and  replace  or  repair   all  damaged,  broken,  or  worn  fixtures  and  appurtenances,  except  for  damage  caused  by  ordinary  wear  and  tear  01·   beyond   the  reasonable  control of Tenant; provided  however,  that,  at  Landlord's  option,  or  if  Tenant  fails to  make   such repairs,  Landlord  may,  but  need  not,  ten  (10)  days  after  delivery  of  written  notice  to  Tenant,  make  such  repairs   and  replacements,  and  Tenant  shall  pay  Landlord  the  costs  incurred  therefore,  thirty  (30)  days  being  billed for  same.   Notwithstanding  the  foregoing,  Landlord  shall  be  responsible  for  repairs  to  the  Common  Areas,  exterior  walls,   foundation  and  roof of  the  Building,  the  structural  portions of  the  floors  of  the  Building,  and  the  systems  and   equip1nent  of  the  Building,  except  to  the  extent  that  such  repairs  are  required  due  to  the  negligence  or willful   misconduct of  Tenant;  provided,  however, that  if  such  repairs are  due  to  the negligence  or  willful misconduct  of   Tenant,  Landlord  shall  nevertheless  make  such  repairs at  Tenant's  expense,  subject to the  terms of  Section  10.5  below. Landlord  may,  but  shall  not  be  required  to,  enter  the  Premises  at  all  reasonable  tin1es  after  reasonable prior   notice  to  make  such  repairs,  alterations,  improvements  or  additions to  the  Premises or  to  the  Project  or  to  any   equipment  located  in  the  Project  as  Landlord  shall  desire  or  deem  necessary  or  as  Landlord  may  be  required  to  do  by   governmental   or  quasi - governmental  authority  or  court  order or decree. Tenant  hereby  :waives  any  and  all  rights   under  and  benefits  of subsection  1  of  Section  1932  and  Sections  1941  and  1942  of  the California Civil  Code  or   under  any  similar  law,  statute,  or  ordinance  now  or hereafter  in effect. 8. Additions And Alterations. 1. Landlord's Consent to Alterations. Tenant  may  not  make  any  improvements,  alterations,   additions  or  changes to the  Premises  or  any  mechanical, plumbing  or  HVAC  facilities  or systems  pertaining  to  the   Premises  (collectively,  the  ''Alterations'')  without  frrst  procuring  the  prior  written  consent  of  Landlord  to  such   Alterations,  which  consent shall be  requested  by  Tenant  not  less than  thirty  (30)  days  prior to  the  commencement   thereof,  and  which  consent  shall  not  be  unreasonably  withheld  by  Landlord,  provided  it  shall  be  deemed  reasonable  for  Landlord  to  withhold  its  consent  to  any  Alteration  which  affects  the  structural  portions  or  the  systems or   equipment  of  the  Building,  which  is  visible  from  the  exterior  of  the  Building  or  which  may  give  rise  to  a  governmentally  required  change  to  the  ''Base  Building,"  as  that  term is  defined in  Section  8.2, below.  Notwithstanding  the  foregoing,  Tenant  shall  be  permitted  to  make  Alterations  following ten  (10)  business days   notice  to  La11dlord,  but  without  Landlord's  prior  consent,  to  the extent  that  such  Alterations  are  decorative  only  (i.e.,  installation   of  carpeting  or  painting  of the Premises). The  construction  of  the  initial  improvements to  the  Premises   shall  be  governed  by  the  terms of  the  Tenant  Work  Letter  and  not  the  terms  of  this  Article 8. 2. Manner of Construction. Landlord  may  impose,  as  a  condition  of  its  consent  to  any  and  all   Alterations  or  repairs  of  the  Premises  or  about  the  Premises,  such  requirements  as  Landlord  in  its  reasonable   discretion  may  deem  desirable,  including,  but  not  limited  to,  the  requirement  that  Tenant  utilize  for  such  purposes   only  contractors,  subcontractors,  materials,  mechanics  and  materialmen  selected  by  Tenant  and  reasonably  app1·oved   by Landlord,  the  requirement  that  upon  Landlord's request,  Tenant  shall,  at Tenant's  expense,  remove  such   Alterations  upon  the  expiration  or  any early  ter1nination of  the  Lease  Te1·1n, provided  Landlord shall have  notified   Tenant at  the  time of  Landlord's  consent  to  the  Alteration  that  such  Alteration  was  subject to  such  removal   requirement  and  that  any  Alterations designated  for  removal  by  Landlord shall  be  atypical  for  Comparable  Buildings   or  generally  unusable  by  typical office tenants. As  long  as  the  improvements  installed  in  the Premises for  Tenant's   initial  occupancy  are  typical  for  Comparable  Buildings or  generally usable  by typical  office  tenants,  no  such   improvements  shall  be  required to  be  removed   upon  expiration  or  earlier  ter111i11ation of  the Lease. If  Alte1·ations   will  involve  the  use of or  disturb  hazardous  materials  or  substances  existing  in  the  Premises,  Tenant  shall  comply   with  Landlord's  rules  and  regulations concerning  such  hazardous   materials or substances. Tenant  shall  construct all   Alterations  and  perfor1n such  repairs  in  a  good  and  workmanlike  manner,  in  confom1ance  with  any  and  all   applicable  federal,  state,  county or  municipal  laws,  rules  and  regulations  and  pursuant  to  a  valid building  pennit,   issued  by  the  City of  Los  Angeles  (if  such  per1nit is  required),  all  in  conformance  with  Landlord's  construction  rules  and regulations. In  the  event  Tenant  performs any Alterations  in  the  Premises  after  the  Comme11cement  Date  which   require or  give rise  to  governmentally  required changes to  the  ''Base  Building,"  as  that  te1·m is  defined  below, then Landlord shall,  at  Tena11t's   expense,  make  such changes  to  the Base Building. The  ''Base  Buildil[]lg''  shall include



    	 



    	 



    



the  structural  portions of  the  Building,  and  the  public  restrooms  and  the  systems  and  equipment  located in the   internal  core  of  the  Building  on  the  floor  or  floors  on  which  the  Premises are located. In  performing  the  work  of  any   such  Alterations,  Tenant  shall  have the  work  perforrned in  such  manner  so  as  not  to  obstruct  access  to  the  Project  or   any  portion  thereof,  by  any  other  tenant  of  the  Project,  and  so  as  not  to  obstruct  the  business  of Landlord or  other   tenants in the Project. Tenant  shall  not  use (and  upon  notice  from  Landlord  shall  cease using)  contractors,  services,   workmen,  labor,  materials  or  equipment  that,  in  Landlord's  reasonable  judgment,  would  disturb  labor  harmony  with   the  workforce or  trades  engaged  in  performing  other  work,  labor or services  in  or  about  the Building or  the  Common   Areas. In  addition to  Tenant's  obligations  under  Article  9 of  this  Lease,  upon  completion  of  any  Alterations,  Tenant   agrees  to  cause  a  Notice  of  Completion  to  be  recorded  in  the  office  of  the  Recorder  of  the  County  of  Los  Angeles  in   accordance  with  Section  3093  of  the  Civil  Code  of  the State of  California  or  any  successor  statute,  and  Tenant  shall   deliver  to  the  Project management  office  a  reproducible  copy  of the  ''as  built''  drawings  (or  a  marked - up  set  of  the   final  construction  drawings)  of  the  Alterations  (to  the  extent plans  or  drawings  are  reasonably  necessary  in   connection  with  the Alterations)  as  well  as  all  permits,  approvals  and  other  documents,  if  any,  issued  by  any   governmental  agency  in  connection  with  the Alterations. 3. Payment for Improvements. If  payment  is  made  directly  to  contractors,  Tenant  shall  comply   with  Landlord's  requirements  for  final  lien  releases  and  waivers  in  connection  with  Tenant's  payment  for  work to   contractors. If  Tenant orders any work  directly  from  Landlord,  Tenant  shall  pay  to  Landlord a percentage of  the  cost   of  such  work  sufficient to  compensate Landlord  for  all overhead,  general  conditions,  fees  and  other  costs  and   expenses  arising  from Landlord's  involvement  with such work. If  Tenant  does  not  order  any  work  directly  fi·om   Landlord,  Tenant  shall  reimburse   Landlord for Landlord's reasonable,  actual,  out - of - pocket  costs  and  expe11ses   actually incurred  in  connection  with  Landlord's  review  of  such work. 4. Construction Insurance. In  addition  to  the  requirements  of  Article  10 of  this  Lease,  in  the  event   that  Tenant makes  any  Alterations,  prior  to  the  commencement of  such  Alterations,  Tenant  shall  provide  Landlord   with  evidence  that  Tenant  carries  ''Builder's  All  Risk''  insurance  in  an  amount  approved  by  Landlord  covering  the   construction  of  such  Alterations,  and such  other insurance as  Landlord  may  require,  it  being  understood  and  agreed   that  all  of  such  Alterations  shall  be  insured  by  Tenant  pursuant  to  Article  10 of  this  Lease  inunediately  upon   completion thereof. In  addition, with  respect  to  any  Alterations  that  will  cost in  excess  of  $40,000,  Landlord  may,  in   its  discretion,  require  Tenant  to  obtain  a  lien  and  completion  bond  or  some  alternate  fo11n of  security  satisfactory  to   Landlord  in  an  amount  sufficient  to ensure  the  lien - free  completion  of  such  Alterations  and  naming Landlord as a co - obligee. 5. Landlord's Property. All  Alterations,  improvements,  fixtures, equipment  and/or  appurtenances   which  may  be  installed  or  placed  in  or  about  the  Premises,  from  time  to  time,  shall  be  at  the  sole cost  of  Tenant  and   shall  be  and become  the  property  of  Landlord,  except that  Tenant  may remove  any  Alterations,  improvements,   fixtures  and/or  equipment  which  Tenant can  substantiate  to  Landlord  have  not  been  paid  for with  any  Tenant   improvement  allowance  funds provided  to  Tenant  by  Landlord,  provided  Tenant  repairs  any  damage  to  the  Premises   and  Building  caused  by  such  removal  and  returns  the  affected  portion  of  the Premises to  a  building  standard  tenant   improved  condition  as  determined by Landlord. Furthermore,  Landlord  may,  by  written  notice to Tenant,  require   Tenant,  at  Tenant's  expense,  to  remove  any  Alterations  in  the  Premises,  but  only  as  set  forth  in  Section  8.2 above,   and  to  repair  any  damage  to  the Premises  and  Building  caused  by  such  removal and  returns  the affected  po1·tion  of   the  Premises  to  a  building  standard  tenant  improved   condition  as  deterrnined by Landlord. If  Tenant  fails to   complete  such  removal  and/or  to  repair  any  damage  caused  by  the  removal  of  such  Alterations in  the  Premises, and   returns  the affected  portion of  the  Premises  to  a  building  standard  tenant  improved  condition as  determined  by   Landlord,  Landlord  may  do  so  and  may  charge the  cost thereof to  Tenant. Tenant hereby  protects,  defends,   indemnifies  and  holds  Landlord  harmless  from  any  liability,  cost,  obligation,  expense or  claim  of  lien  in  any  manner   1·elating  to  the  installation,  placement, removal  or  financing  of  any  such  Alterations,  improvements,  fixtures  and/or   equipment  in,  on  or  about  the  Premises,  which  obligations  of  Tenant shall  survive  the  expiration  or  earlier  termination of  this Lease. 9. Covenant Against Liens. Tenant  shall  keep  the  Project  and  Premises  free  from  any  liens  or encumbrances  arising  out of  the  work   perfo  1·1  ned, materials  furnished  or  obligations incurred  by  or  on  behalf  of  Tenant, and  shall  protect,  defend,   indemnify  and  hold Landlord  harmless  from  and  against  any  claims,  liabilities,  judgments or costs (including, [JSG:se/102994_5.DOC/092404/4040.039) - 21 -



    	 



    	 



    



- 22 - [JSG:se/102994_5.DOC/092404/4040.039] • without  limitation,  reasonable  attorneys' fees  and  costs)  arising  out  of  same  or  in  connection therewith. Tenant  shall   give  Landlord  notice  at  least  twenty  (20)  days  prior  to  the  commencement  of  any  such  work  on  the  Premises (or such  additional  time  as  may  be  necessary  under  applicable laws)  to  afford  Landlord  the  opportunity  of  posting  and   recording  appropriate  notices  of  non - responsibility.  Tenant  shall  remove  any  such  lien  or  encumbrance  by  bond  or   otherwise within  five  (5) days  after notice  by  Landlord,  and  if  Tenant  shall  fail  to  do  so,  Landlord  may  pay  the   amount  necessary  to  remove  such  lien  or  encumbrance,  without  being  responsible  for  investigating  the  validity   thereof. The  amount  so paid  shall  be  deemed Additional Rent under  this  Lease  payable  upon  demand,  without   limitation  as  to  other remedies  available  to  Landlord  under this Lease. Nothing  contained in  this  Lease  shall   authorize  Tenant  to  do  any  act  which  shall  subject  Landlord's  title  to the Building  or  Premises  to  any  liens  or   encumbrances  whether  claimed  by  operation  of  law  or  express  or implied contract. Any  claim  to  a  lien  or   encumbrance  upon  the  Building  or  Premises  arising in  connection  with  any  such  work  or  respecting  the  Premises not   performed  by  or  at  the  request  of  Landlord  shall  be  null  and  void,  or  at  Landlord's  option  shall  attach  only  against   Tenant's  interest  in  the  Premises  and  shall  in  all  respects  be  subordinate to  Landlord's  title  to  the  Project,  Building   and Premises. 10. Insurance. 1. Indemnification and Waiver. Tenant  hereby  assumes  all  risk  of  damage  to  property  or  injury  to   Tenant's  property or  injury  to Tenant,  its  shareholders,  partners, subpartners,  members,  and  their  respective  officers,   agents,  servants,  employees  and  independent  contractors (collectively,  ''Tenant  Parties'')  in,  upon  or about  the   Premises  from  any  cause  whatsoever  and  agrees  that  Landlord,  its  partners,  subpartners  and  their  respective  officers,   agents,  servants,  employees,  and  independent  contractors  (collectively,  ''Landlord  Parties'')  shall  not  be  liable  for,   and  are  hereby  released  from  any  responsibility  for,  any damage  either  to  person  or  property  or  resulting  from  the   loss  of  use thereof,  which  damage  is  sustained  by  Tenant  or  by  other  persons  claiming  through  Tenant,  subject  to   Landlord's  indemnity  obligations set  forth  in  this  Section 10.1 below. Tenant  shall  indemnify,  defend, protect,  and   hold  harmless  the  Landlord  Parties  from  any  and  all  loss,  cost,  damage,  expense  and  liability  (including  without   limitation  court  costs and  reasonable  attorneys'  fees)  incurred  in  connection  with  or  arising  fi·om  any  cause  in,  on  or   about  the  Premises,  any  negligence  or  willful  misconduct  of  Tenant  or  of  any  person  claiming  by,  through  or  under   Tenant,  or of  the  contractors,  agents,  servants,  employees,  invitees,  guests  or  licensees  of  Tenant  or  any  such  person,   in,  on  or  about  the  Project  or  any  breach  of  the  terms  of  this  Lease,  either  prior  to,  during,  or  after  the  expiration  of   the  Lease  Term,  provided  that  the  terms  of the  foregoing  indemnity  shall  not  apply  to the  extent of the  negligence  or   willful  misconduct of Landlord. Further,  Tenant's  agreement  to  indemnify  Landlord  pursuant  to  this  Section  10.1 is   not  inte11ded  and shall  not  relieve  any  insurance  carrier  of  its  obligations under  policies  required  to  be  carried  by   Tenant  pursuant  to the  provisions  of  this  Lease,  to the  extent  such  policies  cover  the  matters  subject  to  Tenant's   indemnification obligations;  nor  shall they  supersede  any  inconsistent  agreement  of  the  parties set  forth  in  any  other   provision  of this Lease. Notwithstanding  the  provisions  of  this  Section  10.1 to  the  contrary,  but  subject to  the   limitation  on  Landlord's  liability set  forth  in  Section  29.13, Landlord  shall  indemnify,  protect,  defend and  hold   harmless  the  Tenant  Parties  from  and  against  any  and  all  loss,  cost,  damage,  expense  and  liability  (including  without   limitation  court  costs  and reasonable  attorneys' fees)  with  respect  to  or  arising  out of  any  injury  to  persons  or   damage  to property  located  on  the Premises  or  within  the  Project  (including,  without  limitation,  the  Premises,   Tenant's  property,  any reasonable  insurance  deductible  applicable thereto  (subject to  Section  10.5) and  Tenant's   personnel)  (but  not  for  injury  to,  or  interference  with,  Tenant's or  any  Tenant  Parties'  business  or  for  consequential   damages), to  the  extent  such  damage  or  injury  arises  or  results  from  (i)  the  negligence  or  willful  misconduct  of   Landlord,  its  agents or  employees  (acting  within  the  scope  of  their  relationship with Landlord),  and/or  (ii)  the  default   by  Landlord  of  any  obligations  on  Landlord's  part  to  be  perforrned under  the  terms  of this  Lease. Landlord's   agreement  to  indemnify  Tenant  pursuant  to this  Section  I  0.1 is not  intended  and  shall  not  relieve  any  insurance   carrier of its  obligations  under  policies  required  to  be  carried  by  Landlord  pursuant to the  provisions of  this  Lease,  to   the  extent  such  policies  cover  the  matters  subject  to  Landlord's  indemnification  obligations;  nor  shall  they  supersede   any  inconsistent   agreement  of  the  parties  set  forth in  any  other  provision of this Lease. The  provisions of  this  Section  10.1 shall  survive the expiration  or  sooner  termination  of  this  Lease  with respect  to any  claims or  liability   arising in  connection  with  any  event  occurring prior to  such  expiration  or terrrunation. 2. Tenant's Compliance With  Landlord's  Fire  and Casualty Insurance. Tena11t  shall,  at   Tenant's  expense,  comply  with  all  reasonable  insurance  company  requirements  pertaini11g  to  the  use  of  the  Premises.   If  Tenant's  conduct  or  use  of  the Premises causes  any  increase  in  the  premium  for  such  insurance  policies  then   Tenant  shall  reimburse  Landlord  for  any  such  increase.  Tenant,  at  Tenant's  expense,  shall  comply  with  all rules,



    	 



    	 



    



- 23 - [JSG:se/102994_5.DOC/092404/4040.039] orders,  regulations  or  requirements  of  the American  Insurance  Association  (fo1n1erly the  National  Board  of  Fire   Underwriters)  and  with  any  similar body. 10.3 Tenant's Insurance. Tenant  shall  maintain the  following   coverages  in  the following amounts. (a) Commercial  General  Liability Insurance  covering  the  insured against claims  of bodily injury,  personal  injury  and  property  damage (including  loss  of  use  thereof)  arising  out  of  Tenant's  operations,  and   contractual liabilities (covering the  performance by  Tenant  of  its  indemnity  agreements)  including a Broad  Form   endorsement  covering  the insuring  provisions  of  this  Lease  and  the  performance  by  Tenant  of  the  indemnity   agreements  set  forth  in  Section 10  .1 of  this Lease,  for  limits  of liability  not less than: Bodily  Injury and   Property Damage Liability Personal  Injury Liability $3,000,000  each occurrence $3,000,000  annual aggregate $3,000,000  each occurrence $3,000,000  annual  aggregate   0% Insured's participation (b) Physical  Damage  Insurance  covering  (i)  all  office  furniture, business  and  trade fixtures,   office  equipment,  free - standing cabinet  work,  movable partitions, merchandise  and  all  other  items  of  Tenant's   property  on  the  Premises installed  by,  for,  or  at  the  expense  of  Tenant,  (ii)  the  ''Tenant  Improvements,"  as  that  term   is  defined  in  Section  2  of  Exhibit  B,  and  any  other  improvements  which  exist  in  the  Premises  as  of  the  Lease   Commencement  Date  (excluding  the  Base  Building)  (the  ''Original  Improvements''),  and  (iii)  all  other  improvements,  alterations  and  additions  to  the Premises. Such  insurance  shall  be  written  on  an  ''all  risks'' of   physical  loss  or  damage basis,  for  the  full  replacement  cost  value  (subject  to  reasonable  deductible  amounts)  new   without  deduction  for  depreciation of  the  covered  items  and  in  amounts  that  meet  any  co - insm·ance  clauses  of  the   policies  of  insurance  and  shall  include  coverage  for  damage  or  other  loss  caused  by fire  or  other  peril  including,  but   not  limited  to,  vandalism and  malicious  mischief,  theft,  water  damage  of  any  type,  including  sprinkler  leakage,   bursting or stoppage of pipes, and explosion, and providing business interruption coverage for a period of one year. (c) Worker's  Compensation  and  Employer's  Liability  or  other  similar  insurance pursuant  to   all  applicable state  and  local  statutes and regulations. 10.4 Form of Policies. The  minimum  limits  of  policies  of  insurance  required  of  Tenant  under this Lease  shall  in  no  event  limit the  liability  of  Tenant  under this Lease. Such  insurance  shall  (i)  name  Landlo1·d,  and   any  other party  the  Landlord  so  specifies,  as an  additional insured, including  Landlord's  managing  agent,  if  any;  (ii)   specifically  cover  the  liability  assumed  by  Tenant  under  this  Lease,  including,  but not  limited to,  Te11ant's   obligations  under  Section 10.1 of  this  Lease;  (iii)  be  issued  by  an  insurance  company  having a  rating  of  not less  than   A - X  in  Best's  Insurance Guide  or  which  is  otherwise  acceptable  to  Landlord  and  licensed  to do  business  in  the State   of  California;  (iv)  be  primary insurance as  to  all claims  thereunder  and  provide  that  any  insurance  carried  by   Landlord  is  excess  and  is  non - contributing  with  any  insurance requirement  of  Tenant;  (v)  be  in form  and  content   reasonably  acceptable  to  Landlord;  and  (vi)  provide  that  said  insurance  shall  not  be canceled  or  coverage  changed  unless  thirty  (30)  days'  prior  written  notice shall  have  been  given  to  Landlord  and  any  mortgagee  of Landlord. Tenant shall deliver  said  policy or policies or  certificates  thereof  to  Landlord  on  or  before  the  Lease  Commenceme11t   Date  and  prior  to  the expiration dates thereof. In  the event  Tenant  shall  fail  to procure  such  insurance,  or  to  deliver·   such  policies  or  certificate,  Landlord  may,  at  its  option,  upon  at  least  ten  (10)  days  prior  notice  to  Tenant,  procure   such  policies  for  the  account  of  Tenant,  and the  cost  thereof  shall  be  paid to Landlord  within  five (5)  days after   delivery  to  Tenant  of  bills therefor. 10.5 Subrogatio . Landlord and Tenant  intend that their  respective  property  loss  risks  shall  be  borne   by  reasonable  insurance  carriers  to  the  extent  above provided, and  Landlord  and  Tenant  hereby  agree  to  look  solely   to,  and  seek recovery only  from,  their  respective  insurance  carriers  in  the  event  of  a  property  loss  to the  extent that   such  coverage  is  agreed  to  be provided hereunder. Notwithstanding  anything  to  the  contrary in  this  Lease,  the   parties  each  hereby  waive  all  rights  and  claims against  each other for  such  losses,  and  waive  all  rights  of  subrogation   of  their  respective  insurers,  provided  such  waiver  of  subrogation  shall not affect  the  right  to  the  insured  to recover



    	 



    	 



    



- 24 - [JSG:se/102994_5.DOC/092404/4040.039] thereunder. The  parties  agree  that  their  respective  insurance  policies  are  now,  or  shall  be, endorsed  such  that the   waiver  of subrogation  shall  not  affect  the  right  of  the insured  to  recover  thereunder,  so long  as  no  material additional premium  is charged therefor. 6. Additional Insurance Obligations. If  commercially  reasonable  and  available, Tenant shall  carry   and  maintain  during  the  entire  Lease Term,  at  Tenant's  sole  cost  and  expense, increased  amounts  of  the  insurance   required  to  be  carried  by  Tenant  pursuant  to  this  Article  IO and  such  other  reasonable  types  of  insurance  coverage   and  in such  reasonable  amounts  covering  the  Premises  and  Tenant's  operations  therein,  as  may  be  reasonably   requested  by Landlord  and  generally  required  by  Landlord  of  the  other  tenants  in  the  Project,  but  in  no  event  in   excess  of  the  amounts  and  types  of  insurance  then  being  required  by  landlords of other  Comparable Buildings. 7. Landlord's Insurance. Landlord  shall  maintain  during the  Lease  Term  a  policy  or policies  of   insurance  insuring  the  Building  against  loss or  damage  due  to  fire  and  other  casualties  covered  within the   classification  of  ''all  risk''  or  ''special  forrn'' coverage,  vandalism  coverage  and  malicious mischief, sprinkler  leakage,  water  damage and  special  extended  coverage  on  building,  as  well  as  Commercial General  Liability  Insurance  insuring  against  such  risks as  are  customarily  insured against  by  other  landlords  operating  Comparable   Buildings. Such  coverage  shall  be  in  such amounts  and  with  such deductibles  or  self - insured  retention amounts  as   Landlord  may  from  time  to  time reasonably dete11nine. Additionally,  at  the  option  of  Landlord,  such insurance  coverage  may  include  the risks  of  earthquakes and/or  flood  damage  and  additional  hazards,  a  rental  loss   endorsement  and  one  or  more  loss  payee  endorsements  in  favor  of  the  holders  of  any  mortgages  or  deeds  of  trust   encumbering  the  interest  of  Landlord  in  the  Project  or  any  ground  or  underlying lessors  of the  Project,  or  any portion thereof. 11. Damage  and Destruction. 11.1 Repair  of  Damage  to  Premises by Landlord. Tenant  shall  promptly  notify  Landlord  of  any   damage   to  the  Premises  resulting  from  fire  or  any other casualty. If  the  Premises  or  any  Common  Areas  serving  or   providing  access  to  the  Premises  shall  be  damaged  by  fire  or  other  casualty,  Landlord  shall  pron1ptly  and diligently,   subject  to reasonable delays  for  insurance  adjustment  or  other  matters  beyond  Landlord's  reasonable  control,  and   subject  to  all  other  terms  of  this  Article  11 ,  restore  the  Base Building  and  such  Common Areas. Such restoration   shall  be  to substantially  the same  condition  of  the  Base Building  and  the  Common  Areas  prior  to  the  casualty,  except   for  modifications  required  by  zoning  and  building  codes  and  other laws  or  by  the  holder  of  a  mortgage  on  the   Building  or  Project  or  any  other  modifications  to  the  Common  Areas  deemed  desirable  by  Landlord,  which  are   consistent  with  the  character  of  the  Project, provided  that  access  to  the  Premises  and  any  common  restrooms  serving   the  Premises  shall  not  be materially impaired. Upon  the  occurrence  of  any damage  to  the  Premises, upon  notice  (the   ''Landlord  Repair  Notice'')  to  Tenant  from  Landlord,  Tenant  shall  assign  to  Landlord  (or  to  any  party  designated   by  Landlord)  all  insurance  proceeds  payable  to  Tenant  under  Tenant's  insurance  with  respect  improvements  (but  not   personal  property)  in  the Premises  required  under  Section  10.3 of  this Lease,  and  Landlord  shall repair  any  injur·y  01·   damage  to  the  Tenant  Improvements  and  the  Original  Improvements  installed  in  the  Premises  and  shall return such   Tenant  Improvements  and  Original  Improvements  to  their  original condition;  provided that  if  the  cost  of such  repair   by  Landlord  exceeds  the  amount  of  insurance  proceeds  received by  Landlord  from  Tenant's  insurance  carrier,  as   assigned  by Tenant,  the  cost  of  such  repairs  shall  be  paid  by  Tenant  to Landlord  as  and  when  required for  the  1·epair   of  the  damage;  provided  further  that  Tenant shall  have  the  right  to  require  that the  improvements  to  the  Preniises  be   reconstructed   to  a  lesser standard condition (but  not less  than  a  Project standard condition). In  tl1e  event that Landlord  does  not  deliver  the  Landlord  Repair  Notice  within  sixty  (60)  days following  the  date  the  casualty  becomes   known  to  Landlord,  Tenant  shall,  at  its  sole cost  and  expense,  repair  any  injury  or  damage  to  the  Tenant   Improvements  and  the  Original  Improvements  installed  in  the Premises  and  shall  return such  Tenant  Improven1ents   and Original  Improvements  to  their  original  condition  (or, if  Tenant's  insurance  proceeds  are  not  sufficient  to   complete  such  restoration,  to  at  least a  Project standard condition). Whether  or  not  Landlord  delivers  a  Landlord   Repair  Notice,  prior  to  the  commencement  of  construction,  Tenant  shall  submit  to  Landlord,  for  Landlord's  review   and approval,  all  plans,  specifications  and working  drawings  relating  thereto, and  the  selection  of  the contractors  to   perform  such  improvement   work  shall  be  subject  to  Landlord's prior approval. Landlord  shall  not  be  liable for  any   inconvenience  or  annoyance  to  Tenant  or  its  visitors,  or  injury  to  Tenant's  business  resulting in  any  way  from  such   damage  or  the  repair  thereof; provided  however,  Tenant shall  be  entitled  to  abatement  of  rent  in  com1ection  with   damage  to  Premises, Building or Project in  accordance  with  Section 6.4 above. In  the  event  that  Landlord shall  not   deliver  the  Landlord  Repair Notice,  Tenant's  right  to  rent  abatement  pursuant  to  the  preceding  sentence shall



    	 



    	 



    



- 25 - [JSG:se/102994_5.DOC/092404/4040.039] terminate  as  of  the  date  which  is  reasonably  determined  by  Landlord  to  be  the  date  Tenant  should  have completed - - repairs  to the Premises  assuming  Tenant  used  reasonable  due  diligence  in  connection therewith. 11.2 Landlord's Option to Repair. Notwithstanding  the  terms  of  Section  11.1 of  this  Lease,  in  the   event  of  any  material  damage  to  the  Premises,  Building  or Project, Landlord  may  elect  not to  rebuild  and/or restore   the  Premises,  Building  and/or  Project,  and  instead  terminate  this  Lease,  by  notifying  Tenant  in  writing  of  such   termination within  sixty  (60)  days after the  date  of  damage,  such  notice to  include  a termination  date  giving  Te11ant   sixty  (60)  days  to  vacate  the  Premises,  but  Landlord  may  so  elect  only  if  the  Building  or Project  shall  be  damaged  by   fire  or  other  casualty  or  cause,  whether  or  not  the  Premises  are  affected,  and  one  or more  of  the  following  conditions   is  present:  (i)  in  Landlord's  reasonable judgment,  repairs  cannot  reasonably  be  completed  within  one hundred eighty (180)  days  after the  date  of  discovery  of  the  damage  (when  such repairs  are  made  without  the  payment  of  overtime   or other premiums);  (ii)  the  holder of  any  mortgage  on  the  Building  or  Project  or  ground lessor  with  respect  to the Building  or  Project  shall  require  that  the  insurance  proceeds  or  any  portion  thereof  be  used  to  retire  the  mortgage   debt,  or  shall  terminate the  ground  lease,  as  the  case  may  be;  (iii)  more  than  Five  Million  Dollars  ($5,000,000)  of  the   cost  to repair  the  damage is  not  covered  by Landlord's  insurance policies  for  reasons  other  than Landlord's  failure  to   insure  as  required  under  this  Lease;  or  (iv)  the damage  occurs  during  the  last twelve  (12) months  of  the  Lease  Terrn;  or  (v)  any  owner  of any  other  portion  of  the  Project,  other  than  Landlord,  does  not  intend to  repair  the  damage  to   such  portion of  the  Project;  provided,  however,  that if Landlord  does  not  elect  to  te1111inate this  Lease  pursuant  to   Landlord's  termination  right  as  provided  above,  and the  repairs  cannot,  in  the  reasonable  opinion  of  Landlord,  be   completed  within  one  hundred eighty  (180)  days  after  being  commenced,  Tenant  may  elect,  no  earlier  than sixty (60)  days  after  the  date  of  the  damage  and  not  later  than  ninety  (90)  days after the  date  of  such  damage,  to  te1·1ninate  this  Lease  by  written  notice  to  Landlord effective  as of  the  date  specified  in  the notice,  which  date  shall  not  be  less   than  thirty  (30)  days nor  more than  sixty  (60)  days  after the  date  such  notice  is  given by Tenant. In  addition, if Landlord  does  not  elect  to  terminate  this  Lease  pursuant to  Landlord's  termination  right  as  provided  above, and  the   repairs cannot,  in  the  reasonable  opinion  of  Landlord,  be  completed  within  fifty  percent  (50%)  of  the  remaini11g   portion  of  the  Term at  the  time of  the  damage,  Tenant  may  elect,  no  earlier  than  thirty  (30)  days  after  the  date  of  the   damage  and  not  later  than  sixty  (60)  days  after  the  date  of  such  damage,  to  ternlinate this  Lease  by  writte11  notice to   Landlord effective  as  of  the  date  specified  in  the  notice,  which  date shall  not  be  less  than  thirty  (30)  days nor more   than  sixty  (60)  days  after  the  date  such  notice  is given  by Tenant. 11.3 Waiver  of Statutory Provisions. The  provisions  of  this  Lease, including  this  Article  11 ,   constitute  an  express  agreement  between  Landlord  and  Tenant  with  respect  to  any  and  all  damage  to,  or  destruction   of, all  or  any  part  of  the  Premises,  the  Building  or  the  Project,  and  any  statute  or  regulation  of  the  State  of  Califon1ia,   including,  without  limitation,  Sections  1932(2)  and  1933(4)  of  the California  Civil  Code,  with  respect  to  a11y  rights   or  obligations concerning  damage  or  destruction  in  the  absence  of  an  express  agreement  between  the  parties,  and   any  other  statute  or  regulation,  now  or  hereafter  in  effect,  shall  have  no  application  to  this  Lease  or  any  da1nage  or   destruction  to  all  or  any  part  of  the  Premises,  the  Building  or  the Project. 12. Nonwaiver. No  provision  of  this  Lease  shall  be  deemed  waived  by  either  party hereto  unless  expressly  waived  in  a   writing signed thereby. The  waiver  by  either  party hereto of  any breach  of  any  term,  covenant  or  condition  herein   contained  shall  not  be  deemed  to  be  a  waiver  of  any subsequent  breach  of  same  or  any  other  te1n1, covenant  or   condition herein contained. The  subsequent  acceptance of  Rent  hereunder  by  Landlord  shall  not  be  deemed to  be  a   waiver  of  any  preceding  breach  by  Tenant  of any  terrn, covenant  or  condition  of  this  Lease,  other  than  tl1e  failure  of   Tenant  to  pay  the  particular  Rent  so  accepted, regardless  of  Landlord's  knowledge of  such  preceding  b1·each  at  the   time  of  acceptance  of such Rent. No  acceptance of  a  lesser  amount than  the Rent  herein stipulated  shall  be  deemed   a  waiver  of  Landlord's  right  to  receive  the  full  amount  due,  nor  shall  any  endorsement  or  statement  on  any  check  or   payment  or  any  letter  accompanying  such  check  or  payment  be  deemed  an  accord  and satisfaction,  and  Landlord   may  accept  such  check  or  payment  without  prejudice  to  Landlord's  right  to  recover  the  full  an1ount due. No receipt   of  monies  by  Landlord  from  Tenant  after  the termination  of  this  Lease  shall in  any  way  alter  the  length  of  the  Lease   Term  or of  Tenant's  right  of possession  hereunder,  or  after the  giving  of  any  notice shall  reinstate,  continue  or   extend  the  Lease  Term  or  affect  any  notice  given  Tenant  prior to  the  receipt  of  such monies,  it  being  agreed that   after  the service  of  notice  or  the  commencement  of  a  suit,  or  after  final judgment  for  possession  of  the Premises, · Landlord  may  receive  and  collect  any Rent  due,  and  the  payment  of  said  Rent  shall  not  waive  or  affect  said  notice,   suit  or judgment.



    	 



    	 



    



- 26 - [JSG:se/102994_5.DOC/092404/4040.039] 13. Condemnation. If  the  whole  or  any  part  of  the  Premises, Building  or  Project  shall  be  taken  by power  of  eminent  domain  or   condemned  by  any  competent  authority for  any  public  or quasi - public  use  or  purpose,  or  if any  adjacent property  or   street  shall  be  so  taken  or  condemned,  or  reconfigured  or  vacated  by  such  authority  in  such  manner  as  to  require  tl1e   use,  reconstruction  or  remodeling  of  any part  of  the Premises,  Building  or  Project,  or  if  Landlord  shall  g1·ant  a  deed   or other  instrument  in  lieu  of such  taking  by  eminent  domain  or  condemnation,  Landlord  shall  have  the  option  to   te11ni11ate this  Lease  effective  as  of  the  date possession  is  required  to  be  surrendered   to the autl1ority. If  more  than   twenty - five  percent  (25%)  of  the rentable  square  feet  of  the  Premises  is  taken,  or  if  access  to  the  Prenlises  is   substantially  impaired, in  each  case  for  a  period  in  excess  of  one  hundred  eighty  (180)  days,  Tenant  shall  have  the   option  to  terminate  this  Lease  effective  as  of  the  date possession  is  required  to  be  surrendered  to  the authority. Tenant shall not  because  of  any  taking  assert  any  claim  against  Landlord  or  the  authority  for  any  compensation   because  of such  taking  and  Landlord  shall  be  entitled  to the  entire  award  or  payment  in  connection  therewith, except   that  Tenant  shall  have  the right to  file  any  separate  claim  available  to Tenant  for  any  taking  of  Tenant's personal property  and  fixtures  belonging  to  Tenant  and  removable  by  Tenant  upon  expiration  of  the  Lease  Tern1  pursuant  to   the  terms  of  this Lease,  for  moving  expenses  and  for  damages  relating  to business  interruption  and/or  loss  of   goodwill,  so  long  as  such  claims  do  not  diminish  the  award  available  to  Landlord,  its ground  lessor  with  respect  to   the  Building  or  Project  or  its  mortgagee, and  such  claim  is  payable separately to Tenant. All Rent  shall  be   apportioned   as  of  the  date  of such te1mi11ation. If  any  part  of  the  Premises  shall  be  taken,  and  this Lease shall not  be   so  terminated,  the  Rent shall  be proportionately abated. Tenant  hereby  waives  any  and  all  rights  it  might  otherwise   have  pursuant to  Section  1265.130  of  The  California   Code  of Civil Procedure. Notwithstanding  anything  to  the   contrary  contained  in  this  Article  13 ,  in  the  event  of  a  temporary  taking  of  all  or  any portion  of  the  Premises  for  a   period  of  one  hundred  and  eighty  (180)  days  or  less,  then this  Lease shall  not  ternlinate but  the  Base Rent and  the   Additional  Rent shall  be  abated for  the  period  of such  taking  in  proportion to  the  ratio  that  the  amount  of  rentable   square  feet  of  the  Premises  taken  bears to  the  total rentable square  feet  of  the Prenlises. 14. Assignment And Subletting. 14.1 Transfers. Subject  to  the  te1rns of  Section  14.7 below, Tenant  shall  not,  without  the prior  written   consent  of  Landlord,  which  consent  shall not  be  umeasonably  withheld  or  delayed  in  accordance  with  tl1e  terms   hereof,  assign,  mortgage, pledge,  hypothecate, encumber,  or  perrnit any  lien  to  attach  to,  or  otherwise  transfer, this   Lease  or  any  interest  hereunder,  permit any  assignment,  or  other  transfer  of  this  Lease  or  any  interest  hereunder  by   operation  of  law,  sublet  the  Premises  or  any part  thereof,  or  enter  into  any  license  or  concession  agreements  or   otherwise permit  the  occupancy  or  use  of  the  Premises  or  any  part  thereof  by  any  persons  other  than  Tenant  and its   employees,  guests,  invitees  and  contractors  (all  of  the  foregoing  are  hereinafter  sometimes  referred  to  collectively  as   ''Transfers''  and  any  person  to  whom  any Transfer  is made  or  sought  to  be  made  is  hereinafter  sometimes  referred   to  as  a  ''Transferee''). If  Tenant  desires  Landlord's  consent  to  any  Transfer,  Tenant  shall  notify  Landlord  in   writing,  which  notice  (the  ''Transfer  Notice'')  shall  include  (i)  the  proposed  effective  date  of  the  Transfe1·,  which   shall  not  be  less  than thirty  (30)  days  nor  more  than  one  hundred  eighty  (180)  days after  the  date  of  delivery  of  the  Transfer  Notice,  (ii) a  description  of  the  portion  of  the  Premises  to  be  transferred  (the  ''Subject  Space''),  (iii)  all  of   the  terms  of  the  proposed  Transfer  and  the  consideration  therefor, including  calculation  of  the  ''Transfer  Premium'',  as  that  term  is  defined  in  Section  14.3 below,  in  connection  with  such  Transfer, the  name  and address  of  the  proposed Transferee,  and a  copy  of  all  existing  executed  and/or  proposed  documentation  pertaining  to  the  proposed   Transfer,  including all  existing  operative  documents  to  be  executed  to  evidence  such  Transfer  or  tl1e  ag1·een1ents   incidental  or  related  to  such  Transfer,  provided  that  Landlord  shall  have  the  right  to  require  Tenant  to  utilize   Landlord's  standard  Transfer  documents  in  connection  with  the  documentation  of  such  Transfer,  (iv) current   financial  statements  of  the  proposed  Transferee  and  any  other  information reasonably  required  by  Landlord   necessary to  enable  Landlord  to  deter·111ine the  financial  responsibility,  character,  and  reputation  oftl1e  proposed   Transferee,  the  nature  of  such  Transferee's  business  and  proposed  use  of  the  Subject  Space,  and  (v) an  executed  estoppel  certificate  from  Tenant  in  the  form  attached  hereto  as Exhibit E. Any  Transfer made  without  Landlord's   prior  written  consent  shall,  at  Landlord's  option,  be  null,  void and  ofno  effect,  and  shall,  at  Landlord's  optio11,  may   be  treated  as  a  default  by  Tenant  pursuant to the  applicable   provisions  of  Article 19 below. Whether  or  not  Landlord   consents  to  any  proposed Transfer,  Tenant shall  pay  Landlord's  review  and  processing  fees,  as  well  as  any   reasonable  professional  fees  (including,  without  limitation,  attorneys',  accountants',  architects', engineers'  and   consultants'  fees)  incurred  by  Landlord, within  thirty  (30)  days after  written  request  by  Landlord,  in  an  amount not



    	 



    	 



    



to exceed  $1,000  in  the aggregate,  for  a  Transfer  in  the  ordinary  course  of  business and  for  which  Tenant  and  the   Transferee execute  and  deliver  Landlord's  forrn of  consent  to  transfer  in  the  fo1·1n attached  hereto  as  Exhibit G. 2. Landlord's Consent . Landlord shall not unreasonably withhold, condition or delay its conse 11 t to any proposed Transfer of the Subject Space to the Transferee on the terms specified in the Transfer Notice . Without limitation as to other reasonable grounds for withholding consent, the parties hereby agree that it shall be reasonable under this Lease and under any applicable law for Landlord to withhold consent to any proposed Transfer where one or more of the following apply : (a) The  Transferee  is  of  a  character  or  reputation  or  engaged  in  a business which  is  not   consistent   with  the  quality  of  the Building  or the Project; · (b) The  Transferee  intends  to  use  the  Subject  Space  for  pu1 - poses  which  are  not pennitted under  this Lease; (c ) The  Transferee  is  either  a  governmental  agency  or  instrumentality thereof; (d) The  Transferee  is  not  a  party  of  reasonable  financial worth  and/or  financial stability  in   light  of  the  responsibilities to  be  undertaken  in  connection  with  the Transfer  on  the  date  consent  is requested; (e) The  proposed  Transfer  would  cause  a  violation  of  another  lease  for  space  in  the  Project,   or  would  give  an  occupant  of  the  Project  a  right  to  cancel  its lease; (f) The  tenns  of  the  proposed  Transfer  will  allow  the  Transferee  to  exercise  a  right  of   renewal,  right  of  expansion,  right  of  first  offer,  or  other  similar  right  held  by  Tenant  that  is  specifically not  pennitted   to  be  transferred  (Tenant may  retain  the  right  to  exercise  the  same  for  the  benefit  of  the  Transferee); or (g) Either the  proposed Transferee,  or  any  person  or  entity  which  directly  or  indirectly,   controls,  is  controlled  by,  or  is  under common  control  with,  the  proposed  Transferee,  (i)  occupies  space in the Project  at the  time  of  the  request  for  consent  and  Landlord  has  space  available  for  the  proposed  Transferee  or such • proposed  Transferee  has  an  unexpired option  to  expand  in  the  Project,  or  (ii)  is negotiating  with  Landlord  or has negotiated with  Landlord  (as  evidenced  by  at  least  a  written proposal  and  a  written  response  tl1ereto)  during  the four (4) month period  immediately  preceding  the  date  Landlord  receives  the  Transfer  Notice,  to  lease space  in  the  Project   and  Landlord  has  space  available  for  the  proposed Transferee. If  Landlord  consents  to  any  Transfer  pursuant  to  the  terms  of  this  Section  14.2 (and does  not  exercise  any   recapture  rights  Landlord  may have  under  Section 14.4 of  this  Lease),  Tenant  may  within  six  (6)  months  after   Landlord's  consent,  but not  later  than the expiration  of  said  six - month  period,  enter  into  such  Transfer  of  the   Premises  or  portion  thereof,  upon  substantially  the  same  terms  and  conditions  as  are set  forth  in  the  Transfer  Notice   furnished  by  Tenant to  Landlord  pursuant  to  Section 14.1 of  this  Lease,  provided  that  if  there  are  any  changes  in  the   terms  and  conditions  from  those  specified  in  the  Transfer  Notice  (i)  such  that  Landlord  would  initially  have  bee11   entitled  to  refuse  its  consent  to  such  Transfer  under this  Section  14.2 ,  or  (ii)  which  would  cause  the  proposed   Transfer  to  be  materially  more  favorable  to the  Transferee than  the  terms  set  forth  in  Tenant's  original  Transfer   Notice,  Tenant shall  again  submit  the  Transfer  to  Landlord  for its  approval  and  other  action  under  this  Article  14  (including  Landlord's  right  of  recapture,  if  any,  under  Section 14.4 of this Lease). Notwithstanding anything  to  the   contrary in this  Lease,  if  Tenant  or  any  proposed Transferee claims  that  Landlord  has  unreasonably  withheld  or   delayed its  consent  under  Section  14.2 or  otherwise  has  breached  or  acted  unreasonably  under  this  Article  14 ,  their   sole  remedies  shall  be  a  suit  for  contract damages  (other  than damages for  injury  to,  or  interference  witl1,  Tenant's   business  including, without  limitation,  loss  of  profits,  however  occurring)  or  declaratory judgment  and  an  injunction   for  the  relief  sought,  and  Tenant  hereby  waives  any  right  at  law  or  equity  to  ter111inate this  Lease  in connection   therewith,  on  its  own behalf  and,  to the  extent  pennitted  under all applicable laws, on  behalf  of  the  proposed   Transferee. Tenant shall  indemnify,  defend  and hold harmless  Landlord  from  any  and  all  liability,  losses,  claims,   damages,  costs,  expenses,  causes of  action  and  proceedings  involving  any  third  party  or  parties  (including  without   limitation  Tenant's  proposed  subtenant  or  assignee)  who  claim they  were  damaged  by  Landlord's  wrongful   withholding  or  conditioning of  Landlord's  consent. {JSG:se/102994_5.DOC/092404/4040.039] - 27 -



    	 



    	 



    



- 28 - [JSG:se/102994_5.DOC/092404/4040.039] 3. Transfer Premium. If Landlord  consents  to  a  Transfer,  as a  condition  thereto which  tl1e  parties   hereby  agree  is  reasonable,  Tenant  shall  pay  to  Landlord  fifty  percent  (50%) of  any  ''Transfer  Premium,"  as  that   term  is  defined  in  this  Section  14.3 ,  received  by  Tenant  from such Transferee. ''Transfer  Premium''  shall  mean  all   rent,  additional  rent  or  other  consideration  payable  by  such  Transferee  in  connection with the  Transfer  in  excess  of   the  Rent  and  Additional  Rent  payable  by  Tenant  under  this  Lease  during  the  term  of  the  Transfer  on  a  per rentable , square  foot basis  if  less  than  all  of  the  Premises  is transferred,  after  deducting the  reasonable  expenses  incurred  by   Tenant  for  (i)  any  changes,  alterations  and  improvements  to  the  Premises  in  connection  with  the  Transfer,  (ii)  any   free  base  rent  reasonably  provided  to  the  Transferee,  (iii)  the  Base  Rent  and  Additional  Rent  for  Direct  Expenses   paid  by  Tenant  with  respect  to the  Subject  Space  during the period  such  space  is  vacant,  not  used  for  a11y  purpose  by   Tenant  and  not  subject  to  any  Transfer, provided  no  such  ''vacancy  cost''  occurring  prior  to  Tenant's  notice  to   Landlord  of  Tenant's  intent  to  Transfer  such  space  shall  be  recognized,  (iv)  any  brolcerage  commissions  in   connection with  the  Transfer, (v)  reasonable  legal  fees incurred  in  connection  with  the  Transfer,  and  (vi)  othe1·   reasonable  out - of - pocket costs  incurred  by Tenant  in connection  with  the  Transfer  (collective_ly,  the  ''Transfer   Costs''). ''Transfer  Premium''  shall  also include,  but not  be  limited  to,  key  money,  bonus  money  or  other cash   consider·ation  paid  by  Transferee  to  Tenant  in  connection with  such  Transfer,  and  any  payment  in excess  of  fair   market  value  for  services  rendered  by  Tenant  to  Transferee  or for  assets,  fixtures,  inventory,  equipment,  or  ft11niture   transferred   by  Tenant  to  Transferee  in connection  with such Transfer. Tenant  shall  be  required  to  pay  Landlord  its   portion  of  any  Transfer  Premium  on  a  monthly  basis  when  received  by  Tenant,  provided  that  Tenant  shall  be  entitled   to  recover  all  of  its  Transfer  Costs  prior  to  owing  to  Landlord  any  Transfer  Premium  pursuant  to  the  terr11s of  this   Section 14.3 . 4. Landlord's Option as  to  Subject Space. (a) Subject  to  Paragraph  14.4(b) below,  notwithstanding anything  to  the  contrary  contai11ed   in  this  Article  14, Landlord  shall  have the  option  (the  ''Recapture  Option''),  by  giving  written  notice  to  Tenant   within  twenty  (20)  days  after  receipt  of  any  Transfer  Notice  in which  Tenant  proposes  to  sublease  or  assign  at  least   8,000  rentable  square  feet,  to recapture  the  Subject  Space  for the  te1·1n of  the  proposed  Transfer set  forth in  the   Transfer  Notice.  In  the  event of  any  such  recapture  of  the  Subject  Space  with  respect  to less than  the  entire  Pren1ises,   Landlord  shall  be  responsible  for  any  separate  demising  of  the  Subject  Space  from  the  remainder  of  the  Prenlises,   including  any  necessary  balancing  of  the  HVAC  systems  and  separation of electrical  circuits  serving both  the   Subject  Space  and  the  remainder  of the Premises. Such  recapture  notice  shall  cancel  and  te1minate this Lease  with   respect  to  the  Subject Space  for  the  term  of  the  proposed  Transfer  set  forth  in  the  Transfer  Notice  as of  the  effective   date  of  the  proposed Transfer. (b) Tenant  shall  have  the right to  give Landlord  a  notice  (the  ''Early  Transfer Notice'') including  (i)  the  proposed  effective  date of the  Transfer,  which shall  not  be  less  than  forty - five  (45)  days  after the   date of  delivery of  the  Early  Transfer  Notice,  (ii)  a  description  of  the  portion  of  the Premises to  be  transferred  (the   ''Early  Transfer  Subject  Space''),  and  (iii)  and  the  ter1n for which Tenant proposes  to  Transfer  such  Early  Transfer   Subject Space. Landlord  shall  have  the  option  (the  ''Early  Option''),  if  such  Transfer  relates  to  at  least  8,000   rentable  square  feet,  by  giving written  notice  to  Tenant  within  ten  (10) days  after  receipt  of  any  Early  Transfe1·   Notice,  to recapture  the  Early  Transfer  Subject  Space  for  the  term  of  the  proposed  Transfer set  forth in the  Early   Transfer Notice. Such  recapture  notice shall  cancel  and  terminate  this  Lease  with  respect  to  the  Early  Transfer   Subject  Space  for  the  term  of  the proposed  Transfer set  forth in  the  Early  Transfer  Notice as  of  the  effective  date  of   the proposed Transfer. If the  Early  Option  is  exercised  with  respect  to  less  than  the entire Premises,  Landlord  shall   be  responsible  for any  separate  demising  of  the  Subject  Space  from  the  remainder  of  the  Premises,  including  any   necessary  balancing  of  the  HVAC  systems  and  separation  of  electrical  circuits  serving  both  the  Early  Transfer   Subject  Space  and  the  remainder  of the Premises. In  the  event  the  Subject  Space  has  been  identified  as  the  Early   Transfer  Subject  Space  in  an  Early  Transfer  Notice,  and  Landlord  does  not  exercise  its  Early  Option  with  respect  to   such  space  as  set  forth  in this  Paragraph  14.4(b), then  Landlord  shall not  have  its  Recapture  Option  set  forth  in   Paragraph  14.4(a) above  for  a  period  of 180 days  following  Landlord's  receipt  of the applicable Early  Transfe1·   Notice  with  respect  to any  Transfer  which  is  entered  into  for  such  Early  Transfer  Space  during  said  180  day period. Tena11t,  nonetheless, still  be  obligated  to  give  a  Transfer  Notice  for  its  intended  Transfer of  such  Subject  Space,  and   Landlord  retains  all  of  its  rights with  respect  to  approval  of  any  such  Transfer  and  its  other  rights  under  this  Article  14 (excluding  the Recapture Option).



    	 



    	 



    



- 29 - [JSG:se/102994_5.DOC/092404/4040.039] (c) In  the  event  of  a  recapture  by  Landlord  pursuant  to  this  Section  14.4 , if  this  Lease  shall   be canceled  with  respect  to  less  than the entire  Premises,  the  Rent  and Security  Deposit  reserved herein shall  be   prorated  on  the  basis  of  the  number  ofrentable  square feet  retained  by  Tenant  in  proportion  to  the  number  of   rentable  square  feet contained in  the  Premises,  and  this  Lease  as  so  amended  shall  continue  thereafter  in  full force   and  effect,  and  upon  request  of  either  party,  the  parties  shall  execute  written  confirmation  of  the same. 14.5 Effect of Transfer. If Landlord  consents  to a  Transfer,  (i)  the  terms  and  conditions  of  this  Lease   shall  in  no  way be  deemed  to  have  been  waived  or modified,  (ii)  such consent  shall  not  be  deemed  consent  to  any   further  Transfer  by  either  Tenant  or  a  Transferee, (iii)  Tenant shall  deliver  to  Landlord, promptly  after  execution,  an   original  executed  copy  of  all  documentation  pertaining  to  the Transfer  in  form  reasonably  acceptable  to Landlord, (iv)  Tenant  shall  furnish  upon  Landlord's  request  a  complete  statement,  certified  by  an  independent  certified public accountant,  or  Tenant's  chief  financial  officer,  setting  forth  in  detail the  computation  of  any  Transfer  Premium   Tenant has  derived  and  shall  derive  from  such  Transfer,  and  (v)  no  Transfer  relating  to  this  Lease  or  agreement   entered  into  with  respect  thereto,  whether  with  or  without  Landlord's  consent,  shall  relieve  Tenant  or  any  guaranto1·   of  the  Lease  from  any  liability  under  this  Lease,  including,  without limitation, in  connection with  the Subject  Space.   Landlord  or  its  authorized  representatives  shall  have  the  right  at  all  reasonable times  to  audit  the  books, records  and   papers  of  Tenant  relating  to  any  Transfer,   and  shall  have  the  right  to  make copies thereof. If  the Transfer  Premium   respecting  any  Transfer  shall  be  found  understated, Tenant  shall,  within thirty  (30)  days  after demand, pay  the   deficiency,  and  if understated  by  more  than  two  percent  (2%), Tenant  shall  pay  Landlord's  costs  of such audit. 14.6 Additional Transfers. Subject  to  the  provisions  of  Section  14.7 below,  for purposes  of  this Lease,   the  term  ''Transfer''  shall also  include  (i)  if Tenant  is  a  partnership,  the  withdrawal  or  change,  voluntary,   involuntary  or  by  operation  of  law,  of  fifty percent  (50%) or  more  of  the  partners,  or  transfer  of  fifty  percent  (50%)   or  more  of  partnership  interests,  within  a  twelve (12) - month  period, or  the  dissolution  of  the  partnership  without   immediate  reconstitution  thereof,  and  (ii)  if  Tenant  is  a  closely  held  corporation  (i.e.,  whose stock  is  not publicly   held  and  not  traded  through  an  exchange  or  over  the  counter),  (A)  the  dissolution,  merger,  consolidation  or  other   reorganization  of  Tenant  or  (B)  the  sale  or  other  transfer  of  an  aggregate  of  fifty  percent  (50%)  or  more  of  the  voting   shares  of Tenant  (other  than  to  immediate family  members  by  reason  of  gift  or  death), within  a  twelve  (12) - month   period,  or  (C)  the  sale,  mortgage, hypothecation  or  pledge  of  an  aggregate  of  fifty  percent  (50%)  or  more  of  the  value  of  the  unencumbered  assets  of  Tenant  within  a  twelve  (12) - month period. 14.7 Non - Transfers. (a) Notwithstanding  anything  to the  contrary  contained  in  this  Article  14 ,  none  of the following  shall  be  deemed  a  Transfer  under this  Article 14 and  no  Transfer  Premium  shall  be  payable  in connection   therewith:  (i)  an  assignment  or  subletting  of  all  or  a portion  of  the  Premises  to  a  purchaser  of  all  or  substantially  all   of  the assets  of  Tenant;  (ii)  a  transfer  to  an  entity,  by  operation  of  law  or  otherwise,  in  connection  with  the  merger,   consolidation  or  other  reorganization  of  Tenant  or  an  Affiliate  (as  hereinafter  defined),  provided such entity  has   assets  and  a  net  worth  at  least  substantially the  same  value  as  the  assets  and net worth  of  Tenant immediately  prior  to   such  transfer; (iii)  a  transfer  to  an  Affiliate  (as  hereinafter  defined),  or  (iv) any change  in  ownership  of  Tenant  described  in  Section  14.6 above  if,  after  such  change  in  ownership,  the assets  and  net  worth  of  Tenant are at  least   substantially  the  same  value  as  the assets  and net worth  of  Tenant  immediately prior  to  such  change  in ownership. In  addition,  sale  or  transfer  of  stock  of  Tenant,  Tenant's  parent, or such  parent's  parent, through  any  public   exchange  shall  not  be  deemed  a  Transfer,  and  redemption  or issuance  of  additional  stock  of  any  class,  unless  used as a  subterfuge  to  avoid  the  restrictions  on  Transfer  set  forth herein,  shall not  be  deemed a Transfer. With  reasonable   promptness,  and  in  any  event within fifteen  (15)  days  after  request  by  Landlord,  Tenant  shall  notify  Landlord  of  any   such  assignment, sublease,  action,  or  use  which  qualifies  as  such  ''non - Transfer''  under  this  Section  14.7 and  shall   provide  such  information   reasonably  necessary to  substantiate the same. ''Affiliate,"  as  used  in  this  Section 14.7 , shall  mean  an  entity which  is  controlled  by  Tenant, or  is  under  common  control with Tenant ''Control,"  as  used in   this  Section  14.7, shall  mean  the  possession,  direct  or  indirect,  of  the  power  to  direct  or  cause  the  direction  of  the   management  and  policies  of  a person  or  entity,  whether  through  the  ownership  of  voting  securities,  by  contract or otherwise. (b) Notwithstanding  anything  to  the  contrary  contained in  this  Article  14 ,  Tenant shall  have   the  right,  after  notice  in  accordance  with  Section  14.1, to  permit  other  Persons  (collectively,  the ''Other



    	 



    	 



    



- 30 - [JSG:se/102994_5.DOC/092404/4040.039] Occupants'')  to  occupy  up  to  one  thousand  five  hundred  (1,500)  rentable square feet  of  the  Premises during  the   Ter1n and  any  extensions  thereof  on  the  following conditions: (1) Such Other Occupant or  the  agreement  per11litting such  occupancy  does  not   violate  any  of  the  enumerated  conditions  set  forth  in  Paragraphs  14.2(a)  through 14.2(g)_ above; (2) No  demising wall  shall separate  the  space  occupied  by  Other  Occupants  from   the  space  occupied  by  Tenant; and · (3) The  aggregate  number  of  Other  Occupants  occupying  the  space  within the   Premises  shall  never  exceed  three  (3)  at  any  given time. Landlord agrees  that such  occupancy  of  the  Premises  by  Other  Occupants  shall  not  constitute  a  Transfer.   Consequently,  such  occupancy  by  Other Occupants  shall  not  require  Landlord's  consent  nor  entitle  Landlord  to  any   Transfer Premium. 14.8 Occurrence of Default. Any  Transfer  hereunder shall  be  subordinate  and  subject  to  the   provisions  of  this  Lease,  and if  this  Lease  shall  be  terminated  during  the  te1·1n of  any  Transfer,  Landlord  shall  have  the right  to: (i)  treat  such  Transfer  as  cancelled  and  repossess  the  Subject  Space  by  any  lawful  means,  or  (ii)  requi1·e   that  such Transferee  attorn  to  and  recognize Landlord  as  its  landlord  under  any such Transfer. If  Tenant  shall  be  in   default  under  this Lease,  Landlord is  hereby irrevocably  authorized, as  Tenant's  agent  and attorney - in - fact,  to  direct   any  Transferee  to  make  all  payments  under  or  in  connection  with  the  Transfer  directly  to  Landlord  (which  Landlord   shall  apply  towards  Tenant's  obligations  under  this  Lease)  until  such  default  is cured. Such  Transferee shall  rely  on   any  representation  by  Landlord  that  Tenant  is  in  default hereunder,  without  any  need  for  confi1·n1ation thereof  by   Tenant. Upon  any  assignment,  the assignee  shall assume  in  writing  all  obligations  and  covenants  of  Tenant   thereafter  to  be  performed  or  observed under this Lease. No  collection  or  acceptance  of  rent  by  Landlord  from  any   Transferee  shall  be  deemed  a  waiver  of  any  provision  of  this  Article  14 or  the  approval  of  any  Transferee  or  a   release  of Tenant  from  any  obligation  under  this  Lease,  whether  theretofore  or  thereafter accruing. In  no  event  shall   Landlord's  enforcement of  any  provision  of  this  Lease  against  any  Transferee  be  deemed  a  waiver  of  Landlord's   right  to  enforce  any  ter1n of  this  Lease  against  Tenant  or  any other person. If  Tenant's  obligations  hereunder  have   been  guaranteed,  Landlord's  consent  to  any  Transfer  shall  not  be  effective unless  the  guarantor  also  consents  to  such   Transfer. 15. Surrender Of  Premises;  Ownership  And  Removal  Of  Trade Fixtures. 1. Surrender of Premises. No  act  or  thing  done  by  Landlord  or  any  agent  or  employee  of  Landlord   during  the  Lease  Term  shall  be  deemed  to  constitute  an  acceptance  by  Landlord  of  a surrender  of  the  Premises   unless  such  intent  is  specifically acknowledged   in  writing by Landlord. The  delivery  of  keys  to  the  Pr·enlises  to   Landlord  or  any  agent  or  employee  of  Landlord  shall  not  constitute a  surrender  of  the  Premises  or  effect  a  ter1nination of  this Lease,  whether  or  not  the  keys  are thereafter  retained  by  Landlord,  and  notwithstanding  such   delivery  Tenant shall  be  entitled  to  the  return  of  such  keys  at  any  reasonable  time  upon request  until  tl1is  Lease  shall   have  been properly terminated. The  voluntary  or  other  surrender  of  this  Lease  by  Tenant,  whether  accepted  by   Landlord  or  not,  or  a  mutual  termination  hereof, shall  not  work  a  merger,  and at  the  option of  Landlord  sl1all  operate   as  an  assignment  to  Landlord  of  all  subleases  or  subtenancies  affecting  the  Premises  or  ter1runate any  or  all  such   sublessees  or subtenancies. 2. Removal   of  Tenant  Property by Tenant. Upon  the  expiration  of  the  Lease  Term,  or  upon  any  earlier  termination  of  this  Lease,  Tenant  shall, subject  to  the  provisions  of  this  Article  15 ,  quit  and  smTender   possession  of  the  Premises  to  Landlord  in  as  good  order  and  condition as  when  Tenant  took  possession and  as   thereafter  improved  by  Landlord  and/or  Tenant,  reasonable wear  and  tear  and  repairs which  are  specifically  made   the  responsibility of  Landlord hereunder excepted. Upon  such  expiration  or  ter1ni11ation, Tenant  shall,  without   expense  to  Landlord, remove  or  cause  to  be  removed  from  the  Premises all  debris  and  rubbish,  and  such  items  of   furniture,  equipment,  business  and  trade  fixtures, free - standing  cabinet  work, movable  partitions and  other  articles  of   personal  property  owned  by  Tenant  or  installed  or  placed  by  Tenant  at  its expense  in  the  Premises,  and  such similar



    	 



    	 



    



- 31 - [JSG:se/102994_5.DOC/092404/4040.039] articles  of  any  other  persons  claiming  under  Tenant, as  Landlord may,  in  its  sole  discretion,  require  to  be  removed,   and  Tenant  shall  repair  at  its  own  expense  all  damage to  the  Premises  and  Building  resulting  from  such removal. 16. Holding Over. If  Tenant  holds  over  after  the expiration  of  the  Lease  Term  or  earlier  termination  thereof,  with  or  without   the  express  or  implied consent  of  Landlord,  such tenancy shall  be  from  month - to - month  only, and  shall  not   constitute  a  renewal  hereof  or  an  extension for  any  further  term,  and  in  such  case  Rent  shall  be payable  at  a  monthly  rate  equal  to  one  hundred  fifty  percent  (150%)  (the  ''Holdover  Percentage'')  of  the  Rent  applicable  during the  last   rental  period  of  the  Lease  Te1·1n under this Lease. Such  month - to - month tenancy  shall  be  subject to  every  other   applicable   terrn, covenant  and  agreement contained herein. Nothing  contained  in  this  Article  16 shall  be  construed   as  consent  by  Landlord  to  any  holding  over  by  Tenant,  and  Landlord  expressly  reserves  the  right to  require  Tenant   to  surrender  possession  of  the  Premises  to  Landlord  as  provided  in  this  Lease  upon  the expiration  or  other   termination  of this Lease. The  provisions of  this  Article  16 shall  not  be  deemed  to  limit  or  constitute  a  waiver  of  any   other  rights  or  remedies  of  Landlord  provided  herein  or  at law.  If  Tenant  fails  to  surrender  the  Premises upon  the   termination  or  expiration  of  this  Lease,  in  addition  to  any  other  liabilities  to  Landlord  accruing therefi·om,  Tenant shall  protect, defend,  indemnify  and  hold  Landlord  harmless  from  all  loss,  costs (including  reasonable  attorneys'   fees)  and liability  resulting  from  such  failure,  including,  without  limiting  the  generality  of  the  foregoing,  any  claims   made  by  any  succeeding  tenant  founded  upon  such  failure  to  surrender  and  any  lost  profits to Landlord  1·esulting   therefrom;  provided,  however,  that Landlord  shall  not  be  entitled  to  any  damages  incurred  by  Landlord due  to  the   loss  of  a  prospective third - party  tenant  or  delay  in  delivering  the  Premises or  any  portion  tl1ereof  to  a  prospective   third - party  tenant  resulting  from  Tenant's  holdover,  unless  (a)  the  lease  to the  prospective  third - party  tenant  has   been  fully  executed,  and  (b)  Landlord  has  given  notice  to  Tenant of  the  occurrence  of  such  executed  lease  and  the   date  Landlord,  pursuant  to  such  lease,  intends  to  deliver the  Premises  or  any  portion thereof  to the  prospective  third party  tenant  at  least  thirty  (30)  days  prior  to such date.. Notwithstanding  anything  to the  contrary  set  forth   hereinabove, the  Holdover  Percentage,  with respect  to  the  first  ninety  (90)  days  after  the  expiration  of  the  Lease   Term  or  earlier termination  thereof,  shall  equal  one  hundred  twenty - five  percent (125%). 17. Estoppel Certificates. Within  twenty  (20)  days  following  a  request  in  writing  by  Landlord  given  to the  notice  addressees  set  forth   in  Section  10  of  the  Summary, Tenant  shall  execute, acknowledge and  deliver  to  Landlord  an  estoppel  certificate,   which,  as  submitted  by  Landlord,  shall  be  substantially  in  the  form of  Exhibit  E, attached  hereto  (or  such  other  form   as  may  be  required  by  any  prospective mortgagee or  purchaser  of  the  Project,  or  any portion  thereof),  indicating   therein  any  exceptions  thereto  that  may  exist at that  time,  and  shall  also  contain  any  other  infor1nation reasonably   requested   by Landlord  01·  Landlord's  mortgagee or  prospective mortgagee. Any  such  certificate  may  be  relied  upon   by  any  prospective  mortgagee  or  purchaser  of  all  or any  portion  of the Project. Tenant shall  execute  and  deliver   whatever   other  instruments  may  be  reasonably  required  for such purposes. Within  twenty  (20)  days following   request  by  Tenant,  Landlord  shall  execute,  acknowledge  and deliver  to  the  Tenant  a statement  in  writing, certifying (a)  that  this  Lease  is  unmodified and  in  full  force  and  effect  (or if  there  have  been  modifications,  that  the  same is in full  force  and  effect  as  so  modified  and  stating  such  modifications),  (b)  the  dates  to  which the  Base  Rent,  Additional   Rent  and  other  charges  have  been  paid  in  advance,  if  any,  and  (c)  whether or  not  to  the  knowledge  of  Landlord,   Tenant  is  in  default  in  the  performance of any  covenant,  agreement  or  condition  contained in  this  Lease  and, if  so,   specifying  each  such  default  of  which  Landlord  may  have knowledge. 18. Subordination. This  Lease  shall  be  subject  and  subordinate  to  all  present  and  future  ground  or  underlying leases  of  the   Building  or  Project and  to  the  lien  of  any  mortgage,  trust  deed  or  other encumbrances  now  or  hereafter  in  force   against  the  Building  or Project  or  any  part  thereof,  if any,  and  to  all renewals,  extensions,  modificatio11s,   consolidations  and  replacements  thereof,  and  to all advances  made  or  hereafter  to  be  made upon  the security  of  such   mortgages or  trust  deeds,  unless  the  holders  of  such  mortgages,  trust  deeds or  other  encumbrances,  or  the  lessors   under  such  ground   lease  or   underlying  leases,  require  in  writing  that  this  Lease  be  superior thereto. Tenant   covenants  and  agrees  in the  event any  proceedings  are  brought  for  the  foreclosure  of  any  such  mortgage  or  deed  in   lieu  thereof  (or  if  any  ground  lease  is  ter111inated), to  attom,  without  any  deductions  or  set - offs whatsoever,  to  the   lienholder  or  purchaser  or  any  successors  thereto  upon  any  such  foreclosure  sale  or deed  in  lieu  thereof  (or to  the



    	 



    	 



    



- 32 - [JSG:se/102994_5.DOC/092404/4040.039] ground  lessor),  if  so requested  to  do  so  by such purchaser  or  lienholder  or  ground  lessor,  and  to recognize  such   purchaser  or  lienholder  or  ground  lessor  as  the  lessor  under  this  Lease,  provided  such  lienholder  or  purchaser  or   ground  lessor  shall  agree  to  accept  this  Lease  and  not  disturb  Tenant's  occupancy,  so  long  as  Tenant  timely  pays the   rent  and  observes  and  performs  the  terms,  covenants  and  conditions  of  this  Lease  to  be  observed  and performed  by   Tenant. Landlord's  interest herein  may be  assigned  as  security  at  any  time  to any lienholde1·. Tenant  shall,  within   five (5) business  days  of  request  by  Landlord,  execute  such  further  instruments  or  assurances  as  Landlord  may   reasonably  deem  necessary  to  evidence  or  confrrm  the  subordination  or  superiority  of  this Lease  to any  such   mortgages,  trust  deeds,  ground  leases  or underlying leases. Tenant  waives  the  provisions  of  any  current  or  future   statute,  rule  or  law  which  may  give  or  purport  to  give Tenant  any right  or  election  to  terminate or  otherwise  adversely  affect this  Lease  and  the  obligations  of  the  Tenant  hereunder  in  the  event  of any  foreclosure  proceeding  or   sale. Tenant shall,  within  ten  (10)  business  days  of  request  by  Landlord  from  time  to time, (i)  execute  a   Nondisturbance and  Attornment  Agreement  in  the  for1n of  Exhibit  F hereto  in  favor  of any  mortgagee of  the   Building  or  Project,  and  (ii)  execute  any  other  form  ofnondisturbance  and  attornment agreement  (or  subordination,   nondisturbance  and  attornment  agreement,  or  subordination of  the  applicable  mortgagee's  lien)  reasonably  1·equired   by  any  mortgagee of the  Building  or  Project  (''Lender'')  which provides comparable  nondisturbance  protection  to   Tenant  in  the  event of a foreclosure. Notwithstanding  anything  to  the contrary  contained  herein,  Landlord  agrees  to   expend  commercially  reasonable  efforts  to  obtain  for  Tenant, as soon as  reasonably possible  and,  in  any  case,  within   thirty  (30)  days  of  the  execution  and  delivery  of  this  Lease  by  Landlord  and  Tenant, a  subordination,  no11 - disturbance  and  attornment  agreement  from  each  Lender  holding  a  deed  of  trust  currently  encumbering  the  Project   in  the  form  attached  hereto  as  Exhibit  F which  may  be recorded  at  Tenant's  expense,  and  with  respect  to  any   mortgage,  trust  deed  or  ground  lease  hereafter  executed  affecting  the  Project  and/or the Premises,  this  Lease  shall be · subordinated  thereto  only  if  the  holder thereof  enters  into  a  subordination, non - disturbance  and  attornment   agreement  substantially  in  the  fo11n of  Exhibit  F hereto  or  any  other .fo1·m of  nondisturbance  and  attornment   agreement  (or  subordination,  nondisturbance  and  attornment agreement,  or  subordination  of  the  applicable   mortgagee's  lien)  reasonably  required by  any  Lender which  provides  comparable  nondisturbance  protection  to   Tenant  in  the  event of  a foreclosure. 19. Defaults; Remedies. 1 9 .1 by Tenant: Events of Default. The  occurrence  of  any  of  the  following shall constitute  a  default of  this Lease (a) Any  failure  by  Tenant  to  pay  any  Rent  or any  other  charge  required  to  be  paid  under  this   Lease,  or  any  part  thereof, when due  unless  such failure  is  cured  within five (5) days  after  Tenant's  receipt  of  written   notice  thereof;  provided, however,  the  such  notice  shall  be in  addition  to  and  not  in  lieu  of any  notice required  under   Section  1161  of  the  California  Code  of  Civil  Procedure; or (b) Except  where  a  specific time  period  is  otherwise  set  forth  for  Tena11t's  performance  in   this  Lease,  in  which event  the  failure  to  perfor1n by  Tenant  within  such  time  period  shall  be  a  default  by  Tenant   under  this  Section  19 .1 (b ), any  failure by  Tenant  to  observe  or perform any  other  provision, covenant or  conditio11  of   this  Lease  to  be  observed  or  perfor1ned by  Tenant  where  such  failure continues  for  thirty  (30)  days  after  written   notice  thereof  from  Landlord to Tenant  (such  notice  shall  be  in  addition  to  and  not  in  lieu  of any  notice required   under  Section  1161  of  the California  Code  of  Civil  Procedure);  provided  that  if the  nature  of  such  default  is  such   that  the same cannot  reasonably  be  cured  within  a  thirty  (30)  day  period,  Tenant  shall  not  be deemed  to  be in  default   if  it  diligently  commences  such  cure  within  such  period  and  thereafter  diligently  proceeds to  rectify  and  cure such   default; or (c) To  the  extent  permitted  by  law,  a  general  assignment  by  Tenant  or any  guarantor  of  the   Lease  for  the  benefit  of  creditors,  or  the  taking  of  any  corporate  action  in  furtherance of  bankruptcy or  dissolution   whether  or  not  there  exists  any  proceeding under  an  insolvency or  bankruptcy law, or  the  filing  by  or  against Tenant   or  any  guarantor of  any  proceeding  under  an insolvency  or  bankruptcy  law,  unless  in  the  case  of  a proceeding  filed   against  Tenant  or  any  guarantor  the  same  is  dismissed  within  sixty  (60)  days,  or  the  appointment of  a  trustee  or   receiver  to  take  possession of  all  or  substantially  all  of  the  assets  of  Tenant or  any  guarantor,  unless possession  is   restored  to  Tenant  or  such  guarantor  within  thirty  (30)  days, or  any  execution  or  other  judicially  authorized  seizm·e   of  all  or  substantially  all  of  Tenant's  assets  located  upon  the  Premises  or of  Tenant's  interest  in  this  Lease,  unless  such seizure  is  discharged  within thirty  (30) days; or



    	 



    	 



    



- 33 - [JSG:se/102994_5.DOC/092404/4040.039] (d) The  failure  by  Tenant  to  observe  or  perfo1111 according  to  the  provisio11s of  Articles  5,  14 ,  17 or  18 of  this  Lease  where  such  failure  continues for  more  than  two  (2)  business  days after  notice  from  Landlord;   provided,  however,  if  the  nature of  the  failure  of performance  under  Article  5 does  not  (i)  materially  and adversely   affect  systems  of  the  Building or  the Building  structure,  (ii)  materially  and adversely  affect  access  to  or  safety  of  any   Premises  in  the  Building, or  (iii)  materially  and adversely  affect  the  quiet  enjoyment  of  any  other  tenant in  the   Project,  then,  if  such  default  cannot  reasonably  be  cured  within  such  two  (2)  business  day  period,  Landlord  shall  not   be  entitled  to  exercise  its  remedies  under  Section  19.2 if  within  such  two  (2) business  day period  Tenant  shall   commence  such  cure  and  thereafter  diligently  prosecute  the  same  to  completion  within ten  (10)  days,  provided  that   Tenant  shall  otherwise  be  liable  to  Landlord  for  such non - performance; or (e) Any  failure  by  Tenant  to  provide  Landlord  with  a  renewed  LC  (defined  in  Article 22  below) or  a  substitute  LC  in  for·m reasonably  acceptable  to Landlord  at  least  thirty  (30)  days  prior to  the  expi1·ation   of  the  then  existing LC. 2. Remedies Upon Default. Upon  the  occurrence  of  a  default  by  Tenant, Landlord  shall  have,  in   addition  to  any  other  remedies available to  Landlord  at  law  or  in  equity  (all  of which  remedies  shall  be  distinct,   separate  and  cumulative),  the  option  to  pursue  any  one  or  more  of  the  following  ren1edies,  each  and  all  of  which   shall  be  cumulative  and  nonexclusive,  without  any  notice or  demand whatsoever. (a) Te1·11rinate this Lease, in  which  event  Tenant  shall  immediately surrender  the  Prenrises  to  Landlord,  and  if  Tenant  fails  to  do  so, Landlord  may,  without prejudice  to any  other remedy  which  it  may  have  for   possession  or  arrearages in  rent,  enter  upon  and take  possession  of  the  Premises  and  expel  or  remove  Tenant  and  any   other  person  who  may  be  occupying  the  Premises  or  any  part  thereof,  without  being  liable  for  prosecution  or  any  claim or  damages  therefor;  and  Landlord may  recover  from  Tenant  the following: (1) The  worth  at  the  time of  any  unpaid  rent  which  has  been  earned  at  the  time of such  te11nination; plus (2) The  worth  at  the  time  of  award  of  the  amount  by  which  the  unpaid  rent which   would  have  been  earned  after  termination  until  the  time of  award  exceeds  the  amount  of  such  rental  loss that  Tenant   proves  could  have  been  reasonably  avoided; plus (3) The worth at the time of award of the amount by which the unpaid rent for the balance of the Lease Term after the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided ; plus (4) Any  other  amount  reasonably necessary  to  compensate Landlord  for  all  the   detriment  proximately  caused  by  Tenant's  failure  to  perfor111 its  obligations  under  this  Lease  or  which  in the   ordinary  course  of  things  would be  likely  to  result  therefrom,  specifically  including  but  not  limited  to,  brokerage   commissions  and  advertising  expenses  incurred,  expenses of remodeling  the  Premises or  any  portion  thereof  for  a   new  tenant,  whether  for  the  same  or  a  different  use,  and any  special  concessions  made  to  obtain  a  new  tenant; and (5) At  Landlord's  election,  such  other  amounts  in  addition  to  or  in  lieu  of  the   foregoing  as  may  be  permitted  from  time  to  time  by  applicable law. The  te1·m ''rent''  as  used  in  this  Section  19.2 shall  be  deemed  to  be  and  to  mean  all  sums  of  every  nature   required  to be  paid  by  Tenant  pursuant  to  the  terms  of  this  Lease,  whether  to  Landlord or  to others. As  used  in   Paragraphs  19.2(a)(l) and  ill, above,  the  ''worth  at  the  time of  award''  shall  be  computed  by  allowing  interest  at the rate set  forth  in  Article  25 of  this  Lease, but  in  no  case  greater  than  the  maximum  amount  of  such  interest pe1mitted by law. As  used  in  Paragraph  l  9.2(a)(3) above,  the  ''worth  at  the  time  of  award''  shall  be  computed  by  discounting   such  amount  at  the  discount  rate  of  the  Federal  Reserve  Bank  of  San  Francisco  at  the  time  of  award  plus  one  percent   (1%). (b) Landlord  shall  have  the  remedy  described  in California  Civil  Code  Section  1951.4 (lessor may  continue  lease  in effect  after  lessee's  breach  and abandonment and  recover  rent  as  it  becomes  due,  if  lessee has



    	 



    	 



    



- 34 - [JSG:se/102994_5.DOC/092404/4040.039] • the  right to  sublet  or  assign,  subject  only  to reasonable limitations). Accordingly,  if  Landlord  does not  elect to   terminate  this  Lease  on  account of  any  default  by  Tenant,  Landlord  may, from  time  to  time,  without  terminating this Lease,  enforce  all  of  its rights  and  remedies  under  this  Lease,  including  the  right to  recover  all  rent  as  it becomes due. (c) Landlord  shall at  all  times  have the  rights  and  remedies  (which  shall  be  cumulative  with   each  other  and  cumulative  and  in  addition  to  those  rights  and  remedies  available  under  Sections 19.2(a) and  1.9.2(b),  above, or  any law  or  other  provision of  this  Lease),  without  prior  demand  or  notice except  as  required  by  applicable   law,  to  seek  any  declaratory,  injunctive  or  other  equitable relief,  and  specifically  enforce this  Lease,  or restrain  or   enjoin a  violation  or  breach  of  any  provision hereof. 3. Subleases of Tenant. If  Landlord  elects to  terminate  this  Lease  on  account  of  any  default  by   Tenant,  as  set  forth in  this  Article  19, Landlord  shall  have  the  right to  terminate  any  and  all  subleases,  licenses,   concessions or  other  consensual  arrangements  for  possession  entered  into  by  Tenant  and  affecting  the  Premises or   may,  in  Landlord's  sole  discretion,  succeed  to  Tenant's  interest  in  such  subleases,  licenses, concessions  or   arrangements.  If  Landlord  elects to  terminate  this  Lease  on account of  any  default  by  Tenant and  Landlord elects  to   ucceed  to  Tenant's  interest  in  any such  subleases,  licenses,  concessions or  arrangements,  Tenant  shall  have  no   further  right to  or  interest  in the  rent  or other  consideration  receivable thereunder. 4. Form of  Payment After Default. Following  the  occurrence  of  a  default  by  Tenant,  Landlord   shall  have  the  right to  require  that  any  or  all  subsequent  amounts  paid  by Tenant  to  Landlord  hereunder,  whether  to   cure  the  default  in  question or  otherwise,  be  paid  in the  form  of  cash,  money  order,  cashier's  or  certified  check   drawn on  an  institution acceptable to  Landlord,  or  by  other  means  approved  by  Landlord,  notwithstanding  any  prior   practice  of  accepting  payments  in  any  different form. 5. Efforts to Relet. No  re - entry  or  repossession,  repairs,  maintenance,  changes,  alterations  and   additions,  reletting,  appointment  of  a  receiver  to  protect  Landlord's  interests  hereunder, or any  otl1er  action  or   omission  by  Landlord  shall  be  construed  as  an  election  by Landlord  to  terminate  this  Lease  or  Tenant's  right  to   possession,  or  to  accept a  surrender  of  the  Premises,  nor  shall  same  operate  to release  Tenant  in  whole  or  in  part   from  any  of  Tenant's  obligations  hereunder,  unless  express  written  notice  of  such  intention  is  sent  by  Landlord  to   Tenant. Tenant  hereby  irrevocably  waives  any  right  otherwise  available  under  any law  to  redeem  or  reinstate  this   Lease. 6. Waiver of Consequential Damages. Notwithstanding  anything  to the  contrary  contained  in  this   Lease,  neither  Landlord  nor  Tenant  shall  be  liable  under  any  circumstances  for,  and  each hereby  releases  the  other   from  all  liability  for,  consequential  damages  and  injury  or  damage  to,  or  interference with,  the  other  party's   business,  including,  but not  limited  to, loss  of  title  to the  Premises or  any  portion  thereof, loss  of  profits,  loss  of   business  opportunity,  loss  of  goodwill  or  loss  of  use, in  each  case however  occurring, other than  those  consequential   damages  incurred by  Landlord  in  connection  with a  holdover  in  the  Premises  by  Tenant  after  the  expiration  or   earlier  te11nination of  this  Lease  or  incurred  by Landlord in  connection  with failure  by Tenant  to  provide  an  estoppel   certificate  as  required  under  the provisions of  this Lease. 20. Covenant Of  Quiet  Enjoyment. · Landlord  covenants  that  Tenant,  on  paying  the  Rent,  charges  for  services  and  other  payments  l1erein   reserved  and  on  keeping,  observing  and  performing  all  the  other  terms,  covenants,  conditions,  p1·ovisions  and   agreements  herein  contained  on  the part of  Tenant  to  be  kept,  observed  and  perfor111ed, shall,  during  the Lease  Term,   peaceably  and  quietly have,  hold  and  enjoy  the  Premises  subject  to  the  terms,  covenants,  conditions,  provisions and   agreements   hereof  without  interference  by  any  persons  lawfully  claiming  by  or through Landlord. The  foregoing   covenant  is  in  lieu  of  any  other  covenant  express  or implied. 21. Security Deposit. Concurrent  with  Tenant's  execution of this  Lease,  Tenant  shall  deposit  with Landlord  a  security  deposit   (the  ''Security  Deposit'')  in the  amount  set  forth  in  Section  8  of  the  Summary,  as  security  for  the faithful



    	 



    	 



    



performance  by  Tenant  of  all  of  its  obligations  under this Lease. If  Tenant  defaults  with  respect  to any  provisions of   this  Lease,  including,  but  not  limited  to,  the  provisions  relating  to  the  payment  of  Rent,  the  removal  of  property  and   the  repair  of  resultant damage,  Landlord  may,  without  notice to  Tenant,  but  shall  not  be  required  to apply  all  or any part  of  the  Security  Deposit  for the  payment  of  any  Rent  or  any  other  sum  in  default  and  Tenant  sl1all,  upon  demand   therefor,  restore the  Security  Deposit to  its original amount. Any  unapplied  portion  of  the  Security  Deposit  shall  be   returned  to  Tenant,  or, at  Landlord's  option,  to  the  last  assignee  of  Tenant's  interest  hereunder,  within  thirty  (30)  days  following the  expiration  of  the Lease Term. Tenant  shall  not  be  entitled  to  any  interest  on  the  Security  Deposit.   Tenant  hereby  waives  the  provisions of  Section 1950.7 of  the  California  Civil  Code,  or  any  successor statute. 22. Credit. 22.1 Letter of Credit. Concurrent  with  Tenant's  execution  and  delivery of  this  Lease,  Tenant  shall   deliver  to  Landlord  an  unconditional,  irrevocable  letter  of  credit  (''LC'')  in  the  original  amount  of  Two  Hundred   Forty - Three   Thousand  Eight  Hundred  Forty - Eight and 66/100 Dollars ($243,848.66) (the  ''LC  Stated  Amo1.1nt'').   The  LC  shall  be  issued  by  US  Bank  or  a  national  money  center  bank  reasonably  acceptable  to  Landlord,  and  shall  be   in  the  fonn  attached   hereto  as Exhibit H. Tenant  shall  pay  all  expenses,  points  and/or  fees incurred  in obtaining and   renewing the LC. The  LC  shall  be  effective  from  the  date  of  delivery  thereof through the  date  which  is  one hundred (100)  days  after the  expiration  of  the  Lease  Te11n (the  ''LC Expiration Date''). The  LC  may  be  re - issued,  renewed   or  replaced  for  annual  periods, provided that  the  LC  Stated  Amount  is not  reduced  except as  expressly provided   below. Each  reissue,  renewal  or replacement  LC  shall  be  in  the  form  attached  hereto  as  Exhibit  H and  shall  be   subject to  Landlord's  prior written approval. The  LC  Stated  Amount  shall  be  reduced  on  each  anniversary  of  the   Rent  Commencement  Date  (herein,  each  a  ''Reduction  Date''),  subject  to  the  provisions  of  Paragraphs  (a)  a11d  (b)  immediately  below,  in  accordance  with  the  following  schedule (the  ''Red1.1ction Sched1.1le''): Anniversary of the   Rent  Commencement Date LC  Stated Amount First Second " Third Fourth Fifth $195,078.93 $146,309.20 $97,539.47 $48,769.74 $0.00 (a) No  Reduction if Default. Notwithstanding  any  contrary  provision  hereof, if  Tenant  is  in   default  under  this  Lease after  notice and  lapse  of  any  applicable  cure  period  (herein,  an  ''Event  of  Default'')  on  a   Reduction  Date,  or  if  an  Event  of  Default  would  exist  and  be  continuing  on  a Reduction  Date  but  Landlord  is  barred   by  applicable  law  from  sending  a  notice of  default  to  Tenant  with  respect  thereto,  or  if  Tenant  is  in  default  under  this   Lease  and  Tenant has  received  notice thereof  as  required  by  this  Lease,  but  failed  to cure  such  default  within  the   time  period  per11iitted under  this  Lease  or  such  lesser  time  as  may  remain  before  a  Reduction  Date, then  the  LC   Stated  Amount  shall  not  be  reduced  on  such  Reduction Date  (but  shall  be  reduced  upon  the  curing of  such  default,   subject,  however, to  Landlord's  draw on  the  LC  as  per1rutted hereunder  in  connection  with  an Event  of Default). (b) Failure to  Reissue,  Renew or Replace. If  the  bank  that  issues the  LC  fails  to  extend  the   expiration date thereof  through  the  LC  Expiration  Date,  and/or  if  Landlord  receives  a  notice of  non - renewal  fi·om   such bank  (as  described  in  the  LC),  then  Tenant  shall  provide  Landlord with  a  substitute LC. If  Tenant  fails  to   provide Landlord  with  a  substitute  LC  in  a  fo1111 reasonably  acceptable  to  Landlord  at  least  thirty  (30)  days  prior  to   the  expiration  of  the  then  existing  LC,  then  (i)  such  failure shall  be  deemed  an  Event of  Default  hereunder,  and  (ii)   Landlord  shall  be  entitled  to  draw down  the  full  amount  of  the  LC  then  available  and  apply,  use  and  retain  the   proceeds  thereof  in  accordance with  Section 22.3. [JSG:se/!02994_5.DOC/092404/4040.039] - 35 -



    	 



    	 



    



- 36 - [JSG:se/102994_5.DOC/092404/4040.039] 22.2 Application of  LC  and LC Account. Any  amount  of  the  LC  which  is  drawn  upon  by  Landlord,   but  not  used  or  applied  by  Landlord  shall  be  held  by  Landlord  in  an  account  (the  ''LC  Account'')  as  security  for  the   full  and  faithful  perfonnance  of  each  of  the  terms  hereof  by  Tenant,  subject  to  use  and  application  as  set  forth  below.   If  an  Event  of  Default  shall  occur  and  be  continuing with  respect  to  any provision  of  this  Lease,  including,  but  not   limited  to,  the  provisions  relating  to  the payment  of  rent,  or  an  Event of  Default  would  exist  under  the  Lease  but   Landlord  is  barred  by  applicable  law  from  sending  a  notice  of  default  to  Tenant with  respect  thereto,  01·  in  the event   the  LC is  not  renewed  or  reissued  at  least thirty  (30)  days  prior  to  the  expiration  of  the  then  existing  LC,  Landlord   may,  but  shall  not  be  required  to, draw  upon  all  or  any part  of  the  LC  and/or  LC  Account  or  use, retain  or  apply  all   or  any  part  of  the  proceeds  thereof  for  the payment  of  any rent  or  any  other  sum  in  default,  to  repair  damages  caused   by  Tenant,  to  clean  the  Premises, or  for  the payment  of  any  other  amount  which  Landlord  may  spend  or  become   obligated to  spend  by  reason  of  Tenant's  default  or  to  compensate  Landlord  for  loss  or  damage  which Landlord  may   suffer  by  reason  of  Tenant's  default,  including  without  limitation  the  amounts  to  which  Landlord  may  become   entitled  pursuant  to  Section  19.2 above (whether  or  not  such  amounts  have been  awarded)  and  any  other loss,   liability,  expense  and  damages  that may  accrue  upon  Tenant's  default or  the  act  or  omissio11  of  Tenant  or  any   officer,  employee,  agent  or  invitee  of Tenant,  and  costs and  attorneys'  fees  incurred  by  Landlord to  recover  possession   of the  Premises  upon  a  default  by Tenant hereunder. The  use,  application,  retention  or  draw of  the  LC   and/or  LC  Account,  or  any  portion  thereof,  by  Landlord  shall  not  (i)  constitute the  cure  of  any  default  by  Tenant  or   the  waiver  of  such  default,  (ii)  prevent  Landlord  from  exercising  any  other  remedies  provided  for  under  this  Lease  or   by  law, it  being intended  that  Landlord  shall  not first  be  required  to  proceed  against  the  LC  and/01·  LC  Account, or (iii)  operate  as  a  limitation  on  the  amount  of  any  recovery  to  which  Landlord   may  otherwise be entitled. If  any   portion  of  the  LC  and/or  LC  Account  is  so  drawn  upon,  or  any part  of  the  proceeds  thereof  is  used  or  applied,   Tenant shall,  within  five  (5)  days  after  written  demand  therefor,  deposit  cash  with  Landlord  in  an  amount equal  to  the  draw  upon  the  LC  and/or  the amount of the  LC  Account  that  was  used  or  applied  (so  that  the  combined  amount   of  the  remaining  sums  available to  be  drawn  upon  the  LC  and  the  LC  Account  balance  equals  the  LC  Stated   Amount), and Tenant's  failure  to  do  so  shall  be  an  Event  of  Default  under this Lease. The  LC  Account  may be   commingled  with  other  funds  of  Landlord,  shall  be  held  in  Landlord's  name,  and  Tenant shall  not  be  entitled  to  any   interest   or earnings thereon. Notwithstanding  any  contrary  provision  herein,  in  the  event  that  the  total  amount  of  the   LC  outstanding  plus  any  amount  remaining  in  the  LC  Account  exceeds  the  LC  Stated  Amount  (''Excess  Security''),   then  Landlord shall  return  the  amount of  the  Excess  Security  to  Tenant  upon Tenant's  request  to  the extent  that  such   amount is  available  in  the  LC Account. 3. Waiver. Tenant  hereby  waives  the  provisions  of  Section 1950. 7  of  the California  Civil  Code,  and   all  similar  or  successor  provisions  of  law,  now  or  hereafter  in  force,  and  Landlord and Tenant hereby  acknowledge   that their  entire  agreement  with respect  to  the  LC  and  the  LC  Account  is  set  forth herein. 4. Expiration of LC. Unless  an  Event  of  Default  has occurred and  is  continuing  under this Lease  or • an  Event  of Default  would  exist  under  the  Lease  but  Landlord  is  barred  by  applicable  law  from  sending  a  notice  of   default  to  Tenant  with  respect  thereto,  within  sixty  (60)  days  following  the  LC  Expiration Date,  Landlord  shall   return  any  LC  previously  delivered  by  Tenant  and  any  balance  remaining  in  the  LC  Account after  use  and   application  in accordance  with this  Article  22, to Tenant  (or,  at  Landlord's  option,  to  the  last  assignee,  if  any,  of   Tenant's  interest  hereunder),  and  Tenant  shall  have  no  further  obligation  to  provide  the LC. • 5. Landlord's Transfer. Tenant  acknowledges  that  Landlord has  the  right  to  transfer  or n1ortgage its  interest  in  the  Building  or  Project  and  in  this  Lease,  and  Tenant  agrees  that  in  the  event  of  any  such  transfer  or   mortgage, Landlord shall have the right to transfer or assign the LC and/or the LC Account to the transferee or mortgagee. Upon  such  transfer  or  assignment  of  the  LC  and/or  LC  Account,  Landlord  shall  be  deemed  released  by   Tenant  from  all  liability  or  obligation  for  the  return  of  the  LC  and  LC  Account,  as  applicable,  and  Tenant shall look solely  to  such  transferee  or mortgagee  for  the return thereof. If  Landlord  transfers  or  assigns  the  LC  and  Tenant fails to  cause  the  bank  that  issued  the  LC  to  accept  such  transfer  or  assignment,  such  failure shall  be  an  Event  of  Default   hereunder. 6. Bank Obligation. Tenant  acknowledges  and  agrees  that  the  LC  is  a  separate  and independent   obligation  of  the  issuing  bank  to  Landlord  and  that  Tenant  is  not  a  third  party  beneficiary  of  such  obligation, and  that   Landlord's  right  to  draw  upon  the  LC  for  the  full  amount  due  and  owing thereunder  shall  not  be,  in  any  way,   restricted, impaired,  altered  or  limited  by  virtue of  any  provision of the United  States Bankruptcy Code,  including   without  limitation,  Section  502(b)(6) thereof.



    	 



    	 



    



[JSG:se/102994_5.DOC/092404/4040.039] - 37 - 23. Signs. 1. Full Floors. Subject  to  Landlord's  prior  written  approval, in  its  discretion,  and  provided  all  signs   are  in  keeping  with the  quality,  design  and  style  of  the Building  and  Project,  Tenant,  if  the  Premises  comprise  an   entire  floor  of  the Building,  at  its  sole cost  and  expense,  may  install  identification  signage anywhere  in  the  Premises   including in  the  elevator  lobby  of  the  Premises,  provided  that  such  signs  must  not  be  visible  from  the exterior  of  the   Building. 2. Multi - Tenant Floors. If  other  tenants  occupy space  on  the  floor  on  which  the  P1·emises  is   located,  Tenant's  identifying  signage  shall  be provided  by  Landlord,  at  Tenant's  cost,  and  such  signage  shall  be   comparable  to  that  used  by  Landlord  for  other  similar  floors  in  the  Building  and  shall  comply  with  Landlord's   Building standard  signage program. 3. Prohibited Signage  and Other Items. Any  signs,  notices,  logos,  pictu1·es,  names  or   advertisements  which are installed and that  have  not  been  separately  approved  by  Landlord  may  be  removed  without   notice  by  Landlord at  the  sole  expense of Tenant. Tenant  may  not  install  any  signs  on  the exterior  or  roof  of the   Project  or  the Common Areas. Any  signs,  window  coverings,  or blinds  (even  if the  same  are  located  behind  the   Landlord - approved  window  coverings  for  the  Building),  or  other  items  visible  from  the exterior  of  the  Premises  or   Building,  shall  be  subject to  the  prior approval  of  Landlord,  in  its  sole discretion. 4. Building Directory. At  Tenant's  expense,  Tenant  shall  be  provided  sixteen  (16)  lines  to display   Tenant's  name  and  location in  the  Building  and  the  names  of Tenant's  principal  employees  and  subtenants. 24. Compliance With Law. Landlord  represents  to  Tenant  that  Landlord  has  received  a  certificate  of  occupancy  or  equivalent  approval   for the  Building,  and  that  to  the  best  knowledge  of  Landlord  the Building  is  and  as  of  the  Lease  Commencement   Date  will  be  in  compliance  with all Applicable  Laws  existing,  effective  and enforced  with  respect to  the  P1·oject  as   of  the  date  hereof and  as  of  the Lease Commencement Date. Tenant  shall  not  in  the  conduct  of  its  business  or  in  its   use  of  the Premises  do  anything  or  suffer  anything  to  be  done  in  or  about  the  Premises  which  will in  any  way   conflict  with  any  law,  statute,  ordinance  or  other  governmental  rule, regulation  or  :requirement  now  or  hereafter  in   effect, including,  without limitation, the  Americans  with  Disability  Act of  1990  and  local  enactments  thereof  and   promulgations  thereunder (''Applicable Laws''). At  its  sole  cost  and  expense,  Tenant  shall  promptly  comply  with   all  requirements  of Applicable  Laws  affecting  the  Premises,  including, without  limitation,  making  required  changes   to  the  Premises,  the access  thereto  and  common  area  restrooms  therefor,  systems  serving  the  Premises,  and  other   areas  of  the  Project  (other  than  making  structural  changes  or  changes  to  the  Base  Shell  and  Core,  as defined  in  the   Tenant Work  Letter  attached  hereto  as  Exhibit  B) (i)  required  due  to  the  use  and  occupancy  of  the Premises for   other  than  typical  office  uses,  including those  uses  set  forth in  Article  5 above,  or  (ii) required  due  to  repair,   improvement or  alteration  of  the  Premises,  including  any  Alterations  described in  Article  8, but  excluding  the   construction  and  installation  of  the  initial  Tenant  Improvements by  or  for  Tenant  pursuant  to  the  Tenant  Work   Letter. Landlord  shall  deliver  the  Premises  to  Tenant  in compliance   with all Applicable Laws. Subject  to  Article 4,  Landlord  shall  be  responsible  for  compliance with  Applicable Laws  with  respect  to  areas  of  the  Project  not  within   the  Premises  where  such  compliance  measures  are  required  due  to  another  tenant's  use,  occupancy, repair, improvement or  alteration  of  its  premises,  or where  such  compliance  is  not  made  the  responsibility  of  Tenant  as  set   forth above. 25. Late Charges. If  any  installment  of  Rent or  any  other  sum  due  from Tenant  shall  not  be  received  by  Landlord  or   Landlord's  designee  within  five (5)  business  days  after  Tenant's  receipt  of  written  notice  from  Landlord  that  said   amount  is  due, then  Tenant  shall  pay  to  Landlord a  late charge  equal  to five  percent  (5%)  of  the  overdue amount   plus  any  reasonable  attorneys'  fees  incurred  by  Landlord  by  reason  of  Tenant's  failure  to  pay  Rent  and/or  other   charges   when due hereunder. The  late charge shall  be deemed  Additional  Rent  and  the  right  to  require  it  shall  be  in   addition  to  all  of  Landlord's  other  rights  and  remedies  hereunder  or  at  law  and  shall  not  be  construed  as  liquidated   damages  or  as  limiting  Landlord's  remedies  in any manner. In  addition  to  the  late  charge  described  above,  any  Rent   or  other  amounts  owing  hereunder  which  are  not  paid  within  ten  (I  0)  days  after  the  date  they are  due  sl1all bear



    	 



    	 



    



[JSG:se/102994_5.DOC/092404/4040.039] - 38 - ' interest  from  the  date  when  due  until paid  at a  rate  per  aunum  equal  to  the lesser  of (i) the  annual  ''Bank  Prime   Loan''  rate  cited  in  the Federal  Reserve  Statistical  Release  Publication  G.13(415),  published  on  the first  Tuesday  of   each  calendar  month  (or such  other comparable index  as  Landlord  and  Tenant shall  reasonably agree  upon  if  such   rate  ceases  to  be  published)  plus  three  (3) percentage points,  and  (ii)  the  highest  rate  per11litted by  applicable law. 26. Landlord's Right To  Cure  Default;  Payments  By Tenant. ' 1. Landlord's Cure. All covenants  and  agreements  to  be  kept  or performed  by  Tenant  under  this   Lease  shall  be  performed  by  Tenant  at  Tenant's  sole cost  and  expense and  without  any reduction  of  Rent,  except  to   the  extent,  if  any, otherwise   expressly provided herein. If  Tenant  shall  fail  to  perfot'm any  obligation  under  this   Lease,  and  such  failure shall  continue in  excess  of  the  time allowed  under  Section  19.l(b), above,  unless  a  specific   time  period  is  otherwise stated  in this  Lease,  Landlord  may, but shall not  be  obligated  to,  make  any  such  payment  or  perfo1n1 any  such  act  on  Tenant's  part  without  waiving  its  rights  based upon  any  default  of  Tenant  and  witl1out   releasing  Tenant  from  any  obligations hereunder. 2. Tenant's Reimbursement. Except  as  may be  specifically  provided  to  the contrary in  this  Lease,   Tenant  shall pay  to  Landlord, upon  delivery  by  Landlord to Tenant  of statements therefor: (i)  sums  equal  to   expenditures  reasonably  made  and  obligations  incurred  by  Landlord  in  connection  with  the remedying  by  Landlord   of  Tenant's  defaults  pursuant  to  the provisions  of  Section  26.1; (ii) sums  equal  to  all  losses,  costs,  liabilities,   damages  and  expenses  referred  to  in  Article  10 of  this Lease;  and  (iii)  sums equal  to  all  expenditures  made  and   obligations  incurred  by  Landlord  in  collecting  or  attempting  to  collect the  Rent  or  in  enforcing or  attempting  to   enforce  any  rights  of  Landlord  under  this  Lease  or  pursuant  to  law,  including,  without limitation,  all  legal  fees  a11d   other  amounts so  expended. Tenant's obligations  under  this  Section  26.2 shall  survive  the  expiration  or  sooner   termination  of the  Lease Terrn. 27. Entry  By Landlord. Landlord reserves  the  right  at  all  reasonable times  and  upon  reasonable  notice to  Tenant (except  in  the  case   of  an  emergency)  to  enter  the  Premises  to  (i)  inspect  them;  (ii)  show the  Premises  to  prospective  purchasers,   mortgagees,  or  to  current  or  prospective mortgagees,  ground  or  underlying lessors  or  insurers,  or  during  the  last   twelve  (12)  months  of  the  Lease  Term, to  prospective  tenants; (iii)  post  notices  ofnonresponsibility;  or  (iv)  alter,   improve  or  repair the  Premises  or the  Building,  or for  structural  alterations,  repairs  or  improvements  to the  Building  or  the  Building's  systems and equipment. Notwithstanding anything  to  the  contrary  contained  in  this  Article  27,  Landlord  may  enter  the  Premises at  any  time  to  (A)  perforn1 services  required  of  Landlord,  including janitorial   service;  (B)  take  possession  due  to  any  breach  of  this Lease  in  the  manner  provided  herein;  and  (C)  perfor1n any   covenants   of  Tenant  which  Tenant  fails to perform. Subject  to  Section  6.4, Landlord  may  make  any  sucl1  entries   without  the  abatement  of  Rent,  except  as  otherwise  provided  in  this  Lease  and may  take  such  reasonable  steps  as   required  to  accomplish  the stated purposes. Tenant  hereby  waives  any  claims for  damages  or  for  any  injuries  or   inconvenience  to  or  interference  with  Tenant's  business,  lost  profits,  any  loss  of  occupancy  or  quiet  enjoyment  of   the  Premises,  and  any  other  loss  occasioned  thereby;  provided  that the foregoing  shall  not  modify  Landlord's   indemnity  obligations  set  forth  in  Section   I 0.1 above. For each  of  the  above  purposes,  Landlord  shall  at  all  times   have  a  key  with  which  to unlock  all  the  doors  in  the  Premises, excluding  Tenant's  vaults,  safes  and  special security   areas  designated  in  advance by Tenant. In  an  emergency, Landlord  shall  have  the  right  to  use  any  means  tl1at   Landlord  may deem  proper  to  open  the  doors in  and  to the  Premises. Any  entry  into  the  Premises  by  Landlord  in  tl1e   manner  hereinbefore described  shall not  be  deemed  to  be  a  forcible  or  unlawful  entry  into,  or  a  detainer  of,  the   Premises,   or  an  actual  or  constructive  eviction  of  Tenant  from any  portion  of the Premises. No  provision  of  this   Lease shall  be  construed  as  obligating  Landlord to  perfor1n any  repairs,  alterations  or  decorations except  as   otherwise  expressly  agreed  to  be  performed by  Landlord herein. 28. Tenant Parking. 28.1 Tenant Parking. Tenant hereby  agrees  to  license  from  Landlord,  commencing on  the  Lease   Commencement  Date,  the amount  of  parking  passes  set  forth  in  Section  9  of  the  Summary,  on  a  montl1ly  basis   throughout   the  Lease  Te1n1, which  parking  passes  shall  pertain  to  the  Project parking facility. Commencing on  the   earlier  of  the  date  on  which  Tenant  first  occupies the  Premises for  the  conduct  of  business  and  the  Lease   Commencement  Date,  Tenant  shall  pay  to  Landlord  for  automobile  parking passes  on a  monthly  basis  on  tl1e first



    	 



    	 



    



[JSG:se/102994_5.DOC/092404/4040.039] - 39 - day  of  each  month  (after  Base Rent  commences,  with  Tenant's  monthly  payment  of  Base  Rent)  the  prevailing rate   charged  from  time to  time  at  the location  of such parking passes. (Rates  per  pass  for  parking  as  of  the  date hereof   are  $110.00  for unreserved   parking  and  $175.00  for reserved parking.) In  addition,  Tenant shall  be  responsible  for   the  full  amount  of  any  taxes  imposed  by  any  governmental  authority  in  connection  with  the  licensing  of  such   parking  passes  to  Tenant  or  the  use  of  the  parking  facility by Tenant. Tenant's  continued  right  to  use  the  parking   passes  is  conditioned  upon  Tenant  abiding  by  all  rules  and  regulations  which  are  prescribed  from  time  to  time  for  the   orderly  operation  and  use  of  the  parking facility  where  the  parking passes  are  located,  including  any  sticker  or  other   identification  system  established  by  Landlord,  Tenant's  cooperation  in  seeing  that  Tenant's  employees  and  visitors   also  comply with  such  rules  and regulations  and  Tenant  not  being  in  default  under  this Lease. At  its  election, Tenant may  convert  up  to  two  (2)  of  its  parking passes into parking  passes  for  reserved  spaces  upon  at  least  ten  (10)  days   prior  notice to Landlord. Landlord  reserves  the  right  to  convert  any  such  reserved parking  passes  to  valet assist   parking  passes  at  any  time  during  the  Tenn of  this Lease,  provided  that  the  cost  to  Tenant  for  sucl1  passes  shall  not   be  increased   on  account of such  conversion by Landlord. Landlord specifically  reserves  the  right to change  the  size,   configuration, design,  layout  and  all  other  aspects  of  the  Project parking facility  at  any  time  and  Tenant   acknowledges  and  agrees  that  Landlord  may,  without incurring  any  liability  to  Tenant  and  without  any  abatement  of   Rent under  this  Lease,  from  time  to  time,  close - off  or  restrict  access to  the  Project parking  facility  for  purposes  of   pennitting  or  facilitating  any  such  construction,  alteration or improvements. Landlord  may  delegate  its   responsibilities  hereunder  to a  parking  operator  in  which  case  such  parking operator  shall  have  all  the  1·ights  of   control attributed   hereby  to the Landlord. The  parking  passes licensed to Tenant  pursuant  to  this  Article  28 shall  be   provided to  Tenant  solely  for  use  by  Tenant's  own  personnel  and  such  passes may  not  be  transfen·ed,  assigned,   subleased  or  otherwise  alienated  by  Tenant  without  Landlord's  prior approval. Tenant  may  validate  visitor pa1·king by  such  method  or  methods  as  the  Landlord  may  establish,  at  the  validation  rate  from  time  to  time  generally   applicable  to  visitor parking. 2. Visitor P_arking; Validations. The  Project  parking  facility shall  be  operated  to  provide  parking   for  visitors  to  the  Project  at  prevailing  market  rates,  and  the  amount  of  such  visitor parking  shall not  be  less than  that   required  by  applicable  codes, rules  or  regulations  or  governmental   authorities having jurisdiction. Tenant  shall  have   the  right  to  validation  parking  in  the  Building Parking  Area  upon  terms  and  conditions and  subject  to  reasonable   rules  and  regulations   established  from  time  to  time  by  Landlord  or  Landlord's parking operator. If  Tenant purchases   in  any  particular  month  Six  Hundred  Dollars  ($600)  worth  of  parking  validation  stamps,  Tenant  shall  be  entitled  to   purchase additional  validation  stamps,  which  may  be  used  only  in  such  month,  at  seventy - five  percent  (75%)  of  the   then  prevailing  rate  for  such  validation  stamps  charged  by Landlord. 3. After Hours Passes. In  addition  to  the  passes  set  forth  in  Section  28.1, Tenant  is  hereby  granted   the  right  to a license  from  Landlord  without  charge, commencing  on  the  earlier  of  the  date  on  which Tenant  first   occupies  the  Premises  for  the  conduct  of  business and  the  Lease Commencement  Date,  for up  to  ten  (10)  parking   passes  on  a  monthly  basis  throughout the  Lease  Term,  which  parking  passes shall  be  for  parking  in  the  Project   parking facility  only  during  the  hours  of  5:00  pm  to  6:00  am  Monday  through  Friday  and  At  all  hours  on  weekends   (herein, the  ''After Hours Passes''). Any  such  use  of  any After  Hours  Pass  outside  of  said  hours  shall  be  subject  to   charge  therefor  at  the  Project's  transient parking rates. For  each  of  the  After  Hours  Passes  Tenant  shall  pay to Landlord  $27.50  per  month,  at  the  same  time  and  in  the  same  manner  Tenant  is  required  to  pay  for  its  other  parking   passes hereunder. 29. Miscellaneous Provisions. 1. Terms; Captions. The  words  ''Landlord''  and  ''Tenant''  as  used  herein  shall  include  the plural  as   well as the singular. The  necessary grammatical changes  required  to  make  the  provisions  hereof  apply  either  to   corporations  or  partnerships  or  individuals,  men  or  women,  as  the  case  may  require,  shall in  all  cases  be  assumed  as   though  in  each  case fully expressed. The  captions  of  Articles  and  Sections  are  for  convenience  only  and  shall  not  be   deemed to  limit,  construe,  affect  or  alter the  meaning  of such Articles  and Sections. 2. ;Binding Effect. Subject  to  all  other  provisions of  this  Lease,  each  of  the  covenants,  conditions   and  provisions  of  this  Lease shall  extend  to and  shall,  as  the  case  may  require,  bind  or  inure  to  the  benefit  not  only  of   Landlord  and  of  Tenant,  but  also  of  their  respective  heirs,  personal  representatives,  successors  or  assigns,  provided   this  clause  shall  not  pe1111it any  assignment  by  Tenant contrary to  the  provisions  of  Article  14 of  this Lea.se •



    	 



    	 



    



[JSG:se/102994_5.DOC/092404/4040.039] - 40 - 3. No Air Rights. No  rights  to  any  view  or  to  light  or air  over  any  property,  whether  belonging to   Landlord  or  any  other  person,  are  granted  to  Tenant  by this Lease. If  at  any  time  any  wi11dows  of  the  Premises  are   temporarily  darkened  or  the  light  or  view  therefrom  is  obstructed  by  reason  of any  repairs,  improvements,   maintenance   or cleaning  in  or about the Project,  the  same  shall  be  without  liability  to  Landlord  and  without  any   reduction  or  diminution  of  Tenant's  obligations  under this Lease. 4. Antenna. Tenant  shall  be  pernlitted to  install  on  the  roof  of  the  Building  a  satellite  dish  or   antennae  and  related  equipment  (the  ''Antenna'')  pursuant  to  the  terms  of  a license  agreement  to  be  ente1·ed  into   between  Landlord and Tenant. Tenant  shall  be  responsible  for all  costs  of  installation,  repair,  maintenance  and   operation of  the Antenna. 5. Transfer of Landlord's Interest. Tenant  acknowledges  that  Landlord  has  the  right  to  transfer  all   or  any  portion of  its  interest  in  the  Project  or  Building  and  in  this  Lease,  and  Tenant  agrees  that  in  the  eve11t  of  any   such  transfer,  Landlord  shall  automatically  be  released  from  all  liability  under  this  Lease  first  accruing  after the  date   of such  transfer  and  Tenant  agrees  to  look  solely  to  such  transferee for the  performance  of  Landlord's  obligations   hereunder  after  the  date  of  transfer  and  such  transferee  shall  be  deemed  to  have fully assumed  and  be  liable  for  all   obligations  of  this  Lease  to  be  performed  by  Landlord,  including the  return  of  any  Security  Deposit,  and  Tenant   shall  attom  to such transferee. Tenant  further  acknowledges  that  Landlord  may  assign its interest  in  this  Lease  toa   mortgage  lender  as  additional  security  and  agrees  that  such  an  assignment shall  not  release  Landlord  from its obligations  hereunder  and  that Tenant  shall  continue  to  look  to  Landlord  for  the  perfor111ance of its  obligations   hereunder. 6. Prohibition Against Recording. Except  as  provided  in  Section  29.4 of  this  Lease,  neither  this   Lease,  nor  any  memorandum,  affidavit or  other  writing  with  respect  thereto, shall  be  recorded  by  Tenant  or  by   anyone  acting  through,  under  or on  behalf of Tenant. 7. Landlord's Title. Landlord's  title  is  and  always  shall  be  paramount  to  the  title  of  Tenant.   Nothing  herein  contained  shall  empower  Tenant  to  do  any  act  which  can,  shall  or  may encumber  the  title  of   Landlord. 8. Relationship of Parties. Nothing  contained  in  this  Lease  shall  be  deemed  or  construed  by  the   parties  hereto or  by  any  third  party  to create  the  relationship  of  principal  and  agent,  partnership,  joint  venturer  or  any   association  between  Landlord  and Tenant. 9. Application of Payments. Landlord  shall  have  the  right to apply  payments  received  from  Tenant   pursuant  to  this Lease,  regardless  of  Tenant's  designation of  such  payments,  to  satisfy  any  obligations  of  Tenant   hereunder,  in  such  order  and  amounts  as  Landlord,  in  its  sole  discretion,  may elect. . 29.10 Time of Essence. Time  is  of  the  essence  with  respect  to  the  perforn1ance of  every  provision of this  Lease  in  which time of performance  is  a factor. 11. Partial Invalidity. If  any  ten11, provision  or  condition contained  in  this  Lease  shall,  to  any  exte11t,   be  invalid  or  unenforceable,  the  remainder  of  this  Lease,  or  the  application  of  such  terr11, provision  or  conditio11  to   persons  or  circumstances  other  than  those with  respect  to  which it  is invalid  or  unenforceable,  shall  not  be affected thereby,  and  each  and  every  other  term,  provision  and  condition  of  this  Lease  shall  be  valid  and  enforceable  to  the   fullest  extent  possible  per1nitted by law. 12. No Warranty. In  executing  and  delivering  this  Lease,  Tenant  has  not  relied  on  any   representations,  including,  but  not  linlited  to,  any  representation  as  to  the  amount  of any  item  comprising  Additional   Rent  or  the  amount  of  the  Additional  Rent  in  the  aggregate  or  that  Landlord  is  furnishing  the same  services  to  other tenants,  at  all,  on  the  same  level  or  on  the  same  basis,  or  any  warranty  or  any  statement  of  Landlord  which  is  not set   forth  herein  or  in  one  or more  of  the  exhibits  attached hereto. 13. Landlord Exculpation. The  liability  of  Landlord  or  the  Landlord  Parties  to  Tenant for any   default  by  Landlord  under  this  Lease  or  arising  in  connection  herewith  or  with  Landlord's  operation, management,



    	 



    	 



    



leasing,  repair,  renovation,  alteration  or  any  other  matter  relating  to  the  Project  or  the  Premises shall  be  limited   solely  and  exclusively  to  the interest  of  Landlord  in  the  Building  and  other  assets  of  Landlord  relating  directly  to  the   Project  (such  as operating  account,  insurance  and  sales proceeds  and  condemnation awards). Neither  La11dlord,  nor   any  of  the  Landlord  Parties  shall  have  any  personal  liability  therefor,  and  Tenant  hereby  expressly  waives  and   releases  such  personal  liability  on  behalf  of  itself  and  all  persons  claiming  by,  through  or under Tenant. The   limitations  of  liability  contained  in  this  Section  29.13 shall  inure  to  the  benefit  of  Landlord's  and  the  Landlord   Parties'  present  and  future partners, beneficiaries,  officers,  directors,  trustees,  shareholders,  agents  and  employees,   and  their  respective   partners,  heirs,  successors and assigns. Under  no  circumstances  shall  any  present  or  future   partner of  Landlord  (if  Landlord  is  a  partnership),  or  trustee  or beneficiary (if  Landlord  or  any  partner  of  Landlord  is   a  trust),  have  any  liability  for  the  performance   of  Landlord's  obligations  under this Lease. Notwithstanding  any   contrary provision herein,  neither  Landlord  nor  the  Landlord Parties  shall  be  liable under  any  circumstances  for   injury  or  damage  to,  or  interference  with,  Tenant's  business,  including  but  not  limited to,  loss  of  profits,  loss  of  rents   or  other  revenues, loss  of business  opportunity, loss  of  goodwill  or  loss  of  use,  in  each  case, however occurring. 14. Entire Agreement. It  is  understood  and  acknowledged  that  there  are  no  oral agreements  between   the  parties  hereto  affecting  this  Lease  and  this  Lease  constitutes  the  parties'  entire  agreement  with  respect  to  the   leasing  of  the  Premises  and  supersedes  and  cancels  any  and  all  previous negotiations, arrangements,  brochures,   agreements  and  understandings,  if  any,  between  the  parties  hereto  or displayed  by Landlord  to Tenant  with  respect   to  the  subject  matter  thereof,  and  none  thereof  shall  be  used  to  interpret  or  construe  this Lease. None  of  the  terms,   covenants, conditions  or  provisions  of  this  Lease  can  be  modified,  deleted or  added  to  except  in  writing signed  by   the  parties hereto. 15. Right to Lease. Landlord  reserves  the absolute  right  to  effect  such  other  tenancies  in  the Project   as  Landlord  in  the exercise  of  its  sole  business judgment shall  determine  to  best promote  the  interests  of  the  Building   or Project. Tenant  does  not  rely  on  the  fact,  nor does  Landlord represent,  that  any  specific  tenant  or  type  or  number   of  tenants shall,  during  the  Lease  Te1·1n, occupy  any  space  in  the  Building  or Project. 16. Force Majeure. Any  prevention,  delay  or  stoppage  due  to  strikes, lockouts,  labor disputes,  acts   of  God,  inability  to obtain  services,  labor,  or  materials  or  reasonable  substitutes therefor,  governmental  actions,  civil   commotions,  fire  or  other  casualty,  and  other  causes  beyond  the  reasonable  control  of  the  party  obligated  to  perform,   except  with  respect  to  the  obligations  imposed  with  regard  to  Rent  and  other  charges  to  be  paid  by  Tenant  pursuant   to  this  Lease  and  except  as  to  Tenant's  obligations  under  Articles  5 and  24 of  this  Lease  (collectively,  a  ''Force   Majeure''),  notwithstanding  anything  to  the  contrary contained  i11  this  Lease,  shall  excuse the  performance of such   party  for  a  period  equal  to  any  such  prevention,  delay  or  stoppage  and,  therefore,  if  this  Lease specifies  a  time  period   for  performance of  an  obligation  of  either  party,  that  time  period  shall  be  extended  by  the  period of  any  delay  in   such  party's  perfo11nance caused  by  a Force Majeure. 17. Waiver   of  Redemption by Tenant. Tenant  hereby  waives,  for  Tenant  and  for  all  tl1ose  claiming   under Tenant,  any  and  all  rights  now  or  hereafter  existing  to  redeem  by  order  or  judgme11t  of  any  court  or  by  any   legal process  or  writ,  Tenant's  right  of  occupancy  of  the  Premises  after  any  termination  of this  Lease. 18. Notices. All  notices,  demands,  statements, designations, approvals or  other  communications   (collectively,  ''Notices'')  given  or  required  to  be  given  by  either  party  to  the  other  hereunder  or  by  law  shall  be  in   writing,  shall  be (A)  sent  by  United States  certified  or  registered  mail,  postage  prepaid,  return  receipt  requested   (''Mail''),  (B)  transmitted  by  telecopy,  if  such  telecopy  is  promptly  followed  by  a  Notice  sent  by  Mail  or  a  nationally   recognized  overnight  courier,  (C)  delivered  by  a  nationally  recognized overnight  courier,  or  (D)  delivered  personally. Any  Notice shall  be  sent,  transmitted,  or  delivered,  as  the  case  may  be,  to  Tenant  at  the appropriate   address  as set  forth  in  Section  10  of  the  Summary,  or  to  such  other  place  as  Tenant may from  time  to  time  desig11ate   in  a  Notice  to  Landlord,  or  to Landlord  at  the  addresses  set  forth  below,  or  to  such  other  places  as  Landlord may   from  time  to  time  designate   in  a  Notice to Tenant. The  effective date  of  any  Notice shall  be  the  date  of  delivery  01·   tl1e  date  delivery  is  first  refused,  provided,  however, that  for  delivery  by  telecopy,  any  delivery  after  4:00  p.m.  on  a   business   day  shall  be  the  next business day. If  Tenant  is  notified  of  the  identity  and  address  of  Landlord's   mortgagee  or  ground  or  underlying  lessor,  Tenant  shall  give  to such mortgagee  or  ground  or  underlying  lessor   written  notice  of  any  default  by  Landlord  under  the  terms  of  this  Lease  by  registered  or  certified  mail,  and  such   mortgagee  or  ground  or  underlying  lessor  shall  be  given  a reasonable  opportunity  to  cure  such  default  prior to (JSG:se/102994_5.DOC/092404/4040.039] - 41 -



    	 



    	 



    



[JSG:se/102994_5.DOC/092404/4040.039] - 42 - Tenant's  exercising  any  remedy  available to Tenant. As  of  the  date  of  this Lease,  any  Notices  to  Landlord  must  be   sent,  transmitted,  or  delivered, as  the  case  may  be,  to  the  following addresses: Wilshire  Courtyard  L.L.C.   5750  Wilshire Boulevard Lo s Angeles , Californi a 90036   Attention: Building Manager and Gilchrist  &  Rutter  Professional  Corporation   1299  Ocean  Avenue,  Suite 900 Santa  Monica,  California  9040  I   Attention: Jonathan  S.  Gross, Esq. 19. Joint and Several. If  there  is more  than  one  Tenant,  the  obligations imposed  upon Tenant  under   this  Lease  shall  be  joint and several. 20. Authority. If  Tenant  is  a  corporation,  trust  or  partnership,  each  individual  executing this  Lease  on   behalf of  Tenant  hereby  represents  and  warrants  that  Tenant  is  a  duly  fo1·111ed and  existing  entity  qualified  to  do   business  in  California  and  that  Tenant  has  full  right  and  authority  to  execute  and  deliver  this  Lease  and  that  eacl1   person  signing  on  behalf of  Tenant is  authorized  to  do  so.  In  such  event,  Tenant  shall,  within  ten  (10)  days  after   execution  of  this  Lease,  deliver to  Landlord  satisfactory  evidence  of such  authority  and,  if  a  corporation,  upon   demand  by  Landlord,  also  deliver  to  Landlord  satisfactory  evidence of  (i) good  standing  in  Tenant's  state  of   incorporation  and  (ii) qualification  to  do  business  in California. 21. Attorneys' Fees. In  the  event  that either  Landlord  or  Tenant should bring suit  for  the  possession   of  the  Premises, for  the  recovery  of  any  sum  due  under  this  Lease,  or  because  of  the breach  of  any  provision  of  this   Lease  or  for  any  other relief  against the  other,  then  all  costs  and  expenses, including  reasonable  attorneys'  fees,   incurred  by  the  prevailing  party  therein  shall  be  paid  by  the  other  party,  which  obligation  on  the part  of  the  other   party  shall  be  deemed  to have  accrued on  the  date  of  the  commencement  of such  action  and  shall  be  enforceable   whether  or  not  the  action  is  prosecuted  to judgment. 22. Governing Law;  WAIVER   OF  TRIAL BY JURY. This  Lease  shall  be  construed  and  enforced   in  accordance   with  the laws  of  the  State of California. IN  ANY  ACTION  OR  PROCEEDING  ARISING   HEREFROM,  LANDLORD  AND  TENANT HEREBY  CONSENT  TO  (I)  THE  JURISDICTION  OF  ANY   COMPETENT  COURT  WITHIN  THE  STATE  OF  CALIFORNIA,  (II)  SERVICE  OF  PROCESS  BY  ANY   MEANS  AUTHORIZED  BY  CALIFORNIA  LAW,  AND  (III)  IN  THE  INTEREST  OF  SAYING  TIME AND   EXPENSE,  TRIAL  WITHOUT  A  JURY IN  ANY  ACTION,  PROCEEDING  OR  COUNTERCLAIM  BROUGHT   BY  EITHER  OF  THE  PARTIES HERETO  AGAINST  THE  OTHER  OR  THEIR  SUCCESSORS  IN RESPECT  OF   ANY  MATTER  ARISING  OUT  OF  OR  IN  CONNECTION  WITH  THIS  LEASE,  THE  RELATIONSHIP  OF   LANDLORD  AND  TENANT,  TENANT'S  USE  OR  OCCUPANCY  OF THE  PREMISES, AND/OR  ANY  CLAIM   FOR  INJURY  OR  DAMAGE,  OR  ANY EMERGENCY  OR STATUTORY REMEDY. IN THE  EVENT   LANDLORD  COMMENCES  ANY  SUMMARY  PROCEEDINGS  OR  ACTION  FOR  NONPAYMENT  OF  BASE   RENT  OR  ADDITIONAL  RENT,  TENANT  SHALL  NOT  INTERPOSE  ANY  COUNTERCLAIM  OF  ANY   NATURE  OR  DESCRIPTION (UNLESS  SUCH  COUNTERCLAIM SHALL  BE  MANDATORY)  IN ANY  SUCH   PROCEEDING  OR  ACTION,  BUT  SHALL  BE  RELEGATED  TO  AN  INDEPENDENT  ACTION  AT LAW. 23. Submission of Lease. Submission of  this  instrument  for  examination or  signature  by  Tenant  does   not  constitute  a  reservation  of,  option  for  or  option  to  lease,  and  it  is  not effective  as  a lease  or  otherwise until   execution  and  delivery  by  both  Landlord  and Tenant. 24. Brokers. Landlord  and  Tenant hereby  warrant  to  each  other  that  they  have  had  no  dealings  with   any real  estate  broker  or  agent  in  connection  with  the  negotiation of  this  Lease,  excepting  only  the  real  estate  brokers   or  agents  specified in  Section  12  of  the  Summary  (the  ''Brokers''),  and  that  they  know  ofno  other  real  estate  broker   or  agent  who  is  entitled  to  a commission  in  connection   with this Lease. Each  party  agrees  to  indemnify  and defend



    	 



    	 



    



- 43 - [JSG:se/102994_5.DOC/092404/4040.039] • the  other party  against  and  hold the  other  party  harmless from  any  and  all claims,  demands,  losses,  liabilities,   lawsuits,  judgments,  costs  and  expenses  (including without  limitation reasonable  attorneys'  fees)  with  respect  to  any   leasing  commission  or  equivalent  compensation  alleged  to  be owing on  account  of  any  dealings with  any  real  estate   broker  or  agent,  other  than  the Brokers,   occurring by,  through,  or  under   the indemnifying party. Landlord  covenants   and  agrees  to  pay  all  real  estate commissions  due  in  connection  with  this  Lease to  Brokers  in  accordance  with  the   commission  agreement  executed  by Landlord. 29.25 Independent Covenants. This Lease  shall  be  construed  as  though  the  covenants  herein  between   Landlord  and  Tenant  are  independent  and  not  dependent  and  Tenant  hereby  expressly  waives  the  benefit  of any statute  to  the  contrary  and  agrees  that  if  Landlord  fails  to  perform  its  obligations  set  forth  herein,  Tenant shall  not  be   entitled  to  make  any  repairs or  perform  any  acts hereunder  at  Landlord's  expense  or  to  any  setoff  oftl1e Rent  or   other amounts  owing  hereunder  against Landlord. 26. Project  or  Building   Name and Signage. Landlord  shall  have  the  right  at  any  time to  change  the   name  of  the  Project  or  Building  and to  install,  affix  and  maintain  any  and  all  signs  on  the  exterior  and  on  the  interior   of  the  Project  or  Building  as  Landlord   may,  in  Landlord's  sole discretion, desire. Tenant  shall  not  use  the  name  of   the  Project  or  Building  or  use  pictures  or  illustrations  of  the Project or  Building  in  advertising  or  other publicity  or   for  any  purpose other  than  as  the  address  of  the  business to  be  conducted  by  Tenant  in  the  Premises,  without  the   prior  written  consent  of Landlord. 27. Counterparts. This  Lease  may  be  executed  in  counterparts  with  the  same  effect  as  if  both  parties   hereto  had  executed   the same document. Both  counterparts  shall  be  construed  together  and  shall  constitute  a  single   lease. 28. Confidentiality. Landlord  and  Tenant  acknowledge  that  the  content  of  this  Lease  and  any  related   documents  are confidential information. Landlord and  Tenant  shall  keep  such  confidential information  strictly   confidential  and  shall not  disclose  such  confidential  information  to  any  person  or  entity  other  than  their  respective   financial, legal,  and  space planning  consultants and  their  respective  lenders,  investors,  partners,  managers,  brokers,   members,  officers  and directors. 29. Transportation Management. Tenant  shall  fully comply  with  all  present  or  future  programs   intended  to  manage  parking,  transportation  or  traffic  in  and  around  the Building, and  in  connection  tl1erewith,   Tenant  shall  take  responsible  action  for the  transportation  planning  and  management  of  all  employees  located  at  the   Premises  by  working  directly  with  Landlord,  any  governmental  transportation management  organization  or  any   other  transportation - related committees  or entities. 30. Building Renovations. It  is  specifically  understood  and  agreed  that  Landlord  has made  no   representation  or  warranty  to Tenant  and  has  no  obligation  and has  made  no  promises  to  alter,  remodel,  improve,   renovate,  repair  or  decorate  the  Premises,  Building,  or  any  part  thereof and that  no  representations  respecting  the   condition  of  the  Premises  or  the  Building  have  been  made  by  Landlord  to Tenant  except  as  specifically  set  forth   herein  or  in  the  Tenant Work Letter. However,  Tenant  hereby  acknowledges  that  Landlord  is  currently renovating   or  may  during  the  Lease  Ter1n renovate,  improve,  alter,  or  modify  (collectively,  the  ''Renovations'')  the Project, the   Building and/or  the  Premises  including  without limitation  the  parking structure,  common  areas,  systems  and   equipment, roof,  and  structural  portions of  the  same,  which Renovations  may  include, without  limitation,  (i)   installing  sprinklers in  the  Building  common  areas  and  tenant spaces, (ii)  modifying  the  common  areas  and  tenant   spaces  to  comply  with  applicable  laws  and  regulations,  including  regulations relating  to  the  physically  disabled,   seismic  conditions, and  building  safety  and  security,  and  (iii)  installing  new  floor covering,  lighting,  and  wall   coverings  in  the  Building  common  areas,  and  in  connection  with  any  Renovations,  Landlord  ma:y,  among  other   things,  erect  scaffolding  or  other  necessary  structures  in  the Building,  limit  or eliminate  access  to  portions  of  the . Project, including  portions  of  the  common  areas,  or  perfo11n work  in  the  Building,  which  work  may  create noise, dust  or leave  debris  in the  Building. Provided  Tenant  is  afforded  reasonable access  to  the Premises,  Tenant  hereby   agrees  that  such Renovations  and  Landlord's  actions in connection  with  such  Renovations shall  in  no  way  constitute   a  constructive  eviction  of  Tenant  nor,  except  as  otherwise  provided  herein,  entitle  Tenant  to  any  abatement  of  Rent.   Landlord  shall  have no  responsibility  or  for  any  reason  be  liable  to  Tenant for  any  direct or  indirect  injury  to  or   interference  with  Tenant's  business  arising  from  the  Renovations,  nor  shall Tenant  be  entitled  to  any  compensation   or  damages  from  Landlord  for  loss  of  the  use  of  the  whole  or  any  part of the  Premises  or of Tenant's personal



    	 



    	 



    



- 44 - [JSG:se/102994_5.DOC/092404/4040.039] property  or  improvements  resulting  from  the  Renovations  or  Landlord's  actions  in  connection  with  such   Renovations,  or  for  any  inconvenience  or  annoyance  occasioned  by  such  Renovations  or  Landlord's  actions;   provided that the foregoing shall  not modify Landlord's indemnity obligations set forth in Section 10.1 above. 31. No Violation. Tenant  hereby  warrants  and  represents  that  neither  its  execution of  nor   performance  under  this  Lease  shall cause Tenant  to  be  in  violation  of  any  agreement,  instrument,  contract,  law, rule   or  regulation  by  which  Tenant is  bound,  and  Tenant  shall  protect,  defend,  indemnify  and  hold  Landlord  harmless   against  any  claims,  demands,  losses, damages, liabilities,  costs  and expenses, including,  without  limitation,   reasonable  attorneys'  fees  and  costs,  arising  from  Tenant's  breach  of this  warranty  and representation. 32. Communications and Computer Lines. Tenant  may  install,  maintain,  replace,  remove  or  use   any  communications  or  computer  wires  and  cables  (collectively,  the  ''Lines'')  at  the  Project  in  or  serving  the   Premises,  provided  that  (i)  Tenant  shall  obtain  Landlord's  prior  written  consent  (which  shall  not  be  unreasonably   withheld),  use  an  experienced  and  qualified  contractor  approved  in  writing  by  Landlord,  and  comply  with  all  of  the   other  provisions  of  Articles  7 and  of  this  Lease,  (ii)  reasonable  riser  capacity  shall  be  maintained  for  existing  and   future  occupants  of  the  Project,  as  determined  in  Landlord's  reasonable  opinion,  (iii) the  Lines  therefor  (including   riser  cables)  shall  be  appropriately  insulated  to  prevent  excessive  electromagnetic  fields  or  radiation,  and  shall  be   surrounded  by  a  protective  conduit  reasonably  acceptable  to  Landlord,  (iv)  any new  or  existing  Lines  servicing  the   Premises shall  comply  with  all  applicable governmental  laws  and  regulations,  (v)  as  a  condition  to  permitting the   installation  of  new Lines,  Landlord may  require  that  Tenant  remove  existing  Lines  located  in  or  serving  the   Premises  and  repair  any  damage  in  connection  with such  removal,  and  (vi)  Tenant  shall  pay  all  costs  in  connection   therewith. Landlord  reserves the  right  to  require  that  Tenant  remove  any  Lines  located in  or  serving  the  Premises   which  are  installed  in  violation of  these provisions,  or  which  are  at  any  time in  violation  of  any  laws  or  represent  a   dangerous  or  potentially dangerous condition. 33. Development of  the Project. (a) Subdivision. Landlord  reserves the  right  to  further subdivide all  or  a  portion  of  the   Project. Tenant  agrees  to  execute  and  deliver,  upon  demand  by  Landlord  and  in  the  form  requested  by  Landlord,   any  additional  documents needed  to  conform  this  Lease  to  the  circumstances  resulting  from  such subdivision. (b) The Other Improvements. If  portions  of  the  Project  or  property  adjacent  to  the  Project   (collectively,  the  ''Other  Improvements'')  are  owned  by  an  entity  other  than  Landlord, Landlord,  at  its  option,  may   enter  into  an  agreement  with  the  owner or owners  of  any  or  all  of  the  Other  Improvements  to provide  (i) for   reciprocal  rights  of access  and/or  use  of  the  Project  and  the  Other  Improvements, (ii)  for  the  common  management,   operation, maintenance, improvement  and/or  repair  of  all  or  any  portion  of  the  Project  and  the  Other Improvements, (iii)  for  the  allocation  of  a  portion  of the Direct  Expenses  to  the  Other  Improvements  and  the  operating expenses  and   taxes  for  the  Other  Improvements  to  the Project,  and  (iv)  for  the  use  or  improvement  of  the  Other  In1provements   and/or  the  Project  in  connection  with  the  improvement,  construction,  and/or  excavation  of  the  Other  Improvements   and/or the  Project. Nothing contained herein shall  be  deemed  or  construed  to  limit  or  otherwise  affect  Landlord's   right  to  convey  all  or  any  portion  of  the  Project  or  any  other  of  Landlord's  rights  described  in  this Lease. (c) Construction   of Project  and Other Improvements. Te11ant  acknowledges  that  portions   of  the  Project  and/or  the  Other  Improvements  may  be  under construction  following  Tenant's  occupancy  of  the   Premises, and  that  such  construction  may  result  in  levels  of  noise,  dust,  obstruction  of  access,  etc.  wl1ich  are  in   excess  of  that present   in  a  fully constructed project. Tenant  hereby  waives any  and  all  rent  offsets  or  claims  of   constructive eviction  which  may  arise  in  connection  with  such construction. 29.34 Hazardous Materials. Landlord  represents  and  warrants  to  Tenant  that  to  the  best of Landlord's   knowledge,  the  Project  and  all  improvements  therein  have  been  and  will  be  constructed  without  the  use  of  asbestos   or  any  other Hazardous  Materials (as  defined  below)  known  to  be  hazardous at  the  time  of  its  installation,  and,  to  the   best  of  Landlord's  knowledge,  no  Hazardous  Materials  currently  affect  the  Project  in  a  materially  adverse  ma1mer.   Landlord  and  Tenant  will  not,  at  any  time,  use  or  authorize the  use  of  any  portion  of  the  Premises,  tl1e  Building,   parking  facilities,  or  the  Project  to be  used  in violation  of  any  applicable  laws  relating  to  environmental  conditions   on, under  or  about  the  Project,  including  but  not  limited  to  asbestos,  soil  and  ground  water  conditions  and  Hazardous   Materials. Neither  Landlord  nor  Tenant  shall  at any  time  use,  generate,  store  or  dispose  of  on,  under  or  about the



    	 



    	 



    



- 45 - [JSG:se/102994_5.DOC/092404/4040.039] Building  or  transport to  or  from  the  same  any  Hazardous  Materials  or  permit  or  allow  any  third  party  to  do  so,   without  compliance   with  all applicable laws. Landlord  and  Tenant  shall  defend, indemnify  and  hold  the  other   harmless  from  and  against  any  and  all  losses,  damages,  costs  (including  reasonable  attorneys'  fees),  liabilities  and   claims  arising  from  their  respective  failure to  perfor1n in  accordance   with the foregoing. Any  costs  or  expenses   incurred  with  respect  to Hazardous  Materials  at  the  Project  in  violation  of  Landlord's  representation  and  warranty  in   this  Section  29.34 shall  not  be  included  in Operating Expenses. For  purposes  of  this  Section  29.34, the  ter111 ''to  the   best  of  Landlord's  knowledge''  means  the present,  actual  knowledge  of  persons  directly employed  by  Landlord  or   any of its affiliates. As  used  herein,  the  term  ''Hazardous  Materials''  means  any  hazardous  or  toxic  substance   which  is listed  or  defined  as  a ''hazardous waste,"  ''restricted hazardous  waste,"  or  ''hazardous  substance''  under  any   municipal, state  or  federal  law,  code  or other  regulation,  or which  would  require removal,  treatment  or  remedial   action  pursuant to  standards  established   by  the California  Depa1·t111ent of Health Services. This  Section  29.34 shall   not  be  construed  to  limit  the  provisions  of  Article  5 nor  to  permit use  or  storage  of  Hazardous  Materials at  the   Project  other  than  in  immaterial  quantities  necessary  to  the  uses  permitted  under  Article  5 and  which  do not  require   any  permit  or  variance  from  governmental  authority  having jurisdiction. [signatures appear  on  the following page]



    	 



    	 



    



IN  WITNESS  WHEREOF,  Landlord  and  Tenant have  caused  this  Lease  to  be  executed  the  day  a11d  date   first  above written. ''Landlord'': WILSHIRE COURTYARD L.L.C., - 46 - [JSG:se/102994_5.DOC/092404/4040.039] a  Delaware 1· ·ted  liability comp By:_ Name : _. Title: ----- ' • ''Tenant'': WPT  ENTERPRISES, INC., a Delaware co oration By: · -- = Name:" Title: - By:  Name:_   Title: 'A: N , -- ' --- =