Unassociated Document


    EXHIBIT
      10.4

     

     

    COMMERCIAL
      LEASE FORM

     

    1. Parties.
      This
      Lease date April 27, 1995, is made by and between The Richlar Partnership (a
      California general partnership) (herein
      called "Lessor") and Digital Domain (a New York General Partnership) (herein
      called "Lessee”).

     

    2. Premises.
      Lessor
      hereby leases to Lessee and Lessee leases from Lessor for the term, at the
      rental, and upon all of the conditions set forth herein, that certain premises
      situated in the County of Los Angeles, State of California, commonly known
      as
      362 Main Street, Venice, California, consisting of approximately 13,100 square
      feet of mezzanine offices and warehouse (herein called “The Premises”).

     

    3. Term.

     

    3.1
      Term. The
      term
      of this Lease shall be for one (1) year commencing on June 1, 1995 and ending
      on
      May 31, 1996 unless sooner
      terminated pursuant to any provision hereof.

     

    3.2
      Delay In Commencement.
      Notwithstanding said commencement date, if for any reason Lessor cannot deliver
      possession of the Premises to Lessee on said date, Lessor shall not be subject
      to any liability therefor, nor shall such failure affect the validity of
this
      Lease or the obligations of Lessee hereunder or extend the term hereof, but
      in
      such case Lessee shall not be obligated to pay rent
      until possession of the Premises is tendered to Lessee. If Lessee occupies
      the
      Premises prior to said commencement date (any such occupancy to be only with
      Lessor’s consent), such occupancy shall be subject to all provisions hereof,
      such occupancy shall not advance the termination date, and Lessee shall pay
      rent
      for such period at the initial monthly rates set forth below.

     

    4. Rent.
      Lessee
      shall pay to Lessor rent for the Premises at an annual rate of $125,760.00
      payable in equal monthly payments of $10,480.00
      in advance, on the first day of each month of the term hereof. Lessee shall
      pay
      Lessor upon execution hereof $10,480.00 as
      rent
      for June, 1995. Rent for any period during the term hereof which is for less
      than one month shall be a pro
      rata
      portion of the monthly installment. Rent shall be payable without deduction
      or
      offset, in lawful money of the United States, to Lessor at the address
stated
      herein or to such other persons or at such other places as Lessor may designate
      in writing.

     

    5. Security
      Deposit.
      Lessee
      shall deposit with Lessor upon execution hereof $10,480.00 as security for
      Lessee's faithful performance
      of Lessee's obligation hereunder. If Lessee fails to pay rent or other charges
      due hereunder, or otherwise defaults with respect
      to any provision of this Lease, Lessor may use, apply or retain all or any
      portion of said deposit for the payment of any rent or any
      other
      charge in default beyond any applicable grace period or for the payment of
      any
      other sum which the Lessor may spend or become obligated to spend by reason
      of
      Lessee's default, or to compensate Lessor for any loss or damage which Lessor
      may suffer thereby.
      If Lessor so uses or applies all or any portion of said deposit, Lessee shall
      within ten (10) days after demand therefor deposit
      cash with Lessor in an amount sufficient to restore said deposit to the full
      amount hereinbefore stated and Lessee's failure to do so shall be a material
      breach of this Lease. Lessor shall not be required to keep said deposit separate
      from its general accounts. If Lessee
      performs all of Lessee's obligations hereunder as of the expiration of the
      Lease, said deposit, or so much thereof as has
      not
      been theretofore
      applied by Lessor, shall be returned, without payment of interest or other
      increment for its use, to Lessee
      (or, at Lessor's option, to the last assignee, if any, of Lessee's interest
      hereunder) at the expiration of the term hereof, and after Lessee has vacated
      the Premises, No trust relationship is created herein between Lessor and Lessee
      with respect to said Security Deposit.

     

    6. Use

    


    6.1
      Use.
      The
      Premises shall be used and occupied only for an entertainment, communications,
      computer applications and film production firm and related office and support
      functions and parking therefor and for no other purpose.

    


    6.2
      Compliance with Law.
      Lessee
      shall, at Lessee's expense, comply promptly with all applicable statutes,
      ordinances, rules, regulations,
      orders, restrictions of record, and requirements in effect during the term
      or
      any part of the term hereof regulating the use by Lessee of the Premises, Lessee
      shall not use nor permit the use of the Premises in any manner that will tend
      to
      create waste or a nuisance
      or, if there shall be more than one tenant in the building containing the
      Premises, shall tend to disturb other tenants.

    


    
      
        
        

      

      
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    6.3
      Condition of Premises. (See Addendum-Paragraph 27.)
      Lessee
      hereby accepts the Premises in their condition existing as of
      the
      date of the execution hereof, subject to all applicable zoning, municipal,
      county and state laws, ordinances and regulations governing
      and regulating the use of the Premises, and accepts this Lease subject thereto
      and to all matters disclosed thereby and by any exhibits attached hereto. Lessee
      acknowledges that neither Lessor nor Lessor's agent has made any representation
      or warranty as
      to the
      suitability of the Premises for the conduct of Lessee's business.

    


    7. Maintenance,
      Repairs and Alterations.

    


    7.1
      Lessee's Obligations.
      Lessee
      shall keep in good order, condition and repair the Premises and every part
      thereof, structural (excepting pre-existing structural defect) and
      nonstructural whether or not such portion of the Premises
      requiring repair, or the means of repairing the same are reasonable or
readily
      accessible to Lessee and whether or not the need for
      such
      repairs occurs as a result of Lessee's use, any prior use, the elements
      or age of such portion of the equipment within the Premises, fixtures, walls
      (interior and exterior), foundations, ceilings, roofs
      (interior and exterior), floors, windows, doors, plate glass and skylights
      located within the Premises, and all landscaping, driveways,
      parking lots, fences and signs located on the Premises and sidewalks and
      parkways adjacent to the Premises.

     

    7.2
      Surrender.
      On the
      last day of the term hereof, or on any sooner termination, Lessee shall
      surrender the Premises to Lessor in good
      condition and repair, broom clean, ordinary wear and tear and casualty excepted.
      Lessee shall repair any damage to the Premises
      occasioned by the installation and/or removal of Lessee's trade fixtures,
      furnishings and equipment pursuant to Paragraph 7.5(d),
      which repair shall include without limitation the patching and filling of holes
      and repair of structural damage.

     

    7.3
      Lessor's Rights.
      If
      Lessee fails to perform Lessee's obligations under this Paragraph 7, Lessor
      may
      at its option (but shall not be required to) enter upon the Premises, after
      ten
      (10) days' prior notice to Lessee, and put the same in good order, condition
      and
      repair, and the reasonable cost thereof together with interest thereon at the
      maximum rate permitted by law shall become due and shall
      be
      collectible as additional rental to Lessor together with Lessee's next rental
      Installment.

     

    7.4
      Lessor's Obligation. (See Addendum-Paragraph 23.)
      Except
      for the obligations of Lessor under Paragraph 9 (relating
      to destruction
      of the Premises) and under
      Paragraph 14 (relating to condemnation of the Premises), it is intended by
      the
      parties hereto that Lessor have no obligation, in any manner whatsoever, to
      repair and maintain the Premises nor the building located thereon nor
the
      equipment therein, whether structural or non-structural, excepting pre-existing
      structural defects, all of which obligations are intended to be those of Lessee
      under Paragraph
      7.1 hereof. Lessee expressly waives the benefit of any statute now or
      hereinafter in effect which would otherwise afford Lessee
      the right to make repairs at Lessor's expense or
      to
      terminate this Lease because of Lessor’s failure to keep the Premises in
good
      order, condition and repair.

     

    7.5
      Alterations and Additions.

     

    (a) Lessor
      may require Lessee to provide Lessor, at Lessee's sole cost and expense, a
      lien
      and completion bond in an amount equal to one and one-half times the estimated
      cost of such improvements, to insure Lessor against any liability for mechanic's
      and materialmen's
      liens and to insure completion of the work. Should Lessee make any alterations,
      improvements, additions or Utility Installations
      without the prior approval of Lessor, Lessor may require that Lessee remove
      any
      or all of the same.

    


    (b) Deleted.

     

    (c) Lessee
      shall pay, when due, all claims for labor or materials furnished or alleged
      to
      have been furnished to or for Lessee at or for
      use
      in the Premises, which claims are or may be secured by any mechanic's or
      materialmen's lien against the Premises or any interest
      therein. Lessee shall give Lessor not less than ten (10) days' notice prior
      to
      the commencement of any work in the Premises, and
      Lessor shall have the right to post notices of non-responsibility in or on
      the
      Premises as provided by law. Lessee shall discharge,
      by bond or otherwise, within ten (10) days after the filing thereof, any
      mechanic's lien filed against the Premises for work claimed
      to have been done for, or materials claimed to have been furnished to, Lessee.
      If Lessee shall, in good faith, contest the validity
      of any such lien, claim or demand, then Lessee shall, at its sole expense,
      defend itself and Lessor against the same and shall pay
      and
      satisfy any such adverse judgment that may be rendered thereon before the
      enforcement thereof against the Lessor or the Premises,
      upon condition that Lessor may require Lessee to furnish to Lessor a surety
      bond
      satisfactory to Lessor in an amount equal
      to
      such contested lien, claim or demand indemnifying Lessor against liability
      for
      the same and holding the Premises free from
      the
      effect of such a lien or claim. In addition, Lessor may require Lessee to pay
      Lessors attorneys' fees and costs in participating
      in such an action if Lessor shall decide it is to its best interest to do
      so.

    


    
      
        
        

      

      
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    (d) Unless
      Lessor requires their removal, as set forth in Paragraph 7.5(a), all
      alterations, improvements, additions and Utility Installations
      (whether or not such Utility Installations constitute trade fixtures of Lessee),
      which may be made on the Premises, shall become
      the property of Lessor and remain upon and be surrendered with the Premises
      at
      the expiration of the term. Notwithstanding the provisions of this Paragraph
      7.5(d), Lessee's machinery and equipment, other than that which is affixed
      to
      the Premises so that it cannot
      be
      removed without material damage to the Premises, shall remain the property
      of
      Lessee and may be removed by Lessee subject
      to the provisions of Paragraph 7.2.

     

    7.6
      Lessor's Option.
      Upon
      reasonable advance notice and notwithstanding anything to the contrary contained
      herein and in addition
      to the rights provided Lessor in Paragraph 7.3, Lessor may at its option (but
      shall not be required to) enter upon the Premises
      at any time during the term hereof and perform any maintenance, repairs or
      alterations which Lessor is entitled to perform under
      the
      terms of the Lease, and Lessee shall pay Lessor Lessee's share of the cost
      of
      any such maintenance, repairs or alterations, as
      such
      share shall be equitably determined by Lessor, promptly upon Lessor's billing
      Lessee therefor. Lessors reasonable determination
      thereof, in good faith, shall be conclusive. Lessor agrees to perform any such
      work in a manner which reasonably minimizes
      disruption to Lessee's business activities.

     

    8.
      Insurance and Indemnity.

     

    8.1
      Insuring Party.
      As used
      in this Paragraph 8, the term "insuring party" shall mean Lessor. Lessee shall
      reimburse Lessor for the
      cost
      of the insurance obtained in monthly installments as additional rent hereunder
      in accordance with the provisions of Paragraph
      16.24. If the Premises is a part of a larger building or group of buildings
      and
      is not separately insured, Lessee's liability shall be an equitable proportion
      of the insurance costs for all of the insured property, such equitable
      proportion to be reasonably determined
      by Lessor in a manner reasonably satisfactory to Lessee.

     

    8.2
      Liability Insurance.
      Lessee,
      at its sole cost and expense, shall maintain during the term hereof
      comprehensive (commercial) general
      liability insurance on an "occurrence basis" against claims for "personal
      injury", including without limitation bodily injury, death
      and/or damage, occurring upon, in or about the Premises in a combined single
      limit or not less than $1,000,000 per occurrence and
      with
      policy aggregate limit of no less than $2,000,000 (or such higher amounts
      thereof as may be reasonably requested by Lessor
      not to exceed a policy aggregate limit of $5,000,000 from time to time during
      this Lease). Said insurance shall name Lessor as
      an
      additional insured; shall be written by companies and in form satisfactory
      to
      Lessor (which companies shall be authorized to do business
      in California); shall apply primary to any other comparable liability coverage;
      and shall contain an endorsement requiring thirty
      (30) days' prior written notice sent by certified or registered mail, return
      receipt requested, to Lessor at the address set forth below,
      or
      such other address as may be provided to any such insurer by Lessor, before
      cancellation thereof or change in the coverage,
      scope or amount of such policy or policies. Lessee shall provide Lessor with
      a
      Certificate of Insurance as evidence of such insurance
      within twenty (20) days of the date of this Lease. In the event Lessee fails
      to
      obtain such insurance as provided in this Lease,
      Lessor may obtain any such insurance, and the cost thereof shall be paid by
      Lessee as additional rent with the first payment of
      rent
      which is due subsequent to Lessor's incurring such cost, and Lessor shall have
      all remedies to collect the same as rent in the Lease
      provided, and/or as otherwise provided by law for the collection of rent. The
      policy shall contain "cross-liability" or "separation of
      insureds" coverage and shall insure performance by Lessee of the indemnity
      provisions of this Paragraph 8. The limits of said insurance
      shall not, however, limit the liability of Lessee hereunder. In the event that
      the Premises constitutes a part of a larger property,
      said insurance shall have a Lessor's Protective Liability endorsement attached
      thereto.

     

    8.3
      Property Insurance. (See Addendum-Paragraph 24.)

    
       

      (a) The
        insuring party shall obtain and keep in force during the term of this lease
        a
        policy or policies of insurance covering loss or damage to the Premises,
        in the
        amount of the full replacement value thereof, as the same may exist from
        time to
        time, which replacement value is now $2,000,000.00, against all perils included
        within the classification of fire, extended coverage, vandalism, malicious
        mischief, special extended perils (all risk), sprinkler leakage and, at Lessor’s
        option, earthquake. Said insurance shall provide
        for payment of loss thereunder to lessor or to the holders of mortgages or
        deeds
        of trust on the Premises. The insuring party shall,
        in
        addition, obtain and keep in force during the term of this Lease a policy
        of
        rental income insurance covering a period of twelve
        (12) months, with loss payable to Lessor, which insurance shall also cover
        all
        real estate taxes and insurance costs for said period.
        If such insurance coverage has a deductible clause, Lessee shall be liable
        for
        the deductible amount.

       

      
        
          
          

        

        
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      (b) If
        the
        Premises are part of a larger building, or if the Premises are part of a
        group
        of buildings owned by Lessor which are adjacent to the Premises, then Lessee
        shall pay for any increase in the property insurance of such other building
        or
        buildings if said increase is caused by Lessee's acts, omissions, use or
        occupancy of the Premises.

       

      (c) Lessee
        shall not do or permit to be done anything which shall invalidate the insurance
        policies referred to in Paragraph 8.3. If Lessee does or permits to be done
        anything which shall increase the cost of the insurance policies referred
        to in
        Paragraph 8.3, then Lessee shall forthwith upon Lessor’s demand reimburse Lessor
        for any additional premiums attributable to any act or omission or operation
        of
        Lessee causing such increase in the cost of insurance.

       

      8.4
        Waiver of Subrogation.
        Lessee
        and Lessor each hereby waive any and all rights of recovery against the other,
        or against the officers,
        employees, agents and representatives of the other, for loss of or damage
        to
        such waiving party or its property or the property
        of others under its control to the extent that such loss or damage is insured
        against under any insurance policy in force at the time of
        such
        loss or damage. The insuring party shall, if possible, in obtaining the policies
        of insurance required hereunder, obtain policies
        which permit such waiver.

       

      8.5
        Indemnity.
        Lessee
        shall indemnify and hold harmless Lessor from and against any and all
        claims arising out of any alleged defective
        or unsafe condition of the Premises and from Lessee's use of the Premises,
        or
        from the conduct of Lessees business or from
        any
        activity, work or things done, permitted or suffered by Lessee in or about
        the
        Premises or elsewhere unless due to the willful acts
        or
        gross negligence of Lessor, its employees, agents or contractors and shall
        further indemnify and hold harmless Lessor from and
        against any and all claims arising from any breach or default in the performance
        of any obligation on Lessee's part to be performed
        under the terms
        of
        this Lease, or arising from willful acts or gross negligence of Lessee, or
        any
        of Lessee's agents, contractors,
        or employees, and from and against all costs, attorneys' fees, expenses and
        liabilities incurred in the defense of any such claim or any action or
        proceeding brought thereon; and in case any action or proceeding be brought
        against Lessor by reason of any such
        claim, Lessee upon notice from Lessor shall defend the same at Lessee's expense
        by counsel satisfactory to Lessor. Lessee, as a material part of the
        consideration to Lessor, hereby assumes all risk of damage to property or
        injury
        to persons in, upon, or about the Premises arising from any cause and Lessee
        hereby waives all claims in respect thereof against Lessor.

       

      8.6
        Exemption of Lessor from
        Liability.
        Unless
        due to the willful acts or gross negligence of Lessor, its employees, agents
        or
        contractors, Lessor shall not be liable for injury to Lessee's business or
        any
        loss of income therefrom or for damage to the goods, wares,
        merchandise or other property of Lessee, Lessee's employees, invitees,
        customers, agents, contractors, or any other person in or
        about
        the Premises, nor shall Lessor be liable
        for injury to the person of Lessee, Lessee's employees, invitees, customers,
        agents or contractors, whether such damage or injury is caused by or results
        from fire, steam, electricity, gas, water or rain, or from the breakage,
        leakage, obstruction or other defects of pipes, sprinklers, wires, appliances,
        plumbing, air conditioning or lighting fixtures, or from any other cause,
        whether the said damage or injury results from conditions arising upon the
        Premises or upon other portions of the building of which the Premises is
        a part,
        or from other sources or places, and regardless of whether the cause of such
        damage or
        injury
        or the means of repairing the same is inaccessible to Lessee. Lessor shall
        not
        be liable for any damages arising from any act
        or
        neglect of any other tenant, if any, of the building in which the Premises
        is
        located.

       

      9.
        Damage or Destruction.

       

      9.1
        If the
        Premises shall be partially damaged by fire or other cause, then the Premises
        shall be repaired by and at the expense of Lessor
        and the rent, until such repairs shall be made, shall be apportioned according
        to the part of the Premises which is usable by Lessee.
        No penalty shall accrue for reasonable delay which may arise by reason of
        adjustment of fire insurance on the part of Lessor or
        Lessee, for reasonable delay on account of "labor troubles", or any other
        cause
        beyond Lessor’s control. If (i) the Premises are totally
        damaged or are rendered wholly untenantable, (ii) the Premises are totally
        or
        partially damaged by uninsured fire or other uninsured
        cause, or (iii) the Premises shall be so damaged that Lessor shall
        decide to
        demolish the entire Premises, then within ninety
        (90) days after the occurrence of the event or damage or destruction Lessor
        may
        elect, by written notice to Lessee, to terminate
        this Lease. In such event, the term of this Lease shall expire by lapse of
        time
        upon the third day after such notice is given, and Lessee shall vacate the
        Premises and surrender the same to Lessor. If Lessor does not elect to terminate
        this Lease pursuant to the
        preceding sentence, then: Lessor shall diligently undertake and prosecute
        to
        completion the repair of the Premises, to substantially
        their condition immediately prior to the event of damage or destruction;
        and
        rent shall be apportioned according to the part
        of
        the Premises which is usable by Lessee, until such restoration or rebuilding
        is
        complete. Notwithstanding anything to the contrary contained herein, if Lessor
        notifies Lessee of Lessor’s election to terminate this Lease pursuant to the
        foregoing, then for a period of ten (10) days following Lessee's receipt
        of
        written notice of such election, Lessee may elect, by written notice to Lessor,
        at Lessee's own cost and expense, to restore or rebuild the Premises to
        substantially their condition immediately prior to the event of damage
        or
        destruction, in which event: (i) this Lease shall continue thereafter in
        full
        force and effect, as if Lessor’s election to terminate had never been made; (ii)
        Lessee shall diligently cause the Premises to be restored or rebuilt in
        accordance with the foregoing;
        and (iii) rent shall be apportioned according to the part of the Premises
        which
        is usable by Lessee until such restoration or rebuilding is complete, to
        the
        extent of rental loss insurance available to Lessor.

      


      
        
          
          

        

        
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      Notwithstanding
        anything to the contrary contained herein, in the event that Lessor does
        not or
        may not elect to terminate this Lease
        pursuant to the terms of this Paragraph 9.1, then within sixty (60) following
        the occurrence of any event of damage or destruction
        to the Premises, Lessor shall provide Lessee with written notice, prepared
        by a
        licensed California contractor, reasonably estimating
        the period of time which will be required to repair or rebuild the Premises
        to
        substantially the condition in which they existed
        immediately prior to such damage or destruction. If such reparation or
        rebuilding is not reasonably estimated to be complete within two hundred
        forty
        (240) days following the occurrence of such damage or destruction, then Lessee
        may elect by written notice to Lessor with ten (10) business days of Lessor's
        notice to terminate this Lease in which event: (i) the term of this Lease
        shall
        expire by
        lapse
        of time upon the third day after such notice is given, and (ii) Lessee shall
        vacate the Premises and surrender the same to Lessor.

      


      No
        penalty shall accrue for reasonable delay which may arise by reason of
        adjustment of fire insurance on the part of Lessor or Lessee, for reasonable
        delay on account of "labor troubles", or any other cause beyond the control
        of
        Lessor or Lessee.

       

      9.2
        Damage Near End of Term.
        If the
        Premises are partially destroyed or damaged during the last six (6) months
        of
        the term of this
        Lease, either party hereto may at its option cancel and terminate this Lease
        as
        of the date of occurrence of such damage by giving
        notice to the other party of its election to do so within thirty (30) days
        after
        the date of occurrence of such damage.

       

      9.3
        Termination - Advance Payments.
        Upon
        termination of this Lease pursuant to this Paragraph 9, an equitable adjustment
        shall be made concerning advance rent and any advance payments made by Lessee
        to
        Lessor. Lessor shall, in addition, return to Lessee so
        much
        of Lessee's security deposit as has not theretofore been applied by
        Lessor.

       

      9.4
        Waiver.
        Lessee
        waives the provisions of California Civil Code Sections 1932(2) and 1933(4)
        which relate to termination of leases
        when the thing leased is destroyed and all rights under any law in existence
        during the term of this Lease authorizing a tenant to
        make
        repairs at the expense of a landlord or to terminate a lease on complete
        or
        partial destruction of the leased premises, and agrees
        that any such event shall be governed by the terms of this Lease.

       

      10.
        Real Property Taxes.

       

      10.1
        Payment of Taxes. Lessee
        shall pay to Lessor in monthly installments, as additional rent, Lessee's
        share
        of the real property taxes
        applicable to the Premises in accordance with the provisions of Paragraph
        16.24.

       

      10.2
        Definition of "Real Property" Tax.
        As used
        herein, the term "real property tax" shall include any form of assessment,
        license fee, commercial rental tax, levy, penalty, or tax (other than
        inheritance or estate tax or State or Federal income tax of Lessor), imposed
        by
        any authority having the direct or indirect power to tax, including any city,
        county, state or federal government, or any school,
        agricultural, lighting, drainage or other improvement district thereof, as
        against any legal or equitable interest of Lessor in the Premises
        or in the real property of which the Premises are a part, as against Lessor's
        right to rent or other income therefrom, or as against
        Lessor's business of leasing the Premises or any tax imposed in substitution,
        partially or totally, of any tax previously included
        within the definition of real property tax, or any additional
        tax the nature of which was previously included within the definition
of
        real
        property tax. Any surcharge or regulatory fee imposed by any governmental
        entity
        with reference to parking applicable to the Premises shall also be included
        within the term "real property tax."

       

      
        
          
          

        

        
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      10.3
        Proration of Taxes.
        If the
        Premises are not separately assessed, Lessee's liability shall be an equitable
        proportion of the real property taxes for all of the land and improvements
        included within the tax parcel assessed, such proportion to be determined
        by
Lessor
        from the respective valuations assigned in the assessor's work sheets or
        such
        other information as may be reasonable available.
        Lessor's reasonable determination thereof shall be reasonably acceptable
        to
        Lessee.

       

      10.4
        Personal Property Taxes.

      


      (a) Lessee
        shall pay prior to delinquency all taxes assessed against and levied upon
        trade
        fixtures, furnishings, equipment and all other personal property of Lessee
        contained in the Premises or elsewhere. When possible, Lessee, shall cause
        said
        trade fixtures, furnishings,
        equipment and all other personal property to be assessed and billed separately
        from the real property of Lessor.

      


      (b) If
        any of
        Lessee's said personal property shall be assessed with Lessor's real property,
        Lessee shall pay Lessor the taxes attributable
        to Lessee in accordance with the provisions of Paragraph 16.24.

       

      11.
        Utilities. Lessee
        shall pay for all water, gas, heat, light, power, telephone and other utilities
        and services supplied to the Premises, together with any taxes thereon. If
        any
        such services are not separately metered to Lessee, Lessee shall pay a
        reasonable proportion to be determined by Lessor of all charges jointly metered
        with other premises

       

      12.
        Assignment. Mortgage and Subletting. (See Addendum-Paragraph
        33.)

       

      12.1
        Lessor's Consent.
        Neither
        Lessee, nor Lessee's legal representatives, successors or assigns, shall
        assign,
        mortgage or encumber
        this Lease, or sublet, or use or occupy or permit the Premises or any part
        thereof to be used or occupied by others, without the prior consent of Lessor
        and the payment of any applicable processing fee in each instance, and any
        such
        assignment, mortgage, encumbrance,
        sublease or permission without such consent and payment shall be voidable
        at the
        option of Lessor and, at the further
        option of Lessor, shall terminate this Lease subject to the provisions of
        Paragraph 13 "Defaults; Remedies". If this Lease
        be
        assigned, or if the Premises or any part thereof be sublet or occupied by
        any
        party other than Lessee, Lessor may, alter default by Lessee, collect rent
        from
        the assignee, subtenant or occupant, and apply the net amount collected to
        the
        rent herein reserved,
        but no such assignment, subletting, occupancy or collection shall be deemed
        a
        waiver of this covenant or the acceptance of the
        assignee, subtenant or occupant as tenant, or a release of Lessee from the
        further performance by Lessee of the obligations on the
        part
        of Lessee herein contained. The consent by Lessor to an assignment or subletting
        shall not in any wise be construed to relieve
        Lessee, the assignee or the subtenant from obtaining the express consent
        of
        Lessor to any further assignment or subletting or to release Lessee from
        any
        liability, whether past, present or future, under this Lease or to release
        Lessee from any liability under this Lease because of Lessor's failure to
        give
        notice of default under or in respect of any of the terms, covenants,
        conditions, provisions or agreements of this Lease. Notwithstanding the consent
        of Lessor to such assignment or subletting, Lessee shall remain liable for
        the
payment
        of all bills rendered by Lessor for the charges incurred by the assignee
        or
        subtenant for services and materials supplied to the
        Premises. A transfer of control of Lessee shall be deemed an assignment under
        this Lease and shall be subject to all the provisions
        of this Article, including but not limited to the requirement of obtaining
        Lessor's prior consent, unless Lessee at the time of the proposed transfer
        is
        then a publicly held corporation freely traded on a major stock
        exchange.

       

      Notwithstanding
        any contrary provision of the immediately preceding provisions of this Paragraph
        12.1, but subject to the provisions of Subparagraph 12.2(b), Lessee may assign
        this Lease or sublet the Premises or any portion thereof upon the following
        express
        conditions:

      


      (1)
        that
        the proposed assignee or subtenant shall be subject to the prior consent
        of
        Lessor, which consent will not be unreasonably
        withheld or delayed more than ten (10) business days after Lessor's receipt
        of
        all information required from Lessee but, without
        limiting the generality of the foregoing, it shall be reasonable for Lessor
        to
        deny such consent if:

       

      (a) the
        use
        to be made of the Premises by the proposed assignee or subtenant is a use
        which would
        be
        prohibited by any other portion
        of this Lease (including but not limited to any Rules and Regulations then
        in
        effect) or a use which would impose any additional
        burden upon Lessor in the operation of the Building; however, Lessor shall
        not
        unreasonably withhold its consent to a use differing from those set forth
        in
        Paragraph 6.1 of this Lease; or

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      (b) the
        character, moral stability, reputation and financial responsibility of the
        proposed assignee or subtenant are not reasonably satisfactory
        to Lessor or in any event not at least equal to those which were possessed
        by
        Lessee as of the date of execution of this Lease;

       

      (2)
        that
        Lessee shall reimburse Lessor for all reasonable costs incurred by Lessor
        in
        connection with such assignment or subletting
        including without limitation all attorneys' fees applicable
        thereto;

       

      (3)
        that
        the proposed assignee or subtenant shall execute an agreement pursuant to
        which
        it shall agree to perform faithfully and be
        bound
        by all of the terms, covenants, conditions, provisions and agreements of
        this
        Lease;

       

      (4)
        that
        an executed duplicate original of said assignment and assumption agreement
        or
        sublease, as the case may be, on Lessor's then
        standard form, shall be delivered to Lessor within five (5) days after the
        execution thereof, and that such assignment or subletting
        shall not be binding upon Lessor until the delivery thereof to Lessor;
        and

       

      (5)
        that
        Lessee shall pay to Lessor, as additional rent, one-half (1/2) of any
        consideration given to Lessee by the proposed assignee or
        subtenant for or in connection with such assignment or subletting. Lessor
        and
        Lessee have each given full consideration to the possibility
        that the rental value of the Premises may appreciate during the term of the
        Lease. In such regard, Lessor and Lessee have expressly
        allocated the possibility of such rental value increase as part of their
        negotiations of this Lease. Lessor and Lessee freely negotiated
        all of the terms and conditions of this Lease, including but not limited
        to, the
        possibility that this Lease may be terminated by
        Lessor
        pursuant to this Paragraph 12. Lessor and Lessee expressly thus agree that
        any
        such rental increase value is not an element
        of value or property right granted to Lessee, and that Lessor retains all
        rights
        thereto, including, but not limited to, the termination
        and allocation rights herein set forth.

      


      12.2
        Procedure.

       

      (a) At
        least
        thirty (30) days prior to any proposed subletting or assignment or mortgage,
        Lessee shall submit to Lessor a statement containing the name and address
        of the
        proposed subtenant or assignee or mortgagee and all of the principal terms
        and
        conditions of the
        proposed subletting or assignment or mortgage including, but not limited
        to, in
        the event of a subletting the proposed commencement
        and expiration dates of the term thereof. If the proposed sublet area shall
        not
        constitute the entire Premises, such statement
        shall be accompanied by a floor plan delineating the proposed sublet area.
        Lessor shall have a reasonable amount of time but in no event less than ten
        (10)
        business days from the receipt of any such notice to consent, decline to
        consent
        or make one of the elections
        provided in Subparagraph (b) below.

       

      
        (b) In
          lieu
          of consenting or not consenting, Lessor may, at its option (i) terminate
          this
          Lease in its entirety if Lessee submits a written
          request for an assignment or subletting, for substantially the entire remaining
          term of the Lease, of the Premises in its entirety, (ii)
          elect to enter into a lease directly with the proposed assignee or with
          the
          proposed subtenant as to that portion of the Premises which
          Lessee has proposed to sublet, (iii) terminate this Lease as to that portion
          of
          the Premises which Lessee had proposed to sublet,
          or (iv) elect, where the rental charged in the sublease exceeds the pro
          rata
          portion of the rental for such space charged in this Lease, to receive
          from
          Lessee monthly, as additional rent, one-half (1/2) of the excess of the
          rental
          charged in the sublease, over the rental
          charged in this Lease for the subleased space, after deducting from such
          one-half of the excess the amounts, if any, which Lessee
          has reimbursed Lessor pursuant to Paragraph 12.1.(2), Lessor's termination
          rights under this subparagraph shall be exercisable only in the case of
          (i) a
          sublease or assignment occurring with the last two (2) years of the Lease
          Term
          or (ii) a sublease
          or assignment of more than fifty percent (50%) of the floor area of the
          buildings comprising the Premises.

         

        12.3
          Bankruptcy.

        


        (a) If
          Lessee
          shall file a petition for voluntary bankruptcy or reorganization under
          any
          provision of the Bankruptcy Code as then in effect,
          or if Lessee be adjudicated
          a bankrupt in involuntary bankruptcy proceedings and such adjudication
          shall not
          have been vacated
          within ninety (90) days from the date thereof, or a receiver or trustee
          be
          appointed of Lessee's property in any involuntary proceeding
          and the order appointing such receiver or trustee be not set aside or vacated
          within ninety (90) days after the entry thereof,
          or if Lessee shall assign Lessee's estate or effects for the benefit of
          creditors, or if Lessee becomes insolvent, or if this Lease shall
          otherwise by operation of law devolve or pass to any person or persons
          other
          than Lessee, then and in any such events Lessor may,
          at
          its option, with or without notice of such election and with or without
          entry or
          action by Lessor, forthwith terminate this Lease, and
          notwithstanding any other provisions of this Lease, Lessor, in addition
          to any
          and all rights and remedies allowed by law or equity,
          shall upon such termination be entitled to recover damages in an amount
          equal to
          the then present value of the rent reserved in
          this
          Lease for the entire residue of the stated term hereof, less the fair rental
          value of the Premises for the residue of the stated term
          hereof, and neither Lessee nor any person claiming through or under Lessee
          or
          by virtue
          of
          any statute or order of any court shall
          be
          entitled to possession of the Premises but shall forthwith quit and surrender
          the Premises
          to Lessor.

      

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

      (b) Without
        limiting any of the foregoing provisions of this Paragraph, if pursuant to
        the
        Bankruptcy Reform Act of 1978 Lessee is permitted to assign this Lease
        notwithstanding the restrictions contained in this Lease, Lessee agrees that
        adequate assurance of future
        performance by an assignee expressly permitted under such Code shall be deemed
        to mean the deposit of cash security in an amount equal to the sum of one
        year's
        rent reserved hereby plus an amount equal to additional rent under Paragraph
        4.1
        hereof for the
        calendar year preceding the year in which such assignment is intended to
        become
        effective, which deposit shall be held by Lessor
        in
        accordance with Paragraph 5 for the balance of the term, without interest,
        as
        security for the full performance of all of the obligations under this Lease
        on
        Lessee's part to be performed.

       

      12.4
        Identification of Lessee.

      


      (a) If
        more
        than one person executes this Lease as Lessee, (i) each of them shall be
        jointly
        and severally liable for the keeping, observing and performing of all of
        the
        terms, covenants, conditions, provisions and agreements of this Lease to
        be
        kept, observed and performed by Lessee, and (ii) the term "Lessee" as used
        in
        this Lease shall mean and include each of them jointly and severally and
        the act
        of or notice from, or notice or refund to, or the signature of, any one or
        more
        of them, with respect to tenancy of this Lease,
        including, but not limited to any renewal, extension, expiration, termination
        or
        modification of this Lease as Lessee shall have the
        same
        force and effect as if each and all of them had so acted or so given or received
        such notice or refund or so signed.

      


      (b) If
        Lessee
        is a partnership (or is comprised of two or more persons, individually and
        as
        co-partners of a partnership) or if Lessee's interest in this Lease shall
        be
        assigned to a partnership (or to two or more persons individually and as
        co-partners of a partnership) pursuant to Paragraph 12.2 hereof (any such
        partnership and such persons are referred to in this Subparagraph as
Partnership
        Tenant): (i) the liability of each of
        the
        parties comprising Partnership Tenant shall be joint and several, and (ii)
        each
        of the parties comprising Partnership Tenant hereby consents in advance to,
        and
        agrees to be bound by, any written instrument which may hereafter
        be executed, changing, modifying or discharging this Lease, in whole or in
        part,
        or surrendering all or any part of the Premises
        to Lessor, any notices, demands, requests or other communications which may
        hereafter be given by Partnership Tenant or any of the parties comprising
        Partnership Tenant, and (iii) any bills, statements, notices, demands, requests
        or other communications given or rendered to Partnership Tenant or to any
        of the
        parties comprising Partnership Tenant shall be deemed given or rendered to
        Partnership
        Tenant and to all such parties and shall be binding upon Partnership Tenant
        and
        all such parties, and (iv) if Partnership Tenant
        shall admit new partners, all of such new partners shall, by their admission
        to
        Partnership Tenant, be deemed to have assumed
        performance of all of the terms, covenants and conditions of this Lease on
        Lessee's part to be observed and performed, and (v)
        Partnership Tenant shall give prompt notice to Lessor of the admission of
        any
        such new partners, and, upon demand of Lessor, shall cause each such new
        partner
        to execute and deliver to Lessor an agreement in form satisfactory to Lessor,
        wherein each new partner shall assume performance of all of the terms, covenants
        and conditions of this Lease on Lessee's part to be observed and performed,
        but
        neither Lessor's failure to request any such agreement nor the failure of
        any
        such new partner to execute or deliver any such agreement to Lessor shall
        vitiate the provisions of this Subparagraph. Notwithstanding the foregoing,
        the
        individual shareholders, officers and directors of the partnership corporations
        shall not be personally liable hereunder.

       

      13.
        Defaults; Remedies.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

      


      13.1
        Defaults.
        The
        occurrence of any one or more of the following events shall constitute a
        material default and breach of this Lease
        by
        Lessee:

       

      (a) The
        vacating or abandonment of the Premises by Lessee for three (3) consecutive
        months.

      


      (b) The
        failure by Lessee to make any payment of rent or any other payment required
        to
        be made by Lessee hereunder, as and when due after three (3) days' notice
        having
        been given by Lessor to Lessee.

      


      (c) The
        failure by Lessee to observe or perform any of the covenants, conditions
        or
        provisions of this Lease to be observed or performed by Lessee, other than
        described in paragraph (b) above, where such failure shall continue for a
        period
        of thirty (30) days after written notice hereof from Lessor to Lessee; provided,
        however, that if the nature of Lessee's default is such that more than thirty
        (30) days are reasonably required for its cure, then Lessee shall not be
        deemed
        to be in default if Lessee commenced such cure within said thirty (30) day
        period and thereafter diligently pursues such cure to completion.

      


      (d) (i)The
        making by Lessee of any general assignment or general arrangement for the
        benefit of creditors; (ii) the filing by or against Lessee of a petition
        to have
        Lessee adjudged a bankrupt or a petition for reorganization or arrangement
        under
        any law relating to bankruptcy (unless, in the case of a petition filed against
        Lessee, the same is dismissed within ninety (90) days); (iii) the appointment
        of
        a trustee or receiver to take possession of substantially all of Lessee's
        assets
        located at the Premises or of Lessee's interest in this Lease, where possession
        is not restored to Lessee within ninety (90) days; or (iv) the attachment,
        execution or other judicial seizure of substantially all of Lessee's assets
        located at the Premises or of Lessee's interest in this Lease, where such
        seizure is not discharged within ninety (90) days.

      


      (e) The
        discovery by Lessor that any financial statement given to Lessor
        by Lessee, an assignee of Lessee, any subtenant of Lessee, any
        successor in interest of Lessee or any guarantor of Lessee's obligations
        hereunder, and any of them, was materially false.

      


      (f) The
        removal by Lessee of substantially all of Lessee's furniture from the Premises
        for three (3) consecutive months.

      


      (g) The
        failure by Lessee to move into or take possession of the Premises within
        fifteen
        (15) days after the commencement of the term of this Lease.

      


      (h) Deleted.

      


      (i) Deleted.

      


      (j) Any
        default by Lessee with respect to any other lease between (i) Lessor and
        Lessee,
        or (ii) any parent company or subsidiary company or affiliate or agent of
        Lessor
        and Lessee.

      


      (k) The
        assignment or other transfer by Lessee of substantially all of the
        assets used in connection with the business conducted in the
        Premises.

      


       

      13.2
        Remedies.
        In the
        event of any such material default or breach by Lessee, Lessor may at any
        time
        thereafter, with or without notice
        or
        demand and without limiting Lessor in the exercise of any right or remedy
        which
        Lessor may have by reason of such default or
        breach:

       

      


      (a) Terminate
        Lessee's right to possession of the Premises by any lawful means, in which
        case
        this Lease shall terminate and
        Lessee shall immediately surrender possession of the premises to
        Lessor.

      


      (b) Maintain
        Lessee's right to possession in which case this Lease shall continue in effect
        whether or not Lessee shall have abandoned
        the Premises. In such event Lessor shall be entitled to enforce all of Lessor's
        rights and remedies under this Lease, including
        the right to recover the rent as it becomes due hereunder. Lessor shall not
        be
        deemed to have elected to terminate unless Lessor gives Lessee notice of
        such
        election to terminate, and in no event shall Lessor's acts of maintenance
        or
        preservation of the Premises,
        efforts to relet the Premises, or obtaining the appointment of a receiver
        to
        protect the interest of Lessor under this Lease be deemed
        to
        constitute such termination.

      


      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      (c) Pursue
        any other remedy now or hereafter available to Lessor under the laws or judicial
        decisions of the State in which the Premises are located.

      


      (d) In
        the
        event Lessor elects to
        terminate this Lease and Lessee's right to possession in accordance with
        this
        Paragraph, or the same are terminated by operation of law, Lessor may recover
        as
        damages from Lessee the following:

       

      (i)
        The
        worth at the time of award of the unpaid rental (including but not limited
        to
        any additional rent payable under Paragraph 4.1 hereof even if determined
        at a
        later date) and other sums due hereunder which had been earned at the time
        of
        the termination of this
        Lease, and (ii) The worth at the time of award of the amount by which the
        unpaid
        rental (including but not limited to any additional
        rent payable under Paragraph 4.1 hereof) and other sums due hereunder which
        would have been earned after the date of termination of this Lease until
        the
        time of award exceeds the amount of such loss of rental and other sums due
        that
        Lessee proves could
        have been reasonably avoided; and (iii) The worth at the time of the award
        of
        the amount by which the unpaid rental (including but not limited to any
        additional rent payable under Paragraph 4.1 hereof) and other sums due hereunder
        for the balance of the term after
        the
        time of award exceeds the amount of the loss of such rental and other sums
        that
        Lessee proves could be reasonably avoided;
        and (iv) Any other amount, including attorneys' fees and court costs, necessary
        to compensate Lessor for all detriment proximately
        caused by Lessee's act of default or which in the ordinary course of things
        would be likely to result therefrom. The "worth at
        the
        time of award" of the amounts referred to in (i) and (ii) above, is computed
        by
        allowing interest at the maximum rate allowed by law. The “worth at the time of
        award" of the amount referred to in (iii) above, is 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.

       

      13.3
        Late Charges.
        Lessee
        hereby acknowledges that late payment by Lessee to Lessor of rent and other
        sums
        due hereunder will cause Lessor to incur costs not contemplated by this Lease,
        the exact amount of which will be extremely difficult to ascertain. Such
        costs
        include, but are not limited to, processing and accounting charges, and late
        charges which may be imposed on Lessor by the terms
        of
        any mortgage or trust deed covering the Premises. Accordingly, if any
        installment of rent or any other sum due from Lessee shall
        not
        be received by Lessor
        or
        Lessor's designee within ten (10) days after such amount shall be due, Lessee
        shall pay to Lessor a
        late
        charge equal to 6% of such overdue amount. The parties hereby agree that
        such
        late charge by Lessor shall in no event constitute
        a waiver of Lessee's default with respect to such overdue amount, nor prevent
        Lessor from exercising any of the other rights
        and remedies granted hereunder. If the payment of rent is received late for
        two
        consecutive months or more than four times within
        any twelve month period, then, upon notice to Lessee by Lessor, rent for
        the
        balance of the Lease term shall be payable quarterly,
        in advance.

       

      14.
        Condemnation.
        If the
        Premises or any portion thereof are taken under the power
        of
        eminent domain, or sold under the threat of the
        exercise of said power (all of which are herein called "condemnation"), this
        Lease shall terminate as to the part so taken as of the date
        the
        condemning authority takes title or possession, whichever first occurs. If
        more
        than 10% of the floor area of the improvements
        on the Premises, or more than 25% of the land area of the Premises which
        is not
        occupied by any improvements, is taken
        by
        condemnation, Lessor or Lessee may, at either party's option, to be exercised
        in
        writing only within ten (10) days after Lessor
        shall have given Lessee written notice of such taking (or in the absence
        of such
        notice, within ten (10) days after the
        condemning
        authority shall have taken possession) terminate this Lease as of the date
        of
        the condemning authority takes possession.
        If neither party terminates this Lease in accordance with the foregoing,
        this
        Lease shall remain in full force and effect as
        to
        the
        portion of the Premises remaining, except that the rent shall be reduced
        in
        proportion that the floor area taken bears to the total floor
        area of the building situated on the Premises. Any award for the taking of
        all
        or any part of the Premises under the power of eminent
        domain or any payment made under threat of the exercise of such power shall
        be
        the property of Lessor, whether such award
        shall be made as compensation for diminution in value of the leasehold or
        for
        the taking of the fee, or as severance damages. In the event that this Lease
        is
        not terminated by reason of such condemnation, Lessor shall, to the extent
        of
        severance damages received by Lessor in connection with such condemnation,
        repair any damage to the Premises caused by such condemnation except to the
        extent that Lessee has been reimbursed therefor by the
        condemning authority. Lessee shall pay any amount in excess of such severance
        damages required to complete such repair.

       

      15.
        Brokers.
        In
        connection with this Lease, Lessee and Lessor warrant and represent to each
        other that neither has had dealings with any broker or finder and that each
        knows of no person who is or might be entitled to a commission, finder's
        fee or
        other like payment in connection herewith and do hereby indemnify and agree
        to
        hold each other harmless from and against any and all loss, liability and
        expenses
        that the other may incur should such warranty and representation prove
        incorrect.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

      16.General
        Provisions.

       

      16.1
        Estoppel Certificate.

       

      (a) Lessee
        shall, each time and from time to time upon receipt of request therefor from
        Lessor, within five (5) business days after receipt of such request, execute,
        acknowledge and deliver to Lessor a statement in writing addressed to Lessor
        or
        its designee: (i) certifying
        that this Lease is unmodified and in full force and effect (or, if modified,
        stating the nature of such modification and certifying
        that this Lease as so modified is in full force and effect), (ii) setting
        forth
        the dates to which the rental and other charges are paid
        (and
        if any amounts
        are paid in advance so stating), and (iii) acknowledging that there are not
        any
        uncured defaults on the part of
        Lessor
        or Lessee (or if any defaults are claimed, specifying the same). Such statement
        as given by Lessee (or Lessor pursuant to subparagraph (b) hereof) may be
        relied
        upon by a prospective purchaser or encumbrancer of the real property or any
        part
        thereof of which the Premises are a part. Lessor shall also agree to provide,
        upon request by Lessee, and within five (5) days of request, the same
        information as described in 16.1(a)(i), (ii) and (iii).

       

      (b) The
        failure or refusal of Lessee to deliver the statement(s) as requested by
        Lessor
        pursuant to subparagraph (a) hereof within the
        time
        provided shall, at the option of Lessor, constitutes a default under this
        Lease,
        and in the event of any such failure or refusal Lessee
        shall be conclusively bound by any statement of such import given by
        Lessor.

       

      (c)
        If
        Lessor
        desires to finance or refinance the Premises, or any part thereof, and from
        time
        to time during the term of this Lease, at the sole discretion of Lessor,
        Lessee
        hereby agrees to deliver to any lender designated by Lessor such financial
        statements and tax returns
        of Lessee as may be reasonably requested by Lessor.
        Such statements shall include the past three years' financial statements
        of Lessee or such shorter period based on the time Lessee has been in existence.
        All such financial statements shall be received in confidence and shall be
        used
        only for the purposes herein set forth.

       

      16.2
        Lessor’s Liability.
        The term
“Lessor” as used herein shall mean only the owner or owners at the time in
        question of the fee
        title
        or a lessee's interest in a ground lease of the Premises. In the
        event
        of any transfer of such title or interest, Lessor herein named (and in case
        of
        any subsequent transfers the then grantor) shall be relieved from and after
        the
        date of such transfer of all liability
        as respects Lessor's obligations thereafter to be performed, provided that
        any funds
        in
        the hands of Lessor or the then grantor at the time of such transfer, in
        which
        Lessee has an interest, shall be delivered to the grantee. The obligations
        contained in this Lease to
        be
        performed by Lessor shall, subject as aforesaid, be binding on Lessor's
        successors and assigns, only during their respective periods of ownership.
        Lessee agrees to look solely to Lessor's estate and interest in the real
        property of which the Premises is a part (or
        the
        proceeds thereof) for the satisfaction
        of any remedy
        of
        Lessee for the collection of a judgment (or other judicial process) requiring
        the payment of money by Lessor in the event of any default by Lessor hereunder,
        and no other property or assets of Lessor or
        of any
        of the partners of Lessor shall be subject to levy, execution or other
        enforcement procedure for the satisfaction of Lessee's remedies under or
        with
        respect to this Lease, the relationship of Lessor and Lessee hereunder or
        Lessee's use or occupancy of the Premises. This Lease and the obligations
        of
        Lessee hereunder shall not be affected or impaired because Lessor is unable
        to
        fulfill any of its obligations hereunder or is delayed in doing so if such
        inability or delay is caused by reason of strike or labor troubles or any
        other
        cause beyond the reasonable control of Lessor.

       

      16.3
        Severability.
        The
        invalidity of any provision of this Lease as determined by a court of competent
        jurisdiction, shall in no way affect the validity of any other provision
        hereof.

       

      16.4
        Interest on Past-due Obligations.
        Except
        as expressly herein provided to the contrary, any amount due Lessor not paid
        when
        due
        shall bear interest at the maximum rate allowed by law from the date due.
        Payment of such interest shall not excuse or cure
        any
        default by Lessee under this Lease, provided, however, that interest shall
        not
        be payable on late charges incurred by Lessee nor
        on
        any amounts upon which late charges are paid by Lessee.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      16.5
        Time of Essence.
        Time is
        of the essence as to Lessee's obligations hereunder.

       

      16.6
        Captions.
        Article
        and paragraph captions are for convenience only and shall not be referred
        to for
        the purpose of limiting and construing this Lease in any way.

       

      16.7
        Incorporation of Prior Agreements; Amendments.
        This
        Lease contains all agreements of the parties with respect to any matter
        mentioned herein. No prior agreement or understanding pertaining to any such
        matter shall be effective. Except as otherwise stated
        in
        this Lease, Lessee hereby acknowledges that neither the real estate brokers
        listed in Paragraph 15 hereof nor any cooperating
        broker on this transaction nor the Lessor or any employees or agents of any
        of
        said persons has made any oral or written warranties
        or representations to Lessee relative to the condition or use by Lessee of
        the
        Premises, or the costs of operating or the taxes
        with respect to said Premises and Lessee acknowledges that Lessee assumes
        ail
        responsibility regarding the Occupation Safety
        Health Act or the legal use or adaptability of the Premises and the compliance
        thereof to all applicable laws and regulations enforced
        during the term of this Lease except as otherwise specifically stated in
        this
        Lease. This Lease may be modified in writing only,
        signed by the parties in interest at the time of the modification.

       

      16.8
        Notices.
        Except
        as otherwise in this Lease provided, any notice, consent, approval, demand,
        statement, bill, or other communication
        which Lessor may desire or be required to give to Lessee, shall be deemed
        sufficiently given or rendered if, in writing, delivered
        Lessee personally to the Chief Executive Officer or Chief Financial Officer
        of
        Lessee or sent by registered or certified mail addressed
        to Lessee at the Premises or at the address set forth below, and at the time
        of
        the rendition of such bill or statement and of the giving of such notice,
        consent, approval, demand or communication shall be deemed to be the time
        when the
        same
        is delivered to Lessee,
        mailed, or left at the Premises as herein provided. Any notice, request,
        demand
        or communication by Lessee
        to
        Lessor must be
        served
        by registered or certified mail addressed to Lessor, at the address set forth
        below, or at such other address as Lessor shall designate by notice given
        as
        herein provided, and the time of giving such notice, request, demand or
        communication shall be deemed
        to
        be the
        time when the same is mailed as herein provided.

       

      16.9
        Waivers. No
        waiver
        by Lessor of any provision hereof shall be deemed a waiver of any other
        provision hereof or of any subsequent
        breach by Lessee of the same or any other provision. Lessor's consent to
        or
        approval of any act shall not be deemed to render
        unnecessary the obtaining of Lessor's consent to or approval of any subsequent
        act by Lessee. The acceptance of rent hereunder
        by Lessor shall not be a waiver of any preceding breach at the time of
        acceptance of such rent. No payment by Lessee or receipt
        by Lessor of a lesser amount than the monthly rent herein stipulated shall
        be
        deemed to be other than on account of the earliest
        stipulated rent, nor shall any endorsement or statement on any check or any
        letter accompanying any check or payment as rent
        be
        deemed an accord and satisfaction and Lessor may accept such check or payment
        without prejudice to Lessor's right to recover
        the balance of such rent or pursue any other remedy in this Lease
        provided.

       

      16.10
        Recording.
        Lessee
        shall not record this Lease or a short form memorandum thereof without Lessor's
        prior consent, and any
        such
        recordation without Lessor's prior consent shall, at the option of Lessor,
        constitute a non-curable default of Lessee hereunder.
        Lessee and Lessor shall execute and acknowledge a short form memorandum of
        this
        Lease for recording purposes in form
        and
        content acceptable to both parties.

       

      16.11 
        Holding Over.
        If
        Lessee remains in possession of the Premises or any part thereof after the
        expiration of the term hereof without
        the express consent of Lessor, such occupancy shall be a tenancy from
        month-to-month at a rental equal to one and one-half (1 1/2) the amount of
        the
        last monthly rental plus all other charges payable hereunder, and upon all
        the
        terms hereof applicable to a month-to-month
        tenancy.

       

      16.12
        Cumulative Remedies.
        No
        remedy or election hereunder shall be deemed exclusive but shall, wherever
        possible, be cumulative
        with all other remedies at law or in equity.

       

      16.13
        Covenants and Conditions.
        Each
        provision of this Lease performable by Lessee shall be deemed both a covenant
        and a condition.

      


      16.14
        Binding Effect; Choice of Law.
        Subject
        to any provisions hereof restricting assignment, encumbrancing or subletting
        by
        Lessee and subject to the provisions of Paragraph 16.2, this Lease shall
        bind
        the parties, their personal representatives, successors and assigns. This
        Lease
        shall be governed by the laws of the State in which the Premises are
        located.

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      16.15
        Subordination.

      


      (a) This
        Lease, at Lessor’s option, shall be subordinate or superior to any ground lease,
        mortgage, deed of trust, or any other hypothecation
        for security now or hereafter placed upon the real property of which the
        Premises is a part and to any and all advances made
        on
        the security thereof and to all renewals, modifications, consolidations,
        replacements and extensions thereof.

      


      (b) Lessee
        agrees to execute any documents required to effectuate such subordination
        or to
        make this Lease prior to the lien of any
        mortgage, deed of trust or ground lease, as the case may be, provided Lessor
        shall furnish Lessee with a reasonably acceptable
        non-disturbance agreement.

      


      (c) Subject
        to all of the provisions of this Lease, including without limitations this
        Paragraph 16.15, Lessee agrees to attorn to a lender or any other party who
        acquires ownership of the Premises by reason of a foreclosure.

       

      16.16
        Attorneys' Fees.

      


      (a) In
        the
        event that Lessor 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 Lessee hereunder,
        then
        all costs and expenses, including
        reasonable attorneys' fees, incurred by Lessor therein shall be paid by Lessee,
        which obligation on the part of Lessee 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 judgement.

      


      (b) Should
        Lessor be named as a defendant in any suit brought against Lessee in connection
        with or arising out of Lessee's occupancy
        hereunder, Lessee shall pay to Lessor its costs and expenses incurred in
        such
        suit, including reasonable attorneys' fees.

      


      (c) Lessor
        and Lessee covenant and agree that in any suit or proceeding arising out
        of,
        under, or by virtue of this Lease, Lessor and
        Lessee do hereby waive trial by jury.

       

      16.17
        Lessor's Access. (See Addendum-Paragraph 34.)
        Lessor
        and Lessors agents shall have the right to enter the Premises at
        reasonable times for the purpose of inspecting the same, showing the same
        to
        prospective purchasers, or lenders, or lessees, and making
        such alterations, repairs, improvements or additions to the Premises or to
        the
        building of which they are a part as may be reasonable
        required pursuant hereto. Lessor may at any time place on or about the Premises
        any ordinary "For Sale" signs and Lessor
        may at any time during the last 120 days of the term hereof place on or about
        the Premises any ordinary "For Lease" signs, all without
        rebate of rent or liability to Lessee.

       

      16.18
        Signs and Auctions. (See Addendum-Paragraph 28.)
        Lessee
        shall not place any sign upon the Premises or conduct any auction
        thereon without Lessors prior consent.

       

      16.19
        Merger.
        The
        voluntary or other surrender of this Lease by Lessee, or a mutual cancellation
        hereof, or a termination by Lessor,
        shall not work as a merger, and shall, at the option of Lessor, terminate
        all or
        any existing subtenancies or may, at the option of
        Lessor, operate as an assignment to Lessor of any or all of such
        subtenancies.

       

      16.20
        Corporate Authority.
        If
        Lessee is a corporation, each individual executing this Lease on behalf of
        said
        corporation represents
        and warrants that he is duly authorized to execute and deliver this Lease
        on
        behalf of said corporation in accordance with a duly adopted resolution of
        the
        Board of Directors of said corporation or in accordance with the Bylaws of
        said
        corporation, and that this
        Lease is binding upon said corporation in accordance with its terms. If Lessee
        is a corporation Lessee shall, within thirty (30) days
        after execution of this Lease, deliver to Lessor a certified copy of a
        resolution of the Board of Directors of said corporation authorizing or
        ratifying the execution of this Lease.

       

      16.21
        Guarantor.
        In the
        event that there is a guarantor of this Lease, said guarantor shall have
        the
        same obligations as Lessee under Paragraphs 16.1 and 16.20 of this
        Lease.

       

      16.22
        Quiet Possession.
        Upon
        Lessee paying the fixed rent reserved hereunder and observing and performing
        all
        of the covenants,
        conditions and provisions on Lessee's part to be observed and performed
        hereunder, Lessee shall have quiet possession of the Premises for the entire
        term hereof subject to all of the provisions of this Lease, including without
        limitation the provisions of Paragraph 16.15.

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

      16.24
        Common Areas and Building Costs.
        As used
        herein, "Common Areas" shall mean all areas within the building and grounds
        which are not specifically leased or held for lease by Lessor, including,
        without limiting the foregoing, parking areas, driveways,
        sidewalks, loading areas, access and egress roads, corridors, landscaped
        and
        planted areas and all other improvements provided by Lessor for the common
        use
        of lessees. Lessor may from time to time change the size, location, nature,
        and
        use of any of the Common Areas including converting any portion of the Common
        Areas to leasable areas and increasing or decreasing common area land and/or
        facilities.

       

      Lessee,
        its employees, agents, customers, and business invitees shall have the
        non-exclusive right (in common with other lessees and
        all
        others whom Lessor has granted or may grant such rights) to use the Common
        Areas
        for the purposes intended, subject to such reasonable rules and regulations
        relating to such use as Lessor may from time to time establish. Lessee agrees,
        after notice thereof, to abide by such rules and regulations and to use its
        best
        efforts to cause its officers, employees, agents, customers, and business
        invitees to conform thereto. Lessor may at any time close any Common Areas
        to
        effect construction, repairs, or changes thereto,
        or to prevent the acquisition of public rights in such areas, and may do
        such
        other acts in and to the Common Areas as in its judgement
        may be desirable to improve the convenience thereof. Lessee shall not at
        any
        time interfere with the rights of Lessor, or other lessees, or of any person
        entitled to use the Common Areas or to use any part thereof.

       

      Lessor
        shall operate, manage, equip, clean, sweep, remove refuse, light, patrol,
        repair, replace, and maintain the Common Areas for
        their
        intended purposes in such manner as Lessor shall in its sole discretion
        determine to be reasonably appropriate.

       

      Lessee
        shall pay to Lessor, in the manner provided in the following paragraph hereof,
        Lessee's pro-rata share of all the costs of operating, managing, leasing,
        maintaining, repairing, and replacing the Common Areas and the building of
        which
        the Premises forms a part. Such costs shall include all costs and expenses
        incurred by Lessor for the operation and maintenance of the Common Areas
        and
        the
        building of which the Premises forms a part during the Lease term (including
        appropriate reserves) including, without limiting the
        foregoing: costs and expenses of gardening and landscaping; water and sewage
        charges; maintenance and signs (other than Lessee's
        signs); premiums for liability, property damage, fire and other types of
        casualty and worker's compensation insurance (including,
        but not limited to, liability insurance procured by Lessor pursuant to Paragraph
        8.2); all taxes levied on or attributable to the
        Common Areas and the building of which the Premises forms a part (including,
        but
        not limited to, "real property taxes" as defined in
        Paragraph 10.2 and 10.4); fees for required licenses and permits; management
        and similar
        administrative fees; costs and expenses
        of repairs, resurfacing, repaving, maintenance, painting, lighting, cleaning,
        refuse removal, security, parking attendants, and other items.

       

      Lessee's
        pro-rata share of the costs referred to in the previous subparagraph shall
        be
        reasonably determined by Lessor and such reasonable
        determination made in good faith shall be conclusive. Lessee's annual pro-rata
        share as estimated by Lessor shall be paid
        as
        additional rent in monthly installments, in advance, on the first day of
        each
        calendar month of the Lease term after commencement
        thereof (pro-rated for any fractional month). Lessor shall deliver to Lessee
        within sixty (60) days after the expiration of
        each
        calendar year a reasonably detailed statement showing Lessee's share of the
        actual costs incurred during the preceding year. If Lessee's payments under
        this
        Paragraph 16.24 during said preceding year exceed Lessee's pro-rata share
        as
        indicated on said statement,
        Lessee shall be entitled to credit the amount of such overpayment against
        Lessee's pro-rata share of such costs next falling
        due. If Lessee's payments under this Paragraph during said preceding year
        were
        less than Lessee's pro-rata share as indicated on
        said
        statement, Lessee shall pay to Lessor the amount of the deficiency as additional
        rent within ten (10) days after delivery by Lessor to Lessee of said
        statement.

       

      17. Hazardous
        Materials. (See Addendum-Paragraph 28.)

      


      17.1
        Reportable Uses Require Consent.
        The term
        "Hazardous Substance" as used in this Lease shall mean any product, substance,
        chemical, material or waste whose presence, nature, quantity and/or intensity
        of
        existence, use, manufacture, disposal, transportation,
        spill, release or effect, either by itself or in combination with other
        materials expected to be on the Premises, is either: (i)
        potentially injurious to the public health, safety or welfare, the environment,
        or the Premises; (ii) regulated or monitored by any governmental
        authority; or (iii) a basis for potential liability of Lessor to any
        governmental agency or third party under any applicable statute
        or common law theory. Hazardous Substance shall include, but not be limited
        to,
        hydrocarbons, petroleum, gasoline, crude oil or any products or by-products
        thereof. Lessee shall not engage in any activity in or about the Premises
        which
        constitutes a Reportable
        Use (as hereinafter defined) of Hazardous Substances without the express
        prior
        written consent of Lessor and compliance in a timely manner (at Lessee's
        sole
        cost and expense) with all Applicable Requirements (as defined In Paragraph
        17.4). "Reportable Use"
        shall mean (i) the installation or use of any above or below ground storage
        tank, (ii) the generation, possession, storage, use, transportation,
        or disposal of a Hazardous Substance that requires a permit from, or with
        respect to which a report, notice, registration
        or business plan is required to be filed with, any governmental authority,
        and
        (iii) the presence in, on or about the Premises
        of a Hazardous Substance with respect to which any applicable laws require
        that
        a notice be given to persons, entering or occupying the Premises or neighboring
        properties. Notwithstanding the foregoing, Lessee may, without Lessor's prior
        consent, but upon notice to Lessor and in compliance with all Applicable
        Requirements, use any ordinary and customary materials reasonably required
        to be
        used by Lessee
        in
        the normal course of the Permitted Use, so long as such use is not a Reportable
        Use and does not expose the Premises
        or neighboring properties to any meaningful risk of contamination or damage
        or
        expose Lessor to any liability therefor.
        In addition, Lessor may (but without any obligation to do so) condition its
        consent to any Reportable Use of any Hazardous Substance
        by Lessee upon Lessee's giving Lessor such additional assurances as Lessor,
        in
        its reasonable discretion, deems necessary
        to protect itself, the public, the Premises and the environment against damage,
        contamination or injury and/or liability therefor,
        including but not limited to the installation (and,
        at
        Lessor's option, removal on or before Lease expiration or earlier termination)
        of reasonably necessary protective modifications to the Premises (such as
        concrete encasements) and/or the deposit of an
        additional Security Deposit under Paragraph 5 hereof.

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

      17.2
        Duty to Inform Lessor.
        If
        Lessee knows, or has reasonable cause to believe, that a Hazardous Substance
        has
        come to be located
        in, on, under or about the Premises or the Building, other than as previously
        consented to by Lessor, Lessee shall immediately
        give Lessor written notice thereof, together with a copy of any statement,
        report, notice, registration, application, permit, business plan, license,
        claim, action, or proceeding given to, or received from, any governmental
        authority or private party concerning the
        presence, spill, release, discharge of, or exposure to, such Hazardous Substance
        including but not limited to all such documents as may be involved in any
        Reportable Use involving the Premises. Lessee shall not cause or permit any
        Hazardous Substance to be spilled
        or released in, on, under or about the Premises (including, without limitation,
        through the plumbing or sanitary sewer system).

       

      17.3
        Indemnification.
        Lessee
        shall indemnify, protect, defend and hold Lessor, its agents, employees,
        lenders
        and ground lessor, if any, and the Premises, harmless from and against any
        and
        all damages, liabilities, judgements, costs, claims, liens, expenses, penalties,
        loss of permits and attorneys' and consultants' fees arising out of or involving
        any Hazardous Substance brought onto the Premises by or for Lessee or by
        anyone
        under Lessee's control. Lessee's obligations under this Paragraph 17.3 shall
        include, but not be
        limited to, the effects of any contamination or injury to person, property
        or
        the environment created or suffered by Lessee,
        and the cost
        of
        investigation (including consultants' and attorneys' fees and testing), removal,
        remediation, restoration and/or abatement thereof,
        or of any contamination therein involved, and shall survive the expiration
        or
        earlier termination of this Lease. No termination, cancellation
        or release agreement entered into by Lessor and Lessee shall release Lessee
        from
        its obligations under this Lease with respect to Hazardous Substances, unless
        specifically so agreed by Lessor in writing at the time of such
        agreement.

       

      17.4 Lessee's
        Compliance with Requirements.
        Lessee
        shall, at Lessee's sole cost and expense, fully, diligently and in a timely
        manner,
        comply with all "Applicable Requirements," which term is used in this Lease
        to
        mean all laws, rules, regulations, ordinances, directives, covenants, easements
        and restrictions of record, permits, the requirements of any applicable fire
        insurance underwriter or rating bureau, and the recommendations of Lessor's
        engineers and/or consultants, relating in any manner to the Premises (including
        but
        not
        limited to matters pertaining to (i) industrial hygiene, (ii) environmental
        conditions on, in, under or about the Premises, including
        soil and groundwater conditions, and (iii) the use, generation, manufacture,
        production, installation, maintenance, removal, transportation, storage,
        spill,
        or release of any Hazardous Substance), now in effect or which may hereafter
        come into effect. Lessee shall,
        within five (5) days after receipt of Lessor's written request, provide Lessor
        with copies of all documents and information, including but not
        limited to permits, registration, manifests, applications, reports and
        certificates, evidencing Lessee's compliances, reports
        and certificates, evidencing Lessee's compliance with any Applicable
        Requirements specified by Lessor, and shall immediately
        upon receipt, notify Lessor in writing (with copies of any documents involved)
        of any threatened or actual claim, notice, citation,
        warning, complaint or report pertaining to or involving failure by Lessee
        or the
        Premises to comply with any Applicable Requirements

       

      18.
        Examination Lease. Submission
        of this instrument for examination or signature by Lessee does not constitute
        a
        reservation of or option
        for lease, and it is not effective as a lease or otherwise until execution
        and
        delivery by both Lessor and Lessee. The parties hereto
        have executed this Lease as of the date first set forth above. The Addendum
        attached containing Paragraphs 19-38 is incorporated
        as a part of this Lease. In the event of any conflict between the printed
        portion of the Lease and the typed Addendum, the typed Addendum provisions
        shall
        prevail. (See Addendum-Paragraphs 19-37.)

      


      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

       

      
        	ADDRESS:	LESSEE:
	 	 	 
	 
                
                362
                  Main Street

                Venice,
                  CA 90291

              	
                DIGITAL
                  DOMAIN

                (a New York general partnership)

              
	 
 	 
 	 
 
	 	By:  	/s/ Steven
                J.
                Fredericks 
	 	
                
Steven
                J. Fredericks, CFO
	 	 
	 	Date:
                April
                27, 2005


      

            

       

      
        
          	 	LESSOR:
	 	 	 
	
                  433
                    N. Camden Drive, Suite 820

                  Beverly
                    Hills, CA 90210

                	
                  THE
                    RICHLAR PARTNERSHIP

                  (a California general partnership)

                
	 
 	 
 	 
 
	 	By:  	/s/ Lawrence
                  N. Field
	 	
                  

                  Lawrence
                    N. Field, General Partner

                
	 	 
	 	Date:
                  April
                  28, 2005




      

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

      ADDENDUM
        TO LEASE DATED APRIL 4, 1995 BY AND BETWEEN THE RICHLAR PARTNERSHIP (A
        CALIFORNIA GENERAL PARTNERSHIP), AS LESSOR, AND DIGITAL DOMAIN (A NEW YORK
        GENERAL PARTNERSHIP), AS LESSEE, FOR THE PREMISES LOCATED AT 362 MAIN STREET,
        VENICE, CALIFORNIA.

       

      
        	19.	
                The
                  lease/rent commencement date shall be three (3) days from the date
                  of
                  Lessor's written notice to Lessee
                  stating that Lessee's tenant improvements are substantially
                  completed.

              


      

       

      
        	20.	
                Tenant
                  Improvement. 

              


      

       

      Lessor,
        at its cost, will have its general contractor make the following tenant
        improvements to the Premises prior
        to
        lease commencement;

       

      A. Mezzanine

      
        	 	
                1.

              	
                Paint
                  mezzanine offices and two (2) stairwells. Lessee shall choose paint
                  from
                  building standard
                  samples.

              


      

      
        	 	
                2.

              	
                Carpet
                  mezzanine offices and two (2) stairwells. Lessee shall choose carpet
                  from
                  building standard
                  samples.

              


      

      
        	 	
                3.

              	
                Install
                  two (2) - four (4) ton heating and air conditioning
                  units.

              


      

      
        	 	
                4.

              	
                Replace
                  bathroom fixtures, install grab bar at toilet and
                  clean.

              


      

      
        	 	
                5.

              	
                Install
                  new ceiling tiles and adequate
                  lighting.

              


      

      


      B.
        Warehouse

      
        	 	
                1.

              	
                Install
                  four (4) - five (5) ton heating and air conditioning units. 

              


      

      
        	 	
                2.

              	
                Remodel
                  existing two (2) bathrooms to comply with city handicapped requirements.
                  Install new fixtures
                  and clean. 

              


      

      
        	 	
                3.

              	
                Install
                  approximately thirty (30) - 8 foot fluorescent light fixtures. 

              


      

      
        	 	
                4.

              	
                Repair
                  ceiling foil as required. 

              


      

      
        	 	
                5.

              	
                Install
                  required electric sub-panels in Premises and electric outlets at
                  locations
                  agreed to between
                  Lessor and Lessee. 

              


      

      
        	 	
                6.

              	
                Lessor
                  to contribute a $1,000 carpet allowance for the area directly below
                  the
                  mezzanine. Lessee shall be responsible for any cost above $1,000.
                  

              


      

      
        	 	
                7.

              	
                Adequate
                  lighting for under mezzanine area. 

              


      

      


      
        	21.	
                Tenant
                  Improvement Reimbursement

              


      

       

      In
        the
        event Lessee exercises its first Option to Extend the Lease, as set forth
        in
        Paragraph 22 below, Lessor
        shall reimburse Lessee for an amount not to exceed $10,000 for tenant
        improvements made to the Premises
        by Lessee. Lessor shall reimburse Lessee upon inspection of the improvements
        and
        receipt of all
        paid
        invoices for the improvement work submitted by Lessee at any time during
        the
        first option term.

       

      In
        the
        event Lessee exercises its second Option to Extend the Lease, as set forth
        in
        Paragraph 22 below, Lessor
        shall reimburse Lessee an additional amount not to exceed $10,000 for additional
        tenant improvements
        (that is, tenant improvements in addition to those for which a reimbursement
        has
        been made to
        Lessee
        pursuant to the immediately preceding paragraph) made to the Premises by
        Lessee.
        Lessor shall reimburse Lessee upon inspection of the improvements and receipt
        of
        all paid invoices for the improvement
        work submitted by Lessee at any time during the second option term.

       

      
        
          	22.	
                  Optionto
                    Extend Term. 

                


        

      

       

      Lessor
        hereby grants to Lessee two (2) consecutive three (3) year Options to Extend
        the
        terms of this Lease
        upon the expiration of the initial lease term upon the following terms and
        conditions:

       

      
        
          
            	
                  	a)	
                    Lessee
                      shall give Lessor no less than three (3) months' prior written
                      notice of
                      its intent to exercise the first Option to Extend and four
                      (4) months'
                      prior written notice of its intent to exercise the second Option
                      to Extend.

                  


          

        

      

       

      
        
          
            	
                  	b)	
                    Both
                      at the time of giving notice of its intent to exercise each
                      of the Options
                      and at the time any lease
                      extension pursuant to such notice is entered into, Lessee shall
                      not be in
                      default under the terms
                      of the Lease.

                  


          

        

      

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

      
        
           

          
            	
                  	c)	
                    The
                      monthly rental for each Option term is as
                      follows:

                  


          

        

      

       

      
        	
                First
                  Option

              	
                Base
                  Monthly Rent

              	
                Second
                  Option

              	
                Base
                  Monthly Rent

              
	
                Year
                  2

              	
                $10,880

              	
                Year
                  5

              	
                $12,130

              
	
                Year
                  3

              	
                $11,280

              	
                Year
                  6

              	
                $12,530

              
	
                Year
                  4

              	
                $11,680

              	
                Year
                  7

              	
                $12,930

              


      

      


      Lessee
        shall receive free rent for the eleventh (11th) and twelfth (12th) months
        of the
        lease term only if Lessee validly exercises the first Option.

       

      Lessee
        shall receive free rent
        for
        the forty-seventh (47th) and forty-eighth (48th) months of the lease term
        only
        if
        Lessee validly exercises the second Option.

       

      
        	23.	
                Roof
                  Warranty. 

              


      

       

      Lessor,
        at its cost, shall be responsible for all required roof maintenance and repairs
        during the initial lease term
        and
        first option term, if applicable, only. Lessor shall not be responsible for
        repair and maintenance to any
        roof
        damage caused by Lessee.

       

      
        	24.	
                Real
                  Property Tax Protection. 

              


      

       

      To
        the
        extent the real property taxes described in Paragraph 10 of the Lease increase
        as a result of a change in ownership or sale of the property of which the
        Premises form a part (the "Property") during the initial lease term, Lessee
        shall not be responsible for payment of its prorata share of any portion
        of said
increase
        resulting from the first change in ownership or sale of the
        Property.

       

      
        	25.	
                Seismic
                  Retrofit Requirements. 

              


      

       

      Lessor,
        at its cost, shall comply with all required seismic retrofit requirements
        to the
        Premises imposed by any
        governmental authority during the initial lease term and option term, if
        applicable.

       

      
        	26.	
                Hazardous
                  Materials. 

              


      

       

      To
        the
        best of Lessor's knowledge, there is no asbestos or hazardous/toxic materials
        located at the Premises.
        Lessor indemnifies Lessee from liability arising from any hazardous substance
        conditions which
        existed prior to lease commencement.

       

      
        	27.	
                Condition
                  of Premises. 

              


      

       

      Lessor
        believes, to the best of its knowledge, that the improvements comprising
        the
        Premises meet all code
        requirements as of the date of this Lease. Lessee shall be responsible for
        meeting code requirements
        for all alterations or renovations made by Lessee.

       

      Lessor
        warrants that the HVAC and electrical systems in the Premises shall be in
        good
        working order effective upon the date of this Lease.

       

      
        	28.	
                Signage.
                  

              


      

       

      Lessee
        may install at Lessee's expense any such signage as may be permitted by law
        and
        no other signs may be installed on the property without the approval of Lessee.
        Prior to the installation of any such signs, Lessee
        shall submit detailed plans thereof to Lessor for Lessor's prior approval
        which
        approval shall not be
        unreasonably withheld.

       

      
        	29.	
                Non-Disturbance.
                  

              


      

       

      With
        respect to any lien mortgages, deeds of trust or ground leases entered into
        by
        and between Lessor and any such mortgagee and/or any beneficiary of any deed
        of
        trust or other such ground lease granted by Lessor (collectively referred
        to as
        "Lessor's Mortgagee"), Lessor shall secure and deliver to Lessee a
        non-disturbance agreement reasonably acceptable to Lessor and Lessee from
        and
        executed by Lessor's Mortgagee for the benefit of Lessee.

       

      
        
          
            	30.	
                    Lessee's
                      Access to Premises.


                  


          

        

      

       

      Lessee
        shall have access to the Premises seven (7) days per week, twenty-four (24)
        hours per day except
        for third party interruptions which are beyond the reasonable control of
        Lessor.

       

      
        
          
            	31.	
                    Operating
                      Expenses. 

                  


          

        

      

       

      Lessee
        shall not be responsible for the payment of any administrative expenses,
        or any
        expenses occurred in marketing the Premises for sale or lease or incurred
        as a
        result of a refinancing of the Premises.

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

      
        	32.	
                Parking.
                  

              


      

       

      Lessee
        shall be allocated thirty-one (31) reserved parking spaces, at no charge,
        between the front and rear
        parking lots of the building of which the Premises form a part. Lessee shall
        have exclusive use of the front parking lot directly in front of the Premises
        (13 spaces) and the balance of spaces (18 spaces) shall be at the rear parking
        lot directly behind Lessee's premises.

       

      
        	33.	
                Assignment
                  Mortgage and Subletting. 

              


      

       

      Notwithstanding
        anything contained in the Lease to the contrary, Lessee shall be permitted
        to
        sublease or assign
        all or any portion of the Premises at any time during the term of the Lease
        to
        any subsidiary or affiliate
        of Lessee without obtaining the prior approval or consent of Lessor. Lessee
        shall, however, provide
        to Lessor within thirty (30) days following the execution of any such sublease
        or assignment a copy
        of
        said documentation for Lessor's files. In the case of any assignment or
        subleasing, Lessee shall remain
        fully liable under the terms of the Lease.

       

      
        	34.	
                Lessor's
                  Access. 

              


      

       

      Supplementing
        Paragraph 16.17, but notwithstanding anything to the contrary contained in
        the
        Lease, Lessor's right of access to the Premises shall be subject (except
        upon
        occasions when entry
        shall be required by emergency circumstances) to Lessor giving Lessee reasonable
        prior notice of any such entry by Lessor and to Lessee's reasonable right
        to
        preserve areas of the Premises as are security areas in the operation
        of Lessee's business from such showing and such work to the extent that the
        parameters of such
        security areas have theretofore been clearly indicated by Lessee to Lessor.
        Further, in the event Lessor erects any "For Lease" signs pertaining to the
        Premises only, Lessee shall have the right (subject to the provisions of
        Paragraph 28) to erect its own sign indicating that Lessee will be moving
        to
        another location.

      


      
        	35.	
                Permits,
                  Licenses and Fees. 

              


      

       

      Lessee
        shall be fully
        responsible for the payment of any and all fees, including but not limited
        to
        the cost of all
        permits and licenses required as a result of tenant improvement work being
        performed by Lessee and/or
        as
        a result of Lessee's occupancy of the Premises.

       

      
        	36.	
                Attorneys'
                  Fees. 

              


      

       

      Supplementing
        Paragraph 16.16, in the event that legal action arises out of any dispute
        connected with this Lease,
        if
        Lessee is the prevailing party therein, Lessee shall
        then be entitled to reasonable attorney's fees and court costs.

      


      
        
          
            	37.	
                    Upon
                      receipt of a fully executed lease and a certificate of liability
                      insurance, Lessee may store personal property in the premise
                      rent
                      free.

                  


          

        

      

      


       

    

    
      
        	AGREED AND ACCEPTED: 	 	 	 	 
	 	 	 	 	 	 	 
	 	LESSOR:	 	 	LESSEE:
	 	 	 	 	 	 	 
	 	THE
                RICHLAR PARTNERSHIP  
                (a
                  California general partnership) 

              	 	 	DIGITAL DOMAIN
                (a
                  New York General Partnership)

              
	 	 	 	 	 
	 	By:	/s/ Lawrence
                N. Field	 	 	By:	/s/ Steven
                J.
                Fredericks 
	 	 	
                
Lawrence
                N. Field, General Partner 	 	 	 	
                
Steven
                J. Fredericks, CFO
	 	 	 	 	 	 	 
	 	 	Date:April
                28, 1995	 	 	 	Date:
April
                27, 1995


      

       

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

        
          

        

      

      AMENDMENT
        NO. 1 TO LEASE DATED APRIL 27, 1995 BY AND BETWEEN THE RICHLAR PARTNERSHIP
        (A
        CALIFORNIA GENERAL PARTNERSHIP) AS LESSOR AND DIGITAL DOMAIN, INC. (A NEW
        YORK
        GENERAL PARTNERSHIP), AS LESSEE FOR THE PREMISES LOCATED AT 362 MAIN STREET,
        VENICE, CALIFORNIA

      


      
        
          

        



      1.
        Lease
        Extension.

      


      Pursuant
        to Paragraph 3.1 of the Lease, the lease term shall be extended for three
        (3)
        years commencing June 1, 1999 and expiring May 31, 2002 (hereinafter called
        “Second Option Term”).

       

      2.
        Rent
        Schedule.

       

      Lessee
        shall pay Lessor base monthly rent for the Second Option Term as follows:
        

      
        

          
            	 	
                    Term

                  	 	
                    Base
                      Monthly Rent

                  	 
	 	
                    June
                      1, 1999 to May 31, 2000

                  	 	
                    $
                      12,130.00

                  	 
	 	
                    June
                      1, 2000 to May 31, 2001

                  	 	
                    $
                      12,530.00

                  	 
	 	
                    June
                      1, 2001 to May 31, 2002

                  	 	
                    $
                      12,930.00

                  	 


          

        

      

       

      3.
        Except
        for the above modifications, all other terms, covenants and conditions of
        the
        lease shall remain unmodified and in full force and effect. 

      
         

        
          	AGREED AND ACCEPTED:	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	LESSOR: 	 	 	LESSEE:
	 	 	 	 	 	 	 	 	 
	 	
                  THE
                    RICHLAR PARTNERSHIP

                  (a
                    California general partnership) 

                	 	 	DIGITAL DOMAIN, INC.
                  (a
                    Delaware corporation)

                
	 	 	 	 	 	 	 	 	 
	 	 	By:	THE
                  RILAR
                  PARTNERSHIP, General
                  Partner 	 	 	By:	/s/ 
Steven
                  J. Fredericks 
	 	 	 	 	
                	 	 	 	
                  
Steven
                  J. Fredericks, CFO
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Date:
February
                  8, 1999
	 	 	 	 	 	 	 	 	 
	 	 	 	By:	CARMELITA R.E. INVESTMENTS,
                  INC.,
                  General
                    Partner

                	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	By: /s/ Lawrence N. Field 	 	 	 	 
	 	 	 	 	
                  
Lawrence
                  N. Field, General Partner 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	Date: February
                  12, 1999 	 	 	 	 


        

         

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      AMENDMENT
        NO 2 TO LEASE DATED APRIL 27, 1995, BY AND BETWEEN THE RICHLAR PARTNERSHIP
        (A
        CALIFORNIA GENERAL PARTNERSHIP), AS LESSOR, AND DIGITAL DOMAIN, INC. (A DELAWARE
        CORPORATION),
        AS LESSEE, FOR THE PREMISES LOCATED AT 362 MAIN STREET, VENICE, CALIFORNIA.

       

        
          

        

      

       

      
        	1.	
                Option
                  to Extend.

              


      

       

      Lessor
        hereby grants to Lessee an Option to Extend the term of this Lease for a
        period
        of four (4) years and seven (7) months commencing June 1, 2002 and expiring
        December 31, 2006 upon the following terms and conditions:

       

      
        	 	
                a.

              	
                Lessee
                  shall give Lessor written notice of its intent to exercise the
                  Option at
                  least six (6) months
                  prior to the expiration of the lease
                  term.

              


      

       

      
        	 	
                b.

              	
                Both
                  at the time of giving the notice of its intent to exercise its
                  Option and
                  at the time any agreement
                  pursuant to such notice is entered into, Lessee shall not be in
                  default
                  nor have been
                  in default during the lease term.

              


      

       

      
        	 	
                c.

              	
                In
                  the event Lessee elects to exercise this Option, the initial base
                  rental
                  during the option period shall be at ninety-five percent (95%)
                  of fair
                  market value, but in no event less than 105% or greater than 115%
                  of the
                  base rental paid for the prior year with 3% fixed annual increases
                  thereafter.

              


      

       

      
        	 	
                d.

              	
                "Fair
                  Market Value" shall be determined by rental rates quoted for
                  office/production space built
                  out with at least fifty percent (50%) office space in the Venice/Santa
                  Monica area in clean
                  condition, with adjacent free parking, ranging in size from 7,500
                  square
                  feet to 15,000 square
                  feet.

              


      

       

      
        	2.	
                Except
                  for the above modification, all other terms, covenants and conditions
                  of
                  the Lease shall remain unmodified
                  and in full force and effect.

              


      

      
        
           

          
            	AGREED AND ACCEPTED:   


          

           

          
            	LESSOR:	 	 	LESSEE:
	 	 	 	 	 	 	 
	
                    
                      
                        THE
                          RICHLAR PARTNERSHIP

                        (a
                          California general partnership)

                      

                    

                  	 	 	DIGITAL DOMAIN, INC.
                    (a
                      Delaware corporation)

                  
	 	 	 	 	 	 	 
	
                    By:
                      THE RILAR PARTNERSHIP, General Partner

                  	 	 	 	 
	 	 	 	 	 	 	 
	 	By:	 CARMELITA
                    R.E. INVESTMENTS, INC. 	 	 	By:	 /s/ 
C.
                    Bradley Call  
	 	 	
                  	 	 	 	
                    
                      
C.
                      Bradley Call, SVP

                  
	 	 	 	 	 	 	 
	 	 	 	 	 	 	Date:
6/19/2001
	 	 	 	 	 	 	 
	 	By:  /s/ Lawrence N.
                    Field  	 	 	 	 
	 	
                    
                      
Lawrence
                      N. Field, President

                  	 	 	 	 
	 	 	 	 	 	 	 
	 	Date:
6/20/2001	 	 	 	 
	 	 	 	 	 	 	 
	 	ADDRESS  	 	 	 	ADDRESS
	 	
                    433
                      N. Camden Drive, Suite 820

                    Beverly
                      Hills, CA 90210

                  	 	 	 	
                    300 Rose Avenue

                    Venice, CA 9029

                  


          

          
            
              
              

            

            
              
              

              
                

              

            

            
              
              

            

          

        

      

       


      AMENDMENT
        NO 3 TO LEASE DATED APRIL 27, 1995, BY AND BETWEEN THE RICHLAR PARTNERSHIP
        (A
        CALIFORNIA GENERAL PARTNERSHIP), AS LESSOR, AND DIGITAL DOMAIN, INC. (A DELAWARE
        CORPORATION), AS LESSEE, FOR THE PREMISES LOCATED AT 362 MAIN STREET, VENICE,
        CALIFORNIA.

      


      


      
        	 	
                1.

              	
                Lease
                  Extension.

              


      

      


      The
        lease
        term is extended for a period of four (4) years and seven (7) months commencing
        June 1, 2002 and expiring December 31, 2006 (hereinafter referred to as
        "Extended Term").

      


      
        	 	
                2.

              	
                Rent
                  Schedule.

              


      

      


      Lessee
        shall pay Lessor base monthly rent during the Extended Term as follows:



      

        
          	
                  Term

                	 	
                  Base
                    Monthly Rent

                	 
	 	 	 	 
	
                  June
                    1, 2002 to July 31, 2002

                	 	
                  waived

                	 
	
                  August
                    1, 2002 to November 30, 2002

                	 	
                  $

                	
                  7,434.75

                	 
	
                  December
                    1, 2002 to December 31, 2002

                	 	
                  $

                	
                  14,869.50

                	 
	
                  January
                    1, 2003 to May 31, 2003

                	 	
                  $

                	
                  15,489.06

                	 
	
                  June
                    1, 2003 to May 31, 2004

                	 	
                  $

                	
                  15,935.15

                	 
	
                  June
                    1, 2004 to May 31, 2005

                	 	
                  $

                	
                  16,394.62

                	 
	
                  June
                    1, 2005 to May 31, 2006

                	 	
                  $

                	
                  16,867.87

                	 
	
                  June
                    1, 2006 to December 31, 2006

                	 	
                  $

                	
                  17,355.32

                	 


        



      
        	 	
                3.

              	
                Except
                  for the above modifications, all other terms, covenants and conditions
                  of
                  the Lease shall remain unmodified and in full force and
                  effect.

              


      

      
         

        
          	AGREED AND ACCEPTED:	 	 	 	 
	 	 	 	 	 	 	 	 	 
	LESSOR:	 	 	LESSEE:
	 	 	 	 	 	 	 	 	 
	 	
                  
                    
                      
                        THE
                          RICHLAR PARTNERSHIP    

                        (a
                          California general partnership)

                      

                    

                  

                	 	 	DIGITAL DOMAIN, INC.
                   (a
                    Delaware corporation)

                
	 	 	 	 	 	 	 	 	 
	 	 	By: 	THE
                  RICHLAR
                  PARTNERSHIP, General Partner	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	By:	CARCARMELITA
                  R.E.
                  INVESTMENTS, INC. 	 	 	By:	/s/ 
C.
                  Bradley Call  
	 	 	 	 	
                	 	 	 	
                  
C.
                  Bradley Call, SVP
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	Date:
April
                  22, 2002
	 	 	 	 	 	 	 	 	 
	 	 	 	By: 	/s/ Lawrence N.
                  Field 	 	 	 	 
	 	 	 	 	
                  
Lawrence
                  N. Field, President	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 Date: April 25,
                  2002	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	ADDRESS  	 	 	 	ADDRESS
	 	 	
                  433
                    N. Camden Drive, Suite 820   

                  Beverly
                    Hills, CA 90210  

                	 	 	 	
                  300
                    Rose Avenue

                  Venice, CA
                    9029