EXHIBIT
      10.3


    COMMERCIAL
      LEASE FORM

    


    1.
      Parties.
      This
      Lease dated July 12, 1993, is made by and between The Richlar 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
      300 Rose Avenue and 320 Hampton Drive, Venice, California, consisting of four
      buildings totaling approximately 67,570 square feet and adjacent perking areas
      as shown on the attached plan (herein called “The Premises”). (See
      Addendum-Paragraph 22.)

    


    3.
      Term.

    


    3.1
      Term.
      The term
      of this Lease shall be for ten (10) years commencing on January 1, 1994 and
      ending on December 31, 2003 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 $-------------------
      payable
      in equal monthly payments of $-------------------
      (See
      Addendum - Paragraph 17) in advance, on the first day of each month of the
      term
      hereof. Lessee shall pay Lessor upon execution hereof $67,500.00 as rent for
      January, 1994. 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.

    


    4.1
      Adjustments to Rent.

    


    (a)
      Definitions.“Index”
      shall mean the Consumer Price Index for All Urban Consumers for the Los
      Angeles-Riverside-Anaheim Metropolitan Area: All Items (1982-84=100), issued
      by
      the Bureau of Labor Statistics of the United States Department of Labor. In
      the
      event the Index shall hereafter be converted to a different standard reference
      base or otherwise revised, the determination of the Percentage Increase (defined
      below) shall be made with the use of such conversion factor, formula or table
      for converting the Index as may be published by the Bureau of Labor Statistics
      or any successor or substitute governmental entity or, if said Bureau (or any
      successor or substitute governmental entity) shall not publish the same, then
      with the use of such conversion factor, formula or table as may be published
      by
      Prentice Hall, Inc. or, failing such publication, by any other nationally
      recognized publisher of similar statistical information. In the event the Index
      shall cease to be published, then, for the purposes of this Lease, there shall
      be substituted for the Index such other index as Lessor and Lessee shall agree
      upon, and, if they are unable to agree within ninety (90) days after the Index
      ceases to be published, such matter shall be determined in Los Angeles by
      arbitration in accordance with the rules of the American Arbitration
      Association.

    


    “Base
      Index” (See Addendum-Paragraph 33.)

    


    “Anniversary
      Month” shall mean December of each calendar year during the terms of the Options
      to Extend set forth in Paragraph 33 of the Addendum. 

    


    “Percentage
      Increase” shall mean the percentage equal to the fraction, the numerator of
      which shall be the Index in the Anniversary Month less the Base Index, and
      the
      denominator of which shall be the Base Index.

     

    (b)
      Rental Adjustment.
      If the
      Index in an Anniversary Month shall exceed the Base Index, then the Rent payable
      for the ensuing calendar year, and thereafter until a new index comparative
      statement is sent to Lessee, shall be increased by an amount equal to the
      Percentage Increase multiplied by the Annual Rent set forth in the first
      sentence of Article 4. At any time after January 1st
      of the
      said ensuing calendar year, Lessor shall send Lessee an index comparative
      statement setting forth (a) the Index in the Anniversary Month preceding the
      date of the statement, (b) the Base Index, (c) the Percentage Increase, and
      (d)
      the increase in the Annual Rent. On the first day of the calendar month
      (“current month”) following the month in which the Index comparative statement
      was sent (i) Lessee shall pay to Lessor a sum equal to one-twelfth of said
      Increase in the Annual Rent multiplied by the number of calendar months of
      the
      Lease term then elapsed since said January 1st,
      and
      (ii) thereafter, commencing with the current month and continuing monthly
      thereafter until a different index comparative statement is sent to Lessee,
      the
      monthly installments of rent shall be increased by an amount equal to
      one-twelfth of said increase. In the event the last mentioned increased monthly
      installments of rent shall continue beyond the end of the calendar year for
      which such payments were payable, any necessary adjustment will be made when
      the
      next succeeding index comparative statement is sent to Lessee. In no event
      shall
      the rent computed for any Lease Year be less than the rent for any prior Lease
      Year.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    


    5.
      Security Deposit.
      Lessee
      shall deposit with Lessor upon execution hereof $-------------------
      (See
      Addendum-Paragraph 25.) as security for Lessee's faithful performance of
      Lessee's obligation hereunder. If Lessee falls 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 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 inheres
      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 shell 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.

    


    6.3
      Condition of Premises.
      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.
      (See
      Addendum-Paragraphs 18, 19, and 28.) Lessee shall keep in good order, condition
      and repair the Premises and every part thereof, structural 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.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
 

    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. (See Addendum-Paragraph 28.)

    


    7.3
      Lessor's Rights.
      (See
      Addendum-Paragraphs 18 arid 19.) 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.
      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 structured or non-structural, 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. (See
      Addendum-Paragraph 28.)

    


    (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
      Lessor's attorneys' fees and costs in participating in such an action if Lessor
      shall decide it is to its best interest to do so.

    


    (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. (See
      Addendum-Paragraph 28.)

     

    7.6
      Lessor's Option.
      (See
      Addendum-Paragraph 36.) 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.
      Lessor's 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.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    


    8.
      Insurance and Indemnity. (See
      Addendum-Paragraph 24.)

    


    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.

    Deleted.

    


    8.3
      Property Insurance.

    


    (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 $4,000,000.00, 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.

    


    (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.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    


    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 waver.

    


    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 Lessee's 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 of 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 the repair of the Premises, to substantially their condition
      immediately prior to the even tof 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.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    


    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 reasonable
      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 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.
      (See
      Addendum-Paragraph 20.)

    


    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.”

    


    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.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
 

    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 27.)

    


    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 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, after default by Lessee, collect rent from the
      assignee, subtenant of 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
      or
      the subtenant form 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 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 provisions 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

    


    (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 a 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;

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    


    (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 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 and 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 for the proposed subtenant or assignee or mortgagee and all of the
      principal terms and conditions of the proposed subletting or assignment or
      mortgage included, 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 the (10) business
      days from the receipt of any such notice to consent, decline to consent to
      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
      of 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 exceed 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 damaged 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.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    (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
      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 9or 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
      to
      Lessor, any notices, demands, request or other communications which may
      hereafter be given by 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
      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 to 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.

    


    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 of 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.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    


    (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
      of 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.

    


    (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 the 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.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    


    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 therefore 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 other than Beitler
      Commercial Realty Services and Transaction Financial Corporation (both of whom
      represent Lessee only and which commission shall be paid by Lessor) 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 expense that the other may incur should such warranty and representation
      prove incorrect.

    


    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 modifications
      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 the 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).

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    (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 receive 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 for the collection of a
      judgment (or other judicial process) requiring the payment of money by Lessor
      in
      the even 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
      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.

    


    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 toe 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 all 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 et the time of the modification.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    


    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 he 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 a
      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 breech by Lessee if 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 it 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.

    


    16.15
      Subordination.
      (See
      Addendum-Paragraph 30.)

    (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.

     

    16.16
      Attorneys' Fees.
      (See
      Addendum-Paragraph 38.)

    (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.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    (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.
      Lessor
      and Lessor's 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. (See Addendum-Paragraph 36.)

    


    16.18
      Signs and Auctions.
      Lessee
      shall not place any sign upon the Premises or conduct any auction thereon
      without Lessor's prior consent. (See Addendum-Paragraph 29.)

    


    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.

    


    16.24
      Building Costs.
      Lessee
      shall pay to Lessor, in the manner provided in the following paragraph hereof,
      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 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);
      and fees for required licenses and permits.

    


    The
      costs
      referred to in the previous subparagraph 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.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    


    16.25
      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 deliver 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 17-38 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.

     

    
      
        	 	
                ADDRESS:

              	 	
                LESSEE:

              	 
	 	 	 	 	 
	 	
                300
                  Rose Avenue

              	 	
                DIGITAL
                  DOMAIN (a New York general partnership)

              
	 	
                Venice,
                  CA 90291

              	 	 	 
	 	 	 	 	 
	 	 	 	
                By:
                  /s/ Scott Ross

              	 
	 	 	 	
                
                  
Scott
                  Ross, President

              	 
	 	 	 	 	 
	 	 	 	
                Date:
                  July 12, 1993

              	 
	 	 	 	
                
                  

                

                 

              	 
	 	 	 	
                LESSOR:

              	 
	 	 	 	 	 
	 	
                433
                  N. Camden Drive

              	 	
                
                  THE RICHLAR
                    PARTNERSHIP

                

              
	 	
                Suite
                  820

              	 	 	 
	 	 	 	 	 
	 	 	 	
                By:
                  /s/ Lawrence N. Field

              	 
	 	 	 	
                
                  

                  
                    Lawrence N .
                      Field, 

                    General 
                      Partner

                  

                

              	 
	 	 	 	 	 
	 	 	 	
                Date:
                  July 13, 1993

              	 
	 	 	 	
                
                  

                

              	 


      


      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

    

    

      
        	
                17.
                  

              	
                Rent
                  Schedule.

              


      

       

      
        	
                                       
                  Term

              	
                Base
                  Monthly Rental

              
	
                January
                  1, 1994 - December 31, 1994

              	
                $67,500.00

              
	
                January
                  1, 1995 - December 31, 1995

              	
                $70,767.00

              
	
                January
                  1, 1996 - December 31, 1996

              	
                $74,192.00

              
	
                january
                  1, 1997 - December 31, 1997

              	
                $77,783.00

              
	
                January
                  1, 1998 - December 31, 1998

              	
                $81,548.00

              
	
                January
                  1, 1999 - December 31, 1999

              	
                $85,495.00

              
	
                January
                  1, 2000 - December 31, 2000

              	
                $89,634.00

              
	
                January
                  1, 2001 - December 31, 2001

              	
                $93,972.00

              
	
                January
                  1, 2002 - December 31, 2002

              	
                $98,520.00

              
	
                January
                  1, 2003 - December 31, 2003

              	
                $103,289.00

              


      

      


      The
        monthly rental for the initial Lease Term only is not subject to C.P.I.
        increases.

      


      
        	
                18.

              	
                Lessor's
                  Obligation - Roof Repairs. 

              


      

      Lessor
        agrees to pay for any necessary repairs to the roofs of the Premises (as
        to each
        of the four buildings listed in Paragraph 22 below) during the first six
        (6)
        months Lessee's occupancy of all or any part of each of the four buildings
        of
        which the Premises form a part, except in the case such repairs were caused
        by
        improvements made by or at the request of Lessee. Said six (6) month periods
        shall apply separately to each of the four buildings comprising the Premises.
        After the last to occur of said six (6) month periods (but in no event later
        than June 30, 1994) Lessee shall be fully responsible for all the roofs of
        the
        Premises.

      


      
        	
                19.
                  

              	
                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.

      


      
        	
                20.
                  

              	
                Real
                  Property Taxes.

              


      

      


      Lessor
        states that the real property taxes for the Premises for the tax year 1992/1993
        are approximately $26,000. To the extent said real property taxes increase
        as a
        result of a change in ownership or sale of the property, Lessee shall not
        be
        responsible for the payment of any portion of said increase during the first
        three (3) years of the Lease Term only. Thereafter, during the fourth (4th)
        through the tenth (10th) years of the Lease Term, Lessee shall be responsible
        for the payment of one-half (1/2) of said increase in real property taxes.
        By
        way of example only:

      


      Assume
        a
        transfer of the Premises occurs in the seventeenth (17th) month of the initial
        term of the Lease resulting in an increase in the property taxes for the
        Premises in the amount of $40,000 per year. Lessee shall be required to pay
        all
        property taxes on the Premises less $40,000 per year (on an annualized basis)
        beginning the eighteenth (18th) month through the thirty-sixth (36th) month
        of
        the initial Lease Term only. Lessee shall be required to pay all property
        taxes
        on the Premises less $20,000 per year (on an annualized basis) beginning
        the
        thirty-seventh (37th) month through the one hundred twentieth (120th) month
        of
        the initial Lease term only. Lessee shall pay all property taxes, without
        any
        deduction, during any option period or periods following the one hundred
        twentieth (120th) month of the initial Lease Term.

      
        
           

        

        
          16

          
            

          

        

        
           

        

      

      


      Solely
        in
        the case of increase in real property taxes resulting from capital improvements
        not requested by Lessee, Lessee shall not be obligated to pay the amount
        of such
        increase attributable to such non-requested capital improvements.

      


      
        	
                21.

              	
                Operating
                  Expenses.

              


      

      


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

      


      
        	
                22.

              	
                Premises.

              


      

      


      The
        Premises consist of four (4) buildings as listed below, built-in furniture
        to
        the extent owned by Lessor and fixtures attached thereto and located therein,
        parking facilities, site improvements, land and all easements and appurtenances
        associated therewith located on the property bounded by Rose Avenue on the
        north, Hampton Drive on the west, Third Avenue on the east and the property
        line
        of that building known as 350 Hampton Drive on the south. The building are
        more
        particularly described as:

      
        

          
            	
                    Building
                      Name

                  	
                    Building
                      Name

                  	
                    Use

                  	 	
                    Approx.
                      Size (Sq. Ft.)

                  
	
                    1

                  	
                    Antioch

                  	
                    Office

                  	 	
                    16,500

                  
	
                    2

                  	
                    Boathouse

                  	
                    Screening

                  	 	
                    4,370

                  
	
                    3

                  	
                    Shipping

                  	
                    Shipping

                  	 	
                    4,200

                  
	
                    4

                  	
                    Warehouse

                  	
                    Stage

                  	 	
                    42,500

                  
	 	 	
                    TOTAL
                      SQ. FT.

                  	 	
                    67,570

                  


          

        

         

      

      
        	
                23.

              	
                Prior
                  Occupancy of Premises Pursuant to
                  Sublease/Co-Occupancy.

              


      

      


      CLessor
        and Lessee acknowledge that Lessee will occupy all or portion of the Premises
        before the January 1, 1994 commencement date of this Lease under a sublease
        between Lessee and the present lessee of the Premises, Chiat/Day inc.
        Advertising. Lessor further acknowledges that Lessee’s subsidiaries, affiliates
        and associates may from time to time occupy a portion of said space but such
        co-occupancy shall not relieve Lessee of any of its responsibilities or
        obligations under the Lease.

      


      
        	
                24.

              	
                Insurance.

              


      

      


      Lessee
        shall reimburse Lessor in the manner set forth in the Paragraph 8 and 16.24
        of
        the Lease for the cost of the insurance obtained by Lessor which includes
        property, liability and rental loss insurance. The cost of earthquake coverage
        obtained by Lessor shall be reimbursable by Lessee to the extent that the
        premiums for such earthquake coverage do not exceed $10,000 per year. Lessee
        may
        solicit competing bids for any of the insurance coverage obtained by Lessor
        and
        Lessor will permit Lessee to be the “insuring party” as defined in Paragraph 8
        based upon a lower bid, expressly provided that such alternate coverage and
        insurer quality is equal to or better than that of the coverage provided
        by
        Lessor.

      


      
        	
                25.

              	
                Security
                  Deposit.

              


      

      


      Upon
        commencement of the Lease, Lessee shall deposit with Lessor a security deposit
        as follows:

      


      
        	 	
                1.

              	
                The
                  sum of $103,189 in cash which shall be held by Lessor pursuant
                  to
                  Paragraph 5 of the Lease without the payment of interest thereon
                  for the
                  full term of the Lease; plus

              


      

       

      
        
           

        

        
          17

          
            

          

        

        
           

        

      

       

      
        	 	
                2.

              	
                An
                  amount equal to $155,566 shall be deposited in the form of either
                  a cash
                  payment (which shall bear interest at regular passbook savings
                  account
                  rate of City National Band, said interest to be payable upon the
                  refund of
                  such deposit to Lessee) or in the form of a bank irrevocable letter
                  of
                  credit in the amount of $155,566 subject to Lessor’s approval of the form
                  and issuing bank of said letter of credit. Lessee shall designate
                  to
                  Lessor by November 30, 1993 the form in which said $155,566 portion
                  of the
                  security deposit shall be made. The $155,566 cash or letter of
                  credit
                  portion of the security deposit, as the case may be, shall be returned
                  to
                  Lessee at the end of the forty-eighth (48th)
                  month of the initial term of this Lease, provided no monetary or
                  material
                  default exists under any of the terms of the
                  Lease.

              


      

      


      
        	
                26.

              	
                Parking.

              


      

      


      Lessee
        shall have the exclusive use of all on-site parking during the term of the
        Lease, as it may be extended, the charge for which is included in the base
        rental for the Premises.

      


      
        	
                27.

              	
                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.

      


      
        	
                28.

              	
                Tenant
                  Improvements. 

              


      

      


      Lessee
        shall accept the Premises in "as-is" condition and Lessee may make such
        alterations and modifications to the Premises as it requires for its initial
        occupancy of the Premises, provided that Lessor may provide that the Premises
        be
        returned to their original configuration to the extent that Lessee makes
        changes
        to the building exterior, windows or structural systems in performing said
        initial work. Landlord shall give Lessee notice six (6) months before the
        lease
        expiration of any such requirement by Lessor.

      


      For
        any
        and all improvements constructed after the first six (6) months following
        Lessee's occupancy of the Premises, Lessor shall have the right to require
        that
        such later changes must also be returned to original condition by Lessee.
        In the
        case of such later improvements, Lessee shall submit plans depicting such
        work
        to Lessor at least ten (10) days prior to the proposed commencement date
        of the
        work. Prior to the commencement of any such work Lessor will confirm with
        Lessee
        whether Lessor requires the area affected by said work to be restored to
        original condition. In no event will Lessee be permitted to perform work
        which
        will result in the floor area of the Premises being increased without the
        prior
        written consent of Lessor, which consent may be withheld at Lessor's sole
        discretion.

      


      In
        connection with approved subleases or assignments for a portion of the Premises
        pursuant to Paragraph 12 of the Lease, Lessee may subdivide the space and
        build
        out separate distinct suites with their own ingress and egress to the common
        areas in compliance with applicable city codes and expressly subject to Lessor's
        prior written approval of the plans for such improvements.

      


      All
        alterations and modifications to the Premises are conditioned upon Lessee's
        acquiring a permit to do so from the appropriate governmental agencies, the
        furnishing of a copy thereof to Lessor prior to commencement of the work
        and the
        compliance of the Lessee with all conditions of said permits in a prompt
        and
        expeditious manner.

      


      
        	
                29.

              	
                Signage. 

              


      

      


      Lessee
        may install at Lessee's expense any such signage as may be permitted by law
        and
        no other signs may 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. During the last twelve (12) months of the lease term
        or
        in the event of default by Lessee, Lessor shall be permitted to post "For
        Lease"
        signs on or about the Premises. Lessor shall be permitted at any time to
        post
        "For Sale" signs on or about the Premises.

      
        
           

        

        
          18

          
            

          

        

        
           

        

      

      


      
        	
                30.

              	
                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.

      


      
        	
                31.

              	
                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.

      


      
        	
                32.

              	
                Hazardous
                  Materials.

              


      

      


      Lessor
        warrants and represents to Lessee that, to the best of Lessor’s knowledge, which
“knowledge” is limited to the personal knowledge of Lawrence N. Field, and
        without independent inquiry, there are no “Hazardous Substances” (defined below)
        in, on, under or about the Premises. Lessor shall indemnify and hold harmless
        Lessee, its partners and subsidiaries, and all of their respective directors,
        officers, employees, agents, successors, attorneys and assigns from and against
        any loss, damage, cost, expense or other liability (including, without
        limitation, clean-up costs and reasonable attorneys’ fees and costs) directly or
        indirectly arising out of or attributable to the use, generation, manufacture,
        production, storage, release, discharge, disposal or presence of any Hazardous
        Substance(s) in, on, under or about the Premises (i) at any time prior to
        the
        commencement of the term of this Lease, and (ii) at any time, to the extent
        attributable to Lessor and/or Lessor’s employees, invitees, customers, agents,
        contractors or any other person in or about the Premises on behalf of, or
        at the
        instruction of, Lessor. Lessee shall indemnify and hold harmless Lessor,
        its
        partners and subsidiaries and all of its employees, agents, successors,
        attorneys and assigns, from and any loss damage, cost, expense and reasonable
        attorneys’ fees and costs directly or indirectly arising out of or attributable
        to the use, generation, manufacture, production, storage, release, discharge,
        disposal or presence of any Hazardous Substance(s) in, on, under or about
        the
        Premises at any time during the term of the Lease or during the Period of
        Lessee’s occupancy of any part of the Premises, to the extent attributable to
        Lessee and/or Lessee’s employees, invitees, customers, agents, contractors or
        any other person in or about the Premises on behalf of, or at the instructions
        of Lessee.

      


      As
        used
        herein, Hazardous Substances shall include but not be limited to asbestos,
        lead,
        petroleum, explosives, radioactive materials, chemicals known to cause cancer
        or
        reproductive toxicity, and substances defined as “hazardous substances”,
“hazardous materials”, “toxic substances” or bearing similar or analogous
        definitions in the Comprehensive Environmental Response, Compensation
        Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
        Section 9601, et
        seq.,
        as now
        or hereinafter amended (“CERCLA”), the Resource Conservation and Recover Act, 42
        U.S.C. Section 6901, et
        seq.,
        as now
        or hereafter amended, the Hazardous Materials Transportation Act, 49 U.S.C.
        Section 1801, et
        seq.,
        as now
        or hereafter amended, the Clean Water Act, 33 U.S.C. Section 1251, et
        seq.,
        as now
        or hereafter amended, the Clean Air Act, 42 U.S.C. Section 7901, et
        seq.,
        as now
        or hereafter amended, the Toxic Substances Control Act, 15 U.S.C. Section
        2601
        through 2629, as now or hereafter amended, the Safe Drinking Water Act, 42
        U.S.C. Section 300f through 300j, as now or hereafter amended, the
        Carpenter-Presley-Tanner Hazardous Substance Account Act, Section 25300,
        et
        seq.,
        of the
        California Health and Safety Code, Division 20, Chapter 6.8, the Hazardous
        Waste
        Control Law, Section 25100, et
        seq.,
        of the
        California Health and Safety Code, Division 20, the Safe Drinking Water and
        Toxic Enforcement Act of 1986, Section 25249.2, et
        seq.,
        of the
        California Health and Safety Code, Division 20, the California Water Code,
        and
        any similar federal, state, and local laws and ordinances and the regulations
        now or hereafter adopted, published and/or promulgated pursuant
        thereto.

      
        
           

        

        
          19

          
            

          

        

        
           

        

      

      


      
        	
                33.

              	
                Options
                  to Extend Term.

              


      

      


      Lessor
        hereby grants Lessee two (2) successive options to extend the term of this
        Lease
        for five (5) year periods each (the “Option Period”) commencing January 1, 2004
        and terminating December 31, 2008 in the case of the First Option and commencing
        January 1, 2009 and terminating December 31, 2013 in the case of the Second
        Option. The rental payable at commencement date of each Option Period shall
        be
        at the greater of (1) 95% of the then Fair Market Rental Value for the Premises
        (as defined below) or (2) (in the case of the First Option) the rental payable
        for the one hundred twentieth (120th)
        month
        of initial term of the Lease as adjusted by the change in the Consumer Price
        Index set forth in Paragraph 4.1(a) of the Lease from the commencement date
        of
        the Lease to the commencement date of the First Option and (in the case of
        the
        Second Option) the rental payable for the sixtieth (60th)
        month
        of the First Option term. Commencing at the beginning of the second year
        of each
        Option Period and annually thereafter, the rental shall be increased as provided
        for in Paragraph 4.1 of the Lease using the month of December, 2003 as the
        Base
        Index for the First Option and the month of December, 2008 as the Base Index
        for
        the Second Option.

      


      “Fair
        Market Value” shall mean the rent the Premises could be rented for on the open
        market based upon a survey of comparable office buildings and industrial
        buildings improved with not less than fifty percent (50%) office space on
        Main
        Street from Pico Boulevard on the north to Brooks Avenue on the south. Fair
        Market Rental Value shall also take into consideration the fact that on-site
        parking for the Premises is including in the Base Rent payments. Lessor shall
        notify Lessee of Lessor’s determination of Fair Market Rental Value no less than
        thirty (30) days prior to the proposed commencement date of each Option.
        If
        Lessee objects to Lessor’s opinion of Fair Market Rent, then within ten (10)
        days after receipt of Lessor’s notice, Lessee shall notify Lessor of Lessee’s
        opinion of the Fair Market Rent for the Premises and the parties shall, for
        thirty (30) days after Lessor’s receipt of Lessee’s opinion, negotiate in good
        faith to reach agreement on such Fair Market Rent. If Lessee fails to give
        such
        notice, Lessor’s determination of Fair Market Rent shall be
        conclusive.

      


      If
        Lessor
        and Lessee fail to agree on the Fair Market Rent for the Premises within
        the
        thirty (30) day negotiation period, then they shall each promptly appoint
        an
        appraiser familiar with the geographic area in which the Premises are located,
        who shall determine such Fair Market Rent. If two appraisers are appointed,
        they
        shall promptly meet in an effort to agree upon the Fair Market Rent. If,
        on or
        before sixty (60) days following their appointment, the two appraisers cannot
        agree, then they shall mutually appoint a third appraiser. The third appraiser
        shall, in not more than forty-five (45) days following such appointment,
        deliver
        its opinion of the Fair Market Rent. The final determination of Fair Market
        Rent
        shall be the arithmetic average of the two appraisals of Fair Market Rent
        which
        are closest to each other; the remaining appraisal shall be ignored and not
        used
        to determine such Fair Market Rent.

      


      Lessor
        and Lessee shall each pay the cost of its own appraiser and one half of the
        cost
        of the third, if any. Each appraiser shall be a member of either the Appraisal
        Institute (MAI) or the American Society of Appraisers (ASA), shall have at
        least
        five years’ experience in the appraisals of commercial real property, and shall
        follow appraisal procedures approved by the MAI.

      


      Notice
        of
        Lessee’s exercise of this Option to Extend shall be given to Lessor at least
        fifteen (15) months and not more than eighteen (18) months prior (i) to the
        expiration date of the initial term of this Lease (in the case of the First
        Option) or (ii) the expiration date of the First Option Period (in the case
        of
        Second Option).

      


      Notwithstanding
        the foregoing, if Lessee is in default upon the Option notice dates, then
        the
        Option notice shall at the option of the Lessor be null and void and of no
        effect. It shall be further a condition of the effectiveness of Lessee’s Notice
        of Intent to exercise the Second Option that Lessee shall have validly exercised
        the First Option.

      
        
           

        

        
          20

          
            

          

        

        
           

        

      

      


      
        	
                34.
                  

              	
                Right
                  of First Negotiation.

              


      

      


      Should
        Lessor decide to sell the Premises during the term of this Lease, Lessor
        shall
        first offer the Premises to Lessee for a thirty (30) day exclusive negotiation
        period at a sales price, net of sales commission, and upon all the other
        material terms and conditions at which Lessor plans to market the Premises
        for
        sale. If a written purchase agreement acceptable to both parties does not
        result
        from said negotiation at the end of the thirty (30) day negotiation period,
        Lessor shall be free to sell the Premises to a third party (or to remove
        the
        Premises from the market for sale). If Lessor subsequently decides to reduce
        the
        offering price by 5% or more, Lessor shall then re-offer the Premises to
        Lessee
        for a ten (10) day exclusive negotiation period at the new offering
        price.

      


      
        	
                35.

              	
                Right
                  of First Refusal to Lease Additional
                  Space.

              


      

      


      Lessor
        grants to Lessee a fifteen (15) day right of first refusal to lease additional
        space in the buildings adjacent to the Premises owned by Lessor or its
        affiliates located in Venice, California. This right of first refusal to
        lease
        additional space is not applicable to any renewals or additional space taken
        by
        any existing tenants occupying space in said adjacent buildings.

      


      
        	
                36.

              	
                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 arid 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
        such “For Lease” signs, Lessee shall have the right (subject to the provisions
        of Paragraph 29) to erect its own sign indicating that Lessee will be moving
        to
        another location.

      


      
        	
                37.

              	
                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.

      


      
        	
                38.

              	
                Attorneys’
                  Fees.

              


      

      


      Supplementing
        Paragraph 16.16, in the event that legal action arises out of nay 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.

      
        
           

        

        
          21

          
            

          

        

        
           

        

      

       

       

    

    


    
      	AGREED
              AND ACCEPTED:	 	 	 
	 	 	 	 
	LESSOR: 	 	 	LESSEE:
	 	 	 	 
	THE
              RICHLAR PARTNERSHIP	 	 	DIGITAL
              DOMAIN
	(a
              California general partnership)	 	 	(a
              New York general partnership)
	 	 	 	 
	By:  /s/ Lawrence N. Field 
              	 	 	By: 
              /s/ Scott Ross 
	
              
                

              

              Lawrence
                N. Field, General Partner

            	 	 	
              
                

              

              Scott
                Ross, President

            
	 	 	 	 
	Date:
              July 13, 1993	 	 	Date:
              July 12, 1993


    

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

    


    AMENDMENT
      NO 1 TO LEASE DATED JULY 12, 1993 BY AND BETWEEN THE RIHLAR PARTNERSHIP (A
      CALIFORNIA GENERAL PARTNERSHIP), AS LESSOR, AND DIGITAL DOMAIN, INC. (A DELAWARE
      CORPORATION), AS LESSEE, FOR THE PREMISES LOCATED AT 300 ROSE AVENUE AND 320
      HAMPTON DRIVE, VENICE, CALIFORNIA.

    

      
        	
                1.

              	
                Lease
                  Extension.

              


      

      


      Pursuant
        to Paragraph 3.1 of the Lease, the lease term shall be extended for a five
        (5)-
        year period commencing January 1, 2004 and expiring December 31, 2008
        (hereinafter referred to as “Extension Period”).

      


      
        	
                2.

              	
                Rent
                  Schedule.

              


      

      


      Lessee
        shall pay Lessor base monthly rent during the Extension Period as
        follows:


      
        	
                Term

              	 	
                Base
                  Monthly Rent 

              	 
	
                January
                  1, 2004 to December 31, 2005

              	 	
                $

              	
                103,382.00

              	 
	
                January
                  1, 2006 to December 31, 2007

              	 	
                $

              	
                106,085.00

              	 
	
                January
                  1, 2008 to December 31, 2008

              	 	
                $

              	
                109,463.00

              	 


      

    

    

      
        	
                3.
                  

              	
                Base
                  Rental Abatement.

              


      

      


      Lessee’s
        base monthly rent shall be waived for the months of December 2002 and May
        2003.
        Lessee shall be required to pay its operating expense payment for real estate
        taxes and insurance for these months.

      


      
        	
                4.

              	
                Option
                  to Extend.

              


      

      


      Lessor
        hereby grants to Lessee an Option to Extend the term of this Lease for one
        (1)
        five (5) year period commencing upon the expiration of the Extension Period
        upon
        the following terms and conditions:

      
        	 	
                a.

              	
                Lessee
                  shall give Lessor written notice of its intent to exercise the
                  Option at
                  least twelve (12) months prior to the expiration of the Extension
                  Period.

              


      

      
        	 	
                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 occupy the entire Premises and 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 base rental
                  during
                  the option period shall be as
                  follows:

              


      

    

     

    
      
        	
                Term

              	 	
                Base
                  Monthly Rent 

              	 
	
                January
                  1, 2009 to December 31, 2009

              	 	
                $

              	
                109,463.00

              	 
	
                January
                  1, 2010 to December 31, 2011

              	 	
                $

              	
                112,842.00

              	 
	
                January
                  1, 2012 to December 31, 2013

              	 	
                $

              	
                116,220.00

              	 


      

      

        
          	 	
                  d.

                	
                  This
                    Option is expressly personal to Lessee and may not be assigned
                    or
                    otherwise transferred.

                


        

        

          
            	
                    5.

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

                  


          

        

      

    

    
       

      
        
           

        

        
          23

          
            

          

        

        
           

        

      

       

      
        
          	AGREED
                  AND ACCEPTED:	 	 	 
	 	 	 	 
	LESSOR: 	 	 	LESSEE:
	 	 	 	 
	THE
                  RIHLAR PARTNERSHIP	 	 	DIGITAL
                  DOMAIN
	(a
                  California general partnership)	 	 	(a
                  New York general partnership)
	 	 	 	 
	
                  By:
                    THE RICHLAR PARTNERSHIP, General Partner

                	 	 	 
	 	 	 	 
	
                  By:
                    CARMELITA R.E. INVESTMENTS, INC.,

                	 	 	 
	 	 	 	 
	
                  By: 
/s/
                    Lawrence N. Field  

                	 	 	By: 
                  /s/ Scott Ross 
	
                  
                    

                  

                  Lawrence
                    N. Field, General Partner

                	 	 	
                  
                    

                  

                  Scott
                    Ross, President

                
	 	 	 	 
	
                  Date:
October
                    23, 2002

                	 	 	Date: October
                  21, 2002


        

         

        
          
            
            

          

          
            24