Document:

Exhibit 10.97

 

SECOND AMENDMENT TO LEASE

(EXPANSION)

 

THIS SECOND AMENDMENT TO LEASE (the “Second Amendment”)
is made as of the 2nd day of June 1999, by and between
WILSHIRE-CAMDEN ASSOCIATES, a California limited partnership (“Landlord”) and
KENNEDY-WILSON INC., a Delaware corporation (“Tenant”)

 

RECITALS:

 

A.      Landlord
and Tenant entered into a certain Lease (the “Lease”) dated as of August 19,
1998, whereby Landlord leased to Tenant certain premises (the “Premises”) shown
and designated on the floor plan attached as Exhibit A of the Lease and
located on the second (2nd) floor of the certain building (the “Building”)
known as HEITMAN CENTRE - BEVERLY HILLS (now known as 9601 WILSHIRE) and
located at 9601 Wilshire Boulevard, Beverly Hills, California. The Premises
contain approximately 26,057 rentable square feet.

 

B.      Landlord
and Tenant entered into a certain First Amendment to Lease (the “First
Amendment”) dated March 5, 1999
pursuant to which an additional 937 rentable square feet (the “Additional
Premises”) was added to the Premises and certain other modifications were made.

 

C.      The Lease
and First Amendment shall be known collectively as the Lease unless specific
reference is made to a specific document.

 

D.      Landlord
and Tenant desire to amend the Lease to add certain expansion space to the
Premises upon the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the mutual
covenants and agreements herein and in the Lease contained, it is hereby agreed
as follows:

 

1.       DEFINED TERMS.
Each capitalized term used as a defined term in this Second Amendment but not
otherwise defined in this Second Amendment shall have the same meaning ascribed
to such term in the Lease.

 

2.       ADDITIONAL
PREMISES. Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord that certain premises (the “Second Additional Premises”) consisting of
approximately 822 square feet of rentable area located on the Garden Level of
the Building, as shown on Exhibit A-2 attached hereto and known as Suite GL-2
1. The Lease is hereby amended to add the Second Additional Premises to the
Premises as demised and defined in the Lease upon the same terms and provisions
specified in the Lease, except that:

 

(a)                                   The Base Rent for the Second Additional
Premises shall be Fifteen Thousand Seven Hundred Eighty-two and 40/100 ($15,782.40)[an
annual rate of $19.20 per square foot of Rentable Area of the Premises],
payable in equal monthly installments of One Thousand Three Hundred Fifteen and
20/100 ($1,315.20).

 

(b)           Intentionally
omitted.

 

(c)                                   The lease term for the Second Additional
Premises shall be for a twelve (12) month term commencing on June 1, 1999
(the “Second Additional Premises Commencement Date”), and end on May 31,
2000 as both may be extended as provided below (the “Second Additional Premises
Lease Term”), unless sooner terminated  as Page 2 of 4 provided in the Lease.
Tenant acknowledges that the Second Additional Premises is currently occupied
by another tenant. In the event that the Second Additional Premises Commencement
Date is delayed, Landlord shall not be habit for any damages caused thereby,
and the Second Additional Premises Commencement Date shall be extended-a~
possession of the Second Additional Premises is given to Tenant by Landlord and
the Second Additional Premises Lease Term shall continue for a twelve (12)
month term.

 

 

(d)           The first installment of Base Rent
for the Second Additional Premises shall be due and payable on the Second
Additional Premises Commencement Date, with subsequent installments of Base
Rent applicable to the Second Additional Premises due on the first day of each
month thereafter during the Second Additional Premises Lease Term.

 

(e)                                   The term “Tenants Proportionate Share”,
as defined and used in the Lease, shall mean Thirty-one one hundredths percent
(0.31%) for the Second Additional Premises.

 

(f)            Base Rent for the Second Additional
Premises shall be subject to periodic adjustment pursuant to Section 4 of
the Lease.

 

(g)           “Base Rent shall mean all amounts
payable by Tenant to Landlord, whether or not denominated as such. Any such
amounts due Landlord shall sometimes be referred to as “Rent”.

 

(h)           The Base Rent for the Premises and
the Additional Premises, excluding the Second Additional Premises, is not
affected by this Second Amendment.

 

(i)                                      The Security Deposit for the Second
Additional Premises shall be None ($0).

 

(j)                                      Tenant confirms that the leased premises
are and will be used for general and administrative, non-medical offices and
for no other purpose whatsoever, and that no toxic or hazardous materials have
been or will be stored, kept or used on the leased premises.

 

3.             DEFINITION OF BASE YEAR
Anything contained in the Lease to the contrary
notwithstanding, solely for purposes of calculating Rent Adjustments for the
Second Additional Premises, Tenant’s Base Year shall mean calendar year 1999.

 

4.             CONDITION OF THE SECOND ADDITIONAL PREMISES;
IMPROVEMENT ALLOWANCE. No promises by Landlord to alter, remodel, improve,
repair, redecorate or clean the Second Additional Premises, or any part
thereof, have been made, and no representation respecting the condition of the
Second Additional Premises or the Building or with respect to the suitability
or fitness of either for any purpose, has been made to Tenant. Execution of
this Second Amendment shall serve as Tenant’s acceptance of the Second
Additional Premises “As Is”, and Tenant shall not be entitled to receive any
credit, allowance, or other concession from Landlord in respect to the Second
Additional Premises.

 

5.             BROKER. Tenant represents that except for
Kennedy-Wilson Properties, Ltd. (“Kennedy-Wilson”), Tenant has not retained,
contracted or otherwise dealt with any real estate broker, salesperson or finder
in connection with this Second Amendment, and no such person initiated or
participated in the negotiation of this Second Amendment. Tenant shall
indemnify and hold Landlord and Kennedy-Wilson harmless from and against any
and all liabilities and claims for commissions and fees arising out of a breach
of the foregoing representation.

 

6.             CONFLICT. If any conflict exists between the
terms or provisions of the Lease and the terms or provisions of this Second
Amendment, the terms and provisions of this Second Amendment shall govern and
control.

 

7.             EFFECT OF AMENDMENT. As amended by
this Second Amendment, the Lease shall remain in fill force and effect and is
ratified by Landlord and Tenant. This Second Amendment contains the entire
agreement of the parties with respect to the Second Additional Premises, and
all preliminary negotiations with respect thereto are merged into and
superseded by this Second Amendment.

 

8.       EXCULPATION OF LANDLORD AND KENNEDY-WILSON.
Notwithstanding anything to the contrary contained in this Second Amendment or
in any exhibits, Riders or addenda hereto attached (collectively the “Lease
Documents”), it is expressly understood and agreed by and between the parties
hereto that: (a) the recourse of Tenant or its successors or assigns
against Landlord with respect to the alleged breach by or on the part of Landlord
of any representation, warranty, covenant, undertaking or agreement contained
in any of the Lease Documents or otherwise arising out of Tenant’s use of the
Premises or the Building (collectively, “Landlord’s Lease 

 

 

Undertakings”)
shall extend only to Landlord’s interest in the real estate of which the
Premises demised under the Lease Documents are a part (“Landlord’s Real Estate”)
and not to any other assets of Landlord or its beneficiaries; and (b) except
to the extent of Landlord’s interest in Landlord’s Real Estate, no personal
liability or personal responsibility of any sort with respect to any of
Landlord’s Lease Undertakings or any alleged breach thereof is assumed by, or
shall at any time be asserted or enforceable against, Landlord, its beneficiaries,
Heitman Capital Management LLC or Kennedy-Wilson Properties Ltd., or against any of their respective
directors, officers, employees, agents, constituent partners, beneficiaries,
trustees or representatives.

 

IN WITNESS WHEREOF, the parties hereto have caused
this Second Amendment to Lease to be duly executed and delivered as of the day
and year first written above.

 

	
  TENANT:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  KENNEDY-WILSON INC.,

  	
   

  	
   

  
	
  a Delaware corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ FREEMAN LYLE

  	
   

  	
   

  
	
  Its:
       CFO     

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  LANDLORD:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  WILSHIRE-CAMDEN
  ASSOCIATES,

  	
   

  	
   

  
	
  a California limited
  partnership

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  KENNEDY-WILSON
  PROPERTIES, LTD.,

  	
   

  	
   

  
	
   

  	
  an Illinois
  corporation, its duly authorized

  	
   

  	
   

  
	
   

  	
  agent, and
  attorney-in-fact

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /S/ LAWRENCE STEPHEN

  	
   

  	
   

  
	
   

  	
  Its:

  	
  Managing Director/ControllerExhibit 10.98

 

THIRD AMENDMENT TO OFFICE
LEASE

 

This Third Amendment to Office Lease (the “Third
Amendment”), dated December 20, 2002, is made by and between
BRIGHTON ENTERPRISES. LLC, a California limited liability) company (“Landlord”),
with offices at 808 Wilshire Boulevard, Suite 200. Santa Monica.
California 90401, and KENNEDY-WILSON, INC., a Delaware corporation (“Tenant”),
with offices at 9601 Wilshire Boulevard, Suites 200, and GL-15A/GL-9, Beverly
Hills, California 90210.

 

WHEREAS,

 

A.                                    Wilshire-Camden Associates. a California
limited partnership (“Wilshire-Camden”)
Landlord’s predecessor-in-interest, pursuant to the provisions of that certain
written Office Lease, dated August 19, 1998, as amended by that certain
First Amendment to Lease (Expansion) dated March 5, 1999, that certain
Second Amendment to Lease (Expansion) dated June 2, 1999, and that certain
Termination Agreement dated October 19, 1999 (collectively, the “Lease”),
leased to Tenant, and Tenant leased from Wilshire-Camden space in the property
located at 9601 Wilshire Boulevard, Beverly. Hills, California 0210 (the “Building”),
commonly known as Suites 210 (the entire second noon. and Suite GL-15A/GL-9
(the “Original Premises”);

 

B.                                    On or about December 20, 2001,
Landlord acquired all of Wilshire-Camden’s interest, right and title in and to
the Building, becoming successor-in-interest to Wilshire-Camden under the
Lease;

 

C.                                    During the initial Term of the Lease for
the Original Premises, Tenant wishes to modify its occupancy within the Building.
(i) to temporarily return a portion of space on the second floor (“Construction Area”) for Landlord to
complete certain tenant improvements within the Construction Area, (ii) to
surrender Suite GL-15A/G1.-9 on the Construction Area Surrender Date (as
defined below I, (iii) to continue to occupy the remaining portion of
space on the second door (the “Suite 200 Portion”) until the substantial
completion of the tenant
improvements in the Construction Area,
and (iv) for Tenant to surrender the Suite 200
Portion upon the substantial completion of the tenant improvements within the
Construction Area and thereafter occupy the Construction Area (which shall be
re-named as “Suite 220”), which
modification Landlord has conditionally permitted, contingent upon Tenant’s
acceptance of and compliance with the provisions of this Third Amendment;

 

D.                                    Landlord shall commence to construct a
demising wall separating the Stine 200 Portion from the Construction Area,
which Construction Area shall be renamed as “Suite 22(1” as shown on Exhibit A-1
and perform certain other improvements in Suite 220, pursuant to Exhibit B
attached hereto and made a part hereof;

 

E.                                     The initial Term of the Lease for the
Original Premises expires August 31, 2003 (“Original Expiration Date”);

 

F.                                      Landlord and
Tenant wish (i) to accelerate
the expiration of the initial Term so that the Lease for the Original Premises
expires one (1) day prior to the Suite 220 Effective Date
(collectively, the “Revised Expiration Date” as
defined in Paragraph 3.1 below), and (ii) to extend the Lease with respect
to Suite 220 only for a seven (7) year term commencing on the Suite 220
Effective Date; and

 

 

G.                                    Landlord and Tenant, for their mutual
benefit, wish to revise certain
covenants and provisions of the Lease.

 

NOW,
THEREFORE, In
consideration of the covenants and provisions contained herein, and other good
and valuable consideration, the sufficiency of which Landlord and Tenant
hereby., acknowledge, Landlord and Tenant agree:

 

1.                                      Confirmation of Defined
Terms.  Unless modified herein, all
terms previously
defined and capitalized in the Lease shall hold the same meaning for the
purposes of this Third Amendment.

 

2.                                      Decrease in Size of Original Premises.

 

2.1                               Construction Area/Suite 220.  On the later
of March15, 2003 or the date that possession of Suite 220 (Construction
Area) is delivered by Tenant to Landlord (the “Construction
Area Surrender Date”) Tenant agrees to relocate Tenant’s furniture,
fixtures equipment and personal property from the Construction Area to the Suite 200
Portion and to tender possession of the Construction Area to Landlord, to
accommodate Landlord’s construction of demising wall separating the Suite 200
Portion from the Construction Area and Landlord’s construction of certain other
improvements in the Construction Area (Suite 220), pursuant to Exhibit B
attached hereto and made a part hereof. 
Landlord and Tenant agree to confirm the Construction Area Surrender
Date by the execution a confirmation letter agreement to that effect.

 

2.2                               Surrender of Suite GL-15A/GL-9. 
Tenant shall vacate Suite GL-15A/GL-9 on the Construction Area
Surrender Date and shall tender possession thereof to Landlord in good
condition and repair (reasonable wear and tear excepted), broom-clean, free of
Tenant’s furniture , fixtures, equipment, personal property and debris.  If Tenant vacates GL-15A/GL-9 , but leaves
any property, trash or debris therein, or if there is any damage to
GL-15A/GL-9  beyond reasonable wear and
tear, then the costs incurred by Landlord in the removal or repair of such
items, as the case may be, shall be billed directly to Tenant as Additional
Rent.

 

2.3                               Rentable Area of the Suite 200
Portion.  Effective on the Construction Area Surrender
Date: (i) the Rentable Area of the Original Premises shall be decreased
from approximately 27,043 square feet to approximately 16, 500 square feet; and
(ii) the definition of the Original Premises shall be revised to exclude
the Construction Area and Suite GL-15A/GL-9, and wherever in the Lease the
word Premises is found, it shall thereafter refer to the suite 200
Portion.  The Base Rent and Tenant’s
Percentage Share of increases of Property Taxes and Operating Expenses for the Suite 200
Portion shall be revised subject to the terms of Paragraphs 5. 6 and 7 of this
Third Amendment.

 

2.4                               Surrender of the Suite 200
Portion.  In consideration of Landlord’s substantial
completion of the Improvements for Suite 220 and Tenant’s obligation to
take possession of Suite 220. Tenant shall vacate the Suite 200
Portion on or before the Suite 220 Effective Date (as defined iii
Paragraph 3.2 below) and shall tender possession thereof to Landlord in good
condition and repair (reasonable wear and tear excepted), broom-clean, free of
Tenant’s furniture, fixtures_ equipment, personal property and debris. If
Tenant vacates the Suite 200 Portion, but leaves any property, trash or
debris therein, or if there is any damage to the Suite 200 Portion beyond
reasonable wear and tear, then the costs incurred by Landlord in the removal or
repair of such items, as the case maybe, shall be billed directly to Tenant as
Additional Rent.

 

2

 

2.5                               Re-measurement of Suite 220.

 

Since Suite 220
is not yet fully demised, once the exact location of the demising walls is
established and Landlord substantially completes the Improvements as set forth
in Exhibit B attached hereto and made a part hereof, Landlord and Tenant
agree that a recalculation of the Rentable Area of the Suite 220 shall be
made by Stevenson Systems, Inc., an independent planning firm, in
accordance with the June, 1996 standards set forth by BOMA. Such determination
shall be determinative unless patently unreasonable.

 

Landlord
and Tenant further agree that the Rentable Area of Suite 220 shell be
calculated on the basis of 1.2277 times the estimated Usable Area, regardless
of what actual common areas of the Building may be, or whether they may be more
or less than 22.77% of the total estimated Usable Area of the Building, and is
provided solely to give a general basis for comparison and pricing of this
space in relation to other spaces in the market area.

 

Landlord
and Tenant further agree that once the Rentable Area and Usable Area of Suite 220
has been determined as specified hereinabove, even if later either party
alleges that the actual Rentable Area or Usable Area of Suite 229 is more
or less than the figures stated herein; and whether or not such figures are
inaccurate, for all purposes of the Lease. The Rentable and Usable figures agreed
upon shall be conclusively deemed to be the Rentable Area or Usable Area of Suite 220
as the case may be.

 

If the
Rentable Area of Suite 220 is increased or decreased pursuant to this
Paragraph 2.5, then effective as of the Suite 220 Effective Date, the
initial Base Monthly Rent payable for Suite 220 shall be recalculated
based on $3.30 per square foot of Rentable Ares, per month.

 

If the
Rentable Area of Suite 220 is increased or decreased, pursuant to the
provisions of this Paragraph 2.5, then the increases in Base Rent shall be
appropriately increased or decreased to result in an increase in said Base Rent
of three percent (3%) per annum, cumulative over the Suite 220 Term.

 

If the
Usable Area of Suite 220 is increased or decreased pursuant to this Paragraph
2.3, then Tenant’s Percentage Share of Property Taxes and Operating Expenses
shall be increased or decreased equally, by dividing the newly calculated
Usable Area of Suite 220 by the Usable Area of the Building (approximately
265,105 square feet).

 

Notwithstanding
anything to the contrary contained herein, if the Usable Area of Suite 220
is increased or decreased, pursuant to the provisions of this Paragraph 2.5
then the total number of parking permits to which Tenant shall be entitled
shall be proportionately adjusted subject the Paragraph 7 below.

 

3.                                      Lease Term.

 

3.1                               Original Premises Acceleration of
Original Expiration Date. The Original Expiration Date is hereby accelerated so that the Lease
the Original Premises shall expire on the “Revised Expiration Date”
which is defined as one (1)day prior to the Suite 220 Effective Date.

 

3.2                               Suite 220. The effective date of Tenant’s lease of Suite 220
shall be the first Monday after Landlord substantially completes the
Emplacements contemplated tinder Exhibit B attached hereto and made a part
hereof (the “Suite 220 Effective Date”),
and the term of 

 

3

 

Tenant’s lease of Suite 220 shall end unless sooner terminated as
otherwise provided herein, at midnight on the last calendar day of the calendar
month which occurs seven (7) years after the Suite 220. Effective
Date (the “Suite 220 Term”). The anticipated Suite 220 Effective Date
is June 15, 2003. Landlord and Tenant shall promptly execute an amendment
to this Lease substantially in the form attached hereto as Exhibit C (the “Fourth
Amendment”), confirming the revised Usable Area of Suite 220 per Paragraph
2.5 above, and confirming (i) the finalized Suite 220 Effective Date,
(ii) the Suite 220 Term, and (iii) the actual dates upon which
the changes in the monthly Base Rent payable for Suite 220 specified in
Paragraph 5.2 below shall occur.

 

4.                                      Tenant Improvements for Suite 220.

 

4.1                               Tenant agrees to relocate Tenant’s
furniture, fixtures, equipment and personal property from Suite 220 (i.e.,
the Construction Area), to accommodate Landlord’s construction of a demising
wall separating the Suite 200 Portion from Suite 220 and Landlord’s
construction of certain other improvements in Suite 220, pursuant to Exhibit B
attached hereto and made a part hereof.

 

4.2                               For purposes of establishing the Suite 220
Effective Date, substantial completion shall be defined as that point in the
construction process when (i) all of the structural, mechanical, plumbing
and electrical work specified herein has been performed; (ii) the paint,
carpet, hard flooring materials, base moldings, and millwork, if any, have been
installed, and a majority of the other finish work specified in Tenant’s plans
has been completed in such a manner that Tenant could. If it look possession of
Suite 220, enjoy beneficial occupancy thereof, and (iii) a
certificate of occupancy for Suite 220 has been issued by the governmental
agency having authority therefore;

 

Tenant’s
taking possession of Suite 220 and commencing Tenant’s normal business
operations in Suite 220 shall be deemed conclusive evidence that, as of
the Suite 220 Effective Date:

 

(a)                                 Landlord has substantially completed the
Improvements contemplated hereunder, except for any minor punchlist items to be
completed and items specified under Paragraph 7 of Exhibit B; and

 

(b)                                Suite 220 is its good order and
repair except for any items identified pursuant to Paragraph 7 of Exhibit B.

 

4.3                               Provided that Tenant does not delay
Landlord’s completion of the improvements (as such terms are defined in Exhibit B).
Tenant may enter Suite 220 up to three (3) weeks prior to the
anticipated Suite 220 Effective Date, solely for the purpose of installing
Tenant’s furniture, fixtures and equipment, computer and telephone cabling.
Said early entry shall be subject to Tenant complying with alt of the
provisions and covenants contained herein, except that Tenant shall not be
obligated to pay the Base Rent or Additional Rent that Tenant is required to
pay hereunder for Suite 220 until the Suite 220 Effective Date. If
Tenant’s early entry does so delay completion of the Improvements, then the Suite 220
Effective Date shall be deemed to be the date that the Improvements would have
been substantially completed had no such delay occurred.

 

4.4                               If for any reason (including Landlord’s
inability to complete the improvements hereunder[, Landlord is unable to
substantially complete the Improvements to Suite 220 prior to the
anticipated Suite 220 Effective Date (except to the extent of Tenant
delays as 

 

4

 

defined in Exhibit B), the provisions of this Third Amendment
shall not be void or voidable, nor shall Landlord he liable to Tenant for any
damage resulting from Landlord’s inability to substantially complete the
Improvements. However, Tenant shall not be obligated to pay the Base Rent or
Additional Rent that Tenant is required to pay pursuant to Paragraph 5 below
until the Suite 220 Effective Date . Except for such delay in the
commencement of Rent, Landlord’s failure to give possession on the anticipated Suite 220
Effective Date shall in no way affect Tenant’s obligations hereunder,

 

If for
any reason, (except to the extent of Tenant delays as defined in Exhibit B),
Landlord is unable to deliver possession of Suite 220 within one hundred
and twenty (120) days after the Construction Surrender Date (the “Outside Date”),
the provisions of this Third Amendment shall not be void or voidable, nor shall
Landlord be liable to Tenant for any damage resulting from Landlord’s inability
to tender possession of Suite 220; provided however, (i) Tenant may
continue to occupy the Suite 200 Portion, after the Outside Date, and (ii) Tenant’s
Base Rent and Additional Rent that Tenant is required to pay hereunder for the Suite 200
Portion alter the Outside Date, shall be the agreed upon sum of $39.600 per
month until Landlord’s substantial completion of the Improvements in Suite 220.
Except for such reduction in the Base Rent for the Suite 200 Portion as
set forth above, Landlord’s failure to substantially complete the Improvements
in Suite 220 prior to the Outside Date shall in no way affect Tenant’s
obligations hereunder.

 

lf,
due to “Force Majeure” (as defined in Lease Section 27.04), Landlord is
unable to tender possession of Suite 220 within one hundred fifty (150)
days after the anticipated Suite 220 Effective Date, then this Third
Amendment, and the rights and obligations of Landlord and Tenant hereunder,
shall be deemed null and void upon ten (10) days written notice to either
party, without further liability by either party to the other, and without
further documentation being required.

 

5.                                      Revision to Base Rent.

 

5.1                               The Suite 200 Portion.

 

Commencing
on the Construction Area Surrender Date and continuing until the Suite 220
Effective Date, the Base Rent payable by Tenant for the Suite 200 Portion
shall he $54,540.00 per month.

 

5.2                               Suite 220.  Subject to adjustment pursuant to Paragraph
2.5 above:

 

(a)                                 commencing on the Suite 220
Effective Date and continuing through the last calendar day of the twelfth (I2”)
month of the Suite 220 Term, the Base Rent payable by Tenant for Suite 220
shall be $39,600 per month;

 

(b)                                commencing the first calendar day of the
thirteenth (13th) calendar month of the Suite 220 Term, and continuing
through the last calendar day of the twenty-fourth (24th) calendar month of the
Suite 220 Term, the Base Rent payable by Tenant for Suite 220 shall
increase from 539,600.00 per month to $40,788.00 per month;

 

(c)                                 commencing the first calendar day of the
twenty-fifth (25th) calendar month of the Suite 220 Term, and continuing
through the last calendar day of the thirty-

 

5

 

sixth (36’) calendar month of the Suite 220 Term, the Base Rent
payable by Tenant for Suite 220 shall increase from $40,788.00 per month
to $42,011,64 per month;

 

(d)                                commencing the first calendar day of the
thirty-seventh (37’h) calendar month of the Suite 220 Term, and continuing
through the last calendar day of the Forty-eighth (48th) calendar month of the Suite 220
Term, the Base Rent payable by Tenant for Suite 220 shall increase from
$42,011.64 per month to $43,271.99 per month;

 

(e)                                 commencing the first calendar day of the
forty-ninth (4915) calendar month of the Suite 220 Term, and continuing
through the last calendar day of the sixtieth (6001) calendar month of the Suite 220
Term, the Base Rent payable by Tenant for Suite 220 shall increase from
543.271.99 per month to $44,570.13 per month;

 

(f)                                   commencing the first calendar day of the
sixty-first (61’ ) calendar month of the Suite 220 Term. and continuing
through the last calendar day of the seventy-second (72nd) calendar month of
the Suite 220 Term, the Base Rent payable by Tenant for Suite 220
shall increase from 544,570.15 per month to $45,907.25 per month; and

 

(g)                                commencing the first calendar day of the
seventy-third (73rd) calendar month of the Suite 220 Term, and continuing
throughout the remainder of the Suite 220 Term, the Base Rent payable by
Tenant for Suite 220 shall increase from 545,907.25 per month to
547,284.47 per month. Landlord and Tenant shall, in the Fourth Amendment,
confirm the actual dates upon which the changes in Base Rent specified above
shall occur.

 

5.3                               Suite 220 Rent Abatement.

 

Notwithstanding
anything to the contrary in the Lease, Tenant shall be entitled to a rent
abatement for Suite 220 of fifty percent(50%) of the monthly Base Rent due
for the second (2’ 1, third (3’1), thirteenth (13th) and fourteenth (14”)
months of the Suite 220 Term Except as otherwise stated, the entire
monthly Base Rent for Suite 220 shall he due and payable, in advance,
pursuant to Paragraph 5.2 above.

 

6.                                      Base Year.

 

6.1                               Suite 200 Portion. Effective as of the Construction Area
Surrender Date, the Base Year, with respect to the Suite 200 Portion shall
be changed to calendar year 2003.

 

6.2                               Suite 220. Effective as of the Suite 220
Effective Date, the Base Year, with respect the Suite 220 shall be changed
to calendar year 2003.

 

7.                                      Tenant’s Percentage Share. Subject to adjustment pursuant to
Paragraph 2.3 above, as of the Suite 220 Effective Date, Tenant’s
Percentage Share for Suite 220 shall be approximately three point six-
nine percent (3.69%).

 

8.                                      Parking. 
As of the Suite 220 Effective Date and throughout the Suite 220
Term, and Tenant shall have the obligation to purchase and assign to its
employees twenty-nine (29) unreserved parking permits, and two (2) reserved
parking permits for a total of thirty-one (31) permits 

 

6

 

(“Tenant’s Parking Allotment”); provided further that
throughout the Suite 220 Tern, Tenant shall be entitled to obtain one (1) unreserved
parking permit and two (2) reserved parking permits out of “tenant’s
Parking Allotment at no charge. Except as otherwise permitted by Landlord’s
management tiger!! in its reasonable discretion, and based on the availability
thereof, in no event shall Tenant he entitled to purchase more than Tenant’s
Parking Allotment. If additional parking permits are available on a
month-to-month basis, which determination shall be in the sole discretion of
Landlord’s parking agent, Tenant shall be permitted to purchase one or more of
said permits on a first-come, first-served basis,

 

The
initial rates to be paid by Tenant for such permits shall he: S120.0(1 per
single unreserved permit, per month for garage parking levels “P3” and “P4”;
5140.00 per single reserved permit, per month for garage parking level “P2”;
$175.00 per single reserved permit. per month for garage parking level “Pl”;
$175.00 per VIP Valet permit, per month; and $220.00 per single reserved
permit, per month for garage parking level “PI”.

 

Said
parking permits shall allow Tenant to park in the Building parking facility at
the prevailing monthly parking rate then in effect, which rate may be
thereafter changed from time to time, in Landlord’s sole discretion. Landlord
shall retain reasonable discretion to designate the location of each parking
space, and whether it shall be assigned, or unassigned, unless specifically
agreed to otherwise in writing between Landlord and Tenant.

 

Guests
and invitees of Tenant shall have the right to use, in common with guests and
invitees of other tenants of the Building, the transient parking facilities of
the Building at the then-posted parking rates and charges, or at such other
rate or rates and charges as may be agreed upon from time to time between
Landlord and Tenant in writing, Such rate(s) or charges may be changed by
Landlord from time to time in Landlord’s sole discretion, and shall include,
without limitation, one and all fees or taxes relating to parking assessed to
Landlord for such parking facilities.

 

Tenant
or Tenant’s agents, clients, contractors, directors, employees, invitees,
licensees, officers, partners or shareholders continued use of said transient,
as well as monthly parking, shall be contingent upon Tenant and Tenant’s
agents, clients, contractors. directors, employees. invitees, licensees,
officers, partners or shareholders continued compliance with the reasonable and
non-discriminatory rules and regulations adopted by Landlord, which rules and
regulations may change at any time or from time to time during the Term hereof
in Landlord’s sole discretion.

 

9.                                      Security Deposit. Concurrent with Tenant’s execution and
tendering of this Third Amendment Landlord, Tenant shall deposit the sum of
$47,284.47 (the “Security Deposit”), which amount Tenant shall thereafter at
all times maintain on deposit with Landlord as security for Tenant’s full and
faithful observance and performance of its obligations under this Lease
(expressly including, without limitation, the payment as and when due of the
Base Rent, Additional Rent and any other sums or damages payable by Tenant
hereunder and the payment of any and all other damages for which Tenant shall
be liable by reason of any act or omission contrary to any of stud covenants or
agreements). Landlord shall have the right to commingle the Security Deposit
with its general assets and shall not be obligated to pay Tenant interest
thereon.

 

If at
any time Tenant defaults in the performance of any of its obligations under
this Lease, after the expiration of notice and the opportunity to cure, then,
Landlord may:

 

(a)                                  apply as much of the Security Deposit as
may he necessary to cure Tenant’s non-payment of the Base Rent, Additional Rent
and/or other sums or damages due from Tenant: and/or:

 

7

 

(b)                                 if Tenant is in default of any of the
covenants or agreements of this Lease; apply so much of the Security Deposit as
may be necessary to reimburse all expenses incurred by Landlord in curing such
default; or

 

(c)                                  if the Security Deposit is insufficient
to pay the sums specified in Paragraph 9 (a) or {h), elect to apply the
entire Security Deposit in partial payment thereof, and proceed against Tenant
pursuant to the provisions of Article 15 herein.

 

If, as
a result of Landlord’s application of any portion or all of the Security
Deposit. the amount held by Landlord declines to less than $47,284.47, Tenant
shall, within ten (10) days after demand therefor, deposit with Landlord
additional cash sufficient to bring the then-existing balance held as the
Security Deposit to the amount specified hereinabove Tenant’s failure to
deposit said amount shall constitute a material breach of this Lease.

 

At the
expiration or earlier termination of this Lease, Landlord shall deduct from the
Security Deposit being held on behalf of Tenant any unpaid sums, costs,
expenses or damages payable by Tenant pursuant to the provisions of this Lease;
and/or any costs required to cure Tenant’s default or performance of any other
covenant or agreement of this Lease, and shall, within thirty (30) days after
the expiration or earlier termination of this Lease, return to Tenant, without
interest. all or such part of the Security Deposit as then remains on deposit
with Landlord.

 

10.                               Modification to Definitions.

 

10.1                        Business Hours. As of the Suite 220 Effective Date,
Section 1.1 1 shall be deleted and the following inserted in place thereof

 

“The
term ‘Business Hours’ shall mean 8:00 A.M. to 6;00 P.M., Monday
through Friday, and 9:00 A.M. to 1-.00 P.M. on Saturday, any one or
more Holiday(s) excepted. ‘Holidays’ are defined as any
federally-recognized holiday and any other holiday specified herein, which are:
New Years Day, Presidents’ Day, Memorial Day, the 4th of July, Labor Day,
Thanksgiving Day, the day after Thanksgiving, and Christmas Day (each
individually a ‘Holiday’).”

 

10.2                        Landlord’s Address for Notices. As of the full execution of this Third
Amendment, Section 1.12 of the Lease shall be deleted and the following
inserted in place thereof:

 

“The
term Landlord’s Address for Notices shall mean:

 

BRIGHTON
ENTPEPRISES, LLC,

c/o Douglas, Emmett and Company

Director of Property Management

808 Wilshire Boulevard, Suite 200

Santa Monica, California 90401”

 

11.                               Modification to Article 7
(Utilities and Services).

 

11.1                        Access. 
As of the Suite 220 Effective Date, Section 7.01 (F) is
inserted into the Lease as follows:

 

8

 

“Subject
to Force Majeure, Landlord shall provide Tenant with (i) access to and use
of the parking facilities for persons holding valid parking permits, and (ii) access
to and use of the elevators and Premises, twenty-four (24) hours per day, seven
days per week”

 

11.2                        Security. 
As of the Suite 220 Effective Date, Section 7.01 (G) is
inserted into the Lease as follows:

 

“Tenant
acknowledges that Landlord currently provides uniformed guard service to the
Building on twenty-four (24) hours per day, seven (7) days per week basis,
solely for the purposes of providing surveillance of, information and
directional assistance to persons catering the Building.

 

Tenant
acknowledges that such guard service shall not provide any measure of security
or safety to the Building or the Premises, and that Tenant shall take such
actions as it may deem necessary and reasonable to ensure the safety and
security of Tenant’s property or person or the property or persons of Tenant’s
agents, clients, contractors, directors, employees, invitees, licensees,
officers, partners or shareholders. Tenant agrees and acknowledges that, except
in the case of the gross negligence or willful misconduct of Landlord or its
directors, employees, officers, partners or shareholders, Landlord shall not be
liable to Tenant in any mariner whatsoever arising out of the failure of
Landlord’s guard service to secure any person or property from harm,

 

Tenant
agrees and acknowledges that Landlord, in Landlord’s reasonable discretion,
shall have the option, but not the obligation to add, decrease, revise the
hours or and/or change the level of services being provided by any guard
company serving the Building. so long as the level of services so provided
remains consistent with the level of services provided by landlords of
comparable office projects in the Beverly Hills office markets. Tenant flintier
agrees that Tenant shall not engage or hire any outside guard or security
company without Landlord’s prior written consent, which shall be in Landlord’s
sole discretion:.

 

12.                               Option to Extend the Suite 220
Term.

 

12.1                        Option to Extend Term. Provided Tenant is not in material
default after the expiration of notice and the opportunity to cure on the date
or at any time during the remainder of the Suite 220 Term after Tenant
gives notice to Landlord of Tenant’s intent to exercise its rights pursuant to
this Paragraph 12, Tenant is given the option to extend the term for an
additional Five (5) year period (the “Second Extended Term’), commencing
the next calendar day alter the expiration of the Suite 220 Term (the “Option”).
The Option shall apply only to the entirety of the Premises, and Tenant shall
have no right to exercise the Option as to only a portion of the Premises.

 

Tenant’s
exercise of this Option is contingent upon Tenant giving written notice to
Landlord (the “Option Notice”) of Tenant’s election to exercise its rights
pursuant to this Option by Certified Mail, Return Receipt Requested, no more
than twelve (12) and no less than nine (9) months prior to the Termination
Date.

 

12.2                        Basic Monthly Rent Payable. The Basic Rent payable by Tenant during
the Second Extended Term (“Option Rent”) shall be equal to the Fair Market
Value of the Premises as of the commencement date of the Second Extended Term.
The term “Fair Marker Value” shall be defined as the effective rent reasonably
achievable by Landlord, and shall include but not he limited to, all economic
benefits obtainable by Landlord, such as Basic 

 

9

 

Monthly Rent (including periodic adjustments), Additional Rent in the
form of Operating Expense reimbursements, and any and all other monetary or
non-monetary consideration that may be given in the market place to a
non-renewal tenant, as is chargeable for a similar use of comparable space in
the Beverly Hills area of the Premises. Said computation specifically be based
on the Premises in its “as-is” condition,

 

Landlord
and Tenant shall have thirty (30) days (the -Negotiation Period”) after
Landlord receives the Option Notice in which to agree on the Fair Market Value.
if Landlord and Tenant agree on the Fair Market Value during the Negotiation
Period, they shall immediately execute an amendment to the Lease extending the Suite 220
Term and stating the Fair Market Value,

 

12.3                        Appraisers to Set Fixed Rent. If Landlord and Tenant are unable to
agree on the lair Market Value during the Negotiation Period, then:

 

(a)                                 Landlord and Tenant, each at its own
cost, shall select an independent real estate appraiser with at least ten (10) years
full-time commercial appraisal experience in the area in which the Premises are
located, and shall provide written notice to the other party of the identity
and address of the appraiser so appointed. Landlord and Tenant shall make such
selection within ten ( 10) days after the expiration of the Negotiation Period.

 

(b)                                Within thirty (30) days of having been
appointed to do so (the “Appraisal Period”), the two (2) appraisers so
appointed shall meet and set the Fair Market Value for the Second Extended
Term, in setting the Fair Market Value, the appraisers shall solely consider
the use of the Premises for general office purposes.

 

12.4                        Failure by Appraisers to Set Fair
Market Value. If
the two (2) appointed appraisers arc unable to agree on the Fair Market
Value within ten (10) days slier expiration of the Appraisal Period, they
shall elect a third appraiser of like or better qualifications, and who has not
previously acted in any capacity for either Landlord or Tenant. Landlord and
Tenant shall each bear one half of the costs of the third appraiser’s fee.

 

Within
thirty (30) days after the selection of the third appraiser (the “Second Appraisal Period”) the Fair Market Value for the
Second Extended Term shall be set by it majority of the appraisers now
appointed.

 

If a
majority of the appraisers are unable to set the Fair Market Value within the
Second Appraisal Period, the three (3) appraisers shall individually
render separate appraisals of the Fair Market Value, and their three (3) appraisals
shall be added together, then divided by three (3); resulting in an average of
the appraisals, which shall be the Fair Market Value during the Second Extended
Tenn.

 

However,
if the low appraisal or high appraisal vanes by more than ten percent 110%)
from the middle appraisal, then one (1) or both shall be disregarded. If
only one (1) appraisal is disregarded, the remaining two (2) appraisals
shall be added together and their total divided by two (2), and the resulting average
shall be the Fair Market Value. If both the low and high appraisal are
disregarded, the middle appraisal shall be the Fair Market Value for the
Premises during the Second Extended Term. The appraisers shall immediately
notify Landlord and Tenant of the Fair Market Value so established, and

 

10

 

Landlord
and Tenant shall immediately execute an amendment to the Lease, extending the
Term and revising the Basic Monthly Rent payable pursuant to the Fair Market
Value so established.

 

Landlord
or Tenant’s failure to execute such amendment establishing the Fair Market
Value within fifteen (i5) days after the other party’s request therefor shall
constitute a material default under the Lease, and if Tenant is the party
failing to so execute, this Option shall become null and void and of no further
force or effect.

 

12.5                        No Right of Reinstatement or
Further Extension.  Once Tenant has either failed to
exercise its rights to extend the term pursuant to this Paragraph 12 or failed
to execute the amendment called for hereunder, it shall have no right of
reinstatement of its Option to Extend the Suite 220 Term, nor shall Tenant
have any right to a further extension of the Suite 220 Term beyond the
period stated in Paragraph 12.1 hereinabove.

 

12.6                        No Assignment of Option.  This Option is personal to the original Tenant signing
the Lease, and shall be null, void and of no further force or effect as of the
date that Tenant assigns the Lease to an unaffiliated entity and/or subleases
inure than forty-nine percent (40%) of the total Rentable Area of the Premises.

 

13.                               Right of First Offer.

 

(a)                                  Subject to any pm-existing rights of
first offer and/or refusal which Landlord or Landlord’s predecessors may have
granted other tenants in the Building at the time this Lease is executed: None;
and

 

(b)                                 Upon Landlord’s receipt of written
notification (“Tenant’s Expansion Notice”) from Milani that Tenant desires
additional space contiguous to Suite 220 in the Building on the second
floor; and

 

(c)                                  Provided Tenant is not in material
uncured default after the expiration of lime and the opportunity to cure as of
the date or any time after Tenant tenders to Landlord Tenant’s Expansion
Notice; and

 

(d)                                 At least eighteen (18) months remain
before expiration of the Term of this Lease, or Tenant willing to enter into an
extension of the Term for a minimum of eighteen (.18) additional months or
tenant is willing to exercise its five (5) year renewal option (if during
the initial term);

 

then,
Landlord grants Tenant a one-time right of first offer to lease any space
contiguous to Suite 220 on the second floor of the Building (the “Expansion
Premises”) that is vacated and thereafter becomes available for rent following
Tenant’s Expansion Notice during the Suite 220 Term of this Lease,
including any extension thereof, as follows:

 

If any
space within the Expansion Premises becomes available for lease at any time
during the Suite 220 Term, of this Lease or the Second Extended Term, if
any, Landlord shall give written notice thereof (the “Offer Notice”) to Tenant,
specifying the terms and conditions upon which Landlord is willing to lease
that portion of the Expansion Premises then available.

 

11

 

13.2                        Tenant’s Acceptance.  Tenant
shall have ten (10) business days after receipt of the Offer Notice from
Landlord to advise Landlord of Tenant’s election (the -Acceptance”) to lease
the Expansion Premises on the same terms and conditions as Landlord has
specified in its Offer Notice, except that the termination date of the Lease
with respect to the Expansion Premises shall coincide with the termination date
of this Lease with respect to Suite 220, subject to Section 13 (d) above.
If the Acceptance is so given, then within ten (10) business days
thereafter, Landlord and Tenant shall sign an amendment to this Lease, adding
the Expansion Premises to the Premises and incorporating all of the terms and
conditions originally contained in Landlord’s Offer Notice.

 

13.3                        Failure to Accept Extinguishes
Rights.  If Tenant does not tender the Acceptance of Landlord’s
Offer Notice, or if Landlord and Tenant fail to execute the amendment to Lease
called for above within the time period specified, then Landlord may lease such
portion of the Expansion Premises as is than available to any third party it
chooses without liability to Tenant on terms and conditions reasonably similar
to those specified in Landlord’s Offer Notice, and Tenant’s option to expand
into that portion of the Expansion Premises not accepted by Tenant shall be
null and void thereafter.

 

13.4                        Reinstatement of Right of First
Offer.  If Landlord then enters into a lease for the
all or a portion of the Expansion Premises with a third party tenant, which
lease terminates during the Suite 220 Term or the Second Extended Term, if
any, of this Lease, after expiration or earlier termination of said third party
lease, this right of first offer, as set forth herein, shall re-apply.

 

13.5                        No Assignment of Right.  This
right is personal to the original Tenant signing the Lease and its Affiliates
(as defined to Lease Article 14, Section 14.01), and shall he null,
void and of no further force or effect as of the date that Tenant assigns the
Lease to an unaffiliated entity and/or subleases more than forty-nine percent
(49%) of the total Rentable Area of the Premises.

 

14.                               Signage.  As
of the full execution of this Third Amendment, Article 27, Section 27_20
is hereby added to the Lease as follows:

 

“27.20
Signage. Tenant
may not install, inscribe, paint or affix any awning, shade, sign advertisement
or notice on or to any part of the outside or inside of the Building (other
than “building standard” signage identifying Tenant on the wall adjacent to
Tenant’s entry doors for Suite 220), or in any portion of the Premises
visible to the outside of the Building or common areas without Landlord’s prior
written consent, which shall not he unreasonably withheld, conditioned or
delayed.

 

All “building
standard” signage installed on behalf of Tenant in connection with Landlord’s
construction of the Improvements for Suite 220 (the “Suite 220
Signage”) shall be installed by Landlord, at Landlord’s sole expense, provided
however, all signage other than the Suite 220 Signage, and all directory
listings installed on behalf of Tenant whether installed in, on or upon the
public corridors, doorways, Building directory and/or parking directory (if
any), or in any other location whatsoever visible outside of the Premises,
shall be installed by Landlord. at Tenant’s sole expense.

 

Tenant’s
identification on or in any common area of the Building shall be limited to
Tenant’s name and suite designation, and in no event shall Tenant be entitled
to the installation of Tenant’s logo in any portion of the Building or common
areas. Furthermore, the size, style, 

 

12

 

and
placement of letters to he used in any of Tenant’s signage shall be determined
by Landlord, in Landlord’s sole discretion, in full conformance with
previously-established signage program for the Building.

 

Except
as specified herein below, Tenant shall only be entitled to one (1) listing
on the Building directory, or any parking directory ancillary thereto, which
shall only show Tenant’s business Emilie and suite designation. Tenant shall
also be entitled to a maximum of twelve (12) additional listings on said
Building and/or parking directory, which listings shall be limited solely to
Tenant’s officers, employees, subsidiaries, affiliates and/or sublessees. if
any. All of said listings shall be subject to Landlord’s prior written
approval, which shall not be unreasonably withheld, conditioned or delayed.
Notwithstanding the above, Tenant shall be entitled to up to eight (8) additional
listings on the Building and/or parking directory, subject to availability::

 

15.                               Acceptance of Premises.  Tenant acknowledges that it has been in possession of
Suits 200 for over fifteen (15) years and Suite GL-15A/GL-9 for over three
(3) years. Tenant has made its awn inspection of and inquiries regarding Suite 220,
which are already improved. Therefore, except for the Improvements to Suite 220
pursuant to Exhibit B attached hereto and incorporated herein. Tenant
accepts Suite 220 in its “as-is” condition. Tenant further acknowledges
that Landlord has made no currently effective representation or warranty,
express or implied regarding the condition. suitability or usability of Suite 220
or the Building for the purposes intended by Tenant.

 

16.                               Subordination, Attornment and Non
Disturbance Agreement.  Concurrent with Tenant’s
execution of this Third Amendment, Tenant shall deliver three (3) executed
originals of the Subordination, Attornment and Non Disturbance Agreement in the
same form as the form attached hereto and incorporated herein as Exhibit C.
Landlord agrees to use commercially reasonable efforts to obtain and deliver to
Tenant, within one hundred and twenty days (120) days after the martial
execution and delivery of this Third Amendment (“SNDA Outside Date”), a
Nan-Disturbance Agreement in the form attached hereto as Exhibit C (the “SNDA”)
from the “Leasehold Mortgagee” and the “Ground Lessor” as parties are defined
in the SNDA. if Landlord does not provide Tenant with the SNDA prior to the
expiration of the SNDA Outside Date, then Tenant shall have the right.
exercisable at any time thereafter, to give thirty (30) days’ written notice to
Landlord nullifying this Third Amendment. If Landlord does not provide Tenant
with the SNDA within said thirty (30) day time period, then this Third
Amendment shall be deemed null ad void; provided however, it’ Landlord provides
Tenant with the SNDA within said thirty (30) day period, then the terms of this
Third Amendment shall continue in full force and effect.

 

17.                               Deleted Provisions.  The
following provisions are hereby deleted and have no further force or effect:
Rider One (Parking Commitment) and Rider Two (Renewal Option).

 

18.                               Warranty of Authority.  If
Landlord or ‘remit silos as a corporation, or a limited liability company or a
partnership, each of the persons executing this Third Amendment on behalf of
Landlord or Tenant hereby covenants and warrants that the applicable entity
executing herein below is a duly authorized and existing entity that is
qualified to do business in California; that the person(s) signing on
behalf of either Landlord or Tenant have full right and authority to enter into
this ‘Third Amendment; and that each and every person signing on behalf of
either Landlord or Tenant are authorized in writing to do so.

 

If
either signatory hereto is a corporation, the person(s) executing on
behalf of said entity shall affix the appropriate corporate seal to each area
in the document where request therefor is noted, 

 

13

 

and
the other party shall be entitled to conclusively presume that by doing so the
entity for which said corporate seal has been affixed is attesting to and
ratifying this Third Amendment.

 

19.                               Broker Representation.  Landlord
and Tenant represent to one another that it has dealt with no broker in
connection with this Third Amendment other than Douglas, Emmett and Company and
Kennedy-Wilson Properties, Ltd. Landlord and Tenant shall hold one another
harmless front and against any and all liability, loss, damage, expense, claim,
action, demand, suit or obligation arising out of or relating to a breach by
the indemnifying party of such representation. Landlord agrees to pay all
commissions due to the brokers listed above created by Tenant’s execution of
this -I bird Amendment.

 

20.                               Confidentiality.  Landlord and Tenant agree that the covenants and provisions
of this Third Amendment shall not be divulged to anyone not directly involved
in the management, administration, ownership, lending against, or subleasing of
the Premises, other than Tenant’s or Landlord’s counsel-of-record or leasing or
sub-leasing broker of record.

 

21.                               Disclosure.  Landlord and Tenant acknowledge that principals of
Landlord have a financial interest in Douglas Emmett Realty Advisors, Douglas
Emmett and Company, and P.L.E. Builders.

 

22.                               Governing Law.  The
provisions of this Third Amendment shall be governed by the laws of the State
of California.

 

23.                               Reaffirmation.  Landlord
and Tenant acknowledge and agree that the Lease, as amended herein, constitutes
the entire agreement by and between Landlord and Tenant relating to the Premises,
and supersedes any and all other agreements written or oral between the parties
hereto. Furthermore, except as modified herein, all other covenants and
provisions of the Lease shall remain unmodified and in full force and effect.

 

24.                               Submission of Document.  No
expanded contractual or other rights shall exist between Landlord and Tenant
with respect to the Premises, as contemplated under this Third Amendment, until
both Landlord and Tenant have executed and delivered this Third Amendment,
whether or not any additional rental or security deposits have been received by
Landlord, and notwithstanding that Landlord has delivered to Tenant an
unexecuted copy of this Third Amendment.

 

14

 

IN
WITNESS WHEREOF, Landlord and Tenant have duly executed this document as of the
day and year written below.

 

 

	
  LANDLORD:

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
  BRIGHTON ENTERPRISES, LLC 

  	
   

  	
  KENNEDY-WILSON, INC.

  
	
  a California limited liability company

  	
   

  	
  a Delaware corporation 

  
	
   

  	
   

  	
   

  
	
  By:

  	
  DOUGLAS EMMETT AND COMPANY,

  	
   

  	
   

  
	
   

  	
  a California corporation, 

  	
   

  	
   

  
	
   

  	
  its agent 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Michael J. Means

  	
   

  	
  By:

  	
  /s/ unknown

  
	
   

  	
  Michael J. Means, Vice President 

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Its:

  
	
   

  	
   

  	
   

  
	
  Dated :

  	
   

  	
   

  	
  Dated :

  	
   

  
								

 

15

 

EXHIBIT A-1

 

PREMISES PLAN

 

SUITE 200 PORTION AND SUITE 220 at 9601 Wilshire Boulevard,
Beverly Hills, California

90210

 

Suite 220 Rentable Area: approximately 12,000
square feet

 

Suite 220 Usable Area: approximately 9,774
square feet

 

(Suite 220 to be remeasured pursuant to the
provisions of Paragraph 2.5 of the Third

Amendment)

 

 

A-1

 

EXHIBIT B

 

IMPROVEMENT CONSTRUCTION AGREEMENT

CONSTRUCTION TO BE PERFORMED BY LANDLORD win AN
ALLOWANCE

 

Section 1.              Completion
of Improvements.  Tenant shall obtain one (1) reasonable
commercial and competitive bid for the construction of the Improvements from
one (l) licensed general contractor, and Landlord shall obtain a total of
two (2) reasonable commercial and competitive bids for the construction of
the Improvements from (i) P.L.E. Builders, Inc. (“PLE”), and (ii) one
(I) other licensed general contractor (collectively the “Bids”). Landlord
and Tenant shall review all three (3) of the Bids and select the
contractor (“Contractor”), with the lowest Bid, provided, however, if PLE did
not provide the lowest Bid, Landlord and Tenant agree to select PLE as the
Contractor if PLE agrees to perform the Improvements pursuant to the lowest of
the three (3) Bids. The Contractor shall furnish and install within Suite 220
those items of general construction, shown on the final Plans and
Specifications approved by Landlord and Tenant pursuant to the Schedule of
Approvals below, in compliance with all applicable codes and regulations, and
complete any construction required in the common areas of the Building when
such construction is required by or arises out of completion of the
Improvements (collectively the “improvements”); provided, however, if a
contractor other than P.L.E. Builders. Inc., is selected to construct the
Improvements, then such other contractor shall be required to use the Building’s
subcontractors for all mechanical, electrical, and engineering work.

 

The
definition of Improvements shall include all coals associated with completing
the Tenant Improvements, including but not limited to, space planning, design,
architectural, and engineering fees, contracting, labor and material costs,
municipal fees and permit costs, and document development and/or reproduction.

 

Tenant
acknowledges and agrees that any change in the scope of work or details of
construction after Tenant’s sign off of the finalized working drawings shall
constitute a “Tenant Change,” the costs of which Tenant shall pay pursuant to
the provisions of Subsection 2 (d) herein below.

 

Section 2.              Landlord’s
Allowance.

 

(a)                                  Tenant shall bear all costs of
construction of the Improvements in excess of the ‘Allowance” (as hereinafter
defined), and shall deposit such excess costs with Landlord pursuant to the
provisions of Subsection 2 (d) herein below. Landlord shall have no
obligation whatsoever to commence construction of the Improvements until such
time as Tenant has deposited the excess costs of construction, and Tenant’s
failure to make such deposit timely. as required, shall be assessed against
Tenant as a Tenant delay, pursuant to the provisions contained in Subsection 2 (e) below.

 

(b)                                  Landlord shall contribute a maximum sum
of $33,00 per square foot of Rentable Area contained in Suite 220 (the “Allowance”)
which may solely be applied towards completion of the improvements, and which
Landlord shall pay directly to Contractor for Tenant’s account or reimburse
Tenant as appropriate.

 

(c)                                  Prior to commencing construction of the
Improvements, Landlord shall submit to Tenant a written statement showing the
total anticipated cost of the improvements, which statement shall include
Contractor’s overhead and profit, and an estimate of all fees. It is expressly
understood and tweed that Tenant shall not be required to pay any administration
fee to Landlord in connection with the improvements. Notwithstanding the
foregoing any unused 

 

B-1

 

portion of the Allowance, which remains after the completion at’ the
Improvements shall be held on account for the benefit of Tenant for future
Improvements to Suite 220 completed within the first two (2) years of
the Suite 22)) Term.

 

Tenant’s
failure to give written approval of such statement within ten (10) working
days after submission thereof shall be conclusively deemed a disapproval of
such amen-lent, and Contractor shall not commence the Improvements. Any delay
of Tenant, after the expiration of ten (to) working days from receipt of
Landlord’s statement, to provide Landlord with a revised scope of work and
written approval of a revised cost statement therefor shall be considered a
Tenant delay, assessable against Tenant pursuant to the provisions of
Subsection 2 (e) herein below.

 

(d)                                  Tenant agrees to pay Landlord within ten (10) working
days after receipt of Landlord’s billing for the estimated cost of all the
Improvements in excess of the Allowance and for the actual costs of any Tenant
Change. Tenant’s failure to make such payment timely, as specified herein,
shall release Landlord from any obligation to commence or continue construction
of the Improvements, and each of Tenant’s continued failure to make payment
shall be treated as a Tenant delay, assessable against Tenant pursuant to the
provisions of Subsection 2 (e) herein below.

 

Tenant
hereby authorizes Landlord to pay Contractor interim payments from the funds so
deposited towards completion of the Improvements, except that Landlord shall
retain the suns of ten percent (10%) of the total cost of Improvements. as
revised by Tenant Changes, if any. until such time as:

 

(i)                                    Tenant has advised Landlord of its
approval of completion of the Improvements, which approval shall not be
unreasonably withheld, conditioned or delayed; or

 

(ii)                                Contractor has provided reasonable
documentation that the Improvements, pursuant to the original scope of work,
have been reasonably completed.

 

Within thirty (30) business days after Contractor has
reasonably completed the Improvements, Landlord shall provide Tenant with a
final statement, indicating any difference between the estimated cost of the
Improvements, the final cost of the Improvements; any initial or interim
payments made by Tenant towards completion thereof; the amount of Allowance
contributed and the balance owing from or to Tenant. Any balance owed to Tenant
shall he returned with such statement, and any shortfall due Landlord shall be
paid within five (5) days after Tenant’s receipt of Landlord’s billing.

 

(e)                                  Any delay caused by Tenant shall be a
material breach of this Lease, and in addition to any other remedies available
to Landlord hereunder, the Suite 220 Effective Date set forth in Paragraph
3 of this Third Amendment shall be accelerated on a day-for-day basis for each
day of Tenant delay. As used in this Exhibit B, Tenant delay shall also
include any delay in the substantial completion of Suite 220 as a result
of Tenant’s failure to timely furnish or approve any item required to be
furnished or approved by Tenant; a default by Tenant of the terms of this Exhibit B
or the Lease: Tenant’s request for changes in the final Plans and
Specifications after Tenant’s approval thereof Tenant’s requirement for
materials, components, finishes or improvements which are not available in a
commercially reasonable time (if after Tenant has been notified by Landlord of
the unavailability of said item and Tenant selects an alternate item within
three (3) business days of said notification from 

 

B-2

 

Landlord); or any other acts or omissions of Tenant, or its agents or
employees which cause a delay in the substantial completion of Suite 2.20.

 

(f)                                    Landlord and Tenant agree that if the
Improvements are actually constructed by Contractor at a cost which is less
than the Allowance, there shall be no monetary adjustment between Landlord and
Tenant and the cost savings shall accrue to the benefit of Landlord, subject to
Paragraph 2 (b) above.

 

Section 3.              Plans
and Specifications.  Tenant shall, through Landlord’s
architect or space planner, provide such information and directions as are
necessary to complete the architectural and engineering Plans and
Specifications required for the construction of the Improvements. Tenant shall
provide instructions to Landlord’s architect or space planner so as to meet the
Schedule of Approvals set forth in Section 5 below. Notwithstanding Tenant’s
obligation to provide instructions to Landlord’s architect or space planner,
all Plaits and Specifications referred to herein are subject to Landlord’s
approval, which shall not be unreasonably withheld, conditioned or delayed.

 

Section 4.              Completion
of Work Not included as Improvements.  Any work not
shown in the final construction Plans and Specifications, including but not
limited to telephone service, furnishings, installation of Tenant’s trade fixtures
or cabinetry (collectively “Tenant Work”), shall be separately contracted and
paid for by Tenant. Tenant shall obtain Landlord’s written approval of Tenant’s
suppliers and contractors prior to commencement of any Tenant Work.

 

Landlord
shall give reasonable access to Tenant’s suppliers and contractors so as to
achieve timely completion of any Tenant Work. Notwithstanding Landlord’s
obligation to provide such access, completion of all Tenant Work shall be
subject to Landlord’s supervision, policies and procedures, and shall be
scheduled with Contractor and completed in such as manner as to not
unreasonably hinder or delay completion of the Improvements.

 

Section 5.              Schedule
of Approvals.  Subject to Force Majeure, Tenant shall comply
with the following Schedule of Approvals:

 

	
  Event

  	
   

  	
  Time

  
	
   

  	
   

  	
   

  
	
  Deadline by which Tenant
  shall have met with Landlord’s space planner.

  	
   

  	
  On or before November 15, 2002

  
	
   

  	
   

  	
   

  
	
  Deadline for space plan
  approval.

  	
   

  	
  On or before December 29, 2002

  
	
   

  	
   

  	
   

  
	
  Deadline for notifying
  Landlord of Tenant’s selection of finishes and materials.

  	
   

  	
  On or before January 15, 2003

  
	
   

  	
   

  	
   

  
	
  Deadline for Tenant’s
  approval of final Plans, Specifications and working drawings

  	
   

  	
  On or before February 5, 2003

  
	
   

  	
   

  	
   

  
	
  Deadline for Tenant’s
  approval of Landlord’s cost estimate of improvements.

  	
   

  	
  On or before February 19, 2003

  

 

Section 6.              Construction
Insurance Requirements.  Contractor, at the its sole
expense, shall obtain and maintain public Liability and workmen’s compensation
insurance adequate to protect Tenant and Landlord from and against any and all
liability for death or injury to persons or damage to property caused in or
about Suite 220 by reason of completion of the improvements.

 

B-3

 

Tenant
shall, at Tenant’s sole expense, either obtain and maintain public liability
and workmen’s compensation insurance adequate to fully protect Landlord as well
as Tenant from and against any and all liability for death or injury to persons
or damage to property caused in or about Suite 220 by reason completion of
any Tenant Work, or shall cause Tenant’s contractors or subcontractors to
provide such insurance.

 

Section 7.              Completion
of Punch List.  Prior to Tenant taking possession of Suite 220,
a representative of each of Landlord and Tenant shall conduct a joint
inspection of Suite 220 for the purpose of developing a’ punch list” of
Improvement items, if any, that require repair or correction by Landlord.
Provided that said items were included within the original plans, Landlord
shall cause Contractor shall diligently proceed to correct those items within
thirty (30) days of receipt of Tenant’s list. Tenant’s failure or refusal to
participate in such inspection in a timely manner (provided Tenant has received
reasonable notice of the readiness of Suite 220 for such inspection),
shall constitute Tenant’s waiver of its rights pursuant to this Section 7.

 

Section 8.              Construction Warranties. Landlord agrees
that, subject to Tenants performance hereunder, Landlord shall complete the
Improvements, and shall correct any construction defects about which Tenant
notifies Landlord in writing within one (1) year following the Suite 220
Effective Date. Tenant’s right to repair of any defect shall be extended for
such longer period as may be covered by warranties provided by Contractor or
subcontractor(s)..

 

Section 9.              Parking
and Building Access.  During Business Hours of the Building,
the Contractor and sub-contractors shall receive free parking in the Building,
provided that the Contractor and subcontractors are then performing
construction of the Improvements in Suite 220 per this Exhibit B and
that the Contractor and sub-contractors park in areas designated by Landlord.
Pursuant to the Building’s Rules and Regulations. Tenant’s contractors
shall be accommodated access to the Building’s loading docks and utilities
during Tenant’s move into the Building.

 

Section 10.            Move-In. Landlord at Landlord’s sole cost and
expense shall thoroughly clean Suite 220 prior to delivery of possession
of Suite 220 to Tenant.

 

Section 11.            Transportation
of Freight.  Landlord shall, consistent with its
obligations to other tenants of the Building, make the freight elevator
reasonably available to Tenant in accordance with Paragraph 13 of the Rules and
Regulations, attached and incorporated into the Lease as Exhibit C.
Landlord agrees that Tenant shall be entitled to use the freight elevator at no
charge, provided that Tenant uses the same during the periods proscribed by
Landlord, which currently are as follows: before 9:00 a.m. and after 2:00 p.m.,
Mondays through Fridays (except after 5:00 p.m. for major items e.g.
drywall); and on the weekends (Saturday and Sunday).

 

B-4

 

	
  LANDLORD:

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
  BRIGHTON
  ENTERPRISES, LLC

  	
   

  	
  KENNEDY-WILSON,
  INC.

  
	
  a
  California limited liability company

  	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  	
   

  
	
  By:

  	
  DOUGLAS
  EMMETT AND COMPANY,

  	
   

  	
   

  
	
   

  	
  a
  California corporation,

  	
   

  	
   

  
	
   

  	
  its
  agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Michael J. Means

  	
   

  	
  By:

  	
  /s/
  unknown

  
	
   

  	
  Michael
  J. Means, Vice President

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dated
  :

  	
   

  	
   

  	
  Dated
  :

  	
   

  

 

B-5

 

EXHIBIT B-2

 

FOURTH AMENDMENT TO OFFICE
LEASE

 

This
Fourth Amendment to Office Lease (the “Fourth Amendment”), dated December 20,
2002, is made by and between BRIGHTON ENTERPRISES, LLC, a California limited
liability company (‘Landlord”), with offices at 808 Wilshire Boulevard, Suite 200,
Santa Monica, California 90401, and KENNEDY-WILSON, INC. a Delaware corporation(-’Tenant”),
with offices at 9601 Wilshire Boulevard, Suites 200, and GL-15A/GL-9, Beverly
Hills, California 90210.

 

WHEREAS,

 

A.            Wilshire-Camden Associates, a California limited
partnership (“Wilshire-Camden”).

 

Landlord’s
predecessor-in-interest, pursuant to the provisions of that certain written
Office Lease, dated August 19. 1998, as amended by that certain First
Amendment to Lease (Expansion) dated March 5, 1999, that certain Second
Amendment to Lease (Expansion) dated June 2, 1999. and that certain
Termination Agreement dated October 19, 1999, leased to Tenant, and Tenant
leased from Wilshire- Camden space in the property located at 9601 Wilshire
Boulevard, Beverly Hills, California 90210 (the “Building”), commonly known as
Suites 200 (the entire second floor), and Suite GI.-15AiGL-9 (the “Original
Premises”):

 

B.            Pursuant to that certain Third Amendment to Office
Lease between Landlord and Tenant dated             ,
2002 (the ‘Third Amendment” which document together with the documents described
in Recital A above shall be collectively referred to as the “Lease”), Tenant
tit shall temporarily return the Construction Area for Landlord to complete
certain tenant improvements within the Construction Area, (ii) surrender Suite GL-15A/GL-9,
(iii) continue to occupy the Suite 200 Portion until the substantial
completion of the tenant improvements in the Construction Area, (iv) surrender
the Suite 200 Portion upon the substantial completion of the tenant
improvements within the Construction Area, and re-occupy of the Construction
Area subsequently renamed as Suite 220;

 

C.            The provisions of the Third Amendment to Lease specify
that the Suite 220 would be re- measured upon substantial completion of
the Suite 220 Improvements, and that the Suite 220 Effective Date
shall be the first Monday after the date Landlord substantially completes the Suite 220
improvements:

 

D.            The Improvements for Suite 220 were completed on;

 

NOW,
THEREFORE, in consideration of the covenants and provisions contained herein, and
other good and valuable consideration, the sufficiency of which Landlord and
Tenant hereby acknowledge. Landlord and Tenant agree:

 

1.             Confirmation of Defined Terms. Unless modified herein, all terms
previously defined and capitalized in the Lease, as amended shall hold the same
meaning for the purposes of this Fourth Amendment.

 

2.             Confirmation of Usable Area of Suite 220.
As of the Suite 220 Effective Date:

 

(i)            the revised Usable Area of Suite 220
is hereby confirmed to be             
square feet;

 

B2-1

 

(ii)           Tenant’s Percentage Share of Property
Taxes and Operating Expenses is hereby continued to be      
percent (    %), derived by dividing the Usable Area
of Suite 220 (approximately square feet) by the Usable Area of the
Building (approximately 265,105 square feet); arid

 

(iii)          Tenant’s
Parking Allotment shall be

 

3.             Confirmation of Suite 220
Effective Date and Suite 220 Term. The Suite 220 Effective Date is hereby confirmed
to be and the Suite 220 Term is hereby confirmed from and including                           
to and including                               .

 

4.             Revision in Monthly Base Rent. 
Tenant acknowledges and agrees commencing on the Suite 220
Effective Date and continuing through        ,
the Base Rent payable by Tenant for Suite 220 shall be $         
per month. Furthermore, as of the Suite 220 Effective Date, the provisions
of Paragraph 5.2 of the Third Amendment are hereby deleted in their entirety,
and replaced in lieu thereof, with the following:

 

“5.2  Suite 220. (a)  Commencing on                     ,
and continuing through                   ,
the Base Rent payable by Tenant for Suite 220 shall increase from $                
per month to $                
per month.

 

(b) Commencing
on                     ,
and continuing through                   ,
the Base Rent payable by Tenant for Suite 220 shall increase from $                
per month to $                
per month.

 

(c) 
Commencing on                     ,
and continuing through                   ,
the Base Rent payable by Tenant for Suite 220 shall increase from $                
per month to $                
per month.

 

(d) 
Commencing on                     ,
and continuing through                   ,
the Base Rent payable by Tenant for Suite 220 shall increase from $                
per month to $                
per month.

 

(e) 
Commencing on                     ,
and continuing through                   ,
the Base Rent payable by Tenant for Suite 220 shall increase from $                
per month to $                
per month.

 

(f) 
Commencing on                     ,
and continuing through                   ,
the Base Rent payable by Tenant for Suite 220 shall increase from $                
per month to $                
per month.

 

(g) 
Commencing on                     ,
and continuing through                   ,
the Base Rent payable by Tenant for Suite 220 shall increase from $                
per month to $                
per month.

 

5.             Acceptance of Suite 220. Tenant acknowledges and agrees that
Landlord has completed the improvements for which Landlord was obligated under Exhibit B-1
to the Third Amendment to the Lease to Tenant’s satisfaction, and, as of the Suite 220
Effective Date, Suite 220 was in good .order and repair.

 

6.             Warranty of Authority. If Landlord or Tenant signs as a
corporation, limited liability company or a partnership, each of the persons
executing this Fourth Amendment on behalf of Landlord or Tenant hereby
covenants and warrants that the entity executing herein below is a duly
authorized and existing entity that is qualified to do business in California;
that the person(s) signing on behalf of either Landlord or Tenant have
full right and authority to enter 

 

B2-2

 

into this Fourth Amendment; and that each and every
person signing on behalf of either Landlord or Tenant are authorized in writing
to do so.

 

7.             Broker Representation. Landlord and Tenant represent to one
another that it has dealt with no broker in connection with this Fourth
Amendment other than Douglas, Emmett and Company and Kennedy-Wilson Properties,
Ltd.. Landlord and Tenant shall hold one another harmless from and against any
and all liability, loss, damage, expense, claim, action, demand, suit or
obligation arising out of or relating to a breach by the indemnifying party of
such representation. Landlord agrees to pay all commissions due to the brokers
listed above created by Tenant’s execution of this Fourth Amendment

 

8.             Successors and Heirs. The provisions of this Fourth Amendment
shall inure to the benefit of Landlord’s and Tenant’s respective successors,
assigns, heirs and all persons claiming by, through or under them.

 

9.             Confidentiality. Landlord and Tenant agree that the
covenants and provisions of tins Fourth Amendment shall not be divulged to
anyone not directly involved in the management, administration; ownership,
lending against, or subleasing of the Expansion Space, other than Tenant’s or
Landlords counsel-of-record or leasing or sub-leasing broker of record.

 

10.          Disclosure. Landlord and Tenant acknowledge that
principals of Landlord have a Financial interest in Douglas Emmett Realty
Advisors, Douglas Emmett and Company, and P.L.E. Builders.

 

11.          Governing Law. The provisions of this Fourth Amendment
shall be governed by the laws of the State of California.

 

12.          Reaffirmation. Landlord and Tenant acknowledge and
agree that the Lease, as amended herein. constitutes the entire agreement by
and between Landlord and Tenant relating to the Expansion Space, and supersedes
any and all other agreements written or oral between the parties hereto.
Furthermore, except as modified herein, all other covenants and provisions of
the Lease shall remain unmodified and in full force and effect.

 

13.          Submission of Document. No expanded contractual or other rights
shall exist between Landlord and Tenant with respect to the Premises, as
contemplated under this Fourth Amendment, until both Landlord and Tenant have
executed and delivered this Fourth Amendment, whether or not an7- additional
rental or security deposits have been received by Landlord, and notwithstanding
that Landlord has delivered to Tenant an unexecuted copy of this Fourth
Amendment.

 

14.          Conflict. if ay conflict exists between the terms
or provisions of the Lease and terms or provisions of this Fourth Amendment,
the terms and provisions of this Fourth Amendment shall govern and control.

 

IN
WITNESS WHEREOF,
Landlord and Tenant have duly executed this document as of the day and year
written below.

 

B2-3

 

	
  LANDLORD:

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  
	
  BRIGHTON ENTERPRISES,
  LLC

  	
   

  	
  KENNEDY-WILSON, INC.

  
	
  a California limited
  liability company

  	
   

  	
  a Delaware corporation

  
	
   

  	
   

  	
   

  
	
  By:

  	
  DOUGLAS EMMETT AND
  COMPANY,

  	
   

  	
   

  
	
   

  	
  a California
  corporation,

  	
   

  	
   

  
	
   

  	
  its agent

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Michael J. Means

  	
   

  	
  By:

  	
   

  
	
   

  	
  Michael J. Means, Vice
  President

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Dated :

  	
   

  	
   

  	
  Dated :

  	
   

  

 

B2-4

 

EXHIBIT
C

 

FORM OF
SUBORDINATION, NON DISTURBANCE AND ATTORNMENT AGREEMENT

 

 

TRIANGLE
LENDERS, LI.C,

a California limited liability company

 

DOUGLAS
EMMETT REALTY FUND 2000,

a California limited partnership

 

AND

 

KENNEDY-WILSON,
INC. A DELAWARE CORPORATION

 

 

SUBORDINATION,
NON-DISTURBANCE

AND ATTORNMENT AGREEMENT

 

Dated:
December 20, 2002

 

 

Location:
9601 Wilshire Boulevard,

Beverly Hills. California 90210

 

 

 

EXHIBIT
C

 

SUBORDINATION.
NON-DISTURBANCE

AND
ATTORNMENT AGREEMENT

 

(Lease)

 

THIS AGREEMENT is made as
of December 20. 2002 between TRIANGLE LENDERS, L.L.C., a California
limited liability company, having an address at BM Wilshire Boulevard, Suite 200,
Santa Monica, California 90401 (the “Leasehold Mortgagee”), DOUGLAS EMMETT
REALTY FUND 2000, a California limited partnership, having an address at 808
Wilshire Boulevard. Suite 200, Santa Monica, California 90401 (the “Ground
Lessor”), and KENNEDY-WILSON. INC, a Delaware corporation, having an office at
9601 Wilshire Boulevard, Suites 200, and GL-ISA/GL-9. Beverly I tills,
California 90210 (the “Tenant”);

 

WITNESSETH:

 

WHEREAS the Ground Lessor
and Brighton Enterprises. LLC, it California limited liability company,
successor-in-interest to Wilshire-Camden Associates, a California limited
partnership (the “Ground Lessee”), are the current parties to that certain
Amended and Restated Ground Lease (the “Ground Lease”), pursuant to which the
Ground Lessee is leasing Certain land located in the County of Los Angeles,
City of Beverly Hills and State of California, known as 9601 Wilshire
Boulevard, as more particularly described in Exhibit “A” attached hereto
and incorporated herein by this reference (the “Land”) from the Ground Lessor,

 

WHEREAS the Leasehold
Mortgagee is the present owner and holder of a certain deed of trust or deeds
of trust (the “Leasehold Deed of Trust”) encumbering the Ground Lessee’s
interest in the Ground Lease, as well as that certain office building together
with the four-level subterranean parking garage located on the Land (the “Improvements”);

 

WHEREAS the Tenant is the
holder of a leasehold estate in a portion of the improvements under and
pursuant to the provisions of a certain written Office Lease, dated August 19,
1998, as amended by that certain First Amendment to Lease (Expansion) dated March 5,
1999, that certain Second Amendment to Lease (Expansion) dated June 2,
1999, that certain Termination Agreement dated October 19, 1999, and that
certain Third Amendment to Office Lease dated December 20. 2002 with
Ground Lessee, as landlord (collectively the “Lease”). and

 

WHEREAS the Tenant has
agreed to subordinate the Lease to the Leasehold Deed of Trust and the Ground
Lease, and to the lien of each of the same, and the Leasehold Mortgagee and the
Ground Lessor have each agreed to grant non-disturbance to the Tenant tinder the
Lease on the terms and conditions hereinafter set forth.

 

NOW THEREFORE, in
consideration of Ten Dollars ($10) and other good and valuable consideration,
the receipt of which is hereby acknowledged, the Leasehold Mortgagee, the
Ground Lessor and the Tenant hereby covenant and agree as follows:

 

1              The Tenant agrees that the Lease and all
of the terms, covenants and provisions thereof and all rights, remedies and
options of the Tenant thereunder are and shall at all times continue to be
subject and subordinate in all respects to (i) the Leasehold Deed of Trust
and all of the terms, covenants and provisions thereof and to the lien thereof
and to any and all increases, 

 

C-1

 

renewals, modifications, spreaders, consolidations,
replacements and extensions thereof, and to any and all sums secured thereby.
with the same force and effect as if the Leasehold Deed of Trust had been
executed, delivered and recorded prior to the execution and delivery of the
Lease, and (ii) the Ground Lease and all of the terms, covenants and
provisions thereof and to any and all amendments, modifications, replacements
and extensions thereof, and to any and all amounts required to be paid
thereunder, with the same force and effect as if the Ground Lease had been
executed, delivered and recorded prior To the execution and delivery of the.
Lease.

 

2              The Leasehold Mortgagee and the Ground
Lessor, respectively, agree that provided (i) the Tern shall have
commenced pursuant to the provisions thereof, (ii) the Tenant shall he in
possession of the premises demised under the Lease, (iii) the Lease shall
be in full force and effect. and (iv) the Tenant shall not be in material
default beyond any notice and grace period under any of the terms, covenants or
conditions of the Lease or of this Agreement on the part of the Tenant to be
observed or performed thereunder or hereunder, the right of possession of
Tenant and its rights and privileges to the teased premises shall not be
terminated, affected or disturbed by (a) the Leasehold Mortgagee in the
exercise of any of its rights under the Leasehold Deed of Trust and any sale of
the Improvements pursuant to the exercise of any rights and remedies under the
Leasehold Deed of Trust or otherwise shall be made subject to Tenant’s right of
possession under the Lease, and (h) the Ground Lessor in the exercise of
any of its rights under the Ground Lease and any termination of the Ground
Lease pursuant to the exercise of any rights and remedies under the Ground Lease
or otherwise shall be made subject to Tenant’s right of possession under the
Lease. Further, the Leasehold Mortgagee and the Ground Lessor. respectively,
agree not to join Tenant as a party defendant in any action or proceeding
foreclosing the Leasehold Deed of Trust unless such joinder is necessary to
foreclose the Leasehold Deed of Trust and then only for such purpose and not
for the purpose of terminating the Lease.

 

3              The Tenant agrees that (i) if the
Leasehold Mortgagee or any successors in interest to the Leasehold Mortgagee
shall become the owner of the Improvements and the leasehold interest in the
Ground Lease by reason of the foreclosure of the Leasehold Deed of Trust or the
acceptance or a deed or assignment in lieu of foreclosure or otherwise, or (ii) if
the Ground Lease is terminated and Ground Lessor or any successors in interest
to the Ground Lessor shall become the owner of the improvements. the Lease
shall not be terminated or affected thereby but shall continue in full force
and effect as a direct lease between the Leasehold Mortgagee and the Ground
Lessor, as applicable, and the Tenant upon all of the terms, covenants and
conditions set forth it the Lease and in that event the Tenant agrees to attorn
to the Leasehold Mortgagee and the Ground Lessor, as applicable, and the
Leasehold Mortgagee end the Ground Lessor, as applicable, agrees to accept such
attornment, provided, however, that neither the Leasehold Mortgagee or the
Ground Lessor, as applicable, shall be (i) obligated to complete any
construction work required to be done by the Landlord (as hereinafter defined I
pursuant to the provisions of the Lease or to reimburse the Tenant for any
construction work done by the Tenant, (iii liable for any accrued obligation of
the Landlord, or for any act or omission of the Landlord. whether prior to or
after such foreclosure, sale or termination, as applicable, (iii) liable
under any indemnity provision of whatever nature contained in the Lease,
including, but not limited to, any environmental indemnification, (iv) required
to make any repairs to the Premises (as hereinafter defined in Paragraph l0
below) and/or to the premises demised wider the Lease as a result of fire or
other casualty or by reason of condemnation except as provided under the Lease,
(v) required 

 

C-2

 

to make any capital improvements to the Premises
and/or to the premises demised under the Lease which the Landlord may have
agreed to make, but lied not completed, or to perform or provide any services
not related to possession or quiet enjoyment of the premises demised under the
Lease, (vi) subject to tiny offsets, claims or counterclaims which shall
have accrued to the Tenant against the Landlord prior to the date (in which the
Leasehold Mortgagee or the Ground Lessor, as applicable, or its respective
successor in interest shall become the owner of the Premises, (vii) liable
for any security deposit or other monies not actually received by the Leasehold
Mortgagee or the Ground Lessor, as applicable.

 

4              The Tenant shall not, without the prior
written consent of the Leasehold Mortgagee and the Ground Lessor (which consent
shall not be unreasonably withheld) (i) enter into any agreement
decreasing the amount of rent payable under the Lease, (ii) prepay any of
the rents, additional rents or other sums due under the Lease for more than one
(1) month in advance of the due date thereof, 0 ii voluntarily surrender
the premises demised under the Lease or terminate the Lease without cause or shorten
the term thereof, or (iv) assign the Lease or sublet the premises demised
under the Lease or any part thereof except as expressly permitted by the terms
of the Lease; and any such amendment. modification, termination, prepayment,
voluntary surrender, assignment or subletting, without the prior written
consent of the Leasehold Mortgagee and the Ground Lessor shall not be binding
on the Leasehold Mortgagee or the Ground Lessor, respectively.

 

5              INTENTIONALLY OMITTED.

 

6              Tenant agrees to give the Leasehold
Mortgagee and the Ground Lessor a copy of any notice of default served upon the
Landlord by Tenant, and agrees that, notwithstanding any provisions of the
Lease to the contrary, no such notice of default shall be effective unless the
Leasehold Mortgagee and the Ground Lessor shall have received a copy of said
notice of the material default or other circumstance giving rise to such
cancellation, termination or abatement and shall have failed within sixty (60)
days after receipt of such copy of said notice to cure such material default or
remedy such circumstance, or if such material default cannot be cured within
sixty (60) days, shall have failed within sixty (60) days after receipt of such
copy of said notice to commence and to thereafter diligently pursue any action
necessary to cure such material default or remedy such circumstance, as the
case may Iv Upon such time being allowed to cure such default expiring without
cure, Tenant shall be entitled it) all of its rights and remedies under the
Lease on account of Landlord’s default.

 

7              Anything herein or in the Lease to the
contrary notwithstanding, in the event that the Leasehold Mortgagee or the
Ground Lessor shall acquire title to the Premises, or shall otherwise become
liable for any obligations of the Landlord under the Lease, neither the
Leasehold Mortgagee nor the Ground Lessor, as applicable, shall have any
obligation, nor incur any liability, beyond the then interest, if any, of the
Leasehold Mortgagee or the Ground Lessor, as applicable, in the Premises and
the Tenant shall look exclusively to such interest of the Leasehold Mortgagee
or the Ground Lessor, as applicable, if any, in the Premises for the payment
and discharge of any obligations imposed upon the Leasehold Mortgagee or the
Ground Lessor, as applicable, hereunder or under the Lease and the leasehold
Mortgagee and the Ground Lessor, as applicable, are hereby released or relieved
of any other liability hereunder and under the Lease. The Tenant agrees that
with respect to any money judgment which may be obtained or 

 

C-3

 

secured by the Tenant against the Leasehold Mortgagee
or the Ground Lessor, as applicable, the Tenant shall look solely to the estate
or interest owned by the Leasehold Mortgagee or the Ground Lessor, as
applicable, in the Premises and the Tenant will not collect or attempt to
collect any such judgment out of any other assets of the Leasehold Mortgagee or
the Ground Lessor, as applicable.

 

8              Any notice, request, demand, statement,
authorization, approval or consent made hereunder shall be in writing and shall
be sent by Federal Express, or other reputable courier service. or by postage
pre-paid registered or certified mail, return receipt requested, and shall be
deemed given when received or refused (as indicated on the receipt) and
addressed as follows:

 

If to
the Leasehold Mortgagee:

 

Triangle
Lenders, LLC

c/o Douglas Emmett Realty Advisors

808 Wilshire Boulevard, Suite 200

Santa Monica, California 90401

Attention: Mr. Jordan Kaplan and Mr. William Kamer

 

If to
the Ground Lessor:

 

Douglas
Emmett Realty Fund 2000

c/o Douglas Emmett Realty Advisors

808 Wilshire Boulevard, Suite 200

Santa Monica, California 90401

Attention: Mr. Jordan Kaplan and Mr. William Kamer

 

If to
the Tenant:

 

9601
Wilshire Boulevard, Suite 200

Beverly Hills. California 90210 

Attention:

 

w/
copy to:

 

Kulik,
Gottesman, & Mouton, LLP

13303 Ventura Boulevard, Suite 1400

Sherman Oaks, California 91403

Attention: Francisco Aparicio, Esq.

 

it
being understood and agreed that each party will use reasonable efforts to send
copies of any notices to the addresses marked “With a copy to” hereinabove set
Forth: provided, however, that failure to deliver such copy or copies shall
have no consequence whatsoever to the effectiveness of any notice made to the
Tenant, the Leasehold Mortgagee and/or the Ground Lessor. Each party may
designate a change of address by notice given, as hereinabove provided, to the
other party, at least fifteen (15) days prior to the date such change of
address is to become effective.

 

9              This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.

 

C-4

 

10            The
term “Leasehold Mortgagee” as used herein shall include the successors and
assigns of the Leasehold Mortgagee and any person, party or entity which shall
become the owner or the Premises by reason of a Foreclosure of the Leasehold
Deed of Trust or the acceptance of a deed or assignment in lieu of foreclosure
or otherwise. The term “Ground Lessor’ as used herein shall include the
successors and assigns of the Ground Lessor and any person, party or entity
which shall become the owner of the improvements by reason of a termination of
the Ground Lease. The term “Landlord” as used herein shall mean and include the
present landlord under the Lease and such landlord’s predecessors and
successors in interest under the Lease. The term “Premises” as used herein
shall mean the Land, the improvements, any other improvements now or hereafter
located on the Land and/or the estates therein encumbered by the Leasehold Deed
of Trust and/or the Ground Lease.

 

11            This
Agreement may not be modified in any manner or terminated except by an
instrument in writing executed by the parties hereto.

 

12            l2.      This
Agreement shall be governed by and construed under the laws of the Slate in
which the Premises are located.

 

13            This
Agreement shall have no force and effect until all parties to the Agreement
have executed and notarized the Agreement and fully executed originals have
been delivered to all parties to the Agreement.

 

[INTENTIONALLY
LEFT BLANK]

 

C-5

 

IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the
date first above written.

 

 

	
   

  	
  TRIANGLE LENDERS, LLC,

  
	
   

  	
  a California limited
  liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Douglas Emmett Realty
  Advisors,

  
	
   

  	
   

  	
  a California corporation,

  
	
   

  	
   

  	
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
  Dated:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  DOUGLAS EMMETT REALTY FUND
  2000,

  
	
   

  	
  a California limited
  partnership

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Douglas Emmett Realty
  Advisors,

  
	
   

  	
   

  	
  a California corporation,

  
	
   

  	
   

  	
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
  Dated:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KENNEDY-WILSON, INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  	
   

  	
  Dated:

  	
   

  

 

C-6

 

	
  STATE OF                                    )

  
	
   

  	
  ) ss:

  	
   

  
	
   

  	
   

  
	
  COUNTY OF                                    )

  

 

On                            ,
before me,                                                                   
a Notary Public, personally appeared                      ,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed In the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies). and that by his/her/their signature(s) on
the instrument the person(s), or the entity upon behalf of which the person(s) acted,
executed the instrument.

 

WITNESS my hand and
official seal.

 

	
   

  	
   

  
	
   

  	
   

  	
  Notary Public in and for said County and State

  
	
   

  	
   

  
	
   

  	
   

  	
  My Commission Expires:

  
	
   

  	
   

  	
   

  

 

	
  STATE OF                                    )

  
	
   

  	
  ) ss:

  	
   

  
	
   

  	
   

  
	
  COUNTY OF                                    )

  

 

On                            ,
before me,                                                                   
a Notary Public, personally appeared                      ,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed In the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies). and that by his/her/their signature(s) on
the instrument the person(s), or the entity upon behalf of which the person(s) acted,
executed the instrument.

 

WITNESS my hand and
official seal.

 

	
   

  	
   

  
	
   

  	
   

  	
  Notary Public in and for said County and State

  
	
   

  	
   

  
	
   

  	
   

  	
  My Commission Expires:

  
	
   

  	
   

  	
   

  

 

	
  STATE OF                                    )

  
	
   

  	
  ) ss:

  	
   

  
	
   

  	
   

  
	
  COUNTY OF                                    )

  

 

On                            ,
before me,                                                                   
a Notary Public, personally appeared                      ,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed In the within
instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies). and that by his/her/their signature(s) on
the instrument the person(s), or the entity upon behalf of which the person(s) acted,
executed the instrument.

 

WITNESS my hand and
official seal.

 

	
   

  	
   

  
	
   

  	
   

  	
  Notary Public in and for said County and State

  
	
   

  	
   

  
	
   

  	
   

  	
  My Commission Expires:

  
	
   

  	
   

  	
   

  

 

 

EXHIBIT
“A”

 

LEGAL
DESCRIPTION

 

Lots
8, 9, I0, 11, 12, 13 and 14, in Block 18, of Beverly, in the City of Beverly
Hills, County of Los Angeles, State of California, as per map recorded in Book
11, Pages 94 and 95 of Maps in the Office of the County Recorder of said
County.

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