Document:

Exhibit
10.17

EXECUTED

ORIGINAL

OFFICE
LEASE

443
SOUTH RAYMOND AVENUE

 

443 SOUTH RAYMOND OWNER, LLC,

a California
limited liability company,

as Landlord,

and

THE CHILDREN’S
PLACE SERVICES COMPANY, LLC,

a Delaware limited
liability company,

as Tenant.

TABLE
OF CONTENTS

	
  

  	
  Page

  
	
  ARTICLE 1

  	
  PREMISES, BUILDINGS, PROJECT, AND COMMON AREAS

  	
  3

  
	
  ARTICLE 2

  	
  LEASE TERM; OPTION TERMS

  	
  3

  
	
  ARTICLE 3

  	
  BASE RENT

  	
  6

  
	
  ARTICLE 4

  	
  ADDITIONAL RENT

  	
  7

  
	
  ARTICLE 5

  	
  USE OF PREMISES

  	
  10

  
	
  ARTICLE 6

  	
  OPERATION AND MANAGEMENT OF PROJECT; SERVICES AND
  UTILITIES

  	
  11

  
	
  ARTICLE 7

  	
  REPAIRS

  	
  12

  
	
  ARTICLE 8

  	
  ADDITIONS AND ALTERATIONS

  	
  14

  
	
  ARTICLE 9

  	
  COVENANT AGAINST LIENS

  	
  15

  
	
  ARTICLE 10

  	
  INSURANCE

  	
  16

  
	
  ARTICLE 11

  	
  DAMAGE AND DESTRUCTION

  	
  18

  
	
  ARTICLE 12

  	
  NONWAIVER

  	
  19

  
	
  ARTICLE 13

  	
  CONDEMNATION

  	
  20

  
	
  ARTICLE 14

  	
  ASSIGNMENT AND SUBLETTING

  	
  20

  
	
  ARTICLE 15

  	
  SURRENDER OF PREMISES; OWNERSHIP AND REMOVAL OF
  TRADE FIXTURES

  	
  24

  
	
  ARTICLE 16

  	
  HOLDING OVER

  	
  24

  
	
  ARTICLE 17

  	
  ESTOPPEL CERTIFICATES

  	
  25

  
	
  ARTICLE 18

  	
  SUBORDINATION

  	
  25

  
	
  ARTICLE 19

  	
  DEFAULTS; REMEDIES

  	
  26

  
	
  ARTICLE 20

  	
  COVENANT OF QUIET ENJOYMENT

  	
  28

  
	
  ARTICLE 21

  	
  LETTERS OF CREDIT

  	
  28

  
	
  ARTICLE 22

  	
  TELECOMMUNICATIONS EQUIPMENT

  	
  30

  
	
  ARTICLE 23

  	
  SIGNS

  	
  31

  
	
  ARTICLE 24

  	
  COMPLIANCE WITH LAW

  	
  31

  
	
  ARTICLE 25

  	
  LATE CHARGES

  	
  32

  
	
  ARTICLE 26

  	
  LANDLORD’S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT

  	
  32

  
	
  ARTICLE 27

  	
  ENTRY BY LANDLORD

  	
  32

  
	
  ARTICLE 28

  	
  TENANT PARKING

  	
  33

  
	
  ARTICLE 29

  	
  MISCELLANEOUS PROVISIONS

  	
  33

  

 

	
  EXHIBITS

  
	
   

  
	
  EXHIBITS

  
	
   

  
	
  A

  	
  OUTLINE OF PREMISES

  
	
  A-l

  	
  SITE PLAN

  
	
  B

  	
  TENANT WORK LETTER

  
	
  C

  	
  NOTICE OF LEASE TERM DATES

  
	
  D

  	
  FORM OF TENANT’S ESTOPPEL CERTIFICATE

  
	
  E

  	
  GUARANTY OF LEASE

  
	
  F

  	
  NET EQUIVALENT LEASE RATE

  
	
  G

  	
  FORM OF LETTER OF CREDIT

  

 

 i
 

INDEX

	
  

  	
  Page(s)

  
	
  Abatement Event

  	
  12

  
	
  Additional Rent

  	
  7

  
	
  Alterations

  	
  14

  
	
  Applicable Laws

  	
  31

  
	
  Bank Prime Loan

  	
  32

  
	
  Base Rent

  	
  6

  
	
  Brokers

  	
  36

  
	
  Building

  	
  3

  
	
  Building Structure

  	
  12

  
	
  Building Systems

  	
  11

  
	
  Buildings

  	
  3

  
	
  Claims

  	
  16

  
	
  Common Areas

  	
  3

  
	
  Comparable Buildings

  	
  5

  
	
  Comparable Transactions

  	
  4

  
	
  Concessions

  	
  4

  
	
  Control

  	
  23

  
	
  Cosmetic Alterations

  	
  14

  
	
  Cosmetic Alterations Notice

  	
  14

  
	
  Direct Expenses

  	
  7

  
	
  Eligibility Period

  	
  12

  
	
  Emergency

  	
  13

  
	
  Estimate

  	
  9

  
	
  Estimate Statement

  	
  9

  
	
  Estimated Direct Expenses

  	
  9

  
	
  Excess

  	
  9

  
	
  Expense Year

  	
  7

  
	
  Fair Rental Value

  	
  4

  
	
  Financial Requirement

  	
  18

  
	
  Financial Statements

  	
  30

  
	
  First Option Term

  	
  4

  
	
  Force Majeure

  	
  35

  
	
  Guarantor

  	
  37

  
	
  Guaranty

  	
  37

  
	
  Historical Authorities

  	
  15

  
	
  Historical Designation

  	
  15

  
	
  HVAC

  	
  11

  
	
  Interest Notice

  	
  5

  
	
  Interest Rate

  	
  32

  
	
  JAMS

  	
  13

  
	
  Landlord

  	
  1

  
	
  Landlord Compliance Conditions

  	
  32

  
	
  Landlord Objection Notice

  	
  13

  
	
  Landlord Parties

  	
  16

  
	
  L-C

  	
  28

  
	
  L-C Amount

  	
  28

  
	
  L-C Excess Amount

  	
  29

  
	
  LC Expiration Date

  	
  28

  
	
  LC Reduction Conditions

  	
  30

  
	
  L-C Reduction Date

  	
  30

  
	
  Lease

  	
  1

  
	
  Lease Commencement Date

  	
  3

  
	
  Lease Expiration Date

  	
  3

  
	
  Lease Term

  	
  3

  
	
  Lease Year

  	
  4

  
	
  Lines

  	
  37

  
	
  Mail

  	
  35

  
	
  Minor Cosmetic Alterations

  	
  14

  
	
  Notices

  	
  35

  

 

 ii
 

 

	
  

  	
  Page(s)

  
	
  Operating Expenses

  	
  7

  
	
  Option Rent Notice

  	
  5

  
	
  Option Term

  	
  4

  
	
  Original Improvements

  	
  17

  
	
  Original Tenant

  	
  4

  
	
  Outside Agreement Date

  	
  5

  
	
  Permitted Assignee

  	
  4

  
	
  Premises

  	
  3

  
	
  Proposition 13

  	
  7

  
	
  Recapture Notice

  	
  22

  
	
  Rent

  	
  7

  
	
  Restaurant

  	
  10

  
	
  Second Option Term

  	
  4

  
	
  Second Option Term Rent

  	
  4

  
	
  Secured Areas

  	
  33

  
	
  Security Deposit Laws

  	
  30

  
	
  Statement

  	
  9

  
	
  Subject Space

  	
  21

  
	
  Summary

  	
  1

  
	
  Tax Expenses

  	
  7

  
	
  Telecommunications Equipment

  	
  30

  
	
  Tenant

  	
  1

  
	
  Tenant Parties

  	
  16

  
	
  Tenant Work Letter

  	
  3

  
	
  Tenant’s Signage

  	
  31

  
	
  Transfer

  	
  23

  
	
  Transfer Notice

  	
  21

  
	
  Transfer Premium

  	
  22

  
	
  Transferee

  	
  21

  
	
  Transfers

  	
  21

  

 

 iii

443 SOUTH RAYMOND AVENUE

OFFICE LEASE

This
Office Lease (the “Lease”), dated
as of the date set forth in Section 1 of the Summary of Basic Lease
Information (the “Summary”),
below, is made by and between 443 SOUTH RAYMOND OWNER, LLC, a California
limited liability company (“Landlord”),
and THE CHILDREN’S PLACE SERVICES COMPANY, LLC, a Delaware limited liability
company (“Tenant”).

SUMMARY OF BASIC LEASE
INFORMATION

	
  

  	
   

  	
  TERMS OF
  LEASE

  	
   

  	
  DESCRIPTION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Date:

  	
   

  	
  January 21, 2005.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Premises:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.1   Premises:

  	
   

  	
  72,000 rentable square feet of space located in the
  buildings known as “Building A”, “Building B”, and “Building C”, located at
  443 South Raymond Avenue, Pasadena, California, as further set forth in Exhibit A to the Office Lease.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.2   Project:

  	
   

  	
  The Premises are part of an office project known as
  443 South Raymond Avenue, Pasadena, California, as further set forth in Section
  1.1.2 of this Lease.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Lease Term

  	
   

  	
   

  
	
   

  	
   

  	
  (Article 2):

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.1   Length of Term:

  	
   

  	
  Thirteen (13) “Lease Years,” as that term is defined
  in Section 2.1 of this Lease.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.2   Lease Commencement Date:

  	
   

  	
  The earlier to occur of (i) the date that is one (1)
  month following the date upon which Tenant obtains a certificate of
  occupancy, temporary certificate of occupancy, or its legal equivalent, for
  the Premises, and (ii) September 1, 2005, subject to the terms of Section 5
  of the Tenant Work Letter.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.3   Lease Expiration Date:

  	
   

  	
  The last day of the 13th Lease Year.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.4   Option Terms:

  	
   

  	
  One (1) two (2)-year option to renew and one (1)
  five (5)-year option to renew, as more particularly set forth in Section
  2.2 of this Lease.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Base Rent (Article 3):

  	
   

  	
   

  

 

	
  Lease Year

  	
   

  	
  Annual

  Base Rent

  	
   

  	
  Monthly

  Installment

  of Base Rent

  	
   

  	
  Monthly

  Rental Rate 

  per Rentable

  Square Foot

  	
   

  
	
  1

  	
   

  	
  $

  	
  1,598,400.00

  	
   

  	
  $

  	
  133,200.00

  	
   

  	
  $

  	
  1.85

  	
   

  
	
  2

  	
   

  	
  $

  	
  1,624,320.00

  	
   

  	
  $

  	
  135,360.00

  	
   

  	
  $

  	
  1.88

  	
   

  
	
  3

  	
   

  	
  $

  	
  1,658,880.00

  	
   

  	
  $

  	
  138,240.00

  	
   

  	
  $

  	
  1.92

  	
   

  
	
  4

  	
   

  	
  $

  	
  1,684,800.00

  	
   

  	
  $

  	
  140,400.00

  	
   

  	
  $

  	
  1.95

  	
   

  
	
  5

  	
   

  	
  $

  	
  1,710,720.00

  	
   

  	
  $

  	
  142,560.00

  	
   

  	
  $

  	
  1.98

  	
   

  
	
  6

  	
   

  	
  $

  	
  1,745,280.00

  	
   

  	
  $

  	
  145,440.00

  	
   

  	
  $

  	
  2.02

  	
   

  
	
  7

  	
   

  	
  $

  	
  1,771,200.00

  	
   

  	
  $

  	
  147,600.00

  	
   

  	
  $

  	
  2.05

  	
   

  
	
  8

  	
   

  	
  $

  	
  1,805,760.00

  	
   

  	
  $

  	
  150,480.00

  	
   

  	
  $

  	
  2.09

  	
   

  
	
  9

  	
   

  	
  $

  	
  1,840,320.00

  	
   

  	
  $

  	
  153,360.00

  	
   

  	
  $

  	
  2.13

  	
   

  
	
  10

  	
   

  	
  $

  	
  1,866,240.00

  	
   

  	
  $

  	
  155,520.00

  	
   

  	
  $

  	
  2.16

  	
   

  
	
  11

  	
   

  	
  $

  	
  1,900,800.00

  	
   

  	
  $

  	
  158,400.00

  	
   

  	
  $

  	
  2.20

  	
   

  
	
  12

  	
   

  	
  $

  	
  1,935,360.00

  	
   

  	
  $

  	
  161,280.00

  	
   

  	
  $

  	
  2.24

  	
   

  
	
  13

  	
   

  	
  $

  	
  1,969,920.00

  	
   

  	
  $

  	
  164,160.00

  	
   

  	
  $

  	
  2.28

  	
   

  

 

 

	
  5.

  	
   

  	
  Intentionally Omitted:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Tenant’s Share (Article 4):

  	
   

  	
  100%.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Permitted Use (Article 5):

  	
   

  	
  Provided any such use is legally permissible, Tenant
  shall use the Premises solely for business and professional office use for
  use twenty-four (24) hours a day, seven (7) days a week (subject to the terms
  of this Lease), and, subject to the terms of Section 5.3 of this Lease,
  operation of a restaurant, all to the extent the same comply with applicable
  laws and zoning and are consistent with the character of the Project as a
  first-class office building project.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Letter of Credit:

  	
   

  	
  See Article 21 of this Lease.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  Parking Rights:

  	
   

  	
  See Article 28 of this Lease.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
   

  	
  Address of Tenant (Section 29.17):

  	
   

  	
  915 Secaucus Road 

  Secaucus, New Jersey 07094 

  Attention: VP/Real Estate

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and

  	
   

  	
  915 Secaucus Road 

  Secaucus, New Jersey 07094 

  Attention: Sr. VP/General Counsel

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
   

  	
  Address of Landlord (Section 29.17):

  	
   

  	
  See Section 29.18 of the Lease.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  Broker(s) (Section 29.23):

  	
   

  	
  Colliers Seeley International, Inc. 

  444 South Flower Street 

  Suite 2200 

  Los Angeles, California 90071

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  and

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Marcus & Millichap 

  1055 West 7th Street 

  Los Angeles, California 90017

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  Tenant Improvement Allowance (Tenant Work Letter Section
  2.1):

  	
   

  	
  $5,000,000.00.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  Guarantors 

  (Exhibit E):

  	
   

  	
  The Children’s Place Retail Stores, Inc., a
  Delaware corporation.

  

 

 2
 

ARTICLE 1 

PREMISES, BUILDINGS,
PROJECT, AND COMMON AREAS

1.1                 Premises, Buildings, Project and Common Areas.

1.1.1
   The
Premises. Landlord hereby leases to Tenant and Tenant hereby
leases from Landlord the premises set forth in Section 2.1 of the
Summary (the “Premises”). The
outline of the Premises is set forth in Exhibit
A  attached hereto and the Premises is deemed to have the number
of rentable square feet as set forth in Section 2.2 of the Summary
(which shall not be subject to re-measurement or modification). The parties
hereto agree that the lease of the Premises is upon and subject to the terms,
covenants and conditions (the “TCCs”)
herein set forth, and Tenant covenants as a material part of the consideration
for this Lease to keep and perform each and all of such TCCs by it to be kept
and performed and that this Lease is made upon the condition of such
performance. The parties hereto hereby acknowledge that the purpose of Exhibit A  is to show the approximate
location of the Premises in the “Buildings,” as
that term is defined in Section 1.1.2, below, only, and such Exhibit is
not meant to constitute an agreement, representation or warranty as to the
construction of the Premises, the precise area thereof or the specific location
of the “Common Areas,” as that
term is defined in Section 1.1.3, below, or the elements thereof or of
the accessways to the Premises or the “Project,”
as that term is defined in Section 1.1.2, below. Except as
specifically set forth in this Lease and in the Tenant Work Letter attached
hereto as Exhibit B  (the “Tenant Work Letter”), Landlord shall not
be obligated to provide or pay for any improvement work or services related to
the improvement of the Premises, the Buildings or the Project. Tenant also
acknowledges that, except as set forth in this Lease, neither Landlord nor any
agent of Landlord has made any representation or warranty regarding the
condition of the Premises, the Buildings or the Project or with respect to the
suitability of any of the foregoing for the conduct of Tenant’s business,
except as specifically set forth in this Lease and the Tenant Work Letter. The
taking of possession of the Project, or any portion thereof, by Tenant shall
conclusively establish that the Premises, the Buildings and the Project were at
such time in good and sanitary order, condition and repair; provided, however,
that the foregoing shall not alter or limit Landlord’s obligation pursuant to
the terms of Article 7 of this Lease. Subject to “Applicable Laws,” as that
term is defined in Article 24, below, Tenant shall have access to the Premises,
Buildings and Project, twenty-four hours a day, seven days a week.

1.1.2
   The
Project. The Premises are a part of the office project known as “443
South Raymond, Pasadena, California.” The term “Project,” as used in this Lease, shall mean (i) Building A,
Building B, Building C (each, a “Building”, and
collectively, the “Buildings”) and
the Common Areas, (ii) the parking structure servicing the Buildings, and (iii)
the land (which is improved with landscaping and other improvements) upon which
the Buildings and the Common Areas (including the parking structure) are
located. A site plan of the Project (including Building A, Building B and
Building C) is set forth on Exhibit A-l, attached hereto.

1.1.3
   Common
Areas. Tenant shall have the right to use, subject to Landlord’s
reasonable, nondiscriminatory rules and regulations, the common area portions
of the Project as designated by Landlord from time to time (the “Common Areas”).

ARTICLE 2 

LEASE TERM; OPTION TERMS

2.1
      In
General. The TCCs and provisions of this Lease shall be
effective as of the date of this Lease. The term of this Lease (the “Lease Term”) shall be as set forth in Section
3.1 of the Summary, shall commence on the date set forth in Section 3.2
of the Summary (the “Lease Commencement Date”),
and shall terminate on the date set forth in Section 3.3 of the Summary
(the “Lease Expiration Date”)
unless this Lease is sooner terminated as hereinafter provided. Tenant shall
have the right to occupy the Premises prior to the Lease Commencement Date,
provided that (A) Tenant shall give Landlord at least ten (10) days’ prior
notice of any such occupancy of the Premises, (B) a temporary certificate of
occupancy, certificate of occupancy, or its legal equivalent, shall have been
issued by the appropriate governmental authorities for the Premises, and (C)
all of the terms and conditions of the Lease shall apply, other than Tenant’s
obligation to pay “Base Rent,” as that term is defined in Article 3 below, and “Tenant’s
Share” of the “Direct Expenses,” as those terms are defined in Article 4,
below, as though the Lease

 3
 

Commencement Date had
occurred (although the Lease Commencement Date shall not actually occur until the
occurrence of the same pursuant to the terms of the second sentence of this
Article 2) upon such occupancy of the Premises by Tenant. “Lease Year”, as used in this Lease, shall
mean each consecutive twelve (12) month period following the Lease Commencement
Date; provided, however, that the first Lease Year shall commence on the Lease
Commencement Date and end on the last day of the twelfth month thereafter and
the second and each succeeding Lease Year shall commence on the first day of
the next calendar month; and further provided that the last Lease Year shall
end on the Lease Expiration Date. At any time during the Lease Term, Landlord
may deliver to Tenant a notice in the form as set forth in Exhibit C,  attached hereto, as a confirmation only of the information
set forth therein, which Tenant shall execute and return to Landlord within
twenty (20) days of receipt thereof.

2.2                 Option Terms.

2.2.1
   Option
Right. Landlord hereby grants the Tenant named in this Lease
(the “Original Tenant”) and any
assignee permitted or approved pursuant to the terms of Article 14 of this
Lease (including an assignee under Section 14.8 of this Lease) (a “Permitted Assignee”), one two (2) year
option to extend the Lease Term (the “First
Option Term”)  and,
provided Tenant has exercised its right to extend the Lease Term to include the
First Option Term in accordance with the terms hereof, one five (5) year option
to extend the Lease Term following the expiration of the First Option Term (the
“Second Option Term”) (each, an “Option Term”), which options shall be
exercisable only by written notice delivered by Tenant to Landlord as provided
below, provided that, as of the date of delivery of such notice, Tenant is not
in default under this Lease beyond any applicable notice and cure period. Upon
the proper exercise of each such option to extend, and provided that, at
Landlord’s option, as of the end of the then Lease Term, Tenant is not in
default under this Lease beyond any applicable notice and cure period, the
Lease Term, as it applies to the Premises, shall be extended for a period of
period of the subject Option Term. The rights contained in this Section 2.2
shall be personal to the Original Tenant or a Permitted Assignee, as the case
may be, and may only be exercised by the Original Tenant or a Permitted
Assignee, as the case may be (and not any other assignee or any sublessee or
other transferee of Tenant’s interest in this Lease) if the Original Tenant or
a Permitted Assignee, as the case may be, occupies at least fifty percent (50%)
of the Premises.

2.2.2
   Option
Rent.

2.2.2.1       First Option Term. The monthly Base
Rent payable by Tenant during the First Option Term shall equal $2.32 for each
rentable square foot for the first year of the First Option Term and $2.36 for
each rentable square foot for the second year of the First Option Term. Tenant
shall pay Additional Rent during the First Option Term in accordance with the
terms of this Lease. Tenant shall not be entitled to any concessions or
allowances in connection with its lease of the Premises during the First Option
Term, and shall, during the First Option Term, continue to accept the Project,
Buildings and Premises in their then existing, “as is” condition.

2.2.2.2       Second Option Term. The annual rent
payable by Tenant during the Second Option Term (the “Second Option Term Rent”) shall equal ninety-five percent
(95%) of the “Fair Rental Value,” as that term is defined, below (but including
100% of the Additional Rent included in the Fair Rental Value). The Fair Rental
Value, as used in this Lease, shall be derived from an analysis (as such
derivation and analysis are set forth on Exhibit
F,  attached hereto)
of the “Net Equivalent Lease Rates,” of the “Comparable Transactions” (defined
below) as set forth in Exhibit F,  attached hereto. As used herein, the “Fair Rental Value”,  shall mean the annual rent per rentable
square foot (including additional rent), including all escalations, at which,
as of the commencement of the Second Option Term tenants are leasing
non-sublease, non-encumbered, non-equity, space which is not less than 50,000
rentable square feet in size, and which is comparable in location and quality
to the Premises in transactions consummated during the period between the date
of commencement of the Second Option Term and the date that is twelve (12)
months prior thereto for a comparable lease term, in an arm’s length
transaction (“Comparable Transactions”),
which comparable space is located in any or all of the “Comparable Buildings,”
as that term is defined below. The terms of the Comparable Transactions shall
be calculated as a Net Equivalent Lease Rate pursuant to the terms of Exhibit F,  and shall take into consideration the following concessions
(the “Concessions”): (a) rental
abatement concessions, if any, being granted such tenants in connection with
such comparable space; (b) tenant improvements or allowances provided or to be
provided for such

 4
 

comparable space, and taking
into account the value, if any, of the existing improvements in the subject
space, such value to be based upon the age, condition, design, quality of
finishes and layout of the improvements and the extent to which the same can be
utilized by a general office user; and (c) other reasonable monetary
concessions being granted such tenants in connection with such comparable
space; provided, however, that in calculating the Second Option Term Rent, no
consideration shall be given to (i) the fact that Landlord is or is not
required to pay a real estate brokerage commission in connection with Tenant’s
exercise of its right to extend the Lease Term or the fact that landlords are
or are not paying real estate brokerage commissions in connection with such
comparable space, and (ii) any period of rental abatement, if any, granted to
tenants in comparable transactions in connection with the design, permitting
and construction of tenant improvements in such comparable spaces (provided
that this item (ii) shall in no way eliminate or alter Tenant’s right to the
concession set forth in item (a), above, to the extent applicable). Comparable
Transactions which are not “triple net” in nature shall be equitably modified
(based upon reasonable estimates of operating and taxes expenses for the
subject project) in order to adjust the same to reflect a “triple net” transaction.
The Second Option Term Rent shall additionally include a determination as to
whether, and if so to what extent, Tenant must provide Landlord with financial
security, such as a letter of credit or guaranty, for Tenant’s Rent obligations
in connection with Tenant’s lease of the Premises during the Second Option
Term. Such determination shall be made by reviewing the extent of financial
security then generally being imposed in Comparable Transactions from tenants
of comparable financial condition and credit history to the then existing
financial condition and credit history of Tenant (with appropriate adjustments
to account for differences in the then-existing financial condition of Tenant
and such other tenants). In connection with the determination of the Second
Option Term Rent, the Second Option Term Rent shall be equal to the Net
Equivalent Lease Rate for the Premises, and, accordingly, the Concessions shall
not be granted to Tenant in kind; provided, however, at Landlord’s election,
all or a portion of such Concessions shall be granted to Tenant in kind, in
which event the Second Option Term Rent shall be adjusted to reflect the fact
that Tenant shall be granted such Concessions. For purposes of this Lease, “Comparable Buildings” shall mean first
class headquarters buildings or campuses with comparable quality construction
and build-out which are located in the City of Pasadena.

2.2.3
   Exercise
of Option.

2.2.3.1     First Option Term. The First Option
Term shall be exercised by Tenant, if at all, by Tenant’s delivery of
irrevocable notice of such exercise delivered to Landlord on or before the date
which is twelve (12) months prior to the expiration of the initial Lease Term.

2.2.3.2     Second Option Term. The Second Option
Term shall be exercised by Tenant, if at all, and only in the following manner:
(i) Tenant shall deliver written notice to Landlord not less than fifteen (15)
months prior to the expiration of the First Option Term, stating that Tenant is
interested in exercising its option (the “Interest
Notice”); (ii) Landlord, after receipt of Tenant’s notice, shall
deliver notice (the “Option Rent Notice”)
to Tenant not less than thirteen (13) months prior to the expiration of the
First Option Term, setting forth the Second Option Term Rent; and (iii) if
Tenant wishes to exercise such option, whether or not Tenant shall have
delivered the Interest Notice, Tenant shall, on or before the earlier of (A)
the date occurring twelve (12) months prior to the expiration of the First
Option Term, and (B) the date occurring thirty (30) days after Tenant’s receipt
of the Option Rent Notice, exercise the option by delivering written notice
thereof to Landlord, and upon, and concurrent with, such exercise, if Tenant
has delivered the Interest Notice, Tenant may, at its option, object to the
Second Option Term Rent contained in the Option Rent Notice, in which case the
parties shall follow the procedure, and the Second Option Term Rent shall be
determined, as set forth in Section 2.2.4 below.

2.2.4
   Determination
of Option Rent. In the event Tenant timely and appropriately
objects to the Second Option Term Rent, or in the event that Tenant shall
exercise its right to lease the Premises during the Option Term without having
delivered an Interest Notice, Landlord and Tenant shall attempt to agree upon
the Second Option Term Rent using their best good-faith efforts. If Landlord
and Tenant fail to reach agreement within ten (10) business days following
Tenant’s objection to the Second Option Term Rent (the “Outside Agreement Date”), then each party
shall make a separate determination of the Second Option Term Rent, as the case
may be, within five (5) business days, and such determinations shall be
submitted to arbitration in accordance with Sections 2.2.4.1 through 2.2.4.7
below.

 5
 

2.2.4.1     Landlord and Tenant
shall each appoint one arbitrator who shall by profession be a real estate
broker or lawyer who shall have been active over the five (5) year period
ending on the date of such appointment in the leasing of commercial properties
in Los Angeles County, California. The determination of the arbitrators shall
be limited solely to the issue area of whether Landlord’s or Tenant’s submitted
Second Option Term Rent, is the closest to the actual Second Option Term Rent
as determined by the arbitrators, taking into account the requirements of
Section 2.2.3 of this Lease. Each such arbitrator shall be appointed within
fifteen (15) days after the applicable Outside Agreement Date.

2.2.4.2     The two arbitrators so
appointed shall within ten (10) days of the date of the appointment of the last
appointed arbitrator agree upon and appoint a third arbitrator who shall be
qualified under the same criteria set forth hereinabove for qualification of
the initial two arbitrators.

2.2.4.3     The three arbitrators
shall within thirty (30) days of the appointment of the third arbitrator reach
a decision as to whether the parties shall use Landlord’s or Tenant’s submitted
Second Option Term Rent, and shall notify Landlord and Tenant thereof.

2.2.4.4     The decision of the
majority of the three arbitrators shall be binding upon Landlord and Tenant.

2.2.4.5     If either Landlord or
Tenant fails to appoint an arbitrator within fifteen (15) days after the
applicable Outside Agreement Date, the arbitrator appointed by one of them
shall reach a decision, notify Landlord and Tenant thereof, and such
arbitrator’s decision shall be binding upon Landlord and Tenant.

2.2.4.6     If the two arbitrators
fail to agree upon and appoint a third arbitrator, or both parties fail to
appoint an arbitrator, then the appointment of the third arbitrator or any
arbitrator shall be dismissed and the matter to be decided shall be forthwith
submitted to arbitration under the provisions of the American Arbitration
Association, but subject to the instruction set forth in this Section 2.2.4.

2.2.4.7     The cost of
arbitration shall be paid by Landlord and Tenant equally.

ARTICLE 3

BASE RENT

3.1
      In
General. Tenant shall pay, without prior notice or demand, to
Landlord at such other place as Landlord may from time to time designate in
writing, by a check for currency which, at the time of payment, is legal tender
for private or public debts in the United States of America, base rent (“Base Rent”) as set forth in Section 4
of the Summary, payable in equal monthly installments as set forth in Section
4 of the Summary in advance on or before the first day of each and every
calendar month during the Lease Term, without any setoff or deduction
whatsoever. The Base Rent for the first full month of the Lease Term which
occurs after the expiration of any free rent period shall be paid at the time
of Tenant’s execution of this Lease. If any Rent payment date (including the
Lease Commencement Date) falls on a day of the month other than the first day
of such month or if any payment of Rent is for a period which is shorter than
one month, the Rent for any such fractional month shall accrue on a daily basis
during such fractional month and shall total an amount equal to the product of
(i) a fraction, the numerator of which is the number of days in such fractional
month and the denominator of which is the actual number of days occurring in
such calendar month, and (ii) the then-applicable Monthly Installment of Base
Rent. All other payments or adjustments required to be made under the TCCs of
this Lease that require proration on a time basis shall be prorated on the same
basis.

3.2
      Free
Rent. Notwithstanding anything in Section 3.1, above, to the
contrary, provided that Tenant is not then in default of this Lease, Tenant
shall not be obligated to pay (i) an amount equal to $133,200.00 of the monthly
Base Rent attributable to the Premises for each of the first two (2) months
after the Lease Commencement Date, and (ii) an amount equal to fifty percent
(50%) of the monthly Base Rent attributable to the months of February, 2006 and
August, 2006.

 6
 

ARTICLE 4

ADDITIONAL RENT

4.1       General
Terms. In addition to paying the Base Rent specified in Article
3 of this Lease, Tenant shall pay “Tenant’s
Share” of the annual “Direct
Expenses,” as those terms are defined in Sections 4.2.6 and 4.2.2,
respectively, of this Lease. Such payments by Tenant, together with any and all
other amounts payable by Tenant to Landlord pursuant to the TCCs of this Lease,
are hereinafter collectively referred to as the “Additional Rent,” and the Base Rent and the Additional Rent
are herein collectively referred to as “Rent.”
All amounts due under this Article 4 as Additional Rent shall
be payable for the same periods and in the same manner as the Base Rent.
Without limitation on other obligations of Tenant which survive the expiration
of the Lease Term, the obligations of Tenant to pay the Additional Rent
provided for in this Article 4 shall survive the expiration of the Lease
Term.

4.2       Definitions
of Key Terms Relating to Additional Rent. As used in this Article
4, the following terms shall have the meanings hereinafter set forth:

4.2.1   Intentionally Deleted.

4.2.2   “Direct
Expenses” shall mean “Operating Expenses” and “Tax Expenses.”

4.2.3   “Expense
Year” shall mean each calendar year in which any portion of the
Lease Term falls, through and including the calendar year in which the Lease
Term expires, provided that Landlord, upon notice to Tenant, may change the
Expense Year from time to time to any other twelve (12) consecutive month
period, and, in the event of any such change, Tenant’s Share of Direct Expenses
shall be equitably adjusted for any Expense Year involved in any such change.

4.2.4   “Operating
Expenses” shall mean all expenses, costs and amounts of every kind
and nature which Landlord pays or accrues during any Expense Year because of or
in connection with (i) any insurance (including, without limitation, earthquake
insurance) carried by Landlord with in connection with or with respect to the
Project, or any portion thereof; (ii) costs, fees, charges or assessments
imposed by, or resulting from any mandate imposed on Landlord by, any federal,
state or local government for fire and police protection, trash removal,
community services, or other services which do not constitute “Tax Expenses” as
that term is defined in Section 4.2.5, below; and (iii) payments under
any easement, license, operating agreement, declaration, restrictive covenant,
or instrument pertaining to the sharing of costs by the Buildings and/or
Project.

4.2.5   Taxes.

4.2.5.1 “Tax Expenses” shall mean all federal,
state, county, or local governmental or municipal taxes, fees, charges or other
impositions of every kind and nature, whether general, special, ordinary or
extraordinary, (including, without limitation, real estate taxes, general and
special assessments, transit taxes, leasehold taxes or taxes based upon the
receipt of rent, including gross receipts or sales taxes applicable to the
receipt of rent, unless required to be paid by Tenant, personal property taxes
imposed upon the fixtures, machinery, equipment, apparatus, systems and
equipment, appurtenances, furniture and other personal property used in
connection with the Project, or any portion thereof), which shall be paid or
accrued during any Expense Year (without regard to any different fiscal year
used by such governmental or municipal authority) because of or in connection
with the ownership, leasing and operation of the Project, or any portion
thereof.

4.2.5.2 Tax Expenses
shall include, without limitation: (i) Any tax on the rent, right to rent or
other income from the Project, or any portion thereof, or as against the
business of leasing the Project, or any portion thereof; (ii) Any assessment,
tax, fee, levy or charge in addition to, or in substitution, partially or
totally, of any assessment, tax, fee, levy or charge previously included within
the definition of real property tax, it being acknowledged by Tenant and
Landlord that Proposition 13 was adopted by the voters of the State of
California in the June 1978 election (“Proposition
13”) and that assessments, taxes, fees, levies and charges may be
imposed by governmental agencies for such services as fire protection, street,
sidewalk and road maintenance, refuse removal and for other governmental
services formerly provided

 7
 

without charge to property owners or occupants, and,
in further recognition of the decrease in the level and quality of governmental
services and amenities as a result of Proposition 13, Tax Expenses shall also
include any governmental or private assessments or the Project’s contribution
towards a governmental or private cost-sharing agreement for the purpose of
augmenting or improving the quality of services and amenities normally provided
by governmental agencies; (iii) Any assessment, tax, fee, levy, or charge
allocable to or measured by the area of the Premises or the Rent payable
hereunder, including, without limitation, any business or gross income tax or
excise tax with respect to the receipt of such rent, or upon or with respect to
the possession, leasing, operating, management, maintenance, alteration,
repair, use or occupancy by Tenant of the Premises, or any portion thereof; and
(iv) Any assessment, tax, fee, levy or charge, upon this transaction or any
document to which Tenant is a party, creating or transferring an interest or an
estate in the Premises.

4.2.5.3 Any costs and
expenses (including, without limitation, reasonable attorneys’ fees) incurred
in attempting to protest, reduce or minimize Tax Expenses shall be included in
Tax Expenses in the Expense Year such expenses are paid. Refunds of Tax
Expenses shall be credited against Tax Expenses and refunded to Tenant
regardless of when received, based on the Expense Year to which the refund is
applicable, provided that (i) in no event shall the amount to be refunded to
Tenant for any such Expense Year exceed the total amount paid by Tenant as
Additional Rent under this Article 4 for such Expense Year, and (ii)
nothing contained herein shall alter or reduce Landlord’s rights with respect
to tax credits, as and to the extent set forth in Section 4.2.5.4, below. If
Tax Expenses for any period during the Lease Term or any extension thereof are
increased after payment thereof for any reason, including, without limitation,
error or reassessment by applicable governmental or municipal authorities,
Tenant shall pay Landlord upon demand Tenant’s Share of any such increased Tax
Expenses included by Landlord as Tax Expenses pursuant to the TCCs of this
Lease. Notwithstanding anything to the contrary contained in this Section
4.2.5 (except as set forth in Section 4.2.5.1, above), there shall
be excluded from Tax Expenses all excess profits taxes, franchise taxes, gift
taxes, capital stock taxes, inheritance and succession taxes, estate taxes,
federal and state income taxes, and other taxes to the extent applicable to
Landlord’s general or net income (as opposed to rents, receipts or income
attributable to operations at the Project), and there shall be excluded from
Tax Expenses interest or late penalties of any kind. Further, Tax Expenses
shall exclude real property taxes applicable to any unimproved parcels or land
or other property outside of the Project. In no event shall Tenant be responsible
for the payment of the same Tax Expense twice (provided that the foregoing
shall not limit Tenant’s obligation to pay the same categories of Tax Expenses
from year to year during the Lease Term). In addition, any reduction in real
estate taxes received by Landlord pursuant to the requirements of Sections
439-439.4 of the Revenue and Taxation Code (which is known as the Mills Act)
shall be reflected in Tax Expenses for purposes of this Lease.

4.2.5.4 Invoices/Tax Credits. Tenant shall
promptly supply to Landlord any and all invoices relating to the “Tenant
Improvements,” as that term is defined in Section 2.1 of the Tenant Work Letter
(regardless of whether such invoices relate to amounts that are subject to
payment from the Tenant Improvement Allowance or otherwise) as well as with
respect to any “Alterations”, as that term is defined in Article 8 of this
Lease, so that Landlord may submit the same for receipt of available federal
tax credits (which Tenant hereby acknowledges and agrees Landlord may do). Any
resulting federal tax credits shall be the sole and exclusive property of
Landlord and Tenant shall have no rights with respect thereto (nor shall such
amounts be deducted from or serve as a credit against Tax Expenses), provided
that the foregoing shall not alter or modify the terms of the last sentence of
Section 4.2.5.3, above.

4.2.6 “Tenant’s Share” shall mean the percentage
set forth in Section 6 of the Summary.

4.3       Tenants
Right to Contest Taxes. After written request (the “Tax Notice”) delivered to Landlord by
Tenant in good faith, Landlord shall at Landlord’s option, either (i)
diligently pursue claims for reductions in the Tax Expenses of the Buildings
and Project, in which event Landlord shall provide Tenant with reasonable
information as to how Landlord will pursue such claims, or (ii) allow Tenant to
pursue such claims with Landlord’s concurrence, in the name of Landlord. If
Landlord agrees to pursue such claims or concurs in the decision to pursue such
claims but elects to have them pursued by Tenant, the cost of such proceedings
shall be paid by Landlord and included in Tax Expenses in the Expense Year such
expenses are paid. Tenant may give a Tax Notice prior to or after the issuance
of the actual tax bill by the taxing

 8
 

authority or receipt by Tenant of a billing from
Landlord for Tenant’s Share thereof. Notwithstanding anything contained herein
to the contrary, Tenant in no event shall Tenant take any actions under this
Section 4.3 which may serve to impair or reduce or otherwise adversely effect
Landlord’s rights to tax credits under Section 4.2.5.4, above.

4.4       Calculation
and Payment of Additional Rent. Tenant shall pay to Landlord, in
the manner set forth in Section 4.4.1, below, and as Additional Rent,
Tenant’s Share of Direct Expenses for each Expense Year.

4.4.1       Statement
of Actual Direct Expenses and Payment by Tenant. Landlord shall
give to Tenant following the end of each Expense Year, a statement (the “Statement”) which shall state in general
major categories of Direct Expenses incurred or accrued for such preceding
Expense Year, and which shall indicate the amount of Tenant’s Share of Direct
Expenses. As part of the Statement, Landlord hereby agrees to include the tax
bill received by Landlord from applicable governmental entities reflecting the
real property taxes payable with respect to the Project. Landlord shall use
commercially reasonable efforts to deliver such Statement to Tenant on or
before May 1 following the end of the Expense Year to which such Statement
relates. Upon receipt of the Statement for each Expense Year commencing or
ending during the Lease Term, Tenant shall pay, within thirty (30) days after
receipt of the Statement, the full amount of Tenant’s Share of Direct Expenses
for such Expense Year, less the amounts, if any, paid during such Expense Year
as “Estimated Direct Expenses,” as that term is defined in Section 4.4.2,
below, and if Tenant paid more as Estimated Direct Expenses than the actual
Tenant’s Share of Direct Expenses (an “Excess”),
Tenant shall receive a credit in the amount of such Excess against the Base
Rent next due under this Lease. The failure of Landlord to timely furnish the
Statement for any Expense Year shall not prejudice Landlord or Tenant from
enforcing its rights under this Article 4. Even though the Lease Term
has expired and Tenant has vacated the Premises, when the final determination
is made of Tenant’s Share of Direct Expenses for the Expense Year in which this
Lease terminates, if Tenant’s Share of Direct Expenses is greater than the
amount of Estimated Direct Expenses previously paid by Tenant to Landlord,
Tenant shall, within thirty (30) days after receipt of the Statement, pay to
Landlord such amount, and if Tenant paid more as Estimated Direct Expenses than
the actual Tenant’s Share of Direct Expenses (again, an “Excess”), Landlord
shall, within thirty (30) days, deliver a check payable to Tenant in the amount
of such Excess. The provisions of this Section 4.4.1 shall survive the
expiration or earlier termination of the Lease Term, provided that, other than
Tax Expenses and costs incurred for utilities, Tenant shall not be responsible
for Tenant’s Share of any Direct Expenses which are first billed to Tenant more
than two (2) calendar years after the end of the Expense Year to which such
Direct Expenses relate.

4.4.2       Statement
of Estimated Direct Expenses. In addition, Landlord shall give
Tenant a yearly expense estimate statement (the “Estimate Statement”) which shall set forth in general major
categories Landlord’s reasonable estimate (the “Estimate”) of what the total amount of Direct Expenses for
the then-current Expense Year shall be and the estimated Tenant’s Share of
Direct Expenses (the “Estimated Direct
Expenses”). The failure of Landlord to timely furnish the Estimate
Statement for any Expense Year shall not preclude Landlord from enforcing its
rights to collect any Estimated Direct Expenses under this Article 4,
nor shall Landlord be prohibited from revising any Estimate Statement or
Estimated Direct Expenses theretofore delivered to the extent necessary.
Thereafter, Tenant shall pay, within thirty (30) days after receipt of the
Estimate Statement, a fraction of the Estimated Direct Expenses for the
then-current Expense Year (reduced by any amounts paid pursuant to the last sentence
of this Section 4.4.2). Such fraction shall have as its numerator the
number of months which have elapsed in such current Expense Year, including the
month of such payment, and twelve (12) as its denominator. Until a new Estimate
Statement is furnished (which Landlord shall have the right to deliver to
Tenant at any time), Tenant shall pay monthly, with the monthly Base Rent
installments, an amount equal to one-twelfth (1/12) of the total Estimated
Direct Expenses set forth in the previous Estimate Statement delivered by
Landlord to Tenant.

4.5       Taxes
and Other Charges for Which Tenant Is Directly Responsible.

4.5.1   Tenant shall be liable for and shall pay ten
(10) days before delinquency, taxes levied against Tenant’s equipment,
furniture, fixtures and any other personal property of Tenant located in or
about the Premises, Buildings and/or Project. If any such taxes on Tenant’s
equipment, furniture, fixtures and any other personal property are levied
against Landlord or Landlord’s property or if the assessed value of Landlord’s
property is increased by the inclusion

 9
 

therein of a value placed
upon such equipment, furniture, fixtures or any other personal property and if
Landlord pays the taxes based upon such increased assessment, which Landlord
shall have the right to do regardless of the validity thereof but only under
proper protest if requested by Tenant, Tenant shall upon demand repay to
Landlord the taxes so levied against Landlord or the proportion of such taxes
resulting from such increase in the assessment, as the case may be.

4.5.2    If the tenant improvements in the Premises,
whether installed and/or paid for by Landlord or Tenant and whether or not
affixed to the real property so as to become a part thereof, are assessed to
Landlord or the Project for real property tax purposes, then the same shall be
included in Tax Expenses under this Lease and shall be paid for by Tenant.

4.5.3    Notwithstanding any contrary provision
herein, Tenant shall pay prior to delinquency any (i) rent tax or sales tax,
service tax, transfer tax or value added tax, or any other applicable tax on
the rent or services herein or otherwise respecting this Lease, (ii) taxes
assessed upon or with respect to the possession, leasing, operation,
management, maintenance, alteration, repair, use or occupancy by Tenant of the
Premises or any portion of the Project, including the Project parking facility;
or (iii) taxes assessed upon this transaction or any document to which Tenant
is a party creating or transferring an interest or an estate in the Premises.

ARTICLE 5 

USE OF PREMISES

5.1       Permitted
Use. Tenant shall use the Premises solely for the Permitted Use
set forth in Section 7 of the Summary and Tenant shall not use or permit
the Premises or the Project to be used for any other purpose or purposes
whatsoever without the prior written consent of Landlord, which may be withheld
in Landlord’s sole discretion.

5.2       Prohibited
Uses. The uses prohibited under this Lease shall include,
without limitation, use of the Premises or a portion thereof for (i) offices of
any agency or bureau of the United States or any state or political subdivision
thereof; (ii) offices or agencies of any foreign governmental or political
subdivision thereof; (iii) offices of any health care professionals or service
organization; (iv) schools or other training facilities which are not ancillary
to corporate, executive or professional office use; (v) retail or restaurant
uses (except as specifically permitted in this Lease); or (vi) communications
firms such as radio and/or television stations. Tenant further covenants and
agrees that Tenant shall not use, or suffer or permit any person or persons to
use, the Premises, Buildings or Project, or any parts thereof, for any use or
purpose contrary to the provisions of such the rules and regulations as
Landlord may promulgate on a reasonable basis from time to time, or in
violation of the laws of the United States of America, the State of California,
or the ordinances, regulations or requirements of the local municipal or county
governing body or other lawful authorities having jurisdiction over the
Project) including, without limitation, any such laws, ordinances, regulations
or requirements relating to hazardous materials or substances, as those terms
are defined by applicable laws now or hereafter in effect. Tenant shall not do
or permit anything to be done in or about the Premises, Buildings or Project
which will in any way damage the reputation of the Project or use or allow the
Project, Buildings or Premises to be used for any improper, unlawful or
objectionable purpose, nor shall Tenant cause, maintain or permit any nuisance
in, on or about the Premises, Buildings or Project.

5.3         Restaurant
Use. Tenant shall be permitted, subject to the terms of this
Lease (including, without limitation, this Section 5.3) and subject to
“Applicable Laws,” as that term is defined in Article 24 of this Lease, to
operate a restaurant servicing Tenant’s employees and visitors and/or the
general public (a “Restaurant”).
In such event, the terms of this Section 5.3 shall be applicable.

5.3.1       Grease
Traps. Tenant shall be required to install grease traps located
within the Premises which will be required for all food preparation areas
having pot sinks or any grease-producing appliances that discharge into the
waste system. Tenant shall be responsible for the proper care, cleaning and
maintenance of the grease traps and any piping required therefor in accordance
with all applicable laws and regulations. Tenant, at Tenant’s expense, shall
cause such grease traps to be cleaned at least once a month and maintained so
as to prevent the discharge of any grease into the waste system.

 10
 

5.3.2    Trash
Removal. Tenant shall be required to cause storage and removal
of trash containing food products or other perishable items to be store in
appropriate containers and to be removed with sufficient frequency so as to
avoid odors and infestation by animals or insects. Such trash removal procedure
shall be subject to the reasonable approval of Landlord.

5.3.3    Standard
of Care. Tenant shall operating and maintain the Restaurant in a
first class condition. In connection therewith, Tenant shall keep the
Restaurant, and every part thereof, in a clean and wholesome condition, free
from odors or nuisances, and shall comply with all health and police
regulations in all respects.

ARTICLE 6

OPERATION AND MANAGEMENT OF
PROJECT;

SERVICES AND UTILITIES

6.1       In
General. Subject to the express responsibilities of Landlord as
and to the extent set forth in this Lease, Tenant shall be responsible, at
Tenant’s sole cost and expense, for maintaining, operating, repairing, and
managing the Project, and every portion thereof, and for causing the Project
and every portion thereof to comply with applicable laws. In addition, Tenant
shall be responsible, at Tenant’s sole cost and expense, for equipment required
to obtain and for the cost of obtaining, all services and utilities required
for the Premises and/or the Project in order to maintain the Project in a first
class operating order and condition (and acknowledges and agrees that Landlord
shall have no responsibility whatsoever in connection therewith). Without
limitation of the foregoing, Tenant shall pay for all utilities (including
without limitation, electricity, hvac, gas, sewer and water) attributable to
the Premises and the Project and shall also provide its own janitorial and
security services for the Premises, Buildings and Project. Such utility use
shall include electricity, water, and gas use for lighting, incidental use and
“HVAC,” as that term is defined below. All such utility, janitorial and
security payments shall be paid directly by Tenant prior to the date on which
the same are due to the utility provider janitorial company and/or security
company, as applicable.

6.2
      Tenant
Maintained Building Systems; HVAC. Tenant shall, at Tenant’s
sole cost and expense, (i) install (subject to Landlord’s approval in
accordance with the terms of this Lease) and maintain mechanical, electrical,
life safety, plumbing, fire-sprinkler and other systems to service the
Premises, Buildings and Project, (ii) subject to limitations imposed by all
governmental rules, regulations and guidelines applicable thereto, install
(subject to Landlord’s approval in accordance with the terms of this Lease) and
maintain heating and air conditioning to the Premises and Buildings (“HVAC”) (items identified in (i) and (ii)
collectively, the “Building Systems”),  and (iii) maintain the remaining portions
of the Premises, Buildings and Project which are not part of the “Building
Structure,” as that term is set forth in Article 7 of this Lease.

6.3
      Tenant
Maintained Security. Tenant hereby acknowledges that Landlord
shall have no obligation to provide guard service or other security measures
for the benefit of the Premises, the Buildings or the Project. Any such
security measures for the benefit of the Premises, the Buildings or the Project
shall be provided by Tenant, at Tenant’s sole cost and expense. Tenant hereby
assumes all responsibility for the protection of Tenant and its agents,
employees, contractors, invitees and guests, and the property thereof, from
acts of third parties, including keeping doors locked and other means of entry
to the Premises closed.

6.4
      Tenant
Maintenance Standards. All Building Systems, including HVAC,
shall be maintained in accordance with manufacturer specifications by Tenant
and in a first-class condition. Tenant shall maintain commercially reasonable
service contracts for all HVAC and elevator systems servicing the Project. Upon
request from Landlord, Tenant shall provide to Landlord copies of any service
contracts and records of Tenant’s maintenance of any and/or all Building
Systems.

6.5
      Overstandard
Tenant Use. Tenant’s use of utilities in the Premises, Buildings
and Project shall never exceed the capacity of the systems designed and
installed by Tenant (and approved by Landlord).

6.6
      Interruption
of Use. Tenant agrees that Landlord shall not be liable for
damages, by abatement of Rent (except as otherwise set forth in Section 6.7,
below) or otherwise, for failure to furnish or delay in furnishing any service
(including telephone and

 11
 

telecommunication services), or for any diminution in
the quality or quantity thereof, when such failure or delay or diminution is
occasioned, in whole or in part, by breakage, repairs, replacements, or
improvements, by any strike, lockout or other labor trouble, by inability to
secure electricity, gas, water, or other fuel at the Buildings or Project after
reasonable effort to do so, by any riot or other dangerous condition,
emergency, accident or casualty whatsoever, by act or default of Tenant or
other parties, or by any other cause; and such failures or delays or diminution
shall never be deemed to constitute an eviction or disturbance of Tenant’s use
and possession of the Premises or relieve Tenant from paying Rent (except as
otherwise set forth in Section 6.7, below) or performing any of its obligations
under this Lease. Furthermore, Landlord shall not be liable under any
circumstances for a loss of, or injury to, property or for injury to, or
interference with, Tenant’s business, including, without limitation, loss of
profits, however occurring, through or in connection with or incidental to a
failure to furnish any of the services or utilities.

6.7
      Abatement
of Rent. In the event that Tenant is prevented from using, and
does not use, the Premises or any portion thereof, as a result of (i) any
breach by Landlord of this Lease after the expiration of any applicable cure
period, (ii) any entry by Landlord into the Premises pursuant to the terms of
Article 27 of this Lease, or (iii) any negligence or willful misconduct of
Landlord, in the case of each of items (i), (ii) and (iii), to the extent the
subject act or omission of Landlord substantially interferes with Tenant’s use
of the Premises (any such set of circumstances as set forth in items (i), (ii)
or (iii), above, to be known as an “Abatement
Event”), then Tenant shall give Landlord notice of such Abatement
Event, and if such Abatement Event continues for three (3) consecutive business
days after Landlord’s receipt of any such notice (the “Eligibility Period”),  then the Base Rent and Tenant’s Share of
Direct Expenses shall be abated or reduced, as the case may be, after
expiration of the Eligibility Period for such time that Tenant continues to be
so prevented from using, and does not use, the Premises or a portion thereof,
in the proportion that the rentable area of the portion of the Premises that
Tenant is prevented from using, and does not use, bears to the total rentable
area of the Premises; provided, however, in the event that Tenant is prevented
from using, and does not use, a portion of the Premises for a period of time in
excess of the Eligibility Period and the remaining portion of the Premises is
not sufficient to allow Tenant to effectively conduct its business therein, and
if Tenant does not conduct its business from such remaining portion, then for
such time after expiration of the Eligibility Period during which Tenant is so prevented
from effectively conducting its business therein, the Base Rent and Tenant’s
Share of Direct Expenses for the entire Premises shall be abated for such time
as Tenant continues to be so prevented from using, and does not use, the
Premises. If, however, Tenant reoccupies any portion of the Premises during
such period, the Rent allocable to such reoccupied portion, based on the
proportion that the rentable area of such reoccupied portion of the Premises
bears to the total rentable area of the Premises, shall be payable by Tenant
from the date Tenant reoccupies such portion of the Premises. Such right to
abate Base Rent and Tenant’s Share of Direct Expenses shall be Tenant’s sole
and exclusive remedy at law or in equity for an Abatement Event. Except as
provided in this Section 6.7, nothing contained herein shall be interpreted to
mean that Tenant is excused from paying Rent due hereunder.

ARTICLE 7 

REPAIRS

7.1         In
General. Except as specifically set forth herein, Landlord shall
have no obligation to repair or maintain the Project or Buildings or Premises,
or any portions thereof. Landlord shall maintain in good condition and
operating order and keep in good repair and condition the structural portions
of the Buildings and the structural portions of the parking structure servicing
the same (i.e., the foundation, floor/ceiling slabs, roof (including the roof
membrane), curtain wall, columns, and beams) (collectively, the “Building Structure”). Notwithstanding
anything in this Lease to the contrary, Tenant shall be required to repair the
Building Structure to the extent due to Tenant’s use of the Premises for other
than normal and customary business office operations and/or due to Tenant’s
negligence or willful misconduct. Landlord shall make all repairs required of
Landlord hereunder with reasonable diligence and in good and workmanlike manner
and in compliance with all “Applicable Laws,” as that term is defined in
Article 24 of this Lease (subject to the “Landlord Compliance Conditions,” as
that term is defined in Article 24, below). In performing any such repairs,
Landlord shall use commercially reasonable efforts to prevent material
interference with the conduct of Tenant’s business at the Premises and to
prevent damage to the Premises and Tenant’s property, and,

 12
 

subject to the terms of Section 10.5 of this Lease,
Landlord shall be responsible for any damage to the Premises and/or Tenant’s
property resulting from Landlord’s negligence or willful misconduct in making
any repairs required of Landlord pursuant to the terms of this Section 7.1.
Subject to the foregoing terms of this Section 7.1, Tenant shall, at
Tenant’s own expense, keep the Premises, Buildings, and Project, including the
Common Areas (including the Project parking facilities) and all improvements,
fixtures and furnishings located in the Project, Buildings and/or Premises, in
good order and repair and in a first-class condition at all times during the
Lease Term. Tenant’s obligations under this Article 7 shall include capital
repairs and improvements, as and to the extent required, except to the extent
the subject capital repair or improvement is Landlord’s responsibility pursuant
to the terms of this Lease (i.e., because the same is a part of the Building
Structure). Upon request by Landlord not more than one (1) time per Lease Year,
Tenant shall supply Landlord a report evidencing Tenant’s repair, maintenance
and improvement plans for the next succeeding twelve month period in order to
satisfy the requirements of this Section 7.1., as well as a list of the repair,
maintenance and improvement items which Tenant has completed during the prior
twelve month period. Landlord may, but shall not be required to, enter the
Project, Buildings and/or Premises at all reasonable times to make such repairs,
alterations, improvements or additions or as may be required in connection with
Landlord’s obligations under this Lease or as Landlord may be required to do by
governmental or quasi-governmental authority or court order or decree. Tenant
hereby waives any and all rights under and benefits of subsection 1 of Section
1932 and Sections 1941 and 1942 of the California Civil Code or under any
similar law, statute, or ordinance now or hereafter in effect.

7.2       Tenant’s
Right to Make Repairs. Notwithstanding any of the terms set
forth in this Lease to the contrary, if Tenant provides notice to Landlord of
an event or circumstance which requires the action of Landlord with respect to
repair and/or maintenance required pursuant to the terms of this Lease, which
event or circumstance materially, adversely affects the conduct of Tenant’s
business from the Premises, and Landlord fails to commence corrective action
within a reasonable period of time, given the circumstances, after the receipt
of such notice, but in any event not later than thirty (30) days after receipt
of such notice, then Tenant may proceed to take the required action upon
delivery of an additional ten (10) business days’ notice to Landlord (provided,
however, that the initial thirty (30) day notice and the subsequent ten (10)
business day notice shall not be required in the event of an “Emergency,” as
that term is defined, below, and, in lieu thereof, one five (5) business day
notice shall be required) specifying that Tenant is taking such required action
and if such action was required under the terms of this Lease to be taken by
Landlord and was not commenced by Landlord within such ten (10) business day
period (five (5) business days in the event of an Emergency) and thereafter
diligently pursued to completion, then Tenant shall be entitled to prompt
reimbursement by Landlord of Tenant’s reasonable costs and expenses in taking
such action. In the event Tenant takes such action, Tenant shall use only those
contractors used by landlords of Comparable Buildings for comparable work.
Promptly following completion of any work taken by Tenant pursuant to the terms
of this Section 7.2, Tenant shall deliver a detailed invoice of the work
completed, the materials used and the costs relating thereto. If Landlord does
not deliver a detailed written objection to Tenant within thirty (30) days
after receipt of an invoice from Tenant, then Tenant shall be entitled to
deduct from Rent payable by Tenant under this Lease, the amount set forth in
such invoice. If, however, Landlord delivers to Tenant, within thirty (30) days
after receipt of Tenant’s invoice, a written objection to the payment of such
invoice (a “Landlord Objection Notice”),
setting forth with reasonable particularity Landlord’s reasons for its claim
that such action did not have to be taken by Landlord pursuant to the terms of
this Lease or that the charges are excessive (in which case Landlord shall pay
the amount it contends would not have been excessive), then Tenant shall not
then be entitled to such deduction from Rent, and Tenant’s sole remedy shall be
to either (i) claim a default under this Lease (and seek damages or other
relief permitted pursuant to applicable laws and this Lease), or (ii) elect to
have the matter determined by binding arbitration before a retired judge of the
Superior Court of the State of California under the auspices of Judicial
Arbitration & Mediation Services, Inc. (“JAMS”).
Such arbitration shall be initiated (if at all) by notice from Tenant to
Landlord within ten (10) business days following Tenant’s receipt of the
Landlord Objection Notice (and, following such election (if applicable), the
parties shall act in good faith to promptly proceed on a commercially
reasonably basis to have the dispute resolved pursuant to a JAMS arbitration).
For purposes of this Section 7.2, an “Emergency”
shall mean an event threatening immediate and material danger to people located
in the Buildings or immediate, material damage to the Building Structure.

 13

ARTICLE 8

ADDITIONS AND ALTERATIONS

8.1          Landlord’s Consent to
Alterations. The construction of
the initial improvements to the Premises shall be governed by the terms of the
Tenant Work Letter and not the terms of this Article 8. Tenant may not
make any improvements, alterations, additions or changes to the Premises or any
mechanical, plumbing or HVAC facilities or systems pertaining to or servicing
the Premises (collectively, the “Alterations”)
without first procuring the prior written consent of Landlord to such
Alterations, which consent shall be requested by Tenant not less than fifteen
(15) business days prior to the commencement thereof, and which consent shall
not be unreasonably withheld or delayed by Landlord, provided it shall be
deemed reasonable for Landlord to withhold its consent to any Alteration which
adversely affects the structural portions or the systems or equipment of the
Buildings or is visible from the exterior of the Buildings or Project.
Notwithstanding the foregoing, Tenant shall be permitted to make Alterations to
the Premises following five (5) business days notice to Landlord (the “Cosmetic Alterations Notice”), but without
Landlord’s prior consent, to the extent that such Alterations do not adversely
affect the systems and equipment of the subject Building, exterior appearance
of the subject Building, the “Historical Designation,” as that term is defined
in Section 8.6, below, of the subject Building, or structural aspects of the
subject Building (the “Cosmetic Alterations”);
provided, however, that no Cosmetic Alterations Notice shall not be required
for Cosmetic Alterations which do not affect the exterior appearance of the
subject Building or the Historical Designation of any Building or the Project
in the event that the cost of the subject Cosmetic Alternations is less than
$50,000.00 (the “Minor Cosmetics Exception”).
Subject to Tenant’s rights to make Alterations with respect to the Premises, in
no event shall Tenant be permitted to make improvements, alterations,
additions, or changes to the Building, the Project, or the Common Areas,
provided that any repairs requires with respect to portions of the Building,
Project or Common Areas required of Tenant under this Lease shall,
notwithstanding anything in this Article 8 to the contrary, be subject to the
terms of this Article 8.

8.2          Manner of Construction. Tenant shall construct any Alterations and
perform any repairs in a good and workmanlike manner, in conformance with any
and all applicable federal, state, county or municipal laws, rules and
regulations and pursuant to a valid building permit issued by the City of
Pasadena, and in conformance with Landlord’s construction rules and
regulations; provided, however, that prior to constructing any Alterations
requiring Landlord’s consent, Tenant shall obtain the approval of Landlord
(which shall not be unreasonably withheld) with respect to all contractors
selected by Tenant. Prior to commencing to construct any Alteration which
requires Landlord’s consent, Tenant shall meet with Landlord to discuss
Landlord’s design parameters and code compliance issues and any issues relating
to maintain the Project’s Historical Designation. In the event Tenant performs
any Alterations in the Premises which require or give rise to governmentally
required changes to the Building Structure, then Landlord shall, at Tenant’s
expense, make such changes to the Building Structure. In performing the work of
any such Alterations, Tenant shall have the work performed in a commercially
reasonable manner and in such a manner so as not to obstruct access to the
Project or any portion thereof. In addition to Tenant’s obligations under Article
9 of this Lease, upon completion of any Alterations, Tenant agrees to cause
a Notice of Completion to be recorded in the office of the Recorder of the
County of Los Angeles in accordance with Section 3093 of the Civil Code of the
State of California or any successor statute, and Tenant shall deliver to
Landlord a reproducible copy of the “as built” drawings of the Alterations, to
the extent applicable, as well as all permits, approvals and other documents
issued by any governmental agency in connection with the Alterations.

8.3          Payment for Improvements. Tenant shall (i) comply with Landlord’s
requirements for final lien releases and waivers in connection with Tenant’s
payment for work to contractors, and (ii) comply with Landlord’s commercially
reasonable contractor’s rules and regulations. Tenant shall reimburse Landlord
for Landlord’s reasonable, actual, out-of-pocket costs and expenses actually
incurred in connection with Landlord’s review of any Alteration which requires
Landlord’s consent.

8.4          Construction Insurance. In addition to the requirements of Article
10 of this Lease, in the event that Tenant makes any Alterations, prior to
the commencement of such Alterations, Tenant shall provide Landlord with
evidence that Tenant carries “Builder’s All Risk” insurance in an amount
reasonably approved by Landlord covering the construction of such

 14
 

Alterations, and such other
insurance as Landlord may reasonably require, it being understood and agreed
that all of such Alterations shall be insured by Tenant pursuant to Article
10 of this Lease immediately upon completion thereof.

8.5          Landlord’s Property. All Alterations, improvements, fixtures,
equipment and/or appurtenances which may be installed or placed in or about the
Premises, from time to time, shall be at the sole cost of Tenant and shall be
and become the property of Landlord, except that Tenant may remove any
Alterations, improvements, fixtures and/or equipment which Tenant can
substantiate to Landlord have not been paid for with the Tenant Improvement
Allowance or any other tenant improvement allowance funds provided to Tenant by
Landlord, provided Tenant repairs any damage to the Premises, Buildings and/or
Project caused by such removal and returns the affected area to an improved
condition as determined by Landlord. Furthermore, Landlord may, by written
notice to Tenant prior to the end of the Lease Term, or given following any
earlier termination of this Lease, require Tenant, at Tenant’s expense, to
remove any Tenant Improvements and/or Alterations, and to repair any damage to
the Premises, Buildings and/or Project caused by such removal and return the
affected portion of the Premises, Buildings and/or Project, as the case may be,
to an improved condition as determined by Landlord; provided, however, that in
no event shall Tenant be required to remove any Tenant Improvements or
Alterations pursuant to the terms of this Section 8.5 to the extent the same
consist of typical, general office tenant improvements. If Tenant fails to
complete such removal and/or to repair any damage caused by the removal, and to
return the affected portion of the Premises, Building and/or Project, as the
case may be, to an improved condition as determined by Landlord, then at
Landlord’s option, either (A) Tenant shall be deemed to be holding over in the
Premises and Rent shall continue to accrue in accordance with the terms of Article
16, below, until such work shall be completed, or (B) Landlord may do so
and may charge the cost thereof to Tenant. Tenant hereby protects, defends,
indemnifies and holds Landlord harmless from any liability, cost, obligation,
expense or claim of lien in any manner relating to the installation, placement,
removal or financing of any such Alterations, improvements, fixtures and/or
equipment in, on or about the Premises, which obligations of Tenant shall
survive the expiration or earlier termination of this Lease.

8.6          Historical Designation of
Project. Tenant hereby
acknowledges and agrees that the Project has been designated as a historical
structure by the City of Pasadena and is or will be listed on the National
Register of Historic Places (the “Historical
Designation”). Based upon the foregoing, notwithstanding anything
contained in this Lease to the contrary, all Tenant Improvements, Alterations
and signage and any and all other matters which affect or relate to the Project’s
Historical Designation which may be installed or performed by Tenant under or
in accordance with the terms of this Lease shall at all times be subject to the
approval of appropriate entities governing Historical Designations, including,
without limitation, the City of Pasadena Historical Preservation Commission and
the City of Pasadena Design Commission (collectively, the “Historical Authorities”), at Tenant’s sole
cost and expense. Further, Tenant hereby agrees at all times not to perform any
Tenant Improvements, Alteration, or install any signage, or perform any act or
omission, which may jeopardize or otherwise impact or affect the Project’s
Historical Designation or the benefits associated therewith. Landlord shall
have no liability for, and this Lease and the Rent payable hereunder shall be
unaffected by, any denial of consent or other action which may be taken by
Historical Authorities in connection with the Project. Upon request by Landlord
from time to time, Tenant shall supply Landlord with reasonable evidence of
Tenant’s compliance with the terms of this Section 8.6. Landlord shall, at
Tenant’s sole cost and expense, reasonably cooperate with Tenant in connection
with Tenant’s applications to the Historical Authorities.

ARTICLE 9

COVENANT AGAINST LIENS

Tenant
shall keep the Project, Buildings and Premises free from any liens or
encumbrances arising out of the work performed, materials furnished or
obligations incurred by or on behalf of Tenant, and shall protect, defend,
indemnify and hold Landlord harmless from and against any claims, liabilities,
judgments or costs (including, without limitation, reasonable attorneys’ fees
and costs) arising out of same or in connection therewith. Tenant shall give
Landlord notice at least ten (10) days prior to the commencement of any such
work on the Premises, Buildings or Project (five (5) business days in
connection with a Cosmetic Alterations (subject to the Minor Cosmetics
Exception)) to afford Landlord the opportunity of posting and

 15
 

recording appropriate
notices of non-responsibility. Tenant shall remove any such lien or encumbrance
by bond or otherwise within ten (10) business days after notice by Landlord,
and if Tenant shall fail to do so, Landlord may pay the amount necessary to
remove such lien or encumbrance, without being responsible for investigating
the validity thereof. The amount so paid shall be deemed Additional Rent under
this Lease payable upon demand, without limitation as to other remedies
available to Landlord under this Lease. Nothing contained in this Lease shall
authorize Tenant to do any act which shall subject Landlord’s title to the
Project, Buildings or Premises to any liens or encumbrances whether claimed by
operation of law or express or implied contract. Any claim to a lien or
encumbrance upon the Building or Premises arising in connection with any work
undertaken by Tenant shall be null and void.

ARTICLE
10

INSURANCE

10.1        Indemnification and Waiver. Tenant hereby assumes all risk of damage to
property or injury to persons in, upon or about the Premises, Buildings and
Project from any cause whatsoever and agrees that Landlord, its partners,
subpartners and their respective officers, agents, servants, employees, and
independent contractors (collectively, “Landlord
Parties”) shall not be liable for, and are hereby released from any
responsibility for, any damage either to person or property or resulting from
the loss of use thereof, which damage is sustained by Tenant or by other
persons claiming through Tenant. Except to the extent caused by the negligence
or willful misconduct of Landlord or the Landlord Parties, Tenant shall
indemnify, defend, protect, and hold harmless the Landlord Parties from any and
all loss, cost, damage, expense and liability (including without limitation
court costs and reasonable attorneys’ fees) (collectively, “Claims”) incurred in connection with or
arising from any cause in, on or about the Project, any acts, omissions or
negligence of Tenant or of any person claiming by, through or under Tenant, or
of the contractors, agents, servants, employees, invitees, guests or licensees
of Tenant or any such person, in, on or about the Project or any breach of the
TCCs of this Lease, either prior to, during, or after the expiration of the
Lease Term, provided that the terms of the foregoing indemnity shall not apply to
the negligence or willful misconduct of Landlord. Should Landlord be named as a
defendant in any suit brought against Tenant in connection with or arising out
of Tenant’s occupancy of the Premises or Tenant’s use or operation of the
Project or any portion thereof, Tenant shall pay to Landlord its costs and
expenses incurred in such suit, including without limitation, its actual
professional fees such as appraisers’, accountants’ and attorneys’ fees.
Landlord shall indemnify, defend, protect, and hold harmless Tenant, its
partners, and their respective officers, agents, servants, employees, and
independent contractors (collectively, “Tenant
Parties”) from any and all Claims arising from (i) the negligence or
wilful misconduct of Landlord in, on or about the Project, except to the extent
caused by the negligence or wilful misconduct of the Tenant Parties, and (ii)
Landlord’s breach of this Lease. Notwithstanding anything to the contrary set
forth in this Lease, either party’s agreement to indemnify the other party as
set forth in this Section 10.1 shall be ineffective to the extent the matters
for which such party agreed to indemnify the other party are covered by
insurance required to be carried by the non-indemnifying party pursuant to this
Lease. Further, Tenant’s agreement to indemnify Landlord and Landlord’s
agreement to indemnify Tenant pursuant to this Section 10.1 are not intended to
and shall not relieve any insurance carrier of its obligations under policies
required to be carried pursuant to the provisions of this Lease, to the extent
such policies cover, or if carried, would have covered the matters, subject to
the parties’ respective indemnification obligations; nor shall they supersede
any inconsistent agreement of the parties set forth in any other provision of
this Lease. The provisions of this Section 10.1 shall survive the
expiration or sooner termination of this Lease with respect to any claims or
liability arising in connection with any event occurring prior to such
expiration or termination.

10.2        Landlord’s Fire, Casualty
and Liability Insurance. Landlord
shall carry commercial general liability insurance with respect to the Project
during the Lease Term, and shall further insure the Buildings and Project
during the Lease Term against loss or damage due to due to fire and other
casualties covered within the classification of fire and extended coverage,
vandalism coverage and malicious mischief, sprinkler leakage, water damage and
special extended coverage. Such coverage shall be in such amounts, from such
companies, and on such other terms and conditions, as Landlord may from time to
time reasonably determine. Additionally, at the option of Landlord, such
insurance coverage may include the risks of earthquakes and/or flood damage and
additional hazards, a rental loss endorsement and one or more loss payee
endorsements in favor of the holders of any mortgages or deeds of trust

 16
 

encumbering the interest of
Landlord in the Buildings or the ground or underlying lessors of the Buildings,
or any portion thereof. Notwithstanding the foregoing provisions of this
Section 10.2, the coverage and amounts of insurance carried by Landlord in
connection with the Buildings shall, at a minimum, be comparable to the
coverage and amounts of insurance which are carried by reasonably prudent
landlords of buildings comparable to and in the vicinity of the Buildings
(provided that in no event shall Landlord be required to carry earthquake
insurance), and Worker’s Compensation and Employer’s Liability coverage as
required by applicable law. Tenant shall, at Tenant’s expense, comply with all
insurance company requirements pertaining to the use of the Premises. Tenant,
at Tenant’s expense, shall comply with all rules, orders, regulations or
requirements of the American Insurance Association (formerly the National Board
of Fire Underwriters) and with any similar body.

10.3        Tenant’s Insurance. Tenant shall maintain the following coverages
in the following amounts.

10.3.1   Commercial/Comprehensive
General Liability Insurance covering the insured against claims of bodily
injury, personal injury and property damage (including loss of use thereof)
arising out of Tenant’s operations, and contractual liabilities (covering the
performance by Tenant of its indemnity agreements) including a Broad Form
endorsement covering the insuring provisions of this Lease and the performance
by Tenant of the indemnity agreements set forth in Section 10.1 of this
Lease, for limits of liability not less than:

	
  Bodily Injury and

  	
   

  	
  $5,000,000 each occurrence

  
	
  Property Damage
  Liability

  	
   

  	
  $5,000,000 annual aggregate, or any

  
	
   

  	
   

  	
  combination of primary insurance and

  
	
   

  	
   

  	
  excess insurance

  
	
   

  	
   

  	
   

  
	
  Personal Injury
  Liability

  	
   

  	
  $5,000,000 each occurrence

  
	
   

  	
   

  	
  $5,000,000 annual aggregate, or any

  
	
   

  	
   

  	
  combination of primary insurance and

  
	
   

  	
   

  	
  excess insurance

  
	
   

  	
   

  	
  0% Insured’s participation

  

 

10.3.2   Property
Insurance covering (i) all office furniture, business and trade fixtures,
office equipment, free-standing cabinet work, movable partitions, merchandise
and all other items of Tenant’s property on the Project installed by, for, or
at the expense of Tenant, (ii) the “Tenant Improvements,” as that term is
defined in Section 2.1 of the Tenant Work Letter, and any other
improvements which exist in the Premises as of the Lease Commencement Date (the
“Original Improvements”), and
(iii) all other improvements, alterations and additions to the Premises. Such
insurance shall be written on an “all risks” of physical loss or damage basis,
for the full replacement cost value (subject to reasonable deductible amounts)
new without deduction for depreciation of the covered items and in amounts that
meet any co-insurance clauses of the policies of insurance and shall include
coverage for damage or other loss caused by fire or other peril including, but
not limited to, vandalism and malicious mischief, theft, water damage of any
type, including sprinkler leakage, bursting or stoppage of pipes, and
explosion, and providing business interruption coverage for a period of one
year.

10.3.3   Worker’s
Compensation or other similar insurance pursuant to all applicable state and
local statutes and regulations, and Employer’s Liability Insurance or other
similar insurance pursuant to all applicable state and local statutes and
regulations, with a waiver of subrogation endorsement and with minimum limits
of One Million and No/100 Dollars ($1,000,000.00) per employee and One Million
and No/100 Dollars ($1,000,000.00) per occurrence.

10.4        Form of Policies. The minimum limits of policies of insurance
required of Tenant under this Lease shall in no event limit the liability of
Tenant under this Lease. Such insurance shall (i) name Landlord, and any other
party the Landlord so specifies, as an additional insured, including Landlord’s
managing agent, if any; (ii) specifically cover the liability assumed by Tenant
under this Lease, including, but not limited to, Tenant’s obligations under Section
10.1 of this Lease; (iii) be issued by an insurance company having a rating
of not less than A-X in Best’s Insurance Guide or which is otherwise reasonably
acceptable to Landlord and licensed to do business in the State of California;
(iv) be primary insurance as to all claims thereunder and provide that any
insurance carried by Landlord is excess and is non-contributing with any

 17
 

insurance requirement of
Tenant; (v) be in form and content reasonably acceptable to Landlord; and (vi)
provide that said insurance shall not be canceled or coverage changed unless
thirty (30) days’ prior written notice shall have been given to Landlord and
any mortgagee of Landlord, the identity of whom has been provided to Tenant in
writing. Tenant shall deliver said policy or policies or certificates thereof
to Landlord on or before the Lease Commencement Date and at least thirty (30)
days before the expiration dates thereof. In the event Tenant shall fail to
procure such insurance, or to deliver such policies or certificate, Landlord
may, at its option, after five (5) business days notice to Tenant and Tenant’s
failure to cure within such 5-business day period, procure such policies for
the account of Tenant, and the cost thereof shall be paid to Landlord within
thirty (30) days after delivery to Tenant of bills therefor.

10.5        Subrogation. Landlord and Tenant intend that their
respective property loss risks shall be borne by reasonable insurance carriers
to the extent above provided, and Landlord and Tenant hereby agree to look
solely to, and seek recovery only from, their respective insurance carriers in
the event of a property loss to the extent that such coverage is agreed to be
provided hereunder. The parties each hereby waive all rights and claims against
each other for such losses, and waive all rights of subrogation of their
respective insurers, provided such waiver of subrogation shall not affect the
right to the insured to recover thereunder. The parties agree that their
respective insurance policies are now, or shall be, endorsed such that the
waiver of subrogation shall not affect the right of the insured to recover
thereunder.

10.6        Additional Insurance
Obligations. Tenant shall carry
and maintain during the entire Lease Term, at Tenant’s sole cost and expense,
increased amounts of the insurance required to be carried by Tenant pursuant to
this Article 10 and such other reasonable types of insurance coverage
and in such reasonable amounts covering the Premises and Tenant’s operations
therein, as may be reasonably requested by Landlord.

10.7        Self-Insurance. The Original Tenant or an assignee of the Original
Tenant under Section 14.8(i) of this Lease only shall be entitled to
self-insure its insurance requirements set forth in Section 10.3.2(i), above,
subject to and in accordance with the terms of this Section 10.7. Any
self-insurance shall be deemed to contain all of the terms and conditions
applicable to such insurance as required in this Article 10, including, without
limitation, a full waiver of subrogation. If Tenant elects to so self-insure,
then with respect to any claims which may result from incidents occurring
during the Lease term, such self-insurance obligation shall survive the
expiration or earlier termination of this Lease to the same extent as the
insurance required would survive. Notwithstanding the foregoing, Tenant shall
only have the right to self-insure its insurance requirements under Section
10.3.2(i), if Tenant shall, concurrent with a notice to Landlord electing to
self-insure, provide Landlord with evidence that Tenant or “Guarantor,” as that
term is defined in Section 29.31, above, has a net worth, as determined by a
financial statement audited by a certified public accountant, of equal to or
greater than Fifty Million Dollars ($50,000,000.00) (the “Financial Requirement”). If Tenant at any
time does not satisfy the Financial Requirement, it shall notify Landlord of
the same and supply Landlord with the insurance policies required under this
Article 10.

ARTICLE 11 

DAMAGE AND DESTRUCTION

11.1        Repair of Damage to Premises
by Landlord. Tenant shall
promptly notify Landlord of any damage to the Premises, Buildings or Project
resulting from fire or any other casualty. If the Premises, Buildings or any
Common Areas serving or providing access to the Premises shall be damaged by
fire or other casualty, Landlord shall promptly and diligently, subject to
reasonable delays for insurance adjustment or other matters beyond Landlord’s
reasonable control, and subject to all other terms of this Article 11,
restore the base building of the Premises, Buildings and such Common Areas.
Such restoration shall be to substantially the same condition as existed prior
to the casualty, except for modifications required by zoning and building codes
and other laws or by the holder of a mortgage on the Buildings or Project or
any other modifications to the Common Areas deemed desirable by Landlord, which
are consistent with the character of the Project. Upon the occurrence of any
damage to the Premises, Tenant shall, at its sole cost and expense
(notwithstanding the amount of Tenant’s available insurance proceeds), repair
any injury or damage to the Tenant Improvements and the Original Improvements
installed in the Premises and shall return such Tenant Improvements and
Original Improvements to their original condition. Prior to the commencement of
construction, Tenant

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shall submit to Landlord,
for Landlord’s review and approval, all plans, specifications and working
drawings relating thereto, and Landlord shall approve (in Landlord’s reasonable
discretion) the contractors to perform such improvement work. Landlord shall
not be liable for any inconvenience or annoyance to Tenant or its visitors, or
injury to Tenant’s business resulting in any way from such damage or the repair
thereof; provided however, that if such fire or other casualty shall have
damaged the Premises or Common Areas necessary to Tenant’s occupancy, and the
Premises are not occupied by Tenant as a result thereof, then during the time
and to the extent the Premises are unfit for occupancy, the Rent shall be
abated in proportion to the ratio that the amount of rentable square feet of
the Premises which is unfit for occupancy for the purposes permitted under this
Lease bears to the total rentable square feet of the Premises. Tenant’s right
to rent abatement pursuant to the preceding sentence shall terminate as of the
date which is reasonably determined to be the date Tenant should have completed
repairs to the Premises assuming Tenant used reasonable due diligence in
connection therewith (provided that such rent abatement period shall be
extended by “Force Majeure Delays,” as that term is defined in Section 5.1 of
the Tenant Work Letter, subject to an in accordance with the terms of Section 5
of the Tenant Work Letter).

11.2        Landlord’s Option to Repair. Notwithstanding the terms of Section 11.1
of this Lease, Landlord may elect not to rebuild and/or restore the base
building of the Premises, Buildings and Common Areas as set forth in Section
11.1, above, and instead terminate this Lease, by notifying Tenant in writing
of such termination within sixty (60) days after the date of discovery of the
damage, such notice to include a termination date giving Tenant sixty (60) days
to vacate the Premises, but Landlord may so elect only if the Buildings or
Project shall be damaged by fire or other casualty or cause, only if the
Premises are materially adversely affected, and one or more of the following
conditions is present: (i) in Landlord’s reasonable judgment, repairs cannot
reasonably be completed within two hundred seventy (270) days after the date of
discovery of the damage (when such repairs are made without the payment of
overtime or other premiums); (ii) the damage is not fully covered by Landlord’s
insurance policies (or the insurance policies which Landlord would have
maintained had Landlord complied with the terms of this Lease); or (iii) the
damage occurs during the last twelve (12) months of the Lease Term; provided,
however, that if Landlord does not elect to terminate this Lease pursuant to
Landlord’s termination right as provided above, and either (a) the repairs
cannot, in the reasonable opinion of Landlord, be completed within two hundred
seventy (270) days after being commenced, or (b) if material damage occurs
during the last twelve (12) months of the Lease Term, Tenant may elect, no
earlier than sixty (60) days after the date of the damage and not later than
ninety (90) days after the date of such damage, to terminate this Lease by
written notice to Landlord effective as of the date specified in the notice,
which date shall not be less than thirty (30) days nor more than sixty (60)
days after the date such notice is given by Tenant. In the event this Lease is
terminated in accordance with the terms of this Section 11.2, Tenant
shall assign to Landlord (or to any party designated by Landlord) all insurance
proceeds payable to Tenant under Tenant’s insurance required under items (ii)
and (iii) of Section 10.3.2 of this Lease to the extent the same relate
to the unamortized value of the Tenant Improvements (to the extent paid for
with the Tenant Improvement Allowance).

11.3        Waiver of Statutory
Provisions. The provisions of
this Lease, including this Article 11, constitute an express agreement
between Landlord and Tenant with respect to any and all damage to, or
destruction of, all or any part of the Premises, the Buildings or the Project,
and any statute or regulation of the State of California, including, without
limitation, Sections 1932(2) and 1933(4) of the California Civil Code, with
respect to any rights or obligations concerning damage or destruction in the
absence of an express agreement between the parties, and any other statute or
regulation, now or hereafter in effect, shall have no application to this Lease
or any damage or destruction to all or any part of the Premises, the Buildings
or the Project.

ARTICLE 12

NONWAIVER

No
provision of this Lease shall be deemed waived by either party hereto unless
expressly waived in a writing signed thereby. The waiver by either party hereto
of any breach of any term, covenant or condition herein contained shall not be
deemed to be a waiver of any subsequent breach of same or any other term,
covenant or condition herein contained. The subsequent acceptance of Rent
hereunder by Landlord shall not be deemed to be a waiver of any

 19
 

preceding breach by Tenant
of any term, covenant or condition of this Lease, other than the failure of
Tenant to pay the particular Rent so accepted, regardless of Landlord’s
knowledge of such preceding breach at the time of acceptance of such Rent. No
acceptance of a lesser amount than the Rent herein stipulated shall be deemed a
waiver of Landlord’s right to receive the full amount due, nor shall any
endorsement or statement on any check or payment or any letter accompanying
such check or payment be deemed an accord and satisfaction, and Landlord may
accept such check or payment without prejudice to Landlord’s right to recover
the full amount due. No receipt of monies by Landlord from Tenant after the
termination of this Lease shall in any way alter the length of the Lease Term
or of Tenant’s right of possession hereunder, or after the giving of any notice
shall reinstate, continue or extend the Lease Term or affect any notice given
Tenant prior to the receipt of such monies, it being agreed that after the
service of notice or the commencement of a suit, or after final judgment for
possession of the Premises, Landlord may receive and collect any Rent due, and
the payment of said Rent shall not waive or affect said notice, suit or
judgment.

ARTICLE 13 

CONDEMNATION

If
the whole or any part of the Premises, Buildings or Project shall be taken by
power of eminent domain or condemned by any competent authority for any public
or quasi-public use or purpose, or if any adjacent property or street shall be
so taken or condemned, or reconfigured or vacated by such authority in such
manner as to require the use, reconstruction or remodeling of any part of the
Premises, Buildings or Project, or if Landlord shall grant a deed or other
instrument in lieu of such taking by eminent domain or condemnation, Landlord
shall have the option to terminate this Lease effective as of the date
possession is required to be surrendered to the authority. If more than
twenty-five percent (25%) of the rentable square feet of the Premises is taken,
or if access to the Premises is substantially impaired, in each case for a
period in excess of one hundred eighty (180) days, Tenant shall have the option
to terminate this Lease effective as of the date possession is required to be
surrendered to the authority. Tenant shall not because of such taking assert
any claim against Landlord or the authority for any compensation because of
such taking and Landlord shall be entitled to the entire award or payment in
connection therewith, except that Tenant shall have the right to file any
separate claim available to Tenant for (i) any taking of Tenant’s personal
property and fixtures belonging to Tenant and removable by Tenant upon
expiration of the Lease Term pursuant to the terms of this Lease, and for
moving expenses, so long as such claims do not diminish the award available to
Landlord, its ground lessor with respect to the Buildings or Project or its
mortgagee, and such claim is payable separately to Tenant, and (ii) Landlord
and Tenant shall each be entitled to receive fifty percent (50%) of the “bonus
value” of the leasehold estate in connection therewith, which bonus value shall
be equal to the difference between the Rent payable under this Lease and the
sum established by the condemning authority as the award for compensation. All
Rent shall be apportioned as of the date of such termination. If any part of
the Premises shall be taken, and this Lease shall not be so terminated, the
Rent shall be proportionately abated. Tenant hereby waives any and all rights
it might otherwise have pursuant to Section 1265.130 of The California Code of
Civil Procedure. Notwithstanding anything to the contrary contained in this Article
13, in the event of a temporary taking of all or any portion of the
Premises for a period of one hundred and eighty (180) days or less, then this
Lease shall not terminate but the Base Rent and the Additional Rent shall be
abated for the period of such taking in proportion to the ratio that the amount
of rentable square feet of the Premises taken bears to the total rentable
square feet of the Premises. Landlord shall be entitled to receive the entire
award made in connection with any such temporary taking, provided that Tenant
shall be entitled to any award attributable to a taking of Tenant’s personal
property.

ARTICLE 14

ASSIGNMENT AND SUBLETTING

14.1        Transfers. Tenant shall not, without the prior written
consent of Landlord, assign, mortgage, pledge, hypothecate, encumber, or permit
any lien to attach to, or otherwise transfer, this Lease or any interest
hereunder, permit any assignment, or other transfer of this Lease or any
interest hereunder by operation of law, sublet the Premises or any part
thereof, or enter into any license or concession agreements or otherwise permit
the occupancy or use of the Premises or any part thereof by any persons other
than Tenant and its employees and contractors

 20
 

(all of the foregoing are
hereinafter sometimes referred to collectively as “Transfers” and any person to whom any Transfer is made or
sought to be made is hereinafter sometimes referred to as a “Transferee”). If Tenant desires Landlord’s consent to any Transfer, Tenant
shall notify Landlord in writing, which notice (the “Transfer
Notice”) shall include (i) the proposed effective date of the
Transfer, which shall not be less than thirty (30) days nor more than one
hundred eighty (180) days after the date of delivery of the Transfer Notice,
(ii) a description of the portion of the Premises to be transferred (the “Subject Space”), (iii) all of the terms of
the proposed Transfer and the consideration therefor, including calculation of
the “Transfer Premium”,  as that term is defined in Section 14.3
below, in connection with such Transfer, the name and address of the proposed
Transferee, and a copy of all existing executed and/or proposed documentation
pertaining to the proposed Transfer, including all existing operative documents
to be executed to evidence such Transfer or the agreements incidental or
related to such Transfer, (iv) current financial statements of the proposed
Transferee certified by an officer, partner or owner thereof, business credit
and personal references and history of the proposed Transferee and any other
information required by Landlord which will enable Landlord to determine the
financial responsibility, character, and reputation of the proposed Transferee,
nature of such Transferee’s business and proposed use of the Subject Space and
(v) an executed estoppel certificate from Tenant in the form attached hereto as
Exhibit E.  Any Transfer made without Landlord’s prior
written consent (when Landlord’s consent is required) shall, at Landlord’s
option, be null, void and of no effect, and shall, at Landlord’s option,
constitute a default by Tenant under this Lease. Whether or not Landlord
consents to any proposed Transfer, Tenant shall pay any reasonable,
out-of-pocket professional fees (including, without limitation, attorneys’,
accountants’, architects’, engineers’ and consultants’ fees) incurred by
Landlord, within thirty (30) days after written request by Landlord; provided,
however, that in no event shall such fees exceed $1,500.00 for a Transfer in
the ordinary course of business.

14.2        Landlord’s Consent. Landlord shall not unreasonably withhold its
consent to any proposed Transfer of the Subject Space to the Transferee on the
terms specified in the Transfer Notice. Without limitation as to other
reasonable grounds for withholding consent, the parties hereby agree that it
shall be reasonable under this Lease and under any applicable law for Landlord
to withhold consent to any proposed Transfer where one or more of the following
apply:

14.2.1   The
Transferee is of a character or reputation or engaged in a business which is
not consistent with the quality of the Project or Comparable Buildings;

14.2.2   The
Transferee intends to use the Subject Space for purposes which are not
permitted under this Lease;

14.2.3   The
Transferee is either a governmental agency or instrumentality thereof which is
capable of exercising the power of eminent domain or which creates an increased
security risk to the Project;

14.2.4   The
Transferee is not a party of reasonable financial worth and/or financial
stability in light of the responsibilities to be undertaken in connection with
the Transfer on the date consent is requested; or

14.2.5   Any
disapproval of the proposed Transfer by any lender of Landlord.

If
Landlord consents to any Transfer pursuant to the terms of this Section 14.2
(and does not exercise any recapture rights Landlord may have under Section
14.4 of this Lease), Tenant may within six (6) months after Landlord’s
consent, but not later than the expiration of said six-month period, enter into
such Transfer of the Premises or portion thereof, upon substantially the same
terms and conditions as are set forth in the Transfer Notice furnished by
Tenant to Landlord pursuant to Section 14.1 of this Lease, provided that
if there are any material changes in the terms and conditions from those
specified in the Transfer Notice (i) such that Landlord would initially have
been entitled to refuse its consent to such Transfer under this Section 14.2,
or (ii) which would cause the proposed Transfer to be materially more favorable
to the Transferee than the terms set forth in Tenant’s original Transfer
Notice, Tenant shall again submit the Transfer to Landlord for its approval and
other action under this Article 14 (including Landlord’s right of
recapture, if any, under Section 14.4 of this Lease). Notwithstanding
anything to the contrary in this Lease, if Tenant or any proposed Transferee
claims that Landlord has unreasonably withheld, conditioned or delayed its
consent under Section 14.2 or otherwise

 21
 

has breached or acted
unreasonably under this Article 14, their sole remedies shall be a suit
for contract damages (other than damages for injury to, or interference with,
Tenant’s business including, without limitation, loss of profits, however
occurring) or declaratory judgment and an injunction for the relief sought, and
Tenant hereby waives all other remedies, including, without limitation, any
right at law or equity to terminate this Lease, on its own behalf and, to the
extent permitted under all applicable laws, on behalf of the proposed
Transferee.

14.3        Transfer Premium. At any time that a Transfer shall exist
(which by itself or when aggregated with all other then existing Transfers)
results in fifty percent (50%) of more of the Premises being Transferred
(whether by assignment, sublease or otherwise), as a condition to Landlord’s
consent which the parties hereby agree is reasonable, Tenant shall pay to
Landlord fifty percent (50%) of any “Transfer Premium,” as that term is defined
in this Section 14.3, received by Tenant from such Transferee as well as
from any other then existing Transferee (so that Landlord shall then be
receiving 50% of the Transfer Premium applicable to all then existing
Transfers); provided, however, that in no event shall Landlord be entitled to
any Transfer Premium which is attributable to a sublease of the portion of the
Premises known as Building C. “Transfer
Premium” shall mean all rent, additional rent or other consideration
payable by such Transferee in connection with the Transfer in excess of the
Rent and Additional Rent payable by Tenant under this Lease during the term of
the Transfer on a per rentable square foot basis if less than all of the
Premises is transferred, after deducting the reasonable expenses incurred by
Tenant for (i) any changes, alterations and improvements to the Premises in
connection with the Transfer, (ii) any free base rent or other economic
concessions reasonably provided to the Transferee, (iii) any brokerage
commissions in connection with the Transfer (iv) legal fees reasonably incurred
in connection with the Transfer, and (v) the amount of any Base Rent and
Additional Rent paid by Tenant to Landlord with respect to the Subject Space
during the period commencing on the later of (a) the date Tenant contracts with
a reputable broker to market the Subject Space and delivers notice thereof to
Landlord, and (b) the date Tenant vacates the Subject Space and delivers notice
thereof to Landlord, until the commencement of term of the Transfer. “Transfer
Premium” shall also include, but not be limited to, key money, bonus money or
other cash consideration paid by Transferee to Tenant in connection with such
Transfer, and any payment in excess of fair market value for services rendered
by Tenant to Transferee or for assets, fixtures, inventory, equipment, or
furniture transferred by Tenant to Transferee in connection with such Transfer.
In the calculations of the Rent (as it relates to the Transfer Premium
calculated under this Section 14.3), and the Transferee’s Rent and
Quoted Rent under Section 14.2 of this Lease, the Rent paid during each
annual period for the Subject Space, and the Transferee’s Rent and the Quoted
Rent, shall be computed after adjusting such rent to the actual effective rent
to be paid, taking into consideration any and all leasehold concessions granted
in connection therewith, including, but not limited to, any rent credit and tenant
improvement allowance. For purposes of calculating any such effective rent all
such concessions shall be amortized on a straight-line basis over the relevant
term.

14.4        Landlord’s Option as to
Subject Space. Notwithstanding
anything to the contrary contained in this Article 14, Landlord shall
have the option, by giving written notice (the “Recapture Notice”) to Tenant within thirty (30) days after
receipt of any Transfer Notice which relates to a Transfer which requires
Landlord’s consent (which by itself or when aggregated with all other then
existing Transfers) would result in seventy-five percent (75%) or more of the
Premises being the subject of a Transfer, to recapture the Subject Space.
Notwithstanding the foregoing, within ten (10) business days following Tenant’s
receipt of a Recapture Notice,. Tenant shall have the right, upon notice to
Landlord, to withdraw its to Transfer Notice, in which case the Transfer Notice
and the Recapture Notice shall be void and of no force or effect. Subject to
the foregoing, a Recapture Notice shall cancel and terminate this Lease with
respect to the Subject Space as of the date stated in the Transfer Notice as
the effective date of the proposed Transfer until the last day of the term of
the Transfer as set forth in the Transfer Notice (or at Landlord’s option,
shall cause the Transfer to be made to Landlord or its agent, in which case the
parties shall execute the Transfer documentation promptly thereafter). In the
event of a recapture by Landlord, if this Lease shall be canceled with respect
to less than the entire Premises, the Rent reserved herein shall be prorated on
the basis of the number of rentable square feet retained by Tenant in
proportion to the number of rentable square feet contained in the Premises, and
this Lease as so amended shall continue thereafter in full force and effect,
and upon request of either party, the parties shall execute written
confirmation of the same. If Landlord declines, or fails to elect in a timely
manner to recapture the Subject Space under this Section 14.4, then,
provided Landlord has consented to the proposed Transfer,

 22
 

Tenant shall be entitled to
proceed to transfer the Subject Space to the proposed Transferee, subject to
provisions of this Article 14. In the event of a recapture pursuant to
the terms of this Section 14.4, this Lease (and Tenant’s rights hereunder,
including without limitation, with respect to parking, and control over the
management and operation of the Project) shall be equitably modified as
required by Landlord to reflect that all of the rentable area of the Project is
no longer leased by Tenant.

14.5        Effect of Transfer. If Landlord consents to a Transfer, (i) the
TCCs of this Lease shall in no way be deemed to have been waived or modified,
(ii) such consent shall not be deemed consent to any further Transfer by either
Tenant or a Transferee, (iii) Tenant shall deliver to Landlord, promptly after
execution, an original executed copy of all documentation pertaining to the
Transfer in form reasonably acceptable to Landlord, (iv) Tenant shall furnish
upon Landlord’s request a complete statement, certified by an independent
certified public accountant, or Tenant’s chief financial officer, setting
forth, as applicable, either that (a) no Transfer Premium is due, or (b) in
detail the computation of any Transfer Premium Tenant has derived and shall
derive from such Transfer, and (v) no Transfer relating to this Lease or
agreement entered into with respect thereto, whether with or without Landlord’s
consent, shall relieve Tenant or any guarantor of the Lease from any liability
under this Lease, including, without limitation, in connection with the Subject
Space. Landlord or its authorized representatives shall have the right at all
reasonable times to audit the books, records and papers of Tenant where
Landlord’s consent is required relating to any Transfer, and shall have the
right to make copies thereof. If the Transfer Premium respecting any Transfer
shall be found understated, Tenant shall, within thirty (30) days after demand,
pay the deficiency, and if understated by more than three percent (3%), Tenant
shall pay Landlord’s actual and reasonable costs of such audit.

14.6        Additional Transfers. For purposes of this Lease, the term “Transfer” shall also include (i) if Tenant
is a partnership, the withdrawal or change, voluntary, involuntary or by
operation of law, of fifty percent (50%) or more of the partners, or transfer
of fifty percent (50%) or more of partnership interests, within a twelve
(12)-month period, or the dissolution of the partnership without immediate
reconstitution thereof, and (ii) if Tenant is a closely held corporation (i.e., whose stock is not publicly held
and not traded through an exchange or over the counter), the dissolution,
merger, consolidation or other reorganization of Tenant. Notwithstanding the
foregoing, the sale of stock on any nationally recognized stock exchange shall
not be deemed a Transfer under this Article 14.

14.7
Occurrence of Default. Any
Transfer hereunder shall be subordinate and subject to the provisions of this
Lease, and if this Lease shall be terminated during the term of any Transfer,
Landlord shall have the right to: (i) treat such Transfer as cancelled and
repossess the Subject Space by any lawful means, or (ii) require that such
Transferee attorn to and recognize Landlord as its landlord under any such
Transfer. Such Transferee shall rely on any representation by Landlord that
Tenant is in default hereunder, without any need for confirmation thereof by
Tenant. Upon any assignment, the assignee shall assume in writing all
obligations and covenants of Tenant thereafter to be performed or observed
under this Lease. No collection or acceptance of rent by Landlord from any
Transferee shall be deemed a waiver of any provision of this Article 14
or the approval of any Transferee or a release of Tenant from any obligation
under this Lease, whether theretofore or thereafter accruing. In no event shall
Landlord’s enforcement of any provision of this Lease against any Transferee be
deemed a waiver of Landlord’s right to enforce any term of this Lease against
Tenant or any other person. If Tenant’s obligations hereunder have been
guaranteed, Landlord’s consent to any Transfer shall not be effective unless
the guarantor also consents to such Transfer.

14.8        Non-Transfers. Notwithstanding anything to the contrary
contained in this Article 14, (i) an assignment or subletting of all or
a portion of the Premises to an affiliate of Tenant (an entity which is
controlled by, controls, or is under common control with, Tenant), (ii) an
assignment of the Premises to an entity which acquires all or substantially all
of the assets or interests (partnership, stock or other) of Tenant, or (iii) an
assignment of the Premises to an entity which is the resulting entity of a
merger or consolidation of Tenant, shall not be deemed a Transfer under this Article
14 and Landlord’s consent shall not be required, provided that Tenant
notifies Landlord of any such assignment or sublease and promptly supplies
Landlord with any documents or information requested by Landlord regarding such
assignment or sublease or such affiliate, and further provided that such
assignment or sublease is not a subterfuge by Tenant to avoid its obligations
under this Lease. “Control,” as used
in this Section 14.8, shall mean the

 23
 

ownership, directly or
indirectly, of at least fifty-one percent (51%) of the voting securities of, or
possession of the right to vote, in the ordinary direction of its affairs, of
at least fifty-one percent (51%) of the voting interest in, any person or
entity.

ARTICLE 15

SURRENDER OF PREMISES;
OWNERSHIP AND

REMOVAL OF TRADE FIXTURES

15.1        Surrender of Premises. No act or thing done by Landlord or any agent
or employee of Landlord during the Lease Term shall be deemed to constitute an
acceptance by Landlord of a surrender of the Premises unless such intent is
specifically acknowledged in writing by Landlord. The delivery of keys to the
Premises to Landlord or any agent or employee of Landlord shall not constitute
a surrender of the Premises or effect a termination of this Lease, whether or
not the keys are thereafter retained by Landlord, and notwithstanding such
delivery Tenant shall be entitled to the return of such keys at any reasonable
time upon request until this Lease shall have been properly terminated. The
voluntary or other surrender of this Lease by Tenant, whether accepted by
Landlord or not, or a mutual termination hereof, shall not work a merger, and
at the option of Landlord shall operate as an assignment to Landlord of all
subleases or subtenancies affecting the Premises or terminate any or all such
sublessees or subtenancies.

15.2        Removal of Tenant Property
by Tenant. Upon the expiration
of the Lease Term, or upon any earlier termination of this Lease, Tenant shall,
subject to the provisions of this Article 15, quit and surrender
possession of the Premises, Buildings and Project to Landlord in as good order
and condition as when Tenant took possession and as thereafter improved by
Landlord and/or Tenant, reasonable wear and tear and repairs which are
specifically made the responsibility of Landlord hereunder and casualty
excepted. Upon such expiration or termination, Tenant shall, without expense to
Landlord, remove or cause to be removed from the Premises, Buildings and
Project all debris and rubbish, and such items of furniture, equipment,
business and trade fixtures, free-standing cabinet work, movable partitions and
other articles of personal property owned by Tenant or installed or placed by
Tenant at its expense in the Premises, Buildings and/or Project and such
similar articles of any other persons claiming under Tenant, as Landlord may,
in its reasonable discretion, require to be removed, and Tenant shall repair at
its own expense all damage to the Premises, Buildings and/or Project resulting
from such removal.

ARTICLE 16 

HOLDING OVER

If Tenant holds over
after the expiration of the Lease Term or earlier termination thereof, with or
without the express or implied consent of Landlord, such tenancy shall be from
month-to-month only, and shall not constitute a renewal hereof or an extension
for any further term, and in such case Rent shall be payable at a monthly rate
equal to one hundred fifty percent (150%) of the Rent applicable during the
last rental period of the Lease Term under this Lease. Notwithstanding the
foregoing, in the event that Landlord and Tenant shall be in good faith
negotiations of a renewal of this Lease as of the Lease Expiration Date (which
negotiations may be terminated by either party at any time, in either party’s
sole and absolute discretion), then, during the first sixty (60) days of any
such holdover (to the extent that such good faith renewal negotiations continue
during such 60-day period), the reference above to one hundred fifty percent
(150%) shall be deemed to be one hundred percent (100%). In no event shall such
reduced holdover rent be applicable for more than sixty (60) days following the
Lease Expiration Date. Such month-to-month tenancy shall be subject to every other
applicable term, covenant and agreement contained herein. Nothing contained in
this Article 16 shall be construed as consent by Landlord to any holding
over by Tenant, and Landlord expressly reserves the right to require Tenant to
surrender possession of the Premises to Landlord as provided in this Lease upon
the expiration or other termination of this Lease. The provisions of this Article
16 shall not be deemed to limit or constitute a waiver of any other rights
or remedies of Landlord provided herein or at law. If Tenant fails to surrender
the Premises upon the termination or expiration of this Lease, in addition to
any other liabilities to Landlord accruing therefrom, Tenant shall protect,
defend, indemnify and hold Landlord harmless from all loss, costs (including
reasonable attorneys’ fees) and liability resulting from such failure,
including, without limiting the generality

 24
 

of the foregoing, any claims
made by any succeeding tenant founded upon such failure to surrender and any
lost profits to Landlord resulting therefrom.

ARTICLE 17 

ESTOPPEL CERTIFICATES

Within
ten (10) business days following a request in writing by Landlord, Tenant shall
execute, acknowledge and deliver to Landlord an estoppel certificate, which, as
submitted by Landlord, shall be substantially in the form of Exhibit D, attached hereto (or such
other form as may be required by any prospective mortgagee or purchaser of the
Project, or any portion thereof), indicating therein any exceptions thereto
that may exist at that time, and shall also contain any other information
reasonably requested by Landlord or Landlord’s mortgagee or prospective
mortgagee. Any such certificate may be relied upon by any prospective mortgagee
or purchaser of all or any portion of the Project. Tenant shall execute and
deliver whatever other instruments may be reasonably required for such
purposes. In the event that Landlord shall require delivery of more than one
(1) estoppel certificate in any twelve (12) month period, Landlord shall pay to
Tenant any reasonable, out-of-pocket costs in connection with such additional
requests, provided that in no event shall such costs exceed $1,500.00 for each
such additional request. At any time during the Lease Term, if Guarantor is not
a publicly traded company whose financial statements are readily available,
Landlord may require Tenant to provide Landlord with Guarantor’s current
financial statement and financial statements of the two (2) years prior to the
current financial statement year. Such statements shall be prepared in
accordance with generally accepted accounting principles and, if such is the
normal practice of Guarantor, shall be audited by an independent certified
public accountant, In addition, to the extent required in connection with a
sale, financing or refinancing of the Project, or any portion thereof, Tenant
shall promptly supply Landlord with reasonable financial information regarding
Tenant, provided that Tenant shall not be required for this purpose to create
financial statements or other documentation which is not ordinarily prepared by
Tenant.

ARTICLE 18 

SUBORDINATION

This
Lease shall be subject and subordinate to all present and future ground or
underlying leases of the Buildings or Project and to the lien of any mortgage,
trust deed or other encumbrances now or hereafter in force against the
Buildings or Project or any part thereof, if any, and to all renewals,
extensions, modifications, consolidations and replacements thereof, and to all
advances made or hereafter to be made upon the security of such mortgages or
trust deeds, unless the holders of such mortgages, trust deeds or other
encumbrances, or the lessors under such ground lease or underlying leases,
require in writing that this Lease be superior thereto. In consideration of,
and as a condition precedent to, Tenant’s agreement to permit its interest
pursuant to this Lease to be subordinated to any particular current and future
ground or underlying lease of the Project or to the lien of any current or
future mortgage or trust deed, encumbering the Project and to any renewals,
extensions, modifications, consolidations and replacements thereof, Landlord
shall deliver to Tenant a commercially reasonable non-disturbance agreement
executed by the landlord under such ground lease or underlying lease or the
holder of such mortgage or trust deed. Tenant covenants and agrees in the event
any proceedings are brought for the foreclosure of any such mortgage or deed in
lieu thereof (or if any ground lease is terminated), to attorn, without any
deductions or set-offs whatsoever, to the lienholder or purchaser or any
successors thereto upon any such foreclosure sale or deed in lieu thereof (or
to the ground lessor), if so requested to do so by such purchaser or lienholder
or ground lessor, and to recognize such purchaser or lienholder or ground
lessor as the lessor under this Lease, provided such lienholder or purchaser or
ground lessor shall agree to accept this Lease and not disturb Tenant’s
occupancy, so long as Tenant timely pays the rent and observes and performs the
TCCs of this Lease to be observed and performed by Tenant. Landlord’s interest
herein may be assigned as security at any time to any lienholder. Tenant shall,
within ten (10) business days of request by Landlord, execute such further
instruments or assurances as Landlord may reasonably deem necessary to evidence
or confirm the subordination or superiority of this Lease to any such
mortgages, trust deeds, ground leases or underlying leases.

 25

ARTICLE
19

DEFAULTS;
REMEDIES

19.1        Events of Default. The occurrence of any of the following shall
constitute a default of this Lease by Tenant:

19.1.1  Any
failure by Tenant to pay any Rent or any other charge required to be paid under
this Lease, or any part thereof, when due unless such failure is cured within
five (5) business days after notice; or

19.1.2  Except
where a specific time period is otherwise set forth for Tenant’s performance in
this Lease, in which event the failure to perform by Tenant within such time
period shall be a default by Tenant under this Section 19.1.2, any
failure by Tenant to observe or perform any other provision, covenant or
condition of this Lease to be observed or performed by Tenant where such
failure continues for thirty (30) days after written notice thereof from
Landlord to Tenant; provided that if the nature of such default is such that
the same cannot reasonably be cured within a thirty (30) day period, Tenant
shall not be deemed to be in default if it diligently commences such cure
within such period and thereafter diligently proceeds to rectify and cure such
default; or

19.1.3  To
the extent permitted by law, a general assignment by Tenant or any guarantor of
this Lease for the benefit of creditors, or the taking of any corporate action
in furtherance of bankruptcy or dissolution whether or not there exists any
proceeding under an insolvency or bankruptcy law, or the filing by or against
Tenant or any guarantor of any proceeding under an insolvency or bankruptcy law,
unless in the case of a proceeding filed against Tenant or any guarantor the
same is dismissed within sixty (60) days, or the appointment of a trustee or
receiver to take possession of all or substantially all of the assets of Tenant
or any guarantor, unless possession is restored to Tenant or such guarantor
within thirty (30) days, or any execution or other judicially authorized
seizure of all or substantially all of Tenant’s assets located upon the
Premises or of Tenant’s interest in this Lease, unless such seizure is
discharged within thirty (30) days; or

19.1.4  Abandonment
or vacation of all of the Premises by Tenant for a period of more than sixty
(60) days; or

19.1.5  The
failure by Tenant to observe or perform according to the provisions of Articles
17 or 18 of this Lease where such failure continues for more than ten (10)
business days after notice from Landlord; or

19.1.6  To
the extent Tenant operates a Restaurant, the failure of Tenant to maintain a
health department rating of “A” (or such other highest health department or
similar rating as is available), which failure continues for more than sixty
(60) days; or

19.1.7  (i)
The insolvency of any bank issuing a letter of credit under this Lease, or (ii)
the failure of any bank issuing a letter of credit to have a least a “B” rating
under the Thomson Financial Bank Watch or an equivalent rating service
reasonably selected by Landlord, where Tenant, within fifteen (15) business
days of Landlord’s notice, has not replaced such bank with a bank which qualifies
under this Section 19.1.7 is otherwise reasonably acceptable to Landlord.

The
notice periods provided herein are in lieu of, and not in addition to, any
notice periods provided by law.

19.2        Remedies Upon Default. Upon the occurrence of any event of default
by Tenant, Landlord shall have, in addition to any other remedies available to
Landlord at law or in equity (all of which remedies shall be distinct, separate
and cumulative), the option to pursue any one or more of the following
remedies, each and all of which shall be cumulative and nonexclusive, without
any notice or demand whatsoever.

19.2.1  Terminate
this Lease, in which event Tenant shall immediately surrender the Premises to
Landlord, and if Tenant fails to do so, Landlord may, without prejudice to any
other remedy which it may have for possession or arrearages in rent, enter upon
and take possession of the Premises and expel or remove Tenant and any other
person who may be

 26
 

occupying the Premises or
any part thereof, without being liable for prosecution or any claim or damages
therefor; and Landlord may recover from Tenant the following:

(a)   The
worth at the time of award of any unpaid rent which has been earned at the time
of such termination; plus

(b)   The
worth at the time of award of the amount by which the unpaid rent which would
have been earned after termination until the time of award exceeds the amount
of such rental loss that Tenant proves could have been reasonably avoided; plus

(c)   The
worth at the time of award of the amount by which the unpaid rent for the
balance of the Lease Term after the time of award exceeds the amount of such
rental loss that Tenant proves could have been reasonably avoided; plus

(d)   Any
other amount necessary to compensate Landlord for all the detriment proximately
caused by Tenant’s failure to perform its obligations under this Lease or which
in the ordinary course of things would be likely to result therefrom,
specifically including but not limited to, brokerage commissions and
advertising expenses incurred, expenses of remodeling the Premises or any
portion thereof for a new tenant, whether for the same or a different use, and
any special concessions made to obtain a new tenant; and

(e)   At
Landlord’s election, such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by applicable law.

The
term “rent” as used in this Section
19.2 shall be deemed to be and to mean all sums of every nature required to
be paid by Tenant pursuant to the terms of this Lease, whether to Landlord or
to others. As used in Sections 19.2.1(a) and (b), above, the “worth at
the time of award” shall be computed by allowing interest at the Interest Rate.
As used in Section 19.2.1(c), above, the “worth at the time of award”
shall be computed by discounting such amount at the discount rate of the
Federal Reserve Bank of San Francisco at the time of award plus one percent
(1%).

19.2.2  Landlord
shall have the remedy described in California Civil Code Section 1951.4 (lessor
may continue lease in effect after lessee’s breach and abandonment and recover
rent as it becomes due, if lessee has the right to sublet or assign, subject
only to reasonable limitations). Accordingly, if Landlord does not elect to
terminate this Lease on account of any default by Tenant, Landlord may, from
time to time, without terminating this Lease, enforce all of its rights and
remedies under this Lease, including the right to recover all rent as it
becomes due.

19.2.3  Landlord
shall at all times have the rights and remedies (which shall be cumulative with
each other and cumulative and in addition to those rights and remedies
available under Sections 19.2.1 and 19.2.2, above, or any law or other
provision of this Lease), without prior demand or notice except as required by
applicable law, to seek any declaratory, injunctive or other equitable relief,
and specifically enforce this Lease, or restrain or enjoin a violation or
breach of any provision hereof.

19.2.4  Upon
a default by Tenant after the expiration of any applicable cure period,
Landlord shall mitigate its damages under this Lease as and to the extent
required by “Applicable Law,” as that term is defined in Article 24, below.

19.3        Subleases of Tenant. Whether or not Landlord elects to terminate
this Lease on account of any default by Tenant, as set forth in this Article
19, Landlord shall have the right to terminate any and all subleases,
licenses, concessions or other consensual arrangements for possession entered
into by Tenant and affecting the Premises or may, in Landlord’s sole
discretion, succeed to Tenant’s interest in such subleases, licenses,
concessions or arrangements. In the event of Landlord’s election to succeed to
Tenant’s interest in any such subleases, licenses, concessions or arrangements,
Tenant shall, as of the date of notice by Landlord of such election, have no
further right to or interest in the rent or other consideration receivable
thereunder.

19.4        Form of Payment After
Default. Following the
occurrence of an event of default by Tenant, Landlord shall have the right to
require that any or all subsequent amounts paid by Tenant to Landlord
hereunder, whether to cure the default in question or otherwise, be paid in the
form of cash, money order, cashier’s or certified check drawn on an institution

 27
 

acceptable to Landlord, or by other means approved by
Landlord, notwithstanding any prior practice of accepting payments in any
different form.

19.5        Efforts to Relet. No re-entry or
repossession, repairs, maintenance, changes, alterations and additions,
reletting, appointment of a receiver to protect Landlord’s interests hereunder,
or any other action or omission by Landlord shall be construed as an election
by Landlord to terminate this Lease or Tenant’s right to possession, or to
accept a surrender of the Premises, nor shall same operate to release Tenant in
whole or in part from any of Tenant’s obligations hereunder, unless express
written notice of such intention is sent by Landlord to Tenant. Tenant hereby
irrevocably waives any right otherwise available under any law to redeem or
reinstate this Lease.

ARTICLE
20

COVENANT
OF QUIET ENJOYMENT

Landlord covenants that
Tenant, on paying the Rent, charges for services and other payments herein
reserved and on keeping, observing and performing all the other TCCs,
provisions and agreements herein contained on the part of Tenant to be kept,
observed and performed, shall, during the Lease Term, peaceably and quietly
have, hold and enjoy the Premises subject to the TCCs, provisions and
agreements hereof without interference by any persons lawfully claiming by or
through Landlord. The foregoing covenant is in lieu of any other covenant of
quiet enjoyment express or implied. Landlord has the right and lawful authority
to enter into this Lease and perform Landlord’s obligations hereunder,
including, but not limited to the right and lawful authority to terminate (if
applicable) any present or prior tenant of the Premises and to deliver
possession thereof to Tenant.

ARTICLE
21

LETTERS
OF CREDIT

21.1        Delivery of the L-C. Tenant shall
deliver to Landlord, concurrently with Tenant’s execution and delivery of this
Lease to Landlord, an unconditional, irrevocable letter of credit (the “L-C”) in the amount of Four Million and
No/100 Dollars ($4,000,000.00) (the “L-C
Amount”), which L-C shall be issued by a bank subject to Landlord’s
reasonable approval (provided that Landlord hereby approves Wells Fargo Bank).
The Letter of Credit shall be (i) at sight, irrevocable and unconditional, (ii)
maintained in effect, whether through renewal or extension, for the period from
the Lease Commencement Date and continuing until the “LC Expiration Date,” as
that term is defined, below, and Tenant shall deliver, if applicable, a
certificate of renewal or extension to Landlord at least thirty (30) days prior
to the expiration of the LC then held by Landlord, without any action
whatsoever on the part of Landlord, (iii) fully assignable by Landlord to a
transferee of Landlord’s interest in the Buildings or to a mortgagee, (iv)
permit partial draws, and (v) in a form and content as set forth in Exhibit G,  attached hereto or otherwise shall be subject to Landlord’s
reasonable approval. Tenant shall pay all expenses, points and/or fees incurred
by Tenant in obtaining and maintaining the L-C. As used herein, the “LC Expiration Date” shall mean the date
which is the earlier to occur of (I) the date (if applicable) that the L-C
Amount, pursuant to the terms of this Article 21, equals $0.00, and (II) the
date which is 120 days following the Lease Expiration Date; provided, however,
if prior to such date a voluntary petition is filed by Tenant, or an
involuntary petition is filed against Tenant by any of Tenant’s creditors,
under the Federal Bankruptcy Code, or Tenant executes an assignment for the
benefit of creditors or similar liquidation or windup proceeding under state or
federal law, then the LC Expiration Date shall be extended (but in no event
reduced) until the date which is the earlier of (x) the date either all
preference issues relating to payments under the Lease have been resolved in
such bankruptcy, liquidation or reorganization case, (y) the date such
bankruptcy, liquidation or reorganization case has been dismissed, or (z) the
later to occur of either one hundred twenty (120) days after the expiration of
the initial Lease Term or ten (10) days after the date the bankruptcy court
enters a final order (and all applicable appeal periods have expired) approving
Tenant’s rejection of this Lease.

21.2        Application of the L-C. The L-C shall
be held by Landlord as additional security for the faithful performance by
Tenant of all the terms, covenants, and conditions of this Lease to be kept and
performed by Tenant during the initial Lease Term. The L-C shall not be
mortgaged, assigned or encumbered in any manner whatsoever by Tenant without
the prior

 28
 

written consent of Landlord. If: (I) Tenant defaults
with respect to any provisions of this Lease after the expiration of any
applicable notice and cure period, including, but not limited to, the
provisions relating to the payment of Rent, (II) Tenant fails to renew the L-C
at least thirty (30) days before its expiration, (III) Tenant files a voluntary
petition for relief under any chapter of the United States Bankruptcy Code,
(IV) an involuntary bankruptcy petition is filed against Tenant under any
chapter of the United States Bankruptcy Code, (V) Tenant executes a general
assignment for the benefit of creditors, or (VI) Tenant is placed in
receivership under either state or federal law or commences a liquidation
proceeding under applicable state law, then Landlord may, but shall not be
required to, draw upon all or any portion of the L-C (A) for payment of any
Rent or any other sum in default, or (B) for the payment of any amount that
Landlord may reasonably spend or may become obligated to spend by reason of
Tenant’s default, or (C) to compensate Landlord for any other loss or damage
that Landlord may suffer, or which Landlord reasonably estimates that Landlord
may suffer, by reason of Tenant’s default, including, but not limited to, any
and all damages that may accrue under Section 1951.2 of the California Civil
Code in the event that Landlord elects to terminate the Lease. Tenant hereby
acknowledges and agrees that, for purposes of the L-C, monies shall be deemed
to be “due and owing” in the event of the occurrence of any of items (I)
through (VI), above. The use, application or retention of the L-C, or any
portion thereof, by Landlord shall not (a) prevent Landlord from exercising any
other right or remedy provided by this Lease or by law, it being intended that
Landlord shall not first be required to proceed against the L-C, nor (b)
operate as a limitation on any recovery to which Landlord may otherwise be
entitled. Any amount of the L-C which is drawn upon by Landlord, but is not
used or applied by Landlord as allowed above, shall be held by Landlord until
the LC Expiration Date (the “L-C Excess
Amount”) and may be used and applied by Landlord, at its option, for
payment of any Rent or any other sum in default, or for the payment of any
amount that Landlord may reasonably spend or may become obligated to spend by
reason of Tenant’s default, or to compensate Landlord for any other loss or
damage that Landlord may suffer, or which Landlord reasonably estimates that
Landlord may suffer, by reason of Tenant’s default, including, but not limited
to, any and all damages that may accrue under Section 1951.2 of the California
Civil Code in the event that Landlord elects to terminate this Lease. If any
portion of the L-C is drawn upon, Tenant shall, within ten (10) days after
written demand therefor, at Landlord’s option, either (i) deposit cash with
Landlord (which cash shall be applied by Landlord to the L-C Excess Amount) in
an amount sufficient to cause the sum of the L-C Excess Amount and the amount
of the remaining L-C to be equivalent to the amount of the L-C then required
under this Lease or (ii) reinstate the L-C to the amount then required under
this Lease, and any remaining L-C Excess Amount shall be returned to Tenant
within ten (10) days thereafter. If any portion of the L-C Excess Amount is
used or applied, Tenant shall, within five (5) business days after written
demand therefor, deposit cash with Landlord (which cash shall be applied by
Landlord to the L-C Excess Amount) in an amount sufficient to restore the L-C
Excess Amount to the amount then required under this Lease, and Tenant’s
failure to do so shall be a default under this Lease. Tenant acknowledges that
Landlord has the right to transfer or mortgage its interest in the Project and
the Buildings and in this Lease and Tenant agrees that in the event of any such
transfer or mortgage, Landlord shall have the right to transfer or assign the
L-C Excess Amount and/or the L-C to the transferee or mortgagee, and in the
event of such transfer, Tenant shall look solely to such transferee or
mortgagee for the return of the L-C Excess Amount and/or the L-C. The L-C
Excess Amount and/or the L-C, or any balance thereof, shall either be drawn
upon and applied by Landlord in accordance with the terms hereof or shall be
returned to Tenant within one hundred twenty (120) days following the
expiration or earlier termination of this Lease. Tenant acknowledges and agrees
that the L-C constitutes a separate and independent contract between Landlord
and the issuing bank, that Tenant is not a third party beneficiary of such
contract, that Tenant has no ownership or property interest in the L-C or the
L-C Excess Amount, and that Landlord’s claim under the L-C or the L-C Excess Amount
for the full amount due and owing thereunder shall not be, in any way,
restricted, limited, altered or impaired by virtue of any provision of the
Bankruptcy Code, including, but not limited to, Section 502(b)(6) of the
Bankruptcy Code.

21.3        L-C and L-C Excess  Amount not a Security Deposit. Landlord and Tenant acknowledge and agree
that in no event or circumstance shall the L-C or the L-C Excess Amount or any
renewal thereof or any proceeds thereof be (i) deemed to be or treated as a “security
deposit” within the meaning of California Civil Code Section 1950.7, (ii)
subject to the terms of such Section 1950.7, or (iii) intended to serve as a “security
deposit” within the meaning of such Section 1950.7. The parties hereto (A)
recite that the L-C and the L-C Excess Amount are not intended to serve as a
security deposit and such Section 1950.7 and any and all other laws, rules

 29
 

and regulations applicable
to security deposits in the commercial context (“Security Deposit Laws”) shall have no applicability or relevancy
thereto and (B) waive any and all rights, duties and obligations either party
may now or, in the future, will have relating to or arising from the Security
Deposit Laws.

21.4        Reduction
of L-C Amount. Subject to the terms of this Section 21.4, Landlord
hereby acknowledges and agrees that the L-C Amount shall be subject to
reduction by an amount equal to $571,428.57 upon each of the first seven (7)
anniversaries of the Lease Commencement Date (each, an “L-C Reduction Date”) so long as the “LC
Reduction Conditions,” as that term is defined, below, are satisfied as of the
subject L-C Reduction Date. For purposes of this Lease, the “LC Reduction Conditions”  shall mean that (i) if a draw under the
L-C by Landlord has occurred in accordance with the terms of this Lease, Tenant
shall have fulfilled its obligation to reinstate the L-C or to provide cash to
Landlord as provided above in this Article 21, in order that Landlord shall
hold, immediately prior to the subject L-C Reduction Date, cash and/or an L-C,
as the case may be, in the total L-C Amount required under this Lease
immediately prior to the subject L-C Reduction Date, (ii) Tenant is not in
default under this Lease after the expiration of any applicable cure period as
of the subject L-C Reduction Date, (iii) Tenant shall have delivered audited
financial statements, prepared in accordance with generally accepted accounting
principles consistently applied (“Financial
Statements”) indicating that “Guarantor,” as that term is defined in
Section 29.31 of this Lease, as of the end of the “Fiscal Year”, as that term
is defined, below, completed most recently prior to the subject L-C Reduction
Date, retains a “Quick Ratio” (i.e., “current assets” divided by “current
liabilities”) of not less than one (1), (iv) Tenant shall deliver Financial
Statements indicating that Guarantor, as of the end of the Fiscal Year
completed most recently prior to the subject L-C Reduction Date, retains cash
and cash equivalents (which shall include accounts receivable which are not
older than sixty (60) days) in an amount not less than $25,000,000.00, and (v)
neither Tenant nor Guarantor is, as of the subject L-C Reduction Date, under
material SEC or other governmental investigation or is under threat of any such
investigation, but this item (iv) shall only be applicable only to the extent
the subject investigation or threat thereof will or may have a material adverse
financial effect upon the subject entity. For purposes of this Lease, a “Fiscal Year”  shall mean Tenant’s fiscal year for accounting purposes,
which shall be the one year period commencing approximately as of February 1 of
each year and concluding as of approximately January 31 of the following year.
In the event that the LC Reduction Conditions are not satisfied as of any
particular L-C Reduction Date, then the L-C shall not be subject to reduction
as of such date, provided that in the event that Tenant shall subsequently
satisfy the LC Reduction Conditions, the L-C shall be reduced as of the date of
the satisfaction by Tenant of the LC Reduction Conditions. As an example
only, in the event that Tenant failed to satisfy the LC Reductions
Conditions as of the first anniversary of the Lease Commencement Date, but
satisfied the LC Reduction Conditions as of the second anniversary of the Lease
Commencement Date, then the LC Amount would reduce as of such second
anniversary by $1,142,857.14 (i.e., the $571,428.57 reduction which could have
been, but was not, implemented as of the first anniversary of Lease
Commencement Date (due to the failure of Tenant to then satisfy the LC
Reduction Conditions), plus the $571,428.57 reduction to which Tenant is
entitled as of the second anniversary of the Lease Commencement Date).

ARTICLE 22

TELECOMMUNICATIONS EQUIPMENT

At
any time during the Lease Term, subject to the terms of this Lease, including
this Article 22, and “Applicable Laws,” as that term is defined in
Article 24, below, Tenant shall have the exclusive right to install, at Tenant’s
sole cost and expense, one (1) or more satellite dishes and other
telecommunications equipment (collectively, the “Telecommunications Equipment”)  upon the roof of the Buildings. In no event shall Tenant be
obligated to pay Landlord any rental for that portion of the roof of the
Buildings on which the Telecommunications Equipment shall be located. The
physical appearance, location and all specifications of the Telecommunications
Equipment shall be subject to Landlord’s reasonable approval, and Landlord may
require Tenant to install screening around such Telecommunications Equipment,
at Tenant’s sole cost and expense, as reasonably designated by Landlord. Any
rooftop penetrations required shall also be subject to the approval of
Landlord, which shall not be unreasonably withheld. All contractors performing work
on the roof of the Buildings shall be subject to the prior approval of
Landlord, which shall not be unreasonably withheld. Tenant shall be
responsible, at Tenant’s sole cost and expense, for (i) obtaining all permits
or other governmental approvals required in connection with the
Telecommunications Equipment, and (ii) repairing and maintaining and causing
the Telecommunications Equipment to comply with all Applicable Laws. In no
event shall Tenant

 30
 

permit the
Telecommunications Equipment to interfere with the Building Structure. Tenant
shall be responsible for any and all installation costs, repair and maintenance
costs, and compliance with laws costs associated with Tenant’s
Telecommunications Equipment. Tenant’s indemnity of Landlord, as set forth in this
Lease, shall be applicable to any and all Claims associated with or related to
the Telecommunications Equipment. Upon the expiration or earlier termination of
this Lease, Tenant shall, at Tenant’s sole cost and expense, remove the
Telecommunications Equipment, repair any associated damage, and restore the
affected roof to the condition existing prior to Tenant’s installation of the
subject equipment. In the event Tenant elects to exercise its right to install
the Telecommunication Equipment, then Tenant shall give Landlord prior notice
thereof and Landlord.

ARTICLE 23

SIGNS

23.1        Tenant’s Signage. Subject to Applicable Laws and the terms of
this Lease (including, without limitation, Section 8.6 of this Lease and this
Article 23), the Tenant shall have the right to install (at Tenant’s sole cost
and expense) exterior signage at the Project (“Tenant’s Signage”). Tenant’s Signage shall be subject to all
applicable governmental laws, rules, regulations, codes and approvals. The
content, size, design, specifications, precise location, graphics, materials,
colors and all other specifications of the Tenant’s Sign shall be subject to
the approval of Landlord, which approval shall not be unreasonably withheld,
and shall be consistent with exterior design and materials of the Buildings and
Project. Tenant shall be responsible for all costs and expenses incurred in
connection with the design, construction, installation, repair, operation,
maintenance and compliance with laws of the Tenant’s Signage. Upon the
expiration of the Lease Term or the earlier termination of Tenant’s signage
rights under this Article 23, Tenant shall, at Tenant’s sole cost and expense,
remove the Tenant’s Signage and repair any and all damage to the Buildings
and/or Project caused by such removal.

23.2        Prohibited Signage and Other
Items.
Any signs, notices, logos,
pictures, names or advertisements which are installed and that have not been
separately approved by Landlord are prohibited. Except as may be specifically
set forth herein, Tenant may not install any signs on the exterior or roof of
the Buildings, Project or the Common Areas. Any signs, window coverings, or
blinds (even if the same are located behind the Landlord-approved window
coverings for the Buildings), or other items visible from the exterior of the
Premises or Buildings or Project, shall be subject to the prior approval of
Landlord, in its reasonable discretion as well as subject to Applicable Laws
and the terms of Section 8.6 of this Lease.

ARTICLE 24

COMPLIANCE WITH LAW

Tenant
shall not do anything or suffer anything to be done in or about the Premises,
Buildings or Project which will in any way conflict with any law, statute,
ordinance or other governmental rule, regulation or requirement now in force or
which may hereafter be enacted or promulgated (collectively, “Applicable Laws”). At its sole cost and
expense, Tenant shall promptly comply with all such Applicable Laws which
relate to (i) Tenant’s use of the Premises, Buildings and Project, (ii) the
Building Structure, but, as to the Building Structure, only to the extent such
obligations are triggered by Tenant’s Alterations, the Tenant Improvements, or
Tenant’s manner of use of the Premises, and (iii) any aspect or portion of the
Project, Buildings, Common Areas or Premises, except to the extent the express
responsibility of Landlord hereunder. Tenant’s obligations hereunder to comply
with Applicable Laws shall include, without limitation, compliance with
Applicable Laws with respect to (a) the Tenant Improvements and any Alterations,
(b) all systems and equipment servicing the Premises, Buildings and/or Project,
and (c) the Common Areas (including, without limitation, the parking
facilities). Tenant shall be responsible, at its sole cost and expense, to make
all alterations to the Premises as are required to comply with the governmental
rules, regulations, requirements or standards described in this Article 24.
Landlord shall comply with all Applicable Laws relating to the (x) Building
Structure, and (y) hazardous materials (as defined pursuant to Applicable Law
as of the date hereof) existing at the Project as of the date of this Lease,
provided in each event that compliance with such Applicable Laws is not the
responsibility of Tenant under this Lease, and provided further that Landlord’s
failure to comply therewith would prohibit Tenant from obtaining or maintaining
a certificate of occupancy for the Premises, or would unreasonably and

 31
 

materially affect the safety
of Tenant’s employees or create a significant health hazard for Tenant’s
employees, or would otherwise have a material adverse effect upon Tenant or its
use and occupancy of the Premises in accordance with the terms of this Lease
(collectively, the “Landlord Compliance
Conditions”).

ARTICLE 25

LATE CHARGES

If
any installment of Rent or any other sum due from Tenant shall not be received
by Landlord or Landlord’s designee within five (5) days after said amount is
due on more than two (2) occasions in any twelve (12) month period, then Tenant
shall pay to Landlord a late charge equal to five percent (5%) of the overdue
amount plus any attorneys’ fees incurred by Landlord by reason of Tenant’s
failure to pay Rent and/or other charges when due hereunder. The late charge
shall be deemed Additional Rent and the right to require it shall be in
addition to all of Landlord’s other rights and remedies hereunder or at law and
shall not be construed as liquidated damages or as limiting Landlord’s remedies
in any manner. In addition to the late charge described above, any Rent or other
amounts owing hereunder which are not paid within ten (10) days after the date
they are due shall bear interest from the date when due until paid at the “Interest
Rate.” For purposes of this Lease, the “Interest
Rate” shall be an annual rate equal to the lesser of (i) the annual “Bank Prime Loan” rate cited in the Federal
Reserve Statistical Release Publication G.13(415), published on the first
Tuesday of each calendar month (or such other comparable index as Landlord and
Tenant shall reasonably agree upon if such rate ceases to be published), plus
two (2) percentage points, and (ii) the highest rate permitted by applicable
law.

ARTICLE 26

LANDLORD’S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT

26.1        Landlord’s Cure. All covenants and agreements to be kept or
performed by Tenant under this Lease shall be performed by Tenant at Tenant’s
sole cost and expense and without any reduction of Rent, except to the extent,
if any, otherwise expressly provided herein. If Tenant shall fail to perform
any obligation under this Lease, and such failure shall continue in excess of
the time allowed under Section 19.1.2, above, unless a specific time
period is otherwise stated in this Lease, Landlord may, but shall not be
obligated to, make any such payment or perform any such act on Tenant’s part
without waiving its rights based upon any default of Tenant and without
releasing Tenant from any obligations hereunder.

26.2        Tenant’s Reimbursement. Except as may be specifically provided to the
contrary in this Lease, Tenant shall pay to Landlord, upon delivery by Landlord
to Tenant of statements therefor sums equal to expenditures reasonably made and
obligations incurred by Landlord in connection with the remedying by Landlord
of Tenant’s defaults pursuant to the provisions of Section 26.1 after
the expiration of any applicable notice and cure period. Tenant’s obligations
under this Section 26.2 shall survive the expiration or sooner
termination of the Lease Term.

ARTICLE 27

ENTRY BY LANDLORD

Landlord
reserves the right at any time upon not less than twenty-four (24) hours prior
notice (except in the event of an emergency, in which case no notice shall be
required) to enter the Project for any reasonable purpose. In addition,
Landlord reserves the right, all reasonable times upon reasonable notice to
Tenant (except in the case of an emergency), to enter the Premises to (i)
inspect them; (ii) show the Premises to prospective purchasers, or to current
or prospective mortgagees, ground or underlying lessors or insurers, or during
the last twelve (12) months of the Lease Term, to prospective tenants; (iii)
post notices of nonresponsibility; or (iv) alter, improve or repair the
Premises, Buildings or Project as set forth in this Lease, or for structural
alterations, repairs or improvements to the Buildings or Project.
Notwithstanding anything to the contrary contained in this Article 27,
Landlord may enter the Premises at any time to (A) take possession due to any
breach of this Lease beyond any applicable notice and cure period in the manner
provided herein; and (B) perform any covenants of Tenant which

 32
 

Tenant fails to perform.
Landlord may make any such entries without the abatement of Rent (except as
otherwise expressly set forth in Section 6.7, above), and may take such
reasonable steps as required to accomplish the stated purposes. For each of the
above purposes, Landlord shall at all times have a key with which to unlock all
the doors in the Premises, Buildings and Project, except as otherwise set forth
herein. Notwithstanding anything to the contrary set forth in this Article 27,
Tenant may designate certain areas of the Premises as “Secured Areas” should Tenant require such
areas for the purpose of securing certain valuable property or confidential
information. Landlord shall not have a key to enter such Secured Area and may
only enter the Secured Areas (i) in an emergency, (ii) to maintain or repair
such secured areas to the extent such repair or maintenance is required in
order to maintain and repair the Building Structure or as required by
Applicable Law, or (iii) as reasonably otherwise required by Landlord. Any
entry into the Secured Areas (except in an emergency) shall occur only upon
prior notice to Tenant, in accordance with a schedule reasonably designated by
Tenant, and Tenant shall have the right to have a representative of Tenant
present during any such entry by Landlord into a Secured Area. In an emergency,
Landlord shall have the right to use any reasonable means that Landlord may
deem proper to open the doors in and to the Premises, Buildings and Project.
Any entry into the Premises, Buildings and Project by Landlord in the manner
hereinbefore described shall not be deemed to be a forcible or unlawful entry
into, or a detainer of, the Premises, or an actual or constructive eviction of
Tenant from any portion of the Premises. No provision of this Lease shall be
construed as obligating Landlord to perform any repairs, alterations or
decorations except as otherwise expressly agreed to be performed by Landlord
herein.

ARTICLE 28

TENANT PARKING

Tenant
shall, commencing on the Lease Commencement Date, have the exclusive right to
utilize, without additional charge, the entirety of the parking facilities
servicing the Project, Tenant shall be responsible for the full amount of any
taxes imposed by any governmental authority in connection with the use of the
parking facility by Tenant. In addition, during the Lease Term, Tenant shall,
at Tenant’s sole cost and expense, repair, maintain and operate the Project
parking facilities, provided that, as set forth in Section 7.1, above,
Landlord shall be responsible for structural repairs to the parking facility as
and to the extent set forth in Section 7.1.

ARTICLE 29

MISCELLANEOUS PROVISIONS

29.1        Terms; Captions. The words “Landlord” and “Tenant” as used
herein shall include the plural as well as the singular. The necessary
grammatical changes required to make the provisions hereof apply either to
corporations or partnerships or individuals, men or women, as the case may
require, shall in all cases be assumed as though in each case fully expressed.
The captions of Articles and Sections are for convenience only and shall not be
deemed to limit, construe, affect or alter the meaning of such Articles and
Sections.

29.2        Binding Effect. Subject to all other provisions of this
Lease, each of the covenants, conditions and provisions of this Lease shall
extend to and shall, as the case may require, bind or inure to the benefit not
only of Landlord and of Tenant, but also of their respective heirs, personal representatives,
successors or assigns, provided this clause shall not permit any assignment by
Tenant contrary to the provisions of Article 14 of this Lease.

29.3        No
Air Rights. No rights to any view or to light or air over any
property, whether belonging to Landlord or any other person, are granted to
Tenant by this Lease. If at any time any windows of the Premises are
temporarily darkened or the light or view therefrom is obstructed by reason of
any repairs, improvements, maintenance or cleaning in or about the Project, the
same shall be without liability to Landlord and without any reduction or
diminution of Tenant’s obligations under this Lease.

29.4        Modification of Lease. Should any current or prospective mortgagee
or ground lessor for the Buildings or Project require a modification of this
Lease, which modification will not cause an increased cost or expense to Tenant
or in any other way materially and adversely

 33
 

change the rights and
obligations of Tenant hereunder, then and in such event, Tenant agrees that
this Lease may be so modified and agrees to execute whatever documents are
reasonably required therefor and to deliver the same to Landlord within twenty
(20) days following a request therefor. At the request of Landlord or any
mortgagee or ground lessor, Tenant agrees to execute a short form of Lease and
deliver the same to Landlord within twenty (20) days following the request
therefor. In no event shall Tenant be required to agree, and Landlord shall not
have any right of termination of this Lease for Tenant’s refusal to agree to
any modification of the provisions of this Lease under this Section 29.4
relating to (i) the amount Rent, (ii) the size or location of the Premises,
(iii) the duration of the Lease Term or the Lease Commencement Date, (iv) a
reduction in the amount of the Tenant Improvement Allowance or any free rent
period due to Tenant.

29.5        Transfer of Landlord’s
Interest. Tenant acknowledges
that Landlord has the right to transfer all or any portion of its interest in
the Project or Buildings and in this Lease, and Tenant agrees that in the event
of any such transfer, Landlord shall automatically be released from all
liability under this Lease and Tenant agrees to look solely to such transferee
for the performance of Landlord’s obligations hereunder after the date of
transfer and such transferee shall be deemed to have fully assumed and be
liable for all obligations of this Lease to be performed by Landlord, and
Tenant shall attorn to such transferee. Tenant further acknowledges that Landlord
may assign its interest in this Lease to a mortgage lender as additional
security and agrees that such an assignment shall not release Landlord from its
obligations hereunder and that Tenant shall continue to look to Landlord for
the performance of its obligations hereunder.

29.6        Prohibition Against
Recording. Except as provided
in Section 29.4 of this Lease, neither this Lease, nor any memorandum,
affidavit or other writing with respect thereto, shall be recorded by Tenant or
by anyone acting through, under or on behalf of Tenant.

29.7        Landlord’s Title. Landlord’s title is and always shall be
paramount to the title of Tenant. Nothing herein contained shall empower Tenant
to do any act which can, shall or may encumber the title of Landlord.

29.8        Relationship of Parties. Nothing contained in this Lease shall be
deemed or construed by the parties hereto or by any third party to create the
relationship of principal and agent, partnership, joint venturer or any
association between Landlord and Tenant.

29.9        Application of Payments. Landlord shall have the right to apply
payments received from Tenant pursuant to this Lease, regardless of Tenant’s
designation of such payments, to satisfy any obligations of Tenant hereunder,
in such order and amounts as Landlord, in its sole discretion, may elect.

29.10      Time of Essence. Time is of the essence with respect to the
performance of every provision of this Lease in which time of performance is a
factor.

29.11      Partial Invalidity. If any term, provision or condition contained
in this Lease shall, to any extent, be invalid or unenforceable, the remainder
of this Lease, or the application of such term, provision or condition to
persons or circumstances other than those with respect to which it is invalid
or unenforceable, shall not be affected thereby, and each and every other term,
provision and condition of this Lease shall be valid and enforceable to the
fullest extent possible permitted by law.

29.12      No Warranty. In executing and delivering this Lease,
Tenant has not relied on any representations, including, but not limited to,
any representation as to the amount of any item comprising Additional Rent or
the amount of the Additional Rent in the aggregate, or any warranty or any
statement of Landlord which is not set forth herein or in one or more of the
exhibits attached hereto.

29.13      Landlord Exculpation. The liability of Landlord or the Landlord
Parties to Tenant for any default by Landlord under this Lease or arising in
connection herewith or with Landlord’s operation, management, leasing, repair,
renovation, alteration or any other matter relating to the Project or the
Premises shall be limited solely and exclusively to an amount which is equal to
the interest of Landlord in the Buildings, provided that in no event shall such
liability extend to any sales or insurance proceeds received by Landlord or the
Landlord Parties in connection with the Project, Buildings or Premises. Neither
Landlord, nor any of the Landlord

 34
 

Parties shall have any
personal liability therefor, and Tenant hereby expressly waives and releases
such personal liability on behalf of itself and all persons claiming by,
through or under Tenant. The limitations of liability contained in this Section
29.13 shall inure to the benefit of Landlord’s and the Landlord Parties’
present and future partners, beneficiaries, officers, directors, trustees,
shareholders, agents and employees, and their respective partners, heirs,
successors and assigns. Under no circumstances shall any present or future
partner of Landlord (if Landlord is a partnership), or trustee or beneficiary
(if Landlord or any partner of Landlord is a trust), have any liability for the
performance of Landlord’s obligations under this Lease. Notwithstanding any
contrary provision herein, neither Landlord nor the Landlord Parties shall be
liable under any circumstances for injury or damage to, or interference with,
Tenant’s business, including but not limited to, loss of profits, loss of rents
or other revenues, loss of business opportunity, loss of goodwill or loss of
use, in each case, however occurring.

29.14      Entire Agreement. It is understood and acknowledged that there
are no oral agreements between the parties hereto affecting this Lease and this
Lease constitutes the parties’ entire agreement with respect to the leasing of
the Premises and supersedes and cancels any and all previous negotiations,
arrangements, brochures, agreements and understandings, if any, between the
parties hereto or displayed by Landlord to Tenant with respect to the subject
matter thereof, and none thereof shall be used to interpret or construe this
Lease. None of the terms, covenants, conditions or provisions of this Lease can
be modified, deleted or added to except in writing signed by the parties
hereto.

29.15      Force Majeure. Any prevention, delay or stoppage due to
strikes, lockouts, labor disputes, acts of God, inability to obtain services,
labor, or materials or reasonable substitutes therefor, governmental actions,
civil commotions, fire or other casualty, and other causes beyond the
reasonable control of the party obligated to perform, except with respect to
the obligations imposed with regard to Rent and other charges to be paid by
Tenant pursuant to this Lease and except as to Tenant’s obligations under Articles 5 and 24
of this Lease (collectively, a “Force
Majeure”), notwithstanding
anything to the contrary contained in this Lease, shall excuse the performance
of such party for a period equal to any such prevention, delay or stoppage and,
therefore, if this Lease specifies a time period for performance of an
obligation of either party, that time period shall be extended by the period of
any delay in such party’s performance caused by a Force Majeure.

29.16      Waiver of Redemption by
Tenant. Tenant hereby
waives, for Tenant and for all those claiming under Tenant, any and all rights
now or hereafter existing to redeem by order or judgment of any court or by any
legal process or writ, Tenant’s right of occupancy of the Premises after any
termination of this Lease.

29.17      Notices. All notices, demands, statements,
designations, approvals or other communications (collectively, “Notices”) given or required to be given by
either party to the other hereunder or by law shall be in writing, shall be (A)
sent by United States certified or registered mail, postage prepaid, return
receipt requested (“Mail”), (B)
transmitted by telecopy, if such telecopy is promptly followed by a Notice sent
by Mail, (C) delivered by a nationally recognized overnight courier, or (D)
delivered personally. Any Notice shall be sent, transmitted, or delivered, as
the case may be, to Tenant at the appropriate address set forth in Section
10 of the Summary, or to such other place as Tenant may from time to time
designate in a Notice to Landlord, or to Landlord at the addresses set forth
below, or to such other places as Landlord may from time to time designate in a
Notice to Tenant. Any Notice will be deemed given (i) three (3) days after the
date it is posted if sent by Mail, (ii) the date the telecopy is transmitted,
(iii) the date the overnight courier delivery is made, or (iv) the date
personal delivery is made or attempted to be made. If Tenant is notified of the
identity and address of Landlord’s mortgagee or ground or underlying lessor,
Tenant shall give to such mortgagee or ground or underlying lessor written
notice of any default by Landlord under the terms of this Lease by registered
or certified mail, and such mortgagee or ground or underlying lessor shall be
given a reasonable opportunity to cure such default prior to Tenant’s
exercising any remedy available to Tenant. As of the date of this Lease, any
Notices to Landlord must be sent, transmitted, or delivered, as the case may
be, to the following addresses:

	
  

  	
  c/o Lexington Commercial

  
	
   

  	
  9350 Wilshire Boulevard

  
	
   

  	
  Suite 400

  
	
   

  	
  Beverly Hills, California 90212

  

 

 35
 

 

	
  

  	
  Attn: Ms. Alisa Freundlich

  
	
   

  	
   

  
	
   

  	
  and

  
	
   

  	
   

  
	
   

  	
  Allen Matkins Leck Gamble & Mallory LLP

  
	
   

  	
  1901 Avenue of the Stars, Suite 1800

  
	
   

  	
  Los Angeles, California 90067

  
	
   

  	
  Attention: Anton N. Natsis, Esq.

  

 

29.18      Joint and Several. If there is more than one Tenant, the
obligations imposed upon Tenant under this Lease shall be joint and several.

29.19      Authority. If Tenant is a corporation, trust or
partnership, each individual executing this Lease on behalf of Tenant hereby
represents and warrants that Tenant is a duly formed and existing entity
qualified to do business in California and that Tenant has full right and
authority to execute and deliver this Lease and that each person signing on
behalf of Tenant is authorized to do so. Landlord has the right and lawful
authority to enter into this Lease and perform Landlord’s obligations
hereunder, including, but not limited to, the right and lawful authority to
terminate, if required, any right of any present or prior tenant of the
Premises and to deliver possession thereof to Tenant.

29.20      Attorneys’ Fees. In the event that either Landlord or Tenant
should bring suit for the possession of the Premises, for the recovery of any
sum due under this Lease, or because of the breach of any provision of this
Lease or for any other relief against the other, then all costs and expenses,
including reasonable attorneys’ fees, incurred by the prevailing party therein
shall be paid by the other party, which obligation on the part of the other
party shall be deemed to have accrued on the date of the commencement of such
action and shall be enforceable whether or not the action is prosecuted to
judgment.

29.21      Governing Law; WAIVER OF
TRIAL BY JURY. This
Lease shall be construed and enforced in accordance with the laws of the State
of California. IN ANY ACTION OR PROCEEDING ARISING HEREFROM, LANDLORD AND
TENANT HEREBY CONSENT TO (I) THE JURISDICTION OF ANY COMPETENT COURT WITHIN THE
STATE OF CALIFORNIA, (II) SERVICE OF PROCESS BY ANY MEANS AUTHORIZED BY
CALIFORNIA LAW, AND (III) IN THE INTEREST OF SAVING TIME AND EXPENSE, TRIAL
WITHOUT A JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF
THE PARTIES HERETO AGAINST THE OTHER OR THEIR SUCCESSORS IN RESPECT OF ANY
MATTER ARISING OUT OF OR IN CONNECTION WITH THIS LEASE, THE RELATIONSHIP OF
LANDLORD AND TENANT, TENANT’S USE OR OCCUPANCY OF THE PREMISES, AND/OR ANY
CLAIM FOR INJURY OR DAMAGE, OR ANY EMERGENCY OR STATUTORY REMEDY. IN THE EVENT
LANDLORD COMMENCES ANY SUMMARY PROCEEDINGS OR ACTION FOR NONPAYMENT OF BASE
RENT OR ADDITIONAL RENT, TENANT SHALL NOT INTERPOSE ANY COUNTERCLAIM OF ANY
NATURE OR DESCRIPTION (UNLESS SUCH COUNTERCLAIM SHALL BE MANDATORY) IN ANY SUCH
PROCEEDING OR ACTION, BUT SHALL BE RELEGATED TO AN INDEPENDENT ACTION AT LAW.

29.22      Submission of Lease. Submission of this instrument for examination
or signature by Tenant does not constitute a reservation of, option for or
option to lease, and it is not effective as a lease or otherwise until
execution and delivery by both Landlord and Tenant.

29.23      Brokers. Landlord and Tenant hereby warrant to each
other that they have had no dealings with any real estate broker or agent in
connection with the negotiation of this Lease, excepting only the real estate
brokers or agents specified in Section 12 of the Summary (the “Brokers”), and that they know of no other
real estate broker or agent who is entitled to a commission in connection with
this Lease. Each party agrees to indemnify and defend the other party against
and hold the other party harmless from any and all claims, demands, losses,
liabilities, lawsuits, judgments, costs and expenses (including without
limitation reasonable attorneys’ fees) with respect to any leasing commission
or equivalent compensation alleged to be owing on account of any dealings with
any real estate broker or agent, other than the Brokers, occurring by, through,
or under the indemnifying party.

 36
 

29.24      Independent Covenants. This Lease shall be construed as though the
covenants herein between Landlord and Tenant are independent and not dependent
and, except as otherwise expressly set forth in this Lease to the contrary,
Tenant hereby expressly waives the benefit of any statute to the contrary and
agrees that if Landlord fails to perform its obligations set forth herein,
Tenant shall not be entitled to make any repairs or perform any acts hereunder
at Landlord’s expense or to any setoff of the Rent or other amounts owing hereunder
against Landlord.

29.25      Counterparts. This Lease may be executed in counterparts
with the same effect as if both parties hereto had executed the same document.
Both counterparts shall be construed together and shall constitute a single
lease.

29.26      Intentionally Deleted.

29.27      Transportation Management. Tenant shall fully comply with all present or
future programs intended to manage parking, transportation or traffic in and
around the Buildings, and in connection therewith, Tenant shall take responsible
action for the transportation planning and management of all employees located
at the Premises by working directly with Landlord, any governmental
transportation management organization or any other transportation-related
committees or entities.

29.28      No Violation. Tenant hereby warrants and represents that
neither its execution of nor performance under this Lease shall cause Tenant to
be in violation of any agreement, instrument, contract, law, rule or regulation
by which Tenant is bound, and Tenant shall protect, defend, indemnify and hold
Landlord harmless against any claims, demands, losses, damages, liabilities,
costs and expenses, including, without limitation, reasonable attorneys’ fees
and costs, arising from Tenant’s breach of this warranty and representation.

29.29      Communications and Computer
Lines.
Tenant may install,
maintain, replace, remove or use any communications or computer wires and
cables (collectively, the “Lines”)
at the Project in or serving the Premises, provided that (i) Tenant shall
obtain Landlord’s prior written consent, use an experienced and qualified
contractor, and comply with all of the other provisions of Articles 7 and 8
of this Lease, (ii) the Lines therefor (including riser cables) shall be (x)
appropriately insulated to prevent excessive electromagnetic fields or
radiation, (y) surrounded by a commercially reasonable protective conduit, and
(z) identified in accordance with the “Identification Requirements,” as that
term is set forth hereinbelow, (iii) any new or existing Lines servicing the
Premises shall comply with all applicable governmental laws and regulations,
(iv) as a condition to permitting the installation of new Lines, Tenant shall
remove existing Lines located in or serving the Premises and repair any damage
in connection with such removal, and (v) Tenant shall pay all costs in
connection therewith. All Lines shall be clearly marked with adhesive plastic
labels (or plastic tags attached to such Lines with wire) to show Tenant’s
name, telephone number and the name of the person to contact in the case of an
emergency (A) every four feet (4’) outside the Premises (specifically
including, but not limited to, the electrical room risers and other Common
Areas), and (B) at the Lines’ termination point(s) (collectively, the “Identification Requirements”)._Landlord  reserves the right to require that Tenant
remove any Lines located in or serving the Premises which are installed in
violation of these provisions, or which are at any time (1) are in violation of
any Applicable Laws, (2) are inconsistent with then-existing industry standards
(such as the standards promulgated by the National Fire Protection Association
(e.g., such organization’s “2002 National Electrical Code”)), or (3) otherwise
represent a dangerous or potentially dangerous condition.

29.30      Intentionally Deleted.

29.31      Guaranty. This Lease is subject to and conditioned upon
Tenant delivering to Landlord, concurrently with Tenant’s execution and
delivery of this Lease, a guaranty (a “Guaranty”)
in the form attached hereto as Exhibit E,  which guaranty shall be fully
executed by and binding upon The Children’s Place Retail Stores, Inc., a
Delaware corporation (the “Guarantor”).

 37
 

IN WITNESS WHEREOF, Landlord
and Tenant have caused this Lease to be executed the day and date first above written.

	
  

  	
   

  	
  “LANDLORD”:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  443 SOUTH RAYMOND OWNER, LLC,

  a California limited liability company

  
	
   

  	
   

  	
  SEE ATTACHED SIGNATURE PAGE INSERT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  “TENANT”:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE CHILDREN’S PLACE SERVICES

  COMPANY, LLC,

  a Delaware limited liability company,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Neal Goldberg

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Its:

  	
  NEAL GOLDBERG – PRESIDENT

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Seth Udasin

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Its:

  	
  SETH UDASIN, VP.

  
						

 

 38

Signature Page Insert for
Office Lease, dated January 21, 2005, between 443 South Raymond Owner, LLC, a
California limited liability company, as Landlord, and The Children’s Place
Services Company, LLC, a Delaware limited liability company, as Tenant, with
respect to certain space at the project located at 443 South Raymond Avenue,
Pasadena California

	
  

  	
   

  	
  “LANDLORD”:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  443 SOUTH RAYMOND OWNER, LLC

  a California limited liability company

  
	
   

  
	
   

  	
   

  	
  By:

  	
  Royal Laundry, LLC 

  
	
   

  	
   

  	
   

  	
    a Delaware limited liability company

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
    By:

  	
   

  	
  Lexington Commercial Holdings, Inc. 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  a California corporation, its Manager

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Alisa Freundlich

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Alisa Freundlich 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Chief Operating Officer

  

 

 38A

EXHIBIT A

443 SOUTH RAYMOND AVENUE

OUTLINE OF PREMISES

 1
 

 2
 

 3

EXHIBIT A-l

443 SOUTH RAYMOND AVENUE

SITE PLAN

 1

EXHIBIT B

443 SOUTH RAYMOND AVENUE

TENANT WORK LETTER

This Tenant Work Letter
shall set forth the terms and conditions relating to the construction of the
Premises. This Tenant Work Letter is essentially organized chronologically and
addresses the issues of the construction of the Premises, in sequence, as such
issues will arise during the actual construction of the Premises. All
references in this Tenant Work Letter to Articles or Sections of “this Lease”
shall mean the relevant portions of Articles 1 through 29 of the Office
Lease to which this Tenant Work Letter is attached as Exhibit B, and all
references in this Tenant Work Letter to Sections of “this Tenant Work Letter”
shall mean the relevant portions of Sections 1 through 5 of this Tenant
Work Letter.

SECTION 1

DELIVERY OF THE PREMISES AND BASE BUILDING; ROOF WORK

1.1                                 In
General. Following the full execution and unconditional delivery of this
Lease, Landlord shall deliver the Premises, Buildings and Project to Tenant,
and Tenant shall accept the Premises, Buildings and Project from Landlord in
their presently existing, “as-is” condition, subject to Landlord’s obligations
under the Lease and provided that, prior to or concurrently with the
construction of the initial Tenant Improvements, Landlord shall, at Landlord’s
sole cost and expense, make necessary repairs to the “alley” side of Building B
in order that, as of the Lease Commencement Date, water from such alley shall
not penetrate the interior of the Premises.

1.2                                 Roof
Work. Landlord and Tenant hereby acknowledge and agree that (i) certain
repairs are presently required to the roof of the Buildings and that Landlord
shall, following the date. hereof, make such repairs as required in accordance
with the terms of this Lease (at Landlord’s sole cost and expense), (ii) Tenant
shall perform certain work (including, without limitation, certain HVAC and
insulation work) as part of the Tenant Improvements which will or may require
modification, alteration or improvement of the roof (which work and corresponding
modifications, alterations or improvements shall be at Tenant’s sole cost and
expense, subject to Tenant’s right to utilize the Tenant Improvement Allowance
in accordance with the terms of this Tenant Work Letter), and (iii) Landlord
and Tenant shall cooperate with each other on a commercially reasonable basis
in order that each party shall be permitted to perform and complete their
respective work in a commercially reasonable manner. At Landlord’s option,
Tenant shall be required to utilize Landlord’s roof contractor with respect to
work relating to or affecting the roof (provided such contractor is reasonably
competitively priced).

SECTION 2

TENANT IMPROVEMENTS

2.1                                 Tenant
Improvement Allowance. Tenant shall be entitled to a one-time tenant
improvement allowance (the “Tenant Improvement Allowance”) in the amount of
$5,000,000.00 for the costs relating to the initial design and construction of
Tenant’s improvements, which are permanently affixed to the Premises (the “Tenant
Improvements”). Tenant hereby acknowledges and agrees that the Tenant
Improvements shall include the installation of base building systems and
equipment (including, without limitation, electrical, hvac, sprinkler,
life-safety, plumbing and similar systems) necessary to cause the Buildings and
Premises to function as first class office buildings to be occupied by a first
class office tenant. In no event shall Landlord be obligated to make
disbursements pursuant to this Tenant Work Letter in a total amount which
exceeds the Tenant Improvement Allowance.

2.2                                 Disbursement of Tenant Improvement Allowance by Landlord.

2.2.1                       Tenant Improvement Allowance Items. Except as otherwise set forth in this
Tenant Work Letter, Tenant Improvement Allowance shall be disbursed by Landlord
only for the following items and costs (collectively the “Tenant Improvement
Allowance Items”):

 1
 

2.2.1.1               Payment of the fees of the “Architect” and
the “Engineers,” as those terms are defined in Section 3.1 of this
Tenant Work Letter, which fees shall, notwithstanding anything to the contrary
contained in this Tenant Work Letter, and payment of the fees incurred by, and
the cost of documents and materials supplied by, Landlord and Landlord’s
consultants in connection with the preparation and review of the “Construction
Drawings,” as that term is defined in Section 3.1 of this Tenant Work
Letter;

2.2.1.2               The payment of plan check, permit and license
fees relating to construction of the Tenant Improvements;

2.2.1.3               The cost of construction of the Tenant
Improvements, including, without limitation, purchase of materials and HVAC
equipment, testing and inspection costs, freight elevator usage, hoisting and
trash removal costs, and contractors’ fees and general conditions;

2.2.1
4               The cost of any changes in the Building
Structure when such changes are required by the Construction Drawings
(including if such changes are due to the fact that such work is prepared on an
unoccupied basis), such cost to include all direct architectural and/or
engineering fees and expenses incurred in connection therewith;

2.2.1.5               The cost of any changes to the Construction
Drawings or Tenant Improvements required by all applicable building codes (the “Code”);

2.2.1.6               The cost of the “Coordination Fee,” as that
term is defined in Section 4.2.2 of this Tenant Work Letter;

2.2.1.7               Sales and use taxes; and

2.2.1.8               The cost of movable furniture and fixtures
and telecommunications equipment to be used in the Premises (“Personal Property”),
provided that in no event shall in excess of $1,500,000.00 of Tenant Improvement
Allowance be utilized by Tenant for Personal Property.

2.2.2.                  Disbursement
of Tenant Improvement Allowance. During the construction of the Tenant
Improvements, Landlord shall make monthly disbursements of the Tenant
Improvement Allowance for Tenant Improvement Allowance Items for the benefit of
Tenant and shall authorize the release of monies for the benefit of Tenant as
follows.

2.2.2.1               Monthly Disbursements. On or before the first day of each calendar
month during the construction of the Tenant Improvements, Tenant shall deliver
to Landlord: (i) a request for payment of the “Contractor,” as that term is
defined in Section 4.1 of this Tenant Work Letter, approved by Tenant,
in a form to be provided by Landlord, showing the schedule, by trade, of percentage
of completion of the Tenant Improvements in the Premises, detailing the portion
of the work completed and the portion not completed; (ii) invoices from “Tenant’s
Agents,” as that term is defined in Section 4.1.2 of this Tenant Work
Letter, for labor rendered and materials delivered to the Premises; (iii)
executed mechanic’s lien releases from “Contractor,” as that term is defined in
Section 4.1, below, which shall comply with the appropriate provisions, as
reasonably determined by Landlord, of California Civil Code Section 3262(d);
and (iv) all other information reasonably requested by Landlord (the “Allowance
Documentation”). Tenant’s request for payment shall be deemed Tenant’s
acceptance and approval of the work furnished and/or the materials supplied as
set forth in Tenant’s payment request vis-a-vis Landlord. Within fifteen (15)
business days following Landlord’s receipt of the Allowance Documentation,
Landlord shall deliver a check to Tenant made payable to Tenant in payment of
the lesser of: (A) the amounts so requested by Tenant, as set forth in this Section
2.2.2.1, above, less a ten percent (10%) retention (the aggregate amount of
such retentions to be known as the “Final Retention”), and (B) the balance of
any remaining available portion of the Tenant Improvement Allowance (not
including the Final Retention), provided that no such retention shall be
duplicative of the retention Tenant would otherwise hold (but will not
withhold) pursuant to Tenant’s agreement with Contractor, and provided further
that Landlord’s disbursement obligation shall only be applicable to the extent
that Landlord does not dispute any request for payment based on non-compliance
of any work with the “Approved Working Drawings,” as that term is defined in Section
3.4 below. Landlord’s payment of such amounts

 2
 

shall not be deemed Landlord’s
approval or acceptance of the work furnished or materials supplied as set forth
in Tenant’s payment request.

2.2.2.2               Final Retention.
Subject to the provisions of this Tenant Work Letter, a check for the Final
Retention payable jointly to Tenant and Contractor shall be delivered by
Landlord to Tenant following the completion of construction of the Premises,
provided that (i) Tenant delivers to Landlord properly executed mechanics lien
releases in compliance with both California Civil Code Section 3262(d)(2) and
either Section 3262(d)(3) or Section 3262(d)(4), and (ii) Architect delivers to
Landlord a certificate, in a form reasonably acceptable to Landlord, certifying
that the construction of the Tenant Improvements in the Premises has been
substantially completed in accordance with the “Approved Working Drawings,” as
that term is defined in Section 2.4, below.

2.2.2.3               Other Terms.
Landlord shall only be obligated to make disbursements from Tenant Improvement
Allowance to the extent costs are incurred by Tenant for Tenant Improvement
Allowance Items. All Tenant Improvement Allowance Items for which the Tenant
Improvement Allowance has been made available shall be deemed Landlord’s
property under the terms of this Lease; provided that any Personal Property
shall only be and become the property of Landlord to the extent that Tenant
shall default under this Lease after the expiration of any applicable notice
and cure period.

2.3                                 Failure
to Disburse Tenant Improvement Allowance. If Landlord fails to timely
fulfill its obligation to fund any portion of the Tenant Improvement Allowance,
Tenant shall be entitled to deliver notice (“Payment Notice”) thereof to
Landlord and to any mortgage or trust deed holder of the Buildings whose
identity and address have been previously provided to Tenant. If Landlord still
fails to fulfill any such obligation within ten (10) business days after
Landlord’s receipt of the Payment Notice from Tenant and if Landlord fails to
deliver notice to Tenant within such ten (10) business day period explaining
Landlord’s reasons that Landlord believes that the amounts described in Tenant’s
Payment Notice are not due and payable by Landlord (“Refusal Notice”), Tenant
shall be entitled to offset the amount so funded, together with interest at the
Interest Rate from the last day of such 10-business day period until the date
of offset, against Tenant’s next obligations to pay Rent. However, if Tenant is
in default under Section 19.1.1 of this Lease after the expiration of any
applicable notice and cure period at the time that such offset would otherwise
be applicable, Tenant shall not be entitled to such offset until such default
is cured. If Landlord delivers a Refusal Notice, and if Landlord and Tenant are
not able to agree on the amounts to be so paid by Landlord, if any, within ten
(10) days after Tenant’s receipt of a Refusal Notice, Tenant may, at Tenant’s
option, proceed to claim a default by Landlord. If Tenant prevails in any such
action, the award shall include interest at the Interest Rate calculated from
the last day of the 10-business day period until the date of Landlord’s payment
of such award. Similarly, if Tenant prevails in any such action, Tenant shall
be entitled to apply such award as a credit against Tenant’s obligations to pay
Rent.

SECTION 3

CONSTRUCTION DRAWINGS

3.1                                 Selection
of Architect/Construction Drawings. Tenant shall retain a licensed (the “Architect”)
to prepare the “Construction Drawings,” as that term is defined in this Section
3.1. Tenant shall retain licensed and qualified engineering consultants
(the “Engineers”) to prepare all plans and engineering working drawings
relating to the structural, mechanical, electrical, plumbing, HVAC, lifesafety,
and sprinkler work in the Premises. The plans and drawings to be prepared by
Architect and the Engineers hereunder shall be known collectively as the “Construction
Drawings.” All Construction Drawings shall be subject to Landlord’s approval,
which shall not be unreasonably withheld, conditioned, or delayed. In addition,
Tenant shall comply with the terms of Section 8.6 of the Lease with respect to
all Tenant Improvements (and all Construction Drawings). Tenant and Architect
shall verify, in the field, the dimensions and conditions as shown on the
relevant portions of the base building plans, and Tenant and Architect shall be
solely responsible for the same, and Landlord shall have no responsibility in
connection therewith. Landlord’s review of the Construction Drawings as set
forth in this Section 3, shall be for its sole purpose and shall not
imply Landlord’s review of the same, or obligate Landlord to review the same,
for quality, design, Code compliance or other like matters. Accordingly,
notwithstanding that any Construction Drawings are reviewed by Landlord or its
space planner, architect, engineers and consultants, and notwithstanding any
advice or assistance which may be

 3
 

rendered to Tenant by Landlord or Landlord’s space
planner, architect, engineers, and consultants, Landlord shall have no
liability whatsoever in connection therewith and shall not be responsible for
any omissions or errors contained in the Construction Drawings, and Tenant’s
waiver and indemnity set forth in this Lease shall specifically apply to the
Construction Drawings.

3.2                                 Final
Space Plan. Tenant shall supply Landlord with four (4) copies signed by
Tenant of its final space plan for the Premises before any architectural
working drawings or engineering drawings have been commenced. The final space
plan (the “Final Space Plan”) shall include a layout and designation of all
offices, rooms and other partitioning, their intended use, and equipment to be
contained therein and shall be subject to the approval of Landlord (which shall
not be unreasonably withheld or delayed). Landlord may, to the extent
reasonably required, request clarification or more specific drawings for
special use items not included in the Final Space Plan.

3.3                                 Final
Working Drawings. After the Final Space Plan has been approved by Landlord,
Tenant shall supply the Engineers with a complete listing of standard and
non-standard equipment and specifications, including, without limitation,
B.T.U. calculations, electrical requirements and special electrical receptacle
requirements for the Premises, to enable the Engineers and the Architect to
complete the “Final Working Drawings” (as that term is defined below) in the
manner as set forth below. Upon the approval of the Final Space Plan by
Landlord and Tenant, Tenant shall promptly cause the Architect and the
Engineers to complete the architectural and engineering drawings for the
Premises, and Architect shall compile a fully coordinated set of architectural,
structural, mechanical, electrical and plumbing working drawings in a form which
is complete to allow subcontractors to bid on the work and to obtain all
applicable permits (collectively, the “Final Working Drawings”) and shall
submit the same to Landlord for Landlord’s approval, which shall not be
unreasonably withheld or delayed. Tenant shall supply Landlord with four (4)
copies signed by Tenant of such Final Working Drawings. Landlord shall advise
Tenant within ten (10) business days after Landlord’s receipt of the Final
Working Drawings for the Premises if the same is unsatisfactory or incomplete
in any respect. If Tenant is so advised, Tenant shall within ten (10) business
days, revise the Final Working Drawings in accordance with such review and any
disapproval of Landlord in connection therewith.

3.4                                 Approved
Working Drawings. The Final Working Drawings shall be approved by Landlord
(the “Approved Working Drawings”) prior to the commencement of construction of
the Premises by Tenant. After approval by Landlord of the Final Working
Drawings, Tenant may submit the same to the appropriate municipal authorities
for all applicable building permits. Tenant hereby agrees that neither Landlord
nor Landlord’s consultants shall be responsible for obtaining any building
permit or certificate of occupancy for the Premises and that obtaining the same
shall be Tenant’s responsibility; provided, however, that Landlord shall
cooperate with Tenant in executing permit applications and performing other
ministerial acts reasonably necessary to enable Tenant to obtain any such
permit or certificate of occupancy. No changes, modifications or alterations in
the Approved Working Drawings may be made without the prior written consent of
Landlord, which consent may not be unreasonably withheld or delayed.

SECTION 4

CONSTRUCTION OF THE
TENANT IMPROVEMENTS

4.1                                 Tenant’s
Selection of Contractors.

4.1.1                        The
Contractor. A general contractor shall be retained by Tenant to construct
the Tenant Improvements. Such general contractor (“Contractor”) shall be
selected by Tenant and approved by Landlord, which shall not be unreasonably
withheld or delayed, and Tenant shall deliver to Landlord notice of its
selection of the Contractor upon such selection.

4.1.2                        Tenant’s
Agents. All subcontractors, laborers, materialmen, and suppliers used by
Tenant (such subcontractors, laborers, materialmen, and suppliers, and the
Contractor to be known collectively as “Tenant’s Agents”) shall be qualified
and licensed to do business in California.

 4
 

4.2                                 Construction
of Tenant Improvements by Tenant’s Agents.

4.2.1                        Construction
Contract; Cost Budget. Prior to Tenant’s execution of the construction
contract and general conditions with Contractor (the “Contract”), Tenant shall
submit the Contract to Landlord for its records. Prior to the commencement of
the construction of the Tenant Improvements, and after Tenant has accepted all
bids for the Tenant Improvements, Tenant shall provide Landlord with a detailed
breakdown, by trade, of the final costs to be incurred or which have been
incurred, as set forth more particularly in Sections 2.2.1.1 through 2.2.1.8,
above, in connection with the design and construction of the Tenant
Improvements to be performed by or at the direction of Tenant or the
Contractor, which costs form a basis for the amount of the Contract. Tenant
shall be solely responsible for, and shall make payments for, any and all costs
of the Tenant Improvements or costs otherwise incurred under this Tenant Work
Letter, to the extent the aggregate of such costs are in excess of the Tenant
Improvement Allowance, out of Tenant’s own funds, but Tenant shall continue to
provide Landlord with Allowance Documentation, for Landlord’s approval, prior
to Tenant paying such costs. In no event shall Landlord be obligated to
disburse an amount in excess of Tenant Improvement Allowance pursuant to the
terms of the Tenant Work Letter.

4.2.2                        Tenant’s
Agents.

4.2.2.1              Landlord’s
General Conditions for Tenant’s Agents and Tenant Improvement Work. Tenant’s
and Tenant’s Agent’s construction of the Tenant Improvements shall comply with
the following: (i) the Tenant Improvements shall be constructed in strict
accordance with the Approved Working Drawings; (ii) Tenant’s Agents shall
submit schedules of all work relating to the Tenant’s Improvements to Landlord;
and (iii) Tenant shall abide by all reasonable construction rules made by
Landlord. Tenant shall pay a logistical coordination fee (the “Coordination Fee”)
to Landlord in an amount equal $25,000.00, which Coordination Fee shall be for
services relating to the coordination of the construction of the Tenant Improvements.

4.2.2.2              Indemnity.
Tenant’s indemnity of Landlord as set forth in this Lease shall also apply with
respect to any and all costs, losses, damages, injuries and liabilities related
in any way to any act or omission of Tenant or Tenant’s Agents, or anyone
directly or indirectly employed by any of them, or in connection with Tenant’s
non-payment of any amount arising out of the Tenant Improvements and/or Tenant’s
disapproval of all or any portion of any request for payment. Except to the
extent resulting from the negligence or willful misconduct of Landlord or the
Landlord Parties, such indemnity by Tenant, as set forth in this Lease, shall
also apply with respect to any and all costs, losses, damages, injuries and
liabilities related in any way to Landlord’s performance of any ministerial
acts reasonably necessary (i) to permit Tenant to complete the Tenant
Improvements, and (ii) to enable Tenant to obtain any building permit or
certificate of occupancy for the Premises.

4.2.2.3              Requirements of
Tenant’s Agents. Each of Tenant’s Agents shall guarantee to Tenant and for
the benefit of Landlord that the portion of the Tenant Improvements for which
it is responsible shall be free from any defects in workmanship and materials
for a period of not less than one (1) year from the date of completion thereof.
Each of Tenant’s Agents shall be responsible for the replacement or repair,
without additional charge, of all work done or furnished in accordance with its
contract that shall become defective within one (1) year after the later to
occur of (i) completion of the work performed by such contractor or
subcontractors and (ii) the Lease Commencement Date. The correction of such
work shall include, without additional charge, all additional expenses and
damages incurred in connection with such removal or replacement of all or any
part of the Tenant Improvements, and/or the Building and/or common areas that
may be damaged or disturbed thereby. All such warranties or guarantees as to
materials or workmanship of or with respect to the Tenant Improvements shall be
contained in the Contract or subcontract. Notwithstanding anything contained in
this Section 4.2.2.3 to the contrary, Tenant shall only be required to obtain
warranties and guarantees as set forth herein to the extent available on a
commercially reasonably basis. Upon a default by Tenant after the expiration of
any applicable cure period, Tenant covenants to give to Landlord any assignment
or other assurances which may be necessary to effect direct enforcement of the
guarantees and warranties by Landlord.

 5
 

4.2.2.4              Insurance
Requirements.

4.2.2.4.1                   General
Coverages. All of Tenant’s Agents shall carry worker’s compensation
insurance covering all of their respective employees, and shall also carry
public liability insurance, including property damage, all with limits, in form
and with companies as are required to be carried by Tenant as set forth in this
Lease.

4.2.2.4.2                   Special
Coverages. Tenant shall carry “Builder’s All Risk” insurance in an amount
approved by Landlord covering the construction of the Tenant Improvements, and
such other insurance as Landlord may require, it being understood and agreed
that the Tenant Improvements shall be insured by Tenant pursuant to this Lease
immediately upon completion thereof. Such insurance shall be in amounts and
shall include such extended coverage endorsements as may be reasonably required
by Landlord including, but not limited to, the requirement that all of Tenant’s
Agents shall carry excess liability and Products and Completed Operation
Coverage insurance, each in amounts not less than $500,000 per incident,
$2,000,000 in aggregate, and in form and with companies as are required to be
carried by Tenant as set forth in this Lease.

4.2.2.4.3                   General
Terms. Certificates for all insurance carried pursuant to this Section
4.2.2.4 shall be delivered to Landlord before the commencement of
construction of the Tenant Improvements and before the Contractor’s equipment
is moved onto the site. All such policies of insurance must contain a provision
that the company writing said policy will give Landlord thirty (30) days prior
written notice of any cancellation or lapse of the effective date or any
reduction in the amounts of such insurance. In the event that the Tenant
Improvements are damaged by any cause during the course of the construction
thereof, Tenant shall immediately repair the same at Tenant’s sole cost and
expense. Tenant’s Agents shall maintain all of the foregoing insurance coverage
in force until the Tenant Improvements are fully completed and accepted by
Landlord, except for any Products and Completed Operation Coverage insurance
required by Landlord, which is to be maintained for ten (10) years following
completion of the work and acceptance by Landlord and Tenant. All policies
carried under this Section 4.2.2.4 shall insure Landlord and Tenant, as
their interests may appear, as well as Contractor and Tenant’s Agents. All
insurance, except Workers’ Compensation, maintained by Tenant’s Agents shall
preclude subrogation claims by the insurer against anyone insured thereunder.
Such insurance shall provide that it is primary insurance as respects the owner
and that any other insurance maintained by owner is excess and noncontributing
with the insurance required hereunder. The requirements for the foregoing
insurance shall not derogate from the provisions for indemnification of
Landlord by Tenant under Section 4.2.2.2 of this Tenant Work Letter.

4.2.3                        Governmental
Compliance. The Tenant Improvements shall comply in all respects with the
following: (i) the Code and other state, federal, city or quasi-governmental
laws, codes, ordinances and regulations, as each may apply according to the
rulings of the controlling public official, agent or other person; (ii)
applicable standards of the American Insurance Association (formerly, the
National Board of Fire Underwriters) and the National Electrical Code; and
(iii) building material manufacturer’s specifications.

4.2.4                        Inspection
by Landlord. Landlord shall have the right to inspect the Tenant
Improvements at all reasonable times, provided however, that Landlord’s failure
to inspect the Tenant Improvements shall in no event constitute a waiver of any
of Landlord’s rights hereunder nor shall Landlord’s inspection of the Tenant
Improvements constitute Landlord’s approval of the same. Should Landlord
disapprove any portion of the Tenant Improvements because the same do not
comply with the Approved Working Drawings or due to materially substandard
work, Landlord shall notify Tenant in writing of such disapproval and shall
specify the items disapproved. Any disapproval by Landlord of the Tenant
Improvements in accordance with the terms hereof shall be rectified by Tenant
at no expense to Landlord (provided that the foregoing shall not alter Tenant’s
right to any remaining portion of the Tenant Improvement Allowance), provided
however, that in the event Landlord determines that a defect or deviation
exists or disapproves of any matter in connection with any portion of the
Tenant Improvements and such defect, deviation or matter might adversely affect
the Building Structure or exterior appearance of the Building or the Project’s
Historical Designation, Landlord may following 10 business days notice to
Tenant (except in the case of an emergency, in which case no notice shall be
required), take such action as Landlord deems necessary, at Tenant’s expense
and without incurring any liability on Landlord’s part, to correct any such
defect, deviation and/or matter,

 6
 

including, without limitation, causing the cessation
of performance of the construction of the Tenant Improvements until such time
as the defect, deviation and/or matter is corrected to Landlord’s reasonable
satisfaction. Tenant hereby acknowledges and agrees that, for purposes of this
Section 4.2.4, an emergency shall be deemed to include any matter which might
adversely affect the Historical Designation of the Project, or any portion
thereof.

4.2.5                       Meetings.
Commencing upon the execution of this Lease, Tenant shall hold periodic
meetings with the Architect and the Contractor regarding the progress of the
preparation of Construction Drawings and the construction of the Tenant
Improvements, which meetings shall be held at a location designated by Tenant,
in Tenant’s reasonable discretion, and Landlord and/or its agents shall receive
prior notice of, and shall have the right to attend, all such meetings.

4.3                                 Notice
of Completion; Copy of Record Set of Plans. Within ten (10) days after
completion of construction of the Tenant Improvements, Tenant shall cause a
Notice of Completion to be recorded in the office of the Recorder of the county
in which the Building is located in accordance with Section 3093 of the Civil
Code of the State of California or any successor statute, and shall furnish a
copy thereof to Landlord upon such recordation. If Tenant fails to do so,
Landlord may execute and file the same on behalf of Tenant as Tenant’s agent
for such purpose, at Tenant’s sole cost and expense. At the conclusion of
construction, (i) Tenant shall cause the Architect and Contractor (A) to update
the Approved Working Drawings as necessary to reflect all changes made to the
Approved Working Drawings during the course of construction, (B) to certify to
the best of their knowledge that the “record-set” of as-built drawings are true
and correct, which certification shall survive the expiration or termination of
this Lease, and (C) to deliver to Landlord two (2) sets of copies of such
record set of drawings within ninety (90) days following issuance of a certificate
of occupancy for the Premises, and (ii) Tenant shall deliver to Landlord a copy
of all warranties, guaranties, and operating manuals and information relating
to the improvements, equipment, and systems in the Premises.

SECTION 5

DELAY OF LEASE COMMENCEMENT DATE

5.1                                 Lease
Commencement Date Delays. The Lease Commencement Date shall occur as
provided in Article 2 of this Lease, provided that the Lease Commencement Date
shall be delayed by the number of days of delay of the “substantial completion
of the Tenant Improvements,” as that term is defined below in this Section 5,
in the Premises which is caused solely by a “Lease Commencement Date Delay”,
provided further that, notwithstanding anything in this Section 5 to the
contrary, in no event shall the Lease Commencement Date be extended pursuant to
the terms of this Section 5 beyond December 31, 2005. As used herein, the term “Lease
Commencement Date Delay” shall mean only a “Force Majeure Delay” or a “Delivery
Delay,” as those terms are defined below in this Section 5.1. As used herein,
the term “Force Majeure Delay” shall mean only an actual delay resulting from
fire, earthquake, explosion, flood, hurricane, the elements, acts of God or the
public enemy, war, invasion, insurrection, rebellion, riots, industry-wide
labor strikes or lockouts (which objectively preclude Tenant from obtaining
from any reasonable source of union labor or substitute materials at a
reasonable cost necessary for completing the Tenant Improvements), and delays
(beyond eight (8) weeks following the date of Tenant’s submission of Landlord
approved plans) for Tenant to obtain permits for the Tenant Improvements
(except to the extent any such delay results from or is related to (i) the
Tenant Improvements including improvements which are not typical and customary
general office tenant improvements, (ii) Tenant’s failure to respond to
governmental requests and/or requirements on a commercially reasonable basis
(including, without limitation, with respect to timing of resubmissions), and (iii)
Tenant’s failure to cause Tenant’s plans or the improvements contained therein
to comply with Applicable Laws). Notwithstanding anything to the contrary
contained herein, a Force Majeure Delay shall not include any of the foregoing
delays to the extent caused by the negligence or wilful misconduct of Tenant,
its contractors or agents. As used in this Tenant Work Letter, “Delivery Delay”
shall mean only an actual delay resulting from Landlord’s failure to promptly
deliver the Premises to Tenant following Tenant’s request following the full
execution and unconditional delivery of this Lease.

5.2                                 Determination
of Lease Commencement Date Delay. If Tenant contends that a Lease
Commencement Date Delay has occurred, Tenant shall notify Landlord in writing
within five (5) business days of each of (i) the date upon which such Lease
Commencement Date Delay

 7
 

becomes known to Tenant, Architect, or Contractor and
(ii) the date upon which such Lease Commencement Date Delay ends (the “Termination
Date”). If such actions, inaction or circumstances described in the notice set
forth in clause (i), above (the “Delay Notice”) are not cured by Landlord
within one (1) business day of receipt of the Delay Notice and if such actions,
inaction or circumstances otherwise qualify as a Lease Commencement Date Delay,
then a Lease Commencement Date Delay shall be deemed to have occurred
commencing as of the date of Landlord’s receipt of the Delay Notice and ending
as of the Termination Date.

5.3                                 Definition
of Substantial Completion of the Tenant Improvements. For purposes of this
Section 5, “substantial completion of the Tenant Improvements” shall mean
completion of construction of the Tenant Improvements in the Premises pursuant
to the “Approved Working Drawings,” with the exception of any punch list items,
any furniture, fixtures, work-stations, built-in furniture or equipment (even
if the same requires installation or electrification by Tenant’s Agents), and
any tenant improvement finish items and materials which are selected by Tenant
but which are not available within a reasonable time (given the date of the
Lease Commencement Date).

SECTION 6

MISCELLANEOUS

6.1                                 Tenant’s
Representative. Tenant has designated Mr. Michael Dubiel as its sole
representative with respect to the matters set forth in this Tenant Work
Letter, who, until further notice to Landlord, shall have full authority and
responsibility to act on behalf of the Tenant as required in this Tenant Work
Letter.

6.2                                 Landlord’s
Representative. Landlord has designated Mr. Jonathan Lonner as its sole
representative with respect to the matters set forth in this Tenant Work
Letter, who, until further notice to Tenant, shall have full authority and
responsibility to act on behalf of the Landlord as required in this Tenant Work
Letter.

6.3                                 Time
of the Essence in This Tenant Work Letter. Unless otherwise indicated, all
references herein to a “number of days” shall mean and refer to calendar days.
If any item requiring approval is timely disapproved by Landlord, the procedure
for preparation of the document and approval thereof shall be repeated until
the document is approved by Landlord.

6.4                                 Tenant’s
Lease Default. Notwithstanding any provision to the contrary contained in
this Lease, if an event of default beyond any applicable notice and cure period
as described in the Lease or this Tenant Work Letter has occurred at any time
on or before the Substantial Completion of the Premises, then (i) in addition
to all other rights and remedies granted to Landlord pursuant to this Lease,
Landlord shall have the right to withhold payment of all or any portion of the
Tenant Improvement Allowance and/or Landlord may cause Contractor to cease the
construction of the Premises (in which case, Tenant shall be responsible for
any delay in the substantial completion of the Premises caused by such work
stoppage), and (ii) all other obligations of Landlord under the terms of this
Tenant Work Letter shall be forgiven until such time as such default is cured
pursuant to the terms of this Lease (in which case, Tenant shall be responsible
for any delay in the substantial completion of the Premises caused by such
inaction by Landlord).

6.5                                 Bonding.
Notwithstanding anything to the contrary set forth in this Tenant Work Letter,
neither Tenant nor Contractor nor Tenant’s Agents shall be required to obtain
or provide any completion or performance bond in connection with any Tenant
Improvement work performed by or on behalf of Tenant.

 8

EXHIBIT C

443 SOUTH RAYMOND AVENUE

NOTICE OF LEASE TERM
DATES

To:                                                    

                                   

                                   

                                   

Re:                 Office Lease
dated                ,
200    between                                    ,
a                                    
(“Landlord”),                                              
and                                              ,
a                                              
(“Tenant”) concerning premises located at                                                        ,
                                             ,
California.

Gentlemen:

In
accordance with the Office Lease (the “Lease”), we wish to advise you and/or
confirm as follows:

1.                         The Lease
Term shall commence on or has commenced on                                     
for a term of
                                     
ending on                                        .

2.                         Rent
commenced to accrue on                                        ,
in the amount of                                    .

3.                         If the
Lease Commencement Date is other than the first day of the month, the first
billing will contain a pro rata adjustment. Each billing thereafter, with the
exception of the final billing, shall be for the full amount of the monthly
installment as provided for in the Lease.

4.                         Your rent
checks should be made payable to                                      
at                                        .

5.                         The exact
number of rentable/usable square feet within the Premises is                           
square feet.

	
  

  	
   

  	
   

  	
  “Landlord”:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  a 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Its:

  	
   

  	
   

  
											

 

	
  Agreed to and Accepted
  as of                ,
  200   .

  	
   

  	
   

  
	
  “Tenant”:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  a 

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  	
   

  	
   

  
									

 

 1

EXHIBIT D

443 SOUTH RAYMOND AVENUE

FORM OF TENANT’S ESTOPPEL
CERTIFICATE

The
undersigned as Tenant under that certain Office Lease (the “Lease”) made and
entered into as of
                  ,
200   by and between
               
as Landlord, and the undersigned as Tenant, for Premises located
at             ,
            ,
California               ,
certifies as follows:

1.
Attached hereto as Exhibit A is a true and correct copy of the Lease and
all amendments and modifications thereto. The documents contained in Exhibit
A represent the entire agreement between the parties as to the Premises.

2.
The undersigned currently occupies the Premises described in the Lease, the
Lease Term commenced on
             ,
and the Lease Term expires on              ,
and the undersigned has no option to terminate or cancel the Lease or to
purchase all or any part of the Premises, the Buildings and/or the Project.

3.
Base Rent became payable on
             .

4.
The Lease is in full force and effect and has not been modified, supplemented
or amended in any way except as provided in Exhibit A.

5.
Tenant has not transferred, assigned, or sublet any portion of the Premises nor
entered into any license or concession agreements with respect thereto except
as follows:

6.
Tenant shall not modify the documents contained in Exhibit A without the
prior written consent of Landlord’s mortgagee.

7.
All monthly installments of Base Rent, all Additional Rent and all monthly
installments of estimated Additional Rent have been paid when due through
              .
The current monthly installment of Base Rent is
$               .

8.
All conditions of the Lease to be performed by Landlord necessary to the
enforceability of the Lease have been satisfied and Landlord is not in default
thereunder. In addition, the undersigned has not delivered any notice to
Landlord regarding a default by Landlord thereunder.

9.
No rental has been paid more than thirty (30) days in advance and no security
has been deposited with Landlord except as provided in the Lease.

10.
As of the date hereof, there are no existing defenses or offsets, or, to the
undersigned’s knowledge, claims or any basis for a claim, that the undersigned
has against Landlord.

11.
If Tenant is a corporation or partnership, each individual executing this
Estoppel Certificate on behalf of Tenant hereby represents and warrants that
Tenant is a duly formed and existing entity qualified to do business in
California and that Tenant has full right and authority to execute and deliver
this Estoppel Certificate and that each person signing on behalf of Tenant is
authorized to do so.

12.
There are no actions pending against the undersigned under the bankruptcy or
similar laws of the United States or any state.

 1
 

13.
Other than in compliance with all applicable laws and incidental to the
ordinary course of the use of the Premises, the undersigned has not used or
stored any hazardous substances in the Premises.

14.
To the undersigned’s knowledge, all tenant improvement work to be performed by
Landlord under the Lease has been completed in accordance with the Lease and
has been accepted by the undersigned and all reimbursements and allowances due
to the undersigned under the Lease in connection with any tenant improvement
work have been paid in full.

The
undersigned acknowledges that this Estoppel Certificate may be delivered to
Landlord or to a prospective mortgagee or prospective purchaser, and
acknowledges that said prospective mortgagee or prospective purchaser will be
relying upon the statements contained herein in making the loan or acquiring
the property of which the Premises are a part and that receipt by it of this
certificate is a condition of making such loan or acquiring such property.

Executed at
             on the
             day of
          , 200  .

	
  

  	
   

  	
  “Tenant”:

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  a 

  	
   

  	
   

  	 

	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  	
   

  
										

 

 2

EXHIBIT E

443 SOUTH RAYMOND AVENUE

FORM OF GUARANTY OF LEASE

THIS GUARANTY OF LEASE
(this “Guaranty”) is made as of
January 21, 2005, by The Children’s Place Retail Stores, Inc., a Delaware
corporation (the “Guarantor”),  whose address is as set forth in Section
10 hereof, in favor of 443 South Raymond Owner, LLC, a California limited
liability company (“Landlord”).

WHEREAS, Landlord and The
Children’s Place Services Company, LLC, a Delaware limited liability company (“Tenant”) desire to enter into that certain
Office Lease dated January 21, 2005 (the “Lease”)  concerning certain premises located at 443
South Raymond Avenue, Pasadena, California;

WHEREAS, Guarantor has a
financial interest in the Tenant; and

WHEREAS, Landlord would
not execute the Lease if Guarantor did not execute and deliver to Landlord this
Guaranty.

NOW, THEREFORE, for and
in consideration of the execution of the foregoing Lease by Landlord and as a
material inducement to Landlord to execute said Lease, Guarantor hereby
absolutely, presently, continually, unconditionally and irrevocably guarantees
the prompt payment by Tenant of all rentals and other sums payable by Tenant
under said Lease and the faithful and prompt performance by Tenant of each and
every one of the terms, conditions and covenants of said Lease to be kept and
performed by Tenant, and further agrees as follows:

1.                 It is specifically agreed and
understood that the terms, covenants and conditions of the Lease may be
altered, affected, modified, amended, compromised, released or otherwise
changed by agreement between Landlord and Tenant, or by course of conduct and
Guarantor does guaranty and promise to perform all of the obligations of Tenant
under the Lease as so altered, affected, modified, amended, compromised,
released or changed and the Lease may be assigned by or with the consent of
Landlord or any assignee of Landlord without consent or notice to Guarantor and
that this Guaranty shall thereupon and thereafter guaranty the performance of
said Lease as so changed, modified, amended, compromised, released, altered or
assigned.

2.                 This Guaranty shall not be
released, modified or affected by failure or delay on the part of Landlord to
enforce any of the rights or remedies of Landlord under the Lease, whether
pursuant to the terms thereof or at law or in equity, or by any release of any
person liable under the terms of the Lease (including, without limitation,
Tenant) or any other guarantor, including without limitation, any other
Guarantor named herein, from any liability with respect to Guarantor’s
obligations hereunder.

3.                 Guarantor’s liability under this Guaranty shall
continue until all rents due under the Lease have been paid in full in cash and
until all other obligations to Landlord have been satisfied, and shall not be
reduced by virtue of any payment by Tenant of any amount due under the Lease.
If all or any portion of Tenant’s obligations under the Lease is paid or
performed by Tenant, the obligations of Guarantor hereunder shall continue and
remain in full force and effect in the event that all or any part of such 

payment(s) or performance(s) is avoided or recovered directly or indirectly
from Landlord as a preference, fraudulent transfer or otherwise.

4.                 Guarantor warrants and
represents to Landlord that Guarantor now has and will continue to have full
and complete access to any and all information concerning the Lease, the value
of the assets owned or to be acquired by Tenant, Tenant’s financial status and
its ability to pay and perform the obligations owed to Landlord under the
Lease. Guarantor further warrants and represents that Guarantor has reviewed
and approved copies of the Lease and is fully informed of the remedies Landlord
may pursue, with or without notice to Tenant, in the event of default under the
Lease. So long as any of the Guarantor’s obligations hereunder remains
unsatisfied or owing to Landlord, Guarantor shall keep fully informed as to all
aspects of Tenant’s financial condition and the performance of said
obligations.

 1
 

5.                 Guarantor
hereby covenants and agrees with Landlord that if a default shall at any time
occur in the payment of any sums due under the Lease by Tenant or in the
performance of any other obligation of Tenant under the Lease beyond any
applicable notice and cure period, Guarantor shall and will forthwith upon
demand pay such sums and any arrears thereof, to Landlord in legal currency of
the United States of America for payment of public and private debts, and take
all other actions necessary to cure such default and perform such obligations
of Tenant.

6.                 The liability
of Guarantor under this Guaranty is a guaranty of payment and performance and
not of collectibility, and is not conditioned or contingent upon the
genuineness, validity, regularity or enforceability of the Lease or the pursuit
by Landlord of any remedies which it now has or may hereafter have with respect
thereto, at law, in equity or otherwise.

7.                 Guarantor
hereby waives and agrees not to assert or take advantage of to the extent
permitted by law: (i) all notices to Guarantor, to Tenant, or to any other
person, including, but not limited to, notices of the acceptance of this
Guaranty or the creation, renewal, extension, assignment, modification or
accrual of any of the obligations owed to Landlord under the Lease and, except to
the extent set forth in Section 9 hereof, enforcement of any right or
remedy with respect thereto, and notice of any other matters relating thereto;
(ii) notice of acceptance of this Guaranty; (iii) demand of payment,
presentation and protest; (iv) any right to require Landlord to apply to any
default any security deposit or other security it may hold under the Lease; (v)
any statute of limitations affecting Guarantor’s liability hereunder or the
enforcement thereof; (vi) any right or defense that may arise by reason of the
incapability, lack of authority, death or disability of Tenant or any other
person; and (vii) all principles or provisions of law which conflict with the
terms of this Guaranty. Guarantor further agrees that Landlord may enforce this
Guaranty upon the occurrence of a default under the Lease, notwithstanding any
dispute between Landlord and Tenant with respect to the existence of said
default or performance of the obligations under the Lease or any counterclaim,
set-off or other claim which Tenant may allege against Landlord with respect
thereto. Moreover, Guarantor agrees that Guarantor’s obligations shall not be
affected by any circumstances which constitute a legal or equitable discharge
of a guarantor or surety.

8.                 Guarantor
agrees that Landlord may enforce this Guaranty without the necessity of
proceeding against Tenant or any other guarantor. Guarantor hereby waives the
right to require Landlord to proceed against Tenant, to proceed against any
other guarantor, to exercise any right or remedy under the Lease or to pursue
any other remedy or to enforce any other right.

9.             (a)           Guarantor
agrees that nothing contained herein shall prevent Landlord from suing on the
Lease or from exercising any rights available to it thereunder and that the
exercise of any of the aforesaid rights shall not constitute a legal or
equitable discharge of Guarantor. Without limiting the generality of the
foregoing, Guarantor hereby expressly waives any and all benefits under
California Civil Code § § 2809, 2810, 2819, 2845, 2847, 2848, 2849 and 2850.

(b)           Guarantor agrees that Guarantor shall
have no right of subrogation against Tenant or any right of contribution
against any other guarantor unless and until all amounts due under the Lease
have been paid in full and all other obligations under the Lease have been
satisfied. Guarantor further agrees that, to the extent the waiver of Guarantor’s
rights of subrogation and contribution as set forth herein is found by a court
of competent jurisdiction to be void or voidable for any reason, any rights of
subrogation Guarantor may have against Tenant shall be junior and subordinate
to any rights Landlord may have against Tenant, and any rights of contribution
Guarantor may have against any other guarantor shall be junior and subordinate
to any rights Landlord may have against such other guarantor.

(c)           The obligations of Guarantor under
this Guaranty shall not be altered, limited or affected by any case, voluntary
or involuntary, involving the bankruptcy, insolvency, receivership,
reorganization, liquidation or arrangement of Tenant or any defense which
Tenant may have by reason of order, decree or decision of any court or
administrative body resulting from any such case. Landlord shall have the sole
right to accept or reject any plan on behalf of Guarantor proposed in such case
and to take any other action which Guarantor would be entitled to take,
including, without limitation, the decision to file or not file a claim.
Guarantor acknowledges and agrees that any payment

 2
 

which accrues with respect
to Tenant’s obligations under the Lease (including, without limitation, the
payment of rent) after the commencement of any such proceeding (or, if any such
payment ceases to accrue by operation of law by reason of the commencement of
such proceeding, such payment as would have accrued if said proceedings had not
been commenced) shall be included in Guarantor’s obligations hereunder because
it is the intention of the parties that said obligations should be determined
without regard to any rule or law or order which may relieve Tenant of any of
its obligations under the Lease. Guarantor hereby permits any trustee in
bankruptcy, receiver, debtor-in-possession, assignee for the benefit of
creditors or similar person to pay Landlord, or allow the claim of Landlord in
respect of, any such payment accruing after the date on which such proceeding
is commenced. Guarantor hereby assigns to Landlord Guarantor’s right to receive
any payments from any trustee in bankruptcy, receiver, debtor-in-possession,
assignee for the benefit of creditors or similar person by way of dividend,
adequate protection payment or otherwise.

10.               Any notice, statement, demand, consent, approval or
other communication required or permitted to be given, rendered or made by either
party to the other, pursuant to this Guaranty or pursuant to any applicable law
or requirement of public authority, shall be in writing (whether or not so
stated elsewhere in this Guaranty) and shall be deemed to have been properly
given, rendered or made only if hand-delivered or sent by first-class mail,
postage pre-paid, addressed to the other party at its respective address set
forth below, and shall be deemed to have been given, rendered or made on the
day it is hand-delivered or one day after it is mailed, unless it is mailed
outside of Los Angeles County, California, in which case it shall be deemed to
have been given, rendered or made on the third business day after the day it is
mailed. By giving notice as provided above, either party may designate a
different address for notices, statements, demands, consents, approvals or
other communications intended for it.

	
  

  	
  To Guarantor:

  	
  915 Secaucus Road

  
	
   

  	
   

  	
  Secaucus, New Jersey 07094

  
	
   

  	
   

  	
  Attention: VP/Real Estate

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  915 Secaucus Road

  
	
   

  	
   

  	
  Secaucus, New Jersey 07094

  
	
   

  	
   

  	
  Attention: Sr. VP/General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
  To Landlord:

  	
  c/o Lexington Commercial

  
	
   

  	
   

  	
  9350 Wilshire Boulevard, Suite 400

  
	
   

  	
   

  	
  Beverly Hills, California 90212

  
	
   

  	
   

  	
  Attn: Ms. Alisa Freundlich

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Allen Matkins Leck Gamble & Mallory LLP

  
	
   

  	
   

  	
  1901 Avenue of the Stars

  
	
   

  	
   

  	
  Suite 1800

  
	
   

  	
   

  	
  Los Angeles, California 90067

  
	
   

  	
   

  	
  Attention: Anton N. Natsis, Esq.

  

11.               Guarantor represents and warrants to Landlord as
follows:

(a)           No consent of any other person,
including, without limitation, any creditors of Guarantor, and no license,
permit, approval or authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any governmental authority is
required by Guarantor in connection with this Guaranty or the execution,
delivery, performance, validity or enforceability of this Guaranty and all
obligations required hereunder. This Guaranty has been duly executed and
delivered by Guarantor, and constitutes the legally valid and binding
obligation of Guarantor enforceable against such Guarantor in accordance with
its terms.

(b)           The execution, delivery and
performance of this Guaranty will not violate any provision of any existing law
or regulation binding on Guarantor, or any order,

 3
 

judgment, award or decree of
any court, arbitrator or governmental authority binding on Guarantor, or of any
mortgage, indenture, lease, contract or other agreement, instrument or
undertaking to which Guarantor is a party or by which Guarantor or any of
Guarantor’s assets may be bound, and will not result in, or require, the
creation or imposition of any lien on any of Guarantor’s property, assets or
revenues pursuant to the provisions of any such mortgage, indenture, lease,
contract, or other agreement, instrument or undertaking.

12.               The obligations of Tenant under
the Lease to execute and deliver estoppel statements, as therein provided,
shall be deemed to also require the Guarantor hereunder to do and provide the
same relative to Guarantor.

13.               This Guaranty shall be binding
upon Guarantor, Guarantor’s heirs, representatives, administrators, executors,
successors and assigns and shall inure to the benefit of and shall be
enforceable by Landlord, its successors, endorsees and assigns. As used herein,
the singular shall include the plural, and the masculine shall include the
feminine and neuter and vice versa, if the context so requires.

14.               The term “Landlord” whenever
used herein refers to and means the Landlord specifically named in the Lease and
also any assignee of said Landlord, whether by outright assignment or by
assignment for security, and also any successor to the interest of said
Landlord or of any assignee in the Lease or any part thereof, whether by
assignment or otherwise. So long as the Landlord’s interest in or to the
Premises (as that term is used in the Lease) or the rents, issues and profits
therefrom, or in, to or under the Lease, are subject to any mortgage or deed of
trust or assignment for security, no acquisition by Guarantor of the Landlord’s
interest in the Premises or under the Lease shall affect the continuing
obligations of Guarantor under this Guaranty, which obligations shall continue
in full force and effect for the benefit of the mortgage, beneficiary, trustee
or assignee under such mortgage, deed of trust or assignment, or any purchaser
at sale by judicial foreclosure or under private power of sale, and of the
successors and assigns of any such mortgagee, beneficiary, trustee, assignee or
purchaser.

15.               The term “Tenant” whenever
used herein refers to and means the Tenant in the Lease specifically named and
also any assignee or sublessee of said Lease and also any successor to the
interests of said Tenant, assignee or sublessee of such Lease or any part
thereof, whether by assignment, sublease or otherwise.

16.               In the event of any dispute or
litigation regarding the enforcement or validity of this Guaranty, Guarantor
shall be obligated to pay all charges, costs and expenses (including, without
limitation, reasonable attorneys’ fees) incurred by Landlord, whether or not
any action or proceeding is commenced regarding such dispute and whether or not
such litigation is prosecuted to judgment.

17.               This Guaranty shall be governed
by and construed in accordance with the laws of the State of California, and in
a case involving diversity of citizenship, shall be litigated in and subject to
the jurisdiction of the courts of California.

18.               Every provision of this Guaranty
is intended to be severable. In the event any term or provision hereof is
declared to be illegal or invalid for any reason whatsoever by a court of
competent jurisdiction, such illegality or invalidity shall not affect the
balance of the terms and provisions hereof, which terms and provisions shall
remain binding and enforceable.

19.               This Guaranty may be executed in
any number of counterparts each of which shall be deemed an original and all of
which shall constitute one and the same Guaranty with the same effect as if all
parties had signed the same signature page. Any signature page of this Guaranty
may be detached from any counterpart of this Guaranty and re-attached to any
other counterpart of this Guaranty identical in form hereto but having attached
to it one or more additional signature pages.

20.               No failure or delay on the part
of Landlord to exercise any power, right or privilege under this Guaranty shall
impair any such power, right or privilege, or be construed to be a waiver of
any default or any acquiescence therein, nor shall any single or partial exercise
of such power, right or privilege preclude other or further exercise thereof or
of any other right, power or privilege.

 4
 

21.               This Guaranty shall constitute
the entire agreement between Guarantor and the Landlord with respect to the
subject matter hereof. No provision of this Guaranty or right of Landlord
hereunder may be waived nor may Guarantor be released from any obligation
hereunder except by a writing duly executed by an authorized officer, director
or trustee of Landlord.

22.               The liability of Guarantor and
all rights, powers and remedies of Landlord hereunder and under any other
agreement now or at any time hereafter in force between Landlord and Guarantor
relating to the Lease shall be cumulative and not alternative and such rights,
powers and remedies shall be in addition to all rights, powers and remedies
given to Landlord by law.

IN
WITNESS WHEREOF, Guarantor has executed this Guaranty as of the day and year
first above written

	
   

  	
  THE CHILDREN’S PLACE
  RETAIL STORES,

  INC., a Delaware corporation

  
	
   

  	
  By: 

  	
  

  	
   

  
	
   

  	
   

  	
  Its: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Its: 

  	
   

  	
   

  

 

 5

EXHIBIT F

443 SOUTH RAYMOND AVENUE

NET EQUIVALENT LEASE RATE

1.         METHODOLOGY
FOR COMPARING THE COMPARABLE TRANSACTIONS.

In
order to analyze the Comparable Transactions based on the factors to be
considered in calculating Fair Rental Value, and given that the Comparable
Transactions may vary in terms of length or term, rental rate, concessions,
etc., the following steps shall be taken into consideration to “normalize” the
objective data from each of the Comparable Transactions. By taking this
approach, a “Net Equivalent Lease Rate” for each of the Comparable Transactions
shall be determined using the following steps to normalize the Comparable
Transactions, which will allow for an “apples to apples” comparison of the
Comparable Transactions.

1.1
The contractual rent payments for each of the Comparable Transactions should be
arrayed annually over the lease term. From this figure, the initial lease year
operating expenses (from gross leases) should be deducted, leaving a net lease
rate over the lease term. This results in the net rent received by each
landlord under the Comparable Transactions.

1.2
Any free rent or similar inducements received over time should be deducted in
the time period in which they occur, resulting in the net cash flow arrayed
over the lease term.

1.3
The resultant net cash flow from the lease should be then discounted (using an
6.0% discount rate) to the lease commencement date, resulting in a net present
value estimate.

1.4
From the net present value, up-front inducements (tenant improvement allowances
and other concessions) should be deducted. These items should be deducted
directly, on a “dollar for dollar” basis, without discounting, since they are
typically incurred at lease commencement, while rent (which is discounted) is a
future receipt.

1.5
The net present value should then amortized back over the lease term at the
same discount rate of 6.0% used in the present value analysis. This calculation
will result in a hypothetical level or even payment, termed the “Net Equivalent
Lease Rate” (or constant equivalent in general financial terms).

2.                          USE
OF NET EQUIVALENT LEASE RATES FOR COMPARABLE TRANSACTIONS UNDER SECTION 2.2.2
OF THIS LEASE.

The Net Equivalent Lease Rates for the
Comparable Transactions under Section 2.2.2 of this Lease shall then be
used to arrive at the determination of the Fair Rental Value which shall be
stated as a Net Equivalent Lease Rate applicable to the Second Option Term.

 1

EXHIBIT G

FORM
OF LETTER OF CREDIT

(Letterhead of a money center
bank 

acceptable to the Landlord)

January
      , 2005

443
South Raymond Owner, LLC 

c/o Lexington Commercial Holdings 

9350 Wilshire Boulevard, Suite 400 

Beverly Hills, California 90212 

Attn: Ms. Alisa Freundlich

Gentlemen:

We hereby establish our Irrevocable Letter of Credit
and authorize you to draw on us at sight for the account of The Children’s
Place Services Company, LLC, a Delaware limited liability company, the
aggregate amount of Four Million and No/100 Dollars ($4,000,000.00).

Funds under this Letter of Credit are available to
the beneficiary hereof as follows:

Any or all of the sums hereunder may be drawn down
at any time and from time to time from and after the date hereof by 443 South
Raymond Owner, LLC (“Beneficiary”) when accompanied by this Letter of Credit
and a written statement signed by a representative of Beneficiary, certifying
either that: (i) such moneys are due and owing to Beneficiary under that
certain Office Lease, dated January       , 2005,
between Beneficiary, as landlord, and The Children’s Place Services Company,
LLC, as tenant (“Tenant”); (ii) Tenant has filed a voluntary petition for
relief under any chapter of the United States Bankruptcy Code; (iii) an involuntary
petition for relief has been filed against Tenant under any chapter of the
United States Bankruptcy Code; (iv) Tenant has executed a general assignment
for the benefit of creditors, (v) tenant has been placed in receivership in
either state or federal court; or (vi) Tenant commenced a liquidation
proceeding under applicable state law.

This Letter of Credit is transferable in its
entirety. Should a transfer be desired, such transfer will be subject to the
return to us of this advice, together with written instructions.

The amount of each draft must be endorsed on the
reverse hereof by the negotiating bank.

We hereby agree with you that if drafts are
presented to the [bank name] under this Letter of Credit at or prior to 11:00
a.m.            time, on
a business day, and provided that such drafts presented conform to the terms
and conditions of this Letter of Credit, payment shall be initiated by us in
immediately available funds by our close of business on the succeeding business
day. If drafts are presented to [bank name] under this Letter of Credit after
11:00 a.m.
              time,
on a business day, and provided that such drafts conform with the terms and
conditions of this Letter of Credit, payment shall be initiated by us in
immediately available funds by our close of business on the second succeeding
business day. As used in this Letter of Credit, “business day” shall mean any
day other than a Saturday, Sunday or a day on which banking institutions in the
state of California are authorized or required by law to close. If the
expiration date for this Letter of Credit shall ever fall on a day which is not
a business day then such expiration date shall automatically be extended to the
date which is the next business day.

We hereby engage with you that drafts drawn under
and in compliance with the terms and conditions of this Letter of Credit will
be duly honored by us if presented at our offices located at
             attention:            (or
at such other office of the bank as to which you have received written notice
from us by registered mail, courier service or hand delivery, as being the
applicable such address) on or before the then current expiration date. We
agree to notify you in writing by registered mail, courier service or hand
delivery, of any change in such address.

Presentation
of a drawing under this Letter of Credit may be made on or prior to the then
current expiration date hereof by hand delivery, courier service, overnight
mail, or facsimile.

 1
 

Presentation by facsimile
transmission shall be by transmission of the above required sight draft drawn
on us together with this Letter of Credit to our facsimile number, (      )
                 
attention: the manager, standby letter of credit department, with telephonic
confirmation of our receipt of such facsimile transmission at our telephone
number (      )               or
to such other facsimile or telephone numbers, as to which you have received
written notice from us as being the applicable such number). We agree to notify
you in writing, by registered mail, courier service or hand delivery, of any
change in such direction. Any facsimile presentation pursuant to this paragraph
shall also state thereon that the original of such sight draft and Letter of
Credit are being remitted, for delivery on the next business day, to [bank
name] at the applicable address for presentment pursuant to the paragraph
preceding this one.

This Letter of Credit shall expire on
                      .

Notwithstanding the above expiration date of this
Letter of Credit, the term of this Letter of Credit shall be automatically
renewed for successive, additional one (1) year periods unless, at least sixty
(60) days prior to any such date of expiration, the undersigned shall give
written notice to Beneficiary, by certified mail, return receipt requested and
at the address set forth above or at such other address as may be given to the
undersigned by Beneficiary, that this Letter of Credit will not be renewed. (FINAL EXPIRATION DATE NOT LESS THAN 120 DAYS
FOLLOWING LEASE EXPIRATION DATE)

This
Letter of Credit is governed by the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication 500.

	
  

  	
   

  	
  Very truly yours, 

  
	
   

  	
   

  	
  (Name of Issuing Bank)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  

 

 

 2Exhibit 10.18

FIRST AMENDMENT TO OFFICE LEASE

This First Amendment to Office Lease (this “First Amendment”) is made and entered into
as of January 31, 2005, by and between 443 SOUTH RAYMOND TENANT, LLC, a
California limited liability company (“Landlord”),  and THE CHILDREN’S PLACE SERVICES COMPANY,
LLC, a Delaware limited liability company (“Tenant”).

R  E  C
I  T  A  L  S:

A. 443 South Raymond Owner, LLC, a California
limited liability company (“443 Owner”)
and Tenant executed that certain Office Lease (the “Lease”), dated January 21, 2005, pursuant
to which Tenant leased certain space in the project located at 443 South
Raymond Avenue, Pasadena, California.

B. The “Landlord” entity was incorrectly stated
throughout the Lease and the Guaranty relating thereto, and Landlord and Tenant
desire to amend the Lease to reflect the correct Landlord entity and to
otherwise agree upon the terms and conditions set forth in this First
Amendment.

D. All undefined terms when used herein shall have
the same respective meanings as are given such terms in the Lease, unless
expressly provided otherwise in this First Amendment.

A  G  R
E  E  M  E  N  T:

NOW, THEREFORE, in consideration of the foregoing
recitals and the mutual covenants contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows.

1. Landlord
Entity. Landlord and Tenant hereby acknowledge and agree that
the Lease erroneously referred to “Landlord” as 443 Owner. Based upon the
foregoing, Landlord and Tenant further acknowledge and agree that, retroactive
to the date of the full execution and delivery of the Lease, (i) all references
in the Lease to 443 Owner shall be deemed deleted and replaced with Landlord,
as set forth in this First Amendment, (ii) the landlord under the Lease shall
be deemed the Landlord set forth in this First Amendment (and not 443 Owner) as
if the Landlord set forth in this First Amendment originally executed the
Lease, and (iii) the Lease, as amended hereby, is and shall be in full force or
effect between Landlord, as landlord, and Tenant, as tenant.

2. Amendment to
Letter of Credit. Concurrently herewith, Tenant shall provide
Landlord with an amendment to the L-C, reasonably acceptable to Landlord,
providing that all references in the L-C to the 443 Owner are deleted and are
replaced with the Landlord entity set forth in this First Amendment.

3. No Further
Modification. Except as specifically set forth in this First
Amendment, all of the terms and provisions of the Lease shall remain unmodified
and in full force and effect. In the event of any conflict between the terms
and conditions of the Lease and the terms and conditions of this First
Amendment, the terms and conditions of this First Amendment shall prevail.

IN
WITNESS WHEREOF, this First Amendment has been executed as of the day and year
first above written.

	
  “LANDLORD”

  	
   

  	
  “TENANT”

  
	
   

  	
   

  	
   

  
	
  443 SOUTH
  RAYMOND TENANT, LLC, 

  a California limited liability company

  	
   

  	
  THE CHILDREN’S PLACE SERVICES 

  COMPANY, LLC, a Delaware limited 

  liability company

  
	
   

  	
   

  	
   

  	
   

  
	
   By:

  	
  SALL Lexington,
  LLC 

  	
   

  	
   

  
	
   

  	
  a California
  limited liability company, 

  	
   

  	
  By: 

  	
   

  	
  /s/ Neal Goldberg

  
	
   

  	
  its Managing
  Member

  	
   

  	
   

  	
  Its:

  	
  NEAL GOLDBERG - PRESIDENT

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  SALL, LLC 

  	
   

  	
   

  
	
   

  	
   

  	
  a California
  limited liability 

  	
   

  	
  By: 

  	
   

  	
  /s/ Steven
  Balasiano

  
	
   

  	
   

  	
  company, its
  Managing Member

  	
   

  	
   

  	
  Its: 

  	
  STEVEN
  BALASIANO

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  SR.
  VICE PRESIDENT & GENERAL
  COUNSEL

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael
  Adler

  	
   

  	
   

  
	
   

  	
   

  	
  Michael Adler,
  its member

  	
   

  	
   

  
									

 

GUARANTY AMENDMENT/GUARANTOR ACKNOWLEDGEMENT

By
its execution of this First Amendment to Lease, the undersigned, Guarantor of
the above-modified Lease, hereby acknowledges and agrees that (i) the Guaranty
and Lease erroneously referred to “Landlord” as 443 Owner, and (ii) retroactive
to the date of the execution of the Guaranty (a) all references in the Guaranty
to 443 Owner shall be deemed deleted and replaced with Landlord, as set forth
in this First Amendment, (b) the landlord under the Lease and under the
Guaranty shall be deemed the Landlord set forth in this First Amendment (and
not 443 Owner) as if the Landlord set forth in this First Amendment was
originally set forth in such documents, and (c) the Guaranty, as amended
hereby, is and shall be in full force and effect in favor of Landlord, as set
forth in this First Amendment. Guarantor furthermore consents to the
modifications of the Lease set forth in this First Amendment to Lease, and
hereby reaffirms its obligations pursuant to the Guaranty, as amended hereby,
with respect to the Lease, as amended by this First Amendment.

	
  THE CHILDREN’S PLACE RETAIL
  STORES, INC., 

  	
   

  
	
  a Delaware
  corporation

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Neal Goldberg

  	
   

  
	
   

  	
  Its: 

  	
  NEAL GOLDBERG - PRESIDENT

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/ Steven Balasiano

  	
   

  
	
   

  	
  Its:

  	
  STEVEN BALASIANO 

  	
   

  
	
   

  	
   

  	
  SR. VICE PRESIDENT & GENERAL COUNSEL

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