Document:

Exhibit
10.5

AMENDED
AND RESTATED LEASE AGREEMENT

BY AND BETWEEN

TMCT, LLC

AS
LANDLORD

AND

TRIBUNE COMPANY

AS TENANT

 

TABLE OF CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page

  
	
  1.

  	
   

  	
  Lease

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Use

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Term

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Rent

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Maintenance and Repair

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Alterations and Additions

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Liens

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Assignment and Subletting

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  Exemption of Landlord from Liability

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10

  	
   

  	
  Triple Net Lease

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11

  	
   

  	
  Tenant’s Environmental Representations and
  Indemnification of Landlord

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
   

  	
  Indemnification of Landlord

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
   

  	
  Insurance

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
   

  	
  Waiver of Subrogation

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
   

  	
  Utilities and Services

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
   

  	
  Real Property Taxes

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
   

  	
  Damage or Destruction

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18.

  	
   

  	
  Condemnation

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
   

  	
  Default

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
   

  	
  Remedies

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
   

  	
  Interest on Past-Due Obligations; Late Charge

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
   

  	
  Holding Over

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  23.

  	
   

  	
  Quiet Enjoyment

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  24.

  	
   

  	
  Estoppel Certificate

  	
   

  	
  17

  

 

 i
 

 

 

	
  25.

  	
   

  	
  Surrender of Premises

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  26.

  	
   

  	
  Notices

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  27

  	
   

  	
  Option to Purchase

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  28.

  	
   

  	
  Defined Terms and Headings

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  29.

  	
   

  	
  Enforceability

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  30.

  	
   

  	
  Commissions

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  31.

  	
   

  	
  Attorneys’ Fees

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  32.

  	
   

  	
  Time and Applicable Law

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  33.

  	
   

  	
  Successors and Assigns

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  34.

  	
   

  	
  Entire Agreement

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  35.

  	
   

  	
  Recordation

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  36.

  	
   

  	
  Exhibits

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  37.

  	
   

  	
  Covenants and Conditions

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  38.

  	
   

  	
  Survival

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  39.

  	
   

  	
  No Joint Venture

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  40.

  	
   

  	
  Calendar Days and Business Days

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  41.

  	
   

  	
  Subordination, Nondisturbance and Attornment

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  42.

  	
   

  	
  Counterparts

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  43.

  	
   

  	
  Waiver

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  44.

  	
   

  	
  Landlord’s Access

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  45.

  	
   

  	
  Business Improvement Districts

  	
   

  	
  23

  

 

Exhibits

Exhibit A – Parcels and
Legal Description

Exhibit B – Form of
Agreement of Purchase and Sale

 ii

AMENDED AND RESTATED LEASE AGREEMENT

THIS AMENDED AND RESTATED LEASE AGREEMENT (“Lease”) is made and
entered into as of September 22, 2006, by and between TRIBUNE COMPANY, a
Delaware corporation (“Tenant”), and TMCT, LLC, a Delaware limited
liability company (“Landlord”).

R E  C
I  T  A  L  S

WHEREAS,

A.            On
August 8, 1997 Landlord and The Times Mirror Company, a Delaware corporation (“Original
Tenant”) entered into a certain Lease Agreement (the “Original Lease”),
which Original Lease was assigned to, and assumed by operation of law by
Tenant, as successor to Original Tenant in the merger of Original Tenant and
Tenant;

B.            Landlord
and Tenant desire to amend the Original Lease in order to reflect certain
changes to the terms and provisions set forth in this Amendment; and

C.            This
Lease hereby amends and restates, in its entirety, the Original Lease, which is
hereby superseded and replaced with the terms and provisions set forth herein.

NOW, THEREFORE, in consideration of the mutual
covenants, agreements and promises contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Landlord and Tenant hereby agree as follows:

AGREEMENT

1.             Lease.  By the Original Lease and hereby, Landlord
leases to Tenant and Tenant leases from Landlord certain real estate owned by
Landlord and located in the states of California, Connecticut, Maryland,
Missouri and New York (each parcel of real property a “Parcel”,
collectively “Parcels”), together with all buildings, improvements,
equipment and fixtures located on or attached to said real estate now or during
the Term of this Lease (each  Parcel,
together with the improvements, equipment and fixtures located on or attached
to said parcel, a “Property” and collectively the “Premises”),
which Properties are listed in Exhibit A and which Parcels are more
particularly described in Exhibits A-1 through Exhibits A-8
attached hereto and incorporated herein by this reference.  Tenant acknowledges that its
subsidiaries have occupied the Premises for an extended period of time prior to
the Commencement Date and Tenant agrees to lease the Premises on an “as-is” and
“with all faults” basis.

2.             Use.  The Premises may be used by Tenant in
the manner used by Tenant’s subsidiaries prior to the Commencement Date.  The Premises may also be used by Tenant for
any use permitted by applicable zoning and other applicable law, so long as any
such new use does not reduce the fair market value of the Premises.  Tenant
shall not allow the Premises to be used for any unlawful purpose, nor shall
Tenant cause or maintain or permit any nuisance in, on, or about the
Premises.  Tenant shall not commit or
suffer the commission of any waste in, on, or about the Premises.  Tenant shall comply with all governmental laws,
ordinances, regulations, directives, covenants and restrictions of record (“Regulations”)
applicable to the use and its occupancy of the Premises, and shall promptly

 

comply with the Regulations for the prevention and abatement of any
violations or nuisances in or upon, or connected with, the Premises, all at
Tenant’s sole expense.  If, as a result
of any change in the Regulations, the Premises must be altered to lawfully
accommodate Tenant’s use and occupancy, such alterations shall be made solely
at Tenant’s expense.  Tenant shall not do
or permit anything to be done on or about the Premises or bring or keep
anything therein which will in any way jeopardize the coverage of insurance
thereon.

3.             Term.  The term (the “Term”) of this Lease
commenced on August 8, 1997, the date defined as the “Commencement Date” in the
Original Lease (which shall be referred to herein as the “Commencement Date”),
and shall end at midnight on August 7, 2009 (the “Initial Term”)
or the last day of any Additional Term (the “Termination Date”), unless
sooner terminated as herein provided. 
Tenant shall be entitled to extend the Term for up to two (2) additional
terms (each an “Additional Term”, and, collectively, the “Additional
Terms”) if but only if (i) this Lease shall not have been terminated
pursuant to any of the provisions hereof, and (ii) Tenant is not in default
hereunder unless such default is commercially impractical to cure.  Each such Additional Term shall be for
twelve (12) years and commence (i) on the expiration of the Initial
Term, with respect to the first Additional Term, and (ii) on the
expiration of the first Additional Term with respect to the second Additional
Term.

3.1           If Tenant shall fail or neglect to
exercise the Option to purchase the Premises in accordance with Section 27
hereof during the Early Exercise Period or the Original Exercise Period, or if
such exercise shall been made, but the contemplated purchase and sale shall not
have occurred for any reason whatsoever, Tenant shall be automatically deemed,
without any further notice or action whatsoever, to have made an irrevocable
election to extend the Term for the first Additional Term.  In such event, the Initial Term shall be
deemed to be automatically extended through August 7, 2021 upon all the covenants,
agreements, terms, provisions and conditions set forth in this Lease.

3.2           Tenant may extend the Term for the
second Additional Term by giving Landlord written notice (the “Extension
Notice”) at least one (1) year prior to the expiration of the first
Additional Term.  Upon the giving by
Tenant to Landlord of the Extension Notice, the current Term shall be deemed to
be automatically extended through August 7, 2033 upon all the covenants,
agreements, terms, provisions and conditions set forth in this Lease (excluding
any previously exercised or extinguished option to extend) except that Rent
during such extension shall be determined as provided in Section 4.4
below.

3.2           If Tenant fails or omits to give
Landlord the Extension Notice, it shall be deemed, without further notice and
without further agreement between the parties hereto, that Tenant elected not
to exercise the option granted Tenant pursuant to this Section 3 to
extend the Term for the Second Additional Term.

4.             Rent.

4.1           For the period beginning on the
Commencement Date through and including the Termination Date, Tenant shall pay
as rent (the “Rent”) for the Premises: (i) the amount (the “Base
Rent”) each calendar month as provided in this Section 4,
(ii) the cost of all utilities and services as set forth herein,
(iii) the cost of insurance as set forth herein and (iv) the cost of
the Real Property Tax as set forth in

 2
 

 

Section 16.  Each
payment of Base Rent made pursuant to this Section 4 shall be made
in advance on the first day of each calendar month.  If the Term commences or ends on a date other
than the first day of the month, the installment for any partial month shall be
prorated on the basis of thirty (30) calendar days per month.

4.2.          The Base Rent shall be paid in monthly
installments as set forth herein, without deduction or offset, in such currency
of the United States as at the time shall be legal tender for the payment of
public and private debts, at such place as Landlord may designate from time to
time.

4.3           The Base Rent payable by Tenant
during (i) the Initial Term, and (ii) the first Additional Term, shall be
Two Million Thirteen Thousand Eight Hundred Twenty-Nine Dollars and Seventeen
Cents ($2,013,829.17) per month ($24,165,950 per year).

4.4           The Base Rent payable during the second
Additional Term shall be at Fair Market Rental Value, which shall be determined
as follows:

4.4.1        Within thirty (30) days after Landlord
receives Tenant’s Extension Notice, Landlord and Tenant shall mutually agree
upon and appoint one appraiser to determine the fair market rental value of the
Premises.  If Landlord and Tenant are
unable to agree upon a single appraiser to appraise the fair market rental
value of the Premises within such thirty day period, then Landlord and Tenant
shall each appoint an appraiser within sixty (60) days after Landlord receives
Tenant’s Extension Notice to determine the fair market rental value of each
Property (a single appraiser may appraise more than one Property and Landlord
and Tenant shall each use best efforts to minimize the total number of
appraisers appointed), and notice of each such appointment shall be given to
the other party.  For each Property, the
appraisers thus appointed shall proceed to determine such fair market rental
value for such Property within thirty (30) days after notice of their
appointment.

4.4.2        If the parties were unable to agree on a
single appraiser to appraise the fair market rental value of the Premises, then
within fifteen (15) days after the parties have each appointed appraisers
pursuant to Subsection 4.4.1, the appraisers appointed for each Property shall
join to appoint a third appraiser to appraise such Property and if they fail so
to appoint such third appraiser within such period, the third appraiser shall
be appointed by the court exercising such functions in the jurisdiction in
which the Property is located except that if the court will not do so the third
appraiser shall be appointed by the American Arbitration Association or similar
organization performing such functions, and such third appraiser shall then
individually determine the fair market rental value for such Property within
thirty (30) days of notice of appointment.

4.4.3        If Landlord and Tenant fail to appoint a
single appraiser to appraise the fair market rental value of the Premises, then
the average of the fair market rental values contained in the two closest
appraisals shall constitute the fair market rental value of such Property, and
such

 3
 

 

determination shall be
binding upon each of the parties.  In the
event that there are not two closest appraisals (e.g., if the middle appraisal
is exactly halfway between the highest and lowest appraisals), then the middle
appraisal shall be binding upon each of the parties.  The fair market rental value of the Premises
shall be equal to the sum of the fair market rental values of each Property.

4.4.4        All appraisers appointed hereunder shall
be competent, qualified by training and experience in the County in which the
Property(ies) they are appraising is located, disinterested and independent and
shall be members in good standing of the American Institute of Real Estate
Appraisers or its successor and all appraisal reports shall be rendered in
writing and signed by the appraiser or appraisers making the report.

4.4.5        For purposes of this Section 4,
the term “fair market rental value” means the rental rate, including all
escalations, at which tenants lease comparable space as of the commencement of
the Option Term.  In determining the fair
market rental value, an appraiser shall take into account the terms of this
Lease, including but not limited to such terms as the option to purchase and
the triple net lease provisions.  For
this purpose, “comparable space” shall be space that is:

(a)                                  Not subject to another tenant’s expansion
rights;

(b)                                 Not leased to a tenant that holds an
ownership interest in the landlord;

(c)                                  Not leased to a tenant under a renewal or an
extension of a lease;

(d)                                 Comparable in size, location, and quality to
the Property; provided, however, that the size and quality of the Property
shall be determined as if any capital improvements (as that term is defined in Subsection
27.3.3) made by Tenant or a subtenant had not been made and, instead, any
improvements replaced by a capital improvement had remained and had been maintained,
repaired and/or replaced as required under this Lease;

(e)                                  Leased for a term comparable to the second
Additional Term; and

(f)                                    Suitable
for the tenant’s use in an “as-is” condition without the need for any tenant
improvement allowance.

4.4.6        Landlord and Tenant shall each be solely
responsible for the costs, fees and expenses of the appraisers that they
appoint pursuant to Subsection 4.4.1. 
All costs, fees and expenses of the appraisers appointed pursuant to Paragraph
4.4.2 shall be divided equally between Landlord and Tenant.

 4
 

 

5.             Maintenance
and Repair.  Tenant shall at all
times keep in good condition and repair the Premises and every part thereof,
structural and non-structural, including, without limiting the generality of
the foregoing, all plumbing, heating, air conditioning, ventilating,
electrical, lighting facilities and equipment within the Premises, fixtures,
walls (interior and exterior), foundations, ceilings, roofs (interior and
exterior), floors, windows, doors, plate glass and skylights located within the
Premises, and all gardening, landscaping, driveways, parking lots, fences and
signs located on the Premises and sidewalks and parkways adjacent to the
Premises.  Notwithstanding the foregoing,
Tenant shall have the rights specified in Sections 6 and 17
below.  It is hereby understood and
agreed that other than its obligations under Section 17 below,
Landlord has no other obligation to repair and maintain the Premises or any
part thereof, all of which obligations are intended to be that of Tenant.  Tenant expressly waives to the extent
permitted by law the benefit of any statute or other law or regulation now or
hereafter in effect which would otherwise afford Tenant the right to make
repairs at Landlord’s expense or to terminate this Lease because of Landlord’s
failure to keep the Premises in good order, condition and repair.

6.             Alterations
and Additions.  Tenant shall be
permitted to make any alterations, improvements, additions, or installations (“Improvements”)
in, on or about the Premises; provided,
however, that Tenant shall not make any of the following
Improvements without the consent of Landlord, which consent shall not be
unreasonably withheld, conditioned or delayed: 
(i) any Improvement which will result in a modification to the footprint
of any load bearing exterior wall of any building or any material portion
thereof located on any Parcel; (ii) any single project of which one or more
Improvements is a part costing (including all costs that are capitalized
according to GAAP standards) in excess of Fifteen Million Dollars
($15,000,000); (iii) any Improvement which will render any building on any
Parcel unusable for the general purpose for which such building was used prior
to the construction of such Improvement. 
Tenant shall be responsible for payment of all governmental fees and
costs imposed in connection with the Improvements and/or the use of the
Premises by Tenant, and Landlord shall not have any obligation in that
regard.  Tenant shall properly construct
any and all Improvements in compliance with all applicable laws and shall not
make Improvements which reduce the fair market value of the Premises.  Promptly after the completion of any
Improvements, Tenant shall provide Landlord with as-built plans and
specifications for such Improvements. 
All Improvements which may be made on the Premises by Tenant or any
subtenant shall be made in compliance with all applicable Regulations, and any
such Improvements shall be the sole and exclusive property of Tenant during the
Term of this Lease; provided that any such Improvements (other than Tenant’s
trade fixtures and personal property, which Tenant may elect to remove at the
expiration or earlier termination of this Lease pursuant to Section 25)
shall become the property of Landlord and remain upon and be surrendered with
the Premises at the expiration or prior termination of the Lease.

7.             Liens.  Tenant shall keep the Premises and Tenant’s
interest in the Premises free from any liens arising out of any work performed,
materials furnished, or obligations incurred by Tenant.  In the event that Tenant shall not, within
thirty (30) days following the imposition of any such lien, cause the same to
be released of record by payment or posting of a proper bond, Landlord shall
have, in addition to all other remedies provided herein and by law, the right,
but not the obligation, to cause the same to be released by such means as it
shall deem proper, including payment of the claim giving rise to such
lien.  All such sums paid by Landlord and
all expenses, including attorneys’ fees, incurred by it in connection therewith
shall be payable to Landlord by Tenant on demand.  If Tenant shall, in good faith,

 5
 

 

contest the validity of any such lien, then Tenant shall, after prior
written notice to Landlord, at its sole cost and expense, defend itself and
Landlord against the same and shall pay and satisfy any such adverse judgment
that may be rendered thereon before the enforcement thereof against Landlord or
the Premises, provided that (i) neither the Premises nor any part thereof
would be in any danger of being sold, forfeited, lost or interfered with, and
(ii) Tenant shall furnish to Landlord a surety bond in form and from a
surety reasonably satisfactory to Landlord in an amount equal to one hundred
fifty percent (150%) of such contested lien indemnifying Landlord against
liability for the same and holding the Premises free from the effect of such
lien.

8.             Assignment
and Subletting.

8.1           Tenant
may not assign the Lease without the prior written consent of Landlord, which
consent may be withheld in Lessor’s sole discretion.  Notwithstanding this limitation, Tenant may
assign the Lease without the consent of Lessor to an affiliate of Tenant
(provided, however, that any event or combination of events which results in
such entity ceasing to be an affiliate of Tenant shall be considered to be an
assignment, requiring the consent of Landlord hereunder) or to an entity
acquiring the entire business of Tenant (and its affiliates) as carried out in
the Premises.  Any assignee of Tenant
must assume Tenant’s obligations under the Lease in a form acceptable to
Landlord and Tenant shall not be relieved from its liability under the Lease by
reason of any assignment.  Tenant shall
provide Lessor with a copy of any assignment of the Lease.

8.2           Tenant
shall have the right to sublease any portion of the Premises with the consent
of Lessor, which consent shall not be unreasonably withheld, conditioned or
delayed.  Lessor’s consent to sublease a
portion of the Premises shall not be required (i) if the sublease is to an
affiliate of Tenant (provided, however, that any event or combination of events
which results in such entity ceasing to be an affiliate of Tenant shall be
considered to be a sublease to a non-affiliate of Tenant, requiring the consent
of Landlord hereunder) or an entity acquiring the entire business of Tenant or
Tenant’s affiliate being conducted at the portion of the Premises so sublet, or
(ii) if the space to be sublet, plus any other space previously sublet to non-affiliates
without Landlord’s consent, together total not more than ten percent (10%) of
the square footage of the structures located on the Parcels.

9.             Exemption
of Landlord from Liability.  Except
with respect to its obligations under Section 17 below with respect
to casualties, Landlord shall not be liable to Tenant and Tenant hereby assumes
all risks and waives all claims against Landlord for any damage to any property
or any injury to or death of any person in or about the Premises by or from any
cause whatsoever arising at any time, and without limiting the generality of
the foregoing, whether caused by fire, steam, electricity, gas, water, or rain,
or from the breakage, leakage, obstruction or other defects of pipes,
sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures,
or from any other cause regardless of whether the cause of such damage or
injury or the means of repairing the same is inaccessible to Tenant.  Landlord shall not be liable or responsible
for any loss or damage to any property or person occasioned by theft, fire, act
of God, acts of third parties, public enemy, injunction, riot, strike,
insurrection, war, court order, requisition or order of governmental body or
authority, or other matter beyond the control of Landlord.  In further explanation of and not in
limitation of the foregoing provisions of this Section 9, Landlord
shall only remain liable for any damage to any property or any injury to or
death of any person in or about the

 6
 

 

Premises which may result from the active negligence or willful acts or
omissions of Landlord, or its agents, or employees or contractors.

10.           Triple
Net Lease.  This Lease is intended to
be a “triple net” lease and it should be interpreted accordingly.

11.           Tenant’s
Environmental Representations and Indemnification of Landlord.  Tenant hereby agrees that:

11.1         Tenant acknowledges that its
subsidiaries have owned the Premises for an extended period of time prior to
the Commencement Date.  Accordingly, it
is Tenant’s obligation at its sole cost and expense to comply with any and all Environmental Laws with respect
to Hazardous Substances, including those existing on the Premises on or prior
to the Commencement Date and whether or not such is currently known.  Such obligation, and any liability that
Tenant may have for any breach thereof, shall survive the termination or
expiration of this Lease.

11.2         In the event Tenant discovers or
determines the existence on the Premises of any condition resulting from
Hazardous Substances that were disposed, discharged, leaked, handled or
otherwise present on the Premises, the presence of which may require
investigation, removal or remedial action pursuant to any law, Environmental
Law or may be the basis for the assertion of any third party claims, including
claims of governmental entities, Tenant shall promptly notify Landlord thereof
and Tenant shall, at its sole cost and expense, proceed with all due diligence
as may be required by applicable Environmental Laws with respect to Hazardous
Substances (including those existing prior to the Commencement Date).  In the event that Tenant fails to proceed
with due diligence, Landlord may, at its option, proceed to take the
appropriate action and shall be reimbursed by Tenant therefor.

11.3         Any Hazardous Substances used by Tenant
or its agents, employees, contractors, subtenants, assignees and invitees on,
in, or about the Premises will be contained, treated, stored, used and disposed
of in a safe manner and in accordance with all Environmental Laws.

11.4         Tenant will use, keep and maintain the
Premises in compliance with, and shall not cause or permit the Premises to be
in violation of, any Environmental Laws.

11.5         Neither Tenant nor its agents,
employees, contractors, subtenants, assignees and invitees will use the
Premises in a manner which causes any Hazardous Substance to be deposited, and
will not deposit any Hazardous Substance, except in compliance with
Environmental Laws, into the atmosphere, into the soil or into the ground water
of the Premises.  If Tenant or its
agents, employees, contractors, subtenants, assignees or invitees shall cause
or permit a “release,” as such term is defined in the Environmental Laws,
unless the release occurs after termination of the Lease, or from off-site,
Tenant, upon actual knowledge thereof, will promptly notify Landlord in writing
of such release and begin investigation and remediation of such release and
complete such remediation at Tenant’s own cost and expense as required by the
Environmental Laws.

 7
 

 

11.6         Tenant shall indemnify, defend and hold
harmless Landlord, its officers, directors, employees, shareholders,
affiliates, successors and assigns (the “Indemnitees”) against any and
all damages, claims (including without limitation, third party claims of
personal injury or real or personal property damages), costs, losses (including
losses of value and income), legal, accounting, actions, causes of action,
consulting, engineering, investigation, remediation and removal costs, and
other expenses whether at law, in equity, or administrative (including without
limitation attorneys’ fees and court costs) (hereinafter collectively referred
to as “Claims”), which may be imposed upon, incurred by or asserted
against any of the Indemnitees by any other party or parties, including without
limitation a governmental entity, arising out of or in connection with the
breach by Tenant of Tenant’s covenants in this Section 11.  This obligation by Tenant to indemnify,
defend, and hold harmless the Landlord includes, without limitation, costs
incurred by the Indemnitees for or in connection with any investigation of site
conditions or any cleanup, remedial, monitoring, restoration or closure work
required by any federal, state, or local governmental agency or political
subdivision, or any third party action, because of any Hazardous Substances
present in the soil, air, surface or ground water, on, under, or about the
Premises, including, without limitation, any sums paid in settlement of claims,
penalties, attorneys’ fees, court costs, consultant and laboratory fees, as a
result of Tenant’s and its agents’, employees’, contractors’, subtenants’,
assignees’ and invitees’ activities on or in connection with the Premises, but
excluding that portion of any damages to the extent caused by Indemnitees or
any of their respective agents.

11.7         Promptly upon becoming aware of any
matter described above to which the indemnity applies, Landlord shall provide
Tenant with notice of the same provided that any delay in providing such notice
shall not impair the indemnity hereunder unless the delay actually causes
prejudice to the Tenant, and the Indemnitees shall reasonably cooperate with
Tenant in the defense of the matter. 
Tenant’s obligations pursuant to the indemnity in Subsection 11.4
above shall survive the termination or expiration of this Lease.

11.8         As used herein, the term “Hazardous
Substances” shall mean all hazardous substances, hazardous wastes,
hazardous materials, toxic materials, or toxic substances and any other
substances, including asbestos, petroleum and its by-products, the remediation,
disposal, storage, production, or use of which is regulated by federal, state
or local laws, ordinances, regulations, permit conditions, administrative
orders and similar requirements pertaining to health, safety and the
environment, including, but not limited to, substances listed under the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
42 U.S.C. § 9601 et seq.; the
Hazardous Materials Transportation Act, 42 U.S.C. § 1801 et seq.; the Resource Conservation and
Recovery Act, 42 U.S.C. § 6901 et seq.;
the Toxic Substances Control Act, 15 U.S.C. § 2601 et seq.; the Clean Water Act, 33 U.S.C. § 1251 et seq.; the Safe Drinking Water Act, 42
U.S.C. § 300f et seq.; the Clean Air
Act, 42 U.S.C. § 7401 et seq.; the
California Hazardous Waste Control Law, Cal. Health and Safety Code
§ 25100 et seq.; and the
Porter-Cologne Water Quality Control Act, Cal. Water Code § 13000 et seq., as each may be amended from time to
time (herein referred to as “Environmental Laws”).

 8
 

 

12.           Indemnification
of Landlord.  Tenant shall defend,
indemnify and hold Landlord harmless from any and all claims, demands,
judgments, damages, liabilities, costs, expenses and losses, including
attorneys’ fees and court costs, arising from Tenant’s use of the Premises or
use of the Premises by any party holding under Tenant, or from the conduct of
Tenant’s business, or from the conduct of the business of any party holding
under Tenant, or from any activity, work or things done in or about the
Premises except to the extent caused by the active negligence or willful
misconduct of Landlord.  Tenant further
agrees to defend, indemnify and hold Landlord harmless from any and all claims,
demands, judgments, damages, liabilities, costs, expenses and losses arising
from any breach or default on the part of Tenant in the performance of any
covenant or agreement on the part of Tenant to be performed pursuant to the
terms of this Lease.  If any action or
proceeding is brought against Landlord by reason of any such matters, Tenant
agrees to defend such action or proceeding at Tenant’s sole expense by counsel
reasonably satisfactory to Landlord.  If
Landlord receives insurance proceeds with respect to any claim or loss for
which it is insured pursuant to the terms of this Lease, Tenant shall reduce
its payment to Landlord pursuant to this Section 12 to the extent of
such proceeds.  The provisions of this Section
12 shall survive the expiration or prior termination of this Lease with
respect to any claims or liability relating to matters occurring after the
Commencement Date and prior to such expiration or termination.

13.           Insurance.

13.1         Tenant shall, at Tenant’s expense,
obtain and keep in force during the entire term of this Lease a Comprehensive
General Liability policy (including Premises Liability and Contractual
Liability, Occurrence form) insuring Landlord and Tenant against covered
liability arising out of the Premises or its use, occupancy or maintenance,
including all areas appurtenant thereto. 
Such insurance shall name Landlord as an additional insured and shall
provide coverage in limits of at least $5,000,000 combined single limit for
bodily injury or death to any one person, $20,000,000 for bodily injury or
death to any number of persons in respect of any one accident or occurrence and
$1,000,000 for property damage in respect of one accident or occurrence.  Tenant may maintain up to a $2,000,000
deductible on the insurance required in this Subsection 13.1.  The insurance coverage limits required under
this Section 13.1 shall be increased every three years to reflect any
increases in the Consumer Price Index for All Urban Consumers U.S. City
Average, All Items (base years 1982-84 = 100), published by the United States
Department of Labor, Bureau of Labor Statistics.

13.2         Tenant shall, at Tenant’s expense,
obtain and keep in force during the entire term of this Lease a policy of
insurance covering loss or damage to all improvements, fixtures and equipment
located upon or affixed to the Parcels, including, without limitation, walls
(interior and exterior), foundations, ceilings, roofs (interior and exterior),
floors, windows, doors, plate glass and skylights located within the Premises,
all plumbing, electrical, elevator and lighting facilities and equipment in, on
or about the Parcels, all landscaping, driveways, parking lots, fences and
signs located on the Parcels and sidewalks and parkways adjacent to the
Parcels, and any personal property or fixtures of Tenant located on or affixed to
the Parcels, in the amount of the full replacement value thereof, as the same
may exist from time to time, against (i) all perils included within the
classification of fire, extended coverage, vandalism, malicious mischief, and
special extended perils (“all

 9
 

 

risk” as such term is used
in the insurance industry), and (ii) flooding. 
Said insurance shall name Landlord as loss payee and shall provide for
payment of loss thereunder to Landlord and Tenant as their interests may appear.  Tenant may maintain up to a $500,000
deductible on the insurance required in this Subsection 13.2.

13.3         Tenant shall, at Tenant’s expense,
obtain and keep in force during the entire term of the Lease a policy or
policies of boiler and machinery insurance, if applicable, in an amount not
less than one hundred percent (100%) of the actual replacement value thereof
(including the cost of debris removal but excluding foundations and excavations
and land).

13.4         Tenant may self-insure for the
insurance required in Subsections 13.1, 13.2 and 13.3 in
an aggregate amount not to exceed five percent (5%) of Tenant’s tangible net
worth (as determined by certified financial statements not more than twelve
(12) months old) upon providing notice to Landlord and Tenant shall, to the
extent self-insured, be responsible for all amounts which would have been
payable by an insurer if Tenant had not elected to self-insure.  All deductibles shall be considered
self-insurance and shall be subject to all provisions in this Lease governing
insurance coverage, including any provisions concerning a waiver of
subrogation.

13.5         Tenant shall, at Tenant’s expense,
obtain and keep in force during the entire term of the Lease a policy or
policies of Workers’ Compensation Insurance, including Employers’ Liability Insurance,
or qualified self-insurance, which is in full compliance with the applicable
Workers’ Compensation or similar laws.

13.6         Tenant shall deliver to Landlord
certificates evidencing the existence and amounts of such insurance, with loss
payable clauses as required by this Section 13.  No such policy shall be cancelable or subject
to reduction of coverage or other modification except after thirty (30) days’
prior written notice to Landlord.  Tenant
shall, at least thirty (30) days prior to the expiration of such policies,
furnish Landlord with renewals or “binders” thereof, or if Tenant fails to
furnish such renewals, then Landlord may, upon ten days written notice to
Tenant, order such insurance and charge the cost thereof to Tenant, which
amount shall be payable by Tenant upon demand.

13.7         Tenant shall not carry concurrent
insurance insuring against the risks against which insurance is required
hereunder unless such concurrent insurance satisfies all of the requirements
for Tenant’s insurance set forth in this Lease (including but not limited to
naming Landlord as an additional insured).

13.8         So long as there exists a sublessee of
any portion of the Premises which is required, by the terms of its sublease, to
carry insurance which is no less comprehensive than that described above, and
which names Landlord as an additional insured thereon or loss payee thereof, as
the case may be, then Tenant shall have no obligation during the term of such
sublease to carry the insurance required hereunder with respect to such portion
of the Premises as long as such sublessee actually maintains such required
insurance.

 10
 

 

14.           Waiver
of Subrogation.  Except as otherwise
provided in this Lease, to the extent they receive payment for any loss or
damage arising out of or incident to perils occurring in, on or about the
Premises, Tenant and Landlord each hereby release and relieve the other, and
waive their entire right of recovery against the other for such loss or damage,
whether due to the negligence of Landlord or Tenant or their agents, employees,
contractors and/or invitees, but only to the extent permitted by the parties’
insurance carriers.  Tenant and Landlord
shall use their best efforts to obtain waiver of subrogation endorsements from
such carrier or carriers.

15.           Utilities
and Services.  Tenant shall, during
the entire term of this Lease, procure and pay for all utilities and services
supplied to the Premises, including but not limited to water, gas, heat, light,
power, telephone, security, and janitorial services, together with any taxes
thereon.

16.           Real
Property Taxes.  Tenant shall
pay directly to each County Tax Collector, or other appropriate assessing
authority, as it becomes due and not less than ten (10) days before
delinquency, the amount of the Real Property Tax, as defined in Subsection 16.1,
applicable to the Premises during the term of this Lease.  Notwithstanding the foregoing, Tenant shall
have no obligation to pay for the Real Property Taxes due for the period prior
to the Commencement Date, even if those Real Property Taxes are not assessed
until after the Commencement Date. 
Further, Tenant shall have no obligation to pay any penalties or
interest assessed with respect to the Premises for a period prior to the Commencement
Date, even if such penalties or interest are not assessed until after the
Commencement Date.  If payments made by
Tenant are applied by the assessing authority to unpaid Real Property Taxes
(including without limitation, any interest or penalties thereon) respecting a
period prior to the Commencement Date, then Landlord shall be responsible for
the Real Property Taxes (and all resulting interest and penalties thereon)
which Tenant had attempted to pay, but which were diverted to pay earlier Real
Property Taxes (including without limitation, all interest and penalties
included therein).  If any Real Property
Taxes constituting assessments are, at the election of the taxpayer, payable in
installments, Landlord shall make an election to make such payments in
installments and Tenant shall be responsible for the payment of the
installments of such Real Property Taxes as shall be due and payable during the
term of this Lease.

16.1         As used herein, “Real Property Tax”
shall mean any form of real estate tax or assessment, general, special, ordinary
or extraordinary, and any license fee, commercial rental tax, improvement bond
or bonds, levy or tax (other than inheritance, personal income or estate taxes)
imposed on the Premises by any authority having the direct or indirect power to
tax, including any city, state or federal government or any school,
agricultural, sanitary, fire, street, drainage or other improvement district
thereof, as against any legal or equitable interest of Landlord in the Premises
or in the real property of which the Premises are a part, as against Landlord’s
right to rent or other income therefrom, and as against Landlord’s business of
leasing the Premises, including any tax, fee, levy, assessment or charge
(i) in substitution of, partially or totally, any tax, fee, levy, assessment
or charge hereinabove included, (ii) the nature of which was hereinbefore
included within this definition, or (iii) which is imposed by reason of
this lease transaction, any modifications or changes hereto, or any transfers
hereof.

 11
 

 

16.2         During the term of this Lease, Tenant
shall reimburse to Landlord, upon presentation of a written invoice therefor,
any and all taxes payable by Landlord (other than net income taxes) whether or
not now customary or within the contemplation of the parties hereto: (i) upon,
allocable to, or measured by or on the gross or net rent payable hereunder,
including without limitation any gross income tax or excise tax levied by any
State, any political subdivision thereof, or the Federal Government with
respect to the receipt of such rent; or (ii) upon or with respect to the
possession, leasing, operation, management, maintenance, alteration, repair,
use or occupancy by Tenant of the Premises or any portion thereof; or
(iii) upon or measured by the Tenant’s gross receipts or payroll or the
value of Tenant’s equipment, furniture, fixtures, and other personal property
of Tenant or leasehold improvements, alterations, additions, located in the
Premises.

16.3         Tenant shall pay prior to delinquency
all taxes assessed against and levied upon trade fixtures, furnishings,
equipment and all other personal property of Tenant contained in the Premises
or elsewhere.  Tenant shall cause such
trade fixtures, furnishings, equipment and all other personal property to be
assessed and billed separately from the real property of Landlord.  If any of Tenant’s said personal property
shall be assessed with Landlord’s real property, Tenant shall pay Landlord the
taxes attributable to Tenant within ten (10) days after receipt of a written
statement setting forth the taxes applicable to Tenant’s property.

16.4         Tenant may contest the imposition of
any taxes, including without limitation, the current assessment, and if
required by law, Landlord shall join in any such proceedings brought by
Tenant.  However, Tenant shall pay the
costs and fees of the proceedings.  Upon
the final determination of any proceeding or contest, Tenant shall pay the
taxes due, together with all costs, charges, interest and penalties incidental
to the proceedings if Tenant does not pay the taxes when due and contests such
taxes.  Tenant shall not be in default
under the Lease for nonpayment of such taxes so long as the taxes are paid
under protest if such payment under protest is necessary to prevent the
property from being sold under a “tax sale” or similar enforcement proceeding.

17.           Damage or Destruction.

17.1         In the event that any structure located
on the Parcels is damaged or destroyed, then Tenant shall repair or rebuild
such structure to substantially the condition in which it was immediately prior
to the casualty, but in no event shall Tenant be required to repair or rebuild
non-functional or decorative items (e.g., statues).

17.2         Tenant shall commence to rebuild or
repair the Premises promptly after such damage or destruction, provided that
all permits required for such work have been obtained at the time necessary
with the Tenant using reasonable diligence to obtain such permits, and shall
proceed with diligence to complete the restoration.  If Tenant is not able to obtain permits to
restore the Premises as required hereunder, then Tenant shall repair or rebuild
the Premises as required hereunder to the maximum extent to which it can obtain
permits to do so.  Tenant shall not have
the right to terminate this Lease as the result of any damage to or destruction
of the Premises, and Tenant hereby waives the right to do so under any
applicable statute,

 12
 

 

code, case law or other
legal doctrine.  This Lease shall remain
in full force and effect, and Tenant shall be entitled to an equitable
abatement of the Rent during the time and to the extent any portion of the
Premises is unfit for occupancy; provided, however, that the amount of such
abatement shall not exceed the amount of loss of rents or business interruption
insurance proceeds, if any, payable to Landlord by reason of such damage or
destruction.  In the event Tenant is
obligated to rebuild the Premises pursuant to this Section 17, then
all insurance proceeds arising out of insurance coverage procured by Landlord
(other than loss of rents insurance or business interruption insurance), if
any, shall be made available to Tenant to pay for the cost of such repair,
rebuilding or restoration.

18.           Condemnation.

18.1         In the event that all or any portion of
the Premises shall be lawfully condemned or taken in any manner for any public
or quasi-public use, or conveyed by Landlord in lieu thereof (a “Taking”),
Tenant may require that Landlord rebuild or repair the portion of the Premises
taken so that the same will be in substantially the same condition it was prior
to the Taking.  Notwithstanding the
foregoing, Landlord shall only be obligated to rebuild or restore the portion
of the Premises subject to the Taking to the extent of the award Landlord receives
for such Taking pursuant to Section 18.2.

18.2         Upon a permanent Taking, Landlord and
Tenant shall be entitled to the following portions of the award (less the costs
and fees incurred in the collection thereof) in no order of priority:

(a)           To Tenant, an amount equal to the
fair market value of its personal property and fixtures that it is entitled to
remove at the expiration or earlier termination of this Lease and that are
condemned as part of the Taking;

(b)           To Tenant, an amount equal to the
damages Tenant suffers as a result of the interruption of its business from the
Taking; and

(c)           To Landlord, the balance of the
award.

In no event shall Tenant be
entitled to any award for the value of its leasehold interest.  If Landlord and Tenant are not able to obtain
separate awards from the condemning authority for the above amounts, then such
amounts shall be determined by the mutual agreement of the parties, or if the
parties are unable to agree, then by binding arbitration in accordance with the
rules of the American Arbitration Association then in effect.

18.3         In the event of a permanent Taking, the
Rent shall be equitably abated in proportion to the Base Rent fairly allocable
to the part of the Premises so taken, and Landlord shall be obligated to
restore the Premises only to the extent of any severance damages received as
part of the condemnation award.  The
amount of the abatement shall be determined by the mutual agreement of the
parties, or if the parties are unable to agree, then by binding arbitration in
accordance with the rules of the American Arbitration Association then in
effect.

 13
 

 

18.4         No temporary Taking of the Premises
and/or of Tenant’s rights therein or under this Lease shall terminate this
Lease or give Tenant any right to abatement of Rent hereunder.  Any award made to Tenant by reason of any
such temporary Taking shall belong entirely to Tenant and Landlord shall not be
entitled to share therein.

19.           Default.

19.1         The following events shall be deemed to
be events of default by Tenant under this Lease:

(a)           Tenant shall fail to make any payment
of Rent or any other payment required to be made by Tenant hereunder, as and
when due, and such failure shall continue for a period of five (5) business
days after receiving written notice of said failure; or

(b)           Tenant shall fail to comply with any
term, provision or covenant of this Lease other than a default pursuant to
Subsection (a) of this Section, and shall not cure such failure within thirty
(30) days of receiving written notice of such failure provided, however, that
if the default cannot reasonably be cured within such 30-day period, including
by reason of having to regain possession of the Premises from a sublessee,
Tenant shall not be in default of this Lease if Tenant shall commence to cure
the default, including commencing an action to regain possession of the
Premises, within said 30-day period and diligently continues to prosecute the
cure; or

(c)           The leasehold interest of Tenant
shall be levied upon under execution or be attached by process of law or Tenant
shall fail to contest diligently the validity of any lien or claimed lien and
give sufficient security to Landlord to insure payment thereof or shall fail to
satisfy any judgment rendered thereon and have the same released, and such
default shall continue for thirty (30) days after written notice thereof to
Tenant; or

(d)           Tenant shall become insolvent, admit
in writing its inability to pay its debts generally as they become due, file a
petition in bankruptcy or a petition to take advantage of any insolvency
statute, make an assignment for the benefit of creditors, make a transfer in
fraud of creditors, apply for or consent to the appointment of a receiver of
itself or of the whole or any substantial part of its property, or file a
petition or answer seeking reorganization or arrangement under the federal or
any state bankruptcy laws, as now in effect or hereafter amended, or any other
applicable law or statute of the United States or any state thereof, or have
filed against it a case or proceeding under any such law or statute which is
consented to or acquiesced in by Tenant, results in the entry of an order for
relief, or remains undismissed for ninety (90) days; or

(e)           A court of competent jurisdiction
shall enter an order, judgment or decree adjudicating Tenant a bankrupt, or appointing
a receiver of Tenant, or of the whole or any substantial part of its property,
without the consent of Tenant, or approving a petition filed against Tenant
seeking reorganization or

 14
 

 

arrangement of Tenant under
the bankruptcy laws of the United States, or any state thereof, as now in
effect or hereafter amended, and such order, judgment or decree shall not be
vacated or set aside or stayed within ninety (90) days from the date of entry
thereof.

19.2         Landlord’s failure to perform any of
its obligations under this Lease shall constitute a default by Landlord under
the Lease if the failure shall continue for thirty (30) days after written
notice of the failure from Tenant to Landlord. 
If the required performance cannot be completed within thirty (30) days,
Landlord’s failure to perform shall constitute a default under the Lease unless
Landlord undertakes to cure the failure within thirty (30) days and diligently
prosecutes the cure to completion as soon as reasonably possible.

20.           Remedies.

20.1         In case of an event of default by
Tenant hereunder (as defined in Section 19), Landlord shall not
terminate this Lease unless such default is not cured as provided herein and is
a “material default.”  For purposes of
this Lease, a “material default” shall mean (i) a default described in Subsection
19.1(a), (ii) the failure to carry insurance required hereunder to be
carried by Tenant, (iii) the failure to repair or maintain the Premises as
required under the Lease, (iv) a default described in Subsection 19.1(b-e)
that is likely to result in a cost, loss of value or liability to Landlord of
five million dollars ($5,000,000) or more, or (v) a material incurable
default.  In circumstances where Landlord
has no right to terminate this Lease or where Landlord chooses not to terminate
this Lease, Landlord shall have all other remedies available at law or in
equity, including the right to sue for rent as it comes due and the right to
obtain damages from Tenant for breach of contract.

20.2         Upon the occurrence of any material
default (as defined in Subsection 20.1), Landlord shall have, in
addition to any other remedies available to Landlord at law or in equity, the
option to terminate this Lease by written notice thereof to Tenant, 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 occupying the Premises or any part thereof in accordance with applicable
state law, 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 (as used in
this subparagraph (a) and (b) of this Section 20, the “worth at the
time of award” shall be computed by allowing interest from the date the sums
became due at the lesser of (i) the 30-day LIBOR rate (as published in the Wall
Street Journal) plus 600 basis points (the “Default Interest Rate”), or
(ii) the maximum rate permitted by law); 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

 15
 

 

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 Term after the time of
award exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided (as used in this subparagraph (c), 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 1%); 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, attorneys’ fees and court costs, brokerage commissions and
advertising expenses incurred; 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.

20.3          In addition to the remedies provided
above, Landlord has 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 right to sublet
or assign, subject only to reasonable limitations).

20.4         Upon a default of Tenant hereunder,
Landlord, upon ten (10) days written notice, may cure such default of Tenant
and Tenant shall, immediately upon demand, reimburse Landlord for any and all
reasonable expenses incurred by Landlord to cure such default.

20.5         No act by Landlord shall terminate this
Lease other than the written notice specified above.  No waiver by Landlord of any violation or
breach of any of the terms, provisions and covenants herein contained shall be
deemed or construed to constitute a waiver of any other or later violation or
breach of the same or any other of the terms, provisions, and covenants herein
contained.  Delay by Landlord in
enforcement of one or more of the remedies herein provided upon an event of
default shall not be deemed or construed to constitute a waiver of such default.  The acceptance of any Rent hereunder by
Landlord following the occurrence of any default, whether or not known to
Landlord, shall not be deemed a waiver of any such default, except only a
default in the payment of the Rent so accepted.

20.6         Tenant waives any right to terminate
this Lease or to withhold Rent on Landlord’s default under this Lease.

21.           Interest
on Past-Due Obligations.  Except as
expressly provided herein, any amount due to Landlord which is not paid when
due shall bear interest at the Default Interest Rate (as defined in Section
20.2(a)), but in no event greater than the maximum amount permitted to be
contracted for under applicable law. 
Payment of such interest shall not excuse or cure any default by Tenant
under this Lease.

 16
 

 

22.           Holding
Over.  Tenant shall pay Landlord for each
day Tenant retains possession of the Premises or part thereof after termination
hereof by lapse of time or otherwise the Rent prorated on a daily basis and all
damages and expenses sustained by Landlord by reason of such retention as
provided in this Lease.  Tenant hereby
indemnifies and holds Landlord harmless from any loss or liability resulting
from such holding over and delay in surrender. 
If Landlord gives notice to Tenant of Landlord’s election thereof, such
holding over shall constitute renewal of this Lease for a period of time from
month-to-month at One Hundred Twenty Percent (120%) of the Base Rent, but if
the Landlord does not so elect, acceptance by Landlord of rent after such
termination shall not constitute a renewal. 
This provision shall not be deemed to waive Landlord’s right of reentry
or any other right hereunder or at law.

23.           Quiet
Enjoyment.  Landlord represents and
warrants that it has full right and authority to enter into this Lease and that
Tenant, while paying the rental and performing its other covenants and
agreements herein set forth, shall peaceably and quietly have, hold and enjoy
the Premises for the Term without interference from Landlord subject to the
terms and provisions of this Lease. 
Landlord shall not be liable for any interference or disturbance by
third persons, nor shall Tenant be released from any of the obligations of this
Lease because of such interference or disturbance.

24.           Estoppel
Certificate.  Within fifteen (15)
days following any written request which Landlord may make from time to time,
Tenant shall execute and deliver to Landlord or Landlord’s mortgagee or
prospective mortgagee, a sworn statement certifying: (a) the Commencement
Date, (b) the fact that this Lease is unmodified and in full force and effect
(or, if there have been modifications hereto, that this Lease is in full force
and effect, as modified, and stating the date and nature of such
modifications), (c) the date to which the Rent and other sums payable
under this Lease have been paid, (d) the fact that, to Tenant’s actual
knowledge, there are no current defaults under this Lease by either Landlord or
Tenant except as specified in Tenant’s statement, and (e) such other
matters reasonably requested by Landlord. 
Landlord and Tenant intend that any statement delivered pursuant to this
Section 24 may be relied upon by any mortgagee, beneficiary, or
purchaser of the Premises or any interest therein.  Within fifteen (15) days following any
written request which any mortgagee or prospective mortgagee may make from time
to time (but not more often than twice in any twelve (12) month period),
Landlord shall execute and deliver to such mortgagee or prospective mortgagee,
a sworn statement certifying as to the same matters described above, except
that clause (e) shall refer to matters requested by the mortgagee or
prospective mortgagee.  Failure to comply
with the provisions of this Section 24 shall constitute an event of
default under this Lease.

25.           Surrender
of Premises.  Tenant shall, upon the
expiration or prior termination of the Term, surrender to Landlord the Premises
and all repairs, changes, alterations, fixtures, additions, and improvements
thereto in good order and condition, reasonable wear and tear excepted.  Notwithstanding the foregoing, Tenant shall
have the option, in its sole discretion, to remove any or all personal property
owned by Tenant and any or all fixtures installed on the Premises by Tenant,
provided that Tenant shall restore any damage to the Premises resulting from
such removal.  Tenant shall indemnify
Landlord against any loss or liability resulting from delay by Tenant in so
surrendering the Premises, including without limitation any claims made by any
succeeding tenant founded on such delay.

 17
 

 

26.           Notices.  All notices and demands which may or are
required to be given by either party to the other hereunder shall be in
writing.  All notices and demands by the
Landlord to the Tenant shall be personally delivered or sent by United States certified
mail, postage prepaid, or by prepaid express mail or overnight courier
addressed to Tribune Company, 435 N. Michigan Avenue, Chicago, IL 60611, Attention: General Counsel, or such other
person(s) or to such other place(s) as Tenant may from time to time designate
in a notice to Landlord.  All notices and
demands to Landlord shall be personally delivered or sent by United States
certified mail, postage prepaid, or by prepaid express mail or overnight
courier addressed to TMCT, LLC, c/o Chandler Trust No. 1, 350 West
Colorado Blvd. Suite 230, Pasadena, California 91105, Attention: William Stinehart, Jr., or such other
person(s) or to such other place(s) as Landlord may from time to time designate
in a notice to Landlord.  Notices and
demands delivered personally shall be deemed given on the date of delivery;
notices and demands delivered by mail shall be deemed given three (3) days
after deposit in the United States mail; and notices and demands delivered by
express mail or overnight courier shall be deemed given one (1) day after
deposit.

27.           Option to Purchase.

27.1         Tenant shall have the option to
purchase the entire Premises (but not less than the entirety) during the Early
Exercise Period and the Original Exercise Period (each as hereinafter defined);
provided, however, that Tenant shall not have the Option to
purchase the Premises if this Lease terminates due to a default of Tenant
unless such termination was the result of a default of Tenant that was
commercially impracticable to cure.

27.2         To exercise the option to
purchase the Premises (the “Option”), Tenant must provide written
notice, together with executed copies
of the Purchase Agreement as contemplated in subsection 27.6 below (the “Exercise
Notice”), to Landlord during one of the following periods:

(i)                                     during
the period between January 1, 2008 and
January 31, 2008 (such period shall hereinafter be referred to as the “Early
Exercise Period”); or

(ii)                                  during the period commencing on February 8,
2008 and ending three (3) months prior to the expiration of the Lease (such
period shall hereinafter be referred to as the “Original Exercise Period”);

except that in the event of the early termination of
the Lease due to an uncured default of Tenant that was commercially impractical
to cure, Tenant may exercise the option within thirty (30) days following such
termination (which shall, for all purposes hereof, be deemed to have been an
exercise during the Original Exercise Period notwithstanding the date of such
termination).  If the Option to purchase
hereunder is exercised, the closing of such purchase shall occur within ninety
(90) days from the date of the Exercise Notice. 
If such closing shall occur prior to August 9, 2009, and if there is any
increase in the assessment of real estate taxes as a result thereof, Tenant
agrees, for the benefit of any subtenants of the Property, that no portion of
such increase in real estate taxes accruing during any period prior to August
9, 2009 shall be passed on to any such subtenant.

 18
 

 

27.3         Tenant’s purchase of the
Premises pursuant to the Option shall be in cash at “fair market value” subject
to, and determined in accordance with, the following:

27.3.1         If Tenant shall deliver the Exercise
Notice during the Early Exercise Period, the parties agree that the “fair
market value” of the Premises is, and the purchase price under the Purchase
Agreement shall be, One Hundred and Seventy Five Million Dollars
($175,000,000).

27.3.2      If Tenant shall have delivered the
Exercise Notice during the Original Exercise Period (or shall be deemed to have
exercised the Option in accordance Section 27.2 above), then within
thirty (30) days after Landlord receives the Exercise Notice, Landlord and
Tenant shall mutually agree upon and appoint one appraiser to determine the
fair market value of the Premises.  If
Landlord and Tenant are unable to agree upon a single appraiser to appraise the
Premises within such thirty day period, then Landlord and Tenant shall each
appoint an appraiser within sixty (60) days after Landlord receives the
Exercise Notice to determine the fair market value of each Property (a single
appraiser may appraise more than one Property and Landlord and Tenant shall
each use best efforts to minimize the total number of appraisers appointed),
and notice of each such appointment shall be given to the other party.  For each Property, the appraisers thus
appointed shall proceed to determine such fair market value for such Property
within thirty (30) days after notice of their appointment.

27.3.3      If the parties were unable to agree on a
single appraiser to appraise the Premises, then within fifteen (15) days
after the parties have each appointed appraisers pursuant to Subsection 27.3.2,
the appraisers appointed for each Property shall join to appoint a third
appraiser to appraise such Property and if they fail so to appoint such third
appraiser within such period, the third appraiser shall be appointed by the
court exercising such functions in the jurisdiction in which the Property is
located unless otherwise agreed in writing by the parties, and such third
appraiser shall then individually determine the fair market value for such
Property within thirty (30) days of notice of appointment.

27.3.4      When calculating the fair market value for
any Property, each appraiser shall appraise the Property as if any capital
improvements made to the Property by Tenant had not been made.  For purposes of this Lease only, the term “capital
improvements” shall exclude repairs and replacements which are intended to
preserve the continued functionality of the improvements located on the Property
at issue without substantially upgrading the functionality of such improvements
or the Property, but shall include improvements which (i) are identifiable new
improvements, or (ii) are replacements of existing improvements located on the
Property that so substantially upgrade the functionality of the replaced
improvements as to be substantially equivalent to an identifiable new
improvement.  For example, the
replacement of the roof on a building located on a Property with a roof of
similar quality, or the renovation of existing office space, would not be
considered a capital improvement for purposes of this Section 27.  Conversely, the installation of a kitchen in
a vacant basement (an identifiable new improvement), or the complete renovation
of an auditorium including a substantial increase in seating capacity, stage
size and quality (substantially

 19
 

 

equivalent to an identifiable new improvement), would
be considered capital improvements for purposes of this Lease.

27.3.5      If Landlord and Tenant fail to appoint a
single appraiser to appraise the Premises, then the average of the fair market
values contained in the two closest appraisals shall constitute the fair market
value of such Property, and such determination shall be binding upon each of
the parties.  In the event that there are
not two closest appraisals (e.g., if the middle appraisal is exactly halfway
between the highest and lowest appraisals), then the middle appraisal shall be
binding upon each of the parties.  The
fair market value of the Premises shall be equal to the sum of the fair market
values of each Property.

27.3.6      All appraisers appointed hereunder shall
be competent, qualified by training and experience in the County in which the
Property(ies) they are appraising is located, disinterested and independent and
shall be members in good standing of the American Institute of Real Estate
Appraisers or its successor and all appraisal reports shall be rendered in
writing and signed by the appraiser or appraisers making the report.

27.3.7         Notwithstanding anything to the
contrary herein contained, the parties agree that in no event shall the fair
market value of the Premises (and purchase price payable under the Purchase
Agreement), as determined by the parties or the two appraisers appointed by the
parties under subsection 27.3.2, or as determined by the two appraisers
appointed by the parties or the third appraiser under subsection 27.3.3, be
less than One Hundred and Ninety Five Million Dollars ($195,000,000).

27.4         The conveyance of the Premises shall be
to Tenant or its designated nominee(s), shall be on an “as-is” and “with all
faults” basis without warranties of any kind (except that Landlord shall
represent and warrant that there are no liens, mortgages or other encumbrances
on the Premises that were not present when Landlord obtained title to the
Premises, other than those created by, caused by or approved by Tenant or
suffered by Landlord through no fault of Landlord), and shall occur at the
expiration of the Lease or, in the case of the earlier termination thereof, as
soon as reasonably possible after such termination.

27.5         Landlord shall be solely responsible
for all transfer and recording fees and costs in conjunction with a conveyance
of the Premises to Tenant.  Tenant shall
be solely responsible for the cost of any title insurance if the same is
desired by Tenant.

27.6         Purchase Agreement.  To be effective, the Exercise Notice must be
accompanied by two (2) original copies of the Agreement of Purchase and Sale
substantially in form attached hereto as Exhibit B (the “Purchase
Agreement”) duly executed by Tenant, with such changes thereto as may be
agreed upon by both parties.  If all of
the conditions to the exercise of the Option as set forth in this Section 27
shall then have been satisfied, the copies of the Purchase Agreement shall be
promptly executed, and dated the date of such execution, by Landlord and
Landlord shall deliver one (1) copy of the fully executed Purchase Agreement to
Tenant.

 20
 

 

27.7         Further Assurances.  Each of the parties hereto shall execute and
deliver any and all additional papers and documents, and shall do any and all
further acts and things, as may be reasonably necessary in connection with the
performance of their respective obligations hereunder and to carry out the
intent of this Article 27.

27.8         Time of Essence.  Time is of the essence with respect to the
performance of each of the covenants and obligations contained in this Option
Agreement.

28.           Defined
Terms and Headings.  The Section and
paragraph headings herein are for convenience of reference and shall in no way
define, increase, limit, or describe the scope or intent of any provision of
this Lease.  The term “Landlord” in these
presents shall include Landlord, its successors, and assigns.  Any indemnification of, insurance of, or
option granted to Landlord shall also benefit, include or be exercisable by
Landlord’s trustee, beneficiary, agents and employees, as the case may be.  The term “Tenant” shall include Tenant and
its successors and assigns, subject to any limitation on assignment provided in
this Lease.  Tenant agrees to furnish
promptly upon demand a corporate resolution, proof of due authorization by
partners, or other appropriate documentation evidencing the due authorization
of Tenant to enter into this Lease.

29.           Enforceability.  If for any reason whatsoever any of the
provisions hereof shall be unenforceable or ineffective, all of the other
provisions shall be and remain in full force and effect.

30.           Commissions.  Each of the parties (i) represents and
warrants to the other that neither party has dealt with any broker or finder in
connection with this Lease; and (ii) indemnifies and holds the other harmless
from any and all losses, liability, costs or expenses (including attorneys’
fees), incurred as a result of an alleged breach of the foregoing warranty.

31.           Attorneys’
Fees.  In the event that any action
or proceeding is brought to enforce any term, covenant or condition of this
Lease on the part of Landlord or Tenant, the prevailing party in such
litigation shall be entitled to reasonable attorneys’ fees to be fixed by the
court in such action or proceeding.

32.           Time
and Applicable Law.  Time is of the
essence of this Lease and all of its provisions.  This Lease shall be governed, as to each
Parcel, by the laws of the respective jurisdictions where such Parcel is
located.

33.           Successors
and Assigns.  The terms, covenants
and conditions contained herein shall be binding upon and inure to the benefit
of the permitted heirs, successors, executors, administrators, and assigns of
the parties hereto.  In the event
Landlord sells the Premises or any portion thereof, Landlord shall
automatically be relieved of liability for obligations under this Lease arising
on and after the date title is conveyed to the purchaser.

34.           Entire
Agreement.  This Lease, together with
its exhibits, contains all agreements of the parties hereto and supersedes any
previous negotiations.  There have been
no representations made by the Landlord or understandings made between the parties
regarding the leasing of the Premises by Tenant other than those set forth in
this Lease and

 21
 

 

its exhibits.  This Lease may not
be modified except by a written instrument duly executed by the parties hereto.

35.           Recordation.  Tenant may record
this Lease or any memorandum hereof without the prior written consent of
Landlord.  If requested by Tenant,
Landlord shall execute a memorandum of this Lease in recordable form in the
form of Exhibit B hereto.

36.           Exhibits.
Attached to this Lease and a part hereof are exhibits identified as follows: Exhibit A
(Legal Description), Exhibit B (Memorandum of Lease).

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

38.           Survival.  Except as otherwise expressly provided
herein, all obligations, covenants, warranties and representations shall
survive the expiration or prior termination of this Lease.

39.           No
Joint Venture.  The parties intend by
this Lease to establish the relationship of Landlord and Tenant only, and do
not intend to create a partnership, joint venture, joint enterprise or any
business relationship other than that of Landlord and Tenant.

40.           Calendar
Days and Business Days.  All time
periods described in this Lease in terms of days shall mean calendar days
unless otherwise provided herein.  If any
last day for performance of any act falls upon a day either of the parties is
not open for business, such last day will be the next following business day.

41.           Subordination,
Nondisturbance and Attornment. 
Tenant shall upon demand execute, acknowledge and deliver to Landlord,
any and all instruments that may be reasonably necessary to subordinate this
Lease and all rights of Tenant hereunder to the lien of any mortgage or deed of
trust on the Premises created pursuant to a new loan or refinancing of an
existing loan entered into by Landlord after the date hereof provided that the
beneficiary thereunder executes a nondisturbance agreement in recordable form
and in form and substance acceptable to Tenant and any Mortgagee whereby the
beneficiary agrees (a) that in the event it should become necessary to
foreclose said deed of trust it will cause the sale of the Premises to be made
subject to this Lease, including without limitation, the provisions for the
Additional Term (provided that the Tenant is not in default past any applicable
notice and grace period under this Lease at the time of such foreclosure), and
(b) in the event of condemnation or damage by fire, casualty or other causes as
covered by fire and extended coverage insurance, the condemnation award or
proceeds of such insurance shall be used for reconstruction or otherwise
disbursed as provided in this Lease notwithstanding any provision in the
mortgage or deed of trust to the contrary.

42.           Counterparts.  This Lease may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
constitute one and the same instrument.

43.           Waiver.  Neither Landlord nor Tenant shall be deemed
to have waived the default or breach of any term, covenant or condition of this
Lease by the other party unless

 22
 

 

such waiver shall be in writing and signed by the party charged with such
waiver.  The acceptance of Rent or any
other payment by Landlord shall not be deemed a waiver of any default or breach
by Tenant.  No waiver by Landlord or
Tenant of any default or breach of any term, covenant or condition of this
Lease by the other party shall be deemed to be a waiver of any other term,
covenant or condition of this Lease, or of any subsequent default or breach by
the other party of the same term, covenant or condition of this Lease.

44.           Landlord’s
Access.  Landlord and Landlord’s
agents shall have the right to enter the Premises at any time, in the case of
an emergency, and otherwise at reasonable times and upon reasonable notice for
the purpose of showing the same to prospective purchasers, lenders, or lessees,
and for other reasonable and proper purposes.

45.           Business
Improvement Districts.

45.1         One of the Properties located in
California is currently subject to an annual assessment by the City of Los
Angeles because the Property is part of a business improvement district which
has as its primary purpose the improvement of the neighborhood in which such
Property is located (a “Business Improvement District”).  The Property is subject to such Business
Improvement District pursuant to a vote in which landowners in the neighborhood
voted to form the Business Improvement District and subject their properties to
the annual assessment.

45.2         Tenant may, with Landlord’s consent
(which shall not be unreasonably withheld, delayed or conditioned), vote in
favor of establishing, continuing or terminating any Business Improvement
District with respect to any Property. 
Landlord agrees to promptly execute any documentation or take any other
action reasonably necessary to vote to establish, continue or terminate any
Business Improvement District pursuant to the terms of this Section 45.  Tenant acknowledges that it is required to
pay all fees, costs and assessments associated with any Business Improvement
District which accrue during the Term of this Lease.

The parties hereto have executed this Lease as of
the date first above written.

	
  

  	
   

  	
  LANDLORD

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TMCT, LLC,

  
	
   

  	
   

  	
  A DELAWARE LIMITED LIABILITY COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Chandler Trust No. 1, Managing Member

  
	
   

  	
   

  	
   

  	
  Name:

  	
  William Stinehart, Jr.

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Trustee

  

 

 23
 

 

 

	
  

  	
   

  	
  TENANT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TRIBUNE COMPANY,

  
	
   

  	
   

  	
  A DELAWARE CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Chandler Bigelow

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Chandler Bigelow 

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  

 

 24Exhibit 10.6

CHANDLER TRUST NO. 1

CHANDLER TRUST NO. 2

Tribune Company

Candle Holdings Corporation

Fortify Holdings Corporation

435 North Michigan Avenue

Chicago, Illinois  60611

Date:  September 21, 2006

Ladies and Gentlemen:

Reference is made to that certain Amended and Restated
Limited Liability Company Agreement of TMCT, LLC (the “Company”), of
even date herewith, by and among Tribune Company, a Delaware corporation (“Tribune”),
Candle Holdings Corporation, a Delaware corporation (“Sub 1”), Fortify
Holdings Corporation, a Delaware corporation (“Sub 2” and collectively
with Tribune and Sub 1, the “Tribune Members”), Chandler Trust No. 1 (“Trust
1”) and Chandler Trust No. 2 (“Trust 2” and collectively with Trust
1, the “Trust Members”), as Members of the Company (the “Operating
Agreement”).  Unless otherwise
defined, capitalized terms herein shall have the meaning ascribed to them in
the Operating Agreement.

Each of the Tribune Members and Trust Members hereby
agree as follows:

1.             Put/Call Rights.

1.1           Put
Right.  Trust 1 hereby grants to the
Tribune Members the unconditional and irrevocable right (such right being
hereinafter called the “Put”) to sell to Trust 1, and to require Trust 1
to purchase from the Tribune Members, all the Interests held by the Tribune
Members for the Fair Market Value (as defined below) of such Interests (the “Put
Purchase Price”).  The Put shall be
exercisable by the Tribune Members in their sole discretion by giving written
notice (the “Put Notice”) to Trust 1 at any time during the period
beginning on September 21, 2007 and ending on October 21, 2007 (the “Put
Period”).

1.2           Call
Right.  The Tribune Members hereby
grant to Trust 1 the unconditional and irrevocable right (such right being
hereinafter called the “Call”) to purchase from the Tribune Members, and
to require the Tribune Members to sell to Trust 1, all the Interests held by
the Tribune Members for the Fair Market Value of such Interests (the “Call
Purchase Price”).  The Call shall be
exercisable by Trust 1 in its sole discretion by giving written notice (the “Call
Notice”) to the Tribune Members at any time during the period beginning on
October 22, 2007 and ending on November 22, 2007.

1.3           Fair
Market Value.  For the purposes of
this letter agreement, “Fair Market Value” shall mean the fair market
value of the Interests to be sold pursuant to this letter agreement, as
determined as of the date of the Put Notice or the Call Notice, as applicable,
and as agreed by the Tribune Members, on the one hand, and the Trust Members, on
the other hand.  Such Fair Market Value
shall be determined by the parties by multiplying the aggregate net asset value
of the underlying

 

assets of the Company as of such date of the Put Notice or the Call
Notice, as applicable, by the percentage represented by the Interests to be
sold; provided that the parties
acknowledge and agree that for such purpose the deemed aggregate value of all
real property owned by the Company shall be $175 million.  In the event that the Tribune Members and the
Trust Members shall fail to agree on the Fair Market Value of the Interests
within ten business days after the date on which the Put Notice or the Call
Notice, as applicable, is delivered, then such dispute shall be submitted for
resolution to Valuation Research Corporation or any other independent
investment banking firm of recognized standing mutually acceptable to the Trust
Members and the Tribune Members (the “Appraiser”).  The Tribune Members and the Trust Members
shall each furnish the Appraiser with their respective determination of the
Fair Market Value of the Interests as of the date of the Put Notice or the Call
Notice, as applicable.  The Appraiser
shall notify the parties of its selection of one of the two original determinations
of the Fair Market Value of the Interests as of the date of the Put Notice or
the Call Notice, as applicable, based on its determination that it more closely
reflects the actual Fair Market Value than the other original
determination.  The Appraiser’s
determination as to such Fair Market Value shall be final and binding on all
parties hereto.  The Tribune Members, on
the one hand, and the Trust Members, on the other, shall bear the costs and
expenses of the Appraiser equally.

1.4           Closing.  The closing of the sale of Interests pursuant
to this letter agreement (the “Closing”) shall occur on the later of (a)
15 business days after the date on which the Put Notice or Call Notice, as
applicable, is delivered and (b) two business days after the date of the final
determination of Fair Market Value as provided in Section 1.3 above.  At the Closing, (i) the Tribune Members
shall deliver to Trust 1 a written assignment, in a form satisfactory to Trust
1 (the “Assignment”), evidencing the assignment of the Interests free
and clear of all encumbrances, and (ii) Trust 1 shall pay to the Tribune
Members the Put Purchase Price or Call Purchase Price, as applicable, in any
combination of (A) cash by wire transfer of immediately available funds to an
account or accounts designated by the Tribune Members and/or (B) certificates
representing shares of Tribune common stock (valued at the average of the
closing prices for Tribune’s common stock on the New York Stock Exchange for
the last thirty trading days immediately preceding the Closing), and shall
execute and deliver the Assignment.  The
parties shall cooperate with each other in doing all things reasonably
necessary to effect the Closing on the terms of this letter agreement.

1.5           Assignability of
Put/Call Rights.  Notwithstanding
anything herein to the contrary, Trust 1 may, in its sole discretion, assign
all or any portion of its rights and obligations hereunder to Trust 2 without
the prior consent of the Tribune Members.

2.             Tag Along Right. 
If the Trust Members shall, after complying with Section 5.4 of the
Operating Agreement, decide to sell (a “Third Party Sale”) all or a
portion of their Interests to any third party offeror who is not an affiliate
of the Trust Members (“Third Party Offeror”), the Trust Members shall
promptly notify (the “Tag Notice”) the Tribune Members in writing of the
existence of, and the terms and conditions of, such Third Party Sale.  The Tribune Members shall have fifteen (15)
days from the receipt of the Tag Notice (the “Demand Period”) to deliver
a notice to the Trust Members requesting to participate in such Third Party
Sale.  If the Tribune Members elect to
participate in such Third Party Sale, each of the Trust Members and the Tribune
Members shall be entitled to sell in such Third Party Sale, at the same price
and upon the same terms and conditions, its pro rata portion of the Interests
being sold pursuant to the Third Party Sale. 
The Trust Members shall use their reasonable efforts to obtain the
agreement of the Third Party Offeror to the participation of the Tribune Members,
and shall not, in any event, transfer any Interests to the Third Party Offeror
if such Third Party Offeror declines to allow the participation of the Tribune
Members on the terms specified herein. 
If the Demand Period shall expire and the Tribune Members shall not have
indicated an interest in

 2
 

 

participating in the Third Party Sale, the Trust
Members may complete the Third Party Sale, within ninety (90) days of the
expiration of the Demand Period, upon the terms and subject to the conditions
set forth in the Tag Notice.  Each Member
selling its Interests pursuant to this Section 2 shall pay its pro rata share
of the expenses incurred by the selling Members in connection with such
transfer and shall be obligated to join on a pro rata basis in the indemnification
or other obligations that that selling Members agree to provide in connection
with such transfer (other than any such obligations that relate specifically to
a particular Member, such as indemnification with respect to representations
and warranties given by a Member regarding such Member’s title to and ownership
of the Interests).  The rights of the
Tribune Members granted under this Section 2 shall expire at the end of
the Put Period.

3.             Miscellaneous. 
This letter agreement may be executed by facsimile in one or more
counterparts, each of which shall be deemed to be an original but all of which
shall constitute one and the same agreement. 
This letter agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without giving effect to its conflicts
or choice of law principles.  Any notice
or communication hereunder must be in writing and will be deemed to have been
duly given when (a) delivered by hand (with written confirmation of receipt),
(b) sent by telecopier (with written confirmation of receipt), provided that a
copy is mailed by registered mail, return receipt requested, or (c) received by
the addressee, if sent by United States mail or by a nationally recognized
overnight delivery service (receipt requested), in each case to the appropriate
addresses and telecopier numbers set forth in Section 15.2 of the Operating
Agreement.  The rights and obligations
expressed herein may be transferred by a party hereto solely in connection with
a Permitted Disposition of any Interests in compliance with the Operating
Agreement.  Except as expressly set forth
herein, the Operating Agreement shall remain in full force and effect and this
letter agreement shall not be deemed to be an amendment to any other terms or conditions
thereof.  The parties acknowledge and
agree that any breach of the terms of this letter agreement would give rise to
irreparable harm for which money damages would not be an adequate remedy and,
accordingly, the parties agree that, in addition to any other remedies, each
will be entitled to enforce the terms of this letter agreement by a decree of
specific performance without the necessity of proving the inadequacy of money
damages as a remedy and without the necessity of posting a bond.  This letter agreement may be amended,
modified, superseded, cancelled or extended, and the terms and conditions of
this letter agreement may be waived, only by a written instrument signed by the
parties or, in the case of a waiver, by the party waiving compliance.

 3

 

If the foregoing accurately summarizes our
understanding, we request that you approve this letter and evidence such
approval by causing the enclosed copy of this letter agreement to be executed
and returned to us.

	
   

  	
  Your truly,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CHANDLER TRUST NO. 1

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Susan Babcock

  	
   

  
	
   

  	
   

  	
  Susan Babcock, as Trustee of Chandler Trust

  No. 1 under Trust Agreement dated June 26, 1935

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey Chandler

  	
   

  
	
   

  	
   

  	
  Jeffrey Chandler, as Trustee of Chandler Trust

  No. 1 under Trust Agreement dated June 26, 1935

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Camilla Chandler Frost

  	
   

  
	
   

  	
   

  	
  Camilla Chandler Frost, as Trustee of Chandler

  Trust No. 1 under Trust Agreement dated June 26,

  1935

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Roger Goodan

  	
   

  
	
   

  	
   

  	
  Roger Goodan, as Trustee of Chandler Trust No. 1

  under Trust Agreement dated June 26, 1935

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William Stinehart, Jr.

  	
   

  
	
   

  	
   

  	
  William Stinehart, Jr., as Trustee of Chandler

  Trust No. 1 under Trust Agreement dated June 26,

  1935

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Judy C. Webb

  	
   

  
	
   

  	
   

  	
  Judy C. Webb, as Trustee of Chandler Trust
  No. 1

  under Trust Agreement dated June 26, 1935

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Warren B. Williamson

  	
   

  
	
   

  	
   

  	
  Warren B. Williamson, as Trustee of Chandler

  Trust No. 1 under Trust Agreement dated June 26,

  1935

  

 

 

 

	
  

  	
  CHANDLER TRUST NO. 2

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Susan Babcock

  	
   

  
	
   

  	
   

  	
  Susan Babcock, as Trustee of Chandler Trust

  No. 2 under Trust Agreement dated June 26, 1935

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeffrey Chandler

  	
   

  
	
   

  	
   

  	
  Jeffrey Chandler, as Trustee of Chandler Trust

  No. 2 under Trust Agreement dated June 26, 1935

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Camilla Chandler Frost

  	
   

  
	
   

  	
   

  	
  Camilla Chandler Frost, as Trustee of Chandler

  Trust No. 2 under Trust Agreement dated June 26,

  1935

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Roger Goodan

  	
   

  
	
   

  	
   

  	
  Roger Goodan, as Trustee of Chandler Trust
  No. 2

  under Trust Agreement dated June 26, 1935

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William Stinehart, Jr.

  	
   

  
	
   

  	
   

  	
  William Stinehart, Jr., as Trustee of Chandler

  Trust No. 2 under Trust Agreement dated June 26,

  1935

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Judy C. Webb

  	
   

  
	
   

  	
   

  	
  Judy C. Webb, as Trustee of Chandler Trust
  No. 2

  under Trust Agreement dated June 26, 1935

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Warren B. Williamson

  	
   

  
	
   

  	
   

  	
  Warren B. Williamson, as Trustee of Chandler

  Trust No. 2 under Trust Agreement dated June 26,

  1935

  

 

 

 

	
  ACCEPTED AND AGREED TO THIS

  
	
  21st DAY OF
  SEPTEMBER 2006

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TRIBUNE COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Chandler Bigelow

  	
   

  
	
   

  	
   

  	
  Name: Chandler Bigelow

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CANDLE HOLDINGS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Chandler Bigelow

  	
   

  
	
   

  	
   

  	
  Name: Chandler Bigelow

  
	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  FORTIFY HOLDINGS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Chandler Bigelow

  	
   

  
	
   

  	
   

  	
  Name: Chandler Bigelow

  
	
   

  	
   

  	
  Title: Vice President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00110-of-00352.parquet"}]]