Document:

Exhibit
10.9

 

NOTE PURCHASE AGREEMENT

 

by and among

 

CURRENT MEDIA, LLC

 

HSBC BANK USA, NATIONAL ASSOCIATION, AS COLLATERAL
AGENT

 

and

 

THE LENDERS NAMED HEREIN

 

Dated as of September 20, 2006

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I
  DEFINED TERMS

  	
  1

  
	
   

  	
  Section 1.1

  	
   

  	
  Definitions

  	
  1

  
	
  ARTICLE II SALE OF NOTES

  	
  11

  
	
   

  	
  Section 2.1

  	
   

  	
  Authorization of Notes

  	
  11

  
	
   

  	
  Section 2.2

  	
   

  	
  Purchase and Sale

  	
  12

  
	
   

  	
  Section 2.3

  	
   

  	
  Subsidiary Guaranty

  	
  12

  
	
  ARTICLE III CLOSING; CONDITIONS PRECEDENT

  	
  12

  
	
   

  	
  Section 3.1

  	
   

  	
  Time and Place of
  Closing

  	
  12

  
	
   

  	
  Section 3.2

  	
   

  	
  Deliveries by the
  Company

  	
  13

  
	
   

  	
  Section 3.3

  	
   

  	
  Deliveries by each
  Lender

  	
  13

  
	
   

  	
  Section 3.4

  	
   

  	
  Company’s Conditions

  	
  14

  
	
   

  	
  Section 3.5

  	
   

  	
  Closing Date Conditions to Each Lender’s Obligations
  Under this Agreement

  	
  14

  
	
   

  	
  Section 3.6

  	
   

  	
  Conditions to Each Loan
  Extension

  	
  15

  
	
  ARTICLE IV REVOLVING LOANS

  	
  15

  
	
   

  	
  Section 4.1

  	
   

  	
  Revolving Commitments

  	
  15

  
	
   

  	
  Section 4.2

  	
   

  	
  Borrowing Mechanics for
  Revolving Loans

  	
  15

  
	
   

  	
  Section 4.3

  	
   

  	
  Ratable Sharing

  	
  16

  
	
   

  	
  Section 4.4

  	
   

  	
  Defaulting Lenders

  	
  16

  
	
   

  	
  Section 4.5

  	
   

  	
  Optional Termination or
  Reduction of Commitments

  	
  17

  
	
  ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY

  	
  17

  
	
   

  	
  Section 5.1

  	
   

  	
  Corporate Existence of
  the Company; Subsidiaries

  	
  18

  
	
   

  	
  Section 5.2

  	
   

  	
  Authorization

  	
  18

  
	
   

  	
  Section 5.3

  	
   

  	
  Binding Agreement

  	
  18

  
	
   

  	
  Section 5.4

  	
   

  	
  Subsidiary Guaranties

  	
  18

  
	
   

  	
  Section 5.5

  	
   

  	
  No Violations

  	
  19

  
	
   

  	
  Section 5.6

  	
   

  	
  Compliance with Laws

  	
  19

  
	
   

  	
  Section 5.7

  	
   

  	
  Permits

  	
  20

  
	
   

  	
  Section 5.8

  	
   

  	
  Title to Properties

  	
  20

  
	
   

  	
  Section 5.9

  	
   

  	
  Defaults

  	
  20

  
	
   

  	
  Section 5.10

  	
   

  	
  Financial Statements

  	
  20

  
	
   

  	
  Section 5.11

  	
   

  	
  Absence of Undisclosed
  Liabilities

  	
  21

  
	
   

  	
  Section 5.12

  	
   

  	
  Absence of Certain
  Changes

  	
  21

  
	
   

  	
  Section 5.13

  	
   

  	
  Tax Matters

  	
  21

  
	
   

  	
  Section 5.14

  	
   

  	
  Litigation

  	
  21

  
	
   

  	
  Section 5.15

  	
   

  	
  Intellectual Property

  	
  21

  
	
   

  	
  Section 5.16

  	
   

  	
  Environmental Matters

  	
  22

  
	
   

  	
  Section 5.17

  	
   

  	
  Employee Benefit Plans

  	
  22

  
	
   

  	
  Section 5.18

  	
   

  	
  Labor Matters

  	
  23

  
	
   

  	
  Section 5.19

  	
   

  	
  Use of Proceeds; Margin
  Regulations

  	
  23

  
	
   

  	
  Section 5.20

  	
   

  	
  Creation and Perfection
  of Security Interests

  	
  23

  
	
   

  	
  Section 5.21

  	
   

  	
  Solvency

  	
  23

  
	
   

  	
  Section 5.22

  	
   

  	
  Brokers or Finders

  	
  23

  
															

 

 

	
   

  	
  Section 5.23

  	
   

  	
  No General Solicitation

  	
  24

  
	
   

  	
  Section 5.24

  	
   

  	
  Investment Company Act

  	
  24

  
	
  ARTICLE VI
  REPRESENTATIONS AND WARRANTIES OF THE LENDERS

  	
  24

  
	
   

  	
  Section 6.1

  	
   

  	
  Investment Purpose

  	
  25

  
	
   

  	
  Section 6.2

  	
   

  	
  Availability of Funds

  	
  25

  
	
   

  	
  Section 6.3

  	
   

  	
  Access to Information

  	
  25

  
	
   

  	
  Section 6.4

  	
   

  	
  Limited Operating
  History

  	
  25

  
	
   

  	
  Section 6.5

  	
   

  	
  Accredited Investor

  	
  25

  
	
   

  	
  Section 6.6

  	
   

  	
  Brokers or Finders

  	
  26

  
	
  ARTICLE VII PAYMENT OF
  THE NOTES; REDEMPTION

  	
  26

  
	
   

  	
  Section 7.1

  	
   

  	
  Required Payments

  	
  26

  
	
   

  	
  Section 7.2

  	
   

  	
  Optional Prepayment of
  the Notes

  	
  26

  
	
   

  	
  Section 7.3

  	
   

  	
  Purchase of Notes

  	
  26

  
	
   

  	
  Section 7.4

  	
   

  	
  Redemption

  	
  26

  
	
  ARTICLE VIII
  AFFIRMATIVE COVENANTS

  	
  27

  
	
   

  	
  Section 8.1

  	
   

  	
  Maintenance of
  Existence; Compliance with Obligations

  	
  27

  
	
   

  	
  Section 8.2

  	
   

  	
  Compliance with Laws

  	
  27

  
	
   

  	
  Section 8.3

  	
   

  	
  Financial Information

  	
  27

  
	
   

  	
  Section 8.4

  	
   

  	
  Notice of Defaults

  	
  28

  
	
   

  	
  Section 8.5

  	
   

  	
  Inspection of Property,
  Books and Records

  	
  28

  
	
   

  	
  Section 8.6

  	
   

  	
  Further Assurances

  	
  29

  
	
   

  	
  Section 8.7

  	
   

  	
  Direct Subsidiaries

  	
  29

  
	
   

  	
  Section 8.8

  	
   

  	
  Current TV as a
  Subsidiary Guarantor

  	
  29

  
	
  ARTICLE IX NEGATIVE
  COVENANTS

  	
  29

  
	
   

  	
  Section 9.1

  	
   

  	
  Indebtedness

  	
  29

  
	
   

  	
  Section 9.2

  	
   

  	
  Negative Pledge

  	
  30

  
	
   

  	
  Section 9.3

  	
   

  	
  Investments

  	
  31

  
	
   

  	
  Section 9.4

  	
   

  	
  Merger, Consolidation,
  etc.

  	
  32

  
	
   

  	
  Section 9.5

  	
   

  	
  Transactions with
  Affiliates

  	
  33

  
	
   

  	
  Section 9.6

  	
   

  	
  Restricted Payments,
  etc.

  	
  33

  
	
   

  	
  Section 9.7

  	
   

  	
  Dispositions

  	
  34

  
	
   

  	
  Section 9.8

  	
   

  	
  Subsidiaries

  	
  34

  
	
  ARTICLE X EVENTS OF
  DEFAULT

  	
  34

  
	
   

  	
  Section 10.1

  	
   

  	
  Event of Default

  	
  34

  
	
   

  	
  Section 10.2

  	
   

  	
  Consequences of Events
  of Default

  	
  36

  
	
  ARTICLE XI
  REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES

  	
  38

  
	
   

  	
  Section 11.1

  	
   

  	
  Registration of Notes

  	
  37

  
	
   

  	
  Section 11.2

  	
   

  	
  Transfer and Exchange
  of Notes

  	
  37

  
	
   

  	
  Section 11.3

  	
   

  	
  Replacement of Notes

  	
  38

  
	
  ARTICLE XII COLLATERAL
  AGENT

  	
  37

  
	
   

  	
  Section 12.1

  	
   

  	
  Appointment of the
  Collateral Agent

  	
  38

  
	
   

  	
  Section 12.2

  	
   

  	
  Nature of Duties of
  Collateral Agent

  	
  39

  
	
   

  	
  Section 12.3

  	
   

  	
  Right to Realize on
  Collateral and Enforce Subsidiary Guaranty

  	
  39

  
	
   

  	
  Section 12.4

  	
   

  	
  Lack of Reliance on the
  Collateral Agent

  	
  39

  

 

ii

 

	
   

  	
  Section 12.5

  	
   

  	
  Certain Rights of the
  Collateral Agent

  	
  39

  
	
   

  	
  Section 12.6

  	
   

  	
  Reliance by the
  Collateral Agent

  	
  40

  
	
   

  	
  Section 12.7

  	
   

  	
  Indemnification of the
  Collateral Agent

  	
  40

  
	
   

  	
  Section 12.8

  	
   

  	
  The Collateral Agent in
  its Individual Capacity

  	
  40

  
	
   

  	
  Section 12.9

  	
   

  	
  Successor Collateral
  Agent

  	
  40

  
	
   

  	
  Section 12.10

  	
   

  	
  Collateral Matters

  	
  41

  
	
  ARTICLE XIII EXPENSES,
  ETC.

  	
  41

  
	
   

  	
  Section 13.1

  	
   

  	
  Transaction Expenses

  	
  41

  
	
   

  	
  Section 13.2

  	
   

  	
  Survival

  	
  42

  
	
  ARTICLE XIV SURVIVAL
  AND INDEMNIFICATION

  	
  41

  
	
   

  	
  Section 14.1

  	
   

  	
  Survival of
  Representations and Warranties

  	
  42

  
	
   

  	
  Section 14.2

  	
   

  	
  Company’s Agreement to
  Indemnify

  	
  42

  
	
   

  	
  Section 14.3

  	
   

  	
  Indemnification
  Procedures

  	
  43

  
	
  ARTICLE XV AMENDMENT
  AND WAIVER

  	
  43

  
	
   

  	
  Section 15.1

  	
   

  	
  Requirements

  	
  44

  
	
   

  	
  Section 15.2

  	
   

  	
  Solicitation of Holders
  of Notes

  	
  45

  
	
   

  	
  Section 15.3

  	
   

  	
  Binding Effect

  	
  45

  
	
   

  	
  Section 15.4

  	
   

  	
  Notes held by the
  Company

  	
  45

  
	
  ARTICLE XVI
  MISCELLANEOUS

  	
  45

  
	
   

  	
  Section 16.1

  	
   

  	
  Governing Law; Consent
  to Jurisdiction

  	
  46

  
	
   

  	
  Section 16.2

  	
   

  	
  Waiver of Jury Trial

  	
  46

  
	
   

  	
  Section 16.3

  	
   

  	
  Legal Rate

  	
  46

  
	
   

  	
  Section 16.4

  	
   

  	
  Severability

  	
  46

  
	
   

  	
  Section 16.5

  	
   

  	
  Entire Agreement

  	
  47

  
	
   

  	
  Section 16.6

  	
   

  	
  No Waiver

  	
  47

  
	
   

  	
  Section 16.7

  	
   

  	
  Confidentiality

  	
  47

  
	
   

  	
  Section 16.8

  	
   

  	
  Transferability

  	
  47

  
	
   

  	
  Section 16.9

  	
   

  	
  Notices

  	
  48

  
	
   

  	
  Section 16.10

  	
   

  	
  Descriptive Headings

  	
  49

  
	
   

  	
  Section 16.11

  	
   

  	
  Counterparts

  	
  49

  
	
   

  	
  Section 16.12

  	
   

  	
  Successors and Assigns

  	
  49

  
	
   

  	
  Section 16.13

  	
   

  	
  Payments Due on
  Non-Business Days

  	
  49

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Schedule A

  	
  -

  	
   

  	
  Revolving Commitments

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A

  	
  -

  	
   

  	
  Form of Funding Notice

  	
   

  
	
  Exhibit B

  	
  -

  	
   

  	
  Form of Revolving Loan Note

  	
   

  
	
  Exhibit C

  	
  -

  	
   

  	
  Form of Security Agreement

  	
   

  
	
  Exhibit D

  	
  -

  	
   

  	
  Form of
  Subsidiary Guaranty

  	
   

  
								

 

iii

 

NOTE PURCHASE AGREEMENT

 

This NOTE PURCHASE
AGREEMENT, dated as of September 20, 2006 (this “Agreement”), is
entered into by and among Current Media, LLC, a Delaware limited liability
company (the “Company”), the lenders listed on the signature page hereof
(each a “Lender,” and collectively, the “Lenders”) and HSBC Bank
USA, National Association, as collateral agent on behalf of the Lenders (the “Collateral
Agent”).

 

WHEREAS, the Company is in
need of additional funds for ongoing operations, obligations and general
corporate purposes;

 

WHEREAS, contemporaneously
with the execution and delivery of this Agreement, the Company and the
Collateral Agent for the benefit of the Lenders are entering into a Security
Agreement (as defined below) in the form of Exhibit C hereto; and

 

WHEREAS, the Notes (as
defined below) will be secured by the Collateral (as defined below).

 

NOW, THEREFORE, in
consideration of the foregoing and the mutual representations, warranties,
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereto agree as follows:

 

ARTICLE I

DEFINED TERMS

 

Section 1.1                    Definitions.

 

All references in this
Agreement to “dollars” or “$” shall refer to U.S. dollars. Defined
terms in this Agreement shall include in the singular number the plural and in
the plural number the singular. The following terms, when used in this
Agreement, have the following meanings, unless the context otherwise indicates:

 

“Affiliate” shall
have the meaning specified in Rule 12b-2 promulgated under the Exchange
Act.

 

“Aggregate Amounts Due”
shall have the meaning specified in Section 4.3.

 

“Agreement” shall
have the meaning specified in the Preamble.

 

“Applicable Law”
shall mean all federal, state, foreign or other law, statute, constitution,
principle of common law, resolution, ordinance, order, policy or guideline,
judgment, decision, writ, injunction, decree, rule, regulation, ruling or
requirement issued, enacted, adopted, promulgated, implemented or otherwise put
into effect by or under the authority of any Governmental Entity.

 

 

“Bankruptcy Code”
shall mean Title 11 of the United States Code entitled “Bankruptcy,” as now and
hereafter in effect, or any successor statute.

 

“Board of Directors”
shall mean the Board of Directors of the Company.

 

“Business Day” shall
mean any day other than a Saturday, a Sunday or a holiday on which commercial
banks in the State of New York or the State of California are closed.

 

“Cash Equivalents”
shall mean (a) marketable direct obligations issued by, or guaranteed by,
the United States Government or any agency thereof which mature within one year
from the date of acquisition thereof; (b) certificates of deposit, time
deposits, Eurodollar time deposits or overnight bank deposits issued or held,
as the case may be, by any commercial bank or trust company organized under the
laws of the United States, any State thereof or the District of Columbia, and
in each case (i) having outstanding unsecured indebtedness that is rated
AA or better by Standard & Poor’s Ratings Services (“S&P”)
and Aa or better by Moody’s Investors Service, Inc. (“Moody’s”), or
carrying an equivalent rating by a nationally recognized rating agency, if both
of the two named rating agencies cease publishing ratings of unsecured bank
indebtedness and (ii) maturing within one year from the date of
acquisition thereof; (c) commercial paper of an issuer rated at least A-1
by S&P or P-1 by Moody’s, or carrying an equivalent rating by a nationally
recognized rating agency, if both of the two named rating agencies cease
publishing ratings of commercial paper issuers generally and maturing not later
than one hundred eighty (180) days from the date of acquisition thereof; (d) repurchase
obligations of any commercial bank satisfying the requirements of clause (b) of
this definition with respect to securities issued or fully guaranteed or
insured by the United States government and maturing not later than one hundred
eighty (180) days from the date of acquisition thereof; and (e) shares of
money market mutual or similar funds which invest solely in assets satisfying
the requirements of clauses (a) through (d) of this definition.

 

“Capital Stock” shall
mean, with respect to any Person at any time, any and all shares, interests or
other equivalents (however designated, whether voting or non-voting) of capital
stock, partnership interests (whether general or limited), membership interests
(whether general or limited) or other equity or ownership interests in or
issued by such Person.

 

“Capitalized Lease
Liabilities” shall mean, with respect to any Person, all monetary
obligations of such Person and its Subsidiaries under any leasing or similar
arrangement which have been (or, in accordance with GAAP, should be) classified
as capitalized leases, and for purposes of this Agreement the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP.

 

“Change of Control”
shall mean the occurrence of any event or circumstance whatsoever following
which Permitted Holders cease to own, directly or indirectly, for any reason
whatsoever, in excess of fifty percent (50%) of the voting

 

2

 

Capital Stock of the
Company, on a fully diluted basis, or of the surviving, resulting, successor or
purchasing corporation of the Company in a transaction permitted by Section 9.4,
as the case may be.

 

“Change of Control Notice”
shall have the meaning specified in Section 7.4(b).

 

“Charges” shall have
the meaning specified in Section 16.3.

 

“Claim” shall have
the meaning specified in Section 14.3(a).

 

“Claim Notice” shall
have the meaning specified in Section 14.3(a).

 

“Closing” shall have
the meaning specified in Section 3.1.

 

“Closing Date” shall
have the meaning specified in Section 3.1.

 

“Code” shall mean the
Internal Revenue Code of 1986, as amended, and the Treasury Regulations
promulgated thereunder.

 

“Collateral” shall
have the meaning specified in the Security Agreement.

 

“Collateral Agent”
shall have the meaning specified in the Preamble.

 

“Commitment” shall
mean any Revolving Commitment.

 

“Company” shall have
the meaning specified in the Preamble.

 

“Company Plan” shall
mean each employee benefit plan, program and arrangement maintained by the
Company, any Subsidiary of the Company or any ERISA Affiliate during the
preceding six (6) years (including without limitation each bonus, deferred
compensation, pension, retirement, profit-sharing, thrift, savings, employee
stock ownership, stock bonus, stock purchase, restricted stock, stock option,
employment, termination, severance, compensation, medical, health, other
welfare or other plan, agreement, policy or arrangement).

 

“Company’s Disclosure
Schedule” shall have the meaning specified in Article V.

 

“Convertible Securities”
shall mean any evidences of Indebtedness (other than this Note), Capital Stock
or other securities directly or indirectly convertible into or exercisable or
exchangeable (including upon the further conversion, exercise or exchange of
underlying securities) for Capital Stock.

 

“Current International”
shall mean Current International, LLC, a Delaware limited liability company and
a direct wholly owned subsidiary of the Company.

 

3

 

“Current TV” shall
mean Current TV, LLC, a Delaware limited liability company and a direct wholly
owned subsidiary of the Company.

 

“Default” shall mean
any Event of Default or any condition, occurrence or event which, after notice
or lapse of time or both, would, unless cured or waived, constitute an Event of
Default.

 

“Default Excess”
shall mean, with respect to any Defaulting Lender, the excess, if any, of such
Defaulting Lender’s Pro Rata Share of the aggregate outstanding principal
amount of Loans of all Lenders (calculated as if all Defaulting Lenders (other
than such Defaulting Lender) had funded all of their respective defaulted
Loans) over the aggregate outstanding principal amount of all Loans of such
Defaulting Lender.

 

“Defaulting Lender”
shall have the meaning specified in Section 4.4(a).

 

“Default Period”
shall mean, with respect to any Defaulting Lender, the period commencing on the
date of the applicable Funding Default and ending on the earliest of the
following dates: (a) the date on which all Commitments are cancelled or
terminated and/or all amounts owing to any Lender under the Note Documents are
declared or become immediately due and payable, (b) the date on which (i) the
Default Excess with respect to such Defaulting Lender shall have been reduced
to zero and (ii) such Defaulting Lender shall have delivered to the
Company a written reaffirmation of its intention to honor its obligations
hereunder with respect to its Commitments, and (c) the date on which the
Company shall waive all Funding Defaults of such Defaulting Lender in writing.

 

“Disposition” shall
mean any direct or indirect sale, transfer, license, lease, contribution,
disposition or other conveyance (including by way of merger or consolidation or
by way of sale or other transfer or conveyance of Capital Stock of any
Subsidiary of the Company) of any of the Company’s or its Subsidiaries’
properties or assets to any other Person in a single transaction or series of
related transactions.

 

“Environmental Claim”
shall mean any claim, action, cause of action, investigation or notice (written
or oral) by any Person alleging actual or potential liability for
investigatory, cleanup or governmental response costs, or natural resources or
property damages, or personal injuries, attorney’s fees or penalties relating
to (a) the presence, or release into the environment, of any Materials of
Environmental Concern at any location, or (b) circumstances forming the
basis of any violation, or alleged violation, of any Environmental Law.

 

“Environmental Law”
shall mean each federal, state, local and foreign law and regulation relating
to pollution, protection or preservation of human health or the
environment  including ambient air,
surface water, ground water, land surface or subsurface strata, and natural
resources, and including each law and regulation relating to emissions,
discharges, releases or threatened releases of Materials of Environmental
Concern, or otherwise relating to the manufacturing, processing, distribution,
use,

 

4

 

treatment, generation, storage,
containment (whether above ground or underground), disposal, transport or
handling of Materials of Environmental Concern, or the preservation of the
environment or mitigation of adverse effects thereon and each law and
regulation with regard to record keeping, notification, disclosure and
reporting requirements respecting Materials of Environmental Concern.

 

“ERISA” shall mean
the Employee Retirement Income Security Act of 1974, as amended, and the rules and
regulations promulgated thereunder.

 

“ERISA Affiliate”
shall mean each Person which is deemed a single employer with the Company or
any Subsidiary of the Company under Section 414 of the Code or Section 4001(b) of
ERISA.

 

“Event of Default”
shall have the meaning specified in Section 10.1.

 

“Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.

 

“Existing Note” shall
mean the 9.25% Senior Purchase Money Note, dated as of May 4, 2004, made
by Current TV in favor of Dylan Holdings, Inc., a Delaware corporation.

 

“Existing Security
Agreement” shall mean the Security Agreement dated as of May 4, 2004,
by and between Current TV and Dylan Holdings, Inc.

 

“Final Maturity Date”
shall mean May 4, 2008, or if such day is not a Business Day, then on the
next succeeding Business Day.

 

“Financial Statements”
shall mean (a) the audited consolidated financial statements of the
Company and its Subsidiaries and related auditor’s reports for the calendar
years ended December 31, 2005 and 2004, including balance sheets as of December 31,
2005 and 2004, and statements of income, statements of changes in owners’
equity and statements of cash flows for the above described periods and (b) the
unaudited consolidated balance sheet, and the related statements of income and
cash flows of the Company and its Subsidiaries for the fiscal quarters ended March 31,
2006 and June 30, 2006, including in each case the related schedules and
notes.

 

“Fiscal Quarter”
shall mean any period of three (3) consecutive calendar months ending on
the last day of March, June, September and December or such other
period as the Company shall notify the Lenders of in writing.

 

“Fiscal Year” shall
mean any period of twelve (12) consecutive calendar months ending on December 31
or such other period as the Company shall notify Lenders of in writing;
references to a Fiscal Year with a number corresponding to any calendar year
(e.g., the “2006 Fiscal Year”) refer to the Fiscal Year ending on December 31
of such calendar year or such other date as the Company shall notify the
Lenders of in writing.

 

5

 

“Funding Default”
shall have the meaning specified in Section 4.4(a).

 

“Funding Notice”
shall mean a notice substantially in the form of Exhibit A hereto.

 

“GAAP” shall mean
United States generally accepted accounting principles, as in effect from time
to time.

 

“Governmental Entity”
shall mean any foreign or United States national, state, provincial or local
government or governmental or regulatory authority, agency, or body thereof, or
political subdivision thereof, or court, arbitral tribunal, administrative
agency or commission.

 

“Guarantee Obligation”
of or by any Person (the “guarantor”) shall mean any obligation,
contingent or otherwise, of the guarantor guaranteeing or purporting to
guarantee any Indebtedness of any other Person (the “primary obligor”)
in any manner, whether directly or indirectly, and including any obligation of
the guarantor, direct or indirect, (a) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or to purchase
(or to advance or supply funds for the purchase of) any security for the
payment thereof, (b) to purchase or lease property, securities or services
for the purpose of assuring the owner of such Indebtedness of the payment
thereof, (c) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or (d) as an account
party in respect of any letter of credit or letter of guaranty issued to
support such Indebtedness; provided that the term Guarantee Obligations
shall not include endorsements for collection or deposit in the ordinary course
of business.

 

“Indebtedness” of any
Person shall mean, without duplication:

 

(a)                                  all obligations
of such Person for borrowed money or advances and all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments;

 

(b)                                 all
obligations, contingent or otherwise, relative to the face amount of all
letters of credit, whether or not drawn, and banker’s acceptances issued for
the account of such Person;

 

(c)                                  all Capitalized
Lease Liabilities of such Person;

 

(d)                                 all obligations
of such Person to pay the deferred purchase price of property or services;

 

(e)                                  any mandatorily
redeemable preferred equity issued by such Person, if such Person is, or may
be, required to redeem such preferred equity prior to the fifth (5th) Business
Day following the Final Maturity Date;

 

6

 

(f)                                    all obligations
of such Person under “swaps,” “caps,” “floors,” “collars,” or other interest
rate hedging contracts or similar arrangements;

 

(g)                                 all obligations
of such Person to purchase securities (or other property) which arise out of,
or in connection with, the sale of the same or substantially similar securities
or property (other than such obligations which under no circumstances require
such Person to purchase such securities (or other property) prior to five (5) Business
Days after the Final Maturity Date);

 

(h)                                 all
Indebtedness of others secured by a Lien on any asset of such Person, whether
or not such Indebtedness is assumed by such Person; and

 

(i)                                     all Guarantee
Obligations of such Person in respect of any of the foregoing.

 

Notwithstanding the
foregoing, Indebtedness shall not include any obligations to make any
Restricted Payment permitted by Section 9.6 and declared but not yet paid.
The Indebtedness of any Person shall include the Indebtedness of any other
Person to the extent such Person is liable therefor as a result of such Person’s
ownership interest in or other relationship with such Person, except to the
extent the terms of such Indebtedness provide that such Person is not liable
therefor.

 

“Indemnified Party”
shall have the meaning specified in Section 14.3(a).

 

“Indemnifying Party”
shall have the meaning specified in Section 14.3(a).

 

“Intellectual Property”
shall mean any patents and patent rights, trademarks and trademark rights,
trade names and trade name rights, service marks and service mark rights,
service names and service name rights, brand names, domain names, inventions,
copyrights and copyright rights, computer programs and pending applications for
and registrations of patents, trademarks, service marks, and copyrights. Intellectual
Property shall include, without limitation, any programming, on-air and other
promotional, marketing, advertising and publicity materials, of whatever form
or nature, whether used or not used, and any rights or licenses to use the
same.

 

“Interest” shall have
the meaning specified in Section 2.1(b).

 

“Interest Accrual Date”
shall have the meaning specified in Section 2.1(b).

 

“Investment” by any
Person shall mean any investment in any Person, including, without limitation,
by any direct or indirect purchase or acquisition of Capital Stock, bonds,
notes, debentures or other securities (including any Option, warrant or other
right to acquire any of the foregoing) or evidences of Indebtedness issued by
any other Person (whether by merger, consolidation or otherwise and whether or
not purchased directly from the issuer of such securities or evidences of
Indebtedness). Investments shall exclude (a) extensions of trade credit
and advances to customers and suppliers, (b) endorsements of negotiable
instruments for collection and (c) any acquisition of Capital

 

7

 

Stock or other securities
(including any option, warrant or other right to acquire any of the foregoing)
in connection with a joint venture or other similar arrangement entered into by
the Company (or any Subsidiary of the Company) and another Person or Persons; provided
that in the case of each of clauses (a) and (b) above, Investments shall
only exclude such items to the extent made in the ordinary course of business
and in accordance with customary industry practice.

 

“Issue Date” shall
mean the date of the issuance of the Notes which shall be the date hereof.

 

“Knowledge of the Company”
shall mean the current, actual knowledge of Joel Hyatt, Chief Executive Officer
of the Company, and Mark Goldman, Chief Operating Officer of the Company, after
due inquiry.

 

“Legal Rate” shall
have the meaning specified in Section 16.3.

 

“Lender” and “Lenders”
shall have the meanings specified in the Preamble.

 

“Lender Indemnified Party”
shall have the meaning specified in Section 14.2.

 

“Lien” shall mean any
and all liens, encumbrances, charges, security interests, options, claims,
mortgages, pledges, agreements, obligations, understandings or arrangements or
other restrictions on title or transfer of any nature whatsoever; provided
that any requirement set forth in the LLC Agreement or any similar corporate
governance document of any Subsidiary of the Company that requires the consent
of any equity holder, board of directors or similar governing body of the
Company or any Subsidiary of the Company to the sale or transfer of assets of
such Person shall not be deemed to be a Lien on such assets so long as neither
the intent nor the effect of such a requirement is to give any Person a
security interest in any such assets or to interfere with the rights of the
Lenders under this Agreement or the other Note Documents.

 

“LLC Agreement” shall
mean the First Amended and Restated Operating Agreement of the Company, dated
as of May 4, 2004, as the same may be amended, supplemented or otherwise
modified from time to time.

 

“Loan” shall mean a
Revolving Loan.

 

“Loan Date” shall
mean the date of a Loan Extension.

 

“Loan Extension”
shall mean the making of a Loan.

 

“Loss” and “Losses”
shall have the meanings specified in Section 14.2.

 

“Mandatory Redemption
Notice” shall have the meaning specified in Section 7.4(c).

 

8

 

“Material Subsidiary”
shall mean, at any time, any Subsidiary of the Company which (a) holds any
Capital Stock of the Company, (b) in the aggregate with its Subsidiaries
has consolidated assets with a value of not less than two percent (2%) of the
total value of the assets of the Company and its Subsidiaries, taken as a whole
or (c) in the aggregate with its Subsidiaries has consolidated revenues
not less than two percent (2%) of the consolidated revenues of the Company and
its Subsidiaries, taken as a whole.

 

“Material Adverse Effect”
shall mean a material adverse change in, or effect on, the business, financial
condition, or results of operations of the Company and its Subsidiaries taken
as a whole, or on the validity, priority or perfection of any Lien granted
pursuant to the Note Documents.

 

“Materials of
Environmental Concern” shall mean chemicals, pollutants, contaminants,
wastes, toxic or hazardous substances, materials and wastes, petroleum and
petroleum products, asbestos and asbestos-containing materials, polychlorinated
biphenyls, lead and lead-based paints and materials, and radon.

 

“Note” shall mean a
promissory note substantially in the form of Exhibit B hereto, as it may
be amended, supplemented or otherwise modified from time to time in accordance
with this Agreement.

 

“Note Documents”
shall mean this Agreement, the Notes, the Security Agreement, and the
Subsidiary Guaranties entered into pursuant to Section 2.3, Section 8.8
or Section 9.8.

 

“Officer’s Certificate”
shall have the meaning specified in Section 3.2(f).

 

“Obligations” shall
mean the collective reference to the unpaid principal of and interest on the
Notes and all other obligations and liabilities of the Company (including,
without limitation, interest accruing at the then applicable rate provided in
this Agreement after the maturity of the Loans and interest accruing at the
then applicable rate provided in this Agreement after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization
or like proceeding, relating to the Company, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) to any
Lender or the Collateral Agent, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with the Notes, this Agreement or any
other Note Document or any other document made, delivered or given in
connection therewith, in each case whether on account of principal, interest, indemnities,
cost, expenses or otherwise.

 

“Option” shall mean
rights, options or warrants to subscribe for, purchase or otherwise acquire
Capital Stock or Convertible Securities.

 

“Permit” shall mean
permits, registration, licenses and other governmental consents, approvals and
authorizations.

 

9

 

“Permitted Holder”
shall mean Albert Gore, Jr., Joel Hyatt, members of their respective
families, trusts for the benefit of any of them and any of their respective Affiliates.

 

“Permitted Lien”
shall have the meaning specified in Section 9.2.

 

“Person” shall mean a
natural person, partnership, corporation, limited liability company, business
trust, joint stock company, trust, unincorporated association, joint venture, Governmental
Entity or other entity or organization.

 

“Pro Rata Share” as
to each Lender shall mean a fraction (expressed as a percentage), the numerator
of which shall be the aggregate amount of such Lender’s Commitment and the
denominator of which shall be the Revolving Commitments.

 

“Redemption Price”
shall have the meaning specified in Section 7.4(a).

 

“Required Holders”
shall mean, at any time, the holders of at least fifty percent (50%) in
principal amount of the Notes at the time outstanding (exclusive of Notes then
owned by the Company or any Defaulting Lender); provided that in any
determination of whether the Required Holders shall have consented to an
amendment or waiver of any terms of this Agreement, there shall be excluded
from such determination any consent given by a holder of any Notes as a
condition to or in consideration for or in contemplation of the prepayment or
purchase of any of such Notes by the Company, or by a Person acting on behalf
of the Company.

 

“Restricted Payment”
shall mean (a) any dividend or other distribution (whether in cash,
securities or other property) with respect to any shares of any class of
Capital Stock of the Company or any of its Subsidiaries, (b) any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
cancellation or termination of any such shares of Capital Stock of the Company
or any of its Subsidiaries or any Option of the Company or any of its
Subsidiaries or (c) any payment of management or similar fees to any
Permitted Holder or any Affiliate of a Permitted Holder or any other Person who
controls (as defined in Rule 12b-2 promulgated under the Exchange Act) the
Company or any of its Subsidiaries (excluding, for the avoidance of any doubt,
the payment of salary, bonuses, fees, compensation or benefits, including,
without limitation, directors’ fees, in the ordinary course of business).

 

“Revolving Commitment”
shall mean the commitment of a Lender to make or otherwise fund any Revolving
Loan and “Revolving Commitments” means such commitments of all Lenders
in the aggregate. The amount of each Lender’s Revolving Commitment, if any, is
set forth on Schedule A hereto, subject to any adjustment or reduction pursuant
to the terms and conditions hereof. The aggregate amount of the Revolving
Commitments as of the Issue Date is fifteen million dollars ($15,000,000).

 

10

 

“Revolving Commitment
Period” shall mean the period from the Issue Date to but excluding the
Final Maturity Date.

 

“Revolving Loan”
shall mean a Loan made by a Lender to the Company pursuant to Article IV.

 

“Securities Act”
shall mean the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

 

“Security Agreement”
shall mean the Security Agreement, dated as of the date hereof, by and between
the Company and the Collateral Agent substantially in the form of Exhibit C
hereto, as the same may be amended, modified or supplemented from time to time.

 

“Subsidiary” shall
mean, with respect to any Person, any corporation, limited liability company,
partnership or other business entity (i) which is organized under the laws
of one of the states of the United States of America or the District of
Columbia and (ii) of which more than 50% of the securities, more than 50%
of the limited liability company membership interests, more than 50% of the
partnership interests or more than 50% of the ownership interests, in each
case, representing the total outstanding voting power of the issuer, at the
time any determination is being made, are owned directly by such Person or by
any one or more of its Subsidiaries, or by such Person and one or more of it
Subsidiaries.

 

“Subsidiary Guarantor”
shall mean all current and future formed or acquired Subsidiaries of the
Company; provided, however, that the term “Subsidiary Guarantor”
shall not include Current TV and its Subsidiaries so long as the Existing Note
remains outstanding.

 

“Subsidiary Guaranty”
shall mean the guarantee executed by each Subsidiary Guarantor, substantially
in the form of Exhibit D hereto, as the same may be amended, modified or
supplemented from time to time.

 

“Successor Agent”
shall have the meaning specified in Section 12.9(a).

 

“Tax” shall mean all
taxes imposed by any federal, state, local or foreign governmental authority,
on or with respect to income, gross receipts, excise, property, sales, gain,
use, license, unemployment, capital stock, transfer, franchise, payroll,
withholding, social security, profit, gift, severance, value added, disability,
recapture, occupation, employment, stamp and other similar taxes, and shall
include interest, penalties or additions thereto.

 

“Tax Rate” shall have
the meaning specified in Section 9.6(c).

 

“Tax Return” shall
mean any return, declaration, report, claim for refund, or information return
or statement relating to Taxes, including any such document

 

11

 

prepared on a consolidated,
combined or unitary basis and also including any schedule or attachment
thereto, and including any amendment thereof.

 

ARTICLE II

SALE OF NOTES

 

Section 2.1                    Authorization of Notes.

 

(a)                                  The Company has authorized the
issuance and sale to the Lenders of fifteen million dollars ($15,000,000)
aggregate principal amount of its Senior Notes due May 4, 2008 (the “Notes,”
such term to include any such notes issued in substitution therefor pursuant to
Article XI). The then outstanding principal amount of the Notes, together
with all accrued and unpaid interest thereon, shall be paid in cash to the
Lenders on the Final Maturity Date, except that any overdue payment of
principal or overdue interest shall be payable on demand. The Notes shall be
substantially in the form of Exhibit B hereto, with such changes thereto,
if any, as may be approved by the Lenders and the Company in accordance with Section 15.1.

 

(b)                                 Interest shall accrue on the unpaid
principal amount of the Notes quarterly in arrears on February 4th,
May 4th, August 4th and November 4th
of each year, commencing on the Issue Date through the Final Maturity Date
(each such date, an “Interest Accrual Date”) as follows: (i) at the
rate of fifteen percent (15%) per annum for the period commencing on the Issue
Date and ending on the first anniversary thereof and (ii) thereafter at
the rate of eighteen percent (18%) per annum (“Interest”). Accrued
interest shall be capitalized on the Interest Accrual Date and added to the
principal amount of the Notes then outstanding and shall thereafter be included
in the principal amount of the Notes for all purposes thereof (including,
without limitation, the calculation of subsequent interest accruals). For each
day on, after and during the continuation of an Event of Default under Section 10.1(a),
Interest on the unpaid principal amount of the Notes shall accrue at two
percent (2%) above the rate then applicable to the Notes. Interest on the Notes
shall be payable on the Final Maturity Date, except that any overdue payment of
interest shall be payable on demand.

 

Section 2.2                                      Purchase and Sale. Subject to the terms
and the conditions of this Agreement, at the Closing provided for in Section 3.1,
the Company will issue and sell to each Lender, and each Lender will purchase
from the Company the Notes in the principal amount specified opposite each
Lender’s name on Schedule A hereto.  On
the Closing Date, the Lenders agree to make a Loan to the Company in an
aggregate principal amount of five million dollars ($5,000,000) with each
Lender paying its Pro Rata Share of such amount on the Closing Date.  The obligations of each Lender hereunder are
several and not joint obligations and no Lender shall have any liability to any
Person for the performance or nonperformance of any obligation by any other
Lender hereunder.

 

Section 2.3                                      Subsidiary Guaranty.
The payment by the Company of all amounts due with respect to the Notes and the
performance by the Company of its

 

12

 

obligations under this Agreement and the Notes will be absolutely and
unconditionally guaranteed by the Subsidiary Guarantors pursuant to the terms
of this Agreement and the Subsidiary Guaranties.

 

ARTICLE III

CLOSING; CONDITIONS PRECEDENT

 

Section 3.1                                      Time and Place of Closing. Subject to the terms
and the  conditions of this Agreement,
the closing of the transactions contemplated by this Agreement (the “Closing”)
shall take place at the offices of Skadden, Arps, Slate, Meagher &
Flom LLP, 1440 New York Avenue, NW, Washington, DC at 10:00 a.m. (local
time) on the date hereof following the satisfaction or waiver of all of the
conditions set forth in Section 3.4 and Section 3.5, or at such other
date, place or time as the parties may agree. 
The date on which the Closing occurs and the transactions contemplated
hereby become effective is referred to herein as the “Closing Date.”

 

Section 3.2                                      Deliveries by the Company. Concurrently with
the execution and delivery of this Agreement, the Company shall deliver the
following to each Lender:

 

(a)                        a Note, duly executed by the
Company;

 

(b)                       the Security Agreement, duly
executed by the Company;

 

(c)                        a Subsidiary Guaranty, duly executed
by Current International;

 

(d)                       a certificate of the secretary of
the Company, dated as of the Closing Date, (i) certifying to the
resolutions attached thereto relating to the authorization, execution and
delivery of the Notes, this Agreement and the Security Agreement and (ii) the
incumbency of each of the officers of the Company who executes this Agreement
and the other Note Documents to which the Company is a party;

 

(e)                        a certificate of the secretary of
Current International, dated as of the Closing Date, (i) certifying to the
resolutions attached thereto relating to the authorization, execution and
delivery of the Subsidiary Guaranty and (ii) the incumbency of each of the
officers of Current International who executes the Subsidiary Guaranty;

 

(f)                          a certificate of the chief operating
officer of the Company (the “Officer’s Certificate”), dated as of the
Closing Date, to the effect that, to the best of such officer’s knowledge, the
conditions set forth in Section 3.5(a) and Section 3.5(b) have
been satisfied; and

 

(g)                       a copy of the financing statement
attached as Schedule B to the Security Agreement, which financing statement
shall be filed within five (5) Business Days following the Closing Date in
the office of the Secretary of State of the State of Delaware.

 

13

 

In addition, concurrently with the execution
and delivery of this Agreement, the Company shall deliver to the Collateral
Agent, a copy of the financing statement as well as the certificates listed on
Schedule A to the Security Agreement along with blank transfer powers.

 

Section 3.3                                      Deliveries by each Lender.
Concurrently with the execution and delivery of this Agreement, each Lender
shall deliver the following to the Company:

 

(a)                        each Lender’s Pro Rata Share of the
Loan, in immediately available funds, being made by the Lenders at the Closing;

 

(b)                       the Security Agreement, duly
executed by the Collateral Agent; and

 

(c)                        a receipt, duly executed by the
Collateral Agent acknowledging receipt of the certificates listed on Schedule A
to the Security Agreement.

 

Section 3.4                                      Company’s Conditions. The obligations of
the Company to issue the Notes to the Lenders at the Closing is subject to the
satisfaction at or prior to the Closing Date of the following conditions:

 

(a)                        Each of the representations and
warranties of each of the Lenders in this Agreement shall have been true, correct
and complete in all material respects on the Closing Date, except that those
representations and warranties which address matters only as of a particular
date shall remain true, correct and complete in all material respects as of
such date.

 

(b)                       Each Lender shall have delivered to
the Company its Pro Rata Share of the Loan being made by the Lenders at the
Closing, by wire transfer in immediately available funds.

 

Section 3.5                                      Closing Date Conditions to Each
Lender’s Obligations Under this Agreement. Each Lender’s obligation to purchase
and pay for the Notes to be sold to such Lender at the Closing is subject to
the satisfaction at or prior to the Closing Date of the following conditions:

 

(a)                        Each of the representations and
warranties of the Company in this Agreement and the Security Agreement shall
have been true, correct and complete in all material respects on and as of the
Closing Date, except that those representations and warranties which address
matters only as of a particular date shall remain true, correct and complete in
all material respects as of such date. 
The representations of the Subsidiary  Guarantors contained in the Subsidiary
Guaranties shall have been true, correct and complete in all material respects
as of the Closing Date.

 

(b)                       The Company shall have performed and
complied with all agreements and conditions contained in this Agreement and the
Security Agreement

 

14

 

required to be performed or complied with by
the Company prior to or at the Closing, and after giving effect to the issue
and sale of the Notes (and the application of the proceeds thereof), no Default
or Event of Default shall have occurred and be continuing.

 

(c)                        The Company and each Subsidiary
Guarantor, as applicable, shall have duly authorized, executed and delivered
each of the Note Documents.

 

Section 3.6                                      Conditions to Each Loan Extension.  The obligation of each Lender to make any
Loan on any Loan Date, including the Closing Date, are subject to the
satisfaction or waiver of the following conditions precedent:

 

(a)                        The Lenders shall have received a
Funding Notice executed by a duly authorized officer of the Company in a
writing delivered to the Lenders and an Officer’s Certificate, dated as of such
Loan Date, to the effect that, to the best of such officer’s knowledge, the
conditions set forth in Section 3.6(b) and Section 3.6(c) have
been satisfied.

 

(b)                       As of such Loan Date, the
representations and warranties contained herein shall be true, correct and
complete in all material respects on and as of that Loan Date to the same
extent as though made on and as of that date, except that those representations
and warranties which address matters only as of a particular date shall remain
true, correct and complete in all material respects as of such date.

 

(c)                        As of such Loan Date, the Company
shall have performed and complied with all agreements and conditions contained
in this Agreement required to be performed or complied with by the Company
prior to or at the applicable Loan Extension, and after giving effect thereto,
no Default or Event of Default shall have occurred and be continuing.

 

The Required Holders shall be entitled, but not
obligated to, request and receive, prior to the making of any Loan Extension,
additional information reasonably satisfactory to the requesting party
confirming the satisfaction of any of the foregoing if, in the good faith
judgment of such Lender(s) such request is warranted under the
circumstances.

 

ARTICLE IV

REVOLVING LOANS

 

Section 4.1                                      Revolving
Commitments. Each Lender’s commitment hereunder shall be a Revolving
Commitment.  During the Revolving
Commitment Period, subject to the terms and conditions hereof, each Lender
severally agrees to make Revolving Loans to the Company in an aggregate amount
up to but not exceeding such Lender’s Revolving Commitment.  Amounts borrowed may be repaid and reborrowed
during the Revolving Commitment Period; provided that the conditions set
forth in Section 3.6 are complied with at the time of such borrowing.  Each Lender’s Revolving Commitment shall
expire on the Final Maturity Date and all Revolving Loans and all other amounts
owed hereunder with respect to the Revolving Loans and the Revolving
Commitments shall be paid in full no later than such date.

 

15

Section 4.2                                      Borrowing Mechanics for Revolving
Loans.

 

(a)                        Revolving Loans shall be made in an
aggregate minimum amount of five million dollars ($5,000,000) and integral
multiples of five million dollars ($5,000,000) in excess of that amount.

 

(b)                       Whenever the Company desires that
the Lenders make Revolving Loans, the Company shall deliver to each Lender the
Officer’s Certificate specified in Section 3.6(a) and a fully
executed Funding Notice in respect of such Revolving Loans, together with the
amount of each Lender’s Pro Rata Share thereof, if any, together with the
applicable interest rate, at least ten (10) Business Days in advance of
the proposed Loan Date.  The Funding
Notice shall be delivered to each Lender by facsimile or electronic
transmission.

 

(c)                        Except as provided herein, upon
satisfaction or waiver of the conditions precedent specified in Section 3.6,
each Lender shall make its Pro Rata Share of the Revolving Loan available to
the Company not later than the Loan Date specified in the applicable Funding
Notice by wire transfer of same day funds in lawful money of the United States
of America to the account designated by the Company to each Lender by facsimile
or electronic transmission.

 

Section 4.3                                      Ratable Sharing.  The Lenders hereby agree among themselves
that, except as otherwise provided in the other Note Documents with respect to
amounts realized from the exercise of rights with respect to Liens on the
Collateral, if any of them shall, whether by voluntary payment (other than a
voluntary prepayment of Loans made and applied in accordance with the terms
hereof), through the exercise of any right of set-off or banker’s lien, by
counterclaim or cross action or by the enforcement of any right under the Note
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, or amounts payable
in respect of other amounts then due and owing to such Lender hereunder or
under the other Note Document (collectively, the “Aggregate Amounts Due”
to such Lender) which is greater than the proportion received by any other
Lender in respect of the Aggregate Amounts Due to such other Lender, then the
Lender receiving such proportionately greater payment shall (a) notify the
Company and each  other Lender of the
receipt of such payment and (b) apply a portion of such payment to
purchase participations (which it shall be deemed to have purchased from each
seller of a participation simultaneously upon the receipt by such seller of its
portion of such payment) in the Aggregate Amounts Due to the other Lenders so
that all such recoveries of Aggregate Amounts Due shall be shared by all
Lenders in proportion to the Aggregate Amounts Due to them; provided, if
all or part of such proportionately greater payment received by such purchasing
Lender is thereafter recovered from such Lender upon the bankruptcy or
reorganization of the Company or otherwise, those purchases shall be rescinded
and the purchase prices paid for such participations shall be returned to such
purchasing Lender ratably to the extent of such recovery, but without
interest.  The Company expressly consents
to the foregoing arrangement and agrees that any holder of a participation so
purchased may exercise any

 

16

 

and all rights of banker’s lien, set-off or counterclaim with respect
to any and all monies owing by the Company to that Lender with respect thereto
as fully as if that Lender were owed the amount of the participation held by
that Lender.

 

Section 4.4                                      Defaulting
Lenders.

 

(a)                        A
Lender who fails to pay the Company its Pro Rata Share of any Revolving Loan,
or who fails to pay any other amount owing by it (collectively, a “Funding
Default”) to the Company, is a “Defaulting Lender.”  The Company may recover all such amounts
owing by a Defaulting Lender on demand. 
If the Defaulting Lender does not pay such amounts on the Company’s
demand, the Company shall be entitled to pursue all remedies (at law or in
equity) available to it to require the Defaulting Lender to pay the aggregate
amount of the Funding Default and to compensate the Company for the reasonable
costs and expenses (including reasonable attorneys’ fees and expenses) incurred
by or on behalf of the Company as a result of such failure.

 

(b)                       During any Default Period with
respect to a Defaulting Lender, (i) such Defaulting Lender shall be deemed
not to be a “Lender” for purposes of voting on any matters (including the
granting of any consents or waivers in accordance with Section 15.1) with
respect to this Agreement and the Notes, (ii) the Notes held by such
Defaulting Lender shall not be included for purposes of determining whether the
Required Holders have consented to any amendment or waiver, and (iii) to
the extent permitted by Applicable Law, any voluntary prepayment of the
Revolving Loans shall, if the Company so directs at the time of making such
voluntary prepayment, be applied to the Revolving Loans of the other Lenders as
if such Defaulting Lender had no Revolving Loan outstanding.  The operation of this Section 4.4(b) shall
not be construed to increase or otherwise affect the Commitment of any Lender,
or relieve or excuse the performance by the Company of its duties and
obligations hereunder.

 

(c)                        The failure of any Lender to fund
its Pro Rata Share of any Revolving Loan shall not relieve any other Lender of
its obligation to fund its Pro Rata Share of such Revolving Loan.  Conversely, no Lender shall be responsible
for the failure of another Lender to fund its Pro Rata Share of a Revolving
Loan.

 

Section 4.5                                      Optional Termination or Reduction of
Commitments.  The
Company shall have the right, upon not less than three (3) Business Days’
written notice to the Lenders, to terminate the Revolving Commitments or, from
time to time, to reduce the amount of the Revolving Commitments.  Any such reduction shall be in an amount
equal to $5,000,000 or an integral multiple of $1,000,000 in excess thereof and
shall reduce permanently the Revolving Commitments then in effect.  Any such termination or reduction shall be
applied ratably to the Lenders’ Revolving Commitments and be accompanied by the
ratable prepayment of the Loans, and accrued interest on the amount so prepaid,
to the extent that the principal amount of Loans then outstanding exceeds the
amount of the Revolving Commitments as so reduced.

 

17

 

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF
THE COMPANY

 

Except as set forth in the disclosure schedule dated
as of the date of this Agreement and executed and delivered by the Company to
the Lenders concurrently with or prior to the execution and delivery by the
Company of this Agreement (the “Company Disclosure Schedule”), the
Company represents and warrants to the Lenders, that:

 

Section 5.1                                      Corporate Existence of the Company;
Subsidiaries.  The
Company and each of its Subsidiaries (a) is a limited liability company,
corporation or limited partnership duly formed, validly existing and in good
standing under the laws of its jurisdiction of organization or incorporation; (b) has
full limited liability company or corporate power and authority to carry on
their respective businesses as they are now being conducted; and (c) is
duly qualified or licensed to do business as a foreign corporation currently in
good standing in every jurisdiction in which the conduct of their respective
businesses requires such qualification, excluding from clause (c) such
qualifications or licenses the failure of which to obtain would not reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect.  As of the date hereof, the
Subsidiaries of the Company are Current International and Current TV.  All outstanding Capital Stock of the Company
and its Subsidiaries have been duly authorized and validly issued and, with
respect to any Subsidiary of the Company that is organized as a corporation,
all of the shares of Capital Stock of such Subsidiary are fully paid and
nonassessable, and are owned by the Company free and clear of any Lien other
than Liens contemplated by the Security Agreement.

 

Section 5.2                                      Authorization.  The Company has full limited liability
company power and authority to execute and deliver this Agreement and the
Security Agreement  and to
consummate the transactions contemplated hereby and thereby.  The execution, delivery and performance by
the Company of this Agreement and the Security Agreement and the consummation
by the Company of the transactions contemplated hereby and thereby have been
duly authorized by its Board of Directors and no other limited liability
company power is necessary to authorize the execution and delivery by the
Company of this Agreement or the Security Agreement or the consummation by it
of the transactions contemplated hereby and thereby.  No vote of, or consent by, the holders of any
class or series of membership interests or voting debt issued by the Company
(which has not already been obtained on or prior to the date hereof) is
necessary to authorize the execution and delivery by the Company of this
Agreement or the Security Agreement or the consummation by the Company of the
transactions contemplated hereby and thereby.

 

Section 5.3                                      Binding Agreement.  This Agreement and the Security Agrement have
been duly executed and delivered by the Company and, assuming due and valid
authorization, execution and delivery hereof and thereof by the Lenders, this
Agreement and the Security Agreement each constitutes, and upon execution and
delivery thereof each Note will constitute a valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
except (a) as limited by

 

18

 

applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance and other similar laws of general application affecting
enforcement of creditors’ rights generally and (b) the availability of the
remedy of specific performance or injunctive or other forms of equitable relief
may be subject to equitable defenses and would be subject to the discretion of
the court before which any proceeding therefor may be brought.

 

Section 5.4                                      Subsidiary Guaranties.

 

(a)                        Each Subsidiary Guarantor has full
limited liability company power and authority to execute and deliver its
Subsidiary Guaranty  and to
consummate the transactions contemplated thereby.  The execution, delivery and performance by
such Subsidiary Guarantor of the Subsidiary Guaranty and the consummation by
such Subsidiary Guarantor of the transactions contemplated thereby have been
duly authorized by its board of directors (or similar governing body) and no
other limited liability company or other power is necessary to authorize the
execution and delivery by such Subsidiary Guarantor of its Subsidiary Guaranty  or the consummation by it of the
transactions contemplated thereby.  No
vote of, or consent by, the holders of any class or series of equity interests
or voting debt issued by such Subsidiary Guarantor (which has not already been
obtained on or prior to the date hereof) is necessary to authorize the
execution and delivery by such Subsidiary Guarantor of its Subsidiary Guaranty
or the consummation by such Subsidiary Guarantor of the transactions
contemplated thereby.

 

(b)                       Each Subsidiary Guaranty has been
duly executed and delivered by the Subsidiary Guarantor party thereto and, such
Subsidiary Guaranty constitutes a valid and binding obligation of such
Subsidiary Guarantor, enforceable against such Subsidiary Guarantor in
accordance with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance and other similar
laws of general application affecting enforcement of creditors’ rights
generally and (ii) the availability of the remedy of specific performance
or injunctive or other forms of equitable relief may be subject to equitable
defenses and would be subject to the discretion of the court before which any
proceeding therefor may be brought.

 

Section 5.5                                      No Violations.  None of the execution, delivery or
performance of this Agreement or the other Note Documents by the Company or any
of its Subsidiaries, nor the consummation by the Company or any of its
Subsidiaries of the transactions contemplated hereby or thereby will (a) conflict
with or result in any breach of any provision of the limited liability company
operating agreement or similar organizational documents of the Company or any
of its Subsidiaries, (b) result in a violation or breach of, or constitute
(with or without due notice or the passage of time or both) a default (or give
rise to any right of termination, amendment, modification, cancellation or
acceleration) under, any agreement, indenture, mortgage, lease, sublease,
license, promissory note, evidence of indebtedness or other instrument or
obligation to which the Company or any of its Subsidiaries is a party or by
which any of its assets are bound, or (c) violate any order, writ,
injunction, decree, statute, rule or regulation of any Governmental Entity
applicable to the Company or any of its Subsidiaries or their respective
properties or assets, excluding from the foregoing clauses (b) and (c),
such

 

19

 

violations, breaches or defaults which would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect.

 

Section 5.6                                      Compliance with Laws.  The Company and each of its Subsidiaries has
complied in all material respects with all laws, rules and regulations,
ordinances, judgments, decrees, orders, writs and injunctions of all Government
Entities that affect their respective businesses, properties or assets, and (a) no
notice, charge, claim, action or assertion has been received by the Company or
any of its Subsidiaries from any Governmental Entity alleging a violation of
the foregoing, (b) no written notice, charge, claim, action or assertion
has been received by the Company or any of its Subsidiaries from any Person (excluding
any Governmental Entity) alleging a violation of the foregoing and (c) to
the Knowledge of the Company, no charge, claim or action has been threatened
against the Company or any of its Subsidiaries (with respect to their
businesses) alleging a violation of the foregoing.  No consent, approval or authorization of,
registration, filing (other than the filing of the UCC financing statements as
contemplated by the Security Agreement) or declaration with, any Governmental
Entity is required in connection with the execution, delivery or performance by
the Company or its Subsidiaries with this Agreement and the other Note
Documents.

 

Section 5.7                                      Permits.   There are no Permits that are held by the
Company or any of its Subsidiaries that are material to the operation of their
respective businesses as presently conducted or the ownership and use of their
respective property and assets as presently owned and used.

 

Section 5.8                                      Title
to Properties.   The Company and its
Subsidiaries have good and sufficient title to their respective material
properties, in each case free and clear of Liens other than Permitted
Liens.  All material leases to which the
Company or any of its Subsidiaries is a party are in full force and effect.

 

Section 5.9                                      Defaults.   Except
as set forth on Section 5.9 of the Company’s Disclosure Schedule, neither
the Company nor any Subsidiary is in default in any material respect (or with
notice or the passage of time or both would be in default in any material
respect), under any material contract, and, to the Knowledge of the Company, no
other party to any material contract is in default in any material respect
thereunder (or with notice or the passage of time or both would be in default
in any material respect thereunder).  No
party to any material contracts of the Company or any Subsidiary has exercised
any termination or cancellation rights with respect thereto.

 

Section 5.10                                Financial Statements.

 

(a)                        The Financial Statements have been
prepared from, in accordance with and accurately reflect the books and records
of the Company and its Subsidiaries, prepared in accordance with GAAP applied
on a consistent basis during the periods involved except as may be stated in
the notes thereto (subject, in the case of any interim financial statements, to
normal year-end adjustments) and present fairly, in all

 

20

 

material respects, the results of operations
of the Company and its Subsidiaries as of the times and for the periods
referred to therein.

 

(b)                       Since June 30, 2006, there has
been no development or event, and no change in the business, assets, results of
operations or financial condition of the Company and its Subsidiaries, taken as
a whole, which has had or could reasonably be expected to have a Material
Adverse Effect.

 

Section 5.11                                Absence of Undisclosed Liabilities.  Since June 30, 2006, neither the Company
nor any of its Subsidiaries has incurred any liability or obligation (whether
direct or indirect, fixed, contingent or otherwise) other than (a) such as
have been reflected on the Financial Statements, (b) liabilities which
would not be required to be reflected or reserved against on the Financial
Statements in accordance with GAAP, (c) liabilities incurred subsequent to
June 30, 2006 in the ordinary course of business, and (d) such as
have been set forth on Section 5.11 of the Company’s Disclosure Schedule.

 

Section 5.12                                Absence of Certain Changes.   Since December 31, 2005, the Company and
each of its Subsidiaries has conducted its business, in all material respects,
in the ordinary course consistent with past practice, and there has not
occurred any event, occurrence, fact, condition, change, development or effect
that, individually or in the aggregate, has had or could reasonably be expected
to have a Material Adverse Effect.

 

Section 5.13                                Tax Matters.  Except as set forth on Section 5.13 of
the Company’s Disclosure Schedule:

 

(a)                        The Company and each of its
Subsidiaries has duly filed all material Tax Returns that it is required to
file with respect to the income, properties or operations of, the Company
and/or any of its Subsidiaries and has duly paid or caused to be duly paid in
full all Taxes shown as due on such Tax Returns.  All such Tax Returns are true, correct and
complete in all material respects and accurately reflect all liability for
Taxes for the periods covered thereby.

 

(b)                       No federal, state, local or foreign
audits, examinations, investigations or other administrative proceedings or
court proceedings are presently pending with regard to any Taxes or Tax Returns
with respect to the income, properties or operations of, the Company and/or any
of its Subsidiaries.

 

(c)                        There are no Liens for Taxes except
for statutory liens for Taxes not yet due.

 

Section 5.14                                Litigation.  Except as set forth on Section 5.14 of
the Company’s Disclosure Schedule, there are no actions, suits or proceedings
pending or, to the Knowledge of the Company, threatened against or affecting
the Company or any Subsidiary or any property of the Company or any Subsidiary
in any court or before any

 

21

 

arbitrator of any kind or before or by any Governmental Entity which
individually or in the aggregate may reasonably be expected to have a Material
Adverse Effect.

 

Section 5.15                                Intellectual Property.

 

(a)                        The Company and its Subsidiaries
either own, singly or jointly, license or otherwise possess legally enforceable
rights to use the Intellectual Property.

 

(b)                       Except as set forth on Section 5.15(b) of
the Company’s Disclosure Schedule, (i) neither the Company nor any of its
Subsidiaries has received any notice that the Company or any of its
Subsidiaries are, in default in any material respect (or with the giving of
notice or lapse of time or both, would be in default in any material respect),
under any contract to use the Intellectual Property, (ii) there are no
material restrictions on the transfer of any material contract, or any interest
therein, held by the Company or any of its Subsidiaries in respect of any
Intellectual Property, and (iii) to the Knowledge of the Company, no
Intellectual Property is being infringed upon by any other Person.

 

(c)                        To the Knowledge of the Company, the
conduct of the business of the Company and its Subsidiaries and the
Intellectual Property does not infringe in any material respect upon any
Intellectual Property rights of any Person, and neither the Company nor any of
its Subsidiaries has received any notice from any other Person pertaining to or
challenging the right of the Company and its Subsidiaries to use any of the
Intellectual Property.

 

Section 5.16                                Environmental Matters.  Except as set forth on Section 5.16 of
the Company’s Disclosure Schedule:

 

(a)                        Each of the Company and its
Subsidiaries has been and is in compliance in all material respects with all
applicable Environmental Laws.

 

(b)                       Neither the Company nor any of its
Subsidiaries has received any written communication from any Person that
alleges that the Company or any of its Subsidiaries is not in material
compliance with any Environmental Laws, and, to the Knowledge of the Company,
there are no circumstances that may prevent or interfere with such compliance
in the future.

 

(c)                        There is no material pending
Environmental Claims by any Person that is pending or, to the Knowledge of the
Company, threatened in writing against the Company or any of its Subsidiaries
or against any Person whose liability for any Environmental Claim the Company
or any of its Subsidiaries has retained or assumed either contractually or by
operation of law.

 

(d)                       To the Knowledge of the Company,
there are no past or present actions, activities, circumstances, conditions,
events or incidents, including the release, emission, discharge, presence or
disposal of any Materials of Environmental

 

22

 

Concern, that could form the basis of any
Environmental Claim against the Company or any of its Subsidiaries or, to the
Knowledge of the Company, against any Person whose liability for any
Environmental Claim the Company or any of its Subsidiaries has retained or
assumed either contractually or by operation of law.

 

Section 5.17                                Employee Benefit Plans.  Each Company Plan, if any, has at all times
complied in form and in operation in all material respects with its terms and
the requirements of Applicable Laws, including without limitation, ERISA and
the Code.

 

Section 5.18                                Labor Matters.  Neither the Company nor any of its
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected, either individually or in the aggregate, to have a Material Adverse
Effect.  There is no strike, labor
dispute, slowdown or stoppage pending against the Company or any of its
Subsidiaries or, to the Knowledge of the Company, threatened against the
Company or any of its Subsidiaries that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect.

 

Section 5.19                                Use of Proceeds; Margin Regulations.  All proceeds from the issuance of the Notes
will be used by the Company for general corporate purposes.  No part of the proceeds from the Notes will
be used, directly or indirectly, for the purpose of buying or carrying any
margin stock within the meaning of Regulation G of the Board of Governors of
the Federal Reserve System, or for the purpose of buying or carrying or trading
in any securities under such circumstances as to involve the Company in a
violation of Regulation X of said Board or to involve any broker or dealer in a
violation of Regulation T of said Board. 
As used in this Section 5.19, the term “margin stock” and “purpose
of buying or carrying” shall have the meanings assigned to them in Regulation
G.

 

Section 5.20                                Creation and Perfection of Security
Interests.  The provisions of the Security Agreement are
effective to create in favor of the Collateral Agent a valid and enforceable
security interest in all of the right, title and interest of the Company in the
Collateral.  The security interests
granted pursuant to the Security Agreement (a) upon completion of the
filings and other actions specified therein shall constitute valid perfected
security interests in all of the Collateral in favor of the Collateral Agent as
collateral security for the Obligations, enforceable in accordance with the
terms thereof against all creditors of the Company and any Persons purporting
to purchase any Collateral from the Company and (b) are prior to all other
Liens on the Collateral in existence on the date hereof.

 

Section 5.21                                Solvency.  After giving effect to the sale of the Notes
and the application of the proceeds thereof, (a) the fair value of the
Company’s consolidated assets will be in excess of the total amount of the
Company’s liabilities, including, without limitation, contingent obligations, (b) the
Company will be able to pay its liabilities as they mature, and (c) the
Company will not have unreasonably small capital to carry on its business.

 

23

 

Section 5.22              Brokers or
Finders.  No Person has acted,
directly or indirectly, as a broker, finder or financial advisor for the
Company in connection with the transactions contemplated by this Agreement and
the other Note Documents and no Person is entitled to any fee or commission or
like payment in respect thereof.

 

Section 5.23              No General
Solicitation.  Neither the Company,
nor any of its Subsidiaries, nor any Person acting on its or their behalf, has
engaged in any form of general solicitation or general advertising (within the meaning of Regulation D promulgated
under the Securities Act) in connection with the offer or sale of the Notes.

 

Section 5.24              Investment
Company Act.  Neither the Company nor
any of its Subsidiaries is subject to regulation under the Investment Company
Act of 1940, as amended.

 

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF THE LENDERS

 

Each Lender
severally and not jointly represents and warrants to the Company as follows:

 

Section 6.1                    Investment Purpose. 
Each Lender understands and acknowledges that (a) the
Notes have not been registered under the Securities Act or any state securities
laws and are being offered and sold in reliance upon exemptions provided in the
Securities Act and state securities laws for transactions not involving any
public offering and, therefore, cannot be resold or transferred unless they are
subsequently registered under the Securities Act and applicable state laws or
unless an exemption from such registration is available; and (b) each
Lender is purchasing the Note for investment purposes only for the account of
such Lender or for one or more separate accounts maintained by it or for the
account of one or more pension or trust funds and not with any view toward a
distribution thereof; provided that the disposition of such Lender’s
Note shall at all times be within such Lender’s control.

 

Section 6.2                    Availability of Funds. 
Each Lender represents that it has and will have
sufficient funds available to it to pay its respective Revolving Commitment as
set forth on Schedule A hereto at any time prior to the Final Maturity Date
upon the request of the Company pursuant to Article IV.

 

Section 6.3                    Access to Information.  Each Lender has received, read
carefully and understands this Agreement and the other Note Documents and all
exhibits thereto and has consulted its own attorney, accountant and/or
investment advisor with respect to the transactions contemplated hereby and
thereby and its suitability for such Lender. The Company has made available to
the Lenders, prior to the purchase of the Notes, the opportunity to ask
questions of and receive answers from management of the Company concerning the
terms and conditions of this Agreement and the other Note Documents and to
obtain any additional information necessary to verify information contained in
the Agreement, the Notes or otherwise relative to the financial data and

 

24

 

business of the Company, to the extent that
such parties possess such information or can acquire it without unreasonable
effort or expense, and all such questions, if asked, have been answered
satisfactorily and all such documents, if requested, have been found to be
satisfactory.

 

Section 6.4                    Limited Operating History. 
Each Lender is aware and acknowledges that (a) the
Company is a new venture that has no substantial operating history, and there
is a high degree of risk that the Company will be unable to execute its
business strategy successfully; (b) the Notes involve a substantial degree
of risk of loss of its entire investment; (c) each Lender, in purchasing
the Notes, is relying solely upon the advice of such Lender’s personal tax
advisor with respect to the tax aspects of purchasing the Notes; and (d) because
there are substantial restrictions on the transferability of the Notes it may
not be possible for the undersigned to liquidate its investment readily.

 

Section 6.5                    Accredited Investor.  Each Lender is an accredited
investor within the meaning of Rule 501(a) of Regulation D
promulgated under the Securities Act. Each Lender maintains its domicile, and
is not merely a transient or temporary resident, at the residence address shown
in Schedule A hereto.

 

Section 6.6                    Brokers or Finders.  None of the Lenders nor anyone
acting on each Lender’s behalf has paid any commission or other remuneration to
any person in connection with the purchase of the Notes hereunder.

 

ARTICLE VII

PAYMENT OF THE NOTES; REDEMPTION

 

Section 7.1                    Required Payments. 
The principal amount of the Notes, together with any and
all accrued and unpaid interest thereon, shall be paid in cash to the Lenders
on the Final Maturity Date at the principal office of the Company, or, upon the
written request of the Lender, by wire transfer of immediately available funds
to an account designated by such Lender; provided that any overdue
payment (including any overdue prepayment) of principal or interest shall be
payable on demand.

 

Section 7.2                    Optional Prepayment of the Notes. 
The Company may, upon one (1) Business Day’s written
notice to the Lenders, at any time and from time to time, without premium or
penalty, prepay in whole the aggregate unpaid principal amount of the Notes,
together with all accrued and unpaid Interest thereon, in cash, to (but
excluding) the date of prepayment, or prepay in part in amounts aggregating one
million dollars ($1,000,000) or more the aggregate unpaid principal amount of
the Notes, together with accrued and unpaid Interest thereon, in cash, to (but
excluding) the date of prepayment.

 

Section 7.3                    Purchase of
Notes.  The Company will not and will
not permit any of its Subsidiaries to purchase, redeem, prepay or otherwise
acquire, directly or indirectly, any of the outstanding Notes except upon the
payment or prepayment of the Notes in accordance with the terms of this
Agreement and the Notes.

 

25

 

Section 7.4                    Redemption.

 

(a)                                  If during the time the Notes remain
outstanding there occurs a Change of Control, each Lender shall have the right
(exercisable for a period from (and including) the date on which such Change of
Control occurred to (and including) the thirtieth (30th) day after
each Lender’s receipt of the Change of Control Notice) to require the Company
to redeem its Note in cash at a price (the “Redemption Price”) equal to
the then outstanding principal amount plus any accrued and unpaid Interest
thereon.

 

(b)                                 The Company shall deliver a written
notice (the “Change of Control Notice”) to each Lender as promptly as
reasonably practicable following (and in any event within two (2) Business
Days of) the closing or occurrence of the event causing the Change of Control,
describing in reasonable detail the facts and circumstances giving rise
thereto.

 

(c)                                  If, following its receipt of the
Change of Control Notice, a Lender desires to exercise its right to require the
Company to redeem its Note pursuant to clause (a) above, then such Lender
shall deliver written notice thereof (the “Mandatory Redemption Notice”)
to the Company by no later than the date that occurs thirty (30) days after the
date the Change of Control Notice is received by such Lender, and the Company
shall redeem the Note and pay the Redemption Price within fifteen (15) days
after its receipt of the Mandatory Redemption Notice upon presentation and surrender
of the Note by such Lender to the Company at the Company’s principal place of
business, free and clear of all Liens (other than any Liens imposed in
accordance with any Note Document), whereupon after such payment the Note shall
thereafter be canceled by the Company and the Lender shall no longer hold a
Commitment under the Note Documents.

 

(d)                                 If, within thirty (30) days after
its receipt of the Change of Control Notice, a Lender fails to deliver written
notice to the Company of its desire to exercise its right to require the
Company to redeem its Note, then such right shall be deemed waived.

 

ARTICLE VIII

AFFIRMATIVE COVENANTS

 

The Company
covenants and agrees that so long as any Commitment is in effect or any amount
is owing to any Lender or the Collateral Agent under any Note Document, the
Company will perform or cause to be performed the obligations set forth below:

 

Section 8.1                    Maintenance
of Existence; Compliance with Obligations. The Company will, and will cause
each of its Subsidiaries to, (a) continue to engage in business of the
same general type as is currently contemplated to be conducted by the Company
and its Subsidiaries and do or cause to be done all things necessary to
preserve and keep in full force and effect its legal existence and (b) satisfy
all of their respective material obligations and liabilities as and when they
become due; provided, however, that the foregoing shall not
prohibit (i) any merger, consolidation or other

 

26

 

transaction permitted under Section 9.4,
(ii) any Disposition made pursuant to, and in compliance with, Section 9.7,
or (iii) the Company or any of its Subsidiaries from changing its form of
legal entity, as long as, (x) in the case of each of clause (i), (ii) and
(iii) of this proviso, after giving effect thereto, no Default (including,
without limitation, under Section 10.1(j)) shall have occurred and be
continuing or could reasonably be expected to result therefrom, and (y) in
the case of each of clause (i) and (iii) of this proviso, the
provisions of Section 13(a) of the Security Agreement have been
complied with.

 

Section 8.2                    Compliance with Laws. 
The Company will, and will cause each of its Subsidiaries
to, comply with the requirements of all Applicable Laws, rules, regulations and
orders of any Governmental Entity, except to the extent the non-compliance
therewith would not reasonably be expected to result in a Material Adverse
Effect.

 

Section 8.3                    Financial Information. 
The Company will furnish the following to each Lender:

 

(a)                                  as soon as available and in any
event within sixty (60) days after the end of each of the first three Fiscal
Quarters of each Fiscal Year, a copy of the consolidated balance sheet of the
Company and its Subsidiaries as of the end of such Fiscal Quarter and the
related consolidated statements of income and cash flow of the Company and its
Subsidiaries for such Fiscal Quarter and for the period commencing at the end
of the previous Fiscal Year and ending with the end of such Fiscal Quarter, and
including (in each case), following the first full Fiscal Quarter following the
one-year anniversary of the date hereof, in comparative form, the figures for
the corresponding Fiscal Quarter in, and year to date portion of, the
immediately preceding Fiscal Year;

 

(b)                                 as soon as available and in any
event within one hundred and twenty (120) days after the end of each Fiscal
Year, a copy of the consolidated balance sheet of the Company and its
Subsidiaries and the related consolidated statements of income and cash flow of
the Company and its Subsidiaries for such Fiscal Year, setting forth, following
the first full Fiscal Year following the one-year anniversary of the date
hereof, in comparative form the figures for the immediately preceding Fiscal
Year;

 

(c)                                  simultaneously with the delivery of
each set of financial statements referred to in clauses (a) and (b) above,
a certificate of the chief financial officer of the Company (delivered on
behalf of the Company and in his or her capacity as chief financial officer of
the Company, not in his or her individual capacity) stating that such financial
statements (A) present fairly, in all material respects, the financial
position, the results of operations and the cash flows of the Company as of the
date of such financial statements and (B) were prepared, in all material
respects, in accordance with GAAP applied on a consistent basis; and

 

(d)                                 simultaneously with the delivery of
each set of financial statements referred to in clauses (a) and (b) above,
a certificate of the chief financial

 

27

 

officer or chief
executive officer of the Company stating (i) whether, to his knowledge,
any Default then exists and (ii) if, to his knowledge, any Default then
exists, the details thereof and the actions which the Company is taking or
proposes to take with respect thereto.

 

Section 8.4                    Notice of Defaults. 
Promptly, and in any event within seven (7) Business
Days, after any officer of the Company obtains knowledge of the occurrence of
any Default, the Company shall furnish to the Lenders a certificate of the
chief executive officer or the chief financial officer of the Company setting
forth the details thereof and the actions which the Company is taking or
proposes to take with respect thereto.

 

Section 8.5                    Inspection of Property, Books and
Records.  The Company will keep, and will
cause each of its Subsidiaries to keep, proper books of record and account in
which full, true and correct entries shall be made of all dealings and
transactions in relation to its business and activities; and, if an Event of
Default has occurred and is continuing, will permit, and will cause each of its
Subsidiaries to permit, representatives of the Lenders to visit and inspect any
of their respective properties, to examine and make abstracts from any of their
respective books and records and to discuss their respective affairs, finances
and accounts with their respective officers, employees and independent public
accountants, all at such reasonable times and as often as may reasonably be
desired. The provisions of Section 9 of the Security Agreement apply to
any information acquired by a Lender in the exercise of its rights under this Section 8.5.

 

Section 8.6                    Further Assurances. 
From time to time, the Company shall, or shall cause its
Subsidiaries to, do and perform any and all acts and execute any and all
documents as may be required by Appliable Law or as may be necessary or as
reasonably requested by the Collateral Agent or any Lender in order to effect
the purposes of this Agreement and the other Note Documents to which the
Company is a party and to protect the interests of the Lenders under this
Agreement and the other Note Documents to which the Company is a party
including, without limitation, taking all action reasonably necessary to
maintain the perfection and priority of all Liens on the Collateral.

 

Section 8.7                    Direct
Subsidiaries.  Upon the formation of
any direct Subsidiary of the Company created after the date hereof, the Company
and any such Subsidiary shall take all necessary steps to perfect the security
interest held by the Lenders pursuant to the Security Agreement in the equity
interests of such direct Subsidiary held by the Company.

 

Section 8.8                    Current TV as a Subsidiary Guarantor. 
Upon repayment of the Existing Note, if after such date
any Note is still outstanding, Current TV and its Subsidiaries will execute a
Subsidiary Guaranty.

 

28

 

ARTICLE IX

NEGATIVE COVENANTS

 

The Company
covenants and agrees that so long as any Commitment is in effect or any amount
is owing to any Lender or the Collateral Agent under any Note Document:

 

Section 9.1                    Indebtedness. 
The Company will not, and will not permit any of its
Subsidiaries to, create, incur, assume or permit to exist any Indebtedness,
other than:

 

(a)                                  Indebtedness in respect of the Notes
and the Existing Note;

 

(b)                                 trade Indebtedness (i) incurred
in the ordinary course of business of the Company and its Subsidiaries
(including current accounts payable extended by suppliers on normal trade terms
in connection with purchases of goods and services which are not overdue for a
period of more than ninety (90) days or, if overdue for more than ninety (90)
days, as to which either (x) such amounts are accrued on the books of the
Company or such Subsidiary or (y) a dispute exists and adequate reserves
in conformity with GAAP have been established on the books of the Company or
such Subsidiary) and (ii) in respect of performance, surety or appeal
bonds provided in the ordinary course of business;

 

(c)                                  Indebtedness (i) evidencing the
deferred purchase price of newly acquired property or incurred solely to
finance the acquisition of such property of the Company and its Subsidiaries
(pursuant to purchase money mortgages or otherwise, whether owed to the seller
or a third party) (provided that such Indebtedness is incurred within
one hundred and eighty (180) days of the acquisition of such property), (ii) incurred
solely to finance the construction or improvement of property or assets owned
by the Company or any of its Subsidiaries or (iii) that constitutes
Capitalized Lease Liabilities;

 

(d)                                 unsecured intercompany Indebtedness
among the Company and its Subsidiaries;

 

(e)                                  reimbursement obligations or guarantees
arising in the ordinary course of business in respect of business-related
expenses incurred by any employee of the Company or of any Subsidiary of the
Company;

 

(f)                                    unsecured Guarantee Obligations of
the Company or any Subsidiary of the Company with respect to Indebtedness of
the Company or a Subsidiary permitted under this Section 9.1 (so long as
each such Guarantee Obligation is expressly and fully subordinated to the Notes
and the other Note Documents); and

 

(g)                                 renewals and refinancing of any Indebtedness
permitted pursuant to clause (c) above; provided  that the principal amount of such
Indebtedness does not exceed the principal amount of the Indebtedness
refinanced.

 

29

 

Section 9.2                    Negative Pledge. 
The Company will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Liens upon or
with respect to any asset now owned or hereafter acquired by it (including,
without limitation, the Collateral) or on any of its rights in respect thereof,
except for the following (collectively, the “Permitted Liens”):

 

(a)                                  Liens granted pursuant to the
Security Agreement, the Existing Security Agreement and the Existing Note;

 

(b)                                 Liens existing as of the Closing
Date as set forth on Schedule 5.13 of the Company’s Disclosure Schedule;

 

(c)                                  Liens incidental to the ordinary
conduct of the business of the Company and its Subsidiaries or the ownership of
their respective assets which do not secure Indebtedness, such as carrier’s,
warehousemen’s, materialmen’s, landlord’s and mechanic’s liens, and which do
not in the aggregate materially detract from the value of their respective
assets or materially impair the use thereof in the ordinary course of business;

 

(d)                                 Liens incurred or deposits made in
the ordinary course of business in connection with workers’ compensation,
unemployment insurance or other forms of governmental insurance or benefits, or
to secure performance of tenders, statutory obligations, bids, leases or other
similar obligations (other than for Indebtedness) entered into in the ordinary
course of business or to secure obligations on surety and appeal bonds or
performance bonds entered into in the ordinary course of business;

 

(e)                                  judgment Liens which do not otherwise
result in an Event of Default under Section 10.1(h);

 

(f)                                    Liens securing Indebtedness
permitted pursuant to Section 9.1(c); provided that with respect to
Liens securing Indebtedness permitted pursuant to Section 9.1(c), such
Liens do not extend to any property other than the property being acquired or
constructed or to the property being improved (but only to the extent of such
improvement);

 

(g)                                 Liens for Taxes, assessments or
governmental charges or levies, or otherwise arising by operation of law, which
Taxes, assessments or governmental charges or levies are not yet due and
payable or which are being contested in good faith by appropriate proceedings
and for which adequate reserves have been established in accordance with GAAP;

 

(h)                                 Liens arising solely by virtue of
any statutory provisions relating to banker’s liens, rights of set-off or
similar rights and remedies as to deposit accounts or other funds maintained
with a creditor depositary institution; and

 

30

 

(i)                                     other Liens in respect of assets now
owned or hereafter acquired by the Company or any of its Subsidiaries not
described in clauses (a) through (h) above; provided that each
such Lien and the obligation that it secures is expressly and fully subordinated
to all Liens granted pursuant to the Security Agreement and the obligations of
the Company under this Agreement and the other Note Documents by documents that
contain subordination terms that are reasonably satisfactory to the Lenders.

 

Section 9.3                    Investments. 
The Company will not, and will not permit any of its
Subsidiaries to, make any Investment in any Person, except for:

 

(a)                                  the purchase of all or substantially
all of the Capital Stock of another Person constituting the acquisition of a
business unit;

 

(b)                                 Investments in Cash Equivalents;

 

(c)                                  Investments received in connection
with the bankruptcy or reorganization of, or settlement of delinquent accounts
and disputes with, customers and suppliers, in each case in the ordinary course
of business;

 

(d)                                 Investments by way of contributions
to capital or purchases of Capital Stock of any of the Company’s Subsidiaries
or loans to the Company or any Subsidiary of the Company;

 

(e)                                  Investments consisting of any
deferred portion of the sales price received by the Company or any Subsidiary
in connection with any Disposition permitted under Section 9.7;

 

(f)                                    Investments in Capital Stock of any
Person received in exchange for bona fide services provided to such Person or
its Affiliates by any of the Company’s Subsidiaries in the ordinary course of
business; and

 

(g)                                 other Investments not described in
clauses (a) through (f) above; provided that the Investments
permitted under this clause (g) do not to exceed, in the aggregate, the
sum of five million dollars ($5,000,000).

 

Section 9.4                    Merger, Consolidation, etc. 
The Company shall not, and shall not permit any of its
Subsidiaries to, consolidate or merge with any other Person or sell, transfer
or otherwise dispose of any of its properties and assets substantially as an
entirety to any Person, unless:

 

(a)                                  in the event that the Company or any
of its Subsidiaries shall consolidate with or merge into another Person or
sell, transfer or otherwise dispose of its properties and assets substantially
as an entirety to any Person, the Person formed by such consolidation or into
which the Company or any of its Subsidiaries is merged or the Person which
acquires the properties and assets of the Company or any of its Subsidiaries
shall be a corporation, limited liability company, partnership or trust
organized and

 

31

 

validly existing
under the laws of the United States of America, any State thereof or the
District of Columbia;

 

(b)                                 in the event that the Company shall
consolidate or merge with another Person and the Person surviving such
transaction is not the Company, then such surviving Person shall expressly
assume, by delivery of a written instrument in form reasonably satisfactory to
the Required Holders, all of the Company’s rights and obligations under this
Agreement and under the other Note Documents;

 

(c)                                  in the event that any Subsidiary of
the Company shall consolidate or merge with another Person and the Person
surviving such transaction is not the Subsidiary, then such surviving Person
shall expressly assume, by delivery of a written instrument in form reasonably
satisfactory to the Required Holders, all of the Subsidiary’s rights and
obligations under the Note Documents and under any guarantees granted pursuant
to the Notes; and

 

(d)                                 immediately after giving effect to
such transaction, no Event of Default shall have occurred and be continuing (or
could reasonably be expected to result therefrom).

 

Section 9.5                    Transactions with Affiliates. 
The Company will not, and will not permit any of its
Subsidiaries to, enter into any transaction or contract with any of its
Affiliates, unless such transaction or contract (a) is on fair and
reasonable terms no less favorable to the Company or such Subsidiary than it
could obtain in an arm’s-length transaction with a Person that is not an
Affiliate, (b) was entered into prior to the date hereof or contemplated
by any agreement entered into prior to the date hereof (copies of which have
been furnished to the Lenders), (c) is with officers, directors or other
employees of the Company or its Subsidiaries relating specifically and solely
to employment as such, or (d) relates specifically and solely to the ownership
or issuance of equity interests in the Company or in any of the Company’s
Subsidiaries. Notwithstanding anything in this Section 9.5 to the
contrary, each of the Company’s Subsidiaries shall be permitted to reimburse
the Company for reasonable administrative expenses paid or incurred by the
Company in connection with services performed on behalf of or in support of any
of the Company’s Subsidiaries or in connection with the maintenance of the
consolidated group composed of the Company and its Subsidiaries.

 

Section 9.6                    Restricted Payments, etc. 
The Company will not, and will not permit any of its
Subsidiaries to, declare or make a Restricted Payment other than:

 

(a)                                  Restricted Payments made by (i) a
Subsidiary of the Company to the Company or (ii) a Subsidiary of the
Company to another Subsidiary of the Company;

 

(b)                                 Restricted Payments made in
connection with the repurchase of the Company’s or any of its Subsidiaries’
Capital Stock or Options held by the officers, directors and employees of the
Company or any of its Subsidiaries, so long as each such

 

32

 

repurchase is
pursuant to, and in accordance with the terms of, a management and/or employee
stock plan, a management and/or employee benefit plan, a stock subscription or
similar agreement or a shareholder or similar agreement approved by the board
of directors or comparable governing body of any Subsidiary of the Company that
is bound thereby, is made in accordance with the LLC Agreement (as such
agreement exists on the date hereof, a copy of which has been furnished to the
Lenders) or as required by Applicable Law;

 

(c)                                  so long as no Event of Default has
occurred and is continuing, Restricted Payments made by the Company’s
Subsidiaries to the Company to enable the Company to make distributions
sufficient for the Company or its members to pay Taxes; provided, however,
that the aggregate amount of all such Restricted Payments that may be made by a
Company Subsidiary in any Fiscal Year shall not exceed the product of (A) the
Tax Rate and (B) the aggregate net taxable income of the Company that is
derived from such Subsidiary for the most recently ended Fiscal Year. “Tax
Rate” means the sum of (1) the maximum federal income tax rate
applicable to individuals for the calendar year that includes the end of the
most recently ended Fiscal Year, plus (2) the product of (x) the
maximum state and local income tax rate for such calendar year applicable to
individuals residing in the locality in which the Subsidiary has its principal
place of business and (y) the excess of one hundred percent (100%) over
the rate described in (1) above; and

 

(d)                                 Restricted Payments made to the
Company to reimburse the Company for reasonable administrative expenses paid or
incurred by the Company in connection with services performed on behalf of or
in support of any of the Company’s Subsidiaries or in connection with the
maintenance of the consolidated group composed of the Company and its
Subsidiaries.

 

Section 9.7                    Dispositions. 
The Company will not, and will not permit any of its
Subsidiaries to, make any Disposition, except:

 

(a)                                  Dispositions in the ordinary course
of business;

 

(b)                                 Dispositions made (i) by a
Subsidiary to the Company or any other Subsidiary of the Company or (ii) by
the Company to any of its Subsidiaries;

 

(c)                                  licenses or sublicenses of trademarks,
trade names, copyrights, patents and other intellectual property entered into
by any of the Company’s Subsidiaries in the ordinary course of business; and

 

(d)                                 Dispositions of property not
prohibited by Section 9.4 and not otherwise specifically addressed by
clauses (a) through (c) above, so long as the net proceeds of any
such Disposition (to the extent received by the Company or its Subsidiary, as
applicable, in cash and following such receipt by the Company or its
Subsidiary, as applicable) are either: (i) reinvested into the Company or
a Subsidiary of the Company within one hundred and eighty (180) days after such
Disposition or (ii)

 

33

 

applied as a
prepayment of the then outstanding principal amount of the Notes and permanent
reduction of Commitments in such amount.

 

Section 9.8                    Subsidiaries. 
The Company will not, and will not permit any of its
Subsidiaries to, create a Subsidiary unless such Subsidiary guarantees the
Notes by executing a Subsidiary Guaranty.

 

ARTICLE X

EVENTS OF DEFAULT

 

Section 10.1              Event of Default .
An “Event of Default” shall exist if any of the following conditions or
events shall occur and be continuing:

 

(a)                                  the Company fails to pay the then
outstanding principal amount and accrued Interest on the Notes on the Final
Maturity Date or on any other date any such amounts become due and payable;

 

(b)                                 the Company or any Material
Subsidiary shall (i) apply for or consent to the appointment of, or the
taking of possession by, a receiver, custodian, trustee or liquidator; (ii) be
generally unable to pay its debts as such debts become due; (iii) make a
general assignment for the benefit of the Company’s or any Material Subsidiary’s
creditors; (iv) commence a voluntary case under the Bankruptcy Code; (v) file
a petition seeking to take advantage of any other law of any jurisdiction
relating to bankruptcy, insolvency, or composition or readjustment of debts; (vi) fail
to controvert in a timely and appropriate manner, or acquiesce in writing to,
any petition filed against it in an involuntary case under the Bankruptcy Code;
or (vii) take any action to authorize any of the actions set forth in
clauses (i) through (vii) above;

 

(c)                                  a proceeding or case shall be
commenced, without the application or consent of the Company or any Material
Subsidiary, in any court of competent jurisdiction, seeking (i) liquidation,
reorganization or other relief with respect to it or its assets or the
composition or readjustment of its debts, (ii) the appointment of a
trustee, receiver, custodian, liquidator or the like of any substantial part of
its assets, or (iii) similar relief in respect of the Company or any
Material Subsidiary under any law of any jurisdiction relating to bankruptcy,
insolvency, or the composition or readjustment of debts, and, in each case,
such proceedings or case shall continue undismissed, or an order, judgment or
decree approving or ordering any of the foregoing shall be entered and continue
unstayed and in effect, for a period of sixty (60) days, if in the United
States, or ninety (90) days, if outside of the United States; or an order for
relief against the Company or any Material Subsidiary shall be entered in an
involuntary case under any bankruptcy, insolvency, composition, readjustment of
debt, liquidation of assets or similar law of any jurisdiction;

 

(d)                                 if any representation or warranty
made by the Company or any of its Subsidiaries in any Note Document shall prove
to have been incorrect in a material respect when made;

 

34

 

(e)                                  if the Company or any Subsidiary of
the Company fails to observe or perform any covenant or agreement contained in Section 8.4;

 

(f)                                    the Company or any Subsidiary of the
Company fails to observe or perform any covenant or agreement contained in Article IX
hereof and such failure to observe or perform continues for a period of ten (10) days
after the Company’s receipt of written notice from a Lender of such failure;

 

(g)                                 the Company or any Subsidiary of the
Company fails to observe or perform any covenant or agreement contained in any
of the Note Documents (other than those specified in Section 10.1(a), Section 10.1(e) and
Section 10.1(f)) and such failure to observe or perform continues for a
period of thirty (30) days after the Company’s receipt of written notice from
the Lenders of such failure;

 

(h)                                 any judgment or order for the
payment of money, individually or in the aggregate, of one million dollars
($1,000,000) or more (exclusive of any amounts covered by insurance (less any
applicable deductible)) shall be rendered against the Company or any of its
Subsidiaries and such judgment shall not have been vacated or discharged or
stayed pending appeal (for so long as such appeal is pending) or satisfied
pending appeal by the posting of a bond or guaranty (for so long as such appeal
is pending) within thirty (30) days, if in the United States, or sixty (60)
days, if outside the United States (but only if the Company or any of its
Subsidiaries has used its reasonable best efforts to cause such judgment to be
vacated, discharged or stayed pending appeal), in each case after the entry
thereof or enforcement proceedings shall have been commenced by any creditor
upon such judgment or order and shall not have been dismissed, stayed or
discharged within the period prescribed by Applicable Law;

 

(i)                                     a default shall occur in the payment
of any amount when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any principal or stated amount of, or interest or
fees on, any Indebtedness of the Company or any of its Subsidiaries having an
outstanding principal amount, individually or in the aggregate, of one million
dollars ($1,000,000) or more or an event of default shall occur under any
instrument evidencing or securing any such Indebtedness which gives the holder(s) of
such Indebtedness or any Person acting on behalf of such holder(s) thereof
the right to accelerate the maturity of such Indebtedness; or

 

(j)                                     any Note Document shall cease, for
any reason, to be in full force and effect, or any Lien created by any Note
Document shall fail, for any reason, to constitute a valid and perfected Lien
with respect to the Collateral set forth therein, subject to no other Lien
(other than Permitted Liens), or the Company or any Subsidiary or Affiliate of
the Company shall assert any of the foregoing in writing; provided that
an Event of Default shall not be deemed to have occurred pursuant to this Section 10.1(j) if
(i) the applicable Note Document(s) become in full force and effect
or the applicable Lien becomes valid and perfected within five (5) Business
Days following the date on which the applicable Note Document(s) ceased to
be in full force and effect or the applicable Lien failed to constitute a valid
and perfected Lien with respect to the Collateral set forth

 

35

 

therein and (ii) the
Collateral shall not have become subjected to any Lien not created by a Note
Document (other than Permitted Liens) at any time during the period referred to
in clause (i) hereof.

 

Section 10.2              Consequences of Events of Default.  If an Event of Default has
occurred and is continuing, then the Required Holders may by notice to the
Company declare all or any portion of the then outstanding principal amount of
the Notes, together with all accrued and unpaid Interest thereon, and the Notes
shall thereupon become, immediately due and payable in cash, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Company; provided that in the case of any of the
Events of Default specified in Section 10.1(b) or Section 10.1(c),
without any notice to the Company or any other act by the Lenders, all
outstanding Notes shall thereupon become immediately due and payable in cash,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Company. Such remedies shall be cumulative and not
exclusive and shall be in addition to any other remedies that the Lenders may
have under the Security Agreement and the other Note Documents or under
Applicable Law.

 

ARTICLE XI

REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES

 

Section 11.1              Registration of Notes. 
The Company shall keep at its principal executive office a
register for the registration and transfer of Notes. The name and address of
each holder of one or more Notes, each transfer thereof and the name and
address of each transferee of one or more Notes shall be registered in such
register. Prior to due presentment for registration of transfer, the Person in
whose name any Note shall be registered shall be deemed and treated as the
owner and holder thereof for all purposes hereof, and the Company shall not be
affected by any notice or knowledge to the contrary. The Company shall give to
any institutional holder of a Note, promptly upon request therefor, a complete
and correct copy of the names and addresses of all registered holders of Notes.

 

Section 11.2              Transfer and Exchange of Notes. 
Upon surrender of any Note at the principal executive
office of the Company (as specified in Section 16.9) for transfer or
exchange (and in the case of a surrender for registration for transfer, duly
endorsed or accompanied by a written instrument of transfer duly executed by
the registered holder of such Note or such holder’s attorney duly authorized in
writing and accompanied by the relevant address and other information for
notices of each transferee of such Note or part thereof), within ten (10) Business
Days thereafter, the Company shall execute and deliver, at the Company’s
expense (except as provided below), one or more new Notes (as requested by the
holder thereof) in exchange therefor, in an aggregate principal amount equal to
the unpaid principal amount of the surrendered Note. Each such new Note shall
be payable to such Person as such holder may request and shall be substantially
in the form of Exhibit B hereto. Each such new Note shall be dated the
date of the surrendered Note. The Company may require payment of a sum sufficient
to cover any stamp tax or governmental charge imposed in respect of any such
transfer of Notes.

 

36

 

Notes shall not be transferred in
denominations of less than one hundred thousand dollars ($100,000); provided
that if necessary to enable a holder of Notes to transfer its entire holding of
Notes, one Note may be in a denomination of less than one hundred thousand
dollars ($100,000). Any transferee, by its acceptance of a Note registered in
its name (or the name of its nominee), shall be deemed to have made the
representations set forth in Article VI. The Company shall not be required
to register the transfer of any Note to any Person (other than a transfer by
holder of a Note to its nominee not involving a change of beneficial ownership
of such Note) unless the Company receives (a) from the proposed transferee
a representation reasonably satisfactory to the Company that the
representations and warranties set forth in Article VI are true with
respect to such transferee and (b) in the case of any transfer in which
the Note will be registered in the name of a nominee, the name of the
beneficial owner of the Note and confirmation that such nominee is permitted to
transfer such Note only with the consent of the beneficial owner.

 

Section 11.3              Replacement of
Notes.  Upon receipt by the Company
of evidence reasonably satisfactory to it of the ownership of and the loss,
theft, destruction or mutilation of any Note (which evidence shall be, in the
case of an institutional investor, notice from such institutional investor of
such ownership and such loss, theft, destruction or mutilation), and

 

(a)                                  in the case of loss, theft or
destruction, of indemnity reasonably satisfactory to it (provided that
if the holder of such Note is, or is a nominee for, an institutional investor,
such holder’s own unsecured agreement of indemnity shall be deemed to be
satisfactory),

 

(b)                                 in the case of mutilation, upon
surrender and cancellation thereof, or

 

(c)                                  the Company at its own expense shall
execute and deliver, in lieu thereof, a new Note, dated the date of such lost,
stolen, destroyed or mutilated Note.

 

ARTICLE XII

COLLATERAL AGENT

 

Section 12.1              Appointment of the Collateral Agent.

 

(a)                                  Each Lender hereby authorizes Joel
Z. Hyatt in his capacity as a Lender hereunder, to act on behalf its behalf to
designate a collateral agent. Joel Z. Hyatt hereby designates HSBC Bank USA,
National Association as Collateral Agent to act on behalf of the Lenders and
irrevocably authorizes the Collateral Agent to take action on its behalf under
the Security Agreement and with respect to the Collateral, to exercise the
powers and perform the duties described therein, and to exercise such other
powers reasonably incidental thereto. The Collateral Agent may perform any of
its duties through its agents or employees.

 

(b)                                 Other than the Company’s rights
under Section 12.9, this Article XII is for the benefit of the
Collateral Agent and the Lenders only. The Collateral

 

37

 

Agent shall act only
for the Lenders and assumes no obligation to or agency or trust relationship
with the Company.

 

Section 12.2              Nature of Duties of Collateral Agent.

 

(a)                                  Each Lender hereby further
authorizes the Collateral Agent, as applicable, on behalf of and for the
benefit of the Lenders, to be the agent for and representative of the Lenders
with respect to the Collateral and the Security Agreement. Subject to Section 15.1,
without further written consent or authorization from the Lenders, the
Collateral Agent may execute any documents or instruments necessary
to release any Lien encumbering any item of Collateral that is the subject
of a sale or other disposition of assets permitted hereby or to which the
Required Holders (or such other Lenders as may be required to give such consent
under Section 15.1) have otherwise consented.

 

(b)                                 The Collateral Agent has no duties
or responsibilities except those expressly set forth in the Note Documents. Neither
the Collateral Agent nor any of its officers, directors, employees or agents
shall be liable for any action taken or omitted hereunder or in connection
herewith. The duties of the Collateral Agent shall be mechanical and
administrative in nature. The Collateral Agent shall not have a fiduciary relationship
to any Lender or any Affiliate of any Lender.

 

Section 12.3              Right to Realize on Collateral. 
Anything contained in any of the Note Documents to the
contrary notwithstanding, the Company, the Collateral Agent and each Lender
hereby agree that (a) no Lender shall have any right individually to
realize upon any of the Collateral, it being understood and agreed that all
powers, rights and remedies under the Security Agreement may be exercised
solely by the Collateral Agent, on behalf of the Lenders in accordance with the
terms hereof and thereof, and (b) in the event of a foreclosure by the
Collateral Agent on any of the Collateral pursuant to a public or private sale,
the Collateral Agent or any Lender may be the purchaser of any or all of such
Collateral at any such sale and the Collateral Agent, as agent for and
representative of the Lenders (but not any Lender or Lenders in its or their
respective individual capacities unless the Required Holders shall otherwise
agree in writing) shall be entitled, for the purpose of bidding and making
settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the
obligations as a credit on account of the purchase price for any collateral
payable by the Collateral Agent at such sale.

 

Section 12.4              Lack of Reliance on the Collateral
Agent.  Independently and without
reliance upon the Collateral Agent, each Lender has made and shall continue to
make its own independent investigation and analysis of the content and validity
of the Note Documents or of the performance and creditworthiness of the Company
thereunder. The Collateral Agent assumes no responsibility and undertakes no
obligation to make any inquiry with respect to such matters.

 

38

 

Section 12.5              Certain Rights of the Collateral
Agent.  The Collateral Agent may
request instructions from the Lenders at any time. If the Collateral Agent
requests instructions from the Lenders with respect to any action or inaction,
the Collateral Agent shall be entitled to await instructions from the Required
Holders before such action or inaction. No Lender shall have any right of
action based upon the Collateral Agent’s action or inaction in response to instructions
from the Lenders.

 

Section 12.6              Reliance by the Collateral Agent. 
The Collateral Agent may rely upon written or telephonic
communication it believes to be genuine and to have been signed, sent or made
by the proper person. The Collateral Agent may obtain the advice of legal
counsel (including, for matters concerning the Company, counsel for the
Company), independent public accountants and other experts selected by it and
shall have no liability for action or inaction in good faith based upon such
advice.

 

Section 12.7              Indemnification of the Collateral
Agent.  To the extent
the Collateral Agent is not reimbursed and indemnified by the Company, each
Lender will reimburse and indemnify the Collateral Agent, to the extent of its
Pro Rate Share, for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including counsel fees
and disbursements) or disbursements of any kind or nature whatsoever (including
all expenses) which may be imposed on, incurred by or asserted against the
Collateral Agent in performing its duties hereunder or otherwise relating to
the Note Documents, unless resulting from the Collateral Agent’s gross
negligence or willful misconduct.

 

Section 12.8              The Collateral Agent in its
Individual Capacity . In its individual capacity, the
Collateral Agent shall have the same rights and powers hereunder as any other
Lender and may exercise them as though it was not performing the duties
specified herein. The terms “Lenders,” or any similar terms shall, unless the
context clearly otherwise indicates, include the Collateral Agent in its
individual capacity. The Collateral Agent and its Affiliates may accept
deposits from, lend money to, acquire equity interests in, and generally engage
in any kind of banking, trust, financial advisory or other business with the
Company or any Affiliate of the Company as if it were not performing the duties
specified herein, and may accept fees and other consideration from the Company
for services in connection with this Agreement and otherwise without having to
account for the same to the Lenders.

 

Section 12.9              Successor
Collateral Agent.

 

(a)                                  The
Collateral Agent may, upon five (5) Business Days’ notice to the Lenders
and the Company, resign by giving written notice thereof to the Lenders and the
Company. The Collateral Agent’s resignation shall be effective upon the
appointment of a successor collateral agent (the “Successor Agent”).

 

(b)                                 Upon receipt of the Collateral Agent’s
resignation, the Lenders may appoint a Successor Agent. Unless an Event of
Default shall have occurred and be continuing at the time of such appointment,
the Successor Agent shall be subject to approval by the Company, which approval
shall not to be unreasonably withheld and

 

39

 

 shall be delivered to the Lenders within five (5) Business
Days after the Company’s receipt of notice of a proposed Successor Agent. If a
Successor Agent has not accepted its appointment within fifteen (15) Business
Days, then the retiring Collateral Agent may, on behalf of the Lenders and at
the expense of the Company, appoint a Successor Agent which it reasonably deems
competent to act as collateral agent.

 

(c)                                  Upon its acceptance of the agency
hereunder, a Successor Agent shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Collateral Agent, and the
retiring Collateral Agent shall be discharged from its duties and obligations
under this Agreement. The retiring Collateral Agent shall continue to have the
benefit of this Article XII for any action or inaction while it was
Collateral Agent.

 

Section 12.10        Collateral Matters.

 

(a)                                  Each Lender authorizes and directs
the Collateral Agent to enter into the Security Agreement for the benefit of
the Lenders. Except as otherwise set forth herein, any action or exercise of
powers by the Lenders under the Note Documents, together with such other powers
as are reasonably incidental thereto, shall be authorized and binding upon all
of the Lenders. Prior to an Event of Default, without notice to or consent from
any Lender, the Collateral Agent may take any action necessary or advisable to
perfect and maintain the perfection of the Liens upon the Collateral.

 

(b)                                 The Collateral Agent shall have no
obligation to assure that the Collateral exists or is owned by the Company or
any of its Subsidiaries, that such Collateral is cared for, protected or
insured, or that the Liens in the Collateral have been created, perfected, or
have any particular priority. With respect to the Collateral, the Collateral
Agent may act in any manner it may deem appropriate, in its sole discretion,
given the Collateral Agent’s own interest in the Collateral as one of the
Lenders, and it shall have no duty or liability whatsoever to the Lenders,
except for its gross negligence or willful misconduct.

 

(c)                                  In addition to the Collateral Agent’s
right to take actions on its own accord as permitted under this Agreement, the
Collateral Agent shall take such action with respect to a Default or Event of
Default as shall be directed by the Required Holders in writing. Until the
Collateral Agent shall have received such written directions, the Collateral
Agent may act (or not act) as it deems advisable and in the best interests of
the Lenders.

 

(d)                                 In no event shall the Collateral
Agent be liable, directly or indirectly, for any special, indirect or
consequential damages, even if the Collateral Agent has been advised of the
possibility of such damages.

 

40

 

ARTICLE XIII

EXPENSES, ETC.

 

Section 13.1              Transaction Expenses. 
Whether or not the transactions contemplated hereby are
consummated, the Company agrees to pay all reasonable and documented costs and
expenses (including reasonable attorneys’ fees) incurred by each Lender and the
Collateral Agent in connection with such transactions and in connection with
any amendments, waivers and consents under or in respect of this Agreement or
the Notes (whether or not such amendment, waiver or consent become effective),
including (a) the reasonable and documented costs and expenses incurred in
connection with the preparation, execution and delivery of this Agreement and
the other Note Documents and any waiver or amendment with respect thereto, and
of the Company’s performance of and compliance with all agreements and
conditions contained herein on its part to be performed or complied with, and (b) the
reasonable and documented costs and expenses incurred in connection with the
enforcement of this Agreement and the other Note Documents or in responding to
any subpoena or other legal process or informal investigative demand issued in
connection with this Agreement or the other Note Documents, or by reason of
being a holder of any Note, or otherwise in connection with the transactions
contemplated hereby and thereby.

 

Section 13.2              Survival. 
The obligations of the Company under this Article XIII
will survive the payment or transfer of any Note, the enforcement, amendment or
waiver of any provision of this Agreement or the Notes, and the termination of
this Agreement.

 

ARTICLE XIV

SURVIVAL AND INDEMNIFICATION

 

Section 14.1              Survival of Representations and
Warranties.All
representations and warranties contained herein shall survive the execution and
delivery of this Agreement and the Notes, the purchase or transfer by each
Lender of any Note or portion thereof or interest therein and the payment of
any Note, and may be relied upon by any subsequent holder of a Note, regardless
of any investigation made at any time by or on behalf of each Lender or any
other holder of a Note. All statements contained in any certificate or other
instrument delivered by or on behalf of the Company pursuant to this Agreement
shall be deemed representations and warranties of the Company under this
Agreement. Subject to the preceding sentence, this Agreement and the other Note
Documents embody the entire agreement and understanding between each Lender and
the Company and supersede all prior agreements and understandings relating to
the subject matter hereof.

 

Section 14.2              Company’s Agreement to Indemnify.  Subject to the terms and
conditions set forth herein, the Company hereby agrees to indemnify, defend and
hold the Lenders and the Collateral Agent and their directors, officers,
employees, members, Affiliates, agents, attorneys, representatives, successors
and assigns (each a “Lender Indemnified Party”) harmless from and
against any and all losses, liabilities,

 

41

 

claims, charges, proceedings, judgments,
settlements, damages, interest, penalties, costs and expenses (including
reasonable attorneys’ fees, and expenses and costs of enforcement of such
indemnification claim) (individually, a “Loss” and collectively, “Losses”)
based upon, attributable to or resulting from any investigation, litigation,
action or other proceeding (including any governmental action or proceeding)
(whether or not a Lender Indemnified Party is a party thereto) related to the
entering into and/or performance of this Agreement or the use of any proceeds
of the Notes hereunder or the consummation of any transactions contemplated
herein or any other legal, administrative or other proceeding arising out of
the transactions contemplated hereby, other than such Losses which are
judicially determined in a final and non-appealable decision to have resulted
from the gross negligence or willful misconduct of the Lender Indemnified
Party.

 

Section 14.3              Indemnification Procedures.

 

(a)                                  In the event that any legal proceedings,
judicial, administrative or arbitral action, suit, or proceeding shall be
instituted or any claim or demand shall be asserted by any party hereto or by
any third party in respect of which payment may be sought under Section 14.2
(a “Claim”), the party seeking indemnification pursuant to this Article XIV
(the “Indemnified Party”) shall promptly give written notice thereof
(the “Claim Notice”) to the party from whom such Indemnified Party is
seeking indemnification pursuant to this Article XIV (the “Indemnifying
Party”), specifying in reasonable detail the nature of the Claim and, to
the extent practicable, the amount or the estimated amount thereof and the
source of the Loss under Section 14.2; provided, however,
the failure to give such notice shall not affect the Indemnifying Party’s
obligations hereunder except to the extent that the Indemnifying Party incurs
incremental out-of-pocket expenses or is actually prejudiced by such failure.

 

(b)                                 With respect to Claims not involving
a third party, following receipt of a Claim Notice related to such Claim, the
Indemnifying Party shall have the opportunity to make such investigation of the
Claim as such Indemnifying Party reasonably deems necessary or desirable, and
shall have thirty (30) days following receipt of a Claim Notice related to such
Claim to give notice of dispute of such Claim to the Indemnified Party. For the
purposes of such investigation, such Indemnified Party agrees to make available
to such Indemnifying Party and/or its authorized representative(s) the
information relied upon by such Indemnified Party to substantiate the Claim, as
well as any other information bearing thereon reasonably requested by such
Indemnifying Party. If the Indemnifying Party has timely disputed its liability
with respect to such Claim or fails to notify the Indemnified Party whether
such indemnifying person disputes its liability with respect to such Claim, the
Indemnifying Party and the Indemnified Party shall proceed in good faith to
negotiate a resolution of such dispute, and if not resolved through
negotiations within sixty (60) days following the receipt of the Claim Notice
related to such Claim, such dispute shall be resolved by litigation in a court
of competent jurisdiction.

 

(c)                                  The Indemnifying Party shall have
the right to assume the defense of, negotiate, settle or otherwise deal with
any Claim brought by any third party,

 

42

 

 with counsel of its own choice, which counsel
must be reasonably acceptable to the Indemnified Party, by giving written
notice, within fifteen (15) days from the date of receipt of the Claim Notice,
to the Indemnified Party of its intent to do so, whereupon it shall have the
sole power to direct and control such defense except as provided below. If the
Indemnifying Party elects not to defend against, negotiate, settle or otherwise
deal with any Claim which relates to any Losses indemnifiable against hereunder
or fails to notify the Indemnified Party of its election as herein provided,
the Indemnified Party may defend against, negotiate, settle or otherwise deal
with such Claim. If the Indemnifying Party shall assume the defense of any
Claim, the Indemnified Party may participate, at its own expense, in the
defense of such Claim; provided, however, that such Indemnified
Party shall be entitled to participate in any such defense with separate
counsel at the expense of the Indemnifying Party if, in the reasonable written
opinion of counsel to the Indemnified Party, a conflict or potential conflict
exists between the Indemnified Party and the Indemnifying Party in the conduct
of the defense of such Claim; and provided, further, that the
Indemnifying Party shall not be required to pay for more than one such counsel
for all Indemnified Parties, in each jurisdiction, in connection with any Claim.
The parties hereto agree to reasonably cooperate with each other in connection
with the defense, negotiation or settlement of any such Claim. The Indemnifying
Party shall not settle or compromise any indemnifiable Claim or consent to
entry of any judgment without the written consent of the Indemnified Party
(which consent shall not be unreasonably withheld or delayed), unless such
settlement, compromise or judgment includes an unqualified release from all liability
in respect of the indemnifiable Claim by each claimant or plaintiff to such
Indemnified Party. An Indemnified Party shall not settle or compromise any
indemnifiable Claim or consent to entry of any judgment without the prior
written consent of the Indemnifying Party (which consent shall not be
unreasonably withheld or delayed). If the Indemnifying Party makes any payment
on any indemnifiable Claim, the Indemnifying Party shall be subrogated, to the
extent of such payment, to all rights and remedies of the Indemnified Party to
any Claims of the Indemnified Party with respect to such indemnifiable Claim.

 

(d)                                 After any final judgment or award
shall have been rendered by a Governmental Entity of competent jurisdiction and
the expiration of the time in which to appeal therefrom, or a settlement shall
have been consummated in accordance with the requirements of this Section 14.3,
or the Indemnified Party and the Indemnifying Party shall have arrived at a
mutually binding agreement with respect to a Claim hereunder, the Indemnified
Party shall forward to the Indemnifying Party notice of any sums due and owing
by the Indemnifying Party pursuant to this Agreement with respect to such
matter and the Indemnifying Party shall be required to pay all of the sums so
due and owing to the Indemnified Party by wire transfer of immediately
available funds within ten (10) Business Days after the date of such
notice.

 

ARTICLE XV

AMENDMENT AND WAIVER

 

Section 15.1              Requirements. 
This Agreement and the Notes may be amended, and the
observance of any term hereof or of the Notes may be waived (either

 

43

 

retroactively or prospectively), with (and
only with) the written consent of the Company, the Required Holders and, solely
with respect to Article XII hereof, the Collateral Agent, except that (a) no
amendment or waiver of any of the provisions of Section 2.1, Section 2.2,
Article III, Article IV, or Article XII, or any defined term (as
it is used therein), will be effective as to a holder of a Note unless
consented to by such holder in writing, and (b) no such amendment or
waiver may, without the written consent of the holder of each Note at the time
outstanding affected thereby, (i) subject to the provisions of Section 10.2,
change the amount or time of any prepayment or payment of principal of, or
reduce the rate or change the time of payment or method of computation of
interest on, the Notes, (ii) reduce the percentage of the principal amount
of the Notes the holders of which are required to consent to any such amendment
or waiver, by amendment of the definition of “Required Holders” or otherwise, (iii) change
the percentage of the principal amount of the Notes the holders of which may
declare the Notes to be due and payable as provided in Section 10.2, or
which may rescind any such declaration, or (iv) amend any of Section 10.1(a),
Section 10.2, Section 16.7, or this Article XV.

 

Section 15.2              Solicitation of
Holders of Notes.  (a) The Company
will provide each Lender (irrespective of the amount of any Commitment then
owed to such Lender) with sufficient information, sufficiently far in advance
of the date a decision is required, to enable such Lender to make an informed
and considered decision with respect to any proposed amendment, waiver or
consent in respect of any of the provisions hereof or of the Notes. The Company
will deliver executed or true and correct copies of each amendment, waiver or
consent effected pursuant to the provisions of this Section 15.2(a) to
each holder of outstanding Notes promptly following the date on which it is
executed and delivered by, or receives the consent or approval of, the
requisite holders of Notes.

 

(b)                                 The Company will not directly or
indirectly pay or cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, or grant any security,
to any Lender as consideration for or as an inducement to the entering into by
any Lender or any waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or security is concurrently
granted, on the same terms, ratably to each Lender even if such Lender did not
consent to such waiver or amendment.

 

Section 15.3              Binding Effect. 
Any amendment or waiver consented to as provided in this Article XV
applies equally to all Lenders and is binding upon them and upon each future
holder of any Note and upon the Company without regard to whether such Note has
been marked to indicate such amendment or waiver. No such amendment or waiver
will extend to or affect any obligation, covenant, agreement, Default or Event
of Default not expressly amended or waived or impair any right consequent
thereon. No course of dealing between the Company and any Lender nor any delay
in exercising any rights hereunder or under any Note shall operate as a waiver
of any rights of any Lender. As used herein and in the Notes, the term “this
Agreement” and references thereto shall mean this Agreement as it may from time
to time be amended or supplemented.

 

44

 

Section 15.4              Notes held by the Company.  Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement or the Notes, or
have directed the taking of any action provided herein or in the Notes to be
taken upon the direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by the Company or any of its Subsidiaries shall be deemed not
to be outstanding.

 

ARTICLE XVI

MISCELLANEOUS

 

Section 16.1              Governing Law; Consent to
Jurisdiction.  THIS NOTE AND THE OTHER NOTE
DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK. The Company and each Lender (a) consents to submit
itself to the personal jurisdiction of any New York state or federal court
located in the city and county of New York in the event any dispute arises out
of this Note or any other Note Document or any of the transactions contemplated
hereby or thereby, (b) agrees that it shall not attempt to deny or defeat
such personal jurisdiction by motion or other request for leave from any such
court and (c) agrees that it shall not bring any action relating to this
Note or any other Note Document or any of the transactions contemplated hereby
or thereby in any court other than a federal or state court sitting in the city
and county of New York.

 

Section 16.2              Waiver of Jury Trial. 
THE COMPANY, THE COLLATERAL AGENT AND EACH LENDER HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS NOTE OR ANY OTHER NOTE DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY OR THE ACTIONS OF THE COMPANY OR EACH LENDER IN
THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF AND THEREOF.

 

Section 16.3              Legal Rate.  Notwithstanding anything to the contrary
contained herein or in any other Note Document, if any time the interest rate
payable under the Notes, together with all fees and charges which are treated
as interest under Applicable Law (collectively “Charges”), as provided
in the Notes or otherwise contracted for, charged, received, taken or reserved
by the Lenders, shall exceed the maximum lawful rate (the “Legal  Rate”) which may be contracted for,
charged, received, taken or reserved by a Lender in accordance with Applicable
Law, the interest rate applicable to the Notes, together with all Charges
payable to the Lender, shall be limited to the Legal Rate and any interest or
Charges not so limited, taken, received or reserved by the Lender at such time
shall be spread, prorated or amortized over the term of the Notes to the
fullest extent permitted by Applicable Law.

 

45

 

Section 16.4              Severability.  Any term or provision of this
Agreement and the other Note Documents that is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable in any
situation in any jurisdiction shall not affect the validity or enforceability
of the remaining terms and provisions hereof and thereof or the validity or
enforceability of the offending term or provision in any other situation or in
any other jurisdiction. If the final judgment of a court of competent
jurisdiction or other authority declares that any term or provision hereof or
thereof is invalid, void or unenforceable, the Company and each Lender agrees
that the court making such determination shall have the power to reduce the
scope, duration, area or applicability of the term or provision, to delete
specific words or phrases, or to replace any invalid, void or unenforceable
term or provision with a term or provision that is valid and enforceable and
that comes closest to expressing the intention of the invalid or unenforceable
term or provision.

 

Section 16.5              Entire Agreement.  This Agreement and the other
Note Documents constitute the entire agreement between the parties hereto with
respect to the subject matter hereof and thereof and supercede all prior
agreements, understandings and negotiations, whether written or oral, of the
parties hereto.

 

Section 16.6              No Waiver. 
No failure or delay by a Lender in exercising any right,
power or privilege under this Agreement or any other Note Document shall
operate as a waiver thereof, nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies provided herein and therein
shall be cumulative and not exclusive of any rights or remedies provided by
law.

 

Section 16.7              Confidentiality. 
For a period of time beginning on the date hereof and
ending on the third anniversary of the date hereof, the Lenders shall, and
shall cause their respective officers, directors, employees, consultants,
advisors and representatives including, without limitation, the Collateral
Agent to, treat as confidential the terms of this Agreement and all the other
Note Documents and all nonpublic, confidential or proprietary information
concerning the Company and its Subsidiaries, and the Lenders shall not, and
shall cause their respective officers, directors, employees, consultants,
advisors and representatives including, without limitation, the Collateral
Agent not to, disclose or use such information to the detriment of the Company
or its Subsidiaries, except (a) as otherwise provided herein, (b) with
the prior written consent of the Company, (c) as may be required by
Applicable Law or (d) with respect to such information which is or becomes
generally available to the public other than as a result of a violation of this
provision; provided, however, that the Collateral Agent may
disclose any such information to its counsel, the Lenders and the Lenders’
counsel and any bank auditors and examiners or any other regulatory authority
requiring such information.

 

Section 16.8              Transferability.

 

(a)                                  The Notes and the Commitments shall
not be transferred directly or indirectly, by any Lender to any Person (other
than to Persons who are and

 

46

 

remain Affiliates of
the Lender) without the prior written consent of the Company, which consent
shall not be unreasonably withheld or delayed; provided, however,
that the Company may, in its sole discretion, withhold consent to a transfer of
any Note to a competitor of the Company or any of its Subsidiaries. Any
purported transfer of the Notes and the Commitments in violation of this Section 16.8
shall be null and void.

 

(b)                                 The provisions of the Notes and the
other Note Documents shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, except
that the Company may not assign or otherwise transfer any of its rights or
obligations under the Notes or any Note Document without the prior written
consent of the Required Holders.

 

Section 16.9              Notices. 
All notices and other communications hereunder shall be in
writing and shall be deemed given when mailed, delivered personally, sent via
facsimile (which is confirmed) or sent by an overnight courier service, such as
Federal Express, to the parties at the following addresses (or at such other
address for a party as shall be specified by such party by like notice):

 

If to the Company to:

 

Current Media, LLC

118 King Street

San Francisco, CA 94107

Attention: 
Joel Hyatt

Telephone: 
(415) 995-8200

Facsimile Number:  (415) 995-8283

 

with a copy to:

 

Skadden, Arps, Slate, Meagher & Flom
LLP

1440 New York Avenue, N.W.

Washington, DC 20005

Attention: Ronald C. Barusch

Telephone: (202) 371-7990

Facsimile Number: (202) 393-5760

 

If to a
Lender, to its address and facsimile number set forth on Schedule A attached
hereto, with copies to, in the case the Lender is Blum Strategic Partners II,
L.P., Simpson Thacher & Bartlett LLP at 2550 Hanover Street, Palo
Alto, CA 94304, Attention: William Brentani, Telephone: (650) 251-5110,
Facsimile Number: (650) 251-5002.

 

If to the Collateral Agent, to:

 

HSBC Bank USA, National Association

452 Fifth Avenue

New York, NY 10018

 

47

 

Attention: 
Corporate Trust & Loan Agency

Telephone: 
(212) 525-1351

Facsimile Number:  (212) 525-1300

 

with a copy to:

 

Simpson Thacher & Bartlett LLP

2550 Hanover Street

Palo Alto, CA
94304

Attention:  William Brentani

Telephone: 
(650) 251-5110

Facsimile Number:  (650) 251-5002

 

Section 16.10        Descriptive Headings. 
The descriptive headings herein are inserted for
convenience of reference only and shall in no way be construed to define,
limit, describe, explain, modify, amplify, or add to the interpretation,
construction or meaning of any provision of, or scope or intent of, this
Agreement nor in any way affect this Agreement.

 

Section 16.11        Counterparts. 
This Agreement may be executed in counterparts, each of
which shall be deemed an original, but both of which together shall constitute
one and the same instrument.

 

Section 16.12        Successors and Assigns. 
All covenants and other agreements contained in this
Agreement by or on behalf of any of the parties hereto bind and inure to the
benefit of their respective successors and assigns (including, without
limitation, any subsequent holder of a Note) whether so expressed or not.

 

Section 16.13        Payments Due on Non-Business Days. 
Anything in this Agreement or the Notes to the contrary
notwithstanding, any payment of principal of or interest on any Note that is
due on a date other than a Business Day shall be made on the next succeeding
Business Day without including the additional days elapsed in the computation
of the interest payable on such next succeeding Business Day.

 

[Signature
Page Follows]

 

48

 

IN WITNESS
WHEREOF, each of the undersigned has caused this Agreement to be duly signed as
of the date first above written.

 

	
   

  	
   

  	
  CURRENT MEDIA, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Joel Hyatt

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  HSBC BANK USA, NATIONAL ASSOCIATION,

  as Collateral Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ 

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
  :

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BLUM STRATEGIC PARTNERS II, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Gregory D. Mitchan

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
  :

  	
  Title: 
  Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BCP AIV, L.P.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Gregory D. Mitchan

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title: 
  Managing Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Albert Gore, Jr.

  	
   

  
	
   

  	
   

  	
  Albert Gore, Jr.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Hyatt
  Irrevocable Trust FBO Jared Z. Hyatt

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Joel Hyatt

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title: 
  Trustee

  
										

 

 

	
   

  	
   

  	
  Hyatt
  Irrevocable Trust FBO Zachary R. Hyatt

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Joel Hyatt

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  James A. Kohlberg Revocable
  Trust

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ James A. Kohlberg

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Albert J. Dwoskin

  
	
   

  	
   

  	
  Albert J. Dwoskin

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Andrew Tobias

  
	
   

  	
   

  	
  Andrew Tobias

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Bruce Rauner

  
	
   

  	
   

  	
  Bruce Rauner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/ Philip Murphy

  
	
   

  	
   

  	
  Philip Murphy

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FPB Investments

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Gramercy Fund

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  

 

 

Schedule A

 

Revolving
Commitments

 

	
  Holder

  (name and address)

  	
   

  	
  Revolving Commitment

  	
   

  	
  Pro

  Rata Share

  	
   

  
	
  Blum Strategic Partners II, L.P.

  909 Montgomery Street

  San Francisco, CA 94133

  Facsimile Number: (415) 288-7238

  	
   

  	
  $

  	
  4,128,426

  	
   

  	
  27.523

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BCP AIV, L.P.

  909 Montgomery Street

  San Francisco, CA 94133

  Facsimile Number: (415) 288-7238

  	
   

  	
  $

  	
  2,201,574

  	
   

  	
  14.677

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Albert Gore, Jr.

  The Office of the Honorable Al Gore, Jr.

  2100 West End Avenue

  Nashville, TN 37203

  Facsimile Number: (615) 292-2056

  	
   

  	
  $

  	
  3,000,000

  	
   

  	
  20.000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Hyatt Irrevocable Trust FBO Jared Z. Hyatt

  c/o Joel Hyatt

  118 King Street

  San Francisco, CA 94107

  Facsimile Number: (415) 995-8283

  	
   

  	
  $

  	
  1,500,000

  	
   

  	
  10.000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Hyatt Irrevocable Trust FBO Zachary R. Hyatt

  c/o Joel Hyatt

  118 King Street

  San Francisco, CA 94107

  Facsimile Number: (415) 995-8283

  	
   

  	
  $

  	
  1,500,000

  	
   

  	
  10.000

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  James A. Kohlberg Revocable Trust  

  Attn: Jim Kohlberg

  Kohlberg & Company 

  258 High Street, Suite 100

  Palo Alto, CA 94301-1040

  Facsimile Number: (650) 463-1482

  	
   

  	
  $

  	
  2,000,000

  	
   

  	
  13.333

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Albert J. Dwoskin

  9302 Lee Highway, Suite 300

  Fairfax, VA 22031-1214

  	
   

  	
  $

  	
  200,000

  	
   

  	
  1.333

  	
  %

  

 

 

	
  Andrew Tobias

  787 North East 71st Street 

  Miami, FL 33138

  	
   

  	
  $

  	
  100,000

  	
   

  	
  0.667

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bruce Rauner

  GTCR Golden Rauner, LLC

  6100 Sears Tower

  Chicago, IL 60606

  Facsimile Number: (312) 382-2213

  	
   

  	
  $

  	
  100,000

  	
   

  	
  0.667

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Philip Murphy

  45 Blossom Cove Road

  Red Bank, NJ 07701

  	
   

  	
  $

  	
  100,000

  	
   

  	
  0.667

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FPB Investments

  Jeff Franzen

  867 Alvermar Ridge Drive

  McLean, VA 22102

  Facsimile Number: (703) 760-9211

  	
   

  	
  $

  	
  100,000

  	
   

  	
  0.667

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Gramercy Fund

  Attn: Tom Gegax

  2810 W. Lake of the Isles Pkwy.

  Minneapolis, MN 55416

  	
   

  	
  $

  	
  70,000

  	
   

  	
  0.467

  	
  %Exhibit 10.10

 

OFFICE LEASE

 

THIS LEASE, dated August 30,
2004, for purposes of reference only, is made and entered into by and between
SFI Real Estate Holdings, LLC, a Delaware limited liability company (“Landlord”) INdTV Holdings, LLC, a Delaware limited liability
company, and INdTV, LLC, a Delaware limited liability company (collectively “Tenant”).

 

1.             The Premises.

 

1.1           Landlord hereby leases to Tenant, and Tenant hereby
leases from Landlord, the Premises designated in the Summary of Basic Lease
Information (“Summary”) attached hereto, and
which is more particularly described and outlined on the floor plan attached
hereto and marked Exhibit A, all of which is incorporated herein by
this reference.  The Premises is located
in the building at the address designated in the Summary (the “Building”), and located on the parcel of real property (the “Site”) under the Building. 
Notwithstanding the foregoing, Landlord reserves those rights described
in Subparagraph 1.3 below, and this Lease is subject to those rules and
regulations attached hereto as Exhibit C, and such additional
reasonable rules and regulations as Landlord may deliver to Tenant from
time to time.  Tenant acknowledges that
Landlord has made no representation or warranty regarding the condition of the
Premises, Building, or Site except as specifically stated in this Lease.  The parties hereto agree that said letting
and hiring is upon and subject to the terms, covenants and conditions herein
set forth and Tenant covenants as a material part of the consideration for this
Lease to keep and perform each and all of said terms, covenants and conditions
by it to be kept and performed, and this Lease is made upon the condition of
such performance.

 

1.2           Tenant also shall have the nonexclusive right to use in
common with other tenants in the Building, subject to the Rules and
Regulations referred to in Paragraph 29 below and subject to the reasonable
discretion of Landlord to determine the manner in which the public and common
areas are maintained and operated, the following areas (“Common Areas”)
appurtenant to the Premises:

 

(a)           The common entrances, lobbies, restrooms, elevators,
stairways and access ways, loading docks, ramps, drives and platforms and any
passageways and service ways thereto, and the common pipes, conduits, wires and
appurtenant equipment serving the Premises; and

 

(b)           The loading and unloading areas, roadways, sidewalks,
walkways, parkways, and driveways appurtenant to the Building, including the
roof deck.

 

Landlord shall operate
the Common Areas in a manner consistent with the common areas of similar class
buildings (e.g., 160 King Street, 475 Brannan Street) located in the general
area of the Building.

 

1.3           Landlord reserves the right from time to time to do
any of the following, provided that Landlord shall exercise such rights in a
manner that does not materially interfere with Tenant’s use of or access to the
Premises, and with respect to any work required to be performed in the
Premises, Landlord shall use commercially reasonable efforts to perform such
work after normal business hours:

 

(a)           To remove, install, reinstall, use, maintain, repair
and replace pipes, ducts, conduits, wires and appurtenant meters and equipment
for service to other parts of the Building above the ceiling 

 

1

 

surfaces, below the floor
surfaces, within the walls and in the central core areas, and to relocate any
pipes, ducts, conduits, wires and appurtenant meters and equipment included in
the Premises which are located in the Premises or located elsewhere outside the
Premises, and to expand the Building;

 

(b)           To make changes to the Common Areas, including,
without limitation, changes in the location, size, shape and number of
driveways, entrances, loading and unloading areas, ingress, egress, direction
of traffic and walkways; provided, however, that changes to the Common Areas at
the King Street entrance to the Building shall not be changed without Tenant’s
prior written approval, which shall not be unreasonably withheld, conditioned
or delayed;

 

(c)           To close temporarily any of the Common Areas for
maintenance purposes so long as reasonable access to the Premises remains
available;

 

(d)           To use the Common Areas at any time, including, but
not limited to, while engaged in making additional improvements, repairs or
alterations to the Building, or any portion thereof; and/or

 

(e)           To do and perform such other acts and make such other
changes in, to or with respect to the Site, Common Areas and Building as
Landlord may, in the exercise of Landlord’s business judgment, reasonably deem
to be appropriate.

 

1.4           The rights and obligations of the parties regarding
any initial improvements, alterations, or construction of the Premises to be
performed at the commencement of the Term are described in the Tenant Work
Letter (“Work Letter”) attached to this Lease as
Exhibit B.  Any inconsistency
between the provisions of the Work Letter and the provisions of the balance of
this Lease shall be governed by the provisions of the Work Letter.  In addition to the Tenant Improvements to be
paid for using the Tenant Improvement Allowance (as defined in and contemplated
by the Work Letter), Landlord shall, at Landlord’s expense, (i) construct
a glass partition (the “Glass Partition”)
to separate the King Street lobby of the Building from the Premises, (ii) construct
a demising wall to separate the premises of the other tenant(s) on the
ground floor of the Building from the portion of the Premises located on the
ground floor of the Building, (iii) reprogram the existing key card
security system in the Building elevators and entry doors to limit access to
the Premises to Tenant’s card keys, and (iv) construct an exit corridor
from the rear portion of the Premises located on the ground floor of the
Building (collectively, “Landlord’s Work”).  With the exception of the Glass Partition
(which Landlord shall complete with reasonable diligence), all of Landlord’s
Work shall be completed by the Delivery Date, and pending completion of the
Glass Partition, Landlord shall secure the ground floor portion of the Premises
by limiting access to the King Street lobby of the Building (both through the
exterior doors and the elevator) to Tenant only.  Landlord will construct Landlord’s Work using
new and good quality materials consistent with the existing finishes of the
Building.  Tenant shall have the right,
subject to the immediately preceding sentence, to reasonably approve the
design, finishes, location and layout of Landlord’s Work.

 

1.5           In addition to the Premises as defined herein, Tenant
shall also have the right to use during the Term all of the personal property
located within the Premises and described on Exhibit D attached
hereto (the “Personal Property”).  The Personal Property shall remain the property
of Landlord and upon expiration of the Term or earlier termination of this
Lease, Tenant shall return the Personal Property to Landlord in good condition
and repair, in the same condition as when received, normal wear and tear
excepted.

 

2

 

1.6           References in this Lease to “rentable square feet”, “rentable
square footage” and “rentable area” shall have the same meanings, and Tenant
hereby acknowledges and agrees that the rentable square footage of the Premises
shall be deemed, and is, 27,506 rentable square feet, and the rentable square
footage of the Building shall be deemed, and is, 126,467 rentable square feet.  Landlord represents that the foregoing square
footage determinations were the results of a measurement made of the Building
and the Premises in accordance with BOMA standards, and that, within thirty
(30) days following the Lease Commencement Date, Landlord shall cause Landlord’s
architect, Huntsman Associates, to remeasure the rentable square footage of the
Premises and the Building in accordance with the Standard Method for Measuring
Floor Area in Office Buildings, ANSI/BOMA Z65.1-1996 (“1996 BOMA
Standards”), adopted by the Building Owners and Managers Association
International (BOMA).  If the
remeasurement indicates that the rentable square footage of the Premises or
Building set forth above is inaccurate per the 1996 BOMA Standards, Landlord
and Tenant shall enter into an amendment to this Lease setting forth the
correct rentable square footage of the Premises and/or the Building and
adjusting the Monthly Basic Rent, Tenant’s Percentage Share and other amounts
hereunder calculated based on the rentable square footage thereof.  In addition, at such time as Tenant extends
the ground floor of the Premises to the King Street window line over the
easternmost lightwell and the middle lightwell (immediately adjacent to [and
southwesterly of] the King Street lobby of the Building), which, in the case of
the middle lightwell only, shall be done in accordance with Exhibit H
or such other plans as shall allow an equivalent or greater amount of light to
the lower level of the Building (any deviation of such plans from Exhibit H
shall be subject to Landlord’s approval, which shall not be unreasonably withheld,
conditioned or delayed) (“Permitted Ground Floor
Changes”), then Landlord and Tenant shall enter into an amendment to
this Lease setting forth the adjusted rentable square footage of the Premises
and the Building and adjusting the Monthly Basic Rent, Tenant’s Percentage
Share and other amounts hereunder, including the Tenant Improvement Allowance,
that are calculated based on the rentable square footage thereof; provided,
however, that (a) if such Permitted Ground Floor Changes are completed on
or before the first adjustment of Monthly Basic Rent as set forth in Item (j) of
the Summary above (the “First Adjustment Date”),
then the adjustments in Monthly Basic Rent, Tenant’s Percentage Share and the
rentable square footage of the Premises and Building shall not occur until the
First Adjustment Date (the adjustment in the Tenant Improvement Allowance shall
occur as of the date such Permitted Ground Floor Changes are completed); (b) if
such Permitted Ground Floor Changes are completed following the First Adjustment
Date, but on or before the second adjustment of Monthly Basic Rent, as set
forth in Item (j) of the Summary above (the “Second
Adjustment Date”), then the adjustments in Monthly Basic Rent,
Tenant’s Percentage Share and the rentable square footage of the Premises and
Building shall occur on the date such Permitted Ground Floor Changes are
completed; and (c) if Tenant has not completed such Permitted Ground Floor
Changes on or before the Second Adjustment Date, or has completed only a
portion of the Permitted Ground Floor Changes, then, as of the Second
Adjustment Date, the rentable square footage of the Premises and Building shall
be deemed to be 27,919 and 126,880 rentable square feet, respectively (to
reflect the additional rentable square footage that the parties estimate would
have been added to the Premises had the Permitted Ground Floor Changes been
completed on or before the Second Adjustment Date), and the adjustments in
Monthly Basic Rent, Tenant’s Percentage Share and other amounts hereunder that
are calculated based on the rentable square footage of the Premises shall occur
as of the Second Adjustment Date.  Any
dispute with respect to remeasurement of the Premises or Building shall be
resolved by arbitration pursuant to Paragraph 55 below.

 

3

 

1.7           Tenant additionally shall have the exclusive right to
use the parking bay of the Building located on the Site on the eastern side of
the Building for the sum of $500.00 per month (the “Parking Rent”).  The Parking Rent shall be subject to
adjustment to fair market value, as reasonably determined by Landlord in good
faith, no more frequently than once every two years.  Tenant’s rights pursuant to this Paragraph
are subject to any obligation imposed on Landlord by any governmental entity
for the provision of handicapped parking; provided, however, in all events,
Landlord shall use its commercially reasonable efforts to ensure that Tenant
has the ability to park at least one vehicle at the Site and in no event shall
Tenant’s rights regarding the generator in Paragraph 56 be affected.

 

1.8           In addition to the Premises as contemplated by this
Paragraph 1 and Exhibit A, Tenant shall, at Tenant’s sole election,
additionally lease from Landlord during the Term 50% of the rentable square
footage of the computer server room located on Lower Level 1 of the Building
(the “Server Room”).  At such time as another user of the Building
leases space in the Server Room, Tenant shall install a chain-link fence or
other secure demising barrier to separate the server room into two separate and
functional server rooms.  All of the
costs of demising the server room into two rooms, and to plumb all the
necessary cable and wiring to connect the Premises to the server room, shall be
at Tenant’s sole cost and expense; provided, however, that Landlord shall
require the other user(s) of the Server Room to reimburse Tenant for
50% of the cost of the demising barrier. 
Landlord shall have the right to approve the final design and layout of
the demised server rooms.  In addition to
the Monthly Basic Rent contemplated by the Summary and Paragraph 4 below,
Tenant shall pay to Landlord, in accordance with the payment procedures set
forth in Paragraph 4.1 below, $1.00 per square foot of Tenant’s share of the
Server Room per month, plus 100% of all electrical and HVAC costs
associated with the use of the Server Room until such time as another
tenant of the Building accepts possession of the remaining 50% of the Server
Room, at which time Tenant’s obligation for HVAC and electrical costs for the
Server Room shall reduce to 50%.  All
monthly rental amounts for the Server Room contemplated by this Paragraph
shall be included within the meaning of Monthly Basic Rent whenever such term
is used in this Lease or the Work Letter unless the context clearly
contemplates otherwise.  Promptly after
Tenant completes the work to demise the Server Room, in accordance with plans
approved by Landlord, Landlord and Tenant shall measure the Server Room to
determine the actual monthly rental therefore, and the parties shall execute an
amendment to this Lease setting forth the monthly rental payable by Tenant’s
for the Server Room based on its square footage; provided, however, the
failure to do so shall not affect Landlord’s right to receive and collect such
monthly rental.

 

1.9           Tenant shall also have the right, at no charge to
Tenant, to use the roof deck in common with other tenants of the Building;
provided, however, that Landlord will reasonably assist Tenant in the
occasional exclusive use of the roof deck for conducting and recording
interviews for broadcast and for other Landlord-approved purposes related to
Tenant’s use of the Premises.

 

1.10         In the event any additional space becomes available
for lease from time to time on the ground floor, the third floor or either of
the lower levels of the Building, and Landlord receives an offer to lease such
space that Landlord is prepared to accept, Landlord shall then offer the
subject space (the “First Offer Space”)
to Tenant on the same terms and conditions. 
In addition, if Tenant at any time expands to the third or other floors
in the Building, then, for purposes hereof, the First Offer Space shall include
space on the expansion and adjacent floors; provided, however, in no event
shall any portion of the fifth or sixth floors be included within the First
Offer Space; and provided further that the fourth floor shall be included
within the First Offer Space only if (i)Tenant 

 

4

 

occupies at least one
quadrant of the third floor, and (ii) no other space is available on the
third floor.  Tenant shall thereafter
have five (5) business days within which to commit to leasing the subject
First Offer Space on the same terms and conditions, in which event the parties
shall execute a lease for the subject First Offer Space on the terms and
conditions of the third party offer.  If
Tenant fails to accept the terms and conditions within the time allowed,
Landlord shall be free to lease the subject First Offer Space to the third
party on the terms and conditions of the original offer, without further
obligation to Tenant.  The foregoing
right to additional space in the Building does not include space that is vacant
on the execution date of this Lease (which space Landlord may market for lease
without obligation to Tenant).  Further,
the foregoing right to additional space in the Building is (i) subject to
the options to extend contained, or which may be contained, in any existing or
future lease, (ii) subject to any first offer expansion rights to the
fourth floor Landlord may grant to a tenant leasing a portion of the fourth
floor as part of Landlord’s initial lease up of the Building; provided,
however, that Tenant’s rights hereunder with respect to the fourth floor of the
Building shall be subordinate to the rights of any such fourth floor tenant
only for a period of twenty-four months following the commencement date of such
tenant’s lease (after that date, any 4th floor expansion rights of such tenant shall be
subordinate to Tenant’s rights hereunder), and (iii) subject to the rights
granted to other tenants in leases existing as of the execution date of this
Lease as set forth on Exhibit E attached hereto.

 

2.             Term.

 

2.1           Subject to Paragraphs 2.2, 2.3 and 3 below, the term
of this Lease (“Term”) shall be for the period
designated in the Summary.  The Term
shall commence on the Lease Commencement Date and end on the Lease Expiration
Date, unless the Term shall be sooner terminated or extended as hereinafter
provided.

 

2.2           Tenant shall have one option (the “Extension Option”) to extend the Term, for an additional
five (5) year period (the “Extended Term”)
on all the terms and conditions contained in this Lease with the exception of
the Monthly Basic Rent which shall be adjusted pursuant to the provisions of
Paragraphs 4.3.  In order to exercise the
Extension Option, Tenant shall deliver written notice of its exercise of the
option (“Option Notice”) to Landlord at least
270 days before the expiration of the initial Term.  The Extension Option shall be subject to the
following terms and conditions:

 

(a)           The Extension Option may be exercised only by delivery
of the Option Notice as provided in this Paragraph and only if, as of the date
of delivery of the Option Notice and the commencement date of the Extended
Term, Tenant is not in default under this Lease (after notice and applicable
cure periods), and has not incurred late charges in connection with its
obligation to pay Monthly Basic Rent more than twice during any consecutive
twelve (12) month period of the initial Term.

 

(b)           The rights contained in this Paragraph shall be
personal to the originally named Tenant and any Permitted Transferee (as
defined in Paragraph 25.2 below) and may be exercised only by the originally
named Tenant and any Permitted Transferee, and only if the originally named
Tenant and its Permitted Transferee(s) collectively occupy not less than
50% of the Premises as of the date it exercises the Extension Option in accordance
with the terms of this Paragraph.

 

5

 

(c)           If Tenant properly exercises the Extension Option and
is not in default, beyond applicable cure periods, under this Lease at the end
of the initial Term, the Term shall be extended for the applicable Extended
Term.

 

References in this Lease
to the “Term” shall include the initial Term of ten (10) years, and shall,
in addition, include the Extended Term, if applicable.

 

2.3           As soon as reasonably practical after execution of
this Lease, Tenant shall be entitled to access to the Premises for purposes of
installing Tenant’s trade fixtures, furniture, and equipment, provided that (a) Tenant’s
early entry does not interfere with or delay Landlord’s performance of the
Tenant Improvements, and Landlord shall have the right to restrict the areas of
the Premises to which Tenant will have access in order to avoid interference
with Landlord’s construction work, and (b) prior to Tenant’s entry in the
Premises, Tenant shall furnish to Landlord certificates of insurance
satisfactory to Landlord evidencing Tenant’s compliance with the requirements
of Paragraph 20.1 below.  In connection
with such possession, the provisions of this Lease shall be applicable,
provided only that the obligation of Tenant to pay Monthly Basic Rent and
Operating Rent shall not commence until the Lease Commencement Date.

 

3.             Possession.  If the Lease
Commencement Date fails to occur on or before December 1, 2004, then
Tenant shall have the right to terminate this Lease by giving written notice to
Landlord at any time prior to the date Landlord tenders possession of the
Premises to Tenant.  Termination of the
Lease hereunder shall be Tenant’s sole remedy in the event of a failure of
delivery of possession of the Premises to Tenant by the above date, and Tenant
may not and shall not seek recovery for damages against Landlord.  In the event the Delivery Date does not occur
by October 1, 2004, then unless such failure is the result of a Tenant
Delay (as defined in the Work Letter), the Monthly Basic Rent escalations
scheduled for September 1, 2005 and September 1, 2006 shall be
delayed by one day for each day that the Delivery Date occurs after October 1,
2004.

 

4.             Monthly Basic Rent/Rent Increases.

 

4.1           Tenant agrees to pay to Landlord, on a monthly basis,
the Monthly Basic Rent designated in the Summary.  Tenant shall pay the Monthly Basic Rent in
advance on the first day of each and every calendar month during said Term,
except that the first month’s Monthly Basic Rent which shall be paid upon the
execution hereof.  In the event that the
Lease Commencement Date occurs other than on the first day of a calendar month,
and the full first month’s Monthly Basic Rent has been previously paid as
provided in this Lease, then the rent for the initial partial calendar month of
the Lease Term shall be prorated in the proportion that the number of days this
Lease is in effect during such calendar month bears to thirty (30), and the
prepaid first month’s Monthly Basic Rent shall be applied to such prorated
amount with the balance of the prepaid first month’s Monthly Basic Rent being
applied to reduce the payment of Monthly Basic Rent to be paid on the first day
of the first full calendar month of the Term of this Lease.  Said Monthly Basic Rent and all additional
rent including, without limitation, Operating Rent shall be paid to Landlord,
without any prior demand therefor and, except as otherwise expressly set forth
in this Lease, without any deduction or offset whatsoever in lawful money of
the United States of America, which shall be legal tender at the time of
payment, at the address of Landlord designated in Subparagraph (c) of the
Summary or to such other person or at such other place as Landlord may from
time to time designate in writing.  Further,
all charges to be paid by Tenant hereunder, including, without limitation,
payments for repairs and other costs and expenses, shall be considered
additional rent for the purposes of this 

 

6

 

Lease, and the word “rent”
in this Lease shall include such additional rent as well as Monthly Basic Rent
and Operating Rent unless the context specifically or clearly implies that only
the Monthly Basic Rent or Operating Rent is referenced.

 

4.2           In the event Tenant exercises its option to extend the
Term pursuant to the provisions of Paragraph 2.2, the Monthly Basic Rent shall
be adjusted at the commencement of the Extended Term to reflect ninety-five
percent (95%) of the then-fair market rental value of the Premises pursuant to
the terms of this Paragraph, and the Base Year, for purposes of calculating
Operating Rent during the Extended Term shall be calendar year 2015.  The fair market rental value of the Premises
shall be determined in good faith by Landlord, who shall notify Tenant of such
determination at least one hundred fifty (150) days before commencement of the
Extended Term.  If Tenant does not agree
with Landlord’s determination, Tenant shall deliver written notice of Tenant’s objection
to Landlord within twenty (20) days of receipt of notice from Landlord, or
Landlord’s determination of the fair market rental value shall be final.  If Tenant timely objects to Landlord’s
determination, Landlord and Tenant shall diligently attempt in good faith to
agree on the fair market rental value of the Premises on or before the tenth
(10th)
day following delivery of Tenant’s written objection to Landlord’s
determination (the “Outside Agreement Date”).  If Landlord and Tenant are unable to agree on
the new Monthly Basic Rent by the Outside Agreement Date, the fair market
rental value of the Premises shall be determined by real estate brokers
pursuant to this Paragraph.  Landlord and
Tenant shall first attempt to select a mutually agreeable broker to determine
the fair market rental value of the Premises, which broker’s conclusion shall
be binding on the parties.  In the event
they are unable to agree on one broker within five (5) business days of
the Outside Agreement Date, the parties shall each select a broker within ten (10) business
days of the Outside Agreement Date, who together shall attempt to determine the
fair market rental value of the Premises. 
If either party fails to appoint a broker within such time period, the
broker timely appointed by the other party shall be the sole broker, whose
determination shall be binding on both parties. 
If two brokers are timely appointed, but they are unable to agree on the
fair market rental value of the Premises within fifteen (15) business days of
the Outside Agreement Date, they shall mutually select a third broker and the
three brokers shall each submit their determination of the fair market rental
value of the Premises within ten (10) business days of selection of the
third broker.  The fair market rental
value of the Premises shall be the average of the three brokers’ determination;
provided, however, that if either the high or low broker’s determination
differs from the middle determination by ten percent (10%) or more, it shall be
disregarded and the two remaining determinations shall be averaged to determine
the fair market rental value.  If both
the high and low determinations differ from the middle determination by ten
percent (10%) or more, then both shall be disregarded, and the fair market
rental value of the Premises shall be the middle broker’s determination.  Each party shall bear the cost of their
respective brokers; if a third broker is necessary, the parties shall share
equally the cost of the third broker.  All
brokers shall be licensed as such by the State of California, and shall have a
minimum of ten (10) years’ experience in the leasing of commercial
properties in the San Francisco downtown area.

 

The fair market rental
value shall be based on comparable space in San Francisco, which shall (i) not
be subleased, (ii) shall be comparable in size, location and quality with
the Premises, and (iii) shall be leased for a term comparable to the
subject option term, and shall take into consideration differences in the age
and quality of such buildings, the differences in the historical rental rates ascribed
to such buildings, the floor height of, and the views from, the comparable
space vis-à-vis the subject space, and making adjustments for the following
concessions:  (a) rental abatement
concessions, if any, being granted such tenants in connection with such
comparable space; (b) tenant 

 

7

 

improvements or
allowances provided or to be provided for such comparable space, and (c) other
reasonable monetary concessions being granted such tenants in connection with
such comparable space.

 

4.3           All payments received by Landlord from Tenant shall be
applied to the oldest payment obligation owed by Tenant to Landlord.  No designation by Tenant, either in a
separate writing or in a check or money order, shall modify this clause or have
any force or effect.

 

5.             Operating Expenses.

 

5.1           For the purposes of this Subparagraph 5.1, the
following terms are defined as follows:

 

Base Year.  2005 calendar year

 

Tenant’s
Percentage Share.  Tenant’s
Percentage Share shall mean the percentage set forth in the Summary.

 

Operating Expenses.  Operating Expenses shall consist of all
reasonable costs of operation and maintenance of the Building, the Common Areas
and the Site as determined in accordance with generally accepted accounting
principles, subject to any deviations therefrom to reflect industry-standard
accounting practices.  Operating Expenses
shall be based on the then current level of services and the then current cost
therefor at one hundred percent (100%) occupancy of the Building; provided,
however, that if the Operating Expenses in any year increase due to a change of
policy or practice in operating the Building (such as a determination to carry
earthquake, terrorism or other insurance, or a change in the calculation of the
management fee), or due to an additional type of taxes or assessments levied
against the Building (such as a gross receipts tax), such increase shall be
included only to the extent of the increase in cost over the projected costs
that would have been included in Operating Expenses for the Base Year if such
policy, practice or tax had been in effect during the entire Base Year.  If, during the Term (including the Base
Year), the actual occupancy of the Building is or becomes less than one hundred
percent (100%), Operating Expenses shall be deemed to be increased to an amount
equal to the like Operating Expenses which would normally be incurred had the
occupancy of the Building been one hundred percent (100%), and had such full
utilization of services occurred throughout the entire Term; and Operating
Expenses shall be determined as if the Building had been one hundred percent
(100%) occupied with all tenants paying full rent, as contrasted with free rent
or other rent concessions.  Landlord
shall have the right to reasonably estimate the Operating Expenses which would
be incurred at 100% of occupancy in Landlord’s reasonable discretion.  Operating Expenses shall include the
following costs by way of illustration, but not limitation:  real property taxes and assessments and any
taxes or assessments hereafter imposed in lieu thereof; gross receipt taxes
(whether assessed against Landlord or assessed against Tenant and collected by
Landlord, or both); the cost of insurance for which Landlord is responsible
hereunder or which Landlord or any first mortgagee with a lien affecting the
Premises reasonably deems necessary in connection with the operation of the
Building (including the commercially reasonable deductible portion of any
insured loss, but excluding earthquake or terrorism insurance deductibles, if
maintained by Landlord); janitorial services and supplies; security; labor;
parking expenses (including any tax or other charge determined or measured by
the collection of parking fees levied against Landlord by any governmental
authority); utility surcharges, and any other costs levied, assessed or imposed
by, or at the direction of, or resulting from statutes or regulations or
interpretations thereof, promulgated by any federal, 

 

8

 

state, regional,
municipal or local government authority in connection with the use or occupancy
of the Building or the Premises; the cost of any capital improvements made to
the Building by Landlord (a) which are reasonably anticipated to reduce
Operating Expenses, or any portion thereof, (b) which are replacements or
modifications to the Building’s fire/life safety system, or (c) that are
required under any governmental law or regulation, except for capital
improvements to remedy a condition existing prior to the Lease Commencement
Date; provided, however, that any capital expenditure shall be amortized at an
interest rate equal to the prime rate at the time, plus 2% over its reasonable
useful life as reasonably determined by Landlord; costs incurred in the
management of the Building, if any (including supplies, wages and salaries of
employees used in the management, operation and maintenance of the Building,
and payroll taxes and similar governmental charges with respect thereto); on
site Building management office rental; a commercially reasonable management
fee, not to exceed three percent (3%) of Landlord’s gross rental revenues,
adjusted and grossed up to reflect a one hundred percent (100%) occupancy of
the Building with all tenants paying full rent, as contrasted with free rent,
half-rent and the like; air conditioning; waste disposal and trash removal;
heating; electrical; water; sewer and other utility costs for the Building and
the Common Areas; ventilating; elevator maintenance; supplies; materials;
equipment; tools; repair and maintenance of the plumbing, heating, ventilating,
air conditioning and electrical systems installed or furnished by Landlord; and
maintenance, costs and upkeep of all parking and Common Areas, rental of
personal property used in maintenance; costs and expenses of gardening and
landscaping, maintenance of signs (other than Tenant’s signs); personal
property taxes levied on or attributable to personal property used in
connection with the entire Building, including the Common Areas; reasonable
audit or verification fees; and costs and expenses of repairs, resurfacing,
repairing, maintenance, painting, lighting, cleaning, refuse removal and
similar items.

 

If, during any portion of
a calendar year Landlord is furnishing a particular service or work (the cost
of which, if furnished by Landlord, would be included in Operating Expenses) to
Tenant, but another tenant of the Building has undertaken to perform such
service or work in lieu of receiving it from Landlord, Operating Expenses for
such calendar year shall be considered to be increased by an amount equal to
the additional Operating Expenses that Landlord would reasonably have incurred during
this period if Landlord had furnished a service or work to such tenant.

 

Notwithstanding anything
contained in this Paragraph 5.1 to the contrary, Operating Expenses shall not
include any of the following:

 

(a)           amortization or depreciation on the Building or
equipment therein, except as permitted with respect to capital improvements as
set forth in the definition of Operating Expenses above;

 

(b)           real estate brokers’ commissions;

 

(c)           interest expense, principal, points and fees on
Building financing, and other Building financing expenses;

 

(d)           cost of tenant improvements in the Building (including
permit, license and inspection fees);

 

(e)           ground rent;

 

(f)            income and franchise taxes;

 

9

 

(g)                                 Landlord’s cost of electricity or other
service sold to tenants to the extent Landlord is reimbursed therefore as a
charge over the Monthly Basic Rent and any additional rent payable under the
lease with that tenant;

 

(h)                                 third party accountants’ fees, attorneys’
fees and other professional fees and costs incurred in connection with disputes
or lease negotiations with tenants or other occupants or prospective tenants or
occupants of the Building, the enforcement of any leases (including unlawful
detainer proceedings and the collection of rents), other than de minimis
amounts, and requests to assign or sublet (except such fees which are incurred
in connection with resolving a dispute which benefits all tenants of the
Building generally, such as the enforcement of Rules and Regulations);

 

(i)                                     overhead and profit paid to subsidiaries
or affiliates of the Landlord for management or other services on or to the
Building for supplies or other materials, to the extent that the overall cost
of the services, supplies or materials provided by Landlord materially exceeds
the competitive cost of the services, supplies, or materials if obtained from
an unrelated third party on an arm’s length basis;

 

(j)                                     compensation paid to clerks, attendants,
or other persons in commercial concessions operated by the Landlord;

 

(k)                                  rentals and other related expenses
incurred in leasing air conditioning systems, elevators, or other equipment
ordinarily considered to be of a capital nature;

 

(l)                                     items and services for which Tenant
reimburses the Landlord or pays third parties or that the Landlord provides
selectively to one or more tenants of the Building other than Tenant without
reimbursement;

 

(m)                               maintenance costs incurred in connection
with repairs or other work needed because of fire, windstorm, or other casualty
to the extent Landlord is entitled to be compensated through proceeds or
insurance awards, or would have been so reimbursed if Landlord had in force all
of the insurance required to be carried by Landlord under this Lease;

 

(n)                                 all voluntary contributions to any
political or charitable-organizations;

 

(o)                                 advertising, marketing and promotion
costs;

 

(p)                                 costs associated with the operation of
the corporation or other entity which constitutes the Landlord, as
distinguished from costs of operation of the Building, including accounting and
legal costs, costs of defending lawsuits with any mortgagee, and the costs of
selling, syndicating, financing, mortgaging or hypothecating any ownership
interest in Landlord, or any of the Landlord’s interests in the Building;

 

(q)                                 costs for which Landlord is entitled to
be reimbursed by insurance companies or other third parties;

 

(r)                                    reserves for capital items, bad debts, or
rental losses;

 

(s)                                  the cost of Landlord’s removal from the
Building or the Site of Hazardous Materials (defined below);

 

10

 

(t)                                    fines and penalties incurred due to
Landlord’s operation of the Building in violation of Applicable Laws (as
defined in Paragraph 13.1 below) or due to Landlord’s failure to timely pay
real property taxes;

 

(u)                                 costs in connection with the correction
of defects in the design or original construction of the Building and related
facilities;

 

(v)                                 costs of a capital nature, including, but
not limited to, capital improvements, capital repairs, capital equipment, and
capital tool, and rental payments and other related expenses incurred in
leasing air conditioning systems, elevators or other equipment ordinarily
considered to be of a capital nature, except as otherwise expressly permitted
in the definition of Operating Expenses above;

 

(w)          costs incurred due to violation by
Landlord or its managing agent or any tenant of the terms and conditions of any
lease;

 

(x)            costs of repair or replacement for any
item covered by a warranty to the extent covered by the warranty;

 

(y)                                 reserves for future improvements, repairs
or additions to the Building;

 

(z)                                   The cost of repair or replacement of the
structural elements of the Building, including the structural elements of the
roof;

 

(aa)                            costs incurred in connection with
upgrading the Building to comply with Applicable Laws in effect prior to the
Lease Commencement Date, including penalties or damages incurred due to such
non-compliance; and

 

(bb)                          any other expenses which, in accordance
with general industry practice with respect to the operation of similar class
office buildings, would not normally be treated as operating expenses by
comparable landlords.

 

As used herein, the term “real
property taxes” shall include any form of assessment, license fee, license tax,
business license fee, tax, levy, charge, or similar imposition, imposed by any
authority having the direct power to tax, including any city, county, state or
federal government, or any school, agricultural, lighting, drainage or other
improvement or special assessment district thereof, as against any legal or
equitable interest of Landlord in the Premises, including, but not limited to,
the following:

 

(a)           any tax on Landlord’s “right” to rent or “right” to
other income from the Premises or as against Landlord’s business of leasing the
Premises;

 

(b)           any assessment, tax, fee, levy or charge in
substitution, partially or totally, of any assessment, tax, fee, levy or charge
previously included within the definition of real estate tax, it being
acknowledged by Tenant and Landlord that Proposition 13 was adopted by the
voters of the State of California in the June, 1978 Election and that
assessments, taxes, fees, levies and charges may be imposed by governmental
agencies for such services as fire protection, street, sidewalk and road
maintenance, refuse removal and for other governmental services formerly
provided without charge to property owners or occupants.  It is the intention of Tenant and Landlord
that all such 

 

11

 

new
and increased assessments, taxes, fees, levies and charges be included within
the definition of “real property taxes” for the purposes of this Lease;

 

(c)           any assessment, tax, fee, levy or charge allocable to
or measured by the area of the Premises or the rent payable hereunder,
including, without limitation, any excise tax levied by the State, City or
Federal government, or any political subdivision thereof, with respect to the
receipt of such rent, or upon or with respect to the possession, leasing,
operating, management, maintenance, alteration, repair, use or occupancy by
Tenant of the Premises, or any portion thereof;

 

(d)           any assessment, tax, fee, levy or charge upon this
transaction or any document to which Tenant is a party, creating or
transferring an interest or an estate in the Premises;

 

(e)           any assessment, tax, fee, levy or charge by any
governmental agency related to any transportation plan, fund or system
instituted within the geographic area of which the Building is a part; or

 

(f)            reasonable legal and other professional fees, costs
and disbursements incurred in connection with proceedings to contest, determine
or reduce real property taxes.

 

Notwithstanding any
provision of this Paragraph 5.1 expressed or implied to the contrary, “real
property taxes” shall not include Landlord’s federal or state income,
franchise, inheritance or estate taxes.  In
addition, if the property tax assessment for the Building (or real property
taxes) for the Base Year or any subsequent year does not reflect an assessment
(or real property taxes) for a one hundred percent (100%) leased, completed and
occupied project (such that existing or future leasing, tenant improvements
and/or occupancy may result in an increased assessment and/or increased real
property taxes), real property taxes for the Base Year shall be adjusted, on a
basis consistent with sound real estate accounting principles, to reflect an
assessment for (and real property taxes for) a one hundred percent (100%)
leased, completed and occupied project.  Notwithstanding
anything to the contrary set forth in this Lease, the amount of real property
taxes for the Base Year shall be calculated without taking into account any
decreases in real property taxes obtained in connection with Proposition 8 for
the Base Year.

 

5.2                                 During the Term, Tenant shall be
responsible for payment of Tenant’s Percentage Share of the Operating Expenses
in excess of the Operating Expenses incurred at the Building during the Base
Year (the “Excess Operating Expenses”).  Landlord shall estimate the monthly Operating
Expenses and Tenant’s Percentage Share of the Excess Operating Expenses, and
shall deliver notice thereof to Tenant (“Estimate Statement”).  Tenant shall pay on the first day of each and
every calendar month during the Term as additional rent such estimated monthly
amount.  If Landlord determines that
Tenant’s Percentage Share of the Excess Operating Expenses for such current
calendar year is greater than that set forth in the Estimate Statement, then
Landlord may, at any time, but not more frequently than once during each Lease
Year, deliver a revised Estimate Statement, and Tenant shall thereafter pay
during the balance of such current calendar year Tenant’s Percentage Share of
the new estimate of Excess Operating Expenses.

 

By the first day of April of
each succeeding calendar year during the Term, or as soon thereafter as
possible, Landlord shall deliver to Tenant a statement (“Actual
Statement”) wherein Landlord shall state the actual Operating
Expenses for the preceding calendar year. 
If the Actual Statement reveals an amount of Tenant’s Percentage Share
of Excess Operating Expenses in excess 

 

12

 

of that which was estimated
by Landlord in the Estimate Statement delivered as provided herein, then within
thirty (30) days following receipt of the Actual Statement by Tenant, Tenant
shall pay a lump sum equal to said Excess Operating Expenses.  If the Actual Statement reveals that Tenant
overpaid Excess Operating Expenses for any calendar year, any overpayment made
by Tenant on the monthly installment basis provided above shall be credited
toward the next monthly rent falling due and the monthly installment of Tenant’s
Percentage Share of Excess Operating Expenses to be paid pursuant to the then
current Estimate Statement shall be adjusted to reflect such lower expenses for
the most recent calendar year, or if this Lease has been terminated, such
excess shall be credited against any amount which Tenant owes Landlord pursuant
to this Lease and, to the extent all amounts which Tenant owes Landlord
pursuant to this Lease have been paid, Landlord shall promptly pay such excess
to Tenant.  Any delay or failure by
Landlord in delivering any estimate or statement pursuant to this Paragraph
shall not constitute a waiver of its right to require an increase in Tenant’s
Percentage Share of the Excess Operating Expenses nor shall it relieve Tenant
of its obligations pursuant to this Paragraph, except that Tenant shall not be
obligated to make any payments based on such estimate or statement until thirty
(30) days after receipt of such estimate or statement.

 

5.3           Even though the Term has expired and Tenant has
vacated the Premises, when the final determination is made of Tenant’s
Percentage Share of the Excess Operating Expenses for the year in which this
Lease terminates, Tenant, within thirty (30) days after receipt of Landlord’s
determination, shall pay any increase due over the estimated expenses paid and
conversely any overpayment made in the event said expenses decrease shall be
rebated by Landlord to Tenant, within thirty (30) days after Landlord’s
determination.

 

5.4           Notwithstanding anything contained in this Paragraph
5, the rent payable by Tenant each month shall in no event be less than the
Monthly Basic Rent specified in Paragraph 4 hereof.  The Operating Expenses to be paid by Tenant
to Landlord pursuant to the provisions of this Paragraph 5 shall sometimes be
referred to in the aggregate as the “Operating Rent.”

 

5.5           Within one hundred eighty (180) days after receipt by
Tenant of an Actual Statement for any prior calendar year during the Term,
Tenant or its authorized representative (working on a non-contingency fee
basis) shall have the right to inspect the books of Landlord upon reasonable
notice and during the business hours of Landlord at Landlord’s office in the
Building, or, at Landlord’s option, at such other location in San Francisco as
Landlord reasonably may specify, for the purpose of verifying the information
contained in the statement.  Unless
Tenant asserts specific errors within one hundred eighty (180) days after
receipt of the statement, the statement shall be deemed correct as between
Landlord and Tenant.  If Tenant makes a
timely exception, Landlord shall cause an independent certified public
accountant reasonably acceptable to Tenant to issue a final and conclusive
resolution of Tenant’s exception.  If,
according to such accountant, Landlord’s original determination of annual
Operating Expenses overstated the amounts thereof, in the aggregate, by five
percent (5%) or less or understated the amounts thereof, then Tenant shall pay
the cost of the certification, and, in the case of an understatement, shall pay
to Landlord the deficiency in Tenant’s payment of Operating Expenses within
thirty (30) days following Tenant’s receipt of such certification.  If, according to such certification, Landlord’s
original determination of annual Operating Expenses overstated the amounts thereof,
in the aggregate, by more than five percent (5%), then Landlord shall pay the
cost of the certification and shall, at its election, either promptly refund
the amount of Tenant’s overpayment of Operating Expenses or, if this Lease is
still in effect, credit such overpayment against Tenant’s subsequent
obligations to pay Operating Expenses.

 

13

 

6.             Security Deposit.  Upon
execution of this Lease, Tenant shall pay to Landlord a cash security deposit in
the amount specified in the Summary to be held by Landlord as security for the
faithful performance by Tenant of all of the terms, covenants and conditions of
this Lease to be kept and performed by Tenant during the Term hereof.  If at any time during the Term of this Lease
any item constituting rent as provided herein, or any other sum payable by
Tenant to Landlord hereunder shall be overdue and unpaid (after notice and
applicable cure periods), then Landlord may, at the sole option of Landlord,
but without any requirement to do so, appropriate and apply any portion of the
deposit provided pursuant to this Paragraph 6 to payment of such overdue rent
or other sum.  In the event of the
failure of Tenant to keep and perform any term, covenant or condition of this
Lease to be kept or performed by Tenant (after notice and applicable cure
periods), then, at the sole option of Landlord, and after termination of this
Lease, Landlord may appropriate and apply the entire deposit, or so much
thereof as may be necessary to compensate Landlord for any loss or damage
sustained or suffered by Landlord due to such breach on the part of Tenant.  In the event that all or any portion of the
deposit is appropriated and applied by Landlord to overdue rent or other sums
due and payable to Landlord by Tenant hereunder, then Tenant shall, within ten (10) days
following written demand of Landlord, promptly remit to Landlord a sufficient
amount in cash to restore such deposit to the original sum provided in this
Paragraph.  Any failure on the part of
Tenant to restore the amount of the deposit provided herein within ten (10) days
following the date on which demand for restoration is deemed given hereunder
shall constitute a breach of this Lease pursuant to Paragraph 24.1 hereof.  Within ten (10) days following the
expiration of the Term, or earlier termination of this Lease, Landlord shall
pay to Tenant any portion of the deposit provided for herein which has not been
appropriated or applied by Landlord in accordance with the provisions of this
Paragraph.  Tenant acknowledges that the
deposit provided for herein is not prepaid rent and shall not be applied by
Tenant to the payment of any rent due the Landlord herein.  No interest shall be paid on the deposit
provided for in this Paragraph by Landlord to Tenant, and Landlord shall not be
obligated to maintain the deposit provided herein separate or apart from any
other funds of Landlord.  In the event
Landlord transfers the amount of the deposit provided herein to any successor
in interest of Landlord to title of the Site and Building, then, in such event,
Landlord shall be discharged from any further obligation or liability with
respect to the deposit provided herein.  Tenant
waives the provisions of California Civil Code Section 1950.7 and all
other provisions of law now in force or that become in force after the date of
execution of this Lease, that provide that Landlord may claim from a security
deposit only those sums reasonably necessary to remedy defaults in the payment
of rent, to repair damages caused by Tenant, or to clean the Premises.  Landlord and Tenant agree that Landlord may,
in addition, claim those sums reasonably necessary to compensate Landlord for
damages described in California Civil Code Section 1951.2.  Tenant may not assign or encumber the deposit
without the consent by Landlord.  Any
attempt to do so shall be void and shall not be binding on Landlord.  Provided that Tenant has not previously been
in default of this Lease as defined in Paragraph 24, the security deposit shall
be reduced to $200,000.00 following the fourth anniversary of the Lease
Commencement Date, and further reduced to $120,000.00 following the fifth
anniversary of the Lease Commencement Date. 
In the event Landlord fails to return timely that portion of the
security deposit necessary to reduce the deposit as provided in the preceding
sentence, Tenant may give Landlord a written demand for the return of the
required funds.  If Landlord thereafter
does not return the funds to Tenant within thirty (30) days, Tenant may offset
against the next due payment(s) of Monthly Basic Rent the amount necessary
to reduce the security deposit as provided herein.  Notwithstanding the foregoing, Tenant shall
not have any offset rights if Landlord disputes Tenant’s entitlement to the
return of any portion of the security deposit. 
In the event of such a dispute, the provisions of Paragraph 55 shall
apply.

 

14

 

7.             Use.

 

7.1           Tenant shall use the Premises for general office
purposes and for use as a production/post-production and television broadcast
facility, and all purposes incident thereto and shall not use or permit the
Premises to be used for any other purpose without the prior written consent of
Landlord, which consent may be granted or withheld in Landlord’s sole
discretion.  Tenant shall not use or
occupy the Premises in violation of any law, code, regulation, rule, order, or
injunction or of the Certificate of Occupancy issued for the Building.  Upon five (5) days’ written notice from
Landlord, Tenant shall discontinue any use of the Premises which is declared by
any governmental authority having jurisdiction to be a violation of any such
recorded covenants, conditions and restrictions affecting the Site or of any law,
code, regulation, rule, order, or injunction or of said Certificate of
Occupancy.  Except as otherwise provided
in Paragraph 57 hereof, Tenant shall not install any radio or television
antenna, loudspeaker or other device on the roof or exterior walls of the
Building.  Tenant shall not interfere
with radio or television broadcasting or reception from or in the Building to
the extent such facilities exist on the date of this Lease, provided that in
all events Tenant shall operate its telecommunication equipment and facilities
in and on the Building in compliance with all Applicable Laws.  Landlord agrees to use its commercially
reasonable efforts to cause other tenants of the Building not to interfere with
Tenant’s telecommunication equipment and facilities located on or in the
Building.  Tenant shall comply with any
direction of any governmental authority having jurisdiction which shall, by
reason of the nature of Tenant’s specific use or alteration of the Premises,
impose any duty upon Tenant or Landlord with respect to the Premises or with
respect to the use or occupation thereof. 
Tenant shall not do or permit to be done anything which will invalidate
or increase the cost of any fire, extended coverage or any other insurance
policy covering the Site, the Building, the Premises, and/or property located
therein and shall comply with all rules, orders, regulations and requirements
of the Pacific Fire Rating Bureau or any other organization performing a
similar function.  Upon demand, Tenant
shall promptly reimburse Landlord as additional rent for any additional premium
charged for such policy by reason of Tenant’s failure to comply with the
provisions of this Paragraph 7.  Tenant
shall not do or permit anything to be done in or about the Site, the Building,
and/or the Premises which will in any way obstruct or interfere with the rights
of other tenants or occupants of the Building, or injure them, or use or allow
the Premises to be used for any unlawful purpose.  Tenant shall not cause, maintain or permit any
nuisance in, on or about the Site, the Building and/or the Premises, or allow
any noxious odors to exist at or emanate from the Site, the Building and/or the
Premises.  Tenant shall not commit or
suffer to be committed any waste in or upon the Site, the Building and/or the
Premises and shall keep the Premises in good repair and appearance.  Tenant shall not place a load upon the
Premises which exceeds the average pounds of live load per square foot of floor
area specified for the Building by Landlord’s architect, with the partitions to
be considered a part of the live load.  Landlord
reserves the right to prescribe the weight and position of all safes, files and
heavy equipment which Tenant desires to place in the Premises so as to
distribute properly the weight thereof.  Tenant’s
business machines and mechanical equipment which cause vibration or noise that
may be transmitted to the Building structure or to any other space in the
Building shall be so installed, maintained and used by Tenant as to eliminate
such vibration or noise.  Tenant shall be
responsible for all structural engineering required to determine structural
load.  Tenant shall fasten all files,
bookcases and like furnishings to walls in a manner to prevent tipping over in
the event of earth movements.  Landlord
shall not be responsible for any damage or liability for such events.

 

7.2           Except for the normal and proper use and storage of
typical cleaning fluids and solutions, and office equipment supplies (such as
copier toner), in amounts commensurate with Tenant’s 

 

15

 

permitted use and
occupancy of the Premises, and except in connection with the use of the
Generator pursuant to Paragraph 56 below, Tenant shall not use, introduce to
the Site, the Building and/or the Premises, generate, manufacture, produce,
store, release, discharge or dispose of, on, under or about the Site, the
Building and/or the Premises or transport to or from the Site, the Building
and/or the Premises any Hazardous Material (as defined below) or allow its
employees, agents, contractors, invitees or any other person or entity to do so.  Tenant warrants that it shall not make any
use of the Site, the Building and/or the Premises which may cause contamination
of the soil, the subsoil or ground water. 
Tenant shall keep and maintain the Premises in compliance with, and
shall not cause the Premises to be in violation of, any and all federal, state
or local laws, ordinances, rules or regulations pertaining to health,
industrial hygiene or the environmental conditions on, under or about the
Premises (“Environmental Laws”); provided,
however, that (a) Landlord represents and warrants to Tenant that, upon
the Delivery Date, there shall be no Hazardous Materials actually existing and
present at the Building or the Site or within the Premises as of the Lease
Commencement Date in concentrations which present a known health hazard or
require remediation or other action pursuant to any Environmental Law, and (b) in
no event shall Tenant be responsible for the investigation, cleanup,
detoxification or other ameliorative work of any Hazardous Materials in, on or
about the Site, the Building and/or the Premises, except to the extent arising
from Tenant’s use thereof in violation of Environmental Laws.  Tenant shall give immediate written notice to
Landlord of (i) any action, proceeding or inquiry by any governmental
authority or any third party with respect to the presence of any Hazardous
Material on the Site, the Building and/or the Premises or the migration thereof
from or to other property or (ii) any spill, release or discharge of
Hazardous Materials that occurs with respect to the Site, the Building and/or
the Premises or Tenant’s operations.

 

(a)           Tenant shall indemnify and hold harmless Landlord, its
directors, officers, members, employees, agents, successors and assigns
(collectively “Landlord Parties”, individually a “Landlord Party”) from and against any and all claims arising
from Tenant’s use of the Site, the Building and/or the Premises in violation of
the terms, covenants and conditions of Paragraph 7.2 above.  The indemnity shall include all costs, fines,
penalties, judgments, losses, attorney’s fees, expenses and liabilities
incurred by any of the Landlord Parties for any such claim or any action or
proceeding brought thereon including, without limitation, (i) all
foreseeable consequential damages including without limitation loss of rental
income and diminution in property value; and (ii) the costs of any
cleanup, detoxification or other ameliorative work of any kind or nature
required by any governmental agency having jurisdiction thereof, including
without limitation all costs of monitoring and all fees and expenses of
consultants and experts retained by and of the Landlord Parties.  This indemnity shall survive the expiration or
termination of this Lease.  In any action
or proceeding brought against any of the Landlord Parties by reason of any such
claim, upon notice from such Landlord Party if such Landlord Party does not
elect to retain separate counsel, Tenant shall defend the same at Tenant’s
expense by counsel reasonably satisfactory to such Landlord Party.

 

(b)           Landlord shall indemnify and hold harmless Tenant, its
directors, officers, employees, agents, successors and assigns (collectively, “Tenant Parties”, individually a “Tenant Party”)
from and against any and all claims arising from or relating to Hazardous
Materials actually existing and present at the Building or the Site or within
the Premises (i) as of the Lease Commencement Date, or (ii) not
caused by Tenant, its employees, agents or contractors.  The indemnity shall include all costs, fines,
penalties, judgments, losses, attorney’s fees, expenses and liabilities
incurred by any of the Tenant Parties for any such claim or any action or
proceeding brought thereon including the cost of any clean up, detoxification
or other ameliorative work of any kind or nature required by any 

 

16

 

governmental agency
having jurisdiction thereof and including, without limitation, all fees and
expenses of consultants and experts retained by any of the Tenant Parties.  This indemnity shall survive the expiration
or termination of this Lease.  Any action
or proceeding brought against Tenant Parties by reason of any such claim, upon
notice from such Tenant Party, if such Tenant Party does not elect to retain
separate counsel, Landlord shall defend the same at Landlord’s expense by
counsel reasonably satisfactory to such Tenant Party.

 

(c)           As used herein, the term “Hazardous
Material” shall mean any substance or material which has been
determined by any state, federal or local governmental authority to be capable
of posing a risk of injury to health, safety or property, including all of
those materials and substances designated as hazardous or toxic by the city or
state in which the Premises are located, the U.S. Environmental Protection
Agency, the Consumer Product Safety Commission, the Food and Drug
Administration, the California Water Resources Control Board, the Regional
Water Quality Control Board, San Francisco Bay Region, the California Air
Resources Board, CAL/OSHA Standards Board, Division of Occupational Safety and
Health, the California Department of Food and Agriculture, the California Department
of Health Services, and any federal agencies that have overlapping jurisdiction
with such California agencies, or any other governmental agency now or
hereafter authorized to regulate materials and substances in the environment.  Without limiting the generality of the
foregoing, the term “Hazardous Material” shall include all of those materials
and substances defined as “hazardous materials” or “hazardous waste” in
Sections 66680 through 66685 of Title 22 of the California Administrative Code,
Division 4, Chapter 30, as the same shall be amended from time to time,
petroleum, petroleum-related substances and the by-products, fractions,
constituents and sub-constituents of petroleum or petroleum-related substances,
asbestos, and any other materials requiring remediation now or in the future
under federal, state or local statutes, ordinances, regulations or policies.

 

8.             Payments and Notices.  All rents and
other sums payable by Tenant to Landlord hereunder shall be paid to Landlord by
check, cashier’s check, or cash, at Landlord’s option, at the address
designated by Landlord in the Summary or at such other places as Landlord may
hereafter designate in writing.  Any
notice required or permitted to be given hereunder must be in writing and may
be given by personal delivery, mail, or by recognized overnight courier.  If notice is given by personal delivery, such
notice shall be deemed to be given upon delivery.  If notice is given by Landlord by registered
or certified mail addressed to Tenant at the Building, or by Tenant to Landlord
at both of the addresses designated in the Summary, then such notice shall be
deemed given on receipt or upon attempted delivery if delivery is refused.  If notice is given by overnight courier to
the addresses stated above, notice shall be deemed given on receipt or upon
attempted delivery, if delivery is refused. 
Either party may by written notice to the other specify a different
address for notice purposes except that Landlord may in any event use the
Premises as Tenant’s address for notice purposes.  If more than one person or entity constitutes
the “Tenant” under this Lease, service of any notice upon any one of said
persons or entities shall be deemed as service upon all of said persons or
entities.

 

9.             Brokers.  The parties
recognize that the brokers who negotiated this Lease are the brokers whose
names are stated in Paragraph (o) of the Summary, and agree that Landlord
shall be solely responsible for the payment of brokerage commissions to said
brokers.  Tenant shall have no
responsibility therefor.  As part of the
consideration for the granting of this Lease, Tenant represents and warrants to
Landlord that no other broker, agent or finder was hired, negotiated or was
instrumental in negotiating or consummating this Lease and there is no other
real estate broker, 

 

17

 

agent or finder who is,
or might be, entitled to a commission or compensation in connection with this
Lease.  Any broker, agent or finder of
Tenant whom Tenant has failed to disclose herein shall be paid by Tenant.  Tenant shall hold Landlord (and/or each of
the Landlord Parties) harmless from all damages and indemnify Landlord (and/or
each of the Landlord Parties) for all said damages paid or incurred by Landlord
(and/or each of the Landlord Parties) resulting from any claims that may be
asserted against Landlord (and/or each of the Landlord Parties) by any broker,
agent or finder who has, or has claimed to have, rendered services to Tenant
undisclosed by Tenant herein.  Landlord
shall hold Tenant (and/or each of the Tenant Parties) harmless from all damages
and indemnify Tenant (and/or each of the Tenant Parties) for all said damages
paid or incurred by Tenant (and/or any of the Tenant Parties) resulting from any
claims that may be asserted against Tenant (and/or any of the Tenant Parties)
by any broker, agent or finder who has, or has claimed to have, rendered
services to Landlord undisclosed by Landlord herein.

 

10.           Holding Over.  If Tenant
remains in possession of the Premises after expiration or earlier termination
of this Lease with Landlord’s express consent, Tenant’s occupancy shall be a
month to month tenancy at a rent agreed upon by Landlord and Tenant, but in no
event less than the Monthly Basic Rent and Operating Rent payable under this
Lease during the last full month before the date of expiration or earlier
termination.  The month to month tenancy
shall be on the terms and conditions of this Lease except as provided in the
preceding sentence and the Lease clauses concerning extension rights.  If Tenant holds over after the expiration or
earlier termination of the Term hereof without the express written consent of
Landlord, Tenant shall become a tenant at sufferance only, at a rental rate
equal to the greater of one hundred fifty percent (150%) of the Monthly Basic
Rent which would be applicable to the Premises upon the date of expiration of
the Term (prorated on a daily basis) or fair market value as reasonably
determined by Landlord, and otherwise subject to the terms, covenants and
conditions herein specified, so far as applicable including, without
limitation, the obligation to pay increased Operating Expenses as provided in Paragraph
5.  Acceptance by Landlord of rent after
such expiration or earlier termination shall not constitute a consent to a
holdover hereunder or result in a renewal. 
The foregoing provisions of this Paragraph 10 are in addition to and do
not affect Landlord’s right of re-entry or any rights of Landlord hereunder or
as otherwise provided by law.  If Tenant
fails to surrender the Premises upon the expiration of this Lease despite
written demand to do so by Landlord, Tenant shall indemnify and hold Landlord
harmless from all loss or liability arising out of such failure, including without
limitation, any claim made by any succeeding tenant founded on or resulting
from such failure to surrender.  No
provision of this Paragraph 10 shall be construed as implied consent by
Landlord to any holding over by Tenant.  Landlord
expressly reserves the right to require Tenant to surrender possession of the
Premises to Landlord as provided in this Lease upon expiration or other
termination of this Lease.  The
provisions of this Paragraph 10 shall not be considered to limit or constitute
a waiver of any other rights or remedies of Landlord provided in this Lease or
at law.

 

11.           Taxes on Tenant’s Property.  Tenant
shall be liable for and shall pay before delinquency, taxes levied against any
personal property or trade fixtures placed by Tenant in or about the Premises.  If any such taxes on Tenant’s personal
property or trade fixtures are levied against Landlord or Landlord’s property,
or if the assessed value of the Site, the Building, and/or the Premises is
increased by the inclusion therein of a value placed upon such personal
property or trade fixtures of Tenant, and if Landlord, after written notice to
Tenant, pays the taxes based upon such increased assessments, which Landlord
shall have the right to do regardless of the validity thereof, but only under
proper protest if requested by Tenant, then, upon demand Tenant shall repay to
Landlord the taxes levied against Landlord, or the proportion of such taxes
resulting from such 

 

18

 

increase in the assessment.  Notwithstanding the foregoing, at Tenant’s
sole cost and expense and at no expense or cost to Landlord, Tenant shall have
the right, in the name of Landlord and with Landlord’s full cooperation, to
bring a good faith suit in any court of competent jurisdiction to recover the
amount of any such taxes so paid under protest, any amount so recovered to
belong to Tenant.

 

12.           Condition of Premises.  Other than
with respect to the completion of Landlord’s construction obligations set forth
in Paragraph 1.4 and the Work Letter, which shall be done in a good and
workmanlike manner, and other than as expressly stated herein, Tenant
acknowledges that neither Landlord nor any of the Landlord Parties have made
any representation or warranty of any kind whatsoever with respect to the Site,
the Premises and/or the Building or with respect to the suitability of either
for the conduct of Tenant’s business; provided, however, that Landlord
represents and warrants to Tenant that, upon the Delivery Date, the Building,
the Site and the Premises shall be in compliance with all Applicable Laws,
including the Americans with Disabilities Act of 1990, as amended from time to
time.  Tenant acknowledges and agrees
that Tenant is relying solely upon Tenant’s own inspection of the Site, the
Building and the Premises, and Tenant is not relying on any representation or
warranty from the Landlord regarding the Site, the Premises or the Building,
except as specifically set forth in this Lease, including, without limitation,
any representation or warranty as to the physical condition, design or layout
of the Site, the Building and the Premises. 
Landlord represents that the Service Facilities (as defined below) are,
or will be as of the Commencement Date, in good working condition and comply
with all Applicable Laws.

 

13.           Alterations.

 

13.1         Other than changes to the roof, the structural
portions of the Building and/or the Premises, and to the foundation, Tenant
may, at any time and from time to time during the Term of this Lease, at its
sole cost and expense, make alterations, additions, installations,
substitutions, improvements and decorations (hereinafter collectively called “Changes” and individually, a “Change”)
in and to the Premises, on the following conditions, provided that such Changes
will not result in a violation of all applicable laws, rules, orders,
ordinances, directions, regulations and requirements of all governmental
authorities, agencies, offices, departments, bureaus and boards having
jurisdiction thereof laws, codes, regulations, orders or injunctions
(collectively, “Applicable Laws”) or require a
change in the Certificate of Occupancy applicable to the Premises:

 

(a)           The outside appearance, character or use of the
Building shall not be affected, and no Changes shall weaken or impair the
structural strength or, in the reasonable opinion of Landlord, lessen the value
of the Building, the Site, and/or the Premises or cause material and unusual expenses
to be incurred upon the removal of Changes and the restoration of the Premises
upon the termination of this Lease that Tenant does not agree to bear;
provided, however, that Landlord acknowledges and agrees that Changes relating
to Tenant’s use of the Premises as permitted hereunder, including, without
limitation, the construction of a production/post-production and broadcast
facility and the Permitted Ground Floor Changes are hereby approved.  Notwithstanding such approval, Landlord shall
have the right to disapprove the Changes described in the immediately preceding
sentence if the Changes (a) adversely affect the structure of the
Building, (b) adversely affect the Service Facilities, (c) do not
comply with Applicable Laws or (d) unreasonably interfere with normal and
customary business operations of Landlord or other tenants of the Building (the
“Disapproval Conditions”).

 

19

 

(b)           No part of the Building outside of the Premises shall
be physically affected.

 

(c)           The proper functioning of any of the mechanical,
electrical, sanitary and other service systems or instillations of the Building
(“Service Facilities”) shall not be
adversely affected, and there shall be no construction which might interfere
with Landlord’s free access to the Service Facilities or interfere with the moving
of Landlord’s equipment to or from the enclosures containing the Service
Facilities.

 

(d)           In performing the work involved in making such
Changes, Tenant shall be bound by and observe all of the conditions and
covenants contained in this Paragraph 13, and Tenant shall not unreasonably
interfere with or disturb any other tenants (of such tenants, invitees,
employees, or agents) use and enjoyment of the Site and the Building.

 

(e)           All work shall be done at such times and in such
manner as is set forth in this Paragraph 13.

 

(f)            Tenant shall not be permitted to install and make part
of the Premises any materials, fixtures or articles (excluding Tenant’s trade
fixtures, personal property and other items specified in Paragraph 13.7 below)
which are subject to liens, conditional sales contracts or chattel mortgages.

 

(g)           At the date upon which the Term of this Lease shall
end, or the date of any earlier termination of this Lease, Tenant shall, unless
otherwise requested by Landlord in writing, restore the Premises to their
condition prior to the making of any Changes permitted by this Paragraph,
reasonable wear and tear excepted.  If
Tenant fails to complete the restoration before expiration of the Term,
Landlord may complete the restoration and charge the reasonable cost of the
restoration to Tenant.  Tenant shall have
no obligation to restore the Premises to its condition prior to (i) the
construction of the tenant improvements contemplated by Paragraph 1.4, or (ii) any
Changes made by Tenant during the first twenty-four (24) months of the Term
that relate to Tenant’s use of the Premises as permitted hereunder, provided
such Changes are made in compliance with the provisions of this Paragraph 13.

 

13.2         Before proceeding with any Change (exclusive only of
changes to items constituting Tenant’s personal property), Tenant shall submit
to Landlord plans and specifications for the work to be done, which shall in
all cases require Landlord’s prior written approval, which approval shall not
be withheld unless the Disapproval Conditions apply.  Landlord shall review and approve or
disapprove all such plans and specifications within ten (10) days
following the date upon which Tenant submits the same to Landlord.  Landlord may confer with consultants in
connection with the review of such plans and specifications.  If Landlord or such consultant(s) shall
disapprove of any of the Tenant’s plans, Tenant shall be advised of the reasons
of such disapproval with reasonable specificity.  In any event, Tenant agrees to pay to Landlord,
as additional rent, the reasonable cost of such consultation and review within
thirty (30) days following receipt of invoices either from Landlord or such
consultant(s).  Any Change for which
approval has been received shall be performed strictly in accordance with the
approved plans and specifications, and no material amendments or additions to such
plans and specifications shall be made without the prior written consent of
Landlord, which approval shall not be withheld unless the Disapproval
Conditions apply.

 

13.3         [Intentionally Deleted]

 

20

 

13.4         Tenant shall submit to Landlord for Landlord’s
approval (which approval shall not be unreasonably withheld, conditioned or
delayed) the name and address of each contractor intended to be used by Tenant
in connection with construction of Changes. 
Landlord shall review and approve or disapprove all such contractors
within ten (10) days following the date upon which Tenant submits the same
to Landlord.  If Landlord approves the
construction of specific interior improvements in the Premises by contractors
or mechanics selected by Tenant and approved by Landlord, then Tenant’s
contractors shall obtain on behalf of Tenant and at Tenant’s sole cost and
expense, all necessary governmental permits and certificates for the
commencement and prosecution of Tenant’s Changes and for final approval thereof
upon completion.  In the event Tenant
shall request any Changes in the work to be performed after the submission of
the plans referred to in this Paragraph 13, such additional Changes shall be
subject to the same approvals and notices as the Changes initially submitted by
Tenant.

 

13.5         All Changes and the performance thereof shall at all
times comply with (i) all Applicable Laws, (ii) all rules, orders,
directions, regulations and requirements of the Pacific Fire Rating Bureau, or
of any similar insurance body or bodies, and (iii) all reasonable and
non-discriminatory rules and regulations of Landlord, and Tenant shall
cause Changes to be performed in compliance therewith and in good and
workmanlike manner, using materials and equipment at least equal in quality and
class to the installations of the Building. 
Changes shall be performed in such manner as not to unreasonably interfere
with the occupancy of any other tenant in the Building nor delay or impose any
additional material expense upon Landlord in construction, maintenance or
operation of the Building, and shall be performed by Contractors or mechanics
approved by Landlord and submitted to Tenant pursuant to this Paragraph, who
shall coordinate their work in cooperation with any other work being performed
with respect to the Site and/or the Building. 
Throughout the performance of Changes, Tenant, at its expense, shall
carry, or cause to be carried, workmen’s compensation insurance in statutory
limits, and general liability insurance for any occurrence in or about the
Building, of which Landlord and its managing agent shall be named as parties
insured, in limits of $1,000,000 per occurrence and in the aggregate, with
insurers reasonably satisfactory to Landlord all in compliance with
Subparagraph 20.2.  Notwithstanding any
provision of this Lease to the contrary, except as provided below, in no event
shall Landlord be required to undertake any alteration or any improvements of
any kind whatsoever in connection with the Premises or the Building as a result
of or in connection with any Changes being made by Tenant.  Without limiting the foregoing, Landlord
shall not be required to make any improvements or alteration of any kind
whatsoever in order to comply with any Applicable Laws which may be required in
connection with Changes being made by Tenant, except that if the Site and/or
the Building are not in compliance with all Applicable Laws as of the date of
this Lease, then any improvements required to be made to bring the Site and/or
the Building into compliance shall be performed by Landlord at no cost to
Tenant.

 

13.6         Tenant further covenants and agrees that any mechanic’s
lien filed against the Premises or against the Building for work claimed to
have been done for, or materials claimed to have been furnished to Tenant, will
be discharged by Tenant, by bond (pursuant to California Civil Code Section 3143)
or otherwise, within ten (10) days after the filing thereof, at the cost
and expense of Tenant.  All alterations,
decorations, additions or improvements upon the Premises, made by either party,
including (without limiting the generality of the foregoing) all wall covering,
built-in cabinet work, paneling and the like, shall, unless Landlord elects
otherwise and except as provided in Paragraph 13.7 below, become the property
of Landlord, and shall remain upon, and be surrendered with the Premises, as a
part thereof, at the end of the Term hereof. 
Notwithstanding the foregoing, Landlord may by written notice, given to
Tenant at least thirty (30) days prior to the end of the 

 

21

 

Term, require Tenant to
remove all partitions, counters, railings, changes and the like installed by
Tenant, and Tenant shall repair any damage to the Premises arising from such
removal or, at Landlord’s option, shall pay to the Landlord all of Landlord’s
costs of such removal and repair.  Notwithstanding
the sentence immediately above, Tenant shall not be required to remove or
restore any Changes (a) which Landlord agreed in accordance with the
provisions of Subparagraph 13.1(g) need not be removed or restored or (b) which,
at the time Landlord grants its approval of the Changes hereunder, Landlord
does not specify in writing shall be required to be removed.

 

13.7         With the exception of the Personal Property listed in Exhibit D,
all articles of personal property and all business and trade fixtures,
machinery and equipment, furniture and movable partitions owned by Tenant or
installed by Tenant at its expense in the Premises shall be and remain the
property of Tenant.  Tenant may remove
such items at Tenant’s sole cost and expense at any time during the Term, and
Tenant shall restore and repair all damage to the Premises caused by such
removal, and shall otherwise perform such removal in accordance with Landlord’s
reasonably imposed scheduling and other requirements.  If Tenant shall fail to remove all of its effects
from said Premises upon termination of this Lease for any cause whatsoever,
Landlord may, at its option, remove the same in any manner that Landlord shall
choose, and store said effects without liability to Tenant for loss thereof.  Tenant agrees to pay Landlord upon demand any
and all reasonable expenses incurred in such removal, including court costs and
attorneys’ fees and storage charges on such effects for any length of time that
the same shall be in Landlord’s possession, or Landlord may, at its option,
without notice, sell said effects, or any of the same, at private sale and
without legal process, for such price as Landlord may obtain Landlord shall
apply such proceeds of such sale upon any amounts due under this Lease from
Tenant to Landlord and upon the expense incident to the removal and sale of
said effects.

 

13.8         Landlord reserves the right at any time and from time
to time without the same constituting an actual or constructive eviction and
without incurring any liability to Tenant therefor or otherwise affecting
Tenant’s obligations under this Lease, to make such changes, alterations,
additions, improvements, repairs or replacements in or to the Site or the
Building (including the Premises if required so to do by any law or regulation)
and to the fixtures and equipment thereof, as well as in or to the street
entrances, halls, passages and stairways thereof; provided, however, that
Landlord shall use commercially reasonable efforts to minimize interference
with Tenant’s conduct of business in the Premises in the performance of such
work and, with respect to any such work which is required to be performed in
the Premises, Landlord shall not perform such work during normal business hours
unless it is unavoidable.  Without
limitation to the foregoing, Landlord may change the name by which the Building
is commonly known, as Landlord may deem necessary or desirable; provided,
however, that in no event shall the name of the Building identify a media
company, and Landlord shall be responsible for all reasonable costs and
expenses incurred by Tenant as a result of such name change.  Nothing contained in this Paragraph 13 shall
be deemed to relieve Tenant of any duty, obligation or liability of Tenant with
respect to the terms, covenants and conditions of the Lease, to making any
repair, replacement or improvement required hereby, or to complying with any
law, order or requirement of any government or other authority.  Nothing contained in this Paragraph 13, shall
be deemed or construed to impose upon Landlord any obligation, responsibility or
liability whatsoever, for the care, supervision of repair of the Site, the
Building and/or the Premises or any part thereof other than as otherwise
provided in this Lease.

 

13.9         Within thirty (30) days of completion of any Changes
that require a building permit, Tenant shall provide Landlord with a set of
final “as-built” plans.

 

22

 

13.10       If, following completion of the Tenant Improvements,
the Tenant Improvement Allowance (as defined in the Work Letter) has not been
fully disbursed, then Landlord agrees to contribute the remaining portion of
the Tenant Improvement Allowance to any Changes performed by Tenant during the
first twenty-four (24) months of the Term. 
Landlord shall disburse the remaining portion of the Tenant Improvement
Allowance to Tenant within thirty (30) days after Tenant’s written demand,
which written demand may be made not more often than monthly and shall be
accompanied by (i) copies of applicable invoices, (ii) a written
statement from Tenant’s architect or contractor that the work described on any
such invoices has been completed in accordance with the approved plans and
specifications, and (iii) properly executed lien waivers from Tenant’s
general contractor to the extent of the work described in such invoices.  In the event Landlord fails to disburse the
remainder of the Tenant Improvement Allowance as provided in this Paragraph
within thirty (30) days of receipt of Tenant’s written demand, and provided
that Tenant has complied with all of the requirements for such disbursement,
Tenant may offset against the next due payments of Monthly Basic Rent the
amount of the Tenant Improvement Allowance to which Tenant is entitled.  Notwithstanding the foregoing, Tenant shall
not have any offset rights if Landlord disputes Tenant’s entitlement to the
amounts demanded by Tenant.  In the event
of such a dispute, the provisions of Paragraph 55 shall apply.

 

14.           Repairs.

 

14.1         Subject to the provisions of Paragraph 20.6 below,
Tenant shall, when and if needed, at Tenant’s sole cost and expense, maintain
and make all repairs to the Premises and each and every part thereof, to keep,
maintain and preserve the Premises, and each and every system exclusively
serving the Premises (other than any such systems located in the Server Room,
which shall, subject to inclusion as an Operating Expense, be Landlord’s
responsibility), in good condition, excepting ordinary wear and tear and damage
by fire or other casualty.  Any such
maintenance and repair shall be performed by Landlord’s contractor, or a
contractor or contractors approved in advance in writing by Landlord (which
approval shall not be unreasonably withheld, conditioned or delayed); provided,
however, that if such maintenance and repair is performed by Landlord’s
contractor, then Landlord agrees that (a) the cost to Tenant of such
maintenance and repair shall be reasonably priced vis-à-vis the cost to Tenant
if Tenant had contracted directly for such maintenance and repair with another
qualified contractor approved by Landlord to perform work in the Building, and (b) the
time period required to perform such maintenance and repair shall not be
materially longer than the time period requited to complete such work had Tenant
contracted directly therefor.  All costs
and expenses incurred in such maintenance and repair shall be paid by Tenant
within thirty (30) days after billing by Landlord or such contractor or
contractors.  If Tenant hires a
contractor other than Landlord’s contractor, then the contract between Tenant
and such contractor shall provide that Landlord be copied on all notices and
invoices delivered to Tenant.  Tenant
shall upon the expiration or sooner termination of the Term hereof surrender
the Premises to Landlord in good condition and repair, reasonable wear and tear
and damage by fire or other casualty excepted. 
Landlord shall have no obligation to alter, remodel, improve, repair,
decorate or paint the Premises or any part thereof except as provided in Paragraphs
1.4, 14.2, 21 and 22, and the parties hereto affirm that Landlord (and each of
the Landlord Parties) has made no representations to Tenant respecting the
condition of the Site, the Premises or the Building, except as specifically
herein set forth.  Notwithstanding
anything set forth above in this Paragraph to the contrary, Tenant shall have
no obligation to install, maintain or repair any of the structural elements or
systems of the Building, unless such work is required due to Tenant’s specific
use or misuse of the Premises.

 

23

 

14.2         Notwithstanding anything contained in Subparagraph
14.1 above to the contrary, Landlord shall repair and maintain the structural
portions of the Building, the exterior of the Building, the Common Areas of the
Site and the Service Facilities in good condition, unless and to the extent
such maintenance and repairs are, subject to the provisions of Paragraph 20.6
below, necessary as a result of the act, neglect, fault of or omission of any
duty of Tenant, its agents, servants, employees, representatives or invitees,
in which case Tenant shall pay to Landlord as additional rent, the reasonable
cost of such maintenance and repairs.  Landlord
shall not be liable for any failure to make any such repairs, or to perform any
maintenance, unless such failure shall persist for an unreasonable time after
written notice of the need of such repairs or maintenance is given to Landlord
by Tenant; provided, however, that (a) Landlord shall proceed forthwith to
effect any necessary repairs with reasonable diligence, but in all events
Landlord shall commence making such repairs within thirty (30) days after
having received Tenant’s notice (or, in the case of an emergency situation or
imminent threat to life or safety, as soon as reasonably practicable under the
circumstances) and diligently pursue such repairs to completion; and (b) if
an emergency situation or imminent threat to life or safety arises in the
Premises, Tenant may, following any type of notice to Landlord which is
reasonable under the circumstances, immediately make such repairs as are
necessary to avoid or mitigate such emergency situation or threat, in which
event, provided the same are Landlord’s responsibility hereunder, Landlord
shall reimburse Tenant for the reasonable cost thereof within thirty (30) days
following receipt of a reasonably detailed invoice therefor.  Except as provided in Paragraph 17.2 and
Paragraph 21 hereof, there shall be no abatement of rent and no liability of
Landlord by reason of any injury to or interference with Tenant’s business arising
from the making of any repairs, alterations or improvements in or to any
portion of the Building or the Premises or in or to fixtures, appurtenances and
equipment therein.  Tenant hereby waives
the provisions of California Civil Code Sections 1932(1), 1941 and 1942 and of
any similar law, statute or ordinance now or hereafter in effect.

 

15.           Liens.  As provided
in Paragraph 13.6 above, Tenant covenants and agrees that any mechanic’s lien
filed against the Premises or against the Building for work claimed to have
been done for, or materials claimed to have been furnished to Tenant, will be
discharged by Tenant, by bond (pursuant to California Civil Code Section 3143)
or otherwise, within twenty (20) days after the filing thereof, at the cost and
expense of Tenant.  Landlord shall have
the right at all reasonable times to post and keep posted on the Premises any
notices which it deems necessary for protection from such liens.  Notwithstanding any other provision in this
Lease to the contrary, if Tenant does not comply with the foregoing
requirements, Landlord may, without waiving its rights and remedies based on
such breach of Tenant and without releasing Tenant from any of its obligations,
cause such liens to be released by any means it shall deem proper, including
payment in satisfaction of the claim giving rise to such lien.  Thereafter, Tenant shall promptly pay to
Landlord, upon notice by Landlord, any sum paid by Landlord to remove such
liens, together with interest at the maximum rate per annum permitted by law
from the date of such payment by Landlord.

 

16.           Entry by Landlord.  Landlord
reserves and shall at any and all reasonable times (except in the case of
emergency) have the right to enter the Premises to inspect the same, to supply
any service to be provided by Landlord to Tenant hereunder, to submit said
Premises to prospective purchasers or mortgagors/lenders or, to post notices of
nonresponsibility, to alter, improve or repair the Premises or any other
portion of the Building, during the last six (6) months of the Term of
this Lease, to prospective tenants, all without being deemed guilty of any
eviction of Tenant (so long as Landlord complies with the last sentence of this
Paragraph) and without abatement of rent, except as provided in Paragraph 17.2
below.  In order to carry out such
purposes, Landlord may erect scaffolding and 

 

24

 

other necessary
structures where reasonably required by the character of the work to be
performed, provided that the business of Tenant shall be interfered with as
little as is reasonably practicable.  Tenant
hereby waives any claim for damages for any injury or inconvenience to or
interference with Tenant’s business, any loss of occupancy or quiet enjoyment
of the Premises, and any other loss occasioned thereby.  For each of the aforesaid purposes, Landlord
shall at all times have and retain a key with which to unlock all of the doors
in, upon and about the Premises (excluding Tenant’s vaults and safes), and Landlord
shall have the means which Landlord may deem proper to open said doors in an
emergency in order to obtain entry to the Premises.  Any entry to the Premises obtained by
Landlord by any of said means, or otherwise, shall not, under any
circumstances, be construed or deemed to be a forcible or unlawful entry into,
or a detainer of, the Premises, or an eviction of Tenant from the Premises or
any portion thereof.  Any damages caused
on account thereof shall be paid by Landlord. 
It is understood and agreed that no provision of this Lease shall be
construed as obligating Landlord to perform any repairs, alterations or
decorations except as otherwise expressly agreed herein to be performed by
Landlord.  In the exercise of its rights
under this Paragraph 16 Landlord shall attempt to minimize any disturbance of
Tenant’s use and possession of the Premises and to provide as much notice to
Tenant as may be reasonably possible prior to any such exercise of Landlord’s
rights under this Paragraph 16.

 

17.           Utilities
and Services.

 

17.1         Landlord agrees during the Lease Term to furnish to
the Premises Monday through Friday, 8:00 a.m. through 7:00 p.m.,
holidays excepted, reasonable quantities of electric current for normal
lighting and fractional horsepower office machines, water for lavatory and
drinking purposes, heat and air conditioning required in Landlord’s reasonable
judgment for the comfortable use and occupancy of the Premises (which amounts
shall be materially consistent with the amounts being provided by landlords of
comparable buildings in the San Francisco South of Market area), janitorial
service (including washing the exterior of the windows of the Premises on a
frequency reasonably determined by Landlord consistent with similar buildings)
and elevator service by non attended automatic elevators.  Except as provided in Paragraph 17.2 below,
Landlord shall not be liable for, and Tenant shall not be entitled to any
abatement or reduction of rent by reason of Landlord’s failure to furnish any
of the foregoing when such failure is caused by accident, breakage, repairs,
strikes, lockouts or other labor disturbances or labor disputes of any
character, or for other causes beyond Landlord’s reasonable control.  Landlord’s cost of providing such services
shall be part of Operating Expenses.  Tenant
hereby waives the provisions of California Civil Code Section 1932(1) or
any other applicable existing or future law, ordinance or governmental
regulation permitting the termination of this Lease due to the interruption or
failure of or inability to provide any services required to be provided by
Landlord hereunder.  If Tenant requires
or utilizes materially more water, electric power or other utility service than
is considered typical for general office purposes, which the parties agree
shall be 6.0 watts per square foot (3.5 watts for wall receptacles, 2.5 watts
for desk top computers and peripherals), Landlord may at its option, require
Tenant to pay as additional rent the cost as reasonably estimated by Landlord
incurred by such additional or extraordinary usage.  In the event Tenant requires HVAC service to
the Premises outside of the business hours specified above, Tenant shall pay to
Landlord as additional rent the sum of $85.00 per hour for each hour of
occupancy outside of the business hours specified above to reimburse Landlord
for the electricity costs to operate the HVAC; provided , however, that in the
case where Tenant and one or more other tenants shall order after-hours HVAC,
the cost payable by Tenant shall be prorated to reflect the area of that
portion of the Premises so served and the area of the other tenants’ premises
served.  Electrical power required in
connection with any special air conditioning installed for a “computer 

 

25

 

room” in the Premises or
electric power otherwise required in connection with any such “computer room”
shall be considered extraordinary and Tenant shall be charged therefor as and
to the extent provided in Paragraph 1.8 above. 
Tenant shall additionally be responsible for the payment of all
electrical costs associated with the studio portion of the Premises, but only
to the extent such usage exceeds the electrical consumption which would occur
were the studio portion of the Premises devoted to general office use, as
defined above.  In addition, Landlord
may, but shall not be required to, install separate meter(s) for the
Premises, or advisory meters, at Tenant’s sole expense, and Tenant thereafter
shall pay all charges in excess of the cost of normal office use of such
services and Tenant shall not be charged for any share of Operating Expenses
with respect to, and to the extent that Tenant pays for, the services that are
separately metered.  All charges levied
against Tenant for extraordinary utility usage, or usage outside the business
hours specified above, shall be due and payable thirty (30) days after receipt
by Tenant of Landlord’s written invoice detailing such charges.  Any incandescent light bulbs used in the
Premises shall be paid for by the Tenant. 
Upon Tenant’s request, Landlord’s personnel shall install incandescent
light bulbs or other Building Nonstandard bulbs in the Premises.  Tenant agrees to pay Landlord, within thirty
(30) days after receipt by Tenant of Landlord’s written invoice detailing such
charges, Landlord’s cost for the maintenance and/or replacement, as applicable,
of all such incandescent light bulbs installed or other Building Nonstandard
lighting fixtures.  Landlord shall
provide Tenant access to the Premises on a twenty-four (24) hour per day, seven
(7) days per week basis, subject to events beyond Landlord’s reasonable
control.

 

17.2         Notwithstanding anything to the contrary set forth in
this Lease, in the event that Tenant is prevented from using, and does not use,
the Premises or any portion thereof, as a result of (a) any repair,
maintenance or alteration performed by Landlord, or which Landlord failed to
perform as required by this Lease, which substantially interferes with Tenant’s
use of the Premises, (b) any failure to provide services, utilities or
access to the Premises as required by this Lease, (c) any other event
which is not the result of Tenant’s default hereunder or the negligence or
willful misconduct of Tenant or any Tenant Party (any such set of circumstances
as set forth in items (a), (b) or (c), above, to be known as an “Abatement Event”), then Tenant shall give Landlord notice of
such Abatement Event, and if such Abatement Event continues for five (5) consecutive
business days after Landlord’s receipt of any such notice (the “Eligibility Period”), the Base Rent and Operating Rent, and
Tenant’s obligation to pay for parking (to the extent not utilized by Tenant)
shall be abated or reduced, as the case may be, after expiration of the
Eligibility Period for such time that Tenant continues to be so prevented from
using, and does not use for the normal conduct of Tenant’s business, the
Premises or a portion thereof, in the proportion that the rentable area of the
portion of the Premises that Tenant is prevented from using, and does not use,
bears to the total rentable area of the Premises; provided, however, in the
event that Tenant is prevented from using, and does not use, a portion of the
Premises for a period of time in excess of the Eligibility Period and the
remaining portion of the Premises is not sufficient to allow Tenant to
effectively conduct its business therein, and if Tenant does not conduct its
business from such remaining portion, then for such time after expiration of
the Eligibility Period during which Tenant is so prevented from effectively
conducting its business therein, the Base Rent and Operating Rent for the
entire Premises and Tenant’s obligation to pay for parking shall be abated for
such time as Tenant continues to be so prevented from using, and does not use,
the Premises.  If, however, Tenant
reoccupies any portion of the Premises during such period, the Rent allocable
to such reoccupied portion, based on the proportion that the rentable area of
such reoccupied portion of the Premises bears to the total rentable area of the
Premises, shall be payable by Tenant from the date Tenant reoccupies such
portion of the Premises.  Such right to
abate Base Rent and Operating Rent, and Tenant’s obligation 

 

26

 

to pay for parking shall
be Tenant’s sole and exclusive remedy for rent abatement at law or in equity
for an Abatement Event.  Except as
provided in this Section 19.5.2, nothing contained herein shall be
interpreted to mean that Tenant is excused from paying Rent due hereunder.

 

17.3         If, as a result of an Abatement Event, Tenant is
prevented from using, and does not use, the Premises, for a continuous period
of six (6) months after Landlord’s receipt of an applicable Abatement
Event notice, then Tenant shall have the right to terminate this Lease by
notice to Landlord (the “Abatement Event
Termination Notice”), effective as of a date set forth in the
Abatement Event Termination Notice (the “Abatement Event
Termination Date”), which Abatement Event Termination Date shall not
be less than ten (10) business days following the date such Abatement
Event Termination Notice was delivered to Landlord.  Notwithstanding anything set forth to the
contrary in this Section 17.3, Tenant shall have the right to terminate
this Lease under this Section 17.3 only if Tenant is not then in economic
or material non-economic default under this Lease beyond any applicable notice
and cure period expressly set forth in this Lease.

 

18.           Indemnification.

 

18.1         To the fullest extent permitted by law, Tenant hereby
agrees, subject to the provisions of Paragraph 20.6 below, to defend,
indemnify, protect and hold Landlord and Landlord Parties harmless against and
from any and all loss, cost, damage or liability (“Claims”)
arising from: (a) any cause in, on or about the Premises; or (b) the
negligence or willful misconduct of Tenant or any Tenant Party; provided,
however, that Tenant’s obligations under this Paragraph shall be inapplicable
to the extent such Claims arise from the negligence or willful misconduct of
Landlord or any Landlord Parties.

 

18.2         To the fullest extent permitted by law, Landlord
hereby agrees, subject to the provisions of Paragraph 20.6 below, to defend,
indemnify, protect and hold Tenant and Tenant Parties harmless against and from
any and all Claims arising from (a) the gross negligence or willful
misconduct of Landlord or any Landlord Parties; or (b) any cause in, on or
about the Common Areas to the extent covered by Landlord’s insurance; provided,
however, that Landlord’s obligations under this Paragraph shall be inapplicable
to the extent such Claims (i) arise from the negligence or willful
misconduct of Tenant or any Tenant Parties, or (ii) are covered by Tenant’s
indemnity and related obligations contained in Paragraphs 56 or 57 below.

 

18.3         Landlord’s and Tenant’s obligations under this
Paragraph 18 shall survive the expiration or earlier termination of this Lease
until all Claims within the scope of this Paragraph 18 are fully, finally, and
absolutely barred by the applicable statutes of limitations.

 

19.           Damage to Tenant’s Property.  Notwithstanding
the provisions of Paragraph 18 to the contrary, Landlord and each of the
Landlord Parties shall not be liable for any damage to property entrusted to
employees of the Building, nor for loss of or damage to any property by theft
or otherwise, nor for any injury or damage to persons or property resulting
from fire, explosion, falling plaster, steam, gas, electricity, water or rain
which may leak from any part of the Building (including, but not limited to,
the Premises) or from the pipes, appliances or plumbing works therein or from
the roof, street or sub-surface or from any other place or resulting from
dampness or any other patent or latent cause whatsoever, except to the extent
arising from the negligence or willful misconduct of Landlord or the Landlord
Parties.  Landlord and each of the
Landlord Parties shall not be liable for interference with the light, air or
view of the Premises.  Tenant shall give
prompt 

 

27

 

notice to Landlord in
case of fire or accidents in the Premises or in the Building or of defects
known to Tenant therein or in the fixtures or equipment located therein.  Notwithstanding any provision of Paragraph 18
to the contrary, neither Landlord nor any partner, director, officer, member,
agent, servant or employee of Landlord shall be liable:  (i) for any such damage caused by other
tenants or persons in, upon or about the Building, or caused by operations in
the construction of any private, public or quasi-public work (the limitations
of liability set forth in this clause (i) shall not apply to any damage or
liability caused by the negligence or intentional misconduct of Landlord or any
Landlord Parties); or (ii) for consequential damages, including lost
profits, of Tenant or any person claiming through or under Tenant.

 

20.           Insurance.

 

20.1         During the Term hereof, Tenant, at its sole expense,
shall obtain and keep in force the following insurance:

 

(a)           Commercial general liability insurance naming the
Landlord as an additional insured against any and all claims for bodily injury
and property damage occurring in, or about the Premises arising out of Tenant’s
use and occupancy of the Premises.  Such
insurance shall have a combined single limit of not less than Two Million
Dollars ($2,000,000.00) per occurrence with a Four Million Dollars
($4,000,000.00) aggregate limit.  Such
liability insurance shall be primary and not contributing to any insurance
available to Landlord and Landlord’s insurance shall be in excess thereto.  In no event shall the limits of such
insurance be considered as limiting the liability of Tenant under this Lease.

 

(b)           Personal property insurance insuring all equipment,
trade fixtures, inventory and personal property located on or in the Premises
for perils covered by the causes of loss - special form (all risk) and in
addition, coverage for boiler and machinery (if applicable).  Such insurance shall be written on a replacement
cost basis in an amount equal to the full replacement value of the aggregate of
the foregoing less any applicable deductible. 
Tenant shall also be responsible for insuring any Changes constructed by
Tenant pursuant to Paragraph 13 above and any portion of the Tenant
Improvements constructed by Landlord or Tenant pursuant to the Work Letter in
excess of the Tenant Improvement Allowance.

 

(c)           Workers’ compensation insurance in accordance with
statutory law.

 

20.2         The policies required to be maintained by Tenant shall
be with companies rated AVIII or better in the most current issue of Best’s
Insurance Reports.  Insurers shall be
licensed to do business in the state in which the Premises are located and
domiciled in the USA.  Any deductible
amounts under any insurance policies required to be carried by Tenant hereunder
shall be commercially reasonable.  Tenant
shall be responsible for the payment of all deductible amounts in the event of
a covered occurrence under the policies described in Paragraph 20.1 above.  Certificates of insurance (certified copies
of the policies may be required) shall be delivered to Landlord prior to the
Lease Commencement Date and annually thereafter at least twenty (20) days prior
to the expiration date of the old policy.  Tenant shall have the right to provide
insurance coverage which it is obligated to carry pursuant to the terms hereof
in a blanket policy, provided such blanket policy expressly affords coverage to
the Premises and to Landlord as required by this Lease.  Each policy of insurance shall provide that
Landlord, Landlord’s managing agent and any mortgagee are 

 

28

 

additional insureds, and
shall provide notification to Landlord at least thirty (30) days prior to any
cancellation or modification to reduce the insurance coverage.

 

20.3         During the Term hereof, Landlord shall insure the
Building and the Tenant Improvements constructed using any portion of the
Tenant Improvement Allowance pursuant to the Work Letter (excluding any
property which Tenant is obligated to insure under Subparagraph 20.1(b) hereof)
against damage with All Risk insurance in the amount of the full replacement
cost of the Building and public commercial liability insurance, all in such
amounts and with such deductibles as Landlord reasonably considers appropriate
and consistent with the provisions of Paragraph 20.8.  Landlord may, but shall not be obligated to,
obtain and carry any other form or forms of insurance as it or Landlord’s
mortgagees may determine advisable.  Landlord
may, but shall not be required to, maintain earthquake coverage.  Notwithstanding any contribution by Tenant to
the cost of insurance premiums, as provided herein, Tenant acknowledges that it
has no right to receive any proceeds from any insurance policies carried by
Landlord.

 

20.4         Tenant will not knowingly keep, use, sell, or offer
for sale in, or upon, the Premises any article which may be prohibited by any
insurance policy periodically in force covering the Building.  If Tenant’s occupancy or business in, or on,
the Premises, whether or not Landlord has consented to the same, results in any
increase in premiums for the insurance periodically carried by Landlord with
respect to the Building, Tenant shall pay any such increase in premiums as
additional rent within thirty (30) days after being billed therefor by Landlord.  In determining whether increased premiums are
a result of Tenant’s use of the Premises, a schedule issued by the organization
computing the insurance rate on the Building or the Premises showing the
various components of such rate, shall be conclusive evidence of the several
items and charges which make up such rate. 
Tenant shall promptly comply with all reasonable requirements of the
insurance authority or any present or future insurer relating to the Premises.

 

20.5         If any of Landlord’s insurance policies shall be
canceled or cancellation shall be threatened or the coverage thereunder reduced
or threatened to be reduced in any way because of the specific use of the
Premises or any part thereof by Tenant (other than general office purposes and
the operation of broadcast facilities as permitted herein) or any assignee or
sub-tenant of Tenant or by anyone Tenant permits on the Premises and, if Tenant
fails to remedy the condition giving rise to such cancellation, threatened
cancellation, reduction of coverage, threatened reduction of coverage, increase
in premiums, or threatened increase in premiums, within 72 hours after receipt
of notice thereof, Landlord may, at its option, either terminate this Lease or
enter upon the Premises and attempt to remedy such condition, and Tenant shall
promptly pay the cost thereof to Landlord as additional rent.  Landlord shall not be liable for any damage
or injury caused to any property of Tenant or of others located on the Premises
resulting from such entry, except to the extent arising from the negligence or
willful misconduct of Landlord or the Landlord Parties.  If Landlord is unable, or elects not, to
remedy such condition, then Landlord shall have all of the remedies provided
for in this Lease in the event of a default by Tenant.  Notwithstanding the foregoing provisions of
this Subparagraph 20.5, if Tenant fails to remedy as aforesaid, Tenant shall be
in default of its obligation hereunder and Landlord shall have no obligation to
remedy such default.

 

20.6         Landlord and Tenant hereby mutually waive their
respective rights of recovery against each other for any loss of, or damage to,
either parties’ property, to the extent that such loss or damage is insured by
an insurance policy required to be in effect at the time of such loss or damage.  Each 

 

29

 

party shall obtain any
special endorsements, if required by its insurer whereby the insurer waives its
rights of subrogation against the other party.

 

20.7         In the event Tenant does not purchase the insurance
required by this Lease or keep the same in full force and effect (after notice
and the opportunity to cure), Landlord may, but, shall not be obligated to
purchase the necessary insurance and pay the premium.  Tenant shall repay to Landlord, as additional
rents the amount so paid within thirty (30) days following demand.  In addition, Landlord may recover from Tenant
and Tenant agrees to pay, as additional rent, any and all reasonable expense
(including attorneys’ fees) and damages which Landlord may sustain by reason of
the failure to Tenant to obtain and maintain such insurance.

 

20.8         Landlord shall maintain insurance coverage comparable
to insurance coverage maintained by prudent landlords of similar class
buildings in the San Francisco South of Market area, and which in any event
includes fire and extended coverage insurance for the Building and commercial
liability coverage as provided in Paragraph 20.3 above.

 

21.           Damage
or Destruction.

 

21.1         In the event that the Premises or any Common Areas
necessary to Tenant’s use of or access to the Premises is damaged by fire or
other casualty which is covered under insurance pursuant to the provisions of
the foregoing section, Landlord shall restore such damage provided that: (i) the
insurance proceeds, plus the amount of any deductible (the payment of which
shall be Landlord’s responsibility but included in Operating Expenses to the
extent provided in Paragraph 5), are sufficient to pay one hundred percent
(100%) of the cost of restoration; and (ii) in the reasonable judgment of
Landlord’s architect, the restoration can be completed within one hundred and
eighty (180) days after the date of the damage or casualty under the laws and
regulations of the state, federal, county and municipal authorities having
jurisdiction.  Landlord shall notify
Tenant whether or not the Premises will be restored under this section within
forty-five (45) days of the occurrence of the casualty, which notice shall
include the estimate of Landlord’s architect and contractor with respect to the
cost of, and required time for, the repair and restoration.  If such conditions apply so as to require
Landlord to restore such damage pursuant to this section, this Lease shall
continue in full force and effect, unless otherwise agreed to in writing by
Landlord and Tenant.  Tenant shall be
entitled to a proportionate reduction of Monthly Basic Rent at all times during
which Tenant’s use of the Premises is interrupted, such proportionate reduction
to be based on the extent to which Tenant cannot make use of the Premises in a
commercially reasonable manner.  Tenant’s
right to a reduction of Rent hereunder shall be Tenant’s sole and exclusive
remedy in connection with any such damage.

 

21.2         If Landlord is not required to restore such damage in
accordance with the provisions of the immediately preceding section and if
either (a) the damage was caused by casualty against which Landlord is not
required to maintain insurance pursuant to Paragraph 20 or (b) the
insurance proceeds plus the amount of any deductible are not sufficient to pay
one hundred percent (100%) of the repair/restoration costs, Landlord shall have
the option to either (i) repair or restore such damage, with the Lease
continuing in full force and effect, with Monthly Basic Rent proportionately abated
as provided above; or (ii) give a termination notice to Tenant at any time
within forty-five (45) days after the occurrence of such damage, provided that
Landlord may exercise such termination right only if Landlord terminates the
leases of all tenants of the Building whose premises or access are similarly
damaged by the casualty.  This Lease
shall terminate as of a date to be 

 

30

 

specified in such
termination notice which date shall not be less than thirty (30) nor more than
sixty (60) days after the date on which such notice of termination is given.  This Lease shall expire and all interest of
Tenant in the Premises shall terminate on the date so specified in such
termination notice and the Rent, reduced by any proportionate reduction in
Monthly Basic Rent as provided for above, shall be paid to the date of such
termination.  Notwithstanding the
foregoing, if Landlord elects to terminate this Lease pursuant to this
Subparagraph 21.2, and if within thirty (30) days after receipt of Landlord’s
notice, Tenant elects to provide the funds necessary to make up the shortage
(or absence) of insurance proceeds necessary to restore the Premises and
provides Landlord with reasonable assurance thereof, Landlord shall restore the
Premises as provided in this Subparagraph provided that the Premises are
reasonably subject to restoration within one hundred eighty (180) days
following the date on which the casualty occurs.

 

21.3         [Intentionally Deleted]

 

21.4         Notwithstanding the foregoing, (a) Tenant may
terminate this Lease if the Premises or any Common Areas necessary to Tenant’s
use of or access to the Premises is damaged by fire or other casualty and (i) in
the notice delivered to Tenant pursuant to Paragraph 21.1 above, Landlord’s
architect estimates that the restoration cannot be completed within one hundred
and eighty (180) days after the date of the damage or casualty; or (ii) the
restoration is not completed within one hundred and eighty (180) days after the
date of the damage or casualty; and (b) either Landlord or Tenant may
terminate this Lease if the Premises is damaged by fire or other casualty (and
Landlord’s reasonably estimated cost of restoration of the Premises exceeds ten
percent (10%) of the then replacement value of the Premises) and such damage or
casualty occurs during the last twelve (12) months of the Term of this Lease (or
the Term of any renewal option, if applicable), by giving the other notice
thereof at any time within thirty (30) days following Landlord’s delivery to
Tenant of the notice set forth in Paragraph 21.1 above (or, in the case of a
termination pursuant to clause (a)(ii) above, at any time before the
restoration is substantially completed); provided, however, that if Landlord
elects to terminate this Lease pursuant to clause (b) above, Tenant may
negate Landlord’s election by exercising, within twenty (20) days after receipt
of Landlord’s termination notice, any unexercised Extension Option hereunder.  All termination rights granted herein shall
be exercisable only by written notice, and any such termination notice shall
specify the date of such termination, which date shall not be less than thirty
(30) nor more than sixty (60) days following the date on which such notice of
termination is given.  This Lease shall
expire and all interest of Tenant in the Premises shall terminate on the date
so specified in such termination notice and the Rent shall be paid to the date
of such termination.  Tenant’s right to
terminate this Lease on the grounds that Landlord has not substantially
completed the restoration work within one hundred and eighty (180) days shall
only be effective in the event that Landlord does not complete the required
work within thirty (30) days of receipt of Tenant’s termination notice, which
notice Tenant may give so that the thirty (30) day period expires on the date
which is one hundred eighty (180) days after the date of the damage or
casualty.

 

21.5         Tenant shall not be released from any of its
obligations under this Lease except to the extent and upon the conditions
expressly stated in this Paragraph 21 or otherwise in this Lease.  Notwithstanding anything to the contrary
contained in this Paragraph 21, should Landlord be delayed or prevented from
repairing or restoring the damaged Premises after the occurrence of such damage
or destruction by reason of acts of God, war, governmental restrictions,
inability to procure the necessary labor or materials, or other cause or force
majeure beyond the control of Landlord, the 

 

31

 

time period permitted to
Landlord for repair or restoration shall be extended by one day for each day
completion of the work to restore the Premises is delayed thereby.

 

21.6         Landlord and Tenant hereby agree that if Landlord is
obligated to or elects to repair or restore as herein provided, Landlord shall
be obligated to make repairs or restoration only to the portions of the Site
for which Landlord is obligated pursuant to Paragraph 14.2 and to the Tenant
Improvements made to the Premises by either Tenant or Landlord which were paid
for by any portion of the Tenant Improvement Allowance, as defined in the Work
Letter.  Such restoration shall be
substantially to the same condition as existed prior to the casualty, except
for modifications required by zoning and building codes and other laws or by
the holder of a mortgage on the Building or any other modifications to the
Common Areas deemed reasonably desirable by Landlord, provided that access to
the Premises shall not be materially modified or impaired.  The repair and restoration of items for which
Tenant is required to carry insurance pursuant to Paragraph 20.1(b) shall
be the obligation of Tenant.

 

21.7         Tenant hereby waives California Civil Code Sections
1932(2) and 1933(4), providing for termination of hiring upon destruction
of the thing hired and California Civil Code Sections 1941 and 1942, providing
for repairs to and of Premises.

 

22.           Eminent
Domain.

 

22.1         In case the whole of the Premises shall be taken for
any public or quasi-public purpose by any lawful power or authority by exercise
of the right of appropriation, condemnation or eminent domain, or sold to
prevent such taking (a “Taking”), this
Lease shall terminate effective as of the date possession is required to be
surrendered to said authority.  In case
only part of the Premises is subject to a Taking, but such part [or the Taking
of any other portion of the Site] shall materially interfere with Tenant’s use
and occupancy of the Premises, Tenant shall have the right to terminate this
Lease effective as of the date possession is required to be surrendered to said
authority.  Tenant shall not assert any
claim against Landlord or the taking authority for any compensation because of
such taking, and Landlord shall be entitled to receive the entire amount of any
award without deduction for any estate or interest of Tenant; provided,
however, that the foregoing shall not be deemed to prohibit Tenant from filing
a separate claim at its sole cost and expense for an award or portion thereof
separately designated for (a) relocation costs, (b) moving expenses, (c) the
unamortized portion of the value of all Tenant Improvements or Changes
performed in the Premises (or, if this Lease is not terminated, in the portion
thereof subject to the Taking) and paid for by Tenant (such amortization to be
calculated on a straight-line basis, without interest, over the Term of this
Lease remaining as of the completion of such work).  In the case of a Taking in which this Lease
is not terminated, Landlord shall be entitled to the entire amount of the award
without deduction for any estate or interest of Tenant, and Landlord shall
promptly proceed to restore the Premises to substantially their same condition
prior to such partial Taking, and a proportionate allowance shall be made to
Tenant for the rent corresponding to the time during which, and to the part of
the Premises of which, Tenant shall be so deprived on account of such Taking
and restoration.  Nothing contained in
this Paragraph shall be deemed to give Landlord any interest in any award
separately made to Tenant for the taking of personal property and trade
fixtures belonging to Tenant or for moving costs incurred by Tenant in
relocating Tenant’s business.

 

22.2         In the event of a Taking of the Premises or any part
thereof for temporary use, (i) this Lease shall be and remain unaffected
thereby and rent shall not abate, and (ii) Tenant shall be entitled to 

 

32

 

receive for itself such
portion or portions of any award made for such use with respect to the period
of the Taking which is within the Term, provided that if such Taking shall
remain in force at the expiration or earlier termination of this Lease, Tenant
shall then pay to Landlord a sum equal to the reasonable cost of performing
Tenant’s obligations under Paragraph 14 with respect to surrender of the
Premises and upon such payment shall be excused from such obligations.  For purpose of this Subparagraph 22.2, a
temporary taking shall be defined as a taking for a period of 180 days or less.

 

22.3         Landlord and Tenant each hereby waive the provisions
of California Code of Civil Procedure Section 1265.130 and any other
applicable existing or future law, ordinance or governmental regulation
providing for, or allowing either party to petition the courts of the state of
California for, a termination of this lease upon a partial taking of the
Premises and/or the Building.

 

23.           Bankruptcy.  If Tenant
shall file a petition in bankruptcy under any Chapter of federal bankruptcy law
as then in effect, or if Tenant be adjudicated a bankrupt in involuntary bankruptcy
proceedings and such adjudication shall not have been vacated within thirty
(30) days from the date thereof, or if a receiver or trustee be appointed of
Tenant’s property and the order appointing such receiver or trustee not be set
aside or vacated within thirty (30) days after the entry thereof, or if Tenant
shall assign Tenant’s estate or effects for the benefit of creditors, or if
this Lease shall otherwise by operation of law pass to any person or persons
other than Tenant, then in any such event Landlord may, if Landlord so elects,
with or without notice of such election and with or without entry or action by
Landlord, forthwith terminate this Lease. 
Notwithstanding any other provisions of this Lease, Landlord, in
addition to any and all rights and remedies allowed by law or equity, shall
upon such termination be entitled to recover damages in the amount provided in
Subparagraph 24.2 below.  Neither Tenant
nor any person claiming through or under Tenant or by virtue of any statute or
order of any court shall be entitled to possession of the Premises, and Tenant
shall forthwith quit and surrender the Premises to Landlord.  Nothing herein contained shall limit or
prejudice the right of Landlord to prove and obtain as damages by reason of any
such termination an amount equal to the maximum allowed by any statute or rule of
law in effect at the time when, and governing the proceedings in which, such
damages are to be proved, whether or not such amount be greater, equal to, or
less than the amount of damages recoverable under the provisions of this
Paragraph 23.

 

24.           Defaults
and Remedies.

 

24.1         The occurrence of any one or more of the following
events shall constitute a default hereunder by Tenant:

 

(a)           The abandonment of the Premises by Tenant.  Abandonment is herein defined to include, but
is not limited, to, any absence by Tenant from the Premises for fourteen (14)
consecutive days or more without the payment of Rent.

 

(b)           The failure by Tenant to make any payment of Monthly
Basic Rent, Operating Rent, additional rent or any other payment required to be
made by Tenant hereunder as and when due, where such failure continues for a
period of five (5) days after written notice thereof from Landlord to
Tenant; provided, however, that any such notice shall be in lieu of, and not in
addition to, any notice required under California Code of Civil Procedure 1161.

 

33

 

(c)           The failure by Tenant to observe or perform any of the
express or implied covenants or provisions of this Lease to be observed or
performed by Tenant, other than as specified in Subparagraph 24.1(a) or
24.1(b) above, where such failure shall continue for a period of thirty
(30) days after written notice thereof from Landlord to Tenant; provided,
however, that any such notice shall be in lieu of, and not in addition to, any
notice required under California Code of Civil Procedure 1161; provided,
further, that if the nature of Tenant’s default is such that more than thirty
(30) days are reasonably required for its cure, then Tenant shall not be deemed
to be in default if Tenant shall commence such cure within said 30-day period
and thereafter diligently and without interruption prosecute such cure to
completion.

 

(d)           (1) The making by Tenant of any general
assignment for the benefit of creditors; (2) the filing by or against
Tenant of a petition to have Tenant adjudged a bankrupt or a petition for
reorganization or arrangement under any law relating to bankruptcy (unless, in
the case of a petition filed against Tenant, the same is dismissed within
thirty (30) days); (3) the appointment of a trustee or receiver to take
possession of substantially all of Tenant’s assets located at the Premises or
of Tenant’s interest in this Lease, where possession is not restored to Tenant
within thirty (30) days; or (4) the attachment, execution or other
judicial seizure of substantially all of Tenant’s assets located at the
Premises or of Tenant’s interest in this Lease where such seizure is not
discharged within thirty (30) days.

 

24.2         In the event of any such default by Tenant, in
addition to any other remedies available to Landlord at law or in equity,
Landlord shall have the immediate option to terminate this Lease and all rights
of Tenant hereunder.  Upon such termination
of Tenant’s right to possession of the Premises, this Lease shall terminate and
Landlord shall be entitled to recover damages from Tenant as provided in
California Civil Code Section 1951.2 or any other applicable existing or
future law, ordinance or regulation providing for recovery of damages for such
breach, including but not limited to the following:

 

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

 

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

 

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

 

(d)           any other amount necessary to compensate Landlord for
all the detriment proximately caused by Tenant’s failure to perform his
obligations under this Lease or which in the ordinary course of things would be
likely to result therefrom.

 

As used in Subparagraphs
24.2(a) and 24.2(b) above, the “worth at the time of award” is
computed by allowing interest at the maximum rate permitted by law per annum.  As used in Subparagraph 24.2(c) above,
the Worth at the time of awards is computed by discounting to present value at
the time of the award such amount at the discount rate of the Federal Reserve
Bank of San Francisco at the time of award plus one percent (1%).

 

34

 

24.3         If a default exists under this Lease, Landlord may
exercise its rights under California Civil Code Section 1951.4 and may
continue this Lease in effect after Tenant has breached this Lease and
abandoned the Premises and Landlord may recover rent as it becomes due;
provided, however that Tenant has the right to sublet or assign this Lease,
subject to reasonable limitations.  Acts
of maintenance or preservation or efforts to relet the Premises or the
appointment of a receiver upon initiative of Landlord to protect Landlord’s
interest under this Lease shall not constitute a termination of Tenant’s right
to possession.

 

24.4         All rights, options’ and remedies of Landlord
contained in this Lease shall be construed and held to be cumulative, and no
one of them shall be exclusive of the other, and Landlord shall have the right
to pursue any one or all of such remedies or any other remedy or relief which
may be provided by law, whether or not stated in this Lease.  No waiver of any default of Tenant hereunder
shall be implied from any acceptance by Landlord of any rent or other payments
due hereunder or any omission by Landlord to take any action on account of such
default if such default persists or is repeated, and no express waiver shall
affect defaults other than as specified in said waiver.  The consent or approval or Landlord to or of
any act by Tenant requiring Landlord’s consent or approval shall not be deemed
to waive or render unnecessary Landlord’s consent or approval to or of any
subsequent similar acts by Tenant.

 

25.           Assignment
and Subletting.

 

25.1         Subject to Paragraph 25.2 below, Tenant shall not
voluntarily assign, hypothecate or encumber its interest in this Lease or in
the Premises, or sublease all or any part of the Premises, or allow any other
person or entity to occupy or use all or any part of the Premises, without
first obtaining Landlord’s prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed (all of the foregoing are
hereinafter sometimes referred to individually as a “Transfer”,
and collectively as “Transfers”, and
any person to whom any Transfer is made or sought to be made is hereinafter
sometimes referred to as a “Transferee”).  Any assignment, encumbrance, hypothecation or
sublease without Landlord’s prior written consent shall be voidable, at
Landlord’s election, and shall constitute a default.  Except as otherwise provided in Paragraph
25.2 below, in the event Tenant is a partnership, a withdrawal or change of
partners, or change of ownership of partners, owning more than a fifty percent
(50%) interest in the partnership, or if Tenant is a corporation, any transfer of
fifty percent (50%) of its stock, or of voting control of such corporation,
shall constitute a voluntary assignment and shall be subject to these
provisions; provided, however, that a Transfer shall not be deemed to include
the infusion of additional equity capital in Tenant or an initial public
offering of equity securities of Tenant and the foregoing shall not apply if
Tenant’s stock is publicly held and traded through a national stock exchange.  No consent to any assignment, encumbrance, or
sublease shall constitute a further waiver of the provisions of this Paragraph.  No later than thirty (30) days prior to the
effective date of the proposed assignment or sublease, Tenant shall notify
Landlord in writing of Tenant’s intent to assign, encumber, hypothecate or
sublease, the name of the proposed assignee or sublessee, information
concerning the financial responsibility of the proposed assignee or sublessee
and the terms of the proposed assignment or subletting, and Landlord shall,
within fifteen (15) days of receipt of such written notice as well as any
additional information requested by Landlord concerning the proposed assignee’s
or sublessee’s financial responsibility, elect one of the following:

 

(a)           Consent to such proposed assignment, encumbrance or sublease;

 

35

 

(b)           Refuse such consent, which refusal shall be on
reasonable grounds, including but not limited to those matters set forth
hereinbelow;

 

Without limiting the
other instances in which it may be reasonable for Landlord to withhold its
consent to an assignment or sublease, Landlord and Tenant acknowledge that it
shall be reasonable for Landlord to withhold its consent in the following
instances:  (i) if at the time
consent is requested or at any time prior to the granting of consent, Tenant is
in default under this Lease after any grace or cure period under Paragraph 24
above; (ii) if the proposed assignee or subtenant’s credit, character and
business or professional standing does not meet the reasonable standards of
landlords of similar buildings in the area of the Building; or (iii) if
the proposed assignee is an existing tenant of the Building and Landlord is
currently negotiating with such tenant for available space in the Building.

 

In the event that
Landlord shall consent to any assignment or sublease under the provisions of
this Paragraph 25, Tenant shall pay all of Landlord’s processing costs and
attorneys’ fees incurred in giving such consent in an amount not to exceed Two
Thousand Dollars ($2,000.00).  If, for
any proposed assignment or sublease, Tenant receives rent or other
consideration, either initially or over the term of the assignment or sublease,
in excess of the rent called for hereunder, plus related Transfer Costs
(defined below), or, in case of the sublease of a portion of the Premises, in
excess of all Transfer Costs related to such sublease, plus such rent fairly
allocable to such portion of the Premises (in either case, such excess is
herein referred to as the “Transfer Premium”),
then, at such time as Tenant has recouped all of the Transfer Costs relating to
the assignment or sublease, Tenant shall pay to Landlord as additional rent
hereunder fifty percent (50%) of the Transfer Premium received by Tenant
promptly after its receipt.  If Tenant
enters into more than one sublease with respect to the Premises, then the
calculation of the Transfer Premium hereunder shall take into account any
subleases for which the rent or other consideration received by Tenant over the
term of the sublease is less than the rent called for hereunder, plus related
Transfer Costs, or, in case of the sublease of a portion of the Premises, is
less than the Transfer Costs related to such sublease, plus such rent fairly
allocable to such portion of the Premises. 
As used herein, “Transfer Costs”
shall mean the reasonable expenses incurred by Tenant for (i) any Changes,
or improvement allowances given, in connection with a Transfer, (ii) any
free base rent provided to the Transferee in connection with the Transfer
(provided that such free rent shall be deducted only to the extent the same is
included in the calculation of total consideration payable by such Transferee),
(iii) any brokerage commissions in connection with the Transfer, and (iv) legal
fees reasonably incurred in connection with the Transfer.  Landlord’s waiver or consent to any
assignment or subletting shall not relieve Tenant from any obligation under
this Lease.  Landlord shall have the
right to reasonably approve any rent credits, Changes or improvement
allowances; provided, however, that Landlord may not withhold consent to the
foregoing to the extent they reflect the current rental marketplace, and
related leasing concessions, applicable at the time of the subject assignment
or subletting.

 

25.2         Tenant may assign this Lease or sublet any portion of
the Premises (hereinafter collectively referred to as a “Permitted
Transfer”), which Landlord agrees shall not constitute a Transfer
for purposes of this Lease, to (a) a corporation or other entity with
which Tenant may merge or consolidate, or to whom Tenant sells all or
substantially all of Tenant’s assets or voting stock; or (b) any parent,
affiliate or subsidiary of Tenant; or (c) an affiliate or subsidiary of
Tenant’s parent (individually, a “Permitted Transferee”);
provided that (1) at least ten (10) days prior to the Transfer (or as
soon thereafter as is reasonably practicable), Tenant notifies Landlord of such
Transfer, and supplies Landlord with copies of the documents establishing to
the reasonable 

 

36

 

satisfaction of Landlord
that the transaction in question is one permitted under this Paragraph 25.2, (2) at
least ten (10) days prior to the Transfer (or as soon thereafter as is
reasonably practicable), Tenant furnishes Landlord with a written document
executed by the proposed Permitted Transferee in which such entity assumes all
of Tenant’s obligations under this Lease with respect to the Transfer Premises
(unless such assumption is made by operation of law), and (3) any such
proposed Transfer is made for a good faith operating business purpose and not,
whether in a single transaction or in a series of transactions, be entered into
as a subterfuge to evade the obligations and restrictions relating to Transfers
set forth in this Paragraph 25.  No
Permitted Transfer shall release Tenant from any of its obligations hereunder,
nor result in any change in the Permitted Use of the Premises.

 

25.3         Notwithstanding anything to the contrary contained in
this Paragraph 25, if Tenant contemplates a Transfer (“Contemplated
Transfer”), Tenant shall give Landlord notice (the “Intention to Transfer Notice”) of such contemplated Transfer
(whether or not the contemplated Transferee or the terms of such contemplated
Transfer have been determined) provided, however, that Landlord hereby
acknowledges and agrees that Tenant shall have no obligation to deliver an
Intention to Transfer Notice hereunder, and Landlord shall have no right to
recapture space with respect to, a sublease of less than the entire Premises
for less than the remainder of the Lease Term. 
The Intention to Transfer Notice shall specify the portion of and amount
of rentable square feet of the Premises which Tenant intends to Transfer (the “Contemplated Transfer Space”), the contemplated date of
commencement of the Contemplated Transfer (the “Contemplated
Effective Date”), and the contemplated length of the term of such
contemplated Transfer, and shall specify that such Intention to Transfer Notice
is delivered to Landlord pursuant to this Paragraph 25.3 in order to allow
Landlord to elect to recapture the Contemplated Transfer Space for the
remainder of the Lease Term.  Thereafter,
Landlord shall have the option, by giving written notice to Tenant within
fifteen (15) days after receipt of any Intention to Transfer Notice, to
recapture the Contemplated Transfer Space. 
Any recapture under this Paragraph 25.3 shall cancel and terminate (or
suspend if not for the remainder of the Lease Term) this Lease with respect to
the Contemplated Transfer Space as of the Contemplated Effective Date.  In the event of a recapture by Landlord, (i) Landlord
shall install, on a commercially reasonable basis, any corridor and/or demising
wall which is required as a result of a recapture by Landlord pursuant to the
terms hereof, (ii) the Rent reserved herein shall be prorated on the basis
of the number of rentable square feet retained by Tenant in proportion to the
number of rentable square feet contained in the Premises; and (iii) this
Lease as so amended shall continue thereafter in full force and effect, and
upon request of either party, the parties shall execute written confirmation of
the same.  If Landlord declines, or fails
to elect in a timely manner, to recapture the Contemplated Transfer Space under
this Paragraph 25.3, then Landlord shall not have any right to recapture the
Contemplated Transfer Space with respect to any Transfer made during the twelve
(12) month period following the date of the Intention to Transfer Notice;
provided however, that any such Transfer shall be subject to the remaining
terms of this Paragraph 25.  If such a
Transfer is not so consummated within such 12-month period, Tenant shall again
be required to submit a new Intention to Transfer Notice to Landlord with
respect any contemplated Transfer, as provided above in this Paragraph 25.3.

 

26.           Quiet Enjoyment.  Landlord
covenants and agrees with Tenant that upon Tenant paying the rent required
under this Lease and paying all other charges and performing all of the
covenants and provisions aforesaid on Tenant’s part to be observed and
performed under this Lease and subject to the terms and conditions of this
Lease, Tenant shall and may peaceably and quietly have, hold and enjoy the
Premises in accordance with this Lease.

 

37

 

27.           Subordination.  Without the
necessity of any additional document being executed by Tenant for the purpose
of effecting a subordination, and at the election of Landlord or any first
mortgagee.  with a lien on the Site, the
Premises, the Building (or any portion thereof) or any ground lessor with
respect to the Site and/or the Building (or any portion thereof), this Lease
shall be subject and subordinate at all times to: (a) all ground leases or
underlying leases which may now exist or hereafter be executed affecting the
Site, the Premises, the Building (or any portion thereof) or the land upon
which the Building is situated or both, and (b) the lien of any mortgage
or deed of trust which may now exist or hereafter be executed in any amount for
which the Site, the Premises, the Building, land, ground leases or underlying
leases, or Landlord’s interest or estate in any of said items is specified as
security; provided, however, that any such self-operating subordination shall
be expressly conditioned on Tenant’s rights under this Lease not being
disturbed so long as Tenant is not in default under this Lease (after notice
and applicable cure periods).  Notwithstanding
the foregoing, Landlord shall have the right to subordinate or cause to be
subordinated any such ground leases or underlying leases or any such liens to
this lease.  In the event that any ground
lease or underlying lease terminates for any reason or any mortgage or deed of
trust is foreclosed or a conveyance in lieu of foreclosure is made for any
reason, Tenant shall, if requested by the ground lessor, mortgagee or
beneficiary, as applicable, attorn to and become the Tenant of the successor in
interest to Landlord and in such event Tenant’s right to possession of the
Premises shall not be disturbed if Tenant is not in default under this Lease
(after notice and applicable cure periods), unless the Lease is otherwise
terminated pursuant to its terms.  Tenant
covenants and agrees to execute and deliver, upon demand by Landlord and in the
form reasonably requested by Landlord, any additional documents evidencing the
priority or subordination of this Lease with respect to any such ground leases
or underlying leases or the lien of any such mortgage or deed of trust.  Should Tenant fail to sign and return any
such documents within ten (10) business days of receipt of a second demand
for the execution of such documentation, Tenant shall be in default of this
Lease.  Landlord shall use its
commercially reasonable efforts to obtain a subordination, nondisturbance and
attornment agreement, on Landlord’s lender’s standard form, within a reasonable
time following execution of this Lease.

 

28.           Estoppel
Certificate.

 

28.1         Within ten (10) business days following any
written request which Landlord may make from time to time, Tenant shall execute
and deliver to Landlord a statement, in a commercially reasonable form
acceptable to Landlord, certifying at minimum; (i) the Commencement Date of
this Lease; (ii) 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); (iii) the date to which the rental and other sums payable
under this Lease have been paid; (iv) the fact that, to Tenant’s current
actual knowledge, there are no current defaults under this Lease by either
Landlord or Tenant except as specified in such statement; and (v) such
other matters reasonably requested by the requesting party.  Landlord and Tenant intend that any statement
delivered pursuant to this Paragraph 28 may be relied upon by any mortgagee,
beneficiary, purchaser or prospective purchaser of the Site and/or Building or
any interest therein.

 

28.2         Tenant’s failure to deliver such statement within such
time shall be conclusive upon Tenant (i) that this Lease is in full force
and effect, without modification except as may be represented by Landlord, (ii) that
there are no uncured defaults in the requesting party’s performance, and (iii) that
not more than one (1) month’s rent has been paid in advance.  If Tenant fails to deliver said statement to
Landlord within ten (10) business days of receipt of a second written
request therefor, 

 

38

 

such failure shall,
without the requirement of any future notice or any further grace period,
constitute a default under this Lease pursuant to Paragraph 24.1.

 

29.           Rules and Regulations.  Tenant
shall faithfully observe and comply with the “Rules and Regulations,” a
copy of which is attached hereto and marked Exhibit C, and all
reasonable and nondiscriminatory modifications thereof and additions thereto
from time to time put into effect by Landlord that do not materially increase
any obligations or materially diminish any rights of Tenant.  In the event of any conflict between the
terms of this Lease and the Rules and Regulations, the terms of this Lease
shall prevail.  Landlord shall not be
responsible to Tenant for the violation or nonperformance by any other tenant
or occupant of the Building of any of said Rules and Regulations;
provided, however, that Landlord agrees to enforce the Rules and
Regulations uniformly and in a non-discriminatory manner.

 

30.           Conflict of Laws.  This Lease
shall be governed by and construed pursuant to the laws of the State of
California.

 

31.           Successors and Assigns.  Except as
otherwise provided in this Lease, all of the covenants, conditions and provisions
of this Lease shall be binding upon and shall inure to the benefit of the
parties hereto and their respective heirs, personal representative, successors
and assigns.

 

32.           Surrender of Premises.  The voluntary
or other surrender of this Lease by Tenant, or a mutual cancellation thereof,
shall not work a merger, and shall, at the option of Landlord, operate as an
assignment to it of any or all subleases or subtenancies.  Upon the expiration or termination of this
Lease, Tenant shall peaceably surrender the Premises and all alterations and
additions thereto broom-clean, in good order, repair and condition, reasonable
wear and tear and damage by fire or other casualty excepted.  The delivery of keys to any employee of
Landlord or to Landlord’s agent or any employee thereof shall not be sufficient
to constitute a termination of this Lease or a surrender of the Premises.

 

33.           Professional Fees.  In the event
that Landlord or Tenant should bring suit for the possession of the Premises,
for the recovery of any sum due under this Lease, or because of the breach of
any provisions of this Lease, or for any other relief against Tenant or
Landlord hereunder, or should either party bring suit against the other with
respect to matters arising from or growing out of this Lease, then all costs
and expenses, including without limitation, its reasonable professional fees
such as appraisers’, accountants’ and attorneys’ fees, incurred by the
prevailing party therein shall be paid by the other party, which obligation on
the part of the other party shall be deemed to have accrued on the date of the
commencement of such action and shall be enforceable whether or not the action
is prosecuted to judgment

 

34.           Performance by Tenant.  Except as
otherwise expressly provided in this Lease, all covenants and agreements to be
performed by Tenant under any of the terms of this Lease shall be performed by
Tenant at Tenant’s sole cost and expense and without any abatement of rent.  Tenant acknowledges that the late payment by
Tenant to Landlord of any sums due under this Lease will cause Landlord to
incur costs not contemplated by this Lease, the exact amount of such cost being
extremely difficult and impractical to fix. 
Such costs include, without limitation, processing and accounting charges,
and late charges that may be imposed on Landlord by the terms of any
encumbrance and note secured by any encumbrance covering the Premises or the
Building of which the Premises are a part. 
Therefore if any amount due Landlord from Tenant hereunder has not 

 

39

 

been received within five
(5) days of its due date, Tenant shall pay to Landlord, without notice or
demand, as additional rent, five percent (5%) of the overdue amount as a late
charge; provided, however, that no such late charge shall be assessed on the
first (1st) occasion that any rent or other sum is not received by Landlord or
Landlord’s designee within ten (10) days of the due date.  Such overdue amount shall also bear interest,
as additional rent, at the rate permissible by law calculated, as appropriate,
from the date of receipt of said notice until the date of payment to Landlord.  Landlord’s acceptance of any late charge or
interest shall not constitute a waiver of Tenant’s default with respect to the
overdue amount or prevent Landlord from exercising any of the other rights and
remedies available to Landlord under this Lease or any law now or hereafter in
effect.  Further, in the event such late
charge is imposed by Landlord for two (2) consecutive months for whatever
reason, Landlord shall have the option to require that, beginning with the
first payment of rent due following the imposition of the second consecutive
late charge, rent shall no longer be paid in monthly installments but shall be
payable three (3) months in advance.

 

35.           Mortgagee and Senior Lessor Protection.  No
act or failure to act on the part of Landlord which would entitle Tenant under
the terms of this Lease, or by law, to be relieved of Tenant’s obligations
hereunder or to terminate this Lease (if any), shall result in a release of
such obligations or a termination of this Lease unless (a) Tenant has
given notice by registered or certified mail to Landlord and to any beneficiary
of a deed of trust or mortgage covering the Site and/or the Building (or any
portion thereof) and to the lessor under any master or ground lease covering
the Building, the Site or any interest therein whose identity and address shall
have been furnished to Tenant, and (b) Tenant offers such beneficiary,
mortgagee or lessor a reasonable opportunity (but in no event less than thirty
(30) days) to cure the default, including time to obtain possession of the
Premises by power of sale or of judicial foreclosure, if such should prove
necessary to effect a cure.  Landlord
shall, from time to time, give Tenant written notice of the identity and
address of the beneficiary of any deed of trust or mortgage covering the Site
and/or the Building (or any portion thereof) and/or the lessor under any master
or ground lease.  Notwithstanding the
foregoing provisions of this Paragraph 35, if Landlord or any beneficiary,
mortgagee or lessor shall fail to commence curing any default on the part of
Landlord hereunder within thirty (30) days following notice thereof from Tenant
(or, in the case of an emergency situation or imminent threat to life or
safety, as soon as reasonably practicable under the circumstances) and
diligently pursue such cure to completion, Tenant shall have the right, without
any obligation to do so, to cure any such default at Landlord’s expense.  Any work performed by Tenant pursuant to the
foregoing shall be conducted in accordance with the terms of Paragraph 13 above
(excluding the requirement to obtain Landlord’s consent).  Bills for the expense incurred by Tenant in
connection with performing such obligations, and for the payment for which
Landlord is liable shall be due and payable thirty (30) days after written
notice is given of the amount due.

 

36.           Definition of Landlord.  The term “Landlord”
as used in this Lease, so far as covenants or obligations on the part of
Landlord are concerned, shall be limited to mean, and include only, the owner
or owners, at the time in question, of the fee title to, or a lessee’s interest
in a ground lease of the Site or master lease of the Building.  In the event of any transfer, assignment or
other conveyance or transfer of any such title or interest, Landlord herein
named (and in case of any subsequent transfers or conveyances, the then
grantor) shall be automatically freed and relieved from and after the date of
such transfer, assignment or conveyance of all liability with respect to the
performance of any covenants or obligations on the part of Landlord contained
in this Lease thereafter to be performed and, without further agreement, the
transferee of such title or interest shall be deemed to have agreed to observe
and perform any and all obligations of Landlord 

 

40

 

hereunder, during its
ownership of the Premises.  Landlord may
transfer its interest in the Premises without the consent of Tenant and such
transfer or subsequent transfer shall not be deemed a violation on Landlord’s
part of any of the terms and conditions of this Lease.

 

37.           Waiver.  The failure of
either party to seek redress for violation of, or to insist upon strict
performance of, any term, covenant or condition of this Lease or the Rules and
Regulations attached hereto as Exhibit C, shall not be deemed a
waiver of such violation or prevent a subsequent act which would have
originally constituted a violation from having all the force and effect of an
original violation, nor shall any custom or practice which may become
established between the parties in the administration of the terms hereof be
deemed a waiver of, or in any way affect, the right of Landlord or Tenant to
insist upon the performance by the other party in strict accordance with said
terms.  The subsequent acceptance or
payment of rent hereunder by Landlord or Tenant shall not be deemed to be a
waiver of any preceding breach by Tenant or Landlord of any term, covenant or
condition of this Lease, other than the failure of Tenant to pay the particular
rent so accepted, regardless of Landlord’s knowledge of such preceding breach
at the time of acceptance of such rent.

 

38.           Identification of Tenant.  If
Tenant consists of more than one person or entity, (a) each of them is
jointly and severally liable for the keeping, observing and performing of all
of the terms, covenants, conditions, provisions and agreements of this Lease to
be kept, observed and performed by Tenant, and (b) the term “Tenant” as
used in this Lease shall mean and include each of them jointly and severally
and the act of or notice from, or notice or refund to, or the signature of, any
one or more of them, with respect to the tenancy or this Lease, including, but
not limited to, any renewal, extension, expiration, termination or modification
of this Lease, shall be binding upon each and all of such entities or persons
with the same force and effect as if each and all of them had so acted or so
given or received such notice or refund or so signed.

 

39.           Terms and Headings.  The words “Landlord”
and “Tenant” as used herein shall include the plural as well as the singular.  Words used in any gender include other
genders.  If there be more than one
Tenant, i.e., if two or more persons or entities are jointly referred to in
this Lease as “Tenant,” the obligations hereunder imposed upon Tenant shall be
joint and several.  The Paragraph
headings of this Lease are not a part of this Lease and shall have no effect
upon the construction or interpretation of any part hereof.  Terms capitalized but not otherwise defined
herein shall have the respective meanings given to such terms in the Summary.

 

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

 

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

 

42.           Prior Agreement; Amendments.  This
Lease contains all of the agreements of the parties hereto with respect to any
matter covered or mentioned in this Lease, and no prior agreement or
understanding, oral or written, express or implied, pertaining to any such
matter shall be effective for any purpose. 
No provision of this Lease may be amended or added to except by an
agreement in writing signed by the parties hereto or their respective
successors in interest.  The parties 

 

41

 

acknowledge that all
prior agreements, representations and negotiations are deemed superseded by the
execution of this Lease to the extent they are not incorporated herein.

 

43.           Severability.  Any provision
of this Lease which shall prove to be invalid, void or illegal in no way
affects, impairs or invalidates any other provision hereof, and such other
provisions shall remain in full force and effect.

 

44.           Recording.  Tenant shall
not record this Lease nor a short memorandum thereof without the consent of
Landlord and if such recording occurs, it shall be at the sole cost and expense
of Tenant, including any documentary transfer taxes or other expenses related
to such recordation.

 

45.           Limitation
on Liability.

 

45.1         The obligations of Landlord under this Lease do not
constitute personal obligations of the individual partners, members, directors,
officers or shareholders of Landlord, and Tenant shall not seek recourse
against the individual partners, members, directors, officers or shareholders
of Landlord or any of their personal assets for satisfaction of any liability
in respect to this Lease.  In
consideration of the benefits accruing hereunder, Tenant and all successors and
assigns covenant and agree that in the event of any actual or alleged failure,
breach or default hereunder by Landlord, the sole and exclusive remedy shall be
against Landlord’s interest in the Building, including, without limitation,
rents due from tenants, insurance proceeds, and proceeds from condemnation or
eminent domain proceedings.

 

45.2         Notwithstanding any contrary provision herein, neither
Tenant nor the Tenant Parties shall be liable under any circumstances for any
indirect or consequential damages including damages to Landlord’s business,
loss of profits, loss of business opportunity and loss of goodwill, in each
case, however occurring, provided that the foregoing shall not limit Tenant’s
liability, if any, pursuant to Paragraphs 7.2 or 24.2 of the Lease.

 

46.           Signs.  Tenant shall
not place any sign outside the Premises without Landlord’s prior written
consent, which consent may be withheld in Landlord’s sole discretion.  Notwithstanding the foregoing, Tenant shall
be entitled to have Building standard signage in the main lobby of the
Building, on the lobby directory, and in the elevator lobby of each floor
occupied by Tenant with other tenants, and on the exterior door to the Premises.  The signage in the lobby of the Building
shall be supplied at Landlord’s cost and any signage on the exterior door to
the Premises shall be at Tenant’s cost.  In
addition, Tenant shall have the right to install signage on the exterior of the
Building, specifically, (a) on the green steel beam located on the King
Street side of the Building along with one other tenant of the Building, with
Tenant’s signage to be located where the existing Building signage is currently
located; and (b) subject to compliance with all applicable ordinances, statutes
and regulations imposed by all applicable governmental authorities, banner
signage on the east side of the Building in conformity with the size and
location of such signage depicted on Exhibit F hereto.  All non-Building standard signage shall be
subject to Landlord’s reasonable approval as to size, style and location.  Tenant shall also have creative control over
the King Street window line on the ground floor of the Building.  All signs shall be in full compliance with
all applicable ordinances, statutes and regulations imposed by all applicable
governmental authorities.

 

47.           Modification for Lender.  If in
connection with obtaining construction, interim or permanent financing for the
Site and/or the Building (or any interest therein), the lender shall 

 

42

 

request reasonable
modifications in this Lease as a condition to such financing, Tenant will not
unreasonably withhold, delay or defer its consent thereto, provided that such
modifications do not materially increase the obligations of Tenant hereunder or
materially adversely affect the leasehold interest hereby created or materially
diminish Tenant’s rights hereunder.

 

48.           Accord and Satisfaction.  No payment by
Tenant or receipt by Landlord of a lesser amount than the rent payment herein
stipulated shall be deemed to be other than on account of the rent, nor shall
any endorsement or statement on any check or any letter accompanying any check
or payment as rent be deemed an accord and satisfaction and Landlord may accept
such check or payment without prejudice to Landlord’s right to recover the
balance of such rent or pursue any other remedy provided in this Lease.  Tenant agrees that each of the foregoing
covenants and agreements shall be applicable to any covenant or agreement
either expressly contained in this lease or imposed by any statute or at common
law.

 

49.           Financial Statements.  If requested
by Landlord in connection with a potential sale or financing of the Site and/or
the Building (or any interest therein), Tenant shall, upon ten (10) days
prior written notice from Landlord, provide Landlord, to the extent available,
with a current financial statement and financial statements of the two (2) years
prior to the current financial statement year for Tenant, and any guarantors or
subtenants.  Such statement shall be
prepared in accordance with Tenant’s standard practices and shall be consistent
with financial statements given by Tenant to its investors.  Landlord shall protect the confidentiality of
any such statement and require that any proposed buyer or lender similarly
treat the information contained in such statement as being confidential in
nature, such that such information shall only be disclosed to the consultants,
analysts or counsel as may be reasonably necessary in order to evaluate a
potential purchase of, or loan upon, the Site and/or the Building (or any
interest thereof).  Upon written request
by Tenant, Landlord shall require any such persons to enter into a commercially
reasonable confidentiality agreement covering any confidential information that
is disclosed by Tenant.

 

50.           Tenant as Corporation.  If Tenant
executes this Lease as a legal entity, then Tenant and the persons executing
this Lease on behalf of Tenant represent and warrant that (a) the
individuals executing this Lease on Tenant’s behalf are duly authorized to
execute and deliver this Lease on the entity’s behalf and (b) that this
Lease is binding upon Tenant in accordance with its terms.

 

51.           No Partnership or Joint Venture.  Nothing
in this Lease shall be deemed to constitute Landlord and Tenant as partners or
joint venturers.  It is the express
intent of the parties hereto that their relationship with regard to this Lease
be and remain that of landlord and tenant.

 

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

 

53.           Security System.  Subject to
Landlord’s reasonable approval, Tenant shall have the right to install a
security system to safeguard the Premises at any time.

 

54.           Consents.  Whenever
Landlord’s consent or approval is required under this Lease or the Work Letter,
unless Landlord expressly reserves the right to grant or withhold such consent
or approval in Landlord’s sole discretion, such consent or approval shall not
be unreasonably withheld, conditioned or delayed.

 

43

 

55.           Alternative
Dispute Resolution Process.

 

55.1         Means of Resolution.  In the event
that any controversy or dispute shall arise under this Lease (excluding “Non-ADR Matters” (defined below), a “Dispute”),
including, without limitation, Disputes over which Tenant may be permitted to
terminate this Lease pursuant to the provisions hereof, and in the event that
the parties have been unable to resolve such Dispute within ten (10) days,
the Dispute shall be resolved as provided in this Paragraph 55.1.  All Disputes, the monetary value of which
exceeds Fifty Thousand Dollars ($50,000), or which involve an equitable remedy,
shall first require the utilization of Mediation as provided in Paragraph 55.2
below.  All Disputes, the monetary value
of which is Fifty Thousand Dollars ($50,000) or less shall be settled by
Arbitration as discussed in Paragraph 55.3 below.

 

55.2         Mediation.  The parties
shall first try in good faith to settle the Dispute by mediation pursuant to
the provisions as set forth below.  Either
party may initiate Mediation.  The party
commencing the Mediation shall first give a written notice (a “Mediation Notice”) to the other party setting forth the
nature of the Dispute.  The Mediation
shall be administered by JAMS/Endispute under its Commercial Mediation Rules,
except to the extent that this Paragraph 55.2 is inconsistent therewith, in
which event this Paragraph 55.2 shall govern and prevail.  If the parties cannot agree on the selection
of a Mediator within twenty (20) days after receipt of the Mediation Notice,
the Mediator shall be selected in accordance with JAMS/Endispute procedure.  If the Dispute or any part thereof has not
been resolved by mediation as provided above within sixty (60) clays after
receipt of the Mediation Notice, or if a party fails to participate in
Mediation, then at the option of either party by written notice, the Dispute
shall be determined by suit or action in court, unless it is a matter for
Arbitration as described in Paragraph 55.1 above.

 

55.3         Arbitration.  Either or
both parties may initiate the Arbitration process.  The party initiating the Arbitration process
shall first give a written notice to the other party setting forth the nature
of the Dispute.  The Arbitration shall be
administered by JAMS/Endispute in accordance with its Commercial Arbitration
Rules, except to the extent that this Paragraph 55.3 is inconsistent therewith,
in which event this Paragraph 55.3 shall govern and prevail.  Judgment upon the award rendered by the
Arbitrator may be entered in any court of competent jurisdiction.  Unless otherwise agreed to by the parties,
the matter shall be submitted to one (1) Arbitrator and shall be heard in
the City and County of San Francisco.  If
the parties cannot agree on the selection of an Arbitrator within ten (10) days
after the initiation of the Arbitration process, the Arbitrator shall be
selected in accordance with the JAMS/Endispute procedure, which selection shall
be binding on the parties.  The Arbitrator
shall resolve the controversy in accordance with applicable law and the terms
and conditions of this Lease.  The
Arbitrator shall allow the parties reasonable opportunities for pre-hearing
document exchange and other pre-hearing discovery of evidence as determined by
the arbitrator in his or her discretion. 
The determination of the Arbitrator shall be final, binding and
conclusive upon the parties.

 

55.4         Costs of Mediation and/or Arbitration.  The
costs of the Mediation and/or Arbitration shall be shared equally between the
parties, provided, however, that such costs along with all other costs and
expenses, including attorneys’ fees, shall be subject to award in full or in
part by the Mediator and/or Arbitrator in the Mediator and/or Arbitrator’s discretion
to the prevailing party.

 

55.5         Confidentiality.  Except as
otherwise required by law, the parties, Mediator and/or Arbitrator agree to
keep confidential and not disclose to third parties any information or
documents 

 

44

 

obtained in connection
with the Mediation and/or Arbitration process, including the resolution of the
Dispute.

 

55.6         Specific Performance.  Notwithstanding
the foregoing provisions of this Paragraph 55, Landlord and Tenant agree that irreparable
damage may occur in the event that the provisions of this Lease are not
performed in all material respects in accordance with their specific terms or
are otherwise breached in any material respect. 
It is accordingly agreed that Landlord or Tenant shall be entitled to
seek a temporary restraining order or preliminary injunction from any court of
competent jurisdiction to maintain the status quo or otherwise to prevent a
material breach of this Lease and to enforce specifically the terms and provisions
hereof until an arbitration proceeding can be commenced or an injunction
hearing held.

 

55.7         Non-ADR Matters.  For purposes
of this Paragraph 55, “Non-ADR Matters”
means:

 

(a)           an action by Landlord for unlawful detainer of the
Premises pursuant to California Code of Civil Procedure Section 1161 et
seq. or any successor statute; and

 

(b)           the determination of fair market rental value
hereunder.

 

56.           Emergency
Generator.

 

56.1         Landlord hereby grants to Tenant an exclusive license
(the “Generator License”), at Tenant’s sole
cost and expense, but otherwise without charge, to install, operate, maintain
and use on the Land, in the location shown on Exhibit G, an
electrical generator and related equipment (collectively, the “Generator”), including, but not limited to, fuel storage and
lines, electrical lines and electrical power connections and meters to service
the Premises, subject to, and in accordance with, the terms and conditions
contained in Paragraph 13 above and this Paragraph 56.

 

56.2         The Generator License is subject to the following
requirements:

 

(a)           The manufacturer of the Generator, the type, size, and
quality of the Generator, the substance to be stored in the Generator, the
precise location of the Generator, all safety, monitoring, and related Generator
equipment, the method and manner of installation, and all other matters
material to the installation of the Generator, including, without limitation,
all Building penetrations, are subject to Landlord’s prior written approval,
which approval shall not be withheld unless the Disapproval Conditions apply.

 

(b)           Tenant’s contractor for installation of the Generator
shall be subject to Landlord’s prior approval (which approval will not be
unreasonably withheld, delayed or conditioned) and such contractor must provide
evidence of insurance reasonably satisfactory to Landlord prior to commencing
work in or about the Building.

 

(c)           The Generator must be installed in a good and
workmanlike manner and in accordance with all Applicable Laws, and in
accordance with plans and specifications approved in advance by Landlord, which
approval shall not be withheld unless the Disapproval Conditions apply.

 

(d)           Tenant, at its expense, shall at all times keep the
Generator in good order, condition and repair, and the Generator location and
the areas immediately surrounding same neat and clean.  With respect to all operations relating to
the Generator, Tenant shall conduct its business in such manner 

 

45

 

as not to create any
nuisance, or interfere with, annoy or disturb any other tenant of the Building
or Landlord in its operation of the Building; provided, however, that to
routinely run the Generator, in non-emergency circumstances, for purposes
including, without limitation, testing, training, maintenance and repair, and
picking up utility company shed load shall not be considered an annoyance.

 

(e)           Tenant, at its sole cost and expense,
shall comply with all Applicable Laws and restrictive covenants applicable to
the installation, maintenance, operation and use of the Generator.  Without limiting the generality of the
foregoing, Tenant shall be responsible for obtaining any building permits, and
any licenses, consents, approvals or permits which may be required by any federal,
state and local agencies or governmental authorities required for the
installation, maintenance, operation and removal of the Generator, shall
provide copies of the same to Landlord, and shall, at all times during the term
of the License, comply with all requirements of any such agency or authority.

 

(f)            Tenant shall respond to any release of
Hazardous Materials from the Generator promptly after Tenant becomes aware of
such release, regardless of the amount of the release, and shall make all
required governmental notifications in the event of a release.  In addition, Tenant shall promptly notify
Landlord of such release after Tenant becomes aware thereof.  The provisions of Paragraph 7.2(a) shall
be fully applicable to the Generator and Tenant’s activities with respect to
the Generator License.

 

56.3         Damage Related to Generator.  Any
damage to the Building, or to any personal property of Landlord or other
parties, resulting from the installation, operation, maintenance or removal of
the Generator, including, without limitation, leakage or water damage, shall be
repaired by Tenant, at Tenant’s sole cost and expense; provided, however, that
to the extent Tenant fails to make such repairs after applicable notice and
cure periods (except in an emergency, in which event Landlord shall furnish
Tenant with reasonable notice in light of the circumstances), Landlord may make
such repairs, in which event Tenant shall reimburse Landlord for the reasonable
cost thereof within thirty (30) days following receipt of a reasonably detailed
invoice therefor.

 

56.4         Ownership of Generator; Removal and
Restoration.  The Generator shall be Tenant’s property and,
at Tenant’s option, Tenant may, at its own expense, remove the Generator not
later than ten (10) days after the expiration or earlier termination of
this Lease, and repair all damage to the Building caused by such removal,
normal wear and tear excepted.  If Tenant
does not remove the Generator within ten (10) days following the
expiration or earlier termination of this Lease, then Landlord shall provide
Tenant with notice that the Generator shall be deemed either: (a) conveyed
to Landlord without compensation or (b) abandoned, in which event Landlord
may dispose of any part thereof in any manner, unless Tenant provides written
notice to the contrary to Landlord within five (5) after receipt of such
notice and immediately thereafter takes all necessary steps to remove the
Generator in a prompt manner.

 

56.5         Generator Inspection.  Landlord
and its representatives shall have the right, at any reasonable time and from
time to time, with reasonable prior notice to Tenant, to inspect the Generator,
and to conduct testing, monitoring and analyses and to review any permits,
documents, materials, inventories, financial data, or notices or correspondence
to or from private parties or governmental authorities in connection therewith.  Tenant shall maintain copies of all permits
and other documentation relating to the Generator at the Premises.

 

46

 

56.6         Insurance;
Indemnity.

 

(a)           Tenant shall cause the insurance policies
required to be maintained pursuant to Paragraph 20 of this Lease to cover the
Generator and any claims, demands, suits, liability, damage or loss arising in
connection with the presence, use, operation, installation, repair,
maintenance, or removal of the Generator.

 

(b)           Without limiting the provisions of
Paragraph 18.2 above, Tenant hereby agrees, to the maximum extent permitted by
law, to protect, defend, indemnify and hold Landlord and the other Landlord
Parties harmless from and against any and all Claims arising from or relating
to the Generator or the operations of Tenant in connection therewith (except to
the extent caused by the negligence or willful misconduct of Landlord or any
Landlord Parties).  The foregoing
indemnity shall survive the expiration or earlier termination of the Generator
License and this Lease.

 

57.           Satellite
Dish Antenna.

 

57.1         Grant of License.  During
the Term, Tenant shall have a non-exclusive license (the “Antenna
License”), without any charge, to install, operate, maintain and use
the Antenna Equipment (defined below), subject to, and in accordance with, the
terms and conditions contained in Paragraph 13 above and this Paragraph 57.

 

57.2         Permitted Use; Equipment; Location.  The
use permitted by the Antenna.  License is
solely to install, operate, maintain and use, for the purpose of reception and
transmission of communication and data signals, the following

 

(a)           one or more satellite antennae and
related equipment, and other equipment related to and necessary for the conduct
of Tenant’s business in the Premises as may be approved by Landlord, which
approval shall not be withheld unless the Disapproval Conditions apply (the “Antennae”), to be located on the open space of the roof of
the Building in a location designated by Landlord subject to Tenant’s
reasonable approval; and

 

(b)           connections for the Antennae for (i) electrical
wiring to the Building’s existing electrical supply and (ii) cable or similar
connection necessary to connect the Antennae with Tenant’s related equipment
located in the Premises.  The routes or
paths for such wiring and connections shall be through the Building’s existing
risers, conduits and shafts, subject to reasonable space limitations and
Landlord’s reasonable requirements for use of such areas, and in all events
subject to Landlord’s reasonable approval of plans and installation pursuant to
other provisions of this Antenna License, which approval shall not be withheld
unless the Disapproval Conditions apply (all such electrical and other
connections are referred to collectively as “Antennae
Connections”).  The Antennae
and Antennae Connections are collectively referred to as the “Antennae Equipment”.

 

57.3         Rooftop Installation Work.  The
Antennae Equipment and work related to its installation (“Rooftop
Installation Work”) must be performed in a good and workmanlike
manner and in accordance with all Applicable Laws and restrictive covenants,
shall not affect the integrity of the roof or any roof warranty, and shall be
subject to (a) obtaining Landlord’s prior written approval of plans and
specifications, which approval shall not be withheld unless the Disapproval
Conditions apply; and (b) obtaining Landlord’s prior written approval of
Tenant’s contractor for installation of the Antennae Equipment (which approval
will not be unreasonably withheld), and such contractor 

 

47

 

must provide evidence of
insurance reasonably satisfactory to Landlord prior to commencing work in or
about the Building.  The plans and
specifications for the Antennae Equipment shall, include, without limitation,
the design, size and features thereof and mounting structure, floor and power
load requirements, cabling installations, the means of affixing or mounting the
Antennae Equipment, and the means of connecting the Antennae Equipment to the
Building’s electrical system and to the Premises.

 

57.4         General Requirements.  Tenant’s
use of the roof of the Building is subject to the following general
requirements:

 

(a)           Tenant shall provide Landlord with
reasonable advance notice prior to commencing installation of the Antennae
Equipment or other work on or to the Antennae Equipment from time to time, and
agrees to afford Landlord the opportunity to be present for all such work,
provided that only subsequent notice within a reasonable time, shall be
required in the case of an emergency situation that presents an immediate
danger.

 

(b)           Tenant shall have reasonable access to
the roof for the purposes of installation, maintenance and repair of the
Antennae Equipment upon Tenant’s reasonable advance notice to Landlord (except
in an emergency).

 

(c)           Tenant, at its expense, shall at all
times keep the Antennae Equipment in good order, condition and repair, and the
Antennae Equipment location neat and clean. 
With respect to all operations relating to the Antennae Equipment,
Tenant shall conduct its business and control its agents, employees and
invitees in such manner as not to create any nuisance, or materially interfere
with, annoy or disturb any other licensee or tenant of the Building or Landlord
in its operation of the Building.

 

57.5         Interference.  Without
limiting the generality of any other provision hereof, Tenant shall install,
maintain and operate the Antennae Equipment in a manner so as to not cause any
electrical, electromagnetic, radio frequency or other material interference
with the use and operation of any present or future electronic control system
for any of the Building’s operating services or the operation of the elevators
in the Building.  Landlord shall not
install equipment or procure services or permit any other licensee or tenant of
Landlord to install equipment or procure services that will cause any
electrical, electromagnetic, radio frequency or other material interference
with Tenant’s use and operation of the Antennae Equipment.

 

57.6         Insurance;
Indemnity.

 

(a)           Tenant shall cause the insurance policies
required to be maintained pursuant to Paragraph 20 of the Lease to cover the
Antennae Equipment and any Claims arising in connection with the presence, use,
operation, installation, repair, maintenance, or removal of the Antennae
Equipment.

 

(b)           Without limiting the provisions of
Paragraph 18.2 above, Tenant hereby agrees, to the maximum extent permitted by
law, to protect, defend, indemnify and hold Landlord and the other Landlord
Parties, and each of them, harmless from and against any and all Claims arising
from or connected in any way with the Antennae Equipment or the operations of
Tenant or any Tenant Parties in connection therewith (except to the extent
caused by the negligence or willful misconduct 

 

48

 

of Landlord or a Landlord
Party).  The foregoing indemnity shall
survive the expiration or earlier termination of this Lease.

 

IN
WITNESS WHEREOF, the parties have executed and delivered this Lease as of the
day and year first above written.

 

	
  LANDLORD:

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
   

  
	
  SFI
  REAL ESTATE HOLDINGS LLC,

  	
  INdTV,
  LLC, a Delaware limited liability

  
	
  a
  Delaware limited liability company

  	
  company

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Edward W. Cronin, Jr.

  	
   

  	
  By:

  	
  /s/
  Joel Hyatt

  
	
   

  	
   

  	
   

  	
   

  	
  Joel
  Hyatt

  
	
  Name:

  	
   

  	
   

  	
   

  	
  Chief
  Executive Officer and Secretary

  
	
   

  	
   

  
	
  Its:

  	
  Vice
  President

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INdTV Holdings,
  LLC, a Delaware limited

  
	
   

  	
  liability
  company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joel Hyatt

  
	
   

  	
   

  	
  Joel Hyatt

  
	
   

  	
   

  	
  Chief Executive
  Officer and Secretary

  
						

 

49

 

EXHIBIT C

 

RULES AND REGULATIONS

 

1.             Except as otherwise provided in the Lease, no sign,
placard, picture, advertisement, name or notice shall be installed or displayed
on any part of the Site and/or on the outside or inside of the Building without
the prior written consent of Landlord.  Landlord
shall have the right to remove, at Tenant’s expense and without notice, any
sign installed or displayed in violation of this rule.  Except as otherwise provided in the Lease,
all approved signs or lettering on doors, windows and walls shall be printed,
painted, affixed or inscribed at the expense of Tenant in a style and format
approved by Landlord, which shall not be unreasonably withheld.

 

2.             Intentionally Deleted

 

3.             Tenant shall not obstruct any sidewalks, halls
passages, exits, entrances, elevators, escalators or stairways of the Building.  The halls, passages, exits, entrances,
shopping malls, elevators, escalators and stairways are not for the general
public, and Landlord shall in all cases retain the right to control and prevent
access thereto of all persons whose presence in the judgment of Landlord would
be prejudicial to the safety, character, reputation and interests of the Site
and/or the Building and its tenants; provided that nothing herein contained
shall be construed to prevent such access to persons with whom any tenant normally
deals in the ordinary course of its business, unless such persons are engaged
in illegal activities.  Except as
otherwise provided in the Lease, no tenant and no employee or invitee of any
tenant shall go upon the roof of the Building without Landlord’s consent.

 

4.             The directory of the Building will be provided
exclusively for the display of the name and location of tenants only, and
Landlord reserves the right to exclude any other names therefrom.

 

5.             All cleaning and janitorial services for the Building
and the Premises shall be provided exclusively through Landlord except as
otherwise provided in the Lease.  Tenant
shall not cause any unnecessary labor by carelessness or indifference to the
good order and cleanliness of the Premises. 
Landlord shall not in any way be responsible to any tenant for any loss
of property on the Premises, however occurring, or for any damage to any tenant’s
property by the janitor or any other employee or any other person.

 

6.             Landlord will furnish Tenant, free of charge, with 140
electronic keys to Tenant’s Premises and to the Building.  Landlord may make a reasonable charge for any
additional keys or card keys.  Tenant
shall not make or have made additional keys, and Tenant shall not alter any
lock or install a new additional lock or bolt on any door of its Premises.  Tenant, upon the termination of its tenancy,
shall deliver to Landlord the keys or card keys of all doors which have been
furnished to Tenant, and in the event of loss of any keys or card keys so
furnished, shall pay Landlord therefor.  In
the event Tenant requires additional or replacement keys, or requires any
special access requirements over and above the existing access system at the
Building and the Premises, Tenant shall be responsible for the cost of such
keys or special access requirements.

 

7.             If Tenant requires telegraphic, telephonic, burglar
alarm or similar services, it shall first obtain, and comply with, Landlord’s
reasonable instructions in their installation.

 

1

 

8.             Any freight elevator shall be available for use by all
tenants in the Building, subject to such reasonable scheduling as Landlord in
its discretion shall deem appropriate.  No
equipment, materials, furniture, packages, supplies, merchandise or other
property will be received in the Building or carried in the elevators except
between such hours and in such elevators as may be reasonably designated by
Landlord.

 

9.             Tenant shall not place a load upon any floor of the
Premises which exceeds the load per square foot which such floor was designed
to carry and which is allowed by law.  Landlord
shall have the right to prescribe the weight, size and position of all
equipment, materials, furniture or other property brought into the Building.  Heavy objects, if such objects are considered
necessary by Tenant, as determined by Landlord, shall stand on such platforms
as determined by Landlord to be necessary to properly distribute the weight.  Business machines and mechanical equipment
belonging to Tenant, which cause noise or vibration that may be transmitted to
the structure of the Building or to any space therein to such a degree as to be
objectionable to Landlord or to any tenants in the Building, shall be placed
and maintained by Tenant, at Tenant’s expense, on vibration eliminators or
other devices sufficient to eliminate noise or vibration.  The persons employed to move such equipment
in or out of the Building must be acceptable to Landlord.  Landlord will not be responsible for loss of,
or damage to, any such equipment or other property from any cause, and all
damage done to the Building by maintaining or moving such equipment or other
property shall be repaired at the expense of Tenant.

 

10.           Except as otherwise provided in the Lease, Tenant
shall not use or keep in the Building, on the Site and/or in the Premises any
kerosene, gasoline or flammable or combustible fluid or material other than
those limited quantities necessary for the operation or maintenance of office
equipment.  Tenant shall not use or
permit to be used in the Building, on the Site and/or in the Premises any foul
or noxious gas or substance, or permit or allow the Site, the Building, and/or
the Premises to be occupied or used in a manner offensive or objectionable to
Landlord or other occupants of the Building by reason of noise, odors or
vibrations, nor shall Tenant bring into or keep in or about the Premises any
birds or animals, except seeing-eye dogs when accompanied by their masters.

 

11.           Except as otherwise provided in the Lease and except
for any supplemental HVAC system as may be required for the conduct of Tenant’s
business in the Premises, Tenant shall not use any method of heating or air
conditioning other than that supplied or approved by Landlord.  No space heaters of any type are to be used
within the Premises without Landlord’s prior written consent, which consent
shall not be unreasonably withheld.

 

12.           Tenant shall not waste electricity, water or air
conditioning and agrees to cooperate fully with Landlord to assure the most
effective operation of the Building’s heating and air conditioning and to
comply with any governmental energy-saving rules, laws or regulations of which
Tenant has actual notice, and shall refrain from attempting to adjust controls
other than room thermostats installed for Tenant’s use.  Tenant shall keep corridor doors closed, and
shall close window coverings at the end of each business day.

 

13.           Subject to the terms and conditions of the Lease,
Landlord reserves the right, exercisable without notice and without liability
to Tenant, to change the name and street address of the Site, the Building
and/or the Premises.

 

2

 

14.           Landlord reserves the right to exclude from the
Building between the hours of 6:00 p.m. and 7:00 a m. the following day,
or such other hours as may be established from time to time by Landlord, and on
Saturdays, Sundays and legal holidays, any person unless that person is known
to the person or employee in charge of the Building and has a pass or is
properly identified.  Tenant shall be
responsible for all persons for whom it requests passes and shall be liable to
Landlord for all acts of such persons.  Landlord
shall not be liable for damages for any error with regard to the admission to
or exclusion from the Building of any person. 
Landlord reserves the right to prevent access to the Site and/or the
Building in case of invasion, mob, riot, public excitement or other commotion
by closing the doors or by other appropriate action.

 

15.           Tenant shall close and lock the doors of its Premises
and entirely shut off all water faucets or other water apparatus, and, except
with regard to Tenant’s computers and other equipment which requires utilities
on a twenty-four hour basis, all electricity, gas or air outlets before Tenant
and its employees leave the Premises.

 

16.           The toilet rooms, toilets, urinals, wash bowls and
other apparatus shall not be used for any purpose other than that for which
they were constructed, and no foreign substance of any kind whatsoever shall be
thrown therein.  The expense of any
breakage, stoppage or damage resulting from the violation of this rule shall
be borne by the Tenant who, or whose employees or invitees, shall have caused
it.

 

17.           Tenant shall not sell, or permit the sale at retail,
of newspapers, magazines, periodicals, theater tickets or any other goods or
merchandise to the general public in or on the Site, the Building and/or the
Premises.  Tenant shall not make any
room-to-room solicitation of business from other tenants in the Building.  Tenant shall not use the Premises for any
business or activity other than that specifically provided for in Tenant’s
Lease.

 

18.           Except as otherwise provided in the Lease, Tenant
shall not mark, drive nails, screw or drill into the partitions, woodwork or
plaster or in any way deface the Premises or any part thereof, except to
install normal wall hangings, and to secure files and bookcases and other
furniture that could fall over.  Landlord
reserves the right to direct electricians as to where and how telephone and
telegraph wires are to be introduced to the Premises.  Tenant shall repair any damage resulting from
noncompliance with this rule.

 

19.           Tenant shall not install, maintain or operate upon the
Premises any vending machine without the written consent of Landlord.

 

20.           Canvassing, soliciting and distribution of handbills
or any other written material, and peddling in the Building or the Site are
prohibited, and each tenant shall cooperate to prevent same.

 

21.           Landlord reserves the right to exclude or expel from
the Site and/or the Building any person who, in Landlord’s judgment, is
intoxicated or under the influence of liquor or drugs or who is in violation of
any of the Rules and Regulations of the Building.

 

22.           Tenant shall store all its trash and garbage within
its Premises.  Tenant shall not place in
any trash box or receptacle any material which cannot be disposed of in the
ordinary and customary manner of trash and garbage disposal.  All garbage and refuse disposal shall be made
in accordance with directions issued from time to time by Landlord.

 

3

 

23.           The Premises shall not be used for the storage of
merchandise held for sale to the general public, or for lodging or for
manufacturing of any kind.  No cooking
shall be done or permitted by any tenant on the Premises, except that use by
tenant of Underwriters’ Laboratory-approved equipment for brewing coffee, tea,
hot chocolate and similar beverages shall be permitted, and the use of a
microwave oven shall be permitted, provided that such equipment and use is in
accordance with all applicable federal, state, county and city laws, codes,
ordinances, rules and regulations.  If
odor is objectionable by Landlord or other tenants of Building, microwave use
may be prohibited by Landlord.

 

24.           Tenant shall not use in any space or in the public
halls of the Building any mailcarts or hand trucks except those equipped with
rubber tires and side guards or such other material handling equipment as
Landlord may approve.  Tenant shall not
bring any other vehicles of any kind into the Building except as provided in
the Parking Rules and Regulations.

 

25.           Without the written consent of Landlord, Tenant shall
not use the name of the Site or the Building in connection with or in promoting
or advertising the business of Tenant except as Tenant’s address.

 

26.           Tenant shall comply with all safety, fire protection
and evacuation procedures and regulations established by Landlord or any
governmental agency.

 

27.           Tenant assumes any and all responsibility for
protecting its Premises from theft, robbery and pilferage, which includes
keeping doors locked and other means of entry to the Premises closed.

 

28.           The requirements of Tenant will be attended to only
upon appropriate application to the office of the Building by an authorized
individual.  Employees of Landlord shall
not perform any work or do anything outside of their regular duties unless
under special instructions from Landlord, and no employee of Landlord will
admit any person (tenant or otherwise) to any office without specific
instructions from Landlord.

 

29.           Landlord may, as may be reasonable under the
circumstances, waive any one or more of these Rules and Regulations for the
benefit of Tenant or any other tenant, but no such waiver by Landlord shall be
construed as a waiver of such Rules and Regulations in favor of Tenant or
any other tenant, nor prevent Landlord from thereafter enforcing any such Rules and
Regulations against any or all of the tenants of the Building.

 

30.           These Rules and Regulations are in addition to
the terms, covenants, agreements and conditions of any lease of Premises in the
Building.  In the event these Rules and
Regulations conflict with any provision of the Lease, the Lease shall control.

 

31.           Landlord reserves the right to make such other and
reasonable Rules and Regulations as, in its judgment, may from time to
time be needed for safety and security, for care and cleanliness of the
Building and for the preservation of good order therein, provided such rules and
regulations do not materially increase Tenant’s obligation hereunder or
diminish Tenant’s rights hereunder.  Tenant
agrees to abide by all such Rules and Regulations hereinabove stated and
any such additional rules and regulations which are adopted.

 

32.           Tenant shall be responsible for the observance of all
of the foregoing rules by Tenant’s employees, agents, clients, customers,
invitees and guests.

 

4

 

33.           Smoking is prohibited in all enclosed Common Areas of
the Building, including, but not limited to, the main lobbies, hallways,
stairwells, elevators, elevator lobbies, locker/shower rooms, restrooms and
conference room.  The foregoing shall not
be deemed to prohibit smoking within demised Premises.  When smoking outside the Building, ash
receptacles must be used and provided by the smoker if not provided by Landlord.  Smokers must not leave any ashtrays, smoking
material or debris in the area where they have been smoking, except in ash
receptacles provided by Landlord.

 

5

 

SUMMARY OF BASIC LEASE INFORMATION

 

The undersigned hereby
agree to the following terms of this Summary of Basic Lease Information (the “Summary”). This Summary is hereby incorporated into and made
a part of the attached Office Lease (this Summary and the Office Lease to be
known collectively as the “Lease”) which
pertains to the office building (the “Building”)
which is located at 123 Townsend Street, San Francisco, California. Each
reference in the Office Lease to any term of this Summary shall have the meaning
as set forth in this Summary for such term. In the event of a conflict between
the terms of this Summary and the Office Lease, the terms of the Office Lease
shall prevail. Any capitalized terms used herein and not otherwise defined
herein shall have the meaning as set forth in the Office Lease.

 

	
   

  	
   

  	
  TERMS OF LEASE

  	
   

  	
  DESCRIPTION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (a.)

  	
   

  	
  Date:

  	
   

  	
  August 30, 2004

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (b.)

  	
   

  	
  Landlord:

  	
   

  	
  SFI Real Estate
  Holdings, LLC, a Delaware limited liability company

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (c.)

  	
   

  	
  Address of Landlord:

  	
   

  	
  SFI Real Estate
  Holdings

  c/o Manchester Capital Management

  3657 Main Street

  Manchester Village, Vermont 05254

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (d.)

  	
   

  	
  Tenant:

  	
   

  	
  INdTV, LLC, a
  Delaware limited liability company

  INdTV Holdings, LLC, a Delaware limited liability

  company

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (e.)

  	
   

  	
  Address of Tenant (Paragraph
  8):

  	
   

  	
  118 King Street

  San Francisco, California 94107

  Attention: Chief Operating Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (f.)

  	
   

  	
  Premises (Paragraph
  1):

  	
   

  	
  Approximately 27,506
  rentable square feet of space identified as Suites 100 and 200 and located on
  the first and second floors of the Building, as set forth in Exhibit A
  attached hereto.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (g.)

  	
   

  	
  Building (Paragraph
  1):

  	
   

  	
  123 Townsend Street,
  San Francisco, California. Total square footage of rentable office space of
  the Building: 126,467 rentable square feet.

  
	
  (h.)

  	
   

  	
  Term (Paragraph 2):

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  Delivery Date:

  	
   

  	
  Upon Substantial
  Completion (as defined in the Work Letter attached as Exhibit B)
  of (i) the Tenant Improvements to be completed by Landlord pursuant to
  the Work Letter, and, (ii) subject to Paragraph 1.4, Landlord’s Work,
  estimated to be October 1, 2004; provided, however, that Tenant shall be
  entitled to early access to the Premises as provided in Paragraph 3 below.

  
						

 

i

 

	
   

  	
   

  	
  (ii)

  	
  Lease Commencement Date:

  	
   

  	
  Earliest of:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (a) the
  Delivery Date, or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (b) the date
  Tenant commences business operations in the Premises (excluding early access
  pursuant to Paragraph 3 below).

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)

  	
  Lease Expiration Date:

  	
   

  	
  The day immediately
  preceding the tenth (10th) anniversary of the Lease Commencement
  Date.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (i.)

  	
   

  	
  Renewal Option (Paragraph
  2.2):

  	
   

  	
  One additional five
  (5) year term at 95% of fair market value.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (j.)

  	
   

  	
  Monthly Basic Rent
  (Paragraph 4):

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Lease Commencement
  Date — August 31, 2005:     $ 33,158.71 

  September 1,
  2005 — August 31, 2006:                    $ 46,493.04 

  September 1,
  2006 — Lease Expiration Date:           $ 62,461.54 

   

  (Subject to the
  delay provisions of Paragraph 3.)

  
	
   

  	
   

  	
   

  
	
  (k.)

  	
   

  	
  Security Deposit
  (Paragraph 6):

  	
   

  	
  $400,000.00 (subject
  to reduction pursuant to Paragraph 6.)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (l.)

  	
   

  	
  Prepaid Rent (Paragraph
  4.1):

  	
   

  	
  $33,158.71

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (m.)

  	
   

  	
  Operating Expenses
  (Paragraph 5):

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  Base Year:

  	
   

  	
  2005 calendar year

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  Tenant’s Percentage
  Share:

  	
   

  	
  21.75% (Based on
  square footage of the Premises compared to total square footage of the
  Building)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (n.)

  	
   

  	
  [Intentionally Deleted]

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (o.)

  	
   

  	
  Broker (Paragraph 9):

  	
   

  	
  Tenant’s Broker: 

  Landlord’s Broker:

  	
  CB Richard Ellis

  Newmark &
  Company 

  Commercial Real Estate 

  (Mike Brown and Bill
  Benton)

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (p.)

  	
   

  	
  Parking (Paragraph 1.7)

  	
   

  	
  Entire east bay of
  the Building, exclusive.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (q.)

  	
   

  	
  Work Letter

  	
   

  	
  Attached as Exhibit B.

  
											

 

ii

 

The foregoing terms of this Summary are agreed to by
Landlord and Tenant.

 

	
  LANDLORD:

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
   

  
	
  SFI REAL ESTATE HOLDINGS LLC,

  	
  INdTV, LLC, a Delaware limited liability

  
	
  a Delaware limited liability company

  	
  company

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Edward W. Cronin, Jr.

  	
   

  	
  By:

  	
  /s/ Joel Hyatt

  
	
  Name:

  	
   

  	
   

  	
   

  	
  Joel Hyatt

  
	
  Its:

  	
  Vice President

  	
   

  	
   

  	
  Chief Executive Officer and
  Secretary

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INdTV Holdings, LLC, a Delaware limited

  
	
   

  	
  liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joel Hyatt

  
	
   

  	
   

  	
  Joel Hyatt

  
	
   

  	
   

  	
  Chief Executive Officer and Secretary

  
								

 

iii

 

FIRST AMENDMENT TO LEASE

 

This First Amendment to
Office Lease (“First Amendment”) is entered into effective July 1, 2005 by
and between SFI Real Estate Holdings, LLC, a Delaware limited liability company
(“Landlord”), Current Media, LLC, a Delaware limited liability company
(successor by name change to INdTV Holdings, LLC, a Delaware limited liability
company) and Current TV, LLC, a Delaware limited liability company (successor
by name change to INdTV, LLC, a Delaware limited liability company) (collectively
“Tenant”), and is made with respect to the following facts and circumstances.

 

A.                                   Landlord and.  Tenant are parties to a written Office Lease
(the “Lease”) dated August 30, 2004 pursuant to which Tenant leases from
Landlord 27,506 rentable square feet of space known as Suites 100 and 200 at
123 Townsend Street, San Francisco, California (“the Premises”).

 

B.                                     Landlord and Tenant now desire to amend
the Lease on the terms and conditions set forth herein.  Unless otherwise defined in this First
Amendment, all capitalized terms utilized herein shall have the meanings
ascribed to them in the Lease.

 

Now, therefore, in
recognition of the foregoing premises, in exchange of the covenants, agreements
and conditions set forth below, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, Landlord and Tenant
agree as follows.

 

1.                                       Effective June 1, 2005, Paragraph
1.8 of the Lease is hereby deleted and the following language is inserted in
its place and stead:

 

“1.8 In addition
to the Premises as contemplated by this Paragraph 1 and Exhibit A
of the Lease, Tenant shall additionally lease from Landlord during the Term all
of the rentable square footage of the computer server room located on Lower
Level 1 of the Building (the “Server Room”) in its AS IS condition.  The parties agree that the Server Room consists
of 1,659 rentable square feet.  All of
the costs to plumb all the necessary cable and wiring to connect the Premises
to the Server Room, and the cost to install an electrical advisory meter to
measure the power usage for the Server Room (including power usage to
operate all dedicated HVAC units serving the Server Room) shall be at Tenant’s
sole cost and expense.  In addition to
the Monthly Basic Rent contemplated by the Summary and Paragraph 4 of the
Lease, Tenant shall pay to Landlord, in accordance with the payment procedures
set forth in Paragraph 4.1 of the Lease, $13.00 per rentable square foot/per
year, or $1,797.25 per month, as rent for the Server Room, plus 100% of all
electrical and HVAC costs associated with the use of the Server Room.  All monthly rental amounts for the Server Room contemplated
by this Paragraph shall be included within the meaning of Monthly Basic Rent
whenever such term is used in this Lease unless the context clearly
contemplates otherwise.”

 

2.                                       Except as otherwise expressly provided in
this First Amendment, all other terms and conditions of the Lease shall remain
in full force and effect, fully binding on and enforceable against the parties.

 

1

 

Wherefore, Landlord and
Tenant have executed and delivered this First Amendment as of the day and year
first above written.

 

	
  LANDLORD:

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
   

  
	
  SFI
  REAL ESTATE HOLDINGS LLC,

  	
  CURRENT
  TV, LLC, a Delaware limited

  
	
  a
  Delaware limited liability company

  	
  liability
  company

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Edward W. Cronin, Jr.

  	
   

  	
  By:

  	
  /s/
  Joel Hyatt

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Its:

  	
  Vice
  President

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CURRENT MEDIA,
  LLC, a Delaware limited 

  liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joel Hyatt

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Its:

  	
   

  
											

 

2

 

SECOND AMENDMENT TO LEASE

 

This Second Amendment to
Office Lease (“First Amendment”) is entered into effective June 30, 2006
by and between SFI Real Estate Holdings, LLC, a Delaware limited liability
company (“Landlord”), on the one hand, and Current Media, LLC, a Delaware
limited liability company (formerly known as INdTV Holdings, LLC) and Current
TV, LLC, ,a Delaware limited liability company (formerly known as INdTV, LLC)
(collectively “Tenant”), on the other hand, and is made with respect to the
following facts and circumstances.

 

A.                                   Landlord and Tenant are parties to a
written Office Lease dated August 30, 2004 and a First Amendment to Lease
(the “First Amendment”) dated September 28, 2005 (collectively, the “Lease”)
pursuant to which Tenant leases from Landlord 27,506 rentable square feet of
space known as Suites 100 and 200, a server room and storage space located on
lower level 1, at 123 Townsend Street, San Francisco, California (collectively,
the “Premises”).

 

B.                                     Landlord and Tenant now desire to amend
the Lease on the terms and conditions set forth herein.  Unless otherwise defined in this Second
Amendment, all capitalized terms utilized herein shall have the meanings
ascribed to them in the Lease.

 

Now, therefore, in
recognition of the foregoing premises, in exchange of the covenants, agreements
and conditions set forth below, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, Landlord and Tenant
agree as follows.

 

1.                                       Commencing on July 1, 2006 and
continuing thereafter for the full length of the term of the Lease, which
expires on September 30, 2014, Tenant shall additionally lease AS IS from
Landlord 3,893 rentable square feet located on Lower Level 1 of the Building as
more particularly shown in the attached Exhibit 1 (the “Additional
Premises”).  In addition to the Monthly
Basic Rent contemplated by the Summary and Paragraph 4 of the Lease, and the
rent due for the Server Room pursuant to the First Amendment, Tenant shall
pay to Landlord, in accordance with the payment procedures set forth in
Paragraph 4.1 of the Lease, $13.50 per rentable square foot/per year, or
$4,379.63 per month, as rent for the Additional Premises.

 

2.                                       Tenant shall be financially responsible
for all improvements to the Additional Premises necessary for Tenant’s proposed
use, and all work shall be done by approved contractors in compliance with all
laws and regulations including permitting. 
All work shall be conducted so as to minimize disruption to other
tenants of the Building.

 

3.                                       In the event any governmental authority
declares that Tenant’s use of the Additional Premises is not a permitted use,
Tenant’s occupancy rights of the Additional Premises shall terminate, and
Tenant shall cease to occupy and use the Additional Premises.  In the event Tenant’s occupancy of the
Additional Premises is terminated for any reason, at Landlord’s election Tenant
shall either leave the improvements performed by Tenant intact, or remove them
in a commercially reasonable manner.  Notwithstanding
Paragraph 1 hereof, Landlord retains the right to terminate Tenant’s
occupancy rights of the Additional Premises upon thirty (30) days written
notice; Tenant retains the same 

 

1

 

right should Tenant determine in good faith that the
Additional Premises no longer satisfies Tenant’s space requirements.  In the event of such termination, Tenant
shall have no further obligation to pay rent in connection with the Additional
Premises.

 

4.                                       Except as otherwise expressly provided in
this Second Amendment, all other terms and conditions of the Lease shall remain
in full force and effect, fully binding on and enforceable against the parties.  In the event of a conflict between this
Second Amendment and the Lease, this Second Amendment shall control.

 

Wherefore, Landlord and
Tenant have executed and delivered this First Amendment as of the day and year
first above written.

 

	
  LANDLORD:

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
   

  
	
  SFI
  REAL ESTATE HOLDINGS LLC,

  	
  INdTV,
  LLC, a Delaware limited liability

  
	
  a
  Delaware limited liability company

  	
  company

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Edward W. Cronin, Jr.

  	
   

  	
  By:

  	
  /s/
  Joel Hyatt

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Its:

  	
  Vice
  President

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INdTV Holdings,
  LLC, a Delaware limited 

  liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joel Hyatt

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Its:

  	
   

  
											

 

2

 

THIRD AMENDMENT TO LEASE

 

This third amendment to Office Lease (“Third Amendment”) is entered
into effective April 30, 2005 by and between SFI Real Estate Holds, LLC, a
Delaware limited liability company (“Landlord”) and Current Media, LLC a
Delaware limited liability company (successor by name change to INdTV Holdings,
LLC a Delaware limited liability company) and Current TV, LLC a Delaware
limited liability company) (collectively “Tenant”), and is made with respect to
the following facts and circumstances.

 

A.                                   Landlord and Tenant are parties to a
written Office  Lease (the “Lease”) dated
August 30, 2004 pursuant to which Tenant leases from Landlord 27,506
rentable square feet of space known as Suite 100 and 200 at 123 Townsend
Street (aka 118 King Street), San Francisco, California (the “Premises”).

 

B.                                     Landlord and Tenant now desire to amend
the Lease on the terms and conditions set forth herein.  Unless otherwise defined in this Third
Amendment, all capitalized terms utilized herein shall have the meanings
ascribed to them in the Lease.

 

Now, therefore, in recognition of the foregoing premises, in exchange
of the covenants, agreements and conditions set forth below, and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Landlord and Tenant agree as follows.

 

1.                                       Commencing on July 1, 2006 Tenant
shall additionally lease AS IS from Landlord during the Term storage cage 6
consisting of 1,393 rentable square feet (the “Storage Cage”) and located on
Lower Level 1 of the Building as more particularly shown in the attached Exhibit 1.  In addition to the Monthly Basic Rent
contemplated by the Summary and Paragraph 4 of the Lease, Tenant shall pay to
Landlord, in accordance with the payment procedures set forth in Paragraph 4.1
of the Lease, $1.00 per rentable square foot/per year, or $1,393.00 per month,
as rent for the Storage Cages.

 

2.                                       Commencing on May 1, 2005 Tenant
shall additionally lease AS IS from Landlord during the Term storage cage 8
consisting of 766 rentable square feet (the “Storage Cage”) and located on
Lower Level 1 of the Building as more particularly shown in the attached Exhibit 1.  In addition to the Monthly Basic Rent
contemplated by the Summary and Paragraph 4 of the Lease, Tenant shall pay to Landlord,
in accordance with the payment procedures set forth in Paragraph 4.1 of the
Lease; $1.00 per rentable square foot/per year, or $766.00 per month, as rent
for the Storage Cages.

 

3.                                       Tenant may terminate the lease as it
applies to storage cage 6 and/or storage cage 8 at any time hereunder by notice
to Landlord 60 days prior to the date of termination.

 

4.                                       Except as otherwise expressly provided in
this third Amendment, all other terms and conditions of the Lease shall remain
in full force and effect, fully binding on and enforceable against the parties.  In the event of a conflict this Third
Amendment shall control.

 

1

 

Wherefore, Landlord and Tenant have executed and delivered this Third
Amendment as of the day and year first above written.

 

	
  LANDLORD:

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
   

  
	
  SFI
  REAL ESTATE HOLDINGS LLC,

  	
  CurrentTV,
  LLC,

  
	
  a
  Delaware limited liability company

  	
  a
  Delaware limited liability company

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Edward W. Cronin, Jr.

  	
   

  	
  By:

  	
  /s/
  Joel Hyatt

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Its:

  	
  Vice
  President

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Current Media,
  LLC,

  
	
   

  	
  a Delaware
  limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joel Hyatt

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Its:

  	
   

  
									

 

2

 

FOURTH AMENDMENT TO LEASE

 

This Fourth Amendment to Office Lease (“Fourth Amendment”) is entered
into effective January 1, 2007 by and between SF1 Real Estate Holdings,
LLC, a Delaware limited liability company (“Landlord”) Current Media, LLC
(formerly known as “INdTV Holdings, LLC”), a Delaware limited liability company
and Current TV, LLC (formerly known as “INdTV, LLC”), a Delaware limited
liability company (collectively “Tenant”), and is made with respect to the
following facts and circumstances.

 

A.                                   Landlord and Tenant are parties to a
written Office Lease dated August 30, 2004, as amended by that certain
First Amendment to Lease dated September 28, 2005 and that certain Second
Amendment to Lease dated June 30, 2006, and that certain Third Amendment
to Lease dated as of April 30, 2005 (collectively, the “Lease”) pursuant
to which Tenant leases from Landlord Suites 100 and 200, a portion of lower
level 1 (including storage space), and a server room, at 123 Townsend Street,
San Francisco, California (collectively, the “Premises”).

 

B.                                     Landlord and Tenant now desire to amend
the Lease on the terms and conditions set forth herein.  Unless otherwise defined in this Fourth
Amendment, all capitalized terms utilized herein shall have the meanings
ascribed to them in the Lease.

 

Now, therefore, in recognition of the foregoing premises, in exchange
of the covenants, agreements and conditions set forth below, and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Landlord and Tenant agree as follows.

 

1.                                       The parties agree to amend Paragraph 17.1
of the Lease to provide that the per hour charge to Tenant for electricity
consummation for HVAC usage during after hour occupancy (outside the period
commencing at 8:00 am and ending at 7:00 pm, Monday through Friday, excepting
legal holidays) shall be lowered from $85.00 per hour to $25.00 per hour.  The parties further agree that Tenant’s after
hours usage commencing January 1, 2007 shall be calculated as follows:

 

Estimated after-hours HVAC billing for Tenant @ $25.00 per hour: 24 x 7
= 168 hours per week, minus 55 hours per week for normal building operations
(11 hours per day M-F) = 113 hours per week x 52 weeks = 5,876 hours, plus
88 holiday hours when building is closed (New Year’s, President’s Day, Memorial
Day, July 4, Labor Day, Thanksgiving, Friday after Thanksgiving,
Christmas: 11 x 8 = 88) = 5,964 hours per year x $25 per hour = $149,100
per year/12 = $12,425 per month.

 

Landlord shall invoice Tenant for the above monthly amount at the
beginning of the month following the month in which the usage occurred, and
Tenant shall pay such invoice within thirty (30)days of receipt.  Notwithstanding the foregoing, at any time
during the Term, Tenant may decline after-hours HVAC service by notice
hereunder to Landlord, whereupon Landlord shall cease billing Tenant for such
service effective thirty (30) days following such notice, and thereafter Tenant
shall have no obligation to pay amounts therefor.

 

 

2.                                       Landlord and Tenant further agree to
resolve Tenant’s responsibility under Paragraph 17.1 of the Lease for
after hours HVAC usage for the period September 1, 2005 through December 31,
2006 by Tenant delivering to Landlord the sum of $210,450.00 on or before February 1,
2007.

 

3.                                       In the event Tenant elects to install an
HVAC system that will serve only the Premises (subject to Landlord’s approval
pursuant to the Lease) thus eliminating the need for Tenant to operate the
Building HVAC system during after hours, Landlord agrees to negotiate in good
faith with Tenant to further reduce the after hours charge set forth in
Paragraph 17.1 of the Lease, as amended by Paragraph 1 above, in a fair and
equitable manner.

 

4.                                       Except as otherwise expressly provided in
this Fourth Amendment, all other terms and conditions of the Lease shall remain
in full force and effect, fully binding on and enforceable against the parties.  In the event of a conflict between this
Fourth Amendment and the Lease, this Fourth Amendment shall control.

 

Wherefore, Landlord and Tenant have executed and delivered this Fourth
Amendment as of the day and year first above written.

 

 

	
  LANDLORD:

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
   

  
	
  SFI
  REAL ESTATE HOLDINGS LLC,

  	
  CurrentTV,
  LLC, (Formerly known as

  
	
  a
  Delaware limited liability company

  	
  “INdTV,
  LLC”) a Delaware limited liability

  company

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/
  Edward W. Cronin, Jr.

  	
   

  	
  By:

  	
  /s/
  Joel Hyatt

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
  Its:

  	
  Vice
  President

  	
   

  	
  Its:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Current Media,
  LLC, (Formerly know as

  
	
   

  	
  “INdTV, LLC”) a
  Delaware limited liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Joel Hyatt

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Its:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00135-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00135-of-00352.parquet"}]]