Document:

Exhibit 10.25

 

 

EMPLOYMENT AGREEMENTS—DAVID JOHNSON

 

 

Warner Music Group Inc.

75 Rockefeller Plaza

New York, New York 10019

 

 

February
14, 2003

 

 

David H. Johnson

Warner Music Group Inc.

75 Rockefeller Plaza

New York, NY 10019

 

 

Re: Employment

 

Dear Mr. Johnson,

 

Reference is made to the
Employment Agreement between you and Warner Music Group Inc. (the “Company”)
dated December 15, 1998 (the “Agreement”). This letter will confirm that you
and the Company have agreed that the Agreement shall be modified, as follows:

 

Notwithstanding any more
restrictive provisions in any applicable stock option plan or stock option
agreement, if your employment with the Company is terminated by the Company
without cause or if you shall terminate your employment with the Company due to
a material breach of the Agreement by the Company, then, except if you shall
otherwise qualify for retirement under the terms of the applicable stock option
agreement, (i) all stock options to purchase shares of AOL Time Warner Inc. (“AOLTW”)
Common Stock granted to you by AOLTW or the Company shall continue to vest, and
any vested stock options will remain exercisable (but not beyond the term of
such stock options), while you remain on the payroll of the Company, (ii) all
such stock options granted to you by AOLTW or the Company on or after January
10, 2000 (the “Term Options”) that would have vested on or before the end of
the term of the Agreement (or the comparable date under an employment agreement
that amends, replaces or supersedes the Agreement) shall vest and become
immediately exercisable at the time you go off the payroll of the Company,
(iii) all vested Term Options shall remain exercisable for a period of three
years after the date you leave the payroll of the Company (but not beyond the
term of such options), and (iv) the Company shall not be permitted to determine
that your employment was terminated for “unsatisfactory performance” within the
meaning of any stock option agreement between you and the Company. At the time
you leave the payroll of the Company, all stock options to purchase shares of
AOLTW Common Stock granted to you prior to January 10, 2000 shall be governed
by the terms of the applicable stock option agreements and stock option plans.

 

 

Except as provided herein, all
other terms and conditions of your employment with the Company remain in full
force and effect. Please execute and return this letter at your earliest
convenience.

 

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  /s/ Helen Murphy

  	
   

  
	
   

  	
   

  
	
   

  	
  Helen Murphy

  
	
   

  	
  Executive Vice President and

  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  Acknowledged and agreed,

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ David Johnson

  	
   

  	
   

  
	
  Name:

  	
  David Johnson

  	
   

  
	
  Date: 

  	
  February 14, 2003

  	
   

  
					

 

 

WARNER
MUSIC GROUP INC.

75
ROCKEFELLER PLAZA

New
York, New York 10019

 

 

May
13, 2003

 

David H. Johnson

Warner Music Group Inc.

75 Rockefeller Plaza

New York, NY 10019

 

Re: Employment Agreement

 

Dear David:

 

Reference is made to the
Employment Agreement between Warner Music Group Inc. (the “Company”) and you
dated December 15, 1998 (the “Agreement”).
Capitalized terms used but not defined in this letter shall have the meanings
given such terms in the Agreement. You and the Company desire to amend
the Agreement as follows:

 

1.                                       Paragraph 2 of the Agreement is amended to
extend the Terra through June 29, 2007 (“Term Date”), subject however, to
earlier termination as set forth in the Agreement.

 

2.                                       Paragraph 3.1 of the Agreement is amended to
provide that from the period January 1, 2003 through the Term Date, the Company
shall pay you a base salary of not less than $700,000 (“Base Salary”). The
Company may increase, but not decrease, your Base Salary during the period
January 1, 2003 through the Term Date. Base
Salary shall be paid in accordance with the Company’s customary payroll
practices.

 

3.                                       In addition to any other rights you may have
under the Agreement, and unless previously terminated pursuant to any other
provision of this Agreement, you have the right to terminate the Term (subject
to the notice and cure provisions of Paragraph 13 of the Agreement) if any of
the following events occur:

 

(a)                                  there is any material reduction of your
duties and responsibilities during the Term or any extension thereof. The sale,
transfer or other disposition of the manufacturing and/or the music publishing
operations of the Company shall not constitute a material
reduction in your duties or responsibilities. The sale or transfer or
other disposition (including by way of a joint
venture formation) of all or substantially all of the Company’s assets (or all
or substantially all of the recorded music business of AOL Time Warner) shall
not constitute a material reduction of your duties and responsibilities
provided that (i) the Company assigns its rights and obligations under the
Agreement to the entity acquiring all or substantially all of the assets of the
Company (or all or

 

 

substantially all of the
assets of the recorded music business of AOL Time Warner) (the “successor
entity”) as provided in Paragraph 18(e) of the Agreement; (ii) you shall
continue to have substantially the same duties, responsibilities and authority with respect to Company’s
businesses that you had as of the date of this Amendment and that you may have
with respect to businesses added hereafter, and (iii) you shall report solely
and directly to the individual holding the office within the successor entity
that is substantially equivalent to the position within the Company to whom you
reported under the Agreement; or

 

(b)                                 any failure by the Company to obtain the
assumption and agreement to perform this Agreement by a successor entity as
contemplated by Paragraph 4 of this Amendment.

 

In the event of a termination under this
Paragraph, the Term of this Agreement shall terminate and your sole remedy
shall be that set forth in Paragraph 13 of the Agreement (Termination for
Material Breach by Company and Wrongful Termination by Company).

 

4. Paragraph 18(e) of the
Agreement is amended in its entirety
to read as follows:

 

The
provisions of this Agreement shall inure to the benefit of the parties hereto, their heirs, legal representatives, successors and permitted assigns.
This Agreement, and your rights and obligations hereunder, may not be assigned by you. The Company may assign its
rights, together with its obligations, hereunder in connection with any sale,
transfer or other disposition (including by way of a joint venture formation)
of all or a substantial portion of the stock or assets of Company, WCI, AOL
Time Warner or the recorded music business of AOL Time Warner. The Company
shall use reasonable efforts to cause any successor entity acquiring all or
substantially all of the business and/or assets of the Company (or all or substantially all of the recorded music
business of the Company), whether direct or indirect, by purchase, merger,
consolidation, acquisition of stock, formation of a joint venture, or
otherwise, expressly to assume and agree to perform this Agreement in the same
manner and to the same extent as the Company would be required to perform, and
to specifically agree to the following terms and conditions:

 

(a)     The successor entity shall pay you annual
compensation as follows: (i) Base Salary at a rate that is no less than the
rate you received from Company as of the effective date of the sale or transfer
(“Minimum Base Salary’) and (ii) either the Target Bonus or the average of the
bonus paid you for the two calendar years immediately preceding the effective
date of the sale or transfer, whichever is higher (“Minimum Bonus”). For
example, if the effective date of the sale or transfer was March 31, 2003, your
Minimum Base Salary would be $700,000 and

 

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your Minimum Bonus would be $925,000 (two-year average bonus rather than the Target Bonus of $750,000 at 100%).

 

(b)    Notwithstanding any other provision of the Agreement, in the event that the Term
of Employment is terminated for reasons other than Cause, Disability or Death
(as set forth in Paragraphs 11 and 12 of the Agreement), the successor entity
shall provide you a lump sum severance payment in a minimum amount equal to 2
years’ Base Pay and two years’ target bonus.

 

As amended, the Agreement
shall remain in full force and effect.

 

Please
indicate your agreement
with the terms of this letter by
signing and returning the enclosed
copy.

 

 

	
   

  	
  Warner Music Group Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Helen Murphy

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Confirmed and Agreed

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ David H. Johnson

  	
   

  	
   

  
					

 

3

 

WARNER MUSIC GROUP INC.

75 ROCKEFELLER PLAZA

NEW YORK, NEW YORK 10019

 

 

December 15,
1998

 

 

PERSONAL
AND CONFIDENTIAL

 

Mr. David H. Johnson 

35 East 20th Street

New York, New York 10003

 

Dear David:

 

This letter,
when signed by you, shall constitute our agreement with respect to your
employment with us (“Company”).

 

1.                                       Position.
Executive Vice President and General Counsel of Company.

 

2.                                       Term.
The term of your employment with Company hereunder shall commence on January 1,
1999 (the “Commencement Date”) and shall end December 31, 2003 (the “Term”),
subject to earlier termination as herein below set forth.

 

3.                                       Compensation.

 

a.                                       Salary.
Company shall pay to you salary (“Base Salary”) at the rate of $600,000 per
annum commencing on the Commencement Date through December 31, 2000. Your Base
Salary will be increased to the rate of $650,000 for the years 2001 and 2002
and to $700,000 for the year 2003. Salary accruing to you during the

 

 

Term shall be
payable in accordance with the regular payroll practices of Company for
employees at your level.

 

b.                                      Signing
Bonus. Promptly following the Commencement Date, you shall be entitled to
receive a one-time signing bonus in the amount of $500,000 less applicable
withholdings.

 

c.                                       Relocation
Expenses. You shall be reimbursed your actual reasonable moving expenses
relating to relocating your family and your personal effects to the Los Angeles
metropolitan area in accordance with Company policy for employees at your level
upon presentation of such evidence of such expenditures as Company shall
reasonably require.

 

d.                                      Guaranteed
and Discretionary Bonus. With respect to the period of your employment
commencing on the Commencement Date through December 31, 1999, you shall be
entitled to a bonus of not less than $750,000. With respect to each subsequent
calendar year of the Term, Company may grant to you, in recognition of services
rendered by you during such year, an annual bonus, the amount of which, if any,
shall be determined by Company in its discretion.

 

4.                                       Exclusivity.
During the Term and during any period you remain on the payroll of Company
pursuant to Paragraph 13b(iii) or otherwise, your employment with Company shall
be full-time and exclusive and you will not render any services for others, or
for your own account, in the field of entertainment or otherwise. You may
manage your passive investments and be involved in charitable interests so long
as they do not interfere with the performance of your duties hereunder and

 

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otherwise are
in compliance with Company’s conflict of interest and other policies of general
application.

 

5.                                       Stock
Options. As a separate and added inducement to your entering into this
Agreement, on November 23, 1998 Time Warner Inc. (“Time Warner”) granted you
options to purchase 60,000 shares of the Common Stock of Time Warner at an
exercise price of $104.78 per share, conditioned on your execution of this
Agreement. As a result of the pending two-for-one stock split for stockholders
of record on December 1, 1998, these options shall be adjusted to 120,000
options at an exercise price of $52.39 per share. In addition, during the Term
in the first quarter of each of 2000, 2001, 2002 and 2003 the Company shall use
its best efforts to cause Time Warner to grant you options to purchase an
additional 20,000 shares of Time Warner Common Stock. The number of shares
covered by such options shall be appropriately adjusted as contemplated in Time
Warner’s stock option plans generally in the event of any subsequent changes in
Time Warner’s stock capitalization after the pending stock split. Such options
shall be exercisable as set forth in stock option agreements in the standard
form for such agreements in effect as of the date of grant to be executed by
you and delivered to Time Warner promptly following each such grant.

 

6.                                       Reporting.
You shall serve as the senior legal officer of Company reporting to the
Chairman and Chief Executive Officer (or the Co-Chairmen and Co-Chief Executive
Officers, if applicable) and the President or other Chief Operating Officer, if
any, of Company and you shall perform such duties (consistent with your
position) as you shall reasonably be directed to perform by any such officer.

 

7.                                       Place
of Employment. Prior to June 30, 1999 you shall render services at Company’s
offices in the Los Angeles metropolitan area and in New York City,

 

3

 

as required,
and you understand that it shall be necessary for you to spend substantial periods of time in
Company’s offices in the Los Angeles metropolitan area. On or prior to June 30,
1999 you shall relocate such that your services thereafter shall be rendered
primarily at the offices of Company in the Los Angeles metropolitan area. You
also agree to travel on temporary trips to such other place or places as may be
reasonably required from time to time to perform your duties hereunder.

 

8.                                       Travel
and Entertainment Expenses. Company shall pay or reimburse you for
reasonable expenses actually incurred or paid by you during the Term in the
performance of your services hereunder in accordance with Company’s policy for
employees at your level upon presentation of expense statements or vouchers or
such other supporting information as Company may customarily require.

 

9.                                       Benefits.
During the Term, you shall be entitled to all fringe benefits generally
accorded to employees of Company at your level from time to time, including,
but not limited to, pension, profit-sharing, medical health and accident, group
insurance and similar benefits, provided that you are eligible under the
general. provisions of any applicable plan or program and Company continues to
maintain such plan or program during the Term. In addition, during the Term you
shall be entitled to receive an automobile allowance of $24,000 per annum and a
financial advisory services allowance of $18,000 per annum, each payable in
accordance with the regular payroll practices of Company for employees at your
level.

 

10.                                 Life
Insurance. Company will obtain and maintain $1 million of term life
insurance on your life during the Term, provided that you cooperate with
Company in completing any application(s) to obtain such insurance and shall
submit to, and satisfactorily complete, any medical examinations required with

 

4

 

respect
thereto. The provisions of this Paragraph 10 shall be in addition to any other
insurance provided by Company, Warner Communications Inc. (“WCI”) or Time
Warner on your life under any group policy.

 

11.                                 Disability
and Death.

 

a.                                       If
during the Term you shall become physically or mentally disabled, whether
totally or partially, so that you are substantially prevented from performing
your usual duties for a period of six consecutive months, or for shorter
periods aggregating six months in any twelve-month period, Company shall,
nevertheless, continue to pay you your full compensation through the last day
of the sixth consecutive month of disability or the date on which the shorter
periods of disability shall have equaled a total of six months in any
twelve-month period (such last day or date being referred to herein as the “Disability
Date”). If you have not resumed your usual duties on or prior to the Disability
Date, Company may terminate your employment hereunder and, in such event, shall
pay you the Base Salary to the last day of the month in which such termination
occurs plus a pro rata share of (i) your guaranteed bonus for the year 1999, if
such termination occurs in such year, and (ii) your automobile and financial
services allowances contemplated in Paragraph 9.

 

b.                                      Upon
your death, this Agreement and all benefits hereunder shall terminate except
that your estate (or a designated beneficiary thereof) shall be entitled to
receive the Base Salary to the last day of the month in which your death occurs
plus a pro rata share of (i) your guaranteed bonus for the year 1999, if such
termination

 

5

 

occurs in such year, and (ii) your automobile and financial services
allowances contemplated in Paragraph 9.

 

c.                                       Any
termination pursuant to this Paragraph 11 shall not affect any vested rights
which you may have at the time of such termination pursuant to any insurance or
other benefit plans or arrangements of Company or any of its affiliated
companies or to the. benefit plans described in Paragraph 9, which
vested rights shall continue to be governed by the provisions of such plans.

 

12.                                 Termination
by Company for Cause. Company may at any time during the Term, by written
notice, terminate your employment and all of Company’s obligations hereunder
(other than its obligations set forth in this Paragraph 12) only for “cause”.
The following acts shall constitute “cause” hereunder: (i) any willful or
intentional act or omission having the effect of injuring the reputation,
business or business relationships of Company or its affiliates; (ii)
conviction of, or plea of nolo  contendere to, a misdemeanor
involving moral turpitude or a felony; (iii) breach of material covenants
contained in this Agreement; and (iv) repeated or continuous failure, neglect
or refusal to perform your duties hereunder. Such termination shall be effected
by notice thereof delivered by Company to you and shall be effective as of the
date of such notice; provided,  however,  that if (a) such
termination is by reason of events described in clause (iii) or (iv) of the
preceding sentence, (b) such notice is the first such notice of termination for
any reason delivered by Company to you hereunder, and (c) within 15 days
following the date of such notice, you shall cease your refusal and shall use
your best efforts to perform such obligations, termination shall not be
effective. In the event of termination by Company for cause in accordance with
the foregoing procedures, without prejudice to any other rights or remedies
that Company may have at law

 

6

 

or equity,
Company shall have no further obligations to you other than (i) to pay your
salary accrued through the effective date of termination, (ii) to pay any
annual bonus in respect of any year prior to the year in which such termination
is effective which has been determined and not yet paid as of such termination
and (iii) with respect to any of your rights under Paragraphs 9 or 10 through
the effective date of termination (except as may be otherwise specifically
provided in any such plan or program) or pursuant to any insurance or other
benefit plans or arrangements of Company maintained for the benefit of its
executives.

 

13.                                 Termination
for Material Breach by Company and Wrongful Termination by  Company.

 

a.                                       You
shall have the right, exercisable by written notice to Company specifying the
facts, events or circumstances constituting any alleged breach of this
Agreement, to terminate the Term effective 15 days after the giving of such
notice, if, at the time of such notice. Company shall be in material breach of
its obligations hereunder, provided that, with the exception of clause(i)
below, the Term Shall not so terminate if within such 15-day period Company
shall have cured all such material breaches of its obligations hereunder. The
parties acknowledge and agree that a material breach by Company shall include,
but not be limited to, (i) Company’s failing to cause you to serve during the
Term in the capacities set forth in Paragraph l; and (ii) unless you otherwise
consent, Company’s requiring your primary services to be rendered in an area.
other than as contemplated in Paragraph 7.

 

b.                                      In
the event of a termination by you pursuant to this Paragraph 13, or in the
event of a termination of this Agreement or the term of employment by Company
without cause or in the event Company does not enter into a renewal employment
agreement with you at the end of the original Term of this Agreement, you shall

 

7

 

be entitled to
elect by delivery of written notice to Company within 30 days after written
notice of such termination is given pursuant to Paragraph 13(a) or the
expiration of the original Term without execution of a renewal employment
agreement, as the case may be, either (x) to cease being an employee of Company
and receive a lump sum payment as provided in Paragraph 13(b)(ii) or (y) to
remain an employee of Company as provided in Paragraph 13(b)(iii). After you
make such election, the following provisions shall apply:

 

(i)                                     Regardless
of the election you make, (x) following the effective date of such termination,
you shall have no further obligations or liabilities to Company whatsoever
(except for your obligations under Paragraphs 14, 15 and 16, which shall
survive such termination in accordance with their terms) and (y) you shall be
entitled to receive any earned and unpaid Base Salary and your automobile and
financial services allowances contemplated in Paragraph 9 accrued through the
effective date of such termination, plus, your guaranteed bonus for the year
1999, if not previously paid to you.

 

(ii)                                  If
you make the election provided in clause (x) of Paragraph 13(b), within 30 days
following such election, Company shall pay to you as damages in a lump sum an
amount (discounted as provided in the following sentence) equal to your Base
Salary otherwise payable pursuant to Paragraph 3 and your automobile and
financial services allowances contemplated in Paragraph 9 for the period ending
the later of (a) the end of the original Term or (b) two years following the
effective date of such termination. Any payments required to be made to you
pursuant to this Paragraph 13(b)(ii) in excess of the amount equal to the first
two years of Base Salary otherwise payable following the effective date of such
termination (which shall be paid in a lump sum without discounting) shall be
discounted to present value from the times at which such amounts would have
been paid

 

8

 

absent such
termination at an annual discount rate for the relevant periods equal to 120%
of the “applicable Federal rate” (within the meaning of Section 1274(d) of the
Internal Revenue Code of 1986 (the “Code”) in effect on the date of such
termination, compounded semi-annually, the use of which rate is hereby elected
by Company and you pursuant to Treas. Reg. § 1.280G-l Q/A 32 (provided that, in
the event such election is not permitted under Section 280G and the regulations
thereunder, such other rate determined as of such other date as is applicable
for determining present value under Section 280G of the Code shall be used).

 

(iii)                               If
you make the election provided in clause (y) of Paragraph 13(b), the term of
employment shall continue and you shall remain an employee of Company for the period
ending the later of (a) the end of the original Term or (b) two years following
the effective date of such termination, and during such period you shall be
entitled to receive, whether or not you become disabled during such period but
subject to Paragraph 11(b), your. Base Salary otherwise payable
pursuant to Paragraph 3 and your automobile and financial services allowances
contemplated in Paragraph 9. Except as provided in the following sentence, if
you accept full-time employment with any other entity during such period or
notify Company in writing of your intention to terminate your status as an
employee during such period, then the term of employment shall cease and you
shall cease to be an employee of Company effective upon the commencement of such
employment or the effective date of such termination as specified by you in
such notice, whichever is applicable (the “Termination Date”), and, within 30
days following such Termination Date, Company shall pay to you as damages in a
lump sum an amount determined in accordance with Paragraph 13(b)(ii) (treating
the Termination Date as the effective date of such termination for purposes
thereof). Notwithstanding the preceding

 

9

 

sentence, if
you accept employment with any not-for-profit entity, then you shall be
entitled to remain an employee of Company and receive the payments as provided
in the first sentence of this Paragraph 13(b)(iii); and if you accept full-time
employment with any affiliate of Company, then the payments provided for in
this Paragraph 13(b)(iii) and the term of employment shall cease and you shall
not be entitled to any such lump sum payment. For purposes of this Agreement,
the term “affiliate” shall mean any entity that, directly or indirectly,
controls, is controlled by, or is under common control with, the Company.

 

c.                                       The
termination of this Agreement or the Term pursuant to Paragraph 13 shall not
affect the obligations of Company under the last sentence of Paragraph 9 or
under Paragraph 10. In addition, if following a termination by you pursuant to
Paragraph 13 or a termination of this Agreement by Company without cause or at
the end of the original Term of this Agreement, you make the election provided
in clause (y) of Paragraph 13(b), then during the period you remain on the
payroll of Company after such termination (i) you shall continue to be eligible
to receive the other benefits required to be provided under Paragraphs 9 and 10
to the extent such benefits are maintained in effect by Company for its senior
executives and (ii) you shall continue to be an employee of Company for
purposes of any stock option agreements, including the obligation to use
Company’s best efforts to cause Time Warner to grant stock options pursuant to
Paragraph 5. In the event you leave the payroll of Company or such best efforts
are not successful such that any such options are not granted (whether or not
you leave the payroll of Company, unless your termination is for cause pursuant
to Paragraph 12), Company shall be obligated to pay you the fair value of such
options, less applicable withholdings, the amount of which shall be determined
in good faith using the Black Scholes valuation model. Upon the later of the
time your term of employment with Company terminates and the time you leave the
payroll of

 

10

 

Company
pursuant to the provisions of Paragraph 13(b), your rights to benefits and
payments under any benefit plans or any insurance or other death benefit plans
or arrangements of Company or under any stock, restricted stock, stock
appreciation right, bonus unit, management incentive or other plan of Company shall be determined,
subject to the other terms and provisions of this Agreement, in accordance with
the terms and provisions of such plans and any agreements under which such
stock options, restricted stock or other awards were granted. Notwithstanding
the foregoing or any more restrictive provisions of any such plan or agreement,
upon a termination of this Agreement or the Term pursuant to Paragraph 13 or a
termination of this Agreement by Company without cause all stock options
granted to you by Company shall become immediately exercisable and shall remain
exercisable (but not beyond the term thereof) during the remainder of the Term.

 

d.                                      In
partial consideration for Company’s obligation to make the payments described
in Paragraph 13, you shall execute and deliver to Company a release in
substantially the form attached hereto as Annex A. Company shall deliver such
release to you and to your counsel specified in Paragraph 17 hereof within 10
days after the written notice of termination is delivered pursuant to Paragraph
13(b) and you shall execute and deliver such release to Company within 21 days
after receipt thereof. If you shall fail to execute and deliver such release to
Company within such 21 day period, or if you shall revoke your consent to such
release as provided therein, your term of employment shall terminate as
provided in Paragraph 13(b), but you shall receive, in lieu of the payments
provided for in Paragraph 13, a lump sum cash payment in an amount determined
in accordance with the personnel policies of Company relating to notice and
severance then generally applicable to employees with a length of service and
compensation level comparable to yours.

 

14.                                 Mitigation.
In the event of the termination of this Agreement by you as a result of

 

11

 

a material
breach by Company of any of its obligations hereunder, or in the event of the
termination of this Agreement or the term of employment by Company in breach of
this Agreement or at the end of the original Term of this Agreement, you shall
not be required to seek other employment in order to mitigate your damages
hereunder; provided, however, that, notwithstanding the foregoing, (i) if there
are any damages hereunder by reason of the events of termination described
above which are “contingent on a change” (within the meaning of Section
280G(b)(2)(A)(i) of the Code), you shall be required to mitigate such damages
hereunder, including any such damages theretofore paid, but not in excess of
the extent, if any, necessary to prevent Company from losing any tax deductions
to which it otherwise would be entitled in connection with such damages if they
were not so “contingent on a change,” and (ii) in addition to any obligation
under the preceding clause (i), and without duplication of any amounts required
to be paid to Company thereunder, if any such termination occurs and you,
whether or not required to mitigate your damages under clause (i) above,
thereafter obtain any compensation from any employment or consulting
arrangements other than with a not-for-profit entity, such compensation,
whether paid to you or deferred for your benefit, shall reduce, pro  tanto,
any amount which Company would otherwise be required to pay you as a result of
such termination and, to the extent amounts have theretofore been paid to you
as a result of such termination, such compensation shall be paid over to
Company as received. Notwithstanding anything to the contrary in this Paragraph
14, you shall not be required to mitigate your damages hereunder with respect
to the first two years of Base Salary otherwise payable after such termination
which shall be paid to you without discount or offset.

 

15.                                 Confidential
Matters. Except as may be required by law, you shall keep secret all
confidential matters of Company and its affiliates (for purposes of this
Paragraph.

 

12

 

15 only, “Company”),
and shall not disclose them to anyone outside of Company, either during or
after your employment with Company, except with Company’s written consent. You
shall deliver promptly to Company upon termination of your employment, or at
any time Company may request, all confidential memoranda, notes, records,
reports and other documents (and all copies thereof) relating to the business
of Company which you may then possess or have under your control. Notwithstanding
anything to the contrary in this Paragraph 15, you shall be entitled to
disclose the terms of this Agreement and any other arrangements concerning your
employment hereunder to members of your immediate family and your attorneys and
financial advisors.

 

16.                                 Results
and Proceeds of Employment. You acknowledge that Company shall own all
rights of every kind and character throughout the world in perpetuity in and to
any material and/or ideas written, suggested or in any way created by you
hereunder and all other results and proceeds of your services hereunder,
including, but not limited to, all copyrightable material created by you within
the scope of your employment. You agree to execute and deliver to Company such
assignments or other instruments as Company may require from time to time to
evidence Company’s ownership of the results and proceeds of your services.

 

17.                                 Notices.
All notices, requests, consents and other communications required or permitted
to be given hereunder shall be in writing and shall be deemed to have been duly
given if delivered personally or sent by prepaid telegram, courier, or mailed
first-class, postage prepaid, by registered or certified mail, return receipt
requested, as follows:

 

TO YOU:

Mr. David H.
Johnson

35 East 20th
Street

New York, New
York 10003

 

13

 

WITH A COPY
TO:

Nicholas
Gordon, Esq.

Franklin,
Weinrib, Rudell & Vassallo, P.C.

488 Madison
Avenue

New York, New
York 10022

 

TO COMPANY:

Warner Music Group Inc.

4000 Warner Boulevard - Bldg 2

Burbank, CA 91522

Attn: Chief Executive Officer

 

WITH A COPY TO:

Time Warner Inc.

75 Rockefeller Plaza

New York, NY 10019

Attn: General Counsel

 

Either you or
Company may change the address to which notices are to be sent by giving
written notice of such change of address to the other in the manner herein
provided for giving notice.

 

18.                                 Miscellaneous.

 

a.                                       You
represent and warrant to Company that you are free to enter into this Agreement
and, as of the commencement of the Term hereof, are not subject to any
conflicting obligation or any disability which will prevent you from or
interfere with your executing and performing your obligations hereunder or
could be the basis of any valid claim against Company. Prior to entering into
this Agreement you have obtained release from Sony Music Entertainment Inc. (“Sony”)
of any claims relating to this Agreement, a true, correct and complete copy of
which has been delivered to Company.

 

14

 

b.                                      You
acknowledge that during the Term you will comply with Company’s conflict of
interest policy and other corporate policies (including without limitation, the
policies contained in Time Warner’s Compliance Program Manual, a copy
of which has been
furnished to you), as in effect from time to time, of which you are made aware.
You have accurately completed the attached Conflict of Interest Questionnaire
as of the date hereof.

 

c.                                       You
acknowledge that services to be rendered by you under this Agreement are of a
special, unique and intellectual character which gives them peculiar value, and
that a breach or threatened breach of any provision of this Agreement
(particularly, but not limited to, the provisions of Paragraphs 4 and 15
hereof), will cause Company immediate irreparable injury and damage which
cannot be reasonably or adequately compensated in damages in an action at law.
Accordingly, without limiting any right or remedy which Company may have in the
premises, you specifically agree that Company shall be entitled to injunctive
relief to enforce and protect its rights under this Agreement. The provisions
of this Paragraph 18(c) shall not be construed as a waiver by Company of any
rights which Company may have to damages or any other remedy.

 

d.                                      This
Agreement sets forth the entire agreement and understanding of the parties
hereto, and supersedes and terminates any and all prior agreements,
arrangements and understandings. No representation, promise or inducement has
been made by either party that is not embodied in this Agreement, and neither
party

 

15

 

shall be bound
by or liable for any alleged representation, promise or inducement not herein
set forth.

 

e.                                       The
provisions of this Agreement shall inure to the benefit of the parties hereto,
their heirs, legal representatives, successors and permitted assigns. This
Agreement, and your rights and obligations hereunder, may not be assigned by
you. Company may assign its rights, together with its obligations, hereunder in
connection with any sale, transfer or other disposition of all or a substantial
portion of the stock or assets of Company, WCI, Time Warner or the recorded
music business of Time Warner.

 

f.                                         This
Agreement may be amended, modified, superseded, canceled, renewed or extended,
and the terms or covenants hereof may be waived, only by a written instrument
executed by both of the parties hereto, or in the case of a waiver, by the
party waiving compliance. The failure of either party at anytime or times to
require performance of any provision hereof shall in no manner affect the right
at a later time to enforce the same. No waiver by either party of the breach of
any term or covenant contained in this Agreement, whether by conduct or
otherwise, in any one or more instances shall be deemed to be, or construed as,
a further or continuing waiver of any such breach, or a waiver of the breach of
any other term or covenant contained in this Agreement.

 

g.                                      This
Agreement shall be governed by and construed according to the laws of the State
of New York as applicable to agreements to be wholly performed therein. Any
dispute or controversy arising

 

16

 

with respect
to this Agreement shall, at the election of either Company or you, be submitted
to JAMS/ENDISPUTE for resolution in arbitration in accordance with the rules
and procedures of JAMS/ENDISPUTE. Either party shall make such election by
delivering written notice thereof to the other party at any time (but not later
than 45 days after such party receives notice of the commencement of any
administrative or regulatory proceeding or the filing of any lawsuit relating
to any such dispute or controversy) and thereupon any such dispute or
controversy shall be resolved only in accordance with the provisions of this
Paragraph 18(g). Any such proceedings shall take place in New York City before
a single arbitrator (rather than a panel of arbitrators), pursuant to any
streamlined or expedited (rather than a comprehensive) arbitration process, before
a nonjudicial (rather than a judicial) arbitrator, and in accordance with an
arbitration process which, in the judgment of such arbitrator, shall have the
effect of reasonably limiting or reducing the cost of such arbitration. The
resolution of any such dispute or controversy by the arbitrator appointed in
accordance with the procedures of JAMS/ENDISPUTE shall be final and binding.
Judgment upon the award rendered by such arbitrator may be entered in any court
having jurisdiction thereof, and the parties consent to the jurisdiction of the
New York courts for this purpose. The prevailing party shall be entitled to
recover the costs of arbitration (including reasonable attorneys’ fees and the
fees of experts) from the losing party. If at the time any dispute or
controversy arises with respect to this Agreement, JAMS/ENDISPUTE is not in
business or is no longer providing arbitration services, then the

 

17

 

American Arbitration Association shall be
substituted for JAMS/ENDISPUTE for the purposes of the foregoing provisions in
this Paragraph 18(g). If you shall be the prevailing party in such arbitration,
Company shall promptly pay, upon your demand, all. legal fees, court
costs and other costs and expenses incurred by you in any legal
action seeking to enforce the award in any court.

 

h.                                      You
shall be entitled throughout the period of employment under this Agreement in
your capacity as an officer or director of Company or any of its subsidiaries
or an officer or member of the board of representatives or other governing body
of any partnership or joint venture in which Company has an equity interest
(and after the termination of the period of employment hereunder, to the extent
relating to your service as such officer, director or member) to the benefit of
the indemnification provisions contained on the date hereof in the Certificate
of Incorporation and By-Laws of Company (not including any amendments or
additions after the date of execution hereof that limit or narrow, but
including any that add to or broaden, the protection afforded to you by those
provisions), to the extent not prohibited by applicable law at the time of the
assertion of any liability against you, and provided that no such indemnity
will apply to any claim arising out of the release understanding between you
and Sony referred to in Paragraph 18(a).

 

18

 

If the
foregoing correctly sets forth our understanding, please sign and return the
duplicate copy of the letter enclosed herewith.

 

 

	
   

  	
  Very truly
  yours,

  
	
   

  	
   

  
	
   

  	
  WARNER MUSIC
  GROUP INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
  [ILLEGIBLE]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Accepted and
  Agreed:

  	
   

  
	
   

  	
   

  
	
  /s/ David H.
  Johnson

  	
   

  	
   

  
	
  David H.
  Johnson

  	
   

  
					

 

19Exhibit
10.26

 

 

FIRST
AMENDMENT TO OFFICE LEASE

 

THIS FIRST AMENDMENT TO OFFICE LEASE (this “First
Amendment”) is made and entered into as of the 28 day of Feb, 2003, by and
between MEDIA CENTER DEVELOPMENT, LLC, a Delaware limited liability company (“Landlord”),
and WARNER MUSIC GROUP INC., a Delaware corporation (“Tenant”).

 

RECITALS:

 

A.                                   Landlord and Tenant
are parties to that certain Office Lease dated as of June 27, 2002 (the Lease),
pursuant to which Lease, Landlord leases to Tenant certain “Premises”
(as more particularly described in the Lease) located on the first, second,
third, fourth, fifth and sixth floors of the “Building” located at 3400
West Olive Avenue, Burbank, California. 
All initial capitalized terms used herein but not herein defined shall
have the meaning ascribed to such terms under the Lease.

 

B.                                     Landlord and
Tenant now desire to enter into this First Amendment to provide for adjustment
of the Rentable Area of the Premises based upon measurement of actual Premises
dimensions, as more particularly set forth herein.

 

NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Landlord and Tenant agree as follows:

 

1.                                       The Premises is
hereby agreed to contain, for all purposes of this Lease (as hereby amended),
one hundred ninety-five thousand one hundred sixty-six (195, 166) square feet
of Rentable Area, retroactive to the Effective Date.  If any adjustment payment or refund is
applicable based upon payments made to date under the Lease based upon such
revised calculation of the Rentable Area of the Premises, the parties shall
make such payment or refund, as applicable, within thirty (30) days following
the date hereof.  Nothing contained herein
shall be deemed to limit the right of the parties to verify the actual Rentable
Area of any additional space that may be hereafter added to the Premises in
accordance with the definition of Rentable Area specified in the Lease.

 

2.                                       Except as
specifically amended by this First Amendment, the Lease shall continue in full
force and effect.  In the event of any
conflict between the provisions of the Lease and the provisions of this First
Amendment, the provisions of this First Amendment shall prevail.

 

 

3.                                       This First
Amendment may be executed in any number of counterparts, each of which shall be
deemed to be an original, but any number of which, taken together, shall
constitute one and the same instrument.

 

IN WITNESS WHEREOF, Landlord and Tenant have
entered into this First Amendment as of the date first written above.

 

	
  LANDLORD:

  	
   

  
	
   

  	
   

  
	
  MEDIA CENTER DEVELOPMENT, LLC,

  	
   

  
	
  a Delaware limited liability company

  	
   

  
	
   

  	
   

  
	
  By:

  	
  MEDIA CENTER PARTNERS, LLC,

  	
   

  
	
   

  	
  a California limited liability company

  	
   

  
	
   

  	
  its managing member

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  M. DAVID PAUL DEVELOPMENT LLC,

  	
   

  
	
   

  	
   

  	
  a California limited liability company

  	
   

  
	
   

  	
   

  	
  its managing member

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ M. David Paul

  	
   

  
	
   

  	
   

  	
  M. David Paul, Managing Member

  	
   

  
	
   

  	
   

  
	
  TENANT:

  	
   

  
	
   

  	
   

  
	
  WARNER MUSIC GROUP INC.,

  	
   

  
	
  a Delaware corporation

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Helen
  Murphy

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Print Name:

  	
  Helen Murphy

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
  Evp a CFO

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Blake Messinger

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Print Name:

  	
  Blake Messinger

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
  VP Real Estate

  	
   

  	
   

  
											

 

 

OFFICE
LEASE

 

by and between

 

MEDIA CENTER DEVELOPMENT, LLC,

 

a Delaware limited liability
company,

 

Landlord

 

and

 

WARNER
MUSIC GROUP INC.,

 

a Delaware corporation

 

Tenant

 

“The Pinnacle”

 

Burbank, California

 

 

DATE:  June 27, 2002

 

 

TABLE OF CONTENTS

 

	
  1.

  	
  TERMS AND DEFINITIONS

  	
   

  
	
  2.

  	
  PREMISES LEASED

  	
   

  
	
  3.

  	
  TERM: OPTIONS TO EXTEND

  	
   

  
	
  4.

  	
  DELIVERY OF POSSESSION

  	
   

  
	
  5.

  	
  RENT

  	
   

  
	
  6.

  	
  OPERATING AND TAX EXPENSES

  	
   

  
	
  7.

  	
  USE

  	
   

  
	
  8.

  	
  TAXES ON TENANT’S PROPERTY

  	
   

  
	
  9.

  	
  CONDITION OF PREMISES

  	
   

  
	
  10.

  	
  ALTERATIONS

  	
   

  
	
  11.

  	
  REPAIRS

  	
   

  
	
  12.

  	
  LIENS

  	
   

  
	
  13.

  	
  ENTRY BY LANDLORD

  	
   

  
	
  14.

  	
  UTILITIES AND SERVICES

  	
   

  
	
  15.

  	
  INDEMNIFICATION

  	
   

  
	
  16.

  	
  DAMAGE TO TENANT’S PROPERTY AND WAIVER

  	
   

  
	
  17.

  	
  INSURANCE

  	
   

  
	
  18.

  	
  DAMAGE OR DESTRUCTION

  	
   

  
	
  19.

  	
  EMINENT DOMAIN

  	
   

  
	
  20.

  	
  ASSIGNMENT AND SUBLETTING

  	
   

  
	
  21.

  	
  DEFAULT BY TENANT

  	
   

  
	
  22.

  	
  DEFAULT BY LANDLORD

  	
   

  
	
  23.

  	
  SUBORDINATION

  	
   

  
	
  24.

  	
  ESTOPPEL CERTIFICATE

  	
   

  
	
  25.

  	
  DEFINITION OF LANDLORD

  	
   

  
	
  26.

  	
  PARKING

  	
   

  
	
  27.

  	
  SIGNAGE

  	
   

  
	
  28.

  	
  NOTICES

  	
   

  
	
  29.

  	
  HOLDING OVER

  	
   

  
	
  30.

  	
  QUIET ENJOYMENT

  	
   

  
	
  31.

  	
  BROKERS

  	
   

  
	
  32.

  	
  ROOFTOP EQUIPMENT

  	
   

  
	
  33.

  	
  RIGHT OF FIRST NEGOTIATION

  	
   

  
	
  34.

  	
  RELEASE OF FURTHER LIABILITY UNDER WARNER SPECIAL
  PRODUCTS LEASE

  	
   

  
	
  35.

  	
  ADDITIONAL SPACE BONUS

  	
   

  
	
  36.

  	
  NET EFFECTIVE RENT PROTECTION

  	
   

  
	
  37.

  	
  HOLD SPACE

  	
   

  
	
  38.

  	
  ADJACENT BUILDING DEVELOPMENT

  	
   

  
	
  39.

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A - Space Plans Showing Outline of
  Premises

  	
   

  
	
  Exhibit B - Depiction of the Current Site

  	
   

  
	
  Exhibit C - Improvement of the Premises

  	
   

  
	
  Exhibit D - Rules and Regulations

  	
   

  
	
  Exhibit E - Tenant Signage

  	
   

  
	
  Exhibit F - Warner Special Products Lease
  Assignment Agreement

  	
   

  
	
  Exhibit G - Existing Matters of Record

  	
   

  
	
  Exhibit H - Adjacent Building Excavation
  Area Landscaping Plan

  	
   

  
	
  Exhibit I - Janitorial Specifications

  	
   

  
	
  Exhibit J - Security Specifications

  	
   

  

 

i

 

OFFICE
LEASE

 

THIS OFFICE LEASE (this “Lease”) is
made and entered into as of the 27 day of June, 2002 (the “Effective Date”),
by and between MEDIA CENTER DEVELOPMENT, LLC, a Delaware limited liability
company (“Landlord”), and WARNER MUSIC GROUP INC., a Delaware
corporation (“Tenant”).

 

1.                                       TERMS AND DEFINITIONS.                                  For
the purposes of this Lease, the following terms shall have the following
definitions and meanings:

 

(a)           Address of Tenant:

 

Warner Music
Group Inc.

75 Rockefeller
Plaza

New York, New
York 10104

Attention:              Blake Messinger

Vice
President, Worldwide Real Estate

 

with a copy
to:

 

Mitch Evall,
Esq.

9665 Wilshire
Boulevard, Suite 900

Beverly Hills,
California 90212-2345.

 

(b)           Address of Landlord:

 

Media Center
Development, LLC

c/o M. David
Paul Development LLC

233 Wilshire
Boulevard, Suite 990

Santa Monica,
California 90401

Attention:              M. David Paul

 

(c)                                  Premises:  That certain premises constituting a portion
of each of the first (1st) through and including the sixth (6th) floors of the “Building”
located at 3400 W. Olive Avenue, Burbank, California, approximately as shown as
cross-hatched on the space plan(s) attached hereto as Exhibit A and
incorporated herein by this reference.

 

(d)                                 Premises Area:  Approximately one hundred ninety-three
thousand four hundred fifty-six (193,456) square feet of “Rentable Area”
(as hereinafter defined).

 

(e)                                  Term:  Seventeen (17) years commencing upon the “Commencement
Date” (as defined in Exhibit C attached hereto and incorporated
herein by this reference).

 

(f)                                    Monthly Base
Rent:  Subject to the provisions of
Sections 5(c), 5(d) and 5(e) below, Monthly Base Rent
shall initially equal Two and 90/100ths Dollars ($2.90) per square foot of
Rentable Area in the Premises, and shall be subject to adjustment on each
anniversary of the Commencement Date as follows:  (i) on each of the initial five (5) yearly
anniversaries of the Commencement Date during the Term of this Lease, Monthly
Base Rent shall increase to equal one hundred one percent (101%) of the Monthly
Base Rent in effect immediately prior to the applicable anniversary date, and
(ii) on each subsequent yearly anniversary of the Commencement Date occurring
during the Initial Term of this Lease, Monthly Base Rent shall increase to
equal one hundred two percent (102%) of the Monthly Base Rent in effect
immediately prior to the applicable anniversary date.

 

(g)                                 (i)                                     Tenant’s Building
Percentage:  A fraction, expressed as a
percentage, the numerator of which is the Rentable Area of the Premises and the
denominator of which is the total Rentable Area within the Building.

 

(ii)                                  Tenant’s Project
Percentage:  A fraction, expressed as a
percentage, the numerator of which is the Rentable Area of the Premises and the
denominator of which is the total Rentable Area within the Project.

 

(h)                                 (i)                                     TE Base Year:   2003

 

(ii)                                  OE Base Year:   2004

 

(i)                                     Security
Deposit:   None.

 

 

(j)                                     Permitted
Use:  Any lawful use, including, but not
limited to general office use and incidental lawful uses in connection
therewith (which may include, without limitation, recording studio(s), retail
store serving employees only and any use typical of a media and/or music
company) consistent with the operation of the Project as a first-class office
building project, but in no event to include any restaurant or other food use
available (other than customary general office use employee kitchen use,
limited to Underwriters’ Laboratory approved equipment for brewing coffee, tea,
and other similar hot beverages and microwave oven use); and for no other use
or purpose.

 

(k)                                  Parking:     Tenant shall have the right to purchase up to four
(4) parking passes per each one thousand (1,000) square feet of Rentable Area,
rounded to the nearest whole number of parking passes, subject to the
provisions of Section 26 below.

 

(l)                                     Brokers:    The Worthe Real Estate Group,
Inc. and Cushman & Wakefield of California, Inc., as Landlord’s Broker, and
Travers Realty, as Tenant’s Broker.

 

(m)                               Guarantor:                                        None.

 

This Section 1 represents a
summary of the basic terms of this Lease. 
In the event of any inconsistency between the terms contained in this Section 1
and any specific provision of this Lease, the terms of the more specific
provision shall prevail.

 

2.  PREMISES LEASED.

 

(a)                                  Landlord hereby
leases to Tenant and Tenant hereby hires from Landlord the Premises.  The Premises constitutes all or part of the
floors of the Building designated in Section 1(c), approximately as
shown on the space plans attached hereto as Exhibit A.  The Premises is to be improved with the “Tenant
Improvements” described in Exhibit C attached hereto and
incorporated herein by this reference, in accordance with the terms set forth
in Exhibit C.

 

(b)                                 The term “Rentable
Area” as used in this Lease shall be determined in accordance with BOMA
standards (Building Owners and Managers Association Method for Measuring Floor
Area in Office Buildings, ANSI Z65.1-1996), with Common Areas defined as set
forth in this Lease for purposes of such determination.  However, for all purposes of this Lease, the
Rentable Area of the Premises shall be deemed to be as set forth in Article 1
above, notwithstanding any deviation in actual Rentable Area, unless and until
the boundaries of the Premises are hereafter modified; except, however, that
each party shall have the right to verify the actual Rentable Area of the
Premises prior to the date which is thirty (30) days following the Commencement
Date, and if based upon such verification, it is agreed by the parties that the
actual Rentable Area differs from the amount specified in Article 1,
then an appropriate adjustment shall be made in all calculations under this
Lease based upon such actual Rentable Area, and the parties shall make such
adjustment payment and/or refund, as is applicable.  If the parties are unable to reach agreement
upon actual Rentable Area based upon such verification within such thirty (30)
day period, then such matter shall be resolved by reference proceeding in
accordance with Section 39(t) below.

 

(c)                                  The Building is
located on one or more parcels of real property (the “Site”)
approximately as depicted on Exhibit B attached hereto and incorporated
herein by this reference.  The parking
serving the Building shall include, without limitation, a multi-level parking
structure (the “Parking Structure”) upon the Site and, at Landlord’s
option, surface parking located on the Site. 
The Site (as the same may hereafter be expanded in accordance herewith),
the Building, any and all other improvements now or hereafter situated on the
Site (as the same may hereafter be expanded in accordance herewith), the
Parking Structure (as the same may hereafter be expanded in accordance
herewith) and the other “Common Areas” (as hereinafter defined) are
herein collectively referres to as the “Project”.

 

(d)                                 Tenant shall have the
nonexclusive right to use in common with other tenants in the Building and the
Project, and subject to the Rules and Regulations referred to in Section 39(a)
and the parking rules and regulations referred to in Section 26,
the following areas to the extent included in the Project and made available
for common use by Project occupants (collectively, “Common Areas”):  (i) common lobbies, restrooms, elevators,
stairways, access ways, loading docks, ramps, drives and platforms

 

2

 

and any passageways and service ways thereto, and the common pipes,
conduits, wires and appurtenant equipment serving the Project; and (ii) loading
and unloading areas, trash areas, parking areas (including, without limitation,
the Parking Structure and other on-Site Project parking areas), roadways,
sidewalks, walkways, driveways and landscaped areas and similar areas and
facilities within the Project made available by Landlord for the common use and
enjoyment of the occupants of the Project; provided, however, that
notwithstanding the designation of the Parking Structure and the other Project
parking areas as a part of the Common Areas pursuant hereto, nothing contained
herein shall be deemed to permit Tenant’s use of such Parking Structure and/or
other parking areas constituting a part of the Common Areas except to the
extent permitted by parking passes for particular parking areas within the
Project in accordance with this Lease. 
The Common Areas shall also be deemed to include the exercise facility
within the Project (which Landlord shall cause to be operational on or before
the Commencement Date), and which, when thereafter operating, shall be
available for use, on a non-exclusive basis, by Tenant and its employees,
subject to payment of the applicable prevailing fees and charges payable for
the use thereof by Building occupants.

 

(e)                                  Landlord reserves the
right from time to time:  (i) to
designate other land outside the  current
boundaries of the Site but contiguous to the then Site to be a part of the
Site, in which event the Site shall be deemed to include such additional land,
and the Common Areas shall be deemed to include Common Areas upon such
additional land (provided that land shall not be added to the Site which does
not include improvements thereon so as to have a ratio of Rentable Area to land
which is substantially equivalent to the ratio of Rentable Area to land of the
then existing Site); (ii) to add additional buildings and/or other improvements
(including, without limitation, additional parking structures and/or expansion
of the Parking Structure) to the Project, which (by way of example only and
without limitation) may be located on land added to the Site pursuant to clause
(i) above, and/or to remove existing and/or future buildings and/ or
improvements; (iii) to make changes to the Common Areas, including, without
limitation, addition of additional improvements, changes in the location, size,
shape and number of driveways, entrances, parking spaces, parking areas,
loading and unloading areas, ingress, egress, direction of traffic, landscape
areas and walkways; (iv) to close temporarily any of the Common Areas for
maintenance purposes so long as reasonable access to the Premises remains
available; (v) to use the Common Areas while engaged in making additional
improvements, repairs or alterations to the Building or the Project, or any
portion thereof; and (vi) to install, use, maintain, repair and replace pipes,
ducts, conduits, wires and appurtenant meters and equipment for service to
other parts of the Project above the ceiling 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 alter, expand and/or demolish any building within the Project;
and (vii) to do and perform such other acts and make such other changes in, to
or with respect to the Common Areas, the Building or any other portion of the
Project as Landlord deems to be appropriate in the exercise of its reasonable
business judgment; provided, however, that, without the prior consent of
Tenant, Landlord shall in no event take any action pursuant hereto which would
adversely affect other than in a de minimis manner, (1) the operation of Tenant’s
business from the Premises, (2) reasonable enjoyment of the Premises for the
permitted use under this Lease as a result of required reconfiguration, (3)
reasonable means of access to and from the Premises and parking areas serving the
Premises, or (4) use of the parking areas serving the Premises.

 

(f)                                    During the Lease
Term, Tenant shall also have the right (but not the obligation) to lease from
Landlord such storage space (the “Storage Space”) as is available for
Tenant’s use located within a portion of the Building parking garage or
elsewhere within the Project as designated by Landlord, provided (i) that once
leased, the Storage Space so leased shall be leased by Tenant for the entire
remaining Term of this Lease, and (ii) until the Commencement Date, Landlord
shall make at lease five thousand (5,000) square feet of Storage Space
available for lease by Tenant pursuant hereto, but such Storage Space may be
located in multiple non-contiguous locations (provided that from and after the
Commencement Date, Tenant’s right to lease Storage Space pursuant hereto shall
be on an “as available” basis, but otherwise in accordance with the terms of
this Section 2(f)).  Promptly
following request therefore from Tenant from time to time, Landlord shall
notify Tenant of any Storage Space available for lease in the Project.  The monthly Rent allocable to the Storage
Space leased by Tenant pursuant hereto shall initially be One and 25/100ths
Dollars ($1.25) per month per square

 

3

 

foot of floor area within such Storage Space leased by Tenant, but
shall be increased on the tenth (10th) anniversary of the
Commencement Date and on each yearly anniversary of the Commencement Date
thereafter occurring during the Term to equal one hundred two percent (102%) of
the monthly Storage Space Rent (on a per square foot of Storage Space floor
area basis) in effect immediately prior to the applicable anniversary
date.  Storage Space Rent shall be paid
monthly in advance in the same manner as Monthly Base Rent payable under this
Lease.  The Storage Space shall not
constitute part of the Premises for purposes of calculation of Tenant’s
Building Percentage or Tenant’s Project Percentage.  The Storage Space shall be leased on an
entirely “AS IS” basis except that such Storage Space be separately demised by
Landlord from the remainder of the parking garage or other adjacent areas
(inclusive of any drywall walls within the Storage Space), have a lockable door
and have electrical outlets and lighting installed by Landlord in accordance
with Landlord’s reasonable standards for storage space use.  Electricity shall be available for connection
to the Storage Space from a source stubbed into the Storage Space.  Except as provided in the foregoing, Landlord
shall have absolutely no obligation to alter or improve the Storage Space for
Tenant’s benefit and Tenant shall maintain and repair the Storage Space at its
sole cost and expense.  Except as
specifically otherwise provided in this Section 2(f), Tenant’s
lease of the Storage Space pursuant hereto shall be subject to the same terms
and conditions applicable to Tenant’s lease of the Premises under this Lease
provided that in no event shall any Storage Space be deemed to constitute
Rentable Area for purposes of this Lease and in no event shall Landlord be
obligated to provide any allowance to Tenant for the improvement of the Storage
Space.  Tenant agrees not to store any
flammable or highly combustible materials in the Storage Space.  Tenant also agrees not to store excess or
highly concentrated weight in the Storage Space.  Tenant agrees to use the Storage Space solely
for storage purposes and not as office space or other use.  Tenant agrees that Landlord shall have the
same rights of entry with respect to the Storage Space as are provided in Section 13
below with respect to other portions of the Premises.  Tenant shall, at its sole cost and expense,
deliver to Landlord a key for any locks installed by Tenant for Landlord’s
emergency entry purposes.  In the event
of Tenant’s lease of any such Storage Space pursuant hereto, the parties shall,
at the request of either party, document such lease in accordance with the
provisions hereof by an amendment to this Lease in a form reasonably acceptable
to the parties, but Tenant’s right to lease such Storage Space shall not be
conditioned upon the execution of such amendment.

 

3.                                      TERM:  OPTIONS
TO EXTEND.

 

(a)                                  The term of this
Lease (“Term”) shall be for the period referenced in Section 1(e)
above, commencing on the Commencement Date (such initial period is referred to
herein as the “Initial Term”), unless this Lease is earlier terminated
or the term extended, in accordance with this Lease.  Following determination of the Commencement
Date, the parties shall execute a memorandum confirming the occurrence of the
Commencement Date and the date of the scheduled expiration of the Initial Term.

 

(b)                                 Tenant shall have the
option to extend the term of this Lease for two (2) separate, consecutive
extended terms of sixty (60) months each (each, an “Extended Term” and
collectively, the “Extended Terms”). 
The option to extend for each Extended Term shall be separately
exercisable by Tenant’s delivery to Landlord of written notice exercising the
option to extend the Term by the applicable Extended Term no later than
twenty-four (24) months prior to expiration of the then applicable Term;
provided that Tenant may not exercise such option when Tenant is in default
under this Lease (after Tenant’s receipt of written notice from Landlord and
the expiration of any applicable cure period provided in Section 21(a)
below unless Landlord has waived such default by Tenant in writing, provided
that any such waiver by Landlord shall be granted or withheld in Landlord’s
sole and absolute discretion), and Tenant may not exercise the option to extend
the Term by the second Extended Term if the Term has not been extended by the
first Extended Term.  Further, Tenant
shall have the option to revoke Tenant’s prior exercise of an option to extend
the Term by an Extended Term, which option to revoke shall be exercisable by
Tenant’s delivery to Landlord of written notice of such revocation not later
than the earlier to occur of (x) eighteen (18) months prior to expiration of
the then applicable Term (which eighteen (18) month period shall be reduced by
one day for each day by which determination of the Monthly Base Rent for the
proposed Extended Term in question is delayed by Landlord's failure to comply
with the time frames set forth in this Section 3(b)), or (y) thirty (30) days
following determination of the Monthly Base rent for the proposed Extended Term
in question, provided that in the event of Tenant’s exercise of such option to

 

4

 

revoke, Tenant shall reimburse Landlord for any and all reasonable
costs and expenses incurred by Landlord in connection with the determination of
the Fair Market Rental for the proposed Extended Term in question (including,
without limitation, amounts otherwise to be borne by Landlord in accordance
with clause (i) of this Section 3(b) below).  The terms and conditions of this Lease shall
continue in effect during each such Extended Term, except (A) for terms and
conditions of this Lease which are either expressly  or by their operation applicable only during
the Initial Term of this Lease or portions thereof, including, without
limitation, the provisions of Exhibit C attached hereto, (B) that Tenant
shall have no further right or option to extend the Term of this Lease beyond
the second Extended Term, and (C) that Monthly Base Rent shall be adjusted as
of the commencement of each such Extended Term to equal ninety-two and one-half
percent (92.5%) of the prevailing monthly fair market rental rate as of the commencement
of such Extended Term (the “Fair Market Rental Rate”) for new and
renewal tenants of premises comparable to the Premises in comparable
first-class office buildings in “Burbank Media District” area (“Comparable
Buildings”) for periods comparable to the Extended Term (including, without
limitation, consideration of such rental increases as may be appropriate during
such Extended Term) and considering the manner of pass-through of Operating
Expenses and Tax Expenses, tenant improvements, allowances, rental abatement,
brokerage commissions and all other applicable economic concessions.  If any such improvements, allowances,
abatement, commissions or other concessions would involve any out-of-pocket
costs to Landlord, then, at Landlord’s option, Landlord may elect to do either
of the following:  (X) pay some or all of
such costs in cash; or (Y) reduce the Monthly Base Rent component of the Fair
Market Rental Rate to be an effective rental rate that takes into consideration
the total dollar value of that portion of such costs that Landlord has elected
not to pay in cash (in which case those costs that Landlord has elected not to
pay in cash and evidenced in the effective rental rate shall not be payable by
Landlord).  Following Tenant’s valid
exercise of an option to extend the Term by an Extended Term as granted hereby,
the parties shall enter into an amendment to the Lease (the “Extension
Amendment”), prepared by Landlord and subject to Tenant’s reasonable
approval, memorializing the terms of such extension of the Term by such
Extended Term, but Tenant’s right to continue in occupancy in accordance
herewith shall not be conditioned upon the execution of such amendment by the
parties.  As used in this Lease,
references to the “Term” of this Lease, shall mean the initial Term as
the same may be extended by the Extended Term(s), as applicable, as the context
may require.  The Fair Market Rental Rate
for each Extended term shall be determined as follows:

 

(i)                                     Following Tenant’s
exercise of its option to extend the Term by the applicable Extended Term,
Landlord and Tenant shall meet and endeavor in good faith to agree upon the
Fair Market Rental Rate.  If Landlord and
Tenant fail to reach agreement by the date which is twenty-three (23) months
prior to the commencement of the applicable Extended Term, then, within thirty
(30) days thereafter, each party, at its own cost and by giving notice to the
other party, shall appoint a licensed commercial real estate agent with at
least seven (7) years full-time experience as a real estate agent active in
leasing of commercial office buildings in the area of the Premises to appraise
and set the Fair Market Rental Rate for the applicable Extended Term.  If a party does not appoint an agent within
thirty (30) days after the other party has given notice of the name of its
agent, the single agent appointed shall be the sole agent and shall set the
Fair Market Rental Rate for the applicable Extended Term.  If there are two (2) agents appointed by the
parties as stated above, the agents shall meet within ten (10) days after the
second agent has been appointed and attempt to set Fair Market Rental Rate for
the applicable Extended Term.  If the two
(2) agents are unable to agree on such Fair Market Rental Rate within thirty
(30) days after the second agent has been appointed, they shall, within 20 days
after the last day the two (2) agents were to have set such Fair Market Rental
Rate, attempt to select a third agent who shall be a licensed commercial real
estate agent meeting the qualifications stated above.  If the two (2) agents are unable to agree on
the third agent within such twenty (20) day period, either Landlord or Tenant
may request the President of the Los Angeles County Realtors Association to
select a third agent meeting the qualifications stated in this subsection.  Each of the parties shall bear one-half (1/2)
of the cost of appointing the third agent and of paying the third agent’s
fee.  No agent shall be employed by, or
otherwise be engaged in business with or affiliated with, Landlord or Tenant,
except as an independent contractor.

 

(ii)                                  Within thirty (30)
days after the selection of the third agent, a majority of the agents shall set
the Fair Market Rental Rate for the applicable Extended Term.  If a majority of the agents are unable to

 

5

 

set such Fair Market Rental Rate within the stipulated period of time,
each agent shall make a separate determination of such Fair Market Rental Rate
and the three (3) appraisals shall be added together and the total shall be
divided by three (3).  The resulting
quotient shall be the Fair Market Rental Rate for the Premises for the
applicable Extended Term.  If, however,
the low appraisal and/or high appraisal is/are more than twenty percent (20%)
lower and/or higher than the middle appraisal, the low appraisal and/or the
high appraisal shall be disregarded.  If
only one (1) appraisal is disregarded, the remaining two (2) appraisals shall
be added together and their total divided by two (2), and the resulting
quotient shall be Fair Market Rental Rate for the applicable Extended
Term.  If both the low appraisal and the
high appraisal are disregarded as stated in this subsection, the middle
appraisal shall be the Fair Market Rental Rate for the applicable Extended
Term.

 

(iii) Each agent shall hear, receive and
consider such information as Landlord and Tenant each care to present regarding
the determination of Fair Market Rental Rate for the applicable Extended Term
and each agent shall have access to the information used by each other
agent.  Upon determination of the Fair
Market Rental Rate for the applicable Extended Term, the agents shall
immediately notify the parties hereto in writing of such determination in the
manner provided in this Lease for the giving of notices to the parties hereto.

 

4.   DELIVERY OF POSSESSION.  The parties hereby
acknowledge that the Premises are currently unoccupied and Landlord and Tenant
agree that by the execution and delivery of this Lease, Landlord shall have
delivered possession of the Premises to Tenant and Tenant shall be permitted to
access the Premises for performance of the Tenant Improvements subject to the
provisions of this Lease (including, without limitation, Exhibit C
attached hereto).

 

5.  RENT.

 

(a)                                  (i)  Tenant agrees to pay Landlord as Monthly Base
Rent for the Premises during the Initial Term the applicable Monthly Base Rent
designated in Section 1(f) and during the Extended Term the Monthly
Base Rent determined as set forth in Section 3(b) above, subject to
the express provisions of this Lease granting Tenant rights of rent abatement
and/or reduction.  Monthly Base Rent
shall be paid monthly in advance on the first day of each and every calendar
month during the Term.  In the event the
Term of this Lease commences on a day other than the first day of a calendar
month or ends on a day other than the last day of a calendar month, then the “Rent”
(as hereinafter defined) for such periods shall be prorated in the proportion
that the number of days this Lease is in effect during such periods bears to
the actual number of days in such month, and such Rent shall be paid at the
commencement of such period.  In addition
to the Monthly Base Rent, Tenant agrees to pay all other amounts required to be
paid hereunder as and when same are due as hereinafter provided in this
Lease.  Except as otherwise specifically
provided in this Lease, Rent shall be paid to Landlord, without any prior
notice or demand therefor, and without any abatement, 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 Section 1(b)
or to such other person or at such other place as Landlord may from time to
time designate in writing.  All charges
to be paid by Tenant hereunder other than Monthly Base Rent shall constitute
additional rent, shall be paid in the manner provided herein and shall
sometimes be collectively referred to as “Additional Rent”.  Monthly Base Rent and Additional Rent are
collectively referred to herein as “Rent”.

 

(b)                                 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 costs being extremely difficult and impracticable 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 or note secured by all or any portion
of the Project.  Therefore, if Tenant
fails to pay any Rent within five (5) days of the due date under this Lease for
any reason, Tenant shall pay to Landlord, as Additional Rent, the sum of six
percent (6%) of the overdue amount as a late charge; provided, however, that as
to the first such late payment in any twelve (12) consecutive calendar month
period during the Term, such late charge shall not be payable unless such
failure to pay when due is not cured within ten (10) days after Tenant’s
receipt of written notice thereof from Landlord.  All past-due installments of Rent shall also
bear interest, as Additional Rent, at the “Interest Rate” (as
hereinafter

 

6

 

defined), from the date due until paid; provided, however, that as to
the first such late payment in any twelve (12) consecutive calendar month
period during the Term, such interest charge shall not be payable unless such
failure to pay when due is not cured within ten (10) days after Tenant’s
receipt of written notice thereof from Landlord.  For purposes of this Lease, the “Interest
Rate” shall mean two percent (2%) per annum plus the then prevailing per
annum “Prime Rate” (which for purposes of this Lease shall mean the “prime
rate” as most recently published in the Wall Street Journal [or the then
“prime” rate as established by a comparable alternate source reasonably
designated by Landlord in the event the Wall Street Journal ceases to
publish a prevailing “prime” rate]), provided that in no event shall the
Interest Rate exceed the maximum rate permitted by applicable law governing
interest rate restrictions.  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, at law or in equity.

 

(c)                                  Notwithstanding
anything to the contrary contained in this Lease, Tenant’s obligation for
payment of Monthly Base Rent shall be abated by fifty percent (50%) during the
initial thirty (30) months of the Term (the amount of Monthly Base Rent abated
pursuant to this sentence is collectively referred herein as the “Base Rent
50% Abatement Amount”).  Upon notice
to Tenant delivered by not later than the September 30 which is at least
three (3) months prior to the start of the calendar year(s) as to which any
Base Rent 50% Abatement Amount accelerated pursuant to clause (1) below or
purchased pursuant to clause (2) would otherwise commence, Landlord shall have
the right to (1) accelerate all or any portion of the Base Rent 50% Abatement
Amount so as to be applicable to Monthly Base Rent otherwise payable under this
Lease prior to the date when such portion of the Base Rent 50% Abatement Amount
would otherwise be applicable, and/or (2) purchase all or any part of the Base
Rent 50% Abatement Amount at any time prior to the expiration of the thirtieth
(30th) month of the Lease Term, by paying to Tenant an amount equal to the “Base
Rent 50% Abatement Purchase Price” (as hereinafter defined).  As used herein, the “Base Rent 50%
Abatement Purchase Price” shall mean the present value of such of the Base
Rent 50% Abatement Amount allocable to the unexpired portion of the thirty (30)
months of the Lease Term as Landlord desires to purchase pursuant hereto, as of
the date of payment of the Base Rent 50% Abatement Purchase Price by
Landlord.  Such present value shall be
calculated (x) by using such of the portion of the Base Rent 50% Abatement
Amount attributable to each remaining month during the initial thirty (30)
months of the Lease Term as Landlord desires to purchase pursuant hereto, as
the amounts to be discounted, and (y) by using discount rates for each amount
to be discounted equal to eight percent (8%) per annum.  Upon such payment of the Base Rent 50%
Abatement Purchase Price, the provisions of this Section 5(c) shall
be of no further force or effect as to the portion of the Base Rent 50%
Abatement Amount so purchased (which may be all of the Base Rent 50% Abatement
Amount if fully purchased pursuant hereto) and Tenant shall not be entitled to
any further Base Rent 50% Abatement Amount.

 

(d)                                 Notwithstanding
anything to the contrary contained in this Lease, during each of the initial
one hundred eighty (180) months of the Term (but not thereafter during the Term
or during any Extended Term), Tenant shall be entitled to an additional
abatement of Sixteen Thousand One Hundred Sixty-Six and 67/100 Dollars
($16,166.67) of Tenant’s Monthly Base Rent, calculated after application of any
abatement applicable under Section 5(c) above (the amount of
Monthly Base Rent abated pursuant to this sentence is collectively referred to
herein as the “Base Rent 180 Month Abatement Amount”).

 

(e)                                  Notwithstanding anything
to the contrary contained in this Lease, Tenant hereby agrees to assume
responsibility for payment of the costs of the “Tenant’s Brokers Commissions”
(as hereinafter defined) and funding all “Tenant Improvement Costs”,
and, in consideration thereof, during each of the initial one hundred fifty-six
(156) months of the Term (but not thereafter during the Term or during any
Extended Term), Tenant shall be entitled to an additional abatement of Tenant’s
Monthly Base Rent (calculated after application of any abatement applicable
under Sections 5(c) and 5(d) above) in an amount equal to
one-twelfth (1/12th) of Six and 23/100ths Dollars ($6.23) per square foot of
Rentable Area in the Premises (the amount of Monthly Base Rent abated pursuant
to the foregoing clause (iii) is collectively referred to herein as the “Tenant
Capital Funding Abatement Amount”).

 

7

 

6.                                      OPERATING
AND TAX EXPENSES.

 

(a)                                  For the purposes of
this Section 6, the following terms are defined as follows:

 

(i)                                     “Tenant’s
Building Percentage” shall be that percentage set forth in Section 1(g)(i),
which percentage is the fraction (expressed as a percentage) obtained by
dividing the Rentable Area of the Premises by the Rentable Area of the Building,
and which percentage shall be subject to adjustment in the event of reduction
or increase in the Rentable Area within the Premises and/or Building.  “Tenant’s Project Percentage” shall be
that percentage set forth in Section 1(g)(ii), which percentage is
the fraction (expressed as a percentage) obtained by dividing the Rentable Area
of the Premises by the Rentable Area of the Project, and which percentage shall
be subject to adjustment in the event of reduction or increase in the Rentable
Area within the Premises and/or Project.

 

(ii)                                  The parties
acknowledge that the Project may initially or in the future be a multi-building
project and that, in such event, from and after the inclusion of such other
buildings within the Project, Operating Expenses incurred in connection with
the Project shall be shared between the tenants of the Building and the tenants
of the other buildings of the Project. 
Accordingly, “Building Operating Expenses” shall mean those
Operating Expenses attributable solely to the Building, and “Project
Operating Expenses” shall mean those Operating Expenses attributable to the
Project Common Areas or the Project as a whole. 
Further, the parties agree and acknowledge that for purposes of
allocation of Tax Expenses, the Project is comprised of two (2) separate tax
parcels, with each such parcel containing one (1) of the two (2) Project
buildings together with the applicable building’s equitable portion of the
Project Common Areas.  Accordingly, “Building
Tax Expenses” shall mean those Tax Expenses attributable to the tax parcel
containing the Building.  In addition,
the parties hereby acknowledge that certain Operating Expenses relate only to
certain elements of the Project, Building and/or the Common Area serving
certain elements of the Project or Building, and that other Operating Expenses
relate to the entire Project, Building and/or the Common Area serving the
entire Project or Building.  Accordingly,
Landlord shall have the right to establish cost pools for the components of
Operating Expenses relating only to certain elements of the Project, Building
and/or the Common Area serving certain elements of the Project or Building, and
for Operating Expenses relating to the entire Project, Building and/or the
Common Area serving the entire Project or Building, and to reasonably and in
good faith allocate Operating Expenses among such cost pools.

 

(iii)                               “Comparison Year”
shall mean each calendar year during the Term from, including and after the TE
Base Year (as defined in Section 1.1(h)(i) above) or the OE Base
Year (as defined in Section 1.1(h)(ii) above), as applicable.

 

(iv)                              “Operating Expenses”
shall consist of all costs of operation, management, ownership, maintenance and
repair of the Project, as determined by accepted principles of sound accounting
practice, including the following costs by way of illustration, but not
limitation:  electric, water, sewer and
other utility charges; accounting, legal and other consulting fees; the cost
and expense of insurance for which Landlord may be responsible pursuant to this
Lease, or which Landlord reasonably deems appropriate in connection with the
Project; costs of repair of losses or damage not covered by insurance due to
deductible amounts under such insurance policies; the cost of janitorial
services (including, without limitation, required supplies, trash removal and
hauling), security, and labor; utilities surcharges; expenditures required in
order to comply with “Laws” (as defined in Section 7(a)
below); costs incurred in the management of the Project including, without
limitation, supplies, wages and salaries of employees to the extent used in the
management, operation and maintenance of the Project, and payroll taxes and
similar governmental charges with respect thereto, Project management office rental,
and a commercially reasonable management fee; the cost of supplies, materials,
equipment and tools required in the maintenance and repair of the Project; the
cost of repair and maintenance (including, without limitation, costs of rental
of personal property used in maintenance) of the structural portions, vertical
transportation systems, and other mechanical and utility systems of the Project
and other portions of the Project to be maintained and repaired by Landlord
(including, without limitation, the plumbing, heating, ventilating, air
conditioning and electrical systems installed or furnished by Landlord); the
costs and expenses of gardening and landscaping, maintenance of signs (other
than

 

8

 

amounts allocable to maintenance of signs identifying particular
Project occupants) and all other upkeep of the Common Areas; personal property
taxes levied on or attributable to personal property used in connection with
the Project; reasonable audit or verification fees; and costs and expenses of
resurfacing, painting, lighting and similar items.  In the event the Rentable Area of the Project
is less than ninety-five percent (95%) occupied during the OE Base Year or any
Comparison Year during the Term, then in calculating Operating Expenses for
such year, the variable components of Operating Expenses shall be “grossed up”
to reflect such amounts as would have been incurred had the Rentable Area of
the Project been ninety-five percent (95%) occupied during such year.  In addition, if Landlord is not furnishing
any particular work or service (the cost of which, if performed by Landlord,
would be included in Operating Expenses) to a tenant who has undertaken to
perform such work or service in lieu of the performance thereof by the
Landlord, Operating Expenses shall be deemed to be increased by an amount equal
to  the additional Operating Expenses
which would reasonably have been incurred during such period by Landlord if it
had at its own expense furnished such work or service to such tenant.  Accounting methodology for all calculations
of Operating Expenses shall be consistently applied to both the OE Base Year
and each Comparison Year.

 

(v)                                 Notwithstanding
anything to the contrary contained in this Lease, “Operating Expenses”
shall not include any of the following: 
(1) any ground lease rental; (2) capital expenditures to the extent the
same constitute upgrades as opposed to repairs or replacements, unless required
to comply with applicable Laws, provided further that any capital expenditure
which is otherwise includable in Operating Expenses pursuant to this Lease
(including, without limitation, capital expenditures which are permitted to be
included in Operating Expenses pursuant to the foregoing provisions of this clause
(2)) shall not be wholly included in Operating Expenses in the year incurred
and, instead, shall be amortized by Landlord over the reasonably anticipated
useful life of the applicable item (with interest at the Prime Rate), and
annual amortization of such capital expenditure item (calculated in accordance
with the foregoing) shall be included in Operating Expenses during each year of
such useful life; (3) costs incurred for repair of damage to the Building to
the extent reimbursed by insurance proceeds (provided that commercially
reasonable insurance deductibles shall be included in Operating Expenses), and
other costs reimbursed by insurers, warranties, governmental authorities,
utility companies or any other entity (other than cost reimbursements by other
Project occupants as a part of their contribution to Operating Expenses); (4)
costs, including permit, license and inspection costs, incurred with respect to
the installation of tenant improvements to other tenant’s leased premises
within the Project or incurred in renovating or otherwise improving,
decorating, painting or redecorating vacant leasable space within the Project;
(5) depreciation, amortization and interest payments, except on materials,
tools, supplies and vendor-type equipment purchased by Landlord to enable
Landlord to supply services Landlord might otherwise contract for with a third
party where such depreciation, amortization and interest payments would
otherwise have been included in the charge for such third party’s services; (6)
marketing costs, including leasing commissions, attorneys’ fees in connection
with the negotiation and preparation of letters, deal memos, letters of intent,
leases, subleases and/or assignments, space planning costs, and other costs and
expenses incurred in connection with lease, sublease and/or assignment
negotiations and transactions with present or prospective tenants or other
occupants of the Project; (7) expenses in connection with services which are
not available to Tenant; (8) legal fees and related expenses and legal costs
incurred by Landlord (together with any damages awarded against Landlord) due
to the violation by Landlord or any tenant of the terms and conditions of any
lease of space in the Project; (9) overhead and profit paid to Landlord or to
subsidiaries or affiliates of Landlord for goods and/or services in the Project
to the extent the same exceeds the costs of such goods and/or services rendered
by qualified, unaffiliated third parties on a competitive basis; (10) interest,
principal, points and fees on debts or amortization on any mortgage or
mortgages or any other debt instrument encumbering the Project; (11) Landlord’s
general corporate overhead and general and administrative expenses not
specifically incurred in the management, maintenance and operation of the
Project; (12) costs incurred in correcting any non-compliance of the Project
with Laws where such non-compliance was existing as of the delivery of
possession of the Premises to Tenant; (13) Tax Expenses; (14) costs arising
from the presence of any Hazardous Materials upon or beneath the Project; (15)
increased costs of performance arising from the negligence or wilful misconduct
of Landlord or any employee, agent or contractor of Landlord; (16) costs
arising form Landlord’s charitable or political contributions; (17) costs
(other than ordinary maintenance) for sculpture, paintings and other objects of
art; (18) costs of correcting

 

9

 

defects in the design or construction of the Core and Shell Work; (19)
wages and benefits of employees above the level of project manager (the parties
hereby acknowledging that the project engineer is not above the level of the
project manager), provided that if an employee spends a portion of his or her time
on projects other than the Project, then the wages and benefits of such
employee shall be reasonably and equitably prorated; (20) costs associated with
the operation of the business of the partnership or entity which constitutes
Landlord as the same are distinguished from the costs of the operation of the
Project, including partnership accounting and legal matters, costs of defending
any lawsuits with any mortgagee, costs of selling, syndicating, financing,
mortgaging or hypothecating any of Landlord’s interest in the Project, costs of
any disputes between Landlord and its employees, disputes of Landlord with
Project management, or outside fees paid in connection with disputes with other
Project tenants or occupants; and (21) bad debt loss, rent loss or reserves for
bad debts or rent loss; (22) penalties due to failure to make payments when
due; (23) any items expressly excluded from Operating Expenses pursuant to any
other provision of this Lease; (24) Project management office rental to the
extent such rental exceeds the fair market rental for such space or to the
extent the space utilized therefor exceeds the space utilized for management
offices in comparably sized Comparable Buildings; (25) any entertainment,
dining or travel expenses; (26) any flowers, gifts, balloons or other items
provided to any entity; (27) costs of any tenant relations parties, events or
promotions not consented to by an authorized representative of Tenant in
writing (which consent may be granted or withheld in Tenant’s sole and absolute
discretion); (28) any job placement costs or job advertising costs, other than
with respect to a receptionist or secretary in the Project office, once per
year; (29) the cost of any training or incentive programs, other than for
tenant life safety information services; and (30) reserves for future expenses
beyond the current year anticipated to be incurred by Landlord.  In addition, if in any Comparison Year
following the OE Base Year, a new Operating Expense category (such as, by way
of example only and without limitation, earthquake insurance or concierge
services), is included in Operating Expenses which was not included in the
Operating Expenses during the OE Base Year, then the cost of such new item
shall be added to the Operating Expenses for the OE Base Year for purposes of
determining the amounts payable by Tenant under this Section 6 for
such Comparison Year, and during each subsequent Comparison Year, the same
amount shall continue to be included in the computation of Operating Expenses
for the OE Base Year, resulting in Operating Expenses for each such Comparison
Year including (as to such category of Operating Expenses) only the increase in
the cost of such new Operating Expense category over the OE Base Year, as so
adjusted.  However, if in any Comparison
Year thereafter, such new category item is not included in Operating Expenses,
then no such addition shall be made to Operating Expenses for the OE Base
Year.  Conversely, when a category of
Operating Expenses that was originally included in the Operating Expenses
during the OE Base Year is, in any Comparison Year, no longer included in
Operating Expenses, then the cost of such item shall be deleted from the
calculation of Operating Expenses during the OE Base Year for purposes of determining
the amounts payable by Tenant under this Section 6 for such
Comparison Year.  The same amount shall
continue to be deleted from the calculation of Operating Expenses for the OE
Base Year for each Comparison Year thereafter that the Operating Expense category
is so not included.  However, if such
category of Operating Expenses is again included in the Operating Expenses for
any Comparison Year, then the amount of said Operating Expense category
originally included in the Operating Expenses for the OE Base Year shall again
be added back to the Operating Expenses for the OE Base Year.

 

(vi)                              As used herein, the term “Tax
Expenses” shall include any form of assessment, license fee, license tax,
business license fee, transit tax or fee, commercial rental tax, levy, charge,
tax 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, transportation or other improvement or
special assessment district thereof, as against any legal or equitable interest
of Landlord in the Project and the Premises, or any portion thereof, including,
but not limited to, the following:

 

(1)                                  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;

 

(2)                                  any assessment, tax,
fee, levy or charge in substitution, partially or totally, of any assessments,
taxes, fees, levies and charges that may be imposed by governmental agencies
for such services as fire protection, street, sidewalk and road maintenance,
refuse removal and

 

10

 

for other governmental services formerly provided without charge to
property owners or occupants.  It is the
intention of Tenant and Landlord that all such new and increased assessments,
taxes, fees, levies and charges be included within the definition of Tax
Expenses for the purposes of this Lease;

 

(3)                                  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 gross income tax or
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; and

 

(4)                                  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, or
based upon a reassessment of the Project, or any portion thereof, due to a
change in ownership or transfer of all or part of Landlord’s interest in this
Lease, the Project, or any portion thereof (except to the extent specifically
excluded pursuant to clause (A) below).

 

Notwithstanding any provision of this Section 6 expressed
or implied to the contrary, (A) Tax Expenses shall not include (I) Landlord’s
federal or state net income, franchise, inheritance or estate taxes, (II) tax
penalties and interest incurred as a result of Landlord’s gross negligence,
inability or unwillingness to make payments when due (except that interest
charged on Tax Expense items intentionally paid over the maximum lawful period
shall be included within Tax Expenses); (III) special assessments or special
taxes initiated by Landlord as a means of financing improvements to the
Project; or (IV) during the initial ninety-six (96) months of the Term of this
Lease only (and not thereafter or during any Extended Term), the extent of any
increase in Tax Expenses resulting from a reassessment due to a sale of all or
any portion of the Project following the Commencement Date (a “Reassessment”),
and during the ninety-seventh (97) month of the Term through to the expiration
of the Initial Term of this Lease only (and not during any Extended Term),
fifty percent (50%) of the extent of any increase in Tax Expenses resulting
from a Reassessment, and (B) there shall be no duplication of items included in
Tax Expenses and items included in Operating Expenses.  Tenant shall have such rights to reasonably
contest the validity or amount of Tax Expenses as are permitted by applicable
Laws, at Tenant’s sole cost, and Landlord shall reasonably cooperate with
Tenant in connection therewith (at no cost to Landlord), provided that no such
contest shall in any manner limit Tenant’s obligation to pay Tenant’s Tax
Expenses Excess as and when required under this Lease.

 

(b)                                 (i)  For each Comparison Year during the Term
following the expiration of the OE Base Year and/or TE Base Year, as
applicable, Tenant shall pay to Landlord, in the manner set forth in this Section 6(b),
(1) the amount, if any, by which Tenant’s Building Percentage of Building
Operating Expenses for such Comparison Year increase over the Tenant’s Building
Percentage of Building Operating Expenses for the OE Base Year (the amount of
such increase is referred to in this Lease as the “Tenant’s Building
Operating Expense Excess”); plus (2) the amount, if any, by which Tenant’s
Project Percentage of Project Operating Expenses for such Comparison Year
increase over the Tenant’s Project Percentage of Project Operating Expenses for
the OE Base Year (the amount of such increase is referred to in this Lease as
the “Tenant’s Project Operating Expense Excess”); plus (3) the amount,
if any, by which Tenant’s Building Percentage of Building Tax Expenses for such
Comparison Year increase over the Tenant’s Building Percentage of Building Tax
Expenses for the TE Base Year (the amount of such increase is referred to in
this Lease as the “Tenant’s Tax Expenses Excess”).  The sum of Tenant’s Building Operating
Expenses Excess, plus Tenant’s Project Operating Expenses Excess, plus Tenant’s
Tax Expenses Excess is referred to herein as “Tenant’s Expenses Excess”.  If the final Comparison Year includes time
beyond the expiration of the Term or earlier termination of this Lease, the
calculation of Tenant’s Expenses Excess for such Comparison Year shall be
equitably prorated by Landlord.

 

(ii)                                  Before or after the
expiration of the OE Base Year and/or TE Base Year, as applicable, Landlord
shall deliver to Tenant a statement (the “Estimate Statement”) wherein
Landlord shall reasonably and in good faith estimate the Tenant’s Expenses
Excess for the initial Comparison Year (the amount of such estimated Tenant’s
Expenses Excess for any

 

11

 

Comparison Year, as such estimate may be adjusted from time to time as
hereinafter provided, is referred to herein as the “Estimated Excess”).  During each Comparison Year, payments by
Tenant of the Estimated Excess shall be made in equal monthly installments on
the first day of each calendar month during the applicable Comparison Year on
the basis of Landlord’s most recently delivered Estimate Statement.  On or before May 1st of each Comparison Year
during the Term following the initial Comparison Year, Landlord shall endeavor
to deliver to Tenant an Estimate Statement of the Tenant’s Expenses Excess for
the then current Comparison Year.  In
addition to Landlord’s annual delivery of a revised Estimate Statement for a
particular Comparison Year, Landlord shall have the right, not more than once
per year, to deliver a further revised Estimated Statement for a current
Comparison Year, if Landlord reasonably and in good faith determines that there
is a material inaccuracy or omission in the then applicable Estimate Statement
for such Comparison Year.  Following
Landlord’s delivery of such a new Estimate Statement for the current Comparison
Year, Tenant shall pay to Landlord, within thirty (30) days of the delivery of
such Estimate Statement, the difference between the Estimated Excess under such
new Estimate Statement and the Estimated Excess under the prior Estimate
Statement prorated for the then elapsed portion of the then current Comparison
Year, and Tenant shall thereafter (beginning with the first calendar month
following receipt of such new Estimate Statement) make monthly payments with
respect to the Estimated Excess on the basis of such new Estimate Statement
until Tenant’s receipt of a subsequent Estimate Statement.

 

(iii)                               On or before May 1st
following each Comparison year during the Term of this Lease, Landlord shall
endeavor to deliver to Tenant a statement (“Actual Statement”) which
states the actual Tenant’s Building Percentage of Building Operating Expenses,
the actual Tenant’s Project Percentage of Project Operating Expenses, and the
actual Tenant’s Building Percentage of Building Tax Expenses for such preceding
Comparison Year.  If the Actual Statement
reveals that the actual Tenant’s Expenses Excess for such preceding Comparison
Year exceeds the total amount of Tenant’s payments of Estimated Excess for such
preceding Comparison Year, Tenant shall pay Landlord the difference in a lump
sum within thirty (30) days of receipt of the Actual Statement.  If the Actual Statement reveals that the
actual Tenant’s Expenses Excess for such preceding Comparison Year is less than
the total amount of Tenant’s payments of Estimated Excess for such preceding
Comparison Year, Landlord shall credit such overpayment (plus, to the extent
such Actual Statement is delivered more than six (6) months following the expiration
of the Comparison Year in question, interest on the amount of such overpayment
at the Interest Rate from the expiration of such six (6) month period until
crediting of such amount in accordance herewith) toward Tenant’s Rent
obligations next coming due under this Lease, or, at Tenant’s option, pay the
amount of such overpayment (plus such interest charge, if applicable) to Tenant
within thirty (30) days following Tenant’s request therefor (and prior to
credit of such overpayment amount pursuant hereto).

 

(iv)                              Any delay or failure by
Landlord in delivering any Estimate Statement or Actual Statement pursuant to
this Section 6(b) shall not constitute a waiver of its right to
require Tenant’s payment of Tenant’s Expenses Excess nor shall it relieve Tenant
of its obligations pursuant to this Section 6; provided that (1)
Landlord shall deliver the Actual Statement related to Operating Expenses and
Tax Expenses for each Comparison Year within twelve (12) months following the
May 1 first occurring after the expiration of such Comparison Year, except that
if, through no fault of Landlord, Landlord has not received a final conclusive
statement of the amount of one or more particular Operating Expense and/or Tax
Expense item(s) by the expiration of such twelve (12) month period, then the
time for Landlord’s billing of such item(s) shall be extended until twelve (12)
months following Landlord’s receipt of a final conclusive statement of the
amount of the applicable item(s), and (2) Tenant shall not be liable for the
portion of Tenant’s Expenses Excess, if any, related to a particular Comparison
Year which is not billed to Tenant by Landlord within twelve (12) months
following the date when Tenant should have received the Actual Statement for
such Comparison Year, except that if Landlord has not received a final
conclusive statement of the amount of one or more particular Operating Expense
and/or Tax Expense item(s) by the expiration of such twelve (12) month period,
then the time for Landlord’s billing of such item(s) shall be extended until
twelve (12) months following Landlord’s receipt of a final conclusive statement
of the amount of the applicable item(s).

 

(v)                                 In the event the Term
has expired and Tenant has vacated the Premises, at such time as the final determination
has been made regarding Tenant’s Expenses Excess for the Comparison Year in
which this Lease terminated (which determination shall be timely made), Tenant
shall,

 

12

 

within thirty (30) days following receipt of the Actual Statement for
such final Comparison Year, pay any amounts due as a result of the actual
Tenant’s Expenses Excess for such Comparison Year exceeding Estimated Excess
paid with respect thereto and, conversely, any overpayment made in the event
the actual Tenant’s Expenses Excess for such Comparison Year are less than
Estimated Excess paid with respect thereto shall be remitted to Tenant by
Landlord concurrently with Landlord’s delivery of the Actual Statement for such
final Comparison Year.  Nothing contained
in this Section 6 shall in any manner result in a decrease in
Monthly Base Rent.  Further, in the event
that Building Operating Expenses for any Comparison Year are less than Building
Operating Expenses for the OE Base year, Project Operating Expenses for any
Comparison Year are less than Project Operating Expenses for the OE Base Year
and/or Building Tax Expenses for the TE Base Year, Tenant shall not receive a
credit against any Rent payable hereunder.

 

(vi)                              Tenant and its duly authorized
representatives shall have the right to audit and copy the records of Landlord
related Building Operating Expenses, Project Operating Expenses and Building
Tax Expenses with respect to any calendar year within twelve (12) months
following receipt of the applicable Actual Statement for such calendar year,
upon not less then thirty (30) days’ prior written notice to Landlord, during
normal business hours at Landlord’s business offices; provided that (1) Tenant
shall not conduct more than one (1) such audit in any calendar year (unless
discrepancies have been discovered or Tenant in good faith has reason to
believe that discrepancies exist), and (2) Tenant shall exercise good faith
efforts to keep such information in strict confidence (other than disclosures
to Tenant’s employees, agents, contractors and affiliated entities and as may
be reasonably required to enforce the rights and remedies of Tenant under this
Lease) and shall use commercially reasonable efforts to cause any other person
or entity performing such audit or inspection to keep such information in
strict confidence.  In the event Tenant
in good faith disputes the accuracy of any Actual Statement on the basis of any
such audit, such dispute must be alleged in reasonable detail in written notice
to Landlord within one hundred eighty (180) days following the inspection of
Landlord’s records.  If Tenant’s Expenses
Excess are determined to have been overstated or understated by Landlord for
any calendar year, the parties shall within thirty (30) days thereafter make
such adjustment payment or refund as is applicable, and if the sum of actual
Building Operating Expenses, Project Operating Expenses and Building Tax
Expenses are determined to have been overstated by Landlord for any calendar
year by in excess of three percent (3%), then Landlord shall pay the actual and
reasonable cost of Tenant’s audit. 
Tenant shall pay in a timely manner as required by this Lease any
amounts stated as due on the Actual Statement, provided that such payment shall
not waive any right to audit and/or dispute by Tenant as set forth herein.  Landlord shall retain its books and records
relating to each Comparison Year’s Operating Expenses and Tax Expenses for a
period of at lease twelve (12) months following delivery of the applicable
Actual Statement with respect thereto.

 

7.                                      USE.

 

(a)                                  Tenant shall use the
Premises for the use or uses set forth in Section 1(j) above, and
shall not use or permit the Premises to be used for any other purpose
whatsoever.  Tenant shall use and occupy
the Premises in compliance with all applicable federal, state and local laws,
codes, rules, ordinances, statutes and other requirements (collectively, “Laws”)
(which Laws shall include, without limitation, the Americans with Disabilities
Act of 1990, applicable fire-life safety codes of the City of Burbank, and to
the extent disclosed by that certain preliminary title report with respect to
the Site issued by Chicago Title Company dated as of May 1, 2002, Order No.
21049290-X52 (the “Title Report”), a copy of which is attached hereto as
Exhibit G and incorporated herein by this reference, governmental
requirements imposed in connection with the development or occupancy of the
Building (collectively, the “Development Requirements”), including, without
limitation, participation in any transportation management programs and
compliance with any applicable air quality/trip reduction requirements).  Tenant shall, upon written notice from
Landlord, discontinue any use of the Premises which is declared by any
governmental authority having jurisdiction to be a violation of applicable Laws
or which is in violation of any Development Requirements disclosed by the Title
Report.  Landlord shall not hereafter
voluntarily agree to non-mandatory governmental restrictions which would
adversely affect (other than in a de minimis manner) the operation of Tenant’s
business from the Premises unless otherwise approved by Tenant, which approval
may be granted or withheld in Tenant’s sole and absolute discretion.  Tenant shall make any and all alterations or

 

13

 

improvements to the Premises required to comply with applicable Laws;
except that Tenant shall not be required to make structural alterations or
improvements to the Premises required to comply with applicable Laws unless
such compliance is necessitated by Tenant’s particular use of the Premises
(other than mere general offices use) or Alterations to the Premises.  Tenant shall comply with all rules, orders,
regulations and requirements of any insurance authority having jurisdiction
over the Project or any present or future insurer relating to the Premises or
the Project.  Tenant shall promptly, upon
demand, reimburse Landlord for any additional premium charged for any existing
insurance policy or endorsement required by reason of Tenant’s failure to
comply with the provisions of this Section 7 or by reason of Tenant’s
use or occupancy of the Premises.  Tenant
shall not do or permit anything to be done in or about the Premises which will
in any manner unreasonably obstruct or interfere with the rights of other
tenants or occupants of the Project, or injure them, or use or allow the
Premises to be used for any unlawful purpose, nor shall Tenant cause, maintain
or permit any nuisance in, on or about the Premises.  Tenant shall not commit or suffer to be
committed any waste in or upon the Premises and shall keep the Premises in a
state of repair and appearance which is reasonably comparable to the overall
quality of the Project.  Notwithstanding
anything to the contrary contained in this Lease, in no event shall the
Premises be used for any medical or dental office uses.  Tenant shall not place a load upon the
Premises exceeding 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 reasonably prescribe the weight and
positions of all safes, files and heavy equipment which Tenant desires to place
in the Premises so as to distribute properly the weight thereof.

 

(b)                                 (i)  To Landlord’s actual knowledge, as of the
date hereof, no “Hazardous Materials” (as hereinafter defined) are being
used upon or are located or stored at the Project in violation of any
applicable Laws (other than subsurface groundwater contamination generally
existing in the Burbank area).  In the
event that following the delivery of possession of the Premises, it is
determined that any portion of the Project was, as of the delivery of
possession of the Premises, in violation of applicable Laws respecting
Hazardous Materials and the same has or may have a material and adverse affect
upon the operation of Tenant’s business from the Premises, then Landlord shall,
at Landlord’s expense, promptly thereafter cause the remediation of the same so
as to cure such material and adverse affect. 
In addition, Landlord shall indemnify, defend and hold harmless Tenant
from an against any and all claims, judgments, damages, penalties, fines,
costs, liabilities and losses (including, without limitation, sums paid in
settlement of claims and for reasonable attorneys’ fees, consultant fees and
expert fees, but specifically excluding special, indirect or consequential
damages including but not limited to claims for loss of use, anticipated profit
or business opportunity, market-based stigma damages or business interruption,
or mental or emotional distress or fear of injury or disease, except to the
extent awarded to third parties and not Tenant or any of the “Tenant Parties”,
as hereinafter defined), to the extent arising (1) as a result of any Hazardous
Materials now or hereafter located in, on, under or about the Building and/or
Project unless caused to be so located in, on, under or about the Building
and/or Project by Tenant, any subtenant of Tenant and/or any of their
respective employees, agents, representatives, contractors, licensees or
invitees; or (2) as a result of the breach by Landlord of any representation,
warranty or covenant of Landlord set forth in this Section 7(b)(i).  This indemnification of Tenant by Landlord
includes, without limitation, costs incurred in connection with any
investigation of site conditions after a breach by Landlord or any clean-up,
remedial, removal or restoration work. 
The covenants of Landlord under this Section 7(b)(i) shall
survive the expiration of the Term or earlier termination of this Lease.

 

(ii)                                  Except general office
supplies typically used in an office area in the ordinary course of business,
such as copier toner, liquid paper, glue, ink, and cleaning solvents, for use
in the manner for which they were designed, in such amounts as may be normal
for the office business operations conducted by Tenant in the Premises, neither
Tenant nor any subtenant nor any of their respective employees, agents,
representatives, contractors, licensees or invitees, shall use, handle, store
or dispose of any Hazardous Materials in, on, under or about the Premises, the
Building or the Project.  In the event of
a breach of the covenant contained in the immediately preceding sentence, or in
the event Hazardous Materials are otherwise caused to be located in, on, under
or about the Premises, Building or Project by Tenant, any of its subtenants, or
any of their respective employees, agents, representatives, contractors,
licensees or invitees

 

14

 

(collectively, any “Tenant Hazardous Materials”), Tenant shall
be solely responsible for and shall indemnify, defend and hold Landlord
harmless from and against any and all claims, judgments, damages, penalties,
fines, costs, liabilities and losses (including, without limitation, diminution
in valuation of the Premises, Building or Project, and sums paid in settlement
of claims and for reasonable attorneys’ fees, consultant fees and expert fees)
which arise during or after the Term as a result of any contamination directly
or indirectly arising from the activities which are the basis for such
breach.  This indemnification of Landlord
by Tenant includes, without limitation, costs incurred in connection with any
investigation of site conditions resulting from discovery of any Tenant
Hazardous Materials or any clean-up remedial, removal or restoration work.  Tenant shall promptly take all actions, at
its sole cost and expense, as are necessary to return the Premises, Building
and/or Project to the condition existing prior to the introduction of any such
Tenant Hazardous Materials, provided Landlord’s approval of such actions shall
first be obtained (which approval shall not be unreasonably withheld,
conditioned or delayed) and Tenant shall fully cooperate in connection with any
such clean-up, restoration or other work, at Tenant’s sole cost and
expense.  Furthermore, Tenant shall
(immediately notify Landlord of any injury, test, investigation or enforcement
proceeding by or against Tenant or the Premises concerning the presence of any
Tenant Hazardous Materials, and Landlord shall immediately notify Tenant of any
inquiry, test, investigation or enforcement proceeding by or against Landlord
or the Building concerning the presence of any Hazardous Materials which are
not Tenant Hazardous Materials and which may result in a material adverse
affect upon use or operation of business from the Premises.  Tenant acknowledges that Landlord, at
Landlord’s election upon reasonable prior written notice to Tenant, shall have
the sole right, at Tenant’s reasonable expense, to negotiate, defend, approve
and appeal any action taken or order issued by any governmental authority with
regard to any Hazardous Materials contamination which Tenant is obligated
hereunder to remediate in the event Landlord reasonably believes that Tenant
will not itself promptly undertake the actions required under this Lease with respect
thereto.  The covenants of Tenant under
this Section 7(b) (ii) shall survive the expiration of the Term or
earlier termination of this Lease.

 

(iii)                               As used in this Lease, “Hazardous
Materials” shall mean asbestos, petroleum fuel, natural gas or any fraction
thereof, and any hazardous or toxic substance, material or waste which is or
become regulated by any local governmental authority, the State of California
or the United States Government, including, but not limited to, any material or
substance defined as a “hazardous waste,” “extremely hazardous waste,” “restricted
hazardous waste,” “hazardous substance,” “hazardous material,” or “toxic
pollutant” under state or federal laws, statutes or regulations, including,
without limitation, the California Health and Safety Code and/or under the
Comprehensive Environmental Response, Compensation and Liability Act, 42.  U.S.C. § 9601, et  seq.

 

8.                                      TAXES ON TENANT’S PROPERTY.  Tenant shall be liable and shall pay, before
delinquency, all taxes levied against any personal property and/or trade
fixtures placed by Tenant in or about the Premises, and all real property taxes
on the value of any Tenant Improvements and Alterations in the Premises in
excess of Forty-Five Dollars ($45.00) per square foot of Rentable Area in the
Premises.  If any such taxes on Tenant’s
personal property, trade fixtures, Alterations and/or Tenant Improvements are
levied against Landlord or Landlord’s property or if the assessed value of the
Premises or the Project is increased by the inclusion therein of a value placed
upon such personal property, trade fixtures, Alterations and/or Tenant
Improvements, Tenant shall pay the amount thereof as invoiced to Tenant by
Landlord within thirty (30) days following receipt of such invoice together with
reasonable evidence of such allocation. 
If any such taxes are assessed against Landlord or Landlord’s property,
(a) Landlord shall give prompt notice of such assessment to Tenant, (b)
Landlord shall cooperate with Tenant (at no cost, expense or liability to
Landlord), to petition the appropriate tax authorities for the issuance of a
separate statement or tax bill for such portion of the taxes as are applicable
to Tenant’s property, (c) Landlord shall allow Tenant, at Tenant’s cost, to
contest the amount of the taxes assessed with respect to Tenant’s property to
the extent permitted by applicable Laws, and (d) if Landlord obtains a refund
or credit of any such taxes, Landlord promptly shall repay Tenant the portion
of such refund allocable to the taxes paid by Tenant.

 

9.                                      CONDITIONS OF PREMISES.

 

(a)  If
it is determined within thirty (30) days of Tenant’s commencement of occupancy
of the Premises (other than for purposes of

 

15

 

construction of the Tenant Improvements upon the Premises) that work
was required as of the completion of the Core and Shell Work to cause the Core
and Shell Work mechanical or utility systems serving the Premises to then be in
good working order without regard to the particular improvements (including,
without limitation, Tenant Improvements) or Alterations thereafter to be made
to the Premises for the benefit of Tenant (including, without limitation,
distribution systems to be included as a part of such Tenant Improvements) or
Tenant’s particular use of the Premises (other than mere general office use),
then Landlord shall cause the performance of such work at Landlord’s sole cost
and without inclusion of such cost in Operating Expenses.

 

(b)                                 If it is determined at
any time following the execution of this Lease that work was required as of the
completion of the Core and Shell Work to correct any non-compliance of the Core
and Shell Work with applicable Laws (including, without limitation, the
Americans with Disabilities Act of 1990 and other applicable Laws respecting
accessibility and use by disabled persons), as then enforced by applicable
governmental authorities and without regard to the particular improvements
(including, without limitation, Tenant Improvements) or Alterations thereafter
to be made to the Premises for the benefit of Tenant or Tenant’s particular use
of the Premises (other than mere general office use), then Landlord shall cause
the performance of such work at Landlord’s sole cost and without inclusion of
such cost in Operating Expenses.

 

(c)                                  Tenant acknowledges
that except as specifically otherwise provided in this Lease and subject to
express Landlord’s representations, warranties and covenants set forth in this
Lease (including, without limitation, as provided in Sections 9(a) and 9(b)
above), (i) the lease of the Premises by Tenant pursuant hereto shall be on an “as
is” basis, (ii) neither Landlord nor any employee, representative or agent of
Landlord has made any representation or warranty with respect to the Premises
or any other portion of the Project, and (iii) Landlord shall have no
obligation to improve or alter the Premises or Project for the benefit of
Tenant.

 

10.                               ALTERATIONS.

 

(a)                                  Tenant shall not make
or allow to be made any alterations, additions or improvements (collectively,
any “Alterations”) in or to the Premises during the Term without
obtaining Landlord’s prior written consent (which consent shall not be
unreasonably withheld, conditioned or delayed and shall be granted or withheld
within ten (10) days following Tenant’s request for consent accompanied by the
information required under this Section 10); except, however, that
Tenant may make interior, non-structural Alterations to the Premises costing
less than One Hundred Thousand Dollars ($100,000.00) per work of Alterations
and not (i) requiring the demolition of any existing improvements or (ii)
affecting the roof, base Building mechanical or base Building utility systems
serving the Premises or the exterior appearance of the Building, without Landlord’s
prior consent but upon at least ten (10) days prior written notice to Landlord.
Any request for consent to Alterations requiring consent shall be accompanied
by two (2) complete sets of plans and specifications for the proposed
Alterations suitable for submission to Landlord’s architect for evaluation and
a statement of the identity of the contractor who will perform such
Alterations. However, mere placement of Tenant’s freestanding personal property
or furniture items in the Premises shall not be deemed to constitute
Alterations for purposes of this Section. If Landlord’s consent is required for
any Alterations, Tenant shall pay all reasonable out-of-pocket costs incurred
by Landlord in the evaluation of the plans and specifications, including, but not
limited to, Landlord’s general contractor’s, architects’ and engineers’ fees.
In addition, as a condition to Landlord’s granting of its consent to any
Alterations, Landlord shall have the right to approve the contractor and
subcontractors performing such Alterations, such approval not to be
unreasonably withheld, conditioned or delayed (provided that in any event
Building standard subcontractors shall be used for work on Building roof and
Building mechanical systems to the extent such work could result in an adverse
affect on other Building occupants), and Landlord shall have the right to
require that Tenant furnish assurances reasonably satisfactory to Landlord that
all contractors and subcontractors who will perform such work have in force
workers’ compensation and such other employee and comprehensive general
liability insurance in accordance with the standards set forth in Section 17(a)
(but with a liability limit of not less than One Million Dollars
($1,000,000.00)), and such other insurance as Landlord reasonably deems
necessary to supplement the insurance coverage provided for in Section 17(a).
All Alterations work to be performed by Tenant in the Premises requiring the
consent of Landlord pursuant hereto, including the delivery, storage and
removal of materials, shall be scheduled through and be subject

 

16

 

to the reasonable supervision of Landlord, and shall be performed in
accordance with any reasonable conditions or regulations imposed by Landlord.
All Alterations work (whether or not Landlord’s consent is required therefor)
shall be completed in a good and workmanlike manner and in accordance with all
applicable Laws. All Alterations requiring Landlord’s consent shall be
completed substantially in accordance with the approved plans and
specifications therefor. Promptly following the completion of any Alterations
where the preparation of “as-built” plans would be customary for the particular
Alterations work performed, Tenant shall deliver to Landlord both a “hard” copy
and a copy on CAD diskette of the “as-built” plans (including all working
drawings) together with specifications for such Alterations. Promptly following
the completion of any Alterations for which any governmental permit, approval
or sign-off is required under applicable Laws, Tenant shall deliver to Landlord
a copy of signed-off permits, inspection cards or other documentation, if any
is available given the nature of the Alterations work performed, evidencing
governmental approval of completion of the work. Promptly following the
completion of any Alterations requiring Landlord’s consent, Tenant shall cause
to be recorded in the Office of the County Recorder of Los Angeles County a
Notice of Completion in accordance with Section 3093 of the California
Civil Code or any successor statute with respect to the work, and deliver a
copy thereof to Landlord. Any supervision by Landlord of such Alterations shall
in no event constitute Landlord’s approval of the work so performed, nor shall
Landlord be responsible for or have any liability with respect to such
supervision or work. Copies of required building permits or authorizations
shall be obtained by Tenant at its expense and Tenant shall furnish copies of
same to Landlord. The construction of the Tenant Improvements shall be governed
by Exhibit C to this Lease and the Tenant Improvements shall not be
deemed to constitute Alterations for purposes of this Lease.

 

(b)                                 Any mechanic’s liens
filed against the Premises or against the Building or the Project for work
claimed to have been done for, or materials claimed to have been furnished to,
Tenant will be discharged by Tenant, by bond or otherwise, within thirty (30)
days after the filing thereof, at Tenant’s sole cost and expense. All
Alterations upon the Premises shall, unless Landlord elects otherwise by
written notice to Tenant at the time of Tenant’s installation of such
Alterations, become the property of Landlord upon the expiration of the Term or
earlier termination of this Lease, and shall remain upon and be surrendered
with the Premises, as part thereof, at the expiration of the Term or earlier
termination of this Lease. If Landlord requires Tenant to remove any
Alterations, Tenant, at its sole cost and expense, agrees to remove the identified
Alterations on or before the expiration of the Term or earlier termination of
this Lease and repair any damage to the Premises caused by such removal (or, at
Landlord’s option, Tenant agrees to pay to Landlord Landlord’s reasonable
estimate of the costs of such removal and repair prior to such expiration or
termination).

 

(c)                                  The initial Tenant
Improvements made pursuant to this Lease (including, without limitation, any
stairwells in the Premises) shall be the sole property of Landlord and shall
not be removed by Tenant from the Premises. Notwithstanding the foregoing, all
articles of personal property and all business and trade fixtures (which are
susceptible of removal without material damage to the Premises and which are
not permanently affixed to the Premises), machinery, equipment, furniture and
removable partitions owned by Tenant or installed by Tenant at its expense in
the Premises shall be and remain the sole property of Tenant and may be removed
by Tenant at any time during the Term of this Lease and shall be removed by
Tenant prior to the expiration of the Term or earlier termination of this
Lease, provided that Tenant shall at its sole expense repair any damage caused
by such removal. In addition, notwithstanding anything to the contrary contained
in this Lease, Tenant shall retain the right to all protected marks of Tenant
or Tenant’s affiliated entities and Tenant, at Tenant’s cost, shall remove all
personal property items bearing such marks prior to the expiration of the Term
or earlier termination of this Lease and repair any damage resulting from such
removal. If Tenant shall fail to remove all of its property from the Premises
upon the expiration of the Term or earlier termination of this Lease for any
cause whatsoever, Landlord may, at its option, either (i) treat such property
as being conveyed to Landlord in which case the same shall automatically and
without further action be deemed to be the sole property of Landlord, or (ii)
remove the same in any manner that Landlord shall choose, and store or dispose
of said property without liability to Tenant for loss thereof, and Tenant
agrees to pay to Landlord upon demand any and all reasonable expenses incurred
in such removal, including court costs, reasonable attorneys’ fees and storage
charges on such property for any length of time that the same shall be in
Landlord’s possession, provided that Landlord agrees that any personal property
items not so removed by Tenant and

 

17

 

bearing the protected marks of Tenant or any of Tenant’s affiliates
shall be treated by Landlord in accordance with the provisions of the foregoing
clause (ii) and not the foregoing clause (i). In the alternative, Landlord may,
at its option, sell said property, or any of the same, in such manner as
Landlord determines to be appropriate in Landlord’s reasonable business
judgment, for such prices as Landlord may obtain and apply the proceeds of such
sale to any amounts due under this Lease from Tenant to Landlord and to the expense
incident to the removal and sale of such property. Tenant waives the benefit of
any statutory provisions governing the treatment by a landlord of a tenant’s
personal property left in leased premises following the expiration of the
lease, in the event Tenant fails to remove all of its property from the
Premises upon the expiration of the Term or earlier termination of this Lease,
the parties hereby agreeing that the provisions of this Lease constitute the
express agreement of the parties with respect thereto and are intended to
govern such situation.

 

11.                               REPAIRS.

 

(a)                                  From and after
delivery of possession of the Premises to Tenant, Tenant shall keep, maintain
and preserve the Premises in a first class condition and repair, and shall, as
and when needed, at Tenant’s sole cost and expense, make all repairs to the
Premises and every part thereof (other than elements of the Premises to be
maintained and repaired by Landlord pursuant to this Lease) and all personal
property, trade fixtures and equipment within the Premises. Subject to the
provisions of Section 10(c) above, upon the expiration of the Term
or sooner termination of this Lease, Tenant shall surrender the Premises to
Landlord in the same condition as when received, as improved by the Tenant
Improvements, excepting permitted Alterations which Tenant is not required to
remove pursuant to Section 10(b) above, reasonable wear and tear,
casualty damage governed by Section 18 below, and damage which
Landlord is obligated to repair under this Lease.

 

(b)                                 Landlord shall keep,
maintain and preserve in first-class condition and repair, the roof, structure
and foundation, integrated Building utility and mechanical systems, parking
facilities and other Common Areas and common systems of the Project, the costs
of which shall be included in Operating Expenses (except as otherwise provided
in this Lease); provided, however, that to the extent such maintenance and/or
repair work is (i) attributable to items installed in Tenant’s Premises which
are above standard interior improvements (such as, for example, custom
lighting, special HVAC and/or electrical panels or systems, kitchen or restroom
facilities and appliances constructed or installed within Tenant’s Premises),
(ii) attributable to the installation, as a part of the Tenant Improvements,
Tenant’s Alterations or Tenant’s trade fixtures, of items which are less than
first-class in quality, workmanship or manner of installation, and/or (iii)
subject to Section 17(d) below, necessitated by the negligence or
wilful misconduct of Tenant or any of the “Tenant Parties” (as
hereinafter defined), then Tenant shall pay to Landlord the reasonable cost of
such maintenance and/or 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 more than thirty (30) days (or such shorter period as may be
reasonably appropriate under the circumstances) after written notice of the
need for such repairs or maintenance is given to Landlord by Tenant. Subject to
the provisions of Section 14(d), 18 and 19 below,
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 Project or
the Premises or in or to fixtures, appurtenances and equipment therein. Tenant
waives the right to make repairs at Landlord’s expense under any law, statute
or ordinance now or hereafter in effect (including, without limitation,
Sections 1941 and 1942 of the California Civil Code).

 

12.                               LIENS.   Tenant shall not permit any mechanics’, materialmen’s
or other liens to be filed against the Project nor against Tenant’s leasehold
interest in the Premises on account of any work performed by or on behalf of
Tenant or its employees, agents, invitees or contractors. 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. If any such
liens are filed and are not discharged by Tenant (by bonding or otherwise)
within thirty (30) days following receipt of written notice thereof from
Landlord), Landlord may, without waiving its rights and remedies based on such
breach by 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 liens. Tenant shall
pay to Landlord at once, as Additional Rent, upon notice by Landlord, any sums
paid by Landlord to remove such liens.

 

18

 

13.                               ENTRY
BY LANDLORD.   Landlord
and its employees, agents, representatives, consultants and/or contractors
shall have the right from time to time upon reasonable prior notice to Tenant
and with no more than reasonable frequency (which, notwithstanding anything to
the contrary contained in this Lease respecting the manner of delivery of
notices, may be oral or written notice), except that no such prior notice shall
be required in the event of an emergency or for scheduled provision of services
to the Premises, to enter the Premises to inspect the same, to supply any
service to be provided by Landlord to Tenant hereunder, to show the Premises to
prospective purchasers, encumbrancers or tenants, to post notices of
non-responsibility, to alter, improve or repair the Premises or, to the extent
reasonably necessary under the circumstances, any other portion of the
Building, all without being deemed guilty of any eviction of Tenant and without
abatement of Rent (subject to the provisions of Section 14(d)
below), and may, in order to carry out such purposes, erect scaffolding and
other necessary structures where required by the character of the work to be
performed. Except in the event of an emergency, Tenant shall have the right to
accompany Landlord during any such entry. Landlord shall use reasonable efforts
to minimize any interference with the operation of Tenant’s business from the
Premises resulting from any such entry (except in the event of an emergency
Landlord shall use reasonable efforts to minimize any interference with the operation
of Tenant’s business from the Premises resulting from any such entry only to
the extent reasonably practicable under the circumstances). Subject to the
provisions of Section 14(d) below and Landlord’s compliance with
this Section 13, 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 in, upon and
about the Premises or the Project. Landlord shall at all times have and retain
a key with which to unlock all doors to and in the Premises. In the event of an
emergency, Landlord shall have the right to use any and all means which
Landlord reasonably may deem proper to open said doors in order to obtain entry
to the Premises. Any entry to the Premises obtained by Landlord by any of said
means shall not be construed or deemed to be a forcible or unlawful entry into
the Premises, or an eviction of Tenant from the Premises or any portion
thereof. 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 by Landlord.

 

14.                               UTILITIES
AND SERVICES.

 

(a)                                  (i)                                     Tenant shall be
permitted access to the Premises and parking facilities serving the Premises
during the Term on a twenty-four (24) hours per day, seven (7) days per week
basis.

 

(ii)                                  The Premises shall be
furnished heating, ventilation and air conditioning (“HVAC”), at
comfortable temperatures consistent with the operation of Comparable Buildings
during the hours of 8:00 a.m. to 6:00 p.m. Monday through Friday, and (if
requested by Tenant by Tenant’s use of the automated, telephone-activated
system to be included as a part of such HVAC system) 9:00 a.m. to 1:00 p.m. on
Saturday, excluding Holidays (such hours are collectively referred to herein as
“Building Hours”). As used herein, “Holidays” shall mean New Year’s
Day, Washington’s Birthday (observed), Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas and any other national or state holiday
customarily recognized by operators of Comparable Buildings. If requested by
Tenant by Tenant’s use of the automated, telephone-activated system to be
included as a part of such HVAC system, HVAC service shall be provided to all
or certain of the HVAC zones within the Premises (as requested pursuant hereto)
other than during Building Hours (for a minimum period of two (2) consecutive
hours at a time except that such minimum period shall be one (1) hour at a time
if immediately following Building Hours when HVAC service is provided),
provided that Tenant shall pay to Landlord for each such hour of HVAC service
during non-Building Hours, the then prevailing charge by Landlord for such service
(which charge is currently $60.00 per hour per zone). Amounts payable by Tenant
hereunder shall be paid as additional rent within thirty (30) days following
tenant’s receipt of Landlord’s billing therefor. Tenant agrees to reasonably
cooperate with Landlord, and to abide by all reasonable regulations and
requirements which Landlord may prescribe for the proper function and
protection of the Building HVAC system. Tenant agrees not to connect any
apparatus, device, conduit or pipe to the Building chilled and hot water air
conditioning supply lines without the prior written consent of Landlord (which
consent shall not be unreasonably withheld, conditioned or delayed). Tenant
further agrees that, unless otherwise approved by Landlord in advance in
writing (which approval shall not be unreasonably withheld, conditioned or
delayed), neither Tenant nor its servants, employees, agents,

 

19

 

visitors, licensees or contractors shall at any time enter mechanical
installations or facilities of the Building or Project or unreasonably tamper
with, touch or otherwise affect said installations or facilities. The
reasonable cost of maintenance and service calls to adjust and regulate the
HVAC system shall be charged to Tenant if the need for maintenance work results
from either Tenant’s unreasonably tampering with room thermostats, defects in
the HVAC system as installed by Tenant, or Tenant’s failure to comply with its
obligations under this Section 14, or Tenant’s heat or cold
generation in excess of that which is customary for general office use.

 

(iii)                               The Premises shall be
furnished electric power of five (5) watts connected load per square foot of
Rentable Area for all electrical power (exclusive of Building standard lighting).
Any additional electrical power which Landlord is able to make available to the
Premises at Tenant’s request shall be subject to Tenant’s reimbursement of
Landlord’s reasonable costs (including, without limitation, reasonable
administrative and overhead costs) of providing such additional electrical
power (including, without limitation, if applicable, costs of installing
facilities sufficient to provide such additional electrical power), which
amount shall be paid to Landlord as additional rent within thirty (30) days
following Tenant’s receipt of Landlord’s billing therefor. Tenant agrees not to
connect any apparatus or device with wires, conduits or pipes, or other means
by which such services are supplied, for the purpose of using amounts of such services
in excess of the capacity within the Premises without the written consent of
Landlord, which consent shall not be unreasonably withheld, conditioned or
delayed. Notwithstanding anything to the contrary contained in this Lease, in
the event Tenant operates from the Premises during times other than Building
Hours and/or operates equipment requiring electrical usage in excess of that
which is customary for the operation of standard general office use equipment,
at Landlord’s option, reasonable costs allocable to such non-Building Hours
electrical use and/or excess electrical use (as equitably determined by
Landlord) shall be reimbursed by Tenant to Landlord, as additional rent, on a
monthly or other periodic basis as reasonably determined by Landlord, within
thirty (30) days following Landlord’s submission to Tenant of an invoice
therefor.

 

(iv)                              The Premises shall be
provided with water for drinking fountain, HVAC and, if applicable, restroom
and/or kitchen uses.

 

(v)                                 Landlord shall cause
janitor service to be provided to the Premises after or before Building
business hours on a five (5) days per week basis, excluding Holidays, in
accordance with the specifications set forth on Exhibit I attached
hereto and incorporated herein by this reference. Tenant shall pay to Landlord,
as additional rent within thirty (30) days following receipt of invoice
therefor from Landlord, the cost of (1) any extra janitorial service required
due to the nature of Tenant’s improvements, Alterations, fixtures and/or
personal property being other than that which is customary for general office
use, and/or (2) the removal of any of Tenant’s refuse and rubbish to the extent
that the same exceeds the refuse and rubbish usually attendant upon the use of
the Premises for general office use.

 

(vi)                              Landlord shall provide
certain Project security services, in accordance with the specifications set
forth on Exhibit J attached hereto and incorporated herein by this
reference. Tenant, at its own cost may provide any additional security services
required for Tenant’s Premises.

 

(vii)                           Landlord shall allow Tenant
to utilize up to 400 KVA of the capacity of the existing emergency back-up
generator serving the Building, provided (1) that Landlord shall have the right
to reasonably approve the manner of Tenant’s hook-up to such emergency back-up
generator, which hook-up shall be at Tenant’s sole cost, and (2) that Tenant
shall reimburse Landlord for the reasonable costs of Tenant’s use of such
generator, within thirty (30) days following Tenant’s receipt of billing
therefor from Landlord accompanied by reasonable supporting documentation;
provided further, however, that the parties shall reasonably cooperate
following Tenant’s commencement of occupancy of the Premises and determination
of Tenant’s actual required usage of such emergency back-up generator so as to
reduce the amount of capacity which is dedicated for Tenant’s use to such
required amount if such required amount is less than 400 KVA.

 

(viii)                        Landlord shall allow Tenant to
utilize the existing four inch (4”) conduit and up to fifty percent (50%) of a
second (2nd) existing four inch (4”) conduit, both as currently located in the

 

20

 

southeast corner of the Parking Structure, as the point of entry for
telecom and fiber use serving the Premises, provided that Landlord shall have
the right to reasonably approve the manner of Tenant’s connection to such
conduit, which connection shall be at Tenant’s sole cost.

 

(b)                                 In the event that
Tenant desires any other service in amounts exceeding the services described
herein as reasonably determined by Landlord, Tenant shall pay Landlord the
reasonable and actual out of pocket costs of providing such additional
services, plus a reasonable administrative fee, as Additional Rent.

 

(c)                                  Except as provided in
Section 14(d) below, Landlord’s failure to furnish any of such
utilities and services, whether caused by accident, breakage or repairs,
strikes, lockouts or other labor disturbances or labor disputes of any such
character, governmental regulation, moratorium or other governmental action,
inability despite the exercise of reasonable diligence to obtain such utilities
or services or otherwise shall not result in any liability to Landlord nor
shall Tenant be entitled to any abatement or reduction of Rent, nor shall
Landlord be deemed to have evicted Tenant, nor shall Tenant be relieved from
the performance of any covenant, obligation or agreement in this Lease because
of any such failure. In the event of any stoppage or interruption of services
or utilities, Landlord shall use reasonable diligence to attempt to resume such
services or utilities.

 

(d)                                 Notwithstanding
anything to the contrary contained in this Lease, during the Term of the Lease,
if Tenant is actually prevented from using all or other than a de minimis
portion of the Premises as a result of (i) an interruption in essential utility
services to the Premises, or (ii) Landlord’s actions in entering upon the
Premises (other than in exercising any remedy or curing any Tenant failure to
perform in accordance with this Lease), or (iii) inability to access the
Premises due to the occurrence of a Force Majeure Event, and which prevention
from use is not cured by Landlord within three (3) consecutive days following
Landlord’s receipt of written notice thereof from Tenant stating Tenant’s
intent to receive an abatement (the number of days until cure of such
prevention from use following Landlord’s receipt of such notice from Tenant are
referred to herein as “Prevention Days”) or if Tenant incurs more than
an aggregate of ten (10) Prevention Days in any period of twelve (12)
consecutive months during the Term, then Monthly Base Rate and Tenant’s
obligation for payment of Tenant’s Expenses Excess shall thereafter be equitably
abated based upon the portion of the Premises which Tenant is so prevented from
using and Tenant’s obligation for payment of parking fees shall also be abated
based upon the reduction in use of parking attributable to such prevention from
use of all or a portion of the Premises, until and to the extent that Tenant is
no longer so prevented from using such portion of the Premises as a result of
the applicable item described in clause (i), (ii) or (iii) above.
Notwithstanding the foregoing, the provisions of Section 18 below
and not the provisions of this subsection (d) shall govern in the event of
casualty damage to the Premises or Project and the provisions of Section 19
below and not the provisions of this subsection (d) shall govern in the
event of condemnation of all or a part of the Premises or Project.

 

15.                               INDEMNIFICATION.

 

(a)                                  Tenant shall be
liable for, and agrees, to the maximum extent permissible under applicable
Laws, to promptly indemnify, defend and hold harmless Landlord, its affiliated entities
and their respective members, partners, officers, directors, employees, agents,
successors and assigns (collectively, the “Landlord Indemnified Parties”),
from and against, any and all claims, damages, judgments, suits, causes of
action, losses, liabilities, penalties, fines, expenses and costs, including,
without limitation, reasonable attorneys’ fees and expenses (collectively, “Indemnified
Claims”), to the extent arising or resulting from (i) any negligence or
wilful misconduct of Tenant, its subtenants and/or assignees and their
respective agents, employees, representatives, licensees, contractors and/or
invitees (collectively, the “Tenant Parties”); and/or (ii) the use of
the Premises and Common Areas or conduct of Tenant’s business by Tenant or any
Tenant Parties, or any other activity, work or thing done, permitted or
suffered by Tenant or any Tenant Parties, in or about the Premises, or done or
permitted by Tenant or any Tenant Parties in or about the Building or elsewhere
within the Project. In case any action or proceeding is brought against
Landlord or any Landlord Indemnified Parties by reason of any such Indemnified
Claims, Tenant, upon notice from Landlord, agrees to promptly defend the same
at Tenant’s sole cost and expense by counsel approved in writing by Landlord,
which approval shall not be unreasonably withheld, conditioned or delayed.

 

21

 

Notwithstanding anything to the contrary contained in the foregoing
provisions of this Section 15(a), (1) Tenant shall not be required
to indemnify, defend and/or hold harmless Landlord for matters to the extent
the same (x) arise out of the negligence or wilful misconduct of Landlord or
Landlord’s employees, agents or contractors and (y) are not covered by the
insurance maintained by Tenant (or would not have been so covered had Tenant
maintained the insurance required to be maintained by Tenant under this Lease),
and (2) in no event shall Tenant be liable under this Section 15(a)
for special, indirect or consequential damages including, but not limited to,
claims for loss of use, anticipated profit or business opportunity,
market-based stigma damages or business interruption, or mental or emotional
distress or fear of injury or disease except to the extent awarded to third
parties and not Landlord or any of Landlord’s employees, agents or contractors.

 

(b)                                 Landlord shall
indemnify, defend and hold harmless Tenant, its affiliated entities and their
respective members, partners, officers, directors, employees, agents,
successors and assigns (collectively, the “Tenant Indemnified Parties”),
from and against, any and all claims, damages, judgments, suits, causes of
action, losses, liabilities, penalties, fines, expenses and costs, including,
without limitation, reasonable attorneys’ fees and expenses (collectively, “Indemnified
Claims”), to the extent (i) arising from occurrences in the Common Areas
not resulting from the negligence or wilful misconduct of Tenant or any of the
Tenant Parties, and/or (ii) arising out of the negligence or wilful misconduct
of Landlord or Landlord’s employees, agents or contractors. Notwithstanding
anything to the contrary contained in the foregoing provisions of this Section 15(b),
(1) Landlord shall not be required to indemnify, defend and/or hold harmless
Tenant for matters to the extent the same (x) arise out of the negligence or
wilful misconduct of Tenant or the Tenant Parties, and (y) are not covered by
the insurance maintained by Landlord (or would not have been so covered had
Landlord maintained the insurance required to be maintained by Landlord under
this Lease), (2) and in no event shall Landlord be liable hereunder for
special, indirect or consequential damages including, but not limited to,
claims for loss of use, anticipated profit or business opportunity,
market-based stigma damages or business interruption, or mental or emotional
distress or fear of injury or disease except to the extent awarded to third
parties and not Tenant or any of the Tenant Parties. In case any action or
proceeding is brought against Tenant or any Tenant Indemnified Parties by
reason of any such Indemnified Claims, Landlord, upon notice from Tenant,
agrees to promptly defend the same at Landlord’s sole cost and expense by
counsel approved in writing by Tenant, which approval shall not be unreasonably
withheld, conditioned or delayed.

 

(c)                                  The obligations of
the parties pursuant to this Section 15 shall be subject to the
provisions of Section 17(d) below. Further, the provisions of this Section 15
shall survive the expiration of the Term or sooner termination of this Lease.

 

16.                               DAMAGE
TO TENANT’S PROPERTY AND WAIVER.   Notwithstanding
anything contained in this Lease to the contrary, subject to the provisions of Section 14(d),
Landlord or its agents and employees shall not be liable for (a) loss or damage
to any property by theft or otherwise, or (b) any injury or damage to person or
property resulting from fire, explosion, falling plaster, steam, gas,
electricity, water or rain which may leak from any part of the Building or from
pipes, appliances or plumbing work therein or from the roof, street,
sub-surface or from any other place or resulting from dampness or any other
cause whatsoever, except to the extent (i) resulting from the negligence or
wilful misconduct of Landlord or its contractors, agents, servants or employees
or breach of this Lease by Landlord and (ii) not covered by the insurance
maintained by Tenant (or which would not have been so covered if Tenant had
maintained the insurance required to be maintained by Tenant pursuant to this
Lease). Landlord or its agents shall not be liable for interference with light
or other similar intangible property interests. Tenant shall give prompt notice
to Landlord in case of fire or accidents in the Premises or the Building, and
of defects discovered by Tenant therein or in the fixtures or equipment located
therein.

 

17.                               INSURANCE.

 

(a)                                  Tenant shall, during
the Term hereof, at its sole cost and expense, keep in full force and effect
the following insurance:

 

(i)                                     All Risk insurance
(including a vandalism and malicious mischief endorsement and sprinkler leakage
coverage) upon all of

 

22

 

Tenant’s personal property, trade fixtures, furniture and equipment in
the Premises, in an amount not less than one hundred percent (100%) of the full
replacement cost thereof, subject to commercially reasonable deductible
amounts.

 

(ii)                                  Commercial general
liability insurance coverage, including personal injury, bodily injury, broad
form property damage, automobile, Premises operations hazard, contractual
liability (covering the indemnity contained in Section 15), and
products and completed operations liability, with a combined single limit of
not less than Three Million Dollars ($3,000,000.00). Such insurance shall name
Tenant as named insured thereunder and shall name Landlord and such of Landlord’s
Lienholders and ground lessors as are designated by Landlord, each as
additional insureds thereunder, all as their respective interests may appear,
shall contain a cross liability endorsement, and shall be primary and
non-contributing with respect to any insurance maintained by Landlord. Such
liability insurance shall insure Tenant and each additional insured for (1) the
actions of Tenant and/or any of Tenant’s employees, agents, representatives,
contractors and/or invitees, (2) Alterations to, and occurrences in, the
Premises, and (3) the use or operation of the Premises. Landlord shall have the
right, from time to time, upon not less than thirty (30) days prior written
notice to Tenant, to require an increase in such liability insurance limit if
consistent with then standard industry practices for prudent risk management by
a tenant of comparably-sized premises within Comparable Buildings.

 

(iii)                               Workers’ Compensation
and Employer’s Liability Insurance in form and amounts as required by
applicable law.

 

(iv)                              Any other form or forms
of insurance as Landlord and Landlord’s Lienholders may reasonably require from
time to time, in form, in amounts, and for insurance risks against which a
prudent tenant of a comparable size and in a comparable business would protect
itself given the economic feasibility of such insurance and consistent with
then industry standards for prudent risk management by tenants of
comparably-sized premises in Comparable Buildings.

 

The minimum limits of insurance set forth in this Section 17(a)
are not intended to limit the liability of Tenant under this Lease.
Notwithstanding any provision of this Lease to the contrary, the obligations of
Tenant to provide increased or new insurance under Sections 17(a)(ii)
and (iv) above, shall be limited to the extent the same is then
customarily provided by comparable tenants of comparably sized premises and
having a comparable use in Comparable Buildings and is then reasonably
available on a commercially reasonable basis at a reasonable cost. All policies
of insurance maintained by Tenant under this Section 17(a) shall be
taken out with insurance companies holding a General Policyholders Rating of “A-”
and a Financial Rating of “VIII” or better, as set forth in the most current
issue of Best’s Insurance Reports. As soon as practicable after the placing of
the required insurance, but prior to the date Tenant takes possession of all or
part of the Premises, Tenant shall deliver to Landlord certificates evidencing
the existence of the amounts and forms of coverage required hereunder. No such
policy shall be cancelable or reducible in coverage except after at least
thirty (30) days prior written notice to Landlord if such a time frame for
notice of a reduction or cancellation is afforded by the applicable carrier.
Tenant shall, within ten (10) days prior to the expiration of such policies,
furnish Landlord with certificates of renewals or binders thereof; provided
that if Tenant fails to furnish the same, Landlord may, following fifteen (15)
days’ notice to Tenant (unless such failure is cured within such fifteen (15)
day period), order such insurance and charge the reasonable cost thereof to
Tenant. If Landlord properly obtains any insurance that is the responsibility
of Tenant under this Section 17(a), Landlord shall deliver to
Tenant a written statement setting forth the cost of any such insurance and
showing in reasonable detail the manner in which it has been computed and
Tenant shall promptly remit said amount to Landlord, as additional rent. Tenant
may satisfy its insurance obligations under this Lease by blanket, umbrella
and/or, as to liability coverage in excess of One Million Dollars
($1,000,000.00), excess liability coverage, so long as the coverage afforded
under the applicable policy is not reduced or diminished as a result thereof.

 

(b)                                 During the Term,
Landlord shall carry the following insurance:

 

(i)                                     All Risk insurance
(including a vandalism and malicious mischief endorsement and sprinkler leakage
coverage, and also covering such other risks as Landlord or Landlord’s lender
may require) upon

 

23

 

the Project (but excluding any property which Tenant is obligated to
insure under Sections 17(a) above) in an amount not less than the full
replacement cost thereof (excluding footings, foundations and excavation and
commercially reasonable deductible amounts), and including commercially
reasonable rental loss coverage for losses covered by such insurance policy.
Such insurance policy shall include coverage of the Tenant Improvements (as
modified from time to time by Tenant’s Alterations) and the parties shall
reasonably cooperate to allow for proper valuation thereof for insurance
purposes. Such insurance policy or policies shall name Landlord as a named
insured. The deductible under the All Risk policy shall not exceed such amount
as Landlord determines to be appropriate given reasonable and prudent risk
management practices.

 

(ii)                                  Commercial general
liability insurance coverage, including personal injury, bodily injury, broad
form property damage, automobile, Premises operations hazard, contractual
liability (covering the indemnity contained in Section 15), and
products and completed operations liability, with a combined single limit of
not less than Three Million Dollars ($3,000,000.00).

 

Landlord may satisfy its insurance obligations under this Lease by
blanket, umbrella and/or, as to liability coverage in excess of One Million
Dollars ($1,000,000.00), excess liability coverage, so long as the coverage afforded
under the applicable policy is not reduced or diminished as a result thereof.

 

(c)                                  Other than as
customary for general office use or to the extent permitted by this Lease,
Tenant will not keep or use, sell or offer for sale, in or upon the Premises
any article which may be prohibited by any insurance policy then in force
covering the Building or the Project. If Tenant’s occupancy or business in or
upon the Premises, whether or not Landlord has consented to the same, includes
such extraordinary activities for a first-class office building that the same
results in any increase in premiums for the insurance periodically carried by
Landlord with respect to the Building or the Project, Tenant shall pay as
Additional Rent any such increase in premiums within thirty (30) days after
being billed therefor by Landlord. In determining whether increased premiums
are a result of a change in Tenant’s use of the Premises, a schedule issued
by the organization computing the insurance rate on the Project showing the various
components of such rate, shall be conclusive evidence of the several items and
charges which make up such rate.

 

(d)                                 All policies of
property damage insurance required hereunder shall include a clause or
endorsement denying the insurer any rights of subrogation against the other
party to the extent rights have been waived by the insured before the
occurrence of injury or loss, if same are obtainable without unreasonable cost.
To the extent such a waiver of subrogation is so obtainable, neither Landlord
nor Tenant shall be liable to the other for any damage caused by fire or any of
the risks insured against or required to be insured against under any insurance
policy required by this Lease. Landlord and Tenant waive any rights of recovery
against the other for injury or loss due to risks covered by or required to be
covered by such policies of property damage insurance containing such a waiver
of subrogation clause or endorsement to the extent insurance proceeds cover the
injury or loss.

 

18.                               DAMAGE
OR DESTRUCTION.

 

(a)                                  If the Premises shall
be destroyed by fire or other casualty so as to render all or a portion of the
Premises untenantable, then, for so long as Tenant is actually not occupying
all or a portion of the Premises as a result of such prevention from use,
Tenant shall be entitled to an abatement of Tenant’s obligation for payment of
(i) Monthly Base Rent and Tenant’s Expenses Excess, on a proportionate basis to
the extent that Tenant’s use of the Premises is so effectively prevented, and
(ii) monthly parking fees, to the extent of the reduction in use of parking
attributable to such inability to use all or a portion of the Premises; which
abatement shall commence as of the date of the casualty and continue during the
period of such repair or reconstruction, until such time as Tenant is no longer
so effectively prevented from using the Premises. For all purposes of this Section 18,
casualty damage shall be deemed to include, without limitation, any damage or
destruction resulting from the occurrence of any Force Majeure Event.

 

(b)                                 Except where Landlord
or Tenant elects to terminate this Lease as hereinafter provided, Landlord
shall use reasonable diligence to

 

24

 

repair any casualty to the Premises, Building or Common Areas to the
extent of available insurance proceeds (plus any deductible amounts included in
Operating Expenses pursuant to Section 6(a) above) plus any funds
delivered by Tenant to Landlord for purposes of performing such repairs (as
hereinafter provided), subject to delays and adjustment of insurance proceeds
(provided that Tenant shall be responsible for the repair of Tenant’s
furniture, fixtures, equipment and personal property). In the event of the
total destruction of the Premises or Project, or in the event of the partial
destruction of the Premises or Project which is the result of an event not
required to be covered and actually not covered by the insurance to be
maintained by Landlord pursuant to this Lease, or requiring repair for which
Landlord is unable (despite the exercise of commercially reasonable efforts) to
obtain necessary governmental permits or approvals without being subject to
unreasonable expense or condition, then Landlord shall have the right to elect
to terminate this Lease by written notice to Tenant delivered within ninety
(90) days following the occurrence of the casualty, provided that Tenant may
elect to nullify such termination by agreeing that Landlord shall have no
obligation for the repair of such damage in written notice delivered to
Landlord not later than ten (10) days following Tenant’s receipt of such
termination notice. The proceeds from any insurance paid by reason of damage to
or destruction of the Project or any part thereof insured by Landlord, shall
belong to and be paid to Landlord. Subject to Section 22 below,
Tenant shall not be entitled to any compensation or damages from Landlord or
Landlord’s insurance provider for loss in the use of the whole or any part of
the Premises and/or any inconvenience or annoyance by such damage, repair,
reconstruction or restoration.

 

(c)                                  In the event of any
damage or destruction of all or any part of the Premises, Tenant agrees to
immediately notify Landlord thereof.

 

(d)                                 Notwithstanding
anything to the contrary contained herein, if the Premises is wholly or
partially damaged or destroyed within the final eighteen (18) months of the
then remaining Term of this Lease (as the same may theretofore have been
extended pursuant to this Lease), and if as a result of such damage or
destruction Tenant is, or reasonably will be, denied access to or use of other
than a de minimis portion of the Premises for the conduct of its business
operations for a period of sixty (60) consecutive days (or such shorter period
as is then remaining in the Term), Landlord or Tenant may, at its option, by
giving the other notice no later than sixty (60) days after the occurrence of
such damage or destruction, elect to terminate the Lease as to the affected
portion of the Premises (provided that if operation for business by Tenant as
to the unaffected portions of the Premises is not reasonably possible, then
such termination may be made as to the entire Premises).

 

(e)                                  Notwithstanding
anything to the contrary contained in this Lease, in the event of material
casualty damage to the Premises or portion of the Project Common Areas
reasonably required for operation of Tenant’s business from the Premises (and
where alternative Common Areas are not available) not resulting in termination
of this Lease, Landlord shall deliver written notice to Tenant within ninety
(90) days following such casualty damage or occurrence setting forth Landlord’s
good faith estimate of the time required for substantial completion of repair
and/or restoration of the Premises or such Common Areas, and if such estimated
time exceeds one (1) year from the occurrence of the casualty, Tenant may elect
to terminate this Lease by written notice to Landlord within fifteen (15) days
following Tenant’s receipt of such notice. In addition, in the event such
repair and/or restoration of the Premises or such portions of the Project
Common Areas is not actually substantially completed within one (1) year period
from the occurrence of the casualty (or such longer time period as may have been
estimated in such notice to Tenant), Tenant may elect to terminate this Lease
upon thirty (30) days prior written notice to Landlord, provided that if such
repair and/or restoration is substantially completed within such thirty (30)
day period, such election to terminate shall be nullified and this Lease shall
continue in full force and effect.

 

(f)                                    Landlord and Tenant
hereby waive the provisions of any statutes (including, without limitation,
Sections 1932(2) and 1933(4) of the California Civil Code) or court decisions
which provide a party to a lease with a right to abatement of rent or
termination of the lease when leased property is damaged or destroyed and agree
that such event shall be exclusively governed by the terms of this Lease.

 

(g)                                 In the event of
casualty damage to the Premises not resulting in termination of this Lease and
requiring Tenant to temporarily

 

25

 

vacate all or portion of the Premises pursuant hereto, Landlord shall
Endeavor in good faith to reach agreement with Tenant (on terms and Conditions
mutually acceptable to both parties) for the interim lease by Tenant of
alternate space within the Project (if available) prior to making such
available alternate space available for interim lease by other Building
tenants, provided that Landlord shall not be required to forego the opportunity
to lease any such available space to a third party for a longer term in order
to make such space available for interim lease by Tenant pursuant hereto.

 

19.  EMINENT DOMAIN.

 

(a)  If
any material portion of the Project 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
to such an extent as to render untenantable the entirety of the Promises or
such a material Premises that Tenant’s operation from the reminder of the
Premises is not reasonably practicable as reasonably determined by Tenant.
Tenant shall have the right to terminate this Lease effective as of the date
possession is required to be surrendered to said Authority by written notice to
Landlord by the effective date of such taking. 
Tenant shall not assert any claim against Landlord or the taking
Authority for any compensation because of such taking other than a clam for any
separate award attributable to the value of any personal property or trade
fixtures of Tenant which are taken, costs of Tenant’s relocation and
unamortized costs of Tenant’s Improvements to the extent costing in excess of
$45.00 per square foot of Rentable Area in the Premises and Tenant hereby
assigns to Landlord all of Tenant’s interest in and Landlord shall be entitled
to receive the entire amount of any other award without deduction for any
estate or interest of Tenant (including, without limitation, any award
attributable to the value of the remaining Term of this Lease).  If Tenant does not so elect to terminate
Landlord shall, to the extent of proceeds received commence to restore the Premises
to substantially their some condition prior to such partial taking, and a
proportionate allowance shall be made to Tenant for the Monthly Base Rent and
Tenant’s obligation for payment of Tenant’s expenses excess 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 Section 19(a)
shall be deemed to give Landlord any interest in any award made to Tenant for
the taking of Tenant’s personal property and trade fixtures or for Tenant’s
costs of relocation.

 

(b)  In
the event of a taking of the Premises or any part thereof for temporary use,
(1) this Lease shall be remain unaffected thereby and Rent shall not abate, and
(ii) Tenant shall be entitled to 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 of the Term 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 Section 10(c) with respect to surrender of the
Premises and upon such payment shall be excused from such obligations.  For purposes of this Section 19(b)
a temporary taking shall be defined as a taking for a period of twelve (12)
months or less.

 

(c) 
Landlord and Tenant hereby waive the provisions of any statutes
(including, without limitation, Section1265.130 of the California Cod of Civil
Procedure) or court decisions which provide a party to a leased property is
condemned or taken and agree that such event shall be exclusively governed by
the terms of this Lease.

 

(d)  In
the event of the taking or condemnation of a part of the Premises not resulting
in termination of this Lease and requiring Tenant to temporarily vacate all
portions of the Premises pursuant hereto, Landlord shall endeavor in good faith
to reach agreement with Tenant (on terms and conditions mutually acceptable to
both parties) for the interim lease by Tenant of alternate space within the
Project (if available) prior to making such available alternate pace available
for interim lease by other Building tenants, provided that Landlord shall not
be required to forego the opportunity to lease any such available space to a
third party for a longer term in order to make such space available for interim
lease by Tenant pursuant hereto.

 

26

20.  ASSIGNMENT AND SUBLETTING.

 

(a) 
Tenant shall not voluntarily assign its interest in this Lease (an “assignment”)
or sublease or permit occupancy by third parties of all any part of the
Promises (a “sublease”) without first obtaining Landlord’s prior written
consent which consent shall not be unreasonably withheld, conditioned or
delayed.  Tenant shall not under any
circumstances mortgage pledge or otherwise transfer or encumber this Lease or
the Premises (except for an assignment or sublease pursuant to this Section 20).  Any assignment or sublease without Landlord’s
prior written consent shall be voidable at Landlord’s election and shall
constitute a default hereunder.  For
purposes hereof in the event Tenant is a partnership a withdrawal or change of
the partners owning more than a twenty–five percent (25%) interest in the
partnership in one or more transfers or the transfer by the controlling
shareholder or member of so much of its stock or membership interest that it is
no longer the controlling shareholder or member shall constitute a voluntary
assignment and shall be subject to the provisions of this Section 20
provided however that the provisions of this sentence shall not apply if Tenant
is a public exchange.  Notwithstanding
anything to the contrary contained herein, Tenant shall have the right without
Landlord’s prior consent and without being subject to Section 20 (e)  below but upon not less than fifteen (15) days
prior written notice to Landlord to assign this Lease or sublet the Premises to
any entity (i) controlling, controlled by or having fifty percent (50%) or more
common control with Tenant, or (ii) resulting form a merger or consolidation
with Tenant or acquiring all of the assets and/or stock of Tenant; provided
that any such entity shall assume the obligations and liabilities of Tenant
under this lease (any such assignment or subletting permitted without the prior
consent of Landlord is referred to in this Lease as a “Permitted Transfer”
and any such assignee or subtenant under a Permitted Transfer is referred to in
this Lease as a “Permitted Transferee”) and no such assignment or
sublease shall in any manner release Tenant from its primary liability under
this Lease.

 

(b)  No
consent to an assignment or sublease shall constitute a further waiver of the
provisions of this Section 20.  Tenant
shall notify Landlord in writing of Tenant’s intent to assign or sublease this
Lease, the name of the proposed assignee or subtenant, information concerning
the financial responsibility of the proposed assignee or subtenant and the
economic and other material terms of the proposed assignment or subletting, and
Landlord shall within thirty (30) days of receipt of such written notice, and
the financial responsibility information and such other information as may be
reasonably requested for Landlord’s consent and submission of the information
set forth above) elect one of the following : (i) consent to such proposed
assignment or sublease; or (ii) refuse such consent, which refusal shall be on
reasonable grounds.

 

(c) 
Landlord and Tenant agree, by way of example and not in limitation as to
other reasonable grounds for withholding consent and without in any manner
limiting Landlord’s rights in the event of a proposed assignment or
sublease.  that it shall be reasonable
under this Lease and under any applicable law for landlord to withhold its
consent to a proposed assignment or subletting should Landlord determine that
any of the following apply: (i) the proposed transferee’s use of the Premises
is inconsistent with the Permitted Use set forth in Section I (j)
of this Lease; (ii) the proposed transferee is a character or reputation which
is not consistent with the quality of the Building or Project; (iii) the
proposed assignee or in the case of a sublease of more than fifty thousand
(50,000) square feet of Rentable Area subtenant does not in Landlord’s
reasonable judgment have sufficient financial strength to assure performance of
the obligations to be performed pursuant to such assignment or subletting; (iv)
the space to be subleased is not regular in shape with appropriate means of
ingress and aggress suitable for normal leasing purposes; (v) the proposed
transferee is a governmental agency or instrumentality thereof (including
without limitation any foreign consulate); (vi) the proposed transferee is a
person or entity (or an affiliate thereof) currently leasing or occupying space
within the Project and alternate space is available within the Project for
lease to such proposed transferee; (vii) during the initial eighteen (18)
months of the Term, the proposed transferee is a person or entity with whom
Landlord is then negotiating for the lease or occupancy of space within the
Project and alternate space is available within the Project for lease to such
proposed transferee; (viii) Tenant is in default under this Lease (after

 

27

 

receipt of notice and the expiration of any applicable period for cure
thereof under this Lease) at the time Tenant requests consent to the proposed
assignment or sublease; or (ix) the proposed assignment or sublease is likely
to result in more than a reasonable and safe number of occupants per floor
within the space proposed to be assigned or sublet or is likely to result in
insufficient visitor parking for the Building.

 

(d) 
Any assignee of Tenant’s interest in this Lease (whether or not under
and assignment requiring Landlord’s consent) hereby agrees that (and at
Landlord’s option, if Landlord’s consent is required for such assignment that
Landlord receive an instrument executed by such assignee and expressly
enforceable by Landlord agreeing that) such assignee assumes and agrees to be
bound by all of the terms and provisions of this Lease and to perform all of
the obligations Tenant hereunder.  Any
subtenant of all or any portion of the Premises (whether or not under a
subletting requiring Landlord’s consent) hereby agrees that (and at Landlord’s
option if Landlord’s consent is required for such sublease pursuant to this
Lease, it shall be a condition to such sublease that Landlord receive an
instrument executed by such subtenant agreeing that) such sublease is subject
and subordinate to this Lease and to all mortgages or deeds of trust; that
Landlord my enforce the provisions of the sublease including (following the
occurrence of any default by Tenant under this Lease which is not cured within
any applicable period for cure pursuant to Section 21 below)
collection of rent; that in the event of voluntary surrender by Tenant, or in
the event of any re-entry or repossession of the Premises by Landlord may, at
its option either (i) terminate this sublease or (ii) take over all of the
right title and interest of Tenant as sub landlord under such sublease in which
case such subtenant will attorn to Landlord but that nevertheless Landlord will
not (1) be liable for any previous act or omission of Tenant under such
sublease (2) be subject to any defense or offset previously accrued in favor of
the subtenant against Tenant, or (3) be bound by any previous modification of
any sublease made without Landlord’s written consent or by any previous
prepayment by subtenant of more than one month’s rent.

 

(e)  In
connection with Landlord’s grant of consent to an assignment or sublease as
required under the provisions of this Section 20, Tenant shall pay
Landlord’s reasonable attorneys’ fees and processing costs incurred in giving
such consent.  In the event of any
assignment or sublease (other than a Permitted Transfer) Landlord shall receive
as additional rent hereunder twenty-five percent (25%) of Tenant’s “Excess
Consideration” derived from such assignment or sublease.  If Tenant shall elect to assign or sublet,
Tenant shall use reasonable and good faith efforts to secure consideration form
any such assignee or subtenant which would be generally equivalent to
then-current market rent, but in no event shall Tenant’s monetary obligations
to Landlord, as set forth in this Lease, be reduced.  In the event of sublease “Excess
Consideration” shall mean all rent additional and other consideration
actually received by Tenant from such subtenant and /or actually paid by such
subtenant on behalf of Tenant in connection with the subletting in excess of
the rent additional rent or other sums payable by Tenant under this Lease
during the term of the sublease on a per square foot basis if less than all of
the Premises is subleased, less the sum of Tenant’s reasonable attorney’s fees
the cost of any alterations or improvement made for the benefit of such
subtenant or any free rent period granted to such subtenant.  In the event of an assignment “Excess
Consideration” shall mean key money, bonus money or other consideration
paid by the assignee to Tenant in connection with such assignment and any
payment in excess of fair market value for services rendered by Tenant to
assignee or for assets fixtures inventory equipment or furniture transferred by
Tenant to assignee in connection with such assignment less the sum of Tenant’s
reasonable out-of pocket costs incurred in connection with such assignment for
brokerage commissions, reasonable attorneys’ fees, the cost of any alterations
or improvements made for the benefit of such assignee and/or any free rent
period granted to such assignee.  If part
of the Excess Consideration shall be payable by the assignee or subtenant other
than in cash, then Landlord’s share of such non-cash consideration shall be in
such form as is reasonably satisfactory to Landlord.

 

(f) 
Notwithstanding any permitted assignment or subletting (whether or not
the same requires Landlord’s consent pursuant to this Section) Tenant shall at
all times remain directly, primarily and fully responsible and liable for all
payments owed by Tenant under this Lease and for compliance with all
obligations under the terms and conditions of this

 

28

 

Lease.  Landlord’s waiver or
consent to any assignment or subletting shall not relieve Tenant or any
assignee or sub lessee from any obligation under this Lease whether or not accrued
and Tenant shall at all times remain directly, primarily and fully responsible
and liable for all payments owed by Tenant under this Lease and for compliance
with all obligations of Tenant under the terms and conditions of this Lease.

 

21.  DEFAULT BY TENANT.

 

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

 

(i) 
The failure by Tenant to make payment of Rent as and when due where such
failure shall continue for a period of three (3) 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 or any similar successor statute

 

(ii) 
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 Section 21(a) (i) where such
failure shall continue for a period of thirty days after written notice thereof
form Landlord 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 or any similar successor statute; 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 promptly commence such cure within such thirty (30) day period and
thereafter continuously and diligently prosecute such cure to completion.

 

(iii) 
The making by Tenant of any general assignment for the benefit of
creditors; 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 field against
Tenant the same is dismissed within sixty (60) days); 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 sixty (60) days; or if this Lease where such
seizure is not discharged within sixty (60) days; or if this Lease shall by
operation of law or otherwise pass to any person or persons other than Tenant.

 

(b)  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.  In the event that Landlord shall elect to so
terminate this Lease then Landlord may recover from Tenant: (i) the worth at
the time of award of any unpaid Rent which had been earned at the time of such
termination plus (ii) the worth at the time of award of the amount by which the
unpaid Rent which would have earned after termination until the time of award
exceeds the amount of such rental loss that Tenant proves could have been
reasonably avoided plus (iii) 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 (iv) any other amount necessary to compensate Landlord for all
the determine proximately caused by Tenant’s failure to perform Tenant’s
obligations under this Lease or which in the ordinary course of things would be
likely to result there from for a new tenant, whether for the same or a
different use and any special concessions made to obtain a new tenant, the
unamortized value of any free rent, reduced rent, free parking reduced rate
parking and any Tenant Improvement allowance or other costs or economic
concessions provided paid granted or incurred by Landlord pursuant to this
Lease (which unamortized value shall be determined by taking the total value of
such concessions and multiplying such value by a fraction the numerator of
which is the number of months of the Term not yet elapsed as of the date on
which the Lease is terminated, and the denominator of which is the total number
of months of the Lease Term) plus (v) at Landlord’s election, such other
amounts in addition to or in lieu of the forgoing as may be permitted form time
to time by applicable law.

 

29

 

As used in Section 21 (b) (i) and
(ii) above the “worth at the time of award” is computed by
allowing interest at the interest Rate. 
As used in Section 21 (b) (iii) above, the “worth at the
time of award” is computed by discounting such amount at the discount rate
of the Federal Reserve Bank of San Francisco at the time of award plus one
percent (1%).

 

(c)  In
the event of any such default by Tenant, Landlord shall also have the remedy
described in California Civil Code Section 1951.4 (lessor may continue
lease in effect after lessee’s breach and abandonment and recover rent as it
becomes due, if lessee has the right to sublet or assign subject only to
reasonable limitations).  Accordingly, if
Landlord does not elect to terminate this Lease on account of any default by
Tenant, Landlord may from time to time, without terminating this Lease enforce
all of its rights and remedies under this Lease including the right recover all
rent as it becomes due.  In connection
with the exercise of such remedy, any property of Tenant may be (i) removed and
stored in a public warehouse or elsewhere at the cost of and for the account of
Tenant or (ii) disposed of in personal property items not so removed by Tenant
and bearing the protected marks of Tenant or any of Tenant’s affiliates shall
be treated by Landlord in accordance with the provisions of the forgoing clause
(i) and not the foregoing clause (ii) No re-entry or taking possession of the
Premises by Landlord pursuant to this Section 21 (c) shall be construed
as an election to terminate this Lease unless a written notice of such
intention is given to Tenant or unless the termination thereof be decreed by a
court of competent jurisdiction.

 

(d)  If
Landlord does not elect to terminate this Lease as provided above, Landlord may
either recover all Rent as it becomes due or relet the Premises or any part
thereof for the Term of this Lease on terms and conditions as Landlord in its
reasonable discretion may deem advisable with the right to re-enter the Premises
to make alterations and repairs to the Premises to enable Landlord to take
whatever other actions may be necessary to relet protect or preserve the
Premises.  In the event that Landlord
shall elect to so relet then Rent received by Landlord from such reletting
shall be applied: first to the payment of any costs incurred in connection with
any reletting (including without limitation reasonable costs of brokerage
commissions attorneys fees, improvement and/or moving allowances and
alterations and/or repairs to the Promises); second, to the payment of any
indebtedness other than Monthly Base Rent due hereunder from Tenant to
Landlord; third, to the payment of Monthly Base Rent due and unpaid hereunder;
and the residue, if any, shall be held by Landlord and applied to payment of
future Rent as the same may become due and payable hereunder.  Should that portion of such Rent received
form such reletting during any month, which is applied to the payment of Rent
hereunder be less than the Rent payable during that month by Tenant hereunder,
then Tenant shall pay such deficiency to Landlord immediately upon demand
therefore by Landlord.  Such deficiency
shall be calculated and paid monthly. 
Tenant shall also pay to Landlord, as soon as ascertained, any
reasonable costs and expenses incurred by Landlord in such reletting, including
but not limited to brokerage commissions, or in making such alterations and
repairs not covered by the Rent Received from such reletting.

 

 (e) 
Tenant hereby waives, for itself and all persons claiming by and under
Tenant all rights and privilege which it might have under any present or future
law to redeem the Premises or to continue the Lease after being dispossessed or
ejected form the Premises.

 

(f)  If
Tenant fails to perform any covenant or condition to be performed by Tenant
Landlord shall have the right (but not the obligation) to perform such covenant
or condition (i) immediately in the event of an emergency situation of imminent
risk of personal injury or material property damage, or (ii) prior to cure and
following a second (2nd) written notice to Tenant informing Tenant
of Landlord’s intention to exercise its rights under this Section 21
(f)  after Tenant’s failure to cure
such failure to perform within the period provided for cure after Tenant’s
receipt of written notice form Landlord pursuant to Section 21 (a) (ii)  above. 
All reasonable costs incurred by Landlord by Tenant together with
interest at the interest Rate computed form the due date.  Any performance by Landlord of Tenant’s
obligations shall not waive or cure such default.  All reasonable costs and expenses incurred by
Landlord including reasonable attorney’s fees (whether or not legal proceedings
are instituted) in collecting Rent or enforcing the obligations of Tenant under
Lease shall be paid by Tenant to Landlord upon demand.

 

30

 

(g) 
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.

 

22. 
DEFAULT BY LANDLORD.

 

(a) 
Unless a shorter time period is herein specified Landlord shall not be
in default hereunder unless Landlord fails to perform the obligations required
of Landlord within a reasonable time, but in no event later than thirty (30)
days after written notice by Tenant to Landlord specifying wherein Landlord had
failed to perform such obligation; provided however that if the nature of
Landlord’s obligation is such that more than thirty (30) days are required for
performance then Landlord shall not be in default if Landlord commences
performance within such thirty (30) day period and thereafter continuously and
diligently prosecutes the same to completion.

 

(b)  In
the event of any default on the part of Landlord, Tenant will give notice by
registered or certified mail any Lien holder of writing (which writing shall
include a request that such party be copied on any default notices); and shall
offer such Lien holder a reasonable opportunity to cure the default including
time to obtain possession of the Premises by power of sale or a judicial
foreclosure or in the event of a ground lessor by appropriate judicial
foreclosure or in the event of ground lessor by appropriate judicial action if
such should prove necessary to effect a cure; provided that the provisions of
this Section 22 (b)  shall
not limit Tenant ‘s right to seek an award for damages against Landlord for
Landlord’s default under this Lease which is not cured within the applicable
terminate this Lease as result of such an uncured default until the expiration
of the applicable notice and cure period provided under this Section 22
(b).  

 

23.  SUBORDINATION.  This Lease shall be
subject and subordinate at all times to (a) all ground leases which may now
exist or hereafter be executed affecting the Building, the Project or the land
upon which the Building and Project are situated or both and any and all
amendments, renewals, modifications, supplements and extensions thereof; and
(b) the lien of any mortgage or deed of trust which may now exist or hereafter
be executed and any and all advances made thereunder and interest thereon and
all modifications, renewals supplements consolidations and replacements
thereof.  Notwithstanding the forgoing
Tenant acknowledge that Landlord shall have the right to subordinate or cause
to be subordinated any such ground leases or any such liens to this Lease.  In the event that any ground lease terminates
for any reasons or any mortgage or deed of trust is foreclosed or a conveyance
in lieu of foreclosure is made for any reason, 
Tenant shall, notwithstanding any subordination attorn to and become the
tenant of the successor in interest to Landlord at the option of such successor
in interest.  Tenant shall execute and
deliver, upon reasonable prior notice form Landlord any additional documents in
such commercially reasonable form as is reasonably designated by Landlord
evidencing the priority or subordination of this Lease with respect to any such
ground leases or the lien of any such mortgage or deed of trust.  Landlord shall use commercially reasonable
efforts to obtain from any Lien holder to whose mortgage, deed of trust or
ground lease this Lease is hereafter subordinated an agreement of
non-disturbance on such Lien holder’s commercially reasonable form for the
benefit of Tenant (the “Future SNDA”) and notwithstanding anything to
the contrary contained in the forgoing it shall be a condition to Tenant’s
obligation to subordinate or attorn to any Lien holder to whose mortgage, deed
of trust or ground lease this Lease is hereafter subordinated, that Landlord
obtain such Future SNDA from such Lien holder. 
In addition, Landlord shall use reasonable efforts and diligence to
obtain a subordination non-disturbance and attornment agreement for the benefit
of Tenant form the existing Lien holder for the Project within thirty (30) days
following the execution of this Lease, using such Lienholder’s commercially
reasonable form.  For purposes of this
Lease, a “Lien holder” shall mean any mortgagee under a mortgage
beneficiary under a deed of trust or lessor under a master lease or ground
lease encumbering all or a portion of the Project.

 

24.  ESTOPPEL CERTIFICATE.

 

(a) 
Within fifteen (15) days following any written request which landlord
may make from time to time, Tenant shall execute and deliver

 

31

 

to Landlord a statement in a form reasonably satisfactory to Landlord
certifying: (i) the date of commencement of this Lease; (ii) the fact that this
Lease is unmodified and I n 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 Monthly Base Rent and other sums payable under this Lease have been paid;
(iv) that to Tenant’s 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 Landlord. 
Any statement delivered pursuant to this Section 24 may be
relied upon by any existing or prospective mortgagee, beneficiary, encumbrance,
transferee or purchaser of the interest of Landlord in the Project Promises or
this Lease (without Knowledge to the contrary).

 

(b) 
Unless Landlord has knowledge to the contrary if Tenant fails to deliver
such statement within such fifteen (15) day period and such failure remains
uncured for a period of three (3) business days following Tenant’s receipt of a
second written notice from Landlord, then such failure 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 Landlord’s performance, and (iii) that not more than one (1)
monthly installment of Monthly Base Rent has been paid in advance.

 

25.  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 Project.  In the
event of any transfer or assignment of such title or leasehold interest and the
assumption in writing of Landlord’s remaining obligations under this Lease by
the transferee or assignee, 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 respecting the performance of any covenants or
obligations on the part of Landlord contained in this Lease thereafter to be
performed.  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.

 

26.  PARKING.

 

(a) 
During the Term, Tenant shall be entitled to the number of parking
passes indicated in Section 1 (k), subject to payment of the then
applicable monthly parking fee as established in accordance herewith; provided
that Tenant agrees that in any event, throughout the Term of this Lease, Tenant
shall be required to obtain and pay for not less than three (3) unreserved
parking passes per each one thousand (1,000) square feet of Rentable Area
within the Premises (rounded to the nearest whole number of parking passes to
the extent rentable Area of the Premises is not evenly divisible by one
thousand (1,000).  Each parking pass
shall entitle the holder thereof to one unreserved parking space within those
portions of the Common Areas as may be provided by Landlord from time to time
for the purpose of parking motor vehicles for the Premises, provided that such
Common Area parking shall be unreserved and may be provided by tandem or
stacked parking (which may be for two (2) or three (3) cars), provided that a
reasonably sufficient number of attendants (based upon the volume of such
tandem or stacked parking) are available as reasonably necessary to coordinate
such parking.  Subject to Section 26
(d) below, monthly parking fees per parking pass for unreserved parking
shall be Eighty Dollars ($80.00) per month per pass plus all applicable taxes
and/or assessments from Commencement Date through and including the expiration
of the sixtieth (60th) month of the Term, ninety Dollars ($90.00)
per month per pass plus all applicable taxes and/or assessments from the
commencement of the sixty-first (61st) month of the Term through and
including the expiration of the one hundred twentieth (120th) month
of the Term, One Hundred Dollars ($100.00) per month per pass plus all
applicable taxes and/or assessments from the commencement of the one hundred
twenty-first (121st) month of the Term through and including the
expiration of the one hundred forty-fourth (144th) month of the
Term, and One Hundred Ten Dollars ($110.00) per month per pass plus all
applicable taxes and/or assessments from the commencement of the one hundred
forty-fifth (145th) month of the Term through and including the
expiration of the two hundred fourth (204th) month of the Term.  Monthly parking fees per parking pass for
unreserved parking during the Extended Term(s) shall be at Landlord’s then
prevailing rates therefore (as adjusted by Landlord from time

 

32

 

to time).  Notwithstanding
anything to the contrary contained herein, Tenant shall at all times be
entitled to convert a portion of its monthly parking allotment from passes for
unreserved parking spaces to passes for reserved parking spaces within the
Project Common Areas (which spaces shall be included as a part of the total
parking allotment which Landlord is required to provide to Tenant pursuant
hereto), subject to tenant’s payment of a monthly parking fee for each such
reserved parking space pass, which fee shall equal two hundred percent (200%)
of the then applicable unreserved parking pass rate, plus all applicable taxes
and/or assessments, provided that in no event shall the total of Tenant’s
reserved parking passes at any time exceed ten percent (10%) of the total
parking allotment which Landlord is required to provide to Tenant pursuant to
this Lease.  Tenant may convert from
reserved to unreserved parking passes and vice-versa from time to time during
the term upon not less than thirty (30) days prior written notice, provided
that no more than an aggregate of ten percent (10%) of Tenant’s monthly parking
allotment may be converted from passes for unreserved spaces to passes for
reserved parking spaces.  The location of
such reserved parking spaces shall be designated by Landlord (and to the extent
practicable, shall be within the westerly portion of the Parking Structure),
and shall be subject to tenant’s prior approval (which approval shall not be
unreasonably withheld, conditioned or delayed), so that the initial thirty (30)
such reserved parking spaces are evenly distributed between the two (2) highest
levels of the Project parking garage and all additional reserved parking spaces
beyond such initial thirty (30) reserved parking spaces shall be located on the
third level of the Project parking garage. 
Landlord shall cause each reserved parking space to be designated as “reserved”.  If Tenant desires any additional signage
identifying such reserved parking spaces, such signage shall be subject to
Landlord’s prior written approval (which approval shall not be unreasonably
withheld, conditioned or delayed), as to design and manner of installation and
shall be installed by Landlord at Tenant’s sole but reasonable cost.  Monthly parking fees shall be payable monthly
in advance prior to the first day of each calendar month.  Landlord may assign any unreserved and unassigned
parking spaces and/or make all or a portion of such spaces preferred and/or
reserved, if it determines in its reasonable discretion that it is necessary
for orderly and efficient parking. 
Visitor parking rates shall be at posted rates.  Tenant shall be entitled to purchase
validations for visitor parking charges at the prevailing rated for the
purchase of such validations as established by Landlord from time to time for
Building tenants.  At Landlord’s option,
visitor parking shall be monitored by a parking attendant.  Tenant shall not use any spaces which have
been assigned for uses such as visitor parking or which have been designated by
governmental entities with competent jurisdiction as being restricted to
certain uses.  Tenant hereby agrees to
comply with all Laws relating to parking for Tenant’s employees including without
limitation, the payment of all parking charges and costs for all of its
employees, visitors and invitees, whether by validation or otherwise.

 

(b)  It
is understood that, subject to the provisions of Section 26(a)
above, a system of charges for parking (including the parking spaces to which
Tenant is entitled pursuant to Section 1(k)) and rules and
regulations with respect to parking may be established and amended by Landlord,
in Landlord’s reasonable discretion, from time to time.  The use by Tenant and its employees, visitors
and invitees of the parking facilities of the Project shall be on the terms and
conditions set forth herein as well as in the established parking rules and
regulations.  Landlord shall not be
responsible to Tenant for the violation or non-performance by any other tenant
or occupant of the Projects of any of the established parking rules and
regulations, but Landlord shall use reasonable diligence to enforce such rules
and regulations.  Tenant shall not permit
or allow any vehicles that belong to or are controlled by Tenant or Tenant’s
employees to be loaded, unloaded or parked in areas other than those designated
by Landlord for such activities.  If
Tenant permits or allows any of the prohibited activities described herein and
in the established parking rules and regulations, then Landlord shall have the
right, with reasonable notice given the applicable circumstance, in addition to
such other rights and remedies that it may have, to remove or tow away the
vehicle involved and charge the cost to Tenant, which cost shall be immediately
payable upon demand by Landlord and/or to rescind the parking rights of the
offender.

 

(c) 
Parking areas shall all be located on-Site and may be leased by, added
to, substituted for, enlarged or established by Landlord for parking and any
such addition to, or substitution for, a then parking area or any new parking
area so established by Landlord for the purpose of use under this Section 26©
shall during the time of their respective use under the provisions of this Section 26
be considered as part of the parking area and

 

33

 

shall be subject to all of the provisions of this Section 26,
but Landlord shall not relocate Tenant’s reserved parking spaces without prior
written consent of Tenant (which consent shall not be unreasonably withheld,
conditioned or delayed).

 

(d) 
Notwithstanding anything to the contrary contained herein, Tenant’s
obligation for payment of Tenant’s monthly parking fees for parking passes up
to the number of parking passes indicated in Section 1(k) above
(including, without limitation, any parking passes for reserved parking
obtained by converting unreserved parking passes as provided for under Section 26
(a) shall be abated during the initial twenty-four (24) months of the
Term.  The amount of monthly parking fees
which Tenant is not obligated to pay during the initial twenty-four (24) months
of the Lease Term pursuant to the terms of the immediately preceding sentence
is referred to herein as “Abated Parking Fee Amount”.  Upon notice to tenant delivered by not later
than the September 30 which is at least three (3) months prior to the
start of the calendar year(s) as to which any Abated Parking Fee Amount
purchased pursuant hereto would otherwise commence, Landlord shall have the
right to purchase all or any part of the Abated Parking Fee Amount at any time
prior to the expiration of the twenty-fourth (24th) month of the
Lease Term, by paying to Tenant an amount equal to the “Abated parking Fee
Purchase Price” (as hereinafter defined). 
As used herein, the “Abated Parking Fee Purchase Price” shall
mean the present value of the Abated Parking Fee Amount allocable to such of
the unexpired portion of the initial twenty-four (24) months of the Lease Term
as Landlord desires to purchase pursuant hereto, as of the date of payment of
the Abated Parking Fee Purchase Price by Landlord.  Such present value shall be calculated (x) by
suing such portion of the Abated Parking Fee Amount attributable to each
remaining month during the initial twenty-four (24) months of the Lease Term as
Landlord desires to purchase pursuant hereto, as the amounts to be discounted,
and (y) by suing discount rates for each amount to be discounted equal to eight
percent (8%) per annum.  Upon such
payment of the Abated Parking Fee Purchase Price, the provisions of this Section 26
(d) shall be of no further force or effect as to the portion of the Abated
Parking Fee Amount so purchased (which may be all of the Abated Parking Fee
Amount if fully purchased pursuant hereto) and Tenant shall not be entitled to
any further Abated Parking Fee Amount as to the portion of the Abated Parking
Fee Amount so purchased.

 

27.  SIGNAGE.

 

(a) 
Subject in all events to applicable Laws and any other restrictions of
record or to which the Project is subject, Tenant shall be entitled to (i)
Building standard identification of Tenant and its employees upon the common
Building lobby directory board sign, at Tenant’s sole cost and expense,
provided that Tenant shall not be entitled to use of more than one (1) line
upon such directory board sign per each two thousand (2,000) square feet of
Rentable area within the Premises (rounded to the nearest whole number to the
extent the Rentable Area of the Premises is not evenly divisible by two
thousands (2,000); (ii) Building standard identification of Tenant by name upon
the main entrance door to the Premises, to be installed at Tenant’s sole cost
and expense; and (iii) additional signage in accordance with Exhibit E
attached hereto and incorporated herein by this reference.  The exact location, size, materials,
coloring, lettering and content of all Tenant signage shall not be unreasonably
withheld, conditioned or delayed; provided that Landlord hereby pre-approves
the specification for Tenant’s signage as set forth on Exhibit E, Landlord
hereby pre-approves animation of the monument sign and media display as set
forth on Exhibit E (subject to Tenant obtaining necessary governmental
approval therefore), and Landlord hereby pre-approves of content which would be
rated PG-13 under current MPAA standards and does not contain nudity, profanity
or violence (beyond that which is permitted under a PG-13 rating).  Without limiting the generality of the
foregoing and by way of example only, the parties hereby agree that it shall be
reasonably for Landlord to withhold approval to any Tenant signage (other than
as expressly set forth on Exhibit E) that would adversely affect the
image or character of the Project as a first-class office building Project or
marketing of the Project.  Tenant shall
be responsible for obtaining permits and governmental approvals for,
fabrication, installation, maintenance, repair and replacement (as necessary to
reflect any change in the identification of Tenant) of Tenant’s Building
exterior and Project exterior signage in first-class condition, at Tenant’s
sole cost and expense; provided that, at Landlord’s option, Landlord shall
perform the work of such obtaining of permits and approvals, fabrication,
installation, maintenance, repair and/or replacement of such signs (or any
number thereof) and Tenant shall reimburse Landlord for Landlord’s reasonable
costs of such performance, as additional rent, within thirty (30) days
following Landlord’s submission to

 

34

 

Tenant of a statement of such costs. 
Tenant’s signage rights pursuant to this Section 27(a) shall
be assignable any permitted assignee or subtenant under this Lease; except that
Tenant’s Building exterior and Project exterior signage rights under this Section 27
(a) shall only be assignable to an assignee or subtenant who is a Permitted
Transferee.  Landlord shall cooperate
with Tenant to the maximum extent reasonably practicable in Tenant’s efforts to
obtain necessary governmental approvals for Tenant’s desired identification on
Tenant’s exterior signage granted pursuant to this Section 27 (a)
(including, without limitation, in connection with any desired “videotron”
signage).

 

(b) 
Landlord hereby agrees that for so long as Tenant or any Permitted
Transferee is occupying at least seventy-five percent (75%) of the premises
originally leased hereunder, (i) the Building shall be known as the “Warner
Music Building”, and (ii) Landlord shall be known as the signage upon the
southern elevation of the Building, the western elevation of the Building or
the western one-third (1/3)rd of the northern elevation of the Building (except
that the ground floor restaurant tenants shall be entitled to signage identification
on the western one-third (1/3rd) of the northern elevation of the
Building as shown on Exhibit E).

 

28.  NOTICES.  All notices,
demands, consents and approvals which may or are required to be given by either
party to the other hereunder shall be in writing and shall be either served
personally, or sent by overnight courier, or sent by registered or certified
mail, return receipt requested with postage prepaid, as follows: if to Tenant,
addressed at the address(es) designated in Section 1 (a),  or if to Landlord, at the address(es)
designated in Section 1 (b), or to such other place or places as
the party to be notified may from time to time designate by at least fifteen
(15) days notice to the other party. 
Such notices, demands, consents and approvals shall be deemed
sufficiently served or given for all purposes hereunder, unless otherwise
specified in this Lease, either (a) if personally served, upon such service,
(b) if sent by overnight courier providing receipt of delivery, the following business
day, or (c) if mailed, tow (2) business days after the time of mailing or on
the date of receipt shown on the return receipt, whichever is earlier.

 

29.  HOLDING OVER.  If Tenants holds over in the Premises after
the expiration of the Term or earlier termination of this lease, Tenant shall
become a tenant at sufferance only, subject to the provisions of this Lease,
except that Rent during such holding over shall equal one hundred fifty percent
(150%) of the Rent in effect immediately prior to such expiration or
termination.  Acceptance by Landlord of
Rent after such expiration or earlier termination shall not result in a renewal
or extension of this Lease.  If Tenant
fails to surrender the Premises upon the expiration of the Term or earlier
termination of this Lease despite demand to do so by Landlord, Tenant shall
indemnify, defend and hold harmless Landlord from and against any and all
claims, demands, losses, liabilities, costs and/or expenses (including, without
limitation, reasonable attorneys’ fees and expenses) arising as a result
thereof, including, without limitation, any claim made by any succeeding tenant
founded on or resulting from such failure to surrender.

 

30.  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 on Tenant’s part to be observed and performed under this Lease
(subject to applicable notice and cure periods), Tenant shall and may peaceably
and quietly have, hold and enjoy the Premises in accordance with and subject to
the terms of this Lease and those certain matters of record specified in on Exhibit
G attached hereto and such other matters of record as may hereafter
encumber the Building, subject to the provisions of this Lease.

 

31.  BROKERS.  Landlord shall be
responsible for the payment of a commission owing to Landlord’s Broker
specified in Section 1 (1) in connection with this Lease, to the
extent set forth in separate written agreement between Landlord and Landlord’s
Broker, and Tenant shall be responsible for the payment of a commission owing
to Tenant’s Broker specified in Section 1 (1) in connection with
this Lease to the extent set forth in separate written agreement between Tenant
and Tenant’s Broker (such amount payable to Tenant’s Broker is referred to in
this Lease as the “Tenant’s Brokers Commissions”).  Landlord and Tenant each represent and
warrant that it has had no dealings with any real estate broker or agent in connection
with the negotiation of this Lease, except for the Landlord’s Broker and Tenant’s
Broker and that it know of no other real estate broker, agent or finder who is
or might be entitled to a commission or fee in connection with this Lease.

 

35

 

In the event of any claim for broker’s or finder’s fees or commissions
in connection with this lease other than amounts payable to Landlord’s Broker
and Tenant’s Broker, (a) Landlord shall indemnify, hold harmless and defend
Tenant from and against any and all liability, claims, demands, damages and
costs (including, without limitation, reasonable attorneys’ fees and other
litigation expenses) on account of such claim if it shall be made by Landlord’s
Broker or be based upon any statement, representation or agreement claimed to
have been made by Landlord, and (b) Tenant shall indemnify, hold harmless and
defend Landlord from and against any and all liability, claims, demands,
damages and costs (including, without limitation, reasonable attorneys’ fees
and other litigation expenses) on account of such claim if it shall be made by
Tenant’s Broker or be based upon any statement, representation or agreement
claimed to have been made by Tenant.

 

32.               ROOFTOP
EQUIPMENT.

 

(a) Subject to the provisions of this Section 32
and the other provisions of this Lease respecting Alterations, but at no
additional rental Cost to Tenant, Tenant shall have the non-exclusive right
during the Term, at Tenant’s sole cost and expense, to install within an area
on the roof of the Building reasonably designated by Landlord, for Tenant’s own
use such microwave, satellite or DSS dishes and other antenna and/or rooftop
equipment (collectively,  the “Rooftop  Equipment”) , which Rooftop Equipment shall
include, without limitation, the related vertical and horizontal utility and
telecommunication lines (“Communication 
Lines”) throughout the Premises which are compatible with the
Building structure and/or mechanical and utility systems, which Rooftop Equipment
shall be of such size, weight and quantity, and at such location as is
reasonably approved by Landlord and Landlord’s structural engineer. Subject to
compliance with any screening requirements, Tenant shall reimburse Landlord for
the reasonable fees of Landlord’s structural engineer incurred in evaluating
Tenant’s plans for installation of the Rooftop Equipment and any modifications
thereto, within thirty (30) days following submission by Landlord to Tenant of
invoices therefor. Tenant’s Rooftop Equipment shall not take up more than a pro
rata amount of the roof space available for Rooftop Equipment, based upon the
proportion of Rentable Area within the Building leased by Tenant.

 

(b)                                 The installation,
maintenance, repair, operation and removal (as hereinafter provided) of such
Rooftop Equipment shall be completed in a good and workmanlike manner and in
conformity with (i) plans and specifications therefor (the “Rooftop
Equipment Plans”) showing matters including, without limitation, equipment
size, location, weight and composition, and Tenant’s plan for assembly,
installation, maintenance and removal of such equipment, which Rooftop
Equipment Plans shall be subject to Landlord’s prior written approval, which
approval shall not be unreasonably withheld, conditioned or delayed, and (ii)
all applicable Laws, including, without limitation, Tenant’s obtaining and
keeping in force any necessary governmental permits or approvals for the
operation of such Rooftop Equipment. Landlord shall reasonably cooperate with
Tenant in Tenant’s efforts to obtain any required governmental permits or
approvals for Tenant’s desired Rooftop Equipment in accordance with this Section   32. 
Notwithstanding anything to the contrary contained herein, the
supporting structures for such Rooftop Equipment shall not penetrate the
Building roof unless otherwise approved by Landlord in advance in writing,
which approval shall not be unreasonably withheld, conditioned or delayed
(provided that the parties hereby agree that it shall not be unreasonable for
Landlord to condition such approval on Tenant assuming responsibility for any
damage to the Building roof resulting therefrom or any work of repair or
maintenance which would otherwise have been covered by a warranty which is
voided or made inapplicable as a result thereof). At Landlord’s option, all
work of installation, maintenance, repair and other work affecting the roof in
connection with the Rooftop Equipment shall be performed, at Tenant’s sole but
reasonable cost and expense, by Landlord or Landlord’s affiliate, or by
Landlord’s designated roof contractor. Tenant shall, at its sole cost and
expense, install screening of such Rooftop Equipment to prevent visibility from
the street level, as Landlord may reasonably require, and any other screening
of such Rooftop Equipment as may be required by applicable Laws.  Tenant shall not be permitted to access the
roof except when previously scheduled with Landlord or upon receipt of prior
written approval from Landlord (which approval shall not be unreasonably
withheld, conditioned or delayed ) or as may be reasonably required in the
event of an emergency situation.

 

(c) 
The Rooftop Equipment shall not unreasonably disturb or interfere with
the Rooftop Equipment and uses of other occupants at the Project, and, if
applicable, the Rooftop Equipment shall comply with all non-

 

36

 

interference rules of the Federal Communications Commission.  Anything to the contrary contained herein
notwithstanding, if, during the Lease Term, Landlord, in its reasonable
judgment, believes that any of the Rooftop Equipment poses a material human
health or environmental hazard and Landlord retains a qualified expert in such
matters to review the situation and such expert concurs with Landlord’s
judgment, and such situation cannot be remediated or has not been remediated
within ten (10) days after Tenant has been notified thereof, then Tenant shall
immediately cease all operations of the applicable Rooftop Equipment until such
situation is remedied.  Tenant shall
indemnify, defend (by counsel reasonably acceptable to Landlord) and hold
harmless Landlord from any and all claims, demands, liabilities, damages,
judgments, costs and expenses (including, without limitation, reasonable
attorneys’ fees and costs) which Landlord may suffer or incur arising out of or
related to the installation, use, operation, maintenance, replacement and/or
removal of the Rooftop Equipment or any portion thereof (except to the extent
resulting from Landlord’s breach of its obligations under this Lease).

 

(d) At Landlord’s option, Landlord shall have
the right to require the relocation of the Rooftop Equipment to an alternate
location on the Building roof so long as there is no material adverse affect
upon the continuous operation of Tenant’s Rooftop Equipment, and in the event
Landlord so requires such relocation, Landlord shall be responsible for the
reasonable costs of such relocation.

 

(e) Tenant shall be solely responsible for
any liability, cost, claim, expense (including, without limitation, attorneys’
fees) and/or damage to the Building and/or the Project resulting from Tenant’s
installation, maintenance, operation, use, presence or removal of such Rooftop
Equipment (except to the extent resulting from Landlord’s breach of its
obligations under this Lease).  Tenant
shall, at all times during the Term, pay to Landlord within thirty (30) days
following demand therefor accompanied by reasonable evidence of such charges,
all increased real estate taxes, insurance premiums or other charges which may
be incurred by or charged to Landlord as a result of the installation,
operation, maintenance and/or removal of the Rooftop Equipment.  Tenant shall pay all costs and expenses of
operation of the Rooftop Equipment, including, without limitation, any
necessary utility services therefor. 
Tenant shall be entirely responsible for all maintenance of and repairs
to the Rooftop Equipment so that at all times the Rooftop Equipment is in good
condition and repair.  Tenant shall
maintain such insurance upon the Rooftop Equipment as Tenant is obligated to
maintain with respect to the Premises pursuant to this Lease.

 

(f) Upon the expiration of the Term or
earlier termination of this Lease, Tenant shall remove the Rooftop Equipment
and restore that portion of the Building and Project, including, without
limitation, the Building roof, affected by the Rooftop Equipment, to the same
condition as existed prior to such installation, subject to reasonable wear and
tear, all at Tenant’s sole cost and expense. 
In the event Tenant fails to so remove the Rooftop Equipment and restore
the affected portions of the Building by such expiration or within thirty (30)
days after such earlier termination (other than early termination due to Tenant’s
default), Landlord may, at its option and at Tenant’s sole cost and expense,
remove and store and/or dispose of the Rooftop Equipment and restore the
affected portions of the Building and Project, in which event all amounts
reasonably paid or incurred by Landlord in connection therewith shall be paid
by Tenant to Landlord within thirty (30) days following Landlord’s submission
to Tenant of reasonable evidence of the amount of such costs.

 

(g) Landlord makes no representation or
warranty regarding the availability, feasibility or legality of the
installation, operation, maintenance or removal of the Rooftop Equipment.  In no event shall the installation,
operation, maintenance or removal of the Rooftop Equipment in any manner
adversely affect any warranty in effect with respect to any portion of the
Project.  Tenant acknowledges and agrees
that Tenant’s inability to install, maintain, operate and/or remove the Rooftop
Equipment, either pursuant to the terms hereof or for any other reason, shall not
affect the remainder of this Lease and shall not entitle Tenant to any
reduction in the Rent.

 

33.  RIGHT OF FIRST NEGOTIAION.   From and after the
date hereof and throughout the Term of the Lease, Tenant shall have a right of
first negotiation for the lease of any remaining leasable space located in the
Building that becomes available for lease and is not then subject to an

 

37

 

option or right of any existing occupant (the “Expansion Space”),
which right of first negotiation of Tenant shall be exercisable as follows:

 

(a)  If
following the date hereof and prior to the expiration of the Lease Term, Tenant
desires to expand the Premises leased by Tenant in the Project, then Tenant
shall deliver written notice thereof to Landlord (such notice is referred to
herein as a “Tenant Expansion Interest Notice”).  Notwithstanding anything to the contrary
contained in this Section 33, Landlord shall have no obligation to
comply with the requirements of this Section 33 except during the
one (1) year period following Tenant’s delivery to Landlord of a Tenant
Expansion Interest Notice.  Tenant may
give successive Tenant Expansion Interest Notices so long as each such Tenant
Expansion Interest Notice is given after the date which is one (1) year
following Tenant’s delivery to Landlord of the then most recent such Tenant
Expansion Interest Notice.  If during the
one (1) year period following Tenant’s delivery to Landlord of a Tenant
Expansion Interest Notice, Landlord desires to lease any Expansion Space to a
third party (including by way of a response to an offer by a third party), then
Landlord shall promptly thereafter provide Tenant with written notice (“Landlord’s
Notice”) specifying the Expansion Space and the material terms and
conditions upon which Landlord would be willing to lease such Expansion Space
to Tenant (the parties hereby agreeing that the non-economic terms and
conditions of any lease of the Expansion Space pursuant to this Section 33
shall be on the non-economic terms and conditions set forth in this Lease,
except if otherwise specified in the Landlord’s Notice or Tenant’s Notice, as
applicable, and agreed upon by the other party).  For purposes hereof, “economic terms and
conditions” shall be deemed to include, without limitation, rent, operating
expenses, lease term, rent commencement date (including any rent abatement),
cost of tenant improvements to be constructed by Landlord, amount of tenant
improvement allowance to be provided by Landlord, and brokerage commissions
payable.

 

(b)  If
Tenant desires to lease such Expansion Space, Tenant shall, within ten (10)
days following receipt of such Landlord’s Notice, provide Landlord with written
notice thereof (“Tenant’s Notice”) either (i) agreeing to lease such
Expansion Space on the economic terms and conditions set forth in Landlord’s
Notice, in which event Landlord shall thereafter prepare an amendment to this
Lease, which shall be subject to Tenant’s approval (which approval shall not be
unreasonably withheld, conditioned or delayed and shall, in any event, be
granted or withheld within ten (10) days following submission thereof by
Landlord; provided that Tenant’s failure to respond within such ten (10) day
period shall be deemed to constitute Tenant’s election to rescind delivery of
Tenant’s Notice, in which event it shall be deemed that Tenant did not deliver
a Tenant’s Notice within the original ten (10) day period specified above),
documenting Tenant’s lease from Landlord of such Expansion Space on the terms
and conditions set forth in Tenant’s Notice and the non-economic terms and
conditions set forth in this Lease except as otherwise provided in the Landlord’s
Notice, or (ii) offering to lease such Expansion Space on alternate terms and
conditions set forth in Tenant’s Notice.

 

(c)  If
Tenant fails to deliver such Tenant’s Notice within such ten (10) day period
specified in subsection (b) above, Landlord may proceed to lease such
Expansion Space to any third party upon any terms and conditions Landlord desires
in its sole and absolute discretion.  If
within such ten (10) day period Tenant delivers a Tenant’s Notice pursuant to
clause (ii) of subsection (b) above, Landlord shall promptly thereafter
elect by written notice to Tenant either (1) to accept Tenant’s offer, in which
event Landlord shall thereafter prepare an amendment to this Lease (or a new
lease, if reasonably appropriate), which shall be subject to Tenant’s approval
(which approval shall not be unreasonably withheld, conditioned or delayed and shall,
in any event, be granted or withheld within ten (10) days following submission
thereof by Landlord; provided that Tenant’s failure to respond within such ten
(10) day period shall, at Landlord’s option, be deemed to constitute Tenant’s
election to rescind delivery of Tenant’s Notice, in which event it shall be
deemed that Tenant did not deliver a Tenant’s Notice within the original ten
(10) day period specified above), documenting Tenant’s lease from Landlord of
such Expansion Space on the terms and conditions set forth in Tenant’s Notice
and the non-economic terms and conditions set forth in this Lease except as
otherwise provided in the Tenant’s Notice, or (2) to reject Tenant’s offer, in
which event Landlord shall have the right to lease such Expansion Space prior
to the date which is nine (9) months following the date of Tenant’s Notice, to
any third party on economic terms and conditions not more favorable to such
third party than as set forth in Tenant’s Notice (other than a de minimis
manner).  If Landlord rejects Tenant’s
offer but (x) thereafter prior to the date which is

 

38

 

nine (9) months following the date of Tenant’s Notice, Landlord desires
to lease such Expansion Space to any third party on economic terms and
conditions which are more favorable to such third party than as set forth in
Tenant’s Notice (other than in a de minimis manner), or (y) thereafter
following the date which is nine (9) months following the date of Tenant’s
Notice, Landlord desires to lease such Expansion Space to any third party
(regardless of the proposed terms of such lease), Landlord shall first provide
Tenant with a new Landlord’s Notice setting forth the material terms and
conditions upon which Landlord would be willing to lease such Expansion Space
and Tenant shall again have ten (10) days following receipt of such notice to
elect to lease such Expansion Space on the terms and conditions set forth in
such new Landlord’s Notice in the manner set forth herein.

 

(d)  Landlord
hereby represents and warrants to Tenant that no existing tenant of the
Building has any existing expansion rights to any part of the Building which
are prior to the rights of Tenant contained in this  Section 33, and that no future
tenant of the Building shall hereafter be granted any expansion rights as to
Building that take priority over the expansion rights granted Tenant under this
Section 33.  Tenant’s right
of first negotiation pursuant to this Section 33 is personal to the
original Tenant signatory to this Lease and shall not be transferable to any
assignee or subtenant of Tenant (other than an assignee or subtenant who is a
Permitted Transferee) or exercisable for the benefit of any subtenant of
Tenant.

 

34. 
RELEASE OF FURTHER LIABILITY UNDER WARNER SPECIAL PRODUCTS LEASE.   Promptly following
the date hereof, Landlord shall cause the “landlord” under the “Warner
Special Products Lease” (as hereinafter defined), and Tenant shall cause “Warner
Special Products Tenant” (as hereinafter defined), as the “tenant” under
the Warner Special Products Lease, to enter into a lease assignment agreement
with Landlord which shall provide for the assignment of such Warner Special
Products Lease effective as of the Commencement Date of this Lease from Warner
Special Products to Landlord and the release of Warner Special Products from
further liability under the Warner Special Products Lease accruing with respect
to the period from and after the effective date of such assignment, without
payment of any fee by Warner Special Products, in the form attached hereto as
Exhibit Exhibit F and incorporated herein by this reference.  As used herein, the “Warner Special
Products Lease” shall mean that certain existing lease for premises
containing an aggregate of approximately 16,477 rentable square feet located at
Suites 800 (containing approximately 13,755 rentable square feet) and 730
(containing approximately 2,722 rentable square feet) within the building at
3500 W. Olive Avenue in Toluca Lake, California, between Toluca Lake Financial
Centre, an affiliate of certain of the entities having an interest in Landlord,
as “landlord”, and Warner Special Products, Inc. (“Warner Special Products”),
an affiliate of Tenant, as “tenant”.

 

35.  ADDITIONAL SPACE BONUS.   Not withstanding
anything to the contrary contained in this Lease, if at any time within five
(5) years following the Commencement Date, an entity other than Tenant but
controlled by, controlling or under material common control with Tenant leases
any other space in the Project (collectively, an “Affiliate Entity Lease”),
then Tenant shall be entitled, at Landlord’s option either to a payment from
Landlord or an offset against Tenant’s Monthly Base Rent next thereafter coming
due, in an amount (the “Affiliate Entity Lease Credit Amount”) equal to
two (2) times the initial monthly base rent paid by the tenant under such
Affiliate Entity lease for a Affiliate Entity Lease having an initial term of
ten (10) years or longer (provided that if such Affiliate entity Lease is for
an initial term of less than ten (10) years, then such Affiliate Entity Lease
Credit Amount shall be the product obtained by multiplying two (2) times the
initial monthly base rent paid by the tenant under such Affiliate Entity lease
by a fraction the numerator of which is the number of months in the initial
term of such Affiliate Entity Lease and the denominator of which is one hundred
twenty (120).  Nothing contained in this Section shall
be deemed to obligate Landlord to enter into any such Affiliate Entity Lease or
to require that Landlord reserve any space in the Project for any such
Affiliate Entity Lease.

 

36. 
NET EFFECTIVE RENT PROTECTION.   Notwithstanding anything to the contrary
contained in this Lease, if at any time prior to the date which is the earlier
to occur of (a) twenty-seven (27) months following the Effective Date of this
Lease, or (b) the date upon which Landlord has leased at least eighty-five
percent (85%) of the Building, Landlord enters into a lease (the “Other
Lease”) for any other space within the Building (other than the “Excluded
Space”, as hereinafter defined) pursuant to which Other Lease the tenant
thereunder is required to pay to Landlord a “Net Effective Rent” (as

 

39

 

hereinafter defined) which, on a per square foot of Rentable Area
basis, is less than the Net Effective Rent payable by Tenant under this Lease
on a per square foot of Rentable Area basis, then the Monthly Base Rent under
this Lease on a per square foot of Rentable Area basis being equal to the Net
Effective Rent payable by the tenant under the Other Lease on a per square foot
of Rentable Area basis.  As used herein,
the term “Net Effective Rent” shall mean the effective rental rate
charged by Landlord for the premises leased calculated on a monthly per square
foot of Rentable Area basis, using net present value analysis consistently
applied, and accounting for all payments required to be made to and by Landlord
under the applicable lease, including, without limitation, base rent,
escalation of rent, passthrough of Operating Expenses and Tax Expenses, parking
charges, tenant improvement costs and/or allowances, moving allowances,
brokerage commissions and other lease costs and concessions.  As used herein, the “Excluded Space” shall
mean any portion of the Building designated by Landlord containing not more
than fifteen percent (15%) of the Rentable Area of the Building.

 

37.  HOLD SPACE.

 

(a) 
Tenant shall have the option, exercisable by written notice delivered to
Landlord not later than April 1, 2003, to expand the Premises leased
pursuant to this Lease to include additional space within the Building
designated by Landlord (the “Hold Space”) which shall be one contiguous
area comprising not less than twelve thousand (12,000) square feet of Rentable
Area provided that Tenant may not exercise such option when Tenant is in
default under this Lease (after Tenant’s receipt of written notice from
Landlord and the expiration of any applicable cure period provided in Section 21(a)
above unless Landlord has waived such default by Tenant in writing, provided
that any such waiver by Landlord shall be granted or withheld in Landlord’s
sole and absolute discretion).  If Tenant
exercises its option to lease the Hold Space pursuant hereto, Tenant may lease
all or a portion of the Hold Space, provided that any portion of the Hold Space
not so leased is demised in a manner reasonably acceptable to Landlord so as to
be reasonably susceptible to lease to a third party without additional exiting
requirements or other additional costs. 
If requested by Tenant in advance of the exercise of such option,
Landlord shall promptly identify for Tenant where such Hold Space shall be
located.  Prior to June 15, 2002,
such Hold Space shall be Premises leased, but from and after June 15,
2002, such Hold Space shall be located as designated by Landlord and need not
be contiguous to the original Premises leased. 
In the event of Tenant’s lease of the Hold Space pursuant hereto, the
Hold Space shall be added to the Premises leased under this Lease and shall be
subject to payment of the rental amounts (calculated on a per square foot of
Rentable Area basis) and other terms and conditions of this Lease from time to
time thereafter applicable (including, without limitation, prorated
concessions) to Tenant’s lease of the original Premises pursuant to this
Lease.  In the event of Tenant’s lease of
any such Hold Space pursuant hereto, the parties shall, at the request of
either party, document such lease in accordance with the provisions hereof by
an amendment to this Lease in a form reasonably acceptable to the parties, but
Tenant’s right to lease such Hold Space shall not be conditioned upon the
execution of such amendment. 
Notwithstanding anything to the contrary contained in the foregoing,
from and after June 15, 2002, Landlord need not make the Hold Space
available for lease by Tenant pursuant hereto if (i) a third party desires to
lease space within the Building, (ii) but for other space leased to such third
party and the Hold Space, there is no other available space for lease within
the Building and (iii) all or a portion of the Hold Space is required for lease
to such third party.

 

(b) 
Tenant’s right to lease the Hold Space pursuant to this Section 37
is personal to the original Tenant signatory to this Lease and shall not be
transferable to any assignee or subtenant of Tenant (other than an assignee or
subtenant who is a Permitted Transferee) or exercisable for the benefit of any
subtenant of Tenant.

 

38. 
ADJACENT BUILDING DEVELOPMENT.   The parties hereby
agree and acknowledge that certain entitlements have been received by Landlord
for development of an additional building in the area located adjacent to the
initial Site approximately as depicted on Exhibit B attached
hereto (the “Adjacent Building”) and that certain excavation work has
been performed adjacent to the initial Site in connection with the possible
development of such Adjacent to the initial Site in connection with the
possible development of such Adjacent Building (the area of such existing
excavation work in connection with the possible development of such Adjacent
Building is referred to herein as the “Adjacent Building Excavation Area”).  Nothing contained in

 

40

 

this Lease shall be deemed to create any covenant, representation or
warranty by Landlord whether or when such Adjacent Building shall be
developed.  However, Landlord hereby
agrees that:

 

(a)  In
the event the construction of the Adjacent Building has not commenced by the
date which is one (1) year following the Commencement Date or if once
commenced, such construction of the Adjacent Building ceases (other than on a
temporary basis), then Landlord shall promptly thereafter cause the Adjacent
Building Excavation Area to be landscaped substantially in accordance with the
plan attached hereto as Exhibit H and incorporated herein by this
reference, Landlord shall not permit trailers or materials to be stored on the
Adjacent Building Excavation Area until construction activity commences or
resumes, as applicable, and Landlord shall cause the exposed visible surfaces
of the shoring system to be painted.

 

(b)  If
constructed by Landlord, the Adjacent Building shall not be used for purposes
inconsistent with the use of the Building which would have an adverse affect
(other than in a de minimis manner) on the image or character of the Building
as a first-class office building.

 

39.  MISCELLANEOUS.

 

(a) Tenant shall faithfully observe and
comply with the Rules and Regulations, a copy of which is attached hereto and
marked Exhibit D, and all reasonable and non-discriminatory
modifications thereof and additions thereto from time to time put into effect
by Landlord and delivered in writing to Tenant, provided such modifications do
not increase the monetary obligations of Tenant under this Lease or otherwise
increase (other than in a de minimis manner) the obligations of Tenant under
this Lease or diminish (other than in a de minimis manner) the rights of Tenant
under this Lease.  Landlord shall not be
responsible to Tenant for the violation or non-performance by any other tenant
or occupant of the Project of any of said Rules and Regulations, but Landlord
shall use commercially reasonable efforts to non-discriminatorily enforce the
Rules and Regulations.  In the event of
any conflict between any Rule or Regulation and the other provisions of this
Lease, the other provisions of this Lease shall prevail.

 

(b) 
This Lease shall be governed by, and construed in accordance with, the
laws of the State of California.

 

(c) 
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
representatives, successors and assigns.

 

(d) 
The voluntary or other surrender of this Lease by Tenant, or a mutual
cancellation thereof or any other termination of this Lease, 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. 
Tenant agrees that 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.

 

(e)  In
the event either party shall institute any action or proceeding against the
other party relating to this Lease, the unsuccessful party in such action or
proceeding shall reimburse the successful party for its disbursements incurred
in connection therewith and for its reasonable attorneys’ fees and costs.  In addition to the foregoing award of
attorneys’ fees and costs to the successful party, the successful party in any
lawsuit on this Lease shall be entitled to its attorneys’ fees and costs
incurred in any post-judgment proceedings to collect or enforce the
judgment.  This provision is separate and
several and shall survive the merger of this Lease into any judgment on this
Lease.

 

(f) 
The waiver by either party of any breach of any term, covenant or
condition herein contained shall not be deemed to be a waiver of any subsequent
breach of the same or any term, covenant or condition herein contained, 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 either party to insist upon the performance by the other
party in strict accordance with the terms of this Lease.  The subsequent acceptance of Rent hereunder
by Landlord shall not be deemed to be a waiver of any preceding breach by
Tenant of any term, covenant or condition of this Lease, other than the failure
of Tenant to pay the particular Rent so accepted, regardless of Landlord’s
knowledge of such

 

41

 

preceding breach at the time of acceptance of such Rent.  No acceptance by Landlord of a lesser sum
than that owed and due pursuant to this Lease shall be deemed to be other than
on account of the earliest installment of such Rent or other amount due, nor
shall any endorsement or statement on any check or any letter accompanying any
check 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
installment or other amount or pursue any other remedy provided in this Lease.

 

(g) 
Neither party shall have any liability whatsoever to the other on
account of the inability or delay of such party to fulfill any of its
obligations under this Lease (other than obligations with respect to the
payment of rent or any other monetary amounts owing under this Lease) by reason
of any of the following to the extent not reasonably foreseeable and preventable
or arising out of the negligence or wilful misconduct of the party otherwise
obligated for performance of the obligation in question (collectively, any “Force
Majeure Event”):  fire, earthquake,
explosion, flood, the elements, acts of God or the public enemy, acts of war,
terrorist acts, strike, other labor trouble, interference of governmental
authorities or agents, or shortages of fuel, supplies or labor resulting
therefrom or any other cause beyond the reasonable control of the party
obligated for such performance.  If this
Lease specifies a time period for performance of an obligation by either party
(other than payment of rent or any other monetary amounts owing by either party
under this Lease), that time period shall be extended by the period of any
delay in such party’s performance caused by any of the events described
above.  In addition, except as
specifically set forth in Section 14(d) above, Landlord shall have
no liability whatsoever to Tenant on account of any failure or defect in the
supply, quantity or character of electricity or water furnished to the Premises
or the Project, by reason of any requirement, act or omission of the public
utility or others furnishing the Project with electricity or water, or for any
other reason beyond Landlord’s reasonable control, provided that Landlord shall
use reasonable efforts to fulfill its obligations or remedy such failure or
defect as soon as reasonably possible.

 

(h) 
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 and the neutral.  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.

 

(i) 
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.

 

(j) 
Time is of the essence with respect to the performance of every
provision of this Lease in which time of performance is a factor.  For purposes of this Lease, a “business
day” shall mean any day other than a Saturday, Sunday or a Holiday.

 

(k) 
The parties acknowledge that the content of this Lease and any related
documents are confidential information, except that each party may make
disclosures (collectively, “Permitted Disclosures”) to such party’s
financial, legal, real estate, space planning and/or other consultants, to such
party’s existing or prospective investors or lenders, or prospective
transferees of such party or such party’s interest in this Lease and/or the
Premises, or as may be required by applicable laws or reporting
requirements.  Each party shall use
commercially reasonable efforts to keep such confidential information
confidential (other than Permitted Disclosures).  Tenant agrees that Landlord may issue one or
more press releases or other public announcements respecting the execution of
this Lease, which may include, without limitation, identification of Tenant
provided that the form and substance of any such press release or public
announcement shall be approved in advance by Landlord and Tenant (which
approval shall not be unreasonably withheld, conditioned or delayed).

 

(l)  If
any terms or provision of this Lease, or the application thereof to any persons
or circumstances, shall to any extent be invalid or unenforceable, the
remainder of this Lease, or the application of such provisions to persons or
circumstances other than those as to which it is invalid or unenforceable,
shall not be affected thereby, and each provision of this Lease shall be valid
and shall be enforceable to the extent permitted by law.

 

42

 

(m)  Neither
party shall record this Lease.  However,
upon request of either party, the parties shall execute (with notary
acknowledgement) a memorandum of this Lease in a commercially reasonable form
reasonably acceptable to the parties but not including reference to the rental
amounts owing or other economic terms of this Lease (the “Memorandum of
Lease”), which may be recorded by either party at such party’s sole cost in
the Official Records of Los Angeles County. 
The Memorandum of Lease may include reference to the covenants of
Landlord in Section 38 above, and may be recorded as an encumbrance
against the parcel containing the Adjacent Building Excavation Area.  The provisions of this Lease shall control,
however, in regard to any omissions from the Memorandum of Lease, or in respect
to any provisions hereof which may be in conflict with the Memorandum of
Lease.  In the event either party so
records the Memorandum of Lease, upon the expiration of the Term of this Lease
or earlier termination of this Lease, Tenant shall execute and cause to be
recorded in the Official Records of Los Angeles County, California, at the cost
of the party who originally recorded the Memorandum of Lease, a quitclaim deed
or other evidence of termination of this Lease in such form as is reasonably
requested by Landlord.  Tenant’s
obligation pursuant to the immediately preceding sentence shall survive the
expiration of the Term or earlier termination of this Lease.

 

(n)  In
consideration of the benefits accruing hereunder, and notwithstanding anything
contained in this Lease to the contrary, 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 or in the event of any other action against
Landlord with respect to this Lease, their sole and exclusive remedy shall be
against Landlord’s interest in the Project and the proceeds from the sale
thereof.  Tenant and all such successors
and assigns agree that the obligations of Landlord under this Lease do not
constitute personal obligations of the individual partners, whether general or
limited, 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 with respect to this Lease.  Notwithstanding any contrary provision
contained in this Lease, neither Landlord, any of the individual partners,
members, directors, officers or shareholders of Landlord or any of their
respective employees, agents or contractors shall be liable under any
circumstances for any indirect or consequential damages or any injury or damage
to, or interference with, Tenant’s business, including but not limited to, loss
of profits, loss of rents or other revenues, loss of business opportunity or
loss of goodwill, in each case, however occurring.

 

(o)  If
in connection with obtaining financing for the Project any lender shall request
modifications of this Lease as a condition to Landlord obtaining such
financing, Tenant will not unreasonably withhold, delay or defer its consent
thereto, provided that such modifications do not increase the financial
obligations of Tenant hereunder or materially and adversely affect the
leasehold interest hereby created or Tenant’s rights hereunder.

 

(p) 
Whenever the consent or approval of the Landlord or Tenant is required
under this Lease, such consent or approval shall not be unreasonably withheld,
conditioned or delayed, unless a different standard for the granting or
withholding of such approval or consent is specifically set forth in this
Lease.

 

(q)  At
any time during the Term, Tenant shall upon ten (10) days prior written notice
from Landlord, provide Landlord with a current financial statement and
financial statements of the two (2) years prior to the current financial
statement year.  Such statements shall be
prepared in accordance with generally accepted accounting principles and, if
such is the normal practice of Tenant, shall be audited by an independent
certified public accountant. 
Notwithstanding anything to the contrary contained herein, if Tenant is
a publicly traded corporation making annual 10-K filings with the Securities
and Exchange Commission, Tenant may satisfy the requirements of this subsection with
respect to delivery of financial information by delivery of Tenant’s most
recent annual report filed with the Securities and Exchange Commission.

 

(r) 
Landlord and Tenant each hereby represent and warrant that such party is
duly qualified to do business in California and that the individuals executing
this Lease on such party’s behalf is/are duly authorized to execute and deliver
this Lease on such party’s behalf.

 

43

 

(s) 
EACH PARTY HERETO (WHICH INCLUDES ANY ASSIGNEE, SUCCESSOR, HEIR OR
PERSONAL REPRESENTATIVE OF A PARTY) SHALL NOT SEEK A JURY TRIAL, HEREBY WAIVES
TRIAL BY JURY, AND HEREBY FURTHER WAIVES ANY OBJECTION TO VENUE IN THE COUNTY
IN WHICH THE BUILDING IS LOCATED, AND AGREES AND CONSENTS TO VENUE AND PERSONAL
JURISDICTION OF THE COURTS OF THE COUNTY AND STATE IN WHICH THE BUILDING IS
LOCATED, IN ANY ACTION OR PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY PARTY
HERETO AGAINST THE OTHER ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY
CONNECTED WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, TENANT’S
USE OR OCCUPANCY OF THE PREMISES, OR ANY CLAIM OF INJURY OR DAMAGE, OR THE
ENFORCEMENT OF ANY REMEDY UNDER ANY STATUTE, EMERGENCY OR OTHERWISE, WHETHER
ANY OF THE FOREGOING IS BASED ON THIS LEASE OR ON TORT LAW.  IN THE EVENT LANDLORD COMMENCES ANY SUMMARY
PROCEEDINGS OR ACTION FOR NONPAYMENT OF MONTHLY BASE RENT OR ADDITIONAL RENT,
TENANT SHALL NOT INTERPOSE ANY COUNTERCLAIM OF ANY NATURE OR DESCRIPTION
(UNLESS SUCH COUNTERCLAIM SHALL BE MANDATORY) IN ANY SUCH PROCEEDING OR ACTION,
BUT SHALL BE RELEGATED TO AN INDEPENDENT ACTION AT LAW.  EACH PARTY REPRESENTS THAT IT HAS HAD THE
OPPORTUNITY TO CONSULT WITH LEGAL COUNSEL CONCERNING THE EFFECT OF THIS
SUBSECTION.  THE PROVISIONS OF THIS SUBSECTION SHALL
SURVIVE THE EXPIRATION OF THE TERM OR EARLIER TERMINATION OF THIS LEASE.

 

(t) 
Any dispute between Landlord and Tenant pursuant to this Lease (other
than Landlord’s exercise of unlawful detainer remedies) shall, at the option of
either party, be heard by a reference pursuant to the provisions of California
Code of Civil Procedure Section 638 et seq., for a determination to be
made which shall be binding upon the parties as if tried before a court or
jury.  The parties agree specifically as
to the following: (i) within five (5) business days after service of a demand
by a party hereto, the parties shall agree upon a single referee who shall then
try all issues, whether of fact or law, and then report a finding or judgment
thereon, provided that if the parties are unable to agree upon a referee either
party may seek to have one appointed, pursuant to California Code of Civil
Procedure Section 640, by the presiding judge of the Los Angeles County
Superior Court; (ii)  the compensation of
the referee shall be such charge as is customarily charged by the referee for
like services, and the cost of such proceedings shall initially be borne
equally by the parties; provided, however, the prevailing party in such
proceedings shall be entitled, in addition to all other costs, to recover its
contribution for the cost of the reference as an item of damages and/or
recoverable costs; (iii) if a reporter is requested by either party, then a
reporter shall be present at all proceedings, and the fees of such reporter
shall be borne by the party requesting such reporter and such fees shall be an
item of recoverable costs, provided that only a party shall be authorized to
request a reporter; (iv) the referee shall apply all California Rules of
Procedure and Evidence and shall apply the substantive law of California in
deciding the issues to be heard, and notice of any motions before the referee
shall be given, and all matters shall be set at the convenience of the referee;
(v) the referee’s statement of decision under California Code of Civil
Procedure Section 644 shall stand as the judgment of the court, subject to
appellate review as provided by the laws of the State of California; (vi) the
parties agree that they shall in good faith endeavor to cause any such dispute
to be decided within four (4) months; and the location and date of hearing for
any proceeding shall be determined by agreement of the parties and the referee,
or if the parties cannot agree, then by the referee; and (vii) the referee
shall have the power to award damages and all other relief.

 

(u) 
Tenant may install, maintain, replace, remove or use any communications
or computer wires and cables (collectively, the “Lines”) at the Project in or
serving the Premises, provided that (i) Tenant shall obtain Landlord’s prior
written consent, use an experienced and qualified contractor approved in
writing by Landlord, and comply with all of the other provisions of this Lease
respecting the use of the Premises and the making of Alterations, (ii) an
acceptable number of spare Lines and space for additional Lines shall be
maintained for existing and future occupants of the Project, as determined in
Landlord’s reasonable opinion, (iii) the Lines therefor (including riser
cables) shall be appropriately insulated to prevent excessive electromagnetic
fields or radiation, and shall be surrounded by a protective conduit reasonably
acceptable to Landlord, (iv) any new or existing Lines servicing the Premises
shall comply with all applicable governmental laws and regulations, (v) as a
condition to permitting the installation of new Lines, Landlord may require
that Tenant remove existing Lines previously installed by Tenant located in or
serving the Premises and repair any damage in connection with such removal, and
(vi) Tennant shall pay all costs in connection therewith.  Landlord reserves the right to require that
Tenant remove any Lines located in or serving the Premises which are installed
in violation of these provisions, or which are at any time in violation of any
Laws or represent a dangerous or potentially dangerous

 

44

 

condition.  Landlord further
reserves the right to required that Tenant remove any and all Lines located in
or serving the Premises upon the expiration of the Lease Term or upon any
earlier termination of this Lease.

 

(v) 
This Lease may be executed in any number of counterparts, each of which
shall be deemed to be an original, but any number of which, taken together,
shall constitute one and the same instrument.

 

(w) 
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 pertaining to any such matter shall be effective for
any purpose.  No provisions 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.

 

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

 

	
  LANDLORD:

  	
   

  
	
   

  	
   

  
	
  MEDIA CENTER DEVELOPMENT, LLC,

  	
   

  
	
  a Delaware limited liability company

  	
   

  
	
   

  	
   

  
	
  By:

  	
  MEDIA CENTER PARTNERS, LLC,

  	
   

  
	
   

  	
  a California limited liability company

  	
   

  
	
   

  	
  its managing member

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  M. DAVID PAUL DEVELOPMENT LLC,

  	
   

  
	
   

  	
  a California limited liability company,

  	
   

  
	
   

  	
  its managing member

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ M. DAVID PAUL

  	
   

  	
   

  
	
   

  	
   

  	
  M. David Paul, Managing Member

  	
   

  
	
   

  	
   

  
	
  TENANT:

  	
   

  
	
   

  	
   

  
	
  WARNER MUSIC GROUP INC.,

  	
   

  
	
  a Delaware corporation

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ HELEN MURPHY

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Print Name:

  	
  HELEN MURPHY

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
  CFO

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ JOHN AVAGLIANO

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Print Name:

  	
  JOHN AVAGLIANO

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Its:

  	
  SVP

  	
   

  	
   

  
									

 

45

 

Exhibit A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT B

 

 

 

 

 

 

 

 

 

 

 

Exhibit A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT B

 

 

 

 

 

 

 

 

 

 

EXHIBIT C

 

IMPROVEMENT OF THE PREMISES

 

1.                                       AS
IS LEASE. Except as otherwise specifically provided in the Lease of which
this Exhibit C is a part, the lease of the Premises (including, without
limitation, HVAC, fire/life safety and other utility and mechanical systems
within the Premises) by Tenant pursuant hereto shall be on an entirely “as is”
basis. However, promptly following the date hereof in accordance with Landlord’s
construction schedule (but in any event prior to the Commencement Date),
Landlord shall substantially complete such of the Common Areas of the Project
as are reasonably required for the operation of Tenant’s business from the
Premises without material interference resulting from any incomplete portion of
such Common Areas. Landlord heretofore performed certain “Core and Shell
Work” for the Building substantially in accordance with those certain plans
as more particularly described on Schedule 1 attached hereto and
incorporated herein by this reference (the “Core and Shell Work Plans”).
Landlord shall promptly hereafter perform the following work (collectively, the
“Core and Shell Punch List Work”): (a) the work specified in those
certain Punch Lists dated May 9, 2002 and May 20, 2002, prepared by Contractor,
(b) the work specified in the certain Pre-Construction Site Survey prepared by
HLW International LLP dated May 7, 2002 (except that it is agreed that no
further wainscot need be installed in the first floor janitorial closet), and
(c) painting the western exit staircase (i.e., walls, ceiling and
handrails), providing physical barrier for second floor balcony (although the
parties agree that installation of such barrier need not be completed until
Substantial Completion of the Tenant Improvements), and painting the visible
roofing material on the fourth floor balcony “tan”. The Core and Shell Work
(without regard to any particular Tenant Improvements installed by Tenant)
shall meet the noise specifications set forth in Schedule 2 attached
hereto and incorporated herein by this reference. Notwithstanding anything to
the contrary contained in the Lease of which this Exhibit is a part (including,
without limitation, Section 3(a) below in this Exhibit C), in the event
that hereafter during the course of Tenant’s construction of the Tenant Improvements,
it is determined that any of the Core and Shell Work Plans (other than Core and
Shell Punch List Work already completed), then (i) Landlord shall promptly, at
Landlord’s sole cost, perform such corrective work to conform the Core and
Shell Work to the Core and Shell Work Plans, (ii) Landlord shall repair any
damage to the Tenant Improvements resulting from Landlord’s performance of such
corrective work, and (iii) the period of any delay in the Substantial
Completion of the Tenant Improvements resulting from Landlord’s performance of
such corrective work and/or repair work under the foregoing clauses (i) and/or
(ii) shall constitute a Landlord Delay.

 

2.                                       TENANT
IMPROVEMENTS.

 

(a) Tenant Improvement Allowance. Tenant shall be solely
responsible for all costs of the initial construction of Tenant’s improvements
which are permanently affixed to the Premises ( the “Tenant Improvements”)
and Landlord shall not be required to provide any allowance to Tenant in
connection therewith; except only that within thirty (30) days following Tenant’s
request therefor following Tenant’s commencement of physical construction of
the Tenant Improvements within the Premises, Landlord shall pay to Tenant an
allowance in an amount equal to Three Dollars ($3.00) per square foot of
Rentable Area in the Premises (“Tenant Improvement Cash Allowance”). At Tenant’s
option, Tenant may apply the Tenant Improvement Cash Allowance to the rental
charges first owed under this Lease. Tenant shall indicate whether Tenant would
like to receive the Tenant Improvement Cash Allowance in cash or in the form of
a rent credit at the time of Tenant’s request for the Tenant Improvement Cash
Allowance, and, should Tenant elect to receive a rent credit, then Landlord
will not pay the Tenant Improvement Cash Allowance, and, should Tenant elect to
receive a rent credit, then Landlord will not pay the Tenant Improvement Cash
Allowance to Tenant, and Tenant instead shall apply the Tenant Improvement Cash
Allowance to the first rental charges owed under this Lease until the entire
Tenant Improvement Cash Allowance amount has been applied.

 

(b) Standard Tenant Improvement Package. Landlord has
established specifications (the “Specifications”) for some of the
Building standard components which Tenant shall construct in the Premises,
which Specifications are as described in Schedule 3 attached hereto and
incorporated herein by this reference. Tenant hereby agrees that it has
reviewed and approves the Specifications. The quality of the Tenant
Improvements must at a minimum comply with the applicable Specifications,
provided that if required by

 

 

Landlord as to both (i) the
Tenant Improvements constructed in any portion of the Premises which occupies a
portion of a floor, rather than a full floor, of the Building, and (ii) window
coverings, such items shall meet the Specifications.

 

3.                                       CONSTRUCTION
DRAWINGS.

 

(a)                                  Selection
of Architect/Construction Drawings. Tenant shall retain an architect/space
planner (the “Architect”) approved by Landlord, which approval shall not
be unreasonably withheld, conditioned or delayed, to prepare the Construction
Drawings. Tenant shall retain engineering consultants (the “Engineers”)
designated by Landlord or otherwise reasonably approved by Landlord to prepare
all plans and engineering working drawings relating to the structural,
mechanical, electrical, plumbing, HVAC, life-safety, and sprinkler work in the
Premises in connection with the Tenant Improvements. Notwithstanding anything
to the contrary contained in the foregoing, Landlord hereby pre-approves
retention of HLW International LLP, Syska Hennessey Group, Martin Newsome
Associates and Lighting Design Alliance. The plans and drawings to be prepared
by Architect and the Engineers hereunder shall be known collectively as the “Construction
Drawings”. All Construction Drawings shall be professionally prepared
consistent with drawings for comparable construction projects at Comparable
Buildings, using one-eighth (1/8th) inch scale CAD drawings (or an alternate
standard reasonably acceptable to Landlord). Landlord’s review of the
Construction Drawings as set forth in this Section 3, shall be for its
sole purpose and shall not imply Landlord’s review of the same, or obligate
Landlord to review the same, for quality, design, compliance with Applicable
Law or other like matters. Accordingly, notwithstanding that any Construction
Drawings are reviewed by Landlord or its space planner, architect, engineers
and consultants, and notwithstanding any advice or assistance which may be
rendered to Tenant by Landlord or Landlord’s space planner, architect,
engineers, and consultants, Landlord shall have no liability whatsoever in
connection therewith and shall not be responsible for any omissions or errors
contained in the Construction Drawings, and Tenant’s waiver and indemnity set
forth in the Lease shall specifically apply to the Construction Drawings,
except to the extent that such errors in the Construction Drawings result from
errors contained in the Core and Shell Work Plans and not theretofore
identified by the parties. Furthermore, Tenant and Architect shall use
commercially reasonable efforts and diligence to verify, in the field, the
dimensions and conditions as shown on the relevant portions of the Core and
Shell Work Plans, so as to mitigate any costs Landlord may incur pursuant to
this Exhibit as a result of errors in the Core and Shell Work Plans.

 

(b)                                 Final
Space Plan. The parties hereby approve of the final space plans for the
Tenant Improvements which are attached as Exhibit A to the Lease of
which this Exhibit is a part (the “Final Space Plan”).

 

(c)                                  Final
Working Drawings. Within thirty (30) days after the full execution and
delivery of this Lease by Landlord and Tenant, Tenant shall promptly cause the
Architect and the Engineers to complete the architectural and engineering
drawings for the Premises, and Architect shall compile a fully coordinated set
of architectural, structural, mechanical, electrical and plumbing working
drawings in a form which is complete to allow the general contractor or
subcontractors to bid on the work and to obtain all applicable permits
(collectively, the “Final Working Drawings”) and shall submit the same
to Landlord for Landlord’s approval (which approval shall not be unreasonably
withheld, conditioned or delayed). Tenant shall supply Landlord with four (4)
copies signed by Tenant of such Final Working Drawings. Landlord shall advise
Tenant with specificity within ten (10) business days after Landlord’s receipt
of the Final Working Drawings for the Premises whether or not Landlord approves
of such proposed Final Working Drawings. The parties hereby agree that it shall
be reasonable for Landlord to withhold approval of the proposed final Working
Drawings if the Final Working Drawings are inconsistent with the approved Final
Space Plan, existing Building systems or improvements, applicable Laws, or
first-class office building use for the permitted uses under this Lease or are
incomplete in any respect. If Tenant is so advised of Landlord’s disapproval,
Tenant shall promptly cause the Final Working Drawings to be revised to correct
any deficiencies or other matters Landlord may reasonably require.

 

(d)                                 Approved
Working Drawings. The Final Working Drawings shall be approved by Landlord
(the “Approved Working Drawings”) prior to the commencement of
construction of the Premises by Tenant. Within five (5) days after approval by
Landlord of the Final Working Drawings, Tenant shall submit

 

 

the same to the City of Burbank
for all applicable building permits. Subject to the express representations and
warranties of Landlord set forth in the Lease of which this Exhibit is a part,
Tenant hereby agrees that neither Landlord nor Landlord’s consultants shall be
responsible for obtaining any building permit or certificate of occupancy for
the Premises and that obtaining the same shall be Tenant’s responsibility;
provided, however, that Landlord shall cooperate with Tenant in executing
permit applications and performing other ministerial acts reasonably necessary
to enable Tenant to obtain any such permit or certificate of occupancy and
perform its obligations under Sections 9(a) and 9(b) of the Lease
of which this Exhibit is a part. No changes (other than customary, de minimis “field
changes”), modifications or alterations in the Approved Working Drawings may be
made without the prior written consent of Landlord, which consent shall not be
unreasonably withheld, conditioned or delayed.

 

(e)                                  60%
Construction Drawings. Notwithstanding anything to the contrary contained
in the foregoing, the parties hereby agree that Tenant shall have the right to
prepare customary “60%” construction drawings for the Tenant Improvements based
upon the approved Final Space Plan (the “60% Construction Drawings” )
and submit four (4) copies of the same to Landlord, signed by Tenant, for
Landlord’s prior approval (which approval shall not be unreasonably withheld,
conditioned or delayed). If so submitted, Landlord shall advise Tenant with
specificity with ten (10) business days after Landlord’s receipt of the 60%
Construction Drawings whether or not Landlord approves of such proposed 60%
Construction Drawings. The parties hereby agree that it shall be reasonable for
Landlord to withhold approval of the proposed 60% Construction Drawings if the
60% Construction Drawings are inconsistent with the approved Final Space Plan,
existing Building systems or improvements, applicable Laws, or first-class
office building use for the permitted uses under this Lease or are incomplete
in any respect. If Tenant is so advised of Landlord’s disapproval, Tenant shall
promptly cause the 60% Construction Drawings to be revised to correct any
deficiencies or other matters Landlord may reasonably require. Once the 60%
Construction Drawings are approved by Landlord and Tenant, subject to
compliance with applicable Laws (including, without limitation, any permitting
requirements of the City of Burbank), Tenant may commence performance of the
Tenant Improvements on the basis thereof prior to achieving Approved Working
Drawings so long as Tenant is diligently proceeding to achieve the Approved
Working Drawings, subject to compliance with the other provisions of the Lease
of which this Exhibit is a part.

 

4.                                       CONSTRUCTION
OF THE TENANT IMPROVEMENTS.

 

(a)                                  Tenant’s
Selection of Contractors.

 

(i)                                     The
Contractor. Tenant shall retain a licensed general contractor (the “Contractor”),
as contractor for the construction of the Tenant Improvements, by a process of
competitive bidding (at the schematic design stage) among not less than three
(3) qualified, licensed general contractors reasonably approved by Landlord and
reasonably experienced in the performance of work comparable to the work of the
Tenant Improvements in buildings comparable to the Building, or otherwise
reasonably approved by Landlord, provided that Krismar Construction Company (“Krismar”),
an affiliate of certain of the entities holding an interest in Landlord, shall
have the right (but not the obligation) to be one of the bidding general
contractors; provided, further, that Tenant need not select Krismar even if
Krismar is the lowest bidder.

 

(ii)                                  Tenant’s
Agents. All subcontractors, laborers, materialmen, and suppliers used by
Tenant (such subcontractors, laborers, materialmen, and suppliers, and the
Contractor to be known collectively as “Tenant’s Agents”) must be
approved in writing by Landlord, which approval shall not be unreasonably
withheld, conditioned or delayed; provided that, at Landlord’s option, Tenant
must contract with Landlord’s base building subcontractors for any roof or
mechanical work in the Premises provided that the fees charged by such
subcontractors shall be commercially reasonable and competitive for the work
performed as compared with comparably experienced licensed subcontractors in
the Burbank area.

 

(b)                                 Construction
of Tenant Improvements by Tenant’s Agents.

 

(i)                                     Construction
Contract; Cost Budget. Once a preliminary budget has been established for
the construction of the Tenant Improvements, Tenant shall submit such
preliminary budget to Landlord for informational purposes. Prior to Tenant’s
commencement of construction of the Tenant

 

 

Improvements, Tenant shall
submit to Landlord (1) the construction contract and general conditions with
Contractor (the “Contract”) and the bids of the Contractor and all
subcontractors for major trades and materials suppliers for construction of the
Tenant Improvements, for Landlord’s approval, which approval shall not be
unreasonably withheld, conditioned or delayed; and (2) a detailed breakdown, by
trade, of the final costs to be incurred and/or which have been incurred for
costs of design, purchase of materials for, permitting and construction of the
Tenant Improvements (the “Final Costs”) and a construction budget (the “Construction
Budget” ) based upon such Final Costs.

 

(ii)                                  Tenant’s
Agents.

 

(1)                                  Landlord’s
General Conditions for Tenant’s Agents and Tenant Improvement Work. Tenant’s
and Tenant’s Agent’s construction of the Tenant Improvements shall comply with
the following: (A) the Tenant Improvements shall be constructed in strict
accordance with the Approved Working Drawings; (B) Tenant and Tenant’s Agents
shall not, in any way, interfere with, obstruct or delay, any other work in the
Building; (C) Tenant’s Agents shall submit schedules of all work relating to
the Tenant’s Improvements to Contractor and Contractor shall, within five (5)
business days of receipt thereof, inform Tenant’s Agents of any changes which
are necessary thereto, and Tenant’s Agents shall adhere to such corrected
schedule; and (D) Tenant shall abide by all reasonable and non-discriminatorily
enforced rules made by Landlord with respect to the use of freight, loading
dock and service elevators, storage of materials, coordination of work with the
contractors of other tenants, and any other matter in connection with the
construction of the Tenant Improvements. However Landlord shall reasonably
cooperate with Tenant in the performance of the Tenant Improvements so as to
facilitate use of the shared loading dock and service elevators, storage of materials
and coordination of work in a manner which endeavors to minimize the extent of
any delay in the performance of the Tenant Improvements resulting from use of
such shared facilities and the multi-tenant nature of the Building.

 

(2)                                  Indemnity.
Tenant’s indemnity of Landlord as set forth in the Lease shall also apply with
respect to any and all costs, losses, damages, injuries and liabilities related
in any way to any act or omission of Tenant or Tenant’s Agents, or anyone
directly or indirectly employed by any of them, or in connection with Tenant’s
not-payment of any amount arising out of the Tenant Improvements and/or Tenant’s
disapproval of all or any portion of any request for payment.

 

(3)                                  Requirements
of Tenant’s Agents. Each of Tenant’s Agents shall guarantee to Tenant and
for the benefit of Landlord that the portion of the Tenant Improvements for
which it is responsible shall be free from any defects in workmanship and
materials for a period of not less than one (1) year from the date of completion
thereof. Each of Tenant’s Agents shall be responsible for the replacement or
repair, without additional charge, of all work done or furnished in accordance
with its contract that shall become defective within (1) year after the later
to occur of (i) completion of the work performed by such contractor or
subcontractors and (ii) the Commencement Date. The correction of such work
shall include, without additional charge, all additional expenses and damages
incurred in connection with such removal or replacement of all or any part of
the Tenant Improvements, and/or the Building and/ or common areas that may be
damaged or disturbed thereby. All such warranties or guarantees as to materials
or workmanship of or with respect to the Tenant Improvements shall be contained
in the Contract or subcontract and shall be written such that such guarantees
or warranties shall inure to the benefit of both Landlord and Tenant, as their
respective interests may appear, and can be directly enforced by either. Tenant
covenants to give to Landlord any assignment or other assurances which may be
necessary to effect such right of direct enforcement upon the occurrence of any
uncured event of default by Tenant or earlier termination of the Lease of which
this Exhibit is a part.

 

(4)                                  Insurance
Requirements.

 

(A)                              General
Coverages. All of Tenant’s Agents shall carry worker’s compensation
insurance covering all of their respective employees, and shall also carry
public liability insurance, including property damage, all in form and with companies
as are required to be carried by Tenant as set forth in the Lease provided that
the limits of such insurance may be lower than the minimum limits of coverage
required of Tenant to the extent such lower limits are commercially reasonable
and customary

 

 

given the work being performed
by the applicable Tenant’s Agent, and the policies therefor shall insure
Landlord and Tenant, as their interests may appear, as well as the Contractor
and subcontractors.

 

(B)                                Special
Coverages. Tenant shall carry “Builder’s All Risk” insurance in an amount
reasonably approved by Landlord covering the construction of the Tenant
Improvements, and such other insurance as Landlord may reasonably require, it
being understood and agreed that the Tenant Improvements shall be insured by
Landlord pursuant to the Lease immediately upon completion thereof. Such
insurance shall be in amounts and shall include such extended coverage
endorsements as may be reasonably required by Landlord. To the extent
customarily maintained by first-class contractors, subcontractors or
materialmen (as applicable) performing comparable work in Comparable Buildings,
all of Tenant’s Agents shall carry excess liability and Products and Completed
Operation Coverage insurance, each in amounts not less than $1,000,000 per
incident, $2,000,000 in aggregate, and in form and with companies as are
required to be carried by Tenant as set forth in Section 17 of the Lease
of which this Exhibit C is a part.

 

(C)                                General
Terms. Certificates for all insurance carried pursuant to this Section
4(b) (ii) (4) shall be delivered to Landlord before the commencement of
construction of the Tenant Improvements and before the Contractor’s equipment
is moved onto the site. All such policies of insurance must contain a provision
that the company writing said policy will give Landlord at least thirty (30)
days prior written notice of any cancellation or lapse of the effective date or
any reduction in the amounts of such insurance. In the event that the Tenant
Improvements are damaged by any cause during the course of the construction
thereof, Tenant shall immediately repair the same at Tenant’s sole cost and
expense; except that if such damage is caused by the negligence or wilful
misconduct of Landlord or Landlord’s employees, agents or contractors and is
not covered by the insurance maintained by Tenant (and would not have been so
covered had Tenant maintained the insurance required to be maintained by Tenant
under this Lease), then Landlord shall perform such required repair work at
Landlord’s sole cost. Tenant’s Agents shall maintain all of the foregoing
insurance coverage in force until the Tenant Improvements are fully completed
and accepted by Landlord, except for any Products and Completed Operation
Coverage insurance required by Landlord of the Contractor, which is to be
maintained for five (5) years following completion of the work and acceptance
by Landlord and Tenant. All insurance, except Workers’ Compensation, maintained
by Tenant’s Agents shall preclude subrogation claims by the insurer against
anyone insured thereunder. Such insurance shall provide that it is primary
insurance as respects the owner and that any other insurance maintained by
owner is excess and noncontributing with the insurance required hereunder. The
requirements for the foregoing insurance shall not derogate from the provisions
for indemnification of Landlord by Tenant under Section 4(b) (ii) (2)
above.

 

(iii)                               Governmental
Compliance. The Tenant Improvements shall comply in all respects with the
following: (1) all applicable Laws and other state, federal, city or
quasi-governmental laws, codes, ordinances and regulations, as each may apply
according to the rulings of the controlling public official, agent or other
person; (2) applicable standards of the American Insurance association and the
National Electrical Code; and (3) building material manufacturer’s
specifications.

 

(iv)                              Inspection
by Landlord. Landlord shall have the right to inspect the Tenant
Improvements at all reasonable times, provided however, that Landlord’s failure
to inspect the Tenant Improvements shall in no event constitute a waiver of any
of Landlord’s rights hereunder nor shall Landlord’s inspection of the Tenant
Improvements constitute Landlord’s approval of the same. Tenant shall have the
right to accompany Landlord during any such entry. Should Landlord reasonably
disapprove any portion of the Tenant Improvements based upon a failure to
comply with the Approved Working Drawings, Landlord shall notify Tenant in
writing of such disapproval and shall specify the items disapproved. Any
defects or deviations in, and/or disapproval by Landlord of, the Tenant
Improvements shall be rectified by Tenant at no expense to Landlord.

 

(v)                                 Meetings.
Commencing upon the execution of this Lease (or later as reasonably determined
by Tenant), Tenant shall hold weekly meetings at a reasonable time, with the
Architect and the Contractor regarding the progress of the preparation of
Construction Drawings and construction of the Tenant Improvements, which meetings
shall be held at a location

 

 

reasonably acceptable to
Landlord, and Landlord and/ or its agents shall receive prior notice of, and
shall have the right to attend, all such meetings. One such meeting each month
shall include the review of Contractor’s current request for payment.

 

(c)                                  Notice
of Completion; Updated Approved Working Drawings. Within thirty (30) days
following the commencement of Tenant’s occupancy of the Premises (other than
for purposes of construction of the Tenant Improvements), (i) Tenant shall
cause the Architect and Contractor to update the Approved Working Drawings as
necessary to reflect all changes made to the Approved Working Drawings during
the course of construction (except customary, minor field changes shown on
consultant’s sketches provided to Landlord); (ii) Tenant shall deliver to
Landlord properly executed unconditional final mechanics lien releases in
compliance with California Civil Code Section 3262 (d) (4) from all of Tenant’s
Agents for labor rendered and materials delivered to the Premises in connection
with the Tenant Improvements, and Tenant shall cause a Notice of Completion to
be recorded in the office of the Recorder of the County of Los Angeles in
accordance with Section 3093 of the Civil Code of the State of California or
any successor statute, and deliver a copy thereof to Landlord, provided that if
Tenant fails to do so within a reasonable period after receipt of written
notice from Landlord, Landlord may execute and file the same on behalf of
Tenant as Tenant’s agent for such purpose, at Tenant’s sole cost and expense;
and (iii) Tenant shall deliver to Landlord two (2) sets of sepias and CAD
diskette of such as-built drawings for the Premises with the completed Tenant
Improvements and a copy of all warranties, guaranties, and operating manuals
and information relating to the improvements, equipment, and systems in the
Premises, and shall cause the Architect and Contractor to certify to the best
of their knowledge that the “record-set” of as-built drawings are true and
correct, which certification shall survive the expiration or termination of
this Lease.

 

(d)                                 Coordination
by Tenant’s Agents with Landlord. Upon tenant’s delivery of the Contract to
Landlord under Section 4 (b) (i) above, Tenant shall furnish Landlord
with a schedule setting forth the projected date of the completion of the
Tenant Improvements and showing the critical time deadlines for each phase,
item or trade relating to the construction of the Tenant Improvements.

 

5.                                       COMMENCEMENT
DATE.

 

(a)                                  Commencement
Date. The “Commencement Date” shall occur for all purposes of this
Lease upon January 1, 2003; which date shall be extended on a day for day basis
to the extent of any delay in the “Substantial Completion of the Tenant
Improvements” resulting from any “Landlord Delay”, as such terms are
hereinafter defined. Notwithstanding that the Lease Commencement Date shall not
occur until following the delivery of possession of the Premises to Tenant by
Landlord, this Lease shall be fully effective from and after the date of the
execution of this Lease. Tenant’s occupancy of the Premises following the
delivery of possession of the Premises to Tenant by Landlord and prior to the
Commencement Date for purposes of construction of the Tenant Improvements and installation
of Tenant’s trade fixtures, furniture, equipment and personal property shall be
subject to all terms and conditions of this Lease other than Tenant’s
obligation for payment of Monthly Base Rent and Tenant’s Expenses Excess. In
addition, Tenant shall have the right to occupy all or any part of the Premises
for the conduct of Tenant’s business following the delivery of possession and
prior to the Commencement Date, provided that such occupancy shall be subject
to all terms and conditions of this Lease including, without limitation, Tenant’s
obligation for payment of Monthly Base Rent (calculated without regard to the
provisions of Lease Sections  5 (c), 5(d), and 5(e)),
prorated based upon the Rentable Area of the Premises so occupied for the conduct
of Tenant’s business.

 

(b)                                 Landlord
Delay. As used herein, the term “Landlord Delay” shall mean any
delay in the Substantial Completion of the Tenant Improvements resulting from
(i) the performance of required corrective work and/or repair work by Landlord
pursuant to clause (i) and/ or (ii) of Section 1 of this Exhibit C, (ii)
any breach of this Lease by Landlord; and/or (iii) the negligence or wilful
misconduct of Landlord or its employees or agents; provided that no Landlord
Delay shall be deemed to commence or occur unless and until the matter giving
rise to such Landlord Delay is not cured by Landlord within one (1) business
day following Landlord’s receipt of written notice thereof from Tenant (which
notice may, notwithstanding anything to the contrary contained herein, be
delivered by facsimile transmission to Landlord

 

 

c/o Jeffrey M. Worthe at (310)
458-2644, with telephone confirmation of receipt at (310) 393-9655, with a copy
to Scott D. Brooks at (310) 277-7889 with telephone confirmation of receipt at
(310) 277-4222, or to such other number(s) as Landlord may hereafter specify by
written notice to Tenant).

 

(c)                                  Definition
of Substantial Completion of the Tenant Improvements. For purposes of this
Lease, the “Substantial Completion of the Tenant Improvements” shall
mean completion of construction of the Tenant Improvements in the Premises
pursuant to the Approved Working Drawings with the exception of any punch list
items, any furniture, fixtures, work stations, built-in furniture or equipment
(even if the same requires installation or electrification by Tenant’s Agents),
and any tenant improvement finish items and materials which are selected by
Tenant but which are not available within a reasonable time (given the
anticipated date of the Lease Commencement Date), and Tenant’s receipt of any
governmentally-required permits and/or approvals to allow occupancy of the
Premises (provided that Tenant shall use reasonable efforts and diligence in
good faith to obtain such permits and/or approvals as soon as reasonably
possible).

 

6.                                       MISCELLANEOUS.

 

(a)                                  Tenant’s
Representative. Tenant has designated Anthony Mason Associates, Jean
Cavangh and Blake Messinger each as its representatives with respect to the
matters set forth in this Exhibit, who, until further notice to Landlord, shall
have full authority and responsibility, acting individually or together, to act
on behalf of the Tenant as required in this Exhibit.

 

(b)                                 Landlord’s
Representative. Landlord has designated M. David Paul and Jeffrey M. Worthe
each as its representatives with respect to the matters set forth in this
Exhibit, who, until further notice to Tenant, shall have full authority and
responsibility, individually or together, to act on behalf of the Landlord as
required in this Exhibit.

 

(c)                                  Miscellaneous.
Subject to applicable governmental requirements, Landlord shall reasonably
cooperate with Tenant to allow the performance of construction of the Tenant
Improvements by Tenant’s Agents during such hours as are desired by Tenant.
During the period of construction of the Tenant Improvements prior to the
Commencement Date, (i) Tenant or Tenant’s Agents shall not be charged for,
directly or indirectly, HVAC usage during Building Hours (provided that such
HVAC provided to the Premises need only be at such levels as are commercially
reasonable for a tenant improvement construction site), electricity, water, or
freight elevator or loading dock usage in connection with the construction of
the Tenant Improvements, (ii) Landlord shall cause such loading dock to be
reasonably available for Tenant’s use during construction and move-in to the
Premises, subject to scheduling and reasonable coordination with Landlord and
other Project occupants, and (iii) the Contractor and all of its subcontractors
shall not be charged for parking in the designated parking facility for Project
contractors during construction of the Tenant Improvements prior to the
Commencement Date. Landlord shall cause the Premises to be thoroughly cleaned
promptly following the Substantial Completion of the Tenant Improvements and
promptly following Tenant’s move in to the Premises. None of Tenant’s Agents
shall be entitled to (1) display identification or other signage at the
Project, (2) use passenger elevators at the Project, or (3) park anywhere
except in the designated parking facility for Project contractors.

 

 

SCHEDULE 1 TO EXHIBIT C

 

Core and Shell Work Plans

 

Architectural
Drawings by Dave Thomsen Enterprises

 

	
  Sheet Number

  	
   

  	
  Description

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  A0.01

  	
   

  	
  Cover Sheet, Sheet Index, Location Map

  	
   

  	
  01/30/02

  
	
  A0.02

  	
   

  	
  General Notes, Project Information

  	
   

  	
  04/10/01

  
	
  A0.03

  	
   

  	
  Accessibility Notes and Details

  	
   

  	
  04/10/01

  
	
  A1.01

  	
   

  	
  Site Plan

  	
   

  	
  11/30/01

  
	
  A2.01

  	
   

  	
  P4 Parking Plan

  	
   

  	
  11/30/01

  
	
  A2.02

  	
   

  	
  P3 Parking Plan

  	
   

  	
  11/30/01

  
	
  A2.03

  	
   

  	
  P2 Parking Plan

  	
   

  	
  11/30/01

  
	
  A2.04

  	
   

  	
  P1 Parking Plan

  	
   

  	
  11/30/01

  
	
  A2.05

  	
   

  	
  Plaza Slab and Drainage Plan

  	
   

  	
  10/17/01

  
	
  A2.06

  	
   

  	
  First Floor Plan

  	
   

  	
  01/30/02

  
	
  A2.07

  	
   

  	
  Second Floor Plan

  	
   

  	
  08/17/01

  
	
  A2.08

  	
   

  	
  Third Floor Plan

  	
   

  	
  08/17/01

  
	
  A2.09

  	
   

  	
  Fourth Floor Plan

  	
   

  	
  08/17/01

  
	
  A2.10

  	
   

  	
  Fifth Floor Plan

  	
   

  	
  08/17/01

  
	
  A2.11

  	
   

  	
  Sixth Floor Plan

  	
   

  	
  08/17/01

  
	
  A2.12

  	
   

  	
  Roof and Penthouse Plan

  	
   

  	
  09/07/01

  
	
  A3.01

  	
   

  	
  Building Sections

  	
   

  	
  04/10/01

  
	
  A3.02

  	
   

  	
  Building Sections

  	
   

  	
  04/10/01

  
	
  A3.03

  	
   

  	
  Building Sections

  	
   

  	
  10/17/01

  
	
  A3.04

  	
   

  	
  Building Sections

  	
   

  	
  09/07/01

  
	
  A3.05

  	
   

  	
  North and South Elevations

  	
   

  	
  10/17/01

  
	
  A3.05A

  	
   

  	
  Exterior Color Key Elevations

  	
   

  	
  10/17/01

  
	
  A3.06

  	
   

  	
  East and West Elevations

  	
   

  	
  10/17/01

  
	
  A3.06A

  	
   

  	
  Exterior Color Key Elevations

  	
   

  	
  10/17/01

  
	
  A3.06.1

  	
   

  	
  Penthouse Elevations

  	
   

  	
  10/17/01

  
	
  A3.07

  	
   

  	
  Enlarged Elevations

  	
   

  	
  08/17/01

  
	
  A3.08

  	
   

  	
  Enlarged Elevations

  	
   

  	
  08/17/01

  
	
  A3.09

  	
   

  	
  Enlarged Elevations

  	
   

  	
  10/17/01

  
	
  A3.10

  	
   

  	
  Enlarged Elevations

  	
   

  	
  08/17/01

  
	
  A3.11

  	
   

  	
  Enlarged Elevations

  	
   

  	
  06/27/01

  
	
  A3.11.1

  	
   

  	
  Plaza Elevator Elevations

  	
   

  	
  10/17/01

  
	
  A3.11.2

  	
   

  	
  Plaza Elevator Elevations

  	
   

  	
  11/30/01

  
	
  A3.12

  	
   

  	
  Wall Sections

  	
   

  	
  04/10/01

  

 

 

	
  A3.13

  	
   

  	
  Wall Sections

  	
   

  	
  04/10/01

  
	
  A3.14

  	
   

  	
  Wall Sections

  	
   

  	
  04/10/01

  
	
  A3.15

  	
   

  	
  Garage Wall Sections

  	
   

  	
  10/17/01

  
	
  A3.16

  	
   

  	
  Ramp Wall Elevations, Sections and Details

  	
   

  	
  09/07/01

  
	
  A3.17

  	
   

  	
  Penthouse Wall Sections

  	
   

  	
  04/10/01

  
	
  A3.18

  	
   

  	
  Terrace Sections/Trellis Details

  	
   

  	
  04/10/01

  
	
  A4.01

  	
   

  	
  First Floor Core Plan

  	
   

  	
  11/30/01

  
	
  A4.02

  	
   

  	
  Second Floor Core Plan

  	
   

  	
  09/07/01

  
	
  A4.03

  	
   

  	
  Third Floor Core Plan

  	
   

  	
  09/07/01

  
	
  A4.04

  	
   

  	
  Fourth Floor Core Plan

  	
   

  	
  09/07/01

  
	
  A4.05

  	
   

  	
  Fifth Floor Core Plan

  	
   

  	
  09/07/01

  
	
  A4.06

  	
   

  	
  Sixth Floor Core Plan

  	
   

  	
  09/07/01

  
	
  A4.08

  	
   

  	
  Garage Entry Plan

  	
   

  	
  11/30/01

  
	
  A4.09

  	
   

  	
  West Lobby Plans

  	
   

  	
  01/30/02

  
	
  A4.10

  	
   

  	
  East Lobby Plans

  	
   

  	
  01/30/02

  
	
  A5.01

  	
   

  	
  West Toilet Room Plans & Elevations

  	
   

  	
  10/17/01

  
	
  A5.02

  	
   

  	
  Center Toilet Room Plans & Elevations

  	
   

  	
  10/17/01

  
	
  A5.03

  	
   

  	
  East Toilet Room Plans & Elevations

  	
   

  	
  10/17/01

  
	
  A5.04

  	
   

  	
  West Lobby Elevations

  	
   

  	
  01/30/02

  
	
  A5.05

  	
   

  	
  East Lobby Elevations

  	
   

  	
  01/30/02

  
	
  A5.06

  	
   

  	
  Elevator Cab Interiors

  	
   

  	
  08/17/01

  
	
  A6.01

  	
   

  	
  Garage Entry Ramp Reflected Ceiling Plan

  	
   

  	
  11/30/01

  
	
  A6.02

  	
   

  	
  Reflected Ceiling Plan

  	
   

  	
  06/27/01

  
	
  A6.03

  	
   

  	
  West Lobby Ceiling Plan

  	
   

  	
  11/30/01

  
	
  A6.04

  	
   

  	
  East Lobby Ceiling Plans

  	
   

  	
  11/30/01

  
	
  A7.01

  	
   

  	
  Building Stair Plans (Stairs 1 & 2)

  	
   

  	
  08/17/01

  
	
  A7.02

  	
   

  	
  Building Stair Plans (Stairs 3 & 4)

  	
   

  	
  08/17/01

  
	
  A7.03

  	
   

  	
  Building Stair Sections

  	
   

  	
  04/10/01

  
	
  A7.04

  	
   

  	
  Building Stair Sections

  	
   

  	
  04/10/01

  
	
  A7.05

  	
   

  	
  Stair G1 Plans

  	
   

  	
  05/04/01

  
	
  A7.06

  	
   

  	
  Stair G2 Plans

  	
   

  	
  10/17/01

  
	
  A7.06.1

  	
   

  	
  Stair G3 Plans

  	
   

  	
  09/07/01

  
	
  A7.06.2

  	
   

  	
  Stair G4 & G5 Plans

  	
   

  	
  08/17/01

  
	
  A7.07

  	
   

  	
  Garage Stair Sections

  	
   

  	
  08/17/01

  
	
  A7.10

  	
   

  	
  Stair Details

  	
   

  	
  04/10/01

  
	
  A8.01

  	
   

  	
  Exterior Details

  	
   

  	
  04/10/01

  
	
  A8.02

  	
   

  	
  Exterior Details

  	
   

  	
  04/10/01

  
	
  A8.03

  	
   

  	
  Exterior Details

  	
   

  	
  08/17/01

  
	
  A8.04

  	
   

  	
  Exterior Details

  	
   

  	
  09/07/01

  
	
  A8.05

  	
   

  	
  Exterior Details

  	
   

  	
  08/17/01

  
	
  A8.06

  	
   

  	
  Exterior Details

  	
   

  	
  08/17/01

  

 

 

	
  A8.07

  	
   

  	
  Exterior Details

  	
   

  	
  10/17/01

  
	
  A8.08

  	
   

  	
  Exterior Details

  	
   

  	
  08/17/01

  
	
  A8.09

  	
   

  	
  Exterior Light Fixtures

  	
   

  	
  09/07/01

  
	
  A8.10

  	
   

  	
  Lobby Details

  	
   

  	
  01/30/02

  
	
  A9.01

  	
   

  	
  Door Details

  	
   

  	
  04/10/01

  
	
  A9.02

  	
   

  	
  Partition Details

  	
   

  	
  06/27/01

  
	
  A10.01

  	
   

  	
  Window Schedule

  	
   

  	
  04/10/01

  
	
  A10.02

  	
   

  	
  Window Schedule

  	
   

  	
  04/10/01

  
	
  A10.03

  	
   

  	
  Window Types

  	
   

  	
  08/17/01

  
	
  A10.04

  	
   

  	
  Window Types

  	
   

  	
  05/04/01

  
	
  A10.05

  	
   

  	
  Door Schedule

  	
   

  	
  11/30/01

  
	
  A10.06

  	
   

  	
  Door Schedule

  	
   

  	
  08/17/01

  
	
  A10.07

  	
   

  	
  Finish Schedule

  	
   

  	
  10/17/01

  
	
  A10.08

  	
   

  	
  Finish Schedule

  	
   

  	
  04/10/01

  

 

Structural
Drawings by Englekirk Partners

 

	
  Sheet Number

  	
   

  	
  Description

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  S1.1

  	
   

  	
  General Notes

  	
   

  	
  3/20/2001

  
	
  S1.1.1

  	
   

  	
  General Notes

  	
   

  	
  3/20/2001

  
	
  S1.2

  	
   

  	
  Typical Details

  	
   

  	
  3/20/2001

  
	
  S1.3

  	
   

  	
  Typical Details

  	
   

  	
  3/20/2001

  
	
  S1.3.1

  	
   

  	
  Typical Details

  	
   

  	
  3/20/2001

  
	
  S1.3.2

  	
   

  	
  Typical Details

  	
   

  	
  3/20/2001

  
	
  S1.4

  	
   

  	
  Typical Details

  	
   

  	
  3/20/2001

  
	
  S1.5

  	
   

  	
  Typical Details

  	
   

  	
  3/20/2001

  
	
  S1.6

  	
   

  	
  Typical Details

  	
   

  	
  3/20/2001

  
	
  S2.1

  	
   

  	
  Foundation Plan

  	
   

  	
  3/20/2001

  
	
  S2.2

  	
   

  	
  P3 and P2 Parking Level Framing Plan

  	
   

  	
  3/20/2001

  
	
  S2.3

  	
   

  	
  P1 Parking Level Framing Plan

  	
   

  	
  3/20/2001

  
	
  S2.4

  	
   

  	
  Ground Floor Framing Plan

  	
   

  	
  3/20/2001

  
	
  S2.4A

  	
   

  	
  Ground Floor Reinforcing Plan

  	
   

  	
  3/20/2001

  
	
  S2.5

  	
   

  	
  Second Floor Framing Plan

  	
   

  	
  3/20/2001

  
	
  S2.6

  	
   

  	
  Third Floor Framing Plan

  	
   

  	
  3/20/2001

  
	
  S2.7

  	
   

  	
  Fourth Floor Framing Plan

  	
   

  	
  3/20/2001

  
	
  S2.8

  	
   

  	
  Fifth Floor Framing Plan

  	
   

  	
  3/20/2001

  
	
  S2.9

  	
   

  	
  Sixth Floor Framing Plan

  	
   

  	
  3/20/2001

  
	
  S2.10

  	
   

  	
  Roof Framing Plan

  	
   

  	
  3/20/2001

  

 

 

	
  S2.11

  	
   

  	
  Penthouse Framing Plan and Details

  	
   

  	
  3/20/2001

  
	
  S3.1

  	
   

  	
  Foundation Sections and Details

  	
   

  	
  3/20/2001

  
	
  S3.2

  	
   

  	
  Wall Sections

  	
   

  	
  3/20/2001

  
	
  S4.1

  	
   

  	
  Steel Column Schedule

  	
   

  	
  3/20/2001

  
	
  S4.2

  	
   

  	
  SMF and Brace Elevations

  	
   

  	
  3/20/2001

  
	
  S4.2.1

  	
   

  	
  EBF Elevations

  	
   

  	
  3/20/2001

  
	
  S4.3

  	
   

  	
  Details

  	
   

  	
  3/20/2001

  
	
  S4.4

  	
   

  	
  Details

  	
   

  	
  3/20/2001

  
	
  S4.5

  	
   

  	
  Brace Details and Miscellaneous

  	
   

  	
  3/20/2001

  
	
  S5.1

  	
   

  	
  Elevator Roof Plans and Details

  	
   

  	
  KC 4/19/01

  
	
  S6.1

  	
   

  	
  Ramp Sections

  	
   

  	
  3/20/2001

  
	
  S6.1.1

  	
   

  	
  Ramp Sections

  	
   

  	
  3/20/2001

  
	
  S6.1.2

  	
   

  	
  Ramp Sections

  	
   

  	
  3/20/2001

  
	
  S6.2

  	
   

  	
  Ramp / Parking Level Sections

  	
   

  	
  3/20/2001

  
	
  S6.3

  	
   

  	
  Ramp Sections

  	
   

  	
  3/20/2001

  
	
  S6.4

  	
   

  	
  Details and Sections

  	
   

  	
  3/20/2001

  

 

Mechanical
Drawings by Pacific Mechanical Construction Management

 

	
  Sheet Number

  	
   

  	
  Description

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  M-1

  	
   

  	
  Title 24

  	
   

  	
  12/15/01

  
	
  M-2

  	
   

  	
  Equipment Schedule

  	
   

  	
  12/15/01

  
	
  M-3

  	
   

  	
  Plot Plan

  	
   

  	
  12/15/01

  
	
  M-4

  	
   

  	
  Parking Exhaust Levels P-1, 2, 3, 4 and P-1 Level P

  	
   

  	
  12/15/01

  
	
  M-5

  	
   

  	
  Chiller Room and Tower

  	
   

  	
  12/15/01

  
	
  M-6

  	
   

  	
  Chiller & Tower Schematic

  	
   

  	
  11/21/01

  
	
  M-7

  	
   

  	
  Piping Details

  	
   

  	
  11/21/01

  
	
  M-8

  	
   

  	
  AC Floor Plan

  	
   

  	
  11/21/01

  
	
  M-9

  	
   

  	
  Exhaust Systems and Shaft Connections

  	
   

  	
  12/15/01

  
	
  M-10

  	
   

  	
  Duct Riser and Duct Details

  	
   

  	
  12/15/01

  
	
  M-11

  	
   

  	
  Mechanical Roof Plan

  	
   

  	
  12/15/01

  
	
  M-12

  	
   

  	
  Fan Rooms 1, 2 & 3 Details and Elevations

  	
   

  	
  11/21/01

  
	
  M-13

  	
   

  	
  Vibration Isolators & Smoke Fire Damper Details

  	
   

  	
  11/21/01

  
	
  M-14

  	
   

  	
  Control Wiring Diagram

  	
   

  	
  11/21/01

  

 

 

Plumbing
Drawings by Hellman\Lober and Suttles Plumbing

 

	
  Sheet Number

  	
   

  	
  Description

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  P1.01

  	
   

  	
  Legend, Schedules, General Notes & Sheet List

  	
   

  	
  4/10/2002

  
	
  P1.02

  	
   

  	
  Site Plan

  	
   

  	
  4/10/2002

  
	
  P1.03

  	
   

  	
  Plumbing Specifications

  	
   

  	
  4/10/2002

  
	
  P2.01

  	
   

  	
  P4 Parking Plan

  	
   

  	
  4/10/2002

  
	
  P2.02

  	
   

  	
  P2 and P3 Parking Plan

  	
   

  	
  4/10/2002

  
	
  P2.03

  	
   

  	
  P1 Parking Plan

  	
   

  	
  4/10/2002

  
	
  P2.04

  	
   

  	
  Plaza Level Drainage Plan

  	
   

  	
  4/10/2002

  
	
  P2.05

  	
   

  	
  First Floor Plan

  	
   

  	
  4/10/2002

  
	
  P2.06

  	
   

  	
  Second Floor Plan

  	
   

  	
  4/10/2002

  
	
  P2.07

  	
   

  	
  Third Floor Plan

  	
   

  	
  4/10/2002

  
	
  P2.08

  	
   

  	
  Fourth Floor Plan

  	
   

  	
  4/10/2002

  
	
  P2.09

  	
   

  	
  Fifth Floor Plan

  	
   

  	
  4/10/2002

  
	
  P2.10

  	
   

  	
  Sixth Floor Plan

  	
   

  	
  4/10/2002

  
	
  P2.11

  	
   

  	
  Roof and Penthouse Plan

  	
   

  	
  4/10/2002

  
	
  P3.01

  	
   

  	
  Enlarged Floor Plans

  	
   

  	
  4/10/2002

  
	
  P4.01

  	
   

  	
  Riser Diagrams

  	
   

  	
  4/10/2002

  
	
  P4.02

  	
   

  	
  Riser Diagrams

  	
   

  	
  4/10/2002

  
	
  P5.01

  	
   

  	
  Details

  	
   

  	
  4/10/2002

  
	
  P5.02

  	
   

  	
  Details

  	
   

  	
  4/10/2002

  

 

Electrical
Drawings by Sasco Electric

 

	
  Sheet Number

  	
   

  	
  Description

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E-0

  	
   

  	
  Symbols and Abbreviations, General Notes

  	
   

  	
  04/19/02

  
	
  E-1

  	
   

  	
  Parking Level 4 Electrical Plan

  	
   

  	
  04/19/02

  
	
  E-2

  	
   

  	
  Parking Level 3 Electrical Plan

  	
   

  	
  04/19/02

  
	
  E-3

  	
   

  	
  Parking Level 2 Electrical Plan

  	
   

  	
  04/19/02

  
	
  E-4

  	
   

  	
  Parking Level 1 Electrical Plan

  	
   

  	
  04/19/02

  
	
  E-4A

  	
   

  	
  Main Electrical Room

  	
   

  	
  04/19/02

  
	
  E-5

  	
   

  	
  Plaza Level Electrical Plan

  	
   

  	
  04/19/02

  
	
  E-6

  	
   

  	
  Plaza Level 1 Electrical Plan

  	
   

  	
  04/19/02

  
	
  E-7

  	
   

  	
  Level 2 Electrical Plan

  	
   

  	
  04/19/02

  
	
  E-8

  	
   

  	
  Level 3 Electrical Plan

  	
   

  	
  04/19/02

  
	
  E-9

  	
   

  	
  Level 4 Electrical Plan

  	
   

  	
  04/19/02

  
	
  E-10

  	
   

  	
  Level 5 Electrical Plan

  	
   

  	
  04/19/02

  

 

 

	
  E-11

  	
   

  	
  Level 6 Electrical Plan

  	
   

  	
  04/19/02

  
	
  E-12L

  	
   

  	
  Roof Level Lighting Plan

  	
   

  	
  04/19/02

  
	
  E-12PE

  	
   

  	
  Roof and Penthouse East Power Plan

  	
   

  	
  04/19/02

  
	
  E-12PW

  	
   

  	
  Roof and Penthouse West Power Plan

  	
   

  	
  04/19/02

  
	
  E-13

  	
   

  	
  Details and Telephone Riser

  	
   

  	
  04/19/02

  
	
  E-14

  	
   

  	
  Single Line Diagram MSB-A

  	
   

  	
  04/19/02

  
	
  E-15

  	
   

  	
  Single Line Diagram MSB-B

  	
   

  	
  04/19/02

  
	
  E-16

  	
   

  	
  Panel Schedules

  	
   

  	
  04/19/02

  
	
  E-17

  	
   

  	
  Panel Schedules

  	
   

  	
  04/19/02

  
	
  E-18

  	
   

  	
  Panel Schedules

  	
   

  	
  04/19/02

  
	
  E-19

  	
   

  	
  Panel Schedules

  	
   

  	
  04/19/02

  
	
   

  	
   

  	
  East Lobby

  	
   

  	
  04/19/02

  
	
   

  	
   

  	
  West Lobby

  	
   

  	
  04/19/02

  

 

Fire
Protection Drawings by Qualco Fire Protection

 

	
  Sheet Number

  	
   

  	
  Description

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FP-1

  	
   

  	
  General Notes and Symbols

  	
   

  	
  2/18/2002

  
	
  FP-2

  	
   

  	
  Underground Piping Plan

  	
   

  	
  2/18/2002

  
	
  FP-3

  	
   

  	
  Parking Level P-1 Bulk Piping Plan

  	
   

  	
  2/18/2002

  
	
  FP-4

  	
   

  	
  Sleeve Location Stair #1 and 2

  	
   

  	
  2/18/2002

  
	
  FP-5

  	
   

  	
  Sleeve Location Stair #3 and 4

  	
   

  	
  2/18/2002

  
	
  FP-6

  	
   

  	
  Sleeve Locations-Parking Levels

  	
   

  	
  2/18/2002

  
	
  FP-7

  	
   

  	
  Standpipe Isometric

  	
   

  	
  2/18/2002

  
	
  FP-8

  	
   

  	
  Parking Level P-1

  	
   

  	
  2/18/2002

  
	
  FP-9

  	
   

  	
  Parking Level P-2

  	
   

  	
  2/18/2002

  
	
  FP-10

  	
   

  	
  Parking Level P-3

  	
   

  	
  2/18/2002

  
	
  FP-11

  	
   

  	
  Parking Level P-4

  	
   

  	
  2/18/2002

  
	
  FP-12

  	
   

  	
  Tower Ground Floor

  	
   

  	
  2/18/2002

  
	
  FP-13

  	
   

  	
  Tower Second Floor

  	
   

  	
  2/18/2002

  
	
  FP-14

  	
   

  	
  Tower Third and Fourth Floor

  	
   

  	
  2/18/2002

  
	
  FP-15

  	
   

  	
  Tower 5th Floor

  	
   

  	
  2/18/2002

  
	
  FP-16

  	
   

  	
  Tower 6th Floor

  	
   

  	
  2/18/2002

  
	
  FP-17

  	
   

  	
  Tower Roof

  	
   

  	
  2/18/2002

  
	
  FP-18

  	
   

  	
  Typ. Building Section

  	
   

  	
  2/18/2002

  

 

Fire Alarm
Drawings by National Fail Safe

 

	
  Sheet Number

  	
   

  	
  Description

  	
   

  	
  Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FA-1.00

  	
   

  	
  Cover Sheet

  	
   

  	
  5/21/2001

  
	
  FA-2.01

  	
   

  	
  Fire Alarm Control Panel

  	
   

  	
  5/21/2001

  
	
  FA-2.02

  	
   

  	
  Fire Alarm Amplifier Panel

  	
   

  	
  5/21/2001

  
	
  FA-2.03

  	
   

  	
  Firefighter’s Telephone Panel

  	
   

  	
  5/21/2001

  
	
  FA-3.00

  	
   

  	
  Riser Diagram

  	
   

  	
  5/21/2001

  
	
  FA-4.01

  	
   

  	
  P-4 Fire Alarm Plan

  	
   

  	
  5/21/2001

  
	
  FA-4.02

  	
   

  	
  P-4 Fire Alarm Plan

  	
   

  	
  5/21/2001

  
	
  FA-4.03

  	
   

  	
  P-4 Fire Alarm Plan

  	
   

  	
  5/21/2001

  
	
  FA-4.04

  	
   

  	
  P-3 Fire Alarm Plan

  	
   

  	
  5/21/2001

  
	
  FA-4.05

  	
   

  	
  P-3 Fire Alarm Plan

  	
   

  	
  5/21/2001

  
	
  FA-4.06

  	
   

  	
  P-3 Fire Alarm Plan

  	
   

  	
  5/21/2001

  
	
  FA-4.07

  	
   

  	
  P-2 Fire Alarm Plan

  	
   

  	
  5/21/2001

  
	
  FA-4.08

  	
   

  	
  P-2 Fire Alarm Plan

  	
   

  	
  5/21/2001

  
	
  FA-4.09

  	
   

  	
  P-2 Fire Alarm Plan

  	
   

  	
  5/21/2001

  
	
  FA-4.10

  	
   

  	
  P-1 Fire Alarm Plan

  	
   

  	
  5/21/2001

  
	
  FA-4.11

  	
   

  	
  P-1 Fire Alarm Plan

  	
   

  	
  5/21/2001

  
	
  FA-4.12

  	
   

  	
  P-1 Fire Alarm Plan

  	
   

  	
  5/21/2001

  
	
  FA-5.01

  	
   

  	
  1st Floor Fire Alarm Plan

  	
   

  	
  5/21/2001

  
	
  FA-5.02

  	
   

  	
  1st Floor Fire Alarm Plan

  	
   

  	
  5/21/2001

  
	
  FA-5.03

  	
   

  	
  2nd Floor Fire Alarm Plan

  	
   

  	
  5/21/2001

  
	
  FA-5.04

  	
   

  	
  2nd Floor Fire Alarm Plan

  	
   

  	
  5/21/2001

  
	
  FA-5.05

  	
   

  	
  3rd Floor Fire Alarm Plan

  	
   

  	
  5/21/2001

  
	
  FA-5.06

  	
   

  	
  3rd Floor Fire Alarm Plan

  	
   

  	
  5/21/2001

  
	
  FA-5.07

  	
   

  	
  4th Floor Fire Alarm Plan

  	
   

  	
  5/21/2001

  
	
  FA-5.08

  	
   

  	
  4th Floor Fire Alarm Plan

  	
   

  	
  5/21/2001

  
	
  FA-5.09

  	
   

  	
  5th Floor Fire Alarm Plan

  	
   

  	
  5/21/2001

  
	
  FA-5.10

  	
   

  	
  5th Floor Fire Alarm Plan

  	
   

  	
  5/21/2001

  
	
  FA-5.11

  	
   

  	
  6th Floor Fire Alarm Plan

  	
   

  	
  5/21/2001

  
	
  FA-5.12

  	
   

  	
  6th Floor Fire Alarm Plan

  	
   

  	
  5/21/2001

  
	
  FA-5.13

  	
   

  	
  Roof Fire Alarm Plan

  	
   

  	
  5/21/2001

  
	
  FA-5.14

  	
   

  	
  Roof Fire Alarm Plan

  	
   

  	
  5/21/2001

  
	
  FA-6.00

  	
   

  	
  Fire Alarm Detail Sheet

  	
   

  	
  5/21/2001

  

 

HVAC Controls Submittal by Control Management Systems

SD-110 Dated 09/14/2001

 

 

Sprinkler Submittal by Qualco Fir Protection

SD-20 Dated 02/05/2001

 

 

BUILDING STANDARDS

 

 

	
  Warner Music Group - The
  Pinnacle Building

  MEP Schematic Pricing Package

  	
  May 13, 2002

  

 

 

RECEIVED

 

MAY 15 2002

 

KRISMAR CONSTRUCTION JOBSITE

 

 

233 WILSHIRE BOULEVARD

SUITE 990

SANTA MONICA, CALIFORNIA 90401

TELEPHONE: 310/458-3170

FACSIMILE: 310/458-9063

ACCOUNTING: 310/458-1753

 

krismar construction company, inc.

 

Memorandum

 

To: Jeff Worthe

 

From: Gary Morrison

 

Date: April 4, 2002

 

Re: Building Standard Clarifications

 

The following is in response to the Email
that you forwarded me regarding HLW and Syska and Hennessy questions about our
building standards. Reference the attached copy of the original email for
corresponding item numbers.

 

HLW Questions

 

1.                                       2 1⁄2” 25 GA studs
with one layer of gyp-board both sides, 6” above ceiling for typical wall is
acceptable.

 

2.                                       For
Warner Music Group, building standards are not mandatory however do represent
minimum standard of quality. Deviations from the building standard should be
clearly identified in writing along with the plans submitted to Landlord for
approval.

 

3.                                       Partitions
and/or ceiling should not be attached with screws to window mullions. Ceiling
shall be attached to wall just above the extruded piece that receives the
drywall at the head of the window. Walls that terminate into windows shall end
with 204S cap and the cap shall be adhered to the mullion with two (2) vertical
strips of 1” x 1/8” neoprene, double stick tape.

 

4.                                       Window
coverings will be single roll, Mecho Shades. Color and percentage open of
fabric to be determined. Window shades are an optional Tenant cost item.

 

Syska and
Hennessy Questions

 

1.                                       When 2x4’s, 2x2’s and downlights are used
than the standards shall be used. When design dictates, other fixtures are
acceptable provided that they are approved by the Landlord in advance.

 

2-7 See
attached PMC letter dated April 4, 2002.

 

GENERAL CONTRACTOR/LICENSE:  290899

 

 

	
  PACIFIC

  	
  14120 Live Oak Ave., Suite A-1

  
	
    
  MECHANICAL

  	
  Baldwin Park, California 91706-1345

  
	
        
  CONSTRUCTION

  	
  (626) 960-3971

  
	
           
  MANAGEMENT

  	
  Fax: (626) 960-0485

  
	
   

  	
  PMCM@prnvoo.com

  
	
   

  	
   

  
	
   

  	
  License No. 481491

  
	
   

  	
  B.C.A 20.36.38

  
	
  A Division of Pacific Mechanical Contractors

  	
   

  

 

April 4,
2002

 

Krismar Construction Company

233 Wilshire Boulevard, Suite #990

Santa Monica, California 90401

 

Attention: Gary Morrison

 

Subject: Pinnacle Phase One HVAC Tenant work

 

Dear Gary:

 

This is to address the HVAC related items on
your April 3, 2002 E-mail/fax.

 

2 & 3)                Please see enclosed, revised April 2,
2002 Pinnacle Tenant Work Criteria Section T 15000, pages 1 through 7.
Revisions are of the housekeeping type and include the following:

 

A)                                  Correction of outside design conditions.

 

B)                                    Suggestion for consideration of reheat boxes
for interior zones on ground floor due to garage below.

 

C)                                    Revision of all duct wrap insulation to 2”,
3⁄4” density and a requirement that duct mains, although lined, be wrapped when
not exposed to assure the temperature of conditioned air delivered.

 

4)              The
building system is a variable volume hot water reheat system. The controls
contractor is Control Management Systems, (909) 980-1141, Cliff Bailey.
Thermostats are to be display type.

 

5)              Box minimum setting is a tenant engineer
call. Our experience is that over cooling occurs at 30% minimum when interior
rooms are unoccupied (lights out) and that minimums must be set lower than 30%.
Should resetting be necessary subsequent to commissioning, that will be the
tenant’s responsibility.

LAQ is satisfied by air quantity. Reasonable air quantities should be available
in interior spaces when occupancy (lights and people) provides a load, causing
boxes to open.

 

6)              Duct
configuration in conformance with the T 15000 standards, is a tenant engineer
call. Note requirements for insulation/lining depending on ceiling treatment.

 

7)              There are no seismic joints within
Pinnacle Phase I.

 

Please make sure Don Dodd and Jeff receive the revised criteria.

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
  P.M.C.M.

  
	
   

  	
   

  
	
   

  	
  /s/ DAVE DEMING

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Dave Deming

  
	
   

  
	
  DD/jam

  
	
   

  
	
  Enclosure

  

 

 

THE
PINNACLE

Burbank,
California,

Tensent
Work Criteria

 

1.               DESIGN

 

A.           Airflow
quantity to be based upon temperature difference between room and supply air
at outlet of 20°F and 16°F for the interior
zones. Room design temperature is 72°F summer, 78°F
winter.

 

B.             Low
velocity ducts and fittings sized at less than 0.1 inches water pressure loss
per 100 feet.

 

C.             Supply
Diffusers 24 x 24 perforated face with modular core and frame appropriate to
ceiling type. Diffuser cores and back-pans shall have a flat black enamel
finish. Face to be off-white baked enamel on perforated plate and margin unless
specified otherwise by architect and approved by owner’s representative. Neck
velocities to be 500 FPM maximum, unless scheduled otherwise. Furnish OBD’s. Return
inlet 12 x 24 perforated face.

 

D.            Pressure
independent variable volume boxes. Titus or Krueger minimum 2 row reheat coil.
Box manufacturer to mount electronic controller furnished by control
contractor. This contractor to pipe reheat valve furnished by control
contractor. Thermostat and wiring furnished and installed by control
contractor.

 

E.              Follow
good engineering design principles with low loss conical high side connections,
minimal elbows and fittings; abrupt transitions or “tap and cap” work is not
acceptable. Include minimum 3⁄4” size, type L copper reheat pipe, full port
shut-off ball valves, petas plugs, unions at coil and control valves, and
insulation per base system.

 

F.              Air
and water balance in accord with NEBB or AABC. Submit balance reports. If owner
does not approve air balance, acquire services of an independent balance agency
to rebalance systems. Provide spot check of balance report as requested by
owner.

 

G.             Acquire
services of base building controls contractor to adjust supply and relief fan
settings and sensors to accommodate each new tenant improvement work without
disruption of existing building tenants or creation of unacceptable draft
conditions and/or noise.

 

H.            Submit
a block-out plan of zoning to tenant and owner prior to designing space. Plan
shall indicate zone, air quantity and thermostat locations. Obtain approvals,
by signature, before proceeding with design. Approval by owner does not relieve
designer of compliance with criteria and proper performance. Each exterior exposure
and each corner office to be individually zoned. Maximum 3 exterior rooms per
zone. Consider use of reheat boxes for interior zones on first floor, due to
garage below.

 

	
  P.M.C.M.

  	
  AIR
  CONDITIONING SECTION T 15000-1

  
	
  REV. 04/02/02

  	
   

  

 

 

I.                 Provide appropriate air quantity and ductwork from adjacent interior
zones to feed telephone and electric rooms, elevator lobbies, corridors and
restrooms. Provide air distribution devices, fire, and smoke damper protection
as appropriate.

 

J.                Base
Building Design Criteria:

 

 

	
  Summer Design

  	
  96°F DB  68°F WB

  	
  74°F DB Interior ± 2°

  
	
  Winter Design

  	
  34°F DB

  	
  70°F DB Interior ± 2°

  
	
   

  	
   

  	
   

  
	
  Glazing:                                                      

  	
  .44 Shading Co-efficient

  .35 Transmission Factor

  
	
   

  	
   

  	
   

  
	
  Walls:

  	
  0.1 Transmission Factor

  
	
  Roof:

  	
  .05 Transmission Factor

  
	
  First Floor:

  	
  .33 Transmission Factor

  

 

	
  One person per 150 Usable Sq.
  Ft (average per floor)

  20 CFM OSA per person

  
	
  Lights:           

  	
  1.5 Watts per Sq. Ft.                                    

  
	
   

  	
   

  
	
  Power:

  	
  2.0 Watts per Sq. Ft.

  Maximum 3.5 Watts per sq. ft.*

  

 

* 
Advise owner in writing of proposed usage greater than 2.0 watts per sq.
ft.

 

K.            Controls: To be performed by building base
system control contractor, Control Management Systems. (909) 980-1141

 

Performance of controls by others must be
pre-approved by building owner.

 

L.              The following provisions have been made
for unusual and/or after hours HVAC loads. Contact building owner for usage and
associated costs.

 

1.               24
Hour condenser water system served by open cooling tower at central plant.

 

M. Interior
zones to reduce to 15% of design, adjustable to 0. All zones close to 0 at
building shut down.

 

N. Boxes shall
be selected at 80% or less of nominal CFM, not exceeding 0.7” W.G. pressure
loss through the box, including attenuators, coils, connection to main trunk
and low pressure ducts and diffusers.

 

	
   

  	
  AIR
  CONDITIONING SECTION T 15000-2

  
	
   

  	
   

  

 

 

O.            Hot
water piping and ductwork upstream of boxes shall comply with base building
specifications and plans. Water velocity shall not exceed 8 feet per second;
friction loss shall not exceed 8 feet of water per 100 feet of pipe, fittings
included. Ductwork upstream of boxes shall not exceed 2000 feet per minute
velocity, or 15 inches friction loss per 100 feet of duct based on full load
air quantity design conditions. Duct upstream of boxes shall be constructed
with low loss fittings to SMACNA 3” W.C. specifications and fully lined.

 

1.               Short
radius adjustable elbows are not acceptable. Maximum fitting convergence angle
15o, inlet duct to box at least 2” larger I.D. than box connection.

 

2.               Where
shown in high side ductwork, install single blade volume dampers for rough
system balancing. Damper blades shall be constructed of not less than sixteen
(16) gauge galvanized steel with edges bent and center grooved. Hardware shall
be locked quadrant, heavy duty type as manufactured by Duro-Dyne Type KS-0385
with three-eight inch (3/8”) rod, K-4 quadrant and SB-338 closed end bearings
or approved equal.

 

P.              Where
duct mains are not exposed (concealed above tenant ceiling structure),
regardless of the fact that ducts are lined, insulate all concealed cold supply
air, high side duct mains with Microlite fiberglass duct insulation, foil
faced, 3/4 lb. density, 2 inch thick insulation wrapped entirely around duct
with joints lapped at least 2 inches and secured with 16 gauge galvanized wire on
12 inch centers. Insulation shall cover all surfaces including standing seams.

 

II.                                     INSTALLATION

 

A.           Furnish
all labor, materials, equipment and services required to complete, connect, and
place in optimum operating condition heating, ventilating, and air conditioning
systems. All work shall conform to the applicable requirements of the latest
edition of the Uniform Building Code, Uniform Mechanical Code, Title 22 and 24
of the California Administrative Code, NFPA Life Safety Codes, and all
applicable local, state and federal codes, ordinances, laws and regulations
governing the work.

 

B.             Refer to general
notes and specifications on architectural drawings for all applicable notes.

 

C.             The contractor’s
attention is called to the presence of existing conditions, conduit, piping,
etc. The contractor shall be held responsible for the protection and repair of
any and all damage caused by him or his work to existing conditions, piping,
etc. New work and installations shall be made without interruptions of services
to existing buildings and tenant spaces. Any interruptions required shall be
made to minimize inconvenience and at times as approved in advance by the
owner.

 

D.            Verification of
existing conditions: Contractor shall field verify all points of connection, the
type and capacity of equipment and systems being modified, or affected, the
space available for installation and assume full responsibility for the proper
installation and operation of all mechanical systems added or modified.
Initiation of work constitutes acceptance of existing systems and installation.

 

AIR CONDITIONING SECTION T 15000- 3

 

 

E.              Contractor shall
coordinate his work carefully with that of the other trades in order to avoid
interference. Coordinate all ductwork and mechanical equipment with structural,
plumbing, sprinkler and electrical systems. Any and all conflicts shall be
resolved prior to installation, in concurrence with the architect.

 

F.              Ductwork shall be
galvanized sheet metal and in accordance with the requirements of “SMACNA” HVAC
duct construction for low and medium velocity duct. Round ductwork shall be
spiral construction. Adhere to UMC Chapter 10 Requirements. All ductwork shall
be constructed, erected and tested in accordance with the most restrictive of
local regulations, procedures detailed in the ASHRAE Handbook of Fundamentals,
or the applicable standards adopted by the Sheet Metal and Air Conditioning
Contractors National Association. In conflict, the most stringent shall apply.

 

G.             Ductwork exposed
shall be spiral sheet metal with 1”, 1-1/2 lb. density internal circle liner
insulation in conformance with SMACNA & NFPA Requirements. 1”, 1-1/2 lb.
lining required on all exposed rectangular duct and fittings. All exposed work
to be carefully installed without blemish; duct, hangers, piping, equipment and
appurtenances true, level, and plumb to building structural elements. Use
single strap hangers with bolted connection to belly band on exposed spiral
duct. No flex connections on exposed ductwork. Wipe down exposed duct and boxes
to leave a clean, like new appearance. With the Tenant Engineer’s and Owner
Project Engineer’s written approval, lining of round ductwork downstream of box
plenums may be deleted except for the first 10’ of duct.

 

Where a
ceiling is installed, all lining of the round ductwork downstream of box
plenums may be deleted. Duct must be wrapped with 2” thick 1⁄2 pound density felt
faced duct wrap securely wired in place, and flex duct connections shall be
made to air distribution devices in accord with Section G.G. of this
specification.

 

H.            All raw edges of
internal insulation shall be coated with lagging adhesive to prevent erosion.
Sealant on exposed ductwork shall be neatly applied for appearance with sharp
edges (apply masking tape to achieve sharp edges and remove after sealing to
provide clean edges). Use approved duct sealant at all transverse and
longitudinal joints, fitting joints and elbow gores. On exposed ductwork, seal
fitting joints and gores from inside to prevent aspiration soiling and provide
a clean external appearance.

 

I.                 Make P.O.C to
ducts as shown. Patch, seal and cap affected piping and ductwork; re-insulate
as required.

 

J.                Insure airtight
integrity of entire systems upon completion (new and existing). Patch or
replace ductwork as required. All patch/insulation quality to be aesthetically
pleasing.

 

K.            Confirm thermostats
and control operation for indicated mechanical equipment. Calibrate
thermostats.

 

L.              Protection: Provide
and be responsible for protection and repair of adjacent surfaces and areas
which may become damaged as a result of work in this section. Protect work
performed hereunder until completion and final acceptance of project by owner.
Repair or replace all damaged or defective work to original specified
condition, at no additional cost to the owner.

 

AIR CONDITIONING SECTION T 15000 - 4

 

 

M.         Clean-up: Contractor
shall keep his work, and the adjacent areas affected, free and clear from all
debris caused by the work of this section. During and upon completion of work
herein specified, remove from building and site all debris, unused materials,
and equipment caused by work of this section and leave work in a clean,
acceptable condition.

 

N.            Submit equipment,
ductwork and piping layout shop drawings at 1/8” scale minimum as contract
drawings for owner’s review prior to shop fabrication and construction.

 

O.            Submit
test and balance reports for owner’s review.

 

P.              All
materials exposed within the ceiling return air plenum to have a flame spread
rating of not more than 25 and a smoke developed rating of not more than 50.

 

Q.            Where a ceiling is
installed, provide 3’ 6” max. length flex duct (high pres. side) connection
from mains to VAV boxes. Flex to be straight.

 

R.             Install all VAV boxes
to provide optimum access to service controls. Do not position VAV boxes over
gyp. board ceilings, in or over walls, or in any manner which will impede
service access.

 

S.              Provide all VAV’s
with min. 4’ long discharge sheet metal plenum with 1” thick–1 1⁄2 # density
liner or VAV manufacturer’s approved attenuator. Duct connections not
permitted in this section. Connect ducts to a minimum 2’ long lined plenum
down-stream of attenuator/plenum with low loss fittings.

 

T.             Perimeter zone boxes
shall be located over interior rooms whenever possible.

 

U.            Provide minimum radius
on elbows at 1-1/2 times duct size.

 

V.             Provide conical (45
degree convergence) tap-ins in medium pressure ductwork (typical of all box to
trunk connections).

 

W.        HVAC components to be free
from contact with piping, electrical conduits, ceiling suspension systems, and
all building components. Remove noise and vibration from tenant spaces.

 

X.            Protect penetrations
in lined medium pressure ducts with nosing and accessories to prevent liner
erosion.

 

Y.             In non-accessible
plaster (gyp. board) ceilings, route distribution to provide volume dampers and
other control devices above accessible ceilings. When not possible, provide
Young Regulators. Position same as directed by architect.

 

AIR CONDITIONING SECTION T 1500 - 5

 

 

Z.             All piping and ductwork
shall pass freely through all walls and floors without rigid connections.
Penetration points shall be sleeved to allow passage of piping or ductwork and
maintain 3⁄4 to 1/ 1⁄4” clearance around the outside surfaces. This clearance shall
be tightly packed with one pound density glass fiber, and caulked airtight with
non-hardening sealant after installation of piping or ductwork. Apply
appropriate fire proofing. For penetration through rated walls and floor,
provide state of California fire marshal approved penetration system. Minimize
rated wall duct penetrations. Reroute ductwork as required.

 

AA. The
following items are part of this criteria:

 

a.               Base Building
Specifications.

b.              HVAC Tenant Work
Criteria.

c.               Base Building
Drawings.

 

Written owner
approval must be obtained for deviations.

 

BB.     Provide minimum of four duct
diameters of straight duct prior to inlet of VAV boxes.

 

CC.     At the completion of the
work, the contractor shall deliver to the office of the building complete
as-built drawings showing work as actually installed. Two prints, one Mylar and
one auto cad (most recent update) C.D. Also one print marked up to show
deviation from design drawings.

 

DD.   Thermostats shall be located
beside light switch at a height as directed by architect and in compliance with
the handicap code requirements.

 

EE.       Provide duct across panels
for all fire dampers and access for shutoff and control valves and boxes. Where
these items cannot be reached through accessible tile ceiling panels,
coordinate all ceiling and/or wall access requirements with architect.

 

FF.       Air balancing dampers shall
be provided for each and every air outlet. Locate balancing damper at main
duct branches and branch take-off for each outlet as far away as possible from
air outlet. Outlet opposed blade damper shall be installed at full open
position and shall not be used for air balancing purposing.

 

GG.     Where ceilings occur,
flexible duct shall be 7’ 0” maximum length at diffusers. Flexible ducts shall
consist of an exterior reinforced laminated vapor barrier, 1 1⁄2” thick
fiberglass insulation (K=.25 @ 75 DEG.F) encapsulated spring steel wire helix
and impervious, smooth, non-perforated interior vinyl liner. Flexible ducts
shall be individual lengths with factory fabricated steel connection collars.
Flexible duct to be used only to connect terminal outlet, supply and return,
air register to rigid duct system. Flexible ducts shall be supported at or near
mid-length. Installation shall minimize sharp radius turns or offsets.

 

HH.   All air moving equipment shall
be interlocked with building life safety system to shut down on alarm.

 

II.    All duct and pipe insulation and air conditioning equipment shall
be certified by the California Energy Commission.

 

AIR
CONDITIONING SECTION T 15000 - 6

 

 

JJ.           All unlined ductwork in
return air plenum shall be insulated with 2” thick fiberglass blanket (3/4 lbs.
density) with scrim foil vapor barrier, U.L. listed by “Manville” — Microlite,
Certainteed, or equal.

 

KK.   All rooms shall have return air
path. Provide wall opening above hung ceiling, for all rooms enclosed by
slab-to-slab partitions. Calculate total return air and show appropriately
sized demising wall openings for floor return air. Do not allow any obstruction
of return air path. Calculate return air velocity at less than 400 FPM. Show
openings on plans.

 

LL.       All work performed must
match the existing installation in equipment, product and installation quality.

 

MM. All of the work performed
is subject to inspection by the building owners for conformity with existing
building systems, quality of products and installation. Do not perform any work
that may adversely affect the existing building systems operation. Any work
found unacceptable shall be promptly replaced or corrected at no additional
cost. While owner has the right to inspection, no obligation exists.

 

NN.   Submit all ductwork, duct
accessories, shop drawings, equipment, and air handling fixtures for approval
prior to fabrication and installation. Centrally locate all zone boxes to the
zone served in order that the low velocity ductwork will run in both directions
from the box.

 

OO.   Do not install ducts or VAV
boxes parallel under beams (spanning perpendicular to building core) which may
impede return path @ 400 FPM. Coordinate with other trades, including existing
conditions and shop drawings prior to installation.

 

PP.       Exact locations of all
ceiling diffusers, registers and grilles when detailed on the architectural
reflected ceiling plan and architectural room elevations shall be followed.

 

QQ.   All equipment shall be
installed in strict accordance with the equipment manufacturer’s
recommendations. Provide all fittings, transitions, dampers, valves and other
devices required for a complete workable and serviceable installation.

 

RR.     All equipment, ducts, piping,
and other devices and materials installed outside of the building or otherwise
exposed to the weather shall be completely weatherproofed.

 

SS.       All appliances designed to
be fixed in position shall be securely fastened in place.

 

TT.     Do not use flexible ducts in
exhaust systems.

 

UU.   Provide expansion joints in all
ducts and pipes crossing expansion and seismic joints.

 

VV.     Verify final location of
thermostats and temperature sensors with furniture plans and owner’s
representative prior to installation.

 

AIR CONDITIONING SECTION T 15000 - 7

 

 

EXHIBIT
D

 

RULES AND REGULATIONS

 

1.                                       Except as may be specifically provided in the
Lease to which these Rules and Regulations are attached, no sign, placard,
picture, advertisement, name or notice shall be installed or displayed on any
part of the outside or inside of  the
Building or Project (except within the Premises) without the prior written
consent of Landlord, which consent shall not be unreasonably withheld, conditioned
or delayed. Tenant shall not place anything against or near exterior windows or
doors which may appear unsightly from outside the Premises or which are visible
from the exterior of the Premises (other than approved window coverings).
Landlord shall have the right to remove, at Tenant’s expense and after
affording Tenant a reasonable opportunity for cure after notice from Landlord,
any sign installed or displayed in violation of this rule.

 

2.                                       Tenant shall not obstruct any sidewalks,
halls, passages, exits, entrances, elevators, escalators or stairways of the
Project. The halls, passages, exits, entrances, elevators, escalators and
stairways are not open to the general public, but are open, subject to
reasonable regulations, to Tenant’s business invitees. Landlord shall in all
cases retain the right to control and prevent access thereto of all persons
whose presence in the reasonable judgment of Landlord would be prejudicial to
the safety and interest of the Project and its tenants. Neither Tenant nor any
employee or invitee of Tenant shall go upon the roof of the Project except as
otherwise expressly permitted under Lease Section 32.

 

3.                                       Tenant shall cooperate with Landlord in
maintaining the Premises. All cleaning and janitorial services for the Project
and the Premises shall be provided exclusively through Landlord.

 

4.                                       At Landlord’s request, as a part of the
Tenant Improvements, Tenant shall install new locks in, and re-key, the
Premises, and in such event, Tenant shall deliver a copy of a key to all such
exterior door locks to Landlord upon installation thereof. In addition, upon
the termination of its tenancy, Tenant shall deliver to Landlord the keys to
all doors and locks in the Premises.

 

5.                                       All contractors and technicians rendering any
Building-systems related service to Tenant shall be referred to Landlord for
approval (which approval shall not be unreasonably withheld, conditioned or
delayed) prior to performing any such service, including but not limited to,
installation of telephone and telegraph equipment and electrical devices and
installations affecting floors, exteriors walls, woodwork, windows, ceilings
and any other physical portion of the Building. None of  Tenant’s contractors or subcontractors shall
be entitled to (1) display identification or other signage at the Project, (2)
use the passenger elevators at the Project, or 
(3) park anywhere except on the lowest level of the Project parking
facility in the are designated by Landlord.

 

6.                                       No deliveries shall be made which materially
interfere with the operation of the Project. No outside food vendors shall be
permitted within the Project except for making of specific deliveries of
previously ordered items to the Premises or the premises of another tenant.

 

7.                                       Intentionally omitted.

 

8.                                       Tenant shall not use or keep in the Premises
any kerosene, gasoline or inflammable 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 Premises any
foul or noxious gas or substance, or permit or allow 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.

 

9.                                       Tenant shall not use any method of heating or
air conditioning other than that supplied by Landlord, except for supplemental
air conditioning systems installed in accordance with the provisions of the
Lease.

 

10.                                 Tenant shall not waste electricity, water or
air conditioning and agrees to reasonably cooperate with Landlord to assure the
most reasonably

 

1

 

effective
operation of the Building’s heating and air conditioning and to comply with any
governmental energy-saving rules, laws or regulations. Tenant shall not tamper
with or attempt to adjust temperature control thermostats in the Premises.
Tenant shall keep shell/core corridor doors closed.

 

11.                                 Intentionally omitted.

 

12.                                 Landlord reserves the right to exclude from
the Building during hours other than Building hours of operation, any person
unless that person is known to the person or employee in charge of the Building
or 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 reasonable error with regard to the admission to
or exclusion from the Building of any person. Landlord reserves the right to
prevent access to the Building in case of invasion, mob, riot, public
excitement or other commotion by closing the doors or by other appropriate
action.

 

13.                                 Tenant shall close and lock the doors of its
Premises and entirely shut off all water faucets or other water apparatus, and
electricity, gas or air outlets before Tenant and its employees leave the
Premises. Tenant shall be responsible for any damage or injuries sustained by
other tenants or occupants of the Building or by Landlord for noncompliance
with this rule.

 

14.                                 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
employee or invitees, shall have caused it.

 

15.                                 Tenant shall not use the Premises for any
business or activity other than that specifically provided for in this Lease.

 

16.                                 Subject to the provisions of Lease Section 32,
Tenant shall not install any radio or television antenna, loudspeaker or other
device on the roof(s) or exterior walls of the Building or Project. Tenant
shall not interfere with radio or television broadcasting or reception from or
in the Project or elsewhere.

 

17.                                 Tenant shall not cut or bore holes for wires,
except in accordance with the provisions of the Lease pertaining to Alterations.
Tenant shall not affix any floor covering to floor of the Premises in any
manner except as approved by Landlord to the extent required by the provisions
of the Lease pertaining to Alterations. Tenant shall repair any damage
resulting from noncompliance with this rule.

 

18.                                 Canvassing, soliciting and distribution of
handbills or any other written material, and peddling in the Project are
prohibited, and Tenant shall cooperate to prevent such activities by the Tenant
Parties.

 

19.                                 Landlord reserves the right to exclude or
expel from the Project any person who, in Landlord’s reasonable judgment, is
intoxicated or under the influence of liquor or drugs or who is in material
violation of any of the Rules and Regulations of the Project.

 

20.                                 Tenant shall store all its trash and garbage
bags within its Premises or in other facilities provided by Landlord. 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 reasonable
directions issued from time to time by Landlord.

 

21.                                 No cooking shall be done or permitted on the
Premises except the use by Tenant of Underwriters’ Laboratory approved equipment
for brewing coffee, tea, and other similar hot beverages shall be permitted,
and the use of an Underwriter’s Laboratory approved microwave oven for employee
use shall be permitted, provided that such equipment and use is in accordance
with all applicable Laws. Tenant may install soft drink and/or snack food
vending machines for use by Tenant’s employees and invitees.

 

2

 

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

 

23.                                 Tenant’s requirements will be attended to
only upon appropriate application to the Project management office 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.

 

24.                                 There shall be no smoking within the Building
or immediately adjacent to Building entrance (except in areas, if any,
designated therefor by Landlord).

 

25.                                 Landlord may 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 any other
tenant, provided that Landlord shall not waive any of such Rules and
Regulations for the benefit of another tenant if not also waived for the benefit
of Tenant unless application of such Rule or Regulations to such other tenant
is not comparable to the application of such Rule or Regulation to Tenant due
to the use, premises location or other particularities of the lease of such
other tenant.

 

26.                                 These Rules and Regulations are in addition
to, and shall not be construed to in any way modify or amend, in whole or in
part, the terms, covenants, agreements and conditions of the Lease. However, in
the event of any conflict between these Rules and Regulations and the
provisions of the body of the Lease, the provisions of the body of the Lease
shall control.

 

27.                                 Upon written notice to Tenant, Landlord
reserves the right to rescind any of these Rules and Regulations and to make
future Rules and Regulations as, in its reasonable judgment, may from time to
time be needed for safety, comfort and security, for care and cleanliness of
the Project and for the preservation of good order therein. Tenant agrees to
abide by all such Rules and Regulations herein above stated and any additional
rules and regulations which are adopted and of which Tenant has received
written notice.

 

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

 

3

 

EXHIBIT
E

 

	
   

  	
  Sign Exhibit

  
	
   

  	
  North Elevation

  
	
   

  	
  Scale: 1/32“ = 1’

  

 

 

 

	
   

  	
  Sign Exhibit

  
	
   

  	
  South Elevation (A)

  
	
   

  	
  Scale: 1/32“ =1’

  

 

 

 

	
   

  	
  Sign Exhibit

  
	
   

  	
  South Elevation (B)

  
	
   

  	
  Scale: 1/32“ = 1’

  

 

 

 

	
   

  	
  Sign Exhibit

  
	
   

  	
  West Elevation

  
	
   

  	
  Scale: 1/32“ = 1’

  

 

 

 

	
   

  	
  Sign Exhibit

  
	
   

  	
  Plaza Monument Unit

  
	
   

  	
  Scale: 1⁄4” = 1’

  

 

 

Plaza Internally Lit Media Unit

8’ 0” width x 15’ 0” height, including 1’ 0”
base

 

 

EXHIBIT F

 

ASSIGNMENT
AND ASSUMPTION OF LEASE

 

THIS ASSIGNMENT AND ASSUMPTION OF LEASE (this
“Agreement”) is made as of the
       day of June, 2002, by and among
WARNER SPECIAL PRODUCTS, INC., a Delaware corporation (“Assignor”),
MEDIA CENTER DEVELOPMENT, LLC, a Delaware limited liability company (“Assignee”),
and TOLUCA LAKE FINANCIAL CENTRE, a California limited partnership (“Landlord”).

 

RECITALS:

 

A.                                   Landlord and
Assignor entered into that certain Agreement of Lease and Addendum to Lease
each dated as of June 20, 1995 (as amended, the “Lease”) for the lease
of certain premises (the “Premises”) containing an aggregate of
approximately 16,477 rentable square feet located at Suites 800 (containing
approximately 13,755 rentable square feet) and 730 (containing approximately
2,722 rentable square feet) located on the eighth (8th) and seventh (7th)
floors of the building at 3500 W. Olive Avenue, Burbank, California.

 

B.                                     Concurrently
herewith, Assignee, as “Landlord”, and Warner Music Group Inc., a Delaware
corporation (the “3400 W. Olive Tenant”), as “Tenant”, have entered into
that certain Office Lease (the “3400 W. Olive Lease”) respecting certain
premises leased thereunder to be located within the building at 3400 W. Olive
Avenue, Burbank, California (the “3400 W. Olive Lease Premises”).

 

C.                                     The parties now desire
to enter into this Agreement to provide for the assignment by Assignor to
Assignee of all of the right, title and interest of Assignor in and to the
Lease, and Assignee’s acceptance of such assignment and agreement to perform
all of the obligations of “Tenant” under the Lease with respect to the period
from and after the effective date of such assignment, all upon the terms and
conditions hereinafter set forth.

 

TERMS:

 

NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereby agree as follows:

 

1.                                       Assignor hereby
assigns to Assignee all of its right, title and interest in and to the Lease as
of the date (the “Effective Date”) which is the later to occur of (a)
the date of Assignor’s vacation of the Premises, or (b) the “Commencement Date”
(as defined in the 3400 W. Olive Lease) under the 3400 W. Olive Lease. Assignee
hereby accepts the foregoing assignment and assumes and agrees to be bound by
and perform all covenants, conditions, obligations and duties of Assignor under
the Lease with respect to the period from and after the Effective Date.
Assignee agrees that it has inspected the Premises and hereby agrees to take
the Premises in the condition existing upon the Effective Date, with Assignor
having no obligation to restore the Premises to its original condition.

 

2.                                       Assignor is
hereby released by Landlord and Assignee from further obligations or
liabilities accruing under the Lease with respect to the period from and after
the Effective Date (but nothing contained herein shall be deemed to release
Assignor from obligations or liabilities accruing under the Lease with respect
to the period prior to the Effective Date, including, without limitation,
indemnity obligations relating to claims made following the Effective Date
relating to occurrences prior to the Effective Date). As of the Effective Date,
Assignor shall have no continuing or future possessory rights in and to the
Premises and thereafter waives any right it may possess to receive notice from
Landlord relative to this Agreement or the Lease except with respect to the
period prior to the Effective Date.

 

3.                                       Assignor
represents and covenants as follows:

 

(a)                                  That the Lease is in
full force and effect; that Assignor’s interest therein is free and clear of
all encumbrances; and that Assignor has fully performed all covenants and
obligations due or owing under the Lease and has not done or permitted any acts
in violation of the covenants contained in the Lease.

 

(b)                                 That Assignor has not
heretofore assigned, mortgaged or otherwise transferred, amended or encumbered,
voluntarily or involuntarily, the

 

1

 

Lease or its interest in the Lease or subleased or allowed use or
occupancy of the Premises by any other person or entity.

 

(c)                                  That, to Assignor’s
actual knowledge: (i) Landlord has fully performed all the covenants and
obligations on its part to be performed and observed under the Lease; (ii)
Landlord has not done or permitted any act or acts in violation of any of the
covenants, provisions or terms thereof; and (iii) there is not now in existence
any reason or claim to offset, deduct or decrease any payments due under the
Lease.

 

4.                                       Landlord hereby
consents to the assignment of the Lease to Assignee and the terms of this
Agreement. Except as expressly otherwise provided in this Agreement, nothing in
this Agreement shall be deemed to waive or modify any of the provisions of the
Lease. Consent to this Agreement shall not be deemed a consent by Landlord to
any further assignment, whether or not Assignee purports to permit the same.

 

5.                                       Subject to the
provisions of Paragraph 4, the provisions of this Agreement shall bind and
inure to the benefit of the heirs, representatives, successors and assigns of
the parties hereto.

 

6.                                       Assignee’s
address for notices under the Lease shall be c/o M. David Paul Development LLC,
233 Wilshire Boulevard, Suite 990, Santa Monica, California 90401, Attn: M.
David Paul, unless and until changed in accordance with the Lease.

 

7.                                       In the event
that at any time after the date hereof any party or parties hereto shall
institute any action or proceeding against the other party or parties hereto
relating to this Agreement, then and in that event, the party(ies) not
prevailing in such action or proceeding shall reimburse the prevailing
party(ies) for its reasonable attorneys’ fees, and all fees, costs and expenses
incurred by the prevailing party(ies) in connection with such action or
proceeding. In addition to the foregoing award of fees, the prevailing
party(ies) shall be entitled to its attorneys’ fees, and all fees, costs and
expenses incurred in any post-judgment proceedings to collect and enforce the
judgment.

 

8.                                       Each individual
executing this Agreement on behalf of a partnership, corporation or limited
liability company represents that he or she is duly authorized to execute and
deliver this Agreement on behalf of the entity which is a party to this
Agreement and agrees to deliver evidence of his or her authority to the other
party(ies) upon request.

 

9.                                       The parties
agree to execute such other instruments and to do such further acts as may be
reasonably necessary to carry out the provisions of this Agreement.

 

2

 

10.                                 This Agreement may be
executed in several counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same Agreement.

 

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

 

	
  ASSIGNOR:

  	
  ASSIGNEE:

  	
   

  
	
   

  	
   

  	
   

  
	
  WARNER SPECIAL PRODUCTS, INC.,

  	
  MEDIA CENTER DEVELOPMENT, LLC,

  	
   

  
	
  a Delaware corporation

  	
  a Delaware limited liability company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  MEDIA CENTER PARTNERS, LLC,

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
  a Delaware limited liability

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  company, its managing member

  	
   

  
	
  Print Name:

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  M. DAVID PAUL

  	
   

  
	
  Its:

  	
   

  	
   

  	
   

  	
   

  	
  DEVELOPMENT LLC, a

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  California limited 

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  	
   

  	
  liability company, its 

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  managing member

  	
   

  
	
  Print Name:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  	
   

  	
  M. David Paul

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Managing Member

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  LANDLORD:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  TOLUCA LAKE FINANCIAL CENTRE,

  	
   

  	
   

  
	
  a California limited partnership

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  OLIVE ASSOCIATES,

  	
   

  	
   

  
	
   

  	
  a California limited partnership,

  	
   

  	
   

  
	
   

  	
  its general partner

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  M. DAVID PAUL & ASSOCIATES,

  	
   

  	
   

  
	
   

  	
   

  	
  a California limited

  	
   

  	
   

  
	
   

  	
   

  	
  partnership, its general partner

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  M. David Paul

  	
   

  	
   

  
	
   

  	
   

  	
  General Partner

  	
   

  	
   

  
											

 

3

EXHIBIT G

 

[CHICAGO TITLE COMPANY LOGO]

 

PRELIMINARY
REPORT

 

	
   

  	
  Dated as of:
  May 1, 2002

  	
  at 7:30 AM

  
	
   

  	
   

  	
   

  
	
  Reference: MEDIA CENTER

  	
  Order No.: 21049290-X52

  

 

CHICAGO TITLE COMPANY
hereby reports that it prepared to issue, or cause to be issued, as of the date
hereof, a Policy or Policies of Title Insurance describing the land and the
estate or interest therein hereinafter set forth, insuring against loss which
may be sustained by reason of any defect, lien or encumbrance not shown or
referred to as an Exception in Schedule B or not excluded from coverage
pursuant to the printed Schedules, Conditions and Stipulations of said Policy
forms.

 

The printed Exceptions and Exclusions from the coverage of said Policy
or Policies are set forth in the attached list. Copies of the Policy forms are
available upon request.

 

Please read the exceptions shown or referred
to in Schedule B and the exceptions and exclusions set forth in the
attached list of this report carefully. The exceptions and exclusions are meant
to provide you with notice of matters which are not covered under the terms of
the title insurance policy and should be carefully considered. It is important
to note that this preliminary report is not a written representation as to the
condition of title and may not list all liens, defects, and encumbrances
affecting title to the land.

 

THIS REPORT (AND ANY SUPPLEMENTS OR AMENDMENTS HERETO) IS ISSUED SOLELY
FOR THE PURPOSE OF FACILITATING THE ISSUANCE OF A POLICY OF TITLE INSURANCE AND
NO LIABILITY BE ASSUMED HEREBY. IF IT IS DESIRED THAT LIABILITY BE ASSUMED
PRIOR TO THE ISSUANCE OF A POLICY OF TITLE INSURANCE, A BINDER OR COMMITMENT
SHOULD BE REQUESTED.

 

The form of policy of title insurance contemplated by this report is:

 

AMERICAN LAND TITLE ASSOCIATION OWNER’S EXTENDED
COVERAGE POLICY

AMERICAN LAND TITLE ASSOCIATION LOAN EXTENDED
COVERAGE POLICY

 

	
  Title
  Department

  	
   

  
	
  CHICAGO
  TITLE COMPANY

  	
   

  
	
  700 S.
  FLOWER ST. #900

  	
   

  
	
  LOS ANGELES,
  CA 90017

  	
   

  
	
  (213)488-4300
  fax:

  	
   

  
	
   

  
	
  NATE GLOVER

  
	
  X52

  

 

 

SCHEDULE A

 

	
  Order No: 21049290 X52

  	
   

  	
  Your Ref: MEDIA CENTER

  

 

1.                                       The estate or
interest in the land hereinafter described or referred to covered by this
report is:

 

A FEE

 

2.                                       Title to said
estate or interest at the date hereof is vested in:

 

MEDIA CENTER DEVELOPMENT, LLC, A DELAWARE
LIMITED LIABILITY COMPANY

 

3.                                       The land
referred to in this report is situated in the State of California, County of
LOS ANGELES and is described as follows:

 

SEE ATTACHED DESCRIPTION

 

 

DESCRIPTION

 

Order No. 21049290

 

PARCEL 1:

 

LOTS 17 TO 19 INCLUSIVE, 48 TO 64 INCLUSIVE AND PORTIONS OF LOTS 15,
16, 20, 21, 45, 46, 47, 65, 66 AND THAT PORTION OF VACATED LIME STREET, ALL IN
TRACT NO. 7553, IN THE CITY OF BURBANK, COUNTY OF LOS ANGELES, STATE OF
CALIFORNIA, AS PER MAP RECORDED IN BOOK 99 PAGES 16 AND 17 OF MAPS, IN THE
OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS A WHOLE AS FOLLOWS:

 

BEGINNING AT THE MOST NORTHERLY CORNER OF SAID LOT 57; THENCE ALONG THE
NORTHEASTERLY LINES OF SAID LOTS 57 TO 64 INCLUSIVE TO AND ALONG THE
NORTHWESTERLY LINE OF PARCEL 12 OF THE RELINQUISHMENT DEED RECORDED NOVEMBER 18,
1964 AS INSTRUMENT NUMBER 5197 OF OFFICIAL RECORDS IN THE OFFICE OF SAID COUNTY
RECORDER, SOUTH 22° 59’ 37” EAST 611.34 FEET; THENCE CONTINUING ALONG THE
SOUTHWESTERLY LINE OF SAID PARCEL 12, SOUTH 11° 37’ 43” EAST 16.92 FEET TO THE
BEGINNING OF A TANGENT CURVE CONCAVE SOUTHWESTERLY AND HAVING A RADIUS OF
272.00 FEET, SOUTHERLY ALONG SAID CURVE THROUGH A CENTRAL ANGLE OF 17° 22’ 48”
AN ARC DISTANCE OF 82.51 FEET TO THE SOUTHWESTERLY CORNER OF SAID PARCEL 12,
SAID CORNER BEING IN THE NORTHEASTERLY LINE OF THE I-134 (VENTURA) FREEWAY;
THENCE NORTHWESTERLY ALONG SAID NORTHEASTERLY LINE THROUGH ITS VARIOUS DEEDS,
NORTH 69° 30’ 15” WEST 142.73 FEET, NORTH 69° 35’ 04” WEST 69.76 FEET, NORTH
72° 39’ 12” WEST 110.70 FEET TO THE NORTHEASTERLY LINE OF VACATED LIMA STREET;
THENCE ALONG SAID NORTH EASTERLY LINE, NORTH 22° 59’ 10” WEST 1.52 FEET TO THE
SOUTHWESTERLY LINE OF PARCEL 11 OF SAID RELINQUISHMENT DEED; THENCE ALONG SAID
LINE, NORTH 71° 43’ 21” WEST 79.82 FEET TO THE SOUTHWESTERLY LINE OF SAID
VACATED LIMA STREET; THENCE ALONG SAID SOUTHWESTERLY LINE, NORTH 22° 59’ 10”
WEST 0.22 FEET TO SAID NORTHEASTERLY LINE OF THE I-134 (VENTURA) FREEWAY;
THENCE CONTINUING ALONG SAID NORTHEASTERLY LINE, NORTH 76° 44’ 20” WEST 15.58
FEET, NORTH 77° 29’ 18” WEST 150.46 FEET TO THE NORTHWESTERLY CORNER OF SAID
LOT 20; THENCE CONTINUING ALONG SAID NORTHEASTERLY LINE OF SAID FREEWAY, NORTH
63° 12’ 07” WEST 4.16 FEET, NORTH 57° 21’ 13” WEST 21.44 FEET, NORTH 74° 53’ 41”
WEST 38.46 FEET TO A POINT IN THE SOUTHWESTERLY LINE OF SAID LOT 16, AND ALONG
SAID LINE, SOUTH 23° 00’ 49” EAST 0.21 FEET AND CONTINUING ALONG THE
SOUTHEASTERLY LINE OF SAID FREEWAY, NORTH 74° 01’ 44” WEST 22.11 FEET TO A
POINT IN THE SOUTHEASTERLY LINE OF THE NORTHWESTERLY 10.00 FEET OF SAID LOT 15;
THENCE ALONG SAID SOUTHEASTERLY LINE, NORTH 40° 10’ 20” EAST 19.26 FEET TO SAID
SOUTHWESTERLY LINE OF LOT 16; THENCE ALONG SAID LINE, NORTH 23° 00’ 49” WEST
11.20 FEET TO THE MOST WESTERLY CORNER OF SAID LOT 16; THENCE ALONG THE
NORTHWESTERLY LINES OF LOTS 16, 17, 18 AND 19, NORTH 40° 10’ 20” EAST 201.89
FEET TO THE MOST NORTHERLY CORNER OF SAID LOT 19; THENCE ALONG THE
NORTHEASTERLY LINE OF SAID LOT 19, SOUTH 22° 59’ 10” EAST 11.21 FEET TO THE
NORTHWESTERLY LINE OF SAID VACATED LIMA STREET; THENCE ALONG SAID LINE NORTH
40° 10’ 20” EAST 67.25 FEET TO THE SOUTHWESTERLY LINE OF SAID LOT 52; THENCE
ALONG SAID LINE, NORTH 22° 59’ 10” WEST 11.21 FEET TO THE MOST WESTERLY CORNER
OF SAID LOT 52; THENCE ALONG THE NORTHWESTERLY LINES OF SAID LOTS 52 THROUGH
57, NORTH 40° 10’ 20” EAST 302.67 FEET TO THE POINT OF BEGINNING.

 

EXCEPT THEREFROM THAT PORTION OF SAID LOTS LYING NORTHEASTERLY OF THE
FOLLOWING DESCRIBED LINE:

 

BEGINNING AT THE MOST NORTHERLY CORNER OF SAID LOT 57; THENCE ALONG THE
NORTHEASTERLY LINES OF LOTS 57 TO 62 INCLUSIVE, SOUTH 22° 59’ 37” EAST 484.22
FEET TO THE TRUE POINT OF BEGINNING; THENCE NORTH 70° 36’ 36” WEST 148.83 FEET;
THENCE NORTH 22° 51’ 36” WEST 21.56 FEET; THENCE NORTH 70° 36’ 36” WEST 88.37
FEET; THENCE NORTH 22° 51’36” WEST 106.22 FEET; THENCE NORTH 70° 36’ 36” WEST
103.14 FEET TO THE NORTHWESTERLY LINE OF SAID LOT 52.

 

1

 

Order No. 21049290

 

EXCEPT THEREFROM ALL MINERALS, OIL, GASES AND OTHER HYDROCARBONS BY
WHATSOEVER NAME KNOWN THAT MAY BE WITHIN OR UNDER THE PARCEL OF LAND
HEREINABOVE DESCRIBED, WITHOUT, HOWEVER, THE RIGHT TO DRILL, DIG OR MINE
THROUGH THE SURFACE THEREOF, AS RESERVED IN THE DEEDS RECORDED DECEMBER 3,
1965 AS INSTRUMENT NO. 4248, MARCH 11, 1964 AS INSTRUMENT
NO. 3500 AND JUNE 23, 1964 AS INSTRUMENT NO. 2275.

 

SAID LAND IS SHOWN AS PROPOSED PARCEL 1 ON THAT CERTAIN
CERTIFICATE OF COMPLIANCE RECORDED MAY 22, 2001 AS INSTRUMENT
NO. 01-868383.

 

PARCEL 2:

 

LOTS 55 TO 59 INCLUSIVE AND PORTIONS OF LOTS 50 TO 54
INCLUSIVE AND LOTS 60 TO 62 INCLUSIVE OF TRACT NO. 7553, IN THE CITY
OF BURBANK, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN
BOOK 99 PAGES 16 AND 17 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER
OF SAID COUNTY DESCRIBED AS A WHOLE AS FOLLOWS:

 

BEGINNING AT THE MOST NORTHERLY CORNER OF SAID LOT 57; THENCE
ALONG THE NORTHEASTERLY LINES OF LOTS 57 TO 62 INCLUSIVE, SOUTH 22° 59’ 37”
EAST 484.22 FEET; THENCE NORTH 70° 36’ 36” WEST 148.83 FEET; THENCE NORTH 22°
51’ 36” WEST 21.56 FEET; THENCE NORTH 70° 36’ 36” WEST 88.37 FEET; THENCE NORTH
22° 51’ 36” WEST 106.22 FEET; THENCE NORTH 70° 36’ 36” WEST 103.14 FEET TO THE
NORTHWESTERLY LINE OF SAID LOT 52; THENCE ALONG SAID NORTHWESTERLY LINE
AND THE NORTHWESTERLY LINES OF LOTS 53 THROUGH 57 TO THE POINT OF
BEGINNING.

 

EXCEPT THEREFROM ALL MINERALS, OIL, GASES AND OTHER HYDROCARBONS BY
WHATSOEVER NAME KNOWN THAT MAY BE WITHIN OR UNDER THE PARCEL OF LAND
HEREINABOVE DESCRIBED, WITHOUT, HOWEVER, THE RIGHT TO DRILL, DIG OR MINE THROUGH
THE SURFACE THEREOF, AS RESERVED IN THE DEEDS RECORDED DECEMBER 3, 1965 AS
INSTRUMENT NO. 4248, MARCH 11, 1964 AS INSTRUMENT NO. 3500 AND JUNE 23,
1964 AS INSTRUMENT NO. 2275.

 

SAID LAND IS SHOWN AS PROPOSED PARCEL 2 OF THAT CERTAIN
CERTIFICATE OF COMPLIANCE RECORDED MAY 22, 2001 AS INSTRUMENT
NO. 01-868383.

 

PARCEL 3:

 

ALL RIGHTS AND BENEFITS OF THAT CERTAIN DOCUMENT ENTITLED “DEVELOPMENT
RIGHTS DEED AND AGREEMENT”, BY AND BETWEEN NATIONAL BROADCASTING COMPANY, A
DELAWARE CORPORATION (“GRANTOR”), NBC PLAZA L.P., A CALIFORNIA LIMITED
PARTNERSHIP (“GRANTEE”), AND CITY OF BURBANK, A MUNICIPAL CORPORATION (“CITY”),
AS RECORDED SEPTEMBER 27, 1991 AS INSTRUMENT NO. 91-1534540 AND
MODIFIED BY A DOCUMENT ENTITLED “FIRST AMENDMENT TO DEVELOPMENT AGREEMENT FOR
THE OLIVE-CALIFORNIA PROJECT (PREVIOUSLY CALLED THE NBC PLAZA PROJECT)
AMENDMENT TO PLANNED DEVELOPMENT 89-6” DATED DECEMBER 20, 1996 AND
RECORDED APRIL 21, 1997 AS INSTRUMENT NO. 97-596882.

 

2

 

SCHEDULE B

 

	
  Order No: 21049290 X52 

  	
  Your Ref: MEDIA CENTER

  

 

At
the date hereof exceptions to coverage in addition to the printed Exceptions
and Exclusions in the policy form designated on the face page of this Report
would be as follows:

 

	
  A

  	
  1.

  	
  PROPERTY TAXES, INCLUDING ANY ASSESSMENTS COLLECTED WITH TAXES, TO BE
  LEVIED FOR THE FISCAL YEAR 2002-2003 THAT ARE A LIEN NOT YET DUE.

  
	
   

  	
   

  	
   

  
	
  B

  	
  2. 

  	
  PROPERTY TAXES FOR THE FISCAL YEAR SHOWN BELOW ARE PAID. FOR
  INFORMATION PURPOSES THE AMOUNTS ARE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FISCAL YEAR:

  	
  2001-2002

  
	
   

  	
   

  	
  1ST INSTALLMENT:

  	
  $1,291.93

  
	
   

  	
   

  	
  2ND INSTALLMENT:

  	
  $1,291.92

  
	
   

  	
   

  	
  EXEMPTION:

  	
  $-NONE-

  
	
   

  	
   

  	
  CODE AREA:

  	
  0002542

  
	
   

  	
   

  	
  ASSESSMENT NO:

  	
  2483-023-443

  
	
   

  	
   

  	
   

  
	
  C

  	
  3.

  	
  PROPERTY TAXES FOR THE FISCAL YEAR SHOWN BELOW ARE PAID. FOR
  INFORMATION PURPOSES THE AMOUNTS ARE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FISCAL YEAR:

  	
  2001-2002

  
	
   

  	
   

  	
  1ST INSTALLMENT:

  	
  $82,321.39

  
	
   

  	
   

  	
  2ND INSTALLMENT:

  	
  $82,321.38

  
	
   

  	
   

  	
  EXEMPTION:

  	
  $-NONE-

  
	
   

  	
   

  	
  CODE AREA:

  	
  0002542

  
	
   

  	
   

  	
  ASSESSMENT NO:

  	
  2483-023-444

  
	
   

  	
   

  	
   

  
	
  D

  	
  4.

  	
  THE LIEN OF SUPPLEMENTAL OR ESCAPED ASSESSMENTS OF PROPERTY TAXES, IF
  ANY, MADE PURSUANT TO THE PROVISIONS OF PART 0.5, CHAPTER 3.5 OR PART 2,
  CHAPTER 3,  ARTICLES 3 AND 4
  RESPECTIVELY (COMMENCING WITH SECTION 75) OF THE REVENUE AND TAXATION
  CODE OF THE STATE OF CALIFORNIA AS RESULT OF THE TRANSFER OF TITLE TO THE
  VESTEE NAMED IN SCHEDULE A; OR AS 
  A RESULT OF CHANGES IN OWNERSHIP OR NEW CONSTRUCTION OCCURRING PRIOR
  TO DATE OF POLICY.

  
	
   

  	
   

  	
   

  
	
  E

  	
  5.

  	
  AN EASEMENT FOR THE PURPOSE SHOWN BELOW AND RIGHTS INCIDENTAL THERETO
  AS SET FORTH IN A DOCUMENT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PURPOSE:

  	
  PUBLIC STREET

  
	
   

  	
   

  	
  RECORDED:

  	
  APRIL 5, 1974 AS INSTRUMENT NO. 4545

  
	
   

  	
   

  	
  AFFECTS:

  	
  THAT PORTION OF LOT 57 TRACT NO. 7553, DESCRIBED AS FOLLOWS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BEGINNING AT THE MOST NORTHERLY CORNER OF SAID LOT 57; THENCE
  SOUTHWESTERLY ALONG THE NORTHWESTERLY LINE OF SAID LOT, A DISTANCE OF 10.00
  FEET; THENCE IN A DIRECT LINE TO A POINT ON THE NORTHEASTERLY LINE OF SAID
  LOT, DISTANT SOUTHEASTERLY THEREON 10.00 FEET FROM THE POINT OF BEGINNING;
  THENCE NORTHWESTERLY ALONG SAID NORTHEASTERLY LINE 10.00 FEET

  
						

 

1

 

	
   

  	
   

  	
  TO THE POINT OF BEGINNING.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AFFECTS: 

  	
  PARCEL 8.

  
	
   

  	
   

  	
   

  
	
  G

  	
  6.

  	
  THE FACT THAT SAID LAND IS INCLUDED WITHIN A PROJECT AREA OF THE
  REDEVELOPMENT AGENCY SHOWN BELOW, AND THAT PROCEEDINGS FOR THE REDEVELOPMENT
  OF SAID PROJECT HAVE BEEN INSTITUTED UNDER THE REDEVELOPMENT LAW (SUCH
  REDEVELOPMENT TO PROCEED ONLY AFTER THE ADOPTION OF THE REDEVELOPMENT PLAN)
  AS DISCLOSED BY A DOCUMENT.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  REDEVELOPMENT

  	
   

  
	
   

  	
   

  	
  AGENCY:

  	
  THE WEST
  OLIVE REDEVELOPMENT PROJECT REDEVELOPMENT AREA

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  RECORDED:

  	
  DECEMBER 31, 1976 AS INSTRUMENT NO.
  5100

  
	
   

  	
   

  	
   

  
	
  H

  	
  7.

  	
  AN EASEMENT FOR THE PURPOSE SHOWN BELOW AND
  RIGHTS INCIDENTAL THERETO AS SET FORTH IN A DOCUMENT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PURPOSE:

  	
  PUBLIC UTILITIES

  
	
   

  	
   

  	
  RECORDED:

  	
  MARCH 14, 1961 AS INSTRUMENT NO. 2986

  
	
   

  	
   

  	
  AFFECTS:

  	
  THE SOUTHEASTERLY 3 FEET.

  
	
   

  	
   

  	
   

  
	
  I

  	
   

  	
  AFFECTS:   PARCEL 9

  
	
   

  	
   

  	
   

  
	
  J

  	
  8.

  	
  AN EASEMENT FOR THE PURPOSE SHOWN BELOW AND RIGHTS INCIDENTAL THERETO
  AS SET FORTH IN A DOCUMENT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PURPOSE:

  	
  PUBLIC UTILITIES

  
	
   

  	
   

  	
  RECORDED:

  	
  JUNE 23, 1969 AS INSTRUMENT NO. 2699

  
	
   

  	
   

  	
  AFFECTS:

  	
  THE SOUTHEASTERLY 3.00 FEET MEASURED
  NORTHWESTERLY AT RIGHT ANGLES TO THE SOUTHEASTERLY LINE OF LOTS 18 AND 19 OF
  TRACT NO. 7553.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE NORTHWESTERLY LINE OF SAID STRIP OF LAND TO BE PROLONGED OR
  SHORTENED SO AS TO TERMINATE IN THE SOUTHWESTERLY LINE OF SAID LOT 18 AND THE
  NORTHEASTERLY LINE OF SAID LOT 19.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AFFECTS:

  	
  PARCEL 9.

  
	
   

  	
   

  	
   

  	
   

  
	
  L

  	
  9.

  	
  AN EASEMENT FOR THE PURPOSE SHOWN BELOW AND RIGHTS INCIDENTAL THERETO
  AS SET FORTH IN A DOCUMENT

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PURPOSE:

  	
  PUBLIC
  UTILITIES

  
	
   

  	
   

  	
  RECORDED:

  	
  AUGUST 9, 1955 AS INSTRUMENT NO. 3285
  IN BOOK 48599 PAGE 435, OFFICIAL RECORDS

  
	
   

  	
   

  	
  AFFECTS:

  	
  THE
  SOUTHERLY 3 FEET.

  
						

 

2

 

	
   

  	
   

  	
  AFFECTS:  
  PARCEL 10.

  
	
   

  	
   

  	
   

  
	
  N

  	
  10.

  	
  THE TERMS, COVENANTS AND PROVISIONS SET OUT
  IN THAT  CERTAIN  DOCUMENT ENTITLED NBC PLAZA DEVELOPMENT
  AGREEMENT,  BY AND BETWEEN THE CITY OF
  BURBANK AND THE NBC PLAZA L.P., RECORDED SEPTEMBER 20, 1991 AS
  INSTRUMENT NO. 91-1491083.

  
	
   

  	
   

  	
   

  
	
  O

  	
  11.

  	
  A DOCUMENT ENTITLED “FIRST AMENDMENT TO
  DEVELOPMENT AGREEMENT FOR THE OLIVE-CALIFORNIA PLAZA PROJECT (PREVIOUSLY
  CALLED THE NBC PLAZA PROJECT) AMENDMENT TO PLANNED DEVELOPMENT 89-6”, DATED DECEMBER 20,
  1996 EXECUTED BY SNYDER PROPERTIES VENTURE, L.P., A CALIFORNIA LIMITED
  PARTNERSHIP, AS SUCCESSOR-IN-INTEREST TO NBC PLAZA L.P., AND THE CITY OF
  BURBANK, A MUNICIPAL CORPORATION OF THE STATE OF CALIFORNIA, SUBJECT TO ALL
  THE TERMS, PROVISIONS AND CONDITIONS THEREIN CONTAINED, RECORDED APRIL 21,
  1997 AS INSTRUMENT NO. 97-596882.

  
	
   

  	
   

  	
   

  
	
  P

  	
  12.

  	
  A DOCUMENT ENTITLED “ASSIGNMENT AND
  ASSUMPTION AGREEMENT”, DATED MARCH 10, 2000 EXECUTED BY EOP-MEDIA
  CENTER,  L.L.C., A DELAWARE LIMITED
  LIABILITY COMPANY AND MEDIA CENTER DEVELOPMENT, LLC., A DELAWARE LIMITED
  LIABILITY COMPANY, SUBJECT TO ALL THE TERMS, PROVISIONS AND CONDITIONS
  THEREIN CONTAINED, RECORDED MARCH 10, 2000 AS INSTRUMENT NO. 00-0369324.

  
	
   

  	
   

  	
   

  	
   

  
	
  Q

  	
  13.

  	
  AN EASEMENT FOR THE PURPOSE SHOWN BELOW AND
  RIGHTS INCIDENTAL THERETO AS SET FORTH IN A DOCUMENT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GRANTED TO:

  	
  THE CITY OF BURBANK

  
	
   

  	
   

  	
  PURPOSE:

  	
  PUBLIC STREET PURPOSES

  
	
   

  	
   

  	
  RECORDED:

  	
  JULY 13, 2001 AS INSTRUMENT NO.
  01-1217983

  
	
   

  	
   

  	
  AFFECTS:

  	
  AS PROVIDED THEREIN

  
	
   

  	
   

  	
   

  
	
  R

  	
  14.

  	
  THE FACT THAT SAID LAND IS INCLUDED WITHIN
  A PROJECT AREA OF THE REDEVELOPMENT AGENCY SHOWN BELOW, AND THAT PROCEEDINGS
  FOR THE REDEVELOPMENT OF SAID PROJECT HAVE BEEN INSTITUTED UNDER THE
  REDEVELOPMENT LAW (SUCH REDEVELOPMENT TO PROCEED ONLY AFTER THE ADOPTION OF
  THE REDEVELOPMENT PLAN) AS DISCLOSED BY A DOCUMENT.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  REDEVELOPMENT

  	
   

  
	
   

  	
   

  	
  AGENCY:

  	
  BURBANK REDEVELOPMENT AGENCY

  
	
   

  	
   

  	
  RECORDED:

  	
  JULY 24, 2001 AS INSTRUMENT NO.
  01-1305317

  
	
   

  	
   

  	
   

  
	
  S

  	
  15.

  	
  A DEED OF TRUST TO SECURE AN INDEBTEDNESS IN THE ORIGINAL AMOUNT
  SHOWN BELOW

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AMOUNT:

  	
  $60,000,000.00

  
	
   

  	
   

  	
  DATED:

  	
  OCTOBER 11, 2001

  
	
   

  	
   

  	
  TRUSTOR:

  	
  MEDIA CENTER DEVELOPMENT, LLC, A DELWARE
  LIMITED 

  
					

 

3

 

	
   

  	
   

  	
   

  	
  LIABILITY COMPANY

  
	
   

  	
   

  	
  TRUSTEE:

  	
  CHICAGO TITLE COMPANY

  
	
   

  	
   

  	
  BENEFICIARY:

  	
  CALIFORNIA BANK & TRUST, A CALIFORNIA
  BANKING CORPORATION

  
	
   

  	
   

  	
  RECORDED:

  ORIGINAL LOAN

  	
  OCTOBER 19, 2001 AS INSTRUMENT NO.
  01-1993091

  
	
   

  	
   

  	
  NUMBER:

  	
  NOT SHOWN

  
	
   

  	
   

  	
   

  	
   

  
	
  T

  	
  16.

  	
  AN UNRECORDED LEASE AFFECTING THE PREMISES
  HEREIN DESCRIBED, EXECUTED BY AND BETWEEN THE PARTIES HEREIN NAMED, WITH
  CERTAIN TERMS, COVENANTS, CONDITIONS AND PROVISIONS SET FORTH THEREIN

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LESSOR:

  	
  MEDIA CENTER DEVELOPMENT LLC

  
	
   

  	
   

  	
  LESSEE:

  	
  ARNIE MORTON’S OF CHICAGO/BURBANK LLC

  
	
   

  	
   

  	
  DISCLOSED BY:

  	
  A MEMORANDUM OF LEASE

  
	
   

  	
   

  	
  RECORDED:

  	
  SEPTEMBER 27, 2001 AS INSTRUMENT NO.
  01-1830373

  
	
   

  	
   

  	
   

  
	
  U

  	
   

  	
  AN AGREEMENT (AND THE PROVISIONS CONTAINED
  THEREIN) WHICH STATES THAT SAID LEASE IS SUBORDINATE TO THE DEED OF TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  RECORDED:

  	
  OCTOBER 19, 2001 AS INSTRUMENT NO.
  01-1993091

  
	
   

  	
   

  	
  BY AGREEMENT

  	
   

  
	
   

  	
   

  	
  RECORDED:

  	
  NOVEMBER 30, 2001 AS INSTRUMENT NO.
  01-2274781

  
	
   

  	
   

  	
   

  	
   

  
	
  V

  	
  17.

  	
  AN UNRECORDED LEASE AFFECTING THE PREMISES
  HEREIN DESCRIBED, EXECUTED BY AND BETWEEN THE PARTIES HEREIN NAMED, WITH
  CERTAIN TERMS, COVENANTS, CONDITIONS AND PROVISIONS SET FORTH THEREIN

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LESSOR:

  	
  MEDIA CENTER DEVELOPMENT, LLC, A DELAWARE
  LIMITED LIABILITY COMPANY

  
	
   

  	
   

  	
  LESSEE:

  	
  SPECTRUM FOODS, INC., A CALIFORNIA
  CORPORATION

  
	
   

  	
   

  	
  DISCLOSED BY:

  	
  SUBORDINATION,  ATTORNMENT AND NONDISTURBANCE AGREEMENT

  
	
   

  	
   

  	
  RECORDED:

  	
  NOVEMBER 30, 2001 AS INSTRUMENT NO.
  01-2274780

  
	
   

  	
   

  	
   

  	
   

  
	
  W

  	
   

  	
  AN AGREEMENT (AND THE PROVISIONS CONTAINED
  THEREIN) WHICH STATES THAT SAID LEASE IS SUBORDINATE TO THE DEED OF TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  RECORDED:

  	
  OCTOBER 19, 2001 AS INSTRUMENT NO.
  01-1993091

  
	
   

  	
   

  	
  BY AGREEMENT

  	
   

  
	
   

  	
   

  	
  RECORDED:

  	
  NOVEMBER 30, 2001 AS INSTRUMENT NO.
  01-2274780

  
	
   

  	
   

  	
   

  
	
  X

  	
  18.

  	
  A CLAIM OF MECHANIC’S LIEN

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  AMOUNT:

  	
  $ 597,414.00

  
					

 

4

 

	
   

  	
   

  	
  CLAIMANT:

  	
  STROCAL, INC.

  
	
   

  	
   

  	
  RECORDED:

  	
  APRIL 5, 2002 AS INSTRUMENT NO.
  02-0814200

  
	
   

  	
   

  	
   

  	
   

  
	
  Y

  	
  19.

  	
  ANY OTHER CLAIMS FOR MECHANICS’ LIENS THAT
  MAY BE RECORDED BY REASON OF A WORK OF IMPROVEMENT THAT IS DISCLOSED BY THE
  MECHANIC’S LIEN SHOWN IN THE LAST ABOVE NUMBERED ITEM.

  
	
   

  	
   

  	
   

  
	
  Z

  	
  20.

  	
  ANY RIGHTS, INTERESTS OR CLAIMS WHICH MAY EXIST OR ARISE BY REASON OF
  THE FOLLOWING MATTERS DISCLOSED BY AN INSPECTION OF SURVEY:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A)          A WALKWAY EXISTS OVER APPROXIMATELY THE
  NORTHWESTERLY 11 FEET OF SAID LAND ADJOINING OLIVE AVENUE.

  
	
   

  	
   

  	
   

  
	
  AA

  	
  21.

  	
  WATER RIGHTS, CLAIMS OR TITLE TO WATER, WHETHER OR NOT SHOWN BY THE
  PUBLIC RECORDS.

  
	
   

  	
   

  	
   

  
	
  AB

  	
  22.

  	
  ANY CLAIM, WHICH ARISES OUT OF THE
  TRANSACTION VESTING IN THE INSURED THE ESTATE OR INTEREST INSURED BY THIS
  POLICY, BY REASON OF THE OPERATION OF FEDERAL BANKRUPTCY, STATE INSOLVENCY,
  OR SIMILAR CREDITORS’ RIGHTS LAWS, THAT IS BASED ON:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  THE TRANSACTION CREATING THE ESTATE OR
  INTEREST INSURED BY THIS POLICY BEING DEEMED A FRAUDLENT CONVEYANCE OR
  FRAUDLENT TRANSFER; OR

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  THE TRANSACTION CREATING THE ESTATE OR
  INTEREST INSURED BY THIS POLICY BEING DEEMED A PREFERENTIAL TRANSFER EXCEPT
  WHERE THE PREFERENTIAL TRANSFER RESULTS FROM THE FAILURE:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (A)

  	
  TO TIMELY RECORD THE INSTRUMENT OF
  TRANSFER; OR

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (B)

  	
  OF SUCH RECORDATION TO IMPART NOTICE TO A
  PURCHASER FOR VALUE OR A JUDGMENT OR LIEN CREDITOR.

  
	
   

  	
   

  	
   

  	
   

  
	
  AC

  	
  23.

  	
   

  	
  ANY CLAIM, WHICH ARISES OUT OF THE
  TRANSACTION CREATING THE INTEREST OF THE MORTGAGEE INSURED BY THIS POLICY, BY
  REASON OF THE OPERATION OF FEDERAL BANKRUPTCY, STATE INSOLVENCY, OR SIMILAR
  CREDITORS’ RIGHTS LAWS, THAT IS BASED ON:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
  THE TRANSACTION CREATING THE  INTEREST OF THE INSURED MORTGAGEE BEING
  DEEMED A FRAUDULENT CONVEYANCE OR FRAUDULENT TRANSFER; OR

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
  THE SUBORDINATION OF THE INTEREST OF THE
  INSURED MORTGAGEE AS A RESULTS OF THE APPLICATION OF THE DOCTRINE OF
  EQUITABLE SUBORDINATION; OR

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)

  	
  THE TRANSACTION CREATING THE INTEREST OF
  THE INSURED MORTGAGEE BEING DEEMED A PREFERENTIAL TRANSFER EXCEPT WHERE THE
  PREFERENTIAL

  
						

 

5

 

 

	
   

  	
   

  	
   

  	
  TRANSFER RESULT FROM THE FAILURE:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (A)

  	
  TO TIMELY RECORD THE INSTRUMENT OF TRANSFER; OR

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (B)

  	
  OF SUCH RECORDATION TO IMPART NOTICE TO A PURCHASER FOR VALUE OR A
  JUDGMENT OR LIEN CREDITOR.

  
	
   

  	
   

  	
   

  	
   

  
	
  AD

  	
  24.

  	
  ANY RIGHTS OF THE PARTIES IN POSSESSION OF SAID LAND, BASED ON ANY
  UNRECORDED LEASE, OR LEASES.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THIS COMPANY WILL REQUIRE THAT A FULL COPY OF ANY UNRECORDED LEASE BE
  SUBMITTED TO US, TOGETHER WITH ALL SUPPLEMENTS, ASSIGNMENTS AND AMENDMENTS,
  BEFORE ISSUING ANY POLICY OF TITLE INSURANCE.

  
	
   

  	
   

  	
   

  
	
  AE

  	
  25.

  	
  MATTERS WHICH MAY BE DISCLOSED BY AN INSPECTION OR SURVEY OF SAID
  LAND OR BY INQUIRY OF THE PARTIES IN POSSESSION THEREOF.

  
	
   

  	
   

  	
   

  
	
  AF

  	
   

  	
  THIS OFFICE MUST BE NOTIFIED AT LEAST 7 BUSINESS DAYS PRIOR TO THE
  SCHEDULED CLOSING IN ORDER TO ARRANGE FOR AN INSPECTION OF THE LAND; UPON
  COMPLETION OF THIS INSPECTION YOU WILL BE NOTIFIED OF THE REMOVAL OF SPECIFIC
  COVERAGE EXCEPTIONS AND/OR ADDITIONAL EXCEPTIONS TO COVERAGE.

  
	
   

  	
   

  	
   

  
	
  AG

  	
   

  	
  END OF SCHEDULE B

  
	
   

  	
   

  	
   

  
	
  AH

  	
   

  	
  NOTE NO. 1:   THERE ARE NO
  CONVEYANCES AFFECTING SAID LAND, RECORDED WITHIN SIX (6) MONTHS OF THE DATE
  OF THIS REPORT.

  
	
   

  	
   

  	
   

  
	
  AI

  	
   

  	
  NOTE NO.  2:   THE CHARGE FOR A POLICY OF TITLE
  INSURANCE, WHEN ISSUED THROUGH THIS TITLE ORDER, WILL BE BASED ON THE
  SHORT-TERM RATE.

  
	
   

  	
   

  	
   

  
	
  AJ

  	
   

  	
  NOTE NO. 3:    THIS COMPANY
  WILL REQUIRE THAT AN ALTA SURVEY OF SAID LAND, SATISFACTORY TO THIS COMPANY,
  BE SUBMITTED. IT IS RECOMMENDED THAT THE SURVEYOR CONTACT THIS COMPANY PRIOR
  TO STARTING THE SURVEY.

  
	
   

  	
   

  	
   

  
	
  AK

  	
   

  	
  NOTE NO. 4:     YOUR OPEN ORDER
  REQUEST INDICATES THAT A LIMITED LIABILITY COMPANY WILL BE ACQUIRING,
  ENCUMBERING OR CONVEYING REAL PROPERTY IN YOUR TRANSACTION. UNDER THE
  PROVISIONS OF “THE CALIFONIA LIMITED LIABILITY ACT, EFFECTIVE SEPTEMBER 30,
  1994” THE FOLLOWING WILL BE REQUIRED:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  1.    A COPY OF THE ARTICLES OF
  ORGANIZATION (AND ALL AMENDMENTS, IF ANY)

  
	
   

  	
   

  	
  THAT HAS BEEN FILED WITH THE SECRETARY OF STATE.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  2.    THE REQUIREMENT THAT THIS
  COMPANY BE PROVIDED WITH A COPY OF THE OPERATING AGREEMENT. THE COPY PROVIDED
  MUST BE CERTIFIED BY THE APPROPRIATE MANAGER OR MEMBER THAT IT IS A COPY OF
  THE CURRENT OPERATING AGREEMENT.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  3.    IF THE LIMITED LIABILITY
  COMPANY IS MEMBER-MANAGED THEN THIS COMPANY MUST BE PROVIDED WITH A CURRENT
  LIST OF THE MEMBER NAMES.

  

 

6

 

	
  AL

  	
   

  	
  NOTE NO. 5:  WHEN THIS TITLE
  ORDER CLOSES AND IF CHICAGO TITLE IS HANDLING LOAN PROCEEDS THROUGH
  SUB-ESCROW, ALL TITLE CHARGES AND EXPENSES NORMALLY BILLED, WILL BE DEDUCTED
  FROM THOSE LOAN PROCEEDS (TITLE CHARGES AND EXPENSES WOULD INCLUDE TITLE
  PREMIUMS, ANY TAX OR BOND ADVANCES, DOCUMENTARY TRANSFER TAX AND RECORDING
  FEES, ETC.) .

  
	
   

  	
   

  	
   

  
	
  AM

  	
   

  	
  NOTE NO. 6:   IF THIS COMPANY
  IS REQUESTED TO DISBURSE FUNDS IN CONNECTION WITH THIS TRANSACTION, CHAPTER
  598, STATUTES OF 1989 MANDATES HOLD PERIODS FOR CHECKS DEPOSITED TO ESCROW OR
  SUB-ESCROW ACCOUNTS. THE MANDATORY HOLD PERIOD FOR CASHIER CHECKS, CERTIFIED
  CHECKS AND TELLER’S CHECKS IS ONE BUSINESS DAY AFTER THE DAY DEPOSITED. OTHER
  CHECKS REQUIRE A HOLD PERIOD OF FROM TWO TO FIVE BUSINESS DAYS AFTER THE DAY
  DEPOSITED. IN THE EVENT THAT THE PARTIES TO THE CONTEMPLATED TRANSACTION WISH
  TO RECORD PRIOR TO THE TIME THAT THE FUNDS ARE AVAILABLE FOR DISBURSEMENT
  (AND SUBJECT TO COMPANY APPROVAL), THE COMPANY WILL REQUIRE THE PRIOR WRITTEN
  CONSENT OF THE PARTIES. UPON REQUEST, A FORM ACCEPTABLE TO THE COMPANY
  AUTHORIZING SAID EARLY RECORDING MAY BE PROVIDED TO ESCROW FOR EXECUTION.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WIRE TRANSFERS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THERE IS NO MANDATED HOLD PERIOD FOR FUNDS
  DEPOSITED BY CONFIRMED WIRE TRANSFER. THE COMPANY MAY DISBURSE SUCH FUNDS THE
  SAME DAY.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CHICAGO TITLE WILL DISBURSE BY WIRE (WIRE-OUT)
  ONLY COLLECTED FUNDS OR FUNDS RECEIVED BY CONFIRMED WIRE (WIRE-IN). THE FEE
  FOR EACH WIRE-OUT IS $25.00. THE COMPANY’S WIRE-IN INSTRUCTIONS ARE:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WIRE-IN INSTRUCTIONS FOR BANK OF AMERICA:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BANK:

  	
  BANK OF AMERICA

  
	
   

  	
   

  	
   

  	
  1850 GATEWAY BLVD.

  
	
   

  	
   

  	
   

  	
  CONCORD, CA  94520

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BANK ABA:

  	
  121000358

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ACCOUNT NAME:

  	
  CHICAGO TITLE COMPANY

  
	
   

  	
   

  	
   

  	
  BROADWAY PLAZA OFFICE

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ACCOUNT NO.:

  	
  12351- 50737

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FOR CREDIT TO:

  	
  CHICAGO TITLE COMPANY

  
	
   

  	
   

  	
   

  	
  700 SOUTH FLOWER, SUITE 900

  
	
   

  	
   

  	
   

  	
  LOS ANGELES, CA 90017

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FURTHER CREDIT TO:

  	
  ORDER NO. : 021049290

  

 

7

 

	
   

  	
   

  	
  PLATS

  
	
   

  	
   

  	
  NG/MV

  

 

8

 

CHICAGO
TITLE INSURANCE COMPANY

 

Fidelity
National Financial Group of Companies’ Privacy Statement

July
1, 2001

 

We recognize and respect the privacy
expectation of today’s consumers and the requirements of applicable federal and
state privacy laws. We believe that making you aware of how we use your
non-public personal information (“Personal Information”), and to whom it is
disclosed, will form the basic for a relationship of trust between us and the
public that we serve. This Privacy Statement provides that explanation. We
reserve the right to change this Privacy Statement from time to time consistent
with applicable privacy laws.

 

In the course of our business, we
may collect Personal Information about you from the following sources:

 

•                  From applications or other forms we received
from you or your authorized representatives;

•                  From your transactions with, or from the
services being performed by, us, our affiliates, or others;

•                  From our internet web sites;

•                  From the public records maintained by
governmental entities that we either obtain directly from those entities, or from
our affiliates or others; and

•                  From consumer or other reporting agencies.

 

Our Policies Regarding The
Protection Of The Confidentiality And Security Of Your Personal Information

 

We maintain physical, electronic and
procedural safeguards to protect your Personal Information from unauthorized
access or intrusion. We limit access to the Personal Information only to those
employees who need such access in connection with providing products or
services to you or for other legitimate business purposes.

 

Our Policies and Practices
Regarding the Sharing of Your Personal Information

 

We may share your personal information with
our affiliates, such as insurance companies, agents, and other real estate
settlement service providers. We may also disclose your Personal Information:

 

•                  to agents, brokers or representatives to
provide you with services you have requested;

•                  to third-party contractors or service
providers who provide services or perform marketing or other functions on our
behalf; and

•                  to others with whom we enter into joint
marketing agreements for products or services that we believe you may find of
interest.

 

In addition, we will disclose your Personal
Information when you direct or give us permission, when we are required by law
to do so, or when we suspect fraudulent or criminal activities. We also may
disclose your Personal Information when otherwise permitted by applicable
privacy laws such as, for example, when disclosure is needed to enforce our
rights arising out if any agreement, transaction or relationship with you.

 

One of the most important responsibilities of
some of our affiliated companies is to record documents in the public domain.
Such documents may contain your Personal Information.

 

Right To Access Your Personal
Information And Ability To Correct Errors Or Requests Change Or Deletion

 

Certain states afford you the right to access
your Personal Information and, under certain circumstances, to find out to whom
your Personal Information has been disclosed. Also, certain states afford you
the right to request correction, amendment or deletion of your Personal
Information. We reserve the right, where permitted by law, to charge a
reasonable fee to cover the costs incurred in responding to such requests.

 

All requests must be made in writing to the
following address:

 

Privacy
Compliance Officer

Fidelity
National Financial, Inc.

4050
Calle Real, Suite 220

Santa
Barbara, CA 93110

 

Multiple Products or Services:

 

If we provide you with more than on financial
product or service, you may receive more than one privacy notice from us. We
apologize for any inconvenience this may cause you.

 

 

Attached
to Order No. 021049290

 

CLTA
PRELIMINARY REPORT FORM

 

Exhibit
A (revised 01/04/02)

 

CALIFORNIA
LAND TITLE ASSOCIATION STANDARD COVERAGE POLICY - 1990

 

EXCLUSIONS
FROM COVERAGE

 

The following matters are expressly excluded
from the coverage of this policy and the Company will not pay loss or damage,
costs, attorneys’ fees or expenses which arise by reason of:

 

1.                    (a)          Any
law, ordinance or governmental regulation (including but not limited to
building or zoning laws, ordinances, or regulations) restricting, regulating,
prohibiting or relating (i) the occupancy use, or enjoyment of the land; (ii)
the character, dimensions or location of any improvement now or hereafter
erected on the land; (iii) a separation in ownership or a change in the
dimensions or area of the land or any parcel of which the land is or was a
part; or (iv) environmental protection, or the effect of any violation of these
laws, ordinances or governmental regulations, except to the extent that a
notice of the enforcement there of or a notice of a defect, lien, or
encumbrance resulting from a violation or alleged violation affecting the land
has been recorded in the public records at Date of Policy.

 

2.                    (b)         Any
governmental police power not excluded by (a) above, except to the extent that
a notice of the exercise thereof or notice of a defect, lien or encumbrance
resulting from a violation or alleged violation affecting the land has been
recorded in the public records at Date of Policy.

 

Rights of eminent domain
unless notice of the exercise thereof has been recorded in the public records
at Date of Policy, but not excluding from coverage any taking which has
occurred prior to Date of Policy which would be binding on the rights of a
purchaser for value without knowledge.

 

3.                    Defects, liens, encumbrances, adverse claims
or other matters:

 

(a)          whether or not recorded in the public
records at Date of Policy, but created, suffered, assumed or agreed to by the
insured claimant;

 

(b)         not known to the Company, not recorded
in the public records at Date of Policy, but known to the insured claimant and
not disclosed in writing to the Company by the insured claimant prior to the
date the insured claimant became an insured under this policy;

 

(c)          resulting in no loss or damage to the
insured claimant;

 

(d)         attaching or created subsequence to
Date of Policy; or

 

(e)          resulting in loss or damage which
would not have been sustained if the insured had paid value for the insured
mortgage or for the estate or interest by this policy.

 

4.                    Unenforceability of the lien of the insured
mortgage because of the inability or failure of the insured at Date of Policy,
or the inability or failure of any subsequence owner of the indebtedness, to
comply with the applicable doing business laws of the state in which the land
is situated.

 

Invalidity or unenforceability of the lien of
the insured mortgage, or claim thereof which arises out of the transaction
evidenced by the insured mortgage and is based upon usury or any consumer
credit protection or truth in lending law.

 

5.                    Any claim which arises out of the transaction
vesting in the insured the estate of interest insured by this policy or the
transaction creating the interest of the insured lender, by reason of the
operation of federal bankruptcy, state insolvency or similar creditors’ rights
laws.

 

 

EXCEPTIONS
FROM COVERAGE - SCHEDULE B, PART 1

 

This policy does not insure against loss or
damage (and the Company will not pay costs, attorneys’ fees or expenses) which
arise by reason of:

 

1.                    Taxes or assessments which are not shown as
existing liens by the records of any taxing authority that levies taxes or
assessments on real property or by the public records.

 

Proceedings by a public
agency which may result in taxes or assessments, or notices of such
proceedings, whether or not shown by the records of such agency or by the
public records.

 

2.                    Any fact, rights, interest, or claims which or
not shown by the public records but which could be ascertained by an inspection
of the land which or which may be asserted by persons in thereof.

 

3.                    Easements, liens or encumbrances, or claims
thereof, which are not shown by the public records.

 

4.                    Discrepancies, conflicts in boundary lines, shortage
in area, encroachments, or any other facts which a correct survey would
disclose and which are not shown by the public records.

 

5.                    (a) Unpatented mining claims; (b) reservations
or exceptions in patents or in Acts authorizing the insurance thereof; (c)
water rights, claims or title to water, whether or not the matter excepted
under (a), (b) or (c) are shown by the public records.

 

 

Attached
to Order No. 021049290

 

CLTA
HOMEOWNER’S POLICY OF TITLE INSURANCE (6/2/96)

ALTA
HOMEOWNER’S POLICY OF TITLE INSURANCE (10/17/98)

 

EXCLUSIONS

 

In addition to the Exceptions in Schedule B,
You are not insured against loss, costs, attorneys’ fees, and expenses
resulting from:

 

	
  1.

  	
   

  	
  Governmental police power,
  and the existence or violation of any law or government regulation. This
  includes ordinances, laws, and regulations concerning:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  a.

  	
   

  	
  building

  
	
   

  	
   

  	
  b.

  	
   

  	
  zoning

  
	
   

  	
   

  	
  c.

  	
   

  	
  Land use

  
	
   

  	
   

  	
  d.

  	
   

  	
  improvements on the Land

  
	
   

  	
   

  	
  e.

  	
   

  	
  Land division

  
	
   

  	
   

  	
  f.

  	
   

  	
  environmental protection

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  This Exclusion does not
  apply to violations or the enforcement of these matters if notice of the
  violation or enforcement appears in the Public Records at the Policy Date.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  This Exclusion does not
  limit the coverage described in Coverage Risk 14, 15, 16, 17 or 24.

  
	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  The failure of Your
  existing structures, or any part of them, to be constructed with accordance
  with applicable building codes. This Exclusion does not apply to violations
  of building codes if notice of the violation appears in the Public Records at
  the Policy Date.

  
	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  The right to take the land
  by condemning it, unless:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  a.

  	
   

  	
  notice of exercising the
  right appears in the public records at the Policy Date; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  b.

  	
   

  	
  the taking happened before
  the Policy Date and is on You if You bought the land without Knowing of the
  taking.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Risks:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  a.

  	
   

  	
  that are created, allowed,
  or agreed to by You, whether or not they appear in the Public Records;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  b.

  	
   

  	
  that are Known to You at
  the Policy Date, but not to Us, unless they appear in the Public Records at
  the Policy Date;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  c.

  	
   

  	
  the result is no loss to
  You; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  d.

  	
   

  	
  that first occur after the
  Policy Date - this does not limit the coverage described in Covered Risk 7,
  8.d, 22, 23, 24 or 25.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Failure to pay value for
  YOUR Title.

  
	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  Lack of a right:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  a.

  	
   

  	
  to any Land outside the
  area specifically described and referred to in paragraph 3 of Schedule A; and

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  b.

  	
   

  	
  in streets, alleys, or
  waterways that touch the Land.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  This is the exclusion does
  not limit the coverage described in Covered Risk 11 or 18.

  

 

 

Attached
to Order No. 021049290

 

AMERICAN
LAND TITLE ASSOCIATION RESIDENTIAL TITLE INSURANCE POLICY (6-1-87)

 

EXCLUSIONS

 

	
  In addition to the
  Exceptions in Schedule 8, you are not insured against loss, costs, attorneys’
  fees, and expenses resulting from:

  
	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Governmental police power,
  and the existence or violation of any law or governmental regulation.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  This includes building,
  zoning ordinances and also laws and regulations concerning:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  land use

  
	
   

  	
   

  	
   

  	
   

  	
  improvements on the land

  
	
   

  	
   

  	
   

  	
   

  	
  land division

  
	
   

  	
   

  	
   

  	
   

  	
  environmental protection

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  This exclusion does not
  apply to violations or the enforcement of these matters which appear in the
  public records at Policy Date.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  This exclusion does not
  limit zoning coverage described in Items 12 and 13d Covered Title Risks.

  
	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  The right to take the land
  by condemning it, unless:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  a notice of exercising the
  right appears in the public records on the Policy Date the taking happens
  prior to the Policy Date and is binding on you if you bought the land without
  knowing of the taking.

  
	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Title Risks:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  that are created, allowed,
  or agreed to by you

  
	
   

  	
   

  	
   

  	
   

  	
  that are known to you, but
  not to us, on the Policy Date - unless they appear in the public records

  
	
   

  	
   

  	
   

  	
   

  	
  that result in no loss to
  you

  
	
   

  	
   

  	
   

  	
   

  	
  that first affect your
  title after the Policy Date - this does not limit the labor and material lien
  coverage in item 8 of Covered Title Risks.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Failure to pay value of
  your title.

  
	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Lack of a right:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
   

  	
   

  	
  to any land outside the
  area specifically described and referred to in item 3 of Schedule A

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  OR

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  in streets, alleys, or
  waterways that touch your land

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  This exclusion does not
  limit the access coverage in Item 5 of Coverage Title Risks.

  

 

 

Attached to Order No. 021049290

 

AMERICAN
LAND TITLE ASSOCIATION LOAN POLICY (10-17-92)

WITH
ALTA ENDORSEMENT - FORM 1 COVERAGE

 

and

 

AMERICAN
LAND TITLE ASSOCIATION LEASEHOLD LOAN POLICY (10-17-92)

WITH ALTA
ENDORSEMENT - FORM 1 COVERAGE

 

EXCLUSIONS
FROM COVERAGE

 

	
  The following matters are
  expressly excluded from the coverage of this policy and the Company will not
  pay loss or damage, cost, attorneys’ fee or expenses which arise by reason
  of:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  (a)

  	
   

  	
  Any law, ordinance or
  governmental regulation (including but not limited to building and zoning
  laws, ordinances, or regulations) restricting, regulating, prohibiting or
  regulating to (i) the occupancy, use, or enjoyment of the land; (ii) the
  character, dimensions or location of any improvement now or hereafter erected
  on the land; (iii) a separation in ownership or a change in the dimensions or
  area of the land or any parcel of which the land is or was part; or (iv)
  environmental protection, or the effect of any violation of these laws,
  ordinances or governmental regulations, except to the extent that a notice of
  the enforcement thereof a notice of a defect, lien or encumbrance resulting
  from violation or alleged violation affecting the land has been recorded in
  the public records at Date of Policy.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Any governmental police
  power not excluded by (a) above, except to the extent that a notice of the
  exercise thereof or a notice of a defect, lien or encumbrance resulting from
  violation or alleged violation affecting the land has been recorded in the
  public records at Date of Policy.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Rights of eminent domain
  unless notice of the exercise thereof has been recorded in the public records
  at Date of Policy, but not excluding from coverage any taking which has
  occurred prior to Date of Policy which would be binding on the rights of a
  purchaser for value without knowledge.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Defects, liens,
  encumbrances, adverse claims or other matters:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)

  	
   

  	
  created, suffered, assumed
  or agreed to by the insured claimant;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  	
   

  	
  not known to the Company,
  not recorded in the public records at Date of Policy, but known to the
  insured claimant and not disclosed in writing to the Company by the insured
  claimant prior to the date the insured claimant became an insured under
  policy;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (c)

  	
   

  	
  resulting in no loss or
  damage to the insured claimant;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (d)

  	
   

  	
  attaching or created
  subsequent to Date of Policy (except to the extent that this policy insures
  the priority of the lien of the insured mortgage over any statutory lien for
  services, labor or material or to the extent insurance is afforded herein as
  to assessments for street improvements under construction or completed at
  Date of Policy); or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (e)

  	
   

  	
  resulting in loss or damage
  which would not have been sustained if the insured claimant had paid value
  for the insured mortgage.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Unenforceability of the
  lien of the insured mortgage because of the inability or failure of the
  insured at Date of Policy, or the inability or failure of any subsequent
  owner of the indebtedness to comply with applicable doing business laws of
  the state in which the land is situated.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Invalidity or
  unenforceability of the lien of the insured mortgage, or claim thereof, which
  arises out of the transaction evidence by the insured mortgage and is based
  upon usury or any consumer credit protection or truth in lending law.

  

 

 

	
  6.

  	
   

  	
  Any statutory lien for
  services, labor or materials (or the claim of priority of any statutory lien
  for services, labor or materials over the lien of the insured mortgage)
  arising from an improvement or work related to the land which is contracted
  for and commenced subsequent to Date of Policy and is not financed in whole
  or in part by proceeds of the indebtedness secured by the insured mortgage
  which at Date of Policy the insured has advanced or is obligated to advance.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Any claim, which arises out
  of the transaction creating the interest of the mortgagee insured by this
  policy, by reason of the operation of federal bankruptcy, state insolvency,
  or similar creditors’ right laws, that is based on:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
   

  	
  the transaction creating
  the interest of the insured mortgagee being deemed a fraudulent conveyance or
  fraudulent transfer; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
   

  	
  the subordination of the
  interest of the insured mortgagee as a result of the doctrine of equitable
  subordination; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (iii)

  	
   

  	
  the transaction creating
  the interest of the insured mortgagee being deemed a preferential transfer
  except where the preferential transfer results from the failure:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (a)

  	
   

  	
  to timely record the
  instrument of transfer; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (b)

  	
   

  	
  of such recordation to
  impart notice to a purchaser for value or a judgment or lien creditor.

  

 

The above policy forms may be issued to afford
either Standard Coverage or Extended Coverage. In addition to the above
Exclusions from Coverage, the Exceptions from Coverage in a Standard Coverage
policy will also include the following General Exceptions:

 

EXCEPTIONS
FROM COVERAGE

 

This policy does not insure against loss or
damage (and the Company will not pay costs, attorneys’ fees or expenses) which
arise by reason of:

 

	
  1.

  	
   

  	
  Taxes or assessments which
  are not shown as existing liens by the records of any taxing authority that
  levies taxes or assessments on real property or by the public records.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Proceedings by a public
  agency which may result in taxes or assessments, or notices, of such
  proceedings, whether or not shown by the records of such agency or by the
  public records.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Any facts, rights,
  interests or claims which are not shown by the pubic records but which could
  be ascertained by an inspection of the land or by making inquiry of persons
  in possession thereof.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Easements, liens, or
  encumbrances, or claims thereof, which are not shown by the public records.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Discrepancies, conflicts in
  boundary lines, shortage in area, encroachments, or any other facts which a
  correct survey would disclose, and which are not shown by the public records.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  (a) Unpatented mining
  claims; (b) reservations or exceptions in patents or in Acts authorizing the
  issuance thereof; (c) water rights, claims or title to water, whether or not
  the matters excepted under (a), (b) or (c) are shown by the public records.

  

 

 

Attached
to Order No. 021049290

 

ALTA
EXPANDED COVERAGE RESIDENTIAL LOAN POLICY (10/13/01)

 

EXCLUSIONS
FROM COVERAGE

 

The following matters are expressly excluded
from the coverage of this policy and the Company will not pay loss or damage,
costs, attorney fees or expenses which arise by reason of:

 

	
  1.

  	
   

  	
  (a)

  	
   

  	
  Any law, ordinance or
  governmental regulation (including but not limited to zoning laws,
  ordinances, or regulations) restricting, regulating, prohibiting or relating
  to (i) the occupancy, use, or enjoyment of the Land; (ii) the character,
  dimensions or location of any improvements now or hereafter erected on the
  Land;  (iii) a separation in ownership
  or a change in the dimensions or areas of the Land or any parcel of which the
  Land is or was a part: or (ii) environmental protection, or the effect of any
  violation of these laws, ordinances or governmental regulations, except to
  the extent that a notice of the enforcement thereof or a notice of a defect,
  lien or encumbrance resulting from a violation or alleged violation affecting
  the Land has been recorded in the Public Records at Data of Policy. This
  exclusion does not limit the coverage provided under Covered Risks 12, 13, 14
  and 16 of this policy.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  	
   

  	
  Any governmental police
  power not excluded by (a) above, except to the extent that a notice of the
  exercise thereof or a notice of a defect, lien or encumbrance resulting from
  a violation or alleged violation affecting the Land has been recorded in the
  Public Records at Date of Policy. This exclusion does not limit the coverage
  provided under Covered Risks 12, 13, 14, and 16 of this policy.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Rights of eminent domain
  unless notice of the exercise thereof has been recorded in the Public Records
  at Date of Policy, but not excluding from coverage any taking which has
  occurred prior to Date of Policy which would be binding on the rights of a
  purchaser for value without Knowledge.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Defect, liens,
  encumbrances, adverse claims or other matters:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)

  	
   

  	
  created, suffered, assumed
  or agreed to by the Insured Claimant;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  	
   

  	
  not Known to the Company,
  not recorded in the Public Records at Date of Policy, but Known to the
  Insured Claimant and not disclosed in writing to the Company by the Insured
  Claimant prior to the date the Insured Claimant became an Insured under this
  policy;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (c)

  	
   

  	
  resulting in no loss damage
  to the Insured Claimant;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (d)

  	
   

  	
  attaching or created
  subsequent to Date of Policy (this paragraph does not limit the coverage
  provided under Covered Risks 8, 16, 18, 19, 20, 21, 22, 23, 24, 25 and 26);
  or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (e)

  	
   

  	
  resulting in loss or damage
  which would not have been sustained if the Insured Claimant had paid value
  for the Insured Mortgage.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Unenforceability of the
  lien of the Insured Mortgage because of the inability or failure of the
  Insured at Date of Policy, or the inability or failure of any subsequent
  owner of the indebtedness, to comply with applicable doing business laws of
  the state in which the Land is situated.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  Invalidity or unenforceability
  of the lien of the Insured Mortgage, or claim thereof, which arises out of
  the transaction evidenced by the Insured Mortgage and is based upon usury,
  except as provided in Covered Risk 27, or any consumer credit protection or
  truth in lending law.

  

 

 

	
  6.

  	
   

  	
  Real property taxes or
  assessments of any governmental authority which become a lien on the Land
  subsequent to Date of Policy. This exclusion does not limit the coverage
  provided under Covered Risks 7, 8(e) and 26.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  Any claim of invalidity,
  unenforceability or lack of priority of the lien of the Insured Mortgage as
  to advances or modifications made after the Insured has Knowledge that the
  vestee shown in Schedule A is no longer the owner of the estate or interest
  covered by this policy. This exclusion does not limit the coverage provided
  in Covered Risk 8.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  Lack of priority of the
  lien of the Insured Mortgage as to each and every advance made after Date of
  Policy, and all interest charged thereon, over liens, encumbrances and other
  matters affecting the title, the existence of which are Known to the Insured
  at:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)

  	
   

  	
  The time of the advance; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  	
   

  	
  the time a modification is
  made to the terms of the Insured Mortgage which changes the rate of interest
  charged, if the rate of the interest is greater as a result of the
  modification than it would have been before the modification. This exclusion
  does not limit the coverage provided in covered Risk 8.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
   

  	
  The failure of the
  residential structure, or any portion thereof to have been constructed
  before, on or after Date of Policy in accordance with applicable building
  codes. This exclusion does not apply to violations of building codes if
  notice of the violation appears in the Public Records at Date of Policy.

  

 

 

Attached to Order No. 021049290

 

AMERICAN
LAND TITLE ASSOCIATION OWNER’S POLICY (10-17-92)

 

and

 

AMERICAN
LAND TITLE ASSOCIATION LEASEHOLD OWNER’S POLICY (10-17-92)

 

EXCLUSIONS
FROM COVERAGE

 

	
  The following matters are
  expressly excluded from the coverage of this policy and the Company will not
  pay loss or damage, costs, attorneys’ fees or expenses which arise by reason
  of:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  (a)     Any
  law, ordinance or governmental regulation (including but not limited to
  building and zoning laws, ordinances, or regulations) restricting,
  regulating, prohibiting or relating to (i) the occupancy, use, or enjoyment
  of the land; (ii) the character, dimensions or location of any improvement
  now or hereafter erected on the land; (iii) a separation in ownership or a
  change in the dimensions or area of the land or any parcel of which the land
  is or was a part; or (iv) environmental protection, or the effect of any
  violation of these laws, ordinances or governmental regulations, except to
  the extent that a notice of the enforcement thereof or a notice of a defect,
  lien or encumbrance resulting from a violation or alleged affecting the land
  has been recorded in the public records at Date of Policy.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  (b)     Any
  governmental police power not excluded by (a) above, except to the extent
  notice of the exercise thereof or a notice of a defect, lien or encumbrance
  resulting from a violation or alleged violation affecting the land has been
  recorded in the public records at Date of Policy.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Rights of eminent domain
  unless notice of the exercise thereof has been recorded in the public records
  at Date of Policy, but not excluding from coverage any taking which has
  occurred prior to Date of Policy which would be biding on the rights of a
  purchaser for value without knowledge.  

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Defects, liens,
  encumbrances, adverse claims or other matters:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)

  	
   

  	
  created, suffered, assumed
  or agreed to by the insured claimant;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)

  	
   

  	
  not known to the Company,
  not recorded in the public records at Date of Policy, but known to the
  insured claimant and not disclosed in writing to the Company by the insured
  claimant prior to the date the insured claimant became an insured under this
  policy;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (c)

  	
   

  	
  resulting in no loss or
  damage to the insured claimant;

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (d)

  	
   

  	
  attaching or created
  subsequent to Date of Policy; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (e)

  	
   

  	
  resulting in loss or damage
  which would not have been sustained if the insured claimant had paid value
  for the estate or interest insured by this policy.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Any claim, which arises out
  of the transaction vesting in the insured the estate or interest insured by
  this policy, by reason of the operation of federal bankruptcy, state
  insolvency, or similar creditors' rights laws, that is based on:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (i)

  	
   

  	
  the transaction creating
  the estate or interest insured by this policy being deemed a fraudulent
  conveyance or fraudulent transfer; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (ii)

  	
   

  	
  the transaction creating
  the estate or interest insured by this policy being deemed a preferential
  transfer except where the preferential transfer results from the failure:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (a)

  	
   

  	
  to timely record the
  instrumental of transfer; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  (b)

  	
   

  	
  of such recordation to
  impart notice to a purchaser for value or a judgment or lien creditor.

  

 

 

	
  The above policy forms may
  be issued to afford either Standard Coverage or Extended Coverage.  In addition to the above Exclusions from
  Coverage, the Exceptions from Coverage in a Standard Coverage Policy will
  also include the following General Instructions:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXCEPTIONS FROM COVERAGE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  This policy does not insure
  against loss or damage (and the Company will not pay costs, attorneys’ fees
  or expenses) which arise by reason of:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  Taxes or assessments which
  are not shown as existing liens by the records of any taxing authority that
  levies taxes or assessments on real property or by the public records.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Proceedings by a public
  agency which may result in taxes or assessments, or notices of such
  proceedings, whether or not shown by the records of such agency or by the
  public records.

  
	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  Any facts, rights,
  interests or claims which are not shown by the public records but which could
  be ascertained by an inspection of the land or by making inquiry of persons
  in possession thereof.

  
	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  Easements, liens or
  encumbrances, or claims thereof, which are not shown by the public records.

  
	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  Discrepancies, conflicts in
  boundary lines, shortage in area, encroachments or any other facts which a
  correct survey would disclose, and which are not shown by the public records.

  
	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  (a) Unpatented mining
  claims; (b) reservations or exceptions in patents or in Acts authorizing the
  issuance thereof; (c) water rights, claims or title to water, whether or not
  the matters excepted under (a), (b) or (c) are shown by the public records.

  

 

 

[GRAPHICS FLOOR PLAN]

 

[GRAPHICS BUILDING PICTURE

 

 

EXHIBIT I

 

JANITORIAL SPECIFICATIONS

 

Daily:

 

(1)        Empty
and clean all trash containers, and dispose of all trash and rubbish.

 

(2)        Clean
and maintain in a sanitary and odor-free condition all floors, wash mirrors,
basins, toilet bowls, and urinals.

 

(3)        Furnish
and replenish all toilet room supplies (including soap, towels, seat covers,
toilet tissue, and sanitary napkins).

 

(4)        Sweep
or dust mop all hard surface floors, and carpet sweep all carpeted areas,
including stairways and halls.  Offices
with hard surface floors in the public lobby area shall be damp mopped daily.

 

(5)        Remove
finger marks and smudges from all glass entrance doors and spot clean interior
partition and door glass for finger marks and smudges.

 

(6)        Specifically,
check, and if action is needed then:

 

a.    Dust the tops of all furniture, counters,
cabinets, and window sills, (which are free of interfering objects).

 

b.    If readily removable by janitorial staff in
the ordinary course of janitorial service, remove spots and/or spills from
carpets, floors, and stairways.

 

Twice Weekly:

 

Vacuum all
carpets.

 

Weekly:

 

(1)    Damp mop all hard surface floors.

 

(2)    Treat stainless steel fountains and sinks to
eliminate stains and mineral deposits.

 

(3)    Spot clean the walls if readily cleanable by
janitorial staff in the ordinary course of janitorial service.

 

(4)    Sweep parking areas and sidewalks.

 

Quarterly:

 

(1)    Strip all hard surface floors and apply a
new coat of floor finish; buff as necessary to produce a uniformly shining
appearance.

 

(2)    Treat carpets for electricity control (if
not integrated in the fabric).

 

(3)    Dust window blinds.

 

Semi-annually:

 

Wash all
Building exterior surface of exterior Building windows.

 

Annually:

 

(1)    Steam clean carpets to remove all stains and
spots, as requested by Tenant, at Tenant’s sole cost and expense.

 

(2)    Clean drapes, as requested by Tenant, at
Tenant’s sole cost and expense.

 

(3)    Wash interior surface of exterior Building
windows.

 

1

 

EXHIBIT J

 

SECURITY SPECIFICATIONS

 

1.        During
weekday Building Hours, a receptionist located at the main Common Area Building
lobby security desk to monitor the security cameras throughout the Project.

 

2.        Guard
service during evening hours Monday through Friday and on Saturdays to monitor
the exterior areas of the Project.

 

3.        A
card key system shall be used to control after-hour access to the parking
garage entrances and Building entrances and after-hours elevator use.

 

4.        The
parking garage entrance shall have card key controlled access after-hours with
security roll down gates and operating security cameras.

 

1

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