Document:

Exhibit
10.95

 

OFFICE
LEASE

between

 

WILSHIRE-CAMDEN ASSOCIATES,

a California limited partnership

 

(Landlord)

 

and

 

KENNEDY-WILSON INC.

a California corporation

 

(Tenant)

 

TABLE OF CONTENTS

OFFICE LEASE

 

	
  Article

  	
   

  	
  Title

  	
   

  	
   

  
	
   

  	
   

  	
  Definitions

  	
   

  	
  2

  
	
  2

  	
   

  	
  Premises

  	
   

  	
  3

  
	
  3

  	
   

  	
  Term

  	
   

  	
  3

  
	
  4

  	
   

  	
  Rental

  	
   

  	
  3

  
	
  5

  	
   

  	
  Security Deposit

  	
   

  	
  8

  
	
  6

  	
   

  	
  Use of Premises

  	
   

  	
  8

  
	
  7

  	
   

  	
  Utilities and Services

  	
   

  	
  9

  
	
  8

  	
   

  	
  Maintenance and Repairs

  	
   

  	
  10

  
	
  9

  	
   

  	
  Alterations, Additions
  and Improvements

  	
   

  	
  11

  
	
  10

  	
   

  	
  Indemnification and
  Insurance

  	
   

  	
  12

  
	
  11

  	
   

  	
  Damage or Destruction

  	
   

  	
  15

  
	
  12

  	
   

  	
  Condemnation

  	
   

  	
  15

  
	
  13

  	
   

  	
  Relocation

  	
   

  	
  16

  
	
  14

  	
   

  	
  Assignment and
  Subletting

  	
   

  	
  16

  
	
  15

  	
   

  	
  Default and Remedies

  	
   

  	
  18

  
	
  16

  	
   

  	
  Attorneys’ Fees; Costs
  of Suits

  	
   

  	
  20

  
	
  17

  	
   

  	
  Subordination and
  Attornment

  	
   

  	
  21

  
	
  18

  	
   

  	
  Quiet Enjoyment

  	
   

  	
  22

  
	
  19

  	
   

  	
  Rules and
  Regulations

  	
   

  	
  22

  
	
  20

  	
   

  	
  Estoppel Certificates

  	
   

  	
  22

  
	
  21

  	
   

  	
  Entry by Landlord

  	
   

  	
  23

  
	
  22

  	
   

  	
  Landlord’s Lease
  Undertakings-Exculpation from Personal Liability; Transfer of Landlord’s
  Interest

  	
   

  	
  23

  
	
  23

  	
   

  	
  Holdover Tenancy

  	
   

  	
  24

  
	
  24

  	
   

  	
  Notices

  	
   

  	
  24

  
	
  25

  	
   

  	
  Brokers

  	
   

  	
  24

  
	
  26

  	
   

  	
  Electronic Services

  	
   

  	
  24

  
	
  27

  	
   

  	
  Miscellaneous

  	
   

  	
  27

  
	
  Rider One

  	
   

  	
  Parking Commitment

  	
   

  	
   

  
	
  Rider Two

  	
   

  	
  Renewal Option

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  Floor Plan

  	
   

  	
   

  
	
  Exhibit B

  	
   

  	
  Work Letter Agreement

  	
   

  	
   

  
	
  Exhibit C

  	
   

  	
  Rules and
  Regulations

  	
   

  	
   

  
	
  Exhibit D

  	
   

  	
  Intentionally
  Omitted 

  	
   

  	
   

  
	
  Exhibit E

  	
   

  	
  Suite Acceptance
  Agreement

  	
   

  	
   

  

 

1

 

OFFICE LEASE

 

THIS OFFICE LEASE
(“Lease”), dated August 19, 1998, is made and entered into by and
between WILSHIRE-CAMDEN ASSOCIATES, a California limited partnership (“Landlord”)
and KENNEDY-WILSON INC., a California corporation (“Tenant”) upon the following
terms and conditions:

 

ARTICLE I - DEFINITIONS

 

Unless the context
otherwise specifies or requires, the following terms shall have the meanings
specified herein;

 

1.01         Building. The
term “Building” shall mean that certain office building located at 9601
Wilshire Boulevard in Beverly Hills, California, commonly known as HEITMAN
CENTRE BEVERLY HILLS together with any related land, improvements, parking
facilities, common areas, driveways, sidewalks and landscaping.

 

1.02         Premises. The term “Premises” shall mean Suite 200 in the
Building, as more particularly outlined on the drawing attached hereto as Exhibit A
and incorporated herein by reference. As used herein, “Premises” shall not
include any storage area in the Building, which shall be leased or rented
pursuant to separate agreement.

 

1.03         Rentable Area of the Premises. The term “Rentable Area of the Premises”
shall mean 26,057 square feet, which Landlord and Tenant have stipulated as the
Rentable Area of the Premises. Tenant acknowledges that the Rentable Area of
the Premises includes the usable area, without deduction for columns or
projections, multiplied by a load factor to reflect a share of certain areas,
which may include lobbies, corridors, mechanical, utility, janitorial, boiler
and service rooms and closets, restrooms and other public, common and service
areas of the Building.

 

1.04         Lease Term. The term “Lease Term” shall mean the period between
the Commencement Date and the Expiration Date (as such terms are hereinafter
defined), unless sooner terminated as otherwise provided in this Lease.

 

1.05         Commencement Date. Subject to adjustment as provided in Article 3,
the term “Commencement Date” shall mean September 1, 1998.

 

1.06         Expiration Date. Subject to adjustment as provided in Article 3,
the term “Expiration Date” shall mean August 31, 2003.

 

1.07         Base Rent. Subject to adjustment as provided in Article 4,
the term “Base Rent” shall mean Sixty-five Thousand One Hundred Forty-two and
50/100 Dollars ($65,142.50) per
month for months one through eighteen; Seventy-one Thousand Six Hundred
Fifty-six and 75/100 Dollars ($71,656.75) per month for months nineteen through
thirty-six; and Seventy-six Thousand Five Hundred Forty-two and 44/100 Dollars
($76,542.44) per month for months thirty-seven through sixty.

 

1.08         Tenant’s Percentage Share. The term “Tenant’s Percentage Share”
shall mean Nine and Sixty-four One Hundredths percent (9.64%) with respect to
increases in Property Taxes and Operating Expenses (as such terms are
hereinafter defined). Landlord may reasonably redetermine Tenant’s Percentage
Share from time to time to reflect reconfigurations, additions or modifications
to the Building.

 

1.09         Security Deposit. The term “Security Deposit” shall mean
None. ($0).

 

1.10         Tenant’s Permitted Use. The term “Tenant’s Permitted Use” shall
mean general, administrative, and executive non-medical offices and no other
use.

 

1.11         Business Hours. The term “Business Hours” shall mean the hours of
7:00 A.M. to 6:00 P.M., Monday through Friday (federal and state
holidays excepted). Holidays are defined as the following: New Years

 

2

 

Day,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day,
and to the extent of utilities or services provided by union members engaged at
the Building, such other holidays observed by such unions.

 

1.12         Landlord’s Address For Notices. The term “Landlord’s Address for
Notices” shall mean Kennedy-Wilson Properties Ltd., 9601 Wilshire Boulevard,
Beverly Hills, California 90210, Attn: Property Manager, with a copy to Heitman
Properties Ltd., 180 North LaSalle Street, Suite 3600, Chicago, Illinois
60601,

Attn:  Property
Management.

 

1.13         Tenant’s Address for Notices. The term “Tenant’s Address for Notices”
shall mean 9601 Wilshire Boulevard, Suite 200, Beverly Hills, CA 90210

 

1.14         Broker. The term “Broker” shall mean: None.

 

1.15         Guarantor. The term “Guarantor” shall mean: None.

 

ARTICLE II- PREMISES

 

2.01         Lease of Premises. Landlord hereby leases the
Premises to Tenant, and Tenant hereby leases the Premises from Landlord, upon
all of the terms, covenants and conditions contained in this Lease. On the
Commencement Date described herein, Landlord shall deliver the Premises to
Tenant in substantial conformance with the Work Letter Agreement attached
hereto as Exhibit B.

 

2.02         Acceptance of Premises. Tenant acknowledges that Landlord has not made any
representation or warranty with respect to the condition of the Premises or the
Building or with respect to the suitability or fitness of either for the
conduct of Tenant’s Permitted Use or for any other purpose. Prior to Tenant’s
taking possession of the Premises, Landlord or its designee and Tenant will
walk the Premises for the purpose of reviewing the condition of the Premises
(and the condition of completion and workmanship of any tenant improvements
which Landlord is required to construct in the Premises pursuant to this
Lease); after such review, Tenant shall execute a Suite Acceptance Letter,
in the form of Exhibit E attached hereto, accepting the Premises. Except
as is expressly set forth in this Section 2.02 or the Work Letter
Agreement attached hereto, if any, or as may be expressly set forth in Suite Acceptance
Letter, Tenant agrees to accept the Premises in its “as is” said physical
condition without any agreements, representations, understandings or
obligations on the part of Landlord to perform any alterations, repairs or
improvements (or to provide any allowance for same).

 

ARTICLE III - TERM

 

3.01         Except as otherwise provided in this Lease, the Lease
Term shall be for the period described in Section 1.04 of this Lease,
commencing on the Commencement Date described in Section 1.05 of this
Lease and ending on the Expiration Date described in Section 1.06 of this
Lease; provided, however, that, if, for any reason, Landlord is unable to
deliver possession of the Premises on the date described in Section 1.05
of this Lease, Landlord shall not be liable for any damage caused thereby, nor
shall the Lease be void or voidable, but, rather, the Lease Term shall commence
upon, and the Commencement Date shall be the date that possession of the
Premises is so tendered to Tenant (except for Tenant-caused delays which shall
not be deemed to delay commencement of the Lease Term), and, unless Landlord
elects otherwise, the Expiration Date described in Section 1.06 of this
Lease shall be extended by an equal number of days.

 

ARTICLE IV - RENTAL

 

4.01         Definitions. As used herein,

 

(A)     “Base Year” shall mean calendar year 1998.

 

3

 

(B)     “Property Taxes” shall mean the aggregate amount of
all real estate taxes, assessments (whether they be general or special), sewer
rents and charges, transit taxes, taxes based upon the receipt of rent and any
other federal, state or local governmental charge, general, special, ordinary
or extraordinary (but not including income or franchise taxes, capital stock,
inheritance, estate, gift, or any other taxes imposed upon or measured by
Landlord’s gross income or profits, unless the same shall be imposed in lieu of
real estate taxes or other ad valorem taxes), which Landlord shall pay or
become obligated to pay in connection with the Building, or any part thereof.
Property Taxes shall also include all fees and costs, including attorneys’
fees, appraisals and consultants’ fees, incurred by Landlord in seeking to
obtain a reassessment, reduction of, or a limit on the increase in, any
Property Taxes, regardless of whether any reduction or limitation is obtained.
Property Taxes for any calendar year shall be Property Taxes which are due for
payment or paid in such year, rather than Property Taxes which are assessed or
become a lien during such year. Property Taxes shall include any tax,
assessment, levy, imposition or charge imposed upon Landlord and measured by or
based in whole or in part upon the Building or the rents or other income from
the Building, to the extent that such items would be payable if the Building
was the only property of Landlord subject to same and the income received by
Landlord from the Building was the only income of Landlord. Property Taxes
shall also include any personal property taxes imposed upon the furniture,
fixtures, machinery, equipment, apparatus, systems and appurtenances of
Landlord used in connection with the Building.

 

(C)     “Operating Expenses” shall mean all costs, fees,
disbursements and expenses paid or incurred by or on behalf of Landlord in the
operation, ownership, maintenance, insurance, management, replacement and
repair of the Building (excluding Property Taxes) including without limitation:

 

(i) Premiums
for property, earthquake, casualty, liability, rent interruption or other types
of insurance carried by Landlord.

 

(ii) Salaries,
wages and other amounts paid or payable for personnel including the Building
manager, superintendent, operation and maintenance staff, and other employees
of Landlord involved in the maintenance and operation of the Building,
including contributions and premiums towards fringe benefits, unemployment,
disability and worker’s compensation insurance, pension plan contributions and
similar premiums and contributions and the total charges of any independent
contractors or property managers engaged in the operation, repair, care,
maintenance and cleaning of any portion of the Building.

 

(iii) Cleaning
expenses, including without limitation janitorial services, window cleaning,
and garbage and refuse removal.

 

(iv) Landscaping
expenses, including without limitation irrigating, trimming, mowing,
fertilizing, seeding, and replacing plants.

 

(v) Heating,
ventilating, air conditioning and steam/utilities expenses, including fuel,
gas, electricity, water, sewer, telephone, and other services.

 

(vi) Subject
to the provisions of Section 4.01(C)(xii) below, the cost of maintaining,
operating, repairing and replacing components of equipment or machinery,
including without limitation heating, refrigeration, ventilation, electrical,
plumbing, mechanical, elevator, escalator, sprinklers, fire/life safety,
security and energy management systems, including service contracts,
maintenance contracts, supplies and parts.

 

(vii) Other
items of repair or maintenance of elements of the Building.

 

(viii) The
costs of policing, security and supervision of the Building.

 

(ix) Fair
market rental and other costs with respect to the management office for the
Building.

 

4

 

(x) The cost
of the rental of any machinery or equipment and the cost of supplies used in
the maintenance and operation of the Building (xi) Audit fees and the cost of
accounting services incurred in the preparation of statements referred to in
this Lease and financial statements, and in the computation of the rents and charges
payable by tenants of the Building.

 

(xii) Capital
expenditures (a) made primarily to reduce Operating Expenses, or to comply
with any laws or other governmental requirements, or (b) for replacements
(as opposed to additions or new improvements) of non-structural items located
in the common areas of the property required to keep such areas in good
condition; provided, all such permitted capital expenditures (together with
reasonable financing charges) shall be amortized for purposes of this Lease over
the shorter of (i) their useful lives, (ii) the period during which
the reasonably estimated savings in Operating Expenses equals the expenditures,
or (iii) three (3) years.

 

(xiii) Legal fees
and expenses.

 

(xiv) Payments
under any easement, operating agreement, declaration, restrictive covenant, or
instrument pertaining to the sharing of costs in any planned development.

 

(xv) A fee
for the administration and management of the Building as reasonably determined
by Landlord from time to time.

 

(xvi) A fee
charged by the City of Beverly Hills, sometimes referred to as the Beverly
Hills Business Rental Tax, which shall not have a Base Year applicable to it.

 

Operating Expenses
shall not include costs of alteration of the premises of tenants of the
Building, depreciation charges, interest and principal payments on mortgages,
ground rental payments, real estate brokerage and leasing commissions, expenses
incurred in enforcing obligations of tenants of the Building, salaries and
other compensation of executive officers of the managing agent of the Building
senior to the Building manager, costs of any special service provided to any
one tenant of the Building but not to tenants of the Building generally, and
costs of marketing or advertising the Building.

 

(D)     If the Building does not have one hundred percent
(100%) occupancy during an entire calendar year, including the Base Year, then
the variable cost component of “Property Taxes” and “Operating Expenses” shall
be equitably adjusted so that the total amount of Property Taxes and Operating
Expenses equals the total amount which would have been paid or incurred by
Landlord had the Building been one hundred percent (100%) occupied for the
entire calendar year. In no event shall Landlord be entitled to receive from Tenant
and any other tenants in the Building an aggregate amount in excess of actual
Property Taxes and Operating Expenses as a result of the foregoing provision.

 

4.02         Base Rent.

 

(A)              During the Lease Term, Tenant shall pay
to Landlord as rental for the Premises the Base Rent described in Section 1.07
above, subject to the following annual adjustments (herein called the “Rent Adjustments”):

 

(B)                During each calendar year, the Base Rent
payable by Tenant to Landlord, shall be increased by (collectively, the “Tax
and Operating Expense Adjustment”): (i) Tenant’s Percentage Share of the
dollar increase, if any, in Property Taxes for such year over Property Taxes
for the Base Year; and (H) Tenant’s Percentage Share of the dollar
increase, if any, in any category of Operating Expenses paid or incurred by
Landlord during such year over the respective category of Operating Expenses
paid or incurred by Landlord during the Base Year. A decrease in Property Taxes
or Operating Expenses below the Base Year amounts shall not decrease the amount
of the Base Rent due hereunder or give rise to a credit in favor of Tenant.

 

5

 

(C)                Notwithstanding the foregoing, Tenant
shall not pay, or be responsible for, any Tax and Operating Expense Adjustments
during the first twelve (12) months of the Lease Term.

 

4.03         Adjustment Procedure; Estimates. The Tax and Operating Expense
Adjustment specified in Section 4.02(B) shall be determined and paid
as follows:

 

(A)     During each calendar year subsequent to the Base Year,
Landlord shall give Tenant written notice of its estimate of any increased
amounts payable under Section 4.02(B) for that calendar year. On or
before the first day of each calendar month during the calendar year, Tenant
shall pay to Landlord one-twelfth (1/12th) of such estimated amounts; provided,
however, that, not more often that quarterly, Landlord may, by written notice
to Tenant, revise its estimate for such year, and subsequent payments by Tenant
for such year shall be based upon such revised estimate.

 

(B)     Within one hundred twenty (120) days after the close
of each calendar year or as soon thereafter as is practicable, Landlord shall
deliver to Tenant a statement of that year’s Property Taxes and Operating
Expenses, and the actual Tax and Operating Expense Adjustment to be made
pursuant to Section 4.02(B) for such calendar year, as determined by
Landlord (the “Landlord’s Statement”) and such Landlord’s Statement shall be
binding upon Tenant, except as provided in Section 4.04 below. If the
amount of the actual Tax and Operating Expense Adjustment is more that the
estimated payments for such calendar year made by Tenant, Tenant shall pay the
deficiency to Landlord upon receipt of Landlord’s Statement. If the amount of
the actual Tax and Operating Expense Adjustment is less than the estimated
payments for such calendar year made by Tenant, any excess shall be credited
against Rent (as hereinafter defined) next payable by Tenant under this Lease
or, if the Lease Term has expired, any excess shall be paid to Tenant. No delay
in providing the statement described in this subparagraph (B) shall act as
a waiver of Landlord’s right to payment under Section 4.02(B) above.

 

(C)     If this Lease shall terminate on a day other than the
end of a calendar year, the amount of the Tax and Operating Expense Adjustment
to be paid pursuant to Section 4.02(B) that is applicable to the
calendar year in which such termination occurs shall be prorated on the basis
of the number of days from January 1 of the calendar year to the
termination date bears to 365. The termination of this Lease shall not affect
the obligations of Landlord and Tenant pursuant to Section 4.03(B) to
be performed after such termination.

 

4.04         Review of Landlord’s Statement. Provided that Tenant is not then in
default beyond any applicable cure period of its obligations to pay Base Rent,
additional rent described in Section 4.02(B), or any other payments
required to be made by it under this Lease and provided further that Tenant
strictly complies with the provisions of this Section 4.04, Tenant shall
have the right, once each calendar year, to reasonably review supporting data
for any portion of a Landlord’s Statement (provided, however, Tenant may not
have an audit right to all documentation relating to Building operations as
this would far exceed the relevant information necessary to properly document a
pass-through billing statement, but real estate tax statements, and information
on utilities, repairs, maintenance and insurance will be available), in
accordance with the following procedure:

 

(A)     Tenant shall, within ten (10) business days after
any such Landlord’s Statement is delivered, deliver a written notice to
Landlord specifying the portions of the Landlord’s Statement that are claimed
to be incorrect, and Tenant shall simultaneously pay to Landlord all amounts
due from Tenant to Landlord as specified in the Landlord’s Statement. Except as
expressly set forth in subsection (C) below, in no event shall Tenant be
entitled to withhold, deduct, or offset any monetary obligation of Tenant to
Landlord under the Lease (including, without limitation, Tenant’s obligation to
make all payments of Base Rent and all payments of Tenant’s Tax and Operating
Expense Adjustment) pending the completion of and regardless of the results of
any review of records under this Section 4.04. The right of Tenant under
this Section 4.04 may only be exercised once for any Landlord’s Statement,
and if Tenant fails to meet any of the above conditions as a prerequisite to
the exercise of such right, the right of Tenant under this Section 4.04
for a particular Landlord’s Statement shall be deemed waived.

 

(B)     Tenant acknowledges that Landlord maintains its
records for the Building at Landlord’s manager’s corporate offices presently
located at the address set forth in Section 1.12 and Tenant agrees that
any review of records under this Section 4.04 shall be at the sole expense
of Tenant and shall be conducted by an

 

6

 

independent
firm of certified public accountants of national standing. Tenant acknowledges
and agrees that any records reviewed under this Section 4.04 constitute
confidential information of Landlord, which shall not be disclosed to anyone
other than the accountants performing the review and the principals of Tenant
who receive the results of the review. The disclosure of such information to
any other person, whether or not caused by the conduct of Tenant, shall
constitute a material breach of this Lease.

 

(C)     Any errors disclosed by the
review shall be promptly corrected by Landlord, provided, however, that if
Landlord disagrees with any such claimed errors, Landlord shall have the right
to cause another review to be made by an independent firm of certified public
accountants of national standing. In the event of a disagreement between the
two accounting firms, the review that discloses the least amount of deviation
from the Landlord’s Statement shall be deemed to be correct. In the event that
the results of the review of records (taking into account, if applicable, the
results of any additional review caused by Landlord) reveal that Tenant has
overpaid obligations for a preceding period, the amount of such overpayment
shall be credited against Tenant’s subsequent installment obligations to pay
the estimated Tax and Operating Expense Adjustment. In the event that such
results show that Tenant has underpaid its obligations for a preceding period,
Tenant shall be liable for Landlord’s actual accounting fees, and the amount of
such underpayment shall be paid by Tenant to Landlord with the next succeeding
installment obligation of estimated Tax and Operating Expense Adjustment.

 

4.05         Payment. Concurrently with the execution hereof, Tenant shall
pay Landlord Base Rent for the first calendar month of the Lease Term.
Thereafter the Base Rent described in Section 1.07, as adjusted in
accordance with Section 4.02, shall be payable in advance on the first day
of each calendar month. If the Commencement Date is other than the first day of
a calendar month, the prepaid Base Rent for such partial month shall be
prorated in the proportion that the number of days this Lease is in effect
during such partial month bears to the total number of days in the calendar
month. All Rent, and all other amounts payable to Landlord by Tenant pursuant
to the provisions of this Lease, shall be paid to Landlord, without notice,
demand, abatement, deduction or offset, in lawful money of the United States at
Landlord’s office in the Building or to such other person or at such other
place as Landlord may designate from time to time by written notice given to
Tenant. No payment by Tenant or receipt by Landlord of a lesser amount than the
correct Rent due hereunder shall be deemed to be other than a payment on
account; nor shall any endorsement or statement on any check or any letter
accompanying any check or payment be deemed to effect or evidence an accord and
satisfaction; and Landlord may accept such check or payment without prejudice
to Landlord’s right to recover the balance or pursue any other remedy in this
Lease or at law or in equity provided.

 

4.06         Late Charge; Interest. Tenant acknowledges that the late payment of Base
Rent or any other amounts payable by Tenant to Landlord hereunder (all of which
shall constitute additional rental to the same extent as Base Rent) will cause
Landlord to incur administrative costs and other damages, the exact amount of
which would be impracticable or extremely difficult to ascertain. Landlord and
Tenant agree that if Landlord does not receive any such payment on or before
five (5) days after the date the payment is due, Tenant shall pay to
Landlord, as additional rent, (a) a late charge equal to five percent (5%) of the overdue amount to cover such
additional administrative costs; and (b) interest on the delinquent
amounts at the lesser of the maximum rate permitted by law if any or twelve
percent (12%) per annum from the date due to the date paid.

 

4.07         Additional Rent. For purposes of this Lease, all amounts payable by
Tenant to Landlord pursuant to this Lease, whether or not denominated as such,
shall constitute Base Rent. Any amounts due Landlord shall sometimes be
referred to in this Lease as “Rent”.

 

4.08         Additional Taxes. Notwithstanding anything in Section 4.0 1(B) to
the contrary, Tenant shall reimburse Landlord upon demand for any and all taxes
payable by or imposed upon Landlord upon or with respect to: any fixtures or
personal property located in the Premises; any leasehold improvements made in
or to the Premises by or for Tenant; the Rent payable hereunder, including,
without limitation, any gross receipts tax, license fee or excise tax levied by
any governmental authority; the possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy of any portion of the
Premises (including without limitation any applicable possessory interest
taxes); or this transaction or any document to which Tenant is a party creating
or transferring an interest or an estate in the Premises.

 

7

 

ARTICLE
V - SECURITY DEPOSIT

 

5.01         Intentionally omitted.

 

ARTICLE VI- USE OF PREMISES

 

6.01         Tenants Permitted Use. Tenant shall use the Premises only for Tenant’s
Permitted Use as set forth in Section 1.10 above and shall not use or
permit the Premises to be used for any other purpose. Tenant shall, at its sole
cost and expense, obtain all governmental licenses and permits required to
allow Tenant to conduct Tenant’s Permitted Use. Landlord disclaims any warranty
that the Premises are suitable for Tenant’s use and Tenant acknowledges that it
has had a full opportunity to make its own determination in this regard.

 

6.02         Compliance With Laws and Other Requirements.

 

(A)     Tenant shall cause the Premises to comply in all
material respects with all laws, ordinances, regulations and directives of any
governmental authority having jurisdiction including, without limitation, any
certificate of occupancy and any law, ordinance, regulation, covenant,
condition or restriction affecting the Building or the Premises which in the
future may become applicable to the Premises (collectively “Applicable Laws”).

 

(B)     Tenant shall not use the Premises, or permit the
Premises to be used, in any manner which:

(a) violates
any Applicable Law; (b) causes or is reasonably likely to cause damage to
the Building or the Premises; (c) violates a requirement or condition of
any fire and extended insurance policy covering the Building and/or the
Premises, or increases the cost of such policy; (d) constitutes or is
reasonably likely to constitute a nuisance, annoyance or inconvenience to other
tenants or occupants of the Building or its equipment, facilities or systems;
(e) interferes
with, or is reasonably likely to interfere with, the transmission or reception
of microwave, television, radio, telephone or other communication signals by
antennae or other facilities located in the Building; or (f) violates the Rules and
Regulations described in Article XIX.

 

6.03         Hazardous Materials.

 

(A)     No Hazardous Materials, as defined herein, shall be
Handled, as also defined herein, upon, about, above or beneath the Premises or
any portion of the Building by or on behalf of Tenant, its subtenants or its
assignees, or their respective contractors, clients, officers, directors,
employees, agents, or invitees. Any such Hazardous Materials so Handled shall
be known as Tenant’s Hazardous Materials. Notwithstanding the foregoing, normal
quantities of Tenant’s Hazardous Materials customarily used in the conduct of general
administrative and executive office activities (e.g., copier fluids and
cleaning supplies) may be handled at the Premises without Landlord’s prior
written consent. Tenant’s Hazardous Materials shall be Handled at all times in
compliance with the manufacturer’s instructions therefore and all applicable
Environmental Laws, as defined herein.

 

(B)     Notwithstanding the obligation of Tenant to indemnify
Landlord pursuant to this Lease, Tenant shall, at its sole cost and expense,
promptly take all actions required by any Regulatory Authority, as defined
herein, or necessary for Landlord to make full economic use of the Premises or
any portion of the Building, which requirements or necessity arises from the
Handling of Tenant’s Hazardous Materials upon, about, above or beneath the
Premises or any portion of the Building. Such actions shall include, but not be
limited to, the investigation of the environmental condition of the Premises or
any portion of the Building, the preparation of any feasibility studies or
reports and the performance of any cleanup, remedial, removal or restoration
work. Tenant shall take all actions necessary to restore the Premises or any
portion of the Building to the condition existing prior to the introduction of
Tenant’s Hazardous Materials, notwithstanding any less stringent standards or
remediation allowable under applicable Environmental Laws. Tenant shall
nevertheless obtain Landlord’s written approval prior to undertaking any
actions required by this Section, which approval shall not be unreasonably
withheld so long as such actions would not potentially have a material adverse
long-term or short-term effect on the Premises or any portion of the Building.

 

8

 

(C)     Tenant agrees to execute affidavits, representations,
and the like from time to time at Landlord’s request stating Tenant’s best
knowledge and belief regarding the presence of Hazardous Materials on the
Premises.

 

(D)     “Environmental Laws” means and includes all now and
hereafter existing statutes, laws, ordinances, codes, regulations, rules,
rulings, orders, decrees, directives, policies and requirements by any
Regulatory Authority regulating, relating to, or imposing liability or
standards of conduct concerning public health and safety or the environment.

 

(E)      “Hazardous Materials” means: (a) any material or
substance: (i) which is defined or becomes defined as a “hazardous
substance,” “hazardous waste,” “infectious waste,” “chemical mixture or
substance,” or “air pollutant” under Environmental Laws; (ii) containing
petroleum, crude oil or any fraction thereof; (iii) containing
polychlorinated biphenyls (PCB’s); (iv) containing asbestos; (v) which
is radioactive; (vi) which is infectious; or (b) any other material
or substance displaying toxic, reactive, ignitable or corrosive
characteristics, as all such terms are used in their broadest sense, and are
defined, or become defined by Environmental Laws; or (c) materials which
cause a nuisance upon or waste to the Premises or any portion of the Building.

 

(F)      “Handle,” “handle,” “Handled,” “handled,” “Handling,”
or “handling” shall mean any installation, handling, generation, storage,
treatment, use, disposal, discharge, release, manufacture, refinement,
presence, migration, emission, abatement, removal, transportation, or any other
activity of any type in connection with or involving Hazardous Materials.

 

(G)     “Regulatory Authority” shall mean any federal, state
or local governmental agency, commission, board or political subdivision.

 

ARTICLE VII- UTILITIES AND SERVICES

 

7.01         Building Services. As long as Tenant is not in monetary default under
this Lease, Landlord agrees to furnish or cause to be furnished to the Premises
the following utilities and services, subject to the conditions and standards
set forth herein:

 

(A)     Non-attended automatic elevator service (if the
Building has such equipment serving the Premises), in common with Landlord and
other tenants and occupants and their agents and invitees.

 

(B)     During Business Hours, such air conditioning, heating
and ventilation as, in Landlord’s reasonable judgment, are required for the
comfortable use and occupancy of the Premises. Landlord may make available to
Tenant heating, ventilation or air conditioning in excess of that which Landlord
shall be required to provide hereunder upon such conditions as shall be
determined by Landlord from time to time. Landlord’s fee for any such
additional heating, ventilation or air conditioning provided to Tenant, to be
set by Landlord from time to time, will be separate from and in addition to the
Tax and Operating Expenses Adjustment provide in Article IV and is
currently $100 per hour with a minimum usage of one hour.

 

(C)    Water for drinking and rest room purposes.

 

(D)    Reasonable janitorial and cleaning services, provided
that the Premises are used exclusively for office purposes and are kept
reasonably in order by Tenant. If the Premises are not used exclusively as
offices, Landlord, at Landlord’s sole discretion, may require that the Premises
be kept clean and in order by Tenant, at Tenant’s expense, to the satisfaction
of Landlord and by persons approved by Landlord; and, in all events, Tenant
shall pay to Landlord the cost of removal of Tenants refuse and rubbish, to the
extent that the same exceeds the refuse and rubbish attendant to normal office
usage.

 

9

 

(E)     At all reasonable times, electric current of not less
than 3.5 watts per square foot for building standard lighting and fractional
horsepower office machines; provided, however, that (i) without Landlord’s
consent, Tenant shall not install, or permit the installation, in the Premises
of any computers, word processors, electronic data processing equipment or
other type of equipment or machines which will increase Tenant’s use of
electric current in excess of that which Landlord is obligated to provide
hereunder (provided, however, that the foregoing shall not preclude the use of
personal computers or similar office equipment); (ii) if Tenant shall
require electric current which may disrupt the provision of electrical service
to other tenants, Landlord may refuse to grant its consent or may condition its
consent upon Tenant’s payment of the cost of installing and providing any
additional facilities required to furnish such excess power to the Premises and
upon the installation in the Premises of electric current meters to measure the
amount of electric current consumed, in which latter event Tenant shall pay for
the cost of such meter(s) and the cost of installation, maintenance and
repair thereof, as well as for all excess electric current consumed at the
rates charged by the applicable local public utility, plus a reasonable amount
to cover the additional expenses incurred by Landlord in keeping account of the
electric current so consumed; and (iii) if Tenant’s increased electrical
requirements will materially affect the temperature level in the Premises or
the Building, Landlord’s consent may be conditioned upon Tenant’s requirement
to pay such amounts as will be incurred by Landlord to install and operate any
machinery or equipment necessary to restore the temperature level to that
otherwise required to be provided by Landlord, including but not limited to the
cost of modifications to the air conditioning system. Landlord shall not, in
any way, be liable or responsible to Tenant for any loss or damage or expense
which Tenant may incur or sustain if, for any reasons beyond Landlord’s
reasonable control, either the quantity or character of electric service is
changed or is no longer available or suitable for Tenant’s requirements. Tenant
covenants that at all times its use of electric current shall never exceed the
capacity of the feeders, risers or electrical installations of the Building. If
submetering of electricity in the Building will not be permitted under future
laws or regulations, the Rent will then be equitably and periodically adjusted
to include an additional payment to Landlord reflecting the cost to Landlord
for furnishing electricity to Tenant in the Premises.

 

Any amounts which
Tenant is required to pay to Landlord pursuant to this Section 7.01 shall
be payable upon demand by Landlord and shall constitute additional rent.

 

7.02         Interruption of Services. Landlord shall not be liable for any
failure to furnish, stoppage of, or interruption in furnishing any of the
services or utilities described in Section 7.01, when such failure is
caused by accident, breakage, repairs, strikes, lockouts, labor disputes, labor
disturbances, governmental regulation, civil disturbances, acts of war,
moratorium or other governmental action, or any other cause beyond Landlord’s
reasonable control, and, in such event, Tenant shall not be entitled to any
damages nor shall any failure or interruption abate or suspend Tenant’s
obligation to pay Base Rent and additional rent required under this Lease or
constitute or be construed as a constructive or other eviction of Tenant.
Further, in the event any governmental authority or public utility promulgates
or revises any law, ordinance, rule or regulation, or issues mandatory
controls or voluntary controls relating to the use or conservation of energy,
water, gas, light or electricity, the reduction of automobile or other
emissions, or the provision of any other utility or service, Landlord may take
any reasonably appropriate action to comply with such law, ordinance, rule,
regulation, mandatory control or voluntary guideline and Tenant’s obligations
hereunder shall not be affected by any such action of Landlord. The parties
acknowledge that safety and security devices, services and programs provided by
Landlord, if any, while intended to deter crime and ensure safety, may not in
given instances prevent theft or other criminal acts, or ensure safety of
persons or property. The risk that any safety or security device, service or
program may not be effective, or may malfunction, or be circumvented by a
criminal, is assumed by Tenant with respect to Tenant’s property and interests,
and Tenant shall obtain insurance coverage to the extent Tenant desires
protection against such criminal acts and other losses, as further described in
this Lease. Tenant agrees to cooperate in any reasonable safety or security
program developed by Landlord or required by Law.

 

ARTICLE VIII- MAINTENANCE AND REPAIRS

 

8.01         Landlord’s Obligations. Except as provided in Sections 8.02 and 8.03 below,
Landlord shall maintain the Building in reasonable order and repair throughout
the Lease Term; provided, however, that Landlord shall not be liable for any
failure to make any repairs or to perform any maintenance unless such failure
shall persist for an unreasonable time after written notice of the need for
such repairs or maintenance is given to Landlord by

 

10

 

Tenant.
Except as provided in Article XI, there shall be no abatement of Rent, nor
shall there be any liability of Landlord, by reason of any injury or
inconvenience to, or interference with, Tenant’s business or operations arising
from the making of, or failure to make, any maintenance or repairs in or to any
portion of the Building.

 

8.02         Tenant’s Obligations. During the Lease Term, Tenant shall, at its sole
cost and expense, maintain the Premises in good order and repair (including,
without limitation, the carpet, wall-covering, ~doors, plumbing and other
fixtures, equipment, alterations and improvements, whether installed by
Landlord or Tenant). Further, Tenant shall be responsible for, and upon demand
by Landlord shall promptly reimburse Landlord for, any damage to any portion of
the Building or the Premises caused by (a) Tenant’s activities in the
Building or the Premises; (b) the performance or existence of any
alterations, additions or improvements made by Tenant in or to the Premises; (c) the
installation, use, operation or movement of Tenant’s property in or about the
Building or the Premises; or (d) any act or omission by Tenant or its
officers, partners, employees, agents, contractors or invitees.

 

8.03         Landlord’s Rights. Landlord and its contractors shall have the right,
at all reasonable times and upon prior oral or telephonic notice to Tenant at
the Premises, other than in the case of any emergency in which case no notice
shall be required, to enter upon the Premises to make any repairs to the Premises
or the Building reasonably required or deemed reasonably necessary by Landlord
and to erect such equipment, including scaffolding, as is reasonably necessary
to effect such repairs.

 

ARTICLE IX - ALTERATIONS, ADDITIONS AND IMPROVEMENTS

 

9.01         Landlord’s Consent Conditions. Tenant shall not make or permit to be
made any alterations, additions, or improvements in or to the Premises (“Alterations”)
without the prior written consent of Landlord, which consent, with respect to
non-structural alterations, shall not be unreasonably withheld. Landlord may
impose as a condition to making any Alterations such requirements as Landlord
in its sole discretion deems necessary or desirable including without
limitation: Tenant’s submission to Landlord, for Landlord’s prior written
approval, of all plans and specifications relating to the Alterations; Landlord’s
prior written approval of the time or times when the Alterations are to be
performed; Landlord’s prior written approval of the contractors and
subcontractors performing work in connection with the Alterations; employment
of union contractors and subcontractors who shall not cause labor disharmony;
Tenant’s receipt of all necessary permits and approvals from all governmental
authorities having jurisdiction over the Premises prior to the construction of
the Alterations; Tenant’s delivery to Landlord of such bonds and insurance as
Landlord shall reasonably require; and Tenant’s payment to Landlord of all
costs and expenses incurred by Landlord because of Tenant’s Alterations,
including but not limited to costs incurred in reviewing the plans and
specifications for, and the progress of, the Alterations. Tenant is required to
provide Landlord written notice of whether the Alterations include the Handling
of any Hazardous Materials and whether these materials are of a customary and
typical nature for industry practices. Upon completion of the Alterations,
Tenant shall provide Landlord with copies of as-built plans. Neither the
approval by Landlord of plans and specifications relating to any Alterations
nor Landlord’s supervision or monitoring of any Alterations shall constitute
any warranty by Landlord to Tenant of the adequacy of the design for Tenant’s
intended use or the proper performance of the Alterations.

 

9.02         Performance of Alterations Work. All work relating to the Alterations
shall be performed in compliance with the plans and specifications approved by
Landlord, all applicable laws, ordinances, rules, regulations and directives of
all governmental authorities having jurisdiction (including without [imitation
Title 24 of the California Administrative Code) and the requirements of all
carriers of insurance on the Premises and the Building, the Board of
Underwriters, Fire Rating Bureau, or similar organization. All work shall be
performed in a diligent, first class manner and so as not to unreasonably
interfere with any other tenants or occupants of the Building. All costs
incurred by Landlord relating to the Alterations shall be payable to Landlord
by Tenant as additional rent upon demand. No asbestos-containing materials
shall be used or incorporated in the Alterations. No lead-containing surfacing
material, solder, or other construction materials or fixtures where the
presence of lead might create a condition of exposure not in compliance with
Environmental Laws shall be incorporated in the Alterations.

 

11

 

9.03         Liens. Tenant shall pay when due all costs for work
performed and materials supplied to the Premises. Tenant shall keep Landlord,
the Premises and the Building free from all liens, stop notices and violation
notices relating to the Alterations or any other work performed for, materials
furnished to or obligations incurred by or for Tenant and Tenant shall protect,
indemnify, hold harmless and defend Landlord, the Premises and the Building of
and from any and all loss, cost, damage, liability and expense, including
attorneys’ fees, arising out of or related to any such liens or notices.
Further, Tenant shall give Landlord not less then seven (7) business days
prior written notice before commencing any Alterations in or about the Premises
to permit Landlord to post appropriate notices of non-responsibility. Tenant
shall also secure, prior to commencing any Alterations, at Tenant’s sole
expense, a completion and lien indemnity bond satisfactory to Landlord for such
work. During the progress of such work, Tenant shall, upon Landlord’s request,
furnish Landlord with sworn contractor’s statements and lien waivers covering
all work theretofore performed. Tenant shall satisfy or otherwise discharge all
liens, stop notices or other claims or encumbrances within ten (10) days
after Landlord notifies Tenant in writing that any such lien, stop notice,
claim or encumbrance has been filed, If Tenant fails to pay and remove such
lien, claim or encumbrance within such ten (10) days, Landlord, at its
election, may pay and satisfy the same and in such event the sums so paid by
Landlord, with interest from the date of payment at the rate set forth in Section 4.06
hereof for amounts owed Landlord by Tenant shall be deemed to be additional
rent due and payable by Tenant at once without notice or demand.

 

9.04         Lease Termination. Except as provided in this Section 9.04, upon
expiration or earlier termination of this Lease Tenant shall surrender the
Premises to Landlord in the same condition as existed on the date Tenant first
occupied the Premises, (whether pursuant to this Lease or an earlier lease),
subject to reasonable wear and tear. All Alterations shall become a part of the
Premises and shall become the property of Landlord upon the expiration or
earlier termination of this Lease, unless Landlord shall, by written notice
given to Tenant, require Tenant to remove some or all of Tenant’s Alterations,
in which event Tenant shall promptly remove the designated Alterations and
shall promptly repair any resulting damage, all at Tenant’s sole expense. All
business and trade fixtures, machinery and equipment, furniture, movable
partitions and items of personal property owned by Tenant or installed by
Tenant at its expense in the Premises shall be and remain the property of
Tenant; upon the expiration or earlier termination of this Lease, Tenant shall,
at its sole expense, remove all such items and repair any damage to the
Premises or the Building caused by such removal. If Tenant fails to remove any
such items or repair such damage promptly after the expiration or earlier
termination of the Lease, Landlord may, but need not, do so with no liability
to Tenant, and Tenant shall pay Landlord the cost thereof upon demand.
Notwithstanding the foregoing to the contrary, in the event that Landlord gives
its consent, pursuant to the provisions of Section 9.01 of this Lease, to
allow Tenant to make an Alteration in the Premises, Landlord agrees, upon
Tenant’s written request, to notify Tenant in writing at the time of the giving
of such consent whether Landlord will require Tenant, at Tenant’s cost, to
remove such Alteration at the end of the Lease Term.

 

ARTICLE X - INDEMNIFICATION AND INSURANCE

 

10.01       Indemnification.

 

(A)    Tenant agrees to protect, indemnify, hold harmless and
defend Landlord and any Mortgagee, as defined herein, and each of their
respective partners, directors, officers, agents and employees, successors and
assigns, (except to the extent of the losses described below are caused by the
gross negligence of Landlord, its agents and employees), from and against:

 

(I)            any and all loss, cost, damage, liability or expense
as incurred (including but not limited to reasonable attorneys’ fees and legal
costs) arising out of or related to any claim, suit or judgment brought by or
in favor of any person or persons for damage, loss or expense due to, but not
limited to, bodily injury, including death, or property damage sustained by
such person or persons which arises out of, is occasioned by or is in any way
attributable to the use or occupancy of the Premises or any portion of the
Building by Tenant or the acts or omission of Tenant or its agents, employees,
contractors, clients, invitees or subtenants except that caused by the sole
active

 

12

 

negligence
or willful misconduct of Landlord or its agents or employees. Such loss or
damage shall include, but not be limited to, any injury or damage to, or death
of, Landlord’s employees or agents or damage to the Premises or any portion of
the Building.

 

(ii)           any and all environmental damages which arise from: (i) the
Handling of any Tenant’s Hazardous Materials, as defined in Section 6.03
or (ii) the breach of any of the provisions of this Lease. For the purpose
of this Lease, “environmental damages” shall mean (a) all claims,
judgments, damages, penalties, fines, costs, liabilities, and losses (including
without limitation, diminution in the value of the Premises or any portion of
the Building, damages for the loss of or restriction on use of rentable or
usable space or of any amenity of the Premises or any portion of the Building,
and from any adverse impact of Landlord’s marketing of space); (b) all
reasonable sums paid for settlement of claims, attorneys’ fees, consultants’
fees and experts’ fees; and (c) all costs incurred by Landlord in
connection with investigation or remediation relating to the Handling of Tenant’s
Hazardous Materials, whether or not required by Environmental Laws, necessary
for Landlord to make full economic use of the Premises or any portion of the
Building, or otherwise required under this Lease. To the extent that Landlord
is held strictly liable by a court or other governmental agency of competent
jurisdiction under any Environmental Laws, Tenant’s obligation to Landlord and
the other indemnities under the foregoing indemnification shall likewise be
without regard to fault on Tenant’s part with respect to the violation of any
Environmental Law which results in liability to the indemnity. Tenant’s
obligations and liabilities pursuant to this Section 10.01 shall survive
the expiration or earlier termination of this Lease.

 

(B)    Landlord agrees to protect, indemnify, hold harmless
and defend Tenant from and against any and all loss, cost, damage, liability or
expense, including reasonable attorneys’ fees, with respect to any claim of
damage or injury to persons or property at the Premises, caused by the gross
negligence of Landlord or its authorized agents or employees.

 

(C)    Notwithstanding anything to the contrary contained
herein, nothing shall be interpreted or used to in any way affect, limit,
reduce or abrogate any insurance coverage provided by any insurers to either
Tenant or Landlord.

 

(D)    Notwithstanding anything to the contrary contained in
this Lease, nothing herein shall be construed to infer or imply that Tenant is
a partner, joint venturer, agent, employee, or otherwise acting by or at the
direction of Landlord.

 

10.02       Property Insurance.

 

(A)    At all times during the Lease Term, Tenant shall
procure and maintain, at its sole expense, “all-risk” property insurance, for
damage or other loss caused by fire or other casualty or cause including, but
not limited to, vandalism and malicious mischief, theft, water damage of any
type, including sprinkler leakage, bursting of pipes, explosion, in an amount
not less than one hundred percent (100%) of the replacement cost covering (a) all
Alterations made by or for Tenant in the Premises; and (b) Tenant’s trade
fixtures, equipment and other personal property from time to time situated in
the Premises. The proceeds of such insurance shall be used for the repair or
replacement of the property so insured, except that if not so applied or if
this Lease is terminated following a casualty, the proceeds applicable to the
leasehold improvements shall be paid to Landlord and the proceeds applicable to
Tenant’s personal property shall be paid to Tenant.

 

(B)    At all times during the Lease Term, Tenant shall
procure and maintain business interruption insurance in such amount as will
reimburse Tenant for direct or indirect loss of earnings attributable to all
perils insured against in Section 10.02(A).

 

13

 

(C)    Landlord shall, at all times during the Lease Term,
procure and maintain “all-risk” property insurance in the amount not less than
ninety percent (90%) of the insurable replacement cost covering the Building in
which the Premises are located and such other insurance as may be required by a
Mortgagee or otherwise desired by Landlord.

 

10.03       Liability Insurance.

 

(A)    At all times during the Lease Term, Tenant shall
procure and maintain, at its sole expense, commercial general liability
insurance applying to the use and occupancy of the Premises and the business
operated by Tenant. Such insurance shall have a minimum combined single limit
of liability of at least Two Million Dollars ($2,000,000) per occurrence and a
general aggregate limit of at least Two Million Dollars ($2,000,000). All such
policies shall be written to apply to all bodily injury, property damage,
personal injury losses and shall be endorsed to include Landlord and its
agents, beneficiaries, partners, employees, and any deed of trust holder or
mortgagee of Landlord or any ground lessor as additional insureds. Such
liability insurance shall be written as primary policies, not excess or
contributing with or secondary to any other insurance as may be available to
the additional insureds.

 

(B)    Prior to the sale, storage, use or giving away of
alcoholic beverages on or from the Premises by Tenant or another person,
Tenant, at its own expense, shall obtain a policy or policies of insurance
issued by a responsible insurance company and in a form acceptable to Landlord
saving harmless and protecting Landlord and the Premises against any and all
damages, claims, liens, judgments, expenses and costs, including actual
attorneys’ fees, arising under any present or future law, statute, or ordinance
of the State of California or other governmental authority having jurisdiction
of the Premises, by reason of any storage, sale, use or giving away of
alcoholic beverages on or from the Premises. Such policy or policies of
insurance shall have a minimum combined single limit of One Million
($1,000,000) per occurrence and shall apply to bodily injury, fatal or
nonfatal; injury to means of support; and injury to property of any person.
Such policy or policies of insurance shall name Landlord and its agents,
beneficiaries, partners, employees and any mortgagee of Landlord or any ground
lessor of Landlord as additional insureds.

 

(C)    Landlord shall, at all times during the Lease Term,
procure and maintain commercial general liability insurance for the Building in
which the Premises are located. Such insurance shall have minimum combined
single limit of liability of at least Two Million Dollars ($2,000,000) per
occurrence, and a general aggregate limit of at least Two Million Dollars
($2,000,000).

 

10.04       Workers’ Compensation Insurance. At all times during the Lease Term,
Tenant shall procure and maintain Workers’ Compensation Insurance in accordance
with the laws of the State of California, and Employer’s Liability insurance
with a limit not less than One Million Dollars ($1,000,000) Bodily Injury Each Accident;
One Million Dollars ($1,000,000) Bodily Injury By Disease - Each Person; and
One Million Dollars ($1,000,000) Bodily Injury to Disease - Policy Limit.

 

10.05       Policy Requirements. All insurance required to be maintained by Tenant
shall be issued by insurance companies authorized to do insurance business in
the State of California and rated not less than A-Vu in Best’s Insurance Guide.
A certificate of insurance (or, at Landlord’s option, copies of the applicable
policies) evidencing the insurance required under this Article X shall be
delivered to Landlord not less than thirty (30) days prior to the Commencement
Date. No such policy shall be subject to cancellation or modification without
thirty (30) days prior written
notice to Landlord and to any deed of trust holder, mortgagee or ground lessor
designated by Landlord to Tenant. Tenant shall furnish Landlord with a
replacement certificate with respect to any insurance not less than thirty (30)
days prior to the expiration of the current policy. Tenant shall have the right
to provide the insurance required by this Article X pursuant to blanket
policies, but only if such blanket policies expressly provide coverage to the
Premises and Landlord as required by this Lease.

 

10.06       Waiver of Subrogation. Each party hereby waives any right of recovery
against the other for injury or loss due to hazards covered by insurance or
required to be covered, to the extent of the injury or loss covered thereby.
Any policy of insurance to be provided by Tenant or Landlord pursuant to this Article X
shall contain a clause denying the applicable insurer any right of subrogation
against the other party.

 

14

 

10.07       Failure to Insure. If Tenant fails to maintain any insurance which
Tenant is required to maintain pursuant to this Article X, Tenant shall be
liable to Landlord for any loss or cost resulting from such failure to
maintain. Tenant may not self-insure against any risks required to be covered
by insurance without Landlord’s prior written consent.

 

ARTICLE XI- DAMAGE OR DESTRUCTION

 

11.01       Total Destruction. Except as provided in Section 11.03 below, this
Lease shall automatically terminate if the Building is totally destroyed.

 

11.02       Partial Destruction of Premises. If the Premises are damaged by any
casualty and, in Landlord’s opinion, the Premises (exclusive of any Alterations
made to the Premises by Tenant) can be restored to its pre-existing condition
within two hundred seventy (270) days after the date of the damage or
destruction, Landlord shall, upon written notice from Tenant to Landlord of
such damage, except as provided in Section 11.03, promptly and with due
diligence repair any damage to the Premises (exclusive of any Alterations to
the Premises made by Tenant, which shall be promptly repaired by Tenant at its
sole expense) and, until such repairs are completed, the Rent shall be abated
from the date of damage or destruction in the same proportion that the rentable
area of the portion of the Premises which is unusable by Tenant in the conduct
of its business bears to the total rentable area of the Premises. If such
repairs cannot, in Landlord’s opinion, be made within said two hundred seventy
(270) day period, then Landlord may, at its option, exercisable by written
notice given to Tenant within thirty (30) days after the date of the damage or
destruction, elect to make the repairs within a reasonable time after the
damage or destruction, in which event this Lease shall remain in full force and
effect but the Rent shall be abated as provided in the preceding sentence; if
Landlord does not so elect to make the repairs, then either Landlord or Tenant
shall have the right, by written notice given to the other within sixty (60)
days after the date of the damage or destruction, to terminate this Lease as of
the date of the damage or destruction.

 

11.03       Exceptions to Landlord’s Obligations. Notwithstanding anything to the
contrary contained in this Article XI, Landlord shall have no obligation
to repair the Premises if either: (a) the Building in which the Premises
are located is so damaged as to require repairs to the Building exceeding
twenty percent (20%) of the full insurable value of the Building; or (b) Landlord
elects to demolish the Building in which the Premises are located; or (c) the
damage or destruction occurs less than two (2) years prior to the
Termination Date, exclusive of option periods. Further, Tenant’s Rent shall not
be abated if either (i) the damage or destruction is repaired within five (5) business days after Landlord
receives written notice from Tenant of the casualty, or (ii) Tenant, or
any officers, partners, employees, agents or invitees of Tenant, or any
assignee or subtenant of Tenant, is, in whole or in part, responsible for the
damage or destruction.

 

11.04       Waiver. The provisions contained in this Lease shall
supersede any contrary laws (whether statutory, common law or otherwise) now or
hereafter in effect relating to damage, destruction, self-help or termination,
including California Civil Code Sections 1932 and 1933.

 

ARTICLE XII - CONDEMNATION

 

12.01       Taking. If the entire Premises or so much of the Premises as
to render the balance unusable by Tenant shall be taken by condemnation, sale
in lieu of condemnation or in any other manner for any public or quasi-public
purpose (collectively “Condemnation”), and if Landlord, at its option, is
unable or unwilling to provide substitute premises containing at least as much
rentable area as described in Section 1.02 above, then this Lease shall
terminate on the date that title or possession to the Premises is taken by the
condemning authority, whichever is earlier.

 

12.02       Award. In the event
of any Condemnation, the entire award for such taking shall belong to Landlord.
Tenant shall have no claim against Landlord or the award for the value of any
unexpired term of this Lease or otherwise. Tenant shall be entitled to
independently pursue a separate award in a separate proceeding for Tenant’s
relocation costs directly associated with the taking, provided such separate
award does not diminish Landlord’s award.

 

15

 

12.03       Temporary Taking. No temporary taking of the Premises shall terminate
this Lease or entitle Tenant to any abatement of the Rent payable to Landlord
under this Lease; provided, further, that any award for such temporary taking
shall belong to Tenant to the extent that the award applies to any time period
during the Lease Term and to Landlord to the extent that the award applies to
any time period outside the Lease Term.

 

ARTICLE XIII - RELOCATION

 

13.01       Relocation. Landlord shall have the right, at its option upon
not less than thirty (30) days prior written notice to Tenant, to relocate
Tenant and to substitute for the Premises described above other space in the
Building containing at least as much rentable area as the Premises described in
Section 1.02 above. If Tenant is already in occupancy of the Premises,
then Landlord shall approve in advance the relocation expenses for purposes of
reimbursement for Tenant’s reasonable moving and telephone relocation expenses
and for reasonable quantities of new stationery upon submission to Landlord of
receipts for such expenditures incurred by Tenant.

 

ARTICLE XIV - ASSIGNMENT AND SUBLETTING

 

14.01       Restriction. Without the prior written consent of Landlord,
Tenant shall not, either voluntarily or by operation of law, assign, encumber,
or otherwise transfer this Lease or any interest herein, or sublet the Premises
or any part thereof, or permit the Premises to be occupied by anyone other than
Tenant or Tenant’s employees (any such assignment, encumbrance, subletting,
occupation or transfer is hereinafter referred to as a “Transfer”). For
purposes of this Lease, the term “Transfer” shall also include (a) if
Tenant is a partnership, the withdrawal or change, voluntary, involuntary or by
operation of law, of a majority of the partners, or a transfer of a majority of
partnership interests, within a twelve month period, or the dissolution of the
partnership, (b) if Tenant is a closely held corporation (i.e. whose stock
is not publicly held and not traded through an exchange or over the counter) or
a limited liability company, the dissolution, merger, consolidation, division,
liquidation or other reorganization of Tenant, or within a twelve month period:
(i) the sale or other transfer of more than an aggregate of 50% of the
voting securities of Tenant (other than to immediate family members by reason
of gift or death) or (ii) the sale, mortgage, hypothecation or pledge of
more than an aggregate of 50% of Tenant’s net assets, and (c) any change
by Tenant in the form of its legal organization under applicable state law
(such as, for example, a change from a general partnership to a limited
partnership or from a corporation to a limited liability company). An
assignment, subletting or other action in violation of the foregoing shall be
void and, at Landlord’s option, shall constitute a material breach of this
Lease. Notwithstanding anything contained in this Article XIV to the
contrary, Tenant shall have the right to assign the Lease or sublease the
Premises, or any part thereof, to an “Affiliate” without the prior written
consent of Landlord, but upon at least twenty (20) days’ prior written notice
to Landlord, provided that said Affiliate is not in default under any other
lease for space in a property that is managed by Heitman Properties Ltd. or any
of its affiliates. For purposes of this provision, the term “Affiliate” shall
mean any corporation or other entity controlling, controlled by, or under
common control with (directly or indirectly) Tenant, including, without
limitation, any parent corporation controlling Tenant or any subsidiary that Tenant
controls. The term “control,” as used herein, shall mean the power to direct or
cause the direction of the management and policies of the controlled entity
through the ownership of more than fifty percent (50%) of the voting securities
in such controlled entity. Notwithstanding anything contained in this Article XIV
to the contrary, Tenant expressly covenants and agrees not to enter into any
lease, sublease, license, concession or other agreement for use, occupancy or
utilization of the Premises which provides for rental or other payment for such
use, occupancy or utilization based in whole or in part on the net income or
profits derived by any person from the property leased, used, occupied or
utilized (other than an amount based on a fixed percentage or percentages of
receipts or sales), and that any such purported lease, sublease, license,
concession or other agreement shall be absolutely void and ineffective as a
conveyance of any right or interest in the possession, use, occupancy or
utilization of any part of the Premises.

 

14.02       Notice to Landlord. If Tenant desires to assign this Lease or any
interest herein, or to sublet all or any part of the Premises, then at least
thirty (30) days but not more than one hundred eighty (180) days prior to the effective
date of the proposed assignment or subletting, Tenant shall submit to Landlord
in connection with Tenant’s request for Landlord’s consent:

 

16

 

(A)    A statement containing (i) the name
and address of the proposed assignee or subtenant; (ii) such financial
information with respect to the proposed assignee or subtenant as Landlord
shall reasonably require; (iii) the type of use proposed for the Premises;
and (iv) all of the principal terms of the proposed assignment or
subletting; and

 

(B)    Four (4) originals of the assignment
or sublease on a form approved by Landlord and four (4) originals of the
Landlord’s Consent to Sublease or Assignment and Assumption of Lease and
Consent.

 

(C)    Landlord acknowledges and approves that
Tenant intends to sublease a portion of the Premises to Heitman Financial Ltd.
upon the same terms and conditions as are contained in this Lease.

 

14.03       Landlord’s Recapture Rights. At any time within twenty (20) business
days after Landlord’s receipt of all (but not less than all) of the information
and documents described in Section 14.02 above, Landlord may, at its
option by written notice to Tenant, elect to: (a) sublease the Premises or
the portion thereof proposed to be sublet by Tenant upon the same terms as
those offered to the proposed subtenant; or (b) take an assignment of the
Lease upon the same terms as those offered to the proposed assignee hereunder..
If Landlord does not exercise any of the options described in the preceding
sentence, then, during the above-described twenty (20) business day period,
Landlord shall either consent or deny its consent to the proposed assignment or
subletting.

 

14.04       Landlord’s Consent; Standards. Landlord’s consent to a proposed
assignment or subletting shall not be unreasonably withheld; but, in addition
to any other grounds for denial, Landlord’s consent shall be deemed reasonably
withheld if, in Landlord’s good faith judgment: (i) the proposed assignee
or subtenant does not have the financial strength to perform its obligations
under this Lease or any proposed sublease; (ii) the business and
operations of the proposed assignee or subtenant are not of comparable quality
to the business and operations being conducted by other tenants in the Building;
(iii) the proposed assignee or subtenant intends to use any part of the
Premises for a purpose not permitted under this Lease; (iv) either the
proposed assignee or subtenant, or any person which directly or indirectly
controls, is controlled by, or is under common control with the proposed
assignee or subtenant occupies space in the Building, or is negotiating with
Landlord to lease space in the Building; (v) the proposed assignee or
subtenant is disreputable; or (vi) the use of the Premises or the Building
by the proposed assignee or subtenant would, in Landlord’s reasonable judgment,
impact the Building in a negative manner including but not limited to
significantly increasing the pedestrian traffic in and out of the Building or
requiring any alterations to the Building to comply with applicable laws; (vii) the
subject space is not regular in shape with appropriate means of ingress and
egress suitable for normal renting purposes; (viii) the transferee is a
government (or agency or instrumentality thereof) or (ix) Tenant has
failed to cure a default at the time Tenant requests consent tot the proposed
Transfer.

 

14.05       Additional Rent. If Landlord consents to any such assignment or
subletting, one-half (1/2) of the amount by which all sums or other economic
consideration received by Tenant in connection with such assignment or
subletting, whether denominated as rental or otherwise, exceeds, in the
aggregate, the total sum which Tenant is obligated to pay Landlord under this
Lease (prorated to reflect obligations allocable to less than all of the
Premises under a sublease) shall be paid to Landlord promptly after receipt as
additional Rent under the Lease without affecting or reducing any other
obligation of Tenant hereunder.

 

14.06       Landlord’s Costs. If Tenant shall Transfer this Lease or all or any
part of the Premises or shall request the consent of Landlord to any Transfer,
Tenant shall pay to Landlord as additional rent Landlord’s costs related
thereto, including Landlord’s reasonable attorneys’ fees and a minimum fee to
Landlord of Five Hundred Dollars (3500,00).

 

14.07       Continuing Liability of Tenant. Notwithstanding any Transfer, including
an assignment or sublease to an affiliate, Tenant shall remain as fully and
primarily liable for the payment of Rent and for the performance of all other
obligations of Tenant contained in this Lease to the same extent as if the
Transfer had not occurred; provided, however, that any act or omission of any
transferee, other than Landlord, that violates the terms of this Lease shall be
deemed a violation of this Lease by Tenant.

 

17

 

14.08       Non-Waiver. The consent by Landlord to any Transfer shall not
relieve Tenant, or any person claiming through or by Tenant, of the obligation
to obtain the consent of Landlord, pursuant to this Article XIV, to any
further Transfer. In the event of an assignment or subletting, Landlord may
collect rent from the assignee or the subtenant without waiving any rights
hereunder and collection of the rent from a person other than Tenant shall not
be deemed a waiver of any of Landlord’s rights under this Article XIV, an
acceptance of assignee or subtenant as Tenant, or a release of Tenant from the
performance of Tenant’s obligations under this Lease. If Tenant shall default
under this Lease and fail to cure within the time permitted, Landlord is
irrevocably authorized, as Tenant’s agent and attorney-in-fact, to direct any
transferee to make all payments under or in connection with the Transfer
directly to Landlord (which Landlord shall apply towards Tenant’s obligations
under this Lease) until such default is cured.

 

ARTICLE XV - DEFAULT AND REMEDIES

 

15.01       Events of  Default By  Tenant. The occurrence of any
of the following shall constitute a material default and breach of this Lease
by Tenant:

 

(A)    The failure by Tenant to pay Base Rent or make any
other payment required to be made by Tenant hereunder as and when due.

 

(B)    The abandonment of the Premises by Tenant or the
vacation of the Premises by Tenant for fourteen (14) consecutive days (with or
without the payment of Rent).

 

(C)    The making by Tenant of any assignment of this Lease
or any sublease of all or part of the Premises, except as expressly permitted
under Article XIV of this Lease.

 

(D)    The failure by Tenant to observe or perform any other
provision of this Lease to be observed or performed by Tenant, other than those
described in Sections 15.01(A), 15.01(B) or 15.01 (C) above, if such
failure continues for ten (10) days after written notice thereof by
Landlord to Tenant; provided, however, that if the nature of the default is
such that it cannot be cured within the ten (10) day period, no default
shall exist if Tenant commences the curing of the default within the ten (10) day
period and thereafter diligently prosecutes the same to completion. The ten (10) day
notice described herein shall be in lieu of, and not in addition to, any notice
required under Section 1161 of the California Civil Code of Procedure or
any other law now or hereafter in effect requiring that notice of default be
given prior to the commencement of an unlawful detainer or other legal
proceeding.

 

(E)     The making by Tenant or its Guarantor of any general
assignment for the benefit of creditors, the filing by or against Tenant or its
Guarantor of a petition under any federal or state bankruptcy or insolvency
laws (unless, in the case of a petition filed against Tenant or its Guarantor
the same is dismissed within thirty (30) days after filing); the appointment of
a trustee or receiver to take possession of substantially all of Tenant’s
assets at the Premises or Tenant’s interest in this Lease or the Premises, when
possession is not restored to Tenant within thirty (30) days; or the
attachment, execution or other seizure of substantially all of Tenant’s assets
located at the Premises or Tenant’s interest in this Lease or the Premises, if
such seizure is not discharged within thirty (30) days.

 

(F)     Any material misrepresentation herein, or material
misrepresentation or omission in any financial statements or other materials
provided by Tenant or any Guarantor in connection with negotiating or entering
into this Lease or in connection with any Transfer under Section 14.01.

 

15.02       Landlord’s Right to Terminate Upon Tenant
Default In the
event of any default by Tenant as provided in Section 15.01 above,
Landlord shall have the right to terminate this Lease and recover possession of
the Premises by giving written notice to Tenant of Landlord’s election to
terminate this Lease, in which event Landlord shall be entitled to receive from
Tenant:

 

(A)    The worth at the time of award of any unpaid Rent
which had been earned at the time of such termination; plus

 

18

 

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

 

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

 

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

 

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

 

As used in
subparagraphs (A) and (B) above, “worth at the time of award” shall
be computed by allowing interest on such amounts at the then highest lawful
rate of interest, but in no event to exceed one percent (1%) per annum plus the
rate established by the Federal Reserve Bank of San Francisco on advances made
to member banks under Sections of the Federal Reserve Act (“discount rate”)
prevailing at the time of the award. As used in paragraph (C) above, “worth
at the time of award” shall be computed by discounting such amount by (i) the
discount rate of the Federal Reserve Bank of San Francisco prevailing at the
time of award plus (ii) one percent (1%).

 

15.03       Mitigation of  Damages. If Landlord terminates this
Lease or Tenant’s right to possession of the Premises, Landlord shall have no
obligation to mitigate Landlord’s damages except to the extent required by
applicable law. If Landlord has not terminated this Lease or Tenant’s right to
possession of the Premises, Landlord shall have no obligation to mitigate under
any circumstances and may permit the Premises to remain vacant or abandoned. If
Landlord is required to mitigate damages as provided herein: (i) Landlord
shall be required only to use reasonable efforts to mitigate, which shall not
exceed such efforts as Landlord generally uses to lease other space in the
Building, (ii) Landlord will not be deemed to have failed to mitigate if
Landlord or its affiliates lease any other portions of the Building or other
projects owned by Landlord or its affiliates in the same geographic area,
before reletting all or any portion of the Premises, and (iii) any failure
to mitigate as described herein with respect to any period of time shall only
reduce the Rent and other amounts to which Landlord is entitled hereunder by
the reasonable rental value of the Premises during such period. In recognition
that the value of the Building depends on the rental rates and terms of leases
therein, Landlord’s rejection of a prospective replacement tenant based on an
offer of rentals below Landlord’s published rates for new leases of comparable
space at the Building at the time in question, or at Landlord’s option, below
the rates provided in this Lease, or containing terms less favorable than those
contained herein, shall not give rise to a claim by Tenant that Landlord failed
to mitigate Landlord’s damages.

 

15.04       Landlord’s Right To Continue Lease Upon
Tenant Default.
In the event of a default of this Lease and abandonment of the Premises by
Tenant, if Landlord does not elect to terminate this Lease as provided in Section 15.02
above, Landlord may from time to time, without terminating this Lease, enforce
all of its rights and remedies under this Lease. Without limiting the
foregoing, Landlord has the remedy described in California Civil Code Section 1951.4
(Landlord may continue this Lease in effect after Tenant’s default and
abandonment and recover Rent as it becomes due, if Tenant has the right to
Transfer, subject to reasonable limitations). In the event Landlord re-lets the
Premises, to the fullest extent permitted by law, the proceeds of any reletting
shall be applied first to pay to Landlord all costs and expenses of such
reletting (including without limitation, costs and expenses of retaking or
repossessing the Premises, removing persons and property therefrom, securing
new tenants, including expenses for redecoration, alterations and other costs
in connection with preparing the Premises for the new tenant, and if Landlord
shall maintain and operate the Premises, the costs thereof) and receivers’ fees
incurred in connection with the appointment of and performance by a receiver to
protect the Premises and Landlord’s interest under this Lease and any necessary
or reasonable alterations; second, to the payment of any indebtedness of Tenant
to Landlord other than Rent due and unpaid hereunder; third, to the
payment of Rent due and unpaid hereunder; and the residue, if any, shall be held by
Landlord and applied in payment of other or future obligations of Tenant to
Landlord as the same may become due and payable, and Tenant shall not be
entitled to receive any portion of such revenue.

 

19

 

15.05       Right
of  Landlord to
Perform. All covenants and agreements to be performed by Tenant under this
Lease shall be performed by Tenant at Tenant’s sole cost and expense. If Tenant
shall fail to pay any sum of money, other than Rent, required to be paid by it
hereunder or shall fail to perform any other act on its part to be performed
hereunder, Landlord may, but shall not be obligated to, make any payment or
perform any such other act on Tenant’s part to be made or performed, without
waiving or releasing Tenant of its obligations under this Lease. Any sums so
paid by Landlord and all necessary incidental costs, together with interest
thereon at the lesser of the maximum rate permitted by law if any or twelve
percent (12%) per annum from the date of such payment, shall be payable to
Landlord as additional rent on demand and Landlord shall have the same rights
and remedies in the event of nonpayment as in the case of default by Tenant in
the payment of Rent.

 

15.06       Default Under Other Leases. If the term of any lease, other than
this Lease, heretofore or hereafter made by Tenant for any office space in the
Building shall be terminated or terminable after the making of this Lease
because of any default by Tenant under such other lease, such fact shall
empower Landlord, at Landlord’s sole option, to terminate this Lease by notice
to Tenant or to exercise any of the rights or remedies set forth in Section 15.02.

 

15.07       Non-Waiver. Nothing in this Article shall be deemed to
affect Landlord’s rights to indemnification for liability or liabilities
arising prior to termination of this Lease or Tenant’s right to possession of
the Premises for personal injury or property damages under the indemnification
clause or clauses contained in this Lease. No acceptance by Landlord of a
lesser sum than the Rent then due shall be deemed to be other than on account
of the earliest installment of such rent due, nor shall any endorsement or
statement on any check or any letter accompanying any check or payment as rent
be deemed an accord and satisfaction, and Landlord may accept such check or
payment without prejudice to Landlord’s right to recover the balance of such
installment or pursue any other remedy in the Lease provided. The delivery of
keys to any employee of Landlord or to Landlord’s agent or any employee thereof
shall not operate as a termination of this Lease or a surrender of the
Premises.

 

15.08       Cumulative Remedies. The specific remedies to which Landlord may resort
under the terms of the Lease are cumulative and are not intended to be
exclusive of any other remedies or means of redress to which it may be lawfully
entitled in case of any breach or threatened breach by Tenant of any provisions
of the Lease. In addition to the other remedies provided in the Lease, Landlord
shall be entitled to a restraint by injunction of the violation or attempted or
threatened violation of any of the covenants, conditions or provisions of the
Lease or to a decree compelling specific performance of any such covenants,
conditions or provisions.

 

15.09       Default by  Landlord. Landlord’s failure to perform or
observe any of its obligations under this Lease shall constitute a default by
Landlord under this Lease only if such failure shall continue for a period of
thirty (30) days (or the additional time, if any, that is reasonably necessary
to promptly and diligently cure the failure) after Landlord receives written
notice from Tenant specifying the default. The notice shall give in reasonable
detail the nature and extent of the failure and shall identify the Lease
provision(s) containing the obligation(s). If Landlord shall default in
the performance of any of its obligations under this Lease (after notice and
opportunity to cure as provided herein), Tenant may pursue any remedies
available to it under the law and this Lease, except that, in no event, shall
Landlord be liable for punitive damages, lost profits, business interruption,
speculative, consequential or other such damages. In recognition that Landlord
must receive timely payments of Rent and operate the Building, Tenant shall
have no right of self-help to perform repairs or any other obligation of
Landlord, and shall have no right to withhold, set-off, or abate Rent.

 

ARTICLE XVI - ATTORNEYS’ FEES: COSTS OF SUIT

 

16.01       Attorneys Fees. If either Landlord or Tenant shall commence any
action or other proceeding against the other arising out of, or relating to,
this Lease or the Premises, the prevailing party shall be entitled to recover
from the losing party, in addition to any other relief, its actual attorneys’
fees irrespective of whether or not the action or other proceeding is
prosecuted to judgment and irrespective of any court schedule of reasonable

 

20

 

Attorneys’
fees. In addition, Tenant shall reimburse Landlord, upon demand, for all
reasonable attorneys’ fees incurred in collecting Rent, resolving any actual
default by Tenant, securing indemnification as provided in Article X and
paragraphs, 16.02, 23.01 and 25.01 herein or otherwise seeking enforcement
against Tenant, its sublessees and assigns, of Tenant’s obligations under this
Lease.

 

16.02       Indemnification. Should Landlord
be made a party to any litigation instituted by Tenant against a party other
than Landlord, or by a third party against Tenant, Tenant shall indemnify, hold
harmless and defend Landlord from any and all loss, cost, liability, damage or
expense incurred by Landlord, including attorneys’ fees, in connection with the
litigation.

 

ARTICLE XVII- SUBORDINATION AND ATTORNMENT

 

17.01       Subordination. This Lease, and the
rights of Tenant hereunder, are and shall be subject and subordinate to the
interest of (i) all present and future ground leases and master leases of
all or any part of the Building; (ii) present and future mortgages and
deeds of trust encumbering all or any part of the Building; (iii) all past
and future advances made under any such mortgages or deeds of trust; and (iv) all
renewals, modifications, replacements and extensions of any such ground leases,
master leases, mortgages and deeds of trust; provided, however, that any lessor
under any such ground lease or master lease or any mortgagee or beneficiary
under any such mortgage or deed of trust ( any such lessor, mortgagee or
beneficiary is hereinafter referred to as a “Mortgagee”) shall have the right
to elect, by written notice given to Tenant, to have this Lease made superior
in whole or in part to any such ground lease, master lease, mortgage or deed of
trust (or subject and subordinate to such ground lease, master lease, mortgage
or deed of trust but superior to any junior mortgage or junior deed of trust).
Upon demand, Tenant shall execute, acknowledge and deliver any instruments
reasonably requested by Landlord or any such Mortgagee to effect the purposes
of this Section 17.01. Such instruments may contain, among other things,
provisions to the effect that such Mortgagee (hereafter, for the purposes of
this Section 17.01, a “Successor Landlord”) shall (i) not be liable
for any act or omission of Landlord or its predecessors, if any, prior to the
date of such Successor Landlord’s succession to Landlord’s interest under this
Lease; (ii) not be subject to any offsets or defenses which Tenant might
have been able to assert against Landlord or its predecessors, if any, prior to
the date of such Successor Landlord’s succession to Landlord’s interest under
this Lease; (iii) not be liable for the return of any security deposit
under the Lease unless the same shall have actually been deposited with such
Successor Landlord; (iv) be entitled to receive notice of any Landlord
default under this Lease plus a reasonable opportunity to cure such default
prior to Tenant having any right or ability to terminate this Lease as a result
of such Landlord default; (v) not be bound by any rent or additional rent
which Tenant might have paid for more than the current month to Landlord; (vi) not
be bound by any amendment or modification of the Lease or any cancellation or
surrender of the same made without Successor Landlord’s prior written consent; (vii) not
be bound by any obligation to make any payment to Tenant which was required to
be made prior to the time such Successor Landlord succeeded to Landlord’s
interest and (viii) not be bound by any obligation under the Lease to
perform any work or to make any improvements to the demised Premises. Any
obligations of any Successor Landlord under its respective lease shall be
non-recourse as to any assets of such Successor Landlord other than its interest
in the Premises and improvements.

 

17.02       Attornment.
If the interests of Landlord under the Lease shall be transferred to any
superior Mortgagee or other purchaser or person taking title to the Building by
reason of the termination of any superior lease or the foreclosure of any
superior mortgage or deed of trust, Tenant shall be bound to such Successor
Landlord under all of the terms, covenants and conditions of the Lease for the
balance of the term thereof remaining and any extensions or renewals thereof
which may be effected in accordance with any option therefore in the Lease,
with the same force and effect as if Successor Landlord were the landlord under
the Lease, and Tenant shall attorn to and recognize as Tenant’s landlord under
this Lease such Successor Landlord, as its landlord, said attornment to be
effective and self-operative without the execution of any further instruments
upon Successor Landlord’s succeeding to the interest of Landlord under the
Lease. Tenant shall, upon demand, execute any documents reasonably requested by
any such person to evidence the attornment described in this Section 17.02.
Concurrently, upon written request from Tenant, and provided Tenant is not in
default under this Lease, Landlord agrees to use diligent,

 

21

 

commercially reasonable
efforts to obtain a Non-Disturbance Agreement from the Successor Landlord. Such
Non-Disturbance Agreement may be embodied in the Mortgagee’s customary form of
Subordination and Non-Disturbance Agreement. If, after exerting diligent,
commercially reasonable efforts, Landlord is unable to obtain a Non-Disturbance
Agreement from any such Mortgagee, Landlord shall have no further obligation to
Tenant with respect thereto.

 

17.03       Mortgagee
Protection. Tenant agrees to give any Mortgagee, by registered or certified
mail, a copy of any notice of default served upon Landlord by Tenant, provided
that prior to such notice Tenant has been notified in writing (by way of
service on Tenant of a copy of Assignment of Rents and Leases, or otherwise) of
the address of such Mortgagee (hereafter the “Notified Party”). Tenant further
agrees that if Landlord shall have failed to cure such default within twenty
(20) days after such notice to Landlord (or if such default cannot be cured or
corrected within that time, then such additional time as may be necessary if
Landlord has commenced within such twenty (20) days and is diligently pursuing
the remedies or steps necessary to cure or correct such default), then the
Notified Party shall have an additional thirty (30) days within which to cure
or correct such default (or if such default cannot be cured or corrected within
that time, then such additional time as may be necessary if the Notified Party
has commenced within such thirty (30) days and is diligently pursuing the
remedies or steps necessary to cure or correct such default). Until the time
allowed, as aforesaid, for the Notified Party to cure such default has expired
without cure, Tenant shall have no right to, and shall not, terminate this
Lease on account of Landlord’s default.

 

ARTICLE XVIII- OUIET ENJOYMENT

 

18.01       Provided
that Tenant performs all of its obligations hereunder, Tenant shall have and
peaceably enjoy the Premises during the Lease Term free of claims by or through
Landlord, subject to all of the terms and conditions contained in this Lease.

 

ARTICLE XIX  - RULES AND REGULATIONS

 

19.01       The Rules and
Regulations attached hereto as Exhibit C are hereby incorporated by
reference herein and made a part hereof. Tenant shall abide by, and faithfully
observe and comply with the Rules and Regulations and any reasonable and
non-discriminatory amendments, modifications and or  additions thereto as may hereafter be adopted
and published by written notice to tenants by Landlord for the safety, care,
security, good order And/or cleanliness of the Premises and/or the Building.
Landlord shall not be liable to Tenant for any violation of such rules and
regulations by any other tenant or occupant of the Building.

 

ARTICLE XX  - ESTOPPEL CERTIFICATES

 

20.01       Tenant agrees at any time and from time
to time upon not less than ten (10) days’ prior written notice from
Landlord to execute, acknowledge and deliver to Landlord a statement in writing
addressed and certifying to Landlord, to any current or prospective Mortgagee
or any assignee thereof, to any prospective purchaser of the land, improvements
or both comprising the Building, and to any other party designated by Landlord,
that this Lease is unmodified and in full force and effect (of if there have
been modifications, that the same is in full force and effect as modified and
stating the modifications); that Tenant has accepted possession of the
Premises, which are acceptable in all respects, and that any improvements required
by the terms of this Lease to be made by Landlord have been completed to the
satisfaction of Tenant; that Tenant is in full occupancy of the Premises; that
no rent has been paid more than thirty (30) days in advance; that the first
month’s Base Rent has been paid; that Tenant is entitled to no free rent or
other concessions except as stated in this Lease; that Tenant has not been
notified of any previous assignment of Landlord’s or any predecessor landlord’s
interest under this Lease; the dates to which Base Rent, additional rental and
other charges have been paid; that Tenant, as of the date of such certificate,
has no charge, lien or claim of setoff under this Lease or otherwise against
Base Rent, additional rental or other charges due or to become due under this
Lease; that Landlord is not in default in performance of any covenant,
agreement or condition contained in this Lease; or any other matter relating to
this Lease or the Premises or, if so, specifying each such default. If there is
a Guaranty under this Lease, said Guarantor shall confirm the validity of the

 

22

 

Guaranty by
joining in the execution of the Estoppel Certificate or other documents so
requested by Landlord or Mortgagee. In addition, in the event that such
certificate is being given to any Mortgagee, such statement may contain any
other provisions customarily required by such Mortgagee including, without
limitation, an agreement on the part of Tenant to furnish to such Mortgagee, written
notice of any Landlord default and a reasonable opportunity for such Mortgagee
to cure such default prior to Tenant being able to terminate this Lease. Any
such statement delivered pursuant to this Section may be relied upon by
Landlord or any Mortgagee, or prospective purchaser to whom it is addressed and
such statement, if required by its addressee, may so specifically state. If
Tenant does not execute, acknowledge and deliver to Landlord the statement as
and when required herein, Landlord is hereby granted an irrevocable
power-of-attorney, coupled with an interest, to execute such statement on
Tenant’s behalf, which statement shall be binding on Tenant to the same extent
as if executed by Tenant.

 

ARTICLE XXI  - ENTRY BY LANDLORD

 

21.01       Landlord may enter the Premises at all
reasonable times to: inspect the same; exhibit the same to prospective
purchasers, Mortgagees or tenants; determine whether Tenant is complying with
all of its obligations under this Lease; supply janitorial and other services to
be provided by Landlord to Tenant under this Lease; post notices of
non-responsibility; and make repairs or improvements in or to the Building or
the Premises; provided, however, that all such work shall be done as promptly
as reasonably possible and so as to cause as little interference to Tenant as
reasonably possible. 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 or any other loss occasioned by
such entry. Landlord shall at all times have and retain a key with which to
unlock all of the doors in, on or about the Premises (excluding Tenant’s
vaults, safes and similar areas designated by Tenant in writing in advance),
and Landlord shall have the right to use any and all means by which Landlord
may deem proper to open such doors to obtain entry to the Premises, and any
entry to the Premises obtained by Landlord by any such means, or otherwise,
shall not under any circumstances be deemed or construed to be a forcible or
unlawful entry into or a detainer of the Premises or an eviction, actual or
constructive, of Tenant from any part of the Premises. Such entry by Landlord
shall not act as a termination of Tenant’s duties under this Lease. If Landlord
shall be required to obtain entry by means other than a key provided by Tenant,
the cost of such entry shall by payable by Tenant to Landlord as additional
rent.

 

ARTICLE XXII

 LANDLORD’S LEASE UNDERTAKINGS-EXCULPATION FROM PERSONAL LIABILITY;

TRANSFER OF LANDLORD’S INTEREST

 

22.01       Landlord’s Lease Undertakings.
Notwithstanding anything to the contrary contained in this Lease or in any
exhibits, Riders or addenda hereto attached (collectively the “Lease Document?’),
it is expressly understood and agreed by and between the parties hereto that: (a) the
recourse of Tenant or its successors or assigns against Landlord with respect
to the alleged breach by or on the part of Landlord of any representation,
warranty, covenant, undertaking or agreement contained in any of the Lease
Documents or otherwise arising out of Tenant’s use of the Premises or the
Building (collectively, “Landlord’s Lease Undertakings”) shall extend only to
Landlord’s interest in the real estate of which the Premises demised under the
Lease Documents are a part (“Landlord’s Real Estate”) and not to any other
assets of Landlord or its constituent partners; and (b) except to the
extent of Landlord’s interest in Landlord’s Real Estate, no personal liability
or personal responsibility of any sort with respect to any of Landlord’s Lease
Undertakings or any alleged breach thereof is assumed by, or shall at any time
be asserted or enforceable against, Landlord, its constituent partners, Heitman
Capital Management Corporation or Heitman Properties Ltd., or against any of
their respective directors, officers, employees, agents, constituent partners,
beneficiaries, trustees or representatives.

 

22.02       Transfer of Landlord’s Interest.
In the event of any transfer of Landlord’s interest in the Building, Landlord
shall be automatically freed and relieved from all applicable liability with
respect to performance of any covenant or obligation on the part of Landlord,
provided any deposits or advance rents held by Landlord are turned over to the grantee
and said grantee expressly assumes, subject to the limitations of this Section 22,
all the

 

23

 

terms,
covenants and conditions of this Lease to be performed on the part of Landlord,
it being intended hereby that the covenants and obligations contained in this
Lease on the part of Landlord shall, subject to all the provisions of this Section 22,
be binding on Landlord, its successors and  assigns, only during their respective periods of
ownership.

 

ARTICLE XXIII  - HOLDOVER TENANCY

 

23.01       If Tenant holds possession of the
Premises after the expiration or termination of the Lease Term, by lapse of
time or otherwise, Tenant shall become a tenant at sufferance upon all of the
terms contained herein, except as to Lease Term and Rent. During such holdover
period, Tenant shall pay to Landlord a monthly rental equivalent to two hundred
percent (200%) of the Rent Payable by Tenant to Landlord with respect to the
last month of the Lease Term. The monthly rent payable for such holdover period
shall in no event be construed as a penalty or as liquidated damages for such
retention of possession. Without limiting the foregoing, Tenant hereby agrees
to indemnify, defend and hold harmless Landlord, its beneficiary, and their
respective agents, contractors and employees, from and against any and all
claims, liabilities, actions, losses, damages (including without limitation,
direct, indirect, incidental and consequential) and expenses (including,
without limitation, court costs and reasonable attorneys’ fees) asserted
against or sustained by any such party and arising from or by reason of such
retention of possession, which obligations shall survive the expiration or
termination of the Lease Term.

 

ARTICLE XXIV  - NOTICES

 

24.01       All notices which Landlord or Tenant may
be required, or may desire, to serve on the other may be served, as an
alternative to personal service, by mailing the same by registered or certified
mail, postage prepaid, addressed to Landlord at the address for Landlord set
forth in Section 1.12 above and to Tenant at the address for Tenant set
forth in Section 1.13 above, or, from and after the Commencement Date, to
Tenant at the Premises whether or not Tenant has departed from, abandoned or
vacated the Premises, or addressed to such other address or addresses as either
Landlord or Tenant may from time to time designate to the other in writing. Any
notice shall be deemed to have been served at the time the same was posted.

 

ARTICLE XXV  - BROKERS

 

25.01       The parties recognize as the broker(s) who
procured this Lease the firm(s) specified in Section 1.14 and agree that
Landlord shall be solely responsible for the payment of any brokerage
commissions to said broker(s), and that Tenant shall have no responsibility therefore
unless written provision to the contrary has been made a part of this Lease. If
Tenant has dealt with any other person or real estate broker in respect to
leasing, subleasing or renting space in the Building, Tenant shall be solely
responsible for the payment of any fee due said person or firm and Tenant shall
protect, indemnify, hold harmless and defend Landlord from any liability in
respect thereto. Notwithstanding the foregoing, there shall be no leasing
commissions due to any parties under the terms of this Lease.

 

ARTICLE XXVI- ELECTRONIC SERVICES

 

26.01       Tenant’s Lines. Tenant may, in a
manner consistent with the provisions and requirements of this Lease, install,
maintain, replace, remove or use any communications or computer or other
electronic service wires, cables and related devices (collectively the “Lines”)
at the Building in or serving the Premises, provided: (a) Tenant shall
obtain Landlord’s prior written consent, which consent may be conditioned as
required by Landlord, (b) if Tenant at any time uses any equipment that
may create an electromagnetic field exceeding the normal insulation ratings of
ordinary twisted pair riser cable or cause radiation higher than normal
background radiation, the Lines therefore (including riser cables) shall be
appropriately insulated to prevent such excessive electromagnetic fields or
radiation, and (c) Tenant shall pay all costs in connection therewith.
Landlord reserves the right to require that Tenant remove any Lines which are
installed in violation of these provisions. Tenant shall not, without the prior
written consent of Landlord in each instance, grant to any third party a
security interest or lien in or on the Lines, and any such security interest or
lien granted without Landlord’s written consent shall be null and void.

 

24

 

26.02       Definition of Electronic Services.
As used herein “Electronic Services Provide?’ means a business which provides
telephone, telegraph, telex, video, other telecommunications or other services
which permit Tenant to receive or transmit information by the use of
electronics and which require the use of wires, cables, antennas or similar
devices in or on the Building. The services of Electronic Services Providers
are sometime referred to herein as “Electronic Services.”

 

26.03       No Right to Specific Services.
Landlord shall have no obligation (i) to install any Electronic Services
equipment or facilities, (ii) to make available to Tenant the services of
any particular Electronic Services Provider, (iii) to allow any particular
Electronic Services Provider access to the Building, (iv) to continue to
grant access to an Electronic Services Provider once such provider has been
given access to the Building. Landlord may (but shall not have the obligation
to): (x) install new Lines at the property, (y) create additional
space for Lines at the property, and (z) adopt reasonable and uniform rules and
regulations with respect to Lines.

 

26.04       Limitation of Landlord’s
Responsibility. Tenant acknowledges and agrees that all Electronic Services
desired by Tenant shall be ordered and utilized at the sole expense of Tenant.
Unless Landlord otherwise requests or consents in writing, all of Tenant’s
Electronic Services equipment shall be and remain solely in the Tenant’s
premises and the telephone closet(s) on the floor(s) on which the
Tenant’s premises is located, in accordance with rules and regulations
adopted by Landlord from time to time. Unless otherwise specifically agreed to
in writing, Landlord shall have no responsibility for the maintenance of Tenant’s
Electronic Services equipment, including Lines; nor for any Lines or other
infrastructure to which Tenant’s Electronic Services equipment may be
connected. Tenant agrees that, to the extent any Electronic Services are
interrupted, curtailed or discontinued, Landlord shall have no obligation or
liability with respect thereto and it shall be the sole obligation of Tenant at
its own expense to obtain substitute service. Except to the extent arising from
the intentional or grossly negligent acts of Landlord or Landlord’s agents or
employees, Landlord shall have no liability for damages arising from, and
Landlord does not warrant that Tenant’s use of any Lines will be free from the
following (collectively called “Line Problems”): (x) any eavesdropping or
wire-tapping by unauthorized parties, (y) any failure of any Lines to
satisfy Tenant’s requirements, or (z) any shortages, failures, variations,
interruptions, disconnections, loss or damage caused by the installation,
maintenance, replacement, use or removal of Lines by or for other tenants or
occupants at the property. Under no circumstances shall any Line Problems be
deemed an actual or constructive eviction of Tenant, render Landlord liable to Tenant
for abatement of Rent, or relieve Tenant from performance of Tenant’s
obligations under this Lease. Landlord in no event shall be liable for damages
by reason of loss of profits, business interruption or other consequential
damage arising from any Line Problems.

 

26.05       Necessary Service Interruptions.
Landlord shall have the right, upon reasonable prior notice to Tenant, to
interrupt or turn off Electronic Services facilities in the event of emergency
or as necessary in connection with maintenance, repairs or construction at the
Building or installation of Electronic Services equipment for other Tenants of
the Building or on account of violation by the Electronic Services Provider or
owner of the Electronic Services equipment of any obligation to Landlord or in
the event that Tenant’s use of the Electronic Services infrastructure of the
Building materially interferes with the Electronic Services of other tenants of
the Building.

 

26.06       Removal of Equipment, Wiring and Other
Facilities. Any and all Electronic Services equipment installed in the
Tenant’s Premises or elsewhere in the Building by or on behalf of Tenant,
including Lines, or other facilities for Electronic Services reception or
transmittal, shall be removed prior to the expiration or earlier termination of
the Lease term, by Tenant at its sole cost or, at Landlord’s election, by
Landlord at Tenant’s sole cost, with the cost thereof to be paid as additional
rent. Landlord shall have the right, however, upon written notice to Tenant
given no later than thirty (30) days prior to the expiration or earlier
termination of the Lease term (except that the notice period shall extend to
thirty (30) days beyond the date of termination of the Lease if it is
terminated by either party due to a default by the other), to require Tenant to
abandon and leave in place, without additional payment to Tenant or credit
against rent, any and all Electronic Services Lines and related infrastructure,
or selected components thereof, whether located in the Tenant’s premises or
elsewhere in the Building.

 

26.07       New Provider Installations. In the
event that Tenant wishes at any time to utilize the services of an Electronic
Services Provider whose equipment is not then servicing the Building, no such
Electronic Services Provider shall be permitted to install its Lines or other
equipment within the Building without first securing the prior written approval
of the Landlord. Landlord’s approval shall not be deemed any kind of warranty
or representation by

 

25

 

Landlord,
including, without limitation, any warranty or representation as to the
suitability, competence, or financial strength of the Electronic Services
Provider. Without limitation of the foregoing standard, unless all of the
following conditions are satisfied to Landlord’s satisfaction, it shall be
reasonable for Landlord to refuse to give its approval: (i) Landlord shall
incur no current expense or risk or future expense whatsoever with respect to
any aspect of the Electronic Services Provider’s provision of its Electronic
Services, including without limitation, the costs of installation, materials
and services; (ii) prior to commencement of any work in or about the
Building by the Electronic Services Provider, the Electronic Services Provider
shall supply Landlord with such written indemnities, insurance, financial
statements, and such other items as Landlord reasonably determines to be
necessary to protect its financial interests and the interests of the Building
relating to the proposed activities of the Electronic Services Provider; (iii) the
Electronic Services Provider agrees to abide by such rules and
regulations, Building and other codes, job site rules and such other
requirements as are reasonably determined by Landlord to be necessary to
protect the interests of the Building, the Tenants in the Building and
Landlord, in the same or similar manner as Landlord has the right to protect
itself and the Building with respect to proposed alterations as described in Article IX
of this Lease; (iv) Landlord reasonably determines that, considering other
potential uses for space in the Building, there is sufficient space in the
Building for the placement of all of the provider’s equipment, conduit, Lines
and other materials; (v) the Electronic Services Provider agrees to abide
by Landlord’s requirements, if any, that provider use existing Building
conduits and pipes or use Building contractors (or other contractors approved
by Landlord); (vi) Landlord receives from the Electronic Services Provider
such compensation as is reasonably determined by Landlord to compensate it for
space used in the Building for the storage and maintenance of the Electronic
Services Provider’s equipment, for the fair market value of a Electronic
Services Provider’s access to the Building, for the use of common or core space
within the Building and the costs which may reasonably be expected to be
incurred by Landlord; (vii) the provider agrees to deliver to Landlord
detailed “as built” plans immediately after the installation of the provider’s
equipment is complete; and (viii) all of the foregoing matters are
documented in a written license agreement between Landlord and the provider,
the form and content of which is reasonably satisfactory to Landlord.”

 

26.08       Limit of  Default or Breach.
Notwithstanding any provision of the proceeding paragraphs to the contrary, the
refusal of Landlord to grant its approval to any prospective Electronic
Services Provider shall not be deemed a default or breach by Landlord of its
obligation under this Lease unless and until Landlord is adjudicated to have
acted recklessly or maliciously with respect to Tenant’s request for approval,
and in that event, Tenant shall still have no right to terminate the Lease or
claim an entitlement to rent abatement, but may as Tenant’s sole and exclusive
recourse seek a judicial order of specific performance compelling Landlord to
grant its approval as to the prospective provider in question. The provisions
of this paragraph may be enforced solely by Tenant and Landlord, are not for
the benefit of any other party, and specifically but without limitation, no
telephone or other Electronic Services Provider shall be deemed a third party
beneficiary of this Lease.

 

26.09       Installation and Use of Wireless
Technologies. Tenant shall not utilize any wireless Electronic Services
equipment (other than usual and customary cellular telephones), including
antennae and satellite receiver dishes, within the Tenant’s premises, within
the Building or attached to the outside walls or roof of the Building, without
Landlord’s prior written consent. Such consent may be conditioned in such a
manner so as to protect Landlord’s financial interests and the interests of the
Building, and the other tenants therein, in a manner similar to the
arrangements described in the immediately preceding paragraphs.

 

26.10       Limitation of Liability For Equipment
Interference. In the event that Electronic Services equipment, Lines and
facilities or satellite and antennae equipment of any type installed by or at
the request of Tenant within the Tenant’s premises, on the roof, or elsewhere
within or on the Building causes interference to equipment used by another
party, Tenant shall cease using such equipment, Lines and facilities or
satellite and antennae equipment until the source of the interference is
identified and eliminated and Tenant shall assume all liability related to such
interference. Tenant shall cooperate with Landlord and other parties, to
eliminate such interference promptly. In the event that Tenant is unable to do
so, Tenant will substitute alternative equipment which remedies the situation.
If such interference persists, Tenant shall, at Landlord’s sole discretion,
remove such equipment.

 

26

 

ARTICLE  XXVII- MISCELLANEOUS

 

27.01      Entire Agreement. This Lease contains all of the agreements and
understandings relating to the leasing of the Premises and the obligations of
Landlord and Tenant in connection with such leasing. Landlord has not made, and
Tenant is not relying upon, any warranties, or representations, promises or
statements made by Landlord or any agent of Landlord, except as expressly set
forth herein. This Lease supersedes any and all prior agreements and
understandings between Landlord and Tenant and alone expresses the agreement of
the parties.

 

27.02       Amendments. This Lease shall not
be amended, changed or modified in any way unless in writing executed by
Landlord and Tenant. Landlord shall not have waived or released any of its
rights hereunder unless in writing and executed by Landlord.

 

27.03       Successors. Except as expressly
provided herein, this Lease and the obligations of Landlord and Tenant
contained herein shall bind and benefit the successors and assigns of the parties
hereto.

 

27.04       Force Majeure. Landlord shall
incur no liability to Tenant with respect to, and shall not be responsible for
any failure to perform, any of Landlord’s obligations hereunder if such failure
is caused by any reason beyond the control of Landlord including, but not
limited to, strike, labor trouble, governmental rule, regulations, ordinance,
statute or interpretation, or by fire, earthquake, civil commotion, or failure
or disruption of utility services. The amount of time for Landlord to perform
any of Landlord’s obligations shall be extended by the amount of time Landlord
is delayed in performing such obligation by reason of any force majeure
occurrence whether similar to or different from the foregoing types of
occurrences.

 

27.05       Survival of  Obligations.
Any obligations of Tenant accruing prior to the expiration of the Lease shall
survive the expiration or earlier termination of the Lease, and Tenant shall
promptly perform all such obligations whether or not this Lease has expired or
been terminated.

 

27.06       Light and Air. No diminution or
shutting off of any light, air or view by any structure now or hereafter
erected shall in any manner affect this Lease or the obligations of Tenant
hereunder, or increase any of the obligations of Landlord hereunder.

 

27.07       Governing Law. This Lease shall be
governed by, and construed in accordance with, the laws of the State of
California.

 

27.08       Severability. In the event any
provision of this Lease is found to be unenforceable, the remainder of this
Lease shall not be affected, and any provision found to be invalid shall be
enforceable to the extent permitted by law. The parties agree that in the event
two different interpretations may be given to any provision hereunder, one of
which will render the provision unenforceable, and one of which will render the
provision enforceable, the interpretation rendering the provision enforceable
shall be adopted.

 

27.09       Captions. All captions, headings,
titles, numerical references and computer highlighting are for convenience only
and shall have no effect on the interpretation of this Lease.

 

27.10       Interpretation. Tenant
acknowledges that it has read and reviewed this Lease and that it has had the
opportunity to confer with counsel in the negotiation of this Lease. Accordingly,
this Lease shall be construed neither for nor against Landlord or Tenant, but
shall be given a fair and reasonable interpretation in accordance with the
meaning of its terms and the intent of the parties.

 

27.11       Independent Covenants. Each covenant,
agreement, obligation or other provision of this Lease to be performed by
Tenant are separate and independent covenants of Tenant, and not dependent on
any other provision of the Lease.

 

27.12       Number and Gender. All terms and
words used in this Lease, regardless of the number or gender in which they are
used, shall be deemed to include the appropriate number and gender, as the
context may require.

 

27

 

27.13       Time is of the Essence. Time is of
the essence of this Lease and the performance of all obligations hereunder.

 

27.14       Joint and Several Liabilities. If
Tenant comprises more than one person or entity, or if this Lease is guaranteed
by any party, all such persons shall be jointly and severally liable for
payment of rents and the performance of Tenant’s obligations hereunder. If
Tenant comprises more than one person or entity and fewer than all of the
persons or entities comprising Tenant abandon the Premises, Landlord, at its
sole option, may treat the abandonment by such person or entities as an event
of default and exercise with respect to such persons the rights and remedies
provided in Article XV without affecting the right or obligations of the
persons or entities comprising Tenant which have not abandoned the property.

 

27.15       Exhibits. Exhibits A (Outline of
Premises), B (Work Letter Agreement), C (Rules and Regulations), E (Suite Acceptance
Letter), Rider One (Parking Commitment), and Rider Two (Renewal Option) are
incorporated into this Lease by reference and made a part hereof.

 

27.16       Offer to Lease. The submission of
this Lease to Tenant or its broker or other agent, does not constitute an offer
to Tenant to lease the Premises. This Lease shall have no force and effect
until (a) it is executed and delivered by Tenant to Landlord and (b) it
is fully reviewed and executed by Landlord; provided, however, that, upon
execution of this Lease by Tenant and delivery to Landlord, such execution and
delivery by Tenant, shall, in consideration of the time and expense incurred by
Landlord in reviewing the Lease and Tenant’s credit, constitute an offer by
Tenant to lease the Premises upon the terms and conditions set forth herein
(which offer to Lease shall be irrevocable for twenty (20) business days
following the date of delivery).

 

27.17       No Counterclaim; Choice of  Laws.
It is mutually agreed that in the event Landlord commences any summary
proceeding for non-payment of Rent, Tenant will not interpose any counterclaim
of whatever nature or description in any such proceeding. In addition, Tenant
hereby submits to local jurisdiction in the State of California and agrees that
any action by Tenant against Landlord shall be instituted in the State of
California and that Landlord shall have personal jurisdiction over Tenant for
any action brought by Landlord against Tenant in the State of California.

 

27.18       Electrical Service to the Premises.
Anything set forth in Section 7.01 or elsewhere in this Lease to the
contrary notwithstanding, electricity to the Premises shall not be furnished by
Landlord, but shall be furnished by the approved electric utility company
serving the Building. Landlord shall permit Tenant to receive such service
directly from such utility company at Tenant’s cost (except as otherwise
provided herein) and shall permit Landlord’s wire and conduits, to the extent
available, suitable and safely capable, to be used for such purposes.

 

27.19       Rights Reserved by Landlord.
Landlord reserves the following rights exercisable without notice (except as
otherwise expressly provided to the contrary in this Lease) and without being
deemed an eviction or disturbance of Tenant’s use or possession of the Premises
or giving rise to any claim for set-off or abatement of Rent: (i ) to change
the name or street address of the Building; (ii) to install, affix and
maintain all signs on the exterior and/or interior of the Building; (iii) to
designate and/or approve prior to installation, all types of signs, window
shades, blinds, drapes, awnings or other similar items, and all internal
lighting that may be visible from the exterior of the Premises and,
notwithstanding the provisions of Article IX, the design, arrangement,
style, color and general appearance of the portion of the Premises visible from
the exterior, and contents thereof, including, without limitation, furniture,
fixtures, signs, art work, wall coverings, carpet and decorations, and all
changes, additions and removals thereto, shall, at all times have the
appearance of premises having the same type of exposure and used for
substantially the same purposes that are generally prevailing in comparable
office buildings in the area. Any violation of this provision shall be deemed a
material breach of this Lease; (iv) to change the arrangement of
entrances, doors, corridors, elevators and/or stairs in the Building, provided
no such change shall materially adversely affect access to the Premises; (v) to
grant any party the exclusive right to conduct any business or render any
service in the Building, provided such exclusive right shall not operate to
prohibit Tenant from using the Premises for the purposes permitted under this
Lease; (vi) to prohibit the placement of vending or dispensing

 

28

 

machines
of any kind in or about the Premises other than for use by Tenant’s employees; (vii) to
prohibit the placement of video or other electronic games in the Premises; (viii) to
have access for Landlord and other tenants of the Building to any mail chutes
and boxes located in or on the Premises according to the rules of the
United States Post Office and to discontinue any mail chute business in the
Building; (ix) to close the Building after normal business hours, except
that Tenant and its employees and invitees shall be entitled to admission at
all times under such rules and regulations as Landlord prescribes for
security purposes; (x) to install, operate and maintain security systems
which monitor, by close circuit television or otherwise, all persons entering
or leaving the Building; (xi) to install and maintain pipes, ducts, conduits,
wires and structural elements located in the Premises which serve other parts
or other tenants of the Building; and (xii) to retain at all times master keys
or pass keys to the Premises.

 

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

 

 

	
  LANDLORD:

  	
   

  	
  TENANT:

  
	
  Its:

  	
   

  	
   

  
	
  WILSHIRE-CAMDEN
  ASSOCIATES,

  	
   

  	
  KENNEDY-WILSON, INC.

  
	
  A California limited
  partnership

  	
   

  	
  a California
  corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: HEITMAN PROPERTIES LTD.,
  an Illinois

  	
   

  	
  by::

  	
  /s/ WILLIAM J. McMORROW

  
	
  corporation, its duly
  authorized agent and attorney-in-fact

  	
   

  	
                 CEO

  
	
  /S/ TONY ZIMMERMAN

  	
   

  	
   

  
	
  EXECUTIVE VICE
  PRESIDENT

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /S/ FREEMAN LYLE

  
	
   

  	
   

  	
  CFO

  

 

29

 

RIDER ONE

PARKING
COMMITMENT

 

1. Landlord agrees to cause Century Parking. Inc.,
a California corporation or such other person to whom Landlord shall
hereafter lease the Garage (the “Garage Lessee”) to enter into parking
agreement (“Parking Agreement”) with Tenant, on the Garage Lessee’s standard
form of parking agreement, for the use of up to seventy-eight (78)
parking spaces in the Property Garage (referred to herein as the “Garage”)
during the Term of this Lease, as it may be extended or as it may be terminated
prior to its scheduled expiration date. Tenant shall pay Garage Lessee the
monthly charges established from time to time by the Garage Lessee for parking
in the Garage. The initial monthly or each such space is per the following
schedule: -

 

	
  P1
  Reserved

  	
   

  	
  $

  	
  200.00

  	
   

  
	
  P1
  Unreserved

  	
   

  	
  $

  	
  145.00

  	
   

  
	
  P2
  Unreserved

  	
   

  	
  $

  	
  125.00

  	
   

  
	
  P3 &
  P4 Unreserved

  	
   

  	
  $

  	
  105.00

  	
   

  

 

Notwithstanding
the foregoing, Tenant shall be granted three (3) reserved spaces on the
P-I level at no charge. In addition, up to 35 unreserved spaces on the P-3 and
P-4 levels shall be made available to Tenant at $50.00 per month per stall and
shall increase at the same rate as the rates on the balance of the garage. At
such time as the space currently leased to Wells Fargo Bank becomes occupied or
the average occupancy for the parking garage (monthly and transient parking)
reaches 90%, the rates shall revert to the then current market rates.

 

2.             Tenant acknowledges that the Garage
Lessee is an independent contractor, not affiliated with Landlord, and further
acknowledges that Landlord shall have no liability for claims arising through
acts or omissions of Garage Lessee.

 

3.             If Tenant’s rights under the
Parking Agreement are terminated pursuant to the terms of such Agreement,
Landlord shall have the right to immediately terminate Tenant’s rights under
this Agreement.

 

4.             It is understood and agreed that
the identity of the Garage Lessee may change from time to time during the Term
of the Lease and/or the Parking Agreement. Tenant hereby consents to the
assignment, from time to time, of the initial or any successor Garage Lessee’s
interest in the Parking Agreement to another Garage Lessee or, at Landlord’s
option, Tenant shall, from time to time enter into a new parking agreement with
another Garage Lessee.

 

	
   

  	
  LANDLORD:

  
	
   

  	
  WILSHIRE-CAMDEN
  ASSOCIATES, a California limited partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  HEITMAN PROPERTIES LTD.,
  an Illinois corporation, its duly authorized agent and attorney-in-fact

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Heitman Properties

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
  KENNEDY-WILSON INC., a
  California corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ William J. McMorrow

  
	
   

  	
  Its:

  	
  CEO

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Freeman Lyle, CFO

  

 

 

RIDER TWO

RENEWAL OPTION

 

RENEWAL
OPTION. Tenant
shall have an option (the “Renewal Option”) to renew the initial term with
respect to all (but not less than all) of the Premises demised under or
pursuant to this Lease as of the expiration date of the Term for one additional
term (the “Renewal Term”) of five (5) years, commencing on the day
immediately following the expiration date of the initial Term, under the
following terms and conditions and subject to credit approval by Landlord:

 

(1)     Tenant gives Landlord written notice of its election
to exercise the Renewal Option no earlier than the date which is three hundred
sixty-five (365) days prior to the expiration date of the initial Term and no
later than the date which is two hundred seventy (270) days prior to the
expiration date of the initial Term;

 

(2)     Tenant is not in breach or default under this Lease
either on the date Tenant exercises the Renewal Option or at any time through
and including the proposed commencement date of the Renewal Term.

 

34.02       TERM. If  Tenant timely and properly exercises the Renewal
Option in accordance with the above provisions:

 

(I)      The Rent payable for the Renewal Term shall be based
on the then prevailing rent for similar space in this property, but in no event
shall the rental rate be less than the adjusted rental rate payable under this
Lease on the expiration date of the initial Term. For purposes of the preceding
sentence, “prevailing rental rate” shall mean the total rental then being
quoted by Landlord to third party tenants for reasonably comparable space in
the Building for leases approximately as long, and commencing at approximately
the same time, as the Renewal Term, subject to reasonable adjustment for the
desirability of the applicable floor or area of the Building. If Landlord is
not then quoting rental rates for comparable space, the rates used for purposes
of this provision shall be those rates Landlord would have used if Landlord had
quoted such rates. Landlord’s good faith determination of the “prevailing rental
rate” shall be conclusive and binding as to Landlord and Tenant. If Tenant
timely and properly exercises the Renewal Option, Landlord agrees to give
Tenant written notice setting forth the prevailing rental rate, which notice
shall be given prior to the commencement date of the Renewal Term.

 

(2)     Tenant shall have no further options to renew the
initial Term of this Lease beyond the expiration date of the Renewal Term.

 

(3)     Landlord will not be required to give any economic
concession in connection with the exercise of this option. Without limiting the
generality of the foregoing, Landlord will not be obligated to perform or give
an allowance for leasehold improvements.

 

(4)     Except as otherwise provided herein, all of the terms
and provisions of this Lease shall remain the same and in full force and effect
during the Renewal Term.

 

AMENDMENT. If Tenant exercises the Renewal Option,
Landlord and Tenant shall execute and deliver an amendment to this Lease (or,
at Landlord’s option, a new lease on the form then in use for the Building)
reflecting the lease of the Premises by Landlord to Tenant for the Renewal Term
on the terms provided above, which amendment (or new lease, as the case may be)
shall be executed and delivered prior to the commencement date of the Renewal
Term.

 

TERMINATION. The Renewal Option shall automatically
terminate and become null and void and of no force or effect upon the earlier
to occur of (I) the
expiration or termination of this Lease, (2) the
termination of the Tenant’s right to possession of the Premises, (3) the assignment of this Lease by
Tenant, (4) the sublease by Tenant of all of the Premises, or (5) the
failure of Tenant to timely or properly exercise the Renewal Option or (6) the
occurrence of an Event of Default by Tenant under the Lease.

 

Exhibit “A”

 

 

EXHIBIT
B

WORK LETTER AGREEMENT

 

Landlord
Performs Work

Allowance

 

This
Work Letter Agreement (“Work Letter”) is executed simultaneously with that
certain Office Lease (the “Lease”) between KENNEDY-WILSON INC., a California
corporation as “Tenant”, and WILSHIRE-CAMDEN ASSOCIATES, a California limited
partnership, as “Landlord”, relating to demised premises (“Premises”) at the
building commonly known as HEITMAN CENTRE BEVERLY HILLS (the “Building”), which
Premises are more fully identified in the Lease. Capitalized terms used herein,
unless otherwise defined in this Work Letter, shall have the respective
meanings ascribed to them in the Lease.

 

For and in
consideration of the agreement to lease the Premises and the mutual covenants
contained herein and in the Lease, Landlord and Tenant hereby agree as follows:

 

I.              Tenant’s Initial Plans; the Work. Tenant desires Landlord to perform
certain leasehold improvement work in the Premises in substantial accordance
with the plan or plans (collectively, the “Initial Plan”) prepared by
Architectural Charettes dated ________________________ and last revised ________________________,a
copy or copies of which is/are attached hereto as Schedule I. Such work, as
shown in the Initial Plan and as more fully detailed in the Working Drawings
(as defined and described in Paragraph 2 below), shall be hereinafter referred
to as the “Work”. Not later than August 15, 1998, Tenant shall furnish to
Landlord such additional plans, drawings, specifications and finish details as
Landlord may reasonably request to enable Landlord’s architects and engineers
to prepare mechanical, electrical and plumbing plans and to prepare the Working
Drawings, including a final telephone layout and special electrical connection
requirements, if any. All plans, drawings, specifications and other details
describing the Work which have been or are hereafter furnished by or on behalf
of Tenant shall be subject to Landlord’s approval, which Landlord agrees shall
not be unreasonably withheld. Landlord shall not be deemed to have acted
unreasonably if it withholds its approval of any plans, specifications,
drawings or other details or of any Additional Work (as defined in Paragraph 7
below) because, in Landlord’s reasonable opinion, the work, as described in any
such item, or the Additional Work, as the case may be: (a) is likely to
adversely affect Building systems, the structure of the Building or the safety
of the Building and/or its occupants; (b) might impair Landlord’s ability
to furnish services to Tenant or other tenants in the Building; (c) would
increase the cost of operating the Building; (d) would violate any
governmental laws, rules or ordinances (or interpretations thereof); (e) contains
or uses hazardous or toxic materials or substances; (f) would adversely
affect the appearance of the Building; (g) might adversely affect another
tenant’s premises; (h) is prohibited by any ground lease affecting the
Building or any mortgage, trust deed or other instrument encumbering the Building;
or (i) is likely to be substantially delayed because of unavailability or
shortage of labor or materials necessary to perform such work or the
difficulties or unusual nature of such work. The foregoing reasons, however,
shall not be the only reasons for which Landlord may withhold its approval,
whether or not such other reasons are similar or dissimilar to the foregoing.
Neither the approval by Landlord of the Work or Initial Plan or any other
plans, drawings, specifications or other items associated with the Work nor
Landlord’s performance, supervision or monitoring of the Work shall constitute
any warranty by Landlord to Tenant of the adequacy of the design for Tenant’s
intended use of the Premises. Landlord shall be entitled to a payment of 5% of the cost associated with the
completion of Tenant’s buildout, which cost shall include architectural and
engineering and similar fees and all costs associated with the construction of
the space as charged by the general contractor selected to perform the work.
This payment is for the coordination and day to day supervision performed by
Landlord’s staff in completing Tenant’s buildout. This payment will be part of
the Tenant Allowance package.

 

2.             Working Drawings. If necessary for the performance of the Work
and not included as part of the Initial Plan attached hereto, Landlord shall
prepare or cause to be prepared final working drawings and specifications for
the Work (the “Working Drawings”) based on and consistent with the Initial Plan
and the other plans, drawings, specifications, finish details and other
information furnished by Tenant to Landlord and approved by Landlord pursuant
to Paragraph 1 above. So long as the Working Drawings are consistent with the
Initial Plan, Tenant shall approve the Working Drawings within three (3) days
after receipt of same from Landlord by initialing and returning to Landlord
each sheet of the Working Drawings or by executing Landlord’s approval form
then in use, whichever method of approval Landlord may designate.

 

 

3.             Performance of the Work;
Allowance. Except
as  hereinafter
provided to the contrary, Landlord
shall cause the performance of the Work using (except as may be stated or shown
otherwise in the Working Drawings) building standard materials, quantities and
procedures then in use by Landlord (“Building Standards”). Landlord shall pay
for a portion of the “Cost of Work” (as defined below) in an amount not to
exceed $390,855.00 (such amount being $15.00 per rentable square foot of the
Premises which is to be improved, as described in the Working Drawings) (the “Allowance”),
and Tenant shall pay for the entire Cost of the Work in excess of the
Allowance. Tenant shall not be entitled to any credit, abatement or payment
from Landlord in the event that the amount of the Allowance specified above
exceeds the Cost of the Work. For purposes of this Agreement, the term “Cost of
the Work” shall mean and include any and all costs and expenses of the Work,
including, without limitation, the cost of the Working Drawings and of all
labor (including overtime) and materials constituting the Work. Landlord shall
also pay for one preliminary space plan at a cost not to exceed $.10 per
rentable square foot of the Premises ($2,605.70) Tenant shall have until the
end of the 24th month of the initial lease term to spend the tenant improvement
allowance. The benefit of any portion of the Allowance that remains unspent
after the twenty-fourth month of the initial Lease Term shall inure to
Landlord.

 

4.             Payment. Prior to commencing the Work, Landlord shall submit
to Tenant a written statement of the total Cost of the Work (which shall
include the amount of any overtime projected as necessary to substantially
complete the Work by the Commencement Date specified in the Lease) as then
known by Landlord, and such statement shall indicate the amount, if any, by
which the total Cost of the Work exceeds the Allowance (the “Excess Costs”).
Tenant agrees, within three (3) days after submission to it of such
statement, to execute and deliver to Landlord, in the form then in use by
Landlord, an authorization to proceed with the Work, and Tenant shall also then
pay to Landlord an amount equal to the Excess Costs. No Work shall be commenced
until Tenant has fully complied with the preceding provisions of this Paragraph
4. In the event, and each time, that any change order by Tenant, unknown field
condition, delay caused by acts beyond Landlord’s control or other event or
circumstance causes the Cost of the Work to be increased after the time that
Landlord delivers to Tenant the aforesaid initial statement of the Cost of the
Work, Landlord shall deliver to Tenant a revised statement of the total Cost of
the Work, indicating the revised calculation of the Excess Costs, if any.
Within three (3) days after submission to Tenant of any such revised
statement, Tenant shall pay to Landlord an amount equal to the Excess Costs, as
shown in such revised statement, less the amounts previously paid by Tenant to
Landlord on account of the Excess Costs, and Landlord shall not be required to
proceed further with the Work until Tenant has paid such amount. Delays in the
performance of the Work resulting from the failure of Tenant to comply with the
provisions of this Paragraph 4 shall be deemed to be delays caused by Tenant.

 

5.             Substantial Completion. Landlord shall cause the Work to be “substantially
completed” on or before the scheduled date of commencement of the term of the
Lease as specified in Section 1.05 of the Lease, subject to delays caused
by strikes, lockouts, boycotts or other labor problems, casualties,
discontinuance of any utility or other service required for performance of the
Work, unavailability or shortages of materials or other problems in obtaining
materials necessary for performance of the Work or any other matter beyond the
control of Landlord (or beyond the control of Landlord’s contractors or
subcontractors performing the Work) and also subject to “Tenant Delays” (as
defined and described in Paragraph 6 of this Work Letter). The Work shall be
deemed to be “substantially completed” for all purposes under this Work Letter
and the Lease if and when Landlord’s architect issues a written certificate to
Landlord and Tenant, certifying that the Work has been substantially completed
(i.e., completed except for “punchlist” items listed in such architect’s
certificate) in substantial compliance with the Working Drawings, or when
Tenant first takes occupancy of the Premises, whichever first occurs. If the
Work is not deemed to be substantially completed on or before the scheduled
date of the commencement of the term of the Lease as specified in Section 1.05
of the Lease, (a) Landlord agrees to use reasonable efforts to complete
the Work as soon as practicable thereafter, (b) the Lease shall remain in
full force and effect, (c) Landlord shall not be deemed to be in breach or
default of the Lease or this Work Letter as a result thereof and Landlord shall
have no liability to Tenant as a result of any delay in occupancy (whether for
damages, abatement of Rent or otherwise), and (d) except in the event of
Tenant Delays, and notwithstanding anything contained in the Lease to the
contrary, the Commencement Date of the Lease Term as specified in Section 1.05
of the Lease shall be extended to the date on which the Work is deemed to be
substantially completed and the Expiration Date of the Lease Term as specified
in Section 1.06 of the Lease shall be extended by an equal number of days.
At the request of either Landlord or Tenant in the event of such

 

2

 

extensions
in the commencement and expiration dates of the term of the Lease, Tenant and
Landlord shall execute and deliver an amendment to the Lease reflecting such
extensions. Landlord agrees to use reasonable diligence to complete all
punchlist work listed in the aforesaid architect’s certificate promptly after
substantial completion.

 

6.             Tenant Delays. There shall be no extension of the scheduled
commencement or expiration date of the term of the Lease (as otherwise
permissibly extended under Paragraph 5 above) if the Work has not been
substantially completed on said scheduled commencement date by reason of any
delay attributable to Tenant (“Tenant Delays”), including without limitation:

 

(i)            the failure of Tenant to furnish all or any plans,
drawings, specifications, finish details or the other information required
under Paragraph 1 above on or before the date stated in Paragraph 1;

 

(ii)           the failure of Tenant to grant approval of the Working
Drawings within the time required under Paragraph 2 above;

 

(iii) the
failure of Tenant to comply with the requirements of Paragraph 4 above;

 

(iv) Tenant’s
requirements for special work or materials, finishes, or installations other
than the Building Standards or Tenant’s requirements for special construction
staging or phasing;

 

(v)           the performance of any Additional Work (as defined in
Paragraph 7 below) requested by Tenant or the performance of any work in the
Premises by any person, firm or corporation employed by or on behalf of Tenant,
or any failure to complete or delay in completion of such work; or

 

(vi) any
other act or omission of Tenant that causes a delay.

 

7.             Additional Work. Upon Tenant’s request and submission by Tenant (at
Tenant’s sole cost and expense) of the necessary information and/or plans and
specifications for work other than the Work described in the Working Drawings (“Additional
Work”) and the approval by Landlord of such Additional Work, which approval
Landlord agrees shall not be unreasonably withheld, Landlord shall perform such
Additional Work, at Tenant’s sole cost and expense, subject, however, to the
following provisions of this Paragraph 7. Prior to commencing any Additional
Work requested by Tenant, Landlord shall submit to Tenant a written statement
of the cost of such

 

(c)          Any person signing this Work Letter on behalf of
Tenant warrants and represents he/she has authority to sign and deliver this
Work Letter and bind Tenant.

 

(d)           Notices under this Work Letter shall be given in the
same manner as under the Lease.

 

(e)           The headings set forth herein are for convenience
only.

 

(f)            This Work Letter sets forth the entire agreement of
Tenant and Landlord regarding the Work.

 

(g)           In the event that the final working drawings and
specifications are included as part of the Initial Plan attached hereto, or in
the event Landlord performs the Work without the necessity of preparing working
drawings and specifications, then whenever the term “Working Drawings” is used
in this Agreement, such term shall be deemed to refer to the Initial Plan and
all supplemental plans and specifications approved by Landlord.

 

II.            Exculpation of Landlord and Heitman. Notwithstanding
anything to the contrary contained in this Work Letter, it is expressly
understood and agreed by and between the parties hereto that:

 

(a)           The recourse of Tenant or its successors or assigns
against Landlord with respect to the alleged breach by or on the part of
Landlord of any representation, warranty, covenant, undertaking or agreement

 

3

 

contained
in this Work Letter (collectively “Landlord’s Work Letter Undertakings”) shall
extend only to Landlord’s interest in the real estate, of which the Premises
demised under the Lease are a part (hereinafter, “Landlord’s Real Estate”) and
not to any other assets of Landlord or its constituent partners; and

 

(b)           Except to the extent of Landlord’s interest in
Landlord’s Real Estate, no personal liability or personal responsibility of any
sort with respect to any of Landlord’s Work Letter Undertakings or any alleged
breach thereof is assumed by, or shall at any time be asserted or enforceable
against, Landlord, its constituent partners, Heitman Capital Management
Corporation or Heitman Properties Ltd., or against any of their respective
directors, officers, employees, agents, constituent partners, beneficiaries,
trustees or representatives.

 

IN WITNESS WHEREOF, this
Work Letter Agreement is executed as of the 19th Day of August,l998.

 

 

	
  TENANT:

  	
   

  	
  LANDLORD:

  
	
  KENNEDY-WILSON, INC.

  	
   

  	
   

  
	
  a California Corporation

  	
   

  	
   

  
	
  by:

  	
  /s/ William J. McMorrow,
  CEO

  	
   

  	
  WILSHIRE-CAMDEN
  ASSOCIATES,

  
	
   

  	
   

  	
  a California limited
  partnership

  
	
  by:

  	
  /s/ Freeman Lyle, CFO

  	
   

  	
  By: HEITMAN PROPERTIES LTD., an Illinois

  
	
   

  	
   

  	
  corporation, its duly
  authorized agent and

  
	
   

  	
   

  	
  attorney-in-fact

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  

 

4

 

 

EXHIBIT
C

RULES AND REGULATIONS

 

1.             The sidewalks, entrances, passages,
courts, elevators, vestibules, stairways, corridors or halls shall not be
obstructed or used for any purpose other than ingress and egress. The halls,
passages, entrances, elevators, stairways, balconies and roof are not for the
use of the general public, and Landlord shall in all cases retain the right to
control or prevent access thereto by all persons whose presence in the judgment
of Landlord shall be prejudicial to the safety, character, reputation or
interests of Landlord and its tenants, provided that nothing herein contained
shall be construed to prevent such access by persons with whom the tenant
normally deals in the ordinary course of its business unless such persons are
engaged in illegal activities. No tenant and no employees of any tenant shall
go upon the roof of the Building without the written consent of Landlord,

 

2.             No awnings or other projections
shall be attached to the outside walls or surfaces of the Building nor shall
the interior or exterior of any windows be coated without the prior written
consent of Landlord. Except as otherwise specifically approved by Landlord, all
electrical ceiling fixtures hung in offices or spaces along the perimeter of
the Building must be fluorescent and of a quality, type, design and bulb color
approved by Landlord. Tenant shall not place anything or allow anything to be
placed near the glass of any window, door, partition or wall which may appear
unsightly from outside the Premises,

 

3.             No sign, picture, plaque,
advertisement, notice or other material shall be exhibited, painted, inscribed
or affixed by any tenant on any part of, or so as to be seen from the outside
of, the Premises or the Building without the prior written consent of Landlord.
In the event of the violation of the foregoing by any tenant, Landlord may
remove the same without any liability, and may charge the expense incurred in
such removal to the tenant violating this rule. Interior signs on doors and the
directory tablet shall be inscribed, painted or affixed for each tenant by
Landlord at the expense of such tenant, and shall be of a size, color and style
acceptable to Landlord.

 

4.             The toilets and wash basins and
other plumbing fixtures shall not be used for any purpose other than those for
which they were constructed, and no sweepings, rubbish, rags or other
substances shall be thrown therein. All damage resulting from any misuse of the
fixtures shall be borne by tenant who, or whose servants, employees, agents,
visitors or licensees, shall have caused the same.

 

5.             No tenant or its officers, agents, employees or
invitees shall mark, paint, drill into, or in any way deface any part of the
Premises or the Building. No boring, cutting or stringing of wires or laying of
linoleum or other similar floor coverings shall be permitted except with the
prior written consent of Landlord and as Landlord may direct.

 

6.             No bicycles, vehicles or animals of
any kind shall be brought into or kept in or about the Premises and no cooking
shall be done or permitted by any tenant on the Premises except that microwave
cooking in a ULapproved microwave oven and the preparation of coffee, tea, hot
chocolate and similar items for the tenant and its employees and business
visitors shall be permitted. Tenant shall not cause or permit any unusual or
objectionable odors to escape from the Premises. -

 

7.             The Premises shall not be used for
manufacturing or for the storage of merchandise except as such storage may be
incidental to the use of the Premises for general office purposes. No tenant
shall engage or pay any employees on the Premises except those actually working
for such tenant on the Premises nor advertise for laborers giving an address at
the Premises. The Premises shall not be used for lodging or sleeping or for any
immoral or illegal purposes.

 

8.             No tenant or its officers, agents,
employees or invitees shall make, or permit to be made any unseemly or
disturbing noises, sounds or vibrations or disturb or interfere with occupants
of this or neighboring buildings or Premises or those having business with them
whether by the use of any musical instrument, radio, phonograph, unusual noise,
or in any other way.

 

9.             No tenant or its officers, agents,
employees or invitees shall throw anything out of doors, balconies or down the
passageways.

 

1

 

10.           Tenant shall not maintain armed
security in or about the Premises nor possess any weapons, explosives,
combustibles or other hazardous devices in or about the Building and/or
Premises.

 

11.           No tenant or its officers, agents,
employees or invitees shall at any time use, bring or keep upon the Premises
any flammable, combustible, explosive, foul or noxious fluid, chemical or
substance, or do or permit anything to be done in the leased Premises, or bring
or keep anything therein, which shall in any way increase the rate of fire
insurance on the Building, or on the property kept therein, or obstruct or
interfere with the rights of other tenants, or in any way injure or annoy them,
or conflict with the regulations of the Fire Department or the fire laws, or
with any insurance policy upon the Building, or any part thereof, or with any rules and
ordinances established by the Board of Health or other governmental authority.

 

12.           No additional locks or bolts of any
kind shall be placed upon any of the doors or windows by any tenant, nor shall
any changes be made in existing locks or the mechanism thereof. Each tenant
must, upon the tennination of this tenancy, restore to Landlord all keys of
stores, offices, and toilet rooms, either furnished to, or otherwise procured
by, such tenant, and in the event of the loss of any keys so furnished, such
tenant shall pay to Landlord the cost of replacing the same or of changing the
lock or locks opened by such lost key if Landlord shall deem it necessary to
make such change.

 

13.           All removals, or the carrying in or
out of any safes, freight. furniture, or bulky matter of any description must
take place during the hours which Landlord may determine form time to time. The
moving of safes or other fixtures or bulky matter of any kind must be made upon
previous notice to the manager of the Building and under his or her
supervision, and the persons employed by any tenant for such work must be
acceptable to Landlord. Landlord reserves the right to inspect all safes,
freight or other bulky articles to be brought into the Building and to exclude
from the Building all safes, freight or other bulky articles which violate any
of these Rules and Regulations or the Lease of which these Rules and
Regulations are a part. Landlord reserves the right to prohibit or impose
conditions upon the installation in the Premises of heavy objects which might
overload the building floors. Landlord will not be responsible for loss of or
damage to any safes, freight, bulky articles or other property from any cause,
and all damage done to the Building by moving or maintaining any such safe or
other property shall be repaired at the expense of the tenant.

 

14.           No tenant shall purchase or otherwise
obtain for use in the Premises water, ice, towel, vending machine, janitorial,
maintenance or other like services, or accept barbering or boot blacking
services, except from persons authorized by Landlord, and at hours and under
regulations fixed by Landlord.

 

15.           Landlord shall have the right to
prohibit any advertising by any tenant which, in Landlord’s opinion, tends to
impair the reputation of the Building or its desirability as an office building
and upon written notice from Landlord any tenant shall refrain from or
discontinue such advertising. No tenant shall use any graphic image of the
Building or any part of the Building for advertising or public relations
without Landlord’s written permission.

 

16.           Landlord reserves the right to
exclude from the Building between the hours of 10:00 p.m. and 7:00 a.m.
and at all hours of Saturdays, Sundays and legal holidays all persons who do
not present a pass signed by Landlord. Landlord shall furnish passes to persons
for whom any tenant requests the same in writing. Each tenant shall be
responsible for all persons for whom he requests passes and shall be liable to
Landlord for all acts of such persons. Landlord shall in no case be liable for
damages for any error with regard to the admission to or exclusion from the
Building of any person. In the case of invasion, mob, riot, public excitement
or other commotion, Landlord reserves the right to prevent access to the
Building during the continuance of the same, by closing of the gates and doors
or otherwise, for the safety of the tenants and others and the protection of
the Building and the property therein.

 

17.           Any outside contractor employed by
any tenant, shall, while in the Building, be subject to the prior written
approval of Landlord and subject to the Rules and Regulations of the
Building. Tenant shall be responsible for all acts of such persons and Landlord
shall not be responsible for any loss or damage to property in the Premises,
however occurring.

 

2

 

18.           All doors opening onto public
corridors shall be kept closed, except when in use for ingress and egress, and
left locked when not in use.

 

19.           The requirements of tenants will be
attended to only upon application to the Office of the Building.

 

20.           Canvassing, soliciting and peddling
in the Building are prohibited and each tenant shall cooperate to prevent the
same.

 

21.           All office equipment of any
electrical or mechanical nature shall be placed by tenants in the Premises in
setting approved by Landlord, to absorb or prevent any vibration, noise or
annoyance.

 

22.           No air conditioning unit or other
similar apparatus shall be installed or used by any tenant without the written
consent of Landlord.

 

23.           There shall not be used in any space,
or in the public hails of the Building either by any tenant or others, any hand
trucks except those equipped with rubber tires and side guards.

 

24.           Landlord will direct electricians as
to where and how telephone and telegraph wires are to be introduced. No boring
or cutting for wires or stringing of wires will be allowed without written
consent of Landlord. The location of telephones, call boxes and other office
equipment affixed to the Premises shall be subject to the approval of Landlord.
All such work shall be effected pursuant to permits issued by all applicable
governmental authorities having jurisdiction.

 

25.           No vendor with the intent of selling
such goods shall be allowed to transport or carry beverages, food, food
containers, etc., on any passenger elevators. The transportation of such items
shall be via the service elevators in such manner as prescribed by Landlord.

 

26.           Tenants shall cooperate with Landlord
in the conservation of energy used in or about the Building, including without
limitation, cooperating with Landlord in obtaining maximum effectiveness of the
cooling system by closing drapes or other window coverings when the sun’s rays
fall directly on windows of the Premises, and closing windows and doors to
prevent heat loss. Tenant shall not obstruct, alter or in any way impair the
efficient operation of Landlord’s heating, lighting, ventilating and air
conditioning system and shall not place bottles, machines, parcels or any other
articles on the induction unit enclosure so as to interfere with air flow.
Tenant shall not tamper with or change the setting of any thermostats or
temperature control valves, and shall in general use heat, gas, electricity,
air conditioning equipment and heating equipment in a manner compatible with
sound energy conservation practices and standards.

 

27.           All parking ramps and areas,
pedestrian walkways, plazas, and other public areas forming a part of the
Building shall be under the sole and absolute control of Landlord with the
exclusive right to regulate and control these areas. Tenant agrees to conform
to the rules and regulations that may be established by Landlord for these
areas from time to time.

 

28.           Landlord reserves the right to
exclude or expel from the Building any person who, in the judgment of Landlord,
is intoxicated or under the influence of liquor or drugs, or who shall in any
manner do any act in violation of any of the rules and regulations of the
Building.

 

29.           Tenant and its employees, agents,
subtenants, contractors and invitees shall comply with all applicable “no-smoking”
ordinances and, irrespective of such ordinances, shall not smoke or permit
smoking of cigarettes, cigars or pipes outside of Tenant’s Premises (including
plaza areas) in any portions of the Building except areas specifically
designated as smoking areas by Landlord. If required by applicable ordinance,
Tenant shall provide smoking areas within Tenant’s Premises.

 

3

 

EXHIBIT
D

 

INTENTIONALLY
OMITTED

 

 

EXHIBIT
E

Suite Acceptance
Agreement

 

Building Name/Address:

 

Tenant Name:

 

Tenant Code:                                                                     
Suite Number:                                                                                   

 

Management’s
Tenant Contact:                                                                                   Phone:                         

 

Gentlemen:

 

As a representative of the above referenced
tenant, I/we have physically inspected the suite noted above and its improvements
with                                                                 ,
a representative of                                                                   
(name of HPL Corporation). I/we accept the suite improvements as to compliance
with all the requirements indicated in our lease, also including the following
verified information below:

 

Lease Commencement Date:                                                           ,Occupancy
Date                  

 

Lease Rent Start Date*:                                                               ,Actual
Rent Start*:                  

 

Lease Expiration Date:                                                               ,Actual
Expiration Date:                  

 

Date Keys Delivered:                                               

 

Items requiring attention:

 

*lf these dates are not the same, attach
documentation.

 

NOTE:               This inspection is to be made prior to tenant move-in.

 

Very truly yours,

	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  

 

Distribution

 

Tenant

Tenant Lease File

Leasing Manager:                                            

HPL Document Control:                                            

 

Regional Construction Manager:                                            

Regional Engineering Manager:Exhibit 10.96

 

FIRST
AMENDMENT TO LEASE

(EXPANSION)

 

THIS FIRST AMENDMENT TO
LEASE (the “First Amendment”) is made as of the 5th day of March, 1999, by and
between WILSHIRE-CAMDEN ASSOCIATES, a California limited partnership (“Landlord”)
and KENNEDY-WILSON INC., a Delaware corporation (“Tenant”)

 

RECITALS:

 

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

 

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

 

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

 

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

 

2.                                         ADDITIONAL
PREMISES. Landlord hereby leases to Tenant and Tenant hereby leases from
Landlord that certain premises (the “Additional Premises”) consisting of
approximately 1,343 square feet of rentable area located on the Garden Level of
the Building, as shown on Exhibit A-1 attached hereto and known
collectively as Suite GL-1SA and Suite GL-9. The Lease is hereby
amended to add the Additional Premises to the Premises as demised and defined
in the Lease upon the same terms and provisions specified in the Lease, except
that:

 

(a)                                    The Base Rent
for the Additional Premises shall be Twenty-Five Thousand Seven Hundred
Eighty-Five and 60/100 ($25,785.60)[an annual rate of $19.20 per square foot of
Rentable Area of the Premises], payable in equal monthly installments of Two
Thousand One Hundred Forty-Eight and 80/100 ($2,148.80).

 

(b)                                   Intentionally
omitted.

 

(c)                                    The lease term
for the Additional Premises shall commence on March 1, 1999 (the “Additional
Premises Commencement Date”), and end on the last day of the Lease Term, August 31,
2003 (the “Additional Premises Lease Term”), unless sooner terminated as
provided in the Lease.

 

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

 

 

the
Additional Premises Lease Term.

 

(e)            The term “Tenant’s Proportionate Share”, as defined and
used in the Lease, shall mean one-half of one percent (0.50%) for the
Additional Premises.

 

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

 

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

 

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

 

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

 

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

 

(k)            Landlord hereby acknowledges that Tenant is a Delaware
corporation, although Tenant was identified as a California corporation in the
Lease.

 

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

 

4.              CONDITION OF THE ADDITIONAL PREMISES; IMPROVEMENT
ALLOWANCE. No promises by Landlord to alter, remodel, improve, repair,
redecorate or clean the Additional Premises, or any part thereof, have been
made, and no representation respecting the condition of the Additional Premises
or the Building or with respect to the suitability or fitness of either for any
purpose, has been made to Tenant, other than as defined in the attached Exhibit “B”
(“Work Letter”).

 

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

 

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

 

7.              EFFECT OF AMENDMENT.         As
amended by this First Amendment, the Lease shall remain in full force and
effect and is ratified by Landlord and Tenant. This First Amendment contains
the entire agreement of the parties with respect to the 

 

 

Additional Premises, and all preliminary
negotiations with respect thereto are merged into and superseded by this First
Amendment.

 

8.              EXCULPATION OF LANDLORD AND KENNEDY-WILSON.

 

Notwithstanding anything to
the contrary contained in this First Amendment or in any exhibits, Riders or
addenda hereto attached (collectively the “Lease Documents”), it is expressly understood
and agreed by and between the parties hereto that: (a) the recourse of
Tenant or its successors or assigns against Landlord with respect to the
alleged breach by or on the part of Landlord of any representation, warranty,
covenant, undertaking or agreement contained in any of the Lease Documents or
otherwise arising out of Tenant’s use of the Premises or the Building
(collectively, “Landlord’s Lease Undertakings”) shall extend only to Landlord’s
interest in the real estate of which the Premises demised under the Lease
Documents are a part (“Landlord’s Real Estate”) and not to any other assets of
Landlord or its beneficiaries; and (b) except to the extent of Landlord’s
interest in Landlord’s Real Estate, no personal liability or personal
responsibility of any sort with respect to any of Landlord’s Lease Undertakings
or any alleged breach thereof is assumed by, or shall at any time be asserted
or enforceable against, Landlord, its beneficiaries, Heitman Capital Management
LLC or Kennedy-Wilson Properties Ltd., or against any of their respective
directors, officers, employees, agents, constituent partners, beneficiaries,
trustees or representatives.

 

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

 

	
  TENANT:

  	
   

  
	
  KENNEDY-WILSON [NC.,

  	
   

  
	
  a
  Delaware corporation

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /S/ FREEMAN LYLE

  	
   

  	
   

  
	
   

  	
   

  
	
  Its:

  	
   

  
	
   

  	
   

  
	
  LANDLORD:

  	
   

  
	
   

  	
   

  
	
  WILSHIRE-CAMDEN
  ASSOCIATES,

  	
   

  
	
  a
  California limited partnership

  	
   

  
	
   

  	
   

  
	
  By:

  	
  KENNEDY-WILSON
  PROPERTIES, LTD.,

  	
   

  
	
   

  	
  an
  Illinois corporation, its duly authorized agent, and attorney-in-fact

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Tony Zimmerman

  	
   

  	
   

  
					

 

 

EXHIBIT
B

 

WORK LETTER AGREEMENT

 

[Landlord Performs Work]

[Minor Work Only]

 

This AGREEMENT made as of the 5TH day of March, 1999, between WILSHIRE-CAMDEN ASSOCIATES, a
California limited partnership (‘Landlord”) and KENNEDY-WILSON INC., a Delaware
corporation (“Tenant”).

 

Reference is made to the First Amendment to Lease
dated March 5, 1999 (the “Lease”)
for premises known as Suite 220 (the “Premises”), located in the property
known as 9601 WILSHIRE (the “Property”).

 

Landlord agrees to perform the following items of work
(the “Work”) in the Premises (describe work and/or refer to any drawings or
plans that have been prepared, if they are final):

 

I.              Paint the Premises using building
standard paint.

2.             Carpet the Premises using building standard carpet

3.             Minor construction in accordance
with mutually acceptable plans.

 

Landlord shall pay the frill cost of the Work, not to exceed $10.00 per rentable square
foot or $13,430.00.

 

If Landlord requires further choices by Tenant
respecting the above Work (e.g.,
color choices respecting the
above items), Tenant shall promptly
choose the same from such choices, if any, that
Landlord makes available to
Tenant as “building standard.” If any
such further choices are
required, the parties agree that Tenant
has heretofore been provided an
opportunity to view the
available choices and Tenant agrees to
make such choices by March I, 1999. If Tenant fails to do so by such date, Landlord may make such
choices for Tenant.

 

Landlord will use reasonable efforts to complete the
Work by the Commencement Date under the Lease or within 90 days thereafter,
subject to further delays beyond Landlord’s reasonable control (as may be
further described in the Lease); provided, notwithstanding anything to the
contrary contained in the Lease, delays in the Work hereunder shall not
postpone the commencement of Rent under any circumstances whether the delay is
caused by Tenant or Tenant’s contractors, agents or employees, or the delay is
otherwise beyond Landlord’s reasonable control (as may be further described in
the Lease), or for any other reason whatsoever Tenant acknowledges that the
Work may occur during normal business hours while Tenant is in occupancy of the
Premises and that no interference to Tenant’s business operations in, or use
of, the Premises shall entitle Tenant to any abatement of rent or any other
concession, or give rise to any claim against, or liability of, Landlord.

 

Notwithstanding anything to the contrary contained in
this Work Letter, it is expressly understood and agreed by and between the
pasties hereto that: (a) The recourse of Tenant or its successors or
assigns against Landlord with respect to the alleged breach by or on the past
of Landlord of any representation, warranty, covenant, undertaking or agreement
contained in this Work Letter (collectively, “Landlord’s Work Letter
Undertakings”) shall extend only to Landlord’s interest in the real estate of
which the Premises demised under the Lease are a part hereinafter, “Landlord’s
Real Estate”) and not to any other assets of Landlord or its constituent
partners; and (b) Except to the extent of Landlord’s interest in Landlord’s
Real Estate, no personal liability or personal responsibility of any sort with
respect to any of Landlord’s Work Letter Undertakings or any alleged breach
thereof is assumed by, or shall at any time be asserted or enforceable against,
Landlord, its constituent partners, Heitman Capital Management LLC or
Kennedy-Wilson Properties lid., or against any of their respective directors,
officers, shareholders, employees, agents, constituent partners, beneficiaries,
trustees or representatives.

 

	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  WILSHIRE-CAMDEN ASSOCIATES,

  
	
   

  	
  a California limited
  partnership

  
	
   

  	
  By; KENNEDY-WILSON
  PROPERTIES LW., an Illinois

  
	
   

  	
  corporation,
  its duly authorized agent and

  
	
   

  	
  attorney-in-fact

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