CERRITOS TOWNE CENTER GROUND LEASE This Ground Lease Lease is

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CERRITOS TOWNE CENTER GROUND LEASE This ..., Cerritos Towne Center, Cerritos, CA, Cerritos Center, Towne Center, Los Cerritos, Los Angeles, city of Cerritos, Center for the Performing Arts, Cerritos, California

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CERRITOS TOWNE CENTER GROUND LEASE This Ground Lease (“Lease”) is dated for identification purposes as of the ____th day of _______________, 2001 and is entered into by and between the following (collectively, the “Parties”): THE CERRITOS REDEVELOPMENT AGENCY, a public body corporate and politic (“Landlord”), and __________________________, a ___________________________ (“Tenant”). In consideration of the payments to be made hereunder and the covenants and agreements contained herein, and as provided under that certain Disposition and Development Agreement for Cerritos Towne Center Area Development Plan 2 - Parcel 10, dated as of _______________, 2006, between the Parties, as the same may have been previously or is hereafter amended (“DDA”), Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the real property hereinafter defined as the “Leased Premises” upon the following terms and conditions. ARTICLE 1. LEASED PREMISES 1.1 Leased Premises. The premises demised and leased hereunder (“Leased Premises”) consist of the real property located in the City of Cerritos, County of Los Angeles, State of California more particularly described in the Legal Description attached hereto as Exhibit “A”, together with all buildings, structures, improvements and fixtures now or hereafter erected thereon and all right, title and interest of Landlord in and to all rights of way or use, servitudes, licenses, easements, tenements, hereditaments and appurtenances now or hereafter belonging or pertaining to the use of such real property during the Term. The Leased Premises are located within and comprise a part of a larger development commonly known as the “Cerritos Towne Center” project. ARTICLE 2. TERM 2.1 Term. The term of this Lease (“Term”) shall begin on the date (“Effective Date”) upon which Tenant receives a fully executed copy of this Lease from Landlord, and shall end at midnight on __________________, 20__, unless sooner terminated or extended as provided for in this Lease. 2.2 Options to Extend. Tenant shall have the option to extend the original Term of this Lease, subject to all the provisions of this Lease, including but not limited to provisions for increases in Rent, for one (1) additional period of sixty (60) years, such period commencing upon the expiration of the original Term of this Lease. With respect to such extended term, Tenant may exercise its option hereunder by giving Landlord written notice (in the manner prescribed by Section 15.3) of Tenant’s irrevocable exercise of said option any time after the Effective Date. After the valid exercise of the option to extend, all references in this Lease to the Term hereof shall be considered to mean the Term as extended, and all references to the end of the Term shall be considered to mean the end of the Term as extended. Tenant’s right to exercise the option to extend is subject to satisfaction of the following conditions precedent: (i) this Lease shall be in effect at the time notice of exercise of the option to extend is given; (ii) Tenant shall not be in Default under any provision of this Lease at the time notice of exercise of the option is given; and (iii) the notice of exercise of the option to extend shall be delivered in strict compliance with the requirements and limitations set forth in this Section. The option to extend the Term provided in this Section shall immediately and automatically terminate and shall be of no further force or effect in the event that this Lease is terminated in accordance with the terms and provisions of this Lease. 293688.2 999100-0001 11/28/2005 - 3:51 pm 1 2.3 Possession; Risk of Loss; Covenant of Quiet Enjoyment; Condition of Title. Possession of the Leased Premises shall be delivered to Tenant on the Effective Date and Tenant shall take possession and all risk of loss shall pass as of that date. Landlord covenants that, subject to the limitations expressly set forth herein, Tenant, upon Tenant’s timely payment of the rent and performance of Tenant’s covenants and obligations under this Lease, may quietly have, hold, and enjoy the Leased Premises during the Term of this Lease, without hindrance or interruption by Landlord, subject to the Landlord’s right to enter upon the Leased Premises as provided herein. Except as expressly provided in the DDA, Landlord has made no representations or warranties, express or implied, with respect to the Leased Premises and Tenant shall acquire no rights, easements or licenses in or to the Leased Premises by implication or otherwise except as expressly set forth herein. Landlord shall not be responsible for any latent defect or change of condition in the Leased Premises and the rent hereunder shall in no case be withheld or diminished on account of any defect in the Leased Premises or for any change of condition, or for any damage occurring thereto. Tenant agrees that the Leased Premises are suitable and adequate in all respects for any and all activities and uses that Tenant is entitled to conduct thereon during the Term of this Lease and Tenant hereby accepts the Leased Premises in their current condition and state and “as is”, and without recourse to Landlord as to the title, nature, condition, or usability thereof. Tenant does hereby represent and warrant to Landlord that Tenant is fully acquainted with the nature and condition, in all respects, of the Leased Premises, including, without limitation, the title of Landlord, the soil and geology of the Leased Premises, the sidewalks and structures adjoining the same, matters or states of fact reflected on any tentative or final parcel or subdivision map or concerning or related to the zoning, subdivision, permitted uses on or physical condition of the Leased Premises, and the nature and extent of the rights of others with respect to the Leased Premises whether by way of easement, right of way, lease, sublease, possession, lien, encumbrance, license, reservation, condition, covenant, restriction or otherwise. Tenant agrees that this Lease and its interest hereunder are subject to (i) all matters reflected in the title commitment (Commitment No. _________) issued by _____________________ Title Insurance Company (the “Title Commitment”) attached hereto as Exhibit “B”, (ii) the “CC&Rs” (as defined in Section 4.1 hereof), and all other matters provided for or recorded in connection with the development of the Leased Premises by Tenant, and (iii) any and all other exceptions, reservations, liens, encumbrances, qualifications, covenants, conditions, restrictions, easements, rights of way, matters or statements of fact whether or not appearing of record, including, without limitation, any such matters reflected on any tentative or final parcel or subdivision map obtained by Tenant or resulting from any other pre-development or development activities of Tenant (the items listed in (i), (ii) and (iii) above are collectively referred to as “The Exceptions”). ARTICLE 3. RENT PAYMENTS 3.1 Annual Rental. 3.1.1 Initial Annual Rental Amount. (a) Beginning as of the “Rent Commencement Date”, as defined herein, and continuing throughout the term hereof, Tenant shall pay to Landlord an initial annual base rental (“Initial Annual Base Rental”) in the amount hereinafter set forth, which Initial Annual Base Rental shall be payable in advance in four quarterly installments equal to one fourth of the Initial Annual Base Rental, beginning on the first day of the January, April, July or October next following the Rent Commencement Date, and continuing on the first day of each three month period thereafter. (b) In addition, subject to the limitation of Section 3.1.5(c), beginning as of the Rent Commencement Date and continuing throughout the term hereof, Tenant shall also pay as additional rent to Landlord yearly in arrears, beginning on February 15 of the calendar year next following the calendar year in which the Rent Commencement Date occurs, and on February 15 of 293688.2 999100-0001 11/28/2005 - 3:51 pm 2 each year thereafter, “Participation Rental” in the amounts set forth in Section 3.1.4 below. The Initial Annual Base Rental and the Participation Rental are hereinafter collectively referred to as the “Annual Rental.” The Initial Annual Base Rental shall be as follows: $l.60 multiplied by the total number of “Gross Building Square Feet” (as defined below) contained in the office building(s) constructed or to be constructed by Tenant on the Leased Premises, except for that portion, if any, of the Gross Building Square Feet on the ground floor of any such office building which is occupied a restaurant operation (“Restaurant”). The Initial Annual Base Rental for such Restaurant use shall be $l.20 multiplied by the total number of Gross Building Square Feet contained in such Restaurant. At least thirty (30) days prior to the Rent Commencement Date, Tenant’s architect shall certify to Landlord the Gross Building Square Feet contained or to be contained in the office building improvements constructed or to be constructed by Tenant, and shall separately set out the Gross Building Square Feet, if any, of a Restaurant contained on the ground floor of such building. The “Gross Building Square Feet” for purposes of calculating Initial Annual Base Rental shall be the aggregate gross floor area of each floor, all or a portion of which is intended for occupancy by Sublessees (as defined in Section 8.2.3 hereof), of such building constructed or to be constructed by Tenant on the Leased Premises measured from the exterior walls of each such building. If, following the above certification of the Gross Building Square Feet initially constructed or required to be constructed on the Leased Premises, additional improvements are constructed on the Leased Premises, then the Initial Annual Base Rental or “CPI Adjusted Annual Base Rental” (as defined in Section 3.1.5), whichever is then in effect, shall be increased, effective as of the “Rent Start Date” (as defined below) applicable to such additional improvements, (i) in the case of office space improvements or any other improvements not covered by (ii) below (the “Additional Office Space Improvements”) by an amount equal to the “Base Office Rental Per Square Foot” (as defined below) multiplied by the total number of Gross Building Square Feet contained in such Additional Office Space Improvements or (ii) in the case of ground floor restaurant improvements (the “Additional Retail Space Improvements”), by an amount equal to the “Base Retail Rental Per Square Foot” (as defined below) multiplied by the total number of Gross Building Square Feet contained in such Additional Retail Space Improvements. The “Base Office Rental Per Square Foot” shall be an amount equal to $1.60 increased by the cumulative percentage increases, if any, which have been applied to the Initial Annual Base Rental or the CPI Adjusted Annual Base Rental pursuant to Section 3.1.5 of this Lease on or prior to the applicable Rent Start Date of the Additional Office Space Improvements. The “Base Retail Rental Per Square Foot” shall be an amount equal to $1.20 increased by the cumulative percentage increases, if any, which have been applied to the Initial Annual Base Rental or the CPI Adjusted Annual Base Rental pursuant to Section 3.1.5 of this Lease on or prior to the applicable Rent Start Date of the Additional Retail Space Improvements. The “Rent Start Date” for any Additional Office Space Improvements or Additional Retail Space Improvements shall mean the date on which a Certificate of Occupancy with respect to such improvements is issued. With respect to any additional improvements, Tenant agrees to apply for such Certificate of Occupancy and pay all applicable fees therefor immediately following the final building permit inspections with respect to such improvements and prior to any occupancy or use of such improvements. Agency/City agree to diligently process any application for a Certificate of Occupancy received by Agency/City from Tenant with respect to any such additional improvements. 3.1.2 Commencement of Rent. Notwithstanding that Tenant is entitled to possession following the Effective Date of this Lease, Tenant shall not commence paying any rent hereunder until the Rent Commencement Date. The “Rent Commencement Date” shall be ________________, 200__. All rental payable hereunder shall be payable in lawful money of the United States and shall be payable without deduction, offset, prior notice or demand. 293688.2 999100-0001 11/28/2005 - 3:51 pm 3 3.1.3 Rental For Partial Calendar Year Following Rent Commencement Date and For Partial Calendar Quarter Following Rent Commencement Date. If the Rent Commencement Date occurs other than on January 1 of a year, the Initial Annual Base Rental payable for the calendar year in which the Rent Commencement Date occurs shall be computed by multiplying the Initial Annual Base Rental by a fraction, the numerator of which is the number of days between the Rent Commencement Date and the next January l and the denominator of which is 365. Rent payable for the partial calendar quarter, if any, following the Rent Commencement Date to the first day of the next January, April, July or October shall be paid by Tenant to Landlord with the first quarterly payment of Initial Annual Base Rental. 3.1.4 Participation Rental. (a) As of December 31 of each year after the Rent Commencement Date (the “Adjustment Date(s)”), in addition to the Initial Annual Base Rental, the following amounts (“Participation Rental”) shall, subject to Section 3.1.5(c), accrue as additional rent hereunder, and without any reduction for Initial Annual Base Rental paid or payable: (1) For the first Adjustment Date after the Rent Commencement Date, an amount equal to ten percent (l0%) of the amount, if any, by which aggregate “Gross Rents”, as hereinafter defined, for the calendar year ending on such first Adjustment Date exceed the result of (A) dividing the applicable aggregate “Pro Forma Rent Level”, set forth on Exhibit M1 and Exhibit M2, as applicable, by (B) 365 and (C) multiplying the result times the number of days between the Rent Commencement Date and the first Adjustment Date. The Pro Forma Rent Level set forth on Exhibit “M1" shall apply to any “Triple Net Sublease” (as defined below) entered into between Tenant and any Sublessee and the Pro Forma Rent Level set forth on Exhibit “M2" shall apply to any “Gross Sublease” (as defined below) entered into between Tenant and any Sublessee. As used herein, a “Triple Net Sublease” shall mean a sublease in which the Sublessee assumes substantially all obligations with respect to real property taxes and assessments, repairs and maintenance, insurance and other expenses in the nature of “Operating Costs” (as defined in Section 3.1.4(c)(4) below), (collectively, “Triple Net Expenses”) and a “Gross Sublease” shall mean a sublease in which the landlord assumes substantially all obligations with respect to real property taxes and assessments, common area repairs and maintenance and common area property insurance (including the building shell). If prior to the initial inclusion of Gross Rents from a sublease in a “Yearly Statement” (as defined in Section 3.1.4(a)(3)), Tenant determines that such sublease is neither a Gross Sublease nor a Triple Net Sublease, the Parties shall meet and confer within ten (10) days after Tenant’s written notice (“Notice of Pro Forma Level Adjustment”) to Landlord of such determination, to attempt to reach agreement on an appropriate Pro Forma Rent Level and “Pro Forma Operating Costs” (as defined in Section 3.1.4(c)(4) and set forth in Exhibit “M2") for such lease by, with respect to the Pro Forma Rent Level, interpolating between the Pro Forma Rent Levels set forth on Exhibits “M1" and “M2" based on the proportion of Triple Net Expenses allocated between Tenant and its subtenant and, with respect to the Pro Forma Operating Costs, by adjusting the Pro Forma Operating Costs set forth on Exhibit “M2" based on the proportion of Triple Net Expenses borne by Tenant and its subtenant, respectively. If the Parties are unable to reach agreement with respect to such determination within thirty (30) days of Tenant’s Notice of Pro Forma Level Adjustment, the Parties shall submit their dispute with respect to the appropriate Pro Forma Rent Level and/or Pro Forma Operating Costs to judicial reference in accordance with Section 638 et seq. of the California Code of Civil Procedure, or any successor statute. Each party shall bear their respective attorneys’ fees and costs in any such action. (2) For each Adjustment Date after the first Adjustment Date, an amount equal to ten percent (10%) of the amount, if any, by which the aggregate Gross Rents for the calendar year ending on that Adjustment Date exceed the applicable aggregate Pro Forma Rent Level, determined as provided in paragraph 1 above. (3) The Participation Rental shall be due and payable by Tenant not later than the February 15 following the applicable Adjustment Date. Concurrent with the payment of Participation Rental to Landlord, Tenant shall provide Landlord with a statement 293688.2 999100-0001 11/28/2005 - 3:51 pm 4 certified by Tenant’s accountant, setting forth the Participation Rental due with respect to the previous year (the “Yearly Statement”). The Yearly Statement shall separately set forth (i) the aggregate Gross Rents received during the previous year and the aggregate Pro Forma Rent Level for such year determined in accordance with Section 3.1.4(a)(1) and Exhibits “M1" and “M2", and (ii) the aggregate Operating Costs (as defined in Section 3.1.4(c)(4)) expended during the previous year, and the aggregate Pro Forma Operating Costs for such year determined in accordance with Section 3.1.4(a)(1) and Exhibit “M2", and (iii) Gross Rents received under Gross Subleases, Triple Net Subleases and other types of subleases and the specific subleases falling under each such category of subleases. As to any sublease that is neither a Gross Sublease nor a Triple Net Sublease, the accountant shall identify the specific grounds on which the accountant’s characterization is based, and the financial information supporting that characterization. Tenant shall make available to Landlord, at Landlord’s request, a true and accurate copy of any subleases and the rent rolls and other financial records with respect thereto. If any disagreements arise between the Parties as to the appropriate classification of any subleases, the Parties shall submit the dispute to judicial reference in accordance with Section 638 et seq., of the California Code of Civil Procedure, or any successor statute. The prevailing party in the judicial reference shall be entitled to have its reasonable attorneys’ fees and out-of-pocket costs paid by the non-prevailing party. The prevailing party shall be the party determined by the referee to be the party more successful in the action in light of the issues litigated. If the referee determines that the Participation Rental is understated or overstated in any such Yearly Statement, the party indebted shall promptly after the determination pay the amount due to the other party together with interest thereon at the Default Rate from the date such amounts were due or originally paid, as applicable, provided, however, no interest shall be payable with respect to any Participation Rental payable more than six (6) months prior to the date on which such dispute is first submitted to judicial reference. (b) “Gross Rents” shall mean all gross income, rentals, revenues, payments and consideration, of whatever form or nature, whether direct or indirect, received by or paid to or for the account or benefit of Tenant or any Affiliate of Tenant or any of their agents or employees, from any and all sources, resulting from or attributable to the ownership, operation, leasing and occupancy of the Leased Premises, determined on the basis of sound cash basis accounting practices applied on a consistent basis, and shall include, but not be limited to, any and all of the following (but without duplication of any item): (l) Gross fixed, minimum and guaranteed rentals paid by occupancy tenants of the Leased Premises under occupancy leases, and similar rentals paid by occupancy tenants under occupancy leases. (2) Overage, participation, percentage and similar rentals paid by occupancy tenants under occupancy leases. (3) Amounts paid by occupancy tenants pursuant to escalation provisions in occupancy leases or amounts paid to Tenant or any Affiliate of Tenant on account of “Operating Costs” (as defined in Section 3.1.4(c)(4) below), for further disbursement by Tenant or such Affiliate to a third party or parties. (4) Late charges and interest payable on rentals. (5) Amounts paid as a result of provisions in occupancy leases permitting the landlord thereunder to receive or share in receipts from the subleasing of space or assignment of such occupancy leases. (6) machines and similar items. (7) Other fees, charges or payments not denominated as rental but payable to Tenant in connection with the rental of office, retail, storage, or other space in the Leased Premises. Rents and receipts from licenses, concessions, vending 293688.2 999100-0001 11/28/2005 - 3:51 pm 5 (8) Consideration received in whole or in part for the cancellation, modification, extension or renewal of occupancy leases. (9) insurance. If Tenant or any other entity or person is occupying or using the Leased Premises or a portion thereof without payment of rent or at a rate less than the fair market rental for the space at issue, then the rents received by Tenant from that space shall, for purposes of determining Gross Rents, be deemed to be an amount equal to the average rent for comparable space on the Leased Premises. The determination of whether a Sublease provides for a fair market rental shall be determined as of the date that such Sublease was executed. In the event that Landlord and Tenant are unable to agree on the fair market rental of the space at issue, or the average rent for comparable space, then the matter shall be resolved by an appraisal conducted in accordance with the procedure set forth in Section 7.2(f) of this Lease. Any non-cash consideration received for or on account of any of the foregoing shall, for the purposes hereof, be valued at its fair value when received and included in Gross Rents at the time it is received. Payments under or with respect to any promissory note or an assignment thereof (including without limitation assignments for security purposes) shall be included in Gross Rents when and as such payments are received, provided that if, as of the maturity of the notes (whether by passage of the fixed maturity date or by acceleration or otherwise) any sums shall remain owing under any such note or assignment of note and are reasonably collectible from the maker thereof, then in such case the value of such note based on the remaining principal balance thereof shall be included with Gross Rents for the calendar year during which the maturity of the notes shall occur. With respect to any lease made between Tenant, as lessor, and any “Affiliate” (as defined in Section 3.1.4(d) below) of Tenant, as lessee, if the lessee thereunder does not itself occupy or use all such leased property but instead assigns or subleases all or any portion of its leased premises, then any rental or other consideration derived from such sublease or assignment in excess of the rental payable by such lessee to Tenant (which shall be allocated to such subleased space, if applicable, on a square footage basis) shall be included within “Gross Rents” in addition to all rental payable by such lessee under its lease. (c) Notwithstanding anything included in the above definition of “Gross Rents” there shall be excluded from Gross Rents: (1) Any security or other deposits of lessees unless and until they are actually applied to rental owed. (2) The proceeds of any financing or refinancing with respect to all or any part of the Leased Premises. (3) The proceeds of any sale or other disposition (excluding leases for occupancy purposes only) of all or any portion of the Leased Premises. (4) The amount by which the aggregate Operating Costs incurred by Tenant with respect to the portion of the Leased Premises subject to a Gross Sublease exceed the aggregate Pro Forma Operating Costs set out on the Pro Forma Rent Level schedule attached hereto as Exhibit “M2" for all Gross Subleases in effect (or, in the case of a hybrid sublease, the amount by which the Operating Costs incurred by Tenant with respect to the portion of the Leased Premises subject to such hybrid sublease exceed the adjusted level of Pro Forma Operating Costs established by Landlord and Tenant as provided in Section 3.1.4(a)(1) for such sublease(s) which is determined by Tenant to be neither a Triple Net Sublease nor a Gross Sublease). “Operating Costs” means all expenses, costs and fees incurred by Tenant with respect to the Leased Premises during any calendar year during the term hereof for: (A) electricity, water, gas, sewer, and other utility services to or for the improvements on the Leased Premises, including any utility taxes, fees, charges or other similar impositions; or 293688.2 999100-0001 11/28/2005 - 3:51 pm Proceeds of any rental or business interruption 6 (B) operation, maintenance (including roof repair and exterior painting), repair of ordinary wear and tear, property or other management fees (limited however, to three and one-half percent (3 ½ %) of Gross Rents, including costs of audits, if any), rent collection charges, including legal fees and court costs of collection, insurance (including public liability and property damage, rent continuation, boiler and machinery and extended coverage insurance), and cleaning of the improvements on the Leased Premises and all fixtures and equipment therein, and the annual amortization of costs (including financing at the then prevailing rate, if any) of any equipment, device or improvement required after completion of the Improvements by governmental authority which costs are amortized over the useful life thereof; or (C) all real property taxes and personal property taxes, licenses, charges and assessments which are levied, assessed or imposed by any governmental authority or improvement or assessment district in any calendar year with respect to the improvements on the Leased Premises and the land on which those improvements are located, and any improvements, fixtures, equipment and other property of Tenant, real or personal, located on the Leased Premises and used in connection with the operation or maintenance of the improvements on the Leased Premises or the Leased Premises (computed as if paid in permitted installments regardless of whether actually so paid), as well as any tax which shall be levied or assessed in addition to or in lieu of such taxes (it being acknowledged that because of the passage of laws which limit increases in real property taxes, governmental agencies may impose fees, charges, assessments or other levies in connection with services previously furnished without charge or at a lesser charge and which were previously paid for in whole or in part, directly or indirectly by real property taxes), any charge upon Tenant’s business of leasing the Leased Premises, and any costs or expenses of contesting any such taxes, licenses, charges or assessments, but excluding any federal or state income or gift tax or any franchise, capital stock, estate or inheritance taxes. Operating Costs shall, however, exclude any such expenses, costs and fees paid to an Affiliate of Tenant which exceed the expenses, costs or fees that would be payable in a bona fide arms’ length transactions between unrelated parties in the Los Angeles-Orange County area for the same work or services. Operating Costs shall not include any amounts paid directly by a Sublessee to a third party in connection with expenses which, if incurred by Tenant, would be Operating Costs. (5) Consistent with Section 3.1.4(b)(3), any and all amounts which are paid by a Sublessee for the benefit of Tenant on account of expenses which, if incurred by Tenant, would be Operating Costs and which are included in Gross Rents under Section 3.1.4(b)(3) above. (d) “Affiliate” shall mean any person directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with the Tenant which, if Tenant is a partnership, shall include each of the constituent partners thereof. The term “control” as used in this immediately preceding sentence, means, with respect to a Person that is a corporation, the right to the exercise, directly or indirectly, of more than 50% of the voting rights attributable to the shares of the controlled corporation, and, with respect to a Person that is not a corporation, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled Person. 3.1.5 Increase of Annual Base Rental at Ten Year Intervals. (a) Beginning with the tenth (10th) Adjustment Date, and every ten (10) years thereafter (the “Ten Year Adjustment Date(s)”), the Initial Annual Base Rental (or the CPI Adjusted Annual Base Rental, as the case may be) shall be increased by the percentage increase in the Consumer Price Index [All Urban Consumers] (base year 1982-84=100) for the Los AngelesAnaheim-Riverside CMSA published by the United States Department of Labor’s Bureau of Labor Statistics (“CPI”) as published for the third (3rd) month prior to the Ten Year Adjustment Date over the CPI as published for the one hundred and twenty-third (123rd) month prior to such Ten Year Adjustment Date; provided, however, that the percentage increase pursuant to this subsection shall 293688.2 999100-0001 11/28/2005 - 3:51 pm 7 not, in any case, be less than twenty percent (20%) nor more than sixty percent (60%) for any ten year period. The figure thus obtained shall be referred to as the “CPI Adjusted Annual Base Rental”. (b) Beginning with the calendar year following the 10th Adjustment Date and for each calendar year thereafter, the CPI Adjusted Annual Base Rental shall be payable in advance, in quarterly installments, in the same manner as the Initial Annual Base Rental, without offset, deduction, prior notice or demand. (c) In the event that the Annual Rental (defined in Section 3.1.1 as the sum of the Initial Annual Base Rental and the Participation Rental) for any year exceeds the CPI Adjusted Annual Base Rental for such year, then the excess shall be paid by Tenant to Landlord not later than February 15 following the applicable Adjustment Date. In the event that the CPI Adjusted Annual Base Rental exceeds the Annual Rental in any year, then the only rental due in that year shall be the CPI Adjusted Annual Base Rental. 3.1.6 Provision for Landlord/City Participation in Net Sale Proceeds and the Net Refinancing Proceeds following the Close of Escrow [TO BE DISCUSSED]. Consumer Price Index. 3.1.7 If the CPI is changed so that the base is changed from 1982-84 = 100, the CPI shall be converted in accordance with the conversion factor published by the United States Department of Labor, Bureau of Labor Statistics. If the CPI is discontinued or revised during the Term, such other governmental index or computation with which it is replaced shall be used in order to obtain substantially the same result as would be obtained if the CPI had not been discontinued or revised. If there is no such replacement, then Landlord shall select another price index which is a generally used replacement index used in lieu of the discontinued CPI. 3.1.8 Rental Increase Notice. Upon the calculation of the CPI Adjusted Annual Base Rental for the ensuing calendar year as provided in Section 3.l.5, Landlord shall give Tenant written notice at the address set forth in Section 15.3 hereof of such CPI Adjusted Annual Base Rental for the ensuing calendar year (the “Rental Increase Notice”). The Rental Increase Notice may be tendered at any time by Landlord and shall be effective as of the first day of the calendar year to which it relates even if tendered after that date, and Tenant shall pay to Landlord all additional accrued but unpaid CPI Adjusted Annual Base Rental due as a result of said increase within thirty (30) days of the date of such Rental Increase Notice; provided, however, that if said Rental Increase Notice is tendered more than one (l) year after the beginning of the calendar year to which it relates, Tenant may elect to pay the additional accrued but unpaid CPI Adjusted Annual Base Rental, with interest thereon at the Default Rate from the date of delivery of the Rental Increase Notice until the date of payment, in quarterly installments of principal and interest amortized over two (2) years. 3.1.9 Late Charge. If Tenant fails to pay the rental due under this Lease, or any installment thereof, within ten (l0) days after written notice that the same is due and unpaid, then Tenant shall pay to Landlord an additional Two Thousand Dollars ($2,000) as liquidated damages, it being agreed that such amount represents a reasonable estimate of the losses, costs and expenses that Landlord will suffer in such circumstances (other than interest on the rental due, which shall accrue at the Default Rate from the date such payment is due until the date of payment). 3.2 Maintenance of Books and Records; Inspection and Audit. Tenant shall keep full, true and correct records of all transactions and dealings relating to the Leased Premises. The records to be kept shall include but not be limited to all ledgers, bank deposit receipts, bank books, bank statements, federal, state and local tax returns, and other records reasonably necessary to verify the Gross Rents received by Tenant, the Operating Expenses incurred 293688.2 999100-0001 11/28/2005 - 3:51 pm 8 by Tenant and the allocation of Triple Net Expenses between Tenant and its subtenant in each calendar year (collectively, “Records”). All Records, which may be subject to the lien of a security interest in favor of a Lender, shall be kept at Tenant’s principal place of business for not less than five (5) years after delivery of the required annual reports; provided that, subject to prior written notice to any Lender(s), the parties may at reasonable times remove any or all Records or permit or cause them to be removed for legal and accounting purposes or for other purposes consistent with these provisions and this Lease. Tenant shall, within a reasonable time after any requests by Landlord, furnish or cause to be furnished to Landlord, at Tenant’s expense, such other information with respect to the Leased Premises, including balance sheets, cash flow statements and reports of operations certified by Tenant’s accountants, as Landlord may, from time to time, reasonably request. Landlord shall have the right, during regular business hours and from time to time after giving reasonable notice, to do any or all of the following: to audit the Records; to cause an audit of the Records to be made; to make abstracts from the Records; to make copies of any or all of the Records; to examine any or all Subleases; and to make copies of any or all Subleases. Tenant shall make all Records specified in the notice available at the time specified in the notice, if reasonable, and at the place where the Records are to be kept. All information so obtained by Landlord shall be treated as confidential except in any litigation or arbitration proceedings between the parties and in any tax proceeding, and except, further, that Landlord may divulge the information to a prospective buyer or encumbrancer of the Leased Premises or of Landlord’s interest in the Lease or to a governmental agency or employee properly demanding the information. If the audit discloses that the Participation Rental due to Landlord for the calendar year examined was understated by more than three percent (3%), Tenant shall pay the cost of the audit and investigation; otherwise, Landlord shall bear the cost of such audit and investigation; provided, however, if a Lender should succeed to Tenant’s rights and obligations under this Lease by foreclosure or otherwise, such Lender shall not, regardless of the amount by which Participation Rental was understated be liable for the costs of an audit for any calendar year or the portion thereof occurring prior to such Lender’s exercise of its rights to possession or control of the Leased Premises. If an audit or investigation reveals that the Participation Rental was misstated for any reason, the Participation Rental shall be adjusted as appropriate, and the party indebted, if any, shall, promptly after the determination, pay any difference for the period affected by said adjustment. 3.3 Negation of Partnership. Nothing in this Lease shall be construed to render Landlord a partner, joint venturer, or associate in any relationship or for any purpose with Tenant, other than that of Landlord and Tenant, nor shall this Lease be construed to authorize either to act as agent for the other. ARTICLE 4. USES 4.1 Governmental Restrictions; Applicable Governmental Restrictions; Redevelopment Plan; Area Development Plan for Development Area Two; Conditions, Covenants and Restrictions; Master Plan; Scope of Development; Plans; Precise Plans. The term “Governmental Restrictions” as used herein shall mean and include any or all laws, statutes, ordinances, codes, decrees, rulings, regulations, writs, injunctions, orders, rules, conditions of approval or authorizations of any governmental entity, agency or political subdivision, now in force or which may hereinafter be in force, including, without limitation, the Redevelopment Plan for the Los Coyotes Redevelopment Project Area (“Redevelopment Plan”) adopted by Ordinance No. 490 of the City Council of the City of Cerritos on May 7, 1975, as it may be amended from time to time, and the Area Development Plan for Development Area Two (“ADP-2") adopted by Ordinance No. 427 of the City Council of the City of Cerritos on January 3, 1973 as it may be amended from time to time. The term “Applicable Governmental Restrictions” shall mean and include all Governmental Restrictions applicable to the development use and/or operation of the Leased Premises. 293688.2 999100-0001 11/28/2005 - 3:51 pm 9 The Declaration of Covenants, Conditions and Restrictions (“CC&Rs”) as used herein shall mean that certain Declaration of Covenants, Conditions and Restrictions and Reciprocal Easement Agreement dated as of June 1, 1989, and recorded on June 16, 1989, as Instrument No. 89975564 in the Official Records of the Los Angeles County Recorder’s Office. Tenant hereby agrees that its interest in the Leased Premises is subject to such CC&Rs, and Tenant agrees, promptly upon request by Landlord, to execute such document(s) as are reasonably necessary to confirm that the Leased Premises, and Tenant’s interest therein, are subject to the CC&Rs. Tenant hereby grants Landlord an irrevocable power of attorney, coupled with an interest, to execute such documents on Tenant’s behalf should Tenant fail or refuse to promptly execute such documents upon request by Landlord. The term “Master Plan” shall mean the Master Plan for development of the Cerritos Towne Center project of which the Leased Premises are a part, a copy of which Master Plan is attached hereto as Exhibit “D”, as it may be amended from time to time. The “Scope of Development” shall mean the Scope of Development attached hereto as Exhibit “E”, as it may be amended from time to time. The terms “Plans” as used herein shall mean and include preliminary and final drawings, grading plans, site development plans, architectural plans, specifications, elevations, and renderings, landscape plans, Precise Plans, parking plans and all other approved plans for the improvements to be constructed on the Leased Premises. The term “Precise Plans” shall mean and include any precise plan for the Leased Premises filed and approved in accordance with Chapter 23.90 of the Cerritos Development Code. 4.2 Use of the Leased Premises. Tenant covenants and agrees for itself, its successors and assigns, which covenants shall run with the land and bind every successor or assign in interest of Tenant, that during development and use of the Leased Premises pursuant to this Lease, neither the Leased Premises nor any portion thereof shall be improved, used or occupied in substantial violation of any Applicable Governmental Restrictions, the CC&Rs, the Scope of Development, the Master Plan, or any final, duly approved and effective Precise Plan applicable to the Leased Premises, or any portion thereof. Furthermore, Tenant shall not maintain, commit, or permit the maintenance or commission on the Leased Premises, or any portion thereof, of any nuisance, public or private, as now or hereafter defined by any statutory or decisional law applicable to the Leased Premises, or any portion thereof. Notwithstanding anything to the contrary or that appears to be to the contrary in the general provisions of Sections 4.1 through 4.4 hereof, Tenant agrees for itself, its successors and assigns, which covenants shall run with the land and bind every successor and assign in interest of Tenant, that Tenant and such successors and such assigns shall use the Leased Premises solely for the purpose of constructing and operating an office building and parking and all ancillary uses relating thereto in accordance with and of the quality prescribed by this Lease and the Scope of Development; provided, that Landlord shall not unreasonably withhold its consent to a change in the prescribed use of the Leased Premises if (i) at least thirty (30) years have elapsed since the Effective Date of this Lease and (ii) Tenant is able to demonstrate, to Landlord’s reasonable satisfaction, that the original use prescribed for the Leased Premises is an economically infeasible use at that point in time. 4.3 Grant Easements. Tenant may enter into agreements granting easements over the Leased Premises, provided they are limited to the expiration or sooner termination of this Lease, are subordinate to Landlord’s fee interest, and will not interfere with any rights and remedies of Landlord hereunder. Tenant must obtain Landlord’s prior written consent to any agreement that would grant an easement extending beyond the Term hereof, or that would interfere with any of Landlord’s rights and remedies hereunder. A grant of easement made in accordance with this Section 4.3 shall not be deemed a “Transfer” within the meaning of Section 8.2. Landlord agrees that it will not unreasonably withhold its consent to and will join in the execution of such easements over the Leased Premises as may be necessary to provide utilities to the Leased Premises; provided, Landlord shall not be obligated, except as expressly provided in Section 5.6 of the DDA, to incur any cost or expense in connection with such an easement and Tenant shall indemnify, defend and hold Landlord and Landlord’s Representatives harmless from any “Liabilities” (as defined in Section 5.6 below) in connection with the creation or use of such easements. 293688.2 999100-0001 11/28/2005 - 3:51 pm 10 4.4 Non-Discrimination. Tenant, for itself, its successors and assigns and all persons claiming under or through it, covenants that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the Leased Premises, nor shall Tenant or any person claiming under or through it, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy, of tenants, licensees, employees or vendees in the Leased Premises or the improvements thereon. The foregoing covenants shall run with the land. Tenant, for itself, its successors and assigns and all persons claiming under or through it, covenants that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the construction of any improvements on the Site. The Tenant shall refrain from restricting the rental or lease of the Leased Premises on the basis of race, color, creed, religion, sex, marital status, ancestry or national origin of any person. All such leases, deeds or contracts which Tenant proposes to enter into with respect to the lease, sublease, transfer, use, occupancy, tenure or enjoyment of any land in the Leased Premises shall contain or be subject to substantially the following nondiscrimination or non-segregation clauses which shall be binding on all contracting parties or transferees: a. In deeds: “The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises herein conveyed, nor shall the grantee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the premises herein conveyed. The foregoing covenants shall run with the land.” In leases: “The tenant herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions: “That there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased, nor shall the tenant himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the premises herein leased.” c. In contracts: “There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall any party to this contract, or any person claiming under or through him or her, establish or permit any such practice or 11 b. 293688.2 999100-0001 11/28/2005 - 3:51 pm practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the land.” ARTICLE 5. CONSTRUCTION BY TENANT 5.1 Duty to Construct Improvements. Following the Effective Date of this Lease, Tenant shall construct upon the Leased Premises those buildings, structures, fixtures, excavations, parking areas, walkways, drives, landscape areas, underground installations and other improvements (collectively, the “Improvements”) required to be constructed on, above and under the Leased Premises by this Lease and the Scope of Development as a part of the initial development of the Leased Premises, including, without limitation, an office building containing ________ (__) stories and approximately ______________________ thousand (_____________) gross square feet of building area, and parking, landscaping, and site improvements in compliance with all of the approved final Plan(s), including any Precise Plan(s), for the Leased Premises. The Improvements shall be constructed and completed within the time period set forth in the “Schedule of Performance” attached hereto as Exhibit “F”, and in accordance with the terms and provisions of all Applicable Governmental Restrictions, the CC&Rs, the Master Plan, the Scope of Development, and all final Plans for the Leased Premises which are duly approved by Landlord and/or City, including any final, duly approved and effective Precise Plan applicable to the Leased Premises. The Improvements are generally depicted on the Site Map attached hereto as Exhibit “G”. 5.2 Conditions to Construction of Improvements. Before Tenant begins construction of the Improvements on the Leased Premises, and before any building materials are delivered to the Leased Premises by Tenant or under Tenant’s authority, and as a condition to Tenant’s right to proceed with the construction of those Improvements, Tenant shall have complied with all of the conditions set forth in this Section 5.2. 5.2.1 Submission and Approval of Plans and Specifications. By the deadlines set forth in the Schedule of Performance, Tenant shall have submitted to City and/or Landlord and obtained their approval of all submissions specified therein, including all Plans for the Improvements to be constructed on the Leased Premises. Any changes in such Plans requested by Tenant must be acceptable to and approved by City; provided, that City shall be required to approve such changes in the Plans, within the time set forth below, so long as they are consistent with the Master Plan, the Scope of Development, all previously approved final Plans, this Lease, and all Applicable Governmental Restrictions, and so long as such Plans meet City’s reasonable architectural review requirements relating to the appearance of the Improvements and all public spaces constructed in connection with the Improvements. Landlord and/or City, as appropriate, shall approve or disapprove any proposed changes to the Plans and any other submissions by Tenant within thirty (30) days of their submission. In the event that Landlord and/or City, as required, fails to approve or disapprove the proposed change or other submission within said thirty (30) day period, then the deadlines set forth in the Schedule of Performance shall be extended by a period of time equal to the time between the expiration of said thirty (30) day period and the Landlord’s or City’s subsequent approval or disapproval of said proposed changes or other submissions. In the event of any disapproval, Landlord or City, as appropriate, shall inform Tenant in writing (the “Disapproval Notice”) of the reasons for disapproval and the required changes to the Plans or other submissions. In accordance with Section 15.3 of this Lease, Landlord shall send a “courtesy” copy of such Disapproval Notice to Lender. Tenant shall have ten (10) business days from receipt of any Disapproval Notice within which to notify Landlord or City that Tenant agrees to make such changes or objects to any requested changes. If Tenant does not notify Landlord or City in writing within such 10-day period of its objections to the requested changes, Tenant shall be deemed to have approved of all such requested 293688.2 999100-0001 11/28/2005 - 3:51 pm 12 changes. If Tenant notifies Landlord or City within said 10-day period of its objections to the requested changes, then the Landlord, City and Tenant agree to meet to discuss their differences within ten (10) days after the Tenant gives such notice. Unless excused, the failure of Tenant to meet with Landlord or City within said 10-day period shall constitute a waiver by Tenant of any objections to the requested changes. Following such meeting, Tenant shall revise such Plans or other submissions and resubmit them to the Landlord and/or City, as appropriate, within thirty (30) days after receipt of the Disapproval Notice, unless the nature of such changes requires a longer period of time, in which case Tenant shall resubmit said Plans or other submissions as soon as possible, and, in any case, no later than ninety (90) days after receipt of the Disapproval Notice; provided, that the period of time attributable to submission, revision, re-submission or reconsideration by Landlord or City, of such Plans or other submissions shall not extend or toll the deadlines set forth in the Schedule of Performance for performance of Tenant’s obligations. Any resubmissions by Tenant shall be approved or disapproved and revised within the times set forth herein with respect to the initial submission. Notwithstanding the above time periods, if the Landlord or the City deems it appropriate or necessary to hold a public meeting of the Landlord or of the City Council of City, or any agency or commission thereof, before the action specified is to be taken, the period for such action by the Landlord or City shall be extended by a reasonable amount of time, not to exceed thirty (30) days, in each case, for the holding of such public meeting; provided, that, to the extent that the time required to hold such public meeting(s) is not already factored into and/or reflected on the Schedule of Performance, the period of delay attributable to said public meeting shall extend the Schedule of Performance by a period of time equal to the period of delay caused by that public meeting. Any decision by the City Council or Landlord’s Board shall be deemed a final decision of said entities. Any item, once approved, shall not be subject to subsequent disapproval. During the preparation of any revisions to the Plans or the preparation of any other submissions, the Landlord, the City, and the Tenant shall hold progress meetings to coordinate the preparation, submission and review thereof by the Landlord and the City. The Landlord, the City, and the Tenant shall communicate and consult informally as frequently as is necessary to ensure that the formal submission of all documents and Plans to the Landlord and City shall receive reasonably prompt and speedy consideration. 5.2.2 Submission of Evidence of Financing; Submission of Evidence of Construction Contract. Construction Loan. (a) By the deadline specified therefor in the Schedule of Performance, Tenant shall have delivered to Landlord and City and obtained their written approval of written commitment(s) (“Construction Commitment(s)”), each from a financial institution (licensed to do business in California if legally required) that is financially strong and possesses a sound credit rating (“Construction Lender”) by which the Construction Lender shall represent that it has agreed, subject to customary final loan documentation consistent with the terms of the Construction Commitment(s), to make a construction loan to Tenant (each said Construction Commitment and loan are sometimes referred to collectively as the “Construction Loan”) for the development and construction of the Improvements on the Leased Premises in accordance with this Lease. Landlord and City review and approval or disapproval of the Construction Commitments shall have been conducted for the purpose of determining the consistency of the Construction Commitments with the terms and conditions of this Lease. The amount of such Construction Loan(s) shall be not less than (i) the amount of the Construction Contract, as defined herein, for the Improvements to be constructed on the Leased Premises, plus (ii) an amount equal to all consultant and loan fees, “points,” commissions, charges, furnishings, fixtures, taxes, interest, start-up costs, including, but not limited to, rent to be paid to Landlord during such period, developer’s overhead and administration, and other costs and expenses of developing and completing the Improvements to be constructed in accordance with this Lease (the costs listed in clauses (i) and (ii) of this Section are sometimes referred to collectively as the “Development Costs”), less (iii) the amount of the equity contribution (including, without limitation, funds derived from any unsecured loans obtained by Tenant to finance the Improvements) to the cost of construction. In the event that Tenant will finance all or a portion of the Development Costs by 293688.2 999100-0001 11/28/2005 - 3:51 pm 13 means of an equity contribution to the cost of construction, Tenant agrees to submit evidence, reasonably satisfactory to Landlord, of the source and availability of those funds, which evidence shall, at Landlord’s request, include the Financial Statements of Tenant. The Construction Loan for the Improvements to be constructed on the Leased Premises shall provide that any proceeds from fire or extended coverage insurance shall be used for restoration of the improvements constructed on the Leased Premises to the same condition, character and value as existed prior to such damage or destruction to those improvements so long as the following conditions are satisfied: (i) Tenant is not in default under the Construction Loan at the time such damage or destruction occurs, (ii) Construction Lender has approved all plans and specifications and contracts for such restoration, which shall provide for improvements substantially identical to those previously approved by Construction Lender, or, if the plans, specifications or contracts are materially deficient, as determined by Construction Lender, such plans, specifications or contracts shall have been modified to comply with Construction Lender’s reasonable requests, (iii) in the event that, in Construction Lender’s sole judgment reasonably exercised, the insurance proceeds are not sufficient to accomplish restoration, Tenant deposits with Construction Lender within five days of demand by Construction Lender the additional amounts necessary to accomplish restoration and/or evidence of funds made available for such repair and restoration by Landlord and/or City, provided that the terms and conditions relating to the funding of such amounts from Landlord or City shall be subject to Construction Lender’s reasonable approval, and (iv) in Construction Lender’s reasonable opinion, upon completion, the size, capacity and total value of the improvements will be at least substantially equal to the size, capacity and total value of the improvements prior to the damage requiring such restoration. The Construction Loan shall be consistent with the terms and provisions of this Lease, including the terms and provisions of Section 7.2 hereof, and prior to execution of the final Construction Loan documents by Tenant, Tenant shall secure Landlord’s approval of the terms and conditions of the Construction Loan in accordance with the requirements and conditions of approval set forth in Sections 7.2 and 7.4 hereof. Neither Landlord’s interest under this Lease nor Landlord’s fee title to the Leased Premises shall be subordinated to or encumbered by the Construction Loan. Nothing in this Lease or the Construction Loan shall be deemed or construed to permit or authorize the holder of any Construction Loan to devote the Leased Premises to any uses, or to construct any improvements thereon, other than those uses or improvements provided for and authorized by this Lease. Tenant covenants and agrees to draw upon and utilize the full amount of the Construction Loan only for financing the Development Costs for the Leased Premises or any other purposes approved by Landlord. In the event that Tenant is unable to secure a Construction Loan for any reason, Tenant shall construct all of the Improvements required by this Lease with only equity financing. (b) Permanent Loan. If the Construction Commitment submitted by Tenant under Section 5.2.2(a) above is conditioned upon Tenant obtaining permanent financing, then by the deadline specified therefor in the Schedule of Performance, Tenant shall have delivered to Landlord and City and obtained their written approval of written commitment(s) (“Permanent Commitment(s)”), each from a financial institution(s) (licensed to do business in California if legally required) that is financially strong and possesses a sound credit rating (“Permanent Lender”) by which the Permanent Lender represents that it agrees, subject to customary final loan documentation consistent with the terms of said written commitment(s), to make a permanent loan secured by Tenant’s leasehold interest in the Leased Premises and the Improvements to be constructed thereon (said Permanent Commitment and loan are sometimes referred to collectively as the “Permanent Loan”) to Tenant in an amount equal to at least one hundred percent (100%) of the Construction Loan, less the amount, if any, of Tenant’s additional equity investment in the Improvements on the Leased Premises at the time of the funding of the Permanent Loan. Landlord and City review and approval or disapproval of the Permanent Commitments shall be for the purpose of determining the consistency of the Permanent Commitments with this Lease and the Construction Commitment(s). Neither Landlord’s interest under this Lease nor Landlord’s fee title to the Leased Premises shall be subordinated to or encumbered by the Permanent Loan(s). Tenant shall use reasonable efforts to insure that the documents evidencing the Permanent Loan provide that any proceeds from fire or extended coverage insurance shall be used for repair or rebuilding of the Improvements constructed on the Leased Premises, and not to repay the outstanding balance of the Permanent Loan. The Permanent Loan 293688.2 999100-0001 11/28/2005 - 3:51 pm 14 shall be consistent with the terms and provisions of this Lease, including Section 7.2 hereof, and prior to execution of the final Permanent Loan documents by Tenant, Tenant shall secure the Landlord’s approval of the terms and conditions for the Permanent Loan in accordance with the requirements and conditions of approval set forth in Sections 7.2 and 7.4 hereof. Tenant shall draw upon and utilize the full amount of the Permanent Loan to first repay the Construction Loan. (c) Construction Contract. By the deadline specified therefor in the Schedule of Performance, Tenant shall deliver to Landlord and City a written commitment (the “Construction Contract Commitment”) containing the representation of a reputable and financially responsible general contractor (“General Contractor”), which is capable of being bonded, is licensed in California, and is experienced in completing the type of Improvements contemplated by this Lease, that the General Contractor is obligated and has agreed, subject to final documentation consistent with the Construction Contract Commitment, to commence and complete the development and construction of the Improvements to be constructed on the Leased Premises in accordance with this Lease at the price stated therein. Tenant agrees that it will deliver to Landlord a copy of the General Contractor’s construction contract (“Construction Contract”) with Tenant as soon as the same is executed, which, with respect to the Improvements, shall not, in any case, be later than sixty (60) days after execution of this Lease. The Construction Contract entered into in connection with or pursuant to the Construction Contract Commitment shall give Landlord the right, but not the obligation, to assume Tenant’s obligations and rights under the Construction Contract if Tenant should default thereunder; provided, that such right to assume the Construction Contract shall be subject to the right, if any, of Tenant’s Construction Lender to an assignment of the Construction Contract. 5.2.3 Builder’s Risk and Other Insurance. Prior to the Effective Date of this Lease, Tenant shall have obtained (and delivered insurance certificates therefor to Landlord) for all insurance required under Article 11 of this Lease, including the “builder’s risk” and worker’s compensation insurance prescribed by Sections 11.3 and 11.6 of this Lease in connection with any work on the Leased Premises. 5.2.4 No Construction Before Notice; Notice of Nonresponsibility. Tenant shall have provided Landlord with written notice of the intended commencement of construction of any improvements or delivery of building materials to the Leased Premises at least ten (10) days prior to the earlier of commencement of construction of those improvements or commencement of the delivery of those building materials to the Leased Premises. Landlord shall, at any and all times during the Term of this Lease, have the right to post and maintain on the Leased Premises and to record as required by law any notice or notices of non-responsibility provided for by the mechanics’ lien laws of the State of California. The work for which said ten (10) days written notice is required shall include, in addition to actual construction work, any site preparation work, installation of utilities, street construction or improvement, or any grading or filling of the Leased Premises. 5.3 Completion of Improvements and Other Work; Compliance With Law And Quality. Tenant represents and warrants that the Improvements to be constructed on the Leased Premises, and all other construction thereon, when undertaken, while in progress and as completed: (i) will comply with all Applicable Governmental Restrictions, including, without limitation, all laws and ordinances necessary to permit the lease and development of the Leased Premises pursuant to this Lease; (ii) will be entirely on the Leased Premises and will not encroach upon the land of others or any easement or right-of-way; (iii) will not violate any applicable easement, license, covenant, condition or restriction; and (iv) will comply in all material respects with the final Plans approved for such improvements. All work performed on the Leased Premises pursuant to this Lease, or authorized by this Lease, shall be done in a good workmanlike manner and only with materials of good quality. The Improvements shall be completed by the applicable deadline established therefor 293688.2 999100-0001 11/28/2005 - 3:51 pm 15 in the Schedule of Performance and all other construction work undertaken on the Leased Premises shall be completed promptly and without delay. 5.4 Mechanic’s, Materialman’s, Contractor’s, or Subcontractor’s Liens. Subject to Tenant’s right to contest as hereinafter provided, at all times during the Term of this Lease, Tenant shall keep the Leased Premises, including all buildings and improvements now or hereafter located on the Leased Premises, free and clear of all liens and claims of liens for labor, services, materials, supplies, or equipment performed on or furnished to the Leased Premises. Tenant shall (i) promptly pay and discharge, or cause the Leased Premises to be released from, any such lien or claim of lien, or, if Tenant decides to contest said lien, (ii) furnish Landlord such bond as may be required by law to free the Leased Premises from the effect of such a lien and to secure Landlord against payment of such lien. Should Tenant fail to pay and discharge, or cause the Leased Premises to be released from any such lien or claim of lien or to provide a bond as permitted hereunder within twenty (20) days after service on Tenant by Landlord of a written request to do so, Landlord may pay, adjust, compromise and discharge any such lien or claim of lien on such terms and in such manner as Landlord may deem appropriate. In such event, Tenant shall, on or before the first day of the next calendar month following any such payment by Landlord, reimburse Landlord for the full amount so paid by Landlord, including any actual attorneys’ fees or other costs expended by Landlord, together with interest thereon at the annual rate of interest equal to three percent (3%) above the rate of interest charged from time to time by the Bank of America National Trust and Savings Association, (or, in the event that said bank ceases operations, then one percent (1%) above the average of the rates of interest charged by the two (2) largest banks, based on assets, operating in the State of California) on short term loans to large businesses having a high credit standing (which rate is commonly referred to as the prime or reference rate), or the highest lawful rate, whichever is less, (the “Default Rate”) from the date of payment by Landlord to the date of Tenant’s reimbursement of Landlord, and such amount shall constitute additional rent and become a part of Tenant’s obligation to pay rent hereunder. On completion of any work of improvement during the term of this Lease, Tenant shall file or cause to be filed a notice of completion. Tenant hereby appoints Landlord as Tenant’s attorney-in-fact to file the notice of completion on Tenant’s failure to do so, upon ten (10) days notice from Landlord, after the work of improvement has been completed; provided, that Landlord shall not be obligated to file such a notice of completion and the failure of Landlord to file that notice shall not excuse the failure of Tenant to discharge its obligation to file said notice of completion. 5.5 Alterations, Modifications or Replacements of Improvements; All Work on Written Contract; Approval of General Contractor; Performance and Payment Bond. Following completion of the Improvements on the Leased Premises pursuant to this Lease, the Schedule of Performance and the Scope of Development, Tenant shall not demolish, remove, alter, modify, replace or add to (collectively, “Change”) any of the Improvements during the term of this Lease unless Tenant secures the prior written approval of Landlord to such Change and the plans and specifications therefor, which approval shall not be unreasonably withheld. It shall not be unreasonable for Landlord to withhold its approval if the proposed Change will, in Landlord’s reasonable judgment, result in a reduction of the rents on the Leased Premises or a reduction in the value of the Leased Premises or Landlord’s interest therein. Any such approved Change shall be commenced and completed in accordance with all of the requirements imposed in connection with construction of the Improvements in Sections 5.2.3, 5.2.4, 5.3 and 5.4 of this Lease, and any such Change shall be commenced and completed in accordance with the plans and specifications approved therefor. Notwithstanding anything to the contrary above, Tenant shall not be required to secure any Landlord approvals in connection with Changes to the Improvements that involve only (i) non-structural, interior alterations, not visible from the street level or (ii) exterior maintenance and repair which (A) does not alter or change the originally prescribed elevations, appearance or 293688.2 999100-0001 11/28/2005 - 3:51 pm 16 exterior construction materials of the Improvements, and (B) is necessary to maintain the Leased Premises in a first class condition and (C) except with respect to roof repairs or replacement, does not exceed the “Threshold Amount” (defined below); provided, however, that any such Changes pursuant to this sentence shall comply with all Applicable Governmental Restrictions, including all building and safety rules and codes. Changes meeting the requirements set forth in the preceding sentence are sometimes hereinafter referred to as “Minor Changes”. Changes other than Minor Changes are sometimes hereinafter referred to as “Major Changes”. The “Threshold Amount” shall mean an amount equal to two hundred thousand dollars ($200,000). All work required in connection with any Changes to the Improvements, including any site preparation, landscaping or utility installation, as well as actual construction work on said Improvements, or any other construction work performed at any time on the Leased Premises, shall be performed only by competent and financially responsible contractors, duly licensed as such under the laws of the State of California, and shall be performed pursuant to written contracts with such contractors. For all Major Changes to be performed on the Leased Premises, Tenant shall furnish Landlord with a true copy of Tenant’s contract with the general contractor performing such Changes. Said contract shall give Landlord the right but not the obligation to assume Tenant’s obligations and rights under that contract if Tenant should default thereunder; provided, that such right to assume that contract shall be subject to the right, if any, of a Lender under a Leasehold Mortgage financing the construction of such improvements to an assignment of said contract. In connection with any Major Changes, and before construction thereof commences, Tenant shall furnish Landlord with a performance bond in an amount not less than one hundred percent (100%) of the anticipated cost of such construction work on the Leased Premises, and a payment bond guaranteeing the completion of the improvements free from liens of materialmen, contractors, subcontractors, mechanics, laborers, and other similar liens. Said bonds shall be bonds of a responsible surety company, licensed to do business in California with a financial strength and credit rating reasonably acceptable to Landlord, and shall remain in effect until the entire cost of the work has been paid in full and the new improvements have been insured as provided in this Lease. Any such bonds shall be in a form reasonably satisfactory to Landlord. Landlord may accept such alternative or other security for the completion of such construction as it may approve, which approval shall not be unreasonably withheld. 5.6 Ownership Of Improvements. Notwithstanding anything that is or appears to be to the contrary herein, any and all Improvements erected on the Leased Premises as permitted by this Lease, as well as any and all alterations or additions thereto or any other improvements or fixtures on the Leased Premises, shall be owned by Tenant until the expiration of the Term or sooner termination of this Lease; provided, Tenant shall not waste or destroy any of the above improvements or remove, alter or modify any improvements on the Leased Premises, except as permitted or contemplated by this Lease. Upon the expiration or sooner termination of this Lease, all improvements described above and all alterations, additions or improvements thereto that are made to or placed on the Leased Premises by Tenant or any other person shall be considered part of the real property of the Leased Premises and shall remain on the Leased Premises and become the property of Landlord; provided that Tenant shall retain ownership of and shall be entitled to remove furniture, trade fixtures and removable personal property (which shall be deemed not to include tenant improvements affixed or attached to the premises, including wall coverings, floor coverings, ceilings, or light fixtures, electronic, telephonic or computer systems integrated into the structure of the Improvements on the Leased Premises, or heating, ventilation or air conditioning systems servicing the Leased Premises). Except as otherwise expressly provided in this Lease, said improvements shall become Landlord’s property free and clear of any and all rights to possession and all claims to or against them by Tenant or any third person or entity, and Tenant shall defend and indemnify Landlord and City, and their respective officers, directors, council members, board members, staff, committee members, planning and other commissioners, officials, employees, members, agents, principals, independent contractors, attorneys, accountants, representatives, predecessors, successors and assigns (collectively, “Representatives”) against all liabilities and claims, losses, causes of action, charges, penalties, 293688.2 999100-0001 11/28/2005 - 3:51 pm 17 damages, costs or expenses (including reasonable attorneys’ fees and costs), of whatsoever character, nature and kind, whether to property or person, whether by direct or derivative action, and whether known or unknown, suspected or unsuspected, latent or patent, or existing or contingent (collectively, “Liabilities”) arising from such claims. 5.7 Certificate of Completion. (a) Promptly after completion by Tenant of the Improvements to be constructed on the Leased Premises pursuant to this Lease, Landlord shall furnish Tenant with a Certificate of Completion for the Improvements upon Tenant’s written request therefor. Landlord shall not unreasonably withhold any such Certificate of Completion. Such Certificate of Completion shall be in the form of Exhibit “I” attached hereto and shall conclusively establish that the Improvements required by Landlord to be constructed on the Leased Premise have been satisfactorily completed in full compliance with the terms of this Lease, the CC&Rs and all Applicable Governmental Restrictions of the Landlord and/or City. The Certificate of Completion shall be in such form as to permit it to be recorded in the Office of the Los Angeles County Recorder. (b) After issuance of a Certificate of Completion for the Improvements, Landlord and its successors and assigns shall not have any rights, remedies or controls with respect to the Improvements on the Leased Premises other than those set forth in the CC&Rs, any other covenants, conditions and restrictions recorded against the Leased Premises, the terms, covenants and conditions of the DDA that survive in accordance with Section 6.6 thereof, and this Lease. (c) If Landlord refuses or fails to furnish a Certificate of Completion for the Improvements upon written request from Tenant, Landlord shall, within fifteen (15) days of receipt of said written request, provide Tenant with a written statement of the reason for Landlord’s refusal or failure to furnish a Certificate of Completion. The statement shall also contain Landlord’s statement of the action that must be taken to obtain such Certificate of Completion. If the reason for such refusal is limited to the immediate unavailability of specific items or materials for landscaping, or to uncompleted “punch list” items, the Landlord shall issue a Certificate of Completion upon the posting of a bond by the Tenant with Landlord in an amount representing the cost of the work not yet completed. (d) A Certificate of Completion shall not be construed as a warranty by Landlord and/or City of compliance with or satisfaction of any obligation of Tenant to any holder of any encumbrance, or to any insurer of any such holder; provided, however, that the Certificate of Completion for the Improvements shall constitute acknowledgment by Landlord and/or City that the Tenant’s initial construction obligations under this Lease with respect to the Improvements have been completed and that neither any Lender nor any permitted “Transferee” (as defined in Section 8.2) of any Lender will have any further obligations with respect to such initial construction obligations should they succeed to the Tenant’s rights and obligations under this Lease. A Certificate of Completion is not notice of completion as referred to in California Civil Code Section 3093. ARTICLE 6. REPAIRS AND MAINTENANCE 6.1 Landlord’s Nonresponsibility. During the Term of this Lease, Landlord shall not be required to maintain or make any repairs or replacements of any nature or description whatsoever to the Leased Premises or the improvements thereon. Tenant hereby expressly waives the right to make repairs at the expense of Landlord as provided for in any statute or law in effect at the time of execution of this Lease, or in any other statute or law which may hereafter be enacted. 6.2 Tenant’s Duty to Maintain Premises. Except as specifically otherwise provided for herein, throughout the Term of this Lease Tenant shall, at Tenant’s sole cost and expense, maintain the Leased Premises and the improvements now or hereafter located on the Leased Premises in first class condition and repair and 293688.2 999100-0001 11/28/2005 - 3:51 pm 18 in accordance with (i) all Applicable Governmental Restrictions and (ii) all applicable rules, orders, and regulations of any insurance company insuring all or any part of the Leased Premises or the improvements thereon or both, and Tenant shall make whatever repairs and replacements are required by such enactments or provisions. 6.3 Repair; Destruction. Except as otherwise provided below or in Section 6.4, Tenant shall promptly and diligently repair, replace or restore all damage to or destruction of all or any part of the improvements on the Leased Premises resulting from any cause. Said repair, replacement or restoration shall be commenced as soon as reasonably possible, but in no event later than one hundred and eighty (180) days from the date of such damage or destruction, and shall thereafter be pursued to completion with diligence. The completed work of repair, restoration, or replacement shall be equal in value, quality, and use to the condition of the improvements before the event giving rise to the work, except as may be expressly provided to the contrary in this Lease. Landlord shall not be required to furnish any services or facilities or to make any repairs or alterations of any kind in or on the Leased Premises in connection with such work by Tenant. Landlord may elect to perform any obligation of Tenant under this Section upon Tenant’s failure or refusal to do so, following thirty (30) days written notice; provided, however, that any such work shall be undertaken and completed, to the extent practicable, without disturbing any subtenants on the Leased Premises. Upon delivery of such written notice to Tenant, Landlord shall deliver a copy of such notice to each Lender holding a Leasehold Mortgage on the Leased Premises; provided, such notice shall, in accordance with Section 15.3 below, be only a “courtesy” notice. Such an election by Landlord to perform any obligation of Tenant under this Section shall not constitute a waiver of any right or remedy for Tenant’s default, and Tenant shall promptly reimburse, defend, and indemnify Landlord and City, and their Representatives, against all Liabilities resulting from Landlord’s performance of Tenant’s covenants. All such work of repair, replacement or restoration performed by Tenant shall comply with all of the requirements imposed with respect to Changes to improvements set forth in Section 5.5 of this Lease; provided that no Landlord approvals shall be required in connection with any repair, replacement or restoration work which constitutes a Minor Change. Except as expressly provided in Section 6.4, no deprivation, impairment, or limitation of use resulting from any damage or destruction or event or work contemplated by this Section shall entitle Tenant to any offset, abatement, or reduction in rent, nor to any termination or extension of the Term hereof. In determining whether Tenant has acted promptly as required under this Section, one of the criteria to be considered is the availability of any applicable insurance proceeds. 6.4 Damage or Destruction During Last Part of Term; Uninsured Damage. Notwithstanding anything to the contrary contained in Section 6.3 of this Lease, (a) if there is substantial damage to or destruction of the Leased Premises during the last seven (7) years of the Term, or (b) if there is damage to or destruction of the Leased Premises arising from a cause which is not in fact insured against and is not required to be insured against under any provision of this Lease and if the cost of repairing said damage or destruction exceeds the cost of demolishing and removing the remaining improvements on the Leased Premises (in accordance with the scope of the demolition and removal obligation imposed in Section 14.1 hereof), then Tenant shall have the option to terminate this Lease as of the date Tenant vacates the Leased Premises subject to Tenant’s satisfaction of all of the following requirements: (i) Tenant shall not be in material Default under any provision hereof at the time of termination; and (ii) Tenant shall, within ninety (90) days after the event giving rise to such right to terminate, give Landlord written notice of its election to terminate (“Notice of Election to Terminate”); and (iii) Tenant shall, at the election of Landlord (which election shall be communicated in writing to Tenant (“Demolition Notice”) within thirty (30) days of Landlord’s receipt of the Notice of Election to Terminate), raze and remove the damaged or destroyed improvements and any other improvements on the Leased Premises that Landlord may designate in the Demolition Notice in accordance with the scope of the demolition and removal obligation set forth in Section 14.1 hereof, and shall complete said demolition and removal and shall vacate the Leased Premises within ninety (90) days of Landlord’s delivery of the Demolition Notice 293688.2 999100-0001 11/28/2005 - 3:51 pm 19 (which vacation date shall fix the termination date of this Lease); and (iv) Tenant shall comply with all provisions of Article 14 of this Lease consistent with this Section 6.4 prior to or concurrent with the vacation of the Leased Premises. If Tenant fails to satisfy the requirements set forth in (iii) with respect to demolition and removal of improvements or the requirements of (iv) above, the failure to meet such conditions shall not invalidate the termination, although Tenant shall remain liable to Landlord in damages for such breach. Any and all property damage insurance proceeds (exclusive of any proceeds applicable to Tenant’s personal property that would be retained by Tenant at the end of the Term) paid as a result of the damage or destruction giving rise to the termination, shall be distributed in accordance with the following order of priority: first, to repayment of any outstanding Leasehold Mortgage, if required by the terms of said encumbrance; second, to the demolition and removal costs, if any, incurred by Tenant at Landlord’s direction pursuant to this Section; and third, to Landlord all remaining insurance proceeds. ARTICLE 7. LEASEHOLD FINANCING 7.1 Definitions. As used herein, “Leasehold Mortgage” shall mean any note and the mortgage, deed of trust, or other security instrument securing such note, or an assignment and leaseback, or any other established method of financing real property, which constitutes a lien on the estate created by this Lease. The Construction Loan(s) and the Permanent Loan(s) described in Section 5.2.2 of this Lease are included within the definition of a Leasehold Mortgage, and any reference to a Leasehold Mortgage shall include a reference to such Construction Loan(s) and Permanent Loan(s). “Lender” shall mean the owner and holder of the Leasehold Mortgage. 7.2 Conditions To Obtaining Leasehold Mortgage. Notwithstanding anything which is or appears to be to the contrary in this Lease, Tenant shall not encumber the estate created by this Lease by any mortgage, deed of trust, lien, security instrument or financing conveyance of any kind, including a sale and leaseback (“Encumbrance”) except as expressly provided in this Article 7. Pursuant to Section 5.2.2 of this Lease, and in accordance with the requirements set forth therein, Tenant has obtained or will obtain Construction Loan(s) and Permanent Loan(s) for the purpose of financing construction of the Improvements upon the Leased Premises by Tenant. Prior to issuance of a Certificate of Completion for all of the Improvements, Tenant shall not voluntarily encumber the estate created by this Lease by any other voluntary Encumbrance unless such Encumbrance is first approved in writing by Landlord. Subsequent to issuance of a Certificate of Completion for the Improvements, Tenant shall have the right to encumber the estate created by this Lease with any other Leasehold Mortgages complying with the requirements set forth below. Landlord’s consent to or approval of that Leasehold Mortgage shall not be required, so long as the Leasehold Mortgage conforms to the terms, conditions and limitations set forth in Section 7.2(a)-(f) below: a. Except as otherwise provided above in Section 5.2.2(a) with respect to the Construction Loan, Tenant shall use reasonable efforts to insure that the Leasehold Mortgage provides that any proceeds from fire and extended coverage insurance shall, to the extent required by this Lease, be used for repair or reconstruction of the leasehold improvements and not to repay all or a part of the Leasehold Mortgage. The Leasehold Mortgage shall contain provisions requiring (i) that all notices of default under said Leasehold Mortgage must be sent to Landlord and Tenant and that Landlord shall have the right, but not the obligation, to cure any monetary default of Tenant within 20 b. 293688.2 999100-0001 11/28/2005 - 3:51 pm fifteen (15) days after its receipt of such notice and any other default within thirty (30) days after receipt of such notice; and (ii) that neither Landlord’s right to cure any default nor any exercise of such a right shall constitute an assumption of liability under the Leasehold Mortgage. c. Promptly upon the recording of the Leasehold Mortgage, Tenant shall, at its own expense, cause a copy of the Leasehold Mortgage to be delivered to Landlord and shall cause to be recorded in the Office of the County Recorder of Los Angeles County a written request executed and acknowledged by Landlord for a copy of all notices of default and all notices of sale under the Leasehold Mortgage as provided by applicable law. Inclusion of a request for notice having the effect described above in the body of the recorded Leasehold Mortgage shall constitute compliance with this provision. The Leasehold Mortgage shall be subordinate to Landlord’s fee interest in the Leased Premises and Landlord’s interest under this Lease. The Leasehold Mortgage shall not be cross-collateralized or cross-defaulted with any other loan or encumbrance, shall not secure any obligations other than the Tenant’s obligations arising from financing of the Leased Premises, and shall not constitute a lien or encumbrance against any property other than the Leased Premises. (i) prior to issuance of a Certificate of Completion for the improvements being financed by such Leasehold Mortgage and eighty percent (80%) occupancy of those improvements (the “Completion Date”), the Leasehold Mortgage shall provide and shall make adequate provision for insuring that the maximum permissible outstanding balance of the Leasehold Mortgage, when added to the maximum permissible outstanding balance of all Leasehold Mortgages, if more than one, shall not, at any time, exceed eighty percent (80%) of the incurred and disbursed “Development Costs” (as that term is defined in Section 5.2.2 of this Lease), of the improvements to be located on the Leased Premises; and (ii) following the Completion Date, the Leasehold Mortgage shall provide and shall make adequate provision for insuring that the maximum permissible outstanding balance of the Leasehold Mortgage, when added to the maximum permissible outstanding balance of all Leasehold Mortgages, if more than one, shall not, at any time, exceed eighty percent (80%) of the fair market value of the Improvements located on the Leased Premises at the time of the execution of the Leasehold Mortgage. In the event that the Parties are unable to agree upon the fair market value of the Improvements on the Leased Premises for purposes of determining compliance with this subsection, then an appraisal of those improvements shall be conducted by an independent third-party MAI appraiser selected by Landlord. Tenant shall have the right to challenge the above appraisal by choosing an independent third party MAI appraiser, within thirty (30) days of Tenant’s receipt of the first appraisal, to render a second appraisal. In that event, provided there is no greater than a twenty-five percent (25%) deviation in the two appraisals, the average of the two shall apply. If there is a deviation of greater than twenty-five percent (25%), the two appraisers selected by the Parties shall select a third appraiser, whose appraisal shall determine the fair market value of the improvements located on the Leased Premises; provided, that such third appraisal is no less than the lower of the other two appraisals and no greater than the higher of the other two appraisals. In the event that the third appraisal is not within those 21 d. e. 293688.2 999100-0001 11/28/2005 - 3:51 pm limits, then the final appraised value shall be determined by averaging the third appraisal with whichever of the first two appraisals is closest to said third appraisal. The cost of the above described appraisal(s) shall be shared equally by Landlord and Tenant. f. The Leasehold Mortgage shall not permit or authorize, or be construed to permit or authorize, any Lender to devote the Leased Premises to any uses, or to construct any improvements thereon, other than those uses or improvements provided for and authorized by this Lease. 7.3 Lender’s Rights. 7.3.1 Prior To Extinguishment of Leasehold Mortgage. During the continuance of any Leasehold Mortgage, including any Construction Loan or Permanent Loan, and until such time as the lien of any Leasehold Mortgage has been extinguished: (a) Landlord shall not agree to any mutual termination nor accept any surrender or termination of this Lease, nor shall Landlord consent to any amendment or modification of this Lease without the prior written consent of Lender except in the case of Tenant’s Default which is not cured by Tenant or Lender within the time provided by this Lease; provided, that the provisions of this subsection shall not apply if such cancellation or surrender occurs without Landlord’s consent pursuant to the provisions of the United States Bankruptcy Code, 11 U.S.C. §101, et seq. Notwithstanding that an Uncured Default (as defined in Section 13.5.1 of this Lease) shall have occurred, Landlord shall not have a right to terminate this Lease pursuant to Section 13.5.1, to re-enter the Leased Premises pursuant to Section 13.5.2, or to relet the Leased Premises on Tenant’s account pursuant to Section 13.5.3 unless (i) Landlord shall have given written notice of such Uncured Default (“Notice of Uncured Default”) to any Lender whose name and address was previously given to Landlord in a notice or notices from Tenant or such Lender stating that the notice was for the purpose of notice under this provision and (ii) Lender shall have failed, within sixty (60) days after receipt of the Notice of Uncured Default, to cure said Default; provided that if said Default concerns the payment of any monetary obligations of Tenant under this Lease, Lender shall remedy said Default within thirty (30) days after receipt of the Notice of Uncured Default; and provided, further, that if the Default is such that possession of the Leased Premises is necessary to remedy the Default, Lender shall be allowed a reasonable time after the expiration of said sixty (60) day period within which to remedy such default if (i) Lender shall have fully cured any default in the payment of any monetary obligations of Tenant under this Lease within thirty (30) days after receipt of the Notice of Uncured Default and Lender shall continue to pay currently such monetary obligations as and when the same are due, and (ii) Lender shall have acquired Tenant’s estate in the Leased Premises created hereby or commenced foreclosure or other appropriate proceedings in the nature thereof within said sixty (60) day period and is diligently prosecuting any such proceedings to completion, provided that, so long as Lender is prevented by any process or injunction issued by any court or by any statutory stay, or by reason of any action by any court having jurisdiction of any bankruptcy or insolvency proceeding involving Tenant, from commencing 22 (b) 293688.2 999100-0001 11/28/2005 - 3:51 pm or prosecuting foreclosure or other appropriate proceedings in the nature thereof, Lender shall not be deemed for that reason to have failed to commence such proceedings or to have failed to diligently prosecute such proceedings, provided that Lender shall use reasonable and diligent efforts to contest and appeal the issuance or continuance of any such process, stay or injunction, and shall use reasonable and diligent efforts to seek relief therefrom. Notwithstanding anything to the contrary above, it is hereby agreed and acknowledged that Lender shall not be obligated to pay the late charge provided for in Section 3.1.9 above in order to cure Tenant’s failure to pay the rental due under this Lease, or any installment thereof, provided that Lender pays such rental due in full to Landlord not later than ten (10) days after receipt of the Notice of Uncured Default with respect thereto. If Lender does not pay such rental due in full within said ten (10) days, it shall thereafter be required to pay such late charge in order to cure Tenant’s Default with respect thereto. (c) Any Event of Default under this Lease which in the nature thereof cannot be remedied by Lender shall be deemed to be remedied if (i) within sixty (60) days after receipt of Notice of Uncured Default, or prior thereto, Lender shall have acquired Tenant’s estate in the Leased Premises created hereby or shall have commenced foreclosure or other appropriate proceedings in the nature thereof, (ii) Lender shall diligently prosecute any such proceedings to completion, (iii) Lender shall have fully cured any default in the payment of any monetary obligations of Tenant hereunder within thirty (30) days after receipt of the Notice of Uncured Default and Lender shall thereafter continue to faithfully perform all such monetary obligations, and (iv) after gaining possession of the Leased Premises, Lender performs all other obligations of Tenant hereunder as and when the same are due, provided that, so long as Lender is prevented by any process or injunction issued by any court or by any statutory stay, or by reason of any action by any court having jurisdiction of any bankruptcy or insolvency proceeding involving Tenant, from commencing or prosecuting foreclosure or other appropriate proceedings in the nature thereof, Lender shall not be deemed for that reason to have failed to commence such proceedings or to have failed to diligently prosecute such proceedings, provided that Lender shall use reasonable and diligent efforts to contest and appeal the issuance or continuance of any such process, stay or injunction, and shall use reasonable and diligent efforts to seek relief therefrom. Notwithstanding anything to the contrary above, it is hereby agreed and acknowledged that Lender shall not be obligated to pay the late charge provided for in Section 3.1.9 above in order to cure Tenant’s failure to pay the rental due under this Lease, or any installment thereof, provided that Lender pays such rental due in full to Landlord not later than ten (10) days after receipt of the Notice of Uncured Default with respect thereto. If Lender does not pay such rental due in full within said ten (10) days, it shall thereafter be required to pay such late charge in order to cure Tenant’s Default with respect thereto. If Tenant should default under the terms and provisions of a Leasehold Mortgage and the Lender commences foreclosure thereon, whether by judicial proceedings or by virtue of any power contained in the Leasehold Mortgage: (i) Lender may, without Landlord’s prior approval, transfer the leasehold estate in the Leased Premises to any party (the “Proposed Transferee”) desiring to bid on or purchase the leasehold estate in the Leased Premises through, or in lieu of, foreclosure or other appropriate proceedings in the nature thereof, or 23 (d) 293688.2 999100-0001 11/28/2005 - 3:51 pm (ii) Lender or Lender’s Affiliate may, without the Landlord’s prior approval, acquire the leasehold estate in the Leased Premises and thereafter convey said leasehold estate to any party (the “Successor Transferee”) desiring to purchase the leasehold estate from Lender. The foreclosure of a Leasehold Mortgage (to which neither Landlord’s fee interest in the Leased Premises nor Landlord’s interest under the Lease is subject) whether by judicial proceedings or by virtue of any power contained in the Leasehold Mortgage, or any conveyance of the leasehold estate in the Leased Premises from Tenant to Lender or a Proposed Transferee through, or in lieu of, foreclosure or other appropriate proceedings in the nature thereof or from Lender to a Successor Transferee shall not constitute a Default under this Lease, and upon such foreclosure or conveyance to Lender, a Proposed Transferee or Successor Transferee, Landlord shall recognize Lender or such Proposed Transferee or Successor Transferee as Tenant hereunder provided that Lender, such Proposed Transferee or Successor Transferee shall take subject to all of the obligations of Tenant under this Lease and assume and agree to timely perform the obligations of Tenant hereunder as a condition to maintenance of this Lease. Lender’s, Proposed Transferee’s or Successor Transferee’s assumption of Tenant’s obligations and liability hereunder shall continue only for the period of time that Lender or Proposed Transferee or Successor Transferee remains Tenant hereunder; provided that further Transfer of this leasehold estate by a Proposed Transferee or Successor Transferee shall be subject to Landlord’s prior written consent in accordance with Section 8.2. (e) If the Lender is an institutional lender such as a bank, savings and loan association, insurance company, or union pension or retirement fund, Lender may intervene in any action or proceeding (including, without limitation, arbitration proceedings) between Landlord and Tenant, which Lender, or its counsel, determines may affect Lender’s interests. Notwithstanding the commencement of foreclosure proceedings against Tenant following its default under the terms of a Leasehold Mortgage by the Lender under that Leasehold Mortgage, such Lender may terminate those foreclosure proceedings if Tenant cures all defaults under the Leasehold Mortgage prior to completion of such foreclosure proceedings. Subsequent to Foreclosure of Leasehold Mortgage. (f) 7.3.2 After the foreclosure of a Leasehold Mortgage, whether by judicial proceedings or by virtue of any power contained in the Leasehold Mortgage, or after an assignment in lieu thereof, and continuing during the period in which Lender remains Tenant: a. Provided that, in connection with the acquisition of its interest in the leasehold estate, Lender shall have cured any Default of Tenant in accordance with and by the times required in Sections 7.3.1(b) and (c) above, then the deadlines set forth in the Schedule of Performance which are thereafter applicable to the Lender shall be extended by a period of time equal to the number of days during which the Lender was diligently curing any such Default by Tenant; provided, that, in no event, shall such extension exceed one hundred and eighty (180) days. 293688.2 999100-0001 11/28/2005 - 3:51 pm 24 b. Notwithstanding anything that is or appears to be to the contrary in Section 5.2.1, all submissions with respect to the Plans or any proposed changes in the Plans which are required by Section 5.2.1 shall be deemed approved if: (i) Lender’s initial submission of such Plans is accompanied by a written notice to Landlord, requesting Landlord to approve or disapprove the submission within thirty (30) days and notifying Landlord that the failure to act in that time may result in a deemed approval; (ii) following the failure of the Landlord to approve or disapprove such Plans within said thirty (30) day period, Lender serves a written notice (“Final Notice”) on Landlord informing it that the failure to approve or disapprove such Plans within ten (10) days from the receipt of the Final Notice will result in a deemed approval of such Plans; and (iii) Landlord fails to approve or disapprove the submission within the ten (10) day period after the receipt of the Final Notice. In the event of damage to or destruction of all or any part of the improvements on the Leased Premises from a cause insured against under this Lease following Lender’s acquisition of Tenant’s estate in the Leased Premises by foreclosure or a conveyance of the leasehold estate in lieu thereof, and provided that the insurance required by Article 11 of this Lease with respect to such damage was in force at the time of such damage or destruction, Lender’s obligation to repair, replace or reconstruct the damaged or destroyed improvements shall be limited to the amount of the insurance proceeds payable for such damage or destruction; provided, such repair, replacement or reconstruction shall be comparable in quality to the part of the improvements so damaged or destroyed and shall be otherwise undertaken and completed in compliance with the requirements of Section 6.3. In the event of damage to or destruction of a part of the improvements on the Leased Premises as a result of a “Partial Taking” (as defined in Section 12.1 below) following Lender’s acquisition of Tenant’s estate in the Leased Premises by foreclosure or a conveyance of the leasehold estate in lieu thereof, Lender’s obligation to reconstruct, repair, and restore the improvements on the Leased Premises shall be limited to the amount of the Tenant’s share of the Award described in Section 12.4; provided any such reconstruction, repair or restoration shall be comparable in quality to the part of the improvements on the Leased Premises so taken and shall be otherwise undertaken and completed in compliance with the requirements of Section 12.4. New Lease Provision. c. d. 7.3.3 Except as expressly provided in the last sentence of this Section, in the event of a termination of this Lease as a result of any bankruptcy proceeding brought by or against Tenant, Lender shall have the right to enter into a new lease of the Leased Premises with Landlord within sixty (60) days after such termination; provided, that (i) Lender submits a written notice to Landlord of Lender’s election to enter into the new lease within thirty (30) days after such termination, and (ii) such new lease is effective as of the date of the termination of this Lease and is for the remainder of the term and upon the terms, covenants, provisions and conditions of this Lease, including all terms relating to any rent payable by Tenant. Upon the execution of the new lease Lender shall (i) pay any and all sums which would at the time of execution thereof be due under this Lease but for its termination, and (ii) cure any other existing defaults, or agree in writing to cure such defaults within a reasonable time acceptable to Landlord, to the extent such defaults are capable of being cured. Lender shall pay all necessary and reasonable expenses, including reasonable attorneys’ fees and court costs, incurred by Landlord in terminating this Lease, recovering possession of the Leased 293688.2 999100-0001 11/28/2005 - 3:51 pm 25 Premises, and preparing, executing and delivering the new lease. The new lease shall, at the request of Lender, be accompanied by a deed in recordable form, acceptable to Landlord in its reasonable discretion, pursuant to which all improvements located on the Leased Premises will be deeded to Lender until the expiration or earlier termination of the lease. Nothing herein contained shall be deemed to impose any obligation on the part of Landlord to deliver physical possession of the Leased Premises to Lender. Notwithstanding anything above which is or appears to be to the contrary, this Section shall not apply to any termination which occurs following the Lender’s failure to timely exercise the cure rights provided to Lender in Section 7.3 above. 7.4 Encumbrance of Personal Property. Notwithstanding any other provision contained in this Lease to the contrary, Tenant may grant to the Construction Lender, Permanent Lender or other Lender a security interest in the personal property owned by Tenant on or about the Leased Premises including, without limitation, any portion of the Improvements considered to be personal property, and Landlord agrees to join in the execution of any security agreements, UCC-1's or other security instruments (“Security Agreement”), containing such terms and provisions as are reasonably acceptable to Landlord, Tenant and the affected Lender, as are sufficient to subject any interest of Landlord in such personal property to any lien created under any such Security Agreement, or Landlord shall execute a Landlord’s Consent and Waiver, on reasonable terms and provisions acceptable to Landlord, affirming the right of a secured party to remove the personal property collateral covered by such Security Agreement from the Leased Premises. ARTICLE 8. ASSIGNMENT AND TRANSFER 8.1 Assignment to City; Recoupment Fee. Landlord shall have the right to assign and/or convey all or a portion of its interest in the Leased Premises and/or in the Lease to the City. Pursuant to any such assignment or conveyance, Landlord and City shall enter into a cooperation agreement (“Cooperation Agreement”) wherein City shall agree to participate in the redevelopment as described therein. In the event of any assignment of all or a part of Landlord’s interest in either the Leased Premises or the Lease to the City, Tenant shall attorn to the City and recognize City as the landlord under this Lease, provided that City shall acquire the Leased Premises subject to this Lease. As consideration for its development opportunity under this Lease, and in consideration for the City’s entering into the DDA, its undertakings pursuant to the Cooperation Agreement, and its provision of services arising out of and in connection with the development and use of the Leased Premises, Tenant agrees that it will pay to the City a recoupment fee (“Recoupment Fee”) in lieu of any gross, fixed, minimum or guaranteed rental, any overage, additional, participation or percentage rental or any other rental which is payable pursuant to this Lease and which has been assigned to the City or is otherwise payable to City, to the extent that it is determined that the City is restricted by law from receiving any or all of such rental; provided, (i) that Tenant shall first be given written notice of such assignment and written notice that City has been restricted by law from receiving any such assigned Ground Lease payments, and (ii) that any such Recoupment Fee payment shall be credited against the rental accruing pursuant to this Lease otherwise due to City or Landlord. The Recoupment Fee shall be payable in the same amounts, at the same time, in the same manner, and on the same provisions as the assigned rental payments of which it is in lieu. 8.2 Transfer of Lease or Leased Premises by Tenant; Transfer of Beneficial Interest or Ownership of Tenant; Selection Of Management Entity and Assignment of Beneficial Interest In or Ownership of Entity; Subleases, Licenses or Concession Agreements. The restrictions contained in this Section 8.2 upon any transfer, sale, assignment, lease, sublease, license, franchise, gift, hypothecation, mortgage, pledge or encumbrance, or the like (“Transfer”) to any person or entity (“Transferee”) are imposed because Tenant’s qualifications are 293688.2 999100-0001 11/28/2005 - 3:51 pm 26 of particular concern to Landlord and City, and Landlord has entered into this Lease in reliance upon Tenant’s qualifications. Any purported Transfer which is prohibited by this Section 8.2 or Section 7.2 shall be ipso facto null and void, and no voluntary or involuntary successor to any interest of Tenant under such a Transfer shall acquire any rights pursuant to this Lease. These restrictions on Transfer shall be binding on any successors, heirs or permitted Transferee of Tenant. 8.2.1 Transfer of the Lease, the Leased Premises, or the Improvements to be Constructed Thereon. Except as otherwise provided in this Lease, Tenant shall not Transfer all or any portion of its rights under or interest in this Lease, the Leased Premises, or the Improvements constructed thereon without the Landlord’s prior written consent, which consent may be granted or withheld in Landlord’s sole discretion. (a) Landlord agrees that it shall not unreasonably withhold its consent at any time, commencing upon the Effective Date of this Lease and continuing until the recordation of a Certificate of Completion and issuance of certificates of occupancy for not less than three-fourths of all the Improvements constructed on the Leased Premises in accordance with this Lease, to an assignment of any of Tenant’s rights under or interest in this Lease, the Leased Premises, or the Improvements to be constructed thereon to (i) an Affiliate of Tenant or a joint venture or partnership between Tenant (or an Affiliate of Tenant) and an established and financially secure investor or institutional lender or (ii) a joint venture or partnership between Tenant (or an Affiliate of Tenant) and a prime tenant or a prime tenant’s designee if that joint venture or partnership is created in connection with the location and operation on the Leased Premises of said prime tenant; provided, that (aa) any such assignee pursuant to this paragraph shall expressly assume liability with Tenant under this Lease to the extent of said assignee’s interest; (bb) such assignment shall not relieve Tenant of day to day control of and responsibility for development, construction, leasing, and/or management of the Leased Premises or any of its obligations hereunder; (cc) Tenant shall remain fully responsible to Landlord in accordance with the terms and provisions of this Lease; (dd) Tenant (or an Affiliate of Tenant) shall retain at least twenty-five percent (25%) beneficial ownership and greater than fifty percent (50%) voting control of the joint venture or other form of partnership taking an assignment hereunder; and (ee) except for reasonable rents (not exceeding the fair market rental value that would be established in an arm’s length transaction) received by Tenant from an assignee hereunder for the Improvements on the Leased Premises occupied by said assignee, all consideration received or payable for such an assignment shall be reinvested in the development of the Leased Premises, or used to reimburse the Tenant or an Affiliate of Tenant for amounts previously invested by Tenant in the development of the Leased Premises. (b) Following recordation of a Certificate of Completion and issuance of certificates of occupancy for not less than three-fourths of all the Improvements constructed on the Leased Premises in accordance with this Lease, and provided Tenant is not then in Default hereunder, Tenant may assign all or any portion of the Leased Premises, the Improvements constructed thereon, or its rights under or interest in this Lease; provided, that in each instance Tenant shall first secure the written consent of Landlord to any such proposed assignment, which consent shall not be unreasonably withheld. The refusal of the Landlord to consent to any proposed Transfer of Tenant’s rights under or interest in the Lease, the Leased Premises, or the Improvements constructed thereon pursuant to this Subsection, shall be deemed to be reasonable if the proposed Transferee is unable to document, to Landlord’s satisfaction in its good faith discretion, that (i) the proposed assignee has a financial capacity and net worth at least equal to that of the assignor as of the date of this Agreement or the date of the proposed assignment, whichever is greater, (ii) the proposed assignee is of good standing and repute, with a reputation for quality of property development and operation at least equal to that of the assignor, and (iii) the proposed assignee has demonstrated the capability to manage developments of the size and character of the improvements located on the Leased Premises in accordance with the existing quality standards of the building and the project of which it is a part (the foregoing criteria set forth in (i) - (iii) above are referred to herein as the “Transfer Criteria”). Upon any approved assignment of this Lease or the Leased Premises (other than for security purposes), said assignee shall expressly assume liability with Tenant for the obligations of 293688.2 999100-0001 11/28/2005 - 3:51 pm 27 Tenant under this Lease to the extent of said assignee’s interest, and, notwithstanding any such assignment, Tenant shall remain fully responsible to Landlord in accordance with the terms and provisions of this Lease; provided that, with the exception of an assignment to an Affiliate of Tenant, if (i) said assignee has a net worth of at least one-fifth of the value of the improvements on the Leased Premises, and (ii) said assignee does not commit a material Default at any time within the three (3) years immediately following said assignment, then Tenant shall have no further responsibility to Landlord under this Lease to the extent of Tenant’s assignment of its interest hereunder. 8.2.2 Transfer of Control of Tenant; Retention of Management Entity and Transfer of Interest Therein. (a) The term “ownership and/or control” as used herein includes, without limitation, all voting rights and beneficial ownership with respect to all classes of stock, interests in partnerships and/or beneficial interests under a trust, as may be applicable to the type of entity which is prohibited from making the particular Transfer in question. For purposes of this Section 8.2.2, the term “Third Party” shall mean and include any person or entity that has acquired or hereafter acquires any interest in Tenant, or any person or entity that is a joint venturer or affiliate of Tenant with respect to all or any portion of the Leased Premises and/or this Lease, or any person or entity that is or becomes a limited and/or general partner of any such joint venturer or affiliate of Tenant with respect to all or any portion of the Leased Premises and/or this Lease. (b) Except as otherwise provided herein, prior to recordation of a Certificate of Completion and issuance of certificates of occupancy for not less than three-fourths of all Improvements constructed on the Leased Premises in accordance with this Lease, Tenant shall not suffer or permit the direct or indirect Transfer of more than twenty-five percent (25%) of its present ownership and/or control, in the aggregate taking all Transfers into account on a cumulative basis (but without double counting of successive Transfers by Third Parties of the same interest in the ownership and/or control of Tenant), without the prior written consent of Landlord, which consent may be granted or withheld in the sole discretion of Landlord. (i) Notwithstanding the limitations of subsection (b) above, prior to recordation of a Certificate of Completion and issuance of certificates of occupancy for not less than three-fourths of all Improvements constructed on the Leased Premises in accordance with this Lease, Landlord agrees that it will not unreasonably withhold its consent to a Transfer of not more than forty-nine percent (49%) of Tenant’s present ownership and/or control (but without double counting of successive Transfers by Third Parties of the same interest in the ownership and/or control of Tenant), in the aggregate taking all Transfers into account on a cumulative basis, to an Affiliate of Tenant, or an established and financially secure investor or institutional lender or to a prime tenant (or its designee) purchasing an interest in Tenant in connection with said entity’s location and operation on the Leased Premises; provided, however, that such Transfer (i) shall not diminish Tenant’s ability to perform its obligations hereunder and (ii) except for reasonable rents (equal to the fair market rental value that would be established in an arm’s length transaction) received by Tenant from a Transferee of Tenant’s ownership and/or control because of said Transferee’s occupancy and use of some or all of the Improvements on the Leased Premises, all consideration received or payable for such a Transfer of Tenant’s ownership and/or control shall be reinvested in development of the Leased Premises, or used to reimburse Tenant for amounts previously invested by Tenant in the development of the Leased Premises. (ii) In the event that any Transferee is a corporation, partnership or trust, unless the prior written consent of Landlord is obtained, which consent shall not be unreasonably withheld, Tenant shall not suffer or permit any Transferee to directly or indirectly Transfer more than forty-nine percent (49%) of such Transferee’s ownership and/or control existing at the time it became a Transferee, in the aggregate taking all Transfers into account on a cumulative basis (but without double counting of successive Transfers of the same interest in the ownership and/or control of said Transferee). (iii) In the event that any Third Party is a corporation, partnership or trust, unless the prior written consent of Landlord is obtained, which consent shall not be unreasonably withheld, Tenant shall not suffer or permit any Third Party to directly or indirectly 293688.2 999100-0001 11/28/2005 - 3:51 pm 28 Transfer more than forty-nine percent (49%) of such Third Party’s ownership and/or control existing at the time it became a Third Party, in the aggregate taking all Transfers into account on a cumulative basis (but without double counting of successive Transfers of the same interest in the ownership and/or control of said Transferee). (c) Except as provided in Section 7.3.1(d) herein, after recordation of a Certificate of Completion and issuance of certificates of occupancy for not less than three-fourths of all of the Improvements constructed on the Leased Premises in accordance with this Lease, Tenant shall not directly or indirectly Transfer more than forty-nine percent (49%) of its present ownership and/or control, in the aggregate taking all Transfers into account on a cumulative basis (but without double counting of successive Transfers by Third Parties of the same interest in the ownership and/or control of Tenant), without the prior consent of Landlord, which consent will not be unreasonably withheld. The failure of Landlord to consent to any proposed Transfer of the ownership and/or control of Tenant shall be deemed to be reasonable if the proposed Transferee is unable to document, to Landlord’s satisfaction in its good faith discretion, its compliance with the Transfer Criteria set forth in Section 8.2.1 above. Notwithstanding anything that is or appears to be to the contrary herein, the provisions of Sections 8.2.2(b) and (c) shall not apply (i) to any institutional Lender that acquires Tenant’s leasehold interest in the Leased Premises pursuant to the provisions of Section 7.3.1(d), provided such leasehold interest comprises not more than five percent (5%) of the Lender’s assets and the Transfer at issue is not being undertaken for the purpose and with the intent of circumventing the restrictions on Transfer otherwise applicable under Section 8.2.1, or (ii) to public trading of any stock or securities in any corporation or partnership if the stock or securities of such party are traded publicly on a national stock exchange or in the over-the-counter market and if the price of such stock or securities are regularly quoted in a recognized national quotation service, or if such party is one of the fifty (50) largest mutual insurance companies in the United States, provided this exception shall not apply if the Transfer is the result of the original issuance of such stock or security interests or if the Transfer at issue is being undertaken for the purpose and with the intent of circumventing the restrictions on Transfer otherwise applicable under Section 8.2.1. (d) Unless the prior written consent of Landlord is obtained, which consent shall not be unreasonably withheld, Tenant shall not retain or authorize any person or entity to perform any management and/or supervisory functions (“Management Entity”) with respect to the development and/or operation of the Leased Premises or of any of the improvements thereon; provided, however, that Landlord’s consent shall not be required in connection with the retention of a Management Entity if (i) said entity is owned and controlled by Tenant or an Affiliate of Tenant or (ii) said entity is being retained for a period of two (2) years or less, including any option for extension or renewal, and said entity is recognized as an expert in management of developments of the size and character of those located on the Leased Premises and has a reputation for quality management of Class A office properties. In the event that Tenant retains a Management Entity and such act requires Landlord’s prior written consent, Tenant shall not permit said Management Entity or any person or entity which is a stockholder of or a general or limited partner in said Management Entity, or any person or entity which is a joint venturer or affiliate of said Management Entity to directly or indirectly Transfer more than forty-nine percent (49%) of its present ownership and/or control in the aggregate, unless the prior written consent of Landlord is obtained, which consent shall not be unreasonably withheld. 8.2.3 Concessions, Licenses and Subleases. Notwithstanding anything above which is or appears to be to the contrary, including any restrictions on Transfer contained in Section 8.2 of this Lease, Tenant shall be entitled at any time to enter into license(s), sublease(s) and concession agreement(s) (collectively, “Sublease” or “Subleases”) concerning the Leased Premises without Landlord’s prior written approval; provided, however, that if such Sublease, (i) relates to gross leasable area in excess of forty thousand (40,000) square feet or (ii) involves a term in excess of fifteen (15) years, including any options for renewals or extensions, then Tenant shall obtain Landlord’s prior written consent to such Sublease, which 293688.2 999100-0001 11/28/2005 - 3:51 pm 29 consent shall not be unreasonably withheld. A Sublease meeting either of the requirements set forth in (i) or (ii) above is hereinafter referred to as a “Major Sublease”. For purposes of applying the forty thousand (40,000) square foot limitation set forth above all Subleases between Tenant and any one sublessee, licensee or concessionaire (collectively, “Sublessee”), or any relative thereof or any entity affiliated with or related thereto, shall be aggregated, regardless of when said Subleases were executed, and regardless of whether said Subleases concern contiguous areas. In the event that Tenant is required to obtain Landlord’s approval of a Sublease, Tenant shall submit copies of all written agreements proposed to be entered into between Tenant and the proposed Sublessee and any other documents relevant thereto. In addition, Tenant shall provide Landlord with that information regarding the proposed Sublessee set forth in Section 8.3, and any other information Landlord may reasonably request. All Subleases shall comply with all of the following conditions, and Landlord’s refusal to consent to a proposed Major Sublease or any proposed Sublessee thereunder shall be considered to be reasonable if said Major Sublease or the Sublessee thereunder would violate any of these conditions (as determined by Landlord in its reasonable discretion unless otherwise expressly provided): (a) The proposed Sublessee shall be financially responsible and its proposed use of the Leased Premises shall be consistent with the operation thereof as a Class A office facility; (b) The term of any Sublease shall not extend beyond the Term of this Lease, or, except as expressly provided in Subsection (i) herein, otherwise limit, restrict or impede Landlord’s exercise of any of its rights and remedies hereunder; (c) The proposed Sublease shall contain the nondiscrimination provisions set forth in Section 4.4 hereof; (d) The proposed Sublease shall contain a provision satisfactory to both Landlord and all Lenders requiring the Sublessee, in the event that Tenant Defaults under this Lease, to attorn to Landlord or Landlord’s successors or assigns, or, in the event of a foreclosure of the Leasehold Mortgage, to the Lender on that Leasehold Mortgage; (e) The proposed Sublease shall not result in the violation of any Applicable Governmental Restrictions; (f) The proposed Sublease shall be in writing and shall provide that, after execution, it will be reproduced and supplied to Landlord on demand; (g) The proposed Sublease shall provide that Tenant shall not accept, directly or indirectly, more than three (3) months’ prepaid rent from any Sublessee, not including any good faith bona fide security deposit or other security deposited with Tenant at the time of the execution of such Sublease; (h) The proposed Sublease, if originally requiring Landlord’s consent, shall include provisions prohibiting its Transfer without the consent of Landlord, which consent shall not be unreasonably withheld; (i) The proposed Sublease shall explicitly provide that it is subject and subordinate to the terms and provisions of this Lease; provided, that, with Landlord’s written consent, a Sublease may contain provisions, in a form satisfactory to Landlord and Lender(s) in their discretion, providing that such Sublessee’s possession and use shall not be disturbed by Landlord or by Lender as long as (i) the Sublessee is not in default under the terms of the Sublease, and (ii) the Sublessee attorns to Landlord and Lender(s) according to their respective interests. In the event that Tenant submits a written request to Landlord for its approval of (i) a Major Sublease, (ii) a non-disturbance agreement under Section 8.2.3(i), or (iii) a Transfer pursuant 293688.2 999100-0001 11/28/2005 - 3:51 pm 30 to Section 8.2.3(h), Landlord shall approve or disapprove said Major Sublease, non-disturbance agreement or Transfer in writing within ten (10) working days after Tenant’s written request and submission of all documents necessary for Landlord to act thereon as required by this Lease. 8.3 Investigation of Proposed Transferee; Costs. In the event that Tenant requests Landlord’s written consent to a proposed Transfer pursuant to Section 8.2 of this Lease, Tenant agrees to provide Landlord with such information, including financial statements and tax returns, as Landlord may reasonably require in order to evaluate the solvency, financial responsibility and relevant business acumen and experience of any proposed Transferee. At the time of any request by Tenant for consent to a Transfer pursuant to Section 8.2, Tenant shall make such request in writing and shall submit to Landlord and City (i) all binding agreements and documents evidencing and/or relating to the circumstances surrounding such Transfer, and (ii) a certificate setting forth representations and warranties by Tenant and the Transferee to Landlord and City sufficient to establish and insure that all requirements of Section 8.2 have been and will be met. With respect to a proposed assignment pursuant to Section 8.2.1 or 8.2.2, Landlord agrees to make its decision on Tenant’s request for consent to such an assignment, as promptly as possible, and, in any event, not later than thirty (30) days after Landlord receives the last of the items required by the preceding sentence. Except as otherwise provided in Section 8.2, if Landlord consents to any Transfer pursuant to that Section, such consent shall not be effective unless and until (i) Tenant gives notice of the Transfer and a copy of any documents effecting and/or evidencing such Transfer to Landlord and (ii) any such Transferee (other than a Sublessee and a Lender with respect to a Transfer for security purposes only) assumes all of the obligations and liabilities of Tenant under this Lease to the extent of its interest. In order to enable Landlord to adequately investigate the proposed Transferee’s qualifications, Tenant shall pay within five (5) days of Landlord’s written request therefor, all actual expenses incurred by Landlord and City in connection with the investigation of the proposed Transferee, including attorneys’ fees and costs and all consultant fees. Notwithstanding the above, such fees and costs shall not apply to any Foreclosure by or subsequent Transfer of all of Lender’s interest pursuant to Section 7.3.1(d) or 7.3.3. ARTICLE 9. TAXES AND IMPOSITIONS 9.1 Tenant To Pay Impositions. In addition to the rents and other payments required to be paid under this Lease, Tenant shall pay any and all taxes, assessments, and other charges of any description including, without limitation, the possessory interest tax and any assessment or charge imposed pursuant to any assessment district bonds issued in connection with the development or maintenance of the Cerritos Towne Center, or imposed upon the Leased Premises pursuant to Section 5.6 or 8.10 of the DDA, or otherwise, (collectively, “Impositions”) levied or assessed from the Effective Date until the termination of this Lease by any governmental agency or entity on or against the Leased Premises or any portion thereof, or on or against any interest in the Leased Premises (including the leasehold interest created by this Lease), or any improvements or other property in or on the Leased Premises. The timely payment of the above referenced assessments or other charges is a material term of this Lease, and, to the extent they are payable to Landlord or its successors or assigns, shall constitute additional rent hereunder. If, by law, any such Imposition is payable, or may, at the option of Tenant be paid, in installments, Tenant may pay the same, together with any accrued interest on the unpaid balance of such Imposition, in such installments as those installments respectively become due and before any fine, penalty, interest, or cost may be added thereto for the nonpayment of any such installment and interest. 293688.2 999100-0001 11/28/2005 - 3:51 pm 31 9.2 Proration of Impositions. All Impositions levied or assessed on or against the Leased Premises during a tax year (commencing on July 1 and ending on June 30) which is partially included within the Term of this Lease shall be prorated, based on a 365 day year, between Landlord and Tenant as if Landlord were a private party; so that Landlord shall be responsible for the portion, if any, of such Imposition attributable to any period prior to the commencement or subsequent to the expiration or termination of this Lease, and Tenant shall pay the portion thereof attributable to any period during the Term of this Lease. On service of written request by Landlord, Tenant shall promptly pay to Landlord Tenant’s share of such Impositions paid by Landlord on Tenant’s behalf and, on service of written request by Tenant, Landlord shall promptly pay to Tenant Landlord’s share of such Imposition’s paid by Tenant on Landlord’s behalf. 9.3 Payment Before Delinquency. Subject to Tenant’s right to contest under Section 9.4, any and all Impositions and installments of Impositions required to be paid by Tenant under this Lease shall be paid by Tenant prior to delinquency, and copies of the official and original receipt for the payment of such Imposition or installment thereof shall immediately be given to Landlord upon Landlord’s request therefor. 9.4 Contest of Imposition. Tenant shall have the right to contest, oppose, or object to the amount or validity of any Imposition levied on or assessed against the Leased Premises or any portion thereof and may in good faith diligently conduct any necessary proceeding to prevent or void or reduce the same; provided, however, that the contest, opposition, or objection must be filed before the Imposition at which it is directed becomes delinquent if such contest, opposition or objection is required to be made or filed prior to payment of the Imposition being challenged, and written notice of the contest, opposition, or objection must be given to Landlord at least thirty (30) days before the date the Imposition becomes delinquent. No such contest, opposition, or objection shall be continued or maintained after the date on which the Imposition at which it is directed becomes delinquent unless Tenant has met one of the following conditions: (a) Paid such Imposition under protest prior to its becoming delinquent; or (b) Posted such bond or other security, satisfactory to Landlord, as is necessary to protect Landlord and the Leased Premises from any lien arising from such Imposition. Landlord shall not be required to join in any proceeding or contest brought by Tenant unless the provisions of any law require that the proceeding or contest be brought by or in the name of Landlord or any owner of the Leased Premises. In that case, Landlord shall join in the proceeding or contest or permit it to be brought in Landlord’s name but such action shall be without cost to Landlord. 9.5 Tax Returns And Statements. Tenant shall, as between Landlord and Tenant, have the duty of attending to, preparing, making, and filing any statement, return, report, or other instrument required or permitted by law in connection with the determination, equalization, reduction, or payment of any Imposition that is or may be levied on or assessed against the Leased Premises, or any portion thereof, or any interest therein, or any improvements or other property on the Leased Premises. 9.6 Indemnification. Tenant shall indemnify, defend and hold Landlord and City, and their Representatives, and Landlord’s property (including the Leased Premises and any improvements now or hereafter located on the Leased Premises) free and harmless from any Liabilities resulting from any Impositions required by this Article to be paid by Tenant, and from all interest, penalties, and 293688.2 999100-0001 11/28/2005 - 3:51 pm 32 other sums imposed thereon, and from any sale or other proceeding to enforce collection of any such Imposition. 9.7 Payment By Landlord. Should Tenant fail to pay within the time specified in this Article any Impositions required by this Article to be paid by Tenant, Landlord may, without notice to or demand on Tenant, pay, discharge, or adjust such Imposition for the benefit of Tenant. In such event, Tenant shall, on or before the first day of the next calendar month following any such payment by Landlord, reimburse Landlord for the full amount incurred by Landlord in so paying, discharging, or adjusting such Imposition, together with interest thereon at the Default Rate from the date of payment by Landlord until the date of repayment by Tenant, and the above obligation of Tenant to reimburse Landlord shall be treated as and become a part of Tenant’s obligation to pay rent under this Lease. ARTICLE 10. UTILITY SERVICES 10.1 Tenant’s Responsibility. During the term of this Lease, Tenant shall pay, or cause to be paid, and shall indemnify, defend and hold Landlord and the property of Landlord harmless from all charges for water, sewage, gas, heat, air conditioning, light, power, steam, telephone service and all other services and utilities used, rendered or supplied to, on or in the Leased Premises. 10.2 Landlord and City Have No Responsibility. Landlord shall not be required to furnish to Tenant or any other occupant of the Leased Premises during the term of this Lease, any water, sewage, gas, heat, air conditioning, light, power, steam, telephone, or any other utilities, equipment, labor, materials or services of any kind whatsoever, except that, in the event City becomes Landlord hereunder, it shall supply Tenant municipal services with respect to the above items to the extent, and upon the terms and conditions, that such municipal services are supplied to the public generally. ARTICLE 11. INSURANCE 11.1 Fire and Extended Coverage Insurance. Throughout the term of this Lease, Tenant, at no cost or expense to Landlord, shall keep or cause to be kept, for the mutual benefit of Landlord and Tenant, a policy of standard fire insurance, with extended coverage and vandalism and malicious mischief endorsements, insuring all improvements located on or used in connection with and appurtenant to the Leased Premises, except for foundations and footings. The amount of insurance required hereunder shall in no event be less than one hundred percent (100%) of the full replacement cost of the improvements on the Leased Premises. 11.2 Cooperation in Obtaining Proceeds of Fire and Extended Coverage. Landlord shall, at no cost or expense to Landlord, cooperate fully with Tenant to obtain the largest possible recovery under all policies required by Section 11.1. All such proceeds shall be paid to a responsible, independent and established insurance trustee satisfactory to Landlord, Tenant and Lender, and such payee shall apply the proceeds as required by this Lease. 11.3 Builder’s Risk and Worker’s Compensation Insurance. Before commencement of any demolition or construction work on the Leased Premises, Tenant shall procure, and shall maintain in force until completion and acceptance of the work (i) “all risks” builder’s risk insurance, including coverage for vandalism and malicious mischief, in a form and amount and with a company reasonably acceptable to Landlord, and (ii) worker’s compensation insurance covering all persons employed in connection with work on the Leased Premises and with respect to whom death or bodily injury claims could be asserted against 293688.2 999100-0001 11/28/2005 - 3:51 pm 33 Landlord or the Leased Premises. Said builder’s risk insurance shall cover improvements in place and all material and equipment at the job site furnished under contract, but shall exclude contractor’s, subcontractor’s, and construction manager’s tools and equipment and property owned by contractor’s or subcontractor’s employees. 11.4 Public Liability Insurance. Tenant, commencing on the Effective Date and continuing throughout the Term hereof, shall maintain, at no cost or expense to Landlord, with a reputable and financially responsible insurance company acceptable to Landlord, for the mutual benefit of Landlord and Tenant, comprehensive broad form general public liability insurance against claims and liability for personal injury, death, or property damage arising from the use, occupancy, misuse or condition of the Leased Premises, the improvements thereon, or any adjoining areas or ways, which insurance shall provide combined single limit protection of at least Five Million Dollars ($5,000,000) provided, that, on the twentieth anniversary of the Effective Date of this Lease and each twenty (20) years thereafter during the term of this Lease, the above prescribed minimum coverages shall be increased to the amounts customarily carried by developments of the size, character and nature of the development on the Leased Premises; and provided, further, that in the event Tenant would be entitled to obtain insurance coverage in an amount less than the minimums prescribed above under the doctrine of impossibility of performance, then Tenant shall be required only to obtain such lesser amount of insurance, but, in no event, less than the initial minimum amount of $5,000,000 set forth above. 11.5 Policy Form, Content And Insurer. All insurance required by the provisions of this Lease shall be carried only with responsible insurance companies licensed to do business in this state having a policyholder’s rating from A. M. Best Company of at least A-XI. If, during the Term of this Lease, such rating service ends, then Landlord shall select another comparable rating service which most closely approximates Best’s Insurance Rating, with the view toward maintaining the same quality standard for determining a “secure and acceptable insurance company.” If, during the Term of this Lease, Tenant contends that the rating required above in order for an insurance company to be deemed a secure and acceptable insurance company is unnecessarily high and should be lower than the rating hereinabove set forth, Landlord will reasonably consider such a request by Tenant to reduce the required rating used for determining a secure and acceptable insurance company. In the event of a dispute between the Landlord and the Tenant with respect to the appropriate rating level necessary to insure a secure and acceptable insurance company, such matter shall be submitted to binding arbitration within twenty (20) days of such dispute, and the Parties shall agree upon an individual considered to be expert in the rating of insurance companies who shall act as an arbiter of such dispute in accordance of the rules of the American Arbitration Association (“AAA”). If the parties fail to agree upon such an arbiter within said twenty (20) day period, then the same shall be designated by the chief officer of the Los Angeles Chapter of the AAA. The arbiter shall render his decision within sixty (60) days of his appointment. The fees of the arbiter shall be paid equally by the Parties. All such policies required by the provisions of this Lease shall be nonassessable and shall contain language, to the extent obtainable, to the effect that (i) any loss shall be payable notwithstanding any act or negligence of Landlord or City that might otherwise result in a forfeiture of the insurance, (ii) the insurer waives the right of subrogation against Landlord and City and against Landlord’s and City’s Representatives, (iii) the policies are primary and noncontributing with any insurance that may be carried by Landlord or City, (iv) the policies cannot be cancelled or materially altered except after thirty (30) days notice by the insurer to Landlord, City and Lender, and (v) neither Landlord nor City shall be liable for any premiums or assessments. All such insurance shall have deductibility limits reasonably satisfactory to Landlord. Upon Tenant’s execution and delivery hereof, Tenant shall deliver to Landlord either certificates of insurance evidencing the insurance coverages specified in this Article or a binder for such insurance, in a form satisfactory to Landlord, providing for the commencement of such insurance coverages as of the Effective Date of this Lease. Tenant shall thereafter deliver to Landlord certificates of insurance evidencing the insurance coverages required by this Article upon renewal of any insurance policy. Tenant may provide any insurance required under this Lease by blanket insurance covering the Leased Premises and any other location or locations, provided that the specific policy of blanket insurance proposed by Tenant is reasonably acceptable to Landlord. Landlord’s review of such policy of blanket insurance shall be only for the purpose of determining if it provides the coverages 293688.2 999100-0001 11/28/2005 - 3:51 pm 34 required by this policy and does not adversely affect Landlord’s interest in the Leased Premises or its rights hereunder. All policies shall name Landlord and its successors and assigns as additional insureds. All policies may name a Lender as an additional insured or loss payee. Tenant’s Lender shall be entitled to hold the original policies evidencing all insurance coverages required under this Lease, or certificates of insurance, if any insurance required under this Lease is provided by blanket insurance coverage. Tenant’s Lender shall have the right to participate in negotiating any settlements or adjustments with the applicable insurance company following a loss subject to any of the above policies. 11.6 Indemnification. Tenant shall indemnify, defend and hold Landlord, City and their Representatives, and the property of Landlord and City, including the Leased Premises and any improvements thereon, free and harmless from any and all Liabilities resulting from the use, occupancy or enjoyment of the Leased Premises by Tenant or any person thereon or holding under Tenant arising from any cause; provided, however, that Tenant shall be required to defend but not indemnify Landlord, City and their Representatives, from (i) Liabilities, determined by a final adjudication, to result from the intentional willful and wrongful acts of Landlord, City or any Landlord or City Representative, or (ii) Liabilities, determined by a final adjudication, to result solely and 100% from the gross negligence of Landlord, City or any Landlord or City Representative. The above indemnification includes, without limitation, any Liabilities arising by reason of: (a) The death or injury of any person, including Tenant or any person who is an employee or agent of Tenant, or damage to or destruction of any property, including property owned by Tenant or by any person who is an employee or agent of Tenant, from any cause whatever while such person or property is in or on the Leased Premises or in any way connected with the Leased Premises or with any of the improvements or personal property on said premises; (b) The death or injury of any person, including Tenant or any person who is an employee or agent of Tenant, or damage to or destruction of any property, including property owned by Tenant or any person who is an employee or agent of Tenant, caused or allegedly caused by either (i) the condition of the Leased Premises or some improvement on said premises, or (ii) some act or omission on the Leased Premises by Tenant or any person in, on, or about the Leased Premises with the permission and consent of Tenant; (c) Any work performed on the Leased Premises or materials furnished to said premises at the instance or request of Tenant or any person or entity acting for or on behalf of Tenant; or (d) Tenant’s failure to perform any provision of this Lease or to comply with any Applicable Governmental Restriction. ARTICLE 12. CONDEMNATION 12.1 Definitions. As used in this Article, the following words have the following meanings: (a) Award: means the compensation paid for the Taking, as hereinafter defined, whether by judgment, agreement or otherwise. (b) Taking: means the taking or damaging of the Leased Premises or any portion thereof as the result of the exercise of the power of eminent domain, or for any public or quasi-public use under any statute. Taking also includes a voluntary transfer or conveyance to the condemning agency or entity under threat of condemnation, in avoidance of an exercise of eminent domain, or while condemnation proceedings are pending. 293688.2 999100-0001 11/28/2005 - 3:51 pm 35 (c) Taking Date: means the later of (i) the date on which the condemning authority takes actual physical possession of the Leased Premises or any portion thereof, as the case may be, or (ii) the date on which the right to compensation and damages accrues under the law applicable to the Leased Premises. (d) Total Taking: means the taking of the fee title to all of the Leased Premises and the improvements thereon. (e) Substantial Taking: means the taking of so much of the Leased Premises or improvements thereon or both that the conduct of Tenant’s business on the Leased Premises would be substantially prevented or rendered economically infeasible. (f) Partial Taking: means any Taking of the fee title that is not either a Total or a Substantial Taking. (g) Notice of Intended Taking: means any notice or notification on which a prudent person would rely as expressing an existing intention of taking as distinguished from a mere preliminary inquiry or proposal. It includes but is not limited to the service of a condemnation summons and complaint on a party to this Lease. 12.2 Total or Substantial Taking of Leased Premises. In the event of a Total Taking, except for a Taking for temporary use, Tenant’s obligation to pay rent shall terminate on, and Tenant’s interest in the Leased Premises shall terminate on, the Taking Date. In the event of a Taking, except for a Taking for temporary use, which Tenant considers to be a Substantial Taking, Tenant may, provided that all Lender(s) consent in writing thereto, deliver written notice to Landlord within sixty (60) days after Tenant receives Notice of Intended Taking, notifying Landlord of the Substantial Taking. If Tenant does not so notify Landlord, or any of Tenant’s Lenders refuse to consent thereto, the Taking shall be deemed a Partial Taking. If Tenant gives such notice and, within ten (10) days following Tenant’s notice, Landlord gives Tenant notice disputing Tenant’s contention that there has been a Substantial Taking, the Parties shall resolve their dispute before a court of competent jurisdiction or in such other manner as the Parties and their Lender(s) may mutually agree. If Landlord does not dispute Tenant’s contention that there has been a Substantial Taking, or if it is determined, by order of the Court, that there has been a Substantial Taking, then the Taking shall be considered a Substantial Taking and Tenant shall be entitled to terminate this Lease effective as of the Taking Date if (i) Tenant delivers possession of the Leased Premises to Landlord within thirty (30) days after determination that the Taking was a Substantial Taking, and (ii) Tenant was not in default on the Taking Date under this Lease and has complied with all Lease provisions concerning apportionment of the Award and surrender of the Leased Premises. If these conditions are not met, the Taking shall be treated as a Partial Taking. 12.3 Apportionment And Distribution of Award for Total Taking and Substantial Taking. In the event of a Total Taking or Substantial Taking, all sums, including damages and interest, awarded for the fee or the leasehold or both shall be distributed and disbursed first for the payment of all unpaid real and personal property taxes payable with respect to the Leased Premises or the improvements thereon for the period prior to the Taking (unless the amount of the Award has already been reduced by the amount of such taxes), and the remainder apportioned between Landlord and Tenant in proportion to their respective interests as follows: (i) Tenant’s portion of the Award shall be based upon the sum of (aa) any excess of the present value at the Taking Date of the fair rental value of the Leased Premises, exclusive of Tenant’s improvements or alterations for which Tenant is compensated under clause (bb) below, for the remainder of the Term, over the present value at the Taking Date of the rent payable for the remainder of the Term; and (bb) the value at the Taking Date of its interest for the balance of the Term in all improvements or alterations made to the Leased Premises by Tenant; and (cc) the portion of the Award, if any, allocated to relocation and removal costs of Tenant, if any; and (dd) the portion 293688.2 999100-0001 11/28/2005 - 3:51 pm 36 of the Award, if any, attributable to loss of goodwill or lost profits or damages because of detriment to Tenant’s business, if any. (ii) Landlord’s portion of the Award shall be based upon the sum of the value at the Taking Date of the Leased Premises as unimproved land encumbered by this Lease including, without limitation, the present value at the Taking Date of all rents to accrue to Landlord under this Lease and the present value at the Taking Date of Landlord’s reversionary interest in the Leased Premises, including all improvements or alterations thereon. If no portion of the Award is attributable to the items contained in clauses (i)(cc) or (i)(dd) above, Tenant shall have the absolute right to prosecute Tenant’s own claim for such damages as permitted by law and to receive and keep all such proceeds free from any claim of Landlord. 12.4 Partial Taking; Abatement and Restoration. If there is a Partial Taking of the Leased Premises, except for a Taking for temporary use, the following shall apply. This Lease shall remain in full force and effect on the portion of the Leased Premises not Taken, except that, notwithstanding anything in this Lease which is or appears to be to the contrary, the annual rental due under this Lease shall be reduced in the same ratio that the market value of the Tenant’s interest in the Leased Premises as improved immediately prior to the Taking is reduced by the Taking. The reduction in market value of the Leased Premises shall take into account and shall be determined subject to all Subleases then in effect, and shall be determined upon completion of any repairs, modifications, or alterations to the Improvements on the Leased Premises necessary to restore them to functional and useable condition following the Partial Taking. Notwithstanding anything contained herein to the contrary, if any portion of the rent payable under this Lease is computed solely on the basis of a percentage or participation rental, there shall be no abatement of such percentage or participation rental because any necessary abatement shall have already been effected by the reduced percentage or participation rental payable to Landlord. In the event that rent increases are computed in whole or in part by reference to a Proforma Rent Level or other similar rental receipt base line, said Proforma Rent Level or other similar rental receipt base line shall be reduced in the same proportion that the annual rental is reduced because of the Partial Taking. Within a reasonable time period after a Partial Taking, at Tenant’s expense and in the manner specified in the provisions of this Lease relating to construction, maintenance, repairs, and alterations, Tenant shall reconstruct, repair, alter, or modify the improvements on the Leased Premises so as to make them an operable whole. If Tenant does not repair, alter, modify, or reconstruct as required above, the cost of such repair shall be deducted from Tenant’s share, if any, of the Award and paid to Landlord and such failure shall constitute a Default by Tenant under this Lease; provided, that, upon the cure of such Default, the deduction from Tenant’s share of the Award which has been previously paid to Landlord, as provided above, shall be returned to Tenant. Any such construction, repairs, alterations or modifications shall be undertaken and completed in compliance with all of the provisions of Section 5.5 of this Lease applicable to Changes to the Improvements, including all provisions contained therein relating to consent of or approval by Landlord. 12.5 Apportionment and Distribution of Award For Partial Taking. On a Partial Taking, all sums including damages and interest, awarded for the fee title or the leasehold or both, shall be distributed and disbursed, first, to the cost of restoring the Improvements on the Leased Premises to a complete architectural unit of a quality equal to or greater than such improvements before the Taking, and the remainder shall be apportioned between Landlord and Tenant based upon the formula set forth in Section 12.3; provided, however, for purposes of apportioning the remainder of such Award the value of Tenant’s interest shall also include the severance damages, if any, applicable to Tenant’s leasehold interest and paid in connection with the Partial Taking. 12.6 Taking for Temporary Use. If there is a Taking of the Leased Premises for temporary use for a period equal to or less than six (6) months, this Lease shall continue in full force and effect, Tenant shall continue to 293688.2 999100-0001 11/28/2005 - 3:51 pm 37 comply with Tenant’s obligations under this Lease, neither the Term nor the rent shall be reduced or affected in any way, but shall continue at the level of the last annual rental (regardless of whether computed on a fixed or percentage basis) paid prior to the Taking (including any subsequent increases in such annual rental provided for under this Lease), and Tenant shall be entitled to any Award for the use or estate taken. If any such taking is for a period extending beyond such six (6) month period, the Taking shall be treated under the foregoing provisions for Total, Substantial and Partial Takings, as appropriate. ARTICLE 13. DEFAULT 13.1 Events of Default. The occurrence of any one or more of the following events shall, after the giving of a Notice of Default, constitute a default and breach of this Lease by Tenant or Landlord (“Default(s)” or “Event(s) of Default”): (a) Any failure by Tenant to pay the annual rental or make any other payment required to be made by Tenant hereunder, on the date the payment is due; (b) The abandonment or surrender of the Leased Premises by Tenant (which shall not be deemed to have occurred merely because a Sublessee of Tenant abandons or vacates its Sublease). (c) A failure by Tenant or Landlord to observe and perform any other provision of this Lease to be observed or performed by Tenant or Landlord; (d) An event of insolvency occurs, which event shall be any of the following: Tenant shall make an assignment for the benefit of creditors; Tenant shall file or acquiesce in a petition in any court (whether or not pursuant to any statute of the United States or of any state) in any bankruptcy, reorganization, composition, extension, arrangement or insolvency proceedings; Tenant shall make an application in any such proceedings for, or acquiesce in, the appointment of a trustee or receiver for it or for all or substantially all of its property located at the Leased Premises or for its interest in this Lease, or for substantially all of its property wherever located; any petition shall be filed against Tenant to which it does not acquiesce in any court (whether or not pursuant to any statute of the United States or any state) in any bankruptcy, reorganization, composition, extension, arrangement or insolvency proceedings, and the proceedings shall not be dismissed, discontinued or vacated within ninety (90) days; any proceeding pursuant to the application of any person other than Tenant to which Tenant does not acquiesce, in which a receiver or trustee shall be appointed for Tenant or for all or substantially all of the property of Tenant located at the Leased Premises or for its interest in this Lease or for substantially all of its property wherever located, and the receivership or trusteeship shall not be set aside within ninety (90) days after such appointment; or any judgment, writ, warrant, attachment or execution or similar process shall be issued or levied against a substantial part of the property of Tenant and such judgment, writ or similar process shall not be released, vacated or fully bonded within ninety (90) days of its issue or levy; provided, that if it is determined that this Lease may be assumed by the Tenant’s trustee in bankruptcy notwithstanding the above provision and notwithstanding Landlord’s reliance on Tenant’s particular skill, expertise and character in entering this Lease, said trustee in bankruptcy may not assign this Lease unless (i) said proposed assignee has a net worth at least equal to that of Tenant at the time of execution of this Lease, (ii) the business of the assuming third party is consistent with the character and concept of the prescribed use of the Leased Premises, and (iii) all other provisions of 11 U.S.C. Section 365(f)(2)(B), as well as other applicable bankruptcy law provisions for Landlord’s benefit and protection, are satisfied before any assignment of Tenant’s rights or assumption of Tenant’s obligations under this Lease. This paragraph shall not be deemed to waive any of Landlord’s rights under bankruptcy law or otherwise; (e) A failure by Tenant to perform its obligations under, or a failure by Tenant to observe, Article 8 with respect to Transfer of the Lease or any interest therein, or any other Transfer prohibited therein; or if Tenant shall suffer or permit any of the foregoing, other than as specifically approved in writing by Landlord; 293688.2 999100-0001 11/28/2005 - 3:51 pm 38 (f) A default by Tenant under the provisions of any mortgage placed on the Leased Premises pursuant to Article 7 hereof; and (g) A failure by Tenant to pay or discharge any liens or claims of liens or to provide a bond therefor in accordance with Section 5.4 hereof. 13.2 Notice of Default; Tenant’s Right to Cure. If Tenant is in Default under this Lease, as defined in Section l3.l, as a precondition to pursuing any remedy for an alleged Default by Tenant, Landlord shall give notice of said Default (“Notice of Default”) to Tenant and any applicable cure period shall have expired. Each Notice of Default shall specify the alleged Event of Default. If the alleged Default is nonpayment of rent, Impositions or other sums to be paid by Tenant as provided in this Lease, Tenant shall have fifteen (15) days after notice is given to cure the Default. For any other Default, Tenant shall, after notice, promptly and diligently commence curing the Default and shall have sixty (60) days after notice is given to complete the cure of said Default; provided, however, that if the nature of said Default is such that the same cannot reasonably be cured within said sixty (60) day period, Tenant shall have such additional time as is reasonably necessary to cure such Default, but in no event more than one hundred and twenty (120) days after the Notice of Default is given. 13.3 Landlord’s Right to Cure Tenant’s Defaults. After expiration of the applicable time for curing a particular Default, or before the expiration of that time in the event of an emergency, Landlord may, at Landlord’s election, make any payment required of Tenant under this Lease or perform or comply with any covenant or condition imposed on Tenant under this Lease, and the amount so paid, plus the reasonable cost of any such performance or compliance, plus interest on such sum at the Default Rate, from the date of payment, performance, or compliance until the date of repayment by Tenant, shall be due and payable by Tenant on the first day of the next calendar month following any such payment, performance or compliance by Landlord as additional rent hereunder. No such act shall constitute a waiver of any Default or of any remedy for Default or render Landlord liable for any loss or damage resulting from any such act. 13.4 Notice of Landlord’s Default; Tenant Waiver. If Landlord is in Default under this Lease, as defined in Section 13.1, as a precondition to pursuing any remedy for an alleged Default by Landlord, Tenant shall deliver a Notice of Default to Landlord. Each Notice of Default shall specify the alleged Event of Default. Landlord shall, after notice, promptly and diligently commence curing the Default and shall have sixty (60) days after notice is given to complete the cure of said Default; provided, however, that if the nature of said Default is such that the same cannot reasonably be cured within said sixty (60) day period, Landlord shall have such time as is reasonably necessary to complete the cure of said Default, but in no event more than one hundred and twenty (120) days after the Notice of Default is given. Tenant hereby waives the protections of California Civil Code Sections 1932 and 1933, or any other successor statute containing like protections. Notwithstanding any assignment of the original Landlord’s rights under this Lease to City, in the event of a Default by City under this Lease, Tenant shall deliver a Notice of Default to the original Landlord concerning said Default by City, and the original Landlord shall have the right to cure said Default so long as it undertakes and completes said cure prior to expiration of the applicable cure period. 293688.2 999100-0001 11/28/2005 - 3:51 pm 39 13.5 Landlord’s Remedies. 13.5.1 Right to Terminate. If any material Default by Tenant shall continue uncured, following Notice of Default as required by this Lease, for the entire cure period applicable to that Default under the provisions of this Lease (“Uncured Default”), then in addition to any other remedies available to Landlord at law or in equity, and subject to the rights of a Lender expressly set forth in this Lease, Landlord shall have the immediate option to terminate this Lease and all rights of Tenant hereunder by giving written notice of such termination. In the event that Landlord shall so elect to terminate this Lease then Landlord may recover 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 The worth at the time of award of the amount by which the unpaid Rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; plus 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 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 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 California law. b. c. d. e. The term “Rent” as used herein shall be deemed to include the annual rental (regardless of whether computed on a fixed or percentage basis) and all other sums required to be paid by Tenant pursuant to the terms of this Lease. As used in subsections (a) and (b) above, the “worth at the time of award” is computed by allowing interest at the Default Rate. As used in subparagraph (c) above, the “worth at the time of award” is computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (l%). 13.5.2 Right to Reenter. In the event of any such material Uncured Default by Tenant, Landlord shall also have the right, with or without terminating this Lease, to reenter the Leased Premises and remove all persons and property therefrom by summary proceedings or otherwise. Such property on the Leased Premises may be removed and stored in a public warehouse or elsewhere at the cost of and for the account of Tenant. Notwithstanding any provision of this Lease which may be or appear to be to the contrary, in the event of any such material Uncured Default, Landlord may also elect, subject to the rights of a Lender pursuant to a Security Agreement permitted under Section 7.4(b) above, to retain all of Tenant’s fixtures, furniture, equipment, improvements, additions, alterations, and any other personal property (“fixtures, furniture and equipment”) on the Leased Premises and, in that event, and continuing during the length of said Uncured Default, Landlord shall have the right to take the exclusive possession of same and to use same, rent free and without charge therefor. The election of one remedy for any one item of property shall not foreclose an election of any other remedy for another item or for the same item at a later time. 293688.2 999100-0001 11/28/2005 - 3:51 pm 40 13.5.3 Right to Relet on Tenant’s Account. In the event of abandonment of the Leased Premises by Tenant, or in the event that Landlord shall elect to reenter as provided in Section 13.5.2 above without exercising its option to terminate the Lease, then Landlord may, pursuant to Section 1951.4 of the Civil Code of the State of California, either recover all rental as it becomes due (if said rental consists in whole or in part of a percentage rent it shall be deemed that the percentage rental for the year or years after the Leased Premises are abandoned by Tenant shall be equal each year to the percentage rental paid for the last year prior to the vacation or abandonment of the Leased Premises by Tenant) or relet for Tenant’s account the Leased Premises or any part thereof for such term or terms and at such rental or rentals and upon such other terms and conditions as Landlord in its sole discretion may deem advisable and, in connection therewith, Landlord shall have the right to make alterations and repairs to the Leased Premises. In the event that Landlord shall so elect to relet, then rentals received by Landlord from such reletting shall be applied: first, to the payment of any indebtedness, other than rent due hereunder, owed by Tenant to Landlord; second, to the payment of the cost of such reletting; third, to the payment of the cost of reasonable alterations and repairs to the Leased Premises made by Landlord; fourth, to the payment of rent due and unpaid hereunder; and the residue, if any, shall be held by Landlord and applied in payment of future rent as the same may become due and payable hereunder. Should that portion of such rentals received from such reletting during any month which is applied to the payment of rent hereunder be less than the rent payable during that month by Tenant hereunder, then Tenant shall pay such deficiency to Landlord. Such deficiency shall be calculated and paid monthly. Tenant shall also pay to Landlord, as soon as ascertained, any costs and expenses incurred by Landlord in such reletting or in making such alterations and repairs not covered by the rentals received from such reletting. 13.5.4 Effect of Reentry. No reentry or taking possession of the Leased Premises by Landlord pursuant to this Section 13.5 shall be construed as an election to terminate this Lease unless a written notice of such intention be given to Tenant by Landlord or unless the termination thereof be decreed by a court of competent jurisdiction. Landlord may at any time after such reletting elect to terminate this Lease for any Default by Tenant, and may thereafter pursue any and all remedies available to Landlord upon such termination. 13.5.5 Limitation of Liability for Breach of Obligation To Pay Rent. (a) Notwithstanding anything contained in this Lease to the contrary, following completion of the Improvements prescribed for the Leased Premises and issuance of a Certificate of Completion and issuance of Certificates of Occupancy for at least seventy-five percent (75%) of the rentable area of the Improvements (the foregoing are referred to herein as the “Threshold Conditions”), Landlord and Tenant agree that, in the event of an Uncured Default by Tenant, Landlord shall be entitled to recover from Tenant all damages incurred by Landlord by reason of said Uncured Default or any other Default, breach or failure arising or accruing prior to termination of this Lease. Landlord and Tenant further agree that Landlord may recover monetary damages for all obligations first arising or accruing following termination of this Lease; provided, that the recovery of such monetary damages by Landlord in respect of any obligations of Tenant first arising after the termination of this Lease and the surrender of the Leased Premises to Landlord in the condition required by this Lease shall be limited to an amount equal to all rent Tenant would have been required to pay had this Lease remained in effect for a period of fifteen (15) months following such termination. If the rent due under this Lease is determined in whole or in part based upon a percentage of the revenues received by Tenant from the Leased Premises, then for purposes of calculating the rent due over the fifteen (15) month period described above, it shall be assumed that the monthly revenues to have been received by Tenant during said period are equal to the average monthly revenues received by Tenant during the last full calendar year (or if no full calendar year then partial calendar year) preceding the Uncured Default. Thus, Tenant’s potential monetary liability for breaches or failures first arising after termination of this Lease and the surrender of the Leased Premises in the condition required by this Lease shall not exceed an amount equal to fifteen 293688.2 999100-0001 11/28/2005 - 3:51 pm 41 (15) months worth of rent, which rent shall be based upon the rent in effect at the time of Tenant’s Uncured Default. (b) Notwithstanding anything above in this Section which is or appears to be to the contrary, this Section shall not limit in any way Tenant’s monetary liability for all obligations accruing or damages arising from Tenant’s breaches or failures to perform its obligations under this Lease prior to the termination of this Lease and the surrender of the Leased Premises in the condition required by this Lease, or, where expressly provided in the next sentence, with respect to breaches of Tenant’s obligations arising or accruing after termination. Without limiting the generality of the foregoing sentence, this Section shall not limit Tenant’s liability resulting from its failure (i) to apply insurance proceeds or condemnation awards, prior to or after termination of this Lease, in accordance with the terms of this Lease, or (ii) to adhere to the restrictions on Transfer and the restrictions on permissible Encumbrances imposed by this Lease, or (iii) to discharge the indemnification, repair, reconstruction, maintenance, construction, demolition, and removal obligations imposed herein, regardless of whether such obligations arise before or at the time of the termination of this Lease. Notwithstanding anything which is or appears to be to the contrary in this Lease, in the event that this Lease is terminated, Tenant’s obligation to pay those Impositions allocated to this Lease in accordance with Section 5.6 of the DDA shall survive the termination of this Lease, and Tenant’s obligation to pay those Impositions shall continue until two (2) years after the termination hereof. (c) If, following satisfaction of the Threshold Conditions, Tenant vacates and surrenders the Leased Premises in the condition required by this Lease, then the limitations on Tenant’s potential liability provided in Section 13.5.5(a) above shall apply regardless of whether Landlord thereafter terminates this Lease, and, in applying those limitations on liability, the date of such vacation and surrender, shall, for purposes of those Subsections, be deemed the date of the termination of this Lease. (d) This Section 13.5 shall have no applicability prior to satisfaction of the Threshold Conditions and Tenant shall have unlimited liability prior thereto. 13.6 Remedies Cumulative. Each right and remedy of Landlord and Tenant provided for in this Lease shall be cumulative and shall be in addition to every other right or remedy provided for in this Lease or now or hereafter existing at law or in equity or by statute or otherwise, and the exercise or the beginning of the exercise by Landlord or Tenant of any one or more of the rights or remedies provided for in this Lease or now or hereafter existing at law or in equity or by statute or otherwise shall not preclude the simultaneous or later exercise by Landlord or Tenant of any or all other rights or remedies provided for in this Lease or now or hereafter existing at law or in equity or by statute or otherwise. 13.7 No Waiver. Landlord’s or Tenant’s failure to enforce any provision of this Lease with respect to a Default hereunder shall not constitute a waiver of Landlord’s or Tenant’s right to enforce such provision or any other provision with respect to any future Default. The acceptance of rent by Landlord shall not be deemed a waiver of Landlord’s right to enforce any term or provision hereof. The waiver of any term or condition of this Lease shall not be deemed to be a waiver of any other term or condition hereof or of any subsequent failure of any term or condition hereof. 13.8 Delays in Performance. The time within which the Parties hereto shall be required to perform any act under this Lease, other than the payment of rent, taxes, insurance, or other obligations to pay money that are treated as rent, shall be extended by a period of time equal to the number of days during which performance of such act is delayed due to an act of God, supernatural causes, strikes, lockouts, fire, earthquake, flood, explosion, war, invasion, insurrection, riot, mob violence, acts of the public 293688.2 999100-0001 11/28/2005 - 3:51 pm 42 enemy, epidemics, quarantine restrictions, freight embargoes, unusually severe weather, court order, delays or inaction of independent contractors, or similar events which are completely and strictly beyond that Party’s control. The additional grace period or extension of time provided above shall be equal to the period of delay caused by the above-described event, which period shall commence to run from the time of the commencement of the cause for delay and shall terminate upon termination of that cause. A Party wishing to invoke this Section shall notify in writing the other Party to this Agreement of that intention within sixty (60) days of the date on which it knew or should have known of the commencement of any such cause for delay and shall, at that time, specify the reasons therefor. The failure to so notify the other Party within that period as to the cause for delay shall constitute a waiver of any right to later rely upon this Section with respect to that cause. Notwithstanding anything above to the contrary, the inadequacy or unavailability of financing shall not constitute a force majeure event or delay or excuse any party’s performance under this Agreement. ARTICLE 14. EXPIRATION; TERMINATION 14.1 Tenant’s Duty To Surrender. At the expiration or earlier termination of this Lease, Tenant shall surrender to Landlord the possession of the Leased Premises free and clear of all liens and encumbrances other than those, if any, created by Landlord or which Landlord approves in writing at the time of said expiration or earlier termination; provided however, that upon such earlier termination of this Lease, Landlord will not terminate any permitted Sublease then in full force and effect which has been granted nondisturbance protection by Landlord in writing pursuant to Section 8.2.3(i), or disturb the possession or leasehold rights of the Sublessee thereunder. Surrender or removal of improvements, fixtures and trade fixtures shall be as directed in the provisions of this Lease on ownership of improvements at termination or expiration of the Term. Tenant shall leave the Leased Premises and any other property surrendered in good condition and repair, and shall restore all damage to the Leased Premises resulting from removal of any furniture, removable personal property or trade fixtures pursuant to Section 5.6 above. All property that Tenant is required to surrender shall become Landlord’s property at termination or expiration of this Lease. All property that Tenant is not required to surrender but that Tenant does abandon by failure to remove said property at the expiration or earlier termination of this Lease shall, at Landlord’s election, become Landlord’s property. Unless the improvements on the Leased Premises at the expiration or earlier termination of this Lease are in a functional, useable and first-class condition and state of repair, Landlord shall have the right, at said expiration or earlier termination of this Lease, to demand the removal from the Leased Premises of all improvements or of certain specified improvements thereon at Tenant’s sole cost and expense. A demand for the removal of said improvement(s) shall be made by notice given within six (6) months before the expiration, or at the time of the earlier termination, of this Lease, and Tenant shall comply with said notice no later than the later of: (A) ninety (90) days after the expiration or earlier termination of this Lease, or (B) ninety (90) days after the later of (i) Lender’s election not to enter into a new lease or Lender’s failure to enter into a new lease pursuant to the provisions of Section 7.3.3, if applicable, within the time therein provided, or (ii) the expiration of the applicable cure period for Lender’s cure of the Uncured Default, if any, giving rise to the termination of this Lease with the cure of such Uncured Default not having been completed within such cure period. No removal of such improvements shall be started until the period for exercise of Lender’s right, if any, to enter into a new lease has expired or Lender’s right pursuant to Section 7.3.1 to cure any then existing Uncured Default of Tenant under this Lease has expired without the cure by Lender of such Uncured Default. The duty imposed by this provision includes, but is not limited to, the duty to demolish and remove all basements, foundations, buildings and structures, fill and compact all excavations, remove utilities, if requested, return the surface to grade, and leave the premises safe and free from debris and hazards. If Tenant fails to surrender the Leased Premises at the expiration or sooner termination of this Lease in the condition required by this Lease, Tenant shall indemnify, defend and hold Landlord, City and their Representatives, and the property of Landlord and City, harmless from all Liabilities resulting from the delay or failure to surrender as required, including, without 293688.2 999100-0001 11/28/2005 - 3:51 pm 43 limitation, claims made by any succeeding tenant founded on or resulting from Tenant’s failure to surrender. If requested to do so, Tenant shall, upon the expiration or earlier termination of this Lease, execute, acknowledge and deliver to Landlord and/or City such instruments of further assurance as in the opinion of Landlord and/or City are necessary or desirable to confirm or perfect Landlord’s right, title and interest in and to the Leased Premises, and any other property surrendered to Landlord pursuant to this Lease, free and clear of any claim by Tenant. ARTICLE 15. MISCELLANEOUS 15.1 Tenant’s Representations and Warranties. Tenant covenants, represents and warrants to Landlord, as of the date of execution of this Lease, as follows: (a) Tenant is a _______________, duly organized, qualified and validly existing and in good standing under the laws of _________, is duly qualified to do business and in good standing under the laws of each other jurisdiction where the operation of its business or its ownership of property makes such qualification necessary, and has all requisite power and authority to own and operate its properties and to carry on its business as now and whenever conducted and to enter into and perform its obligations under this Lease. (b) The execution, delivery and performance of this Lease is consistent with Tenant’s _____________ and has been duly authorized by all necessary action of Tenant’s _____. All consents, approvals and authorizations of all applicable governmental authorities, other than Landlord or City, and all consents or approvals of Tenant’s __________ required in connection with the execution, delivery and performance by Tenant of this Lease have been obtained and delivered to the Landlord on or before the Effective Date of this Lease. (c) Tenant has duly obtained and maintained, and will continue to obtain and maintain all material licenses, permits, consents and approvals required by all applicable governmental authorities to own and operate its respective businesses and properties as now owned and hereafter owned. (d) With respect to the financial condition of Tenant and its “Guarantor” (as defined in Section 15.22): (1) Tenant and its Guarantor have furnished Landlord and, upon request of Landlord from time to time, will furnish Landlord with true and correct copies of their Balance Sheets and the related Statements of Income (Loss), and Statements of Changes in Financial Position (collectively, the “Financial Statements”). (2) The Financial Statements have been and will be prepared in accordance with normal accounting methods consistently applied throughout the periods indicated. The Balance Sheets fairly present financial conditions as of the date indicated, and the Statements of Income (Loss) and Statements of Changes in Financial Condition fairly present, in accordance with such accounting principles, the results of operations, the application of funds, and the changes in equity for the respective periods indicated. (3) There have been no changes in the assets, liabilities, financial condition or affairs of Tenant or its Guarantor set forth or reflected in the most recent Financial Statements supplied to Landlord, which either in any one case or in the aggregate, would materially or adversely affect Tenant’s and/or Guarantor’s ability to perform their respective obligations hereunder. (4) The charges, accruals and reserves in the books of Tenant, if any, since inception of Tenant to the date hereof are adequate in accordance with normal accounting principles to reflect any changes in the financial condition of Tenant since its inception. 293688.2 999100-0001 11/28/2005 - 3:51 pm 44 (e) All filings, reports and tax returns of Tenant which are required to be made or filed with any governmental authority have been and will continue to be duly made and filed, and all taxes, assessments, fees and other governmental charges upon Tenant, or upon any of its respective properties, assets, income or franchises, which are due and payable, have been, and will continue to be, paid when due, other than those which are presently payable without penalty or interest, or which Tenant is contesting in good faith. (f) There are no suits, other proceedings or investigations pending or, to the best of Tenant’s knowledge, threatened against, or affecting the business or the properties of Tenant, its Guarantor, or any of Tenant’s general _______, other than as previously disclosed to Landlord, which would materially impair Tenant’s ability to perform under this Lease nor is Tenant, Guarantor or any of Tenant’s general _________ in violation of any laws or ordinances which would materially impair Tenant’s or Guarantor’s performance of its respective obligations under this Lease. (g) There are no facts now in existence which would, with the giving of notice or the lapse of time, or both, constitute an “Event of Default” hereunder. (h) Tenant has not received any notice from any governing jurisdiction of any violation of laws or ordinances, nor any notice requiring any improvements or alterations to be made in connection with the Improvements to be constructed on the Leased Premises. (i) Tenant does not know or have any reason to know, except as disclosed to Landlord, of any adverse conditions, circumstances, or pending or threatened litigation, governmental action, or other condition which could prevent or materially impair Tenant’s ability to develop the Leased Premises as contemplated by the terms of this Lease. (j) This Lease and all other instruments to be executed in connection herewith will, as of the date of their execution, have been duly and validly executed by Tenant, and each such document constitutes, or will, as of the date executed, constitute, a legally valid, binding and fully enforceable obligation of Tenant thereto, in accordance with each and every term and condition stated therein. Tenant assumes due and valid execution of this Lease by Landlord in making the above representations. 15.2 Estoppel Certificate. Within ten (10) days after request by Landlord or Tenant (which request may be from time to time as often as reasonably required by Landlord or Tenant) Landlord or Tenant shall execute and deliver to the other, without charge, a statement in the form of Exhibit “J”, attached hereto, or in such other similar form as Landlord or Tenant may reasonably request. Any such statement may be conclusively relied upon by any prospective purchaser or encumbrancer of the Leased Premises or of all or any portion of the development of which the Leased Premises are a part. Tenant’s or Landlord’s failure to deliver such statement within ten (10) days of a written request therefor shall be a binding agreement of Tenant or Landlord (i) that this Lease is in full force and effect without modification except as may be represented by the Party requesting said statement, (ii) that there are no uncured defaults in the requesting Party’s performance hereunder, (iii) that there have not been any payments of advance rent other than as provided in the provisions of this Lease, and (iv) that such purchaser or encumbrancer may rely upon the truth of such other matters as are contained in such statement. 15.3 Notices. All notices, requests, demands and other communications under this Lease shall be in writing and shall be deemed to have been given on (i) the date of service if served personally on the Party to whom notice is to be given, (ii) the date of actual or attempted delivery provided such attempted delivery is made on a business day, if served by Federal Express, Express Mail or another like overnight delivery service, or (iii) the date of actual delivery as shown by the addressee’s registry or certification of receipt or the third business day after the date of mailing, whichever is earlier, if mailed to the person to whom notice is to be given, by first class mail, registered or certified, postage prepaid, return receipt requested and properly addressed as follows: 293688.2 999100-0001 11/28/2005 - 3:51 pm 45 If to Landlord: Cerritos Redevelopment Agency Bloomfield Avenue at 183rd Street Cerritos, California 90701 Attn: Executive Director With a copy to: Brown, Winfield & Canzoneri, Inc. 300 South Grand Avenue, Suite 1500 Los Angeles, California 90071-3125 Attn: Dennis S. Roy, Esq. If to City: City of Cerritos Bloomfield Avenue at 183rd Street Cerritos, California 90701 Attn: City Manager With a copy to: Brown, Winfield & Canzoneri, Inc. 300 South Grand Avenue, Suite 1500 Los Angeles, California 90071-3125 Attn: Dennis S. Roy, Esq. and, If to Tenant: ______________________________ ______________________________ ______________________________ ______________________________ With the exception of the mandatory notices of default described in Section 7.3.1(b) of this Lease, all notices to Lender shall be “courtesy” notices, and the failure to give any such notices shall not affect, limit or in any way restrict the rights of the Landlord hereunder; provided, however, if the Landlord (i) fails to give Lender notice of Tenant’s failure to pay and discharge, or cause the Leased Premises to be released from, a mechanic’s, materialman’s, contractor’s or subcontractor’s lien or claim of lien prior to Landlord’s payment, adjustment, compromise, or discharge of such lien in accordance with Section 5.4 of this Lease, or (ii) fails to give Lender notice of Tenant’s failure to pay any Impositions as required by this Lease prior to Landlord’s payment of any such Impositions in accordance with Section 9.7 of this Lease, then Lender or its Proposed Transferee or Successor Transferee, should it thereafter succeed to Tenant’s rights and obligations under this Lease by foreclosure or otherwise, shall not be bound to reimburse Landlord for such expenditures as would otherwise be required under Section 13.3 of this Lease. The limitation on Lender’s liability provided under this Section 15.3, or the failure of Landlord to provide Lender with the notices described above, shall not in any way limit, restrict or excuse Tenant’s obligation to reimburse Landlord for any expenditures under Sections 5.4 and 9.7 as provided in Section 13.3 of this Lease, nor shall such limitation on liability, or such failure to provide notice, limit, restrict or impede the exercise against Tenant of any rights or remedies provided to Landlord by this Lease. 15.4 Attorneys’ Fees. In the event that either party hereto brings any action or files any proceeding in connection with the enforcement of its respective rights under this Lease or as a consequence of any breach by the other party of its obligations under this Lease, the prevailing party in such action or 293688.2 999100-0001 11/28/2005 - 3:51 pm 46 proceeding shall be entitled to have its reasonable attorneys’ fees and out-of-pocket expenditures paid by the losing party, including any such fees and expenditures incurred on appeal or in enforcing any judgment entered pursuant to such proceeding. 15.5 Headings. The headings used in this Lease are inserted for reference purposes only and do not affect the interpretation of the terms and conditions hereof. 15.6 Rights of Successors. All of the rights and obligations of the Parties under this Lease shall bind and inure to the benefit of their respective heirs, successors and assigns; provided, however, that nothing in this Section 15.6 shall be construed to limit or waive the provisions concerning restrictions on Transfer set forth in Article 8 hereof. 15.7 Amendments in Writing. This Lease cannot be orally amended or modified. Any modification or amendment hereof must be in writing and signed by the party to be charged. 15.8 Time of Essence. Time is of the essence of each provision in this Lease. 15.9 Interpretation. When the context and construction so require, all words used in the singular herein shall be deemed to have been used in the plural, and the masculine shall include the feminine and neuter and vice versa. The term “person” as used in this Agreement means a natural person, corporation, association, partnership, organization, business, trust, individual, or a governmental authority, agency, instrumentality or political subdivision, and whenever the word “day” or “days” is used herein, such shall refer to calendar day or days, unless otherwise specifically provided herein. Whenever a reference is made herein to a particular Section of this Agreement, it shall mean and include all subsections and subparts thereof. 15.10 Applicable Law; Severability. The interpretation and enforcement of this Lease shall be governed by the laws of the State of California. Should any part, term, portion or provision of this Lease, or the application thereof to any person or circumstances be held to be illegal or in conflict with any Governmental Restrictions, or otherwise be rendered unenforceable or ineffectual, the validity of the remaining parts, terms, portions or provisions, or the application thereof to other persons or circumstances, shall be deemed severable and the same shall remain enforceable and valid to the fullest extent permitted by law. 15.11 Exhibits. All exhibits referred to in this Lease are attached hereto and incorporated herein by reference. 15.12 Waiver of Subrogation. Landlord, City, and Tenant hereby release the other and their Representatives from any and all liability or responsibility to the other or anyone claiming through or under them by way of subrogation or otherwise for any loss or damage to the Leased Premises, any improvements thereon, or any of Tenant’s merchandise or other property thereon caused by or arising from a fire or any other event with respect to which insurance is required to be carried pursuant to Article 11 hereof or with respect to which insurance is actually carried, even if such fire or other casualty shall 293688.2 999100-0001 11/28/2005 - 3:51 pm 47 have been caused by the fault or negligence of the other party, or anyone for whom such party may be responsible. 15.13 Attornment by Tenant. In the event that Landlord assigns its interest in the Leased Premises or the Lease, Tenant shall attorn to the assignee of Landlord, and shall recognize same as Landlord under this Lease. 15.14 Short Form of Lease. Concurrently with the execution of this Lease, the parties shall execute and thereafter record with the County Recorder of Los Angeles County a short form lease, substantially in the form attached hereto as Exhibit “K”, giving notice of the existence of this Lease and the term hereof. 15.15 Indemnification of Rental Payments. Tenant agrees to indemnify and hold Landlord, City and their Representatives harmless from any and all Liabilities should any lawsuit, legislation or other legal challenge be brought against: (a) the payment by Tenant of the rental payments required hereunder or the allocation of those payments between Landlord and City, and/or the payment to City of the Recoupment Fee prescribed by Section 8.1 of this Lease, this indemnification to be in full force and effect notwithstanding any opinion of counsel furnished on Tenant’s behalf with respect to the present legality of such payments and/or their allocation; or (b) Tenant’s obligation to retire Assessment District bonds, if any, issued to pay the costs of the road systems and related utilities within the Cerritos Towne Center project site, or any Assessment District established for Cerritos Towne Center. The indemnification provided for in this Section shall apply to any challenge as hereinbefore described without regard to its outcome. The amount paid by Tenant to Landlord and City pursuant to this Section shall not exceed the amount of rent or other payments described in subsections (a) and (b) above which Landlord and/or City is unable to collect because of said lawsuit, legislation, or other legal challenge described above, and Tenant shall receive a credit for payments pursuant to this Section against the next rent payments or other amounts payable by Tenant to Landlord or City. 15.16 Landlord’s Rights of Inspection. Landlord and its authorized agents and representatives shall have the right at any time and from time to time to enter upon the Leased Premises for purposes of (i) inspecting the same, (ii) making any necessary repairs thereto pursuant to this Lease or taking such other actions as may be authorized by the provisions hereof, or (iii) posting notices of non-responsibility in accordance with its rights under this Lease. If Landlord, in its reasonable discretion, determines that any work or materials are not in conformity with any Plans approved pursuant to this Lease, any Applicable Governmental Restrictions, or any other provisions of this Lease, Landlord may stop the work and order correction of any such work or materials, and, at the time of taking such action, shall deliver a “courtesy” copy to any Lender notifying such Lender of Landlord’s action pursuant to this Section 15.16. Inspection by Landlord of the Leased Premises or any improvements thereon is for the sole purpose of protecting the rights of Landlord and is not to be construed as an acknowledgment, acceptance or representation by Landlord that there has been compliance with any Plans, or the DDA, or that the Leased Premises or any improvements thereon will be free of faulty materials or workmanship. Any holder of any encumbrance on any portion of the Leased Premises shall make or cause to be made such other independent inspections as are permitted by this Lease and as it deems necessary for its own protection, and nothing contained herein shall be construed as requiring 293688.2 999100-0001 11/28/2005 - 3:51 pm 48 Landlord to construct or supervise construction of any improvements on the Leased Premises or any portion thereof. 15.17 Nonmerger of Fee and Leasehold Estates. If both Landlord’s and Tenant’s estates in the Leased Premises become vested in the same owner (other than by termination of this Lease following an Uncured Default hereunder), this Lease shall not be terminated by application of the doctrine of merger except at the express election of the owner and with the consent of any Lender(s) on a Leasehold Mortgage. 15.18 Nonliability of Landlord and City Representatives. No Landlord or City Representatives shall be personally liable to Tenant, or any successor in interest, in the event of any default or breach by the Landlord, or for any amount which may become due to the Tenant or successor, or on any obligation under the terms of this Lease. 15.19 Counterparts. This Lease may be executed in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. 15.20 Authority. Each person executing this Agreement on behalf of Tenant and Landlord hereby represents and warrants (i) his authority to do so on behalf of that Party, (ii) that such authority has been duly and validly conferred and (iii) that Tenant or Landlord, as appropriate, has full right and authority to enter into this Lease. 15.21 Right to Establish Assessment District In Lieu of Revenues. If through judicial decree the City’s right to receive revenues from the Leased Premises or any portion thereof, as contemplated hereunder, including, without limitation, any revenues owed to it pursuant to the assignment of all or any interest in this Lease, is in any manner restricted by law, City shall have the right, in lieu of such revenues, to proceed with the formation of any type of assessment district to assess the Leased Premises for the construction and/or maintenance of public improvements or provision of services as may be permitted by California law; provided, that in the event Tenant is required to pay such assessments, (i) Tenant shall receive a credit against the next rent payments due Landlord or City under this Lease to the extent of such assessment, and (ii) such assessment on Tenant shall be limited to the amount of rent accruing from time to time under the terms of this Lease. 15.22 Guaranty of Tenant’s Obligations. Within the time set forth in the Schedule of Performance, Tenant shall provide Landlord with a guaranty, in the form of Exhibit “L” attached hereto, duly executed by ____________________ (“Guarantor”), in his individual capacity, by which Guarantor shall guaranty Tenant’s performance, subject to the limitations set forth in Section 13.5.5, of Tenant’s obligations under this Lease, including, but not limited to, the obligation of Tenant to timely complete construction of the Improvements required upon the Leased Premises and to pay all rental due hereunder. [signature pages follow] 293688.2 999100-0001 11/28/2005 - 3:51 pm 49 IN WITNESS WHEREOF, the parties have executed this Lease as of the date first above written. TENANT: __________________________________, a ______________________________ By:_______________________________________ Name:____________________________________ Its:_______________________________________ LANDLORD: THE CERRITOS REDEVELOPMENT AGENCY, a public body corporate and politic By:_______________________________________ Name:____________________________________ Its:_______________________________________ ATTEST: _________________________________ APPROVED AS TO FORM: BROWN, WINFIELD & CANZONERI, INC. Agency Attorney By: _____________________________ 293688.2 999100-0001 11/28/2005 - 3:51 pm 50 EXHIBIT “A” Legal Description 293688.2 999100-0001 11/28/2005 - 3:51 pm EXHIBIT "A" - Page 1 EXHIBIT “B” Title Commitment 293688.2 999100-0001 11/28/2005 - 3:51 pm EXHIBIT "B" - Page 1 EXHIBIT “C” [INTENTIONALLY OMITTED] 293688.2 999100-0001 11/28/2005 - 3:51 pm EXHIBIT "C" - Page 1 EXHIBIT “D” Master Plan Governing Development of Cerritos Towne Center 293688.2 999100-0001 11/28/2005 - 3:51 pm EXHIBIT "D" - Page 1 EXHIBIT “E” Scope of Development Master Plan Parcel No. ___ [TO BE REVISED TO REFLECT SELECTED DESIGN PROPOSAL] GENERAL. The Leased Premises shall be designed and developed so that the building, landscaping and other improvements blend with adjacent properties so as to create a pleasing regional commercial and professional office environment and to establish a Towne Center with ancillary and coordinate commercial, professional office and community center uses. Development within the Leased Premises shall be consistent with the provisions, standards and requirements of the Cerritos Redevelopment Plan, the Cerritos General Plan, the Cerritos Municipal Code, the Cerritos Development Code, Area Development Plan Two and the Precise Plan(s) approved for the Leased Premises. The Development Plans (including precise plans, working drawings, architectural renderings, elevations, applications, environmental documents and other related documents) shall be subject to the review and approval by the Landlord (to the extent provided in this Lease) and the City to assure conformance to the Redevelopment Plan, the General Plan, and the City’s building, zoning, architectural, and related ordinances and regulations, and to those standards and requirements for the development of the Leased Premises reasonable and necessary to insure such conformance. In order for the prescribed concept of a Towne Center to succeed, it is necessary that the improvements which this developer proposes to construct and/or install, are compatible with those improvements which will be constructed and/or installed on adjacent parcels. Cooperation and coordination shall be encouraged between the developer, adjacent developers and the Landlord to protect and enhance the natural, social, and physical attributes of the Leased Premises, so as not to detrimentally affect adjacent development and the economic strength and marketability of the Towne Center. SPECIFIC SITE. The Improvements shall include an office building, configured as an eightstory structure with exterior construction material to include at least forty percent (40%) surface area of polished granite (“Metro Granite”) of a type and quality equal to or better than that used in _____________________’s project at ______________________ in ________________, California, with the balance in glass, and containing approximately _____________ gross building square feet. ADDITIONAL OBLIGATIONS. Space shall be provided for pedestrian and vehicular access, open space and landscaping. Access and vehicular circulation shall be established so as to provide for the most effective and efficient movement of vehicles taking into account viewscape and detrimental physical characteristics. The architectural design of street, furniture, signs, landscaping, building, and other improvements shall be consistent with the theme established by the City and the Landlord and shall provide an attractive visual environment to motorists, enhanced open areas, plazas, and concourses for pedestrians, and to provide consistency with the unified motif throughout the Towne Center. Design and control of pedestrian and vehicle linkages shall be coordinated between developments so as to insure integration of movement patterns in the Towne Center. SETBACKS. Setbacks of the building, display areas, and the enhancement of these areas with landscaping shall be consistent with the provisions of the Municipal Code, and Area Development Plan Two and conform with the intent to provide attractive park-like open and landscaped areas, and to provide visual and acoustical mitigation and buffering between the Leased Premises and adjacent development. SITE DESIGN. The arrangement of activities, facilities, and the building on the Leased Premises shall encourage and promote close interactivity and encourage pedestrian movement from one facility to another. The Leased Premises design shall integrate mitigation measures for screening activities and uses considered to be visually detrimental, or which may affect the Leased Premises scope and/or theme of the development. 293688.2 999100-0001 11/28/2005 - 3:51 pm EXHIBIT "E" - Page 1 LANDSCAPING. The pattern, form and relationship of public and private open spaces, and the activities and uses of the Leased Premises shall be designed to incorporate landscaping compatible and complimentary to the intent and purpose of the development. Where appropriate, and consistent with the provisions of the Municipal Code, landscaping shall be introduced on the Leased Premises consistent with the design theme. The use of both soft (i.e., ground cover, grass, trees, shrubs, etc.) and hard (i.e. dry wash effect, rock, sand, etc.) landscaping shall be coordinated and designed to create variety in the visual effect of the landscape plan. PARKING. The provisions and design of off-street parking (visitor, employee and service) shall be adequately incorporated into the overall site design. Provisions shall be made so as to foresee the future growth and prosperity of the development as it relates to on-site parking availability. SIGNS. Signage shall be coordinated and integrated between and within each development. A sign theme shall be established providing adequate, individualized and architecturally sound Leased Premises identification. The Landlord, City and developer shall create a sign environment consistent and compatible with the provisions of the Municipal Code, the community, and also complimentary and responsive to the needs and requirements of the Leased Premises. 293688.2 999100-0001 11/28/2005 - 3:51 pm EXHIBIT "E" - Page 2 EXHIBIT “F” Schedule of Performance 293688.2 999100-0001 11/28/2005 - 3:51 pm EXHIBIT "F" - Page 1 EXHIBIT “G” Site Map for Leased Premises 293688.2 999100-0001 11/28/2005 - 3:51 pm EXHIBIT "G" - Page 1 EXHIBIT “H” [INTENTIONALLY OMITTED] 293688.2 999100-0001 11/28/2005 - 3:51 pm EXHIBIT "H" - Page 1 EXHIBIT “I” Form of Certificate of Completion FORM OF CERTIFICATE OF COMPLETION WHEREAS, by the terms of a Disposition and Development Agreement (as amended or as hereinafter amended, the “Agreement”) dated as of __________, by and between THE CERRITOS REDEVELOPMENT AGENCY (“Landlord”), and _______________________, a _______________________, (“Tenant”), Tenant has satisfactorily completed the construction required to be completed by Tenant on the parcels legally described in Exhibit “A” attached hereto, together with all parking, landscaping, and other improvements on the Leased Premises described in the Agreement which are required to be completed by Tenant prior to commencement of business on said parcels/Leased Premises legally described in Exhibit “A” hereto, according to the terms and conditions of the Agreement; and WHEREAS, pursuant to Section 5.10 of the Agreement, promptly after completion of such construction work by Tenant, Landlord is to furnish Tenant with a Certificate of Completion upon written request therefor by Tenant; and WHEREAS, the issuance by the Landlord of said Certificate of Completion is to be conclusive evidence that Tenant has complied with the terms of the Agreement and that certain Cerritos Towne Center Ground Lease dated as of __________, 200__, by and between Landlord and Tenant (the “Ground Lease”) pertaining to the commencement and completion of the construction covered by said Certificate of Completion; and WHEREAS, Tenant has requested that Landlord furnish Tenant with a Certificate of Completion; and WHEREAS, Landlord has conclusively determined that the construction covered by said Certificate of Completion has been satisfactorily commenced and completed as required by the Agreement; NOW, THEREFORE: 1. As provided in the Agreement and the Ground Lease, Landlord does hereby certify that initial redevelopment of the parcels legally described in Exhibit “A” attached hereto, together with all parking, landscaping and other improvements on the Leased Premises described in the Agreement and the Ground Lease which are required to be completed by Tenant prior to commencement of business on said parcels/Leased Premises legally described in Exhibit “A” hereto have been fully and satisfactorily performed and completed, and such initial redevelopment has been completed in full compliance with the Agreement and the Ground Lease. The Certificate of Completion relates only to completion of the initial construction of the Leased Premises required by the Agreement and the Ground Lease and does not relate to any further construction on the Leased Premises or any other obligations arising under the Agreement or the Ground Lease. 2. This Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of Tenant to any holder of a mortgage, or any insurer of a mortgage, securing money loaned to finance construction work on the Leased Premises, or any part thereof. Nothing contained herein shall modify in any way any provision of the Agreement. 293688.2 999100-0001 11/28/2005 - 3:51 pm EXHIBIT "I" - Page 1 IN WITNESS WHEREOF, Landlord has executed this Certificate as of this _____ day of ________________, 20__. THE CERRITOS REDEVELOPMENT AGENCY By_____________________________ ATTEST: ____________________________ Landlord Secretary 293688.2 999100-0001 11/28/2005 - 3:51 pm EXHIBIT "I" - Page 2 STATE OF CALIFORNIA COUNTY OF LOS ANGELES ) ) ss. ) On _________________________, 20__ before me, the undersigned, a Notary Public in and for the said State and County, personally appeared ________________________________________ ________________________________________________________________________________ ___________________________________________________________________ personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. ______________________________ Signature (This area for official notarial seal) 293688.2 999100-0001 11/28/2005 - 3:51 pm EXHIBIT "I" - Page 3 EXHIBIT “A” Legal Description 293688.2 999100-0001 11/28/2005 - 3:51 pm EXHIBIT "I" - Page 4 EXHIBIT “J” Estoppel Certificate STATEMENT OF TENANT The undersigned, as Tenant, under that lease dated ______________, 200__ made with Cerritos Redevelopment Agency as Landlord, hereby certifies as follows: (1) in said lease; (2) That said lease is in full force and effect and, to the knowledge of the undersigned, has not been assigned, modified, supplemented or amended in any way, except as follows: _________________________________________________________________ _________________________________________________________________ _________________________________________________________________ (3) (4) That the Effective Date of said lease is ______________________________; That there is an unexpired term hereunder of ___________ years. That the undersigned has entered into occupancy of the premises described (5) That, to the knowledge of the undersigned, all conditions of said lease to be performed by Landlord and necessary to the enforceability of said lease have been satisfied; (6) That, to the knowledge of the undersigned, there are no defaults by either Tenant of Landlord thereunder; (7) That no rents have been prepaid, other than as provided in said lease; and (8) That on this date there are no existing defenses or offsets which the undersigned has against the enforcement of said lease by Landlord. The undersigned hereby agrees: (1) by said lease; and To disclaim all right, title or interest in said premises except the rights granted (2) To give to the holder of any mortgage affecting the Leased Premises, or its assignee, the same right as the Landlord has to cure any default complained of in any notice or demand. EXECUTED THIS __________ day of ____________________, 20__. TENANT: __________________________________, a ______________________________ By:_______________________________________ Name:____________________________________ Its:_______________________________________ [TO BE MODIFIED AS APPROPRIATE FOR USE AS LANDLORD ESTOPPEL] 293688.2 999100-0001 11/28/2005 - 3:51 pm EXHIBIT "J" - Page 1 EXHIBIT “K” Short Form of Lease RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: BROWN, WINFIELD & CANZONERI, INC. 300 South Grand Avenue Suite 1500 Los Angeles, California 90071-3125 Attention: Dennis S. Roy, Esq. MEMORANDUM OF LEASE (a) Parties. This Memorandum of Lease, dated for identification purposes only as of _____________, 200__, is entered into by THE CERRITOS REDEVELOPMENT AGENCY, a public body, corporate and politic (“Landlord”) and ____________________, a _______________ (“Tenant”). (b) Grant of Lease: Term: For good and valuable consideration received, Landlord leases to Tenant, and Tenant leases from Landlord, that certain unimproved real property (the “Property”) located in the City of Cerritos, County of Los Angeles, State of California, described in Exhibit “A” attached hereto and incorporated herein by this reference, together with all buildings, structures, improvements and fixtures now or hereafter erected thereon and all right, title and interest of Landlord in and to all rights of way or use, servitudes, licenses, easements, tenements, hereditaments and appurtenances now or hereafter belonging or pertaining to the use of such real property during the term of the Lease, commencing on the Effective Date (as defined in the Lease) and ending on ___________, 20__, subject to the terms, conditions, provisions and covenants of that certain Cerritos Towne Center Ground Lease (the “Lease”) between the parties hereto, dated for identification purposes only as of the ___ day of ________, 200__. All of the terms, provisions and covenants of the Lease are incorporated in this Memorandum of Lease by reference as though written out at length herein, and the Lease and this Memorandum of Lease shall be deemed to constitute a single instrument or document. (c) Purpose of Memorandum of Lease. This Memorandum of Lease is prepared for recordation purposes only, and it in no way modifies the terms, conditions, provisions and covenants of the Lease. In the event of any inconsistency between the terms, conditions, provisions and covenants of this Memorandum of Lease and the Lease, the terms, conditions and covenants of the Lease shall prevail. (d) Counterparts. This Memorandum of Lease may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. 293688.2 999100-0001 11/28/2005 - 3:51 pm EXHIBIT "K" - Page 1 The parties hereto have executed this Memorandum of Lease at the place and on the dates specified immediately adjacent to their respective signatures. “Landlord” THE CERRITOS REDEVELOPMENT AGENCY, a public body, corporate and politic Executed the ___ day of ___________, 200__ at _________________ ____________________ _______________________________ Art Gallucci Executive Director “Tenant” _________________________________, a ______________________________ Executed the ___ day of ___________, 200__ at _________________ ____________________ By:_______________________________________ Name:____________________________________ Its:_______________________________________ 293688.2 999100-0001 11/28/2005 - 3:51 pm EXHIBIT "K" - Page 2 STATE OF CALIFORNIA COUNTY OF LOS ANGELES ) ) ss. ) On ________________________, 200__ before me, the undersigned, a Notary Public in and for the said State and County, personally appeared ________________________________________ personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. ______________________________ Signature (This area for official notarial seal) 293688.2 999100-0001 11/28/2005 - 3:51 pm EXHIBIT "K" - Page 3 STATE OF CALIFORNIA COUNTY OF LOS ANGELES ) ) ss. ) On ________________________, 200__ before me, the undersigned, a Notary Public in and for the said State and County, personally appeared ________________________________________ personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. ______________________________ Signature (This area for official notarial seal) 293688.2 999100-0001 11/28/2005 - 3:51 pm EXHIBIT "K" - Page 4 EXHIBIT “A” Legal Description 293688.2 999100-0001 11/28/2005 - 3:51 pm EXHIBIT "K" - Page 5 EXHIBIT “L” Guaranty of Tenant’s Obligations Under Ground Lease GUARANTY OF GROUND LEASE WHEREAS, The Cerritos Redevelopment Agency, a public body corporate and politic (“Landlord”), and ______________________, a _______________________ (“Tenant”) have entered into that certain ground lease dated for identification purposes as of ___________, 200__ (the “Lease”), whereby Landlord leased to Tenant certain premises in the City of Cerritos, County of Los Angeles, State of California, pursuant to that certain Disposition and Development Agreement, dated as of _____, _____, entered into by and between _______________ (“Developer”) and Landlord (which document, as previously amended or as hereafter amended, is referred to herein as the “DDA”); and WHEREAS, as an inducement to Landlord’s execution of the Lease, the undersigned has agreed to guarantee the full performance of the obligations of Tenant thereunder, subject to the terms and conditions hereof. NOW, THEREFORE, in consideration of the execution of said Lease by Landlord, _____________________ (“Guarantor”) hereby unconditionally guarantees the full performance of each and all of the terms, covenants and conditions of the Lease, as it may be amended hereafter from time to time, to be kept and performed by said Tenant, including the payment of all rentals and other charges that have accrued or may hereafter accrue thereunder, including, without limitation, all Annual Rental and CPI Adjusted Annual Base Rental (as defined in the Lease), subject to the following terms, conditions, and agreements: 1. At such time as Tenant is released from liability under the Lease following an assignment of the Lease pursuant to the terms and conditions thereof, Guarantor shall be similarly released from liability, it being the intent of the parties that at such time as Tenant is exonerated or discharged from further liability following such an assignment, Guarantor shall be similarly discharged. 2. This covenant and agreement on the part of Guarantor shall continue in favor of the Landlord notwithstanding any extension, modification, or alteration (hereinafter collectively referred to as an “Alteration”) of the Lease or any assignment of the Lease (unless by virtue of the assignment, Tenant is discharged from liability under the Lease), regardless of whether said Alteration or assignment is with or without notice to or the consent of Guarantor, or whether said assignment is with or without the consent of the Landlord, and no such Alteration or assignment of the Lease shall in any manner release or discharge Guarantor, and Guarantor does hereby consent thereto. 3. Guarantor hereby waives the benefit of any statute of limitations affecting Guarantor’s liability under this Guaranty, and the benefit of California Civil Code Sections 2815 and 2819, or any like or successor statute, and such provisions shall be inapplicable to this Guaranty. 4. The terms and provisions of this Guaranty shall be binding upon Guarantor’s estate and Guarantor’s heirs, executors, personal representatives and administrators (collectively, “Estate and Heirs”). 5. This Guaranty will continue unchanged by any bankruptcy, reorganization or insolvency of Tenant or any successor or assignee thereof or by any disaffirmance or abandonment by a trustee of Tenant. 6. Landlord may, at its election, exercise any right or remedy it may have against Tenant or any security held by Landlord, including without limitation the right to foreclose upon any such security by judicial or nonjudicial sale, without affecting or impairing in any way the liability 293688.2 999100-0001 11/28/2005 - 3:51 pm EXHIBIT "L" - Page 1 of Guarantor hereunder except to the extent the indebtedness has been paid, and Guarantor waives any defense arising out of the absence, impairment or loss of any right of reimbursement or subrogation or other right or remedy of Guarantor against Tenant or any such security, whether resulting from such election by Landlord, or otherwise. Guarantor waives any defense arising by reason of any disability or other defense of Tenant or by reason of the cessation from any cause whatsoever of the liability of Tenant. Until all indebtedness of Tenant to Landlord shall have been paid in full, even though such indebtedness is in excess of Guarantor’s liability hereunder, Guarantor shall have no right of subrogation, and waives any right to enforce any remedy which Landlord now has or may hereafter have against Tenant, and waives any benefit of, and any right to participate in any security now or hereafter held by Landlord. Guarantor waives all presentments, demands for performance, notices of nonperformance, protests, notices of protest, notices of dishonor, and notices of acceptance of this Guaranty and of the existence, creation, or incurring of new or additional indebtedness. Guarantor assumes the responsibility for being and keeping himself informed of the financial condition of Tenant and of all other circumstances bearing upon the risk of nonpayment of the indebtedness which diligent inquiry would reveal, and agrees that absent a request for such information by Guarantor, Landlord shall have no duty to advise Guarantor of information known to it regarding such condition or any such circumstances. 7. [OMITTED] 8. Any married person who signs this Guaranty hereby expressly agrees that recourse may be had against his or her separate property and any community property of which he or she may be manager for all obligations under this Guaranty. 9. Guarantor agrees to provide Landlord annual financial statements from time to time upon request, and represents and warrants that all financial statements so provided accurately reflect Guarantor’s financial condition. 10. Landlord may, without notice, assign this Guaranty of Ground Lease in whole or in part, and no assignment or transfer of the Lease by Landlord shall operate to extinguish or diminish the liability of Guarantor hereunder. 11. The liability of Guarantor under this Guaranty of Lease shall be primary, at Landlord’s election; and in any right of action which shall accrue to Landlord under the Lease, Landlord may, at its option, proceed against Guarantor without having commenced any action, or having obtained any judgment against the Tenant. The obligations hereunder are joint and several, and independent of Tenant’s obligations. 12. In the event Landlord commences a legal action to enforce the provisions hereof, Guarantor shall pay Landlord’s reasonable attorneys’ fees and all costs and other expenses incurred in the prosecution of such action. 13. Guarantor does hereby waive the following: (a) (b) or reserved in the Lease; notice of any demand by the Landlord; notice of default in the payment of rent or any other amount contained (c) the requirement, if any, that Landlord proceed against Tenant, including any requirement that Landlord exhaust any security that Landlord holds from Tenant; (d) Landlord’s power; (e) (f) Landlord is aware of such. 293688.2 999100-0001 11/28/2005 - 3:51 pm the requirement, if any, that Landlord pursue any other remedy in notice of amendments to the Lease; and notice of any adverse condition or circumstance, whether or not EXHIBIT "L" - Page 2 14. This Guaranty may not be revoked by Guarantor or, if Guarantor is deceased, the Estate and Heirs of Guarantor, and any attempted revocation by Guarantor or such Estate and Heirs shall be null and void and shall not in any manner release or discharge Guarantor or such Estate and Heirs from liability under this Guaranty. 15. Subject to the qualification set forth in Paragraph 2 above, no Alteration of the Lease or assignment of the Lease which occurs after the death of Guarantor shall in any manner release or discharge the Estate and Heirs of Guarantor from liability under this Guaranty whether or not such Estate and Heirs have notice of or consent to such Alteration or assignment, and such Estate and Heirs do hereby consent thereto. 16. The use of the singular herein shall include the plural. The terms and provisions of this Guaranty shall be binding upon the Estate and Heirs of Guarantor and the successors and assigns of Landlord, and shall inure to the benefit of the respective successors and assigns of Guarantor and Landlord. This Guaranty may not be modified or cancelled except by a writing signed by Landlord. 17. If any provision of this Guaranty shall be determined to be void by any court of competent jurisdiction, then such determination shall not affect any other provision of this Guaranty or the Lease and all such other provisions shall remain in full force and effect; and it is the intention of the parties hereto that if any provision of this Guaranty is capable of two constructions, only one of which would render the provision valid, then the provision shall have the meaning which renders it valid. 18. The obligations of Guarantor hereunder shall remain in full force and effect notwithstanding any assignment, sale, encumbrance, conveyance or transfer of either or both of Landlord’s interest and/or Tenant’s interest under the Ground Lease, subject to the provisions of Paragraph 2. 19. This guaranty is not intended, nor shall it be deemed to amend, modify, limit, supersede nor affect any other guaranty previously, now or hereafter made by Guarantor in favor of Landlord whether or not such other guaranty relates to the transaction or transactions from which this Guaranty arises. IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the ___ day of ___________, 200__. _______________________________ Print Name:_____________________ Address: _______________________________ _______________________________ 293688.2 999100-0001 11/28/2005 - 3:51 pm EXHIBIT "L" - Page 3 SPOUSE’S CONSENT AND WAIVER of COMMUNITY PROPERTY RIGHTS with respect to GUARANTY OF GROUND LEASE I hereby acknowledge that I have read and understand the contents of that certain Guaranty of Ground Lease (“Guaranty”) dated as of ___________, 200__, given by my spouse, ________________, to the Cerritos Redevelopment Agency (“Landlord”) to secure that certain ground lease agreement (“Agreement”) dated for identification purposes as of ____________________, 200__ between the Landlord and _________________________, a _______________________________. I hereby give my full, unconditional and unequivocal consent to my spouse’s Guaranty of the Agreement, and agree that all of our community property, including my interest therein, shall be available to the Landlord, if needed, to satisfy any and all claims, losses, liabilities and obligations to the Landlord pursuant to the Guaranty. I agree that all of our community property including my interest therein shall be subject to execution with respect to any lawsuit brought or judgment obtained by the Landlord in connection with the Guaranty, and I waive any and all rights that I might have to object thereto. I further agree that the Landlord shall have the same rights with respect to my one-half interest in our community property as it has with respect to my spouse’s property, taking into full account all liabilities, obligations, covenants, conditions, waivers and other provisions contained in the Guaranty, to the same extent as if I had executed the Guaranty, and that this consent and waiver shall be in addition to and not in derogation of the rights that are otherwise available to the Landlord as a matter of law. Dated: __________________ _________________________ (Signature) _________________________ (Print Name) 293688.2 999100-0001 11/28/2005 - 3:51 pm EXHIBIT "L" - Page 4 EXHIBIT “M1" Proforma Rent Level TRIPLE NET SUBLEASE SCHEDULE OF PROFORMA RENT LEVEL Office Annual Rent Per Square Foot Retail $14.80 $18.80 The “Pro Forma Rent Level” shall mean an amount equal to the product of (i) the number of gross rentable square feet of building area subleased on a “Triple Net Sublease” basis within the building in question multiplied by (ii) the applicable Annual Rent Per Square Foot figure set forth above. 293688.2 999100-0001 11/28/2005 - 3:51 pm EXHIBIT "M1" - Page 1 EXHIBIT “M2" Proforma Rent Level GROSS SUBLEASE SCHEDULE OF PROFORMA RENT LEVEL AND OPERATING COSTS Office Annual Gross Rent Per Square Foot Retail $19.80 $20.00 Annual Operating Costs Per Square Foot $ 5.00 $ 1.20 The “Pro Forma Rent Level” shall mean an amount equal to the product of (i) the number of gross rentable square feet of building area subleased on a “Gross Sublease” basis within the building in question multiplied by (ii) the applicable Annual Gross Rent Per Square Foot figure set forth above. The “Pro Forma Operating Costs” shall mean an amount equal to the product of (i) the number of gross rentable square feet of building area subleased on a “Gross Sublease” basis within the building in question multiplied by (ii) the applicable Annual Operating Costs Per Square Foot figure set forth above. 293688.2 999100-0001 11/28/2005 - 3:51 pm EXHIBIT "M2" - Page 1 CERRITOS TOWNE CENTER GROUND LEASE (BUILDING __) (MASTER PLAN PARCEL NO. __) THE CERRITOS REDEVELOPMENT AGENCY LANDLORD ______________________________, a ___________________________ TENANT 293688.2 999100-0001 11/28/2005 - 3:51 pm TABLE OF CONTENTS Page ARTICLE 1. LEASED PREMISES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.1 Leased Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ARTICLE 2. 2.1 2.2 2.3 TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Options to Extend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Possession; Risk of Loss; Covenant of Quiet Enjoyment; Condition of Title . . . . . 1 1 1 2 2 2 2 3 4 4 7 ARTICLE 3. RENT PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 Annual Rental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1.1 Initial Annual Rental Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1.2 Commencement of Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1.3 Rental For Partial Calendar Year Following Rent Commencement Date and For Partial Calendar Quarter Following Rent Commencement Date . . 3.1.4 Participation Rental . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1.5 Increase of Annual Base Rental at Ten Year Intervals . . . . . . . . . . . . . . . . 3.1.6 Provision for Landlord/City Participation in Net Sale Proceeds and the Net Refinancing Proceeds following the Close of Escrow [TO BE DISCUSSED] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1.7 Consumer Price Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1.8 Rental Increase Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1.9 Late Charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 Maintenance of Books and Records; Inspection and Audit . . . . . . . . . . . . . . . . . . . 3.3 Negation of Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 8 8 8 8 9 ARTICLE 4. USES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 4.1 Governmental Restrictions; Applicable Governmental Restrictions; Redevelopment Plan; Area Development Plan for Development Area Two; Conditions, Covenants and Restrictions; Master Plan; Scope of Development; Plans; Precise Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 4.2 Use of the Leased Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 4.3 Grant Easements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 4.4 Non-Discrimination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 ARTICLE 5. CONSTRUCTION BY TENANT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 Duty to Construct Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 Conditions to Construction of Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.1 Submission and Approval of Plans and Specifications . . . . . . . . . . . . . . . 5.2.2 Submission of Evidence of Financing; Submission of Evidence of Construction Contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.3 Builder’s Risk and Other Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2.4 No Construction Before Notice; Notice of Nonresponsibility . . . . . . . . . . 5.3 Completion of Improvements and Other Work; Compliance With Law And Quality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4 Mechanic’s, Materialman’s, Contractor’s, or Subcontractor’s Liens . . . . . . . . . . 5.5 Alterations, Modifications or Replacements of Improvements; All Work on Written Contract; Approval of General Contractor; Performance and Payment Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6 Ownership Of Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7 Certificate of Completion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ARTICLE 6. 6.1 6.2 6.3 REPAIRS AND MAINTENANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Landlord’s Nonresponsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tenant’s Duty to Maintain Premises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Repair; Destruction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i 12 12 12 12 13 15 15 15 16 16 17 18 18 18 18 19 293688.2 999100-0001 11/28/2005 - 3:51 pm 6.4 ARTICLE 7. 7.1 7.2 7.3 Damage or Destruction During Last Part of Term; Uninsured Damage . . . . . . . . 19 LEASEHOLD FINANCING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Conditions To Obtaining Leasehold Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . Lender’s Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3.1 Prior To Extinguishment of Leasehold Mortgage . . . . . . . . . . . . . . . . . . . 7.3.2 Subsequent to Foreclosure of Leasehold Mortgage . . . . . . . . . . . . . . . . . . 7.3.3 New Lease Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Encumbrance of Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 20 20 22 22 24 25 26 26 26 7.4 ARTICLE 8. ASSIGNMENT AND TRANSFER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1 Assignment to City; Recoupment Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2 Transfer of Lease or Leased Premises by Tenant; Transfer of Beneficial Interest or Ownership of Tenant; Selection Of Management Entity and Assignment of Beneficial Interest In or Ownership of Entity; Subleases, Licenses or Concession Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2.1 Transfer of the Lease, the Leased Premises, or the Improvements to be Constructed Thereon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2.2 Transfer of Control of Tenant; Retention of Management Entity and Transfer of Interest Therein . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2.3 Concessions, Licenses and Subleases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3 Investigation of Proposed Transferee; Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ARTICLE 9. 9.1 9.2 9.3 9.4 9.5 9.6 9.7 TAXES AND IMPOSITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tenant To Pay Impositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Proration of Impositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payment Before Delinquency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Contest of Imposition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tax Returns And Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payment By Landlord . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 27 28 29 31 31 31 32 32 32 32 32 33 ARTICLE 10. UTILITY SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 10.1 Tenant’s Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 10.2 Landlord and City Have No Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 ARTICLE 11. 11.1 11.2 11.3 11.4 11.5 11.6 ARTICLE 12. 12.1 12.2 12.3 12.4 12.5 12.6 ARTICLE 13. 13.1 13.2 13.3 13.4 INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Fire and Extended Coverage Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cooperation in Obtaining Proceeds of Fire and Extended Coverage . . . . . . . . . . Builder’s Risk and Worker’s Compensation Insurance . . . . . . . . . . . . . . . . . . . . . Public Liability Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Policy Form, Content And Insurer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CONDEMNATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Total or Substantial Taking of Leased Premises . . . . . . . . . . . . . . . . . . . . . . . . . . Apportionment And Distribution of Award for Total Taking and Substantial Taking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Partial Taking; Abatement and Restoration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Apportionment and Distribution of Award For Partial Taking . . . . . . . . . . . . . . . Taking for Temporary Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Notice of Default; Tenant’s Right to Cure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Landlord’s Right to Cure Tenant’s Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Notice of Landlord’s Default; Tenant Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii 33 33 33 33 34 34 35 35 35 36 36 37 37 37 38 38 39 39 39 293688.2 999100-0001 11/28/2005 - 3:51 pm 13.5 13.6 13.7 13.8 Landlord’s Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.5.1 Right to Terminate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.5.2 Right to Reenter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.5.3 Right to Relet on Tenant’s Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.5.4 Effect of Reentry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.5.5 Limitation of Liability for Breach of Obligation To Pay Rent . . . . . . . . . . Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Delays in Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 40 40 41 41 41 42 42 42 ARTICLE 14. EXPIRATION; TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 14.1 Tenant’s Duty To Surrender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 ARTICLE 15. 15.1 15.2 15.3 15.4 15.5 15.6 15.7 15.8 15.9 15.10 15.11 15.12 15.13 15.14 15.15 15.16 15.17 15.18 15.19 15.20 15.21 15.22 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tenant’s Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Estoppel Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Attorneys’ Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rights of Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Amendments in Writing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Time of Essence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Applicable Law; Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Waiver of Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Attornment by Tenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Short Form of Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Indemnification of Rental Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Landlord’s Rights of Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nonmerger of Fee and Leasehold Estates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nonliability of Landlord and City Representatives . . . . . . . . . . . . . . . . . . . . . . . . Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Right to Establish Assessment District In Lieu of Revenues . . . . . . . . . . . . . . . . . Guaranty of Tenant’s Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 44 45 45 46 47 47 47 47 47 47 47 47 48 48 48 48 49 49 49 49 49 49 293688.2 999100-0001 11/28/2005 - 3:51 pm iii LIST OF EXHIBITS EXHIBIT “A” EXHIBIT “B” EXHIBIT “C” EXHIBIT “D” EXHIBIT “E” EXHIBIT “F” EXHIBIT “G” EXHIBIT “H” EXHIBIT “I” EXHIBIT “J” EXHIBIT “K” EXHIBIT “L” EXHIBIT “M1" EXHIBIT “M2" Legal Description Title Commitment [Intentionally Omitted] Master Plan Governing Development of Cerritos Towne Center Scope of Development Master Plan Parcel No. ___ Schedule of Performance Site Map for Leased Premises [Intentionally Omitted] Form of Certificate of Completion Estoppel Certificate Short Form of Lease Guaranty of Tenant’s Obligations Under Ground Lease Proforma Rent Level - Triple Net Sublease Proforma Rent Level - Gross Sublease 293688.2 999100-0001 11/28/2005 - 3:51 pm iv