LEASE AGREEMENTS FOR REGISTRANTS PRINCIPLE OFFICES SUBSTANTIALLY IN THE FORM OF THIS EXHIBIT

Construction Agreement

You are currently viewing:

This Construction Agreement involves

21ST CENTURY INSURANCE GR | TISHMAN WARNER CENTER VENTURE, LLC | 20TH CENTURY INDUSTRIES

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: LEASE AGREEMENTS FOR REGISTRANTS PRINCIPLE OFFICES SUBSTANTIALLY IN THE FORM OF THIS EXHIBIT
Governing Law: California Date: 2/11/2004
Industry: Insurance (Prop. and Casualty)

LEASE AGREEMENTS FOR REGISTRANTS PRINCIPLE OFFICES SUBSTANTIALLY

IN THE FORM OF THIS EXHIBIT EXHIBIT 10(l)

OFFICE LEASE

This Office Lease, which includes the preceding Summary of Basic Lease

Information (the "SUMMARY") attached hereto and incorporated herein by this

reference (the Office Lease and Summary are collectively referred to herein as

the "LEASE"), dated as of the date set forth in SECTION 1 of the Summary is made

---------

by and between TISHMAN WARNER CENTER VENTURE, LLC, a California limited

liability company ("LANDLORD"), and 20TH CENTURY INDUSTRIES, a California

corporation ("TENANT").

ARTICLE 1

PREMISES, BUILDING, PROJECT AND COMMON AREAS

1.1 The Premises. The "Premises" consists of all of the occupiable

-------------

area in the "Building" as that term is defined in SECTION 1.2, below, with the

-----------

exception of the space located on the first (ground) floor of the Building and

indicated on Exhibit A, attached hereto, as the "Retail Areas" or "Management

-----------

Office", and not including any basement storage areas (which are to be leased by

Tenant pursuant to the terms of Article 4). The number of rentable square feet

---------

of each floor of the Premises is as provided below.

Floor Rentable Square Feet

----- --------------------

1 11,140

2 21,550

3 21,550

4 21,550

5 21,550

6 21,550

7 21,550

8 21,550

9 21,550

10 21,913

11 22,200

PREMISES TOTAL 227,653

TISHMAN WARNER CENTER VENTURE, LLC

[20th Century Industries; 6303 Owensmouth]

<PAGE>

Upon and subject to the terms, covenants and conditions hereinafter set forth in

this Lease, Landlord hereby leases to Tenant and Tenant hereby leases from

Landlord the Premises. An outline of each floor of the Premises is set forth in

EXHIBIT A attached hereto.

----------

1.2 The Building and The Project. The Premises are a part of the

--------------------------------

building set forth in SECTION 4.1 of the Summary (the "BUILDING"). The Building

-----------

is part of an office project to be known as 20th Century Plaza, consisting of

the Building and the additional office building to be constructed by Landlord

and located at 6303 Owensmouth Avenue, Woodland Hills, California 91367 (the

"ADJACENT BUILDING"). The term "Project," as used in this Lease, shall mean (i)

the Building, the Adjacent Building and the "Common Areas," as that term is

defined in SECTION 1.3 below, including the parking structure and parking areas

-----------

to be constructed on the land containing the Project (the "PARKING STRUCTURE"),

(ii) the land (which is improved with landscaping, parking facilities and other

improvements) upon which the Building, the Adjacent Building and the Common

Areas are located, and (iii) at Landlord's discretion, any additional

improvements added thereto pursuant to the terms of SECTION 1.4 of this Lease.

-----------

Notwithstanding the foregoing, in those areas of this Lease where Tenant is

granted a right or privilege, or Landlord or Tenant undertakes an obligation,

contingent on Tenant's occupying "all of the Project", "the entire Project", or

"100% of the Project" (or such other phrase indicating the entirety of the

Project), Tenant shall be deemed to have achieved such occupancy level

notwithstanding the fact that Tenant does not lease those areas on the ground

floor of the Building which are currently leased to certain retail tenants other

than Tenant. The Project, as initially designated by Landlord, is approximately

set forth on EXHIBIT B, attached hereto. In the event that, during any Option

---------

Term, Tenant no longer leases the Adjacent Building, Landlord shall have the

right to change the name of the Project. Tenant acknowledges that the Parking

Structure is to be constructed by Landlord in accordance with the terms of the

Adjacent Building Lease, and is not anticipated to be fully completed until the

last quarter of 1998.

1.3 Common Areas. Tenant shall have the non-exclusive right to use

-------------

in common with other tenants in the Project, and subject to the rules and

regulations referred to in ARTICLE 5 of this Lease, those portions of the

----------

Project which are provided, from time to time, for use in common by Landlord,

Tenant and any other tenants of the Project (such areas, together with such

other portions of the Project designated by Landlord, in its discretion,

including certain areas designated for the exclusive use of certain tenants, or

to be shared by Landlord and certain tenants, are collectively referred to

herein as the "COMMON AREAS"). The Common Areas shall consist of the "Project

Common Areas" and the "Building Common Areas." The term "Project Common Areas,"

as used in this Lease, shall mean the portion of the Project designated as such

by Landlord, and may include, without limitation, any fixtures, systems, signs,

facilities, parking facilities and areas (including the Parking Structure),

gardens, parks or other landscaping contained, maintained or used in connection

with the Project, and may include any city sidewalks adjacent to the Project,

pedestrian walkway system, whether above or below grade, park or other

facilities open to the general public and roadways, sidewalks, walkways,

parkways, driveways and landscape areas appurtenant to the Project. The term

"Building Common Areas," as used in this Lease, shall mean the Common Areas, to

the extent located within the Building, designated as such by Landlord, and may

include, without limitation, the common entrances, lobbies, atrium areas,

restrooms, elevators, stairways and accessways, loading docks, ramps, drives,

platforms, passageways, serviceways, common pipes, conduits, wires, equipment,

loading and unloading areas, parking facilities and trash areas servicing the

Building.

-2-

TISHMAN WARNER CENTER VENTURE, LLC

[20th Century Industries; 6303 Owensmouth]

<PAGE>

1.4 Landlord's Use and Operation of the Building, Project, and Common

-------------------------------------------------------------------

Areas. Landlord reserves the right from time to time (i) to close temporarily

-----

any of the Common Areas; (ii) to make changes to the Common Areas, including,

without limitation, changes in the location, size, shape and number of street

entrances, driveways, ramps, entrances, exits, passages, stairways and other

ingress and egress, direction of traffic, landscaped areas, loading and

unloading areas, and walkways; (iii) to add additional improvements to the

Common Areas; (iv) to use the Common Areas while engaged in making additional

improvements, repairs or alterations to the Project or to any adjacent land, or

any portion thereof; and (v) to do and perform such other acts and make such

other changes in, to or with respect to the Project as Landlord may, in the

exercise of reasonable discretion, deem to be appropriate. Notwithstanding the

foregoing, except with respect to Landlord's initial construction of Adjacent

Building, Parking Structure and Common Areas, if any of the foregoing actions by

Landlord is reasonably considered by Tenant as likely to have a material and

adverse affect on Tenant's use of or access to the Premises or the "Storage

Area", as that term defined in SECTION 4.1, or the Common Areas, including the

-----------

Parking Structure, or the Adjacent Building, Landlord's right to take any such

action shall be subject to the prior written consent of Tenant, which consent

shall not unreasonably be withheld, conditioned or delayed. Moreover, Landlord

may take the foregoing actions without the prior consent of Tenant in the event

of an emergency, in connection with Landlord's actions pursuant to the terms of

ARTICLES 6, 8, 13 and 19 of this Lease, or in order to comply with "Laws", as

---------------------------

that term is defined in SECTION 19.27, below. Landlord shall use commercially

-------------

reasonably efforts to minimize any interruption of Tenant's use of or access to

the Premises, the Storage Area or the Common Areas, including the Parking

Structure, and, if parking spaces would otherwise be lost, albeit temporarily,

shall use commercially reasonable efforts to provide to Tenant alternative

parking within or in close proximity to the Project, with reasonably adequate

security and, when appropriate, shuttle service to and from such alternative

parking area so as to minimize the inconvenience to Tenant resulting from such

interruption of Tenant's use of or access to the Premises or the Parking

Structure.

1.5 Rentable Square Footage of Premises and Building. For purposes of

-------------------------------------------------

this Lease, "rentable square feet" contained in the Premises and Building shall

be deemed to be as set forth in SECTION 4.2 of the Summary, and shall not be

subject to remeasurement during the Lease Term.

ARTICLE 2

LEASE TERM

2.1 Initial Term. The terms and provisions of this Lease shall be

-------------

effective as of the date of this Lease, except as otherwise set forth herein.

The term of this Lease (the "LEASE TERM") shall be as set forth in SECTION 5.1

-----------

of the Summary, shall commence on the date set forth in SECTION 5.2 of the

-----------

Summary (the "LEASE COMMENCEMENT DATE"), and shall expire on the date determined

as provided in SECTION 5.3 of the Summary (the "LEASE EXPIRATION DATE") unless

-----------

the Lease Term is sooner terminated or extended as hereinafter provided. For

-3-

TISHMAN WARNER CENTER VENTURE, LLC

[20th Century Industries; 6303 Owensmouth]

<PAGE>

purposes of this Lease, the term "Lease Year" shall mean each consecutive twelve

(12) month period during the Lease Term for the initial Premises; provided,

however, that the first Lease Year shall commence on the Lease Commencement Date

and end on the last day of the eleventh calendar month thereafter and the second

and each succeeding Lease Year shall commence on the first day of the next

calendar month; and further provided that the last Lease Year shall end on the

Lease Expiration Date. Landlord shall, within ninety (90) days after the

commencement of the Adjacent Building Lease, deliver to Tenant a supplemental

agreement in the form as set forth in EXHIBIT D, attached hereto, which Tenant

---------

shall execute and return to Landlord within ten (10) days of receipt thereof.

2.2 Intentionally Omitted.

----------------------

2.3 Renewal Option Terms.

---------------------

2.3.1 Renewal Option Right. Landlord hereby grants to Tenant two

---------------------

(2) options to extend the initial Lease Term (each of which is deemed a "RENEWAL

OPTION RIGHT") for a period of five (5) years each (each such term to be known

as a "RENEWAL OPTION TERM"), which Renewal Option Rights shall be exercisable

only by notice delivered by Tenant to Landlord as provided below. Upon the

exercise of any such Renewal Option Right, the then-current Lease Term, as it

applies to the entire Premises then leased by Tenant, shall, in accordance with

Section 2.3.3, be extended for the Renewal Option Term. The Renewal Option

Rights contained in this SECTION 2.3 shall be exercised only by the original

-----------

Tenant named in the Summary (the "ORIGINAL TENANT") and any assignee of the

Original Tenant's interest in this Lease to which the Original Tenant transfers

such rights, provided that such assignment is permitted pursuant to the terms of

ARTICLE 11 of this Lease. The terms and conditions applicable during the

-----------

Renewal Option Terms shall be the same terms and conditions that apply during

the initial Lease Term, except that (i) the Rent and certain other terms

applicable during the Renewal Option Term shall be as set forth in SECTION 2.3.2

-------------

below, and (ii) Tenant may not extend the Lease Term beyond the expiration of

second Renewal Option Term. Tenant shall have the Renewal Option Right for the

second Renewal Option Term only if Tenant has previously extended the initial

Lease Term for the first Renewal Option Term. Tenant shall not have the right

to exercise any Renewal Option Right hereunder if, as of the date of such

attempted exercise, Tenant is in default with respect to its obligation to pay

Base Rent under this Lease, after expiration of any applicable cure period.

2.3.2 Option Rent. The Rent ("OPTION RENT") payable by Tenant

------------

during the first Renewal Option Term or second Renewal Option Term, as the case

may be, shall be equal to ninety-five percent (95%) of the "Fair Market Rental

Rate" for the Premises. The term "Fair Market Rental Rate" shall mean the

annual amount per rentable square foot that a willing, non-equity, non-sublease,

non-encumbered, non-expansion, comparable third-party tenant, represented by a

commercial real estate broker, would pay and a willing, comparable landlord

would accept, at arm's length, for unencumbered space (specifically not

including transactions in which one or more components of the terms and

conditions of the same are pre-determined on a fixed basis in executed lease

documentation or in which the terms and conditions are calculated using a

formula which involves the discounting of one or more components of the terms

and conditions to the benefit of a tenant) comparable to the Premises in

"Comparable Buildings," as that term is defined in this SECTION 2.3.2 below,

-------------

giving appropriate consideration to concessions including the following

(collectively, the "RENEWAL CONCESSIONS"): (i) rental abatement concessions, if

-4-

TISHMAN WARNER CENTER VENTURE, LLC

[20th Century Industries; 6303 Owensmouth]

<PAGE>

any, being granted such tenants in connection with such comparable space; and

(ii) tenant improvements or allowances provided or to be provided for such

comparable space, taking into account, and deducting the value of, the existing

improvements in the Premises, such value to be based upon the age, quality and

layout of the improvements and the extent to which the same can be utilized by

Tenant; and (iii) other typical monetary concessions being granted such

comparable third-party tenants in connection with such comparable space. In

calculating the Fair Market Rental Rate, no consideration shall be given to (Y)

the fact that Landlord is or is not required to pay the real estate brokerage

commission in connection with Tenant's exercise of its right to lease the

Premises during the Renewal Option Term, or the fact that comparable landlords

are or are not paying real estate brokerage commissions in connection with such

comparable space, or (Z) any period of rental abatement, if any, granted to

comparable third-party tenants in comparable transactions in connection with the

design, permitting and construction of tenant improvements in such comparable

space. Consideration shall be given, however, to the creditworthiness of Tenant

as compared to that of the tenants involved in the comparable transactions and

the effect that the lack of creditworthiness of Tenant, if any, should have on

rental rates and/or security requirements. Such Fair Market Rental Rate shall

be increased to take into account the value of the free parking (based on

prevailing rates in the Comparable Buildings) granted to Tenant during any

Renewal Option Term pursuant to the terms of ARTICLE 18 of this Lease. The

----------

Annual Direct Expense Allowance applicable during each Option Term shall be

adjusted to be the amount of Direct Expenses for the Building attributable to

the twelve (12) month period which has most recently ended prior to the first

day of the Renewal Option Term; provided, however, that the Fair Market Rental

Rate shall take into consideration that the Annual Direct Expense Allowance

applicable during the Renewal Option Term shall be as set forth in this

sentence. If in determining the Option Rent, Tenant is entitled to any Renewal

Concessions, Landlord may, at Landlord's sole option, elect any or a portion of

the following: (X) to grant the Renewal Concessions to Tenant in the form as

described above (e.g., as free rent and/or an improvement allowance), and/or (Y)

to grant Tenant the amount, of any or all of the Renewal Concessions in the form

of free rent or reduced "face" or "stated" rental rate during the applicable

Option Term or lease of First Offer Space, which reduction in rental shall be

made in equal monthly installments and shall be calculated, except as otherwise

provided below, over all or a portion of the Option Term or lease of First Offer

Space, as determined by Landlord, and in equal monthly installments commencing

as of the first day of the applicable Option Term or lease of First Offer Space

(in which case the Renewal Concession or Renewal Concessions converted into free

rent shall not be granted to Tenant). The term "Comparable Buildings" shall

mean the Adjacent Building and other office buildings completed after the

calendar year 1985 and containing at least 200,000 rentable square feet, which

are otherwise comparable to the Building in terms of quality of construction,

level of services, amenities and appearance, and are located in Woodland Hills,

California and within the area bounded by the 101 Freeway, DeSoto Avenue,

Topanga Boulevard, and Vanowen Street ("WARNER CENTER").

2.3.3 Exercise of Renewal Option Rights. Landlord shall deliver

---------------------------------

to Tenant a notice ("EXTENSION OPTION REMINDER NOTICE") not more than thirty-six

(36) months prior to the expiration of the initial Lease Term or first Renewal

Option Term, as applicable, which Extension Option Reminder Notice shall

specifically state that: "If Tenant wishes to exercise a Renewal Option Right

-5-

TISHMAN WARNER CENTER VENTURE, LLC

[20th Century Industries; 6303 Owensmouth]

<PAGE>

pursuant to SECTION 2.3.1 of Tenant's Office Lease at 6301 Owensmouth Avenue,

--------------

Woodland Hills, California, Tenant must deliver the 'Exercise Notice,' as that

term is defined therein, on or before the 'Lapse Date,' as that term is defined

in such Office Lease." If Tenant wishes to exercise a Renewal Option right

described in this SECTION 2.3.3, Tenant shall exercise the Renewal Option Right

-------------

by delivering notice ("EXERCISE NOTICE") thereof to Landlord. The Exercise

Notice must be delivered, if at all, after the date which is thirty-five (35)

months prior to the expiration of the initial Lease Term or first Renewal Option

Term, as applicable, and prior to the date ("LAPSE DATE") which is the later of

(a) the date which is thirty (30) days after the date of Tenant's receipt of the

Extension Option Reminder Notice, or (b) the date which is twenty-four (24)

months prior to the expiration of the initial Lease Term or first Renewal Option

Term, as applicable.

2.3.4 Determination of Option Rent. If Tenant timely delivers the

----------------------------

Exercise Notice, Landlord shall deliver notice (the "OPTION RENT NOTICE") to

Tenant on or before the later of (i) the date which is thirty (30) days after

Landlord's receipt of the Exercise Notice, or (ii) the date which is

twenty-three (23) months prior to the expiration of the initial Lease Term or

first Renewal Option Term, as applicable, which Option Rent Notice shall set

forth Landlord's initial determination of the "Option Rent," as that term is

defined in SECTION 2.3.2 above, and which shall be applicable to this Lease

--------------

during the Renewal Option Term. Tenant shall have thirty (30) days ("TENANT'S

DETERMINATION PERIOD") after receipt of Landlord's Option Rent Notice within

which to accept Landlord's initial determination of the Option Rent or to object

thereto in writing to Landlord. If Tenant fails to so object to Landlord's

initial determination of the Option Rent within Tenant's Determination Period,

the Option Rent shall be as set forth in the Option Rent Notice. If, however,

Tenant timely objects in writing to the Option Rent initially determined by

Landlord, Landlord and Tenant shall attempt to agree upon the Option Rent using

their good-faith efforts. If Landlord and Tenant fail to reach agreement within

sixty (60) days following Tenant's objection to the Option Rent (the "OUTSIDE

AGREEMENT DATE"), then each party shall submit to the other party a separate

written determination of the Option Rent within ten (10) business days after the

Outside Agreement Date, and such determinations shall be submitted to

arbitration in accordance with SECTIONS 2.3.4.1 through 2.3.4.7 below. Failure

---------------- -------

of Tenant or Landlord to submit a written determination of the Option Rent

within such ten (10) business day period shall conclusively be deemed to be the

non-determining party's approval of the Option Rent submitted within such ten

(10) business day period by the other party.

2.3.4.1 Landlord and Tenant shall each appoint one arbitrator

who shall by profession be an independent real estate attorney and/or broker, as

either party shall, in its sole discretion elect, who is then active and have

then been active over the ten (10) year period ending on the date of such

appointment in the leasing of comparable office properties in Los Angeles

County, provided that such individual shall not have been engaged or employed by

the party appointing the same within the five (5) year period preceding the date

of such appointment. The determination of the arbitrators shall be limited

solely to the issue of whether Landlord's or Tenant's submitted determination of

Option Rent is the closest to the actual Option Rent as determined by the

arbitrators, taking into account the requirements of SECTION 2.3.2 of this

-------------

Lease. Each such arbitrator shall be appointed within fifteen (15) business

days after the Outside Agreement Date.

-6-

TISHMAN WARNER CENTER VENTURE, LLC

[20th Century Industries; 6303 Owensmouth]

<PAGE>

2.3.4.2 The two (2) arbitrators so appointed shall within ten

(10) business days of the date of the appointment of the last appointed

arbitrator agree upon and appoint a third arbitrator who shall be qualified

under the same criteria set forth hereinabove for qualification of the initial

two (2) arbitrators.

2.3.4.3 The three (3) arbitrators shall within thirty (30) days

after the appointment of the third arbitrator reach a decision as to whether the

parties shall use Landlord's or Tenant's submitted determination of Option Rent

and shall notify Landlord and Tenant thereof.

2.3.4.4 The decision of the majority of the three (3)

arbitrators shall be binding upon Landlord and Tenant.

2.3.4.5 If either Landlord or Tenant fails to appoint an

arbitrator within fifteen (15) business days after the applicable Outside

Agreement Date, the arbitrator appointed by one of them shall reach a decision,

notify Landlord and Tenant thereof, and such arbitrator's decision shall be

binding upon Landlord and Tenant.

2.3.4.6 If the two (2) arbitrators fail to agree upon and

appoint a third arbitrator within the time period provided in SECTION 2.3.4.2

---------------

above, then the parties shall mutually select the third arbitrator. If Landlord

and Tenant are unable to agree upon the third arbitrator within ten (10) days

after the expiration of the time period provided in SECTION 2.3.4.2 above, then

---------------

either party may, upon at least five (5) days prior notice to the other party,

request the Presiding Judge of the Los Angeles County Superior Court to appoint

the third arbitrator. Following the appointment of the third arbitrator, the

panel of arbitrators shall within thirty (30) days thereafter reach a decision

as to whether Landlord's or Tenant's submitted Option Rent shall be used and

shall notify Landlord and Tenant thereof.

2.3.4.7 Each party shall pay the fees of the arbitrator

appointed by such party and the fees of the third (3rd) arbitrator and any other

costs of such arbitration shall be split between Landlord and Tenant equally.

2.3.5 Rent Payable Pending Determination. In the event that a

-----------------------------------

final determination of Option Rent has not been reached prior to the

commencement of a Renewal Option Term pursuant to the provisions of this SECTION

-------

2.3, the Base Rent and Additional Rent payable by Tenant as of the first day of

---

such Renewal Option Term shall be as set forth in Landlord's written

determination of the Option Rent submitted to arbitration in accordance with

SECTION 2.3.4 above. If Landlord's determination of Option Rent is not selected

-------------

in such arbitration proceedings, then within thirty (30) days after the

determination of the arbitrators, Landlord shall pay to Tenant the difference

between the amount of Base Rent and Additional Rent paid by Tenant for the

Premises during such Renewal Option Term to the date of such payment by

Landlord, less the amount of Base Rent and Additional Rent for the Premises for

such Renewal Option Term which Tenant was required to pay as determined in

arbitration.

-7-

TISHMAN WARNER CENTER VENTURE, LLC

[20th Century Industries; 6303 Owensmouth]

<PAGE>

ARTICLE 3

RENT

3.1 Base Rent. Tenant shall pay, without prior notice or demand, to

----------

Landlord or Landlord's agent at the management office of the Project, or, at

Landlord's option, at such other place as Landlord may from time to time

designate by notice to Tenant, in currency or a check for currency which, at the

time of payment, is legal tender for private or public debts in the United

States of America, base rent ("BASE RENT") as set forth in SECTION 6 of the

---------

Summary, payable in monthly installments in advance on or before the first day

of each and every calendar month during the Lease Term, without any setoff or

deduction, except as specifically provided in this Lease. Landlord agrees that,

with respect to each of the months of January, 1998, and January, 1999, Tenant

shall receive a credit against Base Rent in the amount of $300,000.00. If any

"Rent," as that term is defined in SECTION 3.2, below, payment date (including

-----------

the Lease Commencement Date) falls on a day of the month other than the first

day of such month or if any payment of Rent is for a period which is shorter

than one month, the Rent for any fractional month shall be prorated on the basis

of the number of days in that calendar month. All other payments or adjustments

required to be made under the terms of this Lease that require proration on a

time basis shall be prorated on the same basis.

3.2 Additional Rent. In addition to paying the Base Rent specified in

----------------

SECTION 3.1 of this Lease, Tenant shall pay "Tenant's Share" of the annual

------------

"Direct Expenses," as those terms are defined in SECTIONS 3.3.7 and 3.3.2 of

-------------- -----

this Lease, respectively, to the extent such Direct Expenses are in excess of

the amount of the "Annual Direct Expense Allowance" as that term is defined in

SECTION 3.3.1 of this Lease multiplied by the number of rentable square feet in

--------------

the Premises. Such payments by Tenant, together with any and all other amounts

payable by Tenant to Landlord pursuant to the terms of this Lease, are

hereinafter collectively referred to as the "Additional Rent", and the Base Rent

and the Additional Rent are herein collectively referred to as "Rent." All

amounts due under this ARTICLE 3 as Additional Rent shall be payable for the

---------

same periods and in the same manner as the Base Rent. Without limitation on

other obligations of Tenant which survive the expiration of the Lease Term, the

obligations of Tenant to pay the Additional Rent provided for in this ARTICLE 3

---------

shall survive the expiration of the Lease Term. If Tenant's Share of the Direct

Expenses (as defined in SECTION 3.3.2) incurred during the twelve (12) month

-------------

period commencing on the "Lease Commencement Date" as defined in the Adjacent

Building Lease (the "STOP YEAR"), on a per rentable square foot basis, exceeds

the Annual Direct Expense Allowance, Landlord shall elect, which election shall

be subject to the approval of the entities, if any, holding trust deed liens on

the Building (collectively, the "Lien Holders"), to either (A) permanently

increase the Annual Direct Expense Allowance to be equal to the amount of

Tenant's Share of Direct Expenses incurred during the Stop Year, or (B) grant

Tenant a one-time credit from Landlord against the next installments of Base

Rent, estimated Additional Rent and parking charges coming due, in an amount

equal to the net present value of the annuity stream which consists of monthly

payments in the amount of one-twelfth (1/12) of said excess of Tenant's Share of

the Direct Expenses on a per rentable square foot basis over the Annual Direct

Expense Allowance which monthly payments would have continued over the remaining

fourteen (14) years of the Lease Term, calculated utilizing the discount rate of

-8-

TISHMAN WARNER CENTER VENTURE, LLC

[20th Century Industries; 6303 Owensmouth]

<PAGE>

the Federal Reserve Bank of San Francisco plus 1% at the time of payment.

Alternatively, if Tenant's Share of the Direct Expenses, on a per rentable

square foot basis, incurred during the Stop Year are actually less than the

Annual Direct Expense Allowance, the Annual Direct Expense Allowance shall be

permanently reduced for the entire Lease Term to the amount of the Direct

Expenses per rentable square foot actually incurred during the first Stop Year.

For example, if the Direct Expenses on a per rentable square foot basis for the

Stop Year are Eight Dollars and seventy-two cents ($8.72) and if the discount

rate of the Federal Reserve Bank of San Francisco is 5%, then, Tenant shall be

entitled to either (i) a permanent increase in the Annual Direct Expense

Allowance to $8.72, or (ii) a one-time credit as aforesaid equal to Six Dollars

and eighty cents ($6.80) per square foot of rentable area in the Premises. If

the Direct Expenses on a per rentable square foot basis for the Stop Year are

Seven Dollars and eighty cents ($7.80), then the Annual Direct Expense Allowance

shall be reduced to Seven Dollars and eighty cents ($7.80) for the balance of

the initial Lease Term.

3.3 Definitions of Key Terms Relating to Additional Rent. As used in

------------------------------------------------------

this ARTICLE 3, the following terms shall have the meanings hereinafter set

----------

forth.

3.3.1 The "Annual Direct Expense Allowance" shall be the amount

set forth in SECTION 7.2 of the Summary.

------------

3.3.2 "Direct Expenses" shall mean "Operating Expenses" and "Tax

Expenses".

3.3.3 "Expense Year" shall mean each calendar year in which any

portion of the Lease Term falls through and including the calendar year in which

the Lease Term expires; provided that Landlord, upon notice to Tenant, may

change the Expense Year from time to time to any other twelve (12) consecutive

month period. In the event of any such change, Tenant's Share of Direct

Expenses shall be equitably adjusted for any Expense Year involved in any such

change.

3.3.4 "Operating Expenses" shall mean all expenses, costs and

amounts of every kind and nature which Landlord pays during any Expense Year

because of or in connection with the ownership, management, maintenance, repair

or operation of the Project, except as is hereinafter expressly provided.

Without limiting the generality of the foregoing, Operating Expenses shall

specifically include any and all of the following: (i) the cost of supplying

all utilities, the cost of operating, maintaining, repairing, renovating,

complying with conservation measures in connection with, and managing the

utility systems, mechanical systems, sanitary and storm drainage systems, and

elevator systems, and the cost of supplies and equipment and maintenance and

service contracts in connection therewith; (ii) the cost of licenses,

certificates, permits and inspections (not due to Landlord's negligence or

willful misconduct in the management of the Project) and the cost of contesting

the validity or applicability of any governmental enactments which may affect

Operating Expenses, and the costs incurred in connection with the implementation

and operation of a transportation system management program or a municipal,

private or public shuttle service or parking program; (iii) the cost of all

insurance carried by Landlord in connection with the Project, or any portion

thereof; (iv) the cost of landscaping, relamping, and all supplies, tools,

equipment and materials used in the operation, repair and maintenance of the

Project, or any portion thereof; (v) the cost of parking structure and parking

-9-

TISHMAN WARNER CENTER VENTURE, LLC

[20th Century Industries; 6303 Owensmouth]

<PAGE>

area repair, restoration, and maintenance including, but not limited to,

resurfacing, repainting, restriping, and cleaning; (vi) fees, charges and other

costs, including consulting fees, legal fees and accounting and professional

fees, of all contractors and consultants engaged by Landlord or reasonably

incurred by Landlord in connection with the management, operation, maintenance

and repair of the Project, or any portion thereof; (vii) payments under any

equipment rental agreements or management agreements (including the cost of any

management fee and the fair rental value of any office space provided

thereunder, or, if Landlord manages the Project or Building itself, without a

third party manager, an imputed management fee); (viii) wages, salaries and

other compensation and benefits of all persons engaged in the operation,

maintenance or security of the Project, or any portion thereof, including

employer's Social Security taxes, unemployment taxes or insurance, and any other

taxes which may be levied on such wages, salaries, compensation and benefits;

provided, that if any employees of Landlord provide services for more than one

project of Landlord, then a prorated portion of such employees' wages, benefits

and taxes shall be included in Operating Expenses based on the portion of their

working time devoted to the Project, or any portion thereof; (ix) payments, fees

or charges under any easement, license, operating agreement, declaration,

covenants, conditions, or restrictions or instrument pertaining to the sharing

of costs by the Building or Project, or any portion thereof; (x) operation,

repair and maintenance of all "Systems and Equipment," as that term is defined

in SECTION 3.3.5 of this Lease, and components thereof; (xi) the cost of

--------------

janitorial services, alarm and security service, window cleaning, trash removal,

replacement of wall and floor coverings, ceiling tiles and fixtures in lobbies,

corridors, restrooms and other common or public areas or facilities, maintenance

and replacement of curbs and walkways, repair to roofs and re-roofing; (xii)

amortization (including interest on the unamortized cost) of the cost of

acquiring or the rental expense of personal property used in the maintenance,

operation and repair of the Project, or any portion thereof; (xiii) the cost of

capital improvements, or repairs to the Project, or other costs incurred in

connection with the Project which are intended as a labor-saving device or to

effect other economies in the operation or maintenance of the Project, or any

portion thereof, to the extent of cost savings reasonably anticipated by

Landlord, or made to the Project, or any portion thereof, after the Lease

Commencement Date that are required under any governmental law or regulation

that was not a requirement for the Project on the date this Lease was fully

executed and delivered; provided, however, that each such permitted capital

expenditure, as well as those permitted pursuant to SECTIONS 6.1.1 or 19.27,

-------------- -----

below (but not including any "Premises Obligations" or "Compliance Obligations,"

as those terms are defined in such Sections), shall be amortized (including

interest on the unamortized cost at Landlord's actual cost of funds) over its

useful life as reasonably determined by Landlord; and (xiv) costs, fees, charges

or assessments imposed by any federal, state or local government for fire and

police protection, trash removal, community services, or other services which do

not constitute "Tax Expenses" as that term is defined in SECTION 3.3.6, below.

-------------

If Landlord is not furnishing any particular work or service (the cost of which,

if performed by Landlord, would be included in Operating Expenses) to a tenant

who has undertaken to perform such work or service in lieu of the performance

thereof by Landlord, Operating Expenses shall be deemed to be increased by an

amount equal to the additional Operating Expenses which would reasonably have

been incurred during such period by Landlord if it had at its own expense

furnished such work or service to such tenant. If the Project is not at least

one hundred percent (100%) occupied during all or a portion of any Expense Year,

including the Stop Year, Landlord shall make an appropriate adjustment

-10-

TISHMAN WARNER CENTER VENTURE, LLC

[20th Century Industries; 6303 Owensmouth]

<PAGE>

("GROSS-UP ADJUSTMENT") to the variable components of Operating Expenses for

such year employing sound real estate accounting and management principles as

now or hereafter accepted, to determine the amount of Operating Expenses that

would have been paid had the Project been one hundred percent (100%) occupied;

and the amount so determined shall be deemed to have been the amount of

Operating Expenses for such year. Notwithstanding the terms of this SECTION

-------

3.3, Operating Expenses shall not include:

---

(A) costs associated with the operation of the business

of the ownership or entity which constitutes Landlord, as distinguished

from the costs of Building and Project operations, including, but not

limited to, partnership, corporation or limited liability company

accounting and legal matters, costs of defending any lawsuits with any

mortgagee or ground lessor (except as the actions of Tenant may be at

issue), costs of selling, syndicating, financing or refinancing, mortgaging

or hypothecating any of Landlord's interest in the Building or Project,

costs of any disputes between Landlord and its employees (if any) not

engaged directly in Building and Project operations, disputes of Landlord

with Building management or outside fees paid in connection with disputes

with other individual tenants;

(B) costs incurred in connection with the original

construction of the Building or Project (including the Parking Structure),

or in connection with the addition or deletion of floors or construction of

additional buildings or parking structures;

mortgages or other debt costs, if any, except as otherwise provided in this

SECTION 3.3.4;

--------------

(D) costs of correcting defects or deficiencies in the

initial design or construction of the Common Areas or Parking Structure,

which defects or deficiencies are discovered during the first two (2) Lease

Years, or costs of correction resulting from the failure to comply with

laws, codes and regulations in effect prior to the date of completion, as

applicable, of the Parking Structure or relevant portion of the Common

Areas;

(E) expenses directly resulting from the gross

negligence or willful misconduct of Landlord, its agents, contractors or

employees;

(F) legal fees, space planner fees, real estate broker

leasing commissions and advertising expenses incurred in connection with

this Lease or future leasing of the Building or Project;

(G) costs resulting from the occurrence of actual

losses against which Landlord is required to carry property damage

insurance pursuant to this Lease to the extent Landlord is actually

reimbursed by its insurance carrier or Tenant's or any other insurance

carrier for such costs or, if Landlord elects to self-insure such costs (as

permitted pursuant to SECTION 7.2.3.2), to the extent Landlord would have

---------------

been entitled to reimbursement by its insurance carrier had Landlord

actually obtained the property damage insurance required to be carried by

Landlord pursuant to SECTION 7.2 hereof;

------------

-11-

TISHMAN WARNER CENTER VENTURE, LLC

[20th Century Industries; 6303 Owensmouth]

<PAGE>

(H) costs of restoration of, or repair to, the Building

or improvements in the Project as a result of the condemnation thereof for

which an award has been made to Landlord;

(I) any bad debt loss, rent loss or reserves for bad

debt loss or rent loss;

(J) the cost of services not included in Standard

Tenant Services provided to other tenants in the Building or Project and

not provided to Tenant;

(K) the salaries of executives and employees of

Landlord or any Affiliate above the level of property manager (other than

the Building's engineers), except to the extent they may be engaged in

directly providing management and building operation services described in

this SECTION 3.3.4;

---------------

(L) fees (including legal and accounting fees), wages,

salaries and other compensation to the extent allocable to services not

rendered in connection with the management, operation, security, repair or

maintenance of the Building or the Project;

(M) fines and penalties, except to the extent incurred

as a consequence of Tenant's failure to perform any of its obligations

hereunder;

(N) amounts paid by Landlord pursuant to any ground

lease, if any;

(O) costs of new types of insurance coverage obtained

during the Lease Term and not included within the types of insurance

required to be carried by Landlord pursuant to the terms of SECTION 7.2,

------------

below, unless (a) Landlord has or will have retroactively grossed-up the

Annual Direct Expense Allowance by the amount which would have been

incurred by Landlord during the Stop Year or the first twelve (12) months

of the Lease Term had such costs actually then been incurred, (b) such

insurance coverage is a new type of insurance which was not required to be

carried by Landlord hereunder as of the Lease Commencement Date but which

is then customarily being carried by landlords of the Comparable Buildings,

or (c) if such new insurance coverage replaces or supersedes insurance

coverage previously carried pursuant to the terms of SECTION 7.2, below,

-----------

then the costs for such coverage shall be excluded from Operating Expenses

only to the extent the cost of such new insurance exceeds the cost of the

original insurance;

(P) costs of decreasing the amount of the "deductible"

(or otherwise increasing the amount of coverage, not including any increase

based on an inflationary increase in the replacement cost of the Project,

against which Landlord is protected by insurance) after the first twelve

(12) months of the Lease Term, under the types of insurance required to be

carried by Landlord pursuant to SECTION 7.2, below, unless Landlord has or

-----------

will have retroactively grossed-up the Annual Direct Expense Allowance by

the amount which would have been incurred by the Landlord during the first

-12-

TISHMAN WARNER CENTER VENTURE, LLC

[20th Century Industries; 6303 Owensmouth]

<PAGE>

twelve (12) months of the Lease Term had the amount of the deductible been

so decreased or the amount of coverage been so increased at that time;

(Q) any Operating Expenses incurred in connection with

space in the Building or Project devoted to retail use except to the extent

such space is included in the denominator when calculating Tenant's Share;

(R) costs of Alterations or tenant improvements to the

Premises or the premises of other existing tenants except as otherwise

provided in this SECTION 3.3.4;

--------------

(S) costs incurred by Landlord with respect to goods

and services (including utilities sold and supplied to tenants and

occupants of the Building) to the extent that Landlord is reimbursed for

such costs other than through Operating Expense pass throughs;

(T) costs, including permit, license and inspection

costs, incurred with respect to the installation of tenant improvements

made for new tenants in the Building or the Project except as otherwise

provided in this SECTION 3.3.4, or incurred in renovating or otherwise

--------------

improving, decorating, painting or redecorating vacant space for tenants or

other occupants of the Building or the Project;

(U) costs incurred by Landlord for improvements which

are considered capital expenditures under generally accepted accounting

principles, consistently applied, except those set forth in SECTIONS 3.3.4

--------------

(XII) or (XIII) above or SECTION 6.1.1 or 19.27 below;

----- ---- ------------- -----

(V) costs of the initial construction or costs directly

related to the initial construction of the Building or Adjacent Building,

the Tenant Improvements, or Parking Structure and/or, during the two (2)

year period following the "Lease Commencement Date" of the Adjacent

Building Lease, for correcting structural or latent defects in construction

of the Parking Structure or Common Areas;

(W) expenses in connection with Standard Tenant

Services or other benefits which are not provided to Tenant or for which

Tenant is charged directly but which are provided to another tenant or

occupant of the Building or Project without direct charge;

(X) any compensation paid to clerks, attendants or

other persons in commercial concessions operated by Landlord (excluding

parking);

(Y) rentals and other related expenses incurred in

leasing air conditioning systems, elevators or other equipment ordinarily

considered to be part of the original construction of the Building or

Project, except equipment not affixed to the Building which is used in

providing janitorial, landscaping or similar services or except as

otherwise expressly provided in item (T) above;

-13-

TISHMAN WARNER CENTER VENTURE, LLC

[20th Century Industries; 6303 Owensmouth]

<PAGE>

(Z) electric power costs to the extent any tenant

directly contracts with the local public service company;

(AA) advertising and promotion expenditures, and costs

of signs in or on the Project identifying the owner of the Project or other

tenants' signs, except for building directories or building standard

signage;

(BB) any recalculation of or additional Operating

Expenses which were ostensibly incurred more than three (3) years prior to

the Lease Year in which Landlord proposes that such costs be included in

Operating Expenses;

(CC) the costs for any repairs or replacements of

machinery or equipment in the Building or Project, if such costs would not

have been necessary had Landlord properly maintained such machinery or

equipment or had maintained service and/or maintenance contracts after the

Lease Commencement Date with respect to such machinery or equipment, and

such service and/or maintenance contracts would typically have been carried

by landlords of Comparable Buildings; provided that this exclusion shall

only apply to the extent that the costs so expended on repairs or

replacements after the first 12 months of the Lease Term actually and

materially exceed the amount which Landlord would have paid for the service

and/or maintenance contract which Landlord failed to maintain;

(DD) costs for maintenance and/or service contracts for

Systems and Equipment, as that term is defined in SECTION 3.3.5, in the

-------------

Building or the Project, unless (i) the cost of such maintenance or service

contracts was included in the calculation of Direct Expenses for the first

twelve (12) months of the Lease Term, (ii) Landlord has or will have

retroactively grossed-up the amount of the Annual Direct Expense Allowance

by the amount which would have been incurred by Landlord during the first

twelve (12) months of the Lease Term had such maintenance and/or service

contract then been maintained, (iii) such maintenance and/or service

contracts are for new equipment or systems that replaced previous equipment

or systems, where the amortized cost of such replacement equipment is

includable in Operating Expenses pursuant to SECTION 3.3.4(XIII) above,

------------------

(iv) such maintenance and/or service contract improves the level of

services being provided to Tenant (provided that Tenant gives it prior

written consent thereto, which consent shall not be unreasonably withheld),

or (v) such maintenance and/or service contract is first typically carried

by landlords of Comparable Buildings after (and not before) the expiration

of the first twelve (12) months of the Lease Term; and

(EE) management fees (actual or imputed) in excess of

three and one-half percent (3-1/2%) of the annual gross revenues for the

Building and Real Property (including parking revenues) adjusted to reflect

a one hundred percent (100%) occupancy of the Building with all tenants

paying rent.

Operating Expenses shall be net of all cash, trade or quantity

discounts received by Landlord or Landlord's managing agent in the purchase of

any goods, utilities or services in connection with the operation of the

-14-

TISHMAN WARNER CENTER VENTURE, LLC

[20th Century Industries; 6303 Owensmouth]

<PAGE>

Building or Project. Landlord shall use reasonable efforts to make payments for

goods, utilities and services in a timely manner to avoid any late payment

penalties. In the calculation of Operating Expenses, no expense shall be

charged more than once, and all payments from tenants made to Landlord for goods

and services provided, the cost of which are included in Operating Expenses,

shall be treated as an offset.

3.3.5 "Systems and Equipment" shall mean any plant, machinery,

transformers, duct work, conduit, pipe, bus duct, cable, wires, and other

equipment, facilities, and systems designed to supply heat, ventilation, air

conditioning and humidity, elevators or any other services or utilities, or

comprising or serving as any component or portion of the electrical, gas, steam,

plumbing, sprinkler, communications, alarm, security, or fire/life safety

systems or equipment, or any other mechanical, electrical, electronic, computer

or other systems or equipment which serve the Project in whole or in part (but

not including such items to the extent they form a part of the Tenant

Improvements).

3.3.6 "Tax Expenses" shall mean all federal, state, county, or

local governmental or municipal taxes, fees, charges or other impositions of

every kind and nature, whether general, special, ordinary or extraordinary,

(including, without limitation, real estate taxes, general and special

assessments, transit taxes, leasehold taxes or taxes based upon the receipt of

rent, including gross receipts or sales taxes applicable to the receipt of rent,

unless required to be paid by Tenant, personal property taxes imposed upon the

fixtures, machinery, equipment, apparatus, systems and equipment, appurtenances,

furniture and other personal property used in connection with the Project, or

any portion thereof), which shall be paid during any Expense Year (without

regard to any different fiscal year used by such governmental or municipal

authority) because of or in connection with the ownership, leasing and operation

of the Project.

3.3.6.1 Tax Expenses shall include, without limitation:

(i) Any tax on the rent, right to rent or other income

from the Project, or any portion thereof, or as against the business

of leasing the Project, or any portion thereof;

(ii) Any assessment, tax, fee, levy or charge in addition

to, or in substitution, partially or totally, of any assessment, tax,

fee, levy or charge previously included within the definition of real

property tax, it being acknowledged by Tenant and Landlord that

Proposition 13 was adopted by the voters of the State of California in

the June 1978 election ("PROPOSITION 13") and that assessments, taxes,

fees, levies and charges may be imposed by governmental agencies for

such services as fire protection, street, sidewalk and road

maintenance, refuse removal and for other governmental services

formerly provided without charge to property owners or occupants and,

in further recognition of the decrease in the level and quality of

-15-

TISHMAN WARNER CENTER VENTURE, LLC

[20th Century Industries; 6303 Owensmouth]

<PAGE>

governmental services and amenities as a result of Proposition 13, Tax

Expenses shall also include any governmental or private assessments or

the Project's contribution towards a governmental or private

cost-sharing agreement for the purpose of augmenting or improving the

quality of services and amenities normally provided by governmental

agencies. It is the intention of Tenant and Landlord that all such new

and increased assessments, taxes, fees, levies, and charges and all

similar assessments, taxes, fees, levies and charges be included

within the definition of Tax Expenses for the purposes of this Lease;

(iii) Any assessment, tax, fee, levy, or charge allocable

to or measured by the area of the Premises or the Rent payable

hereunder, including, without limitation, any gross income tax with

respect to the receipt of such rent, or upon or with respect to the

possession, leasing, operating, management, maintenance, alteration,

repair, use or occupancy by Tenant of the Premises, or any portion

thereof; and

(iv) Any assessment, tax, fee, levy or charge, upon this

transaction or any document to which Tenant is a party, creating or

transferring an interest or an estate in the Premises.

3.3.6.2 With respect to any assessment that may be levied

against, upon, or in connection with the Project, or any portion thereof, and

may be evidenced by improvement or other bonds, or may be paid in annual

installments, there shall be included within the definition of Tax Expenses with

respect to any tax fiscal year only the amount currently payable on such bonds,

including interest, for such tax fiscal year, or the current annual installment

for such tax fiscal year.

3.3.6.3 If the method of taxation of real estate prevailing at

the time of execution hereof shall be, or has been, altered so as to cause the

whole or any part of the taxes now, hereafter or heretofore levied, assessed or

imposed on real estate to be levied, assessed or imposed upon the owner or

owners of the Project, wholly or partially, as a capital levy or otherwise, or

on or measured by the rents received therefrom, then such new or altered taxes

attributable to the Project, or any portion thereof, shall be included within

the term "Tax Expenses" except that the same shall not include any enhancement

of said tax attributable to income other than from the Property.

3.3.6.4 Any expenses reasonably incurred in attempting to

protest, reduce or minimize Tax Expenses shall be included in Tax Expenses in

the Expense Year such expenses are paid.

3.3.6.5 Tax refunds shall be deducted from Tax Expenses in the

Expense Year to which such refunds apply.

3.3.6.6 If Tax Expenses for any period during the Lease Term or

any extension thereof are increased after payment thereof for any reason,

including, without limitation, error or reassessment by applicable governmental

or municipal authorities, Tenant shall pay Landlord upon demand Tenant's Share

of any such increased Tax Expenses included by Landlord as Tax Expenses pursuant

to the terms of this Lease. Correspondingly, if Tax Expenses for any period

during the Lease Term or any extension thereof are decreased after payment

thereof for any reason including, without limitation, error or reassessment by

-16-

TISHMAN WARNER CENTER VENTURE, LLC

[20th Century Industries; 6303 Owensmouth]

<PAGE>

applicable governmental or municipal authorities, and Landlord receives a refund

of same, Landlord shall forthwith refund to Tenant Tenant's Share of any such

refund. The provisions of this SECTION 3.3.6.6 shall survive the expiration or

---------------

earlier termination of the Lease Term.

3.3.6.7 Notwithstanding anything to the contrary contained in

this SECTION 3.3.6 (except as set forth in SECTIONS 3.3.6.1 and 3.3.6.3, above),

------------- ---------------- -------

there shall be excluded from Tax Expenses (i) all excess profits taxes,

franchise taxes, gift taxes, capital stock taxes, inheritance and succession

taxes, estate taxes, federal and state income taxes, and other taxes to the

extent applicable to Landlord's general or net income (as opposed to rents,

receipts or income attributable to operations at the Project), (ii) any items

included as Operating Expenses, (iii) penalties or interest for late payment of

Tax Expenses (unless due to Tenant's failure to timely pay such amounts to

Landlord under this Lease), (iv) Tax Expenses allocable to any capital

improvement to the Building made by Landlord, if the cost of such capital

improvement is excluded from Operating Expenses pursuant to SECTION 3.3.4, and

-------------

(v) any items paid by Tenant under ARTICLE 9 of this Lease.

----------

3.3.7 "Tenant's Share" shall have the meaning set forth in

SECTION 7 of the Summary. To the extent the number of rentable square feet of

----------

the Premises changes throughout the Lease Term, Tenant's Share shall be

appropriately adjusted and, as to the Expense Year in which such change occurs,

Tenant's Share for such Expense Year shall be determined on the basis of the

number of days during such Expense Year that each such Tenant's Share was in

effect.

3.4 Allocation of Direct Expenses. Direct Expenses are determined

--------------------------------

annually for the Project as a whole. Since the Building is only one of the

buildings which constitute the Project, Direct Expenses shall be allocated by

Landlord, as provided below, to both the tenants of the Building and to the

tenants of the Adjacent Building. The portion of Direct Expenses allocated to

the tenants of the Building shall consist of (i) all Direct Expenses

attributable solely to the Building and (ii) an equitable portion (based upon

the ratio of the number of rentable square feet in the Building to the total

number of rentable square feet in the Project) of Direct Expenses attributable

to the Project as a whole after subtracting the Direct Expenses attributable

solely to the Building and the Adjacent Building.

3.5 Calculation and Payment of Additional Rent. Tenant shall pay to

---------------------------------------------

Landlord, in the manner set forth in SECTION 3.5.1, below, as Additional Rent,

-------------

an amount equal to the amount by which Tenant's Share of Direct Expenses for

each Expense Year exceeds Tenant's Share of the Annual Direct Expense Allowance.

3.5.1 Statement of Actual Direct Expenses and Payment by Tenant.

-----------------------------------------------------------

Landlord shall endeavor to give to Tenant on or before the first day of April

following the end of each Expense Year, a statement (the "STATEMENT") which

shall state the Direct Expenses incurred or accrued for such preceding Expense

Year, and which shall indicate the amount of Tenant's Share of such Direct

Expenses in excess of Tenant's Share of the Annual Direct Expense Allowance.

Upon receipt of the Statement for each Expense Year commencing or ending during

the Lease Term, Tenant shall pay, with its next installment of Base Rent due,

the full amount of Tenant's Share of Direct Expenses for such Expense Year in

-17-

TISHMAN WARNER CENTER VENTURE, LLC

[20th Century Industries; 6303 Owensmouth]

<PAGE>

excess of Tenant's Share of the Annual Direct Expense Allowance, less the

amounts, if any, paid during such Expense Year as "Estimated Additional Rent,"

as that term is defined in SECTION 3.5.2, below. If the first or last Lease

-------------

Year does not coincide with an Expense Year, Direct Expenses and the Annual

Direct Expense Allowance shall be appropriately prorated based upon the actual

number of days of the Lease Term in such Expense Year. The failure of Landlord

to timely furnish the Statement for any Expense Year shall not prejudice

Landlord or Tenant from enforcing its rights under this ARTICLE 3. Even though

---------

the Lease Term has expired and Tenant has vacated the Premises, when the final

determination is made of Tenant's Share of Direct Expenses for the Expense Year

in which this Lease terminates, Tenant shall pay to Landlord any unpaid amounts

described herein within thirty (30) days of invoice. The provisions of this

SECTION 3.5.1 shall survive the expiration or earlier termination of the Lease

--------------

Term.

3.5.2 Statement of Estimated Direct Expenses. In addition, as

------------------------------------------

soon as possible after the start of each Expense Year, but no later than

concurrently with the delivery of the Statement, Landlord shall furnish Tenant

with a yearly expense estimate statement (the "ESTIMATE STATEMENT") which shall

set forth Landlord's reasonable estimate (the "Estimate") of what the total

amount of Direct Expenses for the then-current Expense Year will be and the

estimated amount of Tenant's Share of Direct Expenses for the then-current

Expense Year in excess of Tenant's Share of the Annual Direct Expense Allowance

(the "ESTIMATED ADDITIONAL RENT"). Landlord shall have the right to adjust the

Estimate Statement from time to time during any Expense Year. The failure of

Landlord to timely furnish the Estimate Statement for any Expense Year shall not

preclude Landlord from enforcing its rights to collect any Estimated Additional

Rent under this ARTICLE 3. Thereafter, Tenant shall pay, with its next

----------

installment of Base Rent due, a fraction of the Estimated Additional Rent for

the then-current Expense Year (reduced by any amounts paid pursuant to the

penultimate sentence of this SECTION 3.5.2). Such fraction shall have as its

-------------

numerator the number of months which have elapsed in such current Expense Year,

including the month of such payment, and twelve (12) as its denominator. Until

a new Estimate Statement is furnished (which Landlord shall have the right to

deliver to Tenant at any time), Tenant shall pay monthly, with the monthly Base

Rent installments, an amount equal to one-twelfth (1/12) of the total Estimated

Additional Rent set forth in the previous Estimate Statement delivered by

Landlord to Tenant.

3.6 Landlord's Books and Records. Landlord shall utilize or cause to

------------------------------

be utilized accounting records and procedures for each Expense Year conforming

to sound real estate accounting principles consistently applied with respect to

all of the Direct Expenses for each Expense Year including, without limitation,

all payments of Direct Expenses. In the event that any other tenant in the

Project performs an audit of Landlord's books and records and an adjustment to

Direct Expenses is made, the results of such audit shall be sent to Tenant,

promptly, to allow Tenant to determine whether Tenant is entitled to a

corresponding adjustment, irrespective of the expiration of the Review Period

(as hereinafter defined) for the particular Expense Year for which the

adjustment was made. For a period of ninety (90) days after receipt by Tenant

of a Statement (the "REVIEW PERIOD"), Tenant shall have the right to dispute the

amount of Additional Rent due from Tenant as set forth in the Statement, by

giving written notice to Landlord, whereupon Tenant's employees or an

independent certified public accountant (which accountant is a member of a

nationally recognized accounting firm) designated by Tenant, shall have the

-18-

TISHMAN WARNER CENTER VENTURE, LLC

[20th Century Industries; 6303 Owensmouth]

<PAGE>

right during normal business hours, to inspect and/or audit Landlord's books and

records with respect to both the Statement most recently received by Tenant, as

well as with respect to the Statement applicable to the previous Expense Year,

at Landlord's or the Building Managers office. However, Tenant's right to

inspect and/or audit Landlord's books and records, as aforesaid, shall be

subject to the following: (i) Tenant is not then in default of the payment of

Base Rent after expiration of any applicable cure period, and (ii) Tenant is not

then in default of the payment of Tenant's Share of Direct Expenses after

expiration of any applicable cure period, provided that for purposes of this

item (ii), only, Tenant shall not be deemed to be in default of the payment of

Tenant's Share of Direct Expenses if Tenant is disputing, and withholding, a

portion of Tenant's Share of Direct Expenses reasonably and in good faith, by

notice delivered to Landlord on or prior to the due date of such Direct

Expenses, and the amount of Direct Expenses withheld by Tenant does not exceed

an amount equal to the amount of Additional Rent set forth in the most recent

Statement received by Tenant minus the amount of Additional Rent set forth in

the Statement for the immediately preceding Expense Year. Landlord shall be

obligated to keep such books and records for all Expense Years until three (3)

years following the expiration of the Review Period, or such longer period as

may reasonably be required in order to conduct an audit or arbitration, should

Tenant become entitled to same, pursuant to the provisions of this SECTION 3.6

-----------

or SECTION 19.41. Tenant and such accountant shall use their commercially

--------------

reasonable efforts to cause their respective agents and employees to maintain

all information contained in Landlord's records in strict confidence, and such

accountant shall agree, in writing, that it will not represent any other tenants

or occupants of the Project in connection with any review of the Building

Operating Expenses. Landlord shall cooperate with Tenant during the course of

such inspection or audit, and Landlord agrees, during normal Building hours, to

make those of its personnel available to Tenant as are reasonably necessary to

conduct such inspection or audit, in which event no inspection or audit shall

last more than ten (10) business days (or, provided Tenant is conducting such

inspection or audit with due diligence, such longer period as may reasonably be

required) in duration for any Expense Year audited. Tenant's representatives

shall be entitled to make photostatic copies of such records at Landlord's or

the Building manager's office , provided Tenant bears the expense of such

copying. If, after such inspection, Tenant still disputes such Additional Rent,

Landlord and Tenant shall submit such dispute to arbitration pursuant to the

terms of SECTION 19.41, below, at Tenant's sole cost and expense; provided that

-------------

if the determination of such arbitration is that the Direct Expenses set forth

in the Statement were overstated by more than three percent (3%), then, the cost

of such arbitration and of Tenant's audit or inspection of Landlord's books and

records shall be paid for by Landlord. Promptly following the parties receipt

of such determination, the parties shall make such appropriate payments or

reimbursements, as the case may be, to each other, as are determined to be owing

pursuant to such certification, with interest at the Interest Rate from the date

due until paid, in the case of payments by Tenant to Landlord, or with interest

at the Interest Rate from the date paid until reimbursed, in the case of

reimbursements by Landlord to Tenant. The payment by Tenant of any Additional

Rent pursuant to this ARTICLE 3 shall not preclude Tenant from questioning the

---------

correctness of any Statement delivered by Landlord, provided that the failure of

Tenant to object thereto prior to the expiration of the

-19-

TISHMAN WARNER CENTER VENTURE, LLC

[20th Century Industries; 6303 Owensmouth]

<PAGE>

applicable Review Period shall be conclusively deemed Tenant's approval of all

Statements no longer subject to inspection and/or audit by Tenant, as provided

above, except in the case of fraud by Landlord or its employees or agents. Once

Tenant invokes the rights set forth in this SECTION 3.6 pursuant to the terms of

-----------

this SECTION 3.6, Landlord and Tenant agree that this SECTION 3.6 shall be the

------------ -----------

sole method to be used by them to dispute the amount of any Direct Expenses

payable or not payable by Tenant pursuant to the terms of this Lease, and

Landlord and Tenant hereby waive any right at law or in equity or as otherwise

provided by this Lease relating to any such subject matter.

ARTICLE 4

STORAGE SPACE

4.1 Storage Area. Commencing as of the Lease Commencement Date and

-------------

continuing throughout the initial Lease Term and the Renewal Option Terms (if

applicable), Tenant shall lease from Landlord and Landlord shall lease to Tenant

certain storage area located in the basement level of the Building ("STORAGE

AREA") shown as cross hatched on EXHIBIT G attached hereto. The parties hereby

---------

stipulate that the Storage Area consists of a total of approximately 6,645

square feet. Up to 1,781 square feet of the Storage Area may be used by Tenant

for "human occupancy". The Storage Area shall be delivered by Landlord to

Tenant in its "as-is" condition. Any use of the Storage Area for "human

occupancy" shall be in compliance with applicable law, which compliance shall be

at Tenant's sole cost and expense.

4.2 Annual Storage Rent. The annual rental rate for the Storage Area

---------------------

("ANNUAL STORAGE RENT") shall be as set forth in SECTION 12 of the Summary

----------

during the initial Lease Term, and shall be determined as a separate component

of the Option Rent during any Renewal Option Terms. Such Annual Storage Rent

shall be payable in twelve (12) equal monthly installments on the first day of

each month in advance during the Lease Term at the same time and in the same

manner as Base Rent for the Premises. In the event the Annual Storage Rent is

not paid when due, Landlord shall have the same rights as provided in ARTICLE 12

----------

of this Lease for unpaid Rent. Tenant's Share shall not be increased as a

result of Tenant's leasing of the Storage Area.

4.3 Indemnification. Except to the extent any loss, costs, damage,

---------------

expense or liability is caused by (i) any default by Landlord in the observance

or performance of any of the terms, covenants or conditions to be observed or

performed by Landlord under this Lease, or (ii) the negligence or willful

misconduct of Landlord or any of its agents, employees, contractors, or

licensees, Tenant hereby indemnifies, defends, protects and holds Landlord

harmless from any and all loss, cost, damage, expense and liability, whether

foreseeable or not, from any cause whatsoever, that Tenant may suffer to its

personal property located anywhere in the Storage Area or that it or its agents,

employees, principals, invitees, or licensees may suffer as a direct or indirect

consequence of Tenant's lease of or use of the Storage Area or access areas to

the Storage Area. In addition, Tenant hereby agrees to indemnify, defend,

protect and hold Landlord harmless from and against any loss, cost, damage,

liability, expense, claim, action or cause of action of any third party, whether

foreseeable or not, resulting as a direct or indirect consequence of Tenant's

lease or use of the Storage Area or access areas to the Storage Area.

-20-

TISHMAN WARNER CENTER VENTURE, LLC

[20th Century Industries; 6303 Owensmouth]

<PAGE>

4.4 Use of Storage Area. Except as herein expressly provided, Tenant

---------------------

agrees not to store any flammable or highly combustible materials in the Storage

Area. Tenant also agrees not to store excess or highly concentrated waste in

the Storage Area; it shall be Tenant's responsibility to obtain from Landlord

the tolerable limits thereof. Tenant agrees to use the Dead Storage Area solely

for storage purposes (e.g., files, clerical supplies, business forms) and not as

office space. Tenant agrees that Landlord and its agents may enter and inspect

the Storage Area and any goods stored therein during regular business hours upon

giving twenty-four (24) hours prior notice to Tenant and so long as accompanied

by a representative of Tenant. Tenant shall, at its sole cost and expense,

deliver to Landlord a key for any locks installed by Tenant for Landlord's

emergency entrance purposes. Except as the provisions of ARTICLE 10 may be

----------

applicable to the use of the Storage Area, Landlord shall have no obligation to

maintain or repair the Storage Area. Tenant shall have the right to use that

portion of the Storage Area identified as permitting "human occupancy" for any

lawful purpose, provided that Tenant fully complies with all laws, rules,

regulations, ordinances and the recommendations of Insurance Service Offices,

and provided that Tenant performs such alterations and improvements, (i) in such

"human occupancy" Storage Area as may be required by the Building Department of

the City of Los Angeles and (ii) in such other portions of the Storage Area as

may be required by the City for hallways, restrooms, shafts, ducts, machine and

equipment rooms and all other purposes collateral to or in support of human

occupancy of such portion of Tenant's Storage Area. Landlord agrees to provide

its regular building HVAC and electrical services at Tenant's expense as

Additional Rent. Subject to the foregoing, Tenant shall have the right at any

time during the Lease Term, to change any portion of the Storage Area from "dead

storage" to "human occupancy" storage or from "human occupancy storage" to "dead

storage"; provided that before doing so Tenant shall give Landlord at least

sixty (60) days written notice of such intended change. Whenever that occurs,

Landlord and Tenant shall execute an amendment to this Lease modifying EXHIBIT G

---------

and ARTICLE 12 of the Lease Summary, accordingly. Tenant agrees not to permit

-----------

any odors, fumes or gases to escape from any portion of the Storage Area or in

to the Building HVAC system, nor shall Tenant permit any vibrations or noise to

emanate from said Storage Area if that would impact other tenants in the

Building.

4.5 Assignment and Sublease. The Storage Area may not be separately

-------------------------

assigned or subleased by Tenant or otherwise transferred by Tenant, except in

connection with any transfer permissible pursuant to the terms of ARTICLE 11 of

----------

this Lease.

4.6 Incorporation of Lease Provisions. The provisions of this Lease

------------------------------------

with regard to the Premises, to the extent applicable and not inconsistent with

the provisions of this ARTICLE 4, shall be deemed to apply to the Storage Area

---------

as though the Storage Area is part of the Premises, and as though the Annual

Storage Rent is part of the Base Rent.

ARTICLE 5

USE OF PREMISES

5.1 Permitted Use. Tenant shall use the Premises solely for general

--------------

office purposes as herein provided and, also, for any other legally permitted

use which is consistent with the character of the Project (i.e., as a

first-class office building project), and Tenant shall not use or

-21-

TISHMAN WARNER CENTER VENTURE, LLC

[20th Century Industries; 6303 Owensmouth]

<PAGE>

permit the Premises to be used for any other purpose or purposes whatsoever

without the prior written consent of Landlord, which consent Landlord may

withhold in its sole discretion. Except when and where Tenant's right of access

is specifically excluded in this Lease, Tenant shall have the right of access to

the Premises, Storage Area, all Building Common Area and all Project Common

Area, including the Parking Structure, twenty-four (24) hours per day, seven (7)

days per week, during the Lease Term. Tenant shall have the right to use the

ground floor of the Premises to service drive-in claims. Landlord hereby agrees

that, (i) during the Lease Term, as required by and subject to the terms of

SECTION 19.27, below, Landlord shall comply with all laws, statutes, ordinances,

-------------

building codes and governmental regulations, all covenants and restrictions of

record applicable to the Project, and (ii) during the Lease Term, and any

Renewal Term, all requirements of Landlord's insurance carriers covering the

Project will permit Tenant to use and occupy the Premises for general office

purposes.

5.2 Prohibited Uses. Tenant further covenants and agrees that Tenant

----------------

shall not use, or suffer or permit any person or persons to use, the Premises or

any part thereof for any use or purpose contrary to the provisions of the Rules

and Regulations set forth in EXHIBIT E, attached hereto, or in violation of the

---------

laws of the United States of America, the State of California, or the

ordinances, regulations or requirements of the local, municipal or county

governing body or other lawful authorities or quasi-governmental agencies having

jurisdiction over the Project, including, without limitation, any such laws,

ordinances, regulations or requirements relating to "Hazardous Material", as

that term is defined in SECTION 19.25.4 below. Landlord agrees that, with

----------------

respect to the space on the ground floor of the Building currently used by

retail tenants, Landlord shall use commercially reasonable efforts to keep such

space occupied by tenants in similar retail businesses during the Lease Term and

any Renewal Option Term.

5.3 CC&Rs. Tenant agrees to subordinate this Lease to the terms of

------

that certain "Declaration and Agreement Establishing Covenants, Conditions and

Restrictions and Grants of Easements" (as and to the extent amended from time to

time, the "CC&RS") attached hereto as EXHIBIT P, which CC&Rs may be recorded on

---------

the Property after the date hereof. To evidence Tenant's subordination of this

Lease to the CC&Rs, Tenant shall execute and deliver to Landlord, concurrently

herewith, a "Subordination Agreement" in the form attached hereto as EXHIBIT Q.

---------

Landlord covenants and agrees that the provisions of the CC&Rs and Tenant's

subordination thereto under the terms of the Subordination Agreement referred to

below, may never be construed in a manner that would materially impair (i)

Tenant's use of the Premises or (ii) the exercise by Tenant of the rights

conferred upon Tenant pursuant to the terms of this Lease, or that would include

in Operating Expenses pursuant to Section 3.3.4(ix) any "costs, expenses and

amounts" falling within the definition of "Common Expenses" in the CC&Rs

(including administrative fees), that would otherwise not be included in (or

would be expressly excluded from) Operating Expenses under the provisions of

Section 3.3 hereof. Tenant agrees that Landlord may, without Tenant's prior

consent, modify the terms of the CC&Rs without affecting Tenant's agreement to

subordinate this Lease thereto, so long as such modifications do not materially

and adversely affect Tenant's rights or obligations under this Lease. Except as

aforesaid, Landlord may modify the CC&Rs only with Tenant's prior written

consent, which shall not be unreasonably withheld, conditioned or delayed and

which shall be deemed to have been given by Tenant to Landlord if Tenant does

not respond to Landlord's request for consent within fifteen (15) business days

after Landlord's delivery of such request to Tenant.

-22-

TISHMAN WARNER CENTER VENTURE, LLC

[20th Century Industries; 6303 Owensmouth]

<PAGE>

ARTICLE 6

MAINTENANCE, REPAIRS, ADDITIONS AND ALTERATIONS

6.1 Repairs.

-------

6.1.1 Duties to Repair. The construction of the tenant

------------------

improvements to the Premises shall be governed by the terms of the Tenant Work

Letter and not the terms of this ARTICLE 6. Except as provided in ARTICLES 8,

--------- -----------

13 AND 19, Landlord shall maintain and repair the Building, the Common Areas,

-----------

and the "Parking Structure," as that term is defined in SECTION 1.2. All costs

-----------

incurred by Landlord in performing such maintenance and repairs pursuant to the

terms of this SECTION 6.1.1 (but not including the "Premises Obligations") as

-------------

that term is defined below) shall be included in Operating Expenses to the

extent permitted under the terms of ARTICLE 3 of this Lease. Landlord shall

---------

also maintain and repair the Tenant Improvements (as that term is defined in

SECTION 2.1 of the Tenant Work Letter) and the Alterations (as that term is

------------

defined in SECTION 6.2 hereof) (the maintenance and repair of the Tenant

------------

Improvements and the Alterations being collectively referred to as the "PREMISES

OBLIGATIONS"). Costs incurred by Landlord in connection with the Premises

Obligations shall not be included in Operating Expenses, but shall be billed

directly to Tenant as Additional Rent, and paid by Tenant to Landlord concurrent

with the next payment of Base Rent due hereunder. Landlord may enter the

Premises at all reasonable times to perform its Premises Obligations, and when

reasonably required, to perform maintenance and repairs to other parts of the

Project or to any equipment located in the Project, as Landlord shall desire or

deem necessary, or as Landlord may be required to do by governmental or

quasi-governmental authority or court order or decree; provided that, in any

event, Landlord shall use commercially reasonable efforts to perform any such

work other than during "Building Hours," as that term is defined below in

SECTION 10.1.1. Subject to SECTION 6.1.2, Tenant hereby waives and releases its

-------- -------------

right to make repairs at Landlord's expense under SECTIONS 1941 and 1942 of the

------------- ----

California Civil Code or under any similar law, statute, or ordinance now or

hereafter in effect.

6.1.2 Tenant's Right to Make Repairs.

----------------------------------

6.1.2.1 Tenant's Actions. If Tenant provides notice to

-----------------

Landlord of an event or circumstance which requires the action of Landlord with

respect to an obligation of Landlord under the terms of SECTION 6.1.1 or 10.1 of

------------- ----

this Lease, and Landlord fails, within a reasonable time period, to provide or

commence to provide such action as required by the terms of this Lease, then,

Tenant may proceed to take the required action upon delivery of an additional

ten (10) business days notice to Landlord and any beneficiary of a trust deed or

other similar instrument encumbering the Building or ground lessor under a

ground lease encumbering the Building (collectively, the "LENDER") (provided

that Tenant has been given the name and address of any such Lender) specifying

that Tenant is taking such required action, and if such action was required

under the terms of SECTION 6.1.1 or 10.1 of this Lease to be taken by Landlord

------------- ----

(and if such action does not relate to the Premises Obligations), then,

notwithstanding the provisions of SECTION 7.1, Tenant shall be entitled to

------------

prompt reimbursement by Landlord of Tenant's reasonable costs and expenses in

taking such action, and such costs and expenses actually reimbursed by Landlord

shall, notwithstanding anything to the contrary set forth in this Lease, be

-23-

TISHMAN WARNER CENTER VENTURE, LLC

[20th Century Industries; 6303 Owensmouth]

<PAGE>

included in Operating Expenses. If such action relates to the Premises

Obligations, Tenant shall, notwithstanding anything to the contrary set forth in

this Lease, not be entitled to reimbursement by Landlord of Tenant's reasonable

costs and expenses in taking such action, but such costs and expenses shall not

be included in Operating Expenses. Notwithstanding the foregoing, in the event

of an "Emergency Condition," as that term is defined below in this SECTION

-------

6.1.2.1, Tenant shall immediately notify Landlord and Lender, either in writing

-------

or orally with an immediate follow-up notice in writing, that an Emergency

Condition exists. If an Emergency Condition exists and Tenant has so notified

Landlord, but Landlord fails to initiate the required remedial action within a

reasonable period of time and fails to continuously work to correct or commence

to correct the Emergency Condition, then Tenant shall have the right, but not

the obligation, to initiate such remedial action itself. In the event Tenant

takes such action, whether or not an Emergency Condition, and such work will

affect the Systems and Equipment, structure of the Building or exterior

appearance of the Building, Tenant shall use only those contractors used by

Landlord in the Building for such work unless such contractors are unwilling or

unable to perform such work, in which event Tenant may utilize the services of

any other qualified contractor which normally and regularly performs similar

work in the Comparable Buildings. The term "Emergency Condition" shall mean a

condition or circumstance, the repair of which is Landlord's responsibility

under SECTION 6.1.1 or 10.1 of this Lease, and the correction of which would not

------------- ----

require governmental approval or permits and which, if not repaired immediately,

would either (i) cause an imminent risk of personal injury to Tenant's employees

or customers, or (ii) result in significant damage to Tenant's property.

6.1.2.2 Payment of Costs. If Landlord does not deliver a

------------------

detailed written objection to Tenant, within thirty (30) days after receipt of

an invoice by Tenant of its costs of taking action for which Tenant is entitled

to be reimbursed by Landlord under SECTION 6.1.2.1, above, and which Tenant

---------------

claims should have been taken by Landlord, and if such invoice from Tenant sets

forth a reasonably particularized breakdown of its costs and expenses in

connection with taking such action on behalf of Landlord, then, notwithstanding

the provisions of SECTION 7.1, Tenant shall be entitled to deduct from Rent

------------

payable by Tenant under this Lease the amount set forth in such invoice,

provided that the total amount of such credit shall be amortized over the

remaining Lease Term, with interest on the unamortized portion of such amount

accruing at the Interest Rate. If, however, Landlord delivers to Tenant within

thirty (30) days after receipt of Tenant's invoice, a written objection to the

payment of such invoice, setting forth with reasonable particularity Landlord's

reasons for its claim that (i) such action did not have to be taken by Landlord

pursuant to the terms of this Lease, (ii) Tenant is not entitled to

reimbursement under SECTION 6.1.2.1, or (iii) the charges are excessive (in

----------------

which case Landlord shall pay the amount it contends would not have been

excessive), then Tenant shall not be entitled to such deduction from Rent (and

shall repay to Landlord any such amounts previously deducted), but as Tenant's

sole remedy, Tenant may proceed to institute arbitration proceedings against

Landlord pursuant to SECTION 19.41 of this Lease to collect the amount set forth

-------------

in the subject invoice. To the extent Tenant appropriately deducts any sums

from Rent under this SECTION 6.1.2, and if such sums, had the same been expended

-------------

by Landlord, been includable in Operating Expenses pursuant to the terms of this

Lease (the "INCLUDABLE DEDUCTED SUMS"), then the amount of such Includable

Deducted Sums shall be included in Operating Expenses.

-24-

TISHMAN WARNER CENTER VENTURE, LLC

[20th Century Industries; 6303 Owensmouth]

<PAGE>

6.1.3 Telecommunications Risers. Upon the expiration or earlier

--------------------------

termination of the Lease Term, provided the same is requested by Landlord prior

to Tenant having vacated the Premises, Tenant shall, at Tenant's sole cost and

expense, remove the telecommunications cabling located and installed by Tenant

or its agents on the floors of Tenant's Premises and in the riser closets of the

Building (collectively, the "RISER AREAS") and shall repair any damage to the

Premises, Building and/or the systems of the Building, at Tenant's sole cost and

expense, resulting from such removal by Tenant. Landlord shall, as an Operating

Expense for the Building or the Project, as the case may be, maintain and repair

the Riser Areas and the conduit (excluding the lines or cabling located therein)

installed in the Riser Areas and the Project Common Area by Landlord, and

Landlord shall have access to the Riser Areas in order to satisfy such

maintenance and repair responsibilities and to provide telecommunications

service (including roof top telecommunications services) to other tenants of the

Building or third parties.

6.2 Alterations and Additions. Tenant may make alterations and

---------------------------

additions to the Premises (collectively, "ALTERATIONS") that will not materially

or adversely affect the Building structure, appearance of the Building or the

Building Systems and Equipment or other systems or equipment in the Premises

without Landlord's consent. Tenant shall give Landlord at least five (5)

business days prior notice of such Alterations which do not require Landlord's

consent, which notice shall be accompanied by reasonably adequate evidence that

such changes meet the criteria as set forth above in this SECTION 6.2. Any

-----------

Alterations which will materially or adversely affect the Building structure,

appearance of the Building or the Building Systems and Equipment or other

systems and equipment in the Premises shall require the prior written consent of

Landlord, which consent shall be requested by Tenant not less than thirty (30)

days prior to the commencement thereof, and which consent shall not be

unreasonably withheld or delayed.

6.3 Manner of Construction. When Landlord's consent to Alterations is

-----------------------

required as provided in SECTION 6.2, Landlord may impose, as a condition of its

-----------

consent to any and all Alterations to the Premises or repairs to the Premises,

such reasonable requirements as Landlord in its sole discretion may deem

desirable, including, but not limited to the requirements (which may be imposed,

if at all, only at the time of Landlord's consent to the Alterations) (i) that

Tenant utilize for such purposes only contractors, materials, mechanics and

materialmen reasonably approved by Landlord, or (ii) that Tenant shall, at

Tenant's expense, remove any and all Alterations upon the expiration or any

early termination of the Lease Term. In any event, any contractor performing

mechanical, electrical, plumbing, lifesafety, sprinkler or structural work,

shall be approved in advance by Landlord, which approval shall not be

unreasonably withheld. Tenant shall construct such Alterations and perform such

repairs in conformance with any and all applicable federal, state, county or

municipal laws, rules and regulations and pursuant to a valid building permit,

all in conformance with Landlord's construction rules and regulations. All work

with respect to any Alterations must be done in a good and workmanlike manner

and diligently prosecuted to completion to the end that the Premises shall at

all times be a complete unit except during the period of work. In performing

the work of any such Alterations, Tenant shall have the

-25-

TISHMAN WARNER CENTER VENTURE, LLC

[20th Century Industries; 6303 Owensmouth]

<PAGE>

work performed in such manner so as not to obstruct access to the Project or any

portion thereof by any other tenant of the Project, and so as not to obstruct

the business of Landlord or other tenants in the Project, or interfere with the

labor force working in the Project. In addition to Tenant's obligations under

SECTION 19.18 of this Lease, upon completion of any Alterations, Tenant agrees

--------------

to cause a Notice of Completion to be recorded in the office of the Recorder of

the County of Los Angeles in accordance with SECTION 3093 of the Civil Code of

------------

the State of California or any successor statute, and Tenant shall deliver to

the Project management office copies of all applicable permits, lien releases,

and appropriate architectural certifications, as well as a reproducible copy of

the "as built" drawings of the Alterations.

6.4 Payment for Alterations. In the event Tenant orders any

-------------------------

Alterations directly from Landlord, the charges for such work shall be deemed

Additional Rent under this Lease, payable within ten (10) business days of

billing therefor, either periodically during construction or upon the

substantial completion of such work, at Landlord's option. If payment for

Alterations is made by Tenant directly to contractors, Tenant shall comply with

Landlord's requirements for final lien releases and waivers in connection with

Tenant's payment for work to such contractors. If Tenant orders any work

directly from Landlord, Tenant shall pay to Landlord a fee in the amount of

fifteen percent (15%) of the cost of such Alterations to compensate Landlord for

all overhead, general conditions, fees and other costs and expenses arising from

Landlord's involvement with such work. With respect to all Alterations

performed by Tenant requiring the prior written consent of Landlord, Tenant

agrees to reimburse Landlord for Landlord's reasonable out-of-pocket expenses

incurred in connection with Landlord's review and approval of such work,

provided that in no event shall such expenses exceed seven and one-half percent

(7 1/2%) of the total cost of such work.

6.5 Construction Insurance. In addition to the requirements of ARTICLE

---------------------- -------

7 of this Lease, in the event that any "Transferee," as that term is defined in

ARTICLE 11 of this Lease (but not the originally-named Tenant or any Affiliate)

-----------

makes any Alterations, prior to the commencement of such Alterations, such

Transferee shall provide Landlord with evidence that it carries "Builder's All

Risk" insurance in an amount reasonably approved by Landlord covering the

construction of such Alterations, and such other insurance as Landlord may

reasonably require, it being understood and agreed that all of such Alterations

shall be insured by Landlord pursuant to SECTION 7.2.1 of this Lease. If Tenant

-------------

does not carry such insurance, Tenant shall be deemed to have self-insured for

all of the risks covered by such insurance, which self-insurance shall be

governed by the terms of SECTION 7.3.5, below. In addition, Landlord may, in

------------

its discretion, require such Transferee to obtain a lien and completion bond or

some alternate form of security satisfactory to Landlord in an amount sufficient

to ensure the lien-free completion of such Alterations and naming Landlord as a

co-obligee.

6.6 Landlord's Property. All Alterations or improvements which may be

--------------------

installed or placed in or about the Premises, and all signs installed in, on or

about the Premises, from time to time, shall be at the sole cost of Tenant and,

upon the expiration or sooner termination of the Lease Term, shall be and become

the property of Landlord. Notwithstanding the foregoing, upon the expiration or

earlier termination of the Lease, Tenant may remove all of its personal

property, including, without limitation, the items listed on SCHEDULE 5 to

----------

EXHIBIT C, and, additionally, any Alterations, improvements or signs which

---------

Tenant can reasonably

-26-

TISHMAN WARNER CENTER VENTURE, LLC

[20th Century Industries; 6303 Owensmouth]

<PAGE>

substantiate to Landlord were not paid for with any tenant improvement allowance

funds provided to Tenant by Landlord, and provided Tenant repairs any damage to

the Premises and Building caused by such removal. Furthermore, if Landlord, as

a condition to Landlord's consent to any Alteration, required that Tenant, at

Landlord's election, remove any Alteration upon the expiration or earlier

termination of the Lease Term, and with respect to any "Tenant Improvement

Removal Items," as that term is defined in SECTION 2.1 of the Tenant Work

-----------

Letter, Landlord may, by written notice to Tenant at least thirty (30) days

prior to the end of the Lease Term, or given concurrently with any earlier

notice of termination of this Lease, require Tenant, at Tenant's expense, to

remove such Alterations or Tenant Improvement Removal Items and to repair any

damage to the Premises and Building caused by such removal. If Tenant fails to

complete such removal and/or to repair any damage caused by the removal of any

Alterations, Landlord may do so and may charge the cost thereof to Tenant.

6.7 Additional Costs. To the extent that, as a result of any

-----------------

Alterations, the real estate taxes payable with respect to the Building, or the

net cost of insurance (required to be carried by Landlord pursuant to the terms

of this Lease), are increased, Tenant shall pay to Landlord as Additional Rent

one hundred percent (100%) of any such increase in cost; provided, that if

Tenant rejects Landlord's assertion, as Landlord's sole remedy, Landlord may

proceed to institute arbitration proceedings against Tenant pursuant to SECTION

-------

19.41 of this Lease to collect the amount of such claimed increase in Landlord's

-----

cost of real estate taxes and/or insurance.

ARTICLE 7

INSURANCE

7.1 Indemnification and Waiver. To the extent not prohibited by law,

----------------------------

Landlord, its partners, subpartners and their respective officers, agents,

servants, employees, and independent contractors (collectively, "LANDLORD

PARTIES") shall not be liable for, and are hereby released from any

responsibility for, any damage either to person or property or resulting from

the loss of use thereof, which damage is sustained by Tenant or by other persons

claiming through Tenant due to the Project (including claims for worker's

compensation of Tenant's employees) or any part thereof or any appurtenances

thereof needing repair (including any improvements, materials, or equipment

relating to telephone or telecommunication systems), or due to the occurrence of

any accident or event in or about the Project, or due to any act or neglect of

any tenant or occupant of the Project, including the Premises, or of any other

person. The provisions of this SECTION 7.1 shall apply particularly, but not

-----------

exclusively, to damage caused by gas, electricity, steam, sewage, sewer gas or

odors, fire, water or by the bursting or leaking of pipes, faucets, sprinklers,

plumbing fixtures and windows, and shall apply without distinction as to the

person whose act or neglect was responsible for the damage and whether the

damage was due to any of the causes specifically enumerated above or to some

other cause of an entirely different nature. Tenant further agrees that all

personal property upon the Project shall be at the risk of Tenant only, and that

Landlord shall not be liable for any loss or damage thereto or theft thereof.

Except as hereinafter provided, Tenant shall indemnify, defend, protect, and

hold harmless Landlord and the Landlord Parties from any and all loss, cost,

damage, expense and liability (including without limitation court costs and

reasonable attorneys' fees) incurred in connection with or arising from any

cause in the Premises, including, without limiting the generality of the

foregoing: (i) any default by Tenant in the observance or performance of any of

the terms, covenants or conditions of this Lease on Tenant's part to be observed

or performed; (ii) the use or occupancy of the Premises by Tenant, its partners,

subpartners and their respective officers,

-27-

TISHMAN WARNER CENTER VENTURE, LLC

[20th Century Industries; 6303 Owensmouth]

<PAGE>

agents, servants, employees, and independent contractors, or any person claiming

by, through or under Tenant (collectively, "TENANT PARTIES"); (iii) the

condition of the Premises or any occurrence or happening on the Premises from

any cause whatsoever; (iv) any acts, omissions or negligence of Tenant or of any

person claiming by, through or under Tenant, or of the contractors, agents,

servants, employees, visitors or licensees of Tenant or any such person, in, on

or about the Premises or the Project, either prior to, during, or after the

expiration of the Lease Term; (v) Tenant's installation, maintenance or

operation of its own security system for the Premises (which Tenant shall be

entitled to install subject to the terms of SECTION 10.1.7) and/or for Tenant's

--------------

"tie-in" of the security system for the Premises into the Building's security

system; and (vi) Tenant's maintenance and repairs performed pursuant to SECTION

-------

6.1.2 of this Lease, except as therein is expressly provided. Notwithstanding

-----

the foregoing, Tenant shall not be required to indemnify and hold Landlord

and/or the Landlord Parties harmless from any loss, cost, liability, damage or

expense, including, but not limited to, penalties, fines, attorneys' fees or

costs (collectively, "CLAIMS"): (i) to any person, property or entity resulting

from the negligence or willful misconduct of Landlord or its agents, servants,

employees or licensees, in connection with Landlord's activities in the Building

(except for damage to the Tenant Improvements and Tenant's personal property,

fixtures, furniture and equipment in the Premises), or the Project, or (ii)

resulting from damage to the structure of the Building or to the Systems and

Equipment which damage is covered by the insurance policies carried by Landlord

or required to be carried by Landlord with respect to the Project (and not

within the amount of any deductible permitted pursuant to SECTION 7.2.1 and

-------------

required to be paid under any such policy), or (iii) results from any default by

Landlord in the observance or performance of any of the terms, covenants or

conditions of this Lease on Landlord's part to be observed or performed; and

Landlord hereby so indemnifies and holds Tenant harmless from any such Claims;

provided further that because Landlord is required to maintain insurance on the

Building and Tenant compensates Landlord for such insurance as part of Tenant's

Share of Direct Expenses and because of the existence of waivers of subrogation

set forth in SECTION 7.4 of this Lease, Landlord hereby indemnifies and holds

-----------

Tenant harmless from any Claims to any property outside of the Premises or the

Common Areas (including the Parking Structure) to the extent such Claims are

covered by insurance required to be carried by Landlord, even if resulting from

the negligent acts, omissions or willful misconduct of Tenant or those of its

agents, contractors, servants, employees or licensees. Similarly, since Tenant

must carry insurance pursuant to this ARTICLE 7 to cover its personal property

---------

within the Premises, Tenant hereby indemnifies and holds Landlord harmless from

any Claims with respect to property within the Premises, to the extent such

Claims are required to be covered by such insurance, even if resulting from the

negligent acts, omissions or willful misconduct of Landlord or those of its

agents, contractors, servants, employees or licensees. The provisions of this

SECTION 7.1 shall survive the expiration or sooner termination of this Lease

------------

with respect to any claims or liability arising in connection with any event

occurring prior to such expiration or termination. Notwithstanding anything to

the contrary contained in this Lease, nothing in this Lease shall impose any

obligations on Tenant or Landlord to be responsible or liable for, and each

hereby releases the other from, all liability for consequential damages other

than those consequential damages incurred by Landlord in connection with (i) a

holdover of the Premises by Tenant after the expiration or earlier termination

of this Lease, as more particularly provided in SECTION 19.7 of this

------

Lease, (ii) Tenant's use or storage of "Hazardous Materials," as that

term is defined in SECTION 19.25.4, below, (iii) Tenant's use of the rights set

---------------

forth in SECTION 6.1.2, above; or (iv) Tenant's breach of the terms of SECTIONS

------------- --------

19.1 or 19.11 of this Lease.

---- -----

-28-

TISHMAN WARNER CENTER VENTURE, LLC

[20th Century Industries; 6303 Owensmouth]

<PAGE>

7.2 Landlord's Insurance. From and after the Lease Commencement Date

---------------------

and throughout the Lease Term, Landlord shall maintain in full force and effect

the policies of insurance set forth below in SECTIONS 7.2.1 THROUGH 7.2.3.

----------------------------

7.2.1 Landlord's Fire and Casualty Insurance. Property damage

------------------------------------------

insurance covering the Building (including the Systems and Equipment and the

Building telecommunications riser system), the Parking Structure, the Tenant

Improvements and the Alterations (but excluding Tenant's personal property) and

all other improvements in and about the Common Areas in which Landlord may have

an insurable interest, providing protection against all risks of physical loss,

inclusive of standard fire and extended coverage insurance, including

endorsements against vandalism, malicious mischief and other perils, but

excluding, except as set forth below in SECTION 7.2.3, endorsements against

-------------

earthquake, all in amounts not less than one hundred percent (100%) of their

full replacement cost valuation from time to time during the Lease Term with

deductible amounts which shall not be in excess of the commercially reasonable

deductibles under insurance policies as are carried, generally, by prudent

landlords of Comparable Buildings. Landlord's obligation to insure the

Alterations shall commence only after thirty (30) days prior notice from Tenant

setting forth a list of the Alterations to be insured. Landlord's policy shall

contain at least twelve (12) months of "rental income loss" coverage payable in

instances in which Tenant is entitled to Rent abatement hereunder, and shall

include (i) an "extended coverage" endorsement, (ii) a "building laws" and/or

"law and ordinance" coverage endorsement (which endorsement may, notwithstanding

the foregoing provisions of this SECTION 7.2.1, contain a commercially

--------------

reasonable sublimit) that covers "costs of demolition," "increased costs of

construction" due to changes in building codes and "contingent liability" with

respect to undamaged portions of the Building, and (iii) an "earthquake

sprinkler leakage" endorsement, with each such endorsement to be of a kind

required by Landlord or by Lender to assist Landlord in funding its obligations

under this Lease to repair and restore the Building (including the Systems and

Equipment), the Parking Structure, the Tenant Improvements, the Alterations and

the Common Areas. Such policy shall also contain a "stipulated value"

endorsement deleting any co-insurance provisions. In addition, Landlord shall

maintain "boiler machinery" coverage (and a joint loss agreement if the boiler

machinery coverage is issued by a different insurance company than the basic

property insurance).

7.2.2 General Liability Insurance. Comprehensive general

-----------------------------

liability insurance for bodily injury and property damage, adequate to protect

Landlord and all additional insureds against liability for (i) the actions of

Landlord and Landlord's agents, employees and contractors and (ii) injury to or

death of any one or more persons in an occurrence, and for damage to property,

arising in connection with the (a) construction or alteration of the Building,

the Parking Structure and all improvements in and about the Building Common

Areas, (b) the use, operation or condition of the Common Areas, or (c) the

condition of the Premises unrelated to Tenant's use. Such insurance shall be in

an amount of not less than Ten Million Dollars ($10,000,000.00) Combined Single

Limit, which amount shall be increased throughout the Lease Term to the extent

of such coverage customarily carried by landlords of Comparable Buildings, and

which shall insure against any and all liability of

the insured as aforesaid.

7.2.3 Earthquake Coverage.

--------------------

-29-

TISHMAN WARNER CENTER VENTURE, LLC

[20th Century Industries; 6303 Owensmouth]

<PAGE>

7.2.3.1 Landlord Required Earthquake Insurance. Subject to the

---------------------------------------

terms of SECTION 7.2.3.3, below, Landlord shall, at all times during the Lease

---------------

Term, maintain difference in conditions insurance providing earthquake coverage

in an amount at least equal to the "Minimum Coverage Amount," as that term is

defined below in this SECTION 7.2.3.1, which insurance (the "EARTHQUAKE

-----------------

INSURANCE") (i) is in a coverage amount equal to at least thirty percent (30%)

of the "Replacement Cost", as that term is defined below, and which covers the

Building and the Tenant Improvements (but excluding Tenant's personal property)

(the aggregate estimated replacement cost of the Building and Tenant

Improvements shall be known as the "REPLACEMENT COST"), and (ii) has a

deductible equal the lessor of (A) ten percent (10.0%) (the "DEDUCTIBLE

PERCENTAGE") of the Replacement Cost, or (B) $2,000,000.00. The requirements

set forth in items (i) and (ii), above, are referred to herein as the "Minimum

Coverage Amount." Notwithstanding anything to the contrary set forth in this

Section 7.2.3, the Minimum Coverage Amount may be satisfied by Landlord carrying

a single building policy wherein Replacement Cost, for purposes of calculating

the coverage amount and deductible, only relates to the Building, or a blanket

policy, wherein Replacement Cost, for purposes of calculating the coverage

amount and deductible, relates to all of the structures covered by such policy.

7.2.3.2 Self-Insurance. At such times during the Lease Term

--------------

that Landlord satisfies the "Net Worth Amount" and "Liquidity Amount," as those

terms are defined in Section 7.3.5.2, below, (collectively, the "FINANCIAL

----------------

REQUIREMENTS")Landlord shall have the right to self-insure the requirement of

this SECTION 7.2.3 (the "EARTHQUAKE SELF-INSURANCE").

--------------

7.2.3.3 Self-Insurance Gross-Up. In any Expense Year during

------------------------

which Landlord elects the Earthquake Self-Insurance, as set forth in SECTION

-------

7.2.3.2, above, at Landlord's election, Direct Expenses for such Expense Year

------

shall be deemed to be increased by an amount equal to what a Minimum Coverage

Amount earthquake policy would have cost Landlord during the first Lease Year

(even in the event Landlord carried Earthquake Insurance in a greater coverage

amount than the Minimum Coverage Amount during such first Lease Year) (the

"SELF-INSURANCE GROSS-UP"). If Landlord elects the Earthquake Self-Insurance

during only a portion of a particular Expense Year, the Self-Insurance Gross-Up

for such Expense Year shall be prorated based on the portion of such Expense

Year that Landlord elected the Earthquake Self-Insurance. By way of example

only, which example in no way modifies the foregoing if, but for the

Self-Insurance Gross-Up, Direct Expenses in the fifth Lease Year would be $9.00

per square foot; if the annual Direct Expense Allowance is $8.00; and if during

that Lease Year the Landlord incurred no costs for Earthquake Insurance because

it was entitled to self-insure the same; and if the premium paid by Landlord for

the Minimum Coverage Amount during the first Lease Year was $.25 per square

foot, then, Ten