Exhibit 10.1

 

LEASE AGREEMENT

 

 

between

 

 

PCCP HC Kierland, LLC,

a Delaware limited liability company,

 

as “Landlord”

 

 

and

 

 

The Ryland Group, Inc.,

a Maryland corporation,

 

as “Tenant”

 

 

Ryan Kierland Corporate Center

Scottsdale, Arizona

 

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

 

TABLE OF CONTENTS

 

SECTION

 

 

 

PAGE

 

 

 

 

 

1.

 

PREMISES

 

4

2.

 

TERM; POSSESSION

 

4

3.

 

RENT; SECURITY DEPOSIT

 

7

4.

 

RENTAL TAXES

 

12

5.

 

USE AND COMPLIANCE WITH LAWS

 

12

6.

 

TENANT IMPROVEMENTS AND ALTERATIONS

 

16

7.

 

MAINTENANCE AND REPAIRS

 

17

8.

 

TENANT’S PERSONAL PROPERTY TAXES

 

18

9.

 

UTILITIES AND SERVICES

 

18

10.

 

EXCULPATION AND INDEMNIFICATION

 

20

11.

 

INSURANCE

 

21

12. [a06-6248_1ex10d1.htm#a12_DamageOrDestruction__163057]

 

DAMAGE OR DESTRUCTION [a06-6248_1ex10d1.htm#a12_DamageOrDestruction__163057]

 

24

13. [a06-6248_1ex10d1.htm#a13_Condemnation__163207]

 

CONDEMNATION [a06-6248_1ex10d1.htm#a13_Condemnation__163207]

 

25

14. [a06-6248_1ex10d1.htm#a14_AssignmentAndSubletting__163214]

 

ASSIGNMENT AND SUBLETTING
[a06-6248_1ex10d1.htm#a14_AssignmentAndSubletting__163214]

 

27

15. [a06-6248_1ex10d1.htm#a15_DefaultAndRemedies__163222]

 

DEFAULT AND REMEDIES [a06-6248_1ex10d1.htm#a15_DefaultAndRemedies__163222]

 

29

16. [a06-6248_1ex10d1.htm#a16_LateChargeAndInterest__163246]

 

LATE CHARGE AND INTEREST
[a06-6248_1ex10d1.htm#a16_LateChargeAndInterest__163246]

 

32

17. [a06-6248_1ex10d1.htm#a17_Waiver_NoProvisionsOfThisLeas_163251]

 

WAIVER [a06-6248_1ex10d1.htm#a17_Waiver_NoProvisionsOfThisLeas_163251]

 

32

18. [a06-6248_1ex10d1.htm#a18_EntryInspectionAndClosure_Upo_163253]

 

ENTRY, INSPECTION AND CLOSURE
[a06-6248_1ex10d1.htm#a18_EntryInspectionAndClosure_Upo_163253]

 

33

19. [a06-6248_1ex10d1.htm#a19_SurrenderAndHoldingOver__163258]

 

SURRENDER AND HOLDING OVER
[a06-6248_1ex10d1.htm#a19_SurrenderAndHoldingOver__163258]

 

34

20. [a06-6248_1ex10d1.htm#a20_Encumbrances__163302]

 

ENCUMBRANCES [a06-6248_1ex10d1.htm#a20_Encumbrances__163302]

 

34

21. [a06-6248_1ex10d1.htm#a21_EstoppelCertificates_WithinTe_163313]

 

ESTOPPEL CERTIFICATES
[a06-6248_1ex10d1.htm#a21_EstoppelCertificates_WithinTe_163313]

 

35

22. [a06-6248_1ex10d1.htm#a22_Notices_AnyNoticeDemandReques_163317]

 

NOTICES [a06-6248_1ex10d1.htm#a22_Notices_AnyNoticeDemandReques_163317]

 

36

23. [a06-6248_1ex10d1.htm#a23_AttorneysFees_InTheEventOfAny_163319]

 

ATTORNEYS’ FEES [a06-6248_1ex10d1.htm#a23_AttorneysFees_InTheEventOfAny_163319]

 

36

24. [a06-6248_1ex10d1.htm#a24_QuietPossession_SubjectToTena_163323]

 

QUIET POSSESSION [a06-6248_1ex10d1.htm#a24_QuietPossession_SubjectToTena_163323]

 

36

25. [a06-6248_1ex10d1.htm#a25_SecurityMeasures_LandlordMayB_163326]

 

SECURITY MEASURES
[a06-6248_1ex10d1.htm#a25_SecurityMeasures_LandlordMayB_163326]

 

36

26. [a06-6248_1ex10d1.htm#a26_ForceMajeure_forceMajeureShal_163331]

 

FORCE MAJEURE [a06-6248_1ex10d1.htm#a26_ForceMajeure_forceMajeureShal_163331]

 

37

27. [a06-6248_1ex10d1.htm#a27_RulesAndRegulations_TenantSha_163333]

 

RULES AND REGULATIONS
[a06-6248_1ex10d1.htm#a27_RulesAndRegulations_TenantSha_163333]

 

37

28. [a06-6248_1ex10d1.htm#a28_LandlordsLiability_TheTermlan_163335]

 

LANDLORD’S LIABILITY
[a06-6248_1ex10d1.htm#a28_LandlordsLiability_TheTermlan_163335]

 

37

29. [a06-6248_1ex10d1.htm#a29_ConsentsAndApprovals__163351]

 

CONSENTS AND APPROVALS [a06-6248_1ex10d1.htm#a29_ConsentsAndApprovals__163351]

 

38

30. [a06-6248_1ex10d1.htm#a30_WaiverOfRightToJuryTrial_Land_163400]

 

WAIVER OF RIGHT TO JURY TRIAL
[a06-6248_1ex10d1.htm#a30_WaiverOfRightToJuryTrial_Land_163400]

 

38

31. [a06-6248_1ex10d1.htm#a31_Brokers_WithTheExceptionOfThe_163402]

 

BROKERS [a06-6248_1ex10d1.htm#a31_Brokers_WithTheExceptionOfThe_163402]

 

38

32. [a06-6248_1ex10d1.htm#a32_IntentionallyDeleted__163424]

 

INTENTIONALLY DELETED [a06-6248_1ex10d1.htm#a32_IntentionallyDeleted__163424]

 

38

33. [a06-6248_1ex10d1.htm#a33_Parking_TenantIsEntitledToUse_163427]

 

PARKING [a06-6248_1ex10d1.htm#a33_Parking_TenantIsEntitledToUse_163427]

 

39

34. [a06-6248_1ex10d1.htm#a34_EntireAgreement_ThisLeaseIncl_163429]

 

ENTIRE AGREEMENT [a06-6248_1ex10d1.htm#a34_EntireAgreement_ThisLeaseIncl_163429]

 

39

35. [a06-6248_1ex10d1.htm#a35_Miscellaneous_ThisLeaseMayNot_163431]

 

MISCELLANEOUS [a06-6248_1ex10d1.htm#a35_Miscellaneous_ThisLeaseMayNot_163431]

 

39

36. [a06-6248_1ex10d1.htm#a36_Authority_IfTenantIsACorporat_163435]

 

AUTHORITY [a06-6248_1ex10d1.htm#a36_Authority_IfTenantIsACorporat_163435]

 

40

 

i

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

 

37. [a06-6248_1ex10d1.htm#a37_Signage_ProvidedTenantAtItsCo_163437]

 

SIGNAGE [a06-6248_1ex10d1.htm#a37_Signage_ProvidedTenantAtItsCo_163437]

 

40

38. [a06-6248_1ex10d1.htm#a38_RightOfFirstOffer_SoLongAsNoE_163439]

 

RIGHT OF FIRST OFFER
[a06-6248_1ex10d1.htm#a38_RightOfFirstOffer_SoLongAsNoE_163439]

 

40

39. [a06-6248_1ex10d1.htm#a39_LeaseContingency_TenantAcknow_163442]

 

LEASE CONTINGENCY
[a06-6248_1ex10d1.htm#a39_LeaseContingency_TenantAcknow_163442]

 

41

39. [a06-6248_1ex10d1.htm#a39_LeaseContingency_TenantAcknow_163442]

 

LEASE CONTINGENCY
[a06-6248_1ex10d1.htm#a39_LeaseContingency_TenantAcknow_163442]

 

41

 

ii

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

 

BASIC LEASE INFORMATION

 

Lease Date:

 

For identification purposes only, the date of this Lease is February 28, 2006.

 

 

 

Landlord:

 

PCCP HC Kierland, LLC, a Delaware limited liability company

 

 

 

Tenant:

 

The Ryland Group, Inc., a Maryland corporation

 

 

 

Project:

 

Ryan Kierland Corporate Center

 

 

 

Building Address:

 

14635 North Kierland Boulevard, Scottsdale, Arizona 85254

 

 

 

Rentable Area of Building:

 

106,548 rentable square feet

 

 

 

Premises:

 

Floor: Second 
Suite Number: 200 
Rentable Area: 56,608 rentable square feet 
Usable Area: 53,225 usable square feet

 

 

 

Initial Term:

 

Seventy-six (76) full calendar months (plus any partial month at the beginning
of the Term)

 

 

 

Renewal Terms:

 

Two (2) additional periods of sixty (60) months each (for a total if all Renewal
Terms are exercised of one hundred twenty (120) months)

 

 

 

Commencement Date:

 

The date that is one hundred twenty (120) days following Landlord’s delivery of
the Premises to Tenant in accordance with Section 2.1 below

 

 

 

Expiration Date:

 

The last day of the seventy-sixth (76th) full calendar month in the Term

 

 

 

Base Rent:

 

 

 

 

 

Monthly Installments of
Base Rent

 

Annual Base Rent per rentable
square foot of the Premises

 

Months 01 through 04

 

$

0.00

 

$

0.00

 

Months 05 through 16

 

$

125,009.33

 

$

26.50

 

Months 17 through 28

 

$

127,368.00

 

$

27.00

 

Months 29 through 40

 

$

129,726.67

 

$

27.50

 

Months 41 through 52

 

$

132,085.33

 

$

28.00

 

Months 53 through 64

 

$

134,444.00

 

$

28.50

 

Months 65 through 76

 

$

136,802.67

 

$

29.00

 

 

1

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

 

Security Deposit:

 

$0.00

 

 

 

Tenant’s Share:

 

Approximately 53.13%

 

 

 

Operating Costs Expense Stop:

 

An amount equal to the Operating Costs incurred by Landlord during calendar year
2006.

 

 

 

Improvement Allowance:

 

$35.00 multiplied by the Usable Area of the Premises (or $1,862,875.00 based on
a Premises consisting of 53,225 usable square feet), subject to reduction based
upon the costs incurred by Landlord in connection with the Data Room Floor
Construction as more particularly described under Section 25 of Exhibit C to
this Lease.

 

 

 

Covered Reserved Parking Spaces:

 

Fifty-three (53) covered/reserved parking stalls

 

 

 

Landlord’s Address for Payment of Rent:

 

PCCP HC Kierland, LLC 
c/o Transwestern Commercial Services 
10040 North 25th Avenue, Suite 125 
Phoenix, Arizona 85021 
Attn: Joanne Damman

 

 

 

Business Hours:

 

Between 7:00 a.m. and 6:00 p.m., Monday through Friday, and between 8:00 a.m.
and noon on Saturday

 

 

 

Landlord’s Address  For Notices:

 

PCCP HC Kierland, LLC 
c/o Transwestern Commercial Services 
10040 North 25th Avenue, Suite 125 
Phoenix, Arizona 85021 
Attn: Joanne Damman

 

 

 

with a copy to:

 

PCCP HC Kierland, LLC 
c/o Hibernia Capital Advisors, LLC 
2398 East Camelback Road, Suite 245 
Phoenix, Arizona 85016 
Attn: Richard A. O’Brien

 

 

 

with a copy to:

 

Mr. R. Michael Valenzuela 
Valenzuela Law Group, PLC 
2398 East Camelback Road, Suite 760 
Phoenix, Arizona 85016

 

2

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

 

Tenant’s Address  For Notices:

 

The Ryland Group, Inc. 
6300 Canoga Avenue, 14th Floor 
Woodlands, California 91367 
Attn: Eric Menyuk

 

 

 

Landlord’s Broker:

 

Lee & Associates (Tom Boyle)

 

 

 

Tenant’s Broker:

 

Travers Realty Company (Jim Travers) and Core Realty Advisors (Mike Cavanaugh)

 

 

 

Property Manager:

 

Transwestern Commercial Services

 

Exhibits:

 

 

Exhibit A:

 

Legal Description of the Land

Exhibit B:

 

The Premises

Exhibit C:

 

Construction Rider

Exhibit D:

 

Building Rules

Exhibit E:

 

Subordination, Non-Disturbance and Attornment Agreement

Exhibit F:

 

Operating Costs Exclusions

Exhibit G:

 

Exterior Building Signage Locations

Exhibit G-1:

 

Landlord Approved Signage

 

The Basic Lease Information set forth above is part of the Lease. In the event
of any conflict between any provision in the Basic Lease Information and the
Lease, the Lease shall control.

 

3

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

 

THIS LEASE is made as of the Lease Date set forth in the Basic Lease
Information, by and between the Landlord identified in the Basic Lease
Information (“Landlord”), and the Tenant identified in the Basic Lease
Information (“Tenant”). Landlord and Tenant hereby agree as follows:

 

1.             PREMISES. LANDLORD HEREBY LEASES TO TENANT, AND TENANT HEREBY
LEASES FROM LANDLORD, UPON THE TERMS AND SUBJECT TO THE CONDITIONS OF THIS
LEASE, THE SPACE IDENTIFIED IN THE BASIC LEASE INFORMATION AS THE PREMISES (THE
“PREMISES”), IN THE BUILDING LOCATED AT THE ADDRESS SPECIFIED IN THE BASIC LEASE
INFORMATION (THE “BUILDING”). THE LAND UPON WHICH THE BUILDING IS LOCATED IS
DESCRIBED ON EXHIBIT A (THE “LAND”). THE APPROXIMATE CONFIGURATION AND LOCATION
OF THE PREMISES IS SHOWN ON EXHIBIT B. LANDLORD AND TENANT AGREE THAT, FOR ALL
PURPOSES OF THIS LEASE, THE RENTABLE AREA OF THE PREMISES, THE USABLE AREA OF
THE PREMISES AND THE RENTABLE AREA OF THE BUILDING SHALL BE AS SPECIFIED IN THE
BASIC LEASE INFORMATION. FOR PURPOSES OF LANDLORD’S DETERMINATION OF THE
RENTABLE AREA AND USABLE AREA, THE LOAD FACTOR (THE FLOOR R/U RATIO) IS SIX AND
FOUR-TENTHS PERCENT (6.4%). THE BUILDING, THE LAND, AND ALL IMPROVEMENTS THEREON
(COLLECTIVELY, THE “PROPERTY”) ARE PART OF THE PROJECT IDENTIFIED IN THE BASIC
LEASE INFORMATION (THE “PROJECT”).

 

2.             TERM; POSSESSION.

 

2.1           TERM. THE TERM OF THIS LEASE (THE “TERM”) SHALL COMMENCE ON THE
COMMENCEMENT DATE AS DESCRIBED BELOW AND, UNLESS SOONER TERMINATED, SHALL EXPIRE
ON THE EXPIRATION DATE SET FORTH IN THE BASIC LEASE INFORMATION (THE “EXPIRATION
DATE”). SUBJECT TO THE TIMELY SATISFACTION OF THE CONTINGENCIES SET FORTH IN
SECTIONS 39 AND 40 BELOW, LANDLORD WILL DELIVER THE PREMISES TO TENANT ON OR
BEFORE APRIL 1, 2006 SO THAT TENANT MAY CAUSE THE TENANT IMPROVEMENTS TO BE
CONSTRUCTED THEREIN AS SOON AS IS REASONABLY PRACTICABLE THEREAFTER. TENANT
ACKNOWLEDGES AND AGREES THAT, SUBJECT TO LANDLORD’S REPRESENTATIONS AND
WARRANTIES CONCERNING THE BASE BUILDING AS DESCRIBED IN THE CONSTRUCTION RIDER
ATTACHED AS EXHIBIT C (THE “CONSTRUCTION RIDER”), THE PREMISES ARE BEING LEASED
TO TENANT IN AN “AS IS” CONDITION, WITHOUT REPRESENTATION, WARRANTY OR COVENANT
OF OR FROM LANDLORD AND WITHOUT ANY OBLIGATION OF LANDLORD TO CONSTRUCT ANY
TENANT IMPROVEMENTS OF ANY KIND OR CHARACTER WHATSOEVER. TENANT FURTHER
ACKNOWLEDGES THAT, EXCEPT AS EXPRESSLY SET FORTH TO THE CONTRARY IN THIS LEASE,
LANDLORD HAS MADE NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED,
CONCERNING THE TENANT IMPROVEMENTS PRESENTLY EXISTING AT, OR THE CONDITION OF,
THE PREMISES, AND TENANT FURTHER ACKNOWLEDGES THAT IT HAS HAD ADEQUATE
OPPORTUNITY TO INSPECT AND APPROVE, AND HAS ADEQUATELY INSPECTED AND APPROVED,
THE TENANT IMPROVEMENTS PRESENTLY EXISTING AT, AND THE CONDITION OF, THE
PREMISES. THE “COMMENCEMENT DATE” SHALL BE THE DATE THAT IS ONE HUNDRED TWENTY
(120) DAYS FOLLOWING LANDLORD’S DELIVERY OF THE PREMISES TO TENANT AS SPECIFIED
ABOVE IN THIS SECTION NOTWITHSTANDING THE ACTUAL DATE OF SUBSTANTIAL COMPLETION
OF THE TENANT IMPROVEMENTS. TENANT SHALL NOT DO ANYTHING THAT COULD DELAY
SUBSTANTIAL COMPLETION OF THE TENANT IMPROVEMENTS AND, IN THE EVENT THE TENANT
IMPROVEMENTS ARE NOT SUBSTANTIALLY COMPLETED ON OR BEFORE THE COMMENCEMENT DATE,
THEN IN THAT EVENT TENANT SHALL COMPLETE THE TENANT IMPROVEMENTS AT THE EARLIEST
PRACTICABLE DATE THEREAFTER. WHEN THE COMMENCEMENT DATE HAS BEEN ESTABLISHED,
LANDLORD AND TENANT SHALL CONFIRM THE COMMENCEMENT DATE AND THE EXPIRATION DATE
IN WRITING.

 

4

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

 

2.2           TENANT’S PROPERTY. TENANT AGREES THAT LANDLORD SHALL NOT BE LIABLE
IN ANY WAY FOR ANY INJURY, LOSS OR DAMAGE WHICH MAY OCCUR TO ANY OF TENANT’S
PROPERTY PLACED UPON OR INSTALLED IN THE PREMISES PRIOR TO THE COMMENCEMENT
DATE, THE SAME BEING AT TENANT’S SOLE RISK, AND TENANT SHALL BE LIABLE FOR ALL
INJURY, LOSS OR DAMAGE TO PERSONS OR PROPERTY ARISING AS A RESULT OF SUCH ENTRY
INTO THE PREMISES BY TENANT OR ITS REPRESENTATIVES (AS HEREINAFTER DEFINED).

 

2.3           OCCUPANCY OF PREMISES. TENANT SHALL HAVE THE RIGHT TO OCCUPY THE
PREMISES THROUGHOUT THE TERM, SEVEN (7) DAYS A WEEK, TWENTY-FOUR (24) HOURS A
DAY, SUBJECT TO ALL OF THE TERMS OF THIS LEASE, INCLUDING, WITHOUT LIMITATION,
CASUALTY, CONDEMNATION, FORCE MAJEURE OR OTHER EVENTS BEYOND THE CONTROL OF
LANDLORD. FROM AND AFTER THE COMMENCEMENT DATE, DURING ANY PERIOD THAT TENANT IS
NOT OCCUPYING AND OPERATING THE PREMISES, TENANT WILL KEEP THOSE PORTIONS OF THE
PREMISES VISIBLE FROM COMMON AREAS (AS HEREINAFTER DEFINED) FROM APPEARING
ABANDONED, INCLUDING, WITHOUT LIMITATION, KEEPING SUCH AREAS LIGHTED DURING
BUSINESS HOURS, FREE OF STORED MATERIALS, CLEAN AND OTHERWISE MAINTAINED SUCH
THAT IT IS NOT APPARENT THAT BUSINESS IS NOT BEING CONDUCTED THEREIN.

 

2.4           RENEWAL OPTIONS. IN THE ABSENCE OF AN EVENT OF DEFAULT BY TENANT
WHEN IT EXERCISES A RENEWAL OPTION OR WHEN A RENEWAL TERM BEGINS, TENANT HAS THE
OPTION (EACH, A “RENEWAL OPTION”) TO RENEW THIS LEASE FOR THE NUMBER OF
SUCCESSIVE TERMS SET FORTH IN THE BASIC LEASE INFORMATION (EACH, A “RENEWAL
TERM”) (FOR A TOTAL IF ALL RENEWAL OPTIONS ARE EXERCISED OF TEN (10) YEARS) BY
GIVING NOTICE OF EXERCISE OF A RENEWAL OPTION TO LANDLORD AT LEAST NINE (9)
MONTHS BEFORE THE END OF THE THEN-CURRENT TERM. IF TENANT FAILS TO DELIVER
TIMELY WRITTEN NOTICE OF EXERCISE OF A RENEWAL OPTION TO LANDLORD, ALL REMAINING
RENEWAL OPTIONS SHALL LAPSE AND TENANT WILL HAVE NO FURTHER PRIVILEGE TO EXTEND
THE TERM. TIME IS OF THE ESSENCE OF THIS PROVISION. THE TERMS OF THE RENEWAL
TERMS ARE AS FOLLOWS:

 

(a)           Each Renewal Term shall be on the same terms and conditions of
this Lease (unless clearly inapplicable), except that Base Rent during each
Renewal Term shall be based upon the fair market rental rate for comparable
space in buildings of similar size, type, quality, age and location prevailing
at the start of each Renewal Term (“Market Rental Rate”). Within thirty (30)
days after Landlord receives Tenant’s notice of exercise of a Renewal Option,
Landlord will reasonably calculate the Market Rental Rate and will notify Tenant
of same. Determination of the effective Market Rental Rate will give appropriate
consideration to rental rates for renewals, rental escalations, common area
charges, operating costs, and other terms that would affect the economics in a
similar lease renewal at a competing building in the area.

 

(b)           If Tenant disputes Landlord’s determination of the Market Rental
Rate for a Renewal Term, Tenant will deliver notice of such dispute, together
with Tenant’s proposed Market Rental Rate, to Landlord within five days of
Tenant’s receipt of Landlord’s determination. The parties will then attempt in
good faith to agree upon the Market Rental Rate. If they fail to agree within
fifteen (15) days, they will within seven days thereafter mutually appoint an
appraiser to select the

 

5

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

 

Market Rental Rate in the manner set forth below. The appraiser must have at
least five years of full-time commercial appraisal experience with projects
comparable to the Project and be a member of the American Institute of Real
Estate Appraisers or a similar appraisal association. The appraiser shall not
have any material financial or business interest in common with either of the
parties. If Landlord and Tenant are unable to agree upon an appraiser within
such seven days, the parties will within five days thereafter each appoint an
appraiser meeting the criteria set forth above, which appraisers will, within
seven days of their appointment, mutually select a third appraiser meeting the
criteria set forth above to select the Market Rental Rate in the manner set
forth below. Within seven days of the appointment (either by agreement or
selection) of the deciding appraiser, Landlord and Tenant will submit to that
appraiser their respective determinations of the Market Rental Rate and any
related information. Within twenty (20) days thereafter, the appraiser will
review each party’s submittal (and such other information as the appraiser deems
necessary) and will select one party’s submittal as representing the most
reasonable approximation of the Market Rental Rate for the Premises. The rate so
selected will be used for the applicable Renewal Term as the Base Rent rate.
Subject to the previous sentence, if the appraiser timely receives one party’s
submittal, but not both, the appraiser must designate the submitted rent rate as
the Market Rental Rate for the applicable Renewal Term. Landlord and Tenant will
each pay, directly to the appraiser selecting the Market Rental Rate, one-half
of all fees, costs and expenses of such appraiser. Landlord and Tenant will each
separately pay all costs, fees and expenses of their respective additional
appraiser (if any) appointed to determine the deciding appraiser.

 

(c)           In addition to paying Base Rent determined pursuant to this
Section 2.4, Tenant will continue to pay Additional Rent and all other sums
required under this Lease during all Renewal Terms.

 

(d)           If this Lease or Tenant’s right to possession of the Premises
shall expire or terminate for any reason whatsoever before Tenant exercises all
Renewal Options, then immediately upon such expiration or termination, all
Renewal Options shall simultaneously terminate and become null and void. In
addition, Tenant may not exercise a Renewal Option if it is subletting or has
assigned all or any portion of the Premises other than to a Tenant Affiliate (as
defined below) at the time Tenant seeks to exercise such Renewal Option. The
Renewal Options are personal to Tenant and its Tenant Affiliates, and under no
circumstances shall a subtenant or an assignee other than a Tenant Affiliate
have the right to exercise any Renewal Option. Until such time as Tenant
properly exercises a Renewal Option, all references to the “Term” of this Lease
will mean the Initial Term only. If Tenant properly exercises its right to renew
this Lease for a Renewal Term, then all references to the “Term” of this Lease
will include such Renewal Term.

 

6

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

 

3.             RENT; SECURITY DEPOSIT.

 

3.1           BASE RENT. TENANT SHALL PAY TO LANDLORD ANNUAL RENT (“BASE RENT”)
IN THE AMOUNT SET FORTH IN THE BASIC LEASE INFORMATION, WITHOUT PRIOR NOTICE OR
DEMAND, IN MONTHLY INSTALLMENTS EQUAL TO ONE-TWELFTH (1/12) OF THE BASE RENT, ON
OR BEFORE THE FIRST DAY OF EACH AND EVERY CALENDAR MONTH DURING THE TERM, EXCEPT
THAT BASE RENT FOR THE FIRST FULL CALENDAR MONTH IN WHICH BASE RENT IS PAYABLE
SHALL BE PAID UPON TENANT’S EXECUTION OF THIS LEASE AND BASE RENT FOR ANY
PARTIAL MONTH AT THE BEGINNING OF THE TERM SHALL BE PAID ON THE COMMENCEMENT
DATE. BASE RENT FOR ANY PARTIAL MONTH AT THE BEGINNING OR END OF THE TERM SHALL
BE PRORATED BASED ON THE ACTUAL NUMBER OF DAYS IN THE MONTH.

 

3.2           ADDITIONAL RENT: OPERATING COSTS AND TAXES.

 

(a)           Definitions.

 

1)   “Operating Costs” means all Taxes (as defined below) and other costs of
managing, operating, maintaining and repairing the Property in good condition
and repair, including, without limitation, all costs, expenditures, fees and
charges set forth below. Operating Costs include:

 

(A)          operation, maintenance and repair of the Property (including
maintenance, repair and replacement of glass, the roof covering or membrane, the
parking lot and driveways (including re-painting, re-striping, seal-coating,
cleaning, sweeping, resurfacing, patching and repairing parking areas and other
paved surfaces), sidewalks, exterior light fixtures, common signage, other
common areas and elements, regular painting of the exterior of the Building and
lawn care and landscaping). The terms “repair” or “repairs” shall include
reasonable replacements or renewals when necessary.

 

(B)           utilities and services (including, without limitation,
electricity, water, sewer, gas (if used at the Project), telecommunications
facilities and equipment, recycling programs and trash removal), and associated
supplies and materials.

 

(C)           wages, benefits and other compensation (including employment taxes
and fringe benefits) for persons who perform duties in connection with the
operation, management, maintenance and repair of the Property up to, and
including, level of Building Manager (or equivalent), such compensation to be
appropriately allocated for persons who also perform duties unrelated to the
Property.

 

(D)          property (including coverage for earthquake and flood if carried by
Landlord), liability, rental income and other insurance relating to the
Property, and expenditures for deductible amounts paid under such insurance.

 

7

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

 

(E)           licenses, permits and inspections.

 

(F)           complying with the requirements of any law, statute, ordinance or
governmental rule or regulation or any orders pursuant thereto (collectively
“Laws”), but only to the extent such Laws are enacted and enforceable from and
after the date of this Lease.

 

(G)           amortization of capital improvements required to comply with Laws,
or which are intended to reduce Operating Costs or improve the utility,
efficiency or capacity of any of the Building Systems, with interest on the
unamortized balance at the rate paid by Landlord on funds borrowed to finance
such capital improvements (or, if Landlord finances such improvements out of
Landlord’s funds without borrowing, the rate that Landlord would have paid to
borrow such funds, as reasonably determined by Landlord), over such useful life
as Landlord shall reasonably determine, but in no event greater than ten percent
(10%) per annum.

 

(H)          an office in the Project for the management of the Property,
including expenses of furnishing and equipping such office and the rental value
of any space occupied for such purposes.

 

(I)            commercially reasonable property management fees not to exceed
three percent (3%) of Landlord’s gross rental revenue received for that fiscal
year for the Property.

 

(J)            fees and costs for accounting, legal and other professional
services incurred in connection with the operation of the Property and the
calculation of Operating Costs.

 

(K)          a reasonable allowance for depreciation on machinery and equipment
used to maintain the Property and on other personal property owned by Landlord
in the Property (including window coverings and carpeting in common areas).

 

(L)           fees and costs incurred in contesting the validity or
applicability of any Laws that may affect the Property to the extent that
contesting the Law results in a savings to Tenant. “Savings” under this section
would mean, by example, if any Operating Expense is reduced (or if a proposed
increase is avoided or reduced) because a Law was contested, Landlord may
include in its computation of Operating Expenses the costs of any fees and costs
incurred in connection with such contest up to the amount of any Operating
Expense reduction obtained in connection with the contest or any Operating
Expense increase avoided or reduced in connection with the contest, as the case
may be.

 

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(M)         the Building’s or Property’s share of any shared or common area
maintenance fees and expenses, property association fees, dues and assessments,
and all payments under any recorded documents (excluding mortgages and deeds of
trust) affecting the Property (including costs and expenses of operating,
managing, owning and maintaining the common areas of the Project and any fitness
center or conference center in the Project).

 

(N)          janitorial services, window washing, cleaning, rubbish removal and
other services provided to the Property.

 

(O)          security and access control equipment and services.

 

(P)           subject to the remaining provisions of this Section 3.2(a)(1), any
other cost, expenditure, fee or charge, whether or not hereinbefore described,
which in accordance with generally accepted property management practices would
be considered an expense of managing, operating, maintaining and repairing the
Property.

 

Operating Costs shall not include:

 

(i)      capital improvements (except as otherwise provided above).

 

(ii)     costs of special services rendered to individual tenants (including
Tenant) for which a special charge is made.

 

(iii)    interest and principal payments on loans or indebtedness secured by the
Building.

 

(iv)    costs of interior improvements for Tenant or other tenants of the
Building.

 

(v)     costs of services or other benefits of a type which are not available to
Tenant but which are available to other tenants or occupants, and costs for
which Landlord is reimbursed by other tenants of the Building other than through
payment of tenants’ shares of Operating Costs.

 

(vi)    leasing commissions, attorneys’ fees and other expenses incurred in
connection with leasing space in the Building or enforcing such leases.

 

(vii)   depreciation or amortization, other than as specifically enumerated in
the definition of Operating Costs above.

 

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(viii)  costs, fines or penalties incurred due to Landlord’s violation of any
Law.

 

(ix)    commercially unreasonable contributions to employee pension plans.

 

(x)     Any other exclusions from Operating Costs specifically described on
Exhibit F attached hereto and incorporated herein.

 

2)   “Taxes” means all real property taxes and general, special or district
assessments or other governmental impositions, of whatever kind, nature or
origin, imposed on or by reason of the ownership or use of the Property; any
state, county or municipal governmental property lease excise tax or the
equivalent thereof; service payments in lieu of taxes and taxes and assessments
of every kind and nature whatsoever levied or assessed in addition to, in lieu
of or in substitution for existing or additional real or personal property taxes
on the Property or the personal property described above; and the reasonable
cost of contesting by appropriate proceedings the amount or validity of any
taxes, assessments or charges described above. Taxes shall include all Taxes
either payable in, or attributable to, each calendar year or portion thereof
during the Term.

 

3)   “Tenant’s Share” means the Rentable Area of the Premises divided by the
Rentable Area of the Building. If the Rentable Area of the Premises is increased
by Tenant’s leasing of additional space hereafter, Tenant’s Share shall be
increased accordingly.

 

(b)     Additional Rent.

 

1)   Tenant shall pay Landlord as “Additional Rent” for each calendar year
during the Term Tenant’s Share of the amount by which Operating Costs for such
year exceed the Operating Costs Expense Stop, which amount shall be prorated for
the last year of the Term if such year is less than a full calendar year. Both
Landlord and Tenant acknowledge that basing the Operating Costs Expense Stop on
expenses for 2006, the intent is to base such Expense Stop on the actual
Operating Expenses that Tenant would have incurred had the Building been fully
occupied the entire year. Therefore, Tenant will not incur any costs associated
with Tenant’s Share of Operating Costs until January 2007. In addition, in
determining the Operating Costs Expense Stop, the actual Operating Costs
incurred in 2006 that vary with occupancy shall be adjusted to an amount
reasonably determined by Landlord to be the Operating Costs that would have been
incurred and paid had such occupancy been at least ninety-five percent (95%)
during all of 2006.

 

2)   Prior to the beginning of the Term and each calendar year thereafter,
Landlord shall notify Tenant of Landlord’s estimate of Operating Costs and

 

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Tenant’s Additional Rent for the remaining and following calendar year, as
applicable. Commencing on the first day of the Term and continuing on the first
day of every month thereafter, Tenant shall pay to Landlord one-twelfth (1/12th)
of the estimated Additional Rent. If Landlord thereafter estimates that
Operating Costs for any year will vary from Landlord’s prior estimate, Landlord
may, by notice to Tenant, revise the estimate for such year (and Additional Rent
shall thereafter be payable based on the revised estimate).

 

3)   As soon as reasonably practicable after the end of each calendar year
during the Term, Landlord shall furnish Tenant a reconciliation statement with
respect to such year, showing Operating Costs and Additional Rent for the year,
and the total payments made by Tenant with respect thereto. Unless Tenant raises
any objections to Landlord’s statement within thirty (30) days after receipt of
the same, such statement shall presumptively be deemed correct and Tenant shall
have no right thereafter to dispute such statement or any item therein or the
computation of Additional Rent based thereon, subject only to Tenant’s right of
audit. If Tenant does object to such statement, then Landlord shall provide
Tenant with reasonable verification of the figures shown on the statement and
the parties shall negotiate in good faith to resolve any disputes. Any objection
of Tenant to Landlord’s statement and resolution of any dispute shall not
postpone the time for payment of any amounts due Tenant or Landlord based on
Landlord’s statement, nor shall any failure of Landlord to deliver Landlord’s
statement in a timely manner relieve Tenant of Tenant’s obligation to pay any
amounts due Landlord based on Landlord’s statement.

 

4)   If Tenant’s Additional Rent as finally determined for any calendar year
exceeds the total payments made by Tenant on account thereof, Tenant shall pay
Landlord the deficiency within fifteen (15) business days of Tenant’s receipt of
Landlord’s statement. If the total payments made by Tenant on account thereof
exceed Tenant’s Additional Rent as finally determined for such year, Tenant’s
excess payment shall be credited toward the rent next due from Tenant under this
Lease. For any partial calendar year at the beginning or end of the Term,
Additional Rent shall be prorated on the basis of a 365-day year by computing
Tenant’s Share of Operating Costs for the entire year and then prorating such
amount for the number of days during such year included in the Term.
Notwithstanding the termination of this Lease, Landlord shall pay to Tenant or
Tenant shall pay to Landlord, as the case may be, within fifteen (15) business
days after Tenant’s receipt of Landlord’s final statement for the calendar year
in which this Lease terminates, the difference between Tenant’s Additional Rent
for that year, as finally determined by Landlord, and the total amount
previously paid by Tenant on account thereof.

 

5)   Tenant shall have the right at any time during Landlord’s normal business
hours and upon reasonable prior notice to Landlord, which shall not be given
later than the first anniversary of Tenant’s receipt of Landlord’s
reconciliation statement for the preceding year, to audit Landlord’s books and
records with respect

 

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to such reconciliation statement, at Tenant’s sole expense. Should the audit
disclose an overcharge to Tenant or an underpayment to Landlord, the party owing
an amount to the other party shall reimburse the other party within fifteen (15)
business days after the results of the audit are known to Landlord and Tenant.
Additionally, if the audit report shows that Tenant was overcharged by five
percent (5%) or more, Landlord shall reimburse Tenant for its reasonable out of
pocket costs of conducting the audit, not to exceed $3,000.00 per audit.

 

3.3           PAYMENT OF RENT. ALL AMOUNTS PAYABLE OR REIMBURSABLE BY TENANT
UNDER THIS LEASE, INCLUDING LATE CHARGES AND INTEREST, SHALL CONSTITUTE “RENT”
AND SHALL BE PAYABLE AND RECOVERABLE AS RENT IN THE MANNER PROVIDED IN THIS
LEASE. ALL SUMS PAYABLE TO LANDLORD ON DEMAND UNDER THE TERMS OF THIS LEASE
SHALL BE PAYABLE WITHIN TEN (10) DAYS AFTER NOTICE FROM LANDLORD OF THE AMOUNTS
DUE. EXCEPT AS SPECIFICALLY PROVIDED FOR IN THIS LEASE TO THE CONTRARY, ALL RENT
SHALL BE PAID WITHOUT OFFSET, RECOUPMENT OR DEDUCTION IN LAWFUL MONEY OF THE
UNITED STATES OF AMERICA TO LANDLORD AT LANDLORD’S ADDRESS FOR PAYMENT OF RENT
AS SET FORTH IN THE BASIC LEASE INFORMATION, OR TO SUCH OTHER PERSON OR AT SUCH
OTHER PLACE AS LANDLORD MAY FROM TIME TO TIME DESIGNATE.

 

3.4           INTENTIONALLY DELETED.

 

4.             RENTAL TAXES. TENANT SHALL PAY TO LANDLORD WITH EACH INSTALLMENT
OF RENT THE AMOUNT OF ANY GROSS RECEIPTS, TRANSACTION PRIVILEGE, SALES, EXCISE
OR SIMILAR TAX, EXCLUSIVE OF ANY INCOME TAX, PAYABLE BY LANDLORD ON ACCOUNT OF
THIS LEASE OR TENANT’S PAYMENT OF SUCH ITEMS TO, OR ON BEHALF OF, LANDLORD.

 

5.             USE AND COMPLIANCE WITH LAWS.

 

5.1           USE. THE PREMISES SHALL BE USED AND OCCUPIED SOLELY FOR GENERAL
BUSINESS OFFICE PURPOSES FOR TENANT’S MORTGAGE AND INFORMATION TECHNOLOGY
DEPARTMENTS AND FOR NO OTHER USE OR PURPOSE. TENANT SHALL COMPLY WITH ALL
PRESENT AND FUTURE LAWS RELATING TO TENANT’S USE OR OCCUPANCY OF THE PREMISES
(AND MAKE ANY REPAIRS, ALTERATIONS OR IMPROVEMENTS AS REQUIRED TO COMPLY WITH
ALL SUCH LAWS), AND SHALL OBSERVE THE BUILDING RULES (AS DEFINED IN SECTION 27 -
RULES AND REGULATIONS). TENANT SHALL NOT DO, BRING, KEEP OR SELL ANYTHING IN OR
ABOUT THE PREMISES THAT IS PROHIBITED BY, OR THAT WILL CAUSE A CANCELLATION OF
OR AN INCREASE IN THE EXISTING PREMIUM FOR, ANY INSURANCE POLICY COVERING THE
PROPERTY OR ANY PART THEREOF. TENANT SHALL NOT PERMIT THE PREMISES TO BE
OCCUPIED OR USED IN ANY MANNER THAT WILL CONSTITUTE WASTE OR A NUISANCE, OR
DISTURB THE QUIET ENJOYMENT OF OR OTHERWISE ANNOY OTHER TENANTS IN THE BUILDING.
EXCEPT AS MAY BE PROVIDED IN THE CONSTRUCTION RIDER, TENANT SHALL NOT, WITHOUT
THE PRIOR CONSENT OF LANDLORD, (I) BRING INTO THE BUILDING OR THE PREMISES
ANYTHING THAT MAY CAUSE SUBSTANTIAL NOISE, ODOR OR VIBRATION, OVERLOAD THE
FLOORS IN THE PREMISES OR THE BUILDING OR ANY OF THE HEATING, VENTILATING AND
AIR-CONDITIONING (“HVAC”), MECHANICAL, ELEVATOR, PLUMBING, ELECTRICAL, FIRE
PROTECTION, LIFE SAFETY, SECURITY OR OTHER SYSTEMS IN THE BUILDING (“BUILDING
SYSTEMS”), OR JEOPARDIZE THE STRUCTURAL INTEGRITY OF THE BUILDING OR ANY PART
THEREOF; (II) CONNECT TO THE UTILITY SYSTEMS OF THE BUILDING ANY APPARATUS,
MACHINERY OR OTHER EQUIPMENT OTHER THAN TYPICAL OFFICE EQUIPMENT; OR (III)
CONNECT TO ANY ELECTRICAL CIRCUIT IN THE

 

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PREMISES ANY EQUIPMENT OR OTHER LOAD WITH AGGREGATE ELECTRICAL POWER
REQUIREMENTS IN EXCESS OF 80% OF THE RATED CAPACITY OF THE CIRCUIT.

 

5.2           HAZARDOUS MATERIALS.

 

(a)           Definitions.

 

1)   “Hazardous Materials” shall mean any substance:  (A) that now or in the
future is regulated or governed by, requires investigation or remediation under,
or is defined as a hazardous waste, hazardous substance, pollutant or
contaminant under, any governmental statute, code, ordinance, regulation, rule
or order, and any amendment thereto, including the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. §9601 et seq., and the
Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq., or (B) that is
toxic, explosive, corrosive, flammable, radioactive, carcinogenic, dangerous or
otherwise hazardous, including gasoline, diesel fuel, petroleum hydrocarbons,
polychlorinated biphenyls (PCBs), asbestos, radon and urea formaldehyde foam
insulation.

 

2)   “Environmental Requirements” shall mean all present and future Laws,
orders, permits, licenses, approvals, authorizations and other requirements of
any kind applicable to Hazardous Materials.

 

3)   “Handled by Tenant“ and “Handling by Tenant” shall mean and refer to any
installation, handling, generation, storage, use, disposal, discharge, release,
abatement, removal, transportation, or any other activity of any type by Tenant
or its agents, employees, contractors, licensees, assignees, sublessees,
transferees or representatives (collectively, “Representatives”) or its guests,
customers, invitees, or visitors (collectively, “Visitors“), at or about the
Premises in connection with or involving Hazardous Materials.

 

4)   “Environmental Losses” shall mean all costs and expenses of any kind,
damages (including foreseeable and unforeseeable consequential damages), fines
and penalties incurred in connection with any violation of or compliance with
Environmental Requirements, and all losses of any kind attributable to the
diminution of value, loss of use or adverse effects on marketability or use of
any portion of the Premises or the Property.

 

(b)           Tenant’s Covenants. No Hazardous Materials shall be Handled by
Tenant at or about the Premises or Property without Landlord’s prior written
consent, which consent may be granted, denied, or conditioned upon compliance
with Landlord’s requirements, all in Landlord’s absolute discretion.
Notwithstanding the foregoing, normal quantities and use of those Hazardous
Materials customarily used in the conduct of general office activities, such as
copier fluids and cleaning supplies (“Permitted Hazardous Materials”), may be
used and

 

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stored at the Premises without Landlord’s prior written consent, provided that
Tenant’s activities at or about the Premises and Property and the Handling by
Tenant of all Hazardous Materials shall comply at all times with all
Environmental Requirements. At the expiration or termination of the Lease,
Tenant shall promptly remove from the Premises and Property all Hazardous
Materials Handled by Tenant at the Premises or the Property. Tenant shall keep
Landlord fully and promptly informed of all Handling by Tenant of Hazardous
Materials other than Permitted Hazardous Materials. Tenant shall be responsible
and liable for the compliance with all of the provisions of this Section by all
of Tenant’s Representatives and Visitors, and all of Tenant’s obligations under
this Section (including its indemnification obligations under paragraph (e)
below) shall survive the expiration or termination of this Lease.

 

(c)           Compliance. Tenant shall at Tenant’s expense promptly take all
actions required by any governmental agency or entity in connection with or as a
result of the Handling by Tenant of Hazardous Materials at or about the Premises
or the Property, including inspection and testing, performing all cleanup,
removal and remediation work required with respect to those Hazardous Materials,
complying with all closure requirements and post-closure monitoring, and filing
all required reports or plans. All of the foregoing work and all Handling by
Tenant of all Hazardous Materials shall be performed in a good, safe and
workmanlike manner by consultants qualified and licensed to undertake such work
and in a manner that will not interfere with any other tenant’s quiet enjoyment
of the Property or Landlord’s use, operation, leasing and sale of the Property.
Tenant shall deliver to Landlord prior to delivery to any governmental agency,
or promptly after receipt from any such agency, copies of all permits,
manifests, closure or remedial action plans, notices, and all other documents
relating to the Handling by Tenant of Hazardous Materials at or about the
Premises or the Property. If any lien attaches to the Premises or the Property
in connection with or as a result of the Handling by Tenant of Hazardous
Materials, and if Tenant does not cause the same to be released, by payment,
bonding or otherwise, within ten (10) days after the attachment thereof,
Landlord shall have the right but not the obligation to cause the same to be
released and any sums expended by Landlord (plus Landlord’s administrative
costs) in connection therewith shall be payable by Tenant on demand.

 

(d)           Landlord’s Rights. Landlord shall have the right, but not the
obligation, to enter the Premises at any reasonable time (i) to confirm Tenant’s
compliance with the provisions of this Section 5.2, and (ii) to perform Tenant’s
obligations under this Section if Tenant has failed to do so after reasonable
notice to Tenant. Landlord shall also have the right to engage qualified
Hazardous Materials consultants to inspect the Premises and review the Handling
by Tenant of Hazardous Materials, including review of all permits, reports,
plans, and other documents regarding same. Tenant shall pay to Landlord on
demand the costs of Landlord’s consultants’ fees and all costs incurred by
Landlord in performing Tenant’s obligations under this Section. Landlord shall
use reasonable efforts to minimize any interference with

 

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Tenant’s business caused by Landlord’s entry into the Premises, but Landlord
shall not be responsible for any interference caused thereby.

 

(e)           Tenant’s Indemnification. Tenant agrees to indemnify, defend,
protect and hold harmless Landlord and its partners or members and its or their
partners, members, directors, officers, shareholders, employees and agents from
all Environmental Losses and all other claims, actions, losses, damages,
liabilities, costs and expenses of every kind, including reasonable attorneys’,
experts’ and consultants’ fees and costs, incurred at any time and arising from
or in connection with the Handling by Tenant of Hazardous Materials at or about
the Property or Tenant’s failure to comply in full with all Environmental
Requirements with respect to the Premises.

 

(f)            Landlord’s Representations. Landlord represents to Tenant that
the Base Building does not contain any Hazardous Materials other than
insubstantial amounts, if any, in quantities not having any materially adverse
effect on Tenant’s health and safety, and that Landlord has not released any
Hazardous Materials onto the Property in violation of Environmental
Requirements. Landlord is making no further representations to Tenant with
respect to Hazardous Materials.

 

5.3           AMERICANS WITH DISABILITIES ACT. THE PARTIES AGREE THAT THE
LIABILITIES AND OBLIGATIONS OF LANDLORD AND TENANT UNDER THAT CERTAIN FEDERAL
STATUTE COMMONLY KNOWN AS THE AMERICANS WITH DISABILITIES ACT, AS WELL AS THE
REGULATIONS AND ACCESSIBILITY GUIDELINES PROMULGATED THEREUNDER, AS EACH OF THE
FOREGOING IS SUPPLEMENTED OR AMENDED FROM TIME TO TIME (COLLECTIVELY, THE
“ADA”), SHALL BE APPORTIONED AS FOLLOWS:

 

(a)           Except as otherwise provided in (c) below, if the structural
elements of the Premises or any other portion of the Base Building (as defined
in the Construction Rider) are not in compliance with the public accommodations
provisions of the ADA on the Commencement Date, including lavatory facilities,
such nonconformity shall be promptly made to comply by Landlord.

 

(b)           Except as otherwise provided in (c) below, from and after the
commencement date of the Lease, Tenant covenants and agrees to conduct its
operations within the Premises in compliance with the ADA. If any of the
Premises fails to comply with the ADA, such nonconformity shall be promptly made
to comply by Tenant. In the event that Tenant elects to undertake any
alterations to, for or within the Premises, including initial build-out work,
Tenant agrees to cause such alterations to be performed and constructed in
compliance with the ADA.

 

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(c)           Notwithstanding the foregoing, Tenant shall cause all parts of the
Premises, the Building or the Project designed by Tenant or its own architects,
space planners and designers (“Tenant Design”) to comply with the ADA, and
Landlord shall have no responsibility therefor or liability for any
noncompliance resulting from Tenant Design.

 

6.             TENANT IMPROVEMENTS AND ALTERATIONS.

 

6.1           LANDLORD AND TENANT SHALL PERFORM THEIR RESPECTIVE OBLIGATIONS
WITH RESPECT TO DESIGN AND CONSTRUCTION OF ANY IMPROVEMENTS TO BE CONSTRUCTED
AND INSTALLED IN THE PREMISES AS PROVIDED IN THE CONSTRUCTION RIDER ATTACHED
HERETO AS EXHIBIT C. EXCEPT FOR (I) ANY IMPROVEMENTS TO BE CONSTRUCTED BY TENANT
AS PROVIDED IN THE CONSTRUCTION RIDER AND (II) NON-STRUCTURAL ALTERATIONS NOT
AFFECTING THE BUILDING SYSTEMS AND COSTING LESS THAN $50,000.00 IN THE AGGREGATE
(FOR WHICH NO LANDLORD CONSENT SHALL BE REQUIRED), TENANT SHALL NOT MAKE ANY
ALTERATIONS, IMPROVEMENTS OR CHANGES TO THE PREMISES, INCLUDING INSTALLATION OF
ANY SECURITY SYSTEM OR TELEPHONE OR DATA COMMUNICATION WIRING (“ALTERATIONS“),
WITHOUT LANDLORD’S PRIOR WRITTEN CONSENT, NOT TO BE UNREASONABLY WITHHELD,
CONDITIONED OR DELAYED; PROVIDED, HOWEVER, THAT IT SHALL IN ALL EVENTS BE
REASONABLE FOR LANDLORD TO WITHHOLD SUCH CONSENT IF THE PROPOSED ALTERATIONS
AFFECT THE STRUCTURE OF THE BUILDING AND/OR ANY OF THE BUILDING SYSTEMS. ANY
SUCH ALTERATIONS SHALL BE COMPLETED BY TENANT AT TENANT’S SOLE COST AND
EXPENSE:  (I) WITH DUE DILIGENCE, IN A GOOD AND WORKMANLIKE MANNER, USING NEW
MATERIALS; (II) IN COMPLIANCE WITH PLANS AND SPECIFICATIONS APPROVED BY
LANDLORD; (III) IN COMPLIANCE WITH THE CONSTRUCTION RULES AND REGULATIONS
PROMULGATED BY LANDLORD FROM TIME TO TIME; (IV) IN ACCORDANCE WITH ALL
APPLICABLE LAWS (INCLUDING ALL WORK, WHETHER STRUCTURAL OR NON-STRUCTURAL,
INSIDE OR OUTSIDE THE PREMISES, REQUIRED TO COMPLY FULLY WITH ALL APPLICABLE
LAWS AND NECESSITATED BY TENANT’S WORK); AND (V) SUBJECT TO ALL CONDITIONS WHICH
LANDLORD MAY IN LANDLORD’S REASONABLE DISCRETION IMPOSE. SUCH CONDITIONS MAY
INCLUDE REQUIREMENTS FOR TENANT TO:  (I) PROVIDE PAYMENT OR PERFORMANCE BONDS OR
ADDITIONAL INSURANCE (FROM TENANT OR TENANT’S CONTRACTORS, SUBCONTRACTORS OR
DESIGN PROFESSIONALS); (II) USE CONTRACTORS OR SUBCONTRACTORS DESIGNATED BY
LANDLORD (PROVIDED THAT SUCH CONTRACTORS OR SUB-CONTRACTORS PRICED COMPETITIVELY
WITH OTHERS CHOSEN BY TENANT); AND (III) REMOVE ALL OR PART OF THE ALTERATIONS
PRIOR TO OR UPON EXPIRATION OR TERMINATION OF THE TERM, AS DESIGNATED BY
LANDLORD PRIOR TO THE COMMENCEMENT OF SUCH ALTERATIONS. IF ANY WORK OUTSIDE THE
PREMISES, OR ANY WORK ON OR ADJUSTMENT TO ANY OF THE BUILDING SYSTEMS, IS
REQUIRED IN CONNECTION WITH OR AS A RESULT OF TENANT’S WORK, SUCH WORK SHALL BE
PERFORMED AT TENANT’S EXPENSE BY CONTRACTORS DESIGNATED BY LANDLORD (PROVIDED
THAT SUCH CONTRACTORS OR SUB-CONTRACTORS ARE PRICED COMPETITIVELY WITH MARKET
RATES). LANDLORD’S RIGHT TO REVIEW AND APPROVE (OR WITHHOLD APPROVAL OF)
TENANT’S PLANS, DRAWINGS, SPECIFICATIONS, CONTRACTOR(S) AND OTHER ASPECTS OF
CONSTRUCTION WORK PROPOSED BY TENANT IS INTENDED SOLELY TO PROTECT LANDLORD, THE
PROPERTY AND LANDLORD’S INTERESTS. NO APPROVAL OR CONSENT BY LANDLORD SHALL BE
DEEMED OR CONSTRUED TO BE A REPRESENTATION OR WARRANTY BY LANDLORD AS TO THE
ADEQUACY, SUFFICIENCY, FITNESS OR SUITABILITY OF THE PROPOSED ALTERATIONS OR
COMPLIANCE THEREOF WITH APPLICABLE LAWS OR OTHER REQUIREMENTS. EXCEPT AS
OTHERWISE PROVIDED IN LANDLORD’S CONSENT, ALL ALTERATIONS SHALL UPON
INSTALLATION BECOME PART OF THE REALTY AND BE THE PROPERTY OF LANDLORD.

 

6.2           BEFORE MAKING ANY ALTERATIONS, TENANT SHALL SUBMIT TO LANDLORD FOR
LANDLORD’S PRIOR APPROVAL REASONABLY DETAILED FINAL PLANS AND SPECIFICATIONS
PREPARED BY A LICENSED

 

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ARCHITECT OR ENGINEER, A COPY OF THE CONSTRUCTION CONTRACT, INCLUDING THE NAME
OF THE CONTRACTOR AND ALL SUBCONTRACTORS PROPOSED BY TENANT TO MAKE THE
ALTERATIONS, AND A COPY OF THE CONTRACTOR’S LICENSE. TENANT SHALL REIMBURSE
LANDLORD UPON DEMAND FOR ANY REASONABLE EXPENSES INCURRED BY LANDLORD IN
CONNECTION WITH ANY ALTERATIONS MADE BY TENANT, INCLUDING REASONABLE FEES
CHARGED BY LANDLORD’S CONTRACTORS OR CONSULTANTS TO REVIEW PLANS AND
SPECIFICATIONS PREPARED BY TENANT AND TO UPDATE THE EXISTING AS-BUILT PLANS AND
SPECIFICATIONS OF THE BUILDING TO REFLECT THE ALTERATIONS. TENANT SHALL OBTAIN
ALL APPLICABLE PERMITS, AUTHORIZATIONS AND GOVERNMENTAL APPROVALS AND DELIVER
COPIES OF THE SAME TO LANDLORD BEFORE COMMENCEMENT OF ANY ALTERATIONS.

 

6.3           TENANT SHALL KEEP THE PREMISES AND THE PROPERTY FREE AND CLEAR OF
ALL MECHANICS’, MATERIALMEN’S, CONTRACTORS’ OR OTHER LIENS ARISING OUT OF ANY
WORK PERFORMED, MATERIALS FURNISHED OR OBLIGATIONS INCURRED BY TENANT. IF ANY
SUCH LIEN ATTACHES TO THE PREMISES OR THE PROPERTY, AND TENANT DOES NOT CAUSE
THE SAME TO BE RELEASED BY PAYMENT, BONDING OR OTHERWISE WITHIN TEN (10) DAYS
AFTER NOTICE OF THE ATTACHMENT THEREOF, LANDLORD SHALL HAVE THE RIGHT BUT NOT
THE OBLIGATION TO CAUSE THE SAME TO BE RELEASED, AND ANY SUMS EXPENDED BY
LANDLORD (PLUS LANDLORD’S ADMINISTRATIVE COSTS) IN CONNECTION THEREWITH SHALL BE
PAYABLE BY TENANT ON DEMAND WITH INTEREST THEREON FROM THE DATE OF EXPENDITURE
BY LANDLORD AT THE INTEREST RATE (AS DEFINED IN SECTION 16.2 - INTEREST). TENANT
SHALL GIVE LANDLORD AT LEAST TEN (10) BUSINESS DAYS’ NOTICE PRIOR TO THE
COMMENCEMENT OF ANY ALTERATIONS AND COOPERATE WITH LANDLORD IN POSTING AND
MAINTAINING NOTICES OF NON-RESPONSIBILITY IN CONNECTION THEREWITH.

 

6.4           SUBJECT TO THE PROVISIONS OF SECTION 5 - USE AND COMPLIANCE WITH
LAWS AND THE FOREGOING PROVISIONS OF THIS SECTION, TENANT MAY INSTALL AND
MAINTAIN FURNISHINGS, EQUIPMENT, MOVABLE PARTITIONS, BUSINESS EQUIPMENT AND
OTHER TRADE FIXTURES (“TRADE FIXTURES”) IN THE PREMISES, PROVIDED THAT THE TRADE
FIXTURES DO NOT BECOME AN INTEGRAL PART OF THE PREMISES OR THE BUILDING, WITHOUT
FIRST OBTAINING APPROVAL FROM LANDLORD. TENANT SHALL PROMPTLY REPAIR ANY DAMAGE
TO THE PREMISES OR THE BUILDING CAUSED BY ANY INSTALLATION OR REMOVAL OF SUCH
TRADE FIXTURES.

 

7.             MAINTENANCE AND REPAIRS.

 

7.1           BY TAKING POSSESSION OF THE PREMISES, TENANT AGREES THAT THE
PREMISES ARE THEN IN A GOOD AND TENANTABLE CONDITION. DURING THE TERM, TENANT AT
TENANT’S EXPENSE BUT UNDER THE DIRECTION OF LANDLORD, SHALL REPAIR AND MAINTAIN
THE PREMISES, INCLUDING THE INTERIOR WALLS, FLOOR COVERINGS, CEILING (CEILING
TILES AND GRID), TENANT IMPROVEMENTS, ALTERATIONS, FIRE EXTINGUISHERS, OUTLETS
AND FIXTURES, AND ANY APPLIANCES (INCLUDING DISHWASHERS, HOT WATER HEATERS AND
GARBAGE DISPOSERS) IN THE PREMISES, IN A FIRST CLASS CONDITION, AND KEEP THE
PREMISES IN A CLEAN, SAFE AND ORDERLY CONDITION.

 

7.2           LANDLORD SHALL MAINTAIN OR CAUSE TO BE MAINTAINED IN REASONABLY
GOOD ORDER, CONDITION AND REPAIR, THE STRUCTURAL PORTIONS OF THE ROOF,
FOUNDATIONS, FLOOR SLAB AND EXTERIOR WALLS OF THE BUILDING, THE BUILDING
SYSTEMS, AND THE PUBLIC AND COMMON AREAS OF THE PROPERTY; PROVIDED, HOWEVER,
THAT TENANT SHALL PAY THE COST OF REPAIRS FOR ANY DAMAGE OCCASIONED BY TENANT’S
USE OF THE PREMISES OR THE PROPERTY OR ANY ACT OR OMISSION OF TENANT OR TENANT’S
REPRESENTATIVES OR VISITORS, TO THE EXTENT (IF ANY) NOT COVERED BY LANDLORD’S
PROPERTY INSURANCE. LANDLORD SHALL BE UNDER NO

 

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OBLIGATION TO INSPECT THE PREMISES. TENANT SHALL PROMPTLY REPORT IN WRITING TO
LANDLORD ANY DEFECTIVE CONDITION KNOWN TO TENANT WHICH LANDLORD IS REQUIRED TO
REPAIR.

 

7.3           LANDLORD HEREBY RESERVES THE RIGHT, AT ANY TIME AND FROM TIME TO
TIME, WITHOUT LIABILITY TO TENANT, AND WITHOUT CONSTITUTING AN EVICTION,
CONSTRUCTIVE OR OTHERWISE, OR ENTITLING TENANT TO ANY ABATEMENT OF RENT OR TO
TERMINATE THIS LEASE OR OTHERWISE RELEASING TENANT FROM ANY OF TENANT’S
OBLIGATIONS EXCEPT AS MAY BE SPECIFICALLY PROVIDED FOR UNDER THIS LEASE:

 

(a)           To make alterations, additions, repairs, improvements to or in, or
to decrease the size of area of, all or any part of the Building, the fixtures
and equipment therein, and the Building Systems, so long as such alterations,
additions, repairs and improvements do not alter the size of the Premises or
materially interfere with Tenant’s use and enjoyment of the Premises, excepting
only temporary inconvenience or interference reasonably necessary and
unavoidable as a result of the necessity of such alterations, additions, repairs
or improvements;

 

(b)           To change the Building’s name, provided that the name shall not be
the name of a competitor of Tenant or a Tenant Affiliate;

 

(c)           To install and maintain any and all signs on the exterior and
interior of the Building, subject to the provisions of this Lease;

 

(d)           To reduce, increase, enclose or otherwise change at any time and
from time to time the size, number, location, lay-out and nature of the common
areas and other tenancies and premises in the Property, and to create additional
rentable areas through use or enclosure of common areas; and

 

If any governmental authority promulgates or revises any Law or imposes
mandatory or voluntary controls or guidelines on Landlord or the Property
relating to the use or conservation of energy or utilities or the reduction of
automobile or other emissions or reduction or management of traffic or parking
on the Property (collectively “Controls”), to comply with such Controls, whether
mandatory or voluntary, or make any alterations to the Property related thereto.

 

8.             TENANT’S PERSONAL PROPERTY TAXES. TENANT SHALL PAY PRIOR TO
DELINQUENCY ALL TAXES LEVIED BY ANY GOVERNMENTAL AUTHORITY ON TENANT’S PERSONAL
PROPERTY INCLUDING, BUT NOT LIMITED TO, UNSECURED PERSONAL PROPERTY TAXES.

 

9.             UTILITIES AND SERVICES.

 

9.1           DESCRIPTION OF SERVICES. LANDLORD SHALL FURNISH TO THE PREMISES: 
REASONABLE AMOUNTS OF HEAT, VENTILATION AND AIR-CONDITIONING DURING THE BUSINESS
HOURS SPECIFIED IN THE BASIC LEASE INFORMATION (“BUSINESS HOURS”) ON WEEKDAYS
AND SATURDAY EXCEPT PUBLIC HOLIDAYS (“BUSINESS DAYS”); REASONABLE AMOUNTS OF
ELECTRICITY; JANITORIAL SERVICES FIVE DAYS A WEEK (EXCEPT PUBLIC HOLIDAYS); AND
HOT AND COLD WATER FROM STANDARD OUTLETS FOR LAVATORY, RESTROOM AND DRINKING
PURPOSES. LANDLORD SHALL ALSO PROVIDE THE BUILDING WITH NORMAL FLUORESCENT LAMP
REPLACEMENT,

 

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WINDOW WASHING, ELEVATOR SERVICE, AND COMMON AREA TOILET ROOM SUPPLIES. ANY
ADDITIONAL UTILITIES OR SERVICES THAT LANDLORD MAY AGREE TO PROVIDE (INCLUDING
LAMP OR TUBE REPLACEMENT FOR OTHER THAN BUILDING STANDARD LIGHTING FIXTURES)
SHALL BE AT TENANT’S SOLE EXPENSE.   LANDLORD WILL PROVIDE THE FOLLOWING UTILITY
CONNECTIONS:  1600 AMPS AT 277/480, 3 PHASE, 4 WIRE, 50,000 A.I.C. NEMA 1, WHICH
WILL BE PROVIDED TO THE SECOND (2ND) FLOOR OF THE BUILDING VIA THE PROJECT’S SES
AND DISTRIBUTED TO SUCH SECOND (2ND) FLOOR AT DISTRIBUTION PANEL #2, WHICH IS
LOCATED ON SUCH SECOND (2ND) FLOOR. NOTWITHSTANDING THE FOREGOING, ALL STEP-DOWN
TRANSFORMERS SHALL BE PROVIDED BY TENANT, AT TENANT’S SOLE COST AND EXPENSE, IN
ORDER TO DISTRIBUTE THE AVAILABLE POWER PER THE TENANT IMPROVEMENTS AS DEFINED
IN THE CONSTRUCTION RIDER.

 

9.2           PAYMENT FOR ADDITIONAL UTILITIES AND SERVICES.

 

(a)           Upon request by Tenant in accordance with the procedures
established by Landlord from time to time for furnishing HVAC service at times
other than Business Hours on Business Days, Landlord shall furnish such service
to Tenant and Tenant shall pay for such services on an hourly basis at the then
prevailing rate established for the Building by Landlord (which rate is $8.00
per hour per zone as of the date of this Lease), which usage by Tenant shall be
reasonably estimated by Landlord.

 

(b)           If the temperature otherwise maintained in any portion of the
Premises by the HVAC systems of the Building is affected as a result of (i) any
lights, machines or equipment used by Tenant in the Premises, or (ii) the
occupancy of the Premises by more than one person per 150 square feet of
rentable area, then Landlord shall have the right to install any machinery or
equipment reasonably necessary to restore the temperature, including
modifications to the standard air-conditioning equipment. The cost of any such
equipment and modifications, including the cost of installation and any
additional cost of operation and maintenance of the same, shall be paid by
Tenant to Landlord upon demand.

 

(c)           If Tenant’s usage of electricity, water or any other utility
service exceeds the use of such utility Landlord determines to be typical,
normal and customary for the Building, Landlord may determine the amount of such
excess use by any reasonable means (including the installation at Landlord’s
request but at Tenant’s expense of a separate meter or other measuring device)
and charge Tenant for the cost of such excess usage. In addition, Landlord may
impose a reasonable charge for the use of any additional or unusual janitorial
services required by Tenant because of any unusual Tenant Improvements or
Alterations, the carelessness of Tenant or the nature of Tenant’s business
(including hours of operation).

 

9.3           INTERRUPTION OF SERVICES. SUBJECT TO SECTION 9.4 BELOW, IN THE
EVENT OF AN INTERRUPTION IN OR FAILURE OR INABILITY TO PROVIDE ANY SERVICES OR
UTILITIES TO THE PREMISES OR BUILDING FOR ANY REASON (A “SERVICE FAILURE”), SUCH
SERVICE FAILURE SHALL NOT, REGARDLESS OF ITS DURATION, IMPOSE UPON LANDLORD ANY
LIABILITY WHATSOEVER, CONSTITUTE AN EVICTION OF TENANT, CONSTRUCTIVE OR
OTHERWISE, ENTITLE TENANT TO AN ABATEMENT OF RENT OR TO TERMINATE THIS LEASE OR
OTHERWISE RELEASE

 

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TENANT FROM ANY OF TENANT’S OBLIGATIONS UNDER THIS LEASE. TENANT WAIVES THE
PROTECTION OF ANY STATUTE OR RULE OF LAW THAT GIVES OR PURPORTS TO GIVE TENANT
ANY RIGHT TO TERMINATE THIS LEASE OR SURRENDER POSSESSION OF THE PREMISES UPON A
SERVICE FAILURE.

 

9.4           ABATEMENT. NOTWITHSTANDING THE FOREGOING, IF THERE IS A SERVICE
FAILURE WHICH IS (A) SPECIFIC TO THE BUILDING AND/OR PROPERTY (AS OPPOSED TO AN
INTERRUPTION OR CURTAILMENT IN ESSENTIAL SERVICES WHICH EXTENDS BEYOND THE
BUILDING OR PROPERTY), (B) CAUSES THE PREMISES TO BE UNTENANTABLE, (C) IS CAUSED
SOLELY BY LANDLORD, AND (D) LASTS FOR MORE THAN FIVE (5) CONSECUTIVE BUSINESS
DAYS AFTER LANDLORD HAS NOTICE OF SUCH SERVICE FAILURE OR OTHERWISE PREVENTS
TENANT FROM  REASONABLY BEING ABLE TO ACCESS THE PREMISES FOR MORE THAN FIVE (5)
CONSECUTIVE BUSINESS DAYS AFTER NOTICE TO LANDLORD, THEN TENANT WILL BE ENTITLED
TO AN ABATEMENT OF BASIC RENT AS PROVIDED IN THIS SECTION 9.4. IF TENANT
PROPERLY DELIVERS SUCH AN ABATEMENT NOTICE TO LANDLORD, AND THE UNTENANTABILITY
CAUSED BY THE INTERRUPTION IS NOT REMEDIED WITHIN SUCH FIVE (5) BUSINESS DAY
PERIOD, THEN, SUBJECT TO THE FOLLOWING SENTENCE, TENANT SHALL THEREAFTER BE
ENTITLED TO AN ABATEMENT OF BASIC RENT AND ADDITIONAL RENT (IN PROPORTION TO THE
PORTION OF THE PREMISES RENDERED UNTENANTABLE BY SERVICE FAILURE) UNTIL SUCH
SERVICE IS RESTORED. NOTWITHSTANDING THE FOREGOING, IF BASIC RENT AND ADDITIONAL
RENT ARE ABATED PURSUANT TO THE PRECEDING SENTENCE FOR A PERIOD OF NINETY (90)
CONSECUTIVE DAYS, THEN, UNLESS OTHERWISE MUTUALLY AGREED TO IN WRITING BETWEEN
LANDLORD AND TENANT, TENANT SHALL ELECT, IN WRITING DELIVERED TO LANDLORD WITHIN
TEN (10) BUSINESS DAYS FOLLOWING THE EXPIRATION OF SUCH 90-DAY PERIOD, TO EITHER
TERMINATE THIS LEASE AS OF THE DATE OF SUCH NOTICE OR COMMENCE PAYING FULL BASIC
RENT AND ADDITIONAL RENT FROM AND AFTER THE DATE OF SUCH NOTICE AS OTHERWISE
PROVIDED UNDER THIS LEASE. IN THE EVENT TENANT FAILS TO PROVIDE SUCH WRITTEN
NOTICE WITHIN THE AFOREMENTIONED 10-BUSINESS DAY PERIOD, THEN IN THAT EVENT
TENANT WILL BE DEEMED TO HAVE ELECTED NOT TO TERMINATE THIS LEASE AND, UNLESS
OTHERWISE MUTUALLY AGREED TO IN WRITING BETWEEN LANDLORD AND TENANT, WILL
IMMEDIATELY RETURN TO PAYING FULL BASIC RENT AND ADDITIONAL RENT AS OTHERWISE
PROVIDED UNDER THIS LEASE.

 

10.           EXCULPATION AND INDEMNIFICATION.

 

10.1         LANDLORD’S INDEMNIFICATION OF TENANT. LANDLORD SHALL INDEMNIFY,
PROTECT, DEFEND AND HOLD TENANT HARMLESS FROM AND AGAINST ANY CLAIMS, ACTIONS,
LIABILITIES, DAMAGES, COSTS OR EXPENSES, INCLUDING REASONABLE ATTORNEYS’ FEES
AND COSTS INCURRED IN DEFENDING AGAINST THE SAME (“CLAIMS”), ASSERTED BY ANY
THIRD PARTY AGAINST TENANT WHICH ARISE OUT OF (I) ANY BODILY INJURY, DEATH OR
PROPERTY DAMAGE OCCURRING TO SUCH THIRD PARTIES AT THE PROJECT (OTHER THAN
WITHIN THE PREMISES) TO THE EXTENT CAUSED BY THE WILLFUL MISCONDUCT OR NEGLIGENT
ACTS OF LANDLORD OR ITS AUTHORIZED REPRESENTATIVES AND ARE NOT CAUSED IN WHOLE
OR IN PART BY TENANT AND (II) LANDLORD’S UNCURED BREACH OF ANY REPRESENTATION,
WARRANTY OR OBLIGATION UNDER THIS LEASE.

 

10.2         TENANT’S INDEMNIFICATION OF LANDLORD. TENANT SHALL INDEMNIFY,
PROTECT, DEFEND AND HOLD LANDLORD AND LANDLORD’S AUTHORIZED REPRESENTATIVES
HARMLESS FROM AND AGAINST CLAIMS ARISING FROM (A) THE ACTS OR OMISSIONS OF
TENANT OR TENANT’S REPRESENTATIVES OR VISITORS IN OR ABOUT THE PROPERTY, OR (B)
ANY CONSTRUCTION OR OTHER WORK UNDERTAKEN BY TENANT ON THE PREMISES (INCLUDING
ANY DESIGN DEFECTS), OR (C) ANY BREACH OR DEFAULT OR OCCURRENCE OF TENANT DELAY
UNDER THIS LEASE BY TENANT, OR (D) ANY LOSS, INJURY OR DAMAGE, HOWSOEVER AND BY
WHOMSOEVER CAUSED, TO ANY PERSON OR PROPERTY, OCCURRING IN OR ABOUT THE PREMISES
DURING THE TERM, EXCEPTING ONLY CLAIMS

 

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DESCRIBED IN THIS CLAUSE (D) TO THE EXTENT THEY ARE CAUSED BY THE WILLFUL
MISCONDUCT OR NEGLIGENT ACTS OF LANDLORD OR ITS AUTHORIZED REPRESENTATIVES.

 

10.3         DAMAGE TO TENANT AND TENANT’S PROPERTY. LANDLORD SHALL NOT BE
LIABLE TO TENANT FOR ANY LOSS, INJURY OR OTHER DAMAGE TO TENANT OR TO TENANT’S
PROPERTY IN OR ABOUT THE PREMISES OR THE PROPERTY FROM ANY CAUSE (INCLUDING
DEFECTS IN THE PROPERTY OR IN ANY EQUIPMENT IN THE PROPERTY; FIRE, EXPLOSION OR
OTHER CASUALTY; BURSTING, RUPTURE, LEAKAGE OR OVERFLOW OF ANY PLUMBING OR OTHER
PIPES OR LINES, SPRINKLERS, TANKS, DRAINS, DRINKING FOUNTAINS OR WASHSTANDS IN,
ABOVE, OR ABOUT THE PREMISES OR THE PROPERTY; OR ACTS OF OTHER TENANTS IN THE
PROPERTY) UNLESS CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
LANDLORD OR ITS EMPLOYEES OR AGENTS. NOTWITHSTANDING ANY OTHER PROVISION OF THIS
LEASE TO THE CONTRARY, IN NO EVENT SHALL LANDLORD BE LIABLE TO TENANT FOR ANY
PUNITIVE OR CONSEQUENTIAL DAMAGES OR DAMAGES FOR LOSS OF BUSINESS BY TENANT.

 

10.4         SURVIVAL. THE OBLIGATIONS OF THE PARTIES UNDER THIS SECTION 10
SHALL SURVIVE THE EXPIRATION OR TERMINATION OF THIS LEASE.

 

11.           INSURANCE.

 

11.1         TENANT’S INSURANCE.

 

(a)           Liability Insurance. Tenant shall maintain in full force
throughout the Term commercial general liability insurance providing coverage on
an occurrence form basis with limits of not less than Two Million Dollars
($2,000,000.00) each occurrence for bodily injury and property damage combined,
Two Million Dollars ($2,000,000.00) annual general aggregate, and Two Million
Dollars ($2,000,000.00) products and completed operations annual aggregate.
Tenant’s liability insurance policy or policies shall:  (i) include premises and
operations liability coverage, products and completed operations liability
coverage, broad form property damage coverage, including completed operations,
blanket contractual liability coverage, including, to the maximum extent
possible, coverage for the indemnification obligations of Tenant under this
Lease, and personal and advertising injury coverage; (ii) provide that the
insurance company has the duty to defend all insureds under the policy; (iii)
provide that defense costs are paid in addition to and do not deplete any of the
policy limits;  and (iv) cover liabilities arising out of or incurred in
connection with Tenant’s use or occupancy of the Premises or the Property. Each
policy of liability insurance required by this Section shall:  (i) contain a
cross liability endorsement or separation of insureds clause; (ii) provide that
any waiver of subrogation rights or release prior to a loss does not void
coverage; (iii) provide that it is primary to and not contributing with, any
policy of insurance carried by Landlord covering the same loss; (iv) provide
that any failure to comply with the reporting provisions shall not affect
coverage provided to Landlord or its partners, property managers or Mortgagees
(as defined below); and (v) name Landlord and its partners, the Property Manager
identified in the Basic Lease Information (the “Property Manager”), and such
other parties in interest as Landlord may from time

 

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to time designate to Tenant in writing, as additional insureds. Such additional
insureds shall be provided at least the same extent of coverage as is provided
to Tenant under such policies. All endorsements effecting such additional
insured status shall be at least as broad as additional insured endorsement form
number CG 20 11 11 85 promulgated by the Insurance Services Office.

 

(b)           Property Insurance. Tenant shall at all times maintain in effect
with respect to any Alterations and Tenant’s Trade Fixtures and personal
property, commercial property insurance providing coverage, on an “all risk” or
“special form” basis, in an amount equal to at least 90% of the full replacement
cost of the covered property. Tenant may carry such insurance under a blanket
policy, provided that such policy provides coverage equivalent to a separate
policy. During the Term, the proceeds from any such policies of insurance shall
be used for the repair or replacement of the Alterations, Trade Fixtures and
personal property so insured. Landlord shall be provided coverage under such
insurance to the extent of its insurable interest and, if requested by Landlord,
both Landlord and Tenant shall sign all documents reasonably necessary or proper
in connection with the settlement of any claim or loss under such insurance.
Landlord will have no obligation to carry insurance on any Alterations or on
Tenant’s Trade Fixtures or personal property.

 

(c)           Requirements For All Policies. Each policy of insurance required
under this Section 11.1 shall:  (i) be in a form, and written by an insurer,
reasonably acceptable to Landlord, (ii) be maintained at Tenant’s sole cost and
expense, and (iii) require at least thirty (30) days’ written notice to Landlord
prior to any cancellation, nonrenewal or modification of insurance coverage.
Insurance companies issuing such policies shall have rating classifications of
“A” or better and financial size category ratings of “VII” or better according
to the latest edition of the A.M. Best Key Rating Guide. All insurance companies
issuing such policies shall be admitted carriers licensed to do business in the
state where the Property is located. To the extent Tenant does not self-insure
as permitted under subsection (f) below, any deductible amount under such
insurance shall not exceed $5,000. Tenant shall provide to Landlord, upon
request, evidence that the insurance required to be carried by Tenant pursuant
to this Section, including any endorsement effecting the additional insured
status, is in full force and effect and that premiums therefor have been paid.

 

(d)           Updating Coverage. Tenant shall increase the amounts of insurance
as required by any Mortgagee and, not more frequently than once every three (3)
years, as recommended by Landlord’s insurance broker, if, in the opinion of
either of them, the amount of insurance then required under this Lease is not
adequate. Any limits set forth in this Lease on the amount or type of coverage
required by Tenant’s insurance shall not limit the liability of Tenant under
this Lease.

 

(e)           Certificates of Insurance. Prior to occupancy of the Premises by
Tenant, and not less than thirty (30) days prior to expiration of any policy
thereafter,

 

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Tenant shall furnish to Landlord a certificate of insurance reflecting that the
insurance required by this Section is in force, accompanied by an endorsement
showing the required additional insureds satisfactory to Landlord in substance
and form. Notwithstanding the requirements of this paragraph, Tenant shall at
Landlord’s request provide to Landlord a certified copy of each insurance policy
required to be in force at any time pursuant to the requirements of this Lease
or its Exhibits.

 

(f)            Self-Insurance. Subject to the provisions of this subsection (f),
Tenant may self-insure under a commercially reasonable self-insurance program
with respect to the insurance coverages set forth in subsection (b) above.
Tenant must demonstrate to Landlord’s satisfaction at the beginning of each
calendar year of such self insurance that Tenant maintains a tangible net
financial worth of at least $100,000,000. Tenant will, to the fullest extent
allowable under the applicable laws, indemnify, protect, defend (with counsel
reasonably acceptable to Landlord) and hold harmless Landlord from and against
any and all claims that would have been covered by the insurance replaced by the
self-insurance. Such self-insurance will not affect any waivers, releases or
limitations of liability of Landlord set forth in this Lease. If Tenant elects
to self-insure, Tenant will deliver written notice to Landlord (a) detailing the
coverages being self insured; (b) setting forth the amount, limits, and scope of
the self insurance for each such coverage (which will not be less than those
required herein); (c) demonstrating such tangible net worth; and (d) describing
Tenant’s self-insurance program (including, without limitations, its funding,
claim defense policies, coverage provisions, and other relevant matters). Upon
Landlord’s request, Tenant will provide a certificate reasonably satisfactory to
any mortgagee or assignee of Landlord setting forth the self-insured coverages
and naming (as applicable) such party as an additional insured and/or loss
payee, as its interests may appear.

 

11.2         LANDLORD’S INSURANCE. DURING THE TERM, TO THE EXTENT SUCH COVERAGES
ARE AVAILABLE AT A COMMERCIALLY REASONABLE COST, LANDLORD SHALL MAINTAIN IN
EFFECT INSURANCE ON THE BUILDING WITH RESPONSIBLE INSURERS, ON AN “ALL RISK” OR
“SPECIAL FORM” BASIS, INSURING THE BUILDING AND THE TENANT IMPROVEMENTS IN AN
AMOUNT EQUAL TO AT LEAST 90% OF THE REPLACEMENT COST THEREOF, EXCLUDING LAND,
FOUNDATIONS, FOOTINGS AND UNDERGROUND INSTALLATIONS. LANDLORD MAY, BUT SHALL NOT
BE OBLIGATED TO, CARRY INSURANCE AGAINST ADDITIONAL PERILS AND/OR IN GREATER
AMOUNTS.

 

11.3         MUTUAL WAIVER OF RIGHT OF RECOVERY AND WAIVER OF SUBROGATION.
LANDLORD AND TENANT EACH HEREBY WAIVE ANY RIGHT OF RECOVERY AGAINST EACH OTHER
AND THE PARTNERS, MANAGERS, MEMBERS, SHAREHOLDERS, OFFICERS, DIRECTORS AND
AUTHORIZED REPRESENTATIVES OF EACH OTHER FOR ANY LOSS OR DAMAGE THAT IS COVERED
BY ANY POLICY OF PROPERTY INSURANCE MAINTAINED BY EITHER PARTY (OR REQUIRED BY
THIS LEASE TO BE MAINTAINED) WITH RESPECT TO THE PREMISES OR THE PROPERTY OR ANY
OPERATION THEREIN, REGARDLESS OF CAUSE, INCLUDING NEGLIGENCE (ACTIVE OR PASSIVE)
OF THE PARTY BENEFITING FROM THE WAIVER. IF ANY SUCH POLICY OF INSURANCE
RELATING TO THIS LEASE OR TO THE PREMISES OR THE PROPERTY DOES NOT PERMIT THE
FOREGOING WAIVER, OR IF THE COVERAGE UNDER ANY SUCH POLICY WOULD BE INVALIDATED
AS A RESULT OF SUCH WAIVER, THE PARTY MAINTAINING SUCH POLICY SHALL OBTAIN FROM

 

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THE INSURER UNDER SUCH POLICY A WAIVER OF ALL RIGHT OF RECOVERY BY WAY OF
SUBROGATION AGAINST EITHER PARTY IN CONNECTION WITH ANY CLAIM, LOSS OR DAMAGE
COVERED BY SUCH POLICY.

 

12.           DAMAGE OR DESTRUCTION.

 

12.1         LANDLORD’S DUTY TO REPAIR.

 

(a)           If all or a substantial part of the Premises are rendered
untenantable or inaccessible by damage to all or any part of the Property from
fire or other casualty then, unless either party is entitled to and elects to
terminate this Lease pursuant to Sections 12.2 - Landlord’s Right to Terminate
and 12.3 - Tenant’s Right to Terminate, Landlord shall, at its expense, use
reasonable efforts to repair and restore the Premises and/or the Property, as
the case may be, to substantially their former condition to the extent permitted
by then applicable Laws; provided, however, that in no event shall Landlord have
any obligation for repair or restoration beyond the extent of insurance proceeds
received by Landlord for such repair or restoration, or for any of Tenant’s
personal property, Trade Fixtures or Alterations.

 

(b)           If Landlord is required or elects to repair damage to the Premises
and/or the Property, this Lease shall continue in effect, but Tenant’s Base Rent
and Additional Rent shall be abated with regard to any portion of the Premises
that Tenant is prevented from using by reason of such damage or its repair from
the date of the casualty until substantial completion of Landlord’s repair of
the affected portion of the Premises as required under this Lease. In no event
shall Landlord be liable to Tenant by reason of any injury to or interference
with Tenant’s business or property arising from fire or other casualty or by
reason of any repairs to any part of the Property necessitated by such casualty.

 

12.2         LANDLORD’S RIGHT TO TERMINATE. LANDLORD MAY ELECT TO TERMINATE THIS
LEASE FOLLOWING DAMAGE BY FIRE OR OTHER CASUALTY UNDER THE FOLLOWING
CIRCUMSTANCES:

 

(a)           If, in the reasonable judgment of Landlord, the Premises and the
Property cannot be substantially repaired and restored under applicable Laws
within one hundred eighty (180) days from the date of the casualty;

 

(b)           If, in the reasonable judgment of Landlord, adequate proceeds are
not, for any reason, made available to Landlord from Landlord’s insurance
policies (and/or from Landlord’s funds made available for such purpose, at
Landlord’s sole option) to make the required repairs;

 

(c)           If the Building is damaged or destroyed to the extent that, in the
reasonable judgment of Landlord, the cost to repair and restore the Building
would exceed twenty-five percent (25%) of the full replacement cost of the
Building, whether or not the Premises are at all damaged or destroyed; or

 

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(d)           If the fire or other casualty occurs during the last year of the
Term.

 

If any of the circumstances described in subparagraphs (a), (b), (c) or (d) of
this Section 12.2 occur or arise, Landlord shall give Tenant notice within
thirty (30) days after the date of the casualty, specifying whether Landlord
elects to terminate this Lease as provided above and, if not, Landlord’s
estimate of the time required to complete Landlord’s repair obligations under
this Lease.

 

12.3         TENANT’S RIGHT TO TERMINATE. IF ALL OR A SUBSTANTIAL PART OF THE
PREMISES ARE RENDERED UNTENANTABLE OR INACCESSIBLE BY DAMAGE TO ALL OR ANY PART
OF THE PROPERTY FROM FIRE OR OTHER CASUALTY, AND LANDLORD DOES NOT ELECT TO
TERMINATE AS PROVIDED ABOVE, THEN TENANT MAY ELECT TO TERMINATE THIS LEASE IF
(A) LANDLORD’S ESTIMATE OF THE TIME REQUIRED TO COMPLETE LANDLORD’S REPAIR
OBLIGATIONS UNDER THIS LEASE IS GREATER THAN ONE HUNDRED EIGHTY (180) DAYS, OR
(B) TENANT RECEIVES A CERTIFIED, WRITTEN STATEMENT FROM A CONTRACTOR STATING
THAT REPAIRS CANNOT BE EXECUTED IN ONE HUNDRED EIGHTY (180) DAYS, IN WHICH EVENT
TENANT MAY ELECT TO TERMINATE THIS LEASE BY GIVING LANDLORD NOTICE OF SUCH
ELECTION TO TERMINATE WITHIN THIRTY (30) DAYS AFTER LANDLORD’S NOTICE TO TENANT
PURSUANT TO SECTION 12.2 - LANDLORD’S RIGHT TO TERMINATE OR WITHIN THIRTY (30)
DAYS OF RECEIVING THE CONTRACTOR’S STATEMENT UNDER THIS SECTION 12.3 – TENANT’S
RIGHT TO TERMINATE.

 

12.4         WAIVER OF STATUTORY RIGHTS. TENANT WAIVES ANY STATUTORY RIGHT TO
TERMINATE THIS LEASE OR ABATE RENT BECAUSE OF ANY DAMAGE OR DESTRUCTION TO THE
PREMISES DUE TO FIRE OR OTHER CASUALTY.

 

13.           CONDEMNATION.

 

13.1         DEFINITIONS.

 

(a)           “Award” shall mean all compensation, sums, or anything of value
awarded, paid or received on a total or partial Condemnation.

 

(b)           “Condemnation” shall mean (i) a permanent taking (or a temporary
taking for a period extending beyond the end of the Term) pursuant to the
exercise of the power of condemnation or eminent domain by any public or
quasi-public authority, private corporation or individual having such power
(“Condemnor”), whether by legal proceedings or otherwise, or (ii) a voluntary
sale or transfer by Landlord to any such authority, either under threat of
condemnation or while legal proceedings for condemnation are pending.

 

(c)           “Date of Condemnation” shall mean the earlier of the date that
title to the property taken is vested in the Condemnor or the date the Condemnor
has the right to possession of the property being condemned.

 

13.2         EFFECT ON LEASE.

 

(a)           If the Premises are totally taken by Condemnation, this Lease
shall terminate as of the Date of Condemnation. If a portion but not all of the
Premises is

 

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taken by Condemnation, this Lease shall remain in effect; provided, however,
that if the portion of the Premises remaining after the Condemnation will be
unsuitable for Tenant’s continued use, then, upon notice to Landlord within
thirty (30) days after Landlord notifies Tenant of the Condemnation, Tenant may
terminate this Lease effective as of the Date of Condemnation.

 

(b)           If twenty-five percent (25%) or more of the Project or of the
parcel(s) of land on which the Building is situated or of the floor area in the
Building is taken by Condemnation, or if as a result of any Condemnation the
Building is no longer reasonably suitable for use as an office building, whether
or not any portion of the Premises is taken, Landlord may elect to terminate
this Lease, effective as of the Date of Condemnation, by notice to Tenant within
thirty (30) days after the Date of Condemnation.

 

(c)           If all or a portion of the Premises is temporarily taken by a
Condemnor for a period not extending beyond the end of the Term, this Lease
shall remain in full force and effect.

 

13.3         RESTORATION. IF THIS LEASE IS NOT TERMINATED AS PROVIDED IN SECTION
13.2 - EFFECT ON LEASE, LANDLORD, AT ITS EXPENSE, SHALL DILIGENTLY PROCEED TO
REPAIR AND RESTORE THE PREMISES TO SUBSTANTIALLY ITS FORMER CONDITION (TO THE
EXTENT PERMITTED BY THEN APPLICABLE LAWS) AND/OR REPAIR AND RESTORE THE BUILDING
TO AN ARCHITECTURALLY COMPLETE OFFICE BUILDING; PROVIDED, HOWEVER, THAT
LANDLORD’S OBLIGATIONS TO SO REPAIR AND RESTORE SHALL BE LIMITED TO THE AMOUNT
OF ANY AWARD RECEIVED BY LANDLORD AND NOT REQUIRED TO BE PAID TO ANY MORTGAGEE.
IN NO EVENT SHALL LANDLORD HAVE ANY OBLIGATION TO REPAIR OR REPLACE ANY
IMPROVEMENTS IN THE PREMISES BEYOND THE AMOUNT OF ANY AWARD RECEIVED BY LANDLORD
FOR SUCH REPAIR OR TO REPAIR OR REPLACE ANY OF TENANT’S PERSONAL PROPERTY, TRADE
FIXTURES, OR ALTERATIONS.

 

13.4         ABATEMENT AND REDUCTION OF RENT. IF ANY PORTION OF THE PREMISES IS
TAKEN IN A CONDEMNATION OR IS RENDERED PERMANENTLY UNTENANTABLE BY REPAIRS
NECESSITATED BY THE CONDEMNATION, AND THIS LEASE IS NOT TERMINATED, THE BASE
RENT AND ADDITIONAL RENT PAYABLE UNDER THIS LEASE SHALL BE PROPORTIONALLY
REDUCED AS OF THE DATE OF CONDEMNATION BASED UPON THE PERCENTAGE OF RENTABLE
SQUARE FEET IN THE PREMISES SO TAKEN OR RENDERED PERMANENTLY UNTENANTABLE. IN
ADDITION, IF THIS LEASE REMAINS IN EFFECT FOLLOWING A CONDEMNATION AND LANDLORD
PROCEEDS TO REPAIR AND RESTORE THE PREMISES, THE BASE RENT AND ADDITIONAL RENT
PAYABLE UNDER THIS LEASE SHALL BE ABATED DURING THE PERIOD OF SUCH REPAIR OR
RESTORATION TO THE EXTENT SUCH REPAIRS PREVENT TENANT’S USE OF THE PREMISES.

 

13.5         AWARDS. ANY AWARD MADE SHALL BE PAID TO LANDLORD, AND TENANT HEREBY
ASSIGNS TO LANDLORD, AND WAIVES ALL INTEREST IN OR CLAIM TO, ANY SUCH AWARD,
INCLUDING ANY CLAIM FOR THE VALUE OF THE UNEXPIRED TERM; PROVIDED, HOWEVER, THAT
TENANT SHALL BE ENTITLED TO RECEIVE, OR TO PROSECUTE A SEPARATE CLAIM FOR, AN
AWARD FOR A TEMPORARY TAKING OF THE PREMISES OR A PORTION THEREOF BY A CONDEMNOR
WHERE THIS LEASE IS NOT TERMINATED (TO THE EXTENT SUCH AWARD RELATES TO THE
UNEXPIRED TERM), OR AN AWARD OR PORTION THEREOF SEPARATELY DESIGNATED FOR
RELOCATION EXPENSES OR

 

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THE INTERRUPTION OF OR DAMAGE TO TENANT’S BUSINESS OR AS COMPENSATION FOR
TENANT’S PERSONAL PROPERTY, TRADE FIXTURES OR ALTERATIONS.

 

14.           ASSIGNMENT AND SUBLETTING.

 

14.1         LANDLORD’S CONSENT REQUIRED. TENANT SHALL NOT ASSIGN THIS LEASE OR
ANY INTEREST THEREIN, OR SUBLET OR LICENSE OR PERMIT THE USE OR OCCUPANCY OF THE
PREMISES OR ANY PART THEREOF BY OR FOR THE BENEFIT OF ANYONE OTHER THAN TENANT
OR A TENANT AFFILIATE, OR IN ANY OTHER MANNER TRANSFER ALL OR ANY PART OF
TENANT’S INTEREST UNDER THIS LEASE (EACH AND ALL A “TRANSFER”), WITHOUT THE
PRIOR WRITTEN CONSENT OF LANDLORD, WHICH CONSENT (SUBJECT TO THE OTHER
PROVISIONS OF THIS SECTION 14) SHALL NOT BE UNREASONABLY CONDITIONED, WITHHELD
OR DELAYED. THE TERM “TENANT AFFILIATE” SHALL MEAN AN ENTITY CONTROLLING,
CONTROLLED BY, OR UNDER COMMON CONTROL WITH TENANT, OR A SUCCESSOR TO TENANT BY
REASON OF MERGER OR CONSOLIDATION. IF TENANT IS A BUSINESS ENTITY, ANY DIRECT OR
INDIRECT TRANSFER OF TWENTY FIVE PERCENT (25%) OR MORE OF THE OWNERSHIP INTEREST
OF THE ENTITY (WHETHER IN A SINGLE TRANSACTION OR IN THE AGGREGATE THROUGH MORE
THAN ONE TRANSACTION) SHALL BE DEEMED A TRANSFER. NOTWITHSTANDING ANY PROVISION
IN THIS LEASE TO THE CONTRARY, TENANT SHALL NOT MORTGAGE, PLEDGE, HYPOTHECATE OR
OTHERWISE ENCUMBER THIS LEASE OR ALL OR ANY PART OF TENANT’S INTEREST UNDER THIS
LEASE.

 

14.2         REASONABLE CONSENT.

 

(a)           Prior to any proposed Transfer, Tenant shall submit in writing to
Landlord (i) the name and legal composition of the proposed assignee, subtenant,
user or other transferee (each a “Proposed Transferee”); (ii) the nature of the
business proposed to be carried on in the Premises; (iii) such reasonable
financial and other information concerning the Proposed Transferee as Landlord
may request; and (iv) a copy of the proposed assignment, sublease or other
agreement governing the proposed Transfer. Within fifteen (15) Business Days
after Landlord receives all such information, it shall notify Tenant whether it
approves or disapproves such Transfer or if it elects to proceed under
Section 14.6 - Landlord’s Right to Space.

 

(b)           Tenant acknowledges and agrees that, among other circumstances for
which Landlord could reasonably withhold consent to a proposed Transfer, it
shall be reasonable for Landlord to withhold consent where (i) the Proposed
Transferee does not intend itself to occupy the entire portion of the Premises
that is the subject of such Transfer, (ii) Landlord disapproves of the Proposed
Transferee’s business operating ability or history, reputation or
creditworthiness or the character of the business to be conducted by the
Proposed Transferee at the Premises, (iii) the proposed Transfer would violate
any “exclusive” rights of any tenants in the Project or any use restrictions
governing the Project, (iv) Landlord or Landlord’s agent has shown space in the
Building to the Proposed Transferee, or responded to any inquiries from the
Proposed Transferee or the Proposed Transferee’s agent concerning availability
of space in the Building, at any time within the preceding nine months and space
remains available within the Building which is substantially as large as the
portion of the Premises contemplated to be occupied by the Proposed

 

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Transferee, or (v) Landlord otherwise determines that the proposed Transfer
would have the effect of decreasing the value of the Building or increasing the
expenses associated with operating, maintaining and repairing the Property. In
no event may Tenant publicly offer or advertise all or any portion of the
Premises for assignment or sublease at a rental less than that then sought by
Landlord for a direct lease (non-sublease) of comparable space in the Project.

 

14.3         EXCESS CONSIDERATION. IF LANDLORD CONSENTS TO A TRANSFER, TENANT
SHALL PAY TO LANDLORD AS ADDITIONAL RENT, WITHIN TEN (10) DAYS AFTER RECEIPT BY
TENANT, ANY CONSIDERATION PAID BY ANY TRANSFEREE (THE “TRANSFEREE”) FOR THE
TRANSFER, INCLUDING, IN THE CASE OF A SUBLEASE, FIFTY PERCENT (50%) OF THE
EXCESS OF THE RENT AND OTHER CONSIDERATION PAYABLE BY THE SUBTENANT (NET OF
TENANT’S REASONABLE, DOCUMENTED OUT-OF-POCKET LEASING COSTS AND COMMISSIONS
INCURRED IN CONNECTION WITH THE SUBLEASE) OVER THE AMOUNT OF BASE RENT AND
ADDITIONAL RENT PAYABLE HEREUNDER APPLICABLE TO THE SUBLEASED SPACE.

 

14.4         NO RELEASE OF TENANT. NO TRANSFER (NOR ANY CONSENT BY LANDLORD TO
ANY TRANSFER), INCLUDING, WITHOUT LIMITATION, A TRANSFER TO A TENANT AFFILIATE,
SHALL RELIEVE TENANT OF ANY OBLIGATION TO BE PERFORMED BY TENANT UNDER THIS
LEASE, WHETHER OCCURRING BEFORE OR AFTER SUCH TRANSFER. EACH TRANSFEREE SHALL BE
JOINTLY AND SEVERALLY LIABLE WITH TENANT (AND TENANT SHALL BE JOINTLY AND
SEVERALLY LIABLE WITH EACH TRANSFEREE) FOR THE PAYMENT OF RENT (OR, IN THE CASE
OF A SUBLEASE, RENT IN THE AMOUNT SET FORTH IN THE SUBLEASE) AND FOR THE
PERFORMANCE OF ALL OTHER TERMS AND PROVISIONS OF THIS LEASE. THE CONSENT BY
LANDLORD TO ANY TRANSFER SHALL NOT RELIEVE TENANT OR ANY SUCH TRANSFEREE FROM
THE OBLIGATION TO OBTAIN LANDLORD’S EXPRESS PRIOR WRITTEN CONSENT TO ANY
SUBSEQUENT TRANSFER BY TENANT OR ANY TRANSFEREE. THE ACCEPTANCE OF RENT BY
LANDLORD FROM ANY OTHER PERSON (WHETHER OR NOT SUCH PERSON IS AN OCCUPANT OF THE
PREMISES) SHALL NOT BE DEEMED TO BE A WAIVER BY LANDLORD OF ANY PROVISION OF
THIS LEASE OR A CONSENT TO ANY TRANSFER.

 

14.5         EFFECTIVENESS OF TRANSFER. PRIOR TO THE DATE ON WHICH ANY PERMITTED
TRANSFER (WHETHER OR NOT REQUIRING LANDLORD’S CONSENT) BECOMES EFFECTIVE, TENANT
SHALL DELIVER TO LANDLORD A COUNTERPART OF THE FULLY EXECUTED TRANSFER DOCUMENT
AND LANDLORD’S STANDARD FORM OF CONSENT TO ASSIGNMENT OR CONSENT TO SUBLEASE
EXECUTED BY TENANT AND THE TRANSFEREE IN WHICH EACH OF TENANT AND THE TRANSFEREE
CONFIRMS ITS OBLIGATIONS PURSUANT TO THIS LEASE. FAILURE OR REFUSAL OF A
TRANSFEREE TO EXECUTE ANY SUCH INSTRUMENT SHALL NOT RELEASE OR DISCHARGE THE
TRANSFEREE FROM LIABILITY AS PROVIDED HEREIN. THE VOLUNTARY, INVOLUNTARY OR
OTHER SURRENDER OF THIS LEASE BY TENANT, OR A MUTUAL CANCELLATION BY LANDLORD
AND TENANT, SHALL NOT WORK A MERGER, AND ANY SUCH SURRENDER OR CANCELLATION
SHALL, AT THE OPTION OF LANDLORD, EITHER TERMINATE ALL OR ANY EXISTING SUBLEASES
OR OPERATE AS AN ASSIGNMENT TO LANDLORD OF ANY OR ALL OF SUCH SUBLEASES.

 

14.6         INTENTIONALLY DELETED.

 

14.7         ASSIGNMENT OF SUBLEASE RENTS. SUBJECT TO SECTION 14.3, TENANT
HEREBY ABSOLUTELY AND IRREVOCABLY ASSIGNS TO LANDLORD ANY AND ALL RIGHTS TO
RECEIVE RENT AND OTHER CONSIDERATION FROM ANY SUBLEASE AND AGREES THAT LANDLORD,
AS ASSIGNEE OR AS ATTORNEY-IN-FACT FOR TENANT FOR PURPOSES HEREOF, OR A RECEIVER
FOR TENANT APPOINTED ON LANDLORD’S APPLICATION MAY (BUT SHALL NOT BE OBLIGATED
TO) COLLECT SUCH RENTS AND OTHER CONSIDERATION AND APPLY THE SAME TOWARD

 

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TENANT’S OBLIGATIONS TO LANDLORD UNDER THIS LEASE; PROVIDED, HOWEVER, THAT
LANDLORD GRANTS TO TENANT AT ALL TIMES PRIOR TO OCCURRENCE OF ANY BREACH OR
DEFAULT BY TENANT A REVOCABLE LICENSE TO COLLECT SUCH RENTS (WHICH LICENSE SHALL
AUTOMATICALLY AND WITHOUT NOTICE BE AND BE DEEMED TO HAVE BEEN REVOKED AND
TERMINATED IMMEDIATELY UPON ANY EVENT OF DEFAULT).

 

14.8         COSTS. TENANT WILL PAY TO LANDLORD, AS ADDITIONAL RENT, ALL COSTS
AND EXPENSES LANDLORD ACTUALLY INCURS IN CONNECTION WITH ANY PROPOSED TRANSFER,
INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS’ FEES AND COSTS, REGARDLESS
WHETHER LANDLORD CONSENTS TO THE TRANSFER.

 

15.           DEFAULT AND REMEDIES.

 

15.1         EVENTS OF DEFAULT BY TENANT. THE OCCURRENCE OF ANY OF THE FOLLOWING
SHALL CONSTITUTE AN “EVENT OF DEFAULT” BY TENANT:

 

(a)           Tenant fails to make any payment of Rent when due, or any amount
required to replenish the Security Deposit, if payment in full is not received
by Landlord within five (5) days after written notice to Tenant that it is due;
provided, however, that such failure will not constitute an Event of Default
hereunder on the first late payment in any calendar year during the Term so long
as that payment is made within five (5) days of Tenant’s receipt of a follow-up
notice of nonpayment from Landlord.

 

(b)           Intentionally Deleted.

 

(c)           Tenant fails timely to deliver any subordination document,
estoppel certificate or financial statement requested by Landlord within the
applicable time period specified in Sections 20 - Encumbrances - and 21 -
Estoppel Certificates and Financial Statements - below.

 

(d)           Tenant violates the restrictions on Transfer set forth in
Section 14 - Assignment and Subletting.

 

(e)           Tenant ceases doing business as a going concern; makes an
assignment for the benefit of creditors; is adjudicated an insolvent, files a
petition (or files an answer admitting the material allegations of a petition)
seeking relief under any state or federal bankruptcy or other statute, law or
regulation affecting creditors’ rights; all or substantially all of Tenant’s
assets are subject to judicial seizure or attachment and are not released within
30 days, or Tenant consents to or acquiesces in the appointment of a trustee,
receiver or liquidator for Tenant or for all or any substantial part of Tenant’s
assets; or there is a material adverse change in Tenant’s financial condition.

 

(f)            Tenant fails, within thirty (30) days after the commencement of
any proceedings against Tenant seeking relief under any state or federal
bankruptcy or

 

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other statute, law or regulation affecting creditors’ rights, to have such
proceedings dismissed, or Tenant fails, within thirty (30) days after an
appointment, without Tenant’s consent or acquiescence, of any trustee, receiver
or liquidator for Tenant or for all or any substantial part of Tenant’s assets,
to have such appointment vacated.

 

(g)           Tenant fails to perform or comply with any provision of this Lease
other than those described in (a) through (f) above, and does not fully cure
such failure within fifteen (15) days after notice to Tenant.

 

15.2         LANDLORD’S REMEDIES. UPON THE OCCURRENCE OF AN EVENT OF DEFAULT,
LANDLORD SHALL HAVE THE FOLLOWING RIGHTS AND REMEDIES, WHICH RIGHTS AND REMEDIES
SHALL BE CUMULATIVE AND NOT EXCLUSIVE, AND WHICH SHALL BE IN ADDITION TO ALL
OTHER RIGHTS AND REMEDIES NOW OR HEREAFTER ALLOWED BY LAW OR IN EQUITY, AND
WHICH MAY BE EXERCISED WITHOUT FURTHER NOTICE OR DEMAND:

 

(a)           Landlord may cure the Event of Default at Tenant’s expense. If
Landlord pays any sum or incurs any expense in curing the Event of Default,
Tenant shall reimburse Landlord upon demand for the amount of such payment or
expense with interest at the Interest Rate from the date the sum is paid or the
expense is incurred until Landlord is reimbursed by Tenant.

 

(b)           Landlord may terminate Tenant’s right to possess the Premises by
any lawful means.

 

(c)           Landlord may, by giving written notice to Tenant, terminate this
Lease.

 

(d)           Upon a termination of Tenant’s right to possess the Premises or a
termination of this Lease, (i) Tenant shall immediately surrender possession of
the Premises to Landlord and shall remove all of its property therefrom, (ii)
Landlord may re-enter the Premises in the manner provided by law, (iii) Landlord
may relet all or any portion of the Premises to one or more third parties on
such terms as Landlord determines in its sole and unfettered discretion, and
(iv) Landlord may, at its election, remove all or any portion of Tenant’s
property from the Premises and place the same in storage at the sole expense and
risk of Tenant.

 

(e)           If Landlord exercises any of the remedies stated above, Landlord
shall be entitled to recover from Tenant, and Tenant shall pay to Landlord, as
current damages for the applicable Event of Default, all damages incurred by
Landlord by reason of the Event of Default, which shall include, without
limitation, (i) an amount equal to the Rent payable under this Lease by Tenant
for the remainder of the Term (assuming this Lease had not been terminated),
less (ii) the net proceeds of any reletting of the Premises by Landlord after
deducting all of Landlord’s expenses in connection with such reletting, which
shall include, without limitation, repossession costs, repairs, redecorating,
refurbishments and improvements to the Premises, brokerage commissions,
attorneys’ fees, and legal expenses (such

 

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expenses in connection with such reletting only to be deducted from net proceeds
of such reletting if this Lease is terminated as a result of an Event of Default
prior to the final eighteen (18) months of the Term). Tenant shall pay such
current damages to Landlord, in the amount set forth in the preceding sentence
(hereinafter called the “Deficiency”), in monthly installments on the days on
which Base Rent would have been payable under this Lease if this Lease were
still in effect.

 

(f)            If Landlord exercises any of the remedies stated above, and
regardless of whether Landlord has collected any Deficiency, Landlord shall be
entitled to recover from Tenant, and Tenant shall pay to Landlord, on demand, as
final damages for the applicable Event of Default, the sum of (i) the then
present worth of (A) the aggregate of the Rent payable under this Lease by
Tenant for the remainder of the Term (assuming this Lease had not been
terminated), less (B) the amount of such loss Tenant proves could have been
reasonably avoided, plus (ii) repossession costs, Landlord’s expenses in
connection with any attempts it may have made to relet the Premises (which shall
include, without limitation, repairs, redecorating, refurbishments and
improvements to the Premises and  brokerage commissions if this Lease is
terminated as a result of an Event of Default prior to the final eighteen (18)
months of the Term), attorneys’ fees, legal expenses, and all other damages
incurred by Landlord as a result of such Event of Default. For purposes of
determining such present worth, Landlord will use a discount equal to the
Federal Reserve rate of the Federal Reserve Bank in San Francisco in effect at
the time of the award plus one percent (1%).

 

(g)           Landlord may exercise its statutory lien rights and remove
Tenant’s property from the Premises, which may be stored by Landlord in a public
warehouse or elsewhere at the sole cost and for the account of Tenant and sold
pursuant to law. If Landlord does not elect to store any or all of Tenant’s
property left in the Premises, Landlord may consider such property to be
abandoned by Tenant, and Landlord may thereupon dispose of such property in any
manner deemed appropriate by Landlord. Any proceeds realized by Landlord on the
disposal of any such property shall be applied first to offset all expenses of
storage and sale, then credited against Tenant’s outstanding obligations to
Landlord under this Lease, and any balance remaining after satisfaction of all
obligations of Tenant under this Lease shall be delivered to Tenant.

 

(h)           No action of Landlord shall be construed as an election to
terminate this Lease or to accept a surrender of the Premises unless written
notice of such intention is given by Landlord to Tenant. Tenant shall pay all
attorneys’ fees, costs and expenses incurred by Landlord in enforcing Tenant’s
obligations under this Lease.

 

(i)            Acceptance of payment of Rent or partial payment of Rent or other
partial performance, with or without Landlord’s knowledge of an Event of Default
by Tenant, or failure of Landlord to take action on account of an Event of
Default

 

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by Tenant or to enforce its rights under this Lease, shall not be deemed a
waiver by Landlord of any Event of Default by Tenant.

 

15.3         LANDLORD’S DEFAULT.

 

(a)           Landlord shall not be in default of this Lease unless and until
Tenant has given Landlord written notice of a breach of this Lease by Landlord
and Landlord shall have failed to cure such breach within thirty (30) days after
Landlord’s receipt of Tenant’s notice; provided, however, that if such breach
cannot reasonably be cured within such 30-day period, Landlord will have such
additional time as may be reasonably necessary to cure the breach.

 

(b)           Upon a default by Landlord under this Lease, Tenant may pursue its
rights and remedies under this Lease and Arizona law, excepting only the right
of offset, deduction or termination of this Lease, unless such remedy is
expressly conferred by this Lease.

 

16.           LATE CHARGE AND INTEREST.

 

16.1         LATE CHARGE. IF ANY PAYMENT OF RENT IS NOT RECEIVED BY LANDLORD TEN
(10) DAYS AFTER DUE, TENANT SHALL PAY TO LANDLORD, AS A LATE CHARGE, A SUM EQUAL
TO FOUR PERCENT (4%) OF THE PAYMENT(S) OF RENT OVERDUE. A LATE CHARGE SHALL NOT
BE IMPOSED MORE THAN ONCE ON ANY PARTICULAR INSTALLMENT NOT PAID WHEN DUE, BUT
IMPOSITION OF A LATE CHARGE ON ANY PAYMENT NOT MADE WHEN DUE DOES NOT ELIMINATE
OR SUPERSEDE LATE CHARGES IMPOSED ON OTHER (PRIOR) PAYMENTS NOT MADE WHEN DUE OR
PRECLUDE IMPOSITION OF A LATE CHARGE ON OTHER INSTALLMENTS OR PAYMENTS NOT MADE
WHEN DUE. NOTWITHSTANDING THE FOREGOING, TENANT WILL NOT BE ASSESSED THE LATE
CHARGE DESCRIBED ABOVE ON THE FIRST LATE RENT PAYMENT IN ANY CALENDAR YEAR
DURING THE TERM SO LONG AS THAT PAYMENT IS MADE WITHIN FIVE (5) DAYS OF TENANT’S
RECEIPT OF NOTICE OF NONPAYMENT FROM LANDLORD.

 

16.2         INTEREST. IN ADDITION TO THE LATE CHARGES REFERRED TO ABOVE, WHICH
ARE INTENDED TO DEFRAY LANDLORD’S COSTS RESULTING FROM LATE PAYMENTS, ANY
PAYMENT FROM TENANT TO LANDLORD NOT PAID TEN (10) DAYS AFTER DUE SHALL BEAR
INTEREST FROM THE DATE DUE UNTIL PAID TO LANDLORD BY TENANT AT THE RATE OF
EIGHTEEN PERCENT (18%) PER ANNUM OR THE LEGAL RATE OF INTEREST IN ARIZONA,
WHICHEVER IS LESS (THE “INTEREST RATE”). ACCEPTANCE OF ANY LATE CHARGE AND/OR
INTEREST SHALL NOT CONSTITUTE A WAIVER OF TENANT’S DEFAULT WITH RESPECT TO THE
OVERDUE SUM OR PREVENT LANDLORD FROM EXERCISING ANY OF ITS OTHER RIGHTS AND
REMEDIES UNDER THIS LEASE.

 

17.           WAIVER. NO PROVISIONS OF THIS LEASE SHALL BE DEEMED WAIVED UNLESS
SUCH WAIVER IS IN WRITING. THE WAIVER OF ANY BREACH OF ANY PROVISION OF THIS
LEASE SHALL NOT BE DEEMED A WAIVER OF SUCH PROVISION OR OF ANY SUBSEQUENT BREACH
OF THE SAME OR ANY OTHER PROVISION OF THIS LEASE. NO DELAY OR OMISSION IN THE
EXERCISE OF ANY RIGHT OR REMEDY UPON ANY DEFAULT SHALL IMPAIR SUCH RIGHT OR
REMEDY OR BE CONSTRUED AS A WAIVER. LANDLORD’S ACCEPTANCE OF ANY PAYMENTS OF
RENT DUE UNDER THIS LEASE SHALL NOT BE DEEMED A WAIVER BY LANDLORD OF ANY
DEFAULT BY TENANT UNDER THIS LEASE (INCLUDING TENANT’S RECURRENT FAILURE TO
TIMELY PAY RENT), AND NO ENDORSEMENT OR STATEMENT ON ANY CHECK OR PAYMENT OR IN
ANY LETTER OR DOCUMENT ACCOMPANYING ANY CHECK OR PAYMENT SHALL BE

 

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DEEMED AN ACCORD AND SATISFACTION. LANDLORD’S CONSENT TO OR APPROVAL OF ANY ACT
BY TENANT REQUIRING LANDLORD’S CONSENT OR APPROVAL SHALL NOT BE DEEMED TO WAIVE
OR RENDER UNNECESSARY LANDLORD’S CONSENT TO OR APPROVAL OF ANY SUBSEQUENT ACT BY
TENANT.

 

18.           ENTRY, INSPECTION AND CLOSURE. UPON REASONABLE ORAL OR WRITTEN
NOTICE TO TENANT (AND WITHOUT NOTICE IN EMERGENCIES), LANDLORD AND ITS
AUTHORIZED REPRESENTATIVES MAY ENTER THE PREMISES AT ALL REASONABLE TIMES TO:
(A) DETERMINE WHETHER THE PREMISES ARE IN GOOD CONDITION, (B) DETERMINE WHETHER
TENANT IS COMPLYING WITH ITS OBLIGATIONS UNDER THIS LEASE, (C) PERFORM ANY
MAINTENANCE OR REPAIR OF THE PREMISES OR THE BUILDING THAT LANDLORD HAS THE
RIGHT OR OBLIGATION TO PERFORM, (D) INSTALL OR REPAIR IMPROVEMENTS FOR OTHER
TENANTS WHERE ACCESS TO THE PREMISES IS REQUIRED FOR SUCH INSTALLATION OR
REPAIR, (E) SERVE, POST OR KEEP POSTED ANY NOTICES REQUIRED OR ALLOWED UNDER THE
PROVISIONS OF THIS LEASE, (F) SHOW THE PREMISES TO PROSPECTIVE BROKERS, AGENTS,
BUYERS, TRANSFEREES, MORTGAGEES, OR, IN THE CASE OF PROSPECTIVE TENANTS, NO
EARLIER THAN ONE (1) YEAR PRIOR TO THE EXPIRATION DATE, OR (G) DO ANY OTHER ACT
OR THING NECESSARY FOR THE SAFETY OR PRESERVATION OF THE PREMISES OR THE
BUILDING. WHEN REASONABLY NECESSARY LANDLORD MAY TEMPORARILY CLOSE ENTRANCES,
DOORS, CORRIDORS, ELEVATORS OR OTHER FACILITIES IN THE BUILDING WITHOUT
LIABILITY TO TENANT BY REASON OF SUCH CLOSURE. LANDLORD SHALL CONDUCT ITS
ACTIVITIES UNDER THIS SECTION IN A MANNER THAT WILL MINIMIZE INCONVENIENCE TO
TENANT WITHOUT INCURRING ADDITIONAL EXPENSE TO LANDLORD. IN NO EVENT SHALL
TENANT BE ENTITLED TO AN ABATEMENT OF RENT ON ACCOUNT OF ANY ENTRY BY LANDLORD,
AND LANDLORD SHALL NOT BE LIABLE IN ANY MANNER FOR ANY INCONVENIENCE, LOSS OF
BUSINESS OR OTHER DAMAGE TO TENANT OR OTHER PERSONS ARISING OUT OF LANDLORD’S
ENTRY ON THE PREMISES IN ACCORDANCE WITH THIS SECTION. SUBJECT TO THE REMAINING
PROVISIONS OF THIS PARAGRAPH, NO ACTION BY LANDLORD PURSUANT TO THIS PARAGRAPH
SHALL CONSTITUTE AN EVICTION OF TENANT, CONSTRUCTIVE OR OTHERWISE, ENTITLE
TENANT TO AN ABATEMENT OF RENT OR TO TERMINATE THIS LEASE OR OTHERWISE RELEASE
TENANT FROM ANY OF TENANT’S OBLIGATIONS UNDER THIS LEASE. NOTWITHSTANDING THE
FOREGOING, IF ANY SUCH ENTRY OR CLOSURE UNDER THIS SECTION CAUSES THE PREMISES
TO BE REASONABLY UNTENANTABLE AND LASTS FOR MORE THAN FIVE (5) CONSECUTIVE
BUSINESS DAYS AFTER LANDLORD IS NOTIFIED OF SUCH UNTENANTABILITY OR OTHERWISE
PREVENTS TENANT FROM BEING ABLE TO ACCESS THE PREMISES FOR MORE THAN FIVE (5)
CONSECUTIVE BUSINESS DAYS AFTER NOTICE TO LANDLORD, TENANT WILL BE ENTITLED TO
AN ABATEMENT OF BASIC RENT. IF TENANT PROPERLY DELIVERS SUCH AN ABATEMENT NOTICE
TO LANDLORD, AND THE UNTENANTABILITY CAUSED BY THE ENTRY OR CLOSURE IS NOT
REMEDIED WITHIN SUCH FIVE (5) BUSINESS DAY PERIOD, THEN, SUBJECT TO THE
FOLLOWING SENTENCE, TENANT SHALL THEREAFTER BE ENTITLED TO AN ABATEMENT OF BASIC
RENT AND ADDITIONAL RENT (IN PROPORTION TO THE PORTION OF THE PREMISES RENDERED
UNTENANTABLE BY THE ENTRY OR CLOSURE) UNTIL THE PREMISES ARE AGAIN RENDERED
TENANTABLE. NOTWITHSTANDING THE FOREGOING, IF BASIC RENT AND ADDITIONAL RENT ARE
ABATED PURSUANT TO THE PRECEDING SENTENCE FOR A PERIOD OF NINETY (90)
CONSECUTIVE DAYS, THEN, UNLESS OTHERWISE MUTUALLY AGREED TO IN WRITING BETWEEN
LANDLORD AND TENANT, TENANT SHALL ELECT, IN WRITING DELIVERED TO LANDLORD WITHIN
TEN (10) BUSINESS DAYS FOLLOWING THE EXPIRATION OF SUCH 90-DAY PERIOD, TO EITHER
TERMINATE THIS LEASE AS OF THE DATE OF SUCH NOTICE OR COMMENCE PAYING FULL BASIC
RENT AND ADDITIONAL RENT FROM AND AFTER THE DATE OF SUCH NOTICE AS OTHERWISE
PROVIDED UNDER THIS LEASE. IN THE EVENT TENANT FAILS TO PROVIDE SUCH WRITTEN
NOTICE WITHIN THE AFOREMENTIONED 10-BUSINESS DAY PERIOD, THEN IN THAT EVENT
TENANT WILL BE DEEMED TO HAVE ELECTED NOT TO TERMINATE THIS LEASE AND, UNLESS
OTHERWISE MUTUALLY AGREED TO IN WRITING BETWEEN LANDLORD AND TENANT, WILL
IMMEDIATELY RETURN TO PAYING FULL BASIC RENT AND ADDITIONAL RENT AS OTHERWISE
PROVIDED UNDER THIS LEASE.

 

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19.           SURRENDER AND HOLDING OVER.

 

19.1         SURRENDER. UPON THE EXPIRATION OR TERMINATION OF THIS LEASE, TENANT
SHALL SURRENDER THE PREMISES AND ALL TENANT IMPROVEMENTS AND ALTERATIONS TO
LANDLORD BROOM-CLEAN AND IN THEIR ORIGINAL CONDITION, EXCEPT FOR REASONABLE WEAR
AND TEAR, DAMAGE FROM CASUALTY OR CONDEMNATION AND ANY CHANGES RESULTING FROM
APPROVED ALTERATIONS; PROVIDED, HOWEVER, THAT PRIOR TO THE EXPIRATION OR
TERMINATION OF THIS LEASE, TENANT SHALL REMOVE ALL TELEPHONE AND OTHER CABLING
INSTALLED IN THE BUILDING BY TENANT AND REMOVE FROM THE PREMISES ALL TENANT’S
PERSONAL PROPERTY AND ANY TRADE FIXTURES AND ALL ALTERATIONS THAT LANDLORD HAS
ELECTED TO REQUIRE TENANT TO REMOVE AS PROVIDED IN SECTION 6.1 - TENANT
IMPROVEMENTS AND ALTERATIONS, AND REPAIR ANY DAMAGE CAUSED BY SUCH REMOVAL. IF
SUCH REMOVAL IS NOT COMPLETED BEFORE THE EXPIRATION OR TERMINATION OF THE TERM,
LANDLORD SHALL HAVE THE RIGHT (BUT NO OBLIGATION) TO REMOVE THE SAME, AND TENANT
SHALL PAY LANDLORD ON DEMAND FOR ALL COSTS OF REMOVAL AND STORAGE THEREOF AND
FOR THE RENTAL VALUE OF THE PREMISES FOR THE PERIOD FROM THE END OF THE TERM
THROUGH THE END OF THE TIME REASONABLY REQUIRED FOR SUCH REMOVAL. LANDLORD SHALL
ALSO HAVE THE RIGHT TO RETAIN OR DISPOSE OF ALL OR ANY PORTION OF SUCH PROPERTY
IF TENANT DOES NOT PAY ALL SUCH COSTS AND RETRIEVE THE PROPERTY WITHIN TEN (10)
DAYS AFTER NOTICE FROM LANDLORD (IN WHICH EVENT TITLE TO ALL SUCH PROPERTY
DESCRIBED IN LANDLORD’S NOTICE SHALL BE TRANSFERRED TO AND VEST IN LANDLORD).
TENANT WAIVES ALL CLAIMS AGAINST LANDLORD FOR ANY DAMAGE OR LOSS TO TENANT
RESULTING FROM LANDLORD’S REMOVAL, STORAGE, RETENTION, OR DISPOSITION OF ANY
SUCH PROPERTY. UPON EXPIRATION OR TERMINATION OF THIS LEASE OR OF TENANT’S
POSSESSION, WHICHEVER IS EARLIEST, TENANT SHALL SURRENDER ALL KEYS TO THE
PREMISES OR ANY OTHER PART OF THE BUILDING AND SHALL DELIVER TO LANDLORD ALL
KEYS FOR OR MAKE KNOWN TO LANDLORD THE COMBINATION OF LOCKS ON ALL SAFES,
CABINETS AND VAULTS THAT MAY BE LOCATED IN THE PREMISES. TENANT’S OBLIGATIONS
UNDER THIS SECTION SHALL SURVIVE THE EXPIRATION OR TERMINATION OF THIS LEASE.

 

19.2         HOLDING OVER. IF TENANT (DIRECTLY OR THROUGH ANY TRANSFEREE OR
OTHER SUCCESSOR-IN-INTEREST OF TENANT) REMAINS IN POSSESSION OF THE PREMISES
AFTER THE EXPIRATION OR TERMINATION OF THIS LEASE, TENANT’S CONTINUED POSSESSION
SHALL BE AT THE SUFFERANCE OF LANDLORD AND TENANT SHALL BE DEEMED TO BE
OCCUPYING THE PREMISES WITHOUT CLAIM OF RIGHT. IN SUCH EVENT, TENANT SHALL
CONTINUE TO COMPLY WITH OR PERFORM ALL THE TERMS AND OBLIGATIONS OF TENANT UNDER
THIS LEASE, EXCEPT THAT THE BASE RENT DURING TENANT’S HOLDING OVER SHALL BE AT
ONE HUNDRED FIFTY PERCENT (150%) OF THE THEN-CURRENT BASE RENT (ON A DAILY
BASIS) PAYABLE IMMEDIATELY PRIOR TO THE EXPIRATION OR TERMINATION OF THIS LEASE.
IN THE EVENT OF ANY HOLDOVER WITHOUT LANDLORD’S PRIOR WRITTEN CONSENT, TENANT
SHALL INDEMNIFY, DEFEND AND HOLD LANDLORD HARMLESS FROM AND AGAINST ALL CLAIMS
ARISING OR RESULTING DIRECTLY OR INDIRECTLY FROM TENANT’S FAILURE TO TIMELY
SURRENDER THE PREMISES, INCLUDING, WITHOUT LIMITATION, (I) ANY RENT PAYABLE BY
OR ANY LOSS, COST, OR DAMAGES CLAIMED BY ANY TENANT OR PROSPECTIVE TENANT OF THE
PREMISES, AND (II) LANDLORD’S DAMAGES AS A RESULT OF SUCH TENANT OR PROSPECTIVE
TENANT RESCINDING ITS LEASE OR REFUSING TO ENTER INTO THE PROSPECTIVE LEASE OF
THE PREMISES BY REASON OF TENANT’S FAILURE TO TIMELY SURRENDER THE PREMISES.

 

20.           ENCUMBRANCES.

 

20.1         SUBORDINATION. THIS LEASE IS EXPRESSLY MADE SUBJECT AND SUBORDINATE
TO ANY MORTGAGE, DEED OF TRUST, GROUND LEASE, DEVELOPMENT AGREEMENT, UNDERLYING
LEASE OR OTHER ENCUMBRANCE AFFECTING ANY PART OF THE PROPERTY OR ANY INTEREST OF
LANDLORD THEREIN WHICH IS NOW

 

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EXISTING OR HEREAFTER EXECUTED OR RECORDED (“ENCUMBRANCE”); PROVIDED, HOWEVER,
THAT THIS LEASE SHALL SURVIVE THE TERMINATION OF THE ENCUMBRANCE BY LAPSE OF
TIME, FORECLOSURE OR OTHERWISE SO LONG AS TENANT IS NOT IN DEFAULT UNDER THIS
LEASE. TENANT SHALL EXECUTE AND DELIVER TO LANDLORD, WITHIN TEN (10) BUSINESS
DAYS AFTER WRITTEN REQUEST THEREFOR BY LANDLORD AT ANY TIME DURING THIS LEASE,
ANY ADDITIONAL DOCUMENTS EVIDENCING THE FOREGOING SELF-EFFECTUATING
SUBORDINATION OF THIS LEASE AND NONDISTURBANCE PROTECTION, WHICH DOCUMENTS MAY
CONTAIN SUCH OTHER TERMS AS MAY BE REQUESTED BY THE MORTGAGEE. TENANT WILL ALSO
EXECUTE AND DELIVER TO LANDLORD, PROMPTLY FOLLOWING TENANT’S EXECUTION OF THIS
LEASE AND DELIVERY THEREOF TO LANDLORD, A SUBORDINATION, NON-DISTURBANCE AND
ATTORNMENT AGREEMENT IN THE FORM OF EXHIBIT E ATTACHED HERETO (“SNDA
AGREEMENT”). LANDLORD WILL USE ITS COMMERCIALLY REASONABLE EFFORTS TO CAUSE THE
MORTGAGEE TO EXECUTE THE SNDA AGREEMENT. UPON RECEIPT FROM THE MORTGAGEE OF THE
EXECUTED SNDA AGREEMENT, LANDLORD SHALL PROMPTLY PROVIDE TENANT WITH A FULLY
EXECUTED COPY OF THE SNDA AGREEMENT. IF THE INTEREST OF LANDLORD IN THE PROPERTY
IS TRANSFERRED PURSUANT TO OR IN LIEU OF PROCEEDINGS FOR ENFORCEMENT OF ANY
ENCUMBRANCE, TENANT SHALL IMMEDIATELY AND AUTOMATICALLY ATTORN TO THE NEW OWNER,
AND THIS LEASE SHALL CONTINUE IN FULL FORCE AND EFFECT AS A DIRECT LEASE BETWEEN
THE TRANSFEREE AND TENANT ON THE TERMS AND CONDITIONS SET FORTH IN THIS LEASE.
TENANT WAIVES THE PROTECTION OF ANY STATUTE OR RULE OF LAW THAT GIVES OR
PURPORTS TO GIVE TENANT ANY RIGHT TO TERMINATE THIS LEASE OR SURRENDER
POSSESSION OF THE PREMISES UPON THE TRANSFER OF LANDLORD’S INTEREST.

 

20.2         MORTGAGEE PROTECTION. TENANT AGREES TO GIVE ANY HOLDER OF ANY
ENCUMBRANCE COVERING ANY PART OF THE PROPERTY (“MORTGAGEE”), BY REGISTERED MAIL,
A COPY OF ANY NOTICE OF DEFAULT SERVED UPON LANDLORD, PROVIDED THAT PRIOR TO
SUCH NOTICE TENANT HAS BEEN NOTIFIED IN WRITING (BY WAY OF NOTICE OF ASSIGNMENT
OF RENTS AND LEASES OR OTHERWISE) OF THE ADDRESS OF SUCH MORTGAGEE. IF LANDLORD
SHALL HAVE FAILED TO CURE SUCH DEFAULT WITHIN THIRTY (30) DAYS FROM THE
EFFECTIVE DATE OF SUCH NOTICE OF DEFAULT, THEN THE MORTGAGEE SHALL HAVE AN
ADDITIONAL THIRTY (30) DAYS WITHIN WHICH TO CURE SUCH DEFAULT OR IF SUCH DEFAULT
CANNOT BE CURED WITHIN THAT TIME, THEN SUCH ADDITIONAL TIME AS MAY BE NECESSARY
TO CURE SUCH DEFAULT (INCLUDING THE TIME NECESSARY TO FORECLOSE OR OTHERWISE
TERMINATE ITS ENCUMBRANCE, IF NECESSARY TO EFFECT SUCH CURE), AND TENANT SHALL
NOT PURSUE ANY REMEDY AGAINST LANDLORD SO LONG AS SUCH CURE IS BEING DILIGENTLY
PURSUED.

 

21.           ESTOPPEL CERTIFICATES. WITHIN TEN (10) BUSINESS DAYS AFTER WRITTEN
REQUEST THEREFOR, TENANT SHALL EXECUTE AND DELIVER TO LANDLORD, IN A FORM
PROVIDED BY OR SATISFACTORY TO LANDLORD, A CERTIFICATE STATING THAT THIS LEASE
IS IN FULL FORCE AND EFFECT, DESCRIBING ANY AMENDMENTS OR MODIFICATIONS HERETO,
ACKNOWLEDGING THAT THIS LEASE IS SUBORDINATE OR PRIOR, AS THE CASE MAY BE, TO
ANY ENCUMBRANCE AND STATING ANY OTHER INFORMATION LANDLORD MAY REASONABLY
REQUEST, INCLUDING THE TERM, THE MONTHLY BASE RENT, THE DATE TO WHICH RENT HAS
BEEN PAID, THE AMOUNT OF ANY SECURITY DEPOSIT OR PREPAID RENT, WHETHER EITHER
PARTY HERETO IS IN DEFAULT UNDER THE TERMS OF THE LEASE, AND WHETHER LANDLORD
HAS COMPLETED ITS CONSTRUCTION OBLIGATIONS HEREUNDER (IF ANY). TENANT
IRREVOCABLY CONSTITUTES, APPOINTS AND AUTHORIZES LANDLORD AS TENANT’S SPECIAL
ATTORNEY-IN-FACT FOR SUCH PURPOSE TO COMPLETE, EXECUTE AND DELIVER SUCH
CERTIFICATE IF TENANT FAILS TIMELY TO EXECUTE AND DELIVER SUCH CERTIFICATE AS
PROVIDED ABOVE. ANY PERSON OR ENTITY PURCHASING, ACQUIRING AN INTEREST IN OR
EXTENDING FINANCING WITH RESPECT TO THE PROPERTY SHALL BE ENTITLED TO RELY UPON
ANY SUCH CERTIFICATE. IF TENANT FAILS TO DELIVER SUCH CERTIFICATE WITHIN TEN
(10) BUSINESS DAYS AFTER LANDLORD’S SECOND WRITTEN REQUEST THEREFOR, TENANT
SHALL BE LIABLE TO LANDLORD FOR ANY DAMAGES INCURRED BY LANDLORD INCLUDING ANY
PROFITS OR OTHER BENEFITS FROM ANY FINANCING OR ATTEMPTED FINANCING OF THE
PROPERTY OR ANY INTEREST

 

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THEREIN WHICH ARE LOST OR MADE UNAVAILABLE AS A RESULT, DIRECTLY OR INDIRECTLY,
OF TENANT’S FAILURE OR REFUSAL TO TIMELY EXECUTE OR DELIVER SUCH ESTOPPEL
CERTIFICATE.

 

22.           NOTICES. ANY NOTICE, DEMAND, REQUEST, CONSENT OR APPROVAL THAT
EITHER PARTY DESIRES OR IS REQUIRED TO GIVE TO THE OTHER PARTY UNDER THIS LEASE
SHALL NOT BE EFFECTIVE UNLESS IT IS IN WRITING AND SERVED PERSONALLY, DELIVERED
BY MESSENGER OR COURIER SERVICE, OR SENT BY U.S. CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, POSTAGE PREPAID, ADDRESSED TO THE OTHER PARTY AT THE PARTY’S ADDRESS
FOR NOTICES SET FORTH IN THE BASIC LEASE INFORMATION. ANY NOTICE REQUIRED
PURSUANT TO ANY LAWS MAY BE INCORPORATED INTO, GIVEN CONCURRENTLY WITH OR GIVEN
SEPARATELY FROM ANY NOTICE REQUIRED UNDER THIS LEASE. NOTICES SHALL BE DEEMED TO
HAVE BEEN GIVEN AND BE EFFECTIVE ON THE EARLIER OF (A)  RECEIPT (OR REFUSAL OF
DELIVERY OR RECEIPT); OR (B) ONE (1) DAY AFTER ACCEPTANCE BY THE INDEPENDENT
SERVICE FOR DELIVERY, IF SENT BY INDEPENDENT MESSENGER OR COURIER SERVICE, OR 
THREE (3) DAYS AFTER MAILING IF SENT BY MAIL IN ACCORDANCE WITH THIS SECTION.
EITHER PARTY MAY CHANGE ITS ADDRESS FOR NOTICES HEREUNDER, EFFECTIVE FIFTEEN
(15) DAYS AFTER NOTICE TO THE OTHER PARTY COMPLYING WITH THIS SECTION. IF TENANT
SUBLETS THE PREMISES, NOTICES FROM LANDLORD SHALL BE EFFECTIVE ON THE SUBTENANT
WHEN GIVEN TO TENANT PURSUANT TO THIS SECTION.

 

23.           ATTORNEYS’ FEES. IN THE EVENT OF ANY DISPUTE BETWEEN LANDLORD AND
TENANT IN ANY WAY RELATED TO THIS LEASE, AND WHETHER INVOLVING CONTRACT AND/OR
TORT CLAIMS, THE NON-PREVAILING PARTY SHALL PAY TO THE PREVAILING PARTY ALL
REASONABLE ATTORNEYS’ FEES AND COSTS AND EXPENSES OF ANY TYPE, WITHOUT
RESTRICTION BY STATUTE, COURT RULE OR OTHERWISE, INCURRED BY THE PREVAILING
PARTY IN CONNECTION WITH ANY ACTION OR PROCEEDING (INCLUDING ANY APPEAL AND THE
ENFORCEMENT OF ANY JUDGMENT OR AWARD), WHETHER OR NOT THE DISPUTE IS LITIGATED
OR PROSECUTED TO FINAL JUDGMENT (COLLECTIVELY, “FEES”). THE “PREVAILING PARTY”
SHALL BE DETERMINED BASED UPON AN ASSESSMENT OF WHICH PARTY’S MAJOR ARGUMENTS OR
POSITIONS TAKEN IN THE ACTION OR PROCEEDING COULD FAIRLY BE SAID TO HAVE
PREVAILED (WHETHER BY COMPROMISE, SETTLEMENT, ABANDONMENT BY THE OTHER PARTY OF
ITS CLAIM OR DEFENSE, FINAL DECISION, AFTER ANY APPEALS, OR OTHERWISE) OVER THE
OTHER PARTY’S MAJOR ARGUMENTS OR POSITIONS ON MAJOR DISPUTED ISSUES. ANY FEES
INCURRED IN ENFORCING A JUDGMENT SHALL BE RECOVERABLE SEPARATELY FROM ANY OTHER
AMOUNT INCLUDED IN THE JUDGMENT AND SHALL SURVIVE AND NOT BE MERGED IN THE
JUDGMENT. THE FEES SHALL BE DEEMED AN “ACTUAL PECUNIARY LOSS” WITHIN THE MEANING
OF BANKRUPTCY CODE SECTION 365(B)(1)(B) AND, NOTWITHSTANDING THE FOREGOING, ALL
FEES INCURRED BY EITHER PARTY IN ANY BANKRUPTCY CASE FILED BY OR AGAINST THE
OTHER PARTY, FROM AND AFTER THE ORDER FOR RELIEF UNTIL THIS LEASE IS REJECTED OR
ASSUMED IN SUCH BANKRUPTCY CASE, WILL BE “OBLIGATIONS OF THE DEBTOR” AS THAT
PHRASE IS USED IN BANKRUPTCY CODE SECTION 365(D)(3).

 

24.           QUIET POSSESSION. SUBJECT TO TENANT’S FULL AND TIMELY PERFORMANCE
OF ALL OF TENANT’S OBLIGATIONS UNDER THIS LEASE AND SUBJECT TO THE TERMS OF THIS
LEASE, INCLUDING SECTION 20 - ENCUMBRANCES, TENANT SHALL HAVE THE RIGHT TO
OCCUPY THE PREMISES THROUGHOUT THE TERM AS AGAINST ANY PERSONS OR ENTITIES
LAWFULLY CLAIMING BY, THROUGH OR UNDER LANDLORD.

 

25.           SECURITY MEASURES. LANDLORD MAY, BUT SHALL BE UNDER NO OBLIGATION
TO, IMPLEMENT SECURITY MEASURES FOR THE PROPERTY, SUCH AS THE REGISTRATION OR
SEARCH OF ALL PERSONS ENTERING OR LEAVING THE BUILDING, REQUIRING IDENTIFICATION
FOR ACCESS TO THE BUILDING, EVACUATION OF THE BUILDING FOR CAUSE, SUSPECTED
CAUSE, OR FOR DRILL PURPOSES, THE ISSUANCE OF MAGNETIC PASS CARDS OR KEYS FOR
BUILDING OR ELEVATOR ACCESS, AND OTHER ACTIONS THAT LANDLORD DEEMS NECESSARY OR
APPROPRIATE

 

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TO PREVENT ANY THREAT OF PROPERTY LOSS OR DAMAGE, BODILY INJURY OR BUSINESS
INTERRUPTION; PROVIDED, HOWEVER, THAT SUCH MEASURES SHALL BE IMPLEMENTED IN A
WAY AS NOT TO INCONVENIENCE TENANTS OF THE BUILDING UNREASONABLY. IF LANDLORD
USES AN ACCESS CARD SYSTEM, LANDLORD MAY REQUIRE TENANT TO PAY LANDLORD A
DEPOSIT FOR EACH AFTER-HOURS BUILDING ACCESS CARD ISSUED TO TENANT. TENANT SHALL
BE RESPONSIBLE FOR ANY LOSS, THEFT OR BREAKAGE OF ANY SUCH CARDS, WHICH MUST BE
RETURNED BY TENANT TO LANDLORD UPON EXPIRATION OR EARLIER TERMINATION OF THE
LEASE. LANDLORD MAY RETAIN THE DEPOSIT FOR ANY CARD NOT SO RETURNED. LANDLORD
SHALL AT ALL TIMES HAVE THE RIGHT TO CHANGE, ALTER OR REDUCE ANY SUCH SECURITY
SERVICES OR MEASURES. TENANT SHALL COOPERATE AND COMPLY WITH, AND CAUSE TENANT’S
REPRESENTATIVES AND VISITORS TO COOPERATE AND COMPLY WITH, SUCH SECURITY
MEASURES. LANDLORD AND ITS AGENTS AND EMPLOYEES SHALL HAVE NO LIABILITY TO
TENANT OR ITS REPRESENTATIVES OR VISITORS FOR THE IMPLEMENTATION OR EXERCISE OF,
OR THE FAILURE TO IMPLEMENT OR EXERCISE, ANY SUCH SECURITY MEASURES OR FOR ANY
RESULTING DISTURBANCE OF TENANT’S USE OR ENJOYMENT OF THE PREMISES.

 

26.           FORCE MAJEURE. “FORCE MAJEURE” SHALL MEAN LANDLORD’S INABILITY TO
OBTAIN EQUIPMENT OR BUILDING MATERIALS DESPITE THE TIMELY AND DILIGENT EFFORT BY
LANDLORD OR ITS CONTRACTORS TO OBTAIN SUCH EQUIPMENT AND MATERIALS, ACTS OF GOD,
FIRE, EARTHQUAKE, FLOOD, RAINFALL OR OTHER WEATHER-CAUSED DELAYS WHICH INTERFERE
WITH CONSTRUCTION, VANDALISM, ACTS OR DELAYS OF PUBLIC AGENCIES OR GOVERNMENTAL
BODIES, OR THE AUTHORITY UNDER THE COVENANTS, CONDITIONS AND RESTRICTIONS, ANY
MORATORIUM ON THE ISSUANCE OF GOVERNMENTAL APPROVALS OR UTILITY SERVICE
CONNECTIONS OR OTHER SIMILAR GOVERNMENT ACTIONS, STRIKES, UNION LABOR DISPUTES
OR OTHER UNION WORK STOPPAGES, FREIGHT EMBARGOES OR INABILITY TO OBTAIN BASIC
MATERIALS, SUPPLIES OR FUELS, UNCOMMON OR UNUSUAL DELAYS IN THE ISSUANCE OF
GOVERNMENTAL PERMITS OR APPROVALS, OR OTHER EVENTS BEYOND THE REASONABLE CONTROL
OF LANDLORD OR ITS CONTRACTORS.

 

27.           RULES AND REGULATIONS. TENANT SHALL BE BOUND BY AND SHALL COMPLY
WITH THE RULES AND REGULATIONS ATTACHED TO AND MADE A PART OF THIS LEASE AS
EXHIBIT D, AS WELL AS ANY REASONABLE RULES AND REGULATIONS HEREAFTER ADOPTED BY
LANDLORD FOR ALL TENANTS OF THE BUILDING, UPON NOTICE TO TENANT THEREOF
(COLLECTIVELY, THE “BUILDING RULES”). LANDLORD SHALL NOT BE RESPONSIBLE TO
TENANT OR TO ANY OTHER PERSON FOR ANY VIOLATION OF, OR FAILURE TO OBSERVE, THE
BUILDING RULES BY ANY OTHER TENANT OR PERSON.

 

28.           LANDLORD’S LIABILITY. THE TERM “LANDLORD,” AS USED IN THIS LEASE,
SHALL MEAN ONLY THE OWNER OR OWNERS OF THE BUILDING AT THE TIME IN QUESTION. IN
THE EVENT OF ANY CONVEYANCE OF TITLE TO THE BUILDING, THEN FROM AND AFTER THE
DATE OF SUCH CONVEYANCE, THE TRANSFEROR LANDLORD SHALL BE RELIEVED OF ALL
LIABILITY WITH RESPECT TO LANDLORD’S OBLIGATIONS TO BE PERFORMED UNDER THIS
LEASE AFTER THE DATE OF SUCH CONVEYANCE. NOTWITHSTANDING ANY OTHER TERM OR
PROVISION OF THIS LEASE, THE LIABILITY OF LANDLORD FOR ITS OBLIGATIONS UNDER
THIS LEASE IS LIMITED SOLELY TO LANDLORD’S INTEREST IN THE BUILDING AS THE SAME
MAY FROM TIME TO TIME BE ENCUMBERED, AND NO PERSONAL LIABILITY SHALL AT ANY TIME
BE ASSERTED OR ENFORCEABLE AGAINST ANY OTHER ASSETS OF LANDLORD OR AGAINST
LANDLORD’S PARTNERS OR MEMBERS OR ITS OR THEIR RESPECTIVE PARTNERS,
SHAREHOLDERS, MEMBERS, DIRECTORS, OFFICERS OR MANAGERS ON ACCOUNT OF ANY OF
LANDLORD’S OBLIGATIONS OR ACTIONS UNDER THIS LEASE.

 

 

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29.           CONSENTS AND APPROVALS.

 

29.1         DETERMINATION IN GOOD FAITH. WHEREVER THE CONSENT, APPROVAL,
JUDGMENT OR DETERMINATION OF LANDLORD IS REQUIRED OR PERMITTED UNDER THIS LEASE,
LANDLORD MAY, IN ITS SOLE AND UNFETTERED DISCRETION, EXERCISE ITS GOOD FAITH
BUSINESS JUDGMENT IN GRANTING OR WITHHOLDING SUCH CONSENT OR APPROVAL OR IN
MAKING SUCH JUDGMENT OR DETERMINATION WITHOUT REFERENCE TO ANY EXTRINSIC
STANDARD OF REASONABLENESS, UNLESS THE SPECIFIC PROVISION CONTAINED IN THIS
LEASE PROVIDING FOR SUCH CONSENT, APPROVAL, JUDGMENT OR DETERMINATION SPECIFIES
THAT LANDLORD’S CONSENT OR APPROVAL IS NOT TO BE UNREASONABLY WITHHELD, OR THAT
SUCH JUDGMENT OR DETERMINATION IS TO BE REASONABLE, OR OTHERWISE SPECIFIES THE
STANDARDS UNDER WHICH LANDLORD MAY WITHHOLD ITS CONSENT. IF IT IS DETERMINED
THAT LANDLORD FAILED TO GIVE ITS CONSENT WHERE IT WAS REQUIRED TO DO SO UNDER
THIS LEASE, TENANT SHALL BE ENTITLED TO INJUNCTIVE RELIEF, OR OTHER RELIEF AS
MAY BE PROVIDED FOR UNDER THIS LEASE, BUT SHALL NOT TO BE ENTITLED TO MONETARY
DAMAGES OR TO TERMINATE THIS LEASE FOR SUCH FAILURE.

 

29.2         NO LIABILITY IMPOSED ON LANDLORD. THE REVIEW AND/OR APPROVAL BY
LANDLORD OF ANY ITEM OR MATTER TO BE REVIEWED OR APPROVED BY LANDLORD UNDER THE
TERMS OF THIS LEASE OR ANY EXHIBITS OR ADDENDA HERETO SHALL NOT IMPOSE UPON
LANDLORD ANY LIABILITY FOR THE ACCURACY OR SUFFICIENCY OF ANY SUCH ITEM OR
MATTER OR THE QUALITY OR SUITABILITY OF SUCH ITEM FOR ITS INTENDED USE. ANY SUCH
REVIEW OR APPROVAL IS FOR THE SOLE PURPOSE OF PROTECTING LANDLORD’S INTEREST IN
THE PROPERTY, AND NO THIRD PARTIES, INCLUDING TENANT OR THE REPRESENTATIVES AND
VISITORS OF TENANT OR ANY PERSON OR ENTITY CLAIMING BY, THROUGH OR UNDER TENANT,
SHALL HAVE ANY RIGHTS AS A CONSEQUENCE THEREOF.

 

30.           WAIVER OF RIGHT TO JURY TRIAL.  LANDLORD AND TENANT WAIVE THEIR
RESPECTIVE RIGHTS TO TRIAL BY JURY OF ANY CONTRACT OR TORT CLAIM, COUNTERCLAIM,
CROSS-COMPLAINT, OR CAUSE OF ACTION IN ANY ACTION, PROCEEDING, OR HEARING
BROUGHT BY EITHER PARTY AGAINST THE OTHER ON ANY MATTER ARISING OUT OF OR IN ANY
WAY CONNECTED WITH THIS LEASE, THE RELATIONSHIP OF LANDLORD AND TENANT, OR
TENANT’S USE OR OCCUPANCY OF THE PREMISES, INCLUDING ANY CLAIM OF INJURY OR
DAMAGE OR THE ENFORCEMENT OF ANY REMEDY UNDER ANY CURRENT OR FUTURE LAW,
STATUTE, REGULATION, CODE, OR ORDINANCE.

 

31.           BROKERS.  WITH THE EXCEPTION OF THE LANDLORD’S BROKER AND THE
TENANT’S BROKER DESIGNATED IN THE BASIC LEASE INFORMATION, LANDLORD AND TENANT
EACH REPRESENTS AND WARRANTS TO THE OTHER THAT IT HAS NOT HAD ANY DEALINGS WITH
ANY OTHER REALTORS, BROKERS, FINDERS OR AGENTS IN CONNECTION WITH THIS LEASE AND
EACH RELEASES AND AGREES TO INDEMNIFY THE OTHER FROM AND AGAINST ANY CLAIM OR
CLAIMS, INCLUDING, WITHOUT LIMITATION, COSTS, EXPENSES AND REASONABLE ATTORNEY’S
FEES INCURRED BY THE OTHER IN CONNECTION WITH SUCH CLAIM OR CLAIMS, BASED ON THE
FAILURE OR ALLEGED FAILURE TO PAY ANY REALTORS, BROKERS, FINDERS OR AGENTS
(OTHER THAN LANDLORD’S BROKER AND THE TENANT’S BROKER) AND FROM ANY COST,
EXPENSE OR LIABILITY FOR ANY COMPENSATION, COMMISSION OR CHARGES CLAIMED BY ANY
REALTORS, BROKERS, FINDERS OR AGENTS (OTHER THAN LANDLORD’S BROKER AND THE
TENANT’S BROKER) CLAIMING BY, THROUGH OR ON BEHALF OF IT WITH RESPECT TO THIS
LEASE OR THE NEGOTIATION OF THIS LEASE. LANDLORD WILL PAY THE LANDLORD’S BROKER
AND THE TENANT’S BROKER IN ACCORDANCE WITH A SEPARATE AGREEMENT BETWEEN LANDLORD
AND THE APPLICABLE BROKER.

 

32.           INTENTIONALLY DELETED.

 

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33.           PARKING. TENANT IS ENTITLED TO USE THE NUMBER OF COVERED RESERVED
PARKING SPACES SPECIFIED IN THE BASIC LEASE INFORMATION. LANDLORD WILL EITHER
DESIGNATE SUCH SPACES AS RESERVED SPACES OR WILL MARK TENANT’S NAME THEREON, AND
LANDLORD WILL NOT GRANT ANY OTHER TENANT THE RIGHT TO USE SUCH SPACES; PROVIDED,
HOWEVER, THAT LANDLORD WILL HAVE NO OBLIGATION TO PREVENT UNAUTHORIZED PERSONS
FROM USING SUCH COVERED RESERVED PARKING SPACES. DURING THE INITIAL TERM, TENANT
WILL PAY TO LANDLORD, CONCURRENTLY WITH EACH PAYMENT OF BASE RENT, A FEE OF
$35.00 PER MONTH FOR EACH COVERED RESERVED PARKING SPACE. UPON THE EXPIRATION OF
THE INITIAL TERM, THE FEE FOR THE COVERED RESERVED PARKING SPACES WILL BE
ADJUSTED FROM TIME TO TIME BY LANDLORD TO AN AMOUNT EQUAL TO LANDLORD’S
THEN-STANDARD FEE FOR COVERED RESERVED PARKING SPACES AT THE PROPERTY, PROVIDED
THAT SUCH FEE WILL NOT INCREASE AT A RATE OF MORE THAN THREE PERCENT (3%) PER
YEAR, COMPOUNDED ANNUALLY, OVER THE $35.00 PER MONTH PER COVERED RESERVED
PARKING SPACE FEE INITIALLY CHARGED HEREUNDER AND PROVIDED FURTHER THAT SUCH CAP
IS CUMULATIVE. TENANT IS ALSO ENTITLED TO USE, ON A NON-EXCLUSIVE BASIS, THOSE
PARKING SPACES WITHIN THE PROPERTY THAT ARE MADE AVAILABLE BY LANDLORD FOR THE
COMMON USE OF THE TENANTS OF THE PROPERTY (“UNRESERVED PARKING SPACES”).
LANDLORD WILL DESIGNATE THE INITIAL LOCATIONS OF THE COVERED RESERVED PARKING
SPACES AND THE UNRESERVED PARKING SPACES, AND LANDLORD RESERVES THE RIGHT TO
DESIGNATE AND REDESIGNATE SUCH LOCATIONS AND TO GRANT OTHER PARTIES THE
EXCLUSIVE RIGHT TO USE PARKING SPACES AT THE PROPERTY. THE USE OF COVERED
RESERVED PARKING SPACES AND UNRESERVED PARKING SPACES BY TENANT AND ITS
REPRESENTATIVES AND VISITORS SHALL BE EQUAL TO FIVE (5) SPACES FOR EACH 1,000
RENTABLE SQUARE FEET OF SPACE IN THE PREMISES. TENANT AGREES NOT TO USE, NOR
PERMIT THE USE BY ITS EMPLOYEES, REPRESENTATIVES, OR VISITORS OF, THE DRIVEWAYS
OR PARKING LOT FOR OVERNIGHT OR OTHER STORAGE, OR FOR THE MAINTENANCE, REPAIR OR
CLEANING OF AUTOMOBILES OR OTHER VEHICLES. TENANT SHALL NOT PLACE OR STORE
GOODS, MATERIALS, SUPPLIES, EQUIPMENT, OR OTHER PROPERTY OF TENANT IN THE
DRIVEWAYS OR PARKING LOT OR ANYWHERE ELSE IN THE PROPERTY OR IN THE BUILDING,
EXCEPTING THE PREMISES. LANDLORD IS NOT RESPONSIBLE FOR ANY THEFT, LOSS OR
DAMAGE WITH RESPECT TO VEHICLES AT THE PROPERTY OR THE CONTENTS THEREOF.

 

34.           ENTIRE AGREEMENT. THIS LEASE, INCLUDING THE EXHIBITS AND ANY
ADDENDA ATTACHED HERETO, AND THE DOCUMENTS REFERRED TO HEREIN, IF ANY,
CONSTITUTE THE ENTIRE AGREEMENT BETWEEN LANDLORD AND TENANT WITH RESPECT TO THE
LEASING OF SPACE BY TENANT IN THE BUILDING, AND SUPERSEDE ALL PRIOR OR
CONTEMPORANEOUS AGREEMENTS, UNDERSTANDINGS, PROPOSALS AND OTHER REPRESENTATIONS
BY OR BETWEEN LANDLORD AND TENANT, WHETHER WRITTEN OR ORAL, ALL OF WHICH ARE
MERGED HEREIN. NEITHER LANDLORD NOR LANDLORD’S AGENTS HAVE MADE ANY
REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE PREMISES, THE BUILDING, THE
PROJECT OR THIS LEASE EXCEPT AS EXPRESSLY SET FORTH HEREIN, AND NO RIGHTS,
EASEMENTS OR LICENSES SHALL BE ACQUIRED BY TENANT BY IMPLICATION OR OTHERWISE
UNLESS EXPRESSLY SET FORTH HEREIN. THE SUBMISSION OF THIS LEASE FOR EXAMINATION
DOES NOT CONSTITUTE AN OPTION FOR THE PREMISES AND THIS LEASE SHALL BECOME
EFFECTIVE AS A BINDING AGREEMENT ONLY UPON EXECUTION AND DELIVERY THEREOF BY
LANDLORD TO TENANT.

 

35.           MISCELLANEOUS. THIS LEASE MAY NOT BE AMENDED OR MODIFIED EXCEPT BY
A WRITING SIGNED BY LANDLORD AND TENANT. SUBJECT TO SECTION 14 - ASSIGNMENT AND
SUBLETTING AND SECTION 28 - LANDLORD’S LIABILITY, THIS LEASE SHALL BE BINDING ON
AND SHALL INURE TO THE BENEFIT OF THE PARTIES AND THEIR RESPECTIVE SUCCESSORS,
ASSIGNS AND LEGAL REPRESENTATIVES. THE DETERMINATION THAT ANY PROVISIONS HEREOF
MAY BE VOID, INVALID, ILLEGAL OR UNENFORCEABLE SHALL NOT IMPAIR ANY OTHER
PROVISIONS HEREOF AND ALL SUCH OTHER PROVISIONS OF THIS LEASE SHALL REMAIN IN
FULL FORCE AND EFFECT.

 

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THE UNENFORCEABILITY, INVALIDITY OR ILLEGALITY OF ANY PROVISION OF THIS LEASE
UNDER PARTICULAR CIRCUMSTANCES SHALL NOT RENDER UNENFORCEABLE, INVALID OR
ILLEGAL OTHER PROVISIONS OF THIS LEASE, OR THE SAME PROVISIONS UNDER OTHER
CIRCUMSTANCES. THIS LEASE SHALL BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH
THE LAWS (EXCLUDING CONFLICT OF LAWS PRINCIPLES) OF THE STATE OF ARIZONA. THE
PROVISIONS OF THIS LEASE SHALL BE CONSTRUED IN ACCORDANCE WITH THE FAIR MEANING
OF THE LANGUAGE USED AND SHALL NOT BE STRICTLY CONSTRUED AGAINST EITHER PARTY,
EVEN IF SUCH PARTY DRAFTED THE PROVISION IN QUESTION. WHEN REQUIRED BY THE
CONTEXT OF THIS LEASE, THE SINGULAR INCLUDES THE PLURAL. WHEREVER THE TERM
“INCLUDING” IS USED IN THIS LEASE, IT SHALL BE INTERPRETED AS MEANING
“INCLUDING, BUT NOT LIMITED TO” THE MATTER OR MATTERS THEREAFTER ENUMERATED. THE
CAPTIONS CONTAINED IN THIS LEASE ARE FOR PURPOSES OF CONVENIENCE ONLY AND ARE
NOT TO BE USED TO INTERPRET OR CONSTRUE THIS LEASE. IF MORE THAN ONE PERSON OR
ENTITY IS IDENTIFIED AS TENANT HEREUNDER, THE OBLIGATIONS OF EACH AND ALL OF
THEM UNDER THIS LEASE SHALL BE JOINT AND SEVERAL. TIME IS OF THE ESSENCE WITH
RESPECT TO THIS LEASE, EXCEPT AS TO THE CONDITIONS RELATING TO THE DELIVERY OF
POSSESSION OF THE PREMISES TO TENANT. NEITHER LANDLORD NOR TENANT SHALL RECORD
THIS LEASE.

 

36.           AUTHORITY. IF TENANT IS A CORPORATION, PARTNERSHIP, LIMITED
LIABILITY COMPANY OR OTHER FORM OF BUSINESS ENTITY, EACH OF THE PERSONS
EXECUTING THIS LEASE ON BEHALF OF TENANT WARRANTS AND REPRESENTS THAT TENANT IS
A DULY ORGANIZED AND VALIDLY EXISTING ENTITY, THAT TENANT HAS FULL RIGHT AND
AUTHORITY TO ENTER INTO THIS LEASE AND THAT THE PERSONS SIGNING ON BEHALF OF
TENANT ARE AUTHORIZED TO DO SO AND HAVE THE POWER TO BIND TENANT TO THIS LEASE.
TENANT SHALL PROVIDE LANDLORD UPON REQUEST WITH EVIDENCE REASONABLY SATISFACTORY
TO LANDLORD CONFIRMING THE FOREGOING REPRESENTATIONS.

 

37.           SIGNAGE. PROVIDED TENANT, AT ITS COST, RECEIVES ALL NECESSARY
GOVERNMENTAL AND QUASI-GOVERNMENTAL APPROVALS THEREFOR AS WELL AS LANDLORD’S AND
THE KIERLAND MASTER ASSOCIATION’S PRIOR WRITTEN CONSENT IN CONNECTION THEREWITH,
LANDLORD SHALL ALLOW TENANT TO ERECT TENANT’S SIGN IN TWO (2) LOCATIONS ON THE
EXTERIOR OF THE BUILDING AS DEPICTED ON EXHIBIT G ATTACHED HERETO AND
INCORPORATED HEREIN, WHICH SIGN SHALL BE TENANT’S NAME, “SUBORDINATE” TO
LANDLORD’S BUILDING DESIGNATION SIGN, IF ANY. TENANT SHALL PAY ALL ANNUAL AND
OTHER PERMIT FEES THEREFOR, SHALL PAY ALL COSTS OF INSTALLATION AND MAINTENANCE
THEREOF, SHALL KEEP THE SAME IN GOOD CONDITION, ORDER AND REPAIR AT ITS SOLE
COST AND EXPENSE, SHALL REMOVE THE SAME PRIOR TO TERMINATION OF THIS LEASE, AND
SHALL REPAIR AND RESTORE ANY DAMAGE TO THE BUILDING CAUSED BY SUCH INSTALLATION
AND/OR REMOVAL. ANY SUCH SIGN, AND THE DISPLAY OF TENANT’S NAME THEREON, SHALL
BE SUBJECT TO THE TERMS OF ANY RESTRICTIVE COVENANTS AND/OR SIGN CRITERIA
APPLICABLE THERETO AND ALL APPLICABLE LAWS, ORDINANCES AND REGULATIONS. LANDLORD
HEREBY APPROVES TENANT’S SIGNAGE DEPICTED ON EXHIBIT G-1 ATTACHED HERETO AND
INCORPORATED HEREIN.

 

38.           RIGHT OF FIRST OFFER. SO LONG AS NO EVENT OF DEFAULT THEN EXISTS
UNDER THIS LEASE, TENANT WILL HAVE THE FIRST RIGHT (“FIRST RIGHT”) TO BE OFFERED
BY LANDLORD THE OPPORTUNITY TO LEASE ALL REMAINING SPACE (OTHER THAN THE
PREMISES) WITHIN THE BUILDING (THE “FIRST RIGHT SPACE”). THE FIRST RIGHT IS
SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN THIS SECTION 38, AND IS FURTHER
SUBJECT TO ANY PRIOR RIGHTS TO SUCH SPACE GRANTED TO ANY OTHER TENANTS IN THE
BUILDING. IF AT ANY TIME AFTER THE COMMENCEMENT DATE WHILE THIS FIRST RIGHT IS
IN EFFECT LANDLORD INTENDS TO LEASE ALL OR ANY PART OF THE FIRST RIGHT SPACE,
THEN LANDLORD WILL FIRST NOTIFY TENANT THAT SUCH FIRST RIGHT SPACE IS AVAILABLE
FOR LEASE (THE “AVAILABLE SPACE”). TENANT MUST NOTIFY LANDLORD IN WRITING WITHIN
FIVE (5) DAYS OF RECEIVING LANDLORD’S NOTICE WHETHER TENANT DESIRES TO LEASE THE
AVAILABLE SPACE FROM

 

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LANDLORD. IF TENANT NOTIFIES LANDLORD THAT TENANT DOES NOT DESIRE TO LEASE THE
AVAILABLE SPACE, OR IF TENANT DOES NOT RESPOND IN WRITING TO LANDLORD’S NOTICE
WITHIN SUCH FIVE (5) DAY PERIOD, THEN LANDLORD MAY FREELY LEASE THE AVAILABLE
SPACE WITHOUT RESTRICTION. IF TENANT NOTIFIES LANDLORD IN WRITING WITHIN SUCH
FIVE (5) DAY PERIOD THAT TENANT DESIRES TO LEASE THE AVAILABLE SPACE, THE
PARTIES WILL THEREAFTER NEGOTIATE FOR TENANT’S LEASE OF THE AVAILABLE SPACE FROM
LANDLORD. IF LANDLORD AND TENANT FAIL TO MUTUALLY AGREE UPON THE TERMS OF
TENANT’S LEASE OF THE AVAILABLE SPACE AND TO EXECUTE A WRITTEN AMENDMENT TO THIS
LEASE WITHIN TEN (10) DAYS AFTER TENANT DELIVERS TENANT’S OFFER NOTICE TO
LANDLORD, THEN LANDLORD’S OBLIGATIONS UNDER THIS SECTION 38 SHALL AUTOMATICALLY
TERMINATE AND BE OF NO FURTHER FORCE OR EFFECT AT THE END OF SUCH TEN (10) DAY
PERIOD. THE PURPOSE OF THIS SECTION 38 IS TO PROVIDE NOTICE TO TENANT SO THAT
TENANT MAY BE IN A POSITION TO OFFER TO LEASE SUCH SPACE ON A COMPETITIVE BASIS
WITH OTHERS, AND, NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
SECTION 38, NOTHING IN THIS SECTION 38 SHALL BE DEEMED TO BE AN OPTION OR RIGHT
OF FIRST REFUSAL.

 

39.           LEASE CONTINGENCY. TENANT ACKNOWLEDGES THAT, AS OF THE DATE OF
THIS LEASE, LANDLORD IS PRESENTLY LEASING PORTIONS OF THE PREMISES TO TWO (2)
TENANTS (THE “EXISTING TENANTS”) PURSUANT TO TWO (2) SEPARATE LEASES (THE
“EXISTING LEASES”). ALL OBLIGATIONS OF LANDLORD HEREUNDER ARE CONTINGENT UPON
LANDLORD’S RECEIPT OF WRITTEN TERMINATIONS OF BOTH OF THE EXISTING LEASES
EXECUTED BY THE EXISTING TENANTS (THE “TERMINATION AGREEMENTS”), WHEREIN THE
EXISTING TENANTS EACH AGREE TO VACATE THEIR RESPECTIVE PREMISES WITHIN THE
BUILDING ON OR BEFORE MARCH 31, 2006. IN THE EVENT THAT LANDLORD HAS NOT
RECEIVED BOTH OF THE FULLY EXECUTED TERMINATION AGREEMENTS ON OR BEFORE MARCH 1,
2006 (THE “CONTINGENCY DATE”), THEN IN THAT EVENT LANDLORD OR TENANT MAY
TERMINATE THIS LEASE BY DELIVERY OF WRITTEN NOTICE TO THE OTHER PARTY WITHIN
FIFTEEN (15) DAYS THEREAFTER, IN WHICH EVENT THIS LEASE WILL TERMINATE AND
NEITHER PARTY WILL HAVE ANY FURTHER RIGHTS OR OBLIGATIONS HEREUNDER.

 

40.           LENDER APPROVAL CONTINGENCY. Tenant acknowledges that Landlord’s
existing Mortgagee must consent to this Lease as a condition to its
effectiveness. Promptly following the full execution of this Lease, Landlord
will submit a signed copy of this Lease to such Mortgagee for approval of the
same. Upon receipt of such approval, Landlord will notify Tenant of the same. In
the event that such Mortgagee fails to consent to this Lease and Landlord fails
to notify Tenant of such consent on or before the Contingency Date, then in that
event this Lease shall terminate automatically, and without further action of
the parties, unless Landlord and Tenant mutually agree in writing to extend the
Contingency Date. If this Lease terminates in accordance with this Section 40,
then neither party will have any further rights or obligations hereunder from
and after such termination.

 

[SIGNATURES APPEAR ON NEXT PAGE]

 

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

 

 

LANDLORD:

 

 

 

PCCP HC KIERLAND, LLC, a Delaware limited liability company

 

 

 

By:

PCCP HC Kierland Owner, LLC, a Delaware limited liability company

 

 

Its Sole Member

 

 

 

 

 

 

By:

PCCP LB Hibernia LLC, a Delaware limited liability company

 

 

 

Its Managing Member

 

 

 

 

 

 

 

By:

PCCP Equities II, LLC, a Delaware limited liability company

 

 

 

 

Its Co-Managing Member

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Aaron A. Giovara

 

 

 

 

 

 

Its

Vice President

 

 

 

 

 

 

 

 

TENANT:

 

 

 

THE RYLAND GROUP, INC.,

 

a Maryland corporation

 

 

 

 

 

By:

/s/ Daniel Schreiner

 

 

Name:

Daniel Schreiner

 

 

Title:

Senior Vice President

 

 

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